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Alight Inc
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00:02 Good morning and thank you for holding. My name is Daryl, and I will be your conference operator today. Welcome to Alight Second Quarter twenty twenty one earnings Conference Call. At this time, all parties are in a listen-only mode. As a reminder, today's call is being recorded and a replay of the call will be available on the Investor Relations section of the company's website.
00:24 Now, I would like to turn it over to Jeremy Heaton, Executive Vice President of FP and A at Alight to introduce today's speakers.
00:32 Thank you and we appreciate everyone dialling in this morning. Earlier today, the company issued a press release with second quarter twenty twenty one results. A copy of that release can also be found on the Investor Relations section of the company's website at investor.
00:47 Com. Before we get started, please note that some of the company's discussion today will include forward looking statements. Such forward looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors These factors are discussed in more detail in the company's filings with the Sec, including the company's registration statement on Form S1 filed on August second twenty twenty one as such factors may be updated from time to time in the company's periodic filings with the Sec The company does not undertake any obligation to update forward looking statements.
01:27 Also throughout this conference call, the company will be presenting non Gaap financial measures. Reconciliations of the company's historical non Gaap financial measures to their most directly comparable Gaap financial measures to the extent available without unreasonable effort appear in today's earnings press release, which is available on the company's website at investor. Com.
01:50 On the call from management today, are Stephan Scholl, CEO and Katie Rooney, CFO. After their prepared remarks, we will open the call up for questions. I will now hand the call over to Stephan.
02:04 Thank you, and good morning, everyone. We're really pleased with our performance over the first half of the year, we drove accelerated growth beat our first half guidance and the momentum we are seeing gives us confidence to raise our full year guidance.
02:22 It's just been over one year into our transformation and we couldn't be more energized about our unique opportunity to support the decade of the employee Companies are waking up to the fact that their own employees sit at the heart of driving their transformation and they need to accelerate their digital strategies to address the two most important aspects and employee cares about improving their financial well-being and staying healthy This is why we are so excited about the transformation underway at Alight. We are powering human capital by bringing to market the first integrated employee benefit engagement platform, Alight Worklife, which drives unprecedented levels of engagement and improved productivity through a personalized experience. And this is resonating with our clients.
03:13 Back in January, our original forecast was for a moderate revenue decline in the first half of the year, but as we have shifted towards higher value cloud based solutions on the Alight Worklife platform, we are happy to report we are ahead of that guidance, delivering positive growth and improved bookings given these results and the momentum we are seeing, we are raising our full year guidance on revenue and adjusted Ebitda and have increased visibility to our out year projections as well.
03:45 Katie will review our financial performance in more detail in a moment, but let me give you a few highlights for the second quarter. On a year over year basis for the second quarter, total revenue increased three point nine percent More importantly, this was driven by a five point four percent increase in our employer Solutions segment where the majority of our tech enabled business process as a service offerings, what we call BPaaS sit.
04:13 Gross margin in our employer Solutions segment improved four hundred basis points to thirty three point six percent and adjusted Ebitda increased six point six percent to one hundred and forty five million dollars. Finally, a key indicator of our transformation progress is our BPaaS bookings. I am happy to report that these were significantly ahead of our plan, up two sixty eight percent to two eighty million dollars in the first half of this year.
04:42 When I joined Alight in April of last year, it was for one reason to change the relationship and experience that companies and their employees have around benefits. Today, companies are spending billions of dollars on benefits and often have hundreds of providers and applications, but none of these are stitched together to drive outcomes or insights into the health and financial security of their people.
05:09 Businesses are thriving, but the challenges facing employers and employees today have never been greater, increasing levels of stress depression and anxiety are leading to a surge in mental health issues. Healthcare costs are skyrocketing and more of the burden is shifting to employees. The cost of living is going up and many employees don't know if they'll be able to retire on time and a rise in part time workers, gig workers, regulation, and global competition for talent is changing the relationship between employer and employee.
