Q2 2025 Alithya Group Inc Earnings Call Transcript
Key Points
- Alithya Group Inc (ALYAF) reported a significant improvement in profitability with a $5 million year-over-year increase in adjusted net earnings, reaching $5.3 million in Q2.
- The company achieved a year-over-year increase in gross margin as a percentage of revenue, driven by higher demand for higher-margin services and improved workforce utilization.
- Alithya Group Inc (ALYAF) saw continued share gains in the Canadian renewable energy sector and in Oracle and Microsoft implementations, indicating strong market positioning.
- The company has a robust pipeline of opportunities in mainframe modernization, particularly in Canada, supported by its partnership with AWS and Blu Age technology.
- Alithya Group Inc (ALYAF) has successfully reduced SG&A expenses by 13.6% year-over-year, contributing to a 44% increase in adjusted EBITDA, showcasing effective cost management.
- Alithya Group Inc (ALYAF) experienced a 5.9% year-over-year decrease in consolidated revenues, primarily due to spending reductions in Quebec, particularly in the financial services and public sectors.
- The company faced challenges with slower project kick-offs in the current economic environment, impacting quarterly bookings and delaying the start of new large projects.
- Revenues in Canada decreased by 12.2% year-over-year, reflecting challenges in the Quebec market and the need to backfill revenue from completed large transformation projects.
- Gross margin as a percentage of revenues in the US decreased slightly due to a reduction in software revenue, which typically has higher margins.
- The company is experiencing delays in closing deals in Quebec, particularly in the banking sector, due to the complexity and size of the projects, affecting revenue recovery.
[technical difficulty]
Paul Raymond. Alithya's President and Chief Executive Officer, Bernard Dockrill, Chief Operating Officer and Debbie Di Gregorio, Interim Chief Financial Officer, I will now turn the call over to Paul.
Thank you, Benjamin, good morning, everyone and thank you for joining us today. I'd like to begin by highlighting three notable achievements from the second quarter of our fiscal 2025 year.
I will then turn things over to Bernard to bring down the specifics of our operational performance followed by Debbie to cover some of the financial highlights.
First, I want to commend our team for the continued improvement in our profitability and for delivering a double digit adjusted increase. This was done in a difficult economic environment for discretionary technology spending and given our current client base and type of work, you could say that most of our strategic and critical projects would fall in the discretionary
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