Alithya reports double-digit growth in revenues and continued margin expansion

Core Insights - Alithya Group inc. reported a revenue increase of 11.5% year-over-year for Q2 fiscal 2026, reaching CAD 124.3 million, driven by growth in U.S. operations and acquisitions [5][7][9] - The company experienced a net loss of CAD 31.0 million, primarily due to a CAD 38.0 million impairment charge, contrasting with a minimal loss in the same quarter last year [5][16] - Adjusted Net Earnings rose by 80.0% to CAD 9.5 million, reflecting improved gross margins and contributions from recent acquisitions [5][17] Financial Highlights - Revenues: Increased to CAD 124.3 million from CAD 111.5 million, a rise of CAD 12.8 million [3][7] - Gross Margin: Grew by 25.5% to CAD 42.8 million, with a gross margin percentage of 34.4%, up from 30.6% [3][11] - Net Loss: Increased to CAD 31.0 million from CAD 0.3 million, translating to a loss per share of CAD 0.32 [5][16] - Adjusted Net Earnings: Increased to CAD 9.5 million, or CAD 0.10 per share, compared to CAD 5.3 million, or CAD 0.05 per share, in the prior year [5][17] - Adjusted EBITDA: Rose by 37.5% to CAD 12.8 million, with an Adjusted EBITDA margin of 10.3% [5][18] Revenue Breakdown - Canada: Revenues decreased by CAD 4.4 million, or 7.4%, to CAD 55.2 million, attributed to reduced government contracts and project maturity [8] - U.S.: Revenues increased by CAD 16.3 million, or 34.8%, to CAD 63.1 million, driven by organic growth and acquisitions [9] - International: Revenues rose by CAD 0.8 million, or 15.7%, to CAD 5.9 million, mainly due to organic growth [10] Operational Metrics - Bookings: Totaled CAD 90.9 million, resulting in a Book-to-Bill ratio of 0.73 for the quarter [19] - Backlog: Represented approximately 15 months of trailing twelve-month revenues as of September 30, 2025 [5] Expenses - Selling, General and Administrative Expenses: Increased by CAD 5.4 million, or 20.8%, to CAD 31.3 million, with expenses related to recent acquisitions contributing significantly [14][15] Liquidity and Capital Resources - Net Cash from Operating Activities: Decreased to CAD 1.1 million from CAD 3.0 million, impacted by unfavorable changes in working capital [21][23] - Credit Facility: Drawings amounted to CAD 102.3 million, with additional capital resources available totaling CAD 108.3 million [24]