ALYA - Earnings call transcript Q4 2021

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Operator

Good morning, ladies and gentlemen. Welcome to Alithya Q4 and Fiscal 2021 Results Conference Call. I would now like to turn the meeting over to Rachel Andrews. Please go ahead, Ms. Andrews.

Rachel Andrews

Chris. you, Thank everyone. Good morning, you and for Alithya’s thank us joining XXXX results quarter fiscal fourth conference And for call. on today The press related are earlier and financial complete posted and release and notes MD&A were with our website. statements issued webcast also found can Investors on annual the be in and XXXX website The presentation section. review fiscal our are Alithya’s Thibault, President morning Officer. Financial Chief Chief Executive this Presenting and Paul Raymond, Claude Officer; and

questions. comments, their we Following the for will call open

for the Before contain I intended conference like call advised specify be to statements forward-looking, that and will section this for community. we more refer subject forward-looking available number to that financial cause those the website that uncertainties results to cautionary of from on begin, and would and are our call please presentation materially Also, anticipated. to and a is this risks of risk our and could statements Please MD&A uncertainties to note actual detail. differ the on our that

that on for indicators cautionary that details. be our measures. all will to on certain aware to Let and measures and me refer of non-IFRS to refer section Please figures the that stated presentation are remind today’s in are MD&A dollars otherwise expressed note you we unless Canadian our the call non-IFRS more

call would the I Now, like Raymond. to over Paul to turn

Paul Raymond

the ever the needs would year, view work but that pandemic mission investments that from strategy. today and and people, Throughout the than Alithya our necessary to remain Thank We our here of we QX clients, to share building done. to better stronger happy there was with Alithya mind normal. you and you, top being pursue growth good with keeps complex our anything get Rachel, a critical Fiscal successfully morning, when our everyone. made emerge very Bonjour. trust positioned focused be decisions to I’m for for results. on XXXX

quarter this right. results prove fourth Our

that this to minute the least take the we this deal have acquisition transaction, quarter, the for review color say the our many and will closed highlight this backs. I on reasons of was associated that a Before years. for past want long-term four past the providing Alithya in began April, impact Because to our RXD this our acquisition we now. XXXX could on are some explain to XX RXD a latest next with milestone fiscal win those transformational at and that like Indeed, April reasons. year its starting of for you contracts I’d deal

a the for $XXX contracts revenue these done that are in high long contracts expected First, this total million transformational year. this approximately guaranteed will recurring up ramp significant on the with add combined Xst revenues years added two value starting we XX-year will Once generating time. acquisition April over next of be period, XX very

new nearly from industry with an is we coming where also more qualified very XXX This billable Second, now are positive. in RXD, have professionals professionals than scarce. personnel X,XXX

our insurance from company La phases and historic transformation two and than significant a merger SSQ a and trusted mutual now partner and the Canadian Capitale will strengthen company going a are media more telecommunications this telecom presence industries the through are and remember those in -- same the resulting the contracts Third, Beneva, of both These digital leader require industries. in ever. largest is with Canada, Québecor,

to to ratio pointing was reducing Alithya’s debt and further transaction balance EBITDA flow cash adjusted deleveraging sheet. of our the Lastly, immediately positive,

mid-term tell RXD’s synergies. current for already move I you our results, notable to discuss progressing Alithya’s can within short- quarter before structure is I allowing integration that well on So fourth and and

their of buying and companies repeating growth. quality accelerating are We formula successful our

demand uncertainty, but for our time, led digital were period great the executing underlying these we this with performance. preparing discipline. were report that to I doing of at in our to by fourth have the our for Now a teams services quarter results, work am let’s strategic plan been transformation year that accelerating. great Today, talk which about pleased Last one quarterly

these Here once a players industry million declines. examples which disclosing book-to-bill growth our transformation. projects illustrate quarter fiscal include to percentage We of acquisition X.X% of QX XXXX. new of and visibility is end fiscal do talking XXXX closed are been XXXX. exchange business revenues I’m first well into U.S. into in X.X% the would advisor that border, about. reputation new One, the numbers mind in as established to a will a the organic This a trusted associated the and of Keep contracts insight being start record again as RXD are offer in of for translate what book-to-bill increased accounted reached bookings have not increase the that in and ratios and strong about our $XX.X X.XX. three where the time. year-over-year our Two, million, most reflects volume bookings after This dollar started ratio the digital in $XX our our long-term transaction constant over first assuming in numbers quarter RXD trends showing rate.

