ALIT

Alight’s second quarter was marked by better-than-expected revenue and adjusted profitability, but the market reacted negatively, likely reflecting investor concerns about the company’s declining sales and underlying renewal trends. Management highlighted that project revenue growth and improved operational execution contributed to exceeding Wall Street’s expectations. CEO Rohit Verma pointed to “strengthened project revenue and higher volumes” as primary drivers, while also acknowledging that recurring revenue fell due to weaker commercial activity in prior years, which is now flowing through results. Is now the time to buy ALIT? Find out in our full research report (it’s free). Revenue: $511 million vs analyst estimates of $497 million (3.2% year-on-year decline, 2.8% beat) Adjusted EPS: $0.91 vs analyst estimates of $0.76 (20% beat) Adjusted EBITDA: $92 million vs analyst estimates of $84.82 million (18% margin, 8.5% beat) Revenue Guidance for the full year is $2.09 billion at the midpoint, below analyst estimates of $2.15 billion EBITDA guidance for the full year is $407.5 million at the midpoint, below analyst estimates of $431.6 million Operating Margin: -7.8%, up from -191% in the same quarter last year Market Capitalization: $386.8 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Peter Heckmann (D.A. Davidson) pressed for clarity on retention trends and whether rates have stabilized. CEO Rohit Verma reported “better momentum” but emphasized improvements will take time to show in financials due to long contract cycles. Curtis Nagle (Bank of America) questioned how improved retention trends reconcile with the significant step down in recurring revenue for the second half of the year. Verma explained that revenue reflects commercial activity from 2025, underscoring the business’s long lag between bookings and revenue. Ross Cole (Needham & Company) asked about the large implied step up in fourth-quarter EBITDA versus third quarter. Both Verma and CFO Stephen Lasher attributed this to annual enrollment costs peaking in Q3 and seasonal revenue rebound in Q4. Heckmann (D.A. Davidson) followed up on management’s comments about growth resuming in 2028 and asked for clarity on the timing and metrics. Verma stated improvements in commercial execution and operational transformation should drive meaningful P&L impact beginning in 2028. Heckmann (D.A. Davidson) also asked about capital allocation priorities, including leverage and the use of cash. Lasher and Verma confirmed that maintaining flexibility is a priority, with all capital return options—such as buybacks—under evaluation. In upcoming quarters, the StockStory team will be monitoring (1) whether client retention and renewal rates continue to improve as new account coverage initiatives mature, (2) execution and client adoption of Alight’s AI-driven platform enhancements and insourced service model, and (3) the pace at which recurring revenue stabilizes and returns to growth. Progress on margin improvement and further leadership team development will also be important milestones. Alight currently trades at $14.65, down from $17.18 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

On August 4, Alight (NYSE:ALIT) posted a second quarter that beat Wall Street's numbers while its core business kept shrinking underneath the headline. Revenue slipped, margins compressed sharply, and adjusted earnings per share were cut nearly in half, yet the results still cleared the bar management had set. That combination is unusual enough to make you look twice. The real story sits in the details of a company mid-turnaround, spending on service quality and AI while waiting for a multi-quarter revenue lag to work its way through the numbers. Second quarter revenue came to $511 million, split between $471 million in recurring revenue and $40 million in project work, and both adjusted EBITDA of $92 million and free cash flow topped what the market had penciled in. CEO Rohit Verma pointed to a leadership bench that is now largely complete. New CFO Steve Lasher joined in June this year, President of Employer Solutions Dinesh Tulsiani was appointed in May, and a new Chief Technology Officer came aboard in April. Account executive coverage has expanded to 500 clients, and the company finished insourcing client service functions that had previously been outsourced, a move it says drew positive feedback from clients and outside consultants. The balance sheet backs this up, with $545 million in total liquidity, $215 million of it cash, plus $101 million in year-to-date free cash flow. Wealth Solutions, the company's second-largest segment, carries $1.7 trillion in assets under administration, and Alight closed its 300th pension risk transfer deal. Five AI initiatives are underway across the business, with file processing automation already live and a tool for ingesting client specifications set to go live at the end of the third quarter of 2026. Recurring revenue fell 4.3% from a year earlier, a result of weaker commercial execution in 2025 and prior years working through a sales-to-revenue lag that management says runs 12 to 18 months. Adjusted EBITDA margin dropped to 18% from 24% in the prior-year period, and adjusted gross profit fell $29 million as its margin contracted 440 basis points. Adjusted net income came in at $26 million versus $56 million a year ago, with adjusted EPS of $0.91 against $2.09, roughly a halving of profitability. Guidance for the third quarter calls for revenue of just $469 million to $479 million and adjusted EBITDA of only $55 million to $61 million, reflecting heavier enrollment-season spending. Management was explicit that the second half of 2026 carries the largest hit from that earlier commercial softness, which means hitting the full-year EBITDA guide of $400 million to $415 million now depends on a sizable fourth-quarter rebound. Hedge fund ownership of Alight fell from 42 funds to 34 in the most recent quarter, pointing to institutions trimming rather than adding. Short interest sits at just 3.17% of float, which shows little organized betting against the stock despite that fund exodus. As of August 12, the forward price-to-earnings ratio of 1.32 looks remarkably cheap on its face, a level that low usually signals the market is pricing in serious execution risk rather than handing out a bargain. Alight's quarter shows a company beating guidance while its recurring revenue keeps sliding, a tension that won't resolve until the commercial lag clears. Leadership is now fully rebuilt, liquidity remains strong, and management is banking on AI investments to move margins by 2028. Yet adjusted earnings were cut nearly in half this quarter, and executives themselves flagged that the back half of the year carries the heaviest impact from last year's soft commercial activity. While we acknowledge the potential of ALIT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 4:30 p.m. ET Chief Executive Officer - Rohit Verma Chief Financial Officer - Stephen Lasher Operator: Good afternoon, and welcome to the Alight Second Quarter 2026 Conference Call. There is a presentation accompanying today's presentation available on the Alight Investor Relations website. I will now read the safe harbor statement. Today's discussion includes forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current views and expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may cause such differences are described in today's earnings release and in Alight's filings with the Securities and Exchange Commission, including in the risk factors section of its most recent annual report on Form 10-K. The company undertakes no obligation to update any forward-looking statements except as required by law. In addition, during today's call, the company may