Computer Modelling Group Announces First Quarter Results and Quarterly Dividend

Executive Summary

• Computer Modelling Group Ltd. reported financial results for the first quarter ended June 30, 2025, showing a 3% decline in total revenue to $29.6 million and a 26% drop in Adjusted EBITDA to $7.1 million.
• The company announced a reduction in its quarterly cash dividend to $0.01 per share, down from $0.05, citing a need to retain capital for future acquisitions amidst market uncertainty and organic revenue declines.
• Management expects a mid-single-digit decline in recurring revenue for the second quarter due to a non-renewed contract, which will negatively impact Adjusted EBITDA, though seasonal renewals are expected to drive growth in the second half of the fiscal year.

Key Details

• Revenue Performance:
  • Total Revenue: $29.6 million (down 3% YoY; 15% organic decline offset by 12% growth from acquisitions).
  • Recurring Revenue: $20.9 million (up 7% YoY; 6% organic decline offset by 13% growth from acquisitions).
  • Annuity/Maintenance Licenses: $20.3 million (up 5%).
  • Professional Services: $8.4 million (down 6%).
  • Perpetual Licenses: $0.4 million (down 82%).
• Profitability Metrics:
  • Adjusted EBITDA: $7.1 million (down 26% YoY).
  • Adjusted EBITDA Margin: 24% (down from 31% in the comparative period).
  • Net Income: $3.3 million (down 17% YoY).
  • Earnings Per Share (EPS): $0.04 (down 20% YoY).
  • Free Cash Flow: $4.5 million (down 22% YoY).
  • Free Cash Flow Per Share: $0.05 (down from $0.07).
• Dividend Announcement:
  • Board approved a cash dividend of $0.01 per Common Share for Q1 2026 (fiscal year ending March 2026).
  • Payment Date: September 15, 2025.
  • Record Date: September 5, 2025.
  • Dividend reduced from previous $0.05/share to support acquisition strategy and retain capital.
• Operational Outlook & Guidance:
  • Q2 2026 Recurring Revenue: Expected mid-single-digit decline compared to Q1 2026.
  • Cause of Decline: Non-renewal of a specific reservoir and production solutions contract.
  • Full Year 2026 Expectation: Adjusted EBITDA (excluding SeisWare and future acquisitions) may be lower than Fiscal 2025.
  • H2 vs H1 Expectation: Higher revenue and margin expected in the second half of the year driven by seasonal contract renewals, revenue recognition timing, and strong seismic solutions performance.
• Balance Sheet Highlights (as of June 30, 2025):
  • Cash: $44.0 million.
  • Total Assets: $192.8 million.
  • Total Liabilities: $108.3 million.
  • Shareholders’ Equity: $84.5 million.
• Non-IFRS Adjustments:
  • Recurring revenue includes a reduction of $0.15 million for amortization of deferred revenue fair value reduction recognized on acquisition.
  • Adjusted EBITDA excludes depreciation, amortization, stock-based compensation, acquisition costs, and other non-recurring items.