Alight Inc (NYSE:ALIT) Reports Mixed Q3 2025 Results with Revenue Miss and Goodwill Impairment

Alight Inc - Class A (NYSE:ALIT) reported financial results for the third quarter of 2025, delivering a mixed performance against analyst expectations. The company's key profitability metrics surpassed estimates, but a revenue shortfall and a significant non-cash goodwill impairment charge have shaped the market's initial reaction to the earnings release.

Earnings and Revenue Versus Estimates

The human capital technology provider posted adjusted earnings per share (EPS) of $0.12 for the quarter, which came in below the analyst consensus estimate of $0.132. On the top line, the company reported revenue of $533 million, falling short of the estimated $547.2 million and representing a 4.0% decrease compared to the same period last year.

The market's response was decisively negative, with the stock trading down approximately 9.3% in pre-market activity following the announcement. This price action suggests investor disappointment, likely centered on the revenue miss and the wider net loss reported for the quarter.

Operational Performance and Strategic Highlights

Despite the earnings and revenue miss, the quarter showcased several operational improvements and strategic milestones.

• Profitability Metrics: The company demonstrated progress on profitability, with adjusted EBITDA improving to $138 million from $118 million in the prior year period. The adjusted gross profit margin also expanded to 38.6%, up from 36.0% a year ago.
• Significant Goodwill Impairment: A defining feature of the quarter was a non-cash goodwill impairment charge of $1.338 billion. This accounting adjustment, driven by an evaluation of current business trends and market valuation, was the primary driver behind a reported net loss of $1.055 billion. Management emphasized that this is a non-cash charge that does not impact day-to-day operations or cash flow.
• Recurring Revenue and Cost Management: The business model showed resilience with recurring revenues constituting 91.7% of total revenue. The company also achieved a substantial reduction in selling, general, and administrative expenses, which improved by $55 million year-over-year.
• Capital Return: Alight returned capital to shareholders through a $25 million share repurchase and the declaration of a $0.04 per share dividend.

Business Outlook and Analyst Estimates

Looking ahead, Alight provided its full-year business outlook, which offers a benchmark against existing analyst projections.

The company's guidance for the full year 2025 is as follows:

• Revenue: $2.252 billion to $2.282 billion
• Adjusted EBITDA: $595 million to $620 million
• Adjusted Diluted EPS: $0.54 to $0.58

This revenue outlook sits comfortably within the range of analyst estimates, which anticipated sales of approximately $2.344 billion. For the upcoming fourth quarter, analysts are modeling revenue of $698.84 million, which the company's full-year guidance implies it is positioned to challenge.

Conclusion

Alight's third-quarter results present a complex picture for investors. While the company missed on quarterly revenue and EPS, it demonstrated underlying operational strength through improved EBITDA and gross margins. The substantial goodwill impairment charge, while non-cash, weighs heavily on the GAAP financial results. The market's negative reaction appears to be a direct response to the earnings and revenue miss. However, the company's reaffirmed full-year guidance, which aligns with analyst sales expectations, may provide a foundation for stability moving forward as the company continues its strategic transformation and focuses on its cloud-based human capital platforms.

For a more detailed look at historical earnings and future analyst estimates for Alight, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.