Alithya Group (ALYA) Q4 2024 earnings summary

Executive summary

• Q4 achieved record gross margin (32.1%), adjusted EBITDA margin (8.7%), and net margin, despite an 11.5% year-over-year revenue decline, with net earnings of $2.3M reversing a prior year loss.

• U.S. market contributed 54% of Q4 operating income, with strong growth and major contract wins in healthcare, cybersecurity, and energy sectors.

• Strategic focus on higher-value services, operational efficiencies, and smart shoring, with over 8% of workforce now in smart shore centers.

• New three-year plan targets 5–10% annualized organic growth, 11–13% EBITDA margin, and $150M in M&A-driven revenue.

• Fiscal 2024 marked a year of repositioning, expanding global capabilities and launching proprietary AI-assisted IP and Copilot Academy.

Financial highlights

• Q4 revenues were $120.5M, down 11.5% year-over-year but up sequentially; U.S. revenues grew 2.4% year-over-year to $50.4M, while Canadian revenues declined 20.4% to $64.6M.

• Gross margin for Q4 was $38.7M (32.1%), up from 29.9% last year; adjusted EBITDA was $10.5M (8.7% margin), and adjusted net earnings were $6.1M, up 49% year-over-year.

• Net earnings for Q4 were $2.3M, compared to a net loss of $20.0M in Q4 last year.

• Net cash from operating activities was $9.7M in Q4, up 120% year-over-year, and net debt to EBITDA fell below 3x.

• Fiscal 2024 revenues were $491.1M, with a gross margin of 30.4% and adjusted EBITDA of $35.5M (7.2% margin).

Outlook and guidance

• The three-year plan targets 5–10% annualized organic growth, $150M in acquisition-driven revenues, and 11–13% adjusted EBITDA margin, focusing on U.S., Canada, and Western Europe.

• Plans to expand smart shoring, managed services, and AI/digital transformation offerings to drive margin improvement.

• Investor Day scheduled for September 2024 to review strategic objectives.