SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of: November 2023
Commission File Number: 001-38705
 
ALITHYA GROUP INC.
(Translation of Registrant’s name into English)
 
1100, Robert-Bourassa Boulevard, Suite 400
Montréal, Québec, Canada H3B 3A5
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F    ☐                Form 40-F    ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    ☐
 

This Form 6-K shall be deemed incorporated by reference in the Registrant’s Registration Statements on Form S-8, Reg. Nos. 333-228487 and 333-265666.


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
ALITHYA GROUP INC.
/s/ Nathalie Forcier
Name: Nathalie Forcier
Title: Chief Legal Officer and Corporate Secretary
Date: November 14, 2023

EXHIBIT INDEX
 


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Interim Consolidated
Financial Statements
of Alithya Group inc.

For the three and six months ended September 30, 2023 and 2022
(unaudited)

Exhibit 99.1



TABLE OF CONTENTS


INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
For the three months ended September 30,For the six months ended September 30,
(in thousands of Canadian dollars, except per share data) (unaudited)2023202220232022
Notes$$$$
Revenues11118,492 128,933 250,087 255,697 
Cost of revenues783,701 91,173 177,203 183,873 
Gross margin34,791 37,760 72,884 71,824 
Operating expenses
Selling, general and administrative expenses729,930 30,421 62,429 59,348 
Business acquisition, integration and reorganization costs82,663 2,741 3,768 4,623 
Depreciation71,498 1,602 3,166 3,181 
Amortization of intangibles6,177 6,708 13,001 11,407 
Foreign exchange loss (gain)112 64 (16)(100)
40,380 41,536 82,348 78,459 
Operating loss(5,589)(3,776)(9,464)(6,635)
Net financial expenses93,073 2,301 6,293 4,094 
Loss before income taxes(8,662)(6,077)(15,757)(10,729)
Income tax expense (recovery)
Current86 164 287 48 
Deferred428 (5,806)377 (6,178)
514 (5,642)664 (6,130)
Net loss(9,176)(435)(16,421)(4,599)
Other comprehensive (loss) income
Items that may be classified subsequently to profit or loss
Cumulative translation adjustment on consolidation of foreign subsidiaries1,436 4,614 24 6,228 
1,436 4,614 24 6,228 
Comprehensive (loss) income(7,740)4,179 (16,397)1,629 
Basic and diluted loss per share6(0.10)— (0.17)(0.05)
The accompanying notes are an integral part of these interim consolidated financial statements.


Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As atSeptember 30,March 31,
(in thousands of Canadian dollars) (unaudited)20232023
Notes$$
Assets
Current assets
Cash8,086 22,583
Accounts receivable and other receivables91,975 92,453
Unbilled revenues22,309 23,420
Tax credits receivable9,576 9,944
Prepaids 7,149 7,680
139,095 156,080
Non-current assets
Tax credits receivable15,810 12,108
Other assets1,605 1,111 
Property and equipment6,361 8,724
Right-of-use assets7,614 9,353
Intangibles91,508 104,335
Deferred tax assets5,868 5,997
Goodwill166,767 166,393
434,628 464,101
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities73,448 91,263
Deferred revenues21,644 22,275
Current portion of lease liabilities4,944 3,873
Current portion of contingent consideration121,396 —
Current portion of long-term debt399,449 12,808
200,881 130,219
Non-current liabilities
Contingent consideration125,671 7,037
Long-term debt332,305 114,382
Lease liabilities11,817 14,643
Deferred tax liabilities8,886 8,632
259,560 274,913
Shareholders' equity
Share capital4313,445 311,967
Deficit(157,739)(141,481)
Accumulated other comprehensive income4,634 4,610
Contributed surplus14,728 14,092
175,068 189,188
434,628 464,101
The accompanying notes are an integral part of these interim consolidated financial statements.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended September 30,
(in thousands of Canadian dollars, except share data) (unaudited)
NotesShares
outstanding		Share capitalDeficitAccumulated other
comprehensive
income (loss)
Contributed
surplus(a)
Total
Number$$$$$
Balance as at March 31, 202395,195,816 311,967 (141,481)4,610 14,092 189,188 
Net loss— — (16,421)— — (16,421)
Other comprehensive income— — — 24 — 24 
Total comprehensive (loss) income— — (16,421)24 — (16,397)
Share-based compensation5— — — — 1,679 1,679 
Share-based compensation granted on business acquisition5— — — — 1,287 1,287 
Issuance of Subordinate Voting Shares pursuant to vesting of share-based compensation granted on business acquisition4622,421 1,924 — — (1,924)— 
Shares purchased for cancellation4(139,512)(487)163 — — (324)
Issuance of Subordinate Voting Shares from exercise of stock options4,52,500 8 — — (2)6 
Issuance of Subordinate Voting Shares from settlement of RSUs4,514,707 33 — — (33)— 
Cash settlement of RSUs issued as share-based compensation5— — — — (371)(371)
Total contributions by shareholders500,116 1,478 163 — 636 2,277 
Balance as at September 30, 202395,695,932 313,445 (157,739)4,634 14,728 175,068 
Balance as at March 31, 202292,725,616 305,222 (111,654)(947)7,130 199,751 
Net loss— — (4,599)— — (4,599)
Other comprehensive income— — — 6,228 — 6,228 
Total comprehensive income (loss)— — (4,599)6,228 — 1,629 
Share-based compensation5— — — — 1,226 1,226 
Share-based compensation granted on business acquisitions5— — — — 1,242 1,242 
Issuance of Subordinate Voting Shares in consideration of the Datum Acquisition, net of share issuance costs41,867,262 5,528 — — — 5,528 
Shares purchased for cancellation(283,886)(997)158 — — (839)
Total contributions by shareholders1,583,376 4,531 158 — 2,468 7,157 
Balance as at September 30, 202294,308,992 309,753 (116,095)5,281 9,598 208,537 
(a) The Company reclassified comparative figures as at March 31, 2023 in order to correct an immaterial balance sheet presentation misstatement resulting in an increase in contributed surplus and a decrease in contingent consideration in the amount of $2,120,000.
The accompanying notes are an integral part of these interim consolidated financial statements.

Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30,For the six months ended September 30,
(in thousands of Canadian dollars) (unaudited)2023202220232022
Notes$$$$
(note 10)(note 10)
Operating activities
Net loss(9,176)(435)(16,421)(4,599)
Adjustments for:
Depreciation and amortization7,6758,31016,16714,588
Net financial expenses93,0732,3016,2934,094
Share-based compensation51,2451,7382,9662,468
Unrealized foreign exchange loss (gain)433(456)89(735)
Realized foreign exchange (gain) loss on repayment of long-term debt(27)47(27)105
Impairment of property and equipment and right-of-use assets and loss on lease termination7——1,383—
Settlement of RSUs5——(371)—
Other——18—
Deferred taxes428(5,806)377(6,178)
3,6515,69910,4749,743
Changes in non-cash working capital items10(20,931)(6,349)(20,157)(20,192)
Net cash used in operating activities(17,280)(650)(9,683)(10,449)
Investing activities
Additions to property and equipment(71)(270)(266)(1,023)
Additions to intangibles——(41)(350)
Restricted cash———3,254
Business acquisitions, net of cash acquired—(15,869)—(16,683)
Net cash used in investing activities(71)(16,139)(307)(14,802)
Financing activities
Increase in long-term debt, net of related transaction costs39,5987,14470,36147,687
Repayment of long-term debt(37,441)(2,213)(66,606)(8,891)
Repayment of lease liabilities(987)(892)(1,958)(1,780)
Exercise of stock options46—6—
Share issue costs—(24)—(24)
Shares purchased for cancellation4(175)(309)(324)(839)
Financial expense paid9(2,890)(1,957)(5,885)(3,519)
Net cash (used in) from financing activities(1,889)1,749(4,406)32,634
Effect of exchange rate changes on cash187614(101)874
Net change in cash(19,053)(14,426)(14,497)8,257
Cash, beginning of period27,13940,33822,58317,655
Cash, end of period8,08625,9128,08625,912
Cash paid (included in cash flow used in operating activities)
Income taxes paid135223370223
The accompanying notes are an integral part of these interim consolidated financial statements.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
1. GOVERNING STATUTES AND NATURE OF OPERATIONS
Alithya Group inc. (together with its subsidiaries, “Alithya” or the “Company”) is a professional services firm providing IT services and solutions through the optimal use of digital technologies in the areas of strategic consulting, enterprise transformation and business enablement in the manufacturing, healthcare, financial services, insurance, telecommunications, government, renewable energy, retail and distribution, and higher education sectors.
The Company’s Class A subordinate voting shares (the “Subordinate Voting Shares”) trade on the Toronto Stock Exchange (“TSX”) and on the NASDAQ Capital Market (“NASDAQ”) under the symbol “ALYA”.
The Company’s head office is located at 1100, Robert-Bourassa Boulevard, Suite 400, Montréal, Québec, Canada, H3B 3A5.
2. BASIS OF PREPARATION
Statement of Compliance
These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, and should be read in conjunction with the annual audited consolidated financial statements for the year ended March 31, 2023. The Company applied the accounting policies adopted in its most recent annual audited consolidated financial statements for the year ended March 31, 2023, except for changes as detailed below.
These interim consolidated financial statements were approved and authorized for issue by the Board of Directors (the “Board”) on November 13, 2023.
Basis of Measurement
These interim consolidated financial statements have been prepared under the historical cost basis except for
•Identifiable assets acquired and liabilities and contingent liabilities resulting from a business combination, which are generally measured initially at their fair values at the acquisition date;
•Lease obligations, which are initially measured at the present value of the lease payments that are not paid at the lease commencement date;
•Equity classified share-based payment arrangements which are measured at fair value at grant date pursuant to IFRS 2, Share-Based Payment; and
•Derivatives, which are initially recognized at fair value on the date the derivative contract is entered into and are subsequently re‑measured at their fair value at the end of each reporting period.
Significant Management Judgement in Applying Accounting Policies and Estimation Uncertainty
The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the amounts reported as assets, liabilities, income and expenses in the consolidated financial statements. Actual results could differ from those estimates.
The critical judgements that management has made in applying accounting policies and that have the most significant effect on the amounts recognized in the interim consolidated financial statements are the same as those in the annual consolidated financial statements and in addition, include the liquidity risk associated with the Company’s ability to execute a new credit facility or renew its existing Credit Facility prior to its expiry as discussed in note 12.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
2. BASIS OF PREPARATION (CONT’D)
ACCOUNTING STANDARD AMENDMENTS EFFECTIVE FOR THE YEAR ENDING MARCH 31, 2024
The following amendments to existing standards were adopted by the Company on April 1, 2023:
Amendments to IAS 8, Definition of Accounting Estimates
In February 2021, the IASB amended IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors to introduce a new definition of “accounting estimates” to replace the definition of “change in accounting estimates” and also include clarifications intended to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively. The amendments are effective for annual periods beginning on or after January 1, 2023. Earlier application was permitted. The amendment of IAS 8 had no impact on the Company’s interim consolidated financial statements.
Amendments to IAS 12 - Income Taxes
On May 7, 2021, the IASB issued amendments to IAS 12 - Income Taxes to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. As a result, companies will be required to recognize a deferred tax asset and a deferred tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision. The amendments apply for annual reporting periods beginning on or after January 1, 2023. Earlier application was permitted. The amendment of IAS 12 did not have a material impact on the Company’s consolidated financial statements. Furthermore, the amendment of IAS 12 has no impact on the consolidated statements of financial position and the changes in the income taxes note disclosure will be reflected in the annual consolidated financial statements for the year ended March 31, 2024.
Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure of Accounting Policy Information
In February 2021, the IASB issued amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2 - Making Materiality Judgements. The amendments help entities provide accounting policy disclosures that are more useful to primary users of financial statements by:
•Replacing the requirement to disclose “significant” accounting policies under IAS 1 with a requirement to disclose “material” accounting policies. Under this, an accounting policy would be material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that primary users of general purpose financial statements make on the basis of those financial statements.
•Providing guidance in IFRS Practice Statement 2 to explain and demonstrate the application of the four-step materiality process to accounting policy disclosures.
The amendments shall be applied prospectively. The amendments to IAS 1 are effective for annual periods beginning on or after January 1, 2023. Earlier application was permitted. Once an entity applies the amendments to IAS 1, it is also permitted to apply the amendments to IFRS Practice Statement 2. The Company will update its accounting policy information disclosures in its annual consolidated financial statements for the year ended March 31, 2024.

Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
2. BASIS OF PREPARATION (CONT’D)
FUTURE ACCOUNTING STANDARDS
At the date of authorization of these interim consolidated financial statements, certain new standards, amendments and interpretations, and improvements to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application. Information on new standards, amendments and interpretations, and improvements to existing standards, which could potentially impact the Company’s consolidated financial statements, are detailed as follows:
NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
IAS 1 - Presentation of Financial Statements
On January 23, 2020, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, to clarify the classification of liabilities as current or non-current. For the purposes of non-current classification, the amendments removed the requirement for a right to defer settlement or roll over of a liability for at least twelve months to be unconditional. Instead, such a right must have substance and exist at the end of the reporting period. After reconsidering certain aspects of the 2020 amendments, the IASB reconfirmed that only covenants with which a company must comply on or before the reporting date affect the classification of a liability as current or non-current. Additional disclosure will be required to help users understand the risk that those liabilities could become repayable within twelve months after the reporting date. The amendments also clarify how a company classifies a liability that includes a counterparty conversion option. The amendments state that: settlement of a liability includes transferring a company’s own equity instruments to the counterparty; and when classifying liabilities as current or non-current, a company can ignore only those conversion options that are recognized as equity. The amendments to IAS 1 apply retrospectively and are effective for annual periods beginning on or after January 1, 2024, with earlier application permitted. Management is currently evaluating the impact of the amendment on its consolidated financial statements.
3. LONG-TERM DEBT
The following table summarizes the Company’s long-term debt:
As atSeptember 30,March 31,
20232023
$$
Senior secured revolving credit facility (the "Credit Facility") (a)
86,781 82,512 
Secured loans (b)
17,256 13,192 
Subordinated unsecured loans (c)
20,000 20,000 
Balance of purchase price payable with a nominal value of $8,463,000 (US$6,230,000) (March 31, 2023 - $12,695,000 (US$9,345,000)), non-interest bearing (4.4% effective interest rate), payable in annual installments of $4,232,000 (US$3,115,000), maturing on July 1, 2025
8,026 11,993 
Unamortized transaction costs (net of accumulated amortization of $1,381,000 and $1,184,000)
(309)(507)
131,754 127,190 
Current portion of long-term debt99,449 12,808 
32,305 114,382 
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
3. LONG-TERM DEBT (CONT’D)
(a) The Credit Facility is available to a maximum amount of $125,000,000 which can be increased under an accordion provision to $140,000,000, under certain conditions, and can be drawn in Canadian and the equivalent amount in U.S. dollars.
The advances bear interest at the Canadian or U.S. prime rate, plus an applicable margin ranging from 0.25% to 1.00%, or bankers’ acceptances or SOFR rates, plus an applicable margin ranging from 1.50% to 2.25%, as applicable for Canadian and U.S. advances, respectively. The applicable margin is determined based on threshold limits for certain financial ratios. As security for the Credit Facility, Alithya provided a first ranking hypothec on the universality of its assets excluding any leased equipment and Investissement Québec’s first ranking lien on tax credits receivable for the financing related to refundable tax credits. Under the terms of the agreement, the Group is required to maintain certain financial covenants which are measured on a quarterly basis.
The Credit Facility matures on April 1, 2024 and is renewable for additional one-year periods at the lender’s discretion. As the maturity date of the Credit Facility is within twelve months after the reporting date, it has been classified under the current portion of long-term debt as a current liability in the statement of financial position (note 12).
As at September 30, 2023, the amount outstanding under the Credit Facility includes $83,681,000 (March 31, 2023 - $82,512,000) payable in U.S. dollars (US$61,600,000; March 31, 2023 - US$61,000,000).
The Company has an additional operating credit facility available to a maximum amount of $2,717,000 (US$2,000,000), bearing interest at U.S. prime rate plus 1.00%. This operating credit facility can be terminated by the lender at any time. There was no amount outstanding under this additional operating credit facility as at September 30, 2023.
(b) The secured loans issued by Investissement Québec to finance the Company’s refundable tax credits have the following terms and conditions:
As atSeptember 30,March 31,
20232023
$$
Year of related Refundable Tax CreditRepayable on the earlier of the date of receipt of the refundable tax credits receivable and Bearing interest at
2022March 31, 2024Prime rate + 1.00%8,719 8,719 
2023March 31, 2025Prime rate + 1.25%8,537 4,473 
17,256 13,192 
The maximum amount that can be financed for the 2022 and 2023 refundable tax credits is the lesser of 90% of the eligible refundable tax credits and $8,776,000 for 2022 and $10,670,000 for 2023. The loans are secured by a first ranking hypothec on the universality of the Group’s financed refundable tax credits receivable and a subordinated ranking hypothec on accounts receivable and other receivables.
(c) The subordinated unsecured loans with Investissement Québec, in the amount of $20,000,000, mature on October 1, 2025. The first $10,000,000 bears fixed interest rates ranging between 6.00% and 7.25% and the additional $10,000,000 bears interest ranging between 7.10% and 8.35%, determined and payable quarterly, based on threshold limits for certain financial ratios. Under the terms of the loans, the Company is required to maintain compliance with certain financial covenants which are measured on a quarterly basis.
(a)(c) The Company was in compliance with all of its financial covenants as at September 30, 2023 and March 31, 2023.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
4. SHARE CAPITAL
The following table presents information concerning issued share capital activity for the six month period:
Subordinate Voting SharesMultiple Voting Shares
Number of shares$Number of shares$
Beginning balance as at April 1, 202387,871,568 307,110 7,324,248 4,857 
Shares issued pursuant to vesting of share-based compensation granted on business acquisition622,421 1,924 — — 
Conversion of shares50,000 33 (50,000)(33)
Shares purchased for cancellation(139,512)(487)— — 
Exercise of stock options2,500 8 — — 
Settlement of RSUs14,707 33 — — 
Ending balance at at September 30, 202388,421,684 308,621 7,274,248 4,824 
During the six months ended September 30, 2023, the following transactions occurred:
•As part of the acquisition of Datum Consulting Group, LLC and its international affiliates (the “Datum Acquisition”), 622,421 Subordinate Voting Shares, with a total value of $1,924,000 (US$1,438,000), reclassified from contributed surplus, were issued as settlement of the first anniversary share consideration.
•50,000 Class B multiple voting shares (“Multiple Voting Shares”) with a carrying value of $33,000 were converted into 50,000 Subordinate Voting Shares by a director of the Company.
•The purchase for cancellation of 139,512 Subordinate Voting Shares under the Company's normal course issuer bid for a total cash consideration of $324,000 and a carrying value of $487,000. The excess of the carrying value over the purchase price in the amount of $163,000 was recorded as a reduction to deficit.
•2,500 stock options were exercised and 2,500 Subordinate Voting Shares were issued with a carrying value of $8,000, for cash consideration of $6,000, with $2,000 reclassified from contributed surplus.
•14,707 RSUs were settled and 14,707 Subordinate Voting Shares were issued with a carrying value of $33,000, which was reclassified from contributed surplus.
During the six months ended September 30, 2022, the Company acquired all of the outstanding shares of U.S.-based Datum Consulting Group, LLC and its international affiliates. As part of the acquisition, 1,867,262 Subordinate Voting Shares were issued, for net consideration of $5,528,000.
Normal Course Issuer Bid ("NCIB")
On September 13, 2023, the Company’s Board of Directors authorized and subsequently the TSX approved the renewal of its NCIB. Under the NCIB, the Company is allowed to purchase for cancellation up to 2,411,570 Subordinate Voting Shares, representing 5% of the Company’s public float as of the close of markets on September 7, 2023.
The NCIB commenced on September 20, 2023 and will end on the earlier of September 19, 2024 and the date on which the Company will have acquired the maximum number of Subordinate Voting Shares allowable under the NCIB or will otherwise have decided not to make any further purchases. All purchases of Subordinate Voting Shares are made by means of open market transactions at their market price at the time of acquisition.
Concurrently, the Company entered into an automatic share purchase plan (“ASPP”) with a designated broker in connection with its NCIB. The ASPP allows for the designated broker to purchase for cancellation Subordinate Voting Shares, on behalf of the Company, subject to certain trading parameters established, from time to time, by the Company.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
5. SHARE-BASED COMPENSATION
Stock options
The following tables present information concerning outstanding stock options issued by currency:
Number of stock optionsWeighted average exercise price (CAD)
$
Beginning balance as at April 1, 20233,400,696 3.23 
Forfeited(38,000)3.42 
Expired(18,000)3.97 
Ending balance as at September 30, 20233,344,696 3.22 
Exercisable at period end1,936,814 3.34 
Number of stock optionsWeighted average exercise price (USD)
$
Beginning balance as at April 1, 20231,084,175 2.55 
Forfeited(35,100)2.41 
Expired(13,000)3.23 
Exercised(2,500)1.67 
Ending balance as at September 30, 20231,033,575 2.54 
Exercisable at period end441,875 2.67 
Included in the 1,936,814 stock options exercisable issued in Canadian dollars, 505,264 stock options are available to purchase Multiple Voting Shares as at September 30, 2023.
Deferred Share Units (“DSUs”)
The following table presents information concerning the outstanding number of DSUs for the period:
Number of DSUs
Beginning balance as at April 1, 2023666,974 
Granted to non-employee directors133,760 
Granted to employees304,688 
Ending balance as at September 30, 20231,105,422 
During the six months ended September 30, 2023, 133,760 fully vested DSUs, in aggregate, were granted under the Long-Term Incentive Plan (“LTIP”) to non-employee directors of the Company at an average grant date fair value of $2.11, per DSU, for an aggregate fair value of $282,000.
During the six months ended September 30, 2023, 304,688 DSUs, in aggregate, were granted under the Share Unit Plan (“SUP”) at a grant date fair value of $2.30, per DSU, for an aggregate fair value of $701,000. Share-based compensation expense was recorded as at March 31, 2023 as the related services were performed and the performance conditions were met at that date.
As at September 30, 2023, included in the 1,105,422 DSUs are 800,734 DSUs issued under LTIP and 304,688 DSUs issued under the SUP.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
5. SHARE-BASED COMPENSATION (CONT’D)
Restricted Share Units (“RSUs”)
The following table presents information concerning the outstanding number of RSUs for the period:
Number of RSUs
Beginning balance as at April 1, 2023181,498 
Granted311,246 
Settled(181,498)
Ending balance as at September 30, 2023311,246 
During the six months ended September 30, 2023, 311,246 RSUs, in aggregate, vesting over three years from the date of grant, were granted under the SUP at a grant date fair value of $2.30, per RSU, for an aggregate fair value of $716,000.
During the six months ended September 30, 2023, 181,498 RSUs issued under the LTIP were settled. 14,707 RSUs were settled through the issuance of 14,707 Subordinate Voting Shares, with a carrying value of $33,000. The balance was settled for a total cash consideration of $371,000.
As at September 30, 2023, there were 311,246 RSUs issued under the SUP.
Performance Share Units (“PSUs”)
The following table presents information concerning the outstanding number of PSUs for the period:
Number of PSUs
Beginning balance as at April 1, 2023855,383 
Granted1,349,752 
Forfeited(14,600)
Ending balance as at September 30, 20232,190,535 
During the six months ended September 30, 2023, 1,349,752 PSUs, in aggregate, vesting three years from the date of grant, were granted at a grant date fair value of $2.30, per PSU, for an aggregate fair value of $3,104,000.
As at September 30, 2023, there were 2,190,535 PSUs issued under the LTIP.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
5. SHARE-BASED COMPENSATION (CONT’D)
Share-Based Compensation expense
Total share-based compensation expense for the period is summarized as follows:
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Stock options151 260 336 486 
Share purchase plan – employer contribution350 363 707 694 
Share-based compensation granted on business acquisitions402 1,105 1,287 1,242 
DSUs135 138 319 273 
RSUs111 — 126 — 
PSUs446 235 898 467 
1,595 2,101 3,673 3,162 
6. EARNINGS PER SHARE
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Net loss(9,176)(435)(16,421)(4,599)
Weighted average number of Shares outstanding (a)
95,767,04894,357,07795,480,41393,508,475
Basic and diluted loss per share(0.10)—(0.17)(0.05)
(a) "Shares" include the Subordinate Voting Shares and Multiple Voting Shares
The potentially dilutive outstanding equity instruments, which are DSUs , PSUs and options mentioned in Note 5 granted under LTIP and certain shares to be issued as part of anniversary payments related to business acquisition, were not included in the calculation of diluted earnings per share since the Company incurred losses and the inclusion of these equity instruments would have an antidilutive effect.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
7. ADDITIONAL INFORMATION ON CONSOLIDATED LOSS
The following table provides additional information on the consolidated loss:
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Expenses by Nature
Employee compensation and subcontractor costs105,223 115,590 223,066 231,405 
Tax credits (a)
(1,148)(2,574)(3,540)(5,317)
Licenses and telecommunications2,385 2,404 4,928 4,697 
Professional fees2,220 1,663 3,977 3,483 
Other expenses4,951 4,511 9,818 8,953 
Impairment of property and equipment and right-of-use assets and loss on lease termination— — 1,383 — 
Depreciation of property and equipment850 676 1,849 1,344 
Depreciation of right-of-use assets648 926 1,317 1,837 
115,129 123,196 242,798 246,402 
Expenses by Function
Cost of revenues83,701 91,173 177,203 183,873 
Selling, general and administrative expenses29,930 30,421 62,429 59,348 
Depreciation1,498 1,602 3,166 3,181 
115,129 123,196 242,798 246,402 
(a) Tax credits are included in cost of revenues.
8. BUSINESS ACQUISITION, INTEGRATION AND REORGANIZATION COSTS
The following table summarizes business acquisition, integration and reorganization costs:
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Acquisition costs (a)
262 399 262 1,478 
Integration costs (b)
901 251 1,640 866 
Reorganization costs (c)
1,409 1,735 1,575 1,923 
Employee compensation on business acquisition (d)
91356291356
2,6632,7413,7684,623
(a) The acquisition costs consisted mainly of professional fees incurred in relation to business acquisitions.
(b) For the three and six months ended September 30, 2023, integration costs referred mainly to retention bonuses in relation to business acquisitions and to termination of leases of vacated premises previously acquired as part of business combinations. For the three and six months ended September 30, 2022, integration costs consisted mainly of transition costs related to systems integration.
(c) Reorganization costs consisted of employee termination and benefits costs.
(d) Employee compensation on business acquisition included deferred cash consideration from the Datum Acquisition.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
| 14
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
9. NET FINANCIAL EXPENSES
The following table summarizes net financial expenses:
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Interest on long-term debt2,741 1,651 5,762 2,886 
Interest on lease liabilities186 210 375 427 
Amortization of finance costs99 88 197 171 
Interest accretion on balances of purchase price payable84 256 211 404 
Financing fees40 159 92 288 
Interest income(77)(63)(344)(82)
3,0732,3016,2934,094
10. SUPPLEMENTARY CASH FLOW INFORMATION
Changes in non-cash working capital items are as follows:
For the three months ended September 30,For the six months ended September 30,
2023202220232022
$$$$
Accounts receivable and other receivables(6,171)568 547 8,030 
Unbilled revenues(3,123)(448)1,123 (12,538)
Tax credits receivable(1,006)(1,469)(3,360)(4,216)
Prepaids1,464 598 532 205 
Other assets(555)27 (494)63 
Accounts payable and accrued liabilities(12,151)(5,667)(17,819)(10,530)
Deferred revenues611 42 (686)(1,206)
(20,931)(6,349)(20,157)(20,192)
During the three months ended September 30, 2023, non-cash investing and financing activities included additions to right-of-use assets and lease liabilities in the amount of nil (September 30, 2022 - $135,000).
During the six months ended September 30, 2023, non-cash investing and financing activities included additions to right-of-use assets and lease liabilities in the amount of $454,000 (September 30, 2022 - $428,000).
As a result of the change in accounting policy disclosed in the annual audited consolidated financial statements for the year ended March 31, 2023, the Company changed comparative figures in the consolidated statements of cash flows to conform to the current period’s presentation. Consequently, interest paid in the amount of $1,957,000 for the three months ended September 30, 2022 and $3,519,000 for the six months ended September 30, 2022 have been presented as financing cash flows instead of operating cash flows.
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
| 15
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
11. SEGMENT INFORMATION
The following tables present the Company's operations based on reportable segments:
For the three months ended September 30, 2023
CanadaU.S.InternationalTotal
$$$$
Revenues67,959 45,745 4,788 118,492 
Operating income by segment8,071 5,664 262 13,997 
Head office general and administrative expenses9,136 
Business acquisition, integration and reorganization costs2,663 
Foreign exchange loss (gain)112 
Operating income before depreciation and amortization2,086 
Depreciation and amortization7,675 
Operating loss(5,589)
For the three months ended September 30, 2022
CanadaU.S.InternationalTotal
$$$$
Revenues75,122 48,590 5,221 128,933 
Operating income by segment8,268 6,939 1,078 16,285 
Head office general and administrative expenses8,946 
Business acquisition, integration and reorganization costs2,741 
Foreign exchange loss (gain)64 
Operating income before depreciation and amortization4,534 
Depreciation and amortization8,310 
Operating loss(3,776)
For the six months ended September 30, 2023
CanadaU.S.InternationalTotal
$$$$
Revenues144,946 94,989 10,152 250,087 
Operating income by segment16,041 14,104 974 31,119 
Head office general and administrative expenses20,664 
Business acquisition, integration and reorganization costs3,768 
Foreign exchange loss (gain)(16)
Operating income before depreciation and amortization6,703 
Depreciation and amortization16,167 
Operating loss(9,464)


Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
11. SEGMENT INFORMATION (CONT’D)
For the six months ended September 30, 2022
CanadaU.S.InternationalTotal
$$$$
Revenues153,679 92,855 9,163 255,697 
Operating income by segment15,425 12,458 1,448 29,331 
Head office general and administrative expenses16,855 
Business acquisition, integration and reorganization costs4,623 
Foreign exchange loss (gain)(100)
Operating income before depreciation and amortization7,953 
Depreciation and amortization14,588 
Operating loss(6,635)
Information about revenues
An analysis of the Company’s revenues from customers for each major service category is as follows:
For the three months ended September 30, 2023
CanadaU.S.InternationalTotal
$$$$
Consulting services - time and materials arrangements59,221 24,490 4,412 88,123 
Consulting services - fixed-fee arrangements5,487 9,419 376 15,282 
Subscription, software and other revenue3,251 11,836 — 15,087 
67,959 45,745 4,788 118,492 
For the three months ended September 30, 2022
CanadaU.S.InternationalTotal
$$$$
Consulting services - time and materials arrangements62,787 27,938 4,801 95,526 
Consulting services - fixed-fee arrangements8,596 7,129 420 16,145 
Subscription, software and other revenue3,739 13,523 — 17,262 
75,122 48,590 5,221 128,933 
For the six months ended September 30, 2023
CanadaU.S.InternationalTotal
$$$$
Consulting services - time and materials arrangements125,690 53,507 8,688 187,885 
Consulting services - fixed-fee arrangements13,090 17,806 1,464 32,360 
Subscription, software and other revenue6,166 23,676 — 29,842 
144,946 94,989 10,152 250,087 
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
11. SEGMENT INFORMATION (CONT’D)
For the six months ended September 30, 2022
CanadaU.S.InternationalTotal
$$$$
Consulting services - time and materials arrangements128,348 56,373 8,705 193,426 
Consulting services - fixed-fee arrangements18,368 12,184 458 31,010 
Subscription, software and other revenue6,963 24,298 — 31,261 
153,679 92,855 9,163 255,697 
Major customer
During the three months ended September 30, 2023, one client generated more than 10% of total revenues for $13,231,000 (September 30, 2022 - one client generated more than 10% of total revenues for $14,924,000) and for the six months ended September 30, 2023, one client generated more than 10% of total revenues for $28,679,000 (September 30, 2022 - one client generated more than 10% of total revenues for $32,452,000).
As at September 30, 2023, no customer represented more than 10% of total accounts receivable and other receivables (March 31, 2023 - one major customer amounted to $10,777,000 or 11.7%).
12. FINANCIAL INSTRUMENTS
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s activities are financed through a combination of cash flows from operations, borrowings under existing Credit Facility, issuance of debt and issuance of equity instruments. In order to manage its exposure to liquidity risk, the Company’s primary goal is to maintain an optimal level of liquidity through an active management of assets and liabilities as well as cash flows. As at September 30, 2023, the Company has an unused capacity of $38,219,000 under its Credit Facility of $125,000,000, which expires on April 1, 2024. As at September 30, 2023, the carrying amount of the liabilities of the Company having a maturity of less than one year amount to $200,881,000, some of which bear interest as disclosed in Note 3.
The Company’s ability to meet the obligations associated with its financial liabilities that will require settlement in less than one year is contingent on its ability to maintain adequate credit facilities. The Company is currently in the process of evaluating terms and conditions proposed by several lenders, including its current lenders, and is planning to execute a new credit facility or renew its existing Credit Facility, in the normal course of business, in amounts which will be sufficient, and on acceptable terms and conditions, by the end of 2023. If the Company is unable to execute a new credit facility or renew its existing Credit Facility prior to its expiry on April 1, 2024, it will not have sufficient cash flows to realize its assets and discharge its liabilities in the normal course of business. Significant judgment was exercised by the Company in determining its ability to execute a new credit facility or renew its existing Credit Facility prior to the expiry of its existing Credit Facility on April 1, 2024 and in determining that there are no material uncertainties upon the Company’s ability to continue as a going concern. There is no assurance that the Company will be successful in executing a new credit facility or renewing its existing Credit Facility and be able to meet the obligations associated with its financial liabilities that will require settlement in less than one year.


Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
12. FINANCIAL INSTRUMENTS (CONT’D)
Fair Value of Financial Instruments
Financial instruments recorded at fair value on the interim consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
•Level 1 - Valuation based on quoted prices observed in active markets for identical assets or liabilities.
•Level 2 - Valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
•Level 3 - Valuation techniques with significant unobservable market inputs. A financial instrument is classified at the lowest level of the hierarchy for which a significant unobservable market input has been considered in measuring fair value.
The carrying amount of cash, accounts receivable and other receivables, other assets, accounts payable and accrued liabilities and long-term debt bearing interest at variable rates approximates fair value.
The Company has designated as an effective hedging instrument an interest rate swap for a nominal amount of $30,000,000 maturing on August 30, 2025 to fix the variability in interest rates on a designated portion of borrowings under its Credit Facility. Under the interest rate swap agreement, the Company pays interest based on a fixed rate of 3.97%, and receives interest based on the actual one-month BA/CDOR rate. The fair value of derivatives instruments is estimated by discounting expected cash flows using one month BA/CDOR forward rates (level 2). The fair market value of the interest rate swap agreement as at September 30, 2023 is not material.
The contingent consideration related to business combination is payable in U.S. dollars based on the achievement of growth in excess of the trailing twelve months gross margin for earn-out periods ending on July 1, 2024 and 2025 and is included in Level 3 of the fair value hierarchy. The fair value was determined at $7,067,000 (US$5,202,000), including a current portion of $1,396,000 and a long-term portion of $5,671,000, considering the expected earn-out payments, discounted to present value using a risk-adjusted discount rate of 6.0% as at September 30, 2023. There were no significant changes in the assumptions for the three and six months ended September 30, 2023.
The fair value of the long-term debt bearing interest at fixed rates is estimated by discounting expected cash flows at rates that would be currently offered to the Company for debts of the same remaining maturities and conditions (Level 2). For both September 30, 2023 and March 31, 2023, the Company has determined that the fair value of the Credit Facility, the secured loans and the balance of purchase price payable are not significantly different than their carrying amount.

Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
| 19
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Tabular amounts are in thousands of Canadian dollars, except share and per share data in tables) (unaudited)
12. FINANCIAL INSTRUMENTS (CONT’D)
The following table summarizes the carrying amount of the financial liabilities included in the long-term debt and measured at amortized cost:
As atSeptember 30,March 31,
20232023
$$
Credit Facility86,781 82,512 
Secured loans 17,256 13,192 
Subordinated unsecured loans (a)
20,000 20,000 
Balance of purchase price payable8,026 11,993 
132,063 127,697 
(a) As at September 30, 2023, the fair value of the subordinated unsecured loans, bearing interest at fixed rates, was approximately $18,807,000 (March 31, 2023 - $19,038,000).
Alithya Group inc. – Interim Consolidated Financial Statements for the three and six months ended September 30, 2023 and 2022
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Management’s Discussion and Analysis Alithya Group inc.

For the three and six months ended September 30, 2023

Exhibit 99.2







Table of Contents
Page
1.

2.

Forward-Looking Statements
3.

4.

5.

6.

7.


7.1

7.2

7.3

7.4

7.5
7.6
Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share

7.7
7.8
8.
Bookings and Backlog
9.


9.1

9.2

9.3

9.4

9.5
9.6
Long-Term Debt and Net Debt

9.7
9.8
10

10.1
Normal Course Issuer Bid
11.

12.

13.
14.
15.

16.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
         

1. Basis of Presentation
This Management’s Discussion and Analysis (“MD&A”) provides a review of the results of operations, financial condition and cash flows for Alithya Group inc. for the three-month and six-month periods ended September 30, 2023. References to “Alithya”, the “Company”, the “Group”, “we”, “our” and “us” in this MD&A refer to Alithya Group inc. and its subsidiaries or any one or more of them, unless the context requires otherwise. This document should be read in conjunction with the information contained in the Company’s interim consolidated financial statements (the "Q2 Financial Statements") and accompanying notes for the three-month and six-month periods ended September 30, 2023 and 2022, as well as the audited consolidated financial statements and MD&A for the fiscal year ended March 31, 2023. These documents, as well as the Company's Annual Information Form, and additional information regarding the business of the Company, are available under the Company’s profile on the System for Electronic Document Analysis and Retrieval + (“SEDAR+”) at www.sedarplus.com and the Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) at www.sec.gov.
For reporting purposes, the Company prepared the Q2 Financial Statements in Canadian dollars in accordance with IAS 34 - Interim Financial Reporting of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Unless otherwise indicated, all dollar (“$”) amounts and references in this MD&A are in Canadian dollars and references to “US$” are to U.S. dollars. Variances, ratios and percentage changes in this MD&A are based on unrounded numbers.
This MD&A contains both IFRS and non-IFRS financial measures. See section 5 titled “Non-IFRS and Other Financial Measures”.
Unless otherwise stated, in preparing this MD&A, the Company has considered information available to it up to November 13, 2023, the date the Company’s Board of Directors (“Board”) approved this MD&A and the Q2 Financial Statements.
2. Forward-Looking Statements
This MD&A 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 U.S. Private Securities Litigation Reform Act of 1995 and other applicable U.S. safe harbours (collectively “forward-looking statements”). Statements that do not exclusively relate to historical facts, as well as statements relating to management’s expectations regarding the future growth, results of operations, performance and business prospects of Alithya, and other information related to Alithya’s business strategy and future plans or which refer to the characterizations of future events or circumstances represent forward-looking statements. Such statements often contain the words “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “could,” “would,” “will,” “may,” “can,” “continue,” “potential,” “should,” “project,” “target,” and similar expressions and variations thereof, although not all forward-looking statements contain these identifying words.
Forward-looking statements in this MD&A 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
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 2

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, renew our credit facility and raise additional capital and; (vi) our estimates regarding our financial performance, including our revenues, profitability, research and development, costs and expenses, gross margins, liquidity, capital resources, and capital expenditures; (vii) our ability to realize the expected synergies or cost savings relating to the integration of our business acquisitions, and (viii) 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 the MD&A for the year ended March 31, 2023, as well as in Alithya’s other materials made public, including documents filed with Canadian and U.S. securities regulatory authorities from time to time and which are available on SEDAR+ at www.sedarplus.com and EDGAR at www.sec.gov. Additional risks and uncertainties not currently known to Alithya or that Alithya currently deems to be immaterial could also have a material adverse effect on its financial position, financial performance, cash flows, business or reputation.
Forward-looking statements contained in this MD&A are qualified by these cautionary statements and are made only as of the date of this MD&A. 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.
3. Business Overview
Alithya advises in strategy and digital transformation with professionals in Canada, the U.S. and internationally. The Company guides and supports its clients in their pursuit of innovation and excellence, and the achievement of their business objectives through the optimal use of digital technologies.
Alithya’s collaborative teams deploy solutions and services focused on five main pillars: business strategy, business applications implementation, application services, data and analytics, and digital skilling and change enablement. Through the optimal use of digital technologies, Alithya provides consulting and digital technology services in the areas of strategic consulting, enterprise transformation and business enablement in the manufacturing, healthcare, financial services, insurance, telecommunications, government, renewable energy, retail and distribution, and higher education sectors.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 3

