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Good morning, and thank you for holding. My name is Irene, and I will be your conference operator today. Welcome to Alight's First Quarter 2023 Earnings Conference Call. [Operator Instructions] 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.
And now I would like to turn the call over to Jeremy Cohen, Vice President of Investor Relations at Alight. Please go ahead.
Good morning, and thank you for joining us. Earlier today, the company issued a press release with first quarter 2023 results. A copy of the release can be found on the Investor Relations section of the company's website at investor.alight.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 most recent Form 10-K as such factors may be updated from time to time in the company's periodic filings. The company does not undertake any obligation to update forward-looking statements.
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 appear in today's earnings press release.
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.
Thanks, Jeremy. Good morning, everyone, and thank you all for joining us. Earlier today, we released our Q1 results and are pleased to report a strong quarter to begin the year, building on our momentum from 2022.
At the start, we surpassed $1.5 billion in cumulative BPaaS bookings, nine months earlier than our original 3 year projections. This important milestone signifies how we have improved both the quality of revenue and the trajectory of our business. And the bookings are translating into top line performance, as we delivered quarterly revenue growth of nearly 15%, led by BPaaS growth of 50%. BPaaS represented over 20% of our total revenue for the quarter, a nearly 5 percentage point increase year-over-year.
And our pipeline remains strong with robust activity throughout the sales funnel, our platform and system of record combinations to drive employee engagement is resonating with customers that are looking to optimize the financial health and well-being of their people.
The recent acquisition of ReedGroup has further amplified our pipeline by adding content and capabilities that allow us to support our clients through the lease process, creating even greater value for our clients and supporting our high retention rates. As we think about our positive trajectory, it's rooted in the technology and business transformation that we've talked about in previous quarters.
Let me focus for a moment on how our commitment to strategic investments is driving this transformation and enhancing our growth. First, through our ongoing product innovation, we recently announced the latest release of the Alight Worklife platform. As you may recall, we are on a twice-yearly release cadence and this release focused on two key areas. First, expanding access of the Alight Worklife platform to employees spouses and families, and second, expanding and more fully integrating our well-being capabilities within the platform.
Taken together, these updates will improve the user experience and drive higher engagement and utilization to all employees and their families through complex moments that directly impact their physical, mental and financial well being.
As we enhance our offering, we're also seeing market recognition of our leading capabilities. To that end, we recently announced an expanded partnership with Workday, a first of its kind to offer a powerful end-to-end solution in various European countries that empowers organizations to source, manage and pay their global workforce with a simplified and unified offering.
Additionally, our investments in product, technology and go-to-market are translating to new client wins and expanded relationships with existing clients. I'm excited to announce the expansion of our relationship with a Fortune 50 food and beverage company that has been a long time Alight client. We are building all Alight Worklife experience, which includes the integration of health, payroll and cloud, and we are bringing on the client's retiree population.
We're also pleased to announce new agreements with MasterBrand, the leading North American cabinets manufacturer and Dentsu, one of the largest global marketing and advertising agency networks in the world. MasterBrand like many employers utilized a number of vendors, but it was a fragmented architecture that wasn't having the desired impact for their workforce.
Alight Worklife brings the entire ecosystem together for their employees to get the dots between the unique needs of their people, whether they're healthy or just diagnosed with a complex health issue.
The relationship with Dentsu demonstrates our continued commitment to international markets and is an example of how we use the Alight Worklife platform to provide an integrated payroll experience.
While we invest for growth, we're also making progress on our previously announced restructuring program. As a reminder, this initiative is focused on improving the efficiency of our back end infrastructure, complementing the transformational work we have already completed on the front end. We are pleased to have completed Phase 1 of our migration to the cloud on time as we actively transition our customers and core applications.
As we complete this process of shifting out of physical on-premise data centers, we expect to enhance our margin profile by eliminating redundant costs related to running dual infrastructures. At the same time, the move to the cloud will accelerate our pace of innovation and enhance our ability to deliver for customers every day.
In light of our continued progress on both top and bottom line initiatives, we are reaffirming our 2023 financial targets, which include double-digit growth, margin expansion and strong operating cash flow generation. And in less than a week, we'll host an Investor Day at the New York Stock Exchange, where we will share the next phase of the Alight story.
