Alithya Group Q1 Earnings Call Highlights

Alithya Group TSE: ALYA reported lower first-quarter revenue and profitability as longer client decision-making and project conversion cycles reduced utilization, while management said its pipeline of late-stage opportunities continued to build. Revenue for the quarter totaled CAD 105.1 million, down 15.4% from a year earlier. Adjusted EBITDA fell to CAD 5.4 million, or 5.2% of revenue, from CAD 11.6 million, or 9.4% of revenue, in the prior-year period. The company recorded a net loss of CAD 2.4 million, or CAD 0.03 per share, compared with net earnings of CAD 0.2 million a year earlier.

Management said the quarter’s primary issue was utilization, as some larger projects took longer than expected to begin while the company continued to carry personnel costs. The company also cited lower tax credits and salary increases that took effect at the start of the fiscal year as factors weighing on gross margin. New Reporting Structure Beginning April 1, 2026, Alithya adopted a new reporting structure following the integration of recent acquisitions and a business divestiture. The company now reports two segments: Enterprise Transformation and Industry Services and Solutions. According to CFO Pierre Blanchette, Enterprise Transformation includes consulting, implementation, integration and managed services for enterprise platforms including Microsoft, Oracle and Salesforce. The segment covers areas such as ERP, EPM, CRM, HCM, SCM and AI-enabled business transformation. Industry Services and Solutions combines sector expertise, consulting, advisory services, business enablement and cloud migration work across AWS and Microsoft Azure. Blanchette said the business supports clients from planning and implementation through organizational change and value realization. Comparative figures also include a third segment associated with Datum, which was sold on March 31, 2026.

Segment Results and Margins Enterprise Transformation revenue was CAD 62.6 million, down CAD 3.2 million, or 4.9%, year over year. Blanchette said the decline reflected client projects reaching maturity and lower billable hours, partly offset by a full quarter of eVerge. Margin in the segment declined due to lower utilization from delayed project starts and salary increases. Industry Services and Solutions revenue totaled CAD 42.5 million, down CAD 11.7 million, or 21.6%, from the prior year. The decline reflected maturing client projects as well as lower government-contract revenue and reduced activity in Quebec financial services. The Datum divestiture accounted for an additional CAD 4.2 million revenue decline. Companywide gross margin was CAD 31.9 million, down 19.8% from CAD 39.8 million a year earlier. Gross margin as a percentage of revenue f...