reference certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the earnings release available on the company's website. I will now turn the call over to Rohit Verma, Chief Executive Officer of Alight. Please go ahead. Rohit Verma: Good afternoon, and welcome to Alight's Second Quarter 2026 Earnings Call. I'm very pleased to have Steve Lasher, our Chief Financial Officer, joining me today. Steve joined Alight in June, so it's been a busy first few weeks for him, and we are delighted to have him on board. Included in today's discussion will be our thoughts on our second quarter, our positioning in the marketplace, new initiatives we've put in place to continue strengthening our service, delivery, and user experience, and our long-term growth strategy. We reported a solid second quarter as we exceeded market expectations, primarily as a result of strengthened project revenue and higher volumes. Our transformation initiatives remain on track as we continue to focus on strengthening our operational execution, deepening our client relationships, and enhancing our commercial capabilities. To that end, I have now had more than 180 client meetings since I took the role of CEO, and we've continued to see improvement in our renewal activity and commercial execution as a result. Second quarter revenue of $511 million was comprised of $471 million in recurring revenue and $40 million in project revenue. As expected, recurring revenue was down 4.3% over the prior year period as a result of commercial activity in 2025 and earlier. As a reminder, our lag from commercial execution to revenue realization for a substantial part of our recurring business is 12 to 18 months. This is reflected in the revenue reduction we are seeing now and expect to see for the next couple of quarters as the impact of that activity runs through our P&L. Project revenue in the second quarter was up approximately 11% over the prior year period. As we've previously discussed, project revenue can be inherently unpredictable and is often the key driver behind quarter-over-quarter fluctuations in performance. EBITDA of $92 million, representing 18% margin in the quarter, exceeded market expectations, primarily due to the higher-than-expected revenue performance. We've maintained a strong liquidity position, exiting the quarter with $545 million in total liquidity, consisting of $215 million of cash and a $330 million undrawn revolver. Year-to-date, we've generated $101 million in free cash flow, which includes $48 million in free cash flow in the second quarter, and we remain confident in our cash generation for the year and beyond. Our liquidity position and cash generation provides continued flexibility to drive our business forward. We made several key hires during the quarter to strengthen and bolster our leadership team, which is now largely in place. As I mentioned in June, we welcome Steve Lasher to the team as Alight's new Chief Financial Officer. Steve brings more than 30 years of financial leadership experience across the services, technology, and B2B sectors, has a proven ability to drive transformation at scale, and has the operating expertise and discipline needed at this stage of Alight's journey. In May, we appointed Dinesh Tulsiani as President, Employer Solutions. Dinesh previously served as Alight's Chief Strategy Officer and has been part of Hewitt for 20-plus years. He leads the Employer Solutions business to help accelerate innovation, strengthen how we deliver value, and advance the outcomes our clients count on. As highlighted on our previous call, in April we appointed [ Naveen Bawaja ] as Chief Technology Officer. Naveen is a transformation-focused technology executive and leads Alight's technology organization with a focus on advancing innovation and strengthening execution of our technology roadmap. Beyond senior leadership, since the start of the year, we've added numerous account management and sales professionals, and have expanded our overall sales coverage with account executive coverage, now extending to 500 clients as we build greater expertise across our sales and accounts team. During the quarter, we completed the important phase of insourcing critical client service functions that had previously been outsourced. This has been a major strategic initiative for us as we look to strengthen the client experience and align the priorities of all our staff to one goal, to serve our clients with the highest possible service levels. These changes have garnered very positive feedback from our customers, as well as from industry consultants and third-party evaluators that play a critical role in us being renewed by our clients and selected by our prospects. A fundamental pillar of our long-term growth plan is the continued strategic investment in our technology and people to create consumer-grade customer experience and strengthen service excellence. We made targeted client experience investments during the quarter, intended to modernize our user experience, evolve the data layer, and improve user journeys. Our operating data layer will be the industry's first data framework to bring health, wealth, and leave benefits all under one consolidated platform. It will provide employers with a view that makes benefits experiences for their participants more intuitive and easier to understand. Furthermore, we've made ongoing investments in service delivery excellence, deploying automation with the goal of improving service quality. Alight is the only integrated benefits provider operating at true enterprise scale, with the capabilities and expertise to manage the full complexity of employer needs across our health, wealth, and leave solutions. Our health solution platform is our largest portfolio and spans core health administration, navigation, enrollment services, spending account solutions, engagement services, and point solutions. Our goal is to help employees administer health benefits and manage healthcare spend while helping employees make better and more informed decisions for their health benefits. Wealth Solutions is our second largest business with $1.7 trillion in assets under administration. Our wealth platform includes a portfolio of financial and retirement-related benefit solutions, including defined contribution, defined benefits, and pension risk transfer that allow employees to better navigate and plan for their financial future. Our leave business represents our largest growth opportunity and includes leave of absence administration, medical and disability guideline information, and short-term disability administration. Keeping up with ever-changing leave of absence regulations can be a difficult and time-consuming effort for employers and their HR teams, which is why our tailored leave solutions assist employers in controlling costs and avoiding compliance risk. We're continuing to see strong client demand across the benefits administration space. Employers are increasingly turning to outsource providers to handle their benefits compliance, delivery, and technology needs, which allows them to focus on their core capabilities rather than managing the ever-complex world of benefits management. The non-discretionary nature of benefits means that we're seeing a large and active market for our services regardless of shifting economic conditions. Access to healthcare, financial planning, and retirement services remain essential and create the foundation of what we believe to be a highly resilient business model. Our combination of scale, expertise, and our relentless commitment to service excellence allows us to serve this market effectively, whether it be large Fortune 500 clients or more Main Street organizations. Despite our already expansive breadth of clients and partners, the opportunity