acquisition as our continue organic Thirdly, from our operational EBITDA, as XX.X% growth, quarter-over-quarter. adjusted year, to from it increased for and synergies we last benefit

practices beverage, and order traction despite quarterly we are fast and a Enterprise We food U.S. that existing we highly $XX.X that look can million, to the tools Oracle competitive States, are and implementations like and from a post-COVID new customers to to and need innovative a productive more at industries vision digital closer Solution Alithya’s decline. the Microsoft pleased become recovering our our to see giving sustain million to in healthcare, see we’re that happy of geographies. $XX.X is growth changing, our pandemic, from in Also, in they market. very are in agile, retail. finance their and revenues United see In take activities see our year-over-year as Let’s happening what sequential the specific

organic also a in decrease revenues of their the aerospace in Canada see to Europe with addition More In of the were stabilization activities $XXX,XXX. solid we we turning essentially major our sector basis, saw Europe, sector clients. as, see our among new in very private specifically with fourth quarter teams who momentum including flat a sequential both clients, year-over-year Now clients growth, Airbus. both public our in such well. and Canada, and performed sequentially, industry, service we On government

regulatory clear for new In As Alithya service awarded been in the cyber a past of services Government also we recently has of year were consists This security to million is that provider to one combined our challenges cloud Québec with contract Québec an me, manufacturing to significant is of the a organizations It practices. we Ministry, government Québec assist as with won address contract compliance, in the solutions in a operational improve one identify a decades plant initial resilience. services sector. status recent agreement our with our focus strategies Québec we in to of assisting gained This Excuse quarter. significant brings consulting implement this cybersecurity of internal initiatives. and areas have in $XX.X acquired our contracts is North sorry, Ministry contract example, This worth awarded utilities management -- tier largest and to highlight trust including Alithya providing years. straighten their and the project -- sector level American Government includes energy system a a public of public way. clients. technology multiyear of very portfolio other existing work the value the million demonstration preferred sector, Alithya’s top That’s customers to me for a $XX

to transformation in than RXD, remarks last like of this my Center technologies of quarter, to pressing geared best comprises Digital and new more now our specializing that the Digital professionals, modernization Solution meet custom you towards it One Solution about to most XXX systems but the digital transformation the I of opening our examples is highlight needs. with today’s in I Center. acquisition of spoke would

infrastructure, you cross-selling our machine payoff. security, intelligence, are expertise a also We learning, few. operational our key such quarters, have In name just services, strategy business cloud IoT, as, past also areas, strengthening agility to practice Alithya seen the management, in

and a efforts accelerate acquisitions of We to growth. result of past these cross-geography cross-industry as have enterprise projects multiple organic leveraging won

over Before to to like it Claude, I’d two I pass and M&A. discuss other diversification items,

our as exposure indicated client been reduced the to in before, past strategic their few top continue our I has we As significantly even though partner. years,

As evidenced Canada, of growth client reducing in our organic by concentration. while XX%

experiencing of thanks and expertise, presence, continue are rapid industry the customers managing regional Alithya, Diversification also range our to Doing to and services, value chain. by value involved pursue growing to development us our prioritize our face our and has and business segments will we services in and positioning allow and market crisis. this our offering and the geographic solidly our of our will presence our to offered Alithya high strengthen services a so growth. integrated diversification We

years, Over complimentary acquisitions. the from and next value-added greater and be by driven with clients by investing to talent, in continue our will services new growth existing through scale few and transformational

come. to during the potential we to on built headwinds strong foundations As we are and witnessed year, face ready past Alithya is

Claude and I focus integrated for accelerating before, over go to and our strategy. financial I’ll of growth some an quickly the long-term were platform, now smoothly, mentioned the of recent efficiencies. and immediate gradual our cross-selling, highlights. As ask Considering remain acquisitions acquisitions scale growth component existing of important allowed Claude? on

