Alithya Group Inc. (ALYA) on Q4 2025 Results - Earnings Call Transcript
Operator: Good morning. Welcome to Alithya's Fourth Quarter and Fiscal 2025 Results Conference Call. I would now like to turn the meeting over to Alithya's management team. Please go ahead.
Nathalie Forcier: Thank you. Thank you for being here today for Alithya's Fourth Quarter Fiscal 2025 Results Call. The press release, along with the MD&A containing complete financial statements and related notes was published this morning and is now accessible on our website. The webcast presentation can also be found on our website in the Investors section. Please be advised that this call will contain forward-looking statements, which are subject to various risks and uncertainties that may cause actual results to differ materially from those anticipated. These statements include our estimates, plans, expectations and statements regarding future growth, operational results, performance and business prospects that do not solely relate to historical facts. These statements may also refer to future events, including expectations around client demand, business opportunities, leveraging our services, IP, AI, expertise to meet client needs, excelling in a competitive market, achieving our 3-year strategic plan and deploying our smart shoring capabilities. For more information, please refer to the cautionary note included in our presentation and to the forward-looking statements and Risks and Uncertainties sections of our MD&A, which are accessible on our website. All figures discussed on today's call are in Canadian dollars, unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures. Please refer to the cautionary notes included in our presentation and to the non-IFRS and other Financial Measures section of our MD&A for more details. Presenting this morning are Paul Raymond, Alithya's President and Chief Executive Officer; Bernard Dockrill, Chief Operating Officer; and Debbie Di Gregorio, Interim Chief Financial Officer. I'll now turn the call over to Paul Raymond. Paul?
Paul Raymond: Thank you, Nathalie, and good morning, everyone. Thank you for joining us today. I'm very proud to be here to present our team's achievements for our fourth quarter and full 2025 fiscal year. We will also discuss our latest acquisition and this morning's announcement about our new CFO. I will start with a few notable highlights before turning things over to Bernard Dockrill, our Chief Operating Officer, for more color on our operations, followed by Debbie Di Gregorio, our Interim Chief Financial Officer, who will provide the financial highlights. So back to the results. First, with the Q4 results, the Alithya team delivered another quarter of ongoing improvements in many key areas. Our disciplined approach and commitment to our long-term strategy are bearing fruit. We delivered another sequential and year-over-year quarterly improvement of our adjusted EBITDA, largely due to our continued focus on higher-value business growth, ongoing operational efficiencies and a few positive onetime events tied to successful project completions. Of note, we would still be showing improvements without these onetime events, which resulted in an adjusted EBITDA of 14.4% for the quarter and 10.1% for the fiscal year. Secondly, Q4 was also a high watermark for gross margin as a percentage of revenue at 36.8%. Again, this is the result of our focus on delivering higher value services to our clients, improved utilization and leveraging our IP and smart shore business model in addition to the positive items previously mentioned. Thirdly, I'd like to highlight our sequential and year-over-year growth in quarterly revenues. That growth is mostly derived from our higher value service offerings in all our geographies. These offerings designed to help clients achieve greater efficiency and flexibility in their mission-critical systems by leveraging the cutting-edge technologies, such as AI, in our proprietary IP accelerators continue to be highly sought after even during periods of economic uncertainty. Decision to start these projects can sometimes be delayed. But given their business value and demonstrable benefits, they are viable investments for our clients during these turbulent times. Finally, our strong cash flow allowed us to conclude the year with a net debt to adjusted EBITDA ratio of less than 2x. This financial position provides us with the flexibility to pursue high-quality acquisition should promising opportunities arise. That brings me to our recent announcement of the eVerge acquisition. So again, I'd like to publicly welcome Esteban Neely, who is on listening -- on the call listening this morning, and the eVerge team to the Alithya family. I will let Bernard give you more color, but we feel eVerge checks all the boxes when we look for high-quality, accretive, complementary acquisitions with similar cultures. I will now turn things over to Bernard to provide some specifics on our fourth quarter performance as well as our latest acquisition. Bernard?
