Alight, Inc. (ALIT) Earnings Call Transcript & Summary

Thanks, everyone, for joining. I think we're webcasting this as well. This is Tien-Tsin Huang. I cover the payments, processors and IT services group at JPMorgan. Really excited to have Alight back with us. We're going to take questions from the audience, also questions from the portal. So for those listening in, I'll be watching for that. But yes, we have Stephan Scholl, CEO; Katie Rooney, of course, CFO. Greg is going to keep us on as well. Again, we'll go to fireside chat. I've gathered some questions. And thank you both for being here.

Thanks for having us. Great to see you, too. Thanks for the time.

It's weird doing in-person stuff.

It's great doing it.

But it's great seeing everybody, for sure.

Sure thing.

So always excited to see you guys. We've had some of your peers here as well. We've been leading all the questions the same way, thinking about the current macro climate. There's a lot of questions around, of course, demand, macro inflation, supply chain, tight labor environment that impacts Alight in some many different ways. So I'm curious how that's impacting client decision-making and what you're seeing on the ground. Maybe we can start with that, if you guys don't mind.

That sounds great. I mean there's no question, the last couple of years, the people agenda has become top of mind for every CEO and C-level executive in every company. And if you look at the last couple of years, they've realized that they haven't spent enough in terms of really looking at the transformation of how to help employees stay healthier and financially secure. And so if you look at the history of CEOs and CIOs and others, you can see that they spend a lot of their effort the last decade or so in helping drive client transformations. And when they turn their sights over to the employee, they wake up and realize that many of the Fortune 500 companies have between 60 and up to 100 different solutions stitched together for hire to retire. And when it comes to our world, which is really the health and well-being part of it, there is between 30 and 50 different point solutions. So macro trend, whether economy, whether future recession or not, I would say what I've seen is the focus from C-level executives on doubling down on spending the effort to consolidate, simplify, give better engagement platform to employees is, if not number one, top 2 to 3 initiatives in every company that I talk to.

So given that, have you done anything differently in the last 3, 5, 7 months? I'm not saying over the last 2 years, but just in reaction to that?

So we've been very aggressive on the platform side. So we have a two-pronged strategy, right? One is the content layers. So we've continued to be acquisitive. We've also been aggressive in the technology layer transformation. But the bigger piece of initiative for us has been the platform, meaning we have 30 million participants. I mean that is the largest capability in the industry in the benefits world, and it's leveraging that relationship to expand beyond benefits into all around health and well-being. So that effort, we just launched 30 days ago to our largest clients, the Worklife platform. And so that's being deployed as we speak, third iteration or third version of that product in the last year available on a mobile phone. It's the only place for an employee to go to, to really have access to your benefits data, your 401(k), HSA, payroll data, retirement information, everything, all the navigation clinical, the notion of staying financially secured and healthy is the full complement of what we've been doing the last several months.

Good. So I think last time we all got together, I asked you guys about BPaaS bookings. I know that's a big push for the company. I feel like it's been -- bookings have been growing 200-plus percent for a while. I just wanted to say that because I'm asking the same question over and over again. I think revenues were up, what 20%, 23%? The question I always get when we're doing early calls with investors is, who are you replacing? What is it? Is it more existing clients? Are these prospective clients? What's the process? What's the rhythm of the go-to market? So maybe if you can start with that.

Yes. And Katie, you can jump in as well here. I mean it's been super exciting to see the response from clients around willing to undo the last 20 years across the fragmented silos. And we've announced publicly some great wins at PwC, Sartorius, Navistar, a Fortune Global 19 company, Shell, who all were looking at Fidelity, ADP, Ceridian, any of the b companies that are part of the list, bswift Businessolver, and I'm forgetting one more in there, accolades of the world Grand Rounds. And they all fit a small piece of what they were looking for. And when we convince them of, at the end of the day, stitching it together into one engagement platform, one source of data, one technology platform, one contract, one relationship versus 4 to 5, it became very clear. It didn't start out that way with multiple RFPs and many of those accounts. So we're seeing a lot of positive reaction to wanting to get to one more consolidated place.

