Computer Modelling Group Announces First Quarter Results and Quarterly Dividend
CALGARY, Alberta, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Computer Modelling Group Ltd. (“CMG Group” or the “Company”) announces its financial results for the three months ended June 30, 2025, and the approval by its Board of Directors (the “Board”) of the payment of a cash dividend of $0.01 per Common Share for the first quarter ended June 30, 2025.
FIRST QUARTER 2026 CONSOLIDATED HIGHLIGHTS
Select financial highlights
- Total revenue decreased by 3% (15% Organic decline(1) and 12% growth from acquisitions) to $29.6 million;
- Recurring revenue(2) increased by 7% (6% Organic decline and 13% growth from acquisitions) to $20.9 million;
- Adjusted EBITDA(1) decreased by 26% to $7.1 million;
- Adjusted EBITDA Margin(1) was 24%, compared to 31% in the comparative period;
- Earnings per share was $0.04, a 20% decrease;
- Free Cash Flow(1) decreased by 22% to $4.5 million; Free Cash flow per share decreased to $0.05 from $0.07.
OVERVIEW
Market uncertainty, in energy and energy transition, continues to impact the business by extending sales cycles, lengthening procurement processes, and slowing the pace of closing new opportunities.
The impact of the organic recurring revenue decline in reservoir and production solutions in the fourth quarter carried over, leading to a similar organic recurring revenue decline this quarter when compared to the prior year. This decline partially offset strong recurring revenue growth from acquisitions.
Adjusted EBITDA and Free Cash Flow decreased during the quarter primarily due to the organic decline in recurring revenue and lower professional services revenue.
In the second quarter, we expect a mid-single-digit decline in recurring revenue compared to Q1, the impact of which is also expected to be felt in Adjusted EBITDA. This is due to a contract for our reservoir and production solutions that was not renewed.
As a result, Adjusted EBITDA for the year (excluding SeisWare and any future acquisitions) may be lower than Fiscal 2025. Despite the headwind, higher revenue and margin in the second half of the year compared to the first half of the year, is expected to be driven by seasonal contract renewals, revenue recognition timing, and continued strong performance in our seismic solutions.
Q1 2026 Dividend
To reinforce the durability of our business, we continue to pursue disciplined acquisitions that expand our capabilities and enhance our ability to navigate market volatility. To support this strategy and retain capital for future acquisitions, the quarterly dividend was reduced to $0.01/share. The dividend of $0.01/share will be paid on September 15, 2025, to shareholders of record at the close of business on September 5, 2025.
All dividends paid by Computer Modelling Group Ltd. to holders of Common Shares in the capital of the Company will be treated as eligible dividends within the meaning of such term in section 89(1) of the Income Tax Act (Canada), unless otherwise indicated.
SUMMARY OF FINANCIAL PERFORMANCE
|
Three months ended June 30, |
||||
| ($ thousands, except per share data) | 2025 | 2024 | % change | |
| Annuity/maintenance licenses | 20,334 | 19,335 | 5% | |
| Annuity license fee | 518 | 178 | 191% | |
| Recurring revenue(1) (2) | 20,852 | 19,513 | 7% | |
| Perpetual licenses | 378 | 2,110 | (82%) | |
| Total software license revenue | 21,230 | 21,623 | (2%) | |
| Professional services | 8,403 | 8,900 | (6%) | |
| Total revenue | 29,633 | 30,523 | (3%) | |
| Cost of revenue | 5,958 | 6,192 | (4%) | |
| Operating expenses | ||||
| Sales & marketing | 4,610 | 4,931 | (7%) | |
| Research and development | 8,033 | 8,245 | (3%) | |
| General & administrative | 5,739 | 5,489 | 5% | |
| Operating expenses | 18,382 | 18,665 | (2%) | |
| Operating profit | 5,293 | 5,666 | (7%) | |
| Net income | 3,309 | 3,964 | (17%) | |
| Adjusted EBITDA (1) | 7,074 | 9,526 | (26%) | |
| Adjusted EBITDA Margin (1) | 24% | 31% | (7%) | |
| Earnings per share – basic & diluted | 0.04 | 0.05 | (20%) | |
| Funds flow from operations per share - basic | 0.07 | 0.08 | (13%) | |
| Free Cash Flow per share – basic (1) | 0.05 | 0.07 | (29%) | |
(1) Non-IFRS financial measures are defined in the “Non-IFRS Financial Measures and Reconciliation of Non-IFRS Measures” section.