in front of us remains vast, and we are energized about the prospects ahead of us. We continue to leverage and deploy AI across our organization to transform the HR employee experience and drive organizational impact with our clients and employees always top of mind. For Alight, AI's potential is grounded in the foundation underneath it. Thousands of participant interactions, deep institutional knowledge built over decades, and a platform already operating at scale with an extensive user base. It's this foundation that allows the AI tools we're deploying to be predictive, personalize, and provide actual meaningful assistance to our members, while also ensuring these tools follow strict constraints of security, privacy, auditability, and observability. With that said, we believe there are tangible opportunities across our portfolio of health, wealth, and leave businesses to leverage AI for specific tasks that enhance efficiency, quality, and user experience. We will provide additional updates on how we are deploying AI across dimensions of quality, efficiency, and user experience as our roadmap is quite extensive. While Alight has evolved with the times to strategically implement AI into our offerings, we wholeheartedly believe in a balanced approach that effectively uses AI and people in tandem. We remain intently focused on service quality. And to that end, the most significant part of our CapEx is invested in operational excellence and user experience. We have five overarching initiatives that are being undertaken under my direct oversight. First, we're building an AI-native employee and employer experience with new navigation guidance and end-to-end user journey for a simpler, more modern, and more intuitive experience that makes it easier to get things done, reducing manual work, and most importantly, friction in the benefits process. The design of this is complete and we are getting active user feedback with an expectation for rollouts next year. Second, we're building the first framework of unified data and knowledge for health, wealth, and leave that connects systems to enable AI and orchestrate workflows leading to smarter, more personalized experiences and responses which are more resilient to AI misinformation. We are heavily leveraging AI-based development and expect to begin rolling this out next year. Third is our modernization of our service model with smarter routing, expanded self-service, and AI-enabled agents to provide clients with faster call center-based support with higher quality and more consistent resolution. A number of these enhancements are already active in our call center, and new capabilities are planned incrementally every call center. Fourth, we're enabling AI-based ingestion of client specifications, significantly automating the process of implementation, annual enrollment configuration, and off-cycle plan changes triggered by M&A activity. This improves both efficiency and service quality. The first wave of this capability goes live at the end of Q3 of 2026. Lastly, we're enhancing our file processing with greater transparency, exchange oversight, proactive intervention, and automated validation in order to achieve more reliable processing with lower likelihood of delays, errors, and manual bottlenecks. This capability is now live in our environment and enabling us to better manage our data interchange with clients and partners. The cornerstone of these initiatives are our new client service model, which aims to provide expanded client coverage with clear established ownership and our core culture and values encapsulated by the word Alight. Ultimately, we believe that these initiatives align with feedback we've heard from our client base, and we look forward to successful execution of these initiatives to further drive our market leadership. I'll now turn the call over to Steve to discuss our financial results. Stephen Lasher: Thanks, Rohit, and good afternoon, everyone. I've had the pleasure to speak with some of you since I joined and look forward to meeting more of you in the coming months. I will now walk through our second quarter 2026 results. As we discussed in the second quarter, we exceeded expectations of revenue, adjusted EBITDA, and free cash flow. Revenue for the second quarter was $511 million, a decrease of approximately 3%. We delivered $471 million of recurring revenue in the second quarter, a decrease of 4% compared to the second quarter of 2025, reflecting the impact of lower-than-desired commercial execution in prior years. Project revenue for the quarter was $40 million, up 11% compared to the second quarter last year. As Rohit noted, project revenue can also often vary quarter to quarter and drive fluctuations in our consolidated results. Adjusted gross profit in the second quarter was $176 million, down $29 million from the prior year period, reflecting an adjusted gross profit margin decline of 440 basis points. Second quarter 2026 adjusted EBITDA was $92 million, with an adjusted EBITDA margin of 18%, compared to $127 million, or an adjusted EBITDA margin of 24% in the prior year period. The beat on guidance in the quarter was primarily due to the flow-through of higher-than-expected volumes and project revenue in the quarter. Adjusted net income in the second quarter was $26 million, with adjusted EPS of $0.91, compared to $56 million of adjusted net income and adjusted EPS of $2.09 in the second quarter of 2025. We maintained a strong liquidity position and exited the quarter with $545 million in total liquidity, consisting of $215 million of cash and our $330 million undrawn revolver. Year-to-date, free cash flow was $101 million. We believe our liquidity and cash generation will continue to provide us with the flexibility to effectively pursue our business objectives. Looking forward, with our visibility today for the full year, we expect revenue to be between $2,078,000,000 and $2,098,000,000, with adjusted EBITDA between $400 million and $415 million. As you all know, our Q3 tends to be weaker on profitability due to an uptick in expense from investment in annual enrollment. As a result, we expect third quarter 2026 revenue to be between $469 million and $479 million, with adjusted EBITDA between $55 million and $61 million. This implies a significant rebound in EBITDA and cash in the fourth quarter, enabling us to set the full year expectations where we have. It is also important to note that the back half of the year represents the biggest P&L impact from the commercial activity of 2025 and prior. That said, our liquidity and cash generation remains strong, and we continue to benefit from disciplined cost management, operational streamlining, and progress on our transformation initiatives across IT and operations. We believe we have a strong foundation in place to support reinvestment in the business as we look to build momentum in 2027 and beyond. With that, I'll turn the call back to Rohit. Rohit Verma: Thanks, Steve. It's been a pleasure to have you on the team. My first couple of quarters at Alight have been intensely busy, and they've left me increasingly energized and excited about the opportunity we have ahead. As I touched upon earlier, our leadership team is now largely in place. We made key hires during the quarter as part of our leadership transformation. Their experience and record of impact speaks for itself. Our refreshed board adds further strength to the governance and strategic focus of the company. It boasts deep public company governance experience, as well as unique and complementary financial, operational, and industry perspectives that continue to play a fundamental role in our evolving transformation. Together, we are confident that we have the right leadership team in place to guide the company