Alithya Group (ALYA) Q1 2026 earnings summary

Executive summary

• Achieved year-over-year improvements in adjusted EBITDA, gross margin, and consolidated revenues in Q1 fiscal 2026, driven by disciplined focus on higher-value services, operational efficiency, and AI-driven transformation.

• U.S. segment delivered double-digit organic revenue growth of 17.3%, now matching Canadian revenues, with strong performance in Oracle and Microsoft practices and contributions from recent acquisitions.

• Recent acquisitions (XRM Vision and eVerge) contributed to growth, expanded capabilities, and enhanced Smart Churn/Smart Shore Delivery Centers in Morocco and India, now representing 13% of employees.

• Over 84% of revenues came from repeat clients, reflecting strong client relationships and recurring business.

• Net earnings improved to $0.2 million from a net loss of $2.8 million in the prior year quarter.

Financial highlights

• Consolidated revenues reached $124.2 million, up 2.7% year-over-year; U.S. revenues rose 17.3% to $59.5 million, while Canadian revenues declined 8.5% to $59.6 million.

• Gross margin increased 3.3% year-over-year to $39.8 million (32.1% of revenues), driven by efficiency gains and a higher-value business mix.

• Adjusted EBITDA was $11.6 million, up 15.6% year-over-year, with margin rising to 9.4% from 8.3%.

• Adjusted net earnings reached $6.5 million, up 31.8% year-over-year, or $0.07 per share.

• Net cash used in operating activities was $4.2 million, mainly due to unfavorable working capital changes.

Outlook and guidance

• Management remains confident in continued U.S. growth, closely tied to the performance of key partners Microsoft and Oracle, and focused on leveraging AI and expanding service offerings.

• Canadian business is shifting toward higher-margin, transformational projects, with slower adoption compared to the U.S.

• Bookings for the quarter were $118.1 million (book-to-bill ratio 0.95), with a 12-month backlog representing approximately 15 months of revenue.

• Balance sheet and liquidity position support further complementary acquisitions and execution of the three-year strategic plan.