We will show how we drive outcomes for our clients and their people and how Alight is truly in a category of one. We look forward to seeing many of you there.
And with that, I'll turn the call over to Katie to dive into our financial performance.
Thank you, Stephan, and good morning, everyone. We started the third year of our transformation on strong footing. As Stephan noted, our strategic investments are paying off and contributing to our positive results.
Let me first start with our consolidated results. During the first quarter, we achieved revenue growth of 14.6%, highlighted by BPaaS revenue growth of 50% as prior bookings continue to translate into higher contracted revenue. As a result, we continue to see a shift towards more stable and resilient recurring revenues, which were up 16%. Recurring revenue comprised 85.7% of total revenue, a 130 basis point increase from the prior year.
BPaaS bookings for the quarter were $75 million, and cumulatively, we have now achieved over $1.5 billion in total bookings since we began our transformation in 2021, which is 9 months ahead of plan.
As we've mentioned before, our bookings profile will continue to be impacted by the timing of large deals. Our pipeline remains robust, and we continue to expect full year BPaaS bookings of $900 million to $1 billion.
Turning to profitability. Adjusted EBITDA increased 8.5% to $154 million with an adjusted EBITDA margin of 18.5%, which reflects the impact of certain strategic investments that I will describe in detail momentarily.
Even as we make these investments in product, technology and our go-to-market strategy, I'm pleased to say that we are still driving robust cash generation, delivering operating cash flow of $72 million for the quarter. This translates into an operating cash flow conversion rate of 47%, significantly ahead of our 13% conversion rate last year, even as we account for both our investments and restructuring activity.
Let me spend a moment contextualizing those investments. For the year, we highlighted approximately $50 million in investments. Of that, roughly $30 million represents ongoing annual investments that span the full year. As noted, this includes investments in product and technology, specifically connected to our Alight Worklife platform, as well as in our go-to-market strategy.
The remaining balance of $20 million is concentrated in the first half of the year in connection with our product release schedule as well as the transformation of our ongoing delivery and customer care model, which support our company defining 2022 Q4 deals, including GE and a Fortune 10 company. These investments are positioning us to sustainably capture the long-term opportunity.
Next, I'm going to discuss the performance of our two segments. As we discuss the segment, it bears reminding that we recently realigned our three reporting segments into two, moving hosted into other as it is no longer core to our business operations.
In addition, as you'll see in our disclosures, we changed how we present segment profitability from an adjusted EBITDA metric to a gross profit metric. We believe this best aligns with how we allocate resources and assess performance and will better represent the impact of our transformation and investments.
So let me now turn to the Employer Solutions segment. First quarter revenue was up 16.1% with recurring revenue up 17.4% and project revenue up roughly 2%. Contributing to our growth was the federal Thrift go-live, as well as increased net commercial activity, volumes and the impact from the Reed acquisition.
Our strong growth translated into improving profitability with first quarter adjusted gross profit up 19.5% to $264 million. Adjusted gross margin increased by 100 basis points to 36.5%.
Turning to our Professional Services segment. First quarter revenue was up 8.9% to $98 million, driven by 10% growth in recurring revenue and adjusted gross profit was up $1 million. This represents Professional Services best quarterly top line performance since going public, reflecting the strength of our OneAlight [ph] sales pipeline and backlog entering the year.
Turning to our balance sheet. Our quarter end cash, and cash equivalents balance was $239 million, and our total debt was $2.8 billion. We continue to actively manage our debt with key actions taken during the quarter.
First, we increased our hedge portfolio and are now 84% fixed through 2024 and 60% through 2025. Second, we modified our debt maturity profile by completing a leverage-neutral add-on of our $65 million 2024 term loan, and combined it with our 2028 term loan. As a result, we now have no debt maturities until 2025.
As part of the March secondary offering, we opportunistically repurchased 1.1 million shares at an attractive price. As of 3/31, our remaining share repurchase authorization stood at $78 million. As always, we will continue to evaluate stock buybacks against other attractive opportunities we have for investing in the business organically and inorganically through disciplined M&A.
