Hexagon Ab Stock Earnings Reports

Hexagon reported Q3 2025 organic growth of 4% (Hexagon core +5% organic), with solid cash conversion (77%) and quarter-on-quarter margin improvement but margins remain below target. The company announced a EUR 110m cost-efficiency program (EUR 74m in Hexagon core, EUR 36m in Octave) with implementation costs of ~EUR 113m and benefits starting gradually in Q4 2025 and fully realized by end-2026. Hexagon core took a EUR 186m non-cash charge (largely historic R&D impairments, some inventory/discontinued products) to reset the balance sheet and improve future divisional accountability. Strategic moves: announced sale of the D&E business to Cadence for EUR 2.7bn (expected proceeds net ~EUR 1.4bn), Octave spin-off remains on track for H1 2026, and leadership changes including an interim CFO (Norbert Hanke) and new executives for core roles. Division performance: Manufacturing Intelligence +3% organic (margin ~25.1%), Geosystems +1% (return to growth but China-heavy infrastructure weakness), Autonomous Solutions +19% organic with best-in-quarter margins (36.6%). Octave (former ALI and related businesses) grew 1% organic; recurring revenue +6% and SaaS revenue grew strongly, but margins temporarily below prior levels due to mix, investments, and transition to SaaS. Management introduced a new operating model with 17 P&L-accountable divisions, standardized scorecards and strategic mandates (stability/profitability/growth) to improve accountability and decision speed. Management reiterated that R&D capitalization accounting will remain under IAS 38 but governance around project approvals and reviews will be tightened. Investors should focus on margin recovery from the EUR 110m program, proceeds and capital allocation from the D&E sale, Octave separation details at the forthcoming investor events (Octave Investor Day in Q1 and Hexagon CMD on 30 April 2026), and product-led revenue upside as newly released products ramp.