So, we continue to evolve our platform and technology to the needs of our clients in really helping bring together an end-to-end true employee engagement platform, which up until today has not existed by any company to truly drive an effective outcome for clients.
Jeremy Heaton: And maybe, Joe, what I would add is, I mean you can see in the results, right, the BPaaS revenues being up over 20% for both the total company and the continuing operations business. So, you are seeing demand across the board in that space. And I think you look at those results in the totality of the company. But then you also, in the prepared remarks, Stephan talked about the example of the client, right, where you had a critical medical need for somebody within the HR organization and really saw the value on a personal basis of the combination of the technology that we have, but also the medical expertise and the services that we bring together with that to drive a solution for a family in need. And that’s really the – as a singular point as you think about how we drive the value and outcomes and how we showed that to that particular company.
So, as Stephan said, demand in that space, right, we are in a differentiated space and the value proposition that we have and what we are able to do, and I think the results show that. And then finally, as in the macro, we will always watch the non-recurring part of the business, right. We are pleased that part of that goes away with the deal and some of that volatility. But in the benefit space on the project side, it’s a little bit of you are always watching what that pipeline is, the shorter term sales cycle, M&A and regulatory as Greg talked about are areas that drive project revenue. So, we watch that. But again, as we go to a business that is greater than 90% recurring revenue, that becomes less of what we need to be able to – what we have to watch from a macro perspective.
Joseph Vafi: Sure. That’s helpful. And then I know you mentioned the Board composition has changed, I think at about a 50% clip over maybe the last year or so and maybe that’s reflective here of some of the changes going on in the organization, but does that change in the Board composition effect strategy or any other interesting points or salient points relative to the Board driving strategy here? Thanks a lot.
Stephan Scholl: Yes. Thanks for that. And as you know, we have been very thoughtful since a major sponsor, as you know, has left the Board. We have been able to fill that with great content and voice of client capability. And so for us, we always look for ability to speak to product and technology, speak to industry, the notion of what it means to be in the wealth business, the retiree business, the benefits business in its entirety. So, voice of client around that in terms of CHRO position, voice of industry, technology and product. And then, of course, good stewards of cost and financial horsepower, right. So, I think we have a really good cross-section of capability. And then we also have really strong – where is the pub going as – I am a Canadian, so I can say that, right, where is the pub going to where – to versus where it is.
And so our Board is very thoughtful on while we are always in this 90-day cycle, it’s – as you have heard us say, we are willing to sacrifice a 90-day or even a six-month window for the longer term strategy of this company, right. Because many have asked, you are selling some pretty good growth assets here and – but you have seen the history of this business, which is its very volatile. And so we are making some big bets on better profitability and Jeremy used the word profitable growth 2x or 3x. So, the orientation of the Board around thinking long-term, more profitable growth orientation, even though it may mean some, as we said, tale of two halves this year, it’s worth it, right. It’s worth it for the long-term game, so, strong, strong Board support towards that objective.
Joseph Vafi: Great. Thank you, Stephan.
Stephan Scholl: Yes. You bet.
Operator: Your next question comes from the line of Heather from Bank of America. Your line is now open. Please ask your question.
Emily Marzo: Hi. This is Emily Marzo on for Heather Balsky. I am wondering if we could look at the go-forward business, how did 1Q sales perform versus your internal plan, and are there any areas of upside or opportunity that you are seeing?
Jeremy Heaton: Hi Emily. Good morning. Sure. So, I would say, the drivers of – if you think about the remaining business in growth, it is a ramp this year, as we have said, and we expect it all along, given the timing of the bookings from last year and of course, the hosted business today, that comparison sits within the continuing operations. So, that’s a couple of points of a driver of the headwind from a growth perspective. The one piece, as we have said already is that was different in our – from our early expectations was the non-recurring project revenue, which is split between both the continuing operations and discontinued. But we continue to build the revenue under contract. The BPaaS revenue growth within the continuing operations was over 20%.
The revenue under contract is growing and we continue to see the build of – from commercial execution and on the operational side. So, I would say the only thing was just that non-recurring project revenue, but otherwise, we feel good and we will come out with formal guidance on this business when we close the deal.
Emily Marzo: Thank you. And as a follow-up, the revenue under contract, that’s for the total business. Do you have it broken out for the continuing this?
Jeremy Heaton: We have not. So, that will be part of the guidance that we give in disclosure when we close the transaction. But you can think about it relative to the size of revenue. They are slightly higher on the revenue under contract on the remaining business just given the profile of that business.
Emily Marzo: Okay. Thank you.
Operator: Your next question comes from the line of Tien-tsin from JPMorgan Chase. Your line is now open. Please ask your question.
Tien-tsin Huang: Hey. Thanks so much. I know a lot of moving pieces, but just on the free cash flow side, the operating cash flow conversion. Can you give us some directional views here in the coming quarters on that?
Jeremy Heaton: Sure. Good morning Tien-tsin. Yes, so as we said, Op cash flow was $100 million in the quarter, so up almost 40% versus last year, so which was the conversion of 67%. We guided this year at 55% to 65%. I would say, that’s still the frame we are in. There is – obviously, seasonality plays a part in terms of what we are seeing. But generally speaking, 20 points up year-over-year, we are driving – we have got a big focus around DSOs, working capital efficiencies, how we are generating revenue earlier into transactions that we are doing in deals. And so we are seeing the benefits of that as we come through. So, the cash flow element on an operating basis, we were really pleased with in the quarter. And as I have said, with capital expenditures also down 20% drove a pretty significant – more than doubled the free cash flow for the business in the quarter.
Katie Rooney: Yes. I think the only thing I would add, Tien-tsin, is there will potentially be some additional transaction expenses in the second quarter. But then obviously, those go away in Q3 and Q4. So, you will see kind of as you think about the seasonality of it, just down a bit in the second quarter and then back up in Q3 and Q4.
Tien-tsin Huang: Okay. That’s good. That’s helpful. So, my follow-up, maybe just a bigger picture one for you, Stephan. Just with the cloud conversion underway almost there, been going to a lot of these different user conferences and investor days, it feels like there is a theme again towards, not surprisingly, componentization, modularization, amplifying everything. And so this whole best-of-breed versus best-of-suite conversation comes up a lot. What does that mean for Alight as you guys have been going down this monetization journey yourself? I mean do you see more threat as you are going through this from point solution providers, I am just curious what the latest thinking is there. Thanks.