Turning to our outlook. We believe our strong first quarter performance keeps us on track for another successful year. Revenue under contract at quarter end was 87%. And while we remain confident in our visibility and trend line, as a normal course of business, we continue to watch the macro environment with project revenue tending to be impacted first by a huge swings.
We are reaffirming our full year 2023 guidance, consisting of revenue up $3.47 billion to $3.51 billion or growth of 11% to 12%: adjusted EBITDA of $735 million to $750 million or growth of 12% to 14%, with EBITDA margin expansion of 15 to 50 basis points even with the aforementioned $50 million of investment. Adjusted EPS of $0.62 to $0.67 or growth of 9% to 18%.
BPaaS total contract value bookings of $900 million to $1 billion and an operating cash flow conversion rate of 45% to 55%, up from 43% in 2022. From a phasing perspective, we expect adjusted EBITDA to be weighted towards the second half with higher investments in the first half, and we expect revenue growth to be weighted towards the first half, in part due to the go-live of our large Federal Thrift contract last June and as we monitor project based work for the second half.
As mentioned previously, we're hosting our Investor Day at the New York Stock Exchange on the afternoon of May 15, and we'll be providing further color on our next chapter.
In closing, we remain excited about our path ahead and believe our first quarter performance is yet another indication that our transformation is working and positioning us for long-term profitable growth.
This concludes our prepared remarks, and now we will move into the question-and-answer session. Operator, would you please instruct participants on how to ask questions.
Thank you. [Operator Instructions] The first question is from Scott Schoenhaus of KeyBanc Capital Markets. Please go ahead.
Hi, team, congrats on the strong results and new wins. I wanted to briefly touch about the international opportunities. I think, Stephan, you mentioned a little bit in the prepared comments. I kind of want to dig in more there. What you're seeing on the international side? I know we tended to focus on the domestic client base here. But if you could talk about your growth opportunities on the international side, Stephan, I'd really appreciate it?
Yes. Thanks, Scott. I appreciate that. And thanks for the comments. And as I've said for the last couple of years, we're very - we're breaking up, okay. Very excited about the international markets and with our structure of how we're going to market there with Cesar and team.
And I think the real exciting announcement was the Workday 1 [ph] And as you've seen from Aneel and Carl in Workday's talk track for them international, especially European markets are a huge part of their growth win.
And so we've really locked in together arm-in-arm with a really good international joint go to market strategy. But they're seeing the same thing that I've been talking about for the last 3 years, which is most companies and internationally is no different are looking for an enterprise-wide solution.
There as fatigued as U.S. clients around these complex architectures that have multiple vendors, multiple solutions, and they're now looking for a more integrated enterprise wide solution, which, together with Workday, we bring the most complete solution into the market internationally.
So we've seen strongest pipelines in Europe are some of our size of deals that we're working on in Europe are the biggest we've ever seen internationally. So yes, a big part of our growth strategy for sure.
That's helpful. And then on the margin side, with all this talk about AI and ChatGPT, I'm wondering if you guys are actively exploring ways to integrate more AI-based functions into your offerings to eliminate some of the more labor-intensive parts of your business, i.e., call centers or whatnot. Have you started integrating these AI capabilities into your platform? Thanks.
Yes. I think the automation and digital piece, as you've heard from us for so long is such a core element to our Worklife strategy. As you know, we launched last May Worklife across our entire customer base. And the key thesis not only is to make it a better experience. But as you saw with some of the stats that we launched in Q3, people are using it on a mobile phone to drive annual enrollment to drive a whole bunch of activities that they used to call us for. So absolutely, we're using the Worklife platform.
The AI piece of it is really how do we deliver a recommendation engine of one to the individual. As you know, in our personal lives, as consumers, we all have wonderful experiences on the platform with Amazon and Netflix and so on. And I've talked for a long time, the employee market should have that same experience. And so you need strong AI capability, data aggregation, all that API architecture that we've built into the technology of Worklife is absolutely at the core of our strategy to drive automation, to drive a recommendation engine of one. So that is a definite big playbook for us around platform for Worklife.
Thanks, guys.
Thanks, Scott. Appreciate it.
Next question is from Tien-Tsin Huang of JPMorgan. Please go ahead.