Yes. I mean I think the only thing I'd add, Tien-Tsin, is, if you think about the client demand cycle and where we sit today, it's -- everyone's looking for their competitive advantage, right, and especially with the war for talent. And so if you think about what we can bring and what we can offer coming at it from an outcomes-based approach to help drive a different experience, to drive a different outcome for both the employer and the employee, I think it's a different discussion for us to have at the clients.

Yes, agreed. So it's easy to talk about growth and bookings and all that stuff. But just how do we measure performance, right? I know you talked to both of us, talked to us about engagement, think about how that's going about. But how do you measure the performance on Worklife or any of these engagements that you're doing these big enterprises, big brands, big logos, they're also sophisticated? I'm sure it can be tough. How do you measure that?

I mean it's -- I'll just give a recent example. I was with Dell, who is one of our foundation clients in this journey.

I remember.

And I'm allowed to publicly say that -- I mean this is at their board level. Michael and his team the people agenda is top 3 agenda items, and the benefits department, Tracey and team are -- have presented to that executive team. They have had a 20-plus percent improvement in their NPS scores in terms of the notion of how employees feel the importance of benefits, the value of benefits at Dell has driven the direct impact of $20 million of savings. But that the fact that 89% of the employee population feel the value of benefits is a determinant and their experience at Dell, being an employee of Dell, that's hugely valuable. I mean, 89% puts them in -- I mean that's an innovator category. And what drove that is a lot of our transformation work with them on engaging in a personalized way with their employees so that we meet the specific needs of a large population on a broad issues of financial health related matters, but rather than sending them just a dearth of information that can be 20 different plans and a huge amount of complexity. We were able to specialize the communications to the individual employees so they can make really educated decisions. That's that big impetus to what helped them jump to that 89% level of excitement around how employees feel about the benefits program.

Good. So you touch a lot of people, I think you mentioned $30 million. You get a ton of data. I asked ADP and a lot of the other players, the same question, what kind of data advantage do you have? Like some of the players don't do much with it. We're starting to see others do tangential things like ID verification and point of verification, things like that. But for you, it feels like it's important from a go-to-market overall and selling standpoint and building product content, things like that. So Stephan, maybe you do a great job of talking about this. How important is data from a competitive standpoint?

Yes. I mean it's everything because when I first started 2 years ago, because we were virtual, I was able to talk to 40 C-suite executives in our largest clients, and they all said, we love that you do the administration for us. But I'm understanding and hearing from my employees that half of them have made the wrong decision. They're not getting the help that they need. Hence, the whole strategy then, which I already walked into it what was just validated by clients is that they want a place to go for employees to really get a full complement of information. And the use cases are still variable. Let me give a few. I mean, the notion on the health side, by the way, I get every Friday an e-mail from my Chief Medical Officer, and we're saving lives around this one example I've given a few times now, a large client of ours, this employee was diagnosed with scoliosis. And we looked at all -- and so before she had to go do more spinal surgery, they said, you got to go to Alight together third round of just validation. They just implemented our solution suite then. We found out through a diagnosis through data, through analytics, through research that she doesn't have scoliosis that she actually has osteoporosis. The difference between those 2 things, a, is a huge amount of cost, but it's saving her life. The same is true on the health side. When you start thinking about the benefits decisions, I have large corporations that spend billions of dollars on benefits. But the fact many of them have lower income salaried employees. And in a couple of cases, we have people that are making $40,000 and below in call centers who joined the pandemic didn't have critical illness. It takes the aggregation of the data, looking at the decisions that they've made. We go in and look at the history of the employees in terms of savings rates. And we call out that, hey, they're 5, 8, 10 years away from retirement. You're not saying enough, tell them 8 years in advance, 10 years in advance, not 6 months before retirement. So when you -- and we've seen the stats when you consolidate the data and you do benefits enrollment, but you bring in the 401(k) or HSA discussion, there's a 28% improvement in savings rates when you consolidate into one decision because people are looking at it and saying, "Well, I can't afford to do X, Y or Z, lower benefits, higher deductibles, payroll deductions, 401(k) contributions." But when you do it all in the context of those 3 pieces, people are making better decisions and trade-offs, maximizing saving rates, picking the right deductibles and we're also picking which bucket to put it in.