Bernard Dockrill: Thank you, Paul. Good morning, and thank you for joining our call today. I would like to start by thanking the Alithya professionals throughout North America, Europe and Asia Pacific for their dedication and commitment. As a result, the Alithya team continues to meet or exceed our clients' expectations as demonstrated by the 194 customer satisfaction surveys completed in fiscal year 2025 with an average rating of 9.0 of 10. As we continue to execute on the priorities we set forth in our strategic plan to deliver profitable growth, we are pleased with the results we generated in the fourth quarter. Our quarterly revenues sequentially and year-over-year increased as did our gross margin and adjusted EBITDA as a percentage of revenue. On a sequential basis, revenue increased at all segments of the business and 87% of revenues delivered in Q4 came from clients that worked with Alithya in Q4 of the prior year. Across all segments, we continue to focus on expanding our smart shore capabilities to access new talent pools and drive greater efficiencies. As of the end of the fourth quarter, 10.9% of our employees were based in smart shore centers. And with the recent addition of eVerge in India, which I will discuss later, that number has now risen to over 12%. Globally, we continue to invest in the development of our existing talent. Over the year, Alithya employees completed over 30,000 hours of learning across more than 5,400 courses with 75% of all learning efforts dedicated to advancing technology skills. Among the most sought-after competencies, Microsoft's AI-driven Copilot emerge as a top technology skill, while project management was a leading business development skill. Further reinforcing our adoption of AI through a partnership with Udemy, Alithya hosted constructor-led learning on generative AI for all militia employees. We are honored with the recognition of our accomplishments in fiscal 2025, including being selected by Microsoft for the Business Applications Inner Circle Award, earning a spot in this category for the 19th time. We also celebrated the innovation achievements of 2 valued clients, Oklahoma State University Medical Center and McKesson, who have received prestigious Oracle Customer Excellence Awards for the groundbreaking use of Oracle Cloud applications. The awards highlight the real-world value of Oracle Cloud and reinforce Alithya's role as a strategic partner in helping organizations navigate their digital transformation. Turning to current market conditions and our Q4 bookings. Market uncertainty and economic conditions have caused some buyer hesitancy and longer sales cycles. Our higher-value offerings continue to resonate as clients seek to modernize their enterprise applications and leverage Alithya data and AI capabilities to drive efficiencies. Q4 bookings were $100.1 million or 0.8x revenue. Adjusting for the large commercial agreements signed in April 2021, our book-to- bill for the quarter was 0.9x revenue. On a trailing 12-month basis, bookings were $420.7 million or 0.9x revenue. Adjusting for the same large agreement, book-to-bill was 1.0x revenue. Our backlog at the end of Q4 was approximately 16 months of revenue based on our trailing 12 months. In the quarter, more than half of bookings were in the U.S. market, where our Microsoft and Oracle enterprise application and transformation offerings continue to be in demand. Key client wins include Delta Dental of California, where we were awarded a multimillion dollar engagement to implement Oracle Enterprise Performance Management. In addition, we signed AI enablement engagements in collaboration with Microsoft Industry Solutions Delivery for M365 Copilot tech readiness, deployment and adoption services. Our long-term Microsoft Dynamics client, Hayward Holdings, a global outdoor products manufacturer, has selected Alithya to deploy Microsoft D365 and Azure in Spain and France. We are also leveraging our organizational change management tools and training to ensure user adoption across the organization. This marks the first step for Hayward in standardizing global manufacturing processes and enhancing customer service through a unified technology platform. This is one example of how our increased capacity enables us to accompany our clients and their deployments around the world. Q4 bookings in Canada saw a rebound in the banking sector as well as bookings within the nuclear sector. Our enterprise application and transformation services are also resonating in the Canadian market, where we were awarded engagements to integrate Microsoft Dynamics, ERP and field service, including a multiyear digital transformation engagement with [ Nutrinor. ] Other bookings included renewals of our contracts with 2 Canadian banks and expansion of our partnership with AWS for legacy application modernization services and migration to the cloud. Bookings in Europe included several contract renewals and