through the next phase of our journey. Our long-term growth strategy is focused on three primary areas, growing the market reach of our health solution business, expanding our leave solution, and market growth in our core and adjacent spaces. We continue to make impactful strides in health solution as we explore opportunities beyond our traditional Fortune 500 client base, and we are focused on driving growth, importing solutions, and expanding our Alight Partner Network. We are also making concerted efforts to strengthen our broker and consultant relationships to further penetrate the segment. In our leave business, Alight is one of the few major players with the scaled capabilities and expertise to handle the current growing marketplace. We remain focused on maintaining and growing our position as a leader in this space as we're capitalizing on opportunities we're seeing in the marketplace, in part by cross-selling alongside our health business as applicable. Despite the depth and breadth of our services, we're consistently looking at additive and complimentary offerings in adjacent spaces. And we are utilizing our partner network where we can work to expand upon our capabilities. Additionally, we continue to see wealth as a very active space for us. We completed our 300th PRT solution and continue to provide Alight Financial Advisors services to several of our clients and see more opportunity to broaden financial wellness and planning. As we move forward, we are concentrated on strengthening the areas of our business within Retention remains a key area of focus. As we've discussed on this call, we're making investments across a range of initiatives that ultimately drive service excellence and user experience. We've also placed an increased emphasis on rebuilding our commercial execution through addition of account coverage and increasing rigor on renewal activity. We look at our growth trajectory in three distinct segments. It is important to remember that the sales cycle are inherently long in our business, so it can take some time to see the progress we're making reflected in our numbers. We are confident that we're doing the right things to drive future long-term performance for shareholders. 2026 is where we build upon the foundation that is in place, reinvesting in our business through the support of strong cash generation. We have prioritized delivery excellence and retention while investing in the user experience, increasing our use of AI, and expanding our sales coverage. 2027 is where we expect to gain momentum and start to realize meaningful platform advantages. Our focus next year will be on achieving efficiency gains from our work to drive operational transformation in addition to seeing improvement in our bookings and renewal activities from strengthened commercial execution. 2028 is where we begin to drive quarter-over-quarter growth as a result of the improvements we're making across the organization. At that point, we also expect AI to have created a real and tangible impact on margin expansion. The underlying foundation through each stage is our healthy liquidity and cash generation, which we expect will continue to be a competitive advantage as we move forward. I, along with a broader leadership team, remain confident in Alight's long-term outlook. The path forward is clear. Drive service excellence, deepen client relationships, and execute on our transformation agenda with urgency and discipline. Operator: Our first question is from Pete Heckmann with D.A. Davidson. Please go ahead. Peter Heckmann: Steve, welcome. Glad to have you on board here. As we think about retention, can one of you talk a little bit about the retention rates that you saw for full year 2025 and how that progressed kind of through the year? And then I guess in the first half of 2026, do you feel like that number has continued to deteriorate? Has it bottomed or has it improved? Rohit Verma: Hey, Peter, it's Rohit. How are you? Good to hear from you. Thank you. The way I've been looking at this, and as you know, right, our focus has been on pushing the renewals. The piece that we've been working on hardest has been expanding our account coverage. So we've added, as I mentioned on the call, several individuals, both on the leadership side, but also deeper in the organization to help us get better handle on the coverage of the account, so we've increased the coverage from 100 to 500. What that has done is it's given us better visibility into our renewal work. What I can tell you is that we're actually very encouraged by the trends that we're seeing both from a loss as well as compression side at this point of the year when we compare it to at this point last year. So we feel good about where things are heading. More importantly, I feel good about the overarching pieces that I see. I'm seeing better momentum and velocity on the changes that we're making from a delivery excellence. That is very encouraging. We just held four client council meetings and four innovation days with our clients, that in total probably included about 100 to 150 total clients that we met. And the feedback that we got from there was very, very encouraging in terms of what they saw that we're implementing. And these were not just PowerPoints, but actual demos of things that are in place. So those are, I would say, the indicators that encourage me. Obviously, as you pointed out, we have a long cycle. So some of these things just take time before they show up on the P&L. Peter Heckmann: Understand, understand. Okay, and I appreciate the company providing full-year guidance. That's helpful and should help everyone get their models in line. I didn't hear you say it, but certainly, I think that one of the highlights of the first half, one of the main positives has been how well free cash flow has held up on a year-over-year basis. In terms of, if I didn't hear you say it, I apologize, but did you mention at all how you're thinking about free cash flow conversion for the full year against EBITDA? Stephen Lasher: Yes, Peter, this is Steve. Thank you, and I look forward to working with you as we go here. When we think about free cash flow, based off the seasonality of our business, I think the third quarter is going to be a little more taxing on the business just because of some of the activities and outflows from a cash flow perspective that we have within the business. But then you'll see that rebound within the fourth quarter. So if you look at a full-year perspective, we'll probably be in that, you know, 40% to 43-ish percent conversion range when you look at it on a full-year basis. Obviously, again, I'll reiterate, third quarter is going to be a little bit less for us, but you'll see a rebound within the fourth quarter. Rohit Verma: Peter, you're aware that in the third quarter, expenses go up to support annual enrollment for a bulk of our clients. So, we see that sort of trough, but then it picks up in Q4. Peter Heckmann: Sure, sure. Okay, well, still, I view that as very encouraging and it compares positively to what we were forecasting. Thank you. I'll get back in the queue. Operator: Our next question is from Curtis Nagle with Bank of America. Curtis Nagle: Sure, just a quick one for me. Maybe just, again, kind of square the commentary on the better retention trends. I know these things take a long time to flow through given the contract cycles, but just given the pretty material step down in implied recurring revenue for the back half of the year, just trying to square again kind of the timing and what's, I guess, which contracts for that step down, which, you know, all those from last year are just, yes, again, it's kind of a big step down. So just if you could square that. Rohit Verma: Yes, Curtis. Sure, Curtis, good to