Company: ALIT
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001809104-25-000175
Chunk: 51

Company: Alight, Inc. / Delaware
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 51
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 to $520 million, primarily driven by lower Net Commercial Activity.

Cost of Services, exclusive of Depreciation and Amortization 

Cost of services, exclusive of depreciation and amortization, decreased $5 million, or 1.4%, for the three months ended March 31, 2025 as compared to the prior year period. The decrease was primarily driven by lower revenues and savings realized in conjunction with productivity initiatives.

Depreciation and Amortization

Depreciation and amortization expenses increased by $5 million, or 23.8%, as compared to the prior year period, primarily driven by capitalized software.

Selling, General and Administrative

Selling, general and administrative expenses decreased $42 million, or 28.8%, for the three months ended March 31, 2025 as compared to the prior year period. The decrease was driven by a reduction in compensation expenses primarily 

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related to non-cash share-based awards, lower restructuring charges and lower professional fees incurred related to the sale and separation of the Divested business. 

Depreciation and Intangible Amortization

Depreciation and intangible amortization expenses decreased by $1 million, or 1.3%, and was consistent compared to the prior year period.

Change in Fair Value of Financial Instruments

There was an $8 million gain related to the change in the fair value of financial instruments for the three months ended March 31, 2025 compared to a loss of $21 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 and are related to the Seller Earnout and Additional Seller Note. 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 $9 million for the three months ended March 31, 2025, a decrease of $46 million compared to a loss of $55 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