05:44 Employees are facing the real crisis and so are employers and the pandemic has only made things more difficult. As a result, companies everywhere are waking up to the realization that their employees need help which is key to their success going forward. For the last twenty years, companies have been evaluated by the value they create for their shareholders and customers. At Alight we believe over the next decade, success will be measured by how companies treat their people. Our solutions are changing the way organizations think about their relationship with their people and the way their people interact with their benefits.
06:23 Unlike the technology world and the shift from perpetual to cloud based systems, the human capital industry has remained highly fragmented. Companies are implementing more and more service providers and seeing diminishing return on their investments We are disrupting this approach with a best in class enterprise solutions that brings together health, wealth, and global payroll into a single integrated platform that drives better outcomes and higher engagement for employers and their people.
06:56 To achieve this, we have transformed our business and the way we bring new technology and solutions to the market. We are deploying our solutions on common reference architecture with common data models and common integration points to implement new solutions across our client base in a fraction of the time it took before.
07:17 The most visible example of how we're bringing our new strategy to life is the Alight Worklife platform, which is the foundation of our next generation product. Alight Worklife combines a beautiful consumer grade experience with advanced data analytics and AI to deliver personalized recommendations in a user friendly format. It has a built in integration layer that allows for seamless integration with our health, wealth and payroll clouds and other third party applications.
07:49 Historically, what would have taken us years to complete we’ll be rolling out in a matter of months as our new Alight Worklife mobile app goes live across four hundred of our largest clients.
08:02 The Apple allow employees to use their mobile device during the upcoming annual benefit enrolment period this year. The speed of this deployment and putting real innovative technology in the hands of approximately half of our entire membership base would never have been possible without the investments we made in cloud based technology. In conjunction with Alight Worklife, we are rolling out our next generation health, wealth and payroll clouds. All of these clouds are designed to integrate seamlessly into our Alight Worklife platform and as we sell and then implement new clients over the next few years, we will reduce implementation times.
08:44 With the framework of the Alight Worklife platform, mobile app and new clouds in place we can bring our value engineering teams into our client discussions and begin to show them how we can engage their people drive better outcomes and improve their Roi.
09:01 This gives us the opportunity to meet the current needs of our clients while providing a clear path to migrate them up the value chain by providing additional solutions when they are ready.
09:13 Starting with our core benefits administration solutions, all the way up to our premier integrated platform with guaranteed outcomes in Roi we offer clients a natural progression based on their strategic priorities and particular needs. Most of our clients today are at the foundation level and moving them to Premier presents a 2x revenue uplift potential.
09:40 Organizations around the world believe in Alight’s approach and the value we bring to them and their employees. In the second quarter, we added Navistar and Sartorius to our new client roster and expanded our solutions with Abn Amro, Ledesma and GE appliances. So let me walk you through a great example of how we are executing on our Worklife BPaaS transformation.
10:02 Navistar, is a one Alight new partner with a total employee and retiree population of approximately forty thousand people. Navistar has a vision for an end to end partner that puts their employees at the center of their own transformation.
10:17 Through our value engineering team, we quickly demonstrated how Alight is uniquely positioned to be Navistar pre-eminent employee transformation partner from hire to retire. Our integrated solutions will allow us to optimize Navistar technology positioning them to win in a competitive marketplace.
10:39 Looking ahead, our progress on the product and technology front will allow us to continue expanding our breadth of solutions and core competencies. The fact that we serve over half of the Fortune five hundred and have thirty million members today with that number going to an estimated thirty six million members once the federal program goes live next year, gives us a huge strategic advantage. That's the moat around our business.
11:09 To drive outcomes, you must first drive engagement, but to drive engagement, you need data You need content, analytics and Ai. We have completed seven acquisitions over the past four years and will continue to build by end partner to expand on the significant competitive advantage.
11:30 Before I wrap up and turn the call over to Katie, I would like to take a moment to thank our team of Alight colleagues around the world who are working tirelessly to deliver for our clients and their people with excellence each and every day. This past year has been extraordinary in so many ways and our people have shown exceptional resilience flexibility, commitment and dedication, and I am so proud to be part of an organization with such an incredible group of talented people. I'm excited about what's ahead for Alight as we enter our next chapter as a public company.
