Alithya Group (ALYA) Q2 2025 earnings summary

Executive summary

• Achieved double-digit Adjusted EBITDA and bottom-line growth year-over-year, with strong backlog, share gains in key business lines, and most strategic projects classified as discretionary.

• Delivered year-over-year growth in all business areas except Quebec, where client spending reductions impacted results; backlog remains strong.

• Improved adjusted net earnings to $5.3 million, up $5 million year-over-year, driven by SG&A reductions and a higher-value services mix.

• Gross margin as a percentage of revenue increased year-over-year, supported by demand for higher-margin services and improved workforce utilization.

• Signed 25 new clients and maintained a backlog representing 16 months of trailing twelve-month revenues.

Financial highlights

• Revenues were $111.5 million, a 5.9% decrease year-over-year.

• Gross margin rose to 30.6% from 29.4% in the prior year.

• Adjusted EBITDA reached $9.3 million, a 44% increase year-over-year, with margin improving to 8.3% from 5.4%.

• Adjusted net earnings were $5.3 million, up $5 million year-over-year; net loss narrowed to $0.3 million from $9.2 million.

• Net cash from operating activities was $3.0 million, up 117.3% year-over-year.

Outlook and guidance

• Pipeline in Quebec remains healthy but deal closures are delayed; growth expected to return as market conditions improve.

• Strategic plan targets 5–10% annualized organic growth and $150 million in acquired revenues by fiscal 2027.

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

• Focus on higher value IT segments, AI and IP solutions, and increased smart shoring.

• U.S. revenues expected to continue growing, supported by industry diversification and increased discretionary spending.