Alithya Group (ALYA) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA rose 11.1% year-over-year to $10.1 million, with margin improving to 8.3% despite lower revenues.

• 83% of Q1 revenues came from repeat clients, reflecting strong client relationships and loyalty.

• Gross margin improved to 31.9% from 28.9% year-over-year, driven by cost efficiencies and reduced subcontractor use.

• Net cash flow from operating activities reached $16.7 million, up 119.8% year-over-year.

• Net loss narrowed to $2.8 million from $7.2 million year-over-year; Adjusted Net Earnings increased 65.1% to $4.9 million.

Financial highlights

• Revenues were $120.9 million, down 8.1% year-over-year but up slightly sequentially.

• U.S. revenues rose 3% year-over-year to $50.7 million, now 42% of total revenues.

• Canadian revenues fell 15.4% year-over-year to $65.1 million, but increased sequentially.

• Gross margin totaled $38.5 million (31.9% of revenues), up from $38.1 million (28.9%) year-over-year.

• SG&A expenses were $31.7 million, down 2.6% year-over-year; 26.2% of revenues.

Outlook and guidance

• Backlog remains strong, representing about 16 months of trailing twelve-month revenues.

• Management is focused on executing a three-year strategic plan emphasizing diversification, AI-driven solutions, and higher value IT segments.

• Adjusted EBITDA margin goal set at 11–13% over the next three years.

• Pipeline is healthy, with expectations for bookings to improve as prior strong bookings convert to projects.