12:05 Now, let me turn the call over to Katie to provide a deeper dive into our progress and our trajectory and review of our second quarter results.
12:14 Thanks Stephan, and good morning, everyone. The progress we're making against our transformation objectives is driving several positive trends across our business. First, we continue to see strong growth in bookings led by strength in our Tech enabled BPaaS offerings.
12:29 On a total contract basis, bookings increased fourteen percent to four thirty five million dollars and BPaaS bookings increased two eighty seven percent to two forty million dollars in the second quarter. This represents the fourth consecutive quarter of double digit bookings growth.
12:47 Second, the strong bookings growth is leading to revenue growth and higher contracted revenue in the out years. Excluding our hosted business, which we are in the process of winding down, revenue increased five point one percent in the second quarter and BPaaS revenue increased nineteen percent With our strong first half bookings, we now have over ninety percent of projected twenty one revenue and over sixty percent of projected twenty twenty two revenue under contract, up from approximately seventy five percent and fifty five percent at the start of the year.
13:21 Third, faster growth in our Bpaas offerings in our streamlined delivery model is supporting gross margin expansion in our largest segment, employer solutions. In the second quarter, employer Solutions gross margins increased four hundred basis points to thirty three point six percent And fourth, our value proposition and products are resonating and we are winning new clients and One Alight deals as a result.
13:46 Turning now to our consolidated second quarter results. On a year over year basis, total revenue increased three point nine percent to six seventy two million dollars. Excluding the hosted business, total second quarter revenue increased five point one percent year over year to six sixty one million dollars Total BPaaS revenue, which is a key indicator of our transformation rose nineteen percent to ninety four million dollars Finally, our adjusted Ebitda increased six point six percent to one hundred and forty five million dollars Looking at our two primary segments, employer Solutions revenue increased five point four percent from a year ago to five sixty nine million dollars driven by growth in recurring revenues and higher project revenue.
14:34 Employer Solutions gross margins improved four hundred basis points driven primarily by operating leverage and lower delivery expenses from our productivity initiatives. And Employer Solutions adjusted Ebitda increased eight point seven percent and adjusted Ebitda margins improved eighty basis points to twenty four point three percent. Turning to our professional services segment, revenue increased three point four percent to ninety two million dollars driven by recurring revenue as we continue to help clients realize the investment in their cloud technology.
15:08 Gross profit was unchanged on an absolute basis and adjusted Ebitda declined by two million dollars to seven million dollars as we continue to invest in key talent to support growth in the back half of the year.
15:22 Turning to our balance sheet and credit metrics. On June thirty, our cash and cash equivalents were four sixty million dollars and our total debt was four point one billion dollars. In conjunction with the Foley Trasimene merger on July two, we repaid over forty percent of our long term debt of one point eight billion dollars which consisted of five fifty six million dollars of our term loan and one point two billion dollars in unsecured notes. With the significant reduction in leverage, we have greater ability to invest both organically and inorganically into our business.
15:57 Touching for a moment on M and A, we signed a definitive agreement to acquire Aon’s Retiree Health Exchange business and expect the transaction to close in the fourth quarter. The retiree Health exchange is a Medicare brokerage business that gives us additional scale expertise and capabilities and Medicare enrolment to further expand our ability to serve employees from hire to retire.
16:21 This deal supports what Stephan outlined on our workplace platform strategy and ability to continue to buy build and partner on additional content and technology to increase the value delivered to our clients.
16:34 Buying and integrating assets is core competency for this team and something we will continue to do in a structured and disciplined manner. Given our momentum coming out of the first half of the year, along with the Aon acquisition, we are raising our full year twenty twenty one revenue growth outlook to three percent to five percent from one percent. We are also raising our full year twenty one adjusted Ebitda outlook to six ten million dollars to six twenty million dollars which now includes estimated public company costs that were not included in our previous full year adjusted Ebitda outlook.
