The following is a summary of the Alithya Group Inc. (ALYAF) Q1 2025 Earnings Call Transcript:
Financial Performance:
Alithya reported a stable revenue with a sequential increase from $120.5 million in the fourth quarter of fiscal 2024 to $120.9 million in Q1 2025.
Adjusted EBITDA increased by 11.1% year-over-year, reaching $10.1 million.
Gross margin as a percentage of revenue increased to 31.9%, up from 28.9% in the same quarter last year.
Net cash flow from operating activities improved significantly to $16.7 million, which is a 120% increase year-over-year.
Business Progress:
Alithya has maintained repeat client revenue at 83.1%, indicating strong client relationships and trust.
They have reduced the usage of subcontractors, increasing the proportion of permanent employees which positively impacts their gross margin.
Notable strategic reinforcement in cybersecurity, particularly within the nuclear energy sector, with a $14 million operational technology project secured.
Achievements in the U.S. market include growth in Oracle Cloud and Microsoft Dynamics ERP practices, alongside key Microsoft partnership recognitions.
Launched the Alithya Copilot Academy to enhance AI preparedness for clients.
Opportunities:
Expanding Alithya's digital solutions with existing public sector clients in Quebec and deployments in new government sectors.
Utilization of smart-shoring strategy, leveraging talents from Morocco, Eastern Europe, and India.
Leveraging partnerships, such as the recent strategic partnership with Microsoft for end-to-end Cloud Automation, to push into new markets and sectors.
Risks:
Revenue challenges in the Canadian market, particularly with a 15.4% decrease to $65.1 million due to slower IT investments in the banking sector and maturing client projects.
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