Alithya Group Inc (ALYAF) Q3 2026 Earnings Call Highlights: Strong US Performance and Strategic …

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Sat, February 14, 2026 at 6:00 AM GMT+9 3 min read

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ALYAF

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This article first appeared on GuruFocus.

Release Date: February 13, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Alithya Group Inc (ALYAF) reported a significant increase in net earnings for the third quarter, with a rise of $4.4 million compared to the same period last year.

The US segment showed strong performance with a 12.7% increase in revenues, driven by the acquisition of Everge and organic growth in enterprise transformation services.

The company achieved a book-to-bill ratio of 1.14 for the quarter, indicating strong bookings relative to billings.

Net cash from operating activities increased significantly by $13.8 million year over year, demonstrating improved cash flow generation.

Alithya Group Inc (ALYAF) successfully reduced its leverage ratio to 1.9 times net debt over trailing 12-month adjusted EBITDA, showcasing effective debt management.

Negative Points

Consolidated revenue decreased by 0.5% year over year, with a notable decline in Canadian revenues by 12.5% due to reduced public sector contracts.

Gross margin as a percentage of revenue decreased in both the Canadian and US segments, primarily due to lower utilization rates.

The adjusted EBITDA margin slightly dropped to 8.7% from 8.9% last year, reflecting challenges in maintaining profitability.

The company faced timing issues with project deliveries in the US, impacting utilization rates and resulting in softer organic growth for the quarter.

Revenue growth in Canada is taking time to materialize due to the shift towards higher-value services, impacting short-term performance.

Q & A Highlights

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Q: Can you explain the softer organic growth in the US this quarter compared to previous quarters? A: Unidentified_1: The softer growth is primarily due to timing differences. Last year, we had a record number of go-lives in January, which led to higher utilization in Q3. This year, without that spike, revenues were slightly down, but we believe it’s a timing issue rather than a trend.

Q: Regarding the Everge acquisition, there seems to be a step down in performance from Q2 to Q3. Can you elaborate on this? A: Unidentified_3: There is nothing specific to highlight regarding the step down. The type of work with Everge involves projects like Oracle and Salesforce implementations. The integration is going well, and we are seeing positive results, especially in diversifying our Oracle capabilities into other industries.

Story Continues  

Q: Can you provide more details on the Datum transaction and its financial profile? A: Unidentified_1: Datum was acquired several years ago and has been beneficial for revenue. We are spinning off some IT assets into a new company to unlock more value. Although we haven’t shared specific financial details, the gross margins are very good.

Q: How is the transition to higher-value services in Canada progressing, and what challenges are you facing? A: Unidentified_3: We are in the middle of transitioning to higher-value services, particularly in Quebec. This involves shifting away from lower-margin contracts and focusing on more specialized services. The process takes time, especially with government contracts, but we are seeing improvements in gross margins.

Q: What is the status of your acquisition priorities and pipeline? A: Unidentified_1: Our acquisition pipeline remains healthy. We have shown the ability to leverage up and quickly reduce debt post-acquisition. We are in a strong position to execute on future acquisitions, with our debt ratio currently below two times EBITDA.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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