Canada's Alithya Q1 revenue misses estimates on reduced government and banking contracts

Alithya

13/08/2026 12:23

Overview
Canada digital transformation firm's Q1 revenue fell 15%, missing analyst expectations
Adjusted EPS for Q1 dropped to C$0.03 from C$0.07 a year earlier
Company retained Scotiabank to advise on strategic review, including possible sale or merger

Outlook
Alithya says client demand remains healthy, but decision cycles are longer than anticipated
Company is conducting a strategic review to explore alternatives including a merger, sale, or recapitalization

Result Drivers
PROJECT MATURITY AND LOWER BILLABLE HOURS - Co said revenue decline in Enterprise Transformation segment was mainly due to client projects reaching maturity and fewer billable hours
REDUCED GOVERNMENT AND BANKING CONTRACTS - Co said Industry Services and Solutions segment revenue fell mainly due to reduced revenues from government contracts and the banking sector
LOWER UTILIZATION AND HIGHER SALARIES - Co said gross margin declined due to decreased utilization rates and salary increases, with additional impact from lower tax credits in Industry Services and Solutions

Company press release: ID:nNFC3dzzQQ

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Miss
C$105.05 mln
C$114.72 mln (5 Analysts)
Q1 Adjusted EPS
 
C$0.03
 
Q1 Loss Per Share
 
C$0.03
 
Q1 Adjusted Net Income
 
C$2.87 mln
 
Q1 Adjusted EBITDA
 
C$5.42 mln
 
Q1 Adjusted EBITDA Margin
 
5.20%
 

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the business support services peer group is "buy"
Wall Street's median 12-month price target for Alithya Group Inc is C$1.58, about 27% above its August 12 closing price of C$1.24
The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 13 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)