Business Offerings
Alithya’s business offerings in each of its reportable segments include a comprehensive range of digital technology services to address client needs:
•Business Strategy. Alithya leads clients through essential decision-making processes regarding strategic consulting, digital transformation, business agility, enterprise architecture, organizational performance, and more.
•Application Services. Alithya’s experts guide clients through all facets of cloud and infrastructure, control systems software engineering, cyber security, digital applications development, intelligent document processing, legacy systems modernization, quality assurance, and more.
•Business Applications Implementation. Working with key industry partners, including some of the world’s largest vendors of cloud-based Enterprise Solutions, Alithya’s experts help clients deploy company-wide systems, including Enterprise Resource Planning (ERP), Enterprise Performance Management (EPM), Customer Relationship Management (CRM) and Human Capital Management (HCM).
•Data and Analytics. Leveraging specialized IT systems and software, Alithya’s data professionals help clients gain business insight and drive better decision-making through AI and machine learning, big data, business intelligence, internet of things, operational intelligence, and more.
•Digital Skilling and Change Enablement. Alithya’s digital skilling service and change enablement provides everything our clients and their employees need to adopt new technologies.
Geographically, Alithya’s operations span across Canada, the U.S. and internationally, providing a full spectrum of strategy and digital technology services with deep expertise in a range of technologies and business domains.
Competitive Environment
For many companies, digital systems and infrastructures are among their most important and strategic assets. Not only do these assets require significant investments, but they increasingly serve as key differentiators and drivers of growth for customers.
Accordingly, businesses are seeking solutions that allow them to maintain their ability to differentiate themselves from competitors with proprietary business processes, combined with product customization. That is where digital transformation comes into play, inviting companies to make a shift in their approach and to evolve from traditional information technologies to flexible digital technologies.
As businesses’ technology spending continues to increase, digital technology firms such as Alithya are striving to deliver innovative thinking and in-depth vertical industry expertise, while facilitating business process transformation through the use of the most optimal technologies.
Alithya believes it is well positioned to respond to these trends in clients’ investments in digital technology. Alithya’s business model is built on a philosophy of offering flexible and creative solutions, enabling clients to
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 4

realize maximum benefits from their digital technology investments. Alithya positions itself as an agile trusted advisor and consulting partner capable of delivering rapid results for its clients.
Alithya’s competitors in each of its reportable segments include systems integration firms, contract programming companies, application software companies, cloud computing service providers, large or traditional consulting firms, professional services groups of computer equipment companies, infrastructure management and outsourcing companies and boutique digital companies. In addition, Alithya competes with numerous smaller local companies in the various geographic markets in which it operates.
Alithya competes based on the following principal differentiating factors: vision and strategic advisory ability, digital services capabilities, performance and reliability, quality of technical support, training and services, responsiveness to client needs, reputation and experience, financial stability and strong corporate governance and competitive pricing of services.
Alithya also relies on the following measures to compete effectively: (a) investments to scale its services practice areas; (b) a well-developed recruiting, training and retention model; (c) a successful service delivery model; (d) intrapreneurial culture and approach; (e) a broad referral base; (f) continual investment in process improvement and knowledge capture; (g) investment in infrastructure and research and development; (h) continued focus on responsiveness to client needs, quality of services and competitive prices; and (i) project management capabilities and technical expertise.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 5

4. Strategic Business Plan
Alithya has adopted a three-year strategic plan which sets as a goal to consolidate its position as to become a North American digital transformation leader.
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 strategic acquisitions by:
◦Generating profitable organic growth through innovation, higher-value offerings and client-relationships based on trust;
◦Completing value enhancing business acquisitions by way of a North American geographic expansion to complement current market presence, including geography, while progressively adding major integrated enterprise solutions offerings and selected specialized expertise;
•Achieving best-in-class employee engagement by:
◦Fostering a culture of collaboration, diversity and ownership;
◦Cultivating employee well-being and personal growth;
◦Investing in the development of its leaders and employees;
•Providing its investors, partners and stakeholders with long-term growing return on investment by:
◦Strengthening its existing relationships with clients, as a key trusted advisor, by generating long-term value;
◦Investing in innovation and higher value service offerings;
◦Acting responsibly, with a sustainable and respectful vision for its stakeholders and articulating its Environmental, Social and Governance framework and priorities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 6

5. Non-IFRS and Other Financial Measures
Alithya reports its financial results in accordance with IFRS. This MD&A includes certain non-IFRS and supplementary financial measures and ratios to assess Alithya's financial performance. These measures are provided as additional information to complement IFRS measures by providing further understanding of our results of operations from our perspective. They do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. They should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS. They are used to provide investors with additional insight of our operating performance and thus highlight trends in Alithya's business that may not otherwise be apparent when relying solely on IFRS measures.
The non-IFRS measures used by Alithya are described below:
EBITDA and EBITDA Margin
"EBITDA" refers to net income (loss) before adjusting for income tax expense (recovery), net financial expenses, amortization of intangibles, and depreciation of property and equipment and right-of-use assets.
"EBITDA Margin" refers to the percentage of total revenue that EBITDA represents for a given period.
Management believes that EBITDA and EBITDA Margin are useful measures for investors as they provide an indication of the results generated by Alithya’s main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration non-cash depreciation and amortization. For a reconciliation of net loss to EBITDA, see section 7.8 titled “EBITDA and Adjusted EBITDA”.
Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share
"Adjusted Net (Loss) Earnings" refers to net income (loss) before adjusting for amortization of intangibles, impairment of intangibles and goodwill, impairment of property and equipment and right-of-use assets, share-based compensation, business acquisition, integration and reorganization costs, and the income tax effects of these items.
"Adjusted Net (Loss) Earnings per Share" is calculated by dividing Adjusted Net (Loss) Earnings by the weighted average number of outstanding Class A Subordinate Voting Shares ("Subordinate Voting Shares") and Class B Multiple Voting Shares ("Multiple Voting Shares"), excluding potentially dilutive outstanding equity instruments, during the period.
Management believes that Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share are useful measures for investors as they allow comparability of operating results from one period to another, prior to taking into consideration non-cash items and business acquisition, integration and reorganization costs, which can vary significantly from period to period. These measures provide an indication of the results generated by Alithya’s main business activities prior to taking into consideration the non-cash and other items listed above which have resulted primarily from acquisitions and their subsequent integrations. For a reconciliation of net loss to Adjusted Net (Loss) Earnings, see section 7.6 titled “Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share”.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 7

Adjusted EBITDA and Adjusted EBITDA Margin
"Adjusted EBITDA" refers to net income (loss) before adjusting for income tax expense (recovery), net financial expenses, foreign exchange, amortization of intangibles, depreciation of property and equipment and right-of-use assets, impairment of intangibles and goodwill, impairment of property and equipment and right-of-use assets, share-based compensation, business acquisition, integration and reorganization costs, internal ERP systems implementation, and other redundant and non-recurring items.
"Adjusted EBITDA Margin" refers to the percentage of total revenue that Adjusted EBITDA represents for a given period.
Management believes that Adjusted EBITDA and Adjusted EBITDA Margin are useful measures for investors as they allow comparability of operating results from one period to another. These measures provide an indication of the results generated by Alithya’s main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration the non-cash and other items listed above. For a reconciliation of net loss to Adjusted EBITDA, see section 7.8 titled “EBITDA and Adjusted EBITDA”.
Constant Dollar Revenue and Constant Dollar Growth
"Constant Dollar Revenue" is a measure of revenue and revenue by geographic location before foreign currency translation impacts. This measure is calculated by translating current period revenue and revenue by geographic location in local currency using the exchange rates in the equivalent period from the prior year.
"Constant Dollar Growth" is a measure of revenue growth and revenue growth by geographic location, expressed as a percentage, before foreign currency translation impacts. This measure is calculated by dividing Constant Dollar Revenue as described above with prior period revenue.
Management believes that Constant Dollar Revenue and Constant Dollar Growth are useful measures for investors as they allow revenue to be adjusted to exclude the impact of currency fluctuations to facilitate period-to-period comparisons of business performance. For a reconciliation of revenues to Constant Dollar Revenue by geographic location, see section 7.1 titled “Revenues”.
Net Debt
"Net Debt" refers to long-term debt, including the current portion, less cash and restricted cash. For the calculation of Net Debt, see section 9.6 titled “Long-Term Debt and Net Debt”. Management believes that Net Debt is a useful measure for investors as it provides an indication of the liquidity of the Company.
Other Financial Measures
The other financial measures used by Alithya are described below:
"Gross Margin as a Percentage of Revenues" is calculated by dividing gross margin by revenues.
"Selling, General and Administrative Expenses as a Percentage of Revenues" is calculated by dividing selling, general and administrative expenses by revenues.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 8

"Bookings" refers to the amount of signed revenue agreements during the period, which includes new contracts, including those acquired through acquisitions, as well as renewals, extensions and changes to existing contracts. Management believes information regarding bookings can provide useful trend insight to investors regarding changes in the volume of new business over time.
"Book-to-Bill Ratio" is calculated by dividing Bookings by revenues, for the same period. Management believes this measure allows for the monitoring of the Company’s backlog and offers useful insight to investors on how the business varies and evolves over time. This measure is best used over a long period as it could fluctuate significantly from one quarter to the other.
"Backlog" refers to the amount of future revenue stemming from signed revenue agreements, which includes new contracts, including those acquired through acquisitions, as well as renewals, extensions and changes to existing contracts, expressed as a number of months of trailing twelve-month revenue, as at a given date. Backlog differs from the IFRS definition of remaining performance obligations, as disclosed in the Company's consolidated financial statements, as backlog also includes time and materials arrangements without stated ceilings and contracts with original expected durations exceeding one year. Management believes that backlog information can provide useful trend insight to investors regarding changes in management’s best estimate of future revenue stemming from signed revenue agreements.
"Days Sales Outstanding" ("DSO") refers to the average number of days it takes for the Company to convert its accounts receivable and other receivables (net of sales taxes) and unbilled revenues, less deferred revenues, into cash. Management believes this measure provides useful insight to investors regarding the Company's liquidity.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 9

6. Financial Highlights
Results of OperationsThree months ended September 30,Six months ended September 30,
(in $ thousands)2023202220232022
$$$$
Revenues118,492 128,933 250,087 255,697 
Gross Margin34,791 37,760 72,884 71,824 
Gross Margin as a Percentage of Revenues (1)
29.4 %29.3 %29.1 %28.1 %
Selling, General and Administrative Expenses
29,930 30,421 62,429 59,348 
Selling, General and Administrative Expenses as a Percentage of Revenues (1)
25.3 %23.6 %25.0 %23.2 %
Net Loss(9,176)(435)(16,421)(4,599)
Basic and Diluted Loss per Share(0.10)0.00 (0.17)(0.05)
Adjusted Net (Loss) Earnings (2)
(233)3,393 2,425 6,112 
Adjusted Net (Loss) Earnings per Share (2)
0.00 0.04 0.03 0.07 
Adjusted EBITDA (3)
6,456 9,440 15,511 15,638 
Adjusted EBITDA Margin (3)
5.4 %7.3 %6.2 %6.1 %
 
OtherSeptember 30,March 31,
(in $ thousands, except Backlog and DSO)20232023
$$
Total Assets434,628 464,101 
Non-Current Financial Liabilities (4)
49,793 136,062 
Total Long-Term Debt
131,754 127,190 
Net Debt (5)
123,668 104,607 
Backlog (1)
16 months16 months
DSO (1)
49 days54 days
   
Shares, Stock Options and Share Units OutstandingNovember 12,
2023
Subordinate Voting Shares88,365,511 
Multiple Voting Shares7,274,248 
Options (6)
4,378,271 
Deferred Share Units ("DSUs")1,105,422 
Restricted Share Units ("RSUs")311,246 
Performance Share Units ("PSUs")2,190,535 
  
1 This is an other financial measure. Refer to section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition of this other financial measure.
2 This is a non-IFRS financial measure. Refer to section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure and to section 7.6 titled “Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share” for a quantitative reconciliation to the most directly comparable IFRS measures.
3 This is a non-IFRS financial measure. Refer to section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure and to section 7.8 titled “EBITDA and Adjusted EBITDA” for a quantitative reconciliation to the most directly comparable IFRS measures.
4 Non-current financial liabilities include the long-term portion of the long-term debt, the long-term portion of lease liabilities, and the long-term portion of the contingent consideration. For an explanation of the variance, refer to section 9.6 titled "Long-Term Debt and Net Debt".
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 10

5 This is a non-IFRS financial measure. Refer to section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure and to section 9.6 titled “Long-Term Debt and Net Debt” for a quantitative reconciliation to the most directly comparable IFRS measures and an explanation of the variance.
6 Includes 505,264 stock options to purchase Multiple Voting Shares.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 11

For the three months ended September 30, 2023:
•Revenues decreased 8.1% to $118.5 million, compared to $128.9 million for the same quarter last year.
•84% of revenues were generated from clients which we had in the same quarter last year.
•Gross margin decreased 7.9% to $34.8 million, compared to $37.8 million for the same quarter last year.
•Gross margin as a percentage of revenues increased to 29.4%, compared to 29.3% for the same quarter last year, despite recording a $1.1M provision, on tax credit receivable, of previous periods.
•Adjusted EBITDA decreased 31.6% to $6.5 million, or 5.4% of revenues, compared to $9.4 million, or 7.3% of revenues, for the same quarter last year.
•Net loss was $9.2 million, or $0.10 per share, compared to a net loss of $0.4 million, or $0.00 on a per share basis, for the same quarter last year.
•Adjusted Net Loss amounted to $0.2 million representing an increase of $3.6 million, from $3.4 million of Adjusted Net Earnings for the same quarter last year. This translated into Adjusted Net Loss per Share of $0.00, compared to $0.04, of Adjusted Net Earnings per Share for the same quarter last year.
•Net cash used in operating activities was $17.3 million, representing an increase of $16.7 million, from $0.7 million of cash used in operating activities for the same quarter last year.
•Q2 Bookings(1) reached $109.7 million, which translated into a Book-to-Bill Ratio(1) of 0.93 for the quarter. The Book-to-Bill Ratio is 1.08 when revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 are excluded.
•Backlog(1) represented approximately 16 months of trailing twelve-month revenues as at September 30, 2023.
•Signed 36 new clients.