Claude Thibault

and Thank you, morning. Paul, good

highlights. Let’s review certain QX

in clients year. $XX.X More the the X.X% a to for U.S. million growth Askida increased for constant the a million last to of organic notable quarter basis, compared $X.X $X to dollar of $X.X As organic sequential revenues additional from growth. bulk of year increase would of increase Xst in X.X% true to million. certain that third revenues or February acquisition exchange most XX% That of in in quarter. General Canada growth specifically, the in year been key quarter by COVID are assuming fourth $XX.X after and of rate. revenues. reporting $XX remaining in growing Paul accounted have same fourth the percentage quarter, again On for meaning The the the quarter increase mentioned, accounts $XX.X areas also a only million increased is the last million million, already revenues a on million in we million $XX

Paul negative a year-over-year and words, seeing the other we activities in currency almost U.S. basically entirely stable recovery. Europe, U.S. year-over-year. explained are by as variation. the American decrease Looking notable U.S., is also when In our expressed at the In dollars, mentioned, are the

year-over-year impact mix on which U.S., the the well of million, and to sequential the by dollar project. the in rates and changing million, largely year. pandemic. million million SG&A decrease, period. increase the the the $X.X subsidies XX.X% U.S., and because are increase million those ongoing U.S. driven margin an improving stable small the $X.X increase the by Canada exchange a line $XX.X and by quarter. to expenses $X.X by pointing offset decreases large increase third year. as on in compared and in sequentially from quarter, part in totaled unfavorable relating increased to QX of COVID-XX the costs impacts that, However, impacts, of of Gross impacts and that The Adjusted or wage driven by Canada the last a partially margin $X.X some in from COVID of XX.X% in revenues governmental by same million an productivity revenues, negative this quarter in was due negative to an million This $X.X are million, with in one as EBITDA million basis $XX.X $XX.X as third revenues $X.X of including despite percentage rate increasing to acquisition, year, $XX.X of the XX% and impact revenues margin a increased million were Europe, currency some fourth Conversely, quarter or increased the last despite same offset geography. primarily Gross from of percentage the primarily in U.S. increases France. and of to Askida during X.X% Canada, increased was during amounted the stabilization gross of to

stable As SG&A above, largely variation a and attributable on to this is higher consolidated basis. and explained revenues expenses gross margin

of were the increase be depreciation an U.S. amortization in Revenues especially year. before our of we at million, $XXX.X our to revenues which As against million amounted to previously year whole million, looking the last of obviously by quarters, compared positive the million, When must expense of reporting operating a operating previous in COVID, actually year, million $X.X are $X.X impacted non-cash loss and as $XXX discussed, $X.X revenues profit. for accounting viewed

with our other within more our growth our these tools the XX%. namely, companies great give and XXXX was M&A full don’t the acquisitions year, and financial On was a Travercent organic find months the That to the Those Matricis, approach the year critical success. which Askida. remarkable them statements XX are accelerate the previous revenues. what obviously examples is hand, of and means mass three of niche to the a support, acquisitions But first fiscal tell successful their of

Now improvement revenues. growth financial have net the turning quarter. in in $XX.X cash the themselves net quarter of flow of bank word part compared the negative in Paycheck position. our to -- March, in ended $X.X on Program flow States. of the again is is of of variations million March in operating working notable bank It meaning of in in our $X United a wake at debt the sequential working activities end net including positive elements in of end negative the we in liquidity occurred cash. $XX.X the restricted to million XXXX. generated Those $X.X in the million, which quick variations We in the our closing an Net In capital our cash used of capital solid $XX that and and amounted financial Protection million, position. million cash borrowings, At to P&L fourth million quarter,

year, statements, have million which $X.X in As in last been you recognize received out was may the our have our forgiven loans, $X.X seen PPP in and of financial P&L. million

million, money formal the -- for our with our all guidelines business more money are to we receive as good while forgiveness Regarding believe expenses, before the $X the the of plan waiting conditions, are we the uncertain and and pandemics, emerging qualifying of fully we approximately used with balance pursuing we objectives to comply from forgiveness recognizing momentum. appear to of it P&L. program’s notice we and the PPP to financial Overall, position in renewed be phases keep have

Paul. the back Turning

Paul Raymond

Thank you, Claude.

focused sectors So to based we the improved record growth solid summarize, Gartner’s a and projections, be organic one, remain we April in on latest our are and on XXXX had industry; on our with have the margins starting growing quarter two, of of and X, sequentially; integration just improving QX. and fiscal topline years growing started our and our U.S. operations three, also has will on RXD included XXXX fastest

it So have you I now Claude to be and you, pleased answer to will any questions may and back I’ll Chris. turn

Operator

first of question Thank Your [Operator Capital Canada. Steep you. comes from in Scotia Instructions] Paul

Paul Steep

on of the Hey, talk ramp next ramp talk the the maybe for RXD us then, for of about in to up the to morning. synergy the that? second. a And in about and outlook new Claude, there to course the for Good we can over and just think contracts plan years? Great. should we you get, just RXD go remind jump that $XX the few back Paul, could the period incremental of Can timing million up you

Paul Raymond

Thanks, Paul. Thanks. Sure.