17:09 In closing, we are confident that our transformation strategy will position us well for the long term. We're ahead of our plan and building momentum as we look to twenty twenty two and beyond.
17:21 This concludes our prepared remarks, and we will now move into the question and answer session. Operator, would you please instruct participants on how to ask questions?
17:31 Thank you. [Operator Instructions] Our first question come from the line of Peter Heckmann with D. A. Davidson. Please proceed with your questions.
18:09 Morning everyone. Thanks for taking the questions. In terms of your bookings in the first half twenty twenty one. Can you talk about are there certain areas that seem to be higher priority, health administration, navigation 401K record keeping. There seem be higher priorities for corporate customers. And in a related question, in terms of some of the larger projects that are in the contracted backlog like the federal thrift savings plan can you talk about some those larger projects and when you expect that the timing of them to start to hit revenue and go live?
Sure, Peter, thanks for the questions. In terms of bookings, what I'd say is, we saw good momentum actually across all of the solutions in our book. We did see significant demand around global payroll. But I think importantly, what we saw you heard it in Stephan’s prepared remarks around Navistar is we're seeing more One Alight deals, which are larger and more comprehensive as we bring together kind of the total value to the employer. And so I think that's a key driver for us as we look at the pipeline going forward.
19:20 And then on your second question, just on the larger deals you're right with our contracted service, federal thrift we are still on track to bring them live at the end of next year. And so that's obviously in our forecast for next year. And obviously we're building kind of the infrastructure around our wealth cloud to support the thrift this year. So key investment for us this year.
19:46 I think the only thing Peter I would add to the bookings question is as you remember, we started aggressively in May June of last year with our whole Bpaas go to market approach. And so since that time, if you look at last six months, our average Bpaas deals themselves have doubled in size. There's more product in them, bigger footprint. So that's I think a key measurement is that our average pipeline deal has doubled in the last year alone.
20:16 Okay, That's helpful. And then it sounds like it's probably a relatively smaller deal, but maybe not given the close. So just wondering if you could provide some sort of brackets around the potential annualized revenue from the Aon retiree health exchange business and if possible maybe some brackets around a purchase price.
20:39 Yeah. So, as we think about the Aon deal, you're right. It's not material for us overall. I mean, as you think about the strategic fit and what it will help drive as we think about building up the overall strategy for our clients from hire to retire. It's a critical aspect of that. So it is factored into our guidance for the year with that business being more back end loaded but won't be material overall.
21:07 Great.. I'll get back to the queue.
21:09 Thanks, Peter.
21:13 Thank you. Our next question comes from the line of Ramsey El Assal With Barclays. Please proceed with your questions.
21:22 Good morning and thanks for taking my question. I wanted to ask also about bookings obviously BPaaS bookings growth accelerated super nicely in the quarter. I'm trying to better understand the conversion cycle between unit bookings and revenue. How should we think about kind of when and how should we think about revenue kind of catching up with those accelerated bookings numbers? Maybe specifically in BPaaS but more generally as well?
21:48 Yes, Ramsey, great question. And I say a couple of things. I think first, what you'll see is there could be volatility quarter to quarter and bookings as you think about again, some of the larger deals we're seeing now in the pipeline. But if you think about the conversion rate, today, we said on average, it takes about a year depending on the cycle a deal is in the [Indiscernible] pipeline to bring a client live. So what we've tried to do to kind of help you understand that is I don't know if you heard in my prepared remarks, just giving you more color on kind of a revenue under contract, because I think that piece translates for you a little bit more how those bookings fall into our guidance. So having over sixty percent now of our revenue and twenty one under contract versus fifty five percent at the start of the year. I mean, that's over two thirty million dollars of incremental revenue. And so we are seeing it start to play through the book. But again, that will be a multi-year process.
