Alithya Shows Resilience with Increased Margins Amid Challenges
Alithya Reports Operational Strength with Margin Improvements
Alithya Group Inc. (TSX: ALYA) has showcased operational resilience despite a slight drop in revenues for the third quarter of fiscal 2025. With a revenue decline of 3.9% to $115.8 million from $120.5 million in the same quarter last year, Alithya is positioning itself as a trusted technology partner, focusing on efficiency and higher-value business offerings.
Third Quarter Highlights
The company noted that revenues in all segments increased on a sequential basis, marking a $4.3 million or 3.8% rise from the previous quarter. Remarkably, 87% of revenues came from clients retained from the previous year's same quarter, highlighting strong client retention. Gross margin as a percentage of revenues has climbed to 32.3%, an all-time high for the company, demonstrating improved operational efficiency.
Continued Growth Despite Challenges
Alithya's gross margin slightly declined to $37.4 million from $37.7 million last year due to lower revenues; however, ongoing reduction in selling, general and administrative expenses by $0.7 million showcases effective cost management practices. Notably, Alithya recorded a net loss of $3.7 million for the quarter, which is an increase from a loss of $2.5 million in the prior-year period, influenced by an impairment of goodwill.
Adjusted Earnings Show Positive Trend
Adjusted Net Earnings reached $5.7 million with earnings per share rising to $0.06, an increase from $0.04 last year. The company witnessed a robust 8.7% rise in Adjusted EBITDA to $10.3 million for the quarter, with an Adjusted EBITDA Margin reflecting a record 8.9%, which marks an increase from 7.8% compared to last year.
Record Bookings Indicate Strong Future
Alithya reported impressive third-quarter bookings of $138.4 million, translating to a Book-to-Bill Ratio of 1.20. When excluding revenues from long-term contracts related to an acquisition, this ratio climbs to 1.34. With a backlog that represents approximately 17 months of trailing twelve-month revenues, Alithya’s growth trajectory looks promising.
Strategic Initiatives and Acquisitions
The strategic acquisition of XRM Vision Inc. has enhanced Alithya's Microsoft capabilities and smart shoring capabilities significantly. The company has signed 24 new clients and is proactively addressing the rapidly evolving technology landscape. New Chief Financial Officer, Nicolas Lavoie, plans to expand Alithya’s influence within the technology sector.
Focus on Sustainable Growth
As part of its three-year strategic plan, Alithya aims to foster organic growth between 5% to 10% annually while also acquiring complementary businesses. The firm also looks to bolster its AI-driven solutions and enhance stakeholder returns through long-term strategies. Alithya’s commitment to profitability suggests an Adjusted EBITDA Margin target between 11% and 13% in the coming years.
About Alithya
Alithya stands as a trusted advisor in digital technology services, driven by a dedicated workforce. Through digital transformation, strategic consulting, and operational efficiency, Alithya embraces its mission to serve its clients effectively while balancing social responsibilities and environmental commitments.
Frequently Asked Questions
What were Alithya's revenues for the third quarter?
Alithya reported revenues of $115.8 million for the third quarter of fiscal 2025.
How did Alithya's gross margin change?
The gross margin as a percentage of revenues increased to 32.3% from 31.3% compared to the same quarter last year.
What were Alithya's Adjusted Net Earnings?
Adjusted Net Earnings for the quarter amounted to $5.7 million, reflecting an increase in earnings per share to $0.06.
How did bookings perform for Alithya in Q3?
Bookings reached $138.4 million, resulting in a Book-to-Bill Ratio of 1.20 for the quarter.
What is Alithya's strategic focus moving forward?
Alithya aims to sustain organic growth of 5% to 10% annually while pursuing strategic acquisitions to enhance its service offerings.
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