1 This is an other financial measure. Refer to section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition of this other financial measure.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 12

7. Results of Operations
For the three months ended September 30,For the six months ended
September 30,
(in $ thousands, except for per share data)2023202220232022
$$$$
Revenues118,492 128,933 250,087 255,697 
Cost of revenues83,701 91,173 177,203 183,873 
Gross margin34,791 37,760 72,884 71,824 
Operating expenses
Selling, general and administrative expenses29,930 30,421 62,429 59,348 
Business acquisition, integration and reorganization costs2,663 2,741 3,768 4,623 
Depreciation1,498 1,602 3,166 3,181 
Amortization of intangibles6,177 6,708 13,001 11,407 
Foreign exchange loss (gain)112 64 (16)(100)
40,380 41,536 82,348 78,459 
Operating loss(5,589)(3,776)(9,464)(6,635)
Net financial expenses3,073 2,301 6,293 4,094 
Loss before income taxes(8,662)(6,077)(15,757)(10,729)
Income tax expense (recovery)
Current86 164 287 48 
Deferred428 (5,806)377 (6,178)
514 (5,642)664 (6,130)
Net loss(9,176)(435)(16,421)(4,599)
Basic and diluted loss per share(0.10)— (0.17)(0.05)
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 13

7.1Revenues
The following table reconciles Constant Dollar Revenue(1) to revenues by geographic location:
For the three months ended September 30,For the six months ended September 30,
(in $ thousands, except for percentages)20232022
% (2)
20232022%
Total Alithya revenue as reported118,492 128,933 (8.1)%250,087 255,697 (2.2)%
Variation prior to foreign currency impact(9.4)%(4.0)%
Foreign currency impact1.3 %1.8 %
Variation over previous period(8.1)%(2.2)%
Canada
Constant dollar revenue67,959 75,122 (9.5)%144,946 153,679 (5.7)%
Foreign currency impact— — 
Canada revenue as reported67,959 75,122 (9.5)%144,946 153,679 (5.7)%
U.S.
Constant dollar revenue44,481 48,590 (8.5)%91,300 92,855 (1.7)%
Foreign currency impact1,264 3,689 
U.S. revenue as reported45,745 48,590 (5.9)%94,989 92,855 2.3 %
International
Constant dollar revenue4,312 5,221 (17.4)%9,286 9,163 1.3 %
Foreign currency impact476 866 
International revenue as reported4,788 5,221 (8.3)%10,152 9,163 10.8 %
1 Non-IFRS measure. See section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure.
2 Constant Dollar Growth, which is a Non-IFRS measure. See section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure.
Revenues amounted to $118.5 million for the three months ended September 30, 2023, representing a decrease of $10.4 million, or 8.1%, from $128.9 million for the three months ended September 30, 2022.
Revenues in Canada decreased by $7.1 million, or 9.5%, to $68.0 million for the three months ended September 30, 2023, from $75.1 million for the three months ended September 30, 2022. The decrease in revenues was principally due to a reduction in information technology investments in the banking sector and one less billable day than in the same quarter last year, partially offset by increases in other areas of the business.
U.S. revenues decreased by $2.9 million, or 5.9%, to $45.7 million for the three months ended September 30, 2023, from $48.6 million for the three months ended September 30, 2022, due primarily to weaker conditions in certain areas of the information technology services sector, notably in digital skilling and change enablement services, some slower project starts and one less billable day than in the same quarter last year. The decreased revenues were partially offset by a favorable US$ exchange rate impact of $1.3 million between the two periods.
International revenues decreased by $0.4 million, or 8.3%, to $4.8 million for the three months ended September 30, 2023, from $5.2 million for the three months ended September 30, 2022, mainly due to reduced
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 14

activities in Australia, partially offset by a favorable foreign exchange rate impact of $0.5 million between the two periods.
Revenues amounted to $250.1 million for the six months ended September 30, 2023, representing a decrease of $5.6 million, or 2.2%, from $255.7 million for the six months ended September 30, 2022.
Revenues in Canada decreased by $8.8 million, or 5.7%, to $144.9 million for the six months ended September 30, 2023, from $153.7 million for the six months ended September 30, 2022. The decrease in revenues was principally due to a reduction in information technology investments in the banking sector partially offset by increases in other areas of the business.
U.S. revenues increased by $2.1 million, or 2.3%, to $95.0 million for the six months ended September 30, 2023, from $92.9 million for the six months ended September 30, 2022. The increase is mainly due to increased revenues of $5.7 million from the acquisition of Datum Consulting, LLC and its international affiliates ("Datum") U.S. business on July 1, 2022, partially offset by weaker conditions in certain areas of the information technology services sector, notably in digital skilling and change enablement services, and some slower project starts. The increased revenues include a favorable US$ exchange rate impact of $3.7 million between the two periods.
International revenues increased by $1.0 million, or 28.9%, to $10.2 million for the six months ended September 30, 2023, from $9.2 million for the six months ended September 30, 2022, driven predominantly by a favorable foreign exchange rate impact of $0.9 million between the two periods.
7.2Gross Margin
Gross margin decreased by $3.0 million, or 7.9%, to $34.8 million for the three months ended September 30, 2023, from $37.8 million for the three months ended September 30, 2022. Gross margin as a percentage of revenues increased to 29.4% for the three months ended September 30, 2023, from 29.3% for the three months ended September 30, 2022. During the three months ended September 30, 2023, a $1.1 million provision, on tax credits receivable of previous periods, with a notable portion related to the activities of a previously acquired business, was recorded due to recoverability uncertainty. Excluding this provision relating to previous periods, gross margin as a percentage of revenues would have increased by 0.9% compared to the same quarter last year to 30.3%. On a sequential basis, gross margin as a percentage of revenues increased, compared to 28.9% for the first quarter of this year, despite a sequential decrease in revenues naturally putting pressure on gross margin performance.
In Canada, gross margin as a percentage of revenues increased, compared to the same quarter last year, mainly due to higher margin offerings and a proportionally larger decrease in the number of subcontractors compared to permanent employees, partially offset by the aforementioned $1.1 million provision on tax credits receivable related to previous periods. Gross margin as a percentage of revenues also increased on a sequential basis.
In the U.S., gross margin as a percentage of revenues remained steady, compared to the same quarter last year, as a result of a positive margin impact from Datum's U.S. business and higher margin offerings.
International gross margin as a percentage of revenues decreased compared to the same quarter last year, as certain projects have slower starts and the negative impact of the foreign exchange between the two periods.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 15

Gross margin increased by $1.1 million, or 1.5%, to $72.9 million for the six months ended September 30, 2023, from $71.8 million for the six months ended September 30, 2022. Gross margin as a percentage of revenues increased to 29.1% for the six months ended September 30, 2023, from 28.1% for the six months ended September 30, 2022, despite annual salary increases which came into effect in the first quarter of this year and the $1.1 million provision on tax credits receivable related to previous periods recorded in the current quarter of this year.
In Canada, gross margin as a percentage of revenues increased for the six months ended September 30, 2023, compared to the same period last year, mainly due to higher margin offerings and a larger decrease in the number of subcontractors compared permanent employees, partially offset by a $1.1 million provision on tax credits receivable related to previous periods.
In the U.S., gross margin as a percentage of revenues increased for the six months ended September 30, 2023, compared to the same period last year due to a positive margin impact from the acquisition of Datum's U.S. business, higher margin offerings and improved project performance.
International gross margin as a percentage of revenues decreased for the six months ended September 30, 2023, compared to the same period last year due to the changes in project mix and the negative impact of the foreign exchange between the two periods.
7.3Operating Expenses
7.3.1Selling, General and Administrative Expenses
Selling, general and administrative expenses include salary, wages and other benefits for selling and administrative employees, occupancy costs, information technology and communications costs, share-based compensation, professional fees, public listing and investor fees, and other administrative expenses.
Selling, general and administrative expenses totaled $29.9 million for the three months ended September 30, 2023, representing a decrease of $0.5 million, or 1.6%, from $30.4 million for the three months ended September 30, 2022, driven mostly by a $1.3 million decrease in variable compensation, a $0.5 million decrease in non-cash share-based compensation, and $0.3 million decrease in recruiting fees, partially offset by a $0.5 million increase in professional fees, $0.5 million increase in business development costs, $0.3 million increase in travel expenses, and $0.4 million increase related to specific discretionary internal projects. On a sequential basis, selling, general and administrative expenses decreased by $2.6 million compared to $32.5 million, for the first quarter, driven mainly by the impairment of property and equipment and right-of-use-assets recorded in the first quarter and reduction in employee compensation costs and other expense categories.
In Canada, expenses decreased by $1.6 million, or 9.6%, to $15.5 million for the three months ended September 30, 2023, from $17.1 million for the three months ended September 30, 2022, due primarily to a decreases of $1.3 million in employee compensation costs, decrease of $0.6 million in non-cash share-based compensation, $0.3 million related to occupancy costs, $0.2 million in recruiting fees, and $0.1 million in employee training costs. These decreases were partially offset by increases of $0.5 million in professional fees, $0.2 million in information technology and communications costs and $0.2 million related to business development costs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 16

U.S. expenses increased by $0.7 million, or 5.7%, to $13.2 million for the three months ended September 30, 2023, from $12.5 million for the three months ended September 30, 2022. The increase was due primarily to increased expenses of $0.3 million in business development costs, $0.3 million in travel costs, $0.2 million in information technology and communications costs, and $0.1 million in non-cash share-based compensation, partially offset by a $0.2 million decrease in employee compensation costs. The increased expenses include an unfavorable US$ exchange rate impact of $0.4 million.
International expenses increased by $0.5 million, or 53.4%, to $1.3 million for the three months ended September 30, 2023, from $0.8 million for the three months ended September 30, 2022, mainly related to $0.3 million increase in employee compensation costs and $0.2 million increases in other expense categories.
Selling, general and administrative expenses totaled $62.4 million for the six months ended September 30, 2023, an increase of $3.1 million, or 5.2%, from $59.3 million for the six months ended September 30, 2022. As a percentage of consolidated revenues, total selling, general and administrative expenses amounted to 25.0% for the six months ended September 30, 2023, compared to 23.2% for the same period last year, driven mostly by a $1.4 million impairment of property and equipment and right-of-use assets, a $1.0 million in expenses from Datum acquired on July 1, 2022, and a $0.5 million increase in non-cash share based compensation, partially offset by reductions in other expense categories.
Expenses in Canada increased by $0.4 million, or 1.2%, to $34.0 million for the six months ended September 30, 2023, from $33.6 million for the six months ended September 30, 2022. This increase was due primarily to increases of $1.4 million due to impairment of property and equipment and right-of-use assets, $0.5 million in information technology, and communications costs, $0.4 million in non-cash share-based compensation, mainly from grants on business acquisitions and PSUs, $0.3 million in professional fees, and $0.2 million in business development costs. These expenses were partially offset by decreases of $1.1 million in employee compensation costs, $0.6 million in recruiting fees, $0.5 million in occupancy costs, and $0.2 million in employee training costs.
U.S. expenses increased by $1.9 million, or 7.6%, to $25.9 million for the six months ended September 30, 2023, from $24.0 million for the six months ended September 30, 2022. The increase was primarily due to increases of $0.6 million in occupancy costs, $0.5 million in information technology and communication costs, $0.5 million in business development costs, an increase of $0.4 million in travel costs, and $0.4 million from the Datum U.S. business, acquired on July 1, 2022, partially offset by a $0.4 million decrease in recruiting fees and $0.3 million in employee compensation costs. The increased expenses include an unfavorable US$ exchange rate impact of $1.0 million.
International expenses increased by $0.8 million, or 50.3%, to $2.5 million for the six months ended September 30, 2023, from $1.7 million for the six months ended September 30, 2022. This increase was primarily due to $0.6 million increase in employee compensation costs, which includes $0.3 million from Datum's international business, and $0.2 million increases in other expense categories from Datum's international business.


Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 17

7.3.2Share-Based Compensation
Share-based compensation is included in cost of revenues and selling, general and administrative expenses and is detailed in the table below:
For the three months ended September 30,For the six months ended
September 30,
(in $ thousands)2023202220232022
$$$$
Stock options151 260 336 486 
Share purchase plan – employer contribution350 363 707 694 
Share-based compensation granted on business acquisitions402 1,105 1,287 1,242 
DSUs135 138 319 273 
RSUs111 — 126 — 
PSUs446 235 898 467 
1,595 2,101 3,673 3,162 
Share-based compensation amounted to $1.6 million for the three months ended September 30, 2023, representing a decrease of $0.5 million, from $2.1 million for the three months ended September 30, 2022. The decrease in share-based compensation was driven primarily by decreased expenses related to share-based compensation granted on business acquisitions and stock options, partially offset by increased expenses related to RSUs and PSUs.
Share-based compensation amounted to $3.7 million for the six months ended September 30, 2023, representing an increase of $0.5 million, from $3.2 million for the six months ended September 30, 2022. The increase in share-based compensation was driven primarily by increased expenses related to RSUs and PSUs.
7.3.3Business Acquisition, Integration and Reorganization Costs
Business acquisition, integration and reorganization costs amounted to $2.7 million for the three months ended September 30, 2023, and remained unchanged from $2.7 million for the three months ended September 30, 2022. For the three months ended September 30, 2023, integration costs increased $0.6 million compared to the three months ended September 30, 2022, mainly due to retention compensation related to a previous business acquisition. Reorganization costs decreased $0.3 million, driven by severance payments due to workforce reduction in response to current economic environment, compared to the same quarter last year where reorganization costs were entirely related to modifications to cost structure consisting of employee termination and benefits costs. Acquisition costs, consisting mainly of professional fees incurred in relation to business acquisitions, decreased $0.1 million compared to the same quarter to last year. Employee compensation on business acquisition, consisting of deferred cash consideration from the acquisition of Datum, decreased $0.2 million compared to the same quarter last year.
Business acquisition, integration and reorganization costs amounted to $3.8 million for the six months ended September 30, 2023, representing a decrease of $0.8 million, from $4.6 million from the six months ended September 30, 2022. For the six months ended September 30, 2023, integration costs increased by $0.8 million compared to the six months ended September 30, 2022, mainly due to retention compensation related to a previous business acquisition. This increase was offset by a $1.2 million decrease in acquisition costs, a $0.3
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 18

million decrease in reorganization costs relating to severance payments during the six months ended September 30, 2023, and a $0.1 million decrease in employee compensation on business acquisition, related to the acquisition of Datum.
7.3.4    Depreciation
Depreciation totaled $1.5 million for the three months ended September 30, 2023, compared to $1.6 million for the three months ended September 30, 2022. These costs consisted primarily of depreciation of Alithya’s property and equipment, which increased by $0.2 million, and right-of-use assets, which decreased by $0.3 million.
Depreciation totaled $3.2 million for the six months ended September 30, 2023 and 2022. These costs consisted primarily of depreciation of Alithya’s property and equipment, which increased by $0.5 million, and right-of-use assets, which decreased by $0.5 million.
7.3.5Amortization of Intangibles
Amortization of intangibles totaled $6.2 million for the three months ended September 30, 2023, compared to $6.7 million for the three months ended September 30, 2022. These costs consisted primarily of amortization of customer relationships recognized on acquisitions, which decreased by $0.4 million, and amortization of software, which decreased by $0.1 million.
Amortization of intangibles totaled $13.0 million for the six months ended September 30, 2023, compared to $11.4 million for the six months ended September 30, 2022. These costs consisted primarily of amortization of customer relationships recognized on acquisitions, which increased by $0.8 million, and amortization of software, which increased by $0.7 million. The increase resulted primarily from the amortization of intangibles recognized on the acquisition of Datum.
7.3.6Foreign Exchange Loss (Gain)
Foreign exchange loss amounted to $0.1 million for the three months ended September 30, 2023 and 2022.
Foreign exchange gain amounted to $0.1 million for the six months ended September 30, 2023 and 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 19