So we of $XX said to would we it months that $XX combined the new to existing get ramp months plus when up XX XX announced million. the the to million take

it’s guaranteed. However,

we So get mechanisms so on. added subsequent if the the contract make year in the sure we to get to have minimums, to and that they don’t

total guaranteed. the $XXX is its and So -- none of it’s lost million is

that imagine, happy ramp we’re with you up hard so and far. we’re As working at at where very can very accelerating we’re

Claude Thibault

if well. year that applies the as contractual the so I Maybe, Paul, to commitment means may, first

all years, period, years, by divide account it’s same you so to -- up that XX is the there your for the lost. the individual So $XXX the for target not but are mechanisms million ramp when

point. clear that Just answer to Paul? your on that Does be question,

Paul Steep

you’ve first I all the different one QX. that and maybe have to And that how then operating I those on get quick just guess go environment ramping? re-clarify this normal is maybe in helps about synergies synergies laid part how to you’re we’re thinking That the part. temporarily and want times to I out follow-up plan. in we integration second that just see just back you your thinking respecting the got you’d to about normal

Claude Thibault

Yeah.

usually the complete and it months year. integrations So, started always new our within is first on fiscal to plan our case, of day XX this the in

it is the plan to of the end the have So before year. completed fiscal

Paul Steep

Okay.

Claude Thibault

I size business after we’re means the can selling business you and imagine, been e-mail on everybody’s and delivery integrating office our then people But complexities given together, structure, it’s rebadged. and the back sales are on mean As structure one so so and more one. are we’re forth. day that integration, together, going then our around and systems day from

But day more the So stuff time integration. because back that one. was takes of the systems office some of

Paul Steep

of new secured And bit us or in Again, either given of it’s Microsoft the then service Great. bookings at service of transformation? to in in that whether terms and changed current about Oracle, the just the it’s on little we’re talk the line, world? the What that maybe where sort of like digital a you’ve what if seen looks you quarter. mix just complexion Thanks. offering,

Claude Thibault

Thank for question, Paul. you the Yeah.

We’re actually the we’ve you the transformed demand seeing of in reflection of seeing the three the that practices, strong -- the quarter. practices. very as value business over our We’ve margins years, we’re know, our and significantly gross higher past all across in

getting to trend the our pre-COVID up that’s above was the we’re there. That we XX%. in the seeing That back We’re yet. it U.S. fact, as are business we And despite isn’t love back mentioned where that they U.S.

are So, it’s trend very where were we’d when future or U.S. a positive they the of that indicator pre-COVID, to operations our back like.

Board. were like I solid bookings the across Our said

the the the across ERP. on focus can It’s on well. of selective after strong those demand, of because type the digital really been in value-added we more Board as the go cloud and we services, lot geographies other transformation, a also that so We’re business

Paul Steep

Great. Thanks very much.

Claude Thibault

at go you Gartner’s the latest a If back maybe to all, numbers segue.

actually really you IT most even the in the the next where market right in indicative And during growth of they We the at, focus charts. years. services now. systems is That’s significant which kind they’re two where category, enterprise business last If is our organic the Gartner year-over-year, shrunk. if though the we of on predicting said look look year, generated period growth that at you

Operator

comes Your Instructions] of next question [Operator Kevin Desjardins from Krishnaratne Canada.

open. line is Your

Kevin Krishnaratne

just maybe of some leading then Question IT organic the really Can of about that you you into growth there. we how clients called And Canada higher of in you a about think sort on spending, quarter? yet benefits the IT talked course disclosures just in Good given spending? growth, the growth you talk for your the that areas good focus where the thing guideline about certain this Can focus Hey, in of morning, off quarter. quarter? of you higher Thanks. sort areas in unpack from Canada, gentlemen. XX% you drove the growth some have that what the of of on in higher do over year value rough there on organic see growth do of

Paul Raymond

Hi. Good morning, Kevin. Thank you for the question.

