Q1 2025 Hexagon AB Earnings Call Transcript
Key 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.
- 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.
Good day, and thank you for standing by. Welcome to the Hexagon Q1 Report 2025 Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Norbert Hanke. Please go ahead.
Good morning, and thank you for joining our first quarter 2025 conference call. I am Norbert Hanke, Interim President and CEO of Hexagon, and I'm joined by our Chief Strategy Officer, Ben Maslen; and our Chief Financial Officer, David Mills.
In Q1, we delivered 0% organic growth, 67% gross margins and an operating margin of 26% and with a cash conversion of 71%. Recurring revenue grew strongly by 10%. So the quarter began well, but in mid-March, geopolitical uncertainties impacted the volume.
March is the largest month in the quarter for revenues, so this had a sizable impact on our growth potential in Q1. The largest impact, however, was on operating margin. Here, we saw the combination of negative
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