hear from you. As I mentioned in the Q1 call last time, as well as in the Q4 call, right, we have sort of a 12 to 18-month lag in terms of what we see in the commercial activity to when it starts to show up in our revenue. So, a lot of the 2026 weakness that I've talked about is related to renewal activity that we saw in some of it in 2024, but quite a bit in 2025. So, I would say most of the Q3 impact is coming from that. And then some point solutions, but that's a minority of the impact. Operator: Our next question is from Kyle Peterson with Needham & Company. Ross Cole: Hi, this is Ross Cole on for Kyle Peterson. I wanted to ask a little bit more about your adjusted EBITDA guide. So for 3Q, it makes sense. But then can you maybe go into a little bit more about how you're thinking about the implied 4Q guide? Because, you know, that's a pretty big step up. I'm wondering, you know, plan on getting to that? What's going into that number? Thank you. Rohit Verma: So as you know, that Q3, as I mentioned, we tend to have a higher level of expense. So the drag really is coming from that increased expense that happens for annual enrollment as opposed to anything else. And as we get into Q4, you know, some of that gets all the So that's the reason why you're seeing the increase back in the EBITDA. And Q4 tends to be our higher EBITDA quarter anyway. If you look at the seasonality over the last several years, you will see that Q4 picks up and I think proportionately it's picking up in the same way and is not, you know, not off that so I don't believe there is anything abnormal happening in Q4 that you haven't seen in the past years. There is some level of, you know, new accounts that are coming in line in Q4 and you're starting to see the impact of that, so there's some positivity coming from there, but I think on a relative basis the lift is very similar to what has been in the prior quarters. Would you agree? Stephen Lasher: No, I totally agree. And as Rohit mentioned, again, as you'll see, the revenue shortfall in third quarter kind of will flow through as we looked at our guidance as we prepared for fourth quarter. That seasonality is really driven by the annual enrollment expenses that we'll see within third quarter. And then we expect free cash flow rebound as we move into the fourth quarter. So again, that really says we've laid it out based on what we can see, that seasonality of our business is kind of, you'll see the stronger revenues within fourth quarter, which will create some of the natural fluctuations within our EBITDA as well as our cash. Ross Cole: Thank you for the color. Operator: Our next question is from Pete Heckmann with D.A. Davidson. Please go ahead. Peter Heckmann: Hey, just a quick follow-up. You had said a brief comment, basically saying like looking out at 2028 is the time where we should start, I think you said quarter-over-quarter improvements. I just want to see if you could provide a little additional commentary there. And I just want to make sure you weren't talking about year-over-year improvements, just given some of the seasonality of the business, or I guess quarter-over-quarter in some of the metrics. Rohit Verma: Yes, that's right. Look, I think when I look at it, I'm looking at it overarching as the net commercial activity. And what I'm looking at is that as we get our foundation consolidated by doing the work that I'm talking about, right, we've established the team. We started to insource the work that had been outsourced, which is helping us shore up our velocity of implementations has increased and we're bringing a lot of AI capability online. So those capabilities today we are doing demos of and showing it to our clients, right? 2027 when clients start to pick that up and they become standard part of our RFP responses. And as you can imagine, right, as we do that in 2027, right, those are the RFPs then that come through in 2028. So I'm looking at the overall activity picking up and as a result of that, you should see improvement in our commercial execution. I think from a P&L standpoint, again, we're not prepared to give any guide because we're still working through it. But I think what you should see is that the growth factor in 2028 should start to get better because of that improvement in the commercial execution, which is being foreshadowed by the improvement of the operational that we're working on right now and in the better half of 2027. So it's really giving clarity on how we're thinking about phasing their turnaround. Peter Heckmann: Yes, yes, that's very helpful. And then, you know, I'm still working on the model, but just assuming that no other uses of cash beyond just that reduction. But would you assume kind of your net leverage ratio would maybe peak maybe in the first quarter of 2027, or I guess, do you have insights into that yet that you can kind of talk to us about? Stephen Lasher: Yes, I think we're still working through, and this is Steve, so Pete, thank you for that. We're still working through the models within that. Again, as I look at our net leverage ratio, obviously one of the focus for me is to shore up our balance sheet, so looking for all opportunities. The third quarter obviously will be difficult for us because of the reduction in revenue, reduction in cash, but then it rebounds in the fourth quarter. So, again, from a ratio perspective, we'll be balanced from a full year, but we're not looking to make any major paydowns at this point. The focus is really for us to continue to reinvest within the business, make sure we have that financial flexibility as we look to continue to strengthen our balance sheet. Rohit Verma: Yes, I think, as you know, this has been sort of a feature of what I've talked about pretty much since the Q4 earnings call that I did, that I want to make sure that we have flexibility of all capital allocation options open to us. We were kind of locked into that by the dividend. So that's the reason why we canceled the dividend. It has helped us build a decent amount of capital on a cash on the balance sheet, and that gives us the flexibility to deploy that cash that we think makes the best sense for us to implement our long-term strategy. So we want to continue to maintain that flexibility till we get clarity on exactly what's the best way for us to use that cash to get the best cash-on-cash return. And, you know, buybacks, leverage, all those options are open. We're evaluating those options as we speak, and with Steve on board, it's given me a great thought partner to work through that. So we'll soon be coming out on how we want to deploy this cash. Peter Heckmann: Great, great. All right, that is helpful. Thank you. Operator: We have reached the end of the question and answer session. I would like to turn the floor back over to Rohit for closing remarks. Rohit Verma: Thank you, Jasmina. Thank you all for joining our call. I appreciate the hard work of all our colleagues at Alight, the trust of our clients, and the confidence of our investors. I look forward to updating you on our progress in the quarters ahead. Until then, thank you, and God bless. Operator: This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation. Before you buy stock in Alight, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alight wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alight (ALIT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: $511 million in Q2 2026, a decrease of approximately 3% year-over-year. Recurring Revenue: $471 million, down 4.3% compared to Q2 2025. Project Revenue: $40 million, up 11% year-over-year. Adjusted Gross Profit: $176 million, down $29 million from the prior-year period, with a margin decline of 440 basis points. Adjusted EBITDA: $92 million, representing an 18% margin, compared