7.4Other Income and Expenses
7.4.1Net Financial Expenses
Net financial expenses are summarized in the table below:
For the three months ended September 30,For the six months ended
September 30,
(in $ thousands)2023202220232022
$$$$
Interest on long-term debt2,741 1,651 5,762 2,886 
Interest on lease liabilities186 210 375 427 
Amortization of finance costs99 88 197 171 
Interest accretion on balances of purchase price payable84 256 211 404 
Financing fees40 159 92 288 
Interest income(77)(63)(344)(82)
3,073 2,301 6,293 4,094 
Net financial expenses amounted to $3.1 million for the three months ended September 30, 2023, representing an increase of $0.8 million, or 33.6%, from $2.3 million for the three months ended September 30, 2022, driven mainly by increased variable interest rates, which accounted for the increase in interest on long-term debt, partially offset by decreased interest accretion on balances of purchase payable and decreased financing fees.
Net financial expenses amounted to $6.3 million for the six months ended September 30, 2023, representing an increase of $2.2 million, or 53.8%, from $4.1 million for the six months ended September 30, 2022, driven mainly by increased variable interest rates, which accounted for the increase in interest on long-term debt, partially offset by interest income earned in the first quarter of this year on a special one-time commercial agreement, decreased interest accretion on balances of purchase payable, and decreased financing fees.
7.4.2Income Taxes
Income tax expense was $0.5 million for the three months ended September 30, 2023, representing an increase of $6.1 million, from a recovery of $5.6 million for the three months ended September 30, 2022, due primarily to a decrease in deferred tax recovery resulting from a deferred tax asset in the amount of $6.0 million that was probable of being realized as a result of the deferred tax liability pursuant to the acquisition of Datum in the same quarter last year, partially offset by a decrease in current tax expense, as a result of increased taxable income in certain jurisdictions. Certain entities of the Group, with a history of losses, do not recognize deferred tax assets related to their loss in the period.
Income tax expense was $0.7 million for the six months ended September 30, 2023, representing an increase of $6.8 million, from a recovery of $6.1 million for the six months ended September 30, 2022, due primarily to a decrease in deferred tax recovery, partially offset by an increase in current tax expense, as a result of increased taxable income in certain jurisdictions. Certain entities of the Group, with a history of losses, do not recognize deferred tax assets related to their loss in the period.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 20

7.5Net Loss and Loss per Share
Net loss for the three months ended September 30, 2023 was $9.2 million representing an increase of $8.8 million, from $0.4 million for the three months ended September 30, 2022. The increased loss was driven by decreased gross margin, which was impacted by a $1.1 million provision, on tax credits receivable of previous periods, with a notable portion related to the activities of a previously acquired business, increased net financial expenses, and decreased income tax recovery due primarily to a deferred tax asset recognized pursuant to the Datum Acquisition in the same quarter last year, as discussed above, partially offset by decreased selling, general and administrative expenses, decreased business acquisition, integration and reorganization costs, and decreased depreciation and amortization in the three months ended September 30, 2023, compared to the three months ended September 30, 2022. On a per share basis, this translated into a basic and diluted net loss per share of $0.10 for the three months ended September 30, 2023, compared to a net loss of $0.00 on a per share basis for the three months ended September 30, 2022.
Net loss for the six months ended September 30, 2023 was $16.4 million representing an increase of $11.8 million, from $4.6 million for the six months ended September 30, 2022. The increased loss was driven primarily by increased selling, general and administrative expenses, including an impairment charge of $1.4 million on property and equipment and right-of-use assets in the first quarter of this year, increased amortization of intangibles, increased net financial expenses, and decreased income tax recovery, partially offset by increased gross margin and decreased business acquisition, integration and reorganization costs in the six months ended September 30, 2023, compared to the six months ended September 30, 2022. On a per share basis, this translated into a basic and diluted net loss per share of $0.17 for the six months ended September 30, 2023, compared to a net loss of $0.05 per share for the six months ended September 30, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 21

7.6Adjusted Net (Loss) Earnings and Adjusted Net (Loss) Earnings per Share
The following table reconciles net loss to Adjusted Net (Loss) Earnings:
For the three months ended September 30,For the six months ended
September 30,
(in $ thousands)2023202220232022
$$$$
Net loss(9,176)(435)(16,421)(4,599)
Business acquisition, integration and reorganization costs2,663 2,741 3,768 4,623 
Amortization of intangibles6,177 6,708 13,001 11,407 
Share-based compensation1,595 2,101 3,673 3,162 
Impairment of property and equipment and right-of-use assets— — 1,383 — 
Income tax related to deferred tax asset recognized on purchase price allocation— (6,026)— (6,026)
Effect of income tax related to above items(1,492)(1,696)(2,979)(2,455)
Adjusted Net (Loss) Earnings (1)(2)
(233)3,393 2,425 6,112 
Basic and diluted loss per share(0.10)0.00 (0.17)(0.05)
Adjusted Net (Loss) Earnings per Share (1)(2)
0.00 0.04 0.03 0.07 
1 Non-IFRS measure. See section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure.
2 Figures for the six months ended September 30, 2023, reflect adjustments, related to the three months ended June 30, 2023, for certain changes to the calculations and assumptions.
Adjusted Net Loss amounted to $0.2 million for the three months ended September 30, 2023 representing an increase of $3.6 million, from $3.4 million of Adjusted Net Earnings for the three months ended September 30, 2022. As explained above, decreased income tax recovery, decreased gross margin, including a $1.1 million provision, on tax credits receivable of previous periods, with a notable portion related to the activities of a previously acquired business, and increased net financial expenses, were partially offset by decreased selling, general and administrative expenses and decreased depreciation of property and equipment and right-of-use assets. This translated into Adjusted Net Loss per Share of $0.00 for the three months ended September 30, 2023, compared to $0.04 of Adjusted Net Earnings per Share for the three months ended September 30, 2022.
Adjusted Net Earnings amounted to $2.4 million for the six months ended September 30, 2023 representing a decrease of $3.7 million, or 60.3%, from $6.1 million for the six months ended September 30, 2022. As explained above, increased selling, general and administrative expenses, including an impairment charge of $1.4 million on property and equipment and right-of-use assets in the first quarter of this year, increased net financial expenses, and decreased income tax recovery were partially offset by increased gross margin. This translated into Adjusted Net Earnings per Share of $0.03 for the six months ended September 30, 2023, compared to $0.07 for the six months ended September 30, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 22

7.7Segment Reporting
Operating income by segment refers to operating income before head office general and administrative expenses and business acquisition, integration and reorganization costs, which are not considered when assessing the underlying financial performance of the reportable segments. Head office general and administrative expenses are expenses and salaries related to centralized functions, such as global finance, legal, human resources and technology teams, which are not allocated to segments. This measure also excludes the effects of depreciation, amortization and foreign exchange loss (gain).
The following tables present the Company's operations based on reportable segments:
For the three months ended September 30, 2023
(in $ thousands)CanadaU.S.InternationalTotal
$$$$
Revenues67,959 45,745 4,788 118,492 
Operating income by segment8,071 5,664 262 13,997 
Head office general and administrative expenses9,136 
Business acquisition, integration and reorganization costs2,663 
Foreign exchange loss (gain)112 
Operating income before depreciation and amortization2,086 
Depreciation and amortization7,675 
Operating loss(5,589)
For the three months ended September 30, 2022
(in $ thousands)CanadaU.S.InternationalTotal
$$$$
Revenues75,122 48,590 5,221 128,933 
Operating income by segment8,268 6,939 1,078 16,285 
Head office general and administrative expenses8,946 
Business acquisition, integration and reorganization costs2,741 
Foreign exchange loss (gain)64 
Operating income before depreciation and amortization4,534 
Depreciation and amortization8,310 
Operating loss(3,776)
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 23

For the six months ended September 30, 2023
CanadaU.S.InternationalTotal
$$$$
Revenues144,946 94,989 10,152 250,087 
Operating income by segment16,041 14,104 974 31,119 
Head office general and administrative expenses20,664 
Business acquisition, integration and reorganization costs3,768 
Foreign exchange loss (gain)(16)
Operating income before depreciation and amortization6,703 
Depreciation and amortization16,167 
Operating loss(9,464)
For the six months ended September 30, 2022
CanadaU.S.InternationalTotal
$$$$
Revenues153,679 92,855 9,163 255,697 
Operating income by segment15,425 12,458 1,448 29,331 
Head office general and administrative expenses16,855 
Business acquisition, integration and reorganization costs4,623 
Foreign exchange loss (gain)(100)
Operating income before depreciation and amortization7,953 
Depreciation and amortization14,588 
Operating loss(6,635)
For a discussion of revenue variances by segment, refer to section 7.1 titled “Revenues”.
Operating income for the Canada segment decreased by $0.2 million, or 2.4%, to $8.1 million for the three months ended September 30, 2023, from $8.3 million for the three months ended September 30, 2022, due to decreased revenues and gross margin, partially offset by decreased selling, general and administrative expenses.
Operating income for the U.S. segment decreased by $1.2 million, or 18.4%, to $5.7 million for the three months ended September 30, 2023, from $6.9 million for the three months ended September 30, 2022, due to decreased revenues and gross margin, and increased selling, general and administrative expenses.
Operating income for the international segment decreased by $0.8 million, or 75.7%, to $0.3 million for the three months ended September 30, 2023, from $1.1 million for the three months ended September 30, 2022, due to decreased revenues and gross margin, and increased selling, general and administrative expenses.
Operating income for the Canada segment increased by $0.6 million, or 4.0%, to $16.0 million for the six months ended September 30, 2023, from $15.4 million for the six months ended September 30, 2022, due to decreased selling, general and administrative expenses, partially offset by decreased sales and gross margin.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 24

Operating income for the U.S. segment increased by $1.6 million, or 13.2%, to $14.1 million for the six months ended September 30, 2023, from $12.5 million for the six months ended September 30, 2022, due to increased revenues and gross margin, partially offset by increased selling, general and administrative expenses, all stemming primarily from an additional three months of contribution from the acquisition of Datum's U.S. business, as described above.
Operating income for the international segment decreased by $0.4 million, or 32.7%, to $1.0 million for the six months ended September 30, 2023, from $1.4 million for the six months ended September 30, 2022, due to decreased gross margin and increased selling, general and administrative expenses, partially offset by increased revenues.
7.8EBITDA and Adjusted EBITDA
The following table reconciles net loss to EBITDA and Adjusted EBITDA:
For the three months ended September 30,For the six months ended September 30,
(in $ thousands)2023202220232022
$$$$
Revenues118,492 128,933 250,087 255,697 
Net loss(9,176)(435)(16,421)(4,599)
Net financial expenses3,073 2,301 6,293 4,094 
Income tax expense (recovery)514 (5,642)664 (6,130)
Depreciation1,498 1,602 3,166 3,181 
Amortization of intangibles6,177 6,708 13,001 11,407 
EBITDA (1)
2,086 4,534 6,703 7,953 
EBITDA Margin (1)
1.8 %3.5 %2.7 %3.1 %
Adjusted for:
Foreign exchange loss (gain)112 64 (16)(100)
Share-based compensation1,595 2,101 3,673 3,162 
Business acquisition, integration and reorganization costs2,663 2,741 3,768 4,623 
Impairment of property and equipment and right-of-use assets— — 1,383 — 
Adjusted EBITDA (1)
6,456 9,440 15,511 15,638 
Adjusted EBITDA Margin (1)
5.4 %7.3 %6.2 %6.1 %
1 Non-IFRS measure. See section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure.
EBITDA amounted to $2.1 million for the three months ended September 30, 2023, representing a decrease of $2.4 million, or 54.0%, from $4.5 million for the three months ended September 30, 2022. EBITDA Margin was equal to 1.8% for the three months ended September 30, 2023, compared to 3.5% for the three months ended September 30, 2022.
Adjusted EBITDA amounted to $6.5 million for the three months ended September 30, 2023, representing a decrease of $2.9 million, or 31.6%, from $9.4 million for the three months ended September 30, 2022. As explained above, decreased revenues and gross margin, including a $1.1 million provision on tax credits
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 25

receivable related to previous periods, partially offset by decreased selling, general and administrative expenses. Adjusted EBITDA Margin was 5.4% for the three months ended September 30, 2023, compared to 7.3% for the three months ended September 30, 2022.
EBITDA amounted to $6.7 million for the six months ended September 30, 2023, representing a decrease of $1.3 million, from $8.0 million for the six months ended September 30, 2022. EBITDA Margin was equal to 2.7% for the six months ended September 30, 2023, compared to 3.1% for the six months ended September 30, 2022.
Adjusted EBITDA amounted to $15.5 million for the six months ended September 30, 2023, representing a decrease of $0.1 million, from $15.6 million for the six months ended September 30, 2022. As explained above, increased selling, general and administrative expenses, partially offset by increased gross margin and an additional three months of contribution from the acquisition of Datum. Adjusted EBITDA Margin was 6.2% for the six months ended September 30, 2023, compared to 6.1% for the six months ended September 30, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 26