22:44 And maybe one more thing Ramsey to add to that would be there's a big focus for us to move from project to subscription and have the percentage of our recurring revenue increase year over year. If you remember from our investment deck We committed to a guidance of this year being around eighty one percent coming from recurring revenue. So with the bookings that we've had, we’re over eighty four percent already towards recurring revenue from that bookings. So that's another measurement to really help you understand the waterfall from bookings to recurring revenue.
23:18 Got it. That's very helpful. Thanks. A follow-up from me is there some recent media chatter about potential strategic alternatives for the company. Can you give us just your general view on your appetite for something some transformational merger?
23:35 Yeah, listen, I mean, obviously, we don't comment on speculation. What I will say is the last year or so, there's a lot of excitement amongst our employee population amongst our clients. The transformation we started really does meet the needs of what our clients need Ramsey. There is a absolute pent up demand from our clients in giving employees just a lot more help around financial wellness and staying healthy. And so that's creating a lot of excitement around the company. So that's where we're focused on is really supporting what our clients need today as Alight.
24:13 Fair enough. I appreciate it. Thanks so much.
24:15 Sure. Thank you, Ramsey.
24:19 Thank you. Our next question come from the line of Tien Tsin Huang with Jpmorgan. Please proceed with your questions.
24:27 Thank you. Good results here Stephan. To build on what you just mentioned here like all earnings season, we've been hearing this war for talent and wage inflation and difficulty hiring and attrition or whatnot but is this good for you guys from a demand perspective and building up the pipeline are you seeing that or could there actually be a distraction as folks are focusing in other areas and maybe deferring some decisions on the platforms. Just love your take there.
24:55 Yeah. Great question, Tien Tsin. And we talk about this last time as well, which is what I'm seeing is, there's a lot on the docket for our clients. What's exciting is our investments in our commercial business. If you remember last year, we put a ton of money into our value engineering teams, the outcomes teams that going in and doing process maps for our clients because they are waking up today and realizing that it isn't about [Indiscernible] small tables and free launches anymore, they have to really provide a much better support system for helping employees be financially secure. This mental illness crisis that we always read about is it a health crisis of course, it is but it's also a crisis of people not having the savings they need. So it creates anxiety and depression. So the whole blending and that move to enterprise from best of breed. And we've all you the analysts have all written about it. So many times look at the money that was spent by our corporate clients on driving client transformation.
25:53 Not enough has been done around employee transformation. There still is a hodgepodge some of my biggest clients have hundreds of systems to stitch together for an employee to really help them understand how to drive health and Wellness and we're coming together with an enterprise platform. So, it is top of mind. We are getting to the CFO to the outcome discussion their savings to be had. So, we're seeing a lot of excitement and it's manifesting in the pipeline. It's manifesting in you look at the Navistar deal, I just talked about. I mean that deal and Navistar is a net new client. I wouldn't have thought a year ago, we'd be able to get something of that comprehensive done so quickly, which it would have taken five different vendors to stitch together what we just did for Navistar as a great example. So we're pretty excited.
26:43 No, makes perfect sense. Two quick model questions Katie, I’ll asked them together if you don't mind, just the gross profit dollars and margin expansion in employee services that was obviously up quite a bit. And any unusual call outs here or is that just the result of mix shifting to cloud. And then also just can you decompose the guidance rates for us, just trying to put some attribution to the change in revenue guidance?
27:09 Yes, sure, Tien Tsin. So on the gross margin improvement, what I'd say is there could be some volatility quarter to quarter, but overall in terms of the trajectory of improvement, I mean, that really is the flow through you said from operating leverage from the Bpaas growth along with the productivity initiatives that are well underway. So I feel good about kind of the momentum there. In terms of guidance, I think what I’d say is obviously we're half - first half of the year. We see that trend kind of continuing. So as we think about kind of the overall growth for the business there's – as Stephan said look at where we landed on subscription revenue, on BPaaS revenue, right that momentum continuing into the second half. So, there absolutely would have been a raise either way. I think the challenge for us is obviously the timing of the Aon deal closing could have a number of impacts month over month. But if you think about the three percent to five percent that obviously includes the benefit from the underlying business along with the acquisition.
