#Canada #Montreal #financial results #Alithya #Adjusted EBITDA

Alithya Reports Strong Financial Performance in Q4 2025

On June 12, 2025, Alithya Group Inc. unveiled its financial results for the fourth quarter of fiscal year 2025, showcasing impressive growth and improved operational efficiencies. The company's revenue rose by 4.0%, reaching $125.3 million compared to $120.5 million in the same period of the previous year. This increase reflects a thriving business segment as all areas reported sequential revenue growth.

Revenue Growth

With a notable boost from both existing and new clients, 87% of the reported revenues stemmed from existing customers who were active in the same quarter last year. Notably, there was an aggregate revenue increase of $9.5 million, or 8.3%, from the previous third quarter, underlining Alithya's robust operational strategies and market position.

Breakdown of the revenue sources highlighted:

• - Canadian Revenues: Grew by 1.3% to $65.4 million, mainly due to the recovery in the banking sector and revenues from the recent acquisition of XRM Vision.
• - U.S. Revenues: Increased by 7.3% to $54.2 million, driven by organic growth and favorable exchange rates.
• - International Revenues: Slightly improved by 4.5%, reaching $5.7 million.

Record Gross Margins

Alithya reported a record gross margin as a percentage of revenues at 36.8%, a substantial increase from 32.1% in Q4 2024 and 32.3% in Q3 2025. The gross margin increased by 19.0% to $46.1 million, attributed to improved operational efficiencies and strategic shifts towards higher-value service offerings.

The company’s improved gross margins reflect an ongoing evolution towards a business model focused on delivering high-value solutions to clients. This transformation was further evidenced by achieving gross margin increases across all business segments.

Managed Expenses and Earnings

Despite a slight increase in selling, general, and administrative expenses, which totaled $29.7 million, these costs represented a decrease as a percentage of revenues, down from 24.6% to 23.7%. This reduction in the expense ratio underscores Alithya's focus on maintaining cost efficiency alongside growth.

Net earnings for Q4 reached $8.0 million, translating to earnings per share of $0.08, significantly up from $2.3 million or $0.02 per share in the prior year. Adjusted net earnings soared by 101.9% to $12.2 million, equal to $0.12 per share, illustrating the successful execution of the company's strategic initiatives.

Adjusted EBITDA Gains

Alithya’s adjusted EBITDA also reflected a robust performance, climbing 71.8% to $18.0 million, leading to an adjusted EBITDA margin of 14.4% of revenues, in stark contrast to 8.7% in the same quarter of last year. This increase confirms the company's ability to enhance profitability while executing its growth strategies effectively.

Strong Cash Flow and Future Prospects

The company recorded a notable $17.1 million from net cash operating activities, marking a 75.4% rise compared to the previous year. Such strong cash flow enables Alithya to continue investing in strategic opportunities, including recent acquisitions of eVerge and XRM Vision, which aim to bolster its capabilities in pivotal areas like Salesforce and Oracle technologies.

Despite a slight decrease in overall revenues for the fiscal year to $473.5 million, coupled with a slight decline in revenues for the fiscal year overall due to macroeconomic challenges, Alithya remains optimistic about its future. The strategic plan to leverage AI and enhance operational efficiencies positions the company for ongoing growth and stability amidst economic uncertainties.

Conclusion

Paul Raymond, President and CEO of Alithya, expressed pride in the team's accomplishments and reaffirmed the commitment to delivering high-value services while navigating the complexities of the current market. The company demonstrates a promising trajectory, aligning its growth strategies with market demands and client expectations.

As Alithya continues to adapt and innovate, the focus on trusted advisory roles in digital transformation positions the company to not only meet but exceed stakeholder expectations in a rapidly evolving business landscape.