extensions as well as a new opportunity through our partnership with AWS for application modernization and migration to the cloud. From a services mix perspective, the majority of our Q4 bookings were for project services, software and IP and managed services, with the remainder being in consulting services. Before handing the discussions over to Debbie, I would like to share updates on our recent acquisition of eVerge announced last week as well as provide progress on the integration of XRM acquired last December. eVerge adds a rich client portfolio and expanded industry presence, a complementary geographic reach and established consultancy specializing in Oracle and Salesforce solutions. Alithya is now able to address the market-leading CRM solution needs for our clients, whether it be Microsoft Dynamics, Salesforce or Oracle CX. We now have multi-pillar capabilities and increased industry diversification with Oracle Cloud, and we are adding to our smart shoring capacity with operations in Bangalore. As part of this acquisition, we are very excited to welcome Mike Burns, who will lead our Salesforce business; Chris Heilig, our new Vice President of AI and Innovation and 160 eVerge professionals. As for the integration of XRM Vision, 4 months into the process, we have completed most of our integration activities and are seeing growth opportunities from our combined business. As you are aware, Alithya had a strong Microsoft practice premerger. And the addition of XRAM has added further scale to our CRM and smart shore capabilities as well as added new capabilities for project operations. Since the acquisition, we have closed several opportunities that neither party would have pursued prior to the merger. These opportunities are larger than XRM would have been able to take on and require capabilities that Alithya did not have. This includes implementations and POCs or Microsoft project operations for a provincial government agency, a large global payments company and a private nonprofit organization. And we continue to pursue several additional opportunities that have arisen because of the consolidation of our teams. I will now turn things over to Debbie Di Gregorio to provide financial highlights regarding our Q4 and fiscal 2025 achievements. Debbie?
Debbie Di Gregorio: [Foreign Language] Good morning, everyone. I am very happy to join this conference call and to highlight some of the company's significant achievements this past quarter. As mentioned, our fourth quarter fiscal 2025 was highlighted by continued performance improvements on many levels. Let's begin with a review of those improvements. In the fourth quarter, consolidated revenues came in at $125.3 million, up $4.8 million or 4% on a year-over-year basis. On a sequential basis, revenues were up $9.5 million or 8.3% versus the third quarter of this year, with growth in all our geographies. Looking at profitability, we are reporting another quarter of continued improvement on gross margin as a percentage of revenue. Gross margin reached 36.8%, a record level for Alithya in the quarter, up 470 basis points from 32.1% last year and up 450 basis points from 32.3% in the third quarter of this year. On a sequential basis, the increase in gross margin came from all geographies in our business. This performance comes from increased efficiency and our continued evolution towards a higher-value business mix, 2 key priorities of our long-term plan. Looking at adjusted EBITDA, we are reporting $18 million, a high watermark for Alithya. I will now turn to a review of our performance by region, starting with Canada. Revenues in Canada reached $65.4 million in Q4, up $0.8 million or 1.3% on a year- over-year basis. The increase in revenues was primarily due to a recovery in the banking sector, the contribution of XRM Vision acquired on December 1, 2024, and 1 additional billable day, partially offset by one client transformation project reaching maturity and a reduction in revenues from certain government contracts. Of note, revenues in Canada were also up sequentially from the third quarter by 6.1%. Looking at our gross margin in Canada, we saw improvement compared to the same quarter last year due to higher efficiency and hourly billing rates as a result of providing a greater proportion of higher value services and a proportionately larger decrease in the use of subcontractors compared to permanent employees, a positive margin contribution from XRM and a $1 million tax credit recovery from a previous acquisition. In the U.S., revenues increased by $3.8 million or 7.3% to $54.2 million. The increase is due primarily to organic growth in enterprise transformation services and support revenues, including Oracle and Microsoft practices, and a $3.3 million favorable U.S. dollar exchange rate impact between the 2 periods. On a sequential basis, revenues increased by $5.4 million and $3.3 million in constant dollar revenue from the third