28:16 Thank you.
28:19 You're welcome.
28:21 Thank you. Our next question come from the line of Kevin McVeigh with Credit Suisse. Please proceed with your questions.
28:27 Great. Thanks so much. Hey. I guess based on the BPaaS bookings, is there any way to think about what percentage of revenue BPaaS should be as we think about the twenty twenty one and then twenty two based on the bookings you have already?
28:45 Yeah. Kevin, so if you recall in kind of our original outlook back in January, we had said that BPaaS as a percentage of revenue would be around twelve percent exiting this year. That number is already at fourteen percent from where we sit today. So again seeing good momentum there. Our guidance for next year was I believe slightly higher than that around seventeen percent. So as we think about the momentum, this year right already being ahead by a couple of percentage points, I think we'll see that continue into next year.
29:20 Stefan, what was it - obviously Navistar a huge win for you folks. What was it do you think overall that kind of drove them to you? And would you think about kind of any type of seasonality in the business from a bookings perspective? Is there anything you'd call out quarter to quarter just given the size of the clients, whether there's certain time of the year we should look at in terms of bookings, anything like that? And again what drove the Navistar win overall?
Yes. I think it was the investments in not only in product, but commercial teams when Navistar raised their head and said, how do we completely transform our human capital management tower they went to the market and realized that they would need as I said earlier almost five different vendors to stitch it all together. And then we came in and said well we can do all of it at a better cost rate. And they also realized at the end of the day that they have to engage their employees better, Kevin. If you look at all these great companies that are out there in our space, they're all low single digit engagement rate percentages. I mean, that is not a success metric in the long term. And so we are very focused on using our Worklife platform. We show them through this much better consumer grade experience with the analytics dashboard. They're going to get much more information. It's going to be super personalized for the employees. So when they log in, it's going to be based on their history, their age, income level, There's a lot of information that you can really garner when you have an integrated approach to our whole benefits platform, you can give them much better insight and much better support in making trade off decisions across 401 Ks one has or which benefits platform to use. I saw startling stat the other day seventy thousand Google searches a minute done in the United States for people looking for doctors and looking for health and looking for support. I mean, Google is not the standard of record or system of record I would want to go to find out who's a good doctor and who's not, that's where we come in and I think Navistar really sees that and is looking to us to drive that as an integrated enterprise approach.
31:31 And then on bookings, what I'd say is, you're right on kind of a normalized basis, we would see bookings grow over the course of a year. Our original guidance for BPaaS bookings for the year was three ninety five million dollars and we're already at two eighty halfway through the year. So we did see some larger deals in the second quarter.
31:53 So, I think there's good momentum there. And I think we're well on track for the year. But I think overall that’s how to think about it.
32:04 On the Worklife app, as that goes live, would you expect that to kind of shift the acceleration of the BPaaS bookings based on employee activities that app goes live because it sounds like it's going to be across half your base and obviously really nice momentum there. But should we think about that in relation to BPaaS bookings?
I mean, at the end of the day, being able to meet the employees where they want to be met, which is on their mobile phone. That's what we're going to do for fifteen million of our participants in the next few months, which even a year ago, I would not have thought possible. And so here we sit with that right in front of us. So that does create new momentum and excitement on use cases and it drives engagement. At the end of the day when you think about all these great solutions that are in this space that we're in, it always comes back to engagement. And that's where I think we have such a strong advantage over everybody else in the market that thirty million people have to come to us sixteen million are not going to have or fifteen million are going to have a much better experience this coming annual enrolment, in front of us. So that's going to drive a lot more use cases in support for One Alight for sure.
33:21 Thank you.
33:25 Thank you. Our next question come from the line the line of Scott Schoenhaus with Stephens. Please proceed with your questions.