to $127 million (24% margin) in Q2 2025. Adjusted Net Income: $26 million, with adjusted EPS of $0.91, versus $56 million and $2.09 in the prior-year period. Free Cash Flow: $48 million in Q2 2026; $101 million year-to-date. Liquidity: $545 million total, consisting of $215 million in cash and a $330 million undrawn revolver. Assets Under Administration (Wealth Solutions): $1.7 trillion. Full-Year 2026 Guidance: Revenue expected between $2,078 million and $2,098 million; adjusted EBITDA between $400 million and $415 million. Q3 2026 Guidance: Revenue between $469 million and $479 million; adjusted EBITDA between $55 million and $61 million. Warning! GuruFocus has detected 7 Warning Signs with ALIT. Is ALIT fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alight Inc (NYSE:ALIT) exceeded market expectations for revenue, adjusted EBITDA, and free cash flow in Q2 2026. Project revenue grew 11% year-over-year, driven by strengthened project activity and higher volumes. The company maintains a strong liquidity position with $545 million in total liquidity, including $215 million in cash and an undrawn revolver. Alight Inc (NYSE:ALIT) is making strategic investments in AI and technology, including a unified data framework for health, wealth, and leaves, to enhance user experience and operational efficiency. The leadership team has been strengthened with key hires, including a new CFO and President of Employer Solutions, and sales coverage has been expanded to 500 clients. Recurring revenue declined 4.3% year-over-year, reflecting the impact of lower commercial execution in prior years. Adjusted EBITDA margin decreased significantly to 18% from 24% in the prior year period, due to lower revenue and higher costs. The company expects continued revenue pressure in the back half of 2026 due to the 12-18 month lag from prior commercial activity. Q3 2026 is expected to be weak with adjusted EBITDA between $55 million and $61 million, due to increased expenses for annual enrollment. The company's long-term growth plan anticipates meaningful improvements only by 2028, indicating a prolonged turnaround period. Q: Can you provide more detail on the retention rates for full year 2025 and how they have progressed into the first half of 2026? Have they bottomed out or improved? A: Rohit Verma (CEO) stated that the company has expanded account coverage from 100 to 500 clients, which has provided better visibility into renewal activity. He noted that the trends in both client losses and pricing compression are encouraging compared to the same point last year. He also highlighted positive feedback from recent client council meetings and innovation days, where actual product demos were shown, indicating better momentum in delivery excellence. Q: How should we think about free cash flow conversion for the full year against EBITDA? A: Stephen Lasher (CFO) explained that due to the seasonality of the business, the third quarter will be more taxing on cash flow due to annual enrollment activities, but a rebound is expected in the fourth quarter. For the full year, the company expects a free cash flow conversion rate in the range of 40% to 43%. Q: Can you square the commentary on better retention trends with the material step-down in recurring revenue expected in the back half of the year? A: Rohit Verma (CEO) clarified that there is a 12 to 18-month lag between commercial activity and its impact on revenue. The weakness expected in the second half of 2026 is primarily a result of renewal activity from 2024 and, more significantly, 2025. He noted that point solutions contribute a minority of the impact, with most of the decline stemming from the earlier commercial activity. Q: Can you provide more color on the implied fourth-quarter EBITDA guide, which shows a significant step-up from the third quarter? A: Rohit Verma (CEO) explained that the third-quarter drag is due to increased expenses for annual enrollment, which is a normal seasonal pattern. The fourth quarter typically sees a rebound in EBITDA, and this year is consistent with historical trends. He added that some new accounts coming online in Q4 contribute positively. Stephen Lasher (CFO) agreed, noting that the seasonality is driven by annual enrollment expenses and that stronger revenues in Q4 will create natural fluctuations in EBITDA and cash. Q: You mentioned 2028 as the time for quarter-over-quarter improvements. Can you provide additional commentary on that timeline? A: Rohit Verma (CEO) explained that the company is focused on consolidating its foundation by insourcing work, improving implementation velocity, and bringing AI capabilities online. These capabilities are being demonstrated to clients now and will become standard in RFP responses in 2027, leading to improved commercial execution that will show up in the P&L in 2028. He emphasized that the growth factor in 2028 should improve as a result of these efforts. Q: Do you have insights into when the net leverage ratio might peak, assuming no other uses of cash beyond debt reduction? A: Stephen Lasher (CFO) stated that the company is still working through its models, but the focus is on shoring up the balance sheet. The third quarter will be difficult due to reduced revenue and cash, but a rebound is expected in Q4. He noted that the company is not looking to make major debt paydowns at this point, prioritizing reinvestment in the business and financial flexibility. Rohit Verma (CEO) added that the company is evaluating all capital allocation options, including buybacks, leverage, and M&A, and will provide clarity on cash deployment soon. Q: What is driving the strength in project revenue, and how should we think about its sustainability? A: Rohit Verma (CEO) noted that project revenue was up approximately 11% year-over-year in the second quarter, exceeding expectations. He reiterated that project revenue is inherently unpredictable and often drives quarter-over-quarter fluctuations. The strength was primarily due to higher-than-expected volumes and project revenue in the quarter, which also contributed to the adjusted EBITDA beat. Q: Can you elaborate on the key leadership hires and their expected impact on the business? A: Rohit Verma (CEO) highlighted the appointments of Stephen Lasher as CFO, Dinesh Tulsiani as President of Employer Solutions, and Naveen Baweja as CTO. He emphasized that the leadership team is now largely in place, bringing deep experience in financial leadership, transformation, and technology. These hires are expected to strengthen operational execution, accelerate innovation, and drive the company's long-term growth strategy. Q: What are the key initiatives for improving service quality and user experience, and what is the expected timeline? A: Rohit Verma (CEO) outlined five overarching initiatives: building an AI-native employee and employer experience, creating a unified data framework for health, wealth, and leaves, modernizing the service model with AI-enabled agents, enabling AI-based ingestion of client specifications, and enhancing file processing. He noted that the design for the AI-native experience is complete with rollouts expected next year, the data framework will begin rolling out next year, and the first wave of AI-based client specification ingestion goes live at the end of Q3 2026. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