quarter. Our U.S. gross margin as a percentage of revenues increased compared to the same quarter last year, primarily due to higher hourly billing rates, efficiencies and improved project performance, partially offset by lower digital adoption revenues, which historically had a higher gross margin as a percentage of revenues. In our international business, revenues were slightly higher versus prior year with higher gross margin as a percentage of revenues, mainly due to efficiency and improved project performance. Overall, from a geographic perspective, we saw a higher proportion of revenues in the U.S. versus the prior year. This, along with our ongoing efforts in expanding our smart shore capacity positively impacted our consolidated gross margin and is in line with our strategic plan, our cost structure to ensure greater efficiency and long- term performance. In the fourth quarter, SG&A expenses amounted to $29.7 million, an increase of $100,000 or 0.4% year-over-year. The increase in SG&A expenses was driven mainly by increases in employee compensation costs, resulting primarily from higher variable compensation and the addition of the XRM SG&A, partially offset by a decrease in professional fees, business development, information, technology and communication and other costs. SG&A expenses as a percentage of revenue were 23.7% in Q4 compared to 24.6% for the same period last year. Thanks to our revenue growth, increased gross margin due to higher efficiencies and our performance on cost management, the adjusted EBITDA margin reached a record high at 14.4% in Q4, up compared to 8.7% last year and up sequentially from 8.9% in the third quarter of this year. Our fourth quarter adjusted EBITDA amounted to $18 million, a 71.8% increase year-over-year. Again, this reflects the progress we made on operational performance and on cost optimization. Our adjusted net earnings came in at $12.2 million, representing an increase of $6.1 million or $0.06 per share year-over-year. Finally, let's review our cash flow and financial position. Net cash from operating activities remained strong, reaching $17.1 million in the quarter, an increase of $7.4 million versus the prior year, primarily from the net earnings and positive working capital variation. As of March 31, 2025, net debt amounted to $94 million, and our leverage ratio decreased to 2x net debt to trailing 12 months adjusted EBITDA, all within Alithya's target leverage levels and our lowest level reported. The sequential decrease in net debt of approximately $14.1 million reflects our goal of continued deleveraging through the strong performance of the company and management of our net cash from operating activities, positioning us well for capital deployment for the right business acquisition opportunities. Therefore, liquidity remains strong with cash on hand and availability under the credit agreement amounting to $131.1 million. I will now pass it over to Paul for concluding remarks.
Paul Raymond: Thank you very much, Debbie. So as you can see, we are very pleased with our quarter and our key indicators are all moving in the right direction. We delivered sequential and year-over-year revenue growth. We delivered sequential and year-over-year gross margin and adjusted EBITDA growth, and we continue to deleverage. We finished the year with a net debt-to-EBITDA ratio of under 2x. We completed another acquisition that increases our Oracle AI and smart shoring capabilities while adding a new world-class partner in sales force. And we delivered positive net earnings for the full year. But my most important takeaway from our fourth quarter is our disciplined approach and commitment to deliver measurable progress towards our long-term vision. Finally, before opening the lines for questions, I would like to officially welcome Pierre Blanchette, who will join as CFO at the end of July. Pierre is well known in the financial world and brings a wealth of experience to Alithya. He will be a key contributor in supporting our growth strategy. We're very happy to welcome him to the team. And I would also like, once again, to thank Debbie for stepping up and leading the team through this year-end period. She's an asset to Alithya, and we're very fortunate to have her on board. Thank you. We will now open the line for questions. Joelle?
Operator: [Operator Instructions] Your first question comes from Jerome Dubreuil with Desjardins.
Jerome Dubreuil: Congrats on the big margin improvement. So let's start there. I mean a lot of investors were looking at your story and the bulls on your story we're saying that there was some low-hanging fruits on the margin side. So kudos for focusing your efforts there. But the big question this morning is how sustainable is the new level of margin? This is a big improvement sequentially. Obviously, we know about the $1 million of tax return there. But this -- do you think this is a level that can be sustained going forward?
