Alight (NYSE: ALIT) narrows loss, completes 1-for-20 reverse stock split
Alight, Inc. reported Q2 2026 revenue of $511 million and a net loss from continuing operations of $10 million, compared with revenue of $528 million and a $1,073 million loss a year earlier. The prior-year quarter included a $983 million goodwill impairment, which did not recur.
For the first six months of 2026, revenue was $1,045 million with a net loss of $29 million. Operating cash flow from continuing operations was $152 million, funding $51 million of capital expenditures and $136 million of payments on the tax receivable agreement. At June 30, 2026, Alight held $215 million in cash and cash equivalents, long-term debt of $1,976 million (primarily term loans), and total stockholders’ equity of $1,026 million.
The company completed a 1-for-20 reverse stock split effective June 30, 2026, after which 26,399,569 Class A shares were outstanding. Results continue to reflect the 2024 sale of the Payroll & HCM Outsourcing business, with related activity presented as discontinued operations and in a seller financing note.
Positive
- None.
Negative
- None.
Filing Explained
The largest scheduled debt principal payment is $1,969 million in 2028; Class B-1 and B-2 share conversions remain tied to price and timing conditions.
The Form 10-Q is an unaudited quarterly report, and this filing updates the company’s financial position and equity arrangements for the quarter ended
As of
The debt schedule lists
The filing reports 247,733 Class B-1 and 247,733 Class B-2 shares outstanding; each class can automatically convert into Class A shares on a one-for-one basis only if its specified price and trading-day conditions are met. If conversion occurs, the additional Class A shares would increase the share count and reduce existing holders’ percentage ownership absent offsetting changes.
The company reported no share repurchases during the six months ended
Key Figures
Q2 2026 Revenue: $511 million
Q2 2026 Net Loss from Continuing Operations: $10 million
Six-Month 2026 Revenue: $1,045 million
+4 more
7 metrics
Q2 2026 Revenue
$511 million
Three months ended June 30, 2026, Employer Solutions segment
Q2 2026 Net Loss from Continuing Operations
$10 million
Net loss attributable to Alight, Inc. from continuing operations in Q2 2026
Six-Month 2026 Revenue
$1,045 million
Revenue for the six months ended June 30, 2026
Operating Cash Flow
$152 million
Net cash provided by operating activities from continuing operations, six months ended June 30, 2026
Long-Term Debt, Net
$1,976 million
Long-term debt, net, outstanding as of June 30, 2026
Total Stockholders’ Equity
$1,026 million
Total stockholders’ equity as of June 30, 2026
Class A Shares Outstanding
26,399,569 shares
Class A Common Stock outstanding as of June 30, 2026 after 1-for-20 reverse split
Key Terms
Reverse Stock Split, Tax Receivable Agreement, Seller Earnouts, goodwill impairment, +2 more
6 terms
Reverse Stock Split financial
"stockholders approved a reverse stock split of Alight's outstanding common stock"
A reverse stock split reduces a company's number of outstanding shares while raising the price per share proportionally, so the total value of each investor's holding is unchanged; a 1-for-10 split turns 100 shares worth $1 each into 10 shares worth $10 each. Companies often do this to regain compliance with an exchange's minimum price rule or to attract investors who avoid very low-priced stocks.
Tax Receivable Agreement financial
"entered into a tax receivable agreement (the "Tax Receivable Agreement" or the "TRA")"
A contract in which a company agrees to pay a specified party (often former owners after a spinoff or IPO) a share of future tax savings the company realizes. Think of it like agreeing to share a future tax refund with someone who helped create the conditions for that refund. For investors it matters because those payments reduce the cash the company can use for dividends, buybacks, or reinvestment, and therefore affect valuation and returns.
Seller Earnouts financial
"equity owners of Alight Holdings received earnouts (the "Seller Earnouts") that resulted in the issuance"
goodwill impairment financial
"Goodwill impairment | — | 983 | — | 983"
Goodwill impairment occurs when a company’s valued reputation or brand strength, known as goodwill, is found to be worth less than previously recorded on its financial statements. This usually happens when the company's performance declines or market conditions change, signaling that the expected benefits from acquisitions or brand value are no longer as strong. It matters to investors because it can indicate that a company's assets are less valuable than initially thought, potentially affecting its overall financial health.
cash flow hedges financial
"Our interest rate swaps have been designated as cash flow hedges"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
Additional Seller Note financial
"a note with an aggregate principal amount of up to $150 million (the "Additional Seller Note")"
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FAQ
What were Alight (ALIT) revenue and net loss for Q2 2026?
Alight generated $511 million in revenue and a net loss from continuing operations of $10 million in Q2 2026, versus $528 million revenue and a $1,073 million loss in Q2 2025, when results included a large goodwill impairment.
How did Alight (ALIT) perform for the first six months of 2026?
For the six months ended June 30, 2026, Alight reported $1,045 million in revenue and a net loss of $29 million. Operating cash flow from continuing operations was $152 million, supporting capital expenditures and obligations under its tax receivable agreement.
What is Alight’s (ALIT) debt and equity position as of June 30, 2026?
At June 30, 2026, Alight had $1,976 million of long-term debt, mainly Seventh Incremental Term Loans, and total stockholders’ equity of $1,026 million. Cash and cash equivalents were $215 million, with an undrawn $330 million revolving credit facility.
What reverse stock split did Alight (ALIT) complete in 2026?
Alight implemented a 1-for-20 reverse stock split effective June 30, 2026. Every 20 shares of its common stock were reclassified into one share, leaving 26,399,569 Class A shares outstanding, with trading on a split-adjusted basis beginning July 1, 2026.
How did the 2024 divestiture affect Alight (ALIT) in 2026?
Alight’s 2024 sale of its Payroll & HCM Outsourcing business for up to $1.2 billion continues to affect results through discontinued operations and seller financing. A $50 million Seller Note and an Additional Seller Note of up to $150 million are part of the consideration.
What are Alight’s (ALIT) main revenue streams in Q2 2026?
In Q2 2026, Alight’s Employer Solutions segment generated $471 million of recurring revenue and $40 million of project revenue. Recurring revenue comes from longer-term administration contracts, while project revenue reflects shorter-duration work such as implementations and advisory services.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
FORM 10-Q
_______________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-39299
Alight, Inc.
(Exact Name of Registrant as Specified in its Charter)
_______________________________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
______________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o
No x
As of July 30, 2026, the registrant had 26,419,410 shares of Class A Common Stock, par value $0.0001 per share, 247,733 shares of Class B-1 Common Stock, par value $0.0001 per share, 247,733 shares of Class B-2 Common Stock, par value $0.0001 per share, and 24,217 shares of Class V Common Stock, par value $0.0001 per share, outstanding. The foregoing reflects the reverse stock split of the registrant's outstanding common stock that became effective as of Tuesday, June 30, 2026, at 5:00 p.m. Eastern Time (the “Effective Time”). The registrant's Class A Common Stock began trading on a split-adjusted basis on the New York Stock Exchange (“NYSE”) under the existing symbol (ALIT) when the market opened on Wednesday, July 1, 2026.
Table of Contents
| Page | ||||||||
Forward-Looking Statements | 1 | |||||||
PART I. | FINANCIAL INFORMATION | 2 | ||||||
Item 1. | Financial Statements | 2 | ||||||
Condensed Consolidated Balance Sheets (Unaudited) | 2 | |||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | 3 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) | 4 | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | 6 | |||||||
Notes to Unaudited Condensed Consolidated Financial Statements | 7 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 45 | ||||||
Item 4. | Controls and Procedures | 45 | ||||||
PART II. | OTHER INFORMATION | 46 | ||||||
Item 1. | Legal Proceedings | 46 | ||||||
Item 1A. | Risk Factors | 46 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 46 | ||||||
Item 5. | Other Information | 46 | ||||||
Item 6. | Exhibits | 47 | ||||||
Signatures | 48 | |||||||
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include, but are not limited to, statements that relate to expectations regarding future financial performance (including the impact of bookings and losses from contract renewals on revenue growth), and business strategies or expectations for our business. Forward-looking statements can often be identified by the use of words such as “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” or similar expressions or the negative thereof. These forward-looking statements are based on information available as of the date of this report and the Company’s management’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of the Company and its directors, officers and affiliates. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. Forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update, add or otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.
Website and Social Media Disclosure
We use our website (www.alight.com) and our corporate Facebook (http://www.facebook.com/AlightGlobal), Instagram (@alight_solutions), LinkedIn (www.linkedin.com/company/alightsolutions), X (@alightsolutions), and YouTube (www.youtube.com/c/AlightSolutions) accounts, as well as Rohit Verma’s LinkedIn account (https://www.linkedin.com/in/rohit-verma-4291a5/), as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, filings made with the Securities and Exchange Commission (the "SEC") and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about Alight by visiting the “Resources—Investor Email Alerts” section of our website at https://investor.alight.com/overview. The information on our website and any alerts are not, however, part of this Quarterly Report.
The Company makes available free of charge on its website or provides a link on its website to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to the Company’s website and under the “Investors” heading, click on “Financials.”
1
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Alight, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| (in millions, except par values) | |||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Other current assets | |||||||||||
| Fiduciary assets | |||||||||||
| Total Current Assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Fixed assets, net | |||||||||||
| Deferred tax assets, net | |||||||||||
| Other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Liabilities | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Current portion of long-term debt, net | |||||||||||
| Other current liabilities | |||||||||||
| Fiduciary liabilities | |||||||||||
| Total Current Liabilities | |||||||||||
| Deferred tax liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Long-term tax receivable agreement | |||||||||||
| Other liabilities | |||||||||||
| Total Liabilities | $ | $ | |||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders' Equity | |||||||||||
Preferred stock at $ | $ | $ | |||||||||
Class A Common Stock: $ | |||||||||||
Class B Common Stock: $ | |||||||||||
Class V Common Stock: $ | |||||||||||
Class Z Common Stock: $ | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
| Additional paid-in-capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total Alight, Inc. Stockholders' Equity | $ | $ | |||||||||
| Noncontrolling interest | |||||||||||
| Total Stockholders' Equity | $ | $ | |||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | |||||||||
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
2
Alight, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| (in millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||
| Depreciation and intangible amortization | |||||||||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||||||||
| Total Operating expenses | |||||||||||||||||||||||||||||
| Operating Income (Loss) From Continuing Operations | ( | ( | ( | ( | |||||||||||||||||||||||||
| Other (Income) Expense | |||||||||||||||||||||||||||||
| (Gain) Loss from change in fair value of financial instruments | |||||||||||||||||||||||||||||
| (Gain) Loss from change in fair value of tax receivable agreement | ( | ( | |||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||||||||||||||
| Total Other (income) expense, net | ( | ( | |||||||||||||||||||||||||||
| Income (Loss) From Continuing Operations Before Taxes | ( | ( | ( | ( | |||||||||||||||||||||||||
| Income tax expense (benefit) | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net Income (Loss) From Discontinued Operations, Net of Tax | ( | ( | |||||||||||||||||||||||||||
| Net Income (Loss) | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||
| Net Income (Loss) Attributable to Alight, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Earnings (Loss) Per Share | |||||||||||||||||||||||||||||
| Basic and Diluted | |||||||||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Discontinued operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||
| Net Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Net Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||||||
| Change in fair value of derivatives | ( | ( | ( | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||||||||
| Total Other comprehensive income (loss), net of tax: | ( | ( | ( | ( | |||||||||||||||||||||||||
| Comprehensive Income (Loss) Before Noncontrolling Interests | ( | ( | ( | ( | |||||||||||||||||||||||||
| Comprehensive income (loss) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||
| Comprehensive Income (Loss) Attributable to Alight, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
3
Alight, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| (in millions) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Alight, Inc. Equity | Noncontrolling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under ESPP | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Alight, Inc. Equity | Noncontrolling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued under ESPP | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
4
| (in millions) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Alight, Inc. Equity | Noncontrolling Interest | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common stock issued under ESPP | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares withheld in lieu of taxes | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| (in millions) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Alight, Inc. Equity | Noncontrolling Interest | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Common Stock issued under ESPP | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Shares withheld in lieu of taxes | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
5
Alight, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Unaudited)
| Six Months Ended June 30, | |||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||
| Operating activities: | |||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | ( | $ | ( | |||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||
| Depreciation | |||||||||||||||||
| Intangible asset amortization | |||||||||||||||||
| Noncash lease expense | |||||||||||||||||
| Financing fee and premium amortization | |||||||||||||||||
| Share-based compensation expense | |||||||||||||||||
| (Gain) loss from change in fair value of financial instruments | |||||||||||||||||
| (Gain) loss from change in fair value of tax receivable agreement | ( | ||||||||||||||||
| Deferred tax expense (benefit) | ( | ( | |||||||||||||||
| Goodwill impairment | |||||||||||||||||
| Other | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | |||||||||||||||||
| Accounts payable and accrued liabilities | ( | ( | |||||||||||||||
| Other assets and liabilities | |||||||||||||||||
| Cash provided by operating activities - continuing operations | |||||||||||||||||
| Cash provided by operating activities - discontinued operations | |||||||||||||||||
| Net cash provided by operating activities | $ | $ | |||||||||||||||
| Investing activities: | |||||||||||||||||
| Capital expenditures | ( | ( | |||||||||||||||
| Cash provided by (used in) investing activities - continuing operations | ( | ( | |||||||||||||||
| Cash used in investing activities - discontinued operations | |||||||||||||||||
| Net cash provided by (used in) investing activities | $ | ( | $ | ( | |||||||||||||
| Financing activities: | |||||||||||||||||
| Dividend payments | ( | ( | |||||||||||||||
| Net increase (decrease) in fiduciary liabilities | ( | ( | |||||||||||||||
| Repayments to banks | ( | ( | |||||||||||||||
| Principal payments on finance lease obligations | ( | ( | |||||||||||||||
| Payments on tax receivable agreements | ( | ( | |||||||||||||||
| Tax payment for shares/units withheld in lieu of taxes | ( | ( | |||||||||||||||
| Repurchase of shares | ( | ||||||||||||||||
| Other financing activities | ( | ( | |||||||||||||||
| Cash used in financing activities - continuing operations | ( | ( | |||||||||||||||
| Cash provided by (used in) financing activities - discontinued operations | |||||||||||||||||
| Net Cash provided by (used in) financing activities | $ | ( | $ | ( | |||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash - continuing operations | ( | ||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash - discontinued operations | |||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ( | |||||||||||||||
| Cash, cash equivalents and restricted cash balances from: | |||||||||||||||||
| Continuing operations - beginning of year | $ | $ | |||||||||||||||
| Discontinued operations - beginning of year | |||||||||||||||||
| Less discontinued operations - end of period | |||||||||||||||||
| Continuing operations - end of period | $ | $ | |||||||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets | |||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||
| Restricted cash included in fiduciary assets | |||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | |||||||||||||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||||||||||||
| Fixed asset additions acquired through finance leases | $ | $ | |||||||||||||||
| Right of use asset additions acquired through operating leases | |||||||||||||||||
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
6
Alight, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation and Nature of Business
Basis of Presentation
On July 2, 2021 (the “Closing Date”), Alight Holding Company, LLC (the "Predecessor" or "Alight Holdings") completed a business combination (the "Business Combination") with a special purpose acquisition company. On the Closing Date, pursuant to the Business Combination Agreement, the special purpose acquisition company became a wholly owned subsidiary of Alight, Inc. (“Alight”, the “Company”, “we” “us” “our” or the “Successor”). As of June 30, 2026, Alight owned approximately 99 % of the economic interest in the Predecessor, had 100 % of the voting power and controlled the management of the Predecessor. The non-voting ownership percentage held by noncontrolling interest was less than 1 % as of June 30, 2026.
