Alithya Group’s Earnings Call Highlights Growth Amid Uncertainty

Alithya Group, Inc. Class A ((TSE:ALYA)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Alithya Group, Inc. Class A was marked by a generally positive sentiment, underscored by strong operational improvements and financial performance. The company achieved record gross margins and adjusted EBITDA, reflecting its strategic focus on high-value business growth and operational efficiencies. Despite some market uncertainties, Alithya’s strategic acquisitions and high customer satisfaction ratings provide a robust foundation for future growth. The decision to withdraw long-term guidance introduces a note of caution, yet it does not overshadow the company’s positive achievements.

Adjusted EBITDA Improvement

The company reported a significant improvement in adjusted EBITDA, which reached 14.4% for Q4 and 10.1% for the fiscal year. This growth is attributed to higher-value business growth and operational efficiencies, marking a sequential and year-over-year increase.

Record Gross Margin

Alithya achieved a record gross margin of 36.8% in Q4, an increase from the previous year and quarter. This was driven by improved utilization and the delivery of higher-value services, setting a new high watermark as a percentage of revenue.

Revenue Growth

The company saw a 4% year-over-year and 8.3% sequential increase in quarterly revenues for Q4. This growth was fueled by higher-value service offerings across all geographies, showcasing the company’s ability to adapt to market demands.

Strong Cash Flow and Deleveraging

Alithya’s strong cash flow resulted in a net debt to adjusted EBITDA ratio of less than 2x, providing the company with the flexibility to pursue future acquisitions, further strengthening its financial position.

Notable Client Wins

The company secured key client wins with Delta Dental of California and Hayward Holdings, highlighting successful engagements in enterprise transformation services and AI enablement, which are expected to drive future growth.

Successful Acquisition of eVerge

The acquisition of eVerge is set to enhance Alithya’s capabilities in Oracle and Salesforce, adding to its smart shoring capacity with operations in Bangalore, thereby strengthening its market position.

High Customer Satisfaction

Alithya received an impressive average customer satisfaction rating of 9.0 out of 10 from 194 surveys completed in fiscal year 2025, reflecting the company’s commitment to delivering high-quality services.

Market Uncertainty

Economic conditions have introduced some market uncertainty, leading to buyer hesitancy and longer sales cycles. This impacted Q4 bookings, which were $100.1 million, or 0.8x revenue.

Withdrawal of Long-Term Guidance

Alithya has decided to withdraw its previously stated long-term guidance due to market uncertainties, despite being ahead of plan on EBITDA and gross margins. This cautious approach reflects the company’s adaptability to changing market conditions.

Forward-Looking Guidance

During the earnings call, Alithya’s management provided detailed guidance on the company’s performance and future prospects. The focus remains on high-value business growth and operational efficiencies, with a strong emphasis on leveraging the company’s IP and smart shore business model. The acquisition of eVerge is expected to bolster Alithya’s capabilities in Oracle, AI, and Salesforce, further enhancing its market position.

In summary, Alithya Group, Inc. Class A’s earnings call highlighted strong financial performance and strategic growth initiatives, despite some market uncertainties. The company’s record gross margins, improved adjusted EBITDA, and strategic acquisitions position it well for future growth. While the withdrawal of long-term guidance introduces caution, the overall sentiment remains positive, with high customer satisfaction and strong cash flow providing a solid foundation for continued success.