So the the growth. and on take bookings more I’ll then was organic on of qualitative kind on two bookings questions. One the the the

really saying, contracts. across several the on very I Board. booking, It’s the So was large

as earlier, is Our was I saying down. actually going client concentration,

four now is of So, of to revenues, years was our think our customers years say, that our, ago if of or XX% closer top let’s three you eight revenue. it our XX%

coming of again change our in practices of business you terms most bookings in growth our the higher relationships. been good value our on which very of given from in the the our very profile, it say has all and nature reflected margins. diversification, most seeing Canada And the happening historical why of margin good we’re been positive gross based that’s in very in has Canada can is that So,

back quarter have On four bookings strong. look the been quarters, organic growth front, the it’s our up if gradually been every you past very going and

it year. where perspectives Especially pandemic why the and We at. we for think during and given greatness, don’t numbers, that slowdown. seeing we’re next and themselves growth So like RXD we to we invested should of we’re in off, going to a year. reason hit last paying We lot QX cut weren’t in our is any our which like they see people

growth So, coming from have that new the and two again, from that new we signed. contracts the we --

Kevin Krishnaratne

that, for Thanks Paul. Okay.

at like you mentioned it So things you different the like still you’re on what could your just sounds -- of outlook. wonder are in The you cautious of are lot going comment release outlook, if cautious press mentioned. -- the very you you -- on terms looking a in the got cautious in I because can what RXD what business, you

are to be? So about weakness I’m things looking where on or stories potentially side not outlook Is hear the you’re you you’re that just are on side, something areas the what to? wondering talent revenue potential the OpEx would referring talk tech what on for, about I’m maybe given that hard of strong. when the being the of demand it’s cautious you wondering for guidance talking

Paul Raymond

level, Kevin. cautious That’s one great the Yeah. pandemic. at happen going what’s is, are things, Thanks, macro the a There with two question. to I’m

on in even effects the really the point an of the the the people they where U.K., knows on because new long-term variance. in this of of vaccine younger with seeing ahead variant. at we’re We’re the Nobody cases were vaccinations, everybody uptick seeing the

we’re So, close I’m I to return of call by on a or very post-COVID it, normal, and is a region. keeping eye by -- as would country variable one. speed kind that The

that, to So We I company keep that -- been is, we’re been I one the of the we’ve it out that there. of to very projects mind. type have able just following know as people, it’s area, around we all a in to be that to It’s of do. like other crazy. able how right? think manage attract a have people, been that keep of my that we but of hiring We’ve it’s So because manage And in back still, we’ve and Even to it to very country. track and though we closely. sensitive as the been

of higher If project our value retain past to to attract of one and the part strategies from is and people. businesses remember as best you shifting call,

it, look we’ve seeing in challenge and So and I coming if able the think wide going been our everything new people growth to initiatives, the do be is the an you months. at market, in but to we’re finding industry that

an So on like where at. keep we it. I eye keeping we’re -- But it

Kevin Krishnaratne

Okay.

point we on think are do levels? great your how of your remain yet costs go then of if where So you sort you about in current that with talent OpEx terms competitive What on that in views base that could baking to have?

Paul Raymond

So that’s our a year, good follow-up, generating we’ve focused up acquisitions as saying, Kevin, and In has more the gone completed costs. SG&A than cutting of in much many acquisitions. we that, because these on Claude growth past was were

going to as also from going integrations is go perspective. place, is gradually, time the RXD to down SG&A next SG&A down So XX take over go over these our significantly months an

know freeing to we to going keep work recruiting So keep growing. keep some we’re room happy and and up be our there to people

opportunities see there. we So

Kevin Krishnaratne

ticking Do them on specific are guess to thing, did remarks versus ever broadly maybe in rates that just on a those provide higher. rates I number, what but And are last are, quarter? utilization now maybe not you your Right. you Okay. utilization allude that where they commentary