On July 12, 2024, the Company, completed the sale (the “Transaction”) of Alight's Payroll & HCM Outsourcing business (the "Divestiture" or "Divested Business") within the Employer Solutions segment. As a result of this agreement, the results of the Company’s Payroll and Professional Services businesses are reported separately as discontinued operations, net of tax, in our condensed consolidated financial statements for all periods presented.
Reverse Stock Split
At Alight's 2026 Annual Meeting of Stockholders held on June 10, 2026, stockholders approved a reverse stock split of Alight's outstanding common stock and a corresponding decrease in the number of authorized shares of each class and series of common stock (the "Reverse Stock Split"). On June 10, 2026, the Company's Board of Directors determined to effectuate the Reverse Stock Split at a ratio of 1-for-20. The Reverse Stock Split became effective as of Tuesday, June 30, 2026, at 5:00 p.m. Eastern Time (the "Effective Time"). Alight’s Class A Common Stock began trading on a split-adjusted basis on the NYSE under the existing symbol (ALIT) when the market opened on Wednesday, July 1, 2026.
As of the Effective Time, every 20 issued and outstanding shares of Alight’s Class A Common Stock, Class B non-voting common stock (including Class B-1 Common Stock and Class B-2 Common Stock), and Class V Common Stock was reclassified into one issued and outstanding share of Alight’s Class A Common Stock, Class B non-voting common stock (including Class B-1 Common Stock and Class B-2 Common Stock), and Class V Common Stock, respectively. Additionally, the total number of shares Alight is authorized to issue and number of authorized shares of Class A Common Stock, Class B non-voting common stock (including Class B-1 Common Stock, Class B-2 Common Stock and Class B-3 Common Stock), Class V Common Stock and Class Z non-voting common stock (including the Class Z-A Common Stock, Class Z-B-1 Common Stock and Class Z-B-2 Common Stock) was correspondingly decreased. Proportionate adjustments were also made to Alight’s outstanding equity-based awards and equity plans as well as to the outstanding limited liability company units of Alight Holdings in accordance with the terms of the applicable agreements.
No fractional shares were issued as a result of the reverse stock split. Stockholders otherwise entitled to receive a fractional share as a result of the Reverse Stock Split received a cash payment in an amount equal to the fair value thereof as of the Effective Time (as determined by the Board and without interest) in lieu of such fractional shares. The Company's total stockholder's equity and the par value of each class and series of the Company’s common stock did not change as a result of the Reverse Stock Split.
All issued and outstanding common stock, authorized share, share price, weighted average shares outstanding, earnings (loss) per share, share-based compensation awards, outstanding Alight Holdings units and per share amounts contained in this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the Reverse Stock Split for all periods presented.
Nature of Business
We are a technology-enabled services company delivering human capital management solutions to many of the world's largest and most complex organizations. This includes the implementation and administration of employee benefits (e.g., health, wealth and leaves) solutions. Alight’s numerous solutions and services are utilized year-round by employees and their family members in support of their overall health, wealth and wellbeing goals. Participants can access their
7
solutions digitally, including through a mobile application on Alight Worklife®, our intuitive, cloud-based employee engagement platform. Through Alight Worklife, the Company believes it is defining the future of employee benefits by providing an enterprise level, integrated offering designed to drive better outcomes for organizations and individuals.
Our primary business, Employer Solutions, is driven by our Alight Worklife platform, and includes integrated benefits administration, healthcare navigation, financial wellbeing and retiree healthcare. We leverage data across numerous interactions and activities to improve the employee experience, reduce operational costs and better inform management processes and decision-making. Our clients’ employees benefit from an integrated platform and user experience, coupled with a full-service customer care center, helping them manage the full life cycle of their health, wealth and wellbeing.
2. Significant Accounting Policies
There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and from our Quarterly Report on Form 10-Q for the three months ended March 31, 2026.
Use of Estimates
The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses.
These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be predicted with certainty, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods.
New Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Expense Disaggregation Disclosures (Topic 220), which requires disclosure in the notes to financial statements of specified information about certain costs and expenses. This guidance will be effective for the annual periods beginning with the year ending December 31, 2027 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. Upon adoption, the guidance may be applied retrospectively or prospectively. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Accounting for and Disclosure of Software Costs, which improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. Moving forward, the amendments will require an entity to capitalize software costs when a set of two criteria are met. This guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Upon adoption, the guidance may be applied prospectively, using a modified transition approach, or retrospectively. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which aims to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Upon adoption, entities can apply the amendments either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
3. Revenue from Contracts with Customers
8
The majority of the Company’s revenue is highly recurring and is derived from contracts with customers to provide integrated health, wealth, and leave administrative solutions that empower clients and their employees to manage their health, wealth and HR needs. The Company’s revenues are disaggregated by recurring and project revenues within the reportable segment. Recurring revenues are typically longer term in nature and more predictable on an annual basis, while project revenues consist of project work of a shorter duration and are therefore less predictable on an annual basis. See Note 12, “Segment Reporting” for quantitative disclosures of recurring and project revenues by reportable segment. The Company’s reportable segment is Employer Solutions. Employer Solutions is driven by our digital, software and AI-led capabilities powered by the Alight Worklife® platform and spanning total employee wellbeing and engagement, including integrated benefits administration, healthcare navigation, financial health and employee wellbeing. The Company believes the revenue categories within Employer Solutions depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
Revenues are recognized when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. The majority of the Company’s revenue is recognized over time as the customer simultaneously receives and consumes the benefits of our services. We may occasionally be entitled to a fee based on achieving certain performance criteria or contract milestones. To the extent that we cannot estimate with reasonable assurance the likelihood that we will achieve the performance target, we will constrain this portion of the transaction price and recognize it when or as the uncertainty is resolved. Any taxes assessed on revenues relating to services provided to our clients are recorded on a net basis. All of the Company’s revenues are described in more detail below.
Administrative Services
We provide benefits and human resource services across all of our solutions, which are highly recurring. The Company’s contracts may include administration services across one or multiple solutions and typically range from three to five years with mutual renewal options. These contracts typically consist of an implementation phase and an ongoing administration phase:
Implementation phase – In connection with the Company’s long-term agreements, implementation efforts are often necessary to set up clients and their human resource or benefit programs on the Company’s systems and operating processes. Work performed during the implementation phase is considered a set-up activity because it does not transfer a service to the customer. Therefore, it is not a separate performance obligation. As these agreements are longer term in nature, our contracts generally provide that if the client terminates a contract, we are entitled to an additional payment for services performed through the termination date designed to recover our up-front costs of implementation. Any fees received from the customer as part of the implementation are, in effect, an advance payment for the future ongoing administration services to be provided.
Ongoing administration services phase – For all solutions, the ongoing administration phase includes a variety of plan and system support services. More specifically, these services include data management, calculations, reporting, fulfillment/communications, compliance services, call center support, and in our Health Solutions agreements, annual on-boarding and enrollment support. While there are a variety of activities performed across all solutions, the overall nature of the obligation is to provide integrated administration solutions to the customer. The agreement represents a stand-ready obligation to perform these activities across all solutions on an as-needed basis. The customer obtains value from each period of service, and each time increment (i.e., each month, or each benefit cycle in the case of our Health Solutions arrangements) is distinct and the activities are performed substantially the same. Accordingly, the ongoing administration services for each solution represent a series and each series (i.e., each month, or each benefit cycle including the enrollment period in the case of our Health Solutions arrangements) of distinct services are deemed to be a single performance obligation. In agreements that include multiple performance obligations, the transaction price related to each performance obligation is based on a relative stand-alone selling price basis. We establish the stand-alone selling price using a suitable estimation method, which includes a market assessment approach using observable market prices the Company charges separately for similar solutions to similar customers, or an expected cost plus margin approach.
Our contracts with our clients specify the terms and conditions upon which the services are based. Fees for these services are primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable). These contracts may also include fixed components, including lump-sum implementation fees. Our fees are not typically payable until the commencement of the ongoing administration phase. Once fees become payable, payment is typically due on a monthly basis as we perform under the contract, and we are entitled to be reimbursed for work performed to date in the event of termination.
For Health Solutions administration services, each benefits cycle inclusive of the enrollment period represents a time increment under the series guidance and is a single performance obligation. Although ongoing fees are typically not
9
payable until the commencement of the ongoing administrative phase, we begin transferring services to our customers approximately four months prior to payments being due as part of our annual enrollment services. Although our per-participant fees are considered variable, they are typically predictable in nature, and therefore we do not generally constrain any portion of our transaction price estimates. We use an input method based on the labor costs incurred relative to total labor costs as the measure of progress in satisfying our Health Solutions performance obligation commencing when the customer’s annual enrollment services begin. Given that the Health Solutions enrollment and administrative services are stand-ready in nature, it can be difficult to estimate the total expected efforts or hours we will incur for a particular benefits cycle. Therefore, the input measure is based on the historical effort expended, which is measured as labor cost.
In the normal course of business, we enter into change orders or other contract modifications to add or modify services provided to the customer. We evaluate whether these modifications should be accounted for as separate contracts or a modification to an existing contract. To the extent that the modification changes a promise that forms part of the underlying series, the modification is not accounted for as a separate contract.
Other Contracts
In addition to the ongoing administration services, the Company also has services across all solutions that represent separate performance obligations and that are often shorter in duration, such as our participant financial advisory services and enrollment services not bundled with ongoing administration services.
Fee arrangements can be in the form of fixed-fee, time-and-materials, or fees based on assets under management. Payment is typically due on a monthly basis as we perform under the contract, and we are entitled to be reimbursed for work performed to date in the event of termination.
Services may represent stand-ready obligations that meet the series provision, in which case all variable consideration is allocated to each distinct time increment.
Other services are recognized over time based on a method that faithfully depicts the transfer of value to the customer, which may be based on the value of labor hours worked or time elapsed, depending on the facts and circumstances.
The majority of the fees for enrollment services not bundled with ongoing administration services may be in the form of commissions received from insurance carriers for policy placement and are variable in nature. These annual enrollment services include employer-sponsored arrangements that place both retiree Medicare coverage and voluntary benefits. Our performance obligations under these annual enrollment services are typically completed over a short period upon which a respective policy is placed or confirmed with no ongoing fulfillment obligations. For the employer-sponsored arrangements, we recognize the majority of the placement revenue in the fourth quarter of the calendar year, which is when most of the placement or renewal activity occurs. However, the Company may continue to receive commissions from carriers until the respective policy lapses or is canceled. The Company bases the estimates of total transaction price on supportable evidence from an analysis of past transactions, and only includes amounts that are probable of being received or not refunded. For the employer-sponsored arrangements, the estimated total transaction price may differ from the ultimate amount of commissions we may collect. Consequently, the estimate of total transaction price is adjusted over time as the Company receives confirmation of cash received, or as other information becomes available.
A portion of the Company's revenue is subscription-based where monthly fees are paid to the Company. The subscription-based revenue is recognized straight-line over the contract term, which is generally three years .
The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if (1) the contract has an original duration of one year or less, or (2) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods and services that form a single performance obligation.
Contract Costs
Costs to obtain a Contract
The Company capitalizes incremental costs to obtain a contract with a customer that are expected to be recovered. Assets recognized for the costs to obtain a contract, which primarily includes sales commissions paid in relation to the initial contract, are amortized over the expected life of the underlying customer relationships, which is 15 years for most of our solutions and 7 years for our leaves solutions. For situations where the duration of the contract is 1 year or less, the Company has applied a practical expedient and recognized the costs of obtaining a contract as an expense when incurred. These costs are recorded in Cost of services, exclusive of depreciation and amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss).
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Costs to fulfill a Contract
The Company capitalizes costs to fulfill contracts which includes highly customized implementation efforts to set up clients and their human resource or benefit programs. Assets recognized for the costs to fulfill a contract are amortized on a systematic basis over the expected life of the underlying customer relationships, which is 7 years for our leaves solutions and 15 years for all of our other solutions. Amortization for all contracts costs is recorded in Cost of services, exclusive of depreciation and amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss), see Note 5, “Other Financial Data”.
4. Discontinued Operations
As disclosed in Note 1, “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on the sale of the Divested Business. Under the terms of the Purchase Agreement, the Buyer agreed to acquire the Divested Business for total consideration of up to $1.2 billion, in the form of (1) $1.0 billion in cash (the “Closing Cash Consideration”) payable at the closing of the transactions (the “Closing”) contemplated by the Purchase Agreement, (2) a note with an aggregate principal amount of $50 million and a fair value of $35 million as of July 12, 2024 issued at Closing (the “Seller Note”) by an indirect parent of Buyer (the “Note Issuer”) and (3) contingent upon the financial performance of the Divested Business for the 2025 fiscal year, a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) and an initial fair value of $43 million as of July 12, 2024 to be issued by the Note Issuer. The Seller Note has a stated interest rate of 8.0 % which is expected to mature in July 2030. The Seller Note was measured at fair value as of July 12, 2024 on a nonrecurring basis, by calculating the interest of the Seller Note, which is expected to be paid-in-kind, and discounting the principal and interest by applying a discount rate based on the Divested Business's estimated cost of debt.
