Computer Modelling Group (CMG) Q3 2026 earnings summary

Executive summary

• 47-year history in reservoir simulation software, focusing on growth, profitability, and acquisitions.

• Expanded portfolio through three recent acquisitions in seismic interpretation, enhancing upstream energy workflows.

• Global customer base in ~60 countries, with most revenue from the Eastern Hemisphere.

• Q3 2026 revenue decreased 9% year-over-year to $32.7M, with a 17% organic decline partially offset by 8% growth from acquisitions.

• Market conditions remain challenging, with extended sales cycles and cautious customer spending.

Financial highlights

• FY 2025 total revenue was $129.4M, with 67% from recurring software revenue.

• For the nine months ended December 31, 2025, total revenue decreased by 3% to $92.5M, with a 16% organic decline and 13% growth from acquisitions.

• Free cash flow for FY25 was $27.6M, and Adjusted EBITDA margin was 34%.

• Net income for Q3 was $6.0M, down 38% year-over-year; Adjusted EBITDA was $9.7M, down 30%.

• Earnings per share for Q3 were $0.07, a 42% decrease year-over-year.

Outlook and guidance

• Near-term focus on stabilizing and expanding margins, with a return to positive organic recurring revenue growth expected in Q4/26.

• Recurring revenue in Q4 is expected to be higher than Q3 due to seasonal contract renewals.

• Adjusted EBITDA for the current fiscal year is expected to be lower than the prior year, excluding future acquisitions.

• Targeting 80% of total revenue from software over the long term.