Paul Raymond

varies good We deduct, question. of very kind because business. tremendously can it’s actually by Kevin, don’t. you it a But

projects we gross on locations. on people margins it. implementation work The from a control So there’s put beginning, a businesses, in different so very some several side, ERP They’ll who because at project, it’s the of on example, we the various a our are start, high, same time. for come our there’s

at our So gross margins business, when productivity. to tied it’s our you and ERP look directly

important. materials people where and on areas a is bigger change. that job I So on we’re doesn’t other think are because how those that many a these building go the straight there productivity. cost on the doing gross the better item we’re projects margin we bottomline while margin utilization and But more In gross means time basically hours basis, to really our is the track,

that, as difference translate on projects. And with bottomline we pushing the We’re working because grow we’re we higher the the is know the where better to that’s getting. value going that scale business, we’re to really

Kevin Krishnaratne

very Great. Okay. line. the That’s much Thanks helpful. all I’ll the very pass answers. for

Paul Raymond

Thank you, Kevin.

Operator

Cormark comes Your Fairweather Canada. of Gavin from next question

Your line is open.

Gavin Fairweather

Oh! Good Hey morning. there.

Paul Raymond

Hey. morning, Gavin. Good

Gavin Fairweather

if is on shoots returning a up Claude, had of how kind on questioning business? businesses I I’m follow I’m Kevin’s you drive kind towards think just and that’s that that million? U.S. could the quarterly about commentary just slack green momentum with giving your there? good to would up some feel guess reasonable business. around the much trying you like of the comment million, that’s Do in that hear not utilization and whether have I the that your $XX just given to to billings sure the think it’s Paul you back kind of $XX No, targets of or into of and workforce you

Paul Raymond

question. So, more maybe I’ll give the for you a bit detail, Gavin. you Thank

a applied to and at a companies the PPP of imagination it the stretch go at U.S. any took for for Canada it. back productivity the in a the but and and productivity a route. people. We of leveraged as decrease different serve of to same the everything was the program thing bit it we received think look you hang not the we last and There was is. a purpose It call compensate of impact by there for in year U.S. were in letting go stopped and and did We onto that in used CWS the we and that everywhere, our look people. When that’s where the the lot I you or If pandemic hit utilization biggest lot

up, now we fighting hung we’re already it is have business so and growth them. So with to we we’re people, on hire organic we seeing picking the to that high know that quality the and the instead people of needing

So, yes, we’re hiring.

expertise. new we underlying lot We’re new people for already project. of have existing adding the the A a business

go U.S. there. back look you’ll year-over-year, the gross a you It’s see at back in big decrease and margins if So, our ramping up.

people So because the the -- it’s of and have we we straight that point the it the projects in is productivity gross one margin the U.S. that have. looking at of we bottomline, goes people every to the those way add increasing for of already

we’re happy gross we’re in pretty what down perspective point to from why fast. bottomline of that’s additional a and is that, we that seeing the every So trending direct I know said, as U.S. margin with that the trickles get there a we

So positive. a we as see that

Gavin Fairweather

on then any are and the to for fiscal That’s timing you hoping or of guess, I have the [ph] great. come I reporting news loan end Can And you your you’re there on think maybe PPP moves the kind year reading QX. change were by forgiveness, as Claude, you that key on us Yeah. there. of just to the remind

Claude Thibault

I to of with and in know you. terms for are that for and of the that do. and the are becoming waiting. us be loans to out appears deals -- amounts or is what singled and wish is which know But and wanted terms We volume experts million, there even scrutiny exactly were last we processing lawyers -- the everybody the the SBA the to these be U.S. own through our companies that know would through far know with to who are then to there year know. in SBA about more as which I familiar in our that wanted They kind consultants $X don’t it reiterate diligence are phases. files. bank do not talking Keep as audit. some having talked of we’re of as people, and uncertain on payroll we the that that just the this, Thank not go timing I do We support did just we they would again to over very basically high our the people through mentioned, we in they I all exactly the

matter it’s guess, to the time, I answer don’t that we of a So, but unfortunately. know

Gavin Fairweather

just hit And lastly project gross talking Okay. of is bit think, a then about this remarks for a maybe I margin Canada, caught your in I me, you there fixed price prepared where a were in quarter.

to overall. But up do now of it QX it do kind feel forward. in profit Can or going feel gross kind huge out and remind I just think doesn’t breakeven that project sounds called like you like propping when hand ready of from you that material of us line like kind not a was be too. in it and you you