In conjunction with the Divestiture, the Company entered into a Transition Services Agreement (the "TSA") with the Buyer. The TSA outlines the terms under which the Company would provide certain reimbursable post-closing services to support the business on a transitional basis for an initial period of up to 18 months, with the option to extend for an additional six months . As of June 30, 2026, the Company is no longer providing the majority of services originally agreed upon in the TSA.
TSA services income was immaterial and $8 million for the three months ended June 30, 2026 and 2025, respectively, and was $1 million and $18 million for the six months ended June 30, 2026 and 2025, respectively, and was recognized in Other (income) expense, net, with the corresponding expenses recorded in Cost of services, exclusive of depreciation and amortization, and Selling, general and administrative expense in the Condensed Consolidated Statement of Comprehensive Income (Loss).
Pass-through costs of approximately $1 million and $15 million for the three months ended June 30, 2026 and 2025, respectively, and $3 million and $30 million for the six months ended June 30, 2026 and 2025, respectively, were incurred under the TSA, which were netted against the equal and offsetting reimbursement amounts due from the Divested Business.
Revenue earned from customer care commercial services provided to the Divested Business was $8 million and $12 million for the three months ended June 30, 2026 and 2025, respectively, and $17 million and $24 million for the six months ended June 30, 2026 and 2025, respectively.
11
The following table presents the results as reported in Net Income (Loss) from Discontinued Operations, Net of Tax, within our Condensed Consolidated Statements of Comprehensive Income (Loss) (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||
| Depreciation and intangible amortization | |||||||||||||||||||||||||||||
| Total Operating Expenses | |||||||||||||||||||||||||||||
| Income (loss) from Discontinued Operations | |||||||||||||||||||||||||||||
| Other (income) expense, net | |||||||||||||||||||||||||||||
| Income (Loss) from Discontinued Operations Before Income Taxes | |||||||||||||||||||||||||||||
| (Gain) Loss on sale of disposition, net of tax | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | |||||||||||||||||||||||||||||
| Net Income (Loss) from Discontinued Operations, Net of Tax | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||
The Company concluded that it controlled a portion of the Divested Business services subsequent to separation as a result of certain shared contractual relationships that had not been legally assigned as of June 30, 2026. As such, the Company determined it was the principal for these services and, therefore, the Company recorded $2 million and $13 million for the three months ended June 30, 2026 and 2025, respectively, and $5 million and $37 million for the six months ended June 30, 2026 and 2025, respectively, of Revenue and Cost of services, exclusive of depreciation and amortization, on a gross basis within Net Income (Loss) from Discontinued Operations, Net of Tax, in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The expense amounts reflected above represent only the direct costs attributable to the Divested Business and exclude allocations of corporate costs retained following the sale.
5. Other Financial Data
Condensed Consolidated Balance Sheets Information
Receivables, net
The components of Receivables, net are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Billed and unbilled receivables | $ | $ | |||||||||
| Allowance for expected credit losses | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
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Other current assets
The components of Other current assets are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Deferred project costs | $ | $ | |||||||||
| Prepaid expenses | |||||||||||
| Commissions receivable | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
Other assets
The components of Other assets are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Deferred project costs | $ | $ | |||||||||
| Operating lease right of use asset | |||||||||||
| Commissions receivable | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
The current and non-current portions of deferred project costs relate to costs to obtain and fulfill contracts (see Note 3, “Revenue from Contracts with Customers”). Total amortization expense related to deferred project costs was $11 million and $7 million for the three months ended June 30, 2026 and 2025, respectively, and $22 million and $13 million for the six months ended June 30, 2026 and 2025, respectively, and was recorded in Cost of services, exclusive of depreciation and amortization in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
Other current assets and Other assets include the fair value of outstanding derivative instruments related to interest rate swaps. The interest rate swap balances in Other current assets as of June 30, 2026 and December 31, 2025 were $4 million and $5 million, respectively. As of June 30, 2026 and December 31, 2025, there were no 45 million and $42 million, respectively, related to the Seller Note.
Other current liabilities
The components of Other current liabilities are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Deferred revenue | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Finance lease liabilities | |||||||||||
| Current portion of tax receivable agreement liability | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
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Other liabilities
The components of Other liabilities are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Deferred revenue | $ | $ | |||||||||
| Operating lease liabilities | |||||||||||
| Finance lease liabilities | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
The current and non-current portions of deferred revenue relate to consideration received in advance of performance under client contracts. During the six months ended June 30, 2026 and 2025, revenue of approximately $56 million and $46 million was recognized that was recorded as deferred revenue at the beginning of each period, respectively.
6. Goodwill and Intangible assets, net
The changes in the net carrying amount of goodwill are as follows (in millions):
| Gross Carrying Amount | Accumulated Impairment Losses | Net Carrying Amount | |||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | $ | |||||||||||||
| Impairment | — | ||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | |||||||||||||
Intangible assets by asset class are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
| Intangible assets: | |||||||||||||||||||||||||||||||||||
| Customer-related and contract based intangibles | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Technology related intangibles | |||||||||||||||||||||||||||||||||||
| Trade name | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amortization expense from finite-lived intangible assets for the three months ended June 30, 2026 and 2025 was $70 million and $70 million, respectively. Amortization expense from finite-lived intangible assets for the six months ended June 30, 2026 and 2025 was $140 million and $141 million, respectively. Amortization expense from finite-lived intangible assets was recorded in Depreciation and intangible amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss).
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The following table reflects intangible assets net carrying amount and weighted-average remaining useful lives as of June 30, 2026 and December 31, 2025 (in millions, except for years):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Net Carrying Amount | Weighted-Average Remaining Useful Lives | Net Carrying Amount | Weighted-Average Remaining Useful Lives | ||||||||||||||||||||
| Intangible assets: | |||||||||||||||||||||||
| Customer-related and contract-based intangibles | $ | $ | |||||||||||||||||||||
| Technology-related intangibles | |||||||||||||||||||||||
| Trade name | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
Subsequent to June 30, 2026, the annual amortization expense is expected to be as follows (in millions):
| Customer-Related and Contract Based Intangibles | Technology Related Intangibles | Trade Name Intangibles | Total | ||||||||||||||||||||
| 2026 (July - December) | $ | $ | $ | $ | |||||||||||||||||||
| 2027 | |||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||
| 2030 | |||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||
| Total amortization expense | $ | $ | $ | $ | |||||||||||||||||||
7. Income Taxes
The Company’s effective tax rates for the three months ended June 30, 2026 and 2025 were 47 % and 0 %, respectively. The Company's effective tax rates for the six months ended June 30, 2026 and 2025 were 36 % and 1 %, respectively. The effective tax rates for each of the three and six months ended June 30, 2026 were higher than the 21 21
8. Debt
Debt outstanding consisted of the following (in millions):
| Maturity Date | June 30, 2026 | December 31, 2025 | |||||||||||||||
Seventh Incremental Term Loans(1) | August 31, 2028 | $ | $ | ||||||||||||||
$ | May 31, 2030 | ||||||||||||||||
| Total debt, net | |||||||||||||||||
| Less: current portion of long-term debt, net | ( | ( | |||||||||||||||
| Total long-term debt, net | $ | $ | |||||||||||||||
_______________________________________________________
Term Loan
In January 2025, the Company entered into Amendment No. 11 to its credit agreement, dated as of May 1, 2017 (as amended from time to time, the "Credit Agreement") with a syndicate of lenders to establish a new class of Seventh
15
Incremental Term Loans with an aggregate principal amount of $2,030 million and to reprice the outstanding Sixth Incremental Term Loans due August 31, 2028 by reducing the applicable rate from SOFR + 2.25 % to SOFR + 1.75 %.
Interest rates on the Term Loan borrowings are based on SOFR plus a margin. The Company is required to make principal payments at the end of each fiscal quarter based on defined terms in the Credit Agreement with the remaining principal balances due on the maturity dates.
The Company utilized swap agreements to fix a portion of the floating interest rates through December 2026 (see Note 13, “Derivative Financial Instruments” for additional information).
During the three and six months ended June 30, 2026, the Company made total principal payments on the Incremental Term Loans of $5 million and $10 million, respectively. During the three and six months ended June 30, 2025, the Company made total principal payments on the Incremental Term Loans of $5 million and $10 million, respectively.
Revolving Credit Facility
In August 2021, the Company entered into a $294 million revolving credit facility with a maturity date of August 31, 2026. In March 2023, the Company amended and upsized the revolving credit facility to $300 million and updated the benchmark reference rate from LIBOR to Term SOFR. In May 2025, the Company entered into Amendment No. 12 to the Credit Agreement, which increased the aggregate principal amount of its revolving credit facility to $330 million and extended the maturity date to May 31, 2030. At June 30, 2026, an immaterial amount of unused letters of credit related to insurance policies were issued under the revolving credit facility and there were no outstanding borrowings. The Company is required to make periodic payments for commitment fees and interest related to the revolving credit facility and outstanding letters of credit. During each of the three and six months ended June 30, 2026, the Company made immaterial 1
Financing Fees, Premiums and Interest Expense
The Company capitalized financing fees and premiums related to the term loans and revolving credit facility. These financing fees and premiums were recorded as an offset to the aggregate debt balances and are being amortized over the respective loan terms.
Total interest expense related to the debt instruments for the three months ended June 30, 2026 and 2025 was $28 million and $32 million, respectively. Total interest expense related to the debt instruments for the six months ended June 30, 2026 and 2025 was $56 million and $64 million, respectively. Interest expense is recorded in Interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss) and is net of interest rate swap derivative gains recognized and interest income.
Principal Payments
Aggregate remaining contractual principal payments as of June 30, 2026 are as follows (in millions):
| 2026 (July - December) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total payments | $ | ||||
9. Stockholders' Equity
As disclosed in Note 1, “Basis of Presentation and Nature of Business”, on June 10, 2026, the Company's Board of Director's determined to effectuate a 1-for-20 Reverse Stock Split of outstanding shares of the Company's Class A Common Stock, Class B-1 Common Stock, Class B-2 Common Stock and Class V Common Stock.
As a result of the Reverse Stock Split, the Company proportionately decreased the number of authorized shares of Class A Common Stock from 1,000,000,000 to 50,000,000 , Class B non-voting common stock from 30,000,000 to 1,500,000 (representing 500,000 shares of Class B-1 Common Stock, 500,000 shares of Class B-2 Common Stock, and 500,000 shares of Class B-3 Common Stock), Class V Common Stock from 175,000,000 to 8,750,000 , and Class Z non-voting common stock from 12,900,000 to 645,000 (representing 575,000 shares of Class Z-A Common Stock, 35,000
16
shares of Class Z-B-1 Common Stock, and 35,000 shares of Class Z-B-2 Common Stock). The Reverse Stock Split did not affect the Company’s authorized number of shares of preferred stock.
Additionally, in connection with the Reverse Stock Split, and as required by the limited liability company agreement of Alight Holdings, Alight Holdings effectuated a contemporaneous reverse split with respect to its outstanding units by amending its limited liability company agreement. All issued and outstanding common stock, authorized share, share price, weighted average shares outstanding, earnings (loss) per share, share-based compensation awards, outstanding Alight Holdings units and per share amounts contained in this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the Reverse Stock Split for all periods presented.
Preferred Stock
As of June 30, 2026, 1,000,000 preferred shares, par value $0.0001 per share, were authorized and no
Class A Common Stock
As of June 30, 2026, 26,399,569 shares of Class A Common Stock were outstanding. On July 2, 2024, all remaining shares of the previously unvested Class A Common Stock became fully vested. Holders of shares of Class A Common Stock are entitled to one vote per share, and together with the holders of shares of Class B Common Stock, will participate ratably in any dividends declared by the Company’s Board of Directors.
Class B Common Stock
Upon the Closing Date of the Business Combination, certain equity holders of Alight Holdings received earnouts (the "Seller Earnouts") that resulted in the issuance of a total of 749,978 Class B instruments to the equity holders of the Predecessor. The equity holders of the Predecessor that exchanged their Predecessor Class A units for shares of Class A Common Stock in the Business Combination received shares of Class B Common Stock, and the equity holders of the Predecessor that continue to hold Class A units of Alight Holdings (“Continuing Unit holders”) received Class B common units of Alight Holdings.
The Class B Common Stock and Class B common units are not entitled to a vote and accrue dividends equal to amounts declared per corresponding share of Class A Common Stock and Class A unit; however, such dividends are paid if and when such share of Class B Common Stock or Class B unit converts into a share of Class A Common Stock or Class A unit. If any of the shares of Class B Common Stock or Class B common units do not vest on or before the seventh anniversary of the Closing Date, such shares or units will be automatically forfeited and cancelled for no consideration and will not be entitled to receive any cumulative dividend payments.
These Class B instruments are liability classified. Refer to Note 14, “Financial Instruments” for additional information. As further described below, there are two series of Class B instruments outstanding.
Class B-1
As of June 30, 2026, 247,733 1 -for-1 basis if the volume weighted average price (“VWAP”) of the shares of Class A Common Stock equals or exceeds $250.00 per share for 20 or more trading days within a consecutive 30 -trading day period (or in the event of a change of control or liquidation event that implies a $250.00 per share valuation on a diluted basis).
To the extent any unvested share of Class B-1 Common Stock automatically converts into a share of Class A Common Stock, (i) such share or unit shall remain unvested in accordance with the terms and conditions of the applicable award agreement until it vests or is forfeited in accordance with the terms thereof and (ii) such share or unit shall be treated as unvested Class A consideration as if such share or unit was part of the unvested Class A consideration as of the Closing Date.
As of June 30, 2026, 127,256 1 -for-1 basis if the VWAP of the shares of Class A Common Stock equals or exceeds $250.00 per share for 20 or more trading days within a consecutive 30 -trading day period (or in the event of a change of control or liquidation event that implies a $250.00 per share valuation on a diluted basis).
Class B-2
As of June 30, 2026, 247,733 1 -for-1 basis if the
17
VWAP of the shares of Class A Common Stock equals or exceeds $300.00 per share for 20 or more trading days within a consecutive 30 -trading day period (or in the event of a change of control or liquidation event that implies a $300.00 per share valuation on a diluted basis).
To the extent any unvested share of Class B-2 Common Stock automatically converts into a share of Class A Common Stock, (i) such share or unit shall remain unvested in accordance with the terms and conditions of the applicable award agreement until it vests or is forfeited in accordance with the terms thereof and (ii) such share or unit shall be treated as unvested Class A consideration as if such share or unit was part of the unvested Class A consideration as of the Closing Date.