8. Bookings and Backlog
Bookings during the three months ended September 30, 2023 were $109.7 million, which translated into a Book-to-Bill Ratio of 0.93 for the quarter. The Book-to-Bill Ratio is 1.08 when revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 are excluded.
For the six months ended September 30, 2023, Bookings were $221.0 million, which translated into a Book-to-Bill Ratio of 0.88. The Book-to-Bill Ratio is 1.03 when revenues from the two long-term contracts signed as part of an acquisition in the first quarter of fiscal year 2022 are excluded.
Management believes information regarding Bookings can provide useful trend insight to investors regarding changes in the volume of new business over time. However, contracts typically provide termination clauses at the option of the customer. Furthermore, modifications of the scope of work and demand-driven usage may occur. As such, the amount of the contract actually realized could materially differ from the initial Bookings.
As at September 30, 2023, Backlog represented approximately 16 months of trailing twelve-month revenues. The Backlog includes revenue agreements for projects which may extend beyond twelve months.
Management believes that Backlog information can provide useful trend insight to investors regarding changes in management’s best estimate of future revenue stemming from signed revenue agreements. However, contracts typically provide termination clauses at the option of the customer. Furthermore, modifications of the scope of work and demand-driven usage may occur. There can be no assurance that subsequent cancellations or scope adjustments will not occur, that the Backlog will ultimately result in earnings, or when the related revenues and earnings from such Backlog will be recognized. As such, the amount of the contract actually realized could materially differ from the amount included in Backlog at a given date.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 27

9. Liquidity and Capital Resources
9.1Consolidated Statements of Cash Flows
Alithya’s ongoing operations and growth are financed through a combination of operating cash flows, borrowings under its existing credit facility, secured loans, a subordinated unsecured loan, and the issuance of equity. Alithya seeks to maintain an optimal level of liquidity through the active management of its assets and liabilities, as well as its cash flows. The following table summarizes Alithya’s cash flow activities for the three and six months ended September 30, 2023 and 2022:
For the three months ended September 30,For the six months ended
September 30,
(in $ thousands)2023202220232022
$$$$
Net cash used in operating activities(17,280)(650)(9,683)(10,449)
Net cash used in investing activities(71)(16,139)(307)(14,802)
Net cash (used in) from financing activities(1,889)1,749 (4,406)32,634 
Effect of exchange rate changes on cash187 614 (101)874 
Net change in cash(19,053)(14,426)(14,497)8,257 
Cash, beginning of period27,139 40,338 22,583 17,655 
Cash, end of period8,086 25,912 8,086 25,912 
9.2Cash Flows - Operating Activities
For the three months ended September 30, 2023, net cash used in operating activities was $17.3 million, representing an increase of $16.7 million, from $0.7 million of cash used in operating activities for the three months ended September 30, 2022. The cash flows for the three months ended September 30, 2023 resulted primarily from the net loss of $9.2 million, plus $12.8 million of non-cash adjustments to the net loss, consisting primarily of depreciation and amortization, net financial expenses, share-based compensation, deferred taxes and unrealized foreign exchange loss, partially offset by $20.9 million in unfavorable changes in non-cash working capital items. In comparison, the cash flows for the three months ended September 30, 2022 resulted primarily from the net loss of $0.4 million, plus $6.1 million of non-cash adjustments to the net loss, consisting primarily of depreciation and amortization, net financial expenses, and share-based compensation, partially offset by deferred taxes and unrealized foreign exchange gain, and $6.3 million in unfavorable changes in non-cash working capital items.
Unfavorable changes in non-cash working capital items of $20.9 million during the three months ended September 30, 2023 consisted primarily of a $12.2 million decrease in accounts payable and accrued liabilities, $6.2 million increase in accounts receivable and other receivables, a $3.1 million increase in unbilled revenues, a $1.0 million increase in tax credits receivable, and a $0.6 million increase in other assets, partially offset by a $1.5 million decrease in prepaids and a $0.6 million increase in deferred revenues. The accounts payable and accrued liabilities decrease consisted primarily of decreases in employee compensation, subcontractor cost and vacation accruals, related to timing of the quarter-end relative to the last pay cycle of the quarter, and a reduced headcount. The accounts receivable and other receivables increase consisted primarily of an increase in DSO, largely timing related. For the three months ended September 30, 2022, unfavorable changes in non-cash working capital items of $6.3 million consisted primarily of a $5.7 million decrease in accounts payable and
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 28

accrued liabilities, a $1.5 million increase in tax credits receivable, and a $0.4 million increase in unbilled revenues, partially offset by a $0.6 million decrease in accounts receivable and other receivables and a $0.6 million decrease in prepaids.
For the six months ended September 30, 2023, net cash used in operating activities was $9.7 million, representing a decrease of $0.8 million, from $10.4 million of cash used in operating activities for the six months ended September 30, 2022. The cash used in the six months ended September 30, 2023 resulted primarily from the net loss of $16.4 million, plus $26.9 million of non-cash adjustments to the net loss, consisting primarily of depreciation and amortization, net financial expenses, share-based compensation, impairment of property and equipment and right-of-use assets and deferred taxes and unrealized foreign exchange loss partially offset by the cash settlement of RSUs, and $20.2 million in unfavorable changes in non-cash working capital items. In comparison, the cash flows for the six months ended September 30, 2022 resulted primarily from the net loss of $4.6 million, plus $14.3 million of non-cash adjustments to the net loss, consisting primarily of depreciation and amortization, net financial expenses, and share-based compensation, partially offset by unrealized foreign exchange gain and deferred taxes, and $20.2 million in unfavorable changes in non-cash working capital items.
Unfavorable changes in non-cash working capital items of $20.2 million during the six months ended September 30, 2023 consisted primarily of a $17.8 million decrease in accounts payable and accrued liabilities, a $3.4 million increase in tax credits receivable, a $0.7 million decrease in deferred revenues, and a $0.5 million increase in other assets, partially offset by a $1.1 million decrease in unbilled revenues, $0.5 million decrease in accounts receivable and other receivables, and $0.5 million decrease in prepaids. For the six months ended September 30, 2022, unfavorable changes in non-cash working capital items of $20.2 million consisted primarily of a $12.5 million increase in unbilled revenues, a $10.5 million decrease in accounts payable, a $4.2 million increase in taxes credits receivable, and a $1.2 million decrease in deferred revenues, partially offset by a $8.0 million decrease in accounts receivable and other receivables and accrued liabilities and a $0.2 million decrease in prepaids.
9.3Cash Flows - Investing Activities
For the three months ended September 30, 2023, net cash used in investing activities was $0.1 million, representing a decrease of $16.0 million, from $16.1 million of cash used for the three months ended September 30, 2022. The cash used in the three months ended September 30, 2023 resulted from purchases of property and equipment as part of the ordinary course of business. In comparison, the cash flows used for the three months ended September 30, 2022 resulted from the acquisition of Datum and purchases of property and equipment as part of the ordinary course of business.
For the six months ended September 30, 2023, net cash used in investing activities was $0.3 million, representing a decrease of $14.5 million, from $14.8 million of cash used for the six months ended September 30, 2022. The cash flows for the six months ended September 30, 2023 resulted from purchases of property and equipment and intangibles as part of the ordinary course of business. In comparison, the cash used in the six months ended September 30, 2022 resulted from the acquisition of Datum and purchases of property and equipment and intangibles as part of the ordinary course of business, partially offset by a decrease in restricted cash.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 29

9.4     Cash Flows - Financing Activities
For the three months ended September 30, 2023, net cash used in financing activities was $1.9 million, representing an increase of $3.6 million, from $1.7 million of cash generated for the three months ended September 30, 2022. The cash flows for the three months ended September 30, 2023 resulted primarily from $37.4 million in long-term debt repayments, $2.9 million in net financial expenses paid, $1.0 million in repayments of lease liabilities, and $0.2 million in shares purchased for cancellation, partially offset by $39.6 million in proceeds from long-term debt, net of related transaction costs, as described in section 9.6. In comparison, the cash flows for the three months ended September 30, 2022 resulted primarily from $7.1 million in proceeds from long-term debt, net of related transaction costs, partially offset by $2.2 million in long-term debt repayments, $2.0 million in net financial expenses paid, $0.9 million in repayments of lease liabilities, and $0.3 million in shares purchased for cancellation.
For the six months ended September 30, 2023, net cash used in financing activities was $4.4 million, representing an increase of $37.0 million, from $32.6 million of cash generated for the six months ended September 30, 2022. The cash flows for the six months ended September 30, 2023 resulted primarily from $70.4 million in proceeds from long-term debt, net of related transaction costs, as described in section 9.6, partially offset by $66.6 million in long-term debt repayments, $5.9 million in net financial expenses paid, $2.0 million in repayments of lease liabilities, and $0.3 million in shares purchased for cancellation. In comparison, the cash flows for the six months ended September 30, 2022 resulted primarily from $47.7 million in proceeds from long-term debt, net of related transaction costs, as described in section 9.6, partially offset by $8.9 million in long-term debt repayments, $3.5 million in net financial expenses paid, $1.8 million in repayments of lease liabilities, and $0.8 million in shares purchased for cancellation.
9.5Capital Resources
Alithya’s capital consists of cash, long-term debt and total equity. Alithya’s main objectives when managing capital are to provide a strong capital base in order to maintain shareholders’, creditors’ and other stakeholders’ confidence and to sustain future growth and development of the business, to maintain a flexible capital structure that optimizes the cost of capital at an acceptable risk level and preserves the ability to meet its financial obligations, to ensure sufficient liquidity to pursue its organic growth strategy and undertake selective acquisitions, and to provide returns on investment to shareholders.
In managing its capital structure, Alithya monitors performance throughout the year to ensure anticipated working capital requirements and maintenance capital expenditures are funded from operations, available cash and, where applicable, bank borrowings.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 30

9.6    Long-Term Debt and Net Debt
The following table summarizes the Company’s long-term debt:
As atSeptember 30,March 31,
(in $ thousands)20232023
$$
Senior secured revolving credit facility (the "Credit Facility") (a)
86,781 82,512 
Secured loans (b)
17,256 13,192 
Subordinated unsecured loans (c)
20,000 20,000 
Balance of purchase price payable with a nominal value of $8,463,000 (US$6,230,000) (March 31, 2023 - $12,695,000 (US$9,345,000)), non-interest bearing (4.4% effective interest rate), payable in annual installments of $4,232,000 (US$3,115,000), maturing on July 1, 2025
8,026 11,993 
Unamortized transaction costs (net of accumulated amortization of $1,381,000 and $1,184,000)(309)(507)
131,754 127,190 
Current portion of long-term debt99,449 12,808 
32,305 114,382 
(a) The Credit Facility is available to a maximum amount of $125,000,000 which can be increased under an accordion provision to $140,000,000, under certain conditions, and can be drawn in Canadian and the equivalent amount in U.S. dollars.
The advances bear interest at the Canadian or U.S. prime rate, plus an applicable margin ranging from 0.25% to 1.00%, or bankers’ acceptances or SOFR rates, plus an applicable margin ranging from 1.50% to 2.25%, as applicable for Canadian and U.S. advances, respectively. The applicable margin is determined based on threshold limits for certain financial ratios. As security for the Credit Facility, Alithya provided a first ranking hypothec on the universality of its assets excluding any leased equipment and Investissement Québec’s first ranking lien on tax credits receivable for the financing related to refundable tax credits. Under the terms of the agreement, the Group is required to maintain certain financial covenants which are measured on a quarterly basis.
The Credit Facility matures on April 1, 2024 and is renewable for additional one-year periods at the lender’s discretion. As the maturity date of the Credit Facility is within twelve months after the reporting date, it has been classified under the current portion of long-term debt as a current liability in the statement of financial position.
As at September 30, 2023, the amount outstanding under the Credit Facility includes $83,681,000 (March 31, 2023 - $82,512,000) payable in U.S. dollars (US$61,600,000; March 31, 2023 - US$61,000,000).
The Company has an additional operating credit facility available to a maximum amount of $2,717,000 (US$2,000,000), bearing interest at U.S. prime rate plus 1.00%. This operating credit facility can be terminated by the lender at any time. There was no amount outstanding under this additional operating credit facility as at September 30, 2023.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 31

(b) The secured loans issued by Investissement Québec to finance the Company’s refundable tax credits have the following terms and conditions:
As atSeptember 30,March 31,
(in $ thousands)20232023
$$
Year of related Refundable Tax CreditRepayable on the earlier of the date of receipt of the refundable tax credits receivable and Bearing interest at
2022March 31, 2024Prime rate + 1.00%8,719 8,719 
2023March 31, 2025Prime rate + 1.25%8,537 4,473 
17,256 13,192 
The maximum amount that can be financed for the 2022 and 2023 refundable tax credits is the lesser of 90% of the eligible refundable tax credits and $8,776,000 for 2022 and $10,670,000 for 2023. The loans are secured by a first ranking hypothec on the universality of the Group’s financed refundable tax credits receivable and a subordinated ranking hypothec on accounts receivable and other receivables.
(c) The subordinated unsecured loans with Investissement Québec, in the amount of $20,000,000, mature on October 1, 2025. The first $10,000,000 bears fixed interest rates ranging between 6.00% and 7.25% and the additional $10,000,000 bears interest ranging between 7.10% and 8.35%, determined and payable quarterly, based on threshold limits for certain financial ratios. Under the terms of the loans, the Company is required to maintain compliance with certain financial covenants which are measured on a quarterly basis.
(a)(c) The Company was in compliance with all of its financial covenants as at September 30, 2023 and March 31, 2023.
Total long-term debt as at September 30, 2023 increased by $4.6 million, to $131.8 million, from $127.2 million as at March 31, 2023, due primarily to an increase of $4.3 million in drawings under the Credit Facility and an increase of $4.1 million in the secured loans, partially offset by a $4.0 million decrease in the balance of purchase price payable.
As at September 30, 2023, cash amounted to $8.1 million and $86.8 million was drawn under the Credit Facility and classified as current portion of long-term debt, as it matures on April 1, 2024. In comparison, as at March 31, 2023, cash amounted to $22.6 million and $82.5 million was drawn under the Credit Facility and classified as long-term debt. As at September 30, 2023, the Company has an unused capacity of $38.2 million under its Credit Facility of $125.0 million, which expires on April 1, 2024. As at September 30, 2023, the carrying amount of the liabilities of the Company having a maturity of less than one year amount to $200.9 million, some of which bear interest as disclosed in Note 3 of Alithya's interim consolidated financial statements.
The Company’s ability to meet the obligations associated with its financial liabilities that will require settlement in less than one year is contingent on its ability to maintain adequate credit facilities. The Company is currently in the process of evaluating terms and conditions proposed by several lenders, including its current lenders, and is planning to execute a new credit facility or renew its existing Credit Facility, in the normal course of business, in amounts which will be sufficient, and on acceptable terms and conditions, by the end of 2023. If the Company is unable to execute a new credit facility or renew its existing Credit Facility prior to its expiry on April 1, 2024, it will not have sufficient cash flows to realize its assets and discharge its liabilities in the normal course of
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 32

business. Significant judgment was exercised by the Company in determining its ability to execute a new credit facility or renew its existing Credit Facility prior to the expiry of its existing Credit Facility on April 1, 2024 and in determining that there are no material uncertainties upon the Company’s ability to continue as a going concern. There is no assurance that the Company will be successful in executing a new credit facility or renewing its existing Credit Facility and be able to meet the obligations associated with its financial liabilities that will require settlement in less than one year.
The following table reconciles long-term debt to Net Debt(1):
As atSeptember 30,March 31,
(in $ thousands)20232023
$$
Current portion of long-term debt99,449 12,808 
Non-current portion of long-term debt32,305 114,382 
Total long-term debt131,754 127,190 
Less:
Cash8,086 22,583 
8,086 22,583 
Net Debt
123,668 104,607 
 
