Alithya reports first quarter fiscal 2024 results
- Revenues increased
- Gross margin increased
- Adjusted EBITDA increased
- Q1 bookings reached $111.3 million
- Signed 32 new clients
- Net loss was $7.2 million
Q1-2024 Highlights
- Revenues increased
3.8% to$131.6 million $126.8 million 82% of revenues were generated from clients which we had in the same quarter last year.- Gross margin increased
11.8% to$38.1 million $34.1 million - Gross margin as a percentage of revenues(1) increased to
28.9% , compared to26.9% for the same quarter last year. - Adjusted EBITDA(2) increased
46.1% to$9.1 million 6.9% of revenues, compared to$6.2 million 4.9% of revenues, for the same quarter last year. - Net loss was
$7.2 million $0.08 $4.2 million $0.04 $1.4 million - Adjusted Net Earnings(2) decreased
$1.0 million 38.3% , to$1.7 million $2.7 million $0.02 $0.03 - Net cash from operating activities was
$7.6 million $17.4 million $9.8 million - Q1 bookings(1) reached
$111.3 million - Backlog(1) represented approximately 16 months of trailing twelve-month revenues as at June 30, 2023.
- Signed 32 new clients.
- Alithya recognized in eight categories of the combined 2023 Microsoft Partner of the Year and Impact Awards, including Partner of the Year Award in the Modern Work, Apps & Solutions category for a fifth consecutive year.
Summary of the financial results for the first quarter:
Financial Highlights (in thousands of $, except for margin percentages) | F2024-Q1 | F2023-Q1 |
Revenues | 131,595 | 126,764 |
Gross Margin | 38,093 | 34,064 |
Gross Margin (%) | 28.9 % | 26.9 % |
Selling, general and administrative expenses | 32,499 | 28,927 |
Selling, general and administrative expenses (%)(1) | 24.7 % | 22.8 % |
Adjusted EBITDA(2) | 9,055 | 6,198 |
Adjusted EBITDA Margin(2) (%) | 6.9 % | 4.9 % |
Net Loss | (7,245) | (4,164) |
Basic and Diluted Loss per Share | (0.08) | (0.04) |
Adjusted Net Earnings(2) | 1,677 | 2,719 |
Adjusted Net Earnings per Share(2) | 0.02 | 0.03 |
(1) | These are other financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. See "Non-IFRS and Other Financial Measures" below. |
(2) | These are non-IFRS financial measures without a standardized definition under IFRS, which may not be comparable to similar measures used by other issuers. Definition and quantitative reconciliation of Adjusted Net Earnings and Adjusted EBITDA to the most directly comparable IFRS measure is presented below under the caption "Non-IFRS and Other Financial Measures". "Adjusted EBITDA Margin" refers to the percentage of total revenue that Adjusted EBITDA represents for a given period. |
Quote by Paul Raymond, President and CEO, Alithya:
"I am pleased to announce another quarter of year over year global operations growth to begin our 2024 fiscal year. Despite some slowdowns in our Canadian financial sector, our US and international operations are continuing their growth. Our bookings remain robust, our margins, cash generation, and days sales outstanding keep improving, and we are adding new clients at a solid pace, which gives us confidence for the future.
We are particularly pleased with our gross margin performance in the US, driven by the integration of recent acquisitions and improved project mix and performance. We also continue to build on our smart-shore operations, and we recently opened a new office in
With our finger on the pulse of complementary new technologies, we are leveraging the power of artificial intelligence to bolster our own intellectual property products, including our RapidSUITE solutions. We also continue to harness leading edge automation, both for our clients and internally, to reduce manual processes and drive greater efficiencies. As a people-centric company, Alithya continues to advance into the artificial intelligence realm with an ethical, human-centered approach to harnessing the technology to enhance existing processes.
The first quarter of fiscal 2024 was also filled with prestigious global accolades validating our approach to building relationships of trust with our clients, partners, and other stakeholders. Alithya was nominated in eight categories of Microsoft's Global, US, and Canadian awards programs. Of particular note, we were honoured as Microsoft Partner of the Year in the Modern Work, Apps & Solutions category. In May, we also received a prestigious Mercuriades award in the Training and Workforce Development category for our Alithya Leadership Academy.