As of June 30, 2026, 127,256 1 -for-1 basis if the VWAP of the shares of Class A Common Stock equals or exceeds $300.00 per share for 20 or more trading days within a consecutive 30 -trading day period (or in the event of a change of control or liquidation event that implies a $300.00 per share valuation on a diluted basis).
Class B-3
As of June 30, 2026, 500,000 shares of Class B-3 Common Stock, par value $0.0001 , were authorized. There were no
Class V Common Stock
As of June 30, 2026, 24,217 shares of Class V Common Stock were legally issued and outstanding. Holders of Class V Common Stock are entitled to one vote per share and have no economic rights. The Class V Common Stock is held on a 1 -for-1 basis with Class A Units in Alight Holdings held by Continuing Unit holders. The Class A Units, together with an equal number of shares of Class V Common Stock, can be exchanged for an equal number of shares of Class A Common Stock.
Class Z Common Stock
As of June 30, 2026, there were no outstanding shares or units of Class Z Common Stock. Upon the Closing Date of the Business Combination, Class Z instruments were issued to the equity holders of the Predecessor. The equity holders of the Predecessor that exchanged their Predecessor Class A units for shares of Class A Common Stock in the Business Combination received shares of Class Z Common Stock, and the Continuing Unit holders received Class Z common units of Alight Holdings. The Class Z instruments were issued to the equity holders of the Predecessor to allow for the re-allocation of the consideration paid to the holders of unvested management equity (i.e., the unvested shares of Class A, Class B-1, and Class B-2 Common Stock) to the equity holders of the Predecessor in the event such equity is forfeited under the terms of the applicable award agreement and vested in connection with any such forfeiture.
Class A Units
Holders of Alight Holdings Class A units can exchange all or any portion of their Class A units, together with the cancellation of an equal number of shares of Class V Common Stock, for a number of shares of Class A Common Stock equal to the number of exchanged Class A units. Alight has the option to cash settle any future exchange.
The Continuing Unit holders’ ownership of Class A units represents the noncontrolling interest of the Company, which is accounted for as permanent equity on the Condensed Consolidated Balance Sheets. As of June 30, 2026, there were 26,423,786 Class A Units outstanding, of which 26,399,569 were held by the Company and 24,217 were held by the noncontrolling interest of the Company.
The Alight Holdings limited liability company agreement contains provisions that require a one -to-one ratio is maintained between each class of Alight Holdings units held by Alight and its subsidiaries (including the Alight Group, Inc., but excluding subsidiaries of Alight Holdings) and the number of outstanding shares of the corresponding class of Alight common stock, subject to certain exceptions (including in respect of management equity in the form of options, rights or other securities which have not been converted into or exercised for Alight common stock). In addition, the Alight Holdings limited liability company agreement permits Alight, in its capacity as the managing member of Alight Holdings, to take actions to maintain such ratio, including undertaking stock splits, combinations, recapitalization and exercises of the exchange rights of holders of Alight Holdings units.
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Share Repurchase Program
On August 1, 2022, the Company's Board of Directors authorized a share repurchase program (the "Program"), under which the Company may repurchase issued and outstanding shares of Class A Common Stock from time to time, depending on market conditions and alternate uses of capital. The Program has no expiration date and may be suspended or discontinued at any time. The Program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to any number of shares being repurchased by the Company. The Company's 1-for-20 Reverse Stock Split, effective June 30, 2026, did not impact the total dollar amount of remaining share repurchase authorization under the program.
During the three and six months ended June 30, 2026, the Company did not 216 million. Repurchased shares are reflected as Treasury Stock on the Condensed Consolidated Balance Sheets as a component of equity.
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The following table reflects the changes in our outstanding stock:
| Class A | Class B-1 | Class B-2 | Class V | Class Z | Treasury | ||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Conversion of noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares granted upon vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issuance for compensation to non-employees (1) | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Share forfeitures | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Class A | Class B-1 | Class B-2 | Class V | Class Z | Treasury | ||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Conversion of noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares granted upon vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issuance for compensation to non-employees (1) | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Share repurchases | ( | — | — | — | — | ||||||||||||||||||||||||||||||
| Share forfeitures | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Class A | Class B-1 | Class B-2 | Class V | Class Z | Treasury | ||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Conversion of noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares granted upon vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issuance for compensation to non-employees (1) | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Share forfeitures | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Class A | Class B-1 | Class B-2 | Class V | Class Z | Treasury | ||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Conversion of noncontrolling interest | — | — | ( | — | — | ||||||||||||||||||||||||||||||
| Shares granted upon vesting | — | — | — | — | — | ||||||||||||||||||||||||||||||
Issuance for compensation to non-employees (1) | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Share repurchases | ( | — | — | — | — | ||||||||||||||||||||||||||||||
| Share forfeitures | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | |||||||||||||||||||||||||||||||||||
_______________________________________________________
Dividends
On February 19, 2026, the Company announced it replaced its cash dividend on its Class A common stock, par value $0.0001 per share, with other capital allocation activities, including deleveraging the balance sheet and continuing our share repurchase program, subject to market and other conditions.
Accumulated Other Comprehensive Income
As of June 30, 2026, the Accumulated other comprehensive income ("AOCI") balance included unrealized gains and losses for interest rate swaps and foreign currency translation adjustments related to our foreign subsidiaries that do not
20
have the U.S. dollar as their functional currency. The tax effect on the Company's pre-tax AOCI items is recorded in the AOCI balance. This tax is comprised of two items: (1) the tax effects related to the unrealized pre-tax items recorded in AOCI and (2) the tax effect related to certain valuation allowances that have also been recorded in AOCI. When unrealized items in AOCI are recognized, the associated tax effects on these items will also be recognized in the tax provision.
Changes in accumulated other comprehensive income, net of noncontrolling interests, are as follows (in millions):
| Foreign Currency Translation Adjustments | Interest Rate Swaps (1) | Total | |||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss) before reclassifications | |||||||||||||||||
| Tax (expense) benefit | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Tax expense | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | |||||||||||||||
| Net current period other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ||||||||||||||
| _______________________________________________________ | |||||||||||||||||
(1) Reclassifications from this category are recorded in Interest expense. See Note 13 “Derivative Financial Instruments” for additional information | |||||||||||||||||
| Foreign Currency Translation Adjustments | Interest Rate Swaps (1) | Total | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss) before reclassifications | |||||||||||||||||
| Tax (expense) benefit | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Tax expense | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | |||||||||||||||
| Net current period other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ||||||||||||||
| _______________________________________________________ | |||||||||||||||||
(1) Reclassifications from this category are recorded in Interest expense. See Note 13 “Derivative Financial Instruments” for additional information | |||||||||||||||||
| Foreign Currency Translation Adjustments | Interest Rate Swaps (1) | Total | |||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
| Tax (expense) benefit | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | ( | ||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Tax expense | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | |||||||||||||||
| Net current period other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ||||||||||||||
_______________________________________________________ | |||||||||||||||||
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(1) Reclassifications from this category are recorded in Interest expense. See Note 13, “Derivative Financial Instruments” for additional information | |||||||||||||||||
| Foreign Currency Translation Adjustments | Interest Rate Swaps (1) | Total | |||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||
| Tax (expense) benefit | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
| Tax expense | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | |||||||||||||||
| Net current period other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ||||||||||||||
_______________________________________________________ | |||||||||||||||||
(1) Reclassifications from this category are recorded in Interest expense. See Note 13, “Derivative Financial Instruments” for additional information | |||||||||||||||||
10. Share-Based Compensation
As described in Note 1, “Basis of Presentation and Nature of Business”, the Company's share-based compensation awards presented herein have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split.
Omnibus Incentive Plan
The Company has an active equity incentive plan, the Alight, Inc. 2021 Omnibus Incentive Plan (the "Incentive Plan"), under which the Company has been authorized to grant share-based awards to key employees and non-employee directors, which consist primarily of time-based restricted stock units ("RSUs") and performance and market condition share units ("PRSUs"). Under this plan, for grants issued during the six months ended June 30, 2026, approximately 51 % of the units are subject to time-based vesting requirements and approximately 49 % are subject to additional performance or market condition vesting requirements. As of June 30, 2026, there were 6,217,367 remaining shares of common stock authorized for issuance pursuant to the Company’s stock-based compensation plans under its 2021 Omnibus Incentive Plan. RSU and PSU nonvested share-based payment awards contain rights to receive forfeitable dividends and therefore are not participating securities.
Restricted Share Units and Performance Share Units
Time-based RSUs are valued at the market price of a share of the Company’s common stock on the date of grant. In general, these awards vest ratably over a three-year period from the date of grant. All awards are expensed on a straight-line basis over a three-year period, which is considered to be the requisite service period.
The Company’s PRSUs contain various performance, market and service conditions that must be satisfied for an employee to earn the right to benefit from the award. The PRSUs vest upon achievement of various performance metrics or market conditions aligned to goals established by the Company. Expense is recognized on a straight-line basis over the requisite service period, based on the probability of achieving the performance or market conditions, with changes in expectations recognized as an adjustment to earnings in the period of the change. Compensation cost is not recognized for performance share units that do not vest because service or performance conditions are not satisfied, and any previously recognized compensation cost is reversed. Compensation cost is recognized for awards with a market condition provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied.
The weighted-average grant-date fair value per share of RSUs and PRSUs granted during each of the six months ended June 30, 2026 and 2025 were approximately $15.80 and $123.40 , and $16.51 and $129.80 , respectively.
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The following table summarizes the RSU and PRSU activity during the six months ended June 30, 2026:
| RSUs | Weighted Average Grant Date Fair Value Per Unit | PRSUs(1) | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Vested | ( | ( | ||||||||||||||||||||||||
| Forfeited | ( | ( | ||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | ||||||||||||||||||||||||
_______________________________________________________
(1)The number of PRSUs presented are based on actual or expected achievement of the respective performance goals and market conditions as of the end of the period.
Share-based Compensation Expense
Total share-based compensation expense related to the RSUs and PRSUs are recorded in the Condensed Consolidated Statements of Comprehensive Income (Loss) as follows (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||
| Total share-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||||||||
As of June 30, 2026, total future compensation expense related to unvested RSUs was $42 million, which will be recognized over a remaining weighted-average amortization period of approximately 2.5 years. As of June 30, 2026, total future compensation expense related to unvested PRSUs was $15 million, which will be recognized over a remaining weighted-average amortization period of approximately 3.4 years.
Employee Stock Purchase Plan
In December 2022, the Company began offering its employees an Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, all full-time and certain part-time employees of the Company based in the U.S. and certain other countries are eligible to purchase Class A Common Stock of the Company twice per year at the end of a six-month payment period (a “Payment Period”). During each Payment Period, eligible employees who so elect may authorize payroll deductions in an amount no less than 1 % nor greater than 10 % of his or her base pay for each payroll period in the Payment Period. At the end of each Payment Period, the accumulated deductions are used to purchase shares of Class A Common Stock from the Company up to a maximum of 1,250 shares for any one employee during a Payment Period. Shares may be purchased at a discount of up to 15 % of the fair market value of the Company’s Class A Common Stock on the last business day of a Payment Period. As of June 30, 2026, there were 1,296,485 remaining shares available for grant and 271,310 shares issued under the ESPP. The amount of share-based compensation expense related to the ESPP was immaterial 0.2 million and $0.5 million for three and six months ended June 30, 2025, respectively, which was recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).
11. Earnings Per Share
As described in Note 1, “Basis of Presentation and Nature of Business”, the number of shares and per share amounts presented herein have been retrospectively adjusted to reflect the 1-for-20 Reverse Stock Split for all periods presented.
Basic earnings per share is calculated by dividing the net income (loss) attributable to Alight, Inc. by the weighted average number of shares of Class A Common Stock issued and outstanding. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or
23
converted into shares or resulted in the issuance of shares that would then share in the net income of Alight, Inc. The Company’s Class V Common Stock does not, and its Class Z Common Stock did not, participate in the earnings or losses of the Company and are therefore not participating securities and have not been included in either the basic or diluted earnings per share calculations. RSU and PSU nonvested share-based payment awards contain rights to receive forfeitable dividends and therefore are not participating securities.
In conjunction with the Business Combination, the Company issued Seller Earnouts contingent consideration, which is payable in the Company’s Common Stock when the related market conditions are achieved. As the related conditions to pay the consideration had not been satisfied as of June 30, 2026, the Seller Earnouts were excluded from the diluted earnings per share calculations.
Basic and diluted (net loss) earnings per share are as follows (in millions, except for share and per share amounts):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Basic and diluted (net loss) earnings per share: | |||||||||||||||||||||||||||||
| Numerator | |||||||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | |||||||||||||||||||||||||||||
| Net Income (loss) from continuing operations attributable to Alight, Inc. | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Net Income (Loss) From Discontinued Operations, Net of Tax | ( | ( | |||||||||||||||||||||||||||
| Net Income (Loss) Attributable to Alight, Inc. - basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Loss impact of conversion of noncontrolling interest | |||||||||||||||||||||||||||||
| Net income (loss) attributable to Alight, Inc. - diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Denominator | |||||||||||||||||||||||||||||
| Weighted-average shares outstanding - basic | |||||||||||||||||||||||||||||
| Dilutive effect of the exchange of noncontrolling interest units | |||||||||||||||||||||||||||||
| Dilutive effect of RSUs | |||||||||||||||||||||||||||||
| Weighted-average shares outstanding - diluted | |||||||||||||||||||||||||||||
| Basic and Diluted (net loss) earnings per share | |||||||||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Discontinued operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||
| Net Income (Loss) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
For the three and six months ended June 30, 2026, 24,217 2,146,325 749,978 1,866,728
For the three and six months ended June 30, 2025, 25,505 370,259 749,978 295,326
12. Segment Reporting
We currently operate under one reportable segment, Employer Solutions. Employer Solutions is driven by our Alight Worklife platform, and includes integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management and retiree healthcare.
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The Company’s reportable segment has been determined using a management approach, which is consistent with the basis and manner in which the Company’s chief operating decision maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance. The Company’s Chief Executive Officer is its CODM. The CODM evaluates the performance of the Company based on Revenue and Net Income (Loss) From Continuing Operations.
The CODM also uses Revenue and Net Income (Loss) From Continuing Operations to manage and evaluate our business, make planning decisions, and as performance measures for Company-wide incentive compensation plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business. The Company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis.