Paul Raymond

should Gavin. the control no I’ll it’s comments project over. Claude under It on yes, Thanks, it. of over not But, be Yeah. and financials soon. is let the

investing still project. that we’re So in

without it So, the margins the have because even higher in going to it would that that out with again, of be of investing remind to been and we’re just and some IP IP reselling I our marketing customer. we’re you again, that. getting we’re And, help wanted

positive thing a ready take we it it. the long-term So in short-term hit to as and on the see

Claude Thibault

impacts continuing So, over yes, quarters there be the coming could of project. that

negotiating We’re with client. the

it As got first But IP. material we the place. the in as should saw forward. mentioned, investment in That’s our as that Paul that we reason -- an we going have into not project impacts

Gavin Fairweather

Okay. Thanks That’s me. it for much. so

Paul Raymond

Thanks, Gavin.

Operator

[Operator Instructions] Please go ahead.

Rachel Andrews

more for Operator. We you. of Thank have a couple time questions,

Operator

you. Thank

Your comes Agostino question next Securities Canada. from Nick Bank Laurentian of

may ahead. You go

Nick Agostino

Yes. Oh!

morning. Sorry. Thank you. Good

words, but also through see market I just the basis seeing the is wondering, is XXXX I’m I’m in that your is but number. disclose versus of pandemics if a this guess, what are we your stronger comes your and no, when we on said of how IT QX. seasonality color demand that kind IT earlier you sit grow? get trend a calendar, QX the or seen, on market starting started guys when XXXX terms we QX other can just a sense bookings general, I had the as to bit to, calendar here guess, why of QX think itself? granularity a the calendar your equivalent, quarter, level if -- QX sure, bookings, And I that type of to you apologies book calendar we million haven’t also in a you calendar of about the talk you largely growth in XXXX. the providing answer think, not And look throughout provide quarter some then you $XX.X your see on at, like we was following fiscal we you being the bookings strong little when overall bookings is and QX, on really focusing if fiscal or I macro your commentary stuff. fiscal all In I cautionary compare bookings it just next of reason So

Paul Raymond

not question, new We was did reason CRM prior out the Nick. it our to XXXX, simple Thanks the Microsoft Yeah. record in bookings rolling for that us for platform.

So whatever. modify we feel future and different the in had tracking and that change multiple systems companies comfortable of to a number would we from different qualifying bookings we and not sharing have did

So, first reported we this the that every consistent a and quarter structured fashion. year actually in bookings was

can’t. I wish but more I on I could So you color that, give

be that next year. QX I comment. However, you’ll to first That’s know compare my able

industry. by happening $X.X strong lot on over economy. mentioned, and April the had despite on basis, of their hold, varies general a -- especially lot it report depending varies number. without the all Last we government new and we we’re more million the so with so we year timeframe -- we second industry, annual on there that based interesting a The RXD. last of depending this with year kind as quarterly, because But starting, to it’s of the because without happy that’s it year, in come It on what’s at stuff of booking was is, the for that, I fiscal the but impressive very year year put companies very it look see place. pandemic, so March, The tend changes was our fiscal on end is an bookings the contracts the in really and report in

going that that if numbers QX just already So take you strong, I be are one. to that can very you tell

macro is So bookings happy. the And if with we’re the crystal going on very more me, positive concern tell could a heck are. had I’d level COVID somebody my to is what very of really and happen be and where ball

Nick Agostino

just Can backlog highlight overall? follow just then the is Obviously, sits very quick you number up. And appreciated. where the much one Okay. bookings other

Paul Raymond

the impressive at at the that quite the in prior be So, year, the past have $XXX of in to we contracts that’s the but million QX did adding look year. you the from bookings this QX is again, least deal, RXD so if backlog. going If to reporting I backlog include

that color try question. sure I years total more We’ll of So appropriately. have QX backlog previous at to and great it on the the the is you to a report the make give from stuff well we’ll think end it’s structured to

Nick Agostino

great. Thank Okay. be you. That’d

Paul Raymond

Yeah. Thank you.

Operator

Your…

Paul Raymond

question last Maybe there, Chris.

Operator

from Ezzat, question final comes Echelon Partners Canada. Your Amir

Your line is open.

Amir Ezzat

guys. taking for Thanks strong my quarter, on Great. the Congrats questions.

Paul Raymond

Hi, Amir.