– Revenue of $511 million – – Year to date Cash From Operations of $152 million and Free Cash Flow of $101 million – CHICAGO, August 04, 2026--(BUSINESS WIRE)--Alight, Inc. (NYSE: ALIT), a leading benefits administration provider of health, wealth and leave solutions, today reported results for the second quarter ended June 30, 2026. Rohit Verma, Chief Executive Officer of Alight, commented, "Our second quarter results once again exceeded expectations for both total revenue and adjusted EBITDA and our business remained highly cash generative. These results continue to give us a platform to build and execute our long-term strategy for profitable growth and strengthening our leadership position in the benefits market. "During the quarter, we continued strengthening our management ranks, created significant market traction on modernization initiatives we have underway, and completed the important step of insourcing critical client service functions that had been outsourced. Our investment focus remained on leveraging AI to further improve user experience and service excellence, which we believe will ultimately drive client retention and growth. "As we move through our operational transformation, we expect that the back half of the year will be impacted by the commercial execution experienced in 2025 and seasonally higher expenses in Q3. That said, our liquidity remains strong to support the continued implementation of our strategy to achieve long-term sustainable growth. We are encouraged by the early results from our enhanced customer engagement and account management efforts. These improvements are helping us build deeper, more strategic client partnerships that we believe will support stronger retention and contribute to future performance." Summary of Second Quarter 2026 Results Revenue decreased 3.2% to $511 million, as compared to $528 million in the prior year. The change was primarily due to lower net commercial activity, partially offset by an increase in project revenue. Recurring revenues were 92.2% of total revenue. Gross profit was $142 million, or 27.8% of revenue, compared to $176 million, or 33.3% of revenue in the prior year. The decrease in gross profit was primarily attributable to lower revenues. Selling, general and administrative expenses decreased by $21 million compared to the prior year, primarily due to lower severance and other restructuring costs. Interest expense of $24 million increased $2 million from the prior year. The increase was due to higher interest expense net of swaps. The Company’s loss from continuing operations before income tax was $19 million compared to a loss from continuing operations before income tax of $1,076 million in the prior year. The improvement was primarily attributable to the $983 million non-cash goodwill impairment in the prior year and the non-operating fair value remeasurements of the tax receivable agreement and financial instruments. Balance Sheet Highlights As of June 30, 2026, the Company’s cash and cash equivalents balance was $215 million, total debt was $1,996 million and total debt net of cash and cash equivalents was $1,781 million. 2026 Business Outlook Third Quarter Revenues in the range of $469 million to $479 million Adjusted EBITDA in the range of $55 million to $61 million Full Year Revenues in the range of $2,078 million to $2,098 million Adjusted EBITDA in the range of $400 million to $415 million Reconciliations of the historical financial measures used in this earnings release that are not recognized under U.S. generally accepted accounting principles ("GAAP") are included below. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results. Earnings Conference Call and Webcast Information A conference call to discuss the Company’s second quarter 2026 financial results is scheduled for today, August 4, 2026 at 3:30 p.m. Central Time (4:30 p.m. Eastern Time). Interested parties can access the live webcast and accompanying presentation materials by logging on to the Investor Relations section on the Company’s website at http://investor.alight.com. A replay of the conference call and the accompanying presentation materials will be available on the investor relations website for approximately 90 days. About Alight Solutions Alight is a leading benefits administration provider of health, wealth, leave and point solutions for many of the world’s largest organizations and over 30 million people. Through the administration of employee benefits, Alight helps clients gain a benefits advantage while building a healthy and financially secure workforce by unifying the benefits ecosystem across health, wealth, wellbeing, absence management and navigation. Our Alight Worklife® platform empowers employers to gain a deeper understanding of their workforce and engage them throughout life’s most important moments with personalized benefits management and data-driven insights, leading to increased employee wellbeing, engagement and productivity. Learn more at alight.com. Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our leadership position, strategy for profitable and long-term growth, our ability to improve the member experience and service excellence, client retention and growth, and outlook for Alight’s business, financial results, liquidity and capital resources, including statements in the "Business Outlook" section of this earnings release. In some cases, these forward-looking statements can be identified by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "would," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks associated with competition, our ability to successfully execute the next phase of our strategic transformation, an inability to successfully execute on operational and technological enhancements designed to drive value for our clients or drive internal efficiencies, issues relating to the use of new and evolving technologies, such as Artificial Intelligence ("AI") and Machine Learning ("ML"), we may not achieve our financial projections, which could have an adverse effect on our business, operating results, and financial condition, cyber-attacks and security vulnerabilities and other significant disruptions in our information technology systems and networks that could expose us to legal liability, impair its reputation or have a negative effect on our results of operations, our handling of confidential, personal or proprietary data, actions or proposals from activist stockholders, the precision of assumptions underlying certain reported measures, and compliance with applicable laws or regulations, including changes thereto. Additional factors that could cause Alight’s results to differ materially from those described in the forward-looking statements can be found under the section entitled "Risk Factors" of Alight’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on February 24, 2026, as such factors may be updated from time to time in Alight's filings with the SEC, which are, or will be, accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be considered along with other factors noted in this earnings release and in Alight’s filings with the SEC. Alight undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. Non-GAAP Financial Measures and Other Information The Company refers to certain non-GAAP financial measures in this earnings release, including: Adjusted EBITDA From Continuing Operations, Adjusted EBITDA Margin From Continuing Operations, Adjusted Net Income From Continuing Operations, Adjusted Diluted Earnings Per Share From Continuing Operations, Free Cash Flow, Adjusted Gross Profit and Adjusted Gross Profit Margin. Please see below for additional information and for reconciliations of such non-GAAP financial measures. The presentation of non-GAAP financial measures is used to enhance our investors’ and lenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Adjusted EBITDA From Continuing Operations, which is defined as earnings from continuing operations before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items, that we do not consider in the evaluation of ongoing operational performance. Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations divided by revenue. Both Adjusted EBITDA From Continuing Operations and Adjusted EBITDA Margin From Continuing Operations are non-GAAP financial measures used by management and our stakeholders to provide useful supplemental information that enables a better comparison of our performance across periods as well as to evaluate our core operating performance. Adjusted Net Income From Continuing Operations, which is defined as net income (loss) from continuing operations adjusted for intangible amortization and the impact of certain non-cash items, that we do not consider in the evaluation of ongoing operational performance, is a non-GAAP financial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations. Adjusted Diluted Earnings Per Share From Continuing Operations is defined as Adjusted Net Income From Continuing Operations divided by the adjusted weighted-average number of shares of Alight Inc. common stock, diluted. Adjusted Diluted Earnings Per Share From Continuing Operations is used by us and our investors to evaluate our core operating performance and to benchmark our operating performance against our competitors. 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 cash generated that is available to repay debt obligations, make strategic acquisitions and investments and for certain other activities such as dividends and stock repurchases. Adjusted Gross Profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation, and Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by revenue. Management uses Adjusted Gross Profit and Adjusted Gross Profit Margin 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 is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods. Revenue Under Contract is an operational metric that represents management’s estimate of anticipated revenue expected to be recognized in the period referenced based on available information that includes historical client contracting practices. The metric does not reflect potential future events such as unexpected client volume fluctuations, early contract terminations or early contract renewals. Our metric may differ from similar terms used by other companies and therefore comparability may be limited. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804325648/en/ Contacts Investors: [email protected] Media: Mariana [email protected]

Alight, Inc. (ALIT) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $2 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +21.33%. A quarter ago, it was expected that this company would post earnings of $0.6 per share when it actually produced earnings of $1.2, delivering a surprise of +100%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Alight, which belongs to the Zacks Internet - Software industry, posted revenues of $511 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.25%. This compares to year-ago revenues of $528 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Alight shares have lost about 49.7% since the beginning of the year versus the S&P 500's gain of 11%. While Alight has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Alight was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.00 on $496.83 million in revenues for the coming quarter and $5.52 on $2.12 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, SurgePays, Inc. (SURG), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.11 per share in its upcoming report, which represents a year-over-year change of +69.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. SurgePays, Inc.'s revenues are expected to be $13.8 million, up 19.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alight, Inc. (ALIT) : Free Stock Analysis Report SurgePays, Inc. (SURG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year increase in earnings on higher revenues when Block (XYZ) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 5. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This mobile payments services provider is expected to post quarterly earnings of $0.86 per share in its upcoming report, which represents a year-over-year change of +38.7%. Revenues are expected to be $6.54 billion, up 8% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.07% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Block, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.23%. On the other hand, the stock currently carries a Zacks Rank of #1. So, this combination indicates that Block will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Block would post earnings of $0.68 per share when it actually produced earnings of $0.85, delivering a surprise of +25.00%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Block appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Internet - Software industry, Alight, Inc. (ALIT), is soon expected to post earnings of $0.75 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -62.5%. Revenues for the quarter are expected to be $494.9 million, down 6.3% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Alight has been revised 27.5% down to the current level. Nevertheless, the company now has an Earnings ESP of 0.00%, reflecting an equal Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Alight will beat the consensus EPS estimate. Over the last four quarters, the company surpassed EPS estimates just once. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Block, Inc. (XYZ) : Free Stock Analysis Report Alight, Inc. (ALIT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year decline in earnings on lower revenues when Alight, Inc. (ALIT) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on August 4, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.75 per share in its upcoming report, which represents a year-over-year change of -62.5%. Revenues are expected to be $494.9 million, down 6.3% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 27.5% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Alight, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Alight will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Alight would post earnings of $0.6 per share when it actually produced earnings of $1.20, delivering a surprise of +100.00%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Alight doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alight, Inc. (ALIT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Shareholders of Alight would probably like to forget the past six months even happened. The stock dropped 61.2% and now trades at $0.90. This may have investors wondering how to approach the situation. Is now the time to buy Alight, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free. Even though the stock has become cheaper, we don't have much confidence in Alight. Here are three reasons there are better opportunities than ALIT and a stock we'd rather own. Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Alight’s demand was weak over the last five years as its sales fell at a 3.8% annual rate. This was below our standards and is a sign of poor business quality. While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business. Sadly for Alight, its EPS declined by more than its revenue over the last two years, dropping 19.5%. This tells us the company struggled to adjust to shrinking demand. A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Alight’s ROIC has decreased significantly over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between. We cheer for all companies making their customers lives easier, but in the case of Alight, we’ll be cheering from the sidelines. After the recent drawdown, the stock trades at 3.1× forward P/E (or $0.90 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better investments elsewhere. Let us point you toward the most entrenched endpoint security platform on the market. WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.