Alight (ALIT) Q4 2024 earnings summary

Executive summary

• 2024 was a transformational year with cloud migration, divestiture of payroll and professional services, and a refreshed leadership and board structure, including a leadership transition and new board members.

• The company is now focused on tech-enabled employee benefits services, with 2025 set as a transitional year for steady progress and execution.

• Fourth quarter revenue was $680 million, with recurring revenue at $617 million (90.7% of total), and ARR bookings up 18% to $114 million.

• Net income for Q4 was $29 million versus a net loss of $121 million in Q4 2023; full year net loss narrowed to $140 million from $317 million.

• Initiated a dividend and increased share repurchase authorization by $200 million, with $167 million returned to shareholders in 2024.

Financial highlights

• Q4 revenue was $680 million; recurring revenue comprised 91% of total revenue and returned to growth sequentially.

• Non-recurring project revenues declined by 17% in Q4.

• Adjusted EBITDA for Q4 was $217 million (31.9% margin); full-year adjusted EBITDA was $594 million (25.2% margin).

• Full-year operating cash flow (adjusted for one-time costs) was $342 million, with a conversion rate of 58%.

• Adjusted diluted EPS for FY24 was $0.48, up from $0.43 in FY23.

Outlook and guidance

• 2025 revenue expected at $2,318–$2,388 million, with adjusted EBITDA of $620–$645 million and adjusted EPS of $0.58–$0.64.

• Free cash flow for 2025 projected at $250–$285 million, representing 13%-29% growth.

• Revenue growth anticipated in the second half of 2025, with improved retention rates and strong bookings.

• Double-digit ARR bookings growth expected to continue in 2025, with annual bookings guidance of $130–$145 million.

• Margin expansion of 150–180 basis points anticipated, driven by cloud migration savings and productivity initiatives.