Alithya reports continued gross margin improvement and record Adjusted EBITDA Margin

Q4-2025 Highlights

Revenues increased 4.0% to $125.3 million, compared to $120.5 million for the same quarter last year. On a sequential basis, revenues increased in all segments of the business, and by $9.5 million in aggregate, or 8.3%, from the third quarter of this year.

87% of revenues were generated from clients which we had in the same quarter last year.

Gross Margin as a Percentage of Revenues(1) increased to 36.8%, a record level, compared to 32.1% for the same quarter last year, and from 32.3% for the third quarter of this year, with all segments of the business contributing to this increase.

Gross margin increased 19.0% to $46.1 million, compared to $38.7 million for the same quarter last year.

Selling, general and administrative expenses increased by $0.1 million, or 0.4%, to $29.7 million, compared to $29.6 million for the same quarter last year. Selling, general and administrative expenses as a percentage of revenues(1) decreased to 23.7%, from 24.6% for the same quarter last year.

Net earnings increased to $8.0 million, or $0.08 per share, compared to $2.3 million, or $0.02 per share, for the same quarter last year.

Adjusted Net Earnings(2) increased by $6.1 million, or 101.9%, to $12.2 million, from $6.1 million for the same quarter last year. This translated into Adjusted Net Earnings per Share(2) of $0.12, compared to $0.06 for the same quarter last year.

Adjusted EBITDA(2) increased 71.8% to $18.0 million, for an Adjusted EBITDA Margin(2) of 14.4% of revenues, compared to $10.5 million, for an Adjusted EBITDA Margin(2) of 8.7% of revenues, for the same quarter last year. Adjusted EBITDA Margin increased from 8.9% for the third quarter of this year.

Net cash from operating activities was $17.1 million, representing an increase of $7.4 million, or 75.4%, from $9.7 million for the same quarter last year.

Q4 Bookings(1) reached $100.1 million, which translated into a Book-to-Bill Ratio(1) of 0.80 for the quarter. The Book-to-Bill Ratio would have been 0.89 if revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 were excluded.

Backlog(1) represented approximately 16 months of trailing twelve-month revenues as at March 31, 2025.

Signed 22 new clients.

Acquired eVerge Interests, Inc. and its subsidiaries ("eVerge") on May 31, 2025, adding Salesforce capabilities and enhancing Alithya's Oracle expertise, other complementary technologies, and smart shoring capabilities.

F2025 Highlights

Revenues decreased 3.6% to $473.5 million, compared to $491.1 million last year.

Gross margin as a percentage of revenues increased to 33.0%, compared to 30.4% last year.

Gross margin increased 4.6% to $156.1 million, compared to $149.3 million last year.

Selling, general and administrative expenses decreased by $5.5 million, or 4.5%, to $116.1 million, compared to $121.6 million last year.

Adjusted EBITDA increased 34.4% to $47.7 million, for an Adjusted EBITDA Margin of 10.1% of revenues, from $35.5 million, or an Adjusted EBITDA Margin of 7.2% of revenues, last year.

Net earnings totaled $1.3 million, or $0.01 per share, compared to a net loss of $16.7 million, or $0.17 per share, last year.

Adjusted Net Earnings increased by $14.5 million, or 106.9%, to $28.1 million, compared to $13.6 million last year. This translated into Adjusted Net Earnings per Share of $0.29, compared to $0.14 last year.

Net cash from operating activities was $48.4 million, representing an increase of $32.8 million, from $15.7 million last year.

Fiscal 2025 Bookings reached $420.7 million, which translated into a Book-to-Bill ratio of 0.89. The Book-to-Bill ratio would have been 1.00 if revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 were excluded.

Acquired XRM Vision Inc. and all of its affiliates ("XRM Vision") (the "XRM Acquisition") enhancing Microsoft expertise and reinforcing smart shore capabilities.

MONTREAL, June 12, 2025 /PRNewswire/ - Alithya Group inc. (TSX:ALYA) ("Alithya" or the "Company") reported today its results for the fourth quarter and fiscal 2025 ended March 31, 2025. All amounts are in Canadian dollars unless otherwise stated.

Summary of the financial results for the fourth quarter and for the twelve-month period:

Financial Highlights

(in thousands of $, except for margin percentages)

F2025-Q4

F2024-Q4

F2025

F2024

Revenues

125,331

120,540

473,481

491,125

Gross Margin

46,091

38,747

156,134

149,310

Gross Margin as a percentage of revenues (%)(1)

36.8 %

32.1 %

33.0 %

30.4 %

Selling, general and administrative expenses

29,739

29,608

116,081

121,558

Selling, general and administrative expenses (%)(1)

23.7 %

24.6 %

24.5 %

24.8 %

Net Earnings (Loss)

8,043

2,298

1,295

(16,660)

Basic and Diluted Earnings (Loss) per Share

0.08

0.02

0.01

(0.17)

Adjusted Net Earnings(2)

12,226

6,056

28,149

13,608

Adjusted Net Earnings per Share(2)

0.12

0.06

0.29

0.14

Adjusted EBITDA(2)

18,047

10,505

47,678

35,471

Adjusted EBITDA Margin (%)(2)

14.4 %

8.7 %

10.1 %

7.2 %

(1)

These are other financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. See "Non-IFRS and Other Financial Measures" below.

