Computer Modelling Group (CMG) Q1 2025 earnings summary

Executive summary

• Total revenue for Q1 2025 was $30.5 million, up 47% year-over-year, driven by the Bluware (BHV) acquisition and 12% organic growth in the core segment.

• Net income declined 43% to $4.0 million, mainly due to higher stock-based compensation linked to share price increases.

• A quarterly cash dividend of $0.05 per share was approved, payable September 13, 2024.

Financial highlights

• Operating profit dropped 42% to $5.7 million, with adjusted operating profit down 5% year-over-year.

• Adjusted EBITDA margin was 31% (down from 48%), with the core segment at 42% and BHV at -4%.

• Earnings per share fell 44% to $0.05; free cash flow per share decreased 22% to $0.07.

• Cash balance at quarter-end was $69.1 million.

Outlook and guidance

• Management expects the core segment to achieve low double-digit annual revenue growth and maintain mid-40% adjusted EBITDA margins.

• BHV's profitability is expected to be lowest in Q1 and Q2 due to revenue recognition timing, with improvement in the latter half of the year.