Hexagon AB (HXGBF) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

In This Article:

  • Organic Growth: 0% in Q1 2025.

  • Gross Margin: 67%.

  • Operating Margin: 26%.

  • Cash Conversion: 71%.

  • Recurring Revenue Growth: 10%.

  • Manufacturing Intelligence Revenue: EUR469.9 million, down 2% organically.

  • Asset Lifecycle Intelligence Revenue: EUR204.4 million, 5% organic growth.

  • Geosystems Revenue: EUR375.7 million, 2% organic decline.

  • Autonomous Solutions Revenue: EUR151.5 million, 2% organic growth.

  • Safety Infrastructure & Geospatial Revenue: EUR120.5 million, 2% organic growth.

  • Q1 Revenue: EUR1.3228 billion, 1.8% reported growth.

  • Operating Earnings: EUR344.7 million, decreased by 8%.

  • Net Income: EPS of EUR9.4, declining by 7%.

  • Interest Expense: EUR33 million, decreased from EUR42 million.

  • Cash Flow from Operations: EUR244.6 million, down 27%.

  • Working Capital: Build of EUR58.4 million.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Hexagon AB (HXGBF) achieved a strong gross margin of 67% in Q1 2025, indicating efficient cost management.

  • Recurring revenue grew by 10%, showcasing the company's ability to maintain stable income streams.

  • The company successfully launched a new Robotics division, focusing on humanoid robotics, which could drive future growth.

  • Hexagon AB (HXGBF) is progressing well with the separation of its ALI division, which is on track and includes the SIG division.

  • The company has a strong pipeline of new products expected to make a significant impact from 2026 onwards.

Negative Points

  • Hexagon AB (HXGBF) experienced 0% organic growth in Q1 2025, impacted by geopolitical uncertainties and tariffs.

  • Operating margin was negatively affected, dropping to 26% due to currency headwinds and a decline in volumes.

  • The Manufacturing Intelligence and Geosystems divisions reported declines, with MI down 2% organically.

  • The company faced significant declines in Canada and Mexico due to increased US tariffs, affecting overall performance.

  • There was a slowdown in perpetual software licenses and sensor business, impacting revenue growth.

Q & A Highlights

Q: Can you provide more details on the stabilization seen in April after the geopolitical uncertainties in March? Is this stabilization broad-based or specific to certain segments? A: We observed a return to growth in some business lines affected in March, but it's difficult to establish a trend as some of it is due to timing differences in customer orders. April has shown some growth, but we need to see how the rest of the quarter develops. - Benjamin Maslen, Chief Strategy Officer