Computer Modelling Group (CMG) 27th Annual Needham Growth Conference summary

Business overview and market positioning

• Operates in upstream energy, specializing in reservoir simulation for oil and gas recovery, with a strong presence in both traditional and energy transition markets.

• Software is mission-critical, used by all super majors and 650 customers globally, including 200 universities as part of a seeding strategy.

• Generates strong free cash flow, with 78% recurring revenue and 45% adjusted EBITDA margin.

• Revenue is globally diversified, with only 18% from Canada and significant presence in the Eastern Hemisphere.

• Energy transition applications (CCS, geothermal, hydrogen) account for 23% of revenue, leveraging decades of experience in these areas.

Regional and market trends

• Canadian market is mature with 80% share, focusing on upsell opportunities.

• U.S. market is competitive and data-driven, with recent tech tuck-in acquisition to address short-term, analytics-focused needs.

• South America, especially Brazil, is growth-oriented with large exploration and production projects.

• Europe is focused on energy transition, particularly CCS, where the company is a market leader.

• Middle East and Africa present growth opportunities, with efforts to penetrate large NOCs and greenfield regions.

• APAC region is seeking enhanced oil recovery solutions, leveraging best practices from North America.

Strategic transformation and CMG 4.0

• CMG 4.0 strategy initiated in 2022 focuses on transformation, organic growth, and margin expansion.

• Shifted culture from research-driven to commercially focused, aligning product development with client needs.

• Implemented performance-based compensation and revamped sales incentives to drive both renewals and new business.

• Marketing strategy emphasizes thought leadership in CCS and category creation for new products like CoFlow.