Good. No, that's good stuff. It's good stuff. So thinking about that, let me, leveraging data. I know there are a lot of tools to capture all that and to relay that, but investments are going to be required. And I know you've talked about, Katie, about investment. So maybe walk us through some of that, right? I wrote down here, right, gross margins were down a little bit in the first quarter.

Yes.

You've got an expectation for the second half and beyond. Is a lot of M&A and other things. So catch us up on where we are in the investment journey?

Yes. I mean so we set out a plan a year ago, January and said we'd get to 6% to 7% growth this year. So that's kind of the path we're on this year with $650 million to $662 million of adjusted EBITDA. Within that, we are self-funding a number of investments to continue to drive the growth. So we have a contract, as you know, with the Federal Thrift going live later this year, right? We're investing ahead of that to bring 6 million people live. We have investments in our commercial organization, right, in terms of driving more feet on the street to accelerate our bookings growth, which you're seeing and also in product and technology. So we've said we'll spend $38 million this year, majority of that coming in the second and third quarter to help accelerate the growth drivers because the great thing about this business, we have over 85% of our '22 revenue under contract. We have visibility into that. So we can manage and drive those investments to support that growth that we'll see later in the year.

So part of the investments, I think we've talked about this, I know, is to stand up the federal contract. How risky is that implementation? Quite large, $6 million, et cetera, is there risk in push out or cost overruns, things like that?

Yes. I mean there always is, right, with a contract of that size. But I mean, honestly, I have to give tremendous kudos to our team. They've done an incredible job. We're doing that in partnership with Accenture. And I think the teams have done an incredible job building out that platform so that we're ready. We've said we're going to go live in the back half of the year, and we're on track to do that.

And to be clear, you're bearing costs for that now for the benefit of the revenue to come on in the second half once it cuts over?

Correct.

And we have a governance process weekly. I mean, like anything, it's green, green, green all the way through, which is where it is right now. These are big programs, but the good news is we have a PMO structure, and you all know Accenture, that's a great thing of what I said 2 years ago. We can't do all this on our own. It's having a great partner like Accenture along for the ride with us with their size and capability. They know how to do this along with our size and strength and capability. So, so far, it's been going really well.

Good, good. So we mentioned Accenture, so let's talk about professional services and implementation work. Refresh us because the services business has changed a little bit, right? When I first got to know you guys, it was a big Workday implementer. You've got a lot of certifications, still do against Workday. That sector has been generally growing in a nice place. You've shown a little bit of decline, but you're expecting a recovery in the second half. So why is that?

It's back to your data question earlier. At the end of the day, when you look at who we serve, half the Fortune 500, 72 of the Fortune 100, a lot of those organizations already have Workday or are planning on Workday on the base HR, North American payroll, the position management piece. The wealth of data, getting that piece right -- and how that feeds benefits and global payroll and that DC and DB, all the defined contribution, defined benefits pieces is crucial. And it gives me a stronger window into the, what I call, the 100% data map to help in the platform side relegate that into better experience for employees. So I do it not for Workday's sake, but I do it for one Alight's sake. So I love the fact that I can implement Workday get access to the data, configure it, set it up, harmonize it and distill it into a platform play. That's why I do it. That's why you're also seeing us moving from project-based to subscription, which is kind of more managed services. We're managing the end-to-end patches updates and fixes yes, but it's because customers are seeing us own that data architecture across it, that's valuable to them. So they're not just giving us the Workday managing of that piece, but it's the whole picture all the way through that I think is really putting us into a new opportunity. But we're doing less and less of just chasing the Workday services deals for Workday's sake on its own I think that's exciting. So that's how we had that air pocket. Katie, you can talk to maybe something visibility...