Paul Raymond: Thank you for the question. We've always said that the long-term view was to get the gross margins up into the higher -- the upper 30s in terms of percentage. So we're seeing progress. To your point, there were some onetimes. You also have to remember that Q4 is usually our strongest quarter just because it's the longest quarter. There are less vacation, more billable day extra. And then Q1, which is our current quarter, usually is the slowest quarter because of the summer months and vacations and so on. But I do think that the improvements, which is what we had put in our long-term plan, I mean, you're going to see continuous improvements over time. I mean that's our goal. Whether it's going to be that high of a jump every quarter, I doubt it. We had a lot of onetime things this quarter. But still without the onetime, it'd still be an improvement from the previous quarter. So that's our long-term plan. That's what we're striving for. I think the mix of business makes a big difference. And that's where we're growing. We're growing our higher-margin business. So yes, I'd say that's our goal.
Jerome Dubreuil: Great. And just to clarify on the one-times, were there other items and the $1 million tax related?
Paul Raymond: There were a couple of -- actually, the -- this is where I think this is positive news as well. As you know, we do more and more large projects. So as we manage those projects and those projects complete, in years past, we had many write-offs on projects. Now we have the opposite. We actually -- because Bernard mentioned the client satisfaction results that we have that are very high, we had positive or good guys because we delivered on time and on budget, and many of these projects had positive contingencies tied to them. So that's good. The other thing you have to remember on the gross margin is Q1, I forgot to say on your first question, is we also have our salary increases that hit April 1, right? So usually, Q1, we always have a challenge. But like I said, long term, that's -- directionally, that's where the gross margins are going.
Jerome Dubreuil: That's great. So if I understand correctly, the one-timers are -- were more in the past and this quarter right here reflects more of the true nature of the business, if you will.
Paul Raymond: Well, Q1 -- like I said, Q1 is usually our slowest quarter because of vacations and salary increases and everything else. But if you look at previous years, and I mean, the gross margin is on an upward trend, and that's where we want to be long term. So...
Jerome Dubreuil: Yes. No, makes sense. And I'll just put another one here just because it's so probably important. You withdrew the longer-term guidance a bit of a head scratcher given that a very good quarter. Here, if you can talk about the rationale of removing the guidance, was it more of a top line thing that you didn't want to rely on maybe more unpredictable M&A or...
Paul Raymond: There's several reasons. Good question, Jerome. Several reasons. One is, if you look at our EBITDA and gross margins, we're actually a year ahead of our plan on the EBITDA and 2 years ahead of our plan on the gross margin. So from that perspective, some of those targets are kind of out the window now. Two, the uncertainty in the market right now around everything that's happening, even though on the tariffs, we're not directly impacted. Some of our clients might be, and all of our clients are pulling their guidance. And as you've seen, many other companies do. So we thought it was the reasonable and safe thing to do to take that out without changing our vision of growing the margins and doubling the company over the next 3 to 5 years. That's where we're going. That's what we want to do. So instead of having fixed numbers in there that would be out of date right now, we decided to make it more generic.
Operator: Your next question comes from Divya Goyal with Scotiabank.
Divya S. Goyal: Congratulations on a good quarter here. Paul, I wanted to get a little bit more clarity on this revenue growth. So I was looking at the breakdown and Debbie talked about it as well. U.S. saw a significant upside coming out of the FX as well. So overall, I think your FX currency impact for the quarter was close to 3%. And now that you're not giving guidance, could you provide some directional guidance as to how do you see your pipeline progress [Technical Difficulty] coming quarter?