Hey, thanks so much. I know the bookings can be lumpy and [Technical Difficulty] I'm just curious on the - I was just wondering on the implied step-up in the BPaaS bookings for the rest of the year. It looks like it's a little bit more than the usual step up we've seen in the last couple of years. So just want to check your confidence in replenishing the pipeline and getting to the full year BPaaS bookings figure?
Yes. Thanks, Tien. Yes. I mean, listen, our pipelines are the strongest we've seen up year-over-year, still big deals. And you just said it, the word lumpiness. I mean, we just came off of our largest sales quarter in history of Alight in Q4 with over $300 million in terms of dollars and over 115%, I think 114%, 115% growth.
And I think even as I mentioned, GE and the Fortune 10 company were to market shaping deals for the company, that truly company defining deals for us. That second one came in, in the last week of the quarter. So whether that hits in the last week of the quarter or the first week of the new quarter, we want to take it in Q4 and really finished the year on a strong note. So that's kind of the backdrop. And then we hit $1.5 billion in terms of bookings, which is 9 months ahead of our 3 year plan.
And then maybe the final piece on bookings. Those two big defining deals that we closed last quarter won't really bring revenue, as you've heard from Katie and myself until '24 and largely the '25. The Q1 bookings actually allowed us to reaffirm '23 guidance because a lot of the bookings that we got, while smaller actually drove a lot of in-year revenue for us, which I think is exciting.
So you always want that balance between big transformational deals and a book of business that kind of feeds the next few quarters ahead of us. So good balance, healthy and strong pipeline still ahead of us.
Perfect. I appreciate the balance comment as well. Maybe just my follow-up, I'll ask on the cloud migration. You mentioned Phase 1 is done. I didn't have a month on our side that we were tracking. So I'm curious what's Phase 2 look like, how immediate could that be? And I know it takes time to get the full benefit, but what can we expect in the short and midterm with respect to the conversions?
Yes, good question, Tien-Tsin. So I think of it almost as like a three phase process. We won't be fully out of the data centers until next year. So in essence, you kind of have to run a dual infrastructure as you're going through that process, right, and converting the client. So Phase 1 was kind of getting all of our existing clients into the new infrastructure, which was a huge milestone.
So you'll continue to see that Phase 2 is obviously continuing to migrate all the applications and transactions over the course of this year. We'll take a pause a little bit through enrollment, and then you kind of complete that cycle in '24. So again, I think this was - to see the work the team did was just phenomenal to get us kind of through Phase 1, seamlessly for our clients and kind of keep us on track for the full plan.
Yes. And if you remember, as we said all throughout last year, Phase 1 was all about front of house, the experience layer, the platform layer Worklife, getting it deployed last May. That's the most visible to clients. Phase 2 is the plumbing, the stuff you don't see on the infrastructure side and obviously equally important, right?
As you think about our strategy to drive platform, aggregation of data, experience, making our applications at the system of record level headless, incorporating third-party data, as you know, it's super important for us, all that requires a modernized back office. So those are all part of the elements of Phase 2.
And as I said on the last call, by this time next year, over a 4 year window, we will have basically replaced 40 years of history. And I think that's a significant milestone for us in a 4 year window to be able to do all that.
Yes. No, for sure. That's great to hear. See you all next week.
Thanks, Tien-Tsin.
Yes, thank you.
Looking forward to it.
The next question is from Kyle Peterson of Needham & Company. Please go ahead.
Great. Good morning, guys. Thanks for taking the questions. Just wanted to touch and see have you guys had any impact from the ongoing kind of regional bank volatility, either directly from clients that might be some of these banks have experienced some disruption or anybody that might have used these guys for whether it's payroll or anything might have led to any disruption on the execution side, either in March or quarter-to-date here?
Yes. Kyle. As you know, right, we have a very diverse client base and kind of across the ecosystem. We do have clients that have used some of the regional banks through payroll. We've been able to navigate that with them. So we have not seen an impact, as I think about just kind of the relationship with our client base.
For us, from a corporation, I think the other piece that's been important. You heard me talk a little bit about kind of cash flow and our debt financing, making sure we, I think, from a liquidity perspective, are also in a really strong place has been an area of focus. So again, if you take a step back, I would say really no significant impact for us or our clients at this point.