As we move forward into the second quarter of the 2024 fiscal year, we will continue to focus on strong bookings, improved gross margins, and increased cash generation."
Revenues
Revenues amounted to
Revenues in
International revenues increased by
Gross Margin
Gross margin increased by
In
In the
International gross margin as a percentage of revenues increased compared to the same quarter last year, and on a sequential basis, mainly as a result of a positive margin impact from the acquisition of Datum's international business.
Selling, General and Administrative Expenses
Selling, general and administrative expenses totaled
Adjusted EBITDA
Adjusted EBITDA amounted to
Net Loss
Net loss for the three months ended June 30, 2023 was
Adjusted Net Earnings
Adjusted Net Earnings amounted to
Liquidity and Capital Resources
For the three months ended June 30, 2023, net cash from operating activities was
Outlook
Notwithstanding the ongoing global uncertainties, the Company maintains focus on its long-term strategic plan, which sets as a goal to consolidate its position to become a trusted leader in digital transformation.
According to this plan, Alithya's consolidated scale and scope should allow it to leverage its geographies, expertise, integrated offerings and position on the value chain to target the fastest growing IT services segments. Alithya's specialization in digital technologies and the flexibility to deploy enterprise solutions and deliver solutions tailored to specific business objectives responds directly to client expectations. More specifically, Alithya has established a three-pronged plan focusing on:
- Increasing scale through organic growth and complementary acquisitions;
- Achieving best-in-class employee engagement;
- Providing its investors, partners and stakeholders with long-term growing return on investment.
Forward-Looking Statements
This press release contains statements that may constitute "forward-looking information" within the meaning of applicable Canadian securities laws and "forward-looking statements" within the meaning of the
Forward-looking statements in this press release include, among other things, information or statements about: (i) our ability to generate sufficient earnings to support our operations; (ii) our ability to take advantage of business opportunities and meet our goals set in our three-year strategic plan; (iii) our ability to maintain and develop our business, including by broadening the scope of our service offerings, entering into new contracts and penetrating new markets; (iv) our strategy, future operations, and prospects, including our expectations regarding future revenue resulting from bookings and backlog; (v) our ability to service our debt and raise additional capital and our estimates regarding our financial performance, including our revenues, profitability, research and development, costs and expenses, gross margins, liquidity, capital resources, and capital expenditures; (vi) our ability to realize the expected synergies or cost savings relating to the integration of our business acquisitions, and (vii) the potential return to pre-COVID-19 pandemic operations.
Forward-looking statements are presented for the sole purpose of assisting investors and others in understanding Alithya's objectives, strategies and business outlook as well as its anticipated operating environment and may not be appropriate for other purposes. Although management believes the expectations reflected in Alithya's forward-looking statements were reasonable as at the date they were made, forward-looking statements are based on the opinions, assumptions and estimates of management and, as such, are subject to a variety of risks and uncertainties and other factors, many of which are beyond Alithya's control, and which could cause actual events or results to differ materially from those expressed or implied in such statements. Such risks and uncertainties include but are not limited to those discussed in the section titled "Risks and Uncertainties" of Alithya's Management Discussion and Analysis for the quarter ended June 30, 2023 and Management's Discussion and Analysis for the year ended March 31, 2023, as well as in Alithya's other materials made public, including documents filed with Canadian and
Forward-looking statements contained in this press release are qualified by these cautionary statements and are made only as of the date of this press release. Alithya expressly disclaims any obligation to update or alter any forward-looking statements, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by applicable law. Investors are cautioned not to place undue reliance on forward-looking statements since actual results may vary materially from them.