Paul Raymond: Thank you for the question. As you know, we don't give guidance, but maybe I can give some color. So in Canada, as Bernard was mentioning, we're seeing a turnaround in the banking sector. So we're seeing growth there. We're still lapping a very large project, as we've mentioned, a very, very large transformation project that has still a couple of quarters until we've lapped that because that was in last year, which wound down, then we have new business coming in. And of course, the new business coming in is higher margin, which we like. In the U.S., we had a bit of an upside on the exchange rate on the revenue in the quarter. So we don't want to fight that. But at the same time, what we're seeing growing -- I mean you saw Oracle report their numbers yesterday. They've shown incredible growth. Microsoft is doing very well as well. And of course, we kind of piggyback on those companies for much of our business in the U.S. And now with the addition of eVerge, which is not in our numbers, which is going to start June 1, so the end of the Q1. So maybe in future quarters, you're going to see that. And we've also added the Salesforce component. And as you know, a Salesforce is a $36 billion company and a leader in that industry. So we like our -- I mean, we like our positioning in terms of the partners that we have in terms of the high quality of our revenues in the U.S. and the potential for growth there through cross-selling. So we like our position. We like where things are going. Like I said, nobody knows what's going to happen in the current market with the uncertainties, but we like our chances.
Divya S. Goyal: That's great. On this cost efficiency standpoint, I know we've been talking about this smart shoring and the reducing mix of subcontractors. Do you see that as one of the key elements of what really drove your upside on the gross profit margin this quarter? And did XRM have a big role to play in that specific upside from an offshoring standpoint?
Paul Raymond: So I'll start with the high-level answer first, Divya. We see a huge opportunity in the smart shoring aspect. As I've said, it's part of our strategic plan. If you go back a year, when we started, we were at about 6%. Today, if you add in eVerge, we're going to be at over 12% of our workforce in smart shoring centers. And more and more, these centers are very specialized. So what we're adding with eVerge is very specialized around Oracle and Salesforce. What we added with XRM was very specialized around Microsoft. So we see that as a positive as well. And we think there's a big opportunity for growth there to support our projects, existing and new. So yes, we see that as very positive. And also, if you look at the business that eVerge and XRM brought on board, again, the gross margins are higher. So as that grows, it's going to have a bigger and bigger impact on the business. It's all now, but as it grows, it will have a bigger impact on the business.
Divya S. Goyal: That's very, very helpful. I'll ask one small last question here. Is there any significant gap that you see in the technology capabilities that you have on board that you would like to fill either organically or through acquisitions over the coming quarters? That will be all for me.
Paul Raymond: Yes. Great. Thank you for the question. So one of the things that I keep saying that if we can get our hands on an SAP business, I'd love to find one. It took us a long time to find a company, the quality of eVerge, and we're very happy to have them on board. We went for -- if you remember, we went for 2 years without making an acquisition, and we've just completed 2 in 6 months. So it depends on what's out there, what we find, the right conditions and people who are interested in joining our platform. We think we have a lot to offer. It's just finding the right fit. So we keep looking for that. And also, if you look at eVerge and XRM, forget the Salesforce piece, but on the Oracle side, we just added a CX platform, which we didn't have, and we entered new markets like professional services. I mean if you look at the professional services industry, this is all the engineering firms, the construction firms or whatever, there's a huge, huge global movement of investment in infrastructure, and all these firms are going to need to modernize and integrate the multiple acquisitions and consolidations happening. They're all going to need an ERP platform. And right now, the 2 leaders in that industry are Microsoft and Oracle. So again, we think we're very well positioned by adding that new industry sector that came from the eVerge acquisition and XRM. And we also, on the XRM side, added all of the project management side of the house from a Microsoft perspective that we didn't have in our Microsoft practice, and as Bernard was mentioning, that's already opened up new opportunities. We actually won several very large opportunities to roll out the Microsoft projects platform within ERP for several large organizations, which we would not have bid on our own. And XRM would not have been invited to bid on their own because they were too small. But together, we're able to get these opportunities and close them. So we think there's still some niche skills out there that we can add that we're going to be incremental. But we don't see any major shortcomings in what we have today. And as Bernard was saying, all of our people have been trained on AI. We're more and more -- many of our projects now have an AI component to them. We use it internally everywhere. Even within our back office operations, we have some tools that we use within our legal department, HR and so on. So I think we're very well positioned for the transition that's coming. So I don't know if that answers your question, but there's a lot of stuff in that question.
