Results of Operations for the Year Ended December 31, 2022 (Successor) Compared to the Combined Year
Ended December 31, 2021 (Successor and Predecessor)
Revenue
Revenues were $3,132 million for the Successor year ended December 31, 2022, and $1,554 million and $1,361 million for the
Successor six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively. The increase in revenue of $217 million, or 7.4%, over the combined Successor and Predecessor prior year was primarily
driven by increased revenues from our Employer Solutions segment. We recorded BPaaS revenue of $564 million for the Successor year ended December 31, 2022 and $203 million and $187 million for the Successor six months ended
December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively. BPaaS revenue increased $174 million, or 44.6%, over the combined Successor and Predecessor prior year.
In addition, we also consider BPaaS bookings, defined as total contract value for BPaaS customer agreements executed in the period, to be a
key indicator of future revenue growth and used as a metric of commercial activity by management and investors. BPaaS bookings were $871 million for the Successor year ended December 31, 2022 and $322 million and $280 million for
the Successor six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively. This represents an increase in BPaaS bookings of $269 million, or 44.7%, over the combined Successor and Predecessor
prior year.
Recurring revenues were $2,638 million for the Successor year ended December 31, 2022. Recurring revenues were
$1,299 million and $1,130 million for the Successor six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively. The increase in recurring revenue of $209 million, or 8.6%, over the
combined Successor and Predecessor prior year was primarily related to growth in Employer Solutions, which is a result of higher revenues related to acquisition activity, increased volumes and increases in Net Commercial Activity.
Project revenues increased $8 million, or 1.6%, when comparing the Successor year ended December 31, 2022 to the combined Successor
six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively, which was attributable to the Employer Solutions segment partially offset by a decrease in the Professional Services segment.
In addition, a majority of our revenue is generated in the U.S., which reflected 88% of the total revenue increase for the Successor year
ended December 31, 2022 compared to the combined Successor and Predecessor prior year period.
Cost of Services, exclusive of Depreciation and
Amortization
Cost of services, exclusive of depreciation and amortization were $2,080 million for the Successor year ended
December 31, 2022. Cost of services, exclusive of depreciation and amortization were $1,001 million and $888 million, respectively, for the Successor six months ended December 31, 2021 and the Predecessor year ended June 30,
2021. The increase in Cost of services, exclusive of depreciation and amortization of $191 million, or 10.1%, over the combined Successor and Predecessor prior year was primarily driven by acquisitions in the fourth quarter of 2021, higher
costs related to growth in current revenues, including investments in key resources, and increased compensation expenses related to share-based awards.
Selling, General and Administrative
Selling, general and administrative expense increased $145 million, or 27.6%, when comparing the Successor year ended December 31,
2022 to the combined Successor six months ended December 31, 2021 and the Predecessor six months ended June 30, 2021, respectively, which was primarily driven by an increase in share-based compensation expense.
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