Earnings Call Transcript - ALYAF Q4 2025

Operator, 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, Management Team

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, CEO

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 insights 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 paying off. 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 cutting-edge technologies, such as AI, in our proprietary IP accelerators continue to be highly sought after even during periods of economic uncertainty. The 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 acquisitions 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 the call listening this morning, and the eVerge team to the Alithya family. I will let Bernard give you more details, 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 Dockrill, COO

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 out 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 emerged as a top technology skill, while project management was a leading business development skill. 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 two valued clients, Oklahoma State University Medical Center and McKesson, who have received prestigious Oracle Customer Excellence Awards for their 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's 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 multi-year digital transformation engagement with Nutrinor. Other bookings included renewals of our contracts with two 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, 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, four 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 pre-merger. And the addition of XRM has added further scale to our CRM and smart shore capabilities as well as 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 for 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.

Debbie Di Gregorio, Interim CFO

Good morning, everyone. I'm pleased to be part of this conference call to share some important accomplishments from the past quarter. Our fourth quarter of fiscal 2025 showcased ongoing performance improvements across the board. To start, consolidated revenues for the fourth quarter reached $125.3 million, an increase of $4.8 million or 4% compared to the same period last year. Sequentially, revenues rose by $9.5 million or 8.3% compared to the third quarter, with growth observed in all our regions. In terms of profitability, we saw continued improvement in gross margin percentage, which hit a record 36.8%. This is a significant increase of 470 basis points from last year’s 32.1% and up 450 basis points from 32.3% in the previous quarter. This rise in gross margin was evident across all regions and is attributed to increased efficiency and our ongoing shift towards a higher-value business mix, which are key priorities in our long-term strategy. Our adjusted EBITDA reached $18 million, marking a high point for Alithya. Now, let's examine our performance by region, starting with Canada. Revenues in Canada were $65.4 million in Q4, reflecting an uptick of $0.8 million or 1.3% year-over-year, mainly due to a rebound in the banking sector, contributions from XRM Vision acquired on December 1, 2024, and an additional billable day, despite a client transformation project nearing completion and a dip in certain government contract revenues. We also experienced a sequential increase of 6.1% in Canada from the third quarter. In Canada, gross margin improved compared to the same quarter last year, thanks to higher efficiency and billing rates driven by a higher proportion of value-added services and a decrease in subcontractor usage relative to permanent employees. Notably, we also gained a positive margin contribution from XRM and a $1 million tax credit recovery from a past acquisition. In the U.S., revenues rose by $3.8 million or 7.3% to $54.2 million. This growth was primarily due to organic growth in enterprise transformation services and support revenues, particularly from Oracle and Microsoft practices, along with a $3.3 million favorable exchange rate impact. On a sequential basis, revenues increased by $5.4 million, with $3.3 million in constant dollar revenue from the third quarter. The U.S. gross margin as a percentage of revenues improved compared to the same quarter last year due to higher hourly billing rates, efficiencies, and better project performance, despite a reduction in revenues from lower-margin digital adoption services. Internationally, revenues showed a slight increase compared to the previous year, along with a higher gross margin percentage driven by efficiencies and improved project performance. Overall, we observed a greater proportion of revenue coming from the U.S. relative to the previous year, positively impacting our consolidated gross margin and aligning with our strategic goal of enhancing efficiency and long-term performance. In Q4, SG&A expenses totaled $29.7 million, reflecting a year-over-year increase of $100,000 or 0.4%. This rise was mainly attributed to higher employee compensation costs due to increased variable compensation and the inclusion of XRM's expenses, along with a reduction in certain expenses such as professional fees and business development costs. SG&A expenses as a percentage of revenue were 23.7% in Q4, down from 24.6% last year. Due to our revenue growth, improved gross margins from enhanced efficiencies, and effective cost management, the adjusted EBITDA margin hit a record high of 14.4% in Q4, up from 8.7% last year and sequentially from 8.9% in Q3. Our fourth quarter adjusted EBITDA amounted to $18 million, a 71.8% increase year-over-year, indicating our progress in operational performance and cost optimization. Adjusted net earnings reached $12.2 million, an increase of $6.1 million or $0.06 per share year-over-year. As for cash flow and financial position, net cash from operating activities remained robust, totaling $17.1 million for the quarter, an increase of $7.4 million compared to the prior year, driven by net earnings and positive working capital variation. As of March 31, 2025, net debt stood at $94 million with a leverage ratio of 2x net debt to trailing 12 months adjusted EBITDA, which is well within our target leverage levels and represents the lowest reported level. The sequential decrease in net debt of approximately $14.1 million supports our ongoing goal of deleveraging through the strong performance of the company and effective management of our operating cash flow, positioning us favorably for strategic capital investments. Consequently, our liquidity remains strong, with $131.1 million available in cash and credit. I will now hand it over to Paul for concluding remarks.

