SECOND QUARTER 2026 CONSOLIDATED HIGHLIGHTS
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Total revenue increased by 2% (17% Organic decline(1) and 19% growth from acquisitions) to $30.2 million;
Recurring revenue(2) increased by 13% (9% Organic decline and 22% growth from acquisitions) to $20.7 million;
Adjusted EBITDA(1) decreased by 25% to $7.6 million;
Adjusted EBITDA Margin(1) was 25%, compared to 34% in the comparative period;
Earnings per share was $0.03, a 40% decrease;
Free Cash Flow(1) decreased by 68% to $2.0 million; Free Cash Flow per share decreased to $0.02 from $0.07.
SECOND QUARTER YEAR TO DATE 2026 CONSOLIDATED HIGHLIGHTS
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Total revenue was flat (15% Organic decline(1) and 15% growth from acquisitions) to $59.8 million;
Recurring revenue(2) increased by 10% (7% Organic decline and 17% growth from acquisitions) to $41.6 million;
Adjusted EBITDA(1) decreased by 25% to $14.6 million;
Adjusted EBITDA Margin(1) was 24%, compared to 33% in the comparative period;
Earnings per share was $0.07, a 22% decrease;
Free Cash Flow(1) decreased by 45% to $6.4 million; Free Cash Flow per share decreased to $0.08 from $0.14.
(1)
Organic growth/decline, Adjusted EBITDA, Adjusted EBITDA Margin, Recurring Revenue, Free Cash Flow and Free Cash Flow per share are not standardized financial measures and might not be comparable to measures disclosed by other issuers. For more description see under "Non-IFRS Financial Measures and Reconciliation of Non-IFRS Measures" heading.
(2)
Recurring revenue includes Annuity/maintenance licenses and Annuity license fee and excludes Perpetual licenses and Professional Services.
OVERVIEW
Energy market dynamics continue to be characterized by volatility and muted commodity prices, with customer focus remaining on exercising tight capital discipline. This resulted in continued longer sales cycles and a slower pace in closing new opportunities. In the second quarter, we closed our third significant acquisition, SeisWare International Inc., a company that develops geoscience interpretation and field development software to support subsurface exploration and development projects, further strengthening and expanding our Seismic Solutions portfolio.
Subsequent to the end of the quarter, on November 10, 2025, we announced a multi-year simulation software licensing agreement with Shell representing the culmination of a long-term product development relationship. The agreement is for the Company's suite of simulation solutions, including CoFlowTM.
On November 11, 2025, the Company announced a Normal Course Issuer Bid for its common shares as the board of directors of the Company believes that, from time to time, the market price of the common shares may not fully reflect the underlying value of the business. Additionally, we continue to pursue disciplined acquisitions that expand our capabilities and enhance our ability to navigate market volatility. To support this strategy and to augment our available cash for accretive capital deployment, we closed a $100M credit facility on November 7, 2025.
In the second quarter, an organic decline in total revenue offset most of the growth contributed by acquisitions. The decline reflected lower perpetual software license sales, which are variable in nature, as well as expected reductions in professional services and previously disclosed reductions in recurring software revenue. Recurring revenue increased 13% as growth from acquisitions more than offset an organic decline driven tied to previously disclosed reductions in licensing for reservoir and production solutions. Despite overall growth, the decline in revenue from reservoir and production solutions had a more pronounced effect on Adjusted EBITDA, given its higher margin profile, and was partially offset by contributions from our acquisitions.
The percentage decrease in Free Cash Flow was larger than the Adjusted EBITDA decrease due to stock-based compensation expenses and one-time capital expenditures.
Revenue in the second half of the year is expected to be higher than in the first half, reflecting the timing of seasonal contract renewals and revenue recognition. Organic recurring revenue growth is expected to turn positive in the fourth quarter and remain positive on an annual basis in fiscal 2027.
Adjusted EBITDA and Free Cash Flow in the second half of the year are anticipated to improve correspondingly however on a full year basis, Adjusted EBITDA (excluding future acquisitions) will be lower in Fiscal 2026 compared to Fiscal 2025 due to the decline in organic revenue and professional services.