33:36 Hi, Stephan. congrats on the quarter. I just wanted to follow-up on your employer solutions growth. The offer, the ongoing opportunities in upselling your bpaas to existing clients obviously BPaaS now represents fifty five percent of your total bookings. You previously mentioned that you plan to add one hundred and twenty new sales and support team members in the first half of the year. Just wanted to see if you're on track there. And as your focus here with these sales, these new sales members most mostly focused on upselling the BPaaS solution, or is it focused on new client wins internationally or in the mid market in the U. S.? Or is it really combination of all three? Thank you.
34:12 That's a lot there, Scott. Listen on the commercial side, we were super aggressive and listen you've seen the press release look at some of the names of the people we've hired. I love sitting here in the call with all of you and talking about how clients have voted with their wallets, but it's equally important if not more in some cases on employees voting with their careers and we have hired the best people from some of our major competitors and you don’t have to look very far to see the talent pool that we've hired. So on your commercial investment in talent, I mean, we are right on the mark if not ahead of where I thought we would be at this point in time.
34:52 That has manifested itself into our BPaaS pipeline being significantly higher than was year ago. I already mentioned the statistic that our average BPaaS deal itself has already doubled which is pretty significant. And then I will say, I have been super impressed with the net new sales team, how fast the pipeline and the demand in net new for this one Alight approach is manifesting. And so that's an exciting area for us probably well probably - it is significantly ahead of where I thought we would be in net new. And then I think the other question you had was in our installed base we've been very intentional and I said it on the call earlier, most of our clients, if not eighty plus percent of them are on that foundation level, And when you map them to the products that we have today, there is a at least 2x uplift in every one of our installed base accounts, hence while we put so much money into product and technologies so that we can go in and do the value engineering work to monetize our installed base. So we're coming at it from all angles, but definitely worklife is at the core of that transformation. Hopefully I answered all of them, Scott.
36:07 You got them. Thanks so much.
36:09 Thank you. Our next question comes from the line of Ryan Krueger with KBW. Please proceed with your questions.
36:20 Hi. Thanks for taking my question. There's been a recent pickup in 401 K consolidation as scale has become increasingly important in that business. So my question is, do you view your wealth businesses as a critical part of the ongoing strategy? Or would you consider a divestiture to focus on some of the higher growth areas talked about?
36:41 Yes, Ryan, thanks, I mean, absolutely this on one Alight it is that comprehensive approach that is crucial to our clients. And not to get to - I'm trying to keep this a really short answer because I get pretty excited about what needs to be done for our clients to help serve employees well you need access to the four zero one K data you need access to their savings, how much our employee savings fit so much into that discussion around mental illness and anxiety and depression, most ceos that I've talked to don't know how many of their employees are on a financial crisis. I would tell you with everything going on in this world, every Ceo needs to know that and so that's what we're front and center on and having these wellness applications and technology and platform as part of Worklife connected then to making the right healthcare decisions or benefits decisions is absolutely tantamount to our one Alight approach. So absolutely, the one integrated Alight dynamic and it's resonating as you've seen in some of our results in our pipeline.
37:43 That's helpful. And then just a follow-up, can you just provide an update on your efforts to and you're largely very large planned focus, but on your efforts to penetrate some more mid-market?
37:59 Yeah. Ryan, I think so overall, are you asking specifically in kind of the wealth side or overall?
38:06 More on the wealth side.
38:08 Yeah, what I'd say is, if you think about kind of our platform strategy, you're right, it has been focused on more of the larger enterprise. We continue to evaluate the middle enterprise space. And I think there's an opportunity to again build [Indiscernible] partner across that to continue to go after that. So, we think about it along all three of those to make sure we're going to land in the right spot there, but you're right. Historically, we've been more focused on the larger enterprise.
38:38 Great. Thanks a lot.
38:40 Thank you, Ryan.
38:41 Thanks.
38:43 Thank you. There are no further questions at this time. I'd like to hand the call back over to management for any closing comments.
Great. Thanks very much. And thank you everybody, and thanks for the questions today and appreciate all of you joining us. We look forward to continuing to update on our progress as we move through the rest of the year, and have a great day. Thanks, everyone.
39:01 Thanks, everyone.
39:04 Thank you. That does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a great day.