Information regarding the Company’s reportable segment is as follows (in millions):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Recurring | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Project | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Less (1) | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of services - Technology (2) | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Cost of services - Delivery, Customer Care and Other (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and Amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Profit | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Selling, General, and Administrative (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and Intangible Amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||||||||||||||
Other segment items (5) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2) Cost of services - Technology is primarily attributable to cost related to application development and client-related infrastructure.
(3) Cost of services - Delivery, Customer Care and Other is primarily attributable to costs related personnel and vendors providing services to support our client base and client participants.
(4) Selling, General, and Administrative expenses exclude restructuring, stock based compensation and depreciation and intangible amortization and primarily include compensation-related costs for administrative and management employees, system and facilities expense, and costs for external professional and consulting services.
There was no single client who accounted for more than 10% of the Company’s revenues in any of the periods presented.
13. Derivative Financial Instruments
The Company is exposed to market risks, including changes in interest rates. To manage the risk related to these exposures, the Company has entered into various derivative instruments that reduce these risks by creating offsetting exposures.
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Interest Rate Swaps
The Company has utilized swap agreements that will fix the floating interest rates associated with its Term Loan as shown in the following table:
| Designation Date | Effective Date | Initial Notional Amount | Notional Amount Outstanding as of June 30, 2026 | Fixed Rate | Expiration Date | |||||||||||||||||||||||||||
| March 2022 | June 2025 | $ | $ | % | December 2026 | |||||||||||||||||||||||||||
| March 2023 | March 2023 | $ | $ | % | December 2026 | |||||||||||||||||||||||||||
| March 2023 | March 2023 | $ | $ | % | December 2026 | |||||||||||||||||||||||||||
During the three and six months ended June 30, 2026, we did not execute any new interest rate swaps. Our interest rate swaps have been designated as cash flow hedges.
Financial Instrument Presentation
The fair values and location of outstanding derivative instruments recorded in the Condensed Consolidated Balance Sheets are as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Other current assets | $ | $ | |||||||||
| Other assets | |||||||||||
| Total | $ | $ | |||||||||
| Liabilities | |||||||||||
| Other current liabilities | $ | $ | |||||||||
| Other liabilities | |||||||||||
| Total | $ | $ | |||||||||
The Company estimates that approximately $4 million of derivative gains included in Accumulated other comprehensive income as of June 30, 2026 will be reclassified into earnings over the next twelve months.
14. Financial Instruments
Seller Earnouts
Upon completion of the Business Combination, the equity owners of Alight Holdings received an earnout in the form of non-voting shares of Class B-1 and Class B-2 Common Stock, which automatically convert into Class A Common Stock if, at any time during the seven years following the Closing Date, certain criteria are achieved. See Note 9, “Stockholders’ Equity” for additional information regarding the Seller Earnouts.
The portion of the Seller Earnouts related to employee compensation was accounted for as share-based compensation. As all employee compensation associated with the Seller Earnouts was vested on July 2, 2024, no portion of the Seller Earnout as of June 30, 2026 was accounted for as share-based compensation. See Note 10, “Share-Based Compensation” for additional information.
As of June 30, 2026, all of the remaining Seller Earnouts were accounted for as a contingent consideration liability at fair value within Financial instruments on the Condensed Consolidated Balance Sheets because the Seller Earnouts do not meet the criteria for classification within equity. This liability is subject to remeasurement at each balance sheet date. At each of June 30, 2026, and December 31, 2025, the fair value of the Seller Earnouts was immaterial no 8 million and $30 million, respectively. Gains or losses related to the remeasurement of Seller Earnouts are recorded in (Gain) Loss from change in fair value of financial instruments within the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The fair value of the Class B-1 and B-2 Seller Earnouts is determined using Monte Carlo simulation and Option Pricing Methods (Level 3 inputs, see Note 16, "Fair Value Measurement"). Significant unobservable inputs are used in the
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assessment of fair value, including the following assumptions: volatility of 44.70 %, risk-free interest rate of 3.48 %, expected holding period of 2.01 years, dividend participation, and probability assessments based on the likelihood of reaching the performance targets defined in the Business Combination. A decrease in the risk-free interest rate or expected volatility would result in a decrease in the fair value measurement of the Seller Earnouts and vice versa.
As discussed in Note 9, “Stockholders’ Equity”, in connection with the ultimate forfeiture of the shares of unvested Class A, unvested Class B-1, and unvested Class B-2 common stock issued to participating management holders on July 2, 2024, all Class Z instruments were ultimately settled resulting in the re-allocation of the forfeited compensatory Class A, Class B-1 and Class B-2 instruments. The Class Z instruments were also accounted for as a contingent consideration liability at fair value within Financial instruments on the Condensed Consolidated Balance Sheets because these instruments did not meet the criteria for classification within equity. The fair value of the Class Z-A contingent consideration was determined using the ending share price as of the last day of each quarter until settlement on July 2, 2024, resulting in the issuance of 0.1 million shares of Class A common stock and units at the $141.80 stock price on that date (in each case, as adjusted for the Reverse Stock Split).
At June 30, 2026 and December 31, 2025, the Class Z-A contingent consideration was no not
Additional Seller Note
As disclosed above in Note 1, “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on the Divestiture. As part of the sale, the Company received a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) with an initial fair value of $43 million as of July 12, 2024 to be issued by the Note Issuer. See Note 4, “Discontinued Operations” for additional information. The Additional Seller Note is considered a level 3 recurring fair value measurement. In June 2025, the Company determined the fair value of the Additional Seller Note was zero . This value remained unchanged as of June 30, 2026 and is subject to final confirmation of financial performance in accordance with the terms and conditions of the agreement. As a result, for the three and six months ended June 30, 2026, the Company did not 36 million and $50 million, respectively, from the fair value remeasurement of the Additional Seller Note. Gains or losses related to the recurring fair value remeasurement of the Additional Seller Note are recorded in (Gain) Loss from change in fair value of financial instruments within the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The fair value of the Additional Seller Note was determined using a variation of the income approach (Level 3 inputs, see Note 16, "Fair Value Measurement"). Significant unobservable inputs are used in the assessment of fair value, including the following assumptions: expected Adjusted EBITDA, expected maturity of 4.03 years for the Additional Seller Note, the Divested Business's estimated cost of debt, and the likelihood of reaching the performance targets defined in the Purchase Agreement.
15. Tax Receivable Agreement
In connection with the Business Combination, Alight entered into a tax receivable agreement (the "Tax Receivable Agreement" or the "TRA") with certain owners of Alight Holdings prior to the Business Combination. Pursuant to the TRA, the Company will pay holders of TRA interests, as applicable, 85% of any savings that we realize, calculated using certain assumptions, as a result of (i) tax basis adjustments from sales and exchanges of Alight Holdings equity interests in connection with or following the Business Combination and certain distributions with respect to Alight Holdings equity interests, (ii) our utilization of certain tax attributes, and (iii) certain other tax benefits related to entering into the TRA.
Actual tax benefits realized by Alight may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Alight may make under the TRA will be substantial.
The Company’s TRA liability established upon completion of the Business Combination is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The TRA liability balance at June 30, 2026 assumes: (i) a blended U.S. federal, state and local income tax rate of 26.6 %; (ii) the latest estimates in taxable income inclusive of the OBBBA, which was enacted into law in the U.S. in July 2025; (iii) the ability to utilize tax attributes based on current tax forecasts; and (iv) future payments under the TRA are made when due under the TRA. The amount of the expected future payments under the TRA has been discounted to its present value using a discount rate of 8.4 %.
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Subsequent to the Business Combination, we record additional liabilities under the TRA as and when Class A units of Alight Holdings are exchanged for Class A Common Stock. Liabilities resulting from these exchanges will be recorded on a gross undiscounted basis and are not remeasured at fair value on a recurring basis. During the six months ended June 30, 2026, and 2025, there were no significant exchanges. As such, no material additional TRA liability was established as a result of the exchanges. As of June 30, 2026, $251 million of the TRA liability was measured at fair value on a recurring basis and $212 million was undiscounted and not remeasured at fair value. During the first quarter of 2026, the Company received an Objection Notice from the TRA Party Representative with respect to certain methodology used to prepare a portion of the Tax Benefit Schedule that calculates our 2026 Tax Benefit Payments to the TRA Parties (all capitalized terms as defined in the TRA). The Company disagrees with the TRA Party Representative’s assertions and is proceeding through the dispute mechanisms as set forth in the TRA agreement. During the six months ended June 30, 2026, consistent with the TRA agreement, the Company paid $136 million, representing what it considered the undisputed amount. The Company is vigorously contesting the TRA Party Representative's assertions in the Objection Notice. If the TRA Party Representative nonetheless prevails in its position or the Company resolves the dispute consensually, the Company currently estimates that a resolution could increase the 2026 Tax Benefit Payments by up to $40 million above the undisputed amount paid during the six months ended June 30, 2026, plus interest as further detailed in the TRA. The Objection Notice does not address the Company's current 2027 Tax Benefit Payments estimate.
The following table summarizes the changes in the TRA liabilities (in millions):
| Tax Receivable Agreement Liability | |||||
| Beginning balance as of December 31, 2025 | $ | ||||
| Fair value remeasurement | ( | ||||
| Payments | ( | ||||
| Ending balance as of June 30, 2026 | |||||
| Less: current portion included in other current liabilities | ( | ||||
| Total long-term tax receivable agreement liability | $ | ||||
16. Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standards related to fair value measurements include a hierarchy for information and valuations used in measuring fair value that is broken down into three levels based on reliability, as follows:
•Level 1 – observable inputs such as quoted prices in active markets for identical assets and liabilities;
•Level 2 – inputs other than quoted prices for identical assets in active markets that are observable either directly or indirectly; and
•Level 3 – unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.
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The Company’s financial assets and liabilities measured at fair value on a recurring basis are as follows (in millions):
| June 30, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Additional seller note | |||||||||||||||||||||||
| Total assets recorded at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Seller earnouts liability | |||||||||||||||||||||||
Tax receivable agreement liability (1) | |||||||||||||||||||||||
| Total liabilities recorded at fair value | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Additional seller note | |||||||||||||||||||||||
| Total assets recorded at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
| Seller earnouts liability | |||||||||||||||||||||||
Tax receivable agreement liability (1) | |||||||||||||||||||||||
| Total liabilities recorded at fair value | $ | $ | $ | $ | |||||||||||||||||||
_________________________________________________________
(1)Excludes the portion of liability related to the exchanges of Class A Units not measured at fair value on a recurring basis.
Derivatives
The valuations of the derivatives intended to mitigate our interest rate risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential non-performance risk.
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Additional Disclosures Regarding Fair Value Measurements
The fair value of the Company’s debt is classified as Level 2 and the Seller note is classified as Level 3 within the fair value hierarchy and corroborated by observable market data is as follows (in millions):
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Seller note | $ | $ | $ | $ | |||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Current portion of long-term debt, net | $ | $ | $ | $ | |||||||||||||||||||
| Long-term debt, net | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The carrying value of the Term Loan includes the outstanding principal balance, less any unamortized premium.
The carrying amounts of Cash and cash equivalents, Receivables, net and Accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments.
During each of the six months ended June 30, 2026 and 2025, there were no
17. Restructuring
Transformation Program
On February 20, 2023, the Company approved a two-year strategic transformation restructuring program (the “Transformation Program”) intended to accelerate the Company’s back-office infrastructure into the cloud and transform its operating model leveraging technology in order to reduce its overall future costs. The Transformation Program included process and system optimization, third party costs associated with technology infrastructure transformation, and elimination of full-time positions. From the inception of the plan through June 30, 2025, the Company incurred total expenses of $140 million, and the plan was complete. These charges were recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Post-Separation Plan
On May 6, 2025, the Audit Committee of the Board of Directors of the Company approved a program (the “Post-Separation Plan” or “PSP”) intended to further optimize our operations following the sale of the Divested Business in July 2024. The PSP includes simplifying our post-divestiture operating model, rationalizing our technology spend, expanding our use of artificial intelligence and automation and continued optimization of real estate. In light of evolving business conditions identified during the second quarter of 2026, we now expect to record approximately $95 million to $115 million in pre-tax restructuring costs and extend the duration of the PSP, which includes primarily cash severance payments and other restructuring cash payments and charges related to technology spend, professional services and optimization of real estate. The Company estimates an annual savings of up to $90 million after the PSP is completed. The PSP commenced in the second quarter of 2025 and is now expected to be substantially completed by the end of fiscal year 2026. These charges are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).
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The following table summarizes restructuring costs by type (in millions):
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Inception to Date | Estimated Remaining Cost | Estimated Total Cost | ||||||||||||||||||||||||||||||||||||||
| Transformation Program | ||||||||||||||||||||||||||||||||||||||||||||
| Severance and Related Benefits | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Other Restructuring Costs(1) | ||||||||||||||||||||||||||||||||||||||||||||
| Total Transformation Program Costs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Post-Separation Plan | ||||||||||||||||||||||||||||||||||||||||||||
| Severance and Related Benefits | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Other Restructuring Costs(1) | $ | |||||||||||||||||||||||||||||||||||||||||||
| Total PSP Costs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Total Restructuring Costs | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
As of June 30, 2026, approximately $12 million of the Company's total severance and related benefits restructuring liability was unpaid and recorded in Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets.
| Severance and Related Benefits | |||||||||||||||||
| Transformation Program | Post-Separation Plan | Total | |||||||||||||||
| (in millions) | |||||||||||||||||
| Accrued restructuring liability as of December 31, 2025 | $ | $ | $ | ||||||||||||||
| Severance and related benefits | |||||||||||||||||
| Cash payments | ( | ( | ( | ||||||||||||||
| Accrued restructuring liability as of June 30, 2026 | $ | $ | $ | ||||||||||||||
18. Employee Benefits
Defined Contribution Savings Plans
Certain of the Company’s employees participate in a defined contribution savings plan sponsored by the Company. For the three months ended June 30, 2026 and 2025, expenses were $7 million and $7 million, respectively. For the six months ended June 30, 2026 and 2025, expenses were $14 million and $14 million, respectively. Expenses were recognized in Cost of services, exclusive of depreciation and amortization and Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).
19. Commitments and Contingencies
Legal Matters
The Company is subject to various claims, tax assessments, lawsuits, and proceedings that arise in the ordinary course of business relating to the delivery of our services and the effectiveness of our technologies. The damages claimed in these matters are or may be substantial. Accruals for any exposures, and related insurance or other receivables, when applicable, are included on the Condensed Consolidated Balance Sheets and have been recognized in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss) to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Management believes that the reserves established are appropriate based on the facts currently known. The
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reserves recorded on the Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025 were not significant.
