Alithya Group (ALYA) Investor Day 2024 summary

Strategic direction and growth outlook

• Targeting 5%-10% annual organic growth and CAD 150 million in additional revenue from acquisitions over the next three years, with a goal to reach 11%-13% EBITDA margin in that period.

• Focus remains on organic, profitable growth, complemented by selective, high-margin tuck-in acquisitions, especially in industry verticals and IP-driven solutions.

• U.S. market is a key growth driver, now representing 40% of revenue, with faster growth than other regions due to market size and smart shoring opportunities.

• Margin expansion will be driven by higher-value services, increased use of proprietary IP, and scaling smart shoring/offshoring capabilities.

• Industry focus includes financial services, healthcare, manufacturing, energy, and public sector, with tailored solutions and accelerators for each.

Financial performance and guidance

• Revenues have grown 134% and gross margin dollars 175% since going public five years ago, with adjusted EBITDA up over 470%.

• Gross margin improved from 26.5% in FY22 to 30.4% in FY24, peaking at 32.1% in Q4 FY24, driven by integration of acquisitions and shift to higher-value services.

• Adjusted EBITDA margin rose from 5.2% in FY22 to 7.2% in FY24, despite a 6% revenue decline in FY24, reflecting cost discipline and margin focus.

• Net debt to trailing twelve-month adjusted EBITDA decreased from 5.4x in Q2 FY22 to 2.7x in Q1 FY24, supporting future M&A capacity.

• Over 80% of FY24 revenue came from existing clients, highlighting strong customer retention and satisfaction.

Differentiation and business model evolution

• Strategic shift from staff augmentation and project-based work to solution-based and trusted advisor roles, emphasizing business outcomes over price.

• Proprietary IP and accelerators, such as RapidSuite and AI-FI, are increasingly central, with IP-driven revenue rising from 2.8% to 12.1% over three years.

• Partnerships with Microsoft, Oracle, and AWS are leveraged for joint go-to-market, product development, and filling solution gaps.

• Smart shoring centers in Morocco, Eastern Europe, Spain, and India provide access to high-value talent and support margin expansion.

• Client satisfaction and employee engagement are rigorously measured, with high scores supporting the trusted advisor positioning.