Non-IFRS and Other Financial Measures
This press release includes certain measures which have not been prepared in accordance with IFRS and other financial measures. Adjusted Net Earnings, Adjusted Net Earnings per Share, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, are non-IFRS measures and Bookings, Book-to-Bill Ratio, Backlog, DSO, Gross Margin as a Percentage of Revenues and Selling, General and Administrative as a Percentage of Revenues are other financial measures used in this press release. These measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. Additional details for these non-IFRS and other financial measures can be found in section 5,"Non-IFRS and Other Financial Measures", of Alithya's MD&A for the quarter ended June 30, 2023, filed on SEDAR+ at www.sedarplus.com and EDGAR at www.sec.gov, and are incorporated by reference in this press release, which includes explanations of the composition and usefulness of these non IFRS financial measures and non IFRS ratios.
The following table reconciles net loss to Adjusted Net Earnings:
For the three months ended June 30, | ||||
(in $ thousands) | 2023 | 2022 | ||
$ | $ | |||
Net loss | (7,245) | (4,164) | ||
Business acquisition, integration and reorganization costs | 1,105 | 1,882 | ||
Amortization of intangibles | 6,824 | 4,699 | ||
Share-based compensation | 2,078 | 1,061 | ||
Impairment of property and equipment and right-of-use assets | 1,383 | — | ||
Income tax expense related to above items | (2,468) | (759) | ||
Adjusted Net Earnings (1) | 1,677 | 2,719 | ||
Basic and diluted loss per share | (0.08) | (0.04) | ||
Adjusted Net Earnings per Share (1) | 0.02 | 0.03 | ||
(1) Non-IFRS measure. See section 5 titled "Non-IFRS and Other Financial Measures" of Alithya's MD&A for the quarter ended June 30, 2023, filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov. |
The following table reconciles net loss to EBITDA and Adjusted EBITDA:
For the three months ended June 30, | ||||
(in $ thousands) | 2023 | 2022 | ||
$ | $ | |||
Revenues | 131,595 | 126,764 | ||
Net loss | (7,245) | (4,164) | ||
Net financial expenses | 3,220 | 1,793 | ||
Income tax expense (recovery) | 150 | (488) | ||
Depreciation | 1,668 | 1,579 | ||
Amortization of intangibles | 6,824 | 4,699 | ||
EBITDA (1) | 4,617 | 3,419 | ||
EBITDA Margin (1) | 3.5 % | 2.7 % | ||
Adjusted for: | ||||
Foreign exchange gain | (128) | (164) | ||
Share-based compensation | 2,078 | 1,061 | ||
Business acquisition, integration and reorganization costs | 1,105 | 1,882 | ||
Impairment of property and equipment and right-of-use assets | 1,383 | — | ||
Adjusted EBITDA (1) | 9,055 | 6,198 | ||
Adjusted EBITDA Margin (1) | 6.9 % | 4.9 % | ||
(1) Non-IFRS measure. See section 5 titled "Non-IFRS and Other Financial Measures" of Alithya's MD&A for the quarter ended June 30, 2023, filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov. |
Conference Call
Alithya will hold a conference call to discuss these results on August 10, 2023, at 9:00 AM Eastern Time. Interested parties can join the call by dialing 888 396 8049, conference ID 70109125, or via webcast at https://www.icastpro.ca/ko7yqc. The conference call recording can be accessed via the same URL link until September 10, 2023.
About Alithya
Empowered by the passion and enthusiasm of a talented global workforce, Alithya is positioned on the crest of the digital wave as a trusted advisor in strategy and digital technology services. Transforming the world one digital step at a time, Alithya leverages collective intelligence and expertise to develop practical IT solutions tailored to complex business challenges. As shared stewards of its clients' success, Alithya accompanies them through the full cycle of their digital evolutions, paving new roads to the future of their businesses.
Living up to its name, meaning truth, Alithya embraces a business model that avoids industry buzzwords and technical jargon to deliver straight talk provided by collaborative teams focused on five main pillars: business strategy, business applications implementation, application services, data and analytics, and digital skilling and change enablement.
With two gender parity certifications obtained in
Note to readers: Management's Discussion and Analysis and the interim consolidated financial statements and notes for the three months ended June 30, 2023 are available on SEDAR+ at www.sedarplus.com, on EDGAR at www.sec.gov and on the Company's website at www.alithya.com. Shareholders may, upon request, receive a hard copy of these documents free of charge.
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SOURCE Alithya