Operator: Your next question comes from Rob Goff with Ventum.
Robert Goff: Let me join in congratulating you on the strength of the results. Very good to see.
Paul Raymond: Sorry, can you repeat the question?
Robert Goff: It wasn't much a question. It's a complement. In terms of a question, it perhaps that builds on what Divya had asked, can you discuss the ways in which there are revenue synergies or potential cost synergies in adding both eVerge and XRM to your fold?
Paul Raymond: Sure. I can start with the growth synergies because that's always our priority. As I was mentioning just previously, like for XRM because of the type of expertise they have around the projects piece of Microsoft, as you probably know in the IT projects world, we keep reading in the papers everywhere about projects going long or not being well managed or whatever. And very often, it goes back to having the right tools and people knowing how to use them. That was one of XRM's expertise. But they were limited in the size of opportunities they could go after because of the size of the company. We don't have that limitation, but we didn't have that offering. So by bringing that on board, we've already closed new business because of that skill set. So together, we're stronger. Same thing with eVerge. And I can't -- I won't go into the details of how we do our acquisitions because I think it's part of our secret sauce. But many of the clients, the existing eVerge clients, we already have joint opportunities with because of the announcement and the transaction. So we -- so the first thing that we focus on is the upside. From a cost perspective, the synergies come from integrating these businesses into our platform. So for example, XRM, as Bernard was saying, they're already on our platform. So that's our ERP, our CRM. So all these things, the benefits. So they're on board. They're integrated from that perspective. So we can already -- we already have better visibility on the opportunities, on the financials, on areas for improvement and how we work better together with the eVerge transaction. The plan is to do that between now and the next few months. And that's where we get some synergies of economies of scale of working on the same platforms and sharing the information better and leveraging the data. So what we do for our clients, we do for ourselves. And that's where we can get the synergies.
Robert Goff: And as you referenced, making 2 large acquisitions within -- or medium-sized acquisitions in the space of 6 months, does that mean you're seeing more opportunities in the marketplace? And are you seeing opportunities within the SAP space?
Paul Raymond: We're seeing -- I'd say we're seeing the same -- I mean, it doesn't vary much. We're seeing the same number of opportunities. It's -- we will go through over 100 opportunities a year easily from the teasers we get, stuff we look at -- the question isn't the quantity of opportunities, but one, is there a fit; two, can we do something in the price range that we like, will these people come on board and stick around, do we see the 1 plus 1 equals 3, like in the last 2 that we just did, I mean, we're seeing the growth coming from those opportunities. We're seeing that the client reaction. We're seeing the people -- we buy people, right? As people join in, you want to make sure they stick around that they see the value in the transaction. They want to join us and want to stay. So there's a lot of parameters that go into our acquisitions. And many of them are more subjective than objective. So once all the financial stuff is sorted out, then it's really the rest that's more important to us. So we're seeing the same quantity. It's just making sure we find the right fit. And that takes more time. But when we do, I mean, we're in great financial. We've never been in a better financial position than we are now. So when we do find the right ones, we can pull the trigger faster.
Operator: Your next question comes from Vincent Colicchio with Barrington Research.
Vincent Alexander Colicchio: Yes. So nice quarter. Curious a little bit about -- let's talk a little bit about the programming efficiencies from AI. Are you seeing a lot of efficiencies already? Do you expect a meaningful improvement in coming quarters? What does that look like?
Paul Raymond: So thanks for the question, Vince. I'm not going to give you specifics in terms of dollars and efficiencies, and I know some people are starting to do that. But I'll give you some examples. So in the past acquisitions, the last 2 acquisitions, our legal team had a tool that basically enabled us to go through contracts in the data room and identify stuff in minutes and hours that would usually take several people many days, weeks to do. So these types of things, these tools that we roll out internally for us are also things that we help our clients with. And I keep telling our folks that AI is not going to replace people. It's people who use AI going to replace people. And I think as we grow the advantage of AI, where we're going to see the benefits is the ability to do more with the same people. So instead of -- as we grow the company, instead of saying we're going to reduce head count is we're going to keep the same head count and increase the business. So -- and to me, that's where I see the opportunity is making our people more efficient, getting rid of more tedious stuff and enabling us to grow faster. So I can't put a number on it today, Vince. So it's more based on what I'm seeing and what the team is doing, but I do see significant opportunities for improvement there on our side and for our clients.
