Computer Modelling Group Announces Third Quarter Results and Quarterly Dividend

Executive Summary

• Computer Modelling Group Ltd. reported financial results for the three and nine months ended December 31, 2025, showing significant declines in revenue, profitability, and cash flow compared to the prior year.
• The Board approved a cash dividend of $0.01 per Common Share for the third quarter, payable in March 2026.
• Management cited challenging market conditions, cautious customer spending, and the impact of a previously disclosed contract loss as primary drivers for the organic revenue decline, which was partially offset by growth from recent acquisitions.

Key Details

• Third Quarter 2026 Financials (Three months ended Dec 31, 2025):
  • Total Revenue: $32.7 million (down 9% YoY; 17% organic decline, 8% growth from acquisitions).
  • Recurring Revenue: $23.7 million (down 4% YoY; 14% organic decline, 10% growth from acquisitions).
  • Adjusted EBITDA: $9.7 million (down 30% YoY); Margin was 30% (vs 39% prior year).
  • Net Income: $5.96 million (down 38% YoY).
  • Earnings Per Share (EPS): $0.07 (down 42% YoY).
  • Free Cash Flow: $5.8 million (down 34% YoY); FCF per share $0.07.
• Year-to-Date 2026 Financials (Nine months ended Dec 31, 2025):
  • Total Revenue: $92.5 million (down 3% YoY; 16% organic decline, 13% growth from acquisitions).
  • Recurring Revenue: $65.3 million (up 4% YoY; 10% organic decline, 14% growth from acquisitions).
  • Adjusted EBITDA: $24.3 million (down 27% YoY); Margin was 26% (vs 35% prior year).
  • Net Income: $12.0 million (down 31% YoY).
  • Earnings Per Share (EPS): $0.14 (down 33% YoY).
  • Free Cash Flow: $12.2 million (down 41% YoY); FCF per share $0.15.
• Dividend Information:
  • Approved cash dividend of $0.01 per Common Share for Q3 2026.
  • Record Date: March 5, 2026.
  • Payment Date: March 13, 2026.
• Operational Highlights & Outlook:
  • Organic recurring revenue declined due to the continued impact of a contract loss disclosed in Q2.
  • Adjusted EBITDA and Free Cash Flow decreases were driven by lower contributions from higher-margin reservoir/production solutions and declining professional services revenue.
  • Acquisition growth helped offset organic declines but contributed lower profitability in Q3.
  • Q4 2026 Recurring Revenue is expected to be higher than Q3 due to seasonal contract renewals.
  • Organic Recurring Revenue is expected to return to positive year-over-year growth in Q4 2026.
  • Full-year Adjusted EBITDA is expected to be lower than the prior year due to organic revenue decline and reduced professional services activity.
• Balance Sheet & Cash Position (as of Dec 31, 2025):
  • Cash and Restricted Cash: $20.7 million (down from $44.2 million at March 31, 2025).
  • Total Assets: $192.4 million.
  • Total Liabilities: $105.1 million.
  • Shareholders’ Equity: $87.3 million.
  • Revolving Credit Facility: $2.0 million drawn.
• Acquisition Activity:
  • Advanced stage discussions underway for potential acquisitions.
  • BHV (Bluware-Headwave) started contributing to organic metrics in Q3 2025.
  • Sharp started contributing to organic metrics in Q4 2026.
  • SeisWare started contributing to organic metrics in Q3 2026.