Computer Modelling Group (CMG) Q2 2026 earnings summary

Executive summary

• Achieved FY25 total revenue of $129.4M, up 19% year-over-year, with 67% from recurring software revenue.

• Q2 2026 total revenue increased 2% to $30.2M, driven by 19% growth from acquisitions despite a 17% organic decline.

• Recurring revenue for Q2 2026 rose 13% to $20.7M, with 22% growth from acquisitions offsetting a 9% organic decline.

• Adjusted EBITDA for Q2 2026 dropped 25% to $7.6M, and earnings per share fell 40% to $0.03.

• Free Cash Flow for Q2 2026 decreased 68% to $2.0M, and a $0.01 per share dividend was approved.

Financial highlights

• FY25 Adjusted EBITDA was $44.0M, up 2% year-over-year, with a 34% margin.

• FY25 free cash flow reached $27.6M.

• For the six months ended September 30, 2025, total revenue was flat at $59.8M, with 15% organic decline offset by 15% growth from acquisitions.

• Net income for Q2 2026 was $2.7M, down 28% year-over-year; for six months, net income was $6.0M, down 22%.

• Recurring revenue for the six months increased 10% to $41.6M.

Outlook and guidance

• FY26 total growth expected to be impacted by a transition to lower professional services revenue.

• Organic recurring revenue growth is projected to turn positive in Q4 2026 and remain positive in fiscal 2027.

• Long-term target is 80% of revenue from software, emphasizing recurring revenue growth.

• Adjusted EBITDA and Free Cash Flow are anticipated to improve in the second half, but full-year Adjusted EBITDA (excluding future acquisitions) will be lower than fiscal 2025.

• Revenue in the second half of the year is expected to be higher due to seasonal contract renewals.