Putative Private Securities Class Action
On March 16, 2026, a putative private securities class action lawsuit was filed in the U.S. District Court for the Northern District of Illinois against the Company, its former Chief Executive Officer and Vice Chair of the Board of Directors, David D. Guilmette, and its former Chief Financial Officer, Jeremy J. Heaton, on behalf of certain purchasers of securities of the Company (the “Securities Class Action”). Claims in the Securities Class Action include (i) alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all Defendants, and (ii) alleged violations of Section 20(a) of the Exchange Act against the Company and/or David D. Guilmette and Jeremy J. Heaton. Plaintiffs in the Securities Class Action allege purported misstatements and omissions concerning the Company’s growth potential, ability to execute on business plans, financial stability, and the sustainability of its recently initiated dividend program. The Company intends to defend against the lawsuit vigorously. The lawsuit is in the early stages, and at this time the Company cannot reasonably estimate the likelihood or amount of any potential loss.
On April 20, 2026, a derivative complaint was filed in the U.S. District Court for the Northern District of Illinois against nominal Defendant Alight Inc.; its former Chief Executive Officer, David D. Guilmette; its former Chief Financial Officer, Jeremy J. Heaton; and eleven current and former members of the Alight Board. Along with alleged violations of Section 10(b) and Rule 10b-5 premised on similar allegations to those in the Securities Class Action, Plaintiff seeks to recover for alleged breach of fiduciary duty, gross mismanagement, waste of corporate assets, and unjust enrichment. The Company intends to defend against the lawsuit vigorously. The lawsuit is in the early stages, and at this time the Company cannot reasonably estimate the likelihood or amount of any potential loss.
Guarantees and Indemnifications
The Company provides a variety of service performance guarantees and indemnifications to its clients. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These notional amounts may bear no relationship to the future payments that may be made, if any, for these guarantees and indemnifications. To date, the Company has not been required to make any payment under any client arrangement as described above. The Company has assessed the current status of performance risk related to the client arrangements with performance guarantees and believes that any potential payments would be immaterial to the Condensed Consolidated Financial Statements.
Purchase Obligations
In March 2024, the Company entered into an agreement with a third-party provider in the ordinary course of business for the use of certain cloud services. Under this agreement, the Company is committed to purchase services totaling $250 million over a 5-year term. The Company’s total expected cash outflow for non-cancellable purchase obligations related to purchases of information technology assets and services is $69 million, $80 million, $62 million, and $17 million for the remainder of 2026 and the years ended 2027, 2028, and 2029, respectively and none thereafter, totaling $228 million.
Service Obligations
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes which are included elsewhere in this Quarterly Report on Form 10-Q and with the Annual Report. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially as a result of the factors discussed in "Item 1A. Risk Factors" in our Annual Report. See "Forward-Looking Statements" in this Quarterly Report on Form 10-Q.
BUSINESS
Overview
Alight is a technology-enabled services company delivering human capital management solutions to many of the world’s largest and most complex organizations. This includes the implementation and administration of employee benefits (e.g. health, wealth and leaves) solutions. Alight’s numerous solutions and services are utilized year-round by employees and their family members in support of their overall health, wealth and wellbeing goals. Participants can access their solutions digitally, including through a mobile application on Alight Worklife®, our intuitive, cloud-based employee engagement platform. Through Alight Worklife, the Company believes it is defining the future of employee benefits by providing an enterprise level, integrated offering designed to drive better outcomes for organizations and individuals.
We aim to be the pre-eminent employee experience partner by providing personalized experiences that help employees make the best decisions for themselves and their families about their health, wealth and wellbeing. At the same time, we help employers tackle their biggest people and business challenges by helping them understand prevalence, trends and risks to generate better outcomes for the future, such as improved employee productivity and retention, while also realizing a return on their people investment. Our data, analytics and AI allow us to deliver actionable insights that drive measurable outcomes, such as healthcare claims savings, for companies and their people.
Business Combination
On July 2, 2021 (the “Closing Date”), Alight Holding Company, LLC (the "Predecessor" or "Alight Holdings") completed a business combination (the "Business Combination") with a special purpose acquisition company. On the Closing Date, pursuant to the Business Combination Agreement, the special purpose acquisition company became a wholly owned subsidiary of Alight, Inc. (“Alight”, the “Company”, “we” “us” “our” or the “Successor”). As of June 30, 2026, Alight owned approximately 99% of the economic interest in the Predecessor, had 100% of the voting power and controlled the management of the Predecessor. The non-voting ownership percentage held by noncontrolling interest was less than 1% as of June 30, 2026.
Divestiture
On July 12, 2024, the Company, completed the previously announced sale (the “Transaction”) of the “Divested Business” entities affiliated with H.I.G. Capital, L.L.C. (collectively, “Buyer”), pursuant to the terms of the Stock and Asset Purchase Agreement (the “Purchase Agreement”), dated as of March 20, 2024. Under the terms of the Purchase Agreement, the Buyer agreed to acquire the Divested Business for total consideration of up to $1.2 billion, in the form of (1) $1.0 billion in cash (the “Closing Cash Consideration”) payable at the closing of the transactions (the “Closing”) contemplated by the Purchase Agreement, (2) a note with an aggregate principal amount of $50 million, and an initial fair value of $35 million as of July 12, 2024 issued at Closing (the “Seller Note”) by an indirect parent of Buyer (the “Note Issuer”) and (3) contingent upon the financial performance of the Divested Business for the 2025 fiscal year, a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) and an initial fair value of $43 million as of July 12, 2024 to be issued by the Note Issuer. The Seller Note has a stated interest rate of 8.0% which is expected to mature in July 2030.
Reverse Stock Split
At Alight's 2026 Annual Meeting of Stockholders held on June 10, 2026, stockholders approved a reverse stock split of Alight's outstanding common stock and a corresponding decrease in the number of authorized shares of each class and series of common stock (the "Reverse Stock Split"). On June 10, 2026, the Company's Board of Directors determined to effectuate the Reverse Stock Split at a ratio of 1-for-20. The Reverse Stock Split became effective as of Tuesday, June 30, 2026, at 5:00 p.m. Eastern Time (the "Effective Time"). Alight’s Class A Common Stock began trading on a split-adjusted basis on the NYSE under the existing symbol (ALIT) when the market opened on Wednesday, July 1, 2026. Proportionate adjustments were also made to Alight’s outstanding equity-based awards and equity plans as well as to the outstanding limited liability company units of Alight Holdings in accordance with the terms of the applicable agreements. All issued and outstanding common stock, share price, authorized share, weighted average shares outstanding, earnings
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(loss) per share, share-based compensation awards, outstanding Alight Holdings units and per share amounts contained in this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the Reverse Stock Split for all periods presented.
EXECUTIVE SUMMARY OF FINANCIAL RESULTS
The following table sets forth our historical results of operations for the periods indicated below:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Revenue | $ | 511 | $ | 528 | $ | 1,045 | $ | 1,076 | |||||||||||||||||||||
| Cost of services, exclusive of depreciation and amortization | 337 | 325 | 684 | 676 | |||||||||||||||||||||||||
| Depreciation and amortization | 32 | 27 | 63 | 53 | |||||||||||||||||||||||||
| Gross Profit | 142 | 176 | 298 | 347 | |||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||||
| Selling, general and administrative | 109 | 130 | 214 | 234 | |||||||||||||||||||||||||
| Depreciation and intangible amortization | 73 | 73 | 146 | 148 | |||||||||||||||||||||||||
| Goodwill impairment | — | 983 | — | 983 | |||||||||||||||||||||||||
| Total Operating expenses | 182 | 1,186 | 360 | 1,365 | |||||||||||||||||||||||||
| Operating Income (Loss) From Continuing Operations | (40) | (1,010) | (62) | (1,018) | |||||||||||||||||||||||||
| Other (Income) Expense | |||||||||||||||||||||||||||||
| (Gain) Loss from change in fair value of financial instruments | — | 28 | — | 20 | |||||||||||||||||||||||||
| (Gain) Loss from change in fair value of tax receivable agreement | (46) | 23 | (65) | 32 | |||||||||||||||||||||||||
| Interest expense | 24 | 22 | 48 | 44 | |||||||||||||||||||||||||
| Other (income) expense, net | 1 | (7) | — | (18) | |||||||||||||||||||||||||
| Total Other (income) expense, net | (21) | 66 | (17) | 78 | |||||||||||||||||||||||||
| Income (Loss) From Continuing Operations Before Taxes | (19) | (1,076) | (45) | (1,096) | |||||||||||||||||||||||||
| Income tax expense (benefit) | (9) | (3) | (16) | (6) | |||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | (10) | (1,073) | (29) | (1,090) | |||||||||||||||||||||||||
| Net Income (Loss) From Discontinued Operations, Net of Tax | — | (1) | — | (9) | |||||||||||||||||||||||||
| Net Income (Loss) | (10) | (1,074) | (29) | (1,099) | |||||||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | — | (1) | — | (1) | |||||||||||||||||||||||||
| Net Income (Loss) Attributable to Alight, Inc. | $ | (10) | $ | (1,073) | $ | (29) | $ | (1,098) | |||||||||||||||||||||
REVIEW OF RESULTS
Key Components of Our Continuing Operations
Revenue
Our clients’ demand for our services ultimately drives our revenues. We generate primarily all of our revenue, which is highly recurring, from fees for services provided from contracts across all solutions, which is primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable). Our contracts typically have three to five-year terms for ongoing services with mutual renewal options. The majority of the Company’s revenue is recognized over time when control of the promised services is transferred, and the customers simultaneously receive and consume the benefits of our services. Payment terms are consistent with industry practice. We calculate growth rates for each of our solutions in relation to recurring revenues and revenues from project work. One of the components of our growth in recurring revenues is the increase in net commercial activity which reflects items such as client wins and losses (“Net Commercial Activity”). We define client wins as sales to new clients and sales of new solutions to existing clients. We define client losses as instances where clients do not renew or terminate their arrangements in relation to individual solutions or all of the solutions that we provide. We use annual revenue retention rates as an important measure to manage our business. We calculate annual revenue retention on a gross basis by identifying the clients from whom we generated
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revenue in the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization includes compensation-related and vendor costs directly attributable to client-related services and costs related to application development and client-related infrastructure.
Depreciation and Amortization
Depreciation and amortization expenses include the depreciation and amortization related to our hardware, software and application development. Depreciation and amortization may increase or decrease in absolute dollars in future periods depending on the future level of capital investments in hardware, software and application development.
Selling, General and Administrative
Selling, general and administrative expenses include compensation-related costs for administrative and management employees, system and facilities expenses, and costs for external professional and consulting services.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses consist of charges relating to the depreciation of the property and equipment used in our business and the amortization of acquired customer-related and contract based intangible assets and technology related intangible assets. Depreciation and intangible amortization may increase or decrease in absolute dollars in future periods depending on the future level of capital investments in hardware and other equipment as well as amortization expense associated with future acquisitions.
Goodwill impairment
Goodwill impairment consists of charges relating to Goodwill. We review goodwill for impairment annually on October 1st and more frequently if events or changes in circumstances indicate that an impairment may exist. If the carrying value of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is calculated and an
impairment loss equal to the excess is recorded.
(Gain) Loss from Change in Fair Value of Financial Instruments
(Gain) loss from change in fair value of financial instruments includes the impact of the revaluation to fair value at the end of each reporting period for the Seller Earnouts contingent consideration and the Additional Seller Note.
(Gain) Loss from Change in Fair Value of Tax Receivable Agreement
(Gain) loss from change in fair value of Tax Receivable Agreement ("TRA") includes the impact of the revaluation to fair value at the end of each reporting period.
Interest Expense
Interest expense primarily includes interest expense related to our outstanding debt and is net of interest rate swap derivative gains recognized and interest income.
Other (Income) Expense, net
Other (income) expense, net includes non-operating expenses and income, including realized (gains) and losses from remeasurement of foreign currency transactions and Transition Services Agreement (the "TSA") income for providing various corporate services to the Divested Business.
Results of Continuing Operations for the Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Revenue
Revenues were $511 million for the three months ended June 30, 2026 as compared to $528 million for the prior year period. The decrease of $17 million, or 3.2%, was driven by lower Net Commercial Activity, partially offset by higher project revenue. The Company continues to experience the impact from prior year client losses and lower bookings, which has impacted revenue growth and is expected to continue to impact revenue growth during the remainder of fiscal year 2026.
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Recurring revenues for the three months ended June 30, 2026 decreased by $21 million, or 4.3%, from $492 million in the prior year period to $471 million, primarily driven by lower Net Commercial Activity.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization increased $12 million, or 3.7%, for the three months ended June 30, 2026 as compared to the prior year period and was primarily attributable to higher compensation expense.
Depreciation and Amortization
Depreciation and amortization expenses increased by $5 million, or 18.5%, as compared to the prior year period, primarily driven by capitalized software.
Selling, General and Administrative
Selling, general and administrative expenses decreased $21 million, or 16.2%, for the three months ended June 30, 2026 primarily driven by lower severance and other restructuring costs.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses were consistent with the prior year period.
Goodwill Impairment
There was no goodwill impairment charge recognized for the three months ended June 30, 2026 as compared to the prior year period, where we identified a goodwill impairment in the Health Solutions reporting unit and recorded a $983 million non-cash impairment charge.
Change in Fair Value of Financial Instruments
There was no gain or loss related to the change in the fair value of financial instruments for the three months ended June 30, 2026 compared to a loss of $28 million for the prior year period. We are required to remeasure the financial instruments at the end of each reporting period and reflect a gain or loss for the change in fair value of the financial instruments in the period the change occurred. Changes in the fair value are primarily due to changes in the underlying assumptions of each respective instrument, including changes in the risk-free interest rate, volatility, cost of debt, forecasts, and the closing stock price for the period. See Note 14, "Financial Instruments" within the Condensed Consolidated Financial Statements for additional information.
Change in Fair Value of Tax Receivable Agreement
The change in the fair value of the TRA resulted in a gain of $46 million for the three months ended June 30, 2026, an increase of $69 million compared to a loss of $23 million for the prior year period. The change in fair value was due to changes in the Company's assumptions related to the timing of the utilization of tax attributes during the term of the TRA, changes in the discount rate and the passage of time.
Interest Expense
Interest expense increased $2 million for the three months ended June 30, 2026 as compared to the prior year period. The increase was due to higher interest expense net of swaps.