Paul Raymond, CEO

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 Salesforce. 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.

Operator, Operator

Your first question comes from Jerome Dubreuil with Desjardins.

Jerome Dubreuil, Analyst

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 were saying that there was some low-hanging fruit 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 tax return there. But do you think this is a level that can be sustained going forward?

Paul Raymond, CEO

Thank you for the question. We've always said that the long-term view was to get the gross margins up into the upper 30s in terms of percentage. So we're seeing progress. To your point, there were some onetime events. You also have to remember that Q4 is usually our strongest quarter just because it's the longest quarter. There are fewer vacations, more billable days, and so on. And then Q1, which is our current quarter, is usually the slowest quarter because of the summer months and vacations. But I do think that the improvements, which is what we had put in our long-term plan, 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 events this quarter. But still, without the one-times, 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, Analyst

Great. And just to clarify, were there other one-time items beyond the $1 million tax refund?

Paul Raymond, CEO

There were a couple of positive updates to share. As you know, we are increasingly engaged in larger projects. In the past, we faced many write-offs for these projects, but now, with high client satisfaction results, we are seeing positive outcomes because we are delivering on time and on budget, along with positive contingencies linked to many of these projects. Additionally, it's important to note that in Q1, we experienced salary increases that took effect on April 1. This often presents a challenge in Q1. However, in the long run, the direction of our gross margins is promising.

Jerome Dubreuil, Analyst

That's great. So if I understand correctly, the one-time events were more prevalent in the past, and this quarter reflects a more accurate representation of the business.

Paul Raymond, CEO

Well, Q1 is typically our slowest quarter due to vacations and salary increases among other factors. However, if you examine previous years, the gross margin is showing an upward trend, which is our long-term goal.

Jerome Dubreuil, Analyst

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, CEO

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 two 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 reasonable and safe 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.

Operator, Operator

Your next question comes from Divya Goyal with Scotiabank.

Divya S. Goyal, Analyst

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 progressing coming quarter?

Paul Raymond, CEO

Thank you for the question. While we don't provide guidance, I can offer some insights. In Canada, as Bernard mentioned, we are noticing a rebound in the banking sector, which is contributing to our growth. We are still covering a major project from last year that will take a couple more quarters to fully complete, but we have new business coming in that has higher margins, which we appreciate. In the U.S., we experienced a slight benefit from exchange rate fluctuations in this quarter. We do not want to overlook that. At the same time, we see other companies growing; for instance, Oracle reported impressive results yesterday and Microsoft is also performing well. Our business in the U.S. significantly benefits from our partnerships with these companies. Additionally, eVerge, which will start contributing to our numbers on June 1st, will enhance our performance going forward. We have also integrated the Salesforce component, which is a leading $36 billion company in its sector. Overall, we are pleased with our partnerships, the quality of our revenues in the U.S., and the growth opportunities available through cross-selling. We feel confident about our position and the direction we are heading. Although nobody can predict the current market's uncertainties, we believe we are in a good place.

Divya S. Goyal, Analyst

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, CEO

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, Analyst

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, CEO

Yes. Great. Thank you for the question. So one of the things that I keep saying is 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 of the quality of eVerge, and we're very happy to have them on board. We went for two years without making an acquisition, and we've just completed two in six 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 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 two 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 still think there are some niche skills out there that we can add that are 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. 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, Operator

Your next question comes from Rob Goff with Ventum.

Robert Goff, Analyst

Let me join in congratulating you on the strength of the results. Very good to see.

Paul Raymond, CEO

Sorry, can you repeat the question?

Robert Goff, Analyst

It wasn't much of a question; it's a compliment. In terms of a question, it perhaps 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, CEO

Sure. I can start with the growth synergies because that's always our priority. As I mentioned earlier, with XRM, they have expertise in project management within Microsoft, and as you know, there's a lot of discussion in the IT world about projects running over schedule or being poorly managed. Often, these issues stem from having the right tools and knowing how to utilize them effectively. This was one of XRM's strengths, but their company size limited the opportunities they could pursue. We don't have that limitation, and by bringing them on board, we've already secured new business thanks to their skill set, making us stronger together. The same applies to eVerge. I can't disclose our acquisition strategies because that's part of our competitive advantage, but we already see joint opportunities with some of the existing eVerge clients following the announcement of the transaction. Our primary focus is on the upside, and the cost synergies will arise from merging these businesses into our platform. For example, as Bernard mentioned, XRM is already integrated into our ERP and CRM systems. This integration allows us better visibility into opportunities, financials, and areas for improvement, enhancing our collaboration with the eVerge transaction. We plan to achieve this in the coming months, capitalizing on economies of scale by working on the same platforms, improving information sharing, and leveraging data. What we do for our clients, we also do for ourselves, and that’s where we can gain the synergies.