Vincent Alexander Colicchio: And on the smart shoring side, are you seeing any captive opportunities that could potentially be acquired to substantially scale your offshore program?
Paul Raymond: So interesting. So maybe just to answer that one and pick off of your first question. So if you look at our smart shoring teams today, if you would ask me 2 or 3 years ago, I probably would have said that our teams would be twice the size they are today. And they're not because of AI. So our teams also use tools and accelerators and our own. We have over 25 proprietary solutions on Microsoft's marketplace. So we build IP, we leverage AI in that IP. We sell it to clients with services, and we use them internally as well. So I'm -- part of our acquisitions in the last 2, one of the -- when I say they check all the boxes, they both had off to operations, right? So for us, when we look at these acquisitions, I don't think they're mutually exclusive, quite the opposite. I think as we look at potential targets, if they have a smart shoring component, it makes them that much more attractive because it helps us on both sides. So I'd rather [indiscernible] than just finding a captive offshore. I'd rather find organizations that already have one that instantaneously increase our capacity and that we can leverage and it's our own people. So...
Operator: [Operator Instructions] Your next question comes from John Shao with National Bank Financial.
Meng Shao: Congrats on a strong quarter. So could you maybe help us understand a bit more about your book-to-bill ratio this quarter? Is it timing related? Or is this related to some of the macro uncertainties you mentioned just now?
Paul Raymond: Thanks for the question, John. I'll let Bernard take that one.
Bernard Dockrill: Yes. Thanks for the question, John. Similar to what I had said last quarter, looking -- I'll start with [indiscernible]. No real material changes in our pipeline from last quarter. Our win/loss is about the same as what it's been in the past quarters. So really, what we're seeing in the market is longer sales cycles. We have deals that we're very high confidence on that just take several more weeks and sometimes months to get across the goal line. And that's what we're seeing in there. And that's -- I think we'll see bookings are always lumpy, but I think we'll continue to see more lumpiness in the bookings as this is -- we have more certainty in the market. I do think things will change. Very positive news, as Paul mentioned earlier, with the Oracle results. You're still seeing companies make these big decisions for their enterprise transformation, whether it's Microsoft, Oracle, Salesforce, SAP. These decisions are still being made, which is a good leading indicator for us as well as the work we implement those systems. So hopefully that answers your question.
Meng Shao: That's great color. And you're now live on 3 major tech platforms, Microsoft, Oracle and Salesforce. So what would be different going forward in terms of your go-to-market strategy? And what kind of market opportunity do you see out there given a more comprehensive coverage at this point?
Bernard Dockrill: Yes. Great question, John. And our strategy is really consistent over the last 4 -- over the last 2 years. We really set forth on 4 key pillars, right? Our industry-first strategy, our relationship with our partners and our expertise with our partners' platforms, our own IP and accelerators to help us implement quicker as well as our smart shoring capabilities. So as I look at this and taking a customer-first strategy, we want to follow our customers and our customers use multiple platforms. It's not just one platform. And by broadening our capabilities, it allows us to service our customers across multiple platforms. And a big thing, a big focus for us is our cross-selling and being able where we may enter into applying it in one area, but being able to offer services in other areas and help them with their priorities, which span across our offerings. And I see this continues to be opportunities there. So it's a relatively new muscle for us, and then we're continuing to build it. It's showing dividends.
Operator: There are no further questions at this time. I will now turn the call over to Paul Raymond for closing remarks.
Paul Raymond: Thank you, everyone, for joining today. As you can see, we're very happy with our results and looking forward to following up as required.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
