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 EUR 2.7 billion, announced acquisition of Waygate Technologies for $1.45 billion, and advanced Octave separation, expected to complete in May 2026.

• AEON humanoid robot achieved milestones, including BMW pilot and Schaeffler deployment agreement.

• Cost restructuring program delivered EUR 10 million benefit in Q1, with annualized savings at EUR 51 million and target of EUR 74 million by year-end.

• New executive team finalized, including CFO and CPO appointments.

Financial highlights

• Revenue from continuing operations: EUR 964 million, organic growth 8%.

• EBIT: EUR 251 million, operating margin 26.1%, up 20 bps year-over-year.

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

• Cash conversion: 77%, up from 60% in Q1 2025.

• Earnings per share: EUR 0.067, up 3%; reported EPS EUR 0.584 due to EUR 1.4bn gain from D&E divestment.

Outlook and guidance

• Strong order intake in Manufacturing Intelligence and positive market dynamics in aerospace & defense support confidence for coming quarters.

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

• 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.