Q2 2026 Dividend
Computer Modelling Group's Board approved a cash dividend of $0.01 per Common Share. The dividend will be paid on December 15, 2025, to shareholders of record at the close of business on December 5, 2025.
All dividends paid by Computer Modelling Group Ltd. to holders of Common Shares in the capital of the Company will be treated as eligible dividends within the meaning of such term in section 89(1) of the Income Tax Act (Canada), unless otherwise indicated.
SUMMARY OF FINANCIAL PERFORMANCE
Three months ended September 30,
Six months ended September 30,
($ thousands, except per share data)
2025
2024
% change
2025
2024
% change
Annuity/maintenance licenses
19,067
18,302
4
%
39,401
37,637
5
%
Annuity license fee
1,650
71
2,224
%
2,168
249
771
%
Recurring revenue(1) (2)
20,717
18,373
13
%
41,569
37,886
10
%
Perpetual licenses
945
2,149
(56
%)
1,323
4,259
(69
%)
Total software license revenue
21,662
20,522
6
%
42,892
42,145
2
%
Professional services
8,539
8,945
(5
%)
16,942
17,845
(5
%)
Total revenue
30,201
29,467
2
%
59,834
59,990
0
%
Cost of revenue
5,542
5,692
(3
%)
11,500
11,884
(3
%)
Operating expenses
Sales & marketing
5,992
4,229
42
%
10,602
9,160
16
%
Research and development
7,360
6,428
14
%
15,393
14,673
5
%
General & administrative
6,126
4,688
31
%
11,865
10,177
17
%
Operating expenses
19,478
15,345
27
%
37,860
34,010
11
%
Operating profit
5,181
8,430
(39
%)
10,474
14,096
(26
%)
Net income
2,716
3,763
(28
%)
6,025
7,727
(22
%)
Adjusted EBITDA (1)
7,558
10,020
(25
%)
14,629
19,374
(24
%)
Adjusted EBITDA Margin (1)
25
%
34
%
(26
%)
24
%
32
%
(25
%)
Earnings per share, basic & diluted
0.03
0.05
(40
%)
0.07
0.09
(22
%)
Funds flow from operations per share - basic
0.04
0.09
(56
%)
0.11
0.17
(35
%)
Free Cash Flow per share, basic (1)
0.02
0.07
(71
%)
0.08
0.14
(50
%)
(1)
Non-IFRS financial measures are defined in the "Non-IFRS Measures and Reconciliation of Non-IFRS Measures" section.
(2)
Included in the number is a reduction of $0.1 million and $0.2 million for the three and six months ended September 30, 2025, ($0.1 million and $0.2 million for the three and six months September 30, 2024), attributed to the amortization of a deferred revenue fair value reduction recognized on acquisition.
NON-IFRS FINANCIAL MEASURES AND RECONCILIATION OF NON-IFRS MEASURES
Free Cash Flow Reconciliation to Funds Flow from Operations
Free Cash Flow is a non-IFRS financial measure that is calculated as funds flow from operations less capital expenditures and repayment of lease liabilities. Free Cash Flow per share is calculated by dividing Free Cash Flow by the number of weighted average outstanding shares during the period. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods. Management uses free cash flow and free cash flow per share to help measure the capacity of the Company to pay dividends and invest in business growth opportunities.
Fiscal 2024
Fiscal 2025
Fiscal 2026
($ thousands, unless otherwise stated)
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Funds flow from operations
8,477
10,367
6,515
7,101
9,937
8,227
5,524
3,588
Capital expenditures
(459
)
(95
)
(93
)
(236
)
(432
)
(661
)
(542
)
(1,080
)
Repayment of lease liabilities
(728
)
(803
)
(743
)
(769
)
(689
)
(549
)
(526
)
(541
)
Free Cash Flow
7,290
9,469
5,679
6,096
8,816
7,017
4,456
1,967
Weighted average shares, basic (thousands)
81,067
81,314
81,476
81,887
82,753
83,064
83,090
84,058
Free Cash Flow per share - basic
0.09