Yes. I mean we have a great pipeline in that business at the same time. So when you think about the timing from pipeline to revenue, our subscription business is longer, right, from bookings to revenue, but in the professional services business, it's shorter. And so you have more visibility to seeing those deals coming online later in the back half of the year.

Okay, good. And another one more follow-up to that, if you don't mind. Just I know the margin profile on professional services is different. There's a war for talent. You know that very well. But everyone's found the hire, right? These certified employees. So how do you retain that group? And is that a potential headwind that we should be watching out for?

I'd say, actually, it already has been. I think we've seen some of that because when we did have a slowdown in the pipeline, we can't -- you can't manage the business in a way to just let people go and try to hire them back to your point.

Utilization falls.

Right. I mean that would be a tough proposition to get them back. And so the intent is we have great people. We are building a pipeline. We're going to retain those colleagues. So when -- again, when you think about the lead time, we have them on board to help us execute on the deals we're signing.

I think the big difference for us also and our clients have said it from the beginning, we had a global strategy around Workday, meaning a lot of it is based out of India and offshore. And so we have -- if you think of the 3 largest Workday implementers, we're one of the top 3, we have the largest India presence for Workday out of those 3. That has been, for us, also, believe it or not, in some of the centers that we are in, our attrition has been less than what -- and the pressure is a little bit less than what we've seen here in the U.S. with on-site employees. So that's going to help to the fact that we're a global delivery capability.

Yes, that makes sense. And look, it's an asset. I mean I think it's an asset to have that many certified employees working against it, which reminds me, but you also have a working relationship with Wipro on the global delivery side, India. So how do those 2 work together?

Yes. So I think of them a little bit differently in terms of capabilities and services. So they work seamlessly together. I think the benefit is you asked at the start about kind of the environment we're in, right? This business, when you think about the subscription base is very recession-resistant in the sense that, right, you see stability, right, in volumes in terms of the services we provide. Having the partnership with Wipro also helps that as well when you think about it from an inflationary perspective right, in terms of the contract we've had there. So that one, you have great capability, they're investing behind that capability to help us automate, right, and drive transformation for our clients. But we can also kind of have good visibility into the financial model around it.

I was in India 3 weeks ago with the Chairman and the CEO and his executive team. By the way, they had 50,000 people in 60 days. I mean it's incredible. But we've moved away from kind of a labor arbitrage agreement that I inherited when I got here to one of a partnership. And if you think about the concept of ESG, the Capital S, social responsibility is the one that's the most nebulous today, there's not enough formulaic approaches to it. We view with our approach around Alight and so does Wipro because they have a global capability to actually really build out the standards, the configurations, the product, the implementation teams needed to implement a capital less strategy. So we're talking about really new exciting go-to-market strategies together and with their size and scale, I mean, it's an incredible opportunity.

No, the key is that they're doing that at scale, right?

Yes.

I mean this is -- we're not talking about dozens of people...

No, no.

So let's dig back into the numbers a little bit. Katie, if you don't mind. So recurring revenue growth, 7% Employer Services. You have professional services recovering in the second half. So -- and then you've got the federal contract coming on. Help us unpack that 7% to 10% revenue growth target that's been out there. You said revenue retention went 97%. There's a backlog. So again, trying to build up the pieces to build up to the overall growth rate.

Yes. So I mean if you think about it for this year, again, we've said 6% to 7%, add 7% recurring, right, start in the first quarter. So I think seeing good momentum across those service lines. When you take a step back, as you think about the drivers of this business, as I said, 3- to 5-year contracts, good subscription base. And so you don't see a lot of volatility on the core, right, whether up or down market in terms of how those contracts work. The opportunity is, as we said in this environment, right, we talk about BPaaS, right? We talk about kind of bringing the best of product and service. And so you think about adding additional value to the client, especially in this market, right, the demand of moving our clients up that value chain. So when you think about growth, we said historically, we've been kind of low- to mid-single digits. Going forward, we're going to be mid to high because we're capturing additional TAM in terms of driving outcomes, driving an ROI approach, right, additional content we're bringing into our clients that we can leverage to drive that growth. So it's within our existing base and also new logo.