All right. That's great to hear. And maybe just a follow-up on capital deployment and kind of priorities and kind of the M&A pipeline here. Obviously, you guys bought Reed in the fourth quarter and on the buyback a little bit in the first quarter, but maybe how should we think about deployment of some of the free cash flow outside of the organic investments in the balance of the year?
Yes. I mean the great news is cash flow continues to improve. So we continue to have kind of availability to look at both a number of options, whether that's obviously first priority has been organic investment, which you're seeing us do. Next priority we've said has been - if we can find the right acquisitions at attractive multiples that can accelerate our strategy, that will be an area of focus.
If we can't, and we are very disciplined as we think about kind of where valuations are in the marketplace today, I would say, I think buyback can be an attractive opportunity for us as well. So we'll continue to look at both of those as the priority for the year.
All right. That's good to hear. Nice quarter.
Thanks, Kyle.
Thank you.
The next question is from Peter Heckmann of D.A. Davidson. Please go ahead.
Good morning, everyone. I wanted to ask - I wanted to ask a question. Given the strong bookings over the last several years, how is your conversion backlog looking? Are you finding the ability to staff to schedule them and remain on time? Or have there been any push-outs or hurdles that we should be thinking about?
Yes. No, there really haven't been. I mean, even though we've signed large deals, right, we kind of have a history of doing that. We've seen some of those accelerate. But the team has done a phenomenal job working through the implementation of those. I mean that's enabled us to accelerate some of our investments, right, to keep them on track. So from where we sit today, again, the team has done a phenomenal job. We're not seeing any delays in the implementation. The only thing is they take a long time, right? I mean, I wish we could get the live faster and less underway to work through there, but we still remain on track with those big deals.
That's great to hear. And then just in terms of what other macro, I guess, which macro indicators does management really rely on to think about the potential for push-outs or other impacts to the business? It might be helpful for us to be thinking about and keep tracking three or four metrics that you feel are really good leading indicators for your business?
Yes. Pete, it's a good question. I mean the good news is, remember, if you - we've talked a lot about it. But if you think about just the recurring revenue of our business under contract, we've said, even in short-term cycles, you don't see an immediate headwind, right, because people, for instance, in a health plan, if they leave, they will go into co-growth [ph] which we continue to service.
So the question where we spend a lot of time focusing on is more the longer-term impacts. So are we starting to see unemployment kick up more sustainably, more aggressively, right, where people aren't coming back into the workforce after they have potentially been laid off, I think that's an important metric. Again, that would start to impact you 6 months down the line, 9 months down the line. So it's not immediate.
And then I think the other piece to that point is a little bit of customer demand, right? I mean the great news is, and you've heard Stephan talk about it, it's actually a really unique time for us to be able to help our clients as they are thinking about potential cost pressures, consolidation, improving the experience. That's great.
If at the same time, from a project-based scenario, we don't see the M&A market picking up. We don't see a lot of regulatory change. People kind of put some of those decisions on hold. That does start to impact project revenue.
Yes. Pete, as I've said last year, you've seen the headwinds in our Services business, and you're seeing now the rebound of that. That was largely because I was very intentional on focusing our services capability on driving OneAlight [ph] platform type deals, meaning helping clients drive consolidation, simplification.
So the macro dynamic is clients are looking to recession proof themselves as much as they can. And what's the best way to do that. I've said it for a long time, the HR systems landscape is almost a window into 20, 25 years ago of how a systems landscape was for how corporations dealt with their clients. And so we saw that in the last couple of years.
And so I think what's good for us is we're seeing a lot of clients look to consolidate, simplify, reduce the 30, 40, 50 touch points that employees have to go through. And we've built now that strong services delivery muscle to really help build that reference architecture to drive OneAlight platform type dynamic. So that's really in our favor as we look into this year.
Okay. Great. That's helpful. I look forward to digging a little bit more next week.
You bet.
Thanks, Pete.
The next question is from Kevin McVeigh of Credit Suisse. Please go ahead.
Great. Thanks so much. Maybe for Katie or Stephan. The sequencing of the restructuring and kind of the P&L benefit from - when you come off kind of on-prem into the cloud in '24. Can you remind us of that? I know there's $50 million of cost this year, $90 million next year, but what's the P&L benefit from the restructuring, and then the P&L benefit from the cloud conversion as well, specifically in '24?