(2) Included in the number is a reduction of $0.15 million for the three months ended June 30, 2025, ($0.09 million for the three months June 30, 2024), attributed to the amortization of a deferred revenue fair value reduction recognized on acquisition.
NON-IFRS FINANCIAL MEASURES AND RECONCILIATION OF NON-IFRS MEASURES
Free Cash Flow Reconciliation to Funds Flow from Operations
Free Cash Flow is a non-IFRS financial measure that is calculated as funds flow from operations less capital expenditures and repayment of lease liabilities. Free Cash Flow per share is calculated by dividing Free Cash Flow by the number of weighted average outstanding shares during the period. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods. Management uses Free Cash Flow and Free Cash Flow per share to help measure the capacity of the Company to pay dividends and invest in business growth opportunities.
| Fiscal 2024 | Fiscal 2025 | Fiscal 2026 | ||||||
| ($ thousands, unless otherwise stated) | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
|
Funds flow from operations |
11,491 | 8,477 | 10,367 | 6,515 | 7,101 | 9,937 | 8,227 | 5,524 |
| Capital expenditures | (51) | (459) | (95) | (93) | (236) | (432) | (661) | (542) |
| Repayment of lease liabilities | (412) | (728) | (803) | (743) | (769) | (689) | (549) | (526) |
| Free Cash Flow | 11,028 | 7,290 | 9,469 | 5,679 | 6,096 | 8,816 | 7,017 | 4,456 |
| Weighted average shares – basic (thousands) |
80,834 |
81,067 |
81,314 |
81,476 |
81,887 |
82,753 |
83,064 |
83,090 |
| Free Cash Flow per share - basic | 0.14 | 0.09 | 0.12 | 0.07 | 0.07 | 0.11 | 0.08 | 0.05 |
| Funds flow from operations per share- basic | 0.14 | 0.10 | 0.13 | 0.08 | 0.09 | 0.12 | 0.10 | 0.07 |
Free Cash Flow decreased by 22% for the three months ended June 30, 2025 from the same period of the previous fiscal year. This decrease is primarily due to lower funds flow from operations.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA Margin refers to net income before adjusting for depreciation and amortization expense, interest income, income and other taxes, stock-based compensation, restructuring charges, foreign exchange gains and losses, repayment of lease obligations, asset impairments, acquisition related costs and other expenses directly related to business combinations, including compensation expenses and gains or losses on contingent consideration. Adjusted EBITDA should not be construed as an alternative to operating income, net income or liquidity as determined by IFRS. The Company believes that Adjusted EBITDA and Adjusted EBITDA Margin are useful supplemental measures as they provide an indication of the results generated by the Company’s main business activities prior to consideration of how those activities are amortized, financed or taxed. In addition, management has determined that Adjusted EBITDA and Adjusted EBITDA Margin is a more accurate measurement of the Company’s operating performance and our ability to generate earnings as compared to EBITDA and EBITDA Margin.
|
Three months ended June 30, ($ thousands) |
2025 |
2024 |
|
Net income (loss) |
3,309 |
3,964 |
| Add (deduct): | ||
| Depreciation and amortization | 2,415 | 1,883 |
| Acquisition costs | 36 | 188 |
| Stock-based compensation | 177 | 2,906 |
| Gain/(Loss) on contingent consideration | - | (199) |
| Deferred revenue amortization on acquisition fair value reduction | 150 | 89 |
| Income/(Loss) and other tax expense | 917 | 2,488 |
| Interest (income)/loss | (314) | (878) |
| Foreign exchange loss/(gain) | 911 | (172) |
| Repayment of lease liabilities | (526) | (743) |
| Adjusted EBITDA (1) | 7,074 | 9,526 |
| Adjusted EBITDA Margin (1) | 24% | 31% |
(1) This is a non-IFRS financial measure. Refer to definition of the measures above.
Adjusted EBITDA decreased by 26% during the three months ended June 30, 2025, compared to the same period of the previous year of which 2% was growth from acquisitions, offset by an Organic decline of 28%, primarily attributable to lower revenue in the quarter partially offset by lower expenses.
