Alithya Group inc

8.7 Segment Reporting

Operating income by segment refers to operating income before head office general and administrative expenses, business acquisition, integration and reorganization costs, depreciation and amortization and foreign exchange loss (gain), which are not considered when assessing the underlying financial performance of the reportable segments as they are not directly related to the segment’s operations. Head office general and administrative expenses are expenses and salaries related to centralized functions, such as global finance, legal, human capital, and technology teams, which are not allocated to segments.

The following tables present the Company's operations based on reportable segments:

(a)The change in fair value of the contingent consideration of $4,172,000 included in business acquisition, integration and reorganization costs recovery relate mostly to the Canada segment.

(b)Impairment of goodwill in the amount of $26,500,000 relates to the Canada segment and impairment of goodwill and intangibles in the amount of $9,723,000 and $1,805,000, respectively, relate to the U.S. segment.

(a)The change in fair value of the contingent consideration of $4,172,000 and the reorganization costs included in business acquisition, integration and reorganization costs recovery relate mostly to the Canada segment.

b)Impairment of goodwill in the amount of $26,500,000 relates to the Canada segment and impairment of goodwill and intangibles in the amount of $9,723,000 and $1,805,000, respectively, relate to the U.S. segment.

(a) The reorganization costs included in business acquisition, integration and reorganization costs mostly relate to the Canada segment.

For a discussion of revenue variances by segment, refer to section 8.1 titled “Revenues”.

Operating income by segment in Canada decreased by $1.1 million, or 12.3%, to $7.6 million for the three months ended September 30, 2025, from $8.7 million for the three months ended September 30, 2024, due to decreased revenues and tax credits, partially offset by decreased employee compensation and subcontractor costs and a positive margin contribution from XRM Vision.

Operating income by segment in the U.S. increased by $6.3 million, or 83.5%, to $13.8 million for the three months ended September 30, 2025, from $7.5 million for the three months ended September 30, 2024, primarily due to increased revenues and a positive margin contribution from eVerge, partially offset by increased employee compensation and subcontractor costs and increased licenses and telecommunication costs.

Operating income for the international segment totaled $0.5 million for the three months ended September 30, 2025 and 2024.

Operating income by segment in Canada decreased by $5.1 million, or 27.2%, to $13.5 million for the six months ended September 30, 2025, from $18.6 million for the six months ended September 30, 2024, primarily due to decreased revenues and tax credits, partially offset by decreased employee compensation and subcontractor costs and a positive margin contribution from XRM Vision.

Operating income by segment in the U.S. increased by $11.6 million, or 71.3%, to $28.0 million for the six months ended September 30, 2025, from $16.4 million for the six months ended September 30, 2024, primarily due to increased revenues and a positive margin contribution from eVerge since its acquisition on May 31, 2025, partially offset by increased employee compensation and subcontractor costs and increased licenses and telecommunication costs.

Operating income for the international segment increased by $0.1 million, or 13.2%, to $0.7 million for the six months ended September 30, 2025, from $0.6 million for the six months ended September 30, 2024, primarily due to increased revenues and tax credits, partially offset by increased employee compensation and subcontractor costs and licenses and telecommunication costs.