Okay. Let me ask one more, and then we'll open it up. Just on the capital structure side, you guys wrote it down financial flexibility, right? That is something. You have no big debt maturities. You fix out a lot of greed of debt. So is M&A the last question that people are asking is at this point in the cycle, is that a logical assumption or a priority for capital deployment?

Let me start. Yes, I think -- when you think about kind of where we sit today, we were self-funding our own investments, right? We're driving top line and bottom line. We're driving cash flow, and we're going to invest inorganically. I think there is a good opportunity from an M&A perspective to add on content, to add on additional international capabilities. You think about our distribution channel, 30 million people, the ability to sell into that, there's real opportunity there.

So content, geography, is scale important? Or more adding more breadth is a bigger deal for you?

We're also going to put a lot of effort. The race to Berlin for us is owning the relationship with those 30 -- moving to 30 million participants. That is priority #1.

So products that are more end market, end user-oriented, is what you're saying?

Well, I would say within the Worklife platform, it's -- so we've done a lot of work on analytics things like closed loop reporting, but we have more to do to verticalize, right? There are very specialized little companies would be tuck-ins that are $5 million to $25 million, companies that have really figured out close of reporting for banking, for retail on the analytics. And on the integration side, it's some preconfigured integrations. So it's more really deep technology stuff that we would manifest all around harmonizing the data and the analytics and the experience for the end consumers through Worklife. So that 30 million people, anything health-related and well-being related, they look to Alight. So that's the platform piece. And then the international piece, I mean you saw with the IKEA announcement, you saw it with Shell, you saw it with Sartorius, companies are stopping localized buying decisions in the name of corporate governance and saying, "Stop the siloed buying, we want to move to a corporate." So I have thousands of people in EMEA. And giving them more product around well-being, and I was in Holland just a few weeks ago after my India trip, and even places like ABN AMRO and others are all saying, how can we do more around well-being even as socially responsible as reduction. Other countries are, they still see that. They have so much more to do. And there really is nobody doing it, and they would love to learn more about what's happening here in the U.S. and how it applies. Not a different revenue model, different cost model, but well-being is a big topic internationally as well.

Wow. Okay. Yes, a lot of good content stuff that could happen. So any questions, happy to take it now? Otherwise, I'll keep going. If you don't mind using the -- waiting for the mic. Let's use that.

Just 2 questions. First, on the Federal Thrift, I think this is the big -- by far, the biggest deal you've ever brought on. And working with Accenture, does that open up other opportunities going forward? Are there other large federal agencies, large corporations who are looking at this to see if you can handle that scale? And if so, can you speed up that in future deals, either of that size, smaller or bigger, are you learning from the Federal Thrift a way to speed the -- enter the pipeline to revenue recognition?

Great. I'll start with that last piece, which is we built our Wealth Cloud platform, which has basically gone live in the last few months on the foundation of Thrift. So Thrift was the enabler to spend the effort we needed because we need it to be -- because you can imagine, as you all know, to be in the cloud for the government, all the FedRAMP, all the GovCloud, all the certifications and securities, there's nothing more banks, of course, are up there, too. But federal government is the most stringent security framework on the planet. And so to be able to be compliant with that, we had a lot of work to do in the last 18 months, which we have now all done. So that's your last question. In terms of the -- plus there's the partnership with Accenture. So when you take the federal contract, there's provisions in there that allow us to take to the state level. And I don't have a strong state department sales force today. Accenture does, right? So when you start thinking about there's many states with between 300,000 and 500,000 employees, pretty big, right, not 6 million, but 0.5 million times several of those equal a tremendous opportunity. And of course, they're all asking us how it's going, what's happening? A lot of those provisions, a lot of the rules, a lot of the calculations that we do are very applicable to state government organizations. That's just going to take time as you can well imagine. In terms of your first question, this is a big one. I mean, there's nobody who -- this is -- as 1 person, as you said to me last time, this is 3 Walmarts, right? And just getting one of those would be a feather in somebody's cap. So this, for us, for me personally, I view it as a real stated confirmation of not only us being able to drive a new strategy, but being able to execute against a large-scale transformation towards a new paradigm around well-being and the federal government being an anchor tenant around that.

