Alight, Inc. (NYSE:ALIT) Q3 2023 Earnings Call Transcript

A – Jeremy Heaton: Thanks, Pete. This is Jeremy. I’ll take the first part of your question. So just to clarify again, on the revenue question, within employer solutions, what we saw was we were a bit lighter on the non-recurring side of it. Just as you think about expectations and what you’re seeing and possibly getting notes in on, is in the non-recurring project revenue business, sitting within employer solutions. So that’s the important piece there. Sequentially, again, what we talked about right is just in the plan that we had this year, was growth year-over-year was front-end loaded, driven by the Thrift contract, which had its one-year anniversary last quarter and so that’s the driver of sequential change. But again, all within our plan and internal expectations and part of the guidance that we gave for the year. Is that helpful?

Pete Christiansen: Yes. Thank you.

A – Jeremy Heaton: And then just, because I said a lot, I’m not sure I fully understand the second question. Say it again. Benefits attached? I’m not sure I understood that part.

Pete Christiansen: Yeah, sure. Yeah, so I mean, obviously you’re 50% through the enrollment season. You called out some neat things on the operating side, reduced call volumes, so on and so forth. Just curious if you’re seeing any other changes, at least on I guess the revenue side with benefit attachment rates. Some of the other payroll providers have called out weaker health insurance attachment and those types of things, perhaps related to inflation and those types of things. I’m just curious if there’s any takeaways that you’ve noticed already from the enrollment season so far.

Stephan Scholl: Yeah, I think what I – the tripling of mobile really speaks to taking something that’s really complicated. Listen, we’re all employees at the end of the day, right. So when you log in, this is not intuitively the last 30, 40 years in an easy experience. My goal and the team’s goal here with product engineering has been to really simplify the experience. So maybe to your point, if I’m answering this the right way, let me know, but the tripling of mobile use and the ability to have our call center reduction by double digits speaks to now making that experience a much more intuitive, easier experience for employees. That has to be the goal, because our point of our platform is engaging these employees, not on an annualized basis, but on a weekly basis or a daily basis.

When we start connecting more of the data sets across the clinical elements, the payroll elements, the retirement components, that’s the value of our platform. Our goal is not to make just Ben Admin a simpler and better experience. It’s making it that, but it’s connecting the dots across a multitude of different transactions. So it’s a fulsome experience for an employee. Because remember, our number one objective as a company is to help employees keep them healthy and financially secure. And to do that, you need to aggregate all the data and you need to be able to engage employees on a regular basis, and that has to be a beautiful, easy and simple experience. It has to be a consumer-grade experience. So those – the proof points of what you see now in the stats I just mentioned, and you’re seeing the impact of that already.

And the 340 basis points of adjusted gross profit increase is largely because we need less people then, and it is a more technology-oriented capability. So I hope I answered – a long answer, but I hope I answered what you’re looking for there.

Pete Christiansen: Thanks, Stephan. That’s helpful. We’ll follow up later. Thank you.

Stephan Scholl: Okay, you bet. Thanks.

Operator: Thank you. Our next question comes from Heather Balsky of Bank of America. Please go ahead.

Emily Marzo: Hi. This is Emily Marzo on for Heather Belsky. Good morning.

Stephan Scholl: Morning.

Emily Marzo: I guess my first question would be, given where product revenue is now, how much visibility do you have into that? And how should we be thinking about that going into 2024 with the beginning of the rollout of GE?