Yes. Kevin. So I'm just going to correct you slightly. So two numbers this year. We have $50 million of investments, right, kind of flowing through the P&L, as we've talked about, commercial go-to-market tech, all of those. We also then have the $140 million restructuring program over 2 years, $90 million of that will sit in '23, kind of is our current expectation. And so - and on that $140 million, we expect a run rate benefit of $100 million.
So again, we said for this year, as you think about adjusted EBITDA, you'll see about 15 to 50 basis points of expansion. That will improve in '24. And then I think what I'd also say is we're going to spend a lot more time on this at Investor Day on Monday. So I think, hopefully, that will help we'll go into it in a lot more detail for you, so you can kind of see how that all translates over the next couple of years.
Terrific. And then just circling back on that Workday partnership. Can we maybe understand that a little bit more? It seems pretty interesting in terms of - are you providing short modules for them? Is it joint go-to market? And any way to think about the economics out of it because it seems like it would be a pretty big opportunity and maybe compare that to what you've done with them in the past?
Yes. Listen, it's a unique deal for them, too. They've never done a deal or a partnership like this in their history either. So for both of us, it's exciting. And it all stems from Aneel and Carl having the same vision that I do, which is customers are now looking rather than one-off point type solutions. They are looking for more integrated solutions, and Global Payroll is a key ingredient to that.
And as you know, we are one of the - with the deals that we've won in the last few years, we won huge deals in - especially in the European markets, where Workday is very aggressively growing their footprint in Europe. So they're going with a recipe that includes our products. So it's a product partnership around Global Payroll, where we are the product components to Global Payroll as part of their sales approach.
And then as you know, we're one of their largest implementers of Workday. So we're the ones who can bring the most complete end-to-end solution that includes not only the HR pieces, the U.S. payroll piece, the Global Payroll piece, of course, then our Worklife platform as kind of a front door for a lot of the well being elements.
So it's a very complete solution. And we've always said, when you think about Workday and Alight together, it makes the most complete human capital management platform in the market. And of course, they have a big footprint in Europe. And Global Payroll, as we all know, is a very, very growth oriented product set right now, not only for us, but for the market, a lot of CFOs and a lot of CEOs are very focused specifically on the Global Payroll side of things. So a pretty big complement of components coming together and a great partnership for the two of us.
That sounds terrific. And Stephan, would that be going forward new clients? Or is it the potential to kind of cross pollinate across existing Workday clients as well?
Yes. I mean the focus, Kevin, is starting the rollout in kind of six key countries where we can go after new clients, and then expanding that partnership, right, following up into APAC, into LatAm, right, into the U.S. So it will continue to grow and expand, but it's been focused on how do we really capture kind of a new market with that combined offering.
Terrific. Thank you.
Great. Thanks, Kevin. Appreciate it.
The next question is from Heather Balsky of Bank of America. Please go ahead.
Hi. This is Emily Marzo on for Heather Balsky. Thank you for taking my questions. I guess, first, have you guys seen any pullback in project revenue in light of greater macro uncertainty? Or have you seen any lengthening in the sales cycles?
Yes. Emily. From where we sit today, I would say there's still a really strong pipeline around project revenue, particularly when you look as Stephan said, some of the OneAlight deals and Professional Services. I think the area we continue to monitor is more in employer solutions that I think is something, as I said kind of earlier on the question of metrics, right, as we look at what drives that around some of M&A activity, plan design changes, I think that's the area we're monitoring more closely right now. And the second piece - sorry, your second question?
Deal lengthening?
On the deal lengthening. Yes, what I say on the sales, I'm not sure I'd say the deals are lengthening. I would just say we have bigger OneAlight deals in our pipeline, which take longer. And so Stephan said it, we have a great pipeline. It's getting these big deals kind of over the line, which is where we're focused.
Thank you.
There are no further questions at this time. I would like to turn the floor back over to Stephan Scholl for closing comments. Please go ahead, sir.
Great. Thanks very much, and thank you, everybody, for joining us today, and we really look forward to seeing many of you next week at our Investor Day in New York. Have a great day.
Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.