Alithya's Quiet Breakup with Public Markets

A soft quarter masks a deeper strategic review as the integration firm leans into AI and enterprise transformation.

ALYA · Earnings Call · 2026-08-13

Alithya reported a fiscal Q1 that beat on none of the headline metrics — revenue fell 15.4% to $105.1M, adjusted EBITDA dropped to $5.4M, and book-to-bill slipped to 0.85 — but the real news came from the boardroom. On July 27, the company launched a formal strategic review, and management used the earnings call to frame both the quarter and the review in the context of a multi-year transformation. As CEO Paul Raymond put it: “Our challenge today is not a lack of opportunity. It is converting those opportunities more quickly.” — Paul Raymond, Chief Executive Officer · 2026-08-13

A Quarter of Transition

The weak quarter was largely self-inflicted by timing. Management pointed to longer client decision cycles and delayed project starts, especially in the Salesforce practice, which dragged utilization and margins. The company also introduced a new two-segment structure — Enterprise Transformation and Industry Services & Solutions — aligning the business with higher-value integration work. CFO Pierre Blanchette described the change: “We now have 2 reportable segments based on areas of service, Enterprise Transformation and Industry Service and Solutions.” — Pierre Blanchette, Chief Accounting Officer · 2026-08-13 The move reflects Alithya's shift from generic IT services toward Enterprise Solutions, where it pairs Oracle, Microsoft, and Salesforce expertise with AI enablement. While top-line metrics disappointed, bookings quality improved. COO Bernard Dockrill highlighted: “over 70% of our total first quarter bookings were related to new business, including 28% from new customers.” — Bernard Dockrill, Chief Financial Officer · 2026-08-13 That new-business mix, along with a rising share of fixed-price contracts, supports management's claim that the pipeline is healthy but conversion is slow.

The Undervaluation Grievance

The strategic review is the culmination of a long-running frustration with the company's valuation. As far back as February 2025, Paul Raymond quipped “we're going to be one of the last Mohicans, as they say” — Paul Raymond · 2025-02-13 among Canadian IT services stocks as peers went private. On the latest call, he made the business case for exploring alternatives:

The Board concluded that the current public market valuations may not fully reflect the intrinsic value of the company nor adequately support its next phase of growth.
Paul Raymond, Chief Executive Officer · 2026-08-13

He added that the company is "worth less today on paper than it was 8 years ago" — a striking admission for a firm that has spent years pivoting to higher-value services. Prior calls echoed this sentiment; in 2025, Raymond said “we're trading at half the average of companies in our sector.” — Paul Raymond, CEO · 2025-08-13 The strategic review, advised by Scotiabank, will evaluate everything from a sale to a recapitalization to remaining public.

AI Infrastructure in Context

Alithya's fortunes are tied to the enterprise software and AI infrastructure cycle. The company is benefiting from hyperscaler-driven demand for modernizing ERP and data systems, but the market's mood has shifted. The recent tape shows AI data centers among the biggest 30-day decliners, a marked reversal from the 360-day view where the same theme was a rally leader. This suggests that while Alithya's narrative is firmly aligned with the enterprise AI buildout, the investment community is becoming more selective about names with direct infrastructure exposure. Interestingly, other recent reporters — such as Tencent, which flagged AI infrastructure as a key driver, and Lenovo, which cited AI server demand — confirm that the underlying demand for AI enablement remains strong. The disconnect is between long-term trends and near-term execution, exactly the gap Alithya is struggling to bridge. The review may be the most decisive move yet, but it also raises the question: if the company truly has a strong strategic position, why does the market consistently refuse to pay up? Management's answer is that public markets don't appreciate the transformation, and the board is now looking for a way to unlock value that recent quarters have not delivered.