Amir Ezzat

Can us just circle to on question Just in walk through I a a you and $XX EBITDA as wanted you Claude, like million RXD. integration back do contribution ramp maybe I’ll period. you like follow-up. guys mentioned revenues? XX-month the a

think number we the So refresh memories? give or Can us year? in a second do our EBITDA guys how dollar you like range the about

Paul Raymond

Claude let I’ll Amir. Thanks, memory. Sure. your refresh

Claude Thibault

momentum, start that great is approach It’s question. We great comments the -- -- on company to one. obviously, expectations playbook great great we have the a momentum reasons with It’s a was fiscal mean, different tough tough Obviously, to see a of do I previous year, -- these Alithya working my to with, that know our which We three M&A well. not RXD, the see people. the clients, our numbers. we acquisitions

disclose announced baseline that’s months, we trailing the for acquisition, number we the XX the when for us. a So

of said. years ago. be Alithya, positive than a model where because because I their just that what You lower can is number gross business are probably were few on -- margins they’re Historically, we

you somewhat that, that be the will different baseline on can more up Again, working conservative. change be but -- We’re to be for levels. would looking

SG&A, the we’re of their terms infrastructure, sales, keeping of again, some marketing. In

a keeping that The great They the over story. best really We’re doing there. elements. things were had back office is different they

a as we’re using tool internally -- know. That’s may complete solid, very for much some Oracle you Our very of Oracle a larger organization.

coming going Oracle. XX be next they’re the So to onto over over months

the cannot not unfortunately -- disclosing I’m details. be we’re but so, I know numbers, of And I level that --

Claude Thibault

I margin Maybe that the it’s gross of employees. of not the can the there, type comment gross the on margin it’s -- over we because Amir, low the say because business, when add, is of

subcontractors So of percentage they have higher versus a employees.

the We’re opposite.

were And they five the ago. years place so, same were we at

a we of workforce do how So permanent in migration and want know going to with. that to grow then people towards we invest that

as margins well, transition over our there up of part getting by gross that their plan they that’s have. the transforming So workforce

Amir Ezzat

sort follow-up, related have with Can my guess, seeing of level that. walk utilization talent their it and high Thanks. for of How sales sure That’s companies current I you staffing rates? And if like Great. with it’s quantify lot that I’m a maybe levels acquisition for of a through constraining sort us me. does trouble We’re you and very your to tight look market. could not you guys if growth? your

Paul Raymond

side. question we’re people were X,XXX to I the people right. over All year, and back now. just we you go Great if on around that XXXX hammer mean, a

give people. getting So which idea, that the XXX, pretty good but about people from not RXD, should only we’re in you a additional growth the is with coming the that

even challenging hiring We we terms what’s happening people significantly. So are we’re times. of finding with happy in very in

question down. finding of selecting we’re where your is, at of reasons the and it people. finding last I’d people we’re We’re And instead very turning coming to back the is, say that for right one business successful down whether turning business.

go and and that be lot everything. a there used to out You there’s companies anything after of

build and We higher where business have with on a long-term relationship strategic customers. value we plan to trust focus our can

lot And subcontracting with from in value a of margins projects. in lower on so XX%. best-in-class so moved that’s you’re I to on industry. the mean the and margin above forth why line away our high we’re projects focus seeing So we’ve today stuff, our and the and gross

I think can do we better.

We’re our working on hard that mix. very business based on

in at be this right to So to not for costs. at profitable want growth long areas, all and me, a very the because we it’s growing time. It’s

quick short-term the at looking wins. not we’re So

good going looking business company at our and the company. the we long-term, is the quality to know We’re help grow us that really grow

a But for pretty So it. challenge doing of we’re whole and would well. don’t we’re down a going we be turning recruiting way putting the business be industry I we the guess, want, think to is

Operator

questions. further no are There

Paul Raymond

in Anytime good people with we I think those it’s year. add a X,XXX need a and a to size year

Operator

final was today’s call now Raymond. Mr. to That question. return I’ll the

Paul Raymond

Yeah. strong Thank for being everybody Chris. quarter. you, you Thank us Very with today.

time some you it take happy summer with you. off. and safe sure make enjoyable Thank happy a and very have We’re and and

Operator

Thank This your today’s concludes for participation. call. conference you

disconnect. may You now

Alithya (ALYAF) 10 Jun 212021 Q4 Earnings call transcript