1 Non-IFRS measure. See section 5 titled “Non-IFRS and Other Financial Measures” for an explanation of the composition and usefulness of this non-IFRS financial measure.
During the six months ended September 30, 2023, Alithya's Net Debt increased primarily as a result of the increase in long-term debt, as explained above, and the decrease in cash.
9.7    Contractual Obligations
Alithya is committed under the terms of contractual obligations which have various expiration dates, primarily for the rental of premises and technology licenses and infrastructure. Please refer to section 10.7 of Alithya's MD&A for the year ended March 31, 2023 for an overview of such obligations as at such date. There have been no material changes with respect to contractual obligations since March 31, 2023 outside of Alithya’s ordinary course of business.
9.8Off-Balance Sheet Arrangements
Alithya uses off-balance sheet financing for operating commitments for technology licenses and infrastructure. Please refer to section 10.8 of Alithya's MD&A for the year ended March 31, 2023 and Note 14 of the annual audited consolidated financial statements for the same period for an overview of such arrangements as at such date. There have been no material changes with respect to off-balance sheet arrangements since March 31, 2023 outside of Alithya’s ordinary course of business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 33

10. Share Capital
In the context of the discussion on share capital, Alithya Group inc. will be referred to as the “Company”. The details of Alithya's share capital are fully described in Note 4 of Alithya's interim consolidated financial statements.
10.1Normal Course Issuer Bid
On September 13, 2023, the Company’s Board of Directors authorized and subsequently the TSX approved the renewal of the Company's normal course issuer bid ("NCIB"). Under the NCIB, the Company is allowed to purchase for cancellation up to 2,411,570 Subordinate Voting Shares, representing 5% of the Company’s public float as of the close of markets on September 7, 2023.
The NCIB commenced on September 20, 2023 and will end on the earlier of September 19, 2024 and the date on which the Company will have acquired the maximum number of Subordinate Voting Shares allowable under the NCIB or will otherwise have decided not to make any further purchases. All purchases of Subordinate Voting Shares are made by means of open market transactions at their market price at the time of acquisition.
Concurrently, the Company entered into an automatic share purchase plan (“ASPP”) with a designated broker in connection with its NCIB. The ASPP allows for the designated broker to purchase for cancellation Subordinate Voting Shares, on behalf of the Company, subject to certain trading parameters established, from time to time, by the Company.
Shareholders may obtain a copy of the notice of NCIB approved by the TSX, free of charge, by contacting the Company.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 34

11. Eight Quarter Summary
 For the three months ended
(in $ thousands, except for per share data)Dec 31,Mar 31,Jun 30,Sep 30,Dec 31,Mar 31,Jun 30,Sep 30,
20212022202220222022202320232023
Revenues109,713 119,974 126,764 128,933 130,780 136,224 131,595 118,492 
Cost of revenues81,456 88,891 92,700 91,173 91,562 95,492 93,502 83,701 
Gross margin28,257 31,083 34,064 37,760 39,218 40,732 38,093 34,791 
25.8 %25.9 %26.9 %29.3 %30.0 %29.9 %28.9 %29.4 %
Operating expenses
Selling, general and administrative expenses25,002 26,204 28,927 30,421 31,196 35,978 32,499 29,930 
Business acquisition, integration and reorganization costs857 6,128 1,882 2,741 1,290 12,166 1,105 2,663 
Depreciation1,400 1,235 1,579 1,602 1,634 1,721 1,668 1,498 
Amortization of intangibles3,438 4,017 4,699 6,708 7,397 8,693 6,824 6,177 
Foreign exchange (gain) loss(27)(25)(164)64 163 96 (128)112 
30,670 37,559 36,923 41,536 41,680 58,654 41,968 40,380 
Operating loss(2,413)(6,476)(2,859)(3,776)(2,462)(17,922)(3,875)(5,589)
Net financial expenses1,203 1,352 1,793 2,301 2,664 2,577 3,220 3,073 
Loss before income taxes(3,616)(7,828)(4,652)(6,077)(5,126)(20,499)(7,095)(8,662)
Income tax (recovery) expense(130)(575)(488)(5,642)379 (506)150 514 
Net loss (3,486)(7,253)(4,164)(435)(5,505)(19,993)(7,245)(9,176)
Basic and diluted loss per share(0.04)(0.08)(0.04)— (0.06)(0.21)(0.08)(0.10)
     
Quarterly variances in Alithya's results are due primarily to the timing of acquisitions. Quarterly variations can also be attributed to seasonality. The revenues generated by Alithya's consultants are impacted by the number of working days in a particular quarter, which can vary as a result of vacations and other paid time off and statutory holidays. Similarly, customer information technology investment cycles are also affected by the seasonality of their own operations.
Although revenues have slightly decreased since the first quarter of this year, mainly as a result of weaker conditions in certain areas of information technology services sector, revenues over the previous periods have shown a sustained growth mainly due to business acquisitions, and organic growth in most areas of the Company’s business. Fluctuations in gross margin over the previous eight quarters can be attributed to a steady migration towards higher value-added services since the acquisitions of Vitalyst, LLC ("Vitalyst") and Datum on January 31, 2022 and July 1, 2022, respectively, offset by the negative impacts of the COVID-19 pandemic, and the April 1, 2021 acquisition of R3D Consulting Inc., whose revenues historically show a higher proportion from billable subcontractors. Selling, general and administrative expenses have generally increased mainly from business acquisitions, net of synergies, and additional costs associated with carrying out our strategic business plan. These expenses decreased in the first and second quarters of this year, mainly as a result of the review of Alithya's cost structure initiated in the fourth quarter of fiscal 2022, and the modifications undertaken and reorganization costs incurred in the quarters that followed. As a percentage of consolidated revenues, total selling, general and administrative expenses have increased moderately as certain business activities return to pre-Covid-19 levels and due to the higher historical selling, general and administrative expense percentage of Vitalyst. Other expenses, such as business acquisition, integration and reorganization costs, depreciation, amortization of intangibles, and income tax (recovery) expense, have also varied as a result of business acquisitions and the subsequent integration activities and requirements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 35

12. Critical Accounting Estimates
The preparation of Alithya’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the amounts reported as assets, liabilities, income and expenses in the consolidated financial statements. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which they occur and in any future periods affected.
The Q2 Financial Statements have been prepared in accordance with the accounting policies adopted in the most recent annual audited consolidated financial statements for the year ended March 31, 2023. The accounting policies have been applied consistently by all entities of the Company.
13. Accounting Standard Amendments Effective for the Year Ending March 31, 2024
The following amendments to existing standards were adopted by the Company on April 1, 2023:
Amendments to IAS 8, Definition of Accounting Estimates
In February 2021, the IASB amended IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors to introduce a new definition of “accounting estimates” to replace the definition of “change in accounting estimates” and also include clarifications intended to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively. The amendments are effective for annual periods beginning on or after January 1, 2023. Earlier application was permitted. The amendment of IAS 8 had no impact on the Company’s interim consolidated financial statements.
Amendments to IAS 12 - Income Taxes
On May 7, 2021, the IASB issued amendments to IAS 12 - Income Taxes to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. As a result, companies will be required to recognize a deferred tax asset and a deferred tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision. The amendments apply for annual reporting periods beginning on or after January 1, 2023. Earlier application was permitted. The amendment of IAS 12 did not have a material impact on the Company’s consolidated financial statements. Furthermore, the amendment of IAS 12 has no impact on the consolidated statements of financial position and the changes in the income taxes note disclosure will be reflected in the annual consolidated financial statements for the year ended March 31, 2024.


Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 36

Amendments to IAS 1 and IFRS Practice Statement 2, Disclosure of Accounting Policy Information
In February 2021, the IASB issued amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2 - Making Materiality Judgements. The amendments help entities provide accounting policy disclosures that are more useful to primary users of financial statements by:
•Replacing the requirement to disclose “significant” accounting policies under IAS 1 with a requirement to disclose “material” accounting policies. Under this, an accounting policy would be material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that primary users of general purpose financial statements make on the basis of those financial statements.
•Providing guidance in IFRS Practice Statement 2 to explain and demonstrate the application of the four-step materiality process to accounting policy disclosures.
The amendments shall be applied prospectively. The amendments to IAS 1 are effective for annual periods beginning on or after January 1, 2023. Earlier application was permitted. Once an entity applies the amendments to IAS 1, it is also permitted to apply the amendments to IFRS Practice Statement 2. The Company will update its accounting policy information disclosures in its annual consolidated financial statements for the year ended March 31, 2024.
14. New Standards and Interpretations Issued but Not Yet Effective
At the date of authorization of the interim consolidated financial statements, certain new standards, amendments and interpretations, and improvements to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application. Information on new standards, amendments and interpretations, and improvements to existing standards, which could potentially impact the Company’s consolidated financial statements, are detailed as follows:
IAS 1 - Presentation of Financial Statements
On January 23, 2020, the IASB issued amendments to IAS 1 - Presentation of Financial Statements, to clarify the classification of liabilities as current or non-current. For the purposes of non-current classification, the amendments removed the requirement for a right to defer settlement or roll over of a liability for at least twelve months to be unconditional. Instead, such a right must have substance and exist at the end of the reporting period. After reconsidering certain aspects of the 2020 amendments, the IASB reconfirmed that only covenants with which a company must comply on or before the reporting date affect the classification of a liability as current or non-current. Additional disclosure will be required to help users understand the risk that those liabilities could become repayable within twelve months after the reporting date. The amendments also clarify how a company classifies a liability that includes a counterparty conversion option. The amendments state that: settlement of a liability includes transferring a company’s own equity instruments to the counterparty; and when classifying liabilities as current or non-current, a company can ignore only those conversion options that are recognized as equity. The amendments to IAS 1 apply retrospectively and are effective for annual periods beginning on or after January 1, 2024, with earlier application permitted. Management is currently evaluating the impact of the amendment on its consolidated financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 37

15. Risks and Uncertainties
Alithya is subject to a number of risks and uncertainties and is affected by a number of factors which could have a material adverse effect on Alithya's financial position, financial performance, cash flows, business or reputation. These risks should be considered when evaluating an investment in Alithya and may, among other things, cause a decline in the price of the Subordinate Voting Shares.
Such risks and uncertainties include, but are not limited to, those discussed in the section entitled “Risks and Uncertainties” of the Company's MD&A for the fiscal year ended March 31, 2023, all of which are hereby incorporated by reference.
16. Management’s Evaluation of Our Disclosure Controls and Procedures
Disclosure Controls and Procedures
The Company has established and maintains disclosure controls and procedures designed to provide reasonable assurance that the material information relating to the Company is made known to the Chief Executive Officer and Chief Financial Officer by others, particularly during the period in which annual and interim filings are prepared and that information required to be disclosed by the Company in its annual, interim filings or other reports filed or submitted by the Company under Canadian and U.S. securities laws is recorded, processed, summarized and reported within the time periods specified under those laws and the related rules. The effectiveness of these disclosure controls and procedures, as defined under National Instrument 52-109 – Issuers’ annual and interim filings (“NI 52-109”) adopted by Canadian securities regulators and in Rule 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, was evaluated under the supervision of and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer as at the end of the Company’s most recently completed financial year ended March 31, 2023. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as at March 31, 2023.
Internal Control over Financial Reporting
The Company has also established and maintains adequate internal control over financial reporting, as defined under NI 52-109 adopted by Canadian securities regulators and in Rule 13a-15(f) and 15d-15(f) under the U.S. Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and effected by management and other key employees, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB. The effectiveness of the Company’s internal control over financial reporting was evaluated under the supervision of and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer as at the end of the Company’s most recently completed financial year ended March 31, 2023 based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was effective as at March 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 38

Changes in Internal Control over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Limitations on Effectiveness of Disclosure Controls and Procedures and Internal Control over Financial Reporting
The Company’s management recognizes that any disclosure controls and procedures and internal control over financial reporting, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect all errors or misstatements on a timely basis.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alithya
For the three and six months ended September 30, 2023
| 39

FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE

I, Paul Raymond, President and Chief Executive Officer of Alithya Group inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Alithya Group inc. (the "issuer") for the interim period ended September 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.


5.1Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is that of the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013).

5.2N/A

5.3N/A

6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.


Date: November 14, 2023



/s/ Paul Raymond
___________________________
Paul Raymond
President and Chief Executive Officer
2


FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE

I, Claude Thibault, Chief Financial Officer of Alithya Group inc., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Alithya Group inc. (the "issuer") for the interim period ended September 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.


5.1Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is that of the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013).

5.2N/A

5.3N/A

6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1, 2023 and ended on September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.


Date: November 14, 2023


/s/ Claude Thibault
___________________________
Claude Thibault
Chief Financial Officer
2

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Alithya (NASDAQ:ALYA)
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