Robert Goff, Analyst

And as you referenced, making two large acquisitions within or medium-sized acquisitions in the space of six months, does that mean you're seeing more opportunities in the marketplace? And are you seeing opportunities within the SAP space?

Paul Raymond, CEO

We're observing a consistent number of opportunities, and the focus isn't just on the quantity but rather on the fit. We need to ensure that we can offer something within a desirable price range, that potential clients are willing to come on board and remain with us, and that we can achieve the desired synergistic effects, as we did with our recent acquisitions. We're noticing positive growth stemming from these opportunities and favorable client reactions. It's important for us to attract and retain people because they add to our value. There are many factors influencing our acquisition decisions, with a significant portion being subjective rather than objective. Once we handle the financial aspects, the other factors take precedence. Although the number of opportunities remains steady, it's crucial to find the right match, which can require more time. However, our financial situation has never been better, enabling us to act swiftly when we identify the right opportunities.

Operator, Operator

Your next question comes from Vincent Colicchio with Barrington Research.

Vincent Alexander Colicchio, Analyst

Yes. It was a good quarter. I'm curious about the programming efficiencies from AI. Are you already noticing significant efficiencies? Do you anticipate a substantial improvement in the upcoming quarters? What will that look like?

Paul Raymond, CEO

Thank you for the question, Vince. I won't share specific figures regarding costs and efficiencies, although some are starting to provide those details. Instead, I can offer a couple of examples. In our recent acquisitions, our legal team utilized a tool that allowed us to review contracts in the data room and identify key information in just minutes or hours, a task that usually required multiple people days or even weeks to complete. These tools we implement internally also benefit our clients. I often remind our team that AI won't replace individuals; rather, it will be those who effectively use AI that may displace others. As we enhance our use of AI, I believe we will see benefits in doing more with the same workforce. Consequently, as we expand the company, we aim to maintain our current headcount while growing the business instead of reducing it. I see this as an opportunity to increase efficiency, eliminate tedious tasks, and accelerate our growth. While I can't quantify this at the moment, my observations and the team's efforts indicate significant potential for improvement for both us and our clients.

Vincent Alexander Colicchio, Analyst

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, CEO

It's interesting to note that when I look at our smart shoring teams today, I would have expected them to be twice the size they are now if we consider the last two to three years. However, they aren't, and that's largely due to the impact of AI. Our teams utilize various tools and accelerators, including more than 25 proprietary solutions available on Microsoft's marketplace. We develop intellectual property, incorporate AI into it, and provide it to clients alongside our services, while also using these tools internally. Regarding our recent acquisitions, it's important to highlight that they both have strong operational capabilities. We see these acquisitions as complementary rather than mutually exclusive. In fact, potential targets with a smart shoring component become significantly more appealing because they enhance our capabilities on both ends.

Operator, Operator

Your next question comes from John Shao with National Bank Financial.

Meng Shao, Analyst

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, CEO

Thanks for the question, John. I'll let Bernard take that one.

Bernard Dockrill, COO

Thanks for the question, John. As I mentioned last quarter, there haven't been any significant changes in our pipeline. Our win/loss ratio remains consistent with previous quarters. What we're experiencing in the market are longer sales cycles. We have deals that we have high confidence in but that take additional weeks or sometimes months to finalize. We expect to see fluctuations in bookings, but as market conditions become more predictable, these fluctuations may increase. I believe situations will improve. There is positive news, as Paul pointed out earlier, with the Oracle results. Companies are still making major decisions for their enterprise transformations, whether it's with Microsoft, Oracle, Salesforce, or SAP. These ongoing decisions serve as a positive indicator for us, particularly in the implementation of those systems. Hopefully, that addresses your question.

Meng Shao, Analyst

That's great color. And you're now live on three 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, COO

Yes, that's a great question. Our strategy has remained consistent over the past two years, centered around four key pillars. These include our industry-first approach, strong relationships with our partners and expertise in their platforms, our intellectual property and accelerators to enable faster implementation, and our smart shoring capabilities. We prioritize a customer-first approach, recognizing that our customers engage with multiple platforms rather than just one. By expanding our capabilities, we can better serve our customers across these various platforms. A significant focus for us is cross-selling, applying our services in one area while addressing customer needs in other areas that align with their priorities across our offerings. I believe this represents an ongoing opportunity.

Operator, Operator

There are no further questions at this time. I will now turn the call over to Paul Raymond for closing remarks.

Paul Raymond, CEO

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, Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.