Company: ALIT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037820
Chunk: 144

Company: Alight, Inc. / Delaware
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 144
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Change in Fair Value of Financial Instruments

There was a $28 million loss related to the change in the fair value of financial instruments for the three months ended June 30, 2025 compared to a gain of $52 million for the prior year period, primarily due to the $36 million write down of our Additional Seller Note, partially offset by a gain on the remeasurement of the Seller Earnout. 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 loss of $23 million for the three months ended June 30, 2025, a decrease of $54 million compared to a gain of $31 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 decreased $11 million for the three months ended June 30, 2025, as compared to the prior year period. The decrease was primarily due to the partial repayment of debt in the prior year, the opportunistic repricing of our 2028 term loan and higher interest income, partially offset by the Company's hedges. See Note 8 “Debt” within the Condensed Consolidated Financial Statements for additional information. 

Other (Income) Expense, net

Under the terms of the TSA as described in Note 4 "Discontinued Operations" within the Condensed Consolidated Financial Statements, the Company is providing technology infrastructure, risk and security, and various other corporate services to the Divested Business subsequent to the close. We recorded $8 million for services performed under the TSA for the three months ended June 30, 2025 in Other (income) expense, net, and the corresponding expenses were recognized in Cost of services and Selling, general and administrative expense in the Condensed Consolidated Statement of Comprehensive Income (Loss).

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Income