Alithya Q4 2025 slides: Record margins and earnings drive strong performance

Alithya Group (ALYA) reported strong Q4 fiscal 2025 results, with revenue up 4.0% year-over-year to $125.3 million and record gross margin of 36.8%, driving net earnings to $8.0 million. The company's adjusted EBITDA increased 71.8% year-over-year to $18.0 million, supported by the acquisition of eVerge, which expands Alithya's Oracle, Salesforce, and AI capabilities; ALYA's stock price increased 5.29% following the earnings announcement.

Analysis

Alithya Group (ALYA) reported a strong fourth quarter for fiscal 2025, characterized by record profitability metrics and strategic advancements. Revenue reached $125.3 million, an increase of 4.0% year-over-year and 8.3% quarter-over-quarter, accompanied by a significant improvement in gross margin to a record 36.8%, up 470 basis points year-over-year. This enhanced margin contributed to net earnings of $8.0 million, a substantial turnaround from a $3.7 million loss in the prior quarter and a 247.8% increase from $2.3 million in Q4 F2024. Adjusted EBITDA also saw robust growth, climbing 71.8% year-over-year to $18.0 million, with the adjusted EBITDA margin expanding to 14.4%. The positive results spurred a 5.29% increase in Alithya's stock price to $2.19. A key strategic initiative was the acquisition of eVerge for US$23.5 million in cash, a move that bolsters Alithya's capabilities in Oracle, Salesforce, and AI solutions, and expands its smart shoring presence in India. Operationally, the company maintained high customer satisfaction at 9.0/10 and secured its 19th Microsoft Inner Circle award. Financially, Alithya strengthened its balance sheet, reducing its net debt leverage ratio to 2.0x trailing twelve-month adjusted EBITDA, down from 3.1x in Q4 F2024, enhancing its capacity for future M&A. While last twelve months bookings were $420.7 million with a book-to-bill ratio of 0.89 (or 1.00 excluding specific long-term contracts), Q4 bookings showed moderation after a strong Q3 F2025.

Key Decisions for Investors

• Investors should note Alithya's record profitability and successful strategic shifts towards higher-value services and AI, which appear to be driving margin expansion and earnings growth.
• Monitor the integration of the eVerge acquisition and its contribution to revenue synergies and enhanced capabilities in Oracle, Salesforce, and AI, as this is key to the company's industry-first strategy.
• Closely track future bookings and the book-to-bill ratio for sustained revenue momentum, particularly given the recent quarterly fluctuation and the 0.89 LTM ratio (1.00 adjusted).
• Consider Alithya's improved financial leverage, now at 2.0x net debt to adjusted EBITDA, which provides enhanced flexibility for further strategic acquisitions, a core part of its growth model.