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.

CONTACT: 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