Hexagon (HEXA) Q1 2026 earnings summary

Executive summary

• Achieved 8% organic growth in Q1 2026, led by Manufacturing Intelligence and Autonomous Solutions, with a 26% operating margin and 77% cash conversion despite currency headwinds.

• Completed sale of Design & Engineering business for €2.7 billion, announced acquisition of Waygate Technologies for $1.45 billion, and advanced Octave separation, classified as discontinued operations with spin-off expected in May/Q2 2026.

• AEON humanoid robot achieved milestones, including BMW pilot and Schaeffler agreement for up to 1,000 units.

• New executive appointments finalized, including CFO and Chief People Officer.

• Cost restructuring program delivered €10M benefit in Q1, with annualized savings at €51M and target of €74M by end of 2026.

Financial highlights

• Revenue from continuing operations: €964M, organic growth 8%.

• Adjusted EBIT1: €251M, operating margin 26.1%, up 20 bps year-over-year.

• Gross margin: 62.9%, down from 64.4% due to currency, tariffs, and cost inflation.

• Adjusted EBITDA margin: 36.4%, up 80 bps year-over-year.

• Cash conversion: 77%, up from 60% in Q1 last year; cash flow post-investment: €250M, up 16%.

• Earnings per share: €0.067, up 3%; reported EPS €0.584, driven by €1.4bn gain from D&E divestment.

Outlook and guidance

• Strong order intake in Manufacturing Intelligence and positive market dynamics in aerospace & defense support continued growth.

• Geosystems destocking completed, providing a clean base for growth.

• Octave targets 3%-4% total revenue growth and 6%-8% ARR growth for 2026, with medium-term ARR growth ambition of 10%+ and operating margins around 30%.

• Waygate Technologies acquisition expected to close in late H2 2026, expanding into NDT markets.

• Management remains cautious due to macroeconomic and geopolitical uncertainties, especially in mining and agriculture.