Alithya's Q2 Financial Results Reflect Growth and Stability

Alithya's Q2-2025 Performance Highlights

Alithya Group Inc. (TSX: ALYA) has released its impressive financial results for the second quarter of fiscal 2025. The company reported a revenue of $111.5 million, which, despite being a 5.9% decline from the previous year, reflects a consistent performance in a challenging economic environment. An astonishing 84% of this revenue was generated from clients retained in the same quarter last year, illustrating the company’s strong customer loyalty and service value.

Revenue Insights

The decrease in revenue is attributed to a range of factors, including the maturing of a major transformation project for a key client and reduced government contract revenues. However, Alithya experienced organic growth in its services, particularly in the U.S. market, where revenues saw a 2.3% increase, amounting to $46.8 million. This success can be linked to ongoing strategic initiatives aimed at improving service delivery and client engagement.

Growth in Gross Margin and Adjusted EBITDA

The gross margin slightly declined to $34.1 million, a decrease of 1.9% from the same period last year. However, the gross margin as a percentage of revenues grew to 30.6%, a notable improvement from 29.4%. This demonstrates Alithya's capability to manage its operational efficiency amid fluctuating revenues.

Notably, Alithya achieved an adjusted EBITDA of $9.3 million for the quarter, which represents a remarkable 44% increase from $6.5 million in the previous year. This led to an adjusted EBITDA margin of 8.3%, indicating improved profitability and operational health. The company showcased a strong net cash flow from operating activities, which rose to $3 million, marking a staggering increase of $20.3 million from the prior year.

Cost Management and Client Acquisition

Alithya has successfully reduced its selling, general, and administrative expenses by 13.6% to $25.9 million. The company is focusing on strategic initiatives that involve optimizing operational costs while enhancing service quality. This cost management strategy signifies Alithya’s commitment to maintaining financial integrity while driving growth.

In a display of solid client acquisition efforts, Alithya signed 25 new clients during the quarter. The company continues to foster long-term relationships while exploring new business ventures that reinforce its market presence.

Strategic Business Plans for Growth

Looking ahead, Alithya aims to be recognized as a trusted technology advisor. The company is embarking on a strategic three-year plan designed to expand its market share through both organic and acquisition growth. Key objectives include realizing between 5% to 10% annualized organic growth and targeting complementary business acquisitions.

Environmental and Social Responsibilities

Alithya is committed to sustainability alongside its operational and financial initiatives. The company endeavors to obtain carbon care certifications and is actively pursuing pathways to achieve carbon neutrality. These measures demonstrate the organization’s dedication not only to economic growth but also to social responsibility and environmental stewardship.

Frequently Asked Questions

What were the main highlights of Alithya's Q2 report?

Alithya reported $111.5 million in revenue, an adjusted EBITDA of $9.3 million, and successful client acquisition efforts with 25 new clients signed.

How did Alithya's gross margin perform in Q2?

The gross margin was $34.1 million, with an improvement in gross margin percentage rising to 30.6%.

What is Alithya's plan for future growth?

Alithya is focused on achieving 5-10% annualized organic growth and pursuing strategic acquisitions.

How does Alithya manage its costs?

By reducing selling, general, and administrative expenses, which decreased by 13.6% in Q2.

What are Alithya's sustainability goals?

Alithya aims to obtain carbon care certification and achieve carbon neutrality as part of its environmental commitments.

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