Alithya Group inc.

Good morning, ladies and gentlemen. Welcome to Aletheia Q2 fiscal 2023 results conference call. I would now like to turn the meeting over to Rachel Andrews, Vice President, Communications and Marketing at Aletheia. Please go ahead, Ms. Andrews.

Good morning, everyone, and thank you once again for joining us for Aletheia's second quarter fiscal 2023 results conference call. The press release and MD&A with complete financial statements and related notes were issued this morning and are now posted on our website. The webcast presentation can also be found on our website in the Investors section. Please be advised that this call will contain statements that are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. For more information, please refer to the cautionary note in our presentation and to the forward-looking statements and risk and uncertainties section of our MD&A available on the website. All figures discussed on today's call are in Canadian dollars unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures. Please refer to the cautionary note in our presentation and to the non-IFRS measures section of our MD&A for more details. Presenting this morning are Paul Raymond, Alethea's President and Chief Executive Officer, as well as Claude Thibault, our Chief Financial Officer. Now, it's my pleasure to turn the call over to Paul Raymond. Paul?

Thank you, Rachel. Good morning, everyone, and thank you all for joining us on the call this morning to discuss Alethea's second quarter 2023 financial performance. To begin, I'd like to congratulate the Alethea team on delivering another record performance in what is typically a seasonally slower quarter. I would also like to come back on the three guiding principles that allowed us to achieve these results and which continue to guide us through the economic up and down ahead. First, providing ever-increasing and sustained value to our clients. Second, investing in delivering exceptional employee experiences. And third, continuous improvement in our operational efficiencies as we grow our scale and offerings. We are always looking at ways to provide more value for our existing and new clients. By ramping up new agreements with leading solution partners and by targeting complementary acquisitions, we are maintaining our position as the trusted partner of choice for our clients on their digital transformation journeys. The recent acquisitions of Vitalis and Datum, as well as new partnerships in certain verticals such as higher education, are great examples of that. Through our strategic partnerships with One World SIS and Frequency Foundry, Aletheia is helping higher education institutions of all sizes to advance their digital transformation programs. Those partnerships were instrumental in the recent signing of new agreements to assist two top-tier Canadian universities. Aletheia also continues to grow its capacity to help clients replace their legacy system with state-of-the-art integrated enterprise cloud solutions. including our recently developed Aletheia 365 Power Apps for the manufacturing sector. As an example, Aletheia is currently assisting Cloverdale Paint in connecting their sales and marketing products using our apps, which further strengthens our position as the go-to partner for Microsoft Cloud solutions. For many of our clients using Microsoft Office 365, staffing enough people internally just to provide support during their transition would be a very cost prohibitive exercise. So recently Vitalis provided MUFG bank employees with access to support for questions regarding how to use the new Microsoft technology and later providing support through our own service desk capabilities. In addition to investing in training and development, we continue to replace subcontractors with permanent employees and ensure our people's experiences with us is exceptional. Initiatives such as our Leadership Academy, our learning tools, our stimulating professional growth opportunities, our internal mobility initiatives, and our global footprint are all contributing to the retention and growth of our permanent employee base. Over the past year, we realized an increase in permanent employees of 20% and we intend to continue that trend moving forward. Our onboarding process is also playing an important part in our retention strategy. Our new platform also enables new hires to quickly and easily find a mentor right from their phone 24-7. Our many initiatives are bearing fruit and our metrics indicate that our best KPI is the relationship between our leaders and their employees. This is considered the best driver of employee retention. And finally, by publishing our first ESG report earlier this year, we have shed light on initiatives being undertaken to create positive impacts that our people and communities in which we work and live can embrace. As our long-term strategy is demonstrating, scale provides us with multiple advantages, including the ability to leverage valuable assets across our platform to improve our business processes and to identify efficiencies. Additionally, Our digital transformation expertise enables us to apply our best practices internally and to leverage our practices in cloud ERP, CRM, robotic process automation, artificial intelligence, change management, e-learning, offshoring, and many more. Scale also provides us with larger strategic opportunities where our project management expertise can be leveraged. Scale and remote delivery also play a role in our real estate strategy where we can optimize our footprint and alignment with our new reality. Our global project management approach has also had a positive effect on our business. This process has revolved around the concept of applying a single PMO approach, our project management office, to all of our projects across our platform. Our growing platform is also enabling us to now leverage cross-geography opportunities for all of our higher value offerings. We have begun to see the effects of this cross-asset valuation in our gross margins and expense reductions. Within that context and with those priorities top of mind, Alethea maintained pace during a typically slow quarter to deliver yet another record performance, marked by improvements across all key indicators. In Q2 alone, Alethea completed 13 enterprise cloud solution go-lives, while adding 34 new clients along the way. We experienced 23% revenue growth in Q2, which is a significant achievement in our sector. As for our gross margin, it continues to trend in the right direction, and the ongoing integration of our latest acquisition is notably expanding the capabilities of our global delivery teams. Therefore, despite incurring costs associated with acquisitions, salary increases, inflation, and more, we are pleased to have posted results indicating good control of our spending, particularly considering the three acquisitions of the past three quarters alone. We are well on our way towards our 2024 strategic targets. There is much to discuss in respect of numerous initiatives our leaders and employees are implementing, but let me briefly outline three key financial highlights that help put our second quarter fiscal 2023 performance into perspective. First, we take great pride in reporting the adjusted EBITDA that amounted to $9.4 million for this past quarter, which significantly exceeds consensus and is a good indicator of the potential of our platform. Second, a revenue growth of 23%, or $129 million, fueled by cross-asset utilization and the acquisitions of datum and vitalis. And third, we're beginning to reap the benefits of a series of measures that we implemented in response to an ongoing global labor shortage. Aletheia has embraced a longer-term approach based on a mindset of competitive compensation, robust training, abundant career development opportunities, and internal mobility. We also continue to grow our offshore capabilities to ensure our preparedness to respond to client demands. Private and public sector clients are currently working with our global delivery teams for some of their projects, and our recent acquisition of Datum has opened the door to further contribution from delivery teams in Eastern Europe and India. Forging a path to continued success for Aletheia begins with striking a balance between the best combination of cost and efficiency. That's what we refer to as rightshoring. Accordingly, we have been diligently creating capability centers in key geographies that allow us to leverage additional talent pools and lower costs and enter new markets for both project-based work and managed services. As outlined in our long-term strategy, our business continues to evolve. Today, 26% of our business is subscription or IP-based or derived from fixed-fee client initiatives. This segment provides significant value to our clients and to Aletheia. It is also important to note that we continue to report our repeat revenues, or revenues from repeat clients, and in the second quarter, 80% of our revenues came from clients that we also served during the same quarter last year. When combined with the addition of 34 new clients in the quarter, we believe this healthy mix of existing and new business provides us with both stability and growth opportunities. As you may be aware, most of our clients are in the essential services sectors. They view digital transformation as a gateway to competitiveness. We need to be able to support them regardless of the inflationary pressures, recession fears, or whatever other external, local, or global event comes our way. Our clients recognize the value that our experts bring and continue to turn to Aletheia as their trusted advisor and partner to help accelerate their digital transformation projects and to find efficiencies in their own organizations. The positive impacts of all these factors in our Q2 performance reinforces our focused and disciplined approach towards the execution of our long-term plan. I will now pass it over to Claude for more financial messages. Claude? Thank you, Paul. Bonjour.