Organic Growth/ Organic Decline
Organic growth and organic decline are not a standardized financial measures and might not be comparable to measures disclosed by other issuers. The Company measures Organic growth/ organic decline on a quarterly and year-to-date basis at the revenue and Adjusted EBITDA levels and includes revenue and Adjusted EBITDA under CMG Group’s ownership for a year or longer, beginning from the first full quarter of CMG Group’s ownership in the current and comparative period(s). For example, BHV was acquired on September 25, 2023 (Q2 2024). September 25, 2024, marked one full year of ownership under CMG Group and on October 1, 2024 (Q3 2025), which is the first full quarter under CMG Group’s ownership in the current and comparative period, started being tracked under Organic growth. Any revenue and Adjusted EBITDA generated by BHV prior to October 1, 2024, would not be included in Organic growth/ organic decline. Sharp was acquired on November 12, 2025 (Q3 2025) and will start contributing to Organic growth/ organic decline on January 1, 2026 (Q4 2026).
For further clarity, current statements include Organic growth/ organic decline from the following:
- CMG and BHV revenue and Adjusted EBITDA.
Recurring Revenue
Recurring revenue represents the revenue recognized during the period from contracts that are recurring in nature and includes revenue recognized as “Annuity/maintenance licenses” and “Annuity license fee”. We believe that Recurring revenue is an indicator of business expansion and provides management with visibility into our ability to generate predictable cash flows.
The table under “Revenue” heading reconciles Recurring revenue to total revenue for the periods indicated.
REVENUE
| Three months ended June 30, |
|||
| 2025 | 2024 | % change | |
| ($ thousands) | |||
| Annuity/maintenance licenses | 20,334 | 19,335 | 5% |
| Annuity license fee | 518 | 178 | 191% |
| Recurring revenue(1) (2) | 20,852 | 19,513 | 7% |
| Perpetual licenses | 378 | 2,110 | (82%) |
| Total software license revenue | 21,230 | 21,623 | (2%) |
| Professional services | 8,403 | 8,900 | (6%) |
| Total revenue | 29,633 | 30,523 | (3%) |
(1) This is a non-IFRS financial measure.
(2) Included in the number is a reduction of $0.2 million for the three months ended June 30, 2025, ($0.1 million for the three months ended June 30, 2024), attributed to the amortization of a deferred revenue fair value reduction recognized on acquisition.
Condensed Consolidated Statements of Financial Position
| UNAUDITED (thousands of Canadian $) | June 30, 2025 | March 31, 2025 |
|
Assets |
||
| Current assets: | ||
| Cash | 44,026 | 43,884 |
| Restricted cash | 369 | 362 |
| Trade and other receivables | 29,308 | 41,457 |
| Prepaid expenses | 3,121 | 2,572 |
| Prepaid income taxes | 2,262 | 1,641 |
| 79,086 | 89,916 | |
| Intangible assets | 59,484 | 59,955 |
| Right-of-use assets | 27,655 | 28,443 |
| Property and equipment | 10,305 | 10,157 |
| Goodwill | 15,958 | 15,814 |
| Deferred tax asset | 274 | 471 |
| Total assets | 192,762 | 204,756 |
|
Liabilities and shareholders’ equity |
||
| Current liabilities: | ||
| Trade payables and accrued liabilities | 16,078 | 18,452 |
| Income taxes payable | 2,189 | 2,667 |
| Acquisition holdback payable | 1,405 | 188 |
| Acquisition earnout payable | 3,682 | 3,864 |
| Deferred revenue (note 4) | 33,136 | 40,276 |
| Lease liabilities (note 5) | 2,319 | 2,278 |
| Government loan | 321 | 310 |
| 59,130 | 68,035 | |
| Lease liabilities (note 5) | 34,233 | 34,668 |
| Government loan | 1,283 | 1,319 |
| Other long-term liabilities | 599 | 1,725 |
| Deferred tax liabilities | 13,024 | 13,102 |
| Total liabilities | 108,269 | 118,849 |
|
Shareholders’ equity: |
||
| Share capital | 95,104 | 94,849 |
| Contributed surplus | 15,630 | 15,460 |
| Cumulative translation adjustment | 3,313 | 4,326 |
| Deficit | (29,554) | (28,728) |
| Total shareholders’ equity | 84,493 | 85,907 |
| Total liabilities and shareholders' equity | 192,762 | 204,756 |
Condensed Consolidated Statements of Operations and Comprehensive Income
|
Three months ended June 30, UNAUDITED (thousands of Canadian $ except per share amounts) |
2025 |
2024 |
| Revenue (note 6) | 29,633 | 30,523 |
| Cost of revenue | 5,958 | 6,192 |