(2)

These are non-IFRS financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. More information and quantitative reconciliations of Adjusted Net Earnings and Adjusted EBITDA to the most directly comparable IFRS measures are presented below under the caption "Non-IFRS and Other Financial Measures". "Adjusted EBITDA Margin" refers to the percentage of total revenue that Adjusted EBITDA represents for a given period.

Quote by Paul Raymond, President and CEO, Alithya:

"I am very proud of the team's performance and their ability to end the year on a strong positive note. Our margin profile continues to improve as we execute our long-term strategy to profitably grow our trusted advisory status and assist our clients in their digital transformation. We delivered 36.8% gross margin, and 14.4% Adjusted EBITDA Margin in the quarter. We are also achieving quarterly revenue growth, both sequentially and year-over-year.

I would also like to use this opportunity to welcome our new employees from eVerge and to thank Esteban Neely, eVerge's founder, for his trust and leadership. We are adding new experts in Oracle, Salesforce, AI and a new team in India to better serve our clients, globally.

We deliver higher-value services that help our clients automate processes and improve efficiency by leveraging the latest technologies, including AI and our IP accelerators. We believe these types of services will be in demand in the current uncertain economic conditions; we therefore remain cautiously optimistic about the future."

Fourth Quarter Results

Revenues

Revenues amounted to $125.3 million for the three months ended March 31, 2025, representing an increase of $4.8 million, or 4.0%, from $120.5 million for the three months ended March 31, 2024. On a sequential basis, revenues, including constant dollar revenue, increased in all segments of the business, and by $9.5 million in aggregate, or 8.3%, from the third quarter of this year.

Revenues in Canada increased by $0.8 million, or 1.3%, to $65.4 million for the three months ended March 31, 2025, from $64.6 million for the three months ended March 31, 2024. The increase in revenues was due primarily to a recovery in the banking sector, revenues from XRM Vision since the acquisition, and one additional billable day compared to the same quarter last year, partially offset by one client's major transformation project reaching maturity and a reduction in revenues from certain government contracts. On a sequential basis, revenues increased by $3.7 million in aggregate, or 6.1%, from the third quarter of this year.

U.S. revenues increased by $3.8 million, or 7.3%, to $54.2 million for the three months ended March 31, 2025, from $50.4 million for the three months ended March 31, 2024, due primarily to organic growth in enterprise transformation services and support revenues, and a favorable US$ exchange rate impact of $3.3 million between the two periods. On a sequential basis, revenues increased by $5.4 million, and $3.3 million in constant dollar revenue, from the third quarter of this year.

International revenues increased by $0.2 million, or 4.5%, to $5.7 million for the three months ended March 31, 2025, from $5.5 million for the three months ended March 31, 2024.

Gross Margin

Gross margin increased by $7.4 million, or 19.0%, to $46.1 million for the three months ended March 31, 2025, from $38.7 million for the three months ended March 31, 2024. Gross margin as a percentage of revenues increased to 36.8% for the three months ended March 31, 2025, from 32.1% for the three months ended March 31, 2024, due primarily to increased efficiencies, the continued evolution towards a higher value-added business mix, and a $1.0 million tax credit recovery from a previous acquisition. On a sequential basis, gross margin as a percentage of revenues increased from 32.3% for the third quarter of this year, with all segments of the business contributing to this increase.

In Canada, gross margin as a percentage of revenues increased, compared to the same quarter last year, mainly due to increased efficiencies and higher hourly billing rates, as a result of providing a greater proportion of higher-value services, a proportionally larger decrease in the use of subcontractors compared to permanent employees, a positive margin contribution from XRM Vision since the acquisition, and a $1.0 million tax credit recovery from a previous acquisition.

In the U.S., gross margin as a percentage of revenues increased compared to the same quarter last year, primarily due to higher hourly billing rates, increased efficiencies, and improved project performance, partially offset by lower digital adoption subscription revenues, which historically had a higher gross margin as a percentage of revenues.

International gross margin as a percentage of revenues increased compared to the same quarter last year, mainly due to higher utilization and improved project performance in the UK.

Selling, General and Administrative Expenses

Selling, general and administrative expenses totaled $29.7 million for the three months ended March 31, 2025, representing an increase of $0.1 million, or 0.4%, from $29.6 million for the three months ended March 31, 2024. Selling, general and administrative expenses as a percentage of revenues amounted to 23.7% for the three months ended March 31, 2025, compared to 24.6% for the same period last year. The increase in selling, general and administrative expenses was driven mainly by an increase in employee compensation costs, resulting primarily from variable compensation and XRM Vision expenses since ...