Just 1 follow-up. You're amongst the rare breed in the universe of specs that's hit their targets, raised guidance, generating cash flow, no debt issues, have you considered a buyback? I mean if you can see -- you're generating significant EBITDA growth. You're telling 10% revenue growth next year and you generate free cash. So you're deleveraging pretty quickly. I know there are M&A opportunities out there. You don't want to make short-term mistakes for longer-term opportunities, but have you considered a buyback?

Yes. I mean, I think we're looking at all capital return decisions. So it's something we look at, right? We look at it from a return perspective and perceived value. It's also an interesting market, I think that we're in right now. So it's -- we're looking at all those opportunities.

Yes. And it's your last point, too, right? As you can see how passionate I am around, there's this small window of opportunity to go own that relationship and whoever -- when we get that relationship with 30 million participants that will put us in terms of economics and TAM and everything else up there with 3 to 5 corporate standards. That's it. There's only 3 to 5 companies that can really say that today. That's our goal, right? Now we need a lot of activity to do that. While our share price is obviously where it is today, so have the acquisition targets have also come down commensurately. So we're doing the trade-off balance of that as we go through the next few months.

Can you talk about who is your competition? And is it -- there's a bunch of like benefits, admin folks, there's some that are more health care-oriented, right, some are more employee or carrier-oriented. So help us understand, you go head up against them, you partner with them? Yes.

We talked about this, Tien-Tsin, right, which is -- and I mentioned it earlier, which is we compete with a lot of different competitors. And so I gave probably the best example is deals. If you look at the Navistar deal, the PwC deal, there's a lot more that we've won, where they've sent out 4 RFPs for this well-being platform. And included in those were Fidelity, the ADPs, the -- to your comment bswift Businessolver, one more in there.

Benefitfocus.

Benefitfocus, thank you. You got -- Ceridian was a competitor. You have obviously all the accolade Grand Rounds in that CM navigation space. That's kind of maybe those -- 10 of those. The issue is, the reason why 4 RFPs were sent out, each one of our competitors solve for 1 of those 4 pieces. We were the only ones who solved for all 4 of those pieces. Now like anything in a sales process, it's never a given. You have to go in and win the best-of-breed battle while we fight the end-to-end enterprise transformation piece. And so those deals, I mean, a big company like PwC, you can imagine the size and scale of that company with 300-plus thousand people, made a decision to give us all 4 of those contracts into one agreement because they saw the value of one relationship, one platform, one approach across these really important systems. But those are great competitors and great companies in their own space, they just don't have our breadth. Is that helpful?

Great. Any others? So we got what, less than 5 minutes left, let me bring rapid fire a few more. So we talked about M&A. Someone asked a great question around buybacks. So the Bill Foley value creation playbook is involved. Just curious how engaged he is? And if anything has changed there?

I mean I was with them last week, and there's -- it's a rare breed to have investment and -- investment banking background and just being an investor, but he's also an operator, and so I've spent a lot of time with him around the design point of the company around the next 3 to 5 years, and he gives great advice and counsel. He looks at 400 companies a year on average with different investment profiles: a, his personal money, his investment funds that he works with. So he's a great source of information. He's also a great source of experience and value to me and to the team, and he's very engaged. He's going to be with us in Chicago next week at our next week's board meeting. So but big supporter and understands the orientation of taking a spreadsheet. And when you put 1% improvement in there, how actually complicated it is to operate that, right? So it's been super helpful.