Other (Income) Expense, net
Under the terms of the TSA described in Note 4, "Discontinued Operations" within the Condensed Consolidated Financial Statements, the Company had provided technology infrastructure, risk and security, and various other corporate services to the Divested Business subsequent to the close. For the three months ended June 30, 2026, we recorded an immaterial amount of income for services performed under the TSA. For the three months ended June 30, 2025, we recorded $8 million for services performed under the TSA. TSA services income is recorded in Other (income) expense, net. The corresponding expenses were recognized in Cost of services, exclusive of depreciation and amortization, and Selling, general and administrative expense in the Condensed Consolidated Statement of Comprehensive Income (Loss).
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Income (Loss) From Continuing Operations Before Taxes
Loss from continuing operations before taxes was $19 million for the three months ended June 30, 2026 as compared to loss from continuing operations before taxes of $1,076 million for the three months ended June 30, 2025. The decrease in loss was primarily attributable to a decrease in the non-cash goodwill impairment and the change in fair value of the TRA, partially offset by lower gross profit.
Income Tax Expense (Benefit)
Income tax benefit was $9 million for the three months ended June 30, 2026, as compared to an income tax benefit of $3 million for the prior year period. The effective tax rate of 47% for the three months ended June 30, 2026 was higher than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, and changes in valuation allowance. The effective tax rate of 0% for the three months ended June 30, 2025 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, changes in valuation allowance, and certain non-recurring items including non-deductible goodwill impairment. See Note 7, “Income Taxes” within the Condensed Consolidated Financial Statements for additional information.
Results of Continuing Operations for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Revenue
Revenues were $1,045 million for the six months ended June 30, 2026 as compared to $1,076 million for the prior year period. The decrease of $31 million, or 2.9%, was driven by lower Net Commercial Activity, partially offset by higher project revenue. The Company continues to experience the impact from prior year client losses and lower bookings, which has impacted revenue growth and is expected to continue to impact revenue growth during the remainder of fiscal year 2026.
Recurring revenues for the six months ended June 30, 2026 decreased by $43 million, or 4.2%, from $1,012 million in the prior year period to $969 million, primarily driven by lower Net Commercial Activity.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization increased $8 million, or 1.2%, for the six months ended June 30, 2026 as compared to the prior year period and was primarily attributable to higher compensation expense.
Depreciation and Amortization
Depreciation and amortization expenses increased by $10 million, or 18.9%, as compared to the prior year period, primarily driven by capitalized software.
Selling, General and Administrative
Selling, general and administrative expenses decreased $20 million, or 8.5%, for the six months ended June 30, 2026 and were primarily driven by lower severance and other restructuring costs.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses were consistent with the prior year period.
Goodwill Impairment
There was no goodwill impairment charge recognized for the six months ended June 30, 2026 as compared to the prior year period, where we identified a goodwill impairment in the Health Solutions reporting unit and recorded a $983 million non-cash impairment charge.
Change in Fair Value of Financial Instruments
There was no gain or loss related to the change in the fair value of financial instruments for the six months ended June 30, 2026 compared to a loss of $20 million for the prior year period. We are required to remeasure the financial instruments at the end of each reporting period and reflect a gain or loss for the change in fair value of the financial instruments in the period the change occurred. Changes in the fair value are primarily due to changes in the underlying assumptions of each respective instrument, including changes in the risk-free interest rate, volatility, cost of debt, forecasts, and the closing stock price for the period. See Note 14, "Financial Instruments" within the Condensed Consolidated Financial Statements for additional information.
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Change in Fair Value of Tax Receivable Agreement
The change in the fair value of the TRA resulted in a gain of $65 million for the six months ended June 30, 2026, an increase of $97 million compared to a loss of $32 million for the prior year period. The change in fair value was due to changes in the Company's assumptions related to the timing of the utilization of tax attributes during the term of the TRA, changes in the discount rate and the passage of time.
Interest Expense
Interest expense increased $4 million for the six months ended June 30, 2026 as compared to the prior year period. The increase was due to higher interest expense net of swaps and lower interest income.
Other (Income) Expense, net
Under the terms of the TSA described in Note 4, "Discontinued Operations" within the Condensed Consolidated Financial Statements, the Company had provided technology infrastructure, risk and security, and various other corporate services to the Divested Business subsequent to the close. For the six months ended June 30, 2026, we recorded $1 million of income for services performed under the TSA. For the six months ended June 30, 2025, we recorded $18 million for services performed under the TSA. TSA income is recorded in Other (income) expense, net. The corresponding expenses were recognized in Cost of services, exclusive of depreciation and amortization, and Selling, general and administrative expense in the Condensed Consolidated Statement of Comprehensive Income (Loss).
Income (Loss) From Continuing Operations Before Taxes
Loss from continuing operations before taxes was $45 million for the six months ended June 30, 2026 as compared to loss from continuing operations before taxes of $1,096 million for the six months ended June 30, 2025. The decrease in loss was primarily attributable to the decrease in the non-cash goodwill impairment and the change in fair value of the TRA, partially offset by lower gross profit.
Income Tax Expense (Benefit)
Income tax benefit was $16 million for the six months ended June 30, 2026, as compared to an income tax benefit of $6 million for the prior year period. The effective tax rate of 36% for the six months ended June 30, 2026 was higher than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, and changes in valuation allowance. The effective tax rate of 1% for the six months ended June 30, 2025 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, changes in valuation allowance, and certain non-recurring items including non-deductible goodwill impairment. See Note 7, “Income Taxes” within the Condensed Consolidated Financial Statements for additional information.
Non-GAAP Financial Measures
The presentation of non-GAAP financial measures is used to enhance our management and stakeholders understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. Management also uses supplemental non-GAAP financial measures to manage and evaluate the business, make planning decisions, allocate resources and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business.
The measures referred to as “adjusted”, have limitations as analytical tools, and such measures should not be considered either in isolation or as a substitute for net income or other methods of analyzing our results as reported under U.S. GAAP. Some of the limitations are:
•Measure does not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
•Measure does not reflect our interest expense or the cash requirements to service interest or principal payments on our indebtedness;
•Measure does not reflect our tax expense or the cash requirements to pay our taxes, including payments related to the Tax Receivable Agreement;
•Measure does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
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•Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often need to be replaced in the future, and the adjusted measure does not reflect any cash requirements for such replacements; and
•Other companies may calculate adjusted measures differently, limiting its usefulness as a comparative measure.
Adjusted Net Income From Continuing Operations and Adjusted Diluted Earnings Per Share From Continuing Operations
Adjusted Net Income From Continuing Operations, which is defined as net income (loss) from continuing operations attributable to Alight, Inc., adjusted for intangible amortization and the impact of certain non-cash items, including goodwill impairment charges, that we do not consider in the evaluation of ongoing operational performance, is a non-GAAP financial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations.
Adjusted Diluted Earnings Per Share From Continuing Operations is defined as Adjusted Net Income From Continuing Operations divided by the adjusted weighted-average number of shares of common stock, diluted. The adjusted weighted shares calculation assumes the full exchange of the non-controlling interest units and the full amount of non-vested time-based restricted units that were determined to be antidilutive and therefore excluded from the U.S. GAAP diluted earnings per share. Adjusted Diluted Earnings Per Share From Continuing Operations, including the adjusted weighted-average number of shares, is used by us and our investors to evaluate our core operating performance and to benchmark our operating performance against our competitors.
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A reconciliation of Adjusted Net Income (Loss) From Continuing Operations and the computation of Adjusted Diluted Earnings Per Share From Continuing Operations is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in millions, except share and per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
Net Income (Loss) From Continuing Operations Attributable to Alight, Inc. (1) | $ | (10) | $ | (1,072) | $ | (29) | $ | (1,089) | |||||||||||||||
| Conversion of noncontrolling interest | — | (1) | — | (1) | |||||||||||||||||||
| Intangible amortization | 70 | 70 | 140 | 141 | |||||||||||||||||||
| Share-based compensation | 7 | 5 | 11 | 11 | |||||||||||||||||||
Transaction and integration expenses (2) | 3 | 5 | 7 | 8 | |||||||||||||||||||
| Restructuring | 16 | 36 | 28 | 40 | |||||||||||||||||||
| (Gain) Loss from change in fair value of financial instruments | — | 28 | — | 20 | |||||||||||||||||||
| (Gain) Loss from change in fair value of tax receivable agreement | (46) | 23 | (65) | 32 | |||||||||||||||||||
Goodwill impairment and other (3) | 2 | 984 | 3 | 985 | |||||||||||||||||||
Tax effect of adjustments (4) | (16) | (22) | (34) | (39) | |||||||||||||||||||
| Adjusted Net Income From Continuing Operations | $ | 26 | $ | 56 | $ | 61 | $ | 108 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding - basic | 26,351,020 | 26,423,496 | 26,294,427 | 26,518,940 | |||||||||||||||||||
| Dilutive effect of the exchange of noncontrolling interest units | — | — | — | — | |||||||||||||||||||
| Dilutive effect of RSUs | — | — | — | — | |||||||||||||||||||
| Weighted average shares outstanding - diluted | 26,351,020 | 26,423,496 | 26,294,427 | 26,518,940 | |||||||||||||||||||
Exchange of noncontrolling interest units(5) | 24,217 | 25,505 | 24,217 | 25,505 | |||||||||||||||||||
Impact of unvested RSUs(6) | 2,146,325 | 370,259 | 2,146,325 | 370,259 | |||||||||||||||||||
Adjusted shares of Class A Common Stock outstanding - diluted(7)(8) | 28,521,562 | 26,819,260 | 28,464,969 | 26,914,704 | |||||||||||||||||||
| Basic (Net Loss) Earnings Per Share From Continuing Operations | $ | (0.38) | $ | (40.57) | $ | (1.10) | $ | (41.06) | |||||||||||||||
| Diluted (Net Loss) Earnings Per Share From Continuing Operations | $ | (0.38) | $ | (40.57) | $ | (1.10) | $ | (41.06) | |||||||||||||||
| Adjusted Diluted Earnings Per Share From Continuing Operations | $ | 0.91 | $ | 2.09 | $ | 2.14 | $ | 4.01 | |||||||||||||||
(1)Excludes the impact of discontinued operations.
(2)Transaction and integration expenses primarily relate to acquisitions and divestiture activities.
(3)Goodwill impairment and other primarily includes a $983 million non-cash goodwill impairment charge for each of the three and six months ended June 30, 2025 related to the Company's Health Solutions reporting unit.
(4)Income tax effects have been calculated based on statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix of income and adjusted for significant changes in fair value measurement.
(5)Assumes the full exchange of the units held by noncontrolling interests for shares of Class A Common Stock of Alight, Inc. pursuant to the exchange agreement.
(6)Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes.
(7)Excludes two tranches of contingently issuable seller earnout shares: (i) 0.4 million shares will be issued if the Company's Class A Common Stock's volume-weighted average price ("VWAP") is >$250.00 for any 20 trading days within a consecutive period of 30 trading days; (ii) 0.4 million shares will be issued if the Company's Class A Common Stock VWAP is >$300.00 for any 20 trading days within a consecutive period of 30 trading days. Both tranches have a seven-year duration.
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(8)Excludes approximately 1.9 million and 0.3 million performance-based units, which represents the gross number of shares expected to vest based on achievement of the respective performance and market conditions as of June 30, 2026 and 2025, respectively.
Adjusted EBITDA From Continuing Operations and Adjusted EBITDA Margin From Continuing Operations
Adjusted EBITDA From Continuing Operations is defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items, including goodwill impairments, that we do not consider in the evaluation of ongoing operational performance. Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margin From Continuing Operations are non-GAAP financial measures used by management and our stakeholders to provide useful supplemental information that enables a better comparison of our performance across periods as well as to evaluate our core operating performance. A reconciliation of Adjusted EBITDA From Continuing Operations to Net Income (Loss) From Continuing Operations is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | (10) | $ | (1,073) | $ | (29) | $ | (1,090) | |||||||||||||||
| Interest expense | 24 | 22 | 48 | 44 | |||||||||||||||||||
| Income tax expense (benefit) | (9) | (3) | (16) | (6) | |||||||||||||||||||
| Depreciation | 35 | 30 | 69 | 60 | |||||||||||||||||||
| Intangible amortization | 70 | 70 | 140 | 141 | |||||||||||||||||||
| EBITDA From Continuing Operations | 110 | (954) | 212 | (851) | |||||||||||||||||||
| Share-based compensation | 7 | 5 | 11 | 11 | |||||||||||||||||||
Transaction and integration expenses (1) | 3 | 5 | 7 | 8 | |||||||||||||||||||
| Restructuring | 16 | 36 | 28 | 40 | |||||||||||||||||||
| (Gain) Loss from change in fair value of financial instruments | — | 28 | — | 20 | |||||||||||||||||||
| (Gain) Loss from change in fair value of tax receivable agreement | (46) | 23 | (65) | 32 | |||||||||||||||||||
Goodwill impairment and other (2) | 2 | 984 | 3 | 985 | |||||||||||||||||||
Adjusted EBITDA From Continuing Operations (3) | $ | 92 | $ | 127 | $ | 196 | $ | 245 | |||||||||||||||
| Revenue | $ | 511 | $ | 528 | $ | 1,045 | $ | 1,076 | |||||||||||||||
Adjusted EBITDA Margin From Continuing Operations (4) | 18.0 | % | 24.1 | % | 18.8 | % | 22.8 | % | |||||||||||||||
(1)Transaction and integration expenses primarily relate to acquisition and divestiture activities.
(2)Goodwill impairment and other primarily includes a $983 million non-cash goodwill impairment charge for each of the three and six months ended June 30, 2025 related to the Company's Health Solutions reporting unit.
(3)Adjusted EBITDA excludes the impact of discontinued operations.
(4)Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations as a percentage of revenue.
Employer Solutions Results of Operations for the Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025
Revenue Disaggregation
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Employer Solutions Revenue | |||||||||||||||||||||||
| Recurring | $ | 471 | $ | 492 | $ | 969 | $ | 1,012 | |||||||||||||||
| Project | 40 | 36 | 76 | 64 | |||||||||||||||||||
| Total Employer Solutions Revenue | $ | 511 | $ | 528 | $ | 1,045 | $ | 1,076 | |||||||||||||||
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Employer Solutions revenue was $511 million for the three months ended June 30, 2026 as compared to $528 million for the prior year period. The overall decrease of $17 million was primarily driven by decreases in Net Commercial Activity, partially offset by an increase in project revenue.