| Gross profit | 23,675 | 24,331 |
| Operating expenses | ||
| Sales and marketing | 4,610 | 4,931 |
| Research and development (note 7) | 8,033 | 8,245 |
| General and administrative | 5,739 | 5,489 |
| 18,382 | 18,665 | |
| Operating profit | 5,293 | 5,666 |
| Finance income (note 8) | 314 | 1,050 |
| Finance costs (note 8) | (1,381) | (463) |
| Change in fair value of contingent consideration | - | 199 |
| Profit before income and other taxes | 4,226 | 6,452 |
| Income and other taxes (note 9) | 917 | 2,488 |
| Net income for the period | 3,309 | 3,964 |
| Other comprehensive income: | ||
| Foreign currency translation adjustment | (1,013) | 899 |
| Other comprehensive income/(loss) | (1,013) | 899 |
| Total comprehensive income | 2,296 | 4,863 |
| Net income per share – basic (note10(d)) | 0.04 | 0.05 |
| Net income per share – diluted (note 10(d)) | 0.04 | 0.05 |
| Dividend per share | 0.05 | 0.05 |
Condensed Consolidated Statements of Cash Flows
| Three months ended June 30, UNAUDITED (thousands of Canadian $) |
2025 |
2024 |
| Operating activities | ||
| Net income | 3,309 | 3,964 |
| Adjustments for: | ||
| Depreciation and amortization of property, equipment, right- of use assets |
1,062 | 1,218 |
| Amortization of intangible assets | 1,354 | 665 |
| Deferred income tax expense (recovery) | (383) | (653) |
| Stock-based compensation (note 10(c)) | 149 | 1,892 |
| Foreign exchange and other non-cash items | 33 | (571) |
| Funds flow from operations | 5,524 | 6,515 |
| Movement in non-cash working capital: | ||
| Trade and other receivables | 12,149 | 13,811 |
| Trade payables and accrued liabilities | (2,267) | (3,331) |
| Prepaid expenses and other assets | (549) | 34 |
| Income taxes receivable (payable) | (968) | 1,424 |
| Deferred revenue | (7,290) | (10,230) |
| Change in non-cash working capital | 1,075 | 1,708 |
| Net cash provided by (used in) operating activities | 6,599 | 8,223 |
| Financing activities | ||
| Repayment of government loan | (80) | - |
| Proceeds from issuance of common shares | 212 | 2,249 |
| Repayment of lease liabilities (note 5) | (526) | (743) |
| Dividends paid | (4,135) | (4,076) |
| Net cash used in financing activities | (4,529) | (2,570) |
| Investing activities | ||
| Property and equipment additions | (542) | (93) |
| Net cash used in investing activities | (542) | (93) |
| Increase (decrease) in cash | 1,528 | 5,560 |
| Effect of foreign exchange on cash | (1,386) | 449 |
| Cash, beginning of period | 43,884 | 63,083 |
| Cash, end of period | 44,026 | 69,092 |
| Supplementary cash flow information | ||
| Interest received (note 8) | 314 | 878 |
| Interest paid (notes 5 and 8) | 470 | 463 |
| Income taxes paid | 1,779 | 1,496 |
CORPORATE PROFILE
CMG Group (TSX:CMG) is a global software and consulting company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. The Company is headquartered in Calgary, AB, with offices in Houston, Oslo, Stavanger, Kaiserslautern, Oxford, Dubai, Bogota, Rio de Janeiro, Bengaluru, and Kuala Lumpur. For more information, please visit www.cmgl.ca.
QUARTERLY FILINGS AND RELATED QUARTERLY FINANCIAL INFORMATION
Management’s Discussion and Analysis (“MD&A”) and condensed consolidated interim financial statements and the notes thereto for the three months ended June 30, 2025, can be obtained from our website www.cmgl.ca. The documents will also be available under CMG Group’s SEDAR profile www.sedarplus.ca.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will", and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the benefits of the acquired technology, the ongoing development thereof; and the ability of data analytics to improve efficiency, cut costs and reduce risks.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are detailed in the companies’ public filings.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
For further information, please contact:
Pramod Jain
Chief Executive Officer (403) 531-1300
pramod.jain@cmgl.ca
or
Sandra Balic
Vice President, Finance
(403) 531-1300
sandra.balic@cmgl.ca
For investor inquiries, please contact:
Kim MacEachern
Director, Investor Relations
cmg-investors@cmgl.ca
For media inquiries, please contact:
marketing@cmgl.ca
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