Company: ALIT
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-049916
Chunk: 96

Company: Alight, Inc. / Delaware
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 96
---
 by decreases in project revenue and Net Commercial Activity.

Gross Profit to Adjusted Gross Profit Reconciliation for the Three and Nine Months Ended September 30, 2025 Compared to the Three and Nine Months Ended September 30, 2024

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 September 30,Nine Months Ended September 30,(in millions)2025202420252024Gross Profit$178 $174 $525 $523 Add: stock-based compensation— 3 5 11 Add: depreciation and amortization28 23 81 70 Adjusted Gross Profit$206 $200 $611 $604 Gross Profit Margin33.4 %31.4 %32.6 %31.7 %Adjusted Gross Profit Margin38.6 %36.0 %38.0 %36.6 %

Employer Solutions gross profit was $178 million for the three months ended September 30, 2025 compared to $174 million for the prior year period. The increase of $4 million was driven by lower compensation expenses and productivity savings. Employer Solutions adjusted gross profit for the three months ended September 30, 2025 increased $6 million to $206 million from $200 million in the prior year period, primarily driven by lower compensation expenses and productivity savings.

Employer Solutions gross profit was $525 million for the nine months ended September 30, 2025 compared to $523 million for the prior year period. The increase of $2 million was driven by lower expenses related to productivity initiatives. Employer Solutions adjusted gross profit increased $7 million for the nine months ended September 30, 2025, to $611 million from $604 million in the prior year period, primarily driven by lower expenses related to productivity initiatives.

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