So thinking about short term and then a lot of focus on macro and you've got the federal contract. As we're looking at this externally, what big milestones or events do you think are going to matter here for Alight as you look at '23 and even '24?

Hitting our BPaaS bookings numbers this year. We've committed to basically $1.3 billion over 2 years, right? So that, which drives quality of revenue, gives us the revenue under contract into '23 that we've talked about, the Thrift program. I mean getting that, to your earlier question, and just being able to -- as much as they let us market it, of course, right, it's a lot of confidentiality around those types of agreements. But being able to say we're up and running, everybody will understand that, getting that right and continuing to prove out the platform piece and getting the voice of client. We're working on some really neat deals as we speak and being able to share those and just to be able to show the difference. Kind of like the old world that you've underwritten against, right, perpetual to cloud in '14 through '16. A few companies saw that. I was in the middle of that [indiscernible], what are you guys crazy giving up all that great gross margin on-premise dollars for some SaaS ratable single tenant, 40% gross margin dream? Well, we all know what happened there, right, or best-of-breed to enterprise. We saw what companies like SAP and Oracle did to that 20 years ago. We're in that third big race of that people agenda moving from those 2 worlds to cloud, to harmonized, integrated and continuing that platform piece of it and proving that out will be kind of the third piece for me.

Yes, well said.

Does the turning of the calendar do anything in terms of changing the pipeline? So when we catch up with you after the first quarter results, will you have a different picture on the pipeline at that point?

For next year, you mean?

Yes, for next year. Just hypothetically, in any year, thinking about just turning the calendar, people are thinking about their budgets, WT has been paid out, budgets have been set. Does that matter? Or is there a pretty consistent flow?

It's pretty consistent. I think it comes back to timing of decisions, right, because a lot of companies want to be able to -- if they're going to make changes to do that in the back half of the year. So they're making decisions. You're seeing kind of higher sales flow through in the back half of the year, right, because then you have a year to work through that. But I don't think that's a big driver, honestly.

So pipeline is not the issue. It's really just converting and the timing of close. Okay. Good. So let me just get you guys out of here. Again, always grateful for you guys being here. I think it was kind of alluded to in the other question. But just what do you think -- you've been meeting with investors, what do you think is still under appreciated about Alight.

I'll give my answer and then you should give yours. I think 3 things. First is the stability of the base, especially in a recessionary environment. We've -- as you looked at us even through COVID, right, the subscription revenue is very stable. So I think just that kind of base business. Cash flow generation, right, the kind of -- you're going to continue to see that grow and drive value back to my point, we're able to self-fund our own investments. So you think about the health of just the stability of the core, I think sometimes is underappreciated with the opportunity to drive accelerated growth through the BPaaS strategy where we're seeing demand. So I think kind of seeing both sides of that, it's a little more complicated, but I think that's a real opportunity.

And 2 things I would say is it's exciting to be in a category of one. And it's also a negative being in a category of one, to your question, how do you underwrite, right? So I appreciate the complexity of modeling us and underwriting to our playbook when there's a peer group that's very limited in what we do. But again, I've been here twice before. I know that movie. I've seen it and have had great success with it. I don't think this will be any different. And I think the second one is, which is different than the last couple of playbooks, is that we're actually doing it ourselves, investing while still maintaining the profitability. I think that's this profitable growth orientation because I never want to go through that on-prem to cloud migration again. That was a hard 3 years to convince people that on the other side of that, there is this wonderful SaaS-based growth. Here, we're actually doing profitable growth while we're transforming the business. So that's a unique dynamic while we're growing our business.

Yes. Look, it's going to be fun to watch as we go here. So thank you both for the update.

Thanks for having us.

Thank you.

Well, I'm sure, catch you at the next event.

You got it. Good seeing you. Thanks, everybody.

Thank you so much.

Thank you.