Alithya Group (ALYA) Q4 2024 earnings summary

Executive summary

• Q4 achieved record gross margin (32.1%) and adjusted EBITDA margin (8.7%), with net earnings of $2.3M, reversing a prior year loss, despite an 11.5% year-over-year revenue decline.

• U.S. operations delivered 54% of Q4 operating income, with strong growth in Microsoft and Oracle ERP practices and major healthcare and energy sector wins, including a $12M Oracle Cloud contract and a $14M operational technology deal.

• Bookings were robust, with a Q4 book-to-bill ratio of 1.27 (excluding two long-term contracts), driven by large healthcare, cybersecurity, and energy wins.

• Strategic focus on higher-value services, operational efficiencies, and smart shoring, with over 8% of workforce now in smart shore centers.

• Fiscal 2024 marked a repositioning year, expanding global capabilities and launching proprietary AI-assisted IP and the Copilot Academy.

Financial highlights

• Q4 revenues were $120.5M, down 11.5% year-over-year but flat sequentially; U.S. revenues grew 2.4% year-over-year to $50.4M, while Canadian revenues fell 20.4% to $64.6M.

• Gross margin for Q4 was $38.7M (32.1% of revenues), up from 29.9% last year.

• Adjusted EBITDA for Q4 was $10.5M (8.7% margin), with adjusted net earnings of $6.1M, up 49% year-over-year.

• Net earnings for Q4 were $2.3M, compared to a net loss of $20.0M in Q4 last year, aided by a $3.8M earn-out recovery from the Datum acquisition.

• Net cash from operating activities was $9.7M in Q4, up 120% year-over-year; net debt reduced by $9.8M to $117.4M.

Outlook and guidance

• The new three-year plan targets 5–10% annualized organic growth, 11–13% adjusted EBITDA margin, and $150M in acquisition-driven revenues.

• Focus on expanding smart shoring, managed services, and AI-based offerings to drive future margin and revenue growth.

• Investor Day scheduled for September 2024 to review strategic objectives.