Alithya Group Inc.

Q1 revenue was $105.1 million, down 15.4% year over year. Gross margin was $31.9 million, down 19.8% from $39.8 million, and gross margin as a percentage of revenue was 30.4% versus 32.1% last year. Adjusted EBITDA was $5.4 million, or 5.2% of revenue, compared with $11.6 million, or 9.4%, last year. Net loss was $2.4 million, or $0.03 per share, versus net earnings of $0.2 million, or $0.00 per share, and adjusted net earnings were $2.9 million, or $0.03 per share, versus $6.5 million, or $0.07 per share. Bookings were $89.0 million, with a book-to-bill of 0.85; trailing 12-month bookings were $405.1 million, with a book-to-bill of 0.88. Cash used in operating activities was $4.8 million, and net debt to trailing 12-month adjusted EBITDA was 2.9x. The company did not give formal next-quarter or full-year financial guidance; management said it is focused on accelerating pipeline conversion while the strategic review continues.

Paul Raymond framed the quarter as a transitory soft patch, not a change in the long-term story. He emphasized that Alithya has been fundamentally transformed over several years, with stronger enterprise applications, cloud, data and AI capabilities, plus a broader smart-shore model and service mix. He said the main issue is conversion timing, not demand, and reiterated that the company is undervalued in the public market, which is why the board launched a broad strategic review.

Pierre Blanchette led with the new segment reporting structure and then detailed the quarter’s pressure points. He said revenue fell to $105.1 million, gross margin to $31.9 million, SG&A to $28.3 million, and adjusted EBITDA to $5.4 million, with lower utilization, lower tax credits and salary increases hurting profitability. He also noted $4.8 million of cash used in operations and a 2.9x net debt-to-EBITDA ratio, while saying the company is focused on aligning costs with revenue without losing investment capacity.

Analysts pressed on whether the quarter included one-time items, and management said the main issue was utilization because larger projects had not yet started, causing under-absorption of labor costs. On the U.S. slowdown, Bernard Dockrill said the softness was mainly in Salesforce, where planned starts were delayed, but he pointed to a stronger pipeline and cross-sell opportunities. Questions about the strategic review were met with Paul Raymond’s explanation that the board is evaluating a wide range of alternatives because the market is not reflecting intrinsic value and the company cannot use its stock effectively as acquisition currency. Management also said fixed-price and fixed-price-like work is around 40% and growing, while bookings are increasingly driven by new business and new customers.