Employer Solutions revenue was $1,045 million for the six months ended June 30, 2026 as compared to $1,076 million for the prior year period. The overall decrease of $31 million was primarily driven by decreases in Net Commercial Activity, partially offset by an increase in project revenue.
Gross Profit to Adjusted Gross Profit Reconciliation for the Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025
Adjusted gross profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation. Adjusted gross profit margin percent is defined as adjusted gross profit divided by revenue. Management uses adjusted gross profit and adjusted gross profit margin percent as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting adjusted gross profit and adjusted gross profit margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Gross Profit | $ | 142 | $ | 176 | $ | 298 | $ | 347 | |||||||||||||||
| Add: stock-based compensation | 2 | 2 | 4 | 5 | |||||||||||||||||||
| Add: depreciation and amortization | 32 | 27 | 63 | 53 | |||||||||||||||||||
| Adjusted Gross Profit | 176 | $ | 205 | $ | 365 | $ | 405 | ||||||||||||||||
| Gross Profit Margin | 27.8 | % | 33.3 | % | 28.5 | % | 32.2 | % | |||||||||||||||
| Adjusted Gross Profit Margin | 34.4 | % | 38.8 | % | 34.9 | % | 37.6 | % | |||||||||||||||
Employer Solutions gross profit was $142 million for the three months ended June 30, 2026 compared to $176 million for the prior year period. The decrease of $34 million was primarily driven by lower revenues. Employer Solutions adjusted gross profit decreased $29 million for the three months ended June 30, 2026 to $176 million from $205 million in the prior year period, primarily driven by lower revenues.
Employer Solutions gross profit was $298 million for the six months ended June 30, 2026 compared to $347 million for the prior year period. The decrease of $49 million was driven by lower revenues. Employer Solutions adjusted gross profit decreased $40 million for the six months ended June 30, 2026 to $365 million from $405 million in the prior year period, primarily driven by lower revenues.
Free Cash Flow Reconciliation
Free Cash Flow is defined as cash provided by operating activities net of capital expenditures. Management believes that free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make strategic acquisitions and investments and for certain other activities such as dividends and stock repurchases.
| Six Months Ended | |||||||||||
| (in millions) | June 30, 2026 | June 30, 2025 | |||||||||
| Non-GAAP free cash flow reconciliation: | |||||||||||
| Cash provided by operating activities - continuing operations | $ | 152 | $ | 159 | |||||||
| Capital expenditures | (51) | (57) | |||||||||
| Non-GAAP free cash flow | $ | 101 | $ | 102 | |||||||
Cash provided by operating activities - continuing operations was $152 million for the six months ended June 30, 2026 as compared to $159 million for the six months ended June 30, 2025. The decrease in cash provided by operating activities - continuing operations was primarily due to lower gross profit partially offset by changes in our net working capital requirements.
Free cash flow was $101 million for the six months ended June 30, 2026 and was consistent with the prior year period primarily due to a decrease in cash provided from operations, offset by lower capital expenditures.
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LIQUIDITY AND CAPITAL RESOURCES
Executive Summary
Our primary sources of liquidity include our existing cash and cash equivalents, cash flows from operations and availability under our revolving credit facility. Our primary uses of liquidity are operating expenses, funding of our debt requirements and capital expenditures.
We believe that our available cash and cash equivalents, cash flows from operations and availability under our revolving credit facility will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, payments on our TRA and anticipated working capital requirements for the foreseeable future. We will continue to closely monitor and proactively manage our liquidity position in consideration of the evolving economic outlook and changing interest rate environment.
Indebtedness
As of June 30, 2026, we had outstanding long-term debt in the form of term loans for an aggregate principal amount of $1,976 million, which will mature in 2028. In addition, we have a $330 million revolving credit facility with a maturity date of May 31, 2030. As of June 30, 2026, no amounts were borrowed or outstanding under our revolving credit facility agreement.
Share Repurchases
In August 2022, we established a repurchase program allowing for authorized share repurchases. Repurchases may be conducted through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, including pursuant to Rule 10b5-1 trading plans. The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. The stock repurchase program does not obligate Alight to acquire any amount of common stock, and the program may be suspended or terminated at any time by Alight at its discretion without prior notice. The Company's 1-for-20 Reverse Stock Split, effective June 30, 2026, did not impact the total dollar amount of remaining share repurchase authorization under the program.
During the three and six months ended June 30, 2026, the Company did not repurchase any shares of Class A Common Stock. As of June 30, 2026, the total remaining amount authorized for repurchase was $216 million.
Cash Dividends
On February 19, 2026, the Company announced it replaced its cash dividend on its Class A common stock, par value $0.0001 per share, with other capital allocation activities, including deleveraging the balance sheet and continuing our share repurchase program, subject to market and other conditions.
Cash on our balance sheet includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown in Fiduciary assets on the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, with a corresponding amount in Fiduciary liabilities. Fiduciary funds are not used for general corporate purposes and are not a source of liquidity for us.
The following table provides a summary of cash flows from continuing operating, investing, and financing activities for the periods presented.
| Six Months Ended June 30, | |||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||
| Cash provided by operating activities - continuing operations | $ | 152 | $ | 159 | |||||||||||||
| Cash provided by (used in) investing activities - continuing operations | (51) | (57) | |||||||||||||||
| Cash used in financing activities - continuing operations | (173) | (242) | |||||||||||||||
Operating Activities
Cash provided by operating activities was $152 million for the six months ended June 30, 2026 as compared to $159 million for the six months ended June 30, 2025. The decrease in cash provided by operating activities was primarily due to lower gross profit partially offset by changes in our net working capital requirements.
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Investing Activities
Cash used in investing activities was $51 million for the six months ended June 30, 2026 as compared to cash used in investing activities of $57 million for the six months ended June 30, 2025. The decrease in cash used in investing activities was primarily driven by lower capital expenditures.
Financing Activities
Cash used in financing activities for the six months ended June 30, 2026 was $173 million as compared to cash used in financing activities of $242 million for the six months ended June 30, 2025. The primary drivers of cash used in financing activities for the six months ended June 30, 2026 were $136 million of TRA payments, a $15 million net decrease in fiduciary liabilities, $9 million of finance lease payments and $10 million of debt repayments. The decrease in fiduciary cash was primarily due to timing of client funding and subsequent disbursement of payments.
Cash, Cash Equivalents and Fiduciary Assets
At June 30, 2026, our cash and cash equivalents were $215 million, a decrease of $58 million from December 31, 2025. Of the total balances of cash and cash equivalents as of June 30, 2026 and December 31, 2025, none of the balances were restricted as to use.
Some of our client agreements require us to hold funds on behalf of clients to pay obligations on their behalf. The levels of Fiduciary assets and liabilities can fluctuate significantly, depending on when we collect the amounts from clients and make payments on their behalf. Such funds are not available to service our debt or for other corporate purposes. There is typically a short period of time between when the Company receives funds and when it pays obligations on behalf of clients. We are entitled to retain investment income earned on fiduciary funds, when investment strategies are deployed, in accordance with industry custom and practice, which has historically been immaterial. In our Condensed Consolidated Balance Sheets, the amount we report for Fiduciary assets and Fiduciary liabilities are equal. Our continuing operations Fiduciary assets included cash of $233 million and $248 million at June 30, 2026 and December 31, 2025, respectively.
Other Liquidity Matters
Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. For further information, see the “Risk Factors” section within Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.
Tax Receivable Agreement
In connection with the Business Combination, we entered into the TRA with certain of our pre-Business Combination owners that provides for the payment by Alight to such owners of 85% of the benefits that Alight is deemed to realize as a result of the Company’s share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the TRA.
Actual tax benefits realized by Alight may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Alight may make under the TRA will be substantial. During the first quarter of 2026, the Company received an Objection Notice from the TRA Party Representative with respect to certain methodology used to prepare a portion of the Tax Benefit Schedule that calculates our 2026 Tax Benefit Payments to the TRA Parties (all capitalized terms as defined in the TRA). The Company disagrees with the TRA Party Representative’s assertions and is proceeding through the dispute mechanisms as set forth in the TRA agreement. During the six months ended June 30, 2026, consistent with the TRA agreement, the Company paid $136 million, representing what it considered the undisputed amount. The Company is vigorously contesting the TRA Party Representative's assertions in the Objection Notice. If the TRA Party Representative nonetheless prevails in its position or the Company resolves the dispute consensually, the Company currently estimates that a resolution could increase the 2026 Tax Benefit Payments by up to $40 million above the undisputed amount paid during the six months ended June 30, 2026, plus interest as further detailed in the TRA. The Objection Notice does not address the Company's current 2027 Tax Benefit Payments estimate.
Contractual Obligations and Commitments
Our material contractual obligations include debt, non-cancellable contractual service, purchase obligations and lease obligations. For additional information regarding debt and non-cancellable contractual service and purchases
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obligations, see the Condensed Consolidated Financial Statements within Item 1 of this Quarterly Report on Form 10-Q, Note 8, “Debt”, and Note 19, “Commitments and Contingencies”.
On September 1, 2018, the Company executed an agreement to form a strategic partnership with Wipro, a leading global information technology, consulting and business process services company. Effective April 1, 2025, the Company executed Amendment No. 2 which adjusted the mix of services provided by Wipro. Effective January 25, 2026, the Company executed Amendment No. 5 to extend the agreement through August 31, 2029. The Company may terminate certain elements of its arrangement with Wipro for cause or for the Company’s convenience with no penalty prior to August 31, 2029. If an unconsumed portion of the obligation remains after August 31, 2029, then the Company shall satisfy the obligation by paying Wipro the remaining unconsumed portion by September 30, 2029. Following the amendments, the Company’s expected remaining cash outflow for non-cancellable service obligations related to our strategic partnership with Wipro is $50 million, $75 million, and $37 million for the remainder of 2026 and the years ended 2027 and 2028, respectively, and none thereafter, totaling $162 million.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes from the Critical Accounting Estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025. Please refer to "Critical Accounting Estimates" described in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For quantitative and qualitative disclosures about market risk, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report. Our exposures to market risk have not changed materially since the filing of the Annual Report.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required or necessary disclosures. Based on the aforementioned evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2026, the Company's disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are a party to a variety of legal proceedings that arise in the normal course of our business. While the results of these legal proceedings cannot be predicted with certainty, we believe that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on our results of operations or financial condition. The information required with respect to this item can be found under Note 19, "Commitments and Contingencies" in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report and is incorporated by reference into this Item 1.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q are any of the risks described in our Annual Report filed with the SEC on February 24, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. There have been no material changes from the risk factors previously disclosed under "Part I, Item IA. Factors" in the Company’s filing mentioned in the aforementioned paragraph.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
On August 1, 2022, the Company's Board of Directors authorized a share repurchase program (the "Program"), under which the Company may repurchase issued and outstanding shares of Class A Common Stock from time to time, depending on market conditions and alternate uses of capital. The Program may be effected through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, including through Rule 10b5-1 trading plans. The Program has no expiration date and may be suspended or discontinued at any time. The Program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to any number of shares being repurchased by the Company. We did not purchase any shares of our Class A Common Stock during the three months ended June 30, 2026.
Item 5. Other Information.
Trading Arrangements
During the three months ended June 30, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
Adoption of Amended and Restated Bylaws
On June 26, 2026, the Company’s Board of Directors approved an amendment and restatement of the Company’s amended and restated bylaws (as amended, the “Bylaws”), effective June 30, 2026, to, among other things, add certain procedural and informational requirements for stockholders that intend to use the advance notice provisions set forth in the Bylaws, including if such stockholder intends to use the Universal Proxy Rule under Exchange Act Rule 14a-19 (the “Universal Proxy Rule”), as further described below.
The amendments require stockholders or any proponent persons who intend to engage in a solicitation with respect to a director nomination pursuant to the Bylaws to provide to the Company (i) a statement disclosing the name of each participant in such solicitation (as defined in Item 4 of Schedule 14A under the Exchange Act) and (ii) a representation that such stockholder or other proponent person, if any, intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Company’s capital stock required under the Universal Proxy Rule. If any stockholder provides notice of a proposed nomination for election to the Board pursuant to the Universal Proxy Rule, the amended Bylaws require such stockholder to deliver to the Company reasonable evidence that such stockholder has met the requirements thereof. Additionally, stockholders who nominate directors for election are required to deliver written questionnaires requesting certain information from director nominees, as described in further detail in the Bylaws.
In addition, the amendments provide that any stockholder soliciting proxies from other stockholders must use a proxy card color other than white, which color is reserved for the exclusive use by the Board of Directors.
Finally, the Bylaws set forth certain procedures for stockholders who attempt but fail to comply with the Universal Proxy Rule, including the ability of the Company to disregard any proxies or votes solicited for any related nominees.
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The foregoing description is qualified in its entirety by reference to the Bylaws, which are attached hereto as Exhibit 3.2 and incorporated herein by reference.
Item 6. Exhibits.
Exhibit Number | Description | ||||||||||
2.1† | Stock and Asset Purchase Agreement, dated as of March 20, 2024, by and among Tempo Acquisition LLC, Axiom Buyer, LLC, the Company (for the limited purposes set forth therein) and Axiom Intermediate I, LLC (for the limited purposes set forth therein) (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 20, 2024). | ||||||||||
| 3.1 | Restated Certificate of Incorporation of Alight, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2026). | ||||||||||
| 3.2 | Second Amended and Restated Bylaws of Alight, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on July 1, 2026). | ||||||||||
| 10.1 | Second Amendment to the Second Amended and Restated Limited Liability Company Agreement of Alight Holding Company, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 1, 2026). | ||||||||||
10.2*+ | Offer Letter, dated June 1, 2026, by and among Alight, Inc., Alight Solutions LLC and Stephen A. Lasher. | ||||||||||
10.3*+ | Executive Severance Letter Agreement, dated June 1, 2026, by and among Alight, Inc., Alight Solutions LLC and Stephen A. Lasher. | ||||||||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
| 101.INS* | Inline XBRL Instance Document | ||||||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document With Embedded Linkbase Documents | ||||||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
__________________________________
* Filed herewith.
** Furnished herewith.
+ Indicates a management or compensatory plan.
† The related exhibits and schedules are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such exhibits and schedules to the Securities and Exchange Commission upon request.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Alight, Inc. | ||||||||
| (Registrant) | ||||||||
Date: August 4, 2026 | By: | /s/ Stephen Lasher | ||||||
| Stephen Lasher | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer and Authorized Signatory) | ||||||||
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