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ReadX | Hexagon AB | 17 Oct 2025
Software-led demand steady; APAC metrology improving, hardware margins a watch
Peers included: Siemens, PTC, Dassault, Renishaw, Trimble, Topcon, Bentley, Epiroc, Caterpillar, Motorola
  • MI software steady; APAC metrology ticking up — PTC/Dassault growth held HSD/LDD; Siemens DI software orders re-accelerated; Renishaw flagged improving China/semis while Europe stays flat. Positive MI skew with region mix crucial.
  • Construction/AEC subscriptions outgrow hardware — Trimble raised FY25 on 8% organic and 13% ARR; Topcon's Positioning declined HSD YoY. Expect Geosystems software/ARR to carry results; hardware recovery is patchy.
  • Mining/autonomy demand resilient; margin watch — Epiroc orders grew organically; Caterpillar highlighted tariff-driven manufacturing costs. Revenue supportive for Hexagon AS; hardware cost/mix risk.
  • Precision ag still weak — Deere and CNH posted double‑digit declines. Continued drag on Hexagon's small precision ag sub‑segment.
  • Public safety software robust — Motorola's Software & Services +15% with record orders; backlog up. Positive for SIG growth/visibility.
  • ALI (plant/EAM) solid — Bentley ARR >11% and strong net retention. Supports steady ALI SaaS growth and margin resilience.
  • Consensus revisions align — Upward revisions at Trimble, Motorola, Bentley; Caterpillar FY25 earnings trimmed despite revenue stability, echoing margin pressure.
MI software resilience; metrology divergence
  • Software momentum intact; rate-of-change improved — PTC ARR +9.3% cc with FY25 raised and better book-to-bill; Dassault software +6% cc with subscription +10% and 3DEXPERIENCE +20%; Siemens DI reported "exceptionally high" software orders and automation stabilizing from destock. This points to continued HSD growth potential and mix tailwinds for Hexagon's MSC/ETQ/Q‑DAS/Nexus.
  • APAC-led metrology improvement; EMEA flat — Renishaw posted record revenue (+3.1% YoY), with APAC +7.2% cc (China improving), semis/electronics better, auto softer; "steady start" to FY26. For Hexagon MI hardware, assume APAC > EMEA and electronics > auto.
  • Tariff cost friction in hardware chains — Nikon cited a ¥1.3bn OP hit from tariffs; a reminder that hardware-heavy metrology lines may see price/cost pressure even as volumes stabilize.
Construction tech: ARR up, hardware mixed
  • Subscriptions/ARR underpin demand; hardware uneven — Trimble organic +8%, ARR +13% organic, FY25 raised; by contrast Topcon Positioning -9.7% revenue with margin compression. Expect Hexagon Geosystems to lean on Cyclone/HXDR/iCON subscriptions while instruments and machine control recover unevenly by region.
  • AEC demand supported by data centers/infra — Autodesk delivered +17% revenue and raised guidance, citing DC/infra strength offsetting commercial softness; Bentley's ARR +11.5% with 109% net retention. This should sustain reality capture usage and cloud workflows for Hexagon.
Mining/autonomy healthy; tariffs a margin risk
  • Miners' willingness to invest rising — Epiroc orders +2% organic YoY (+1% QoQ) and commentary of "high" demand with growing automation/electrification interest; a multi‑year Fortescue contract began to book. Supports Hexagon Mining's software and autonomy projects.
  • Revenue resilient, but costs up on tariffs — Caterpillar's Resource Industries sales only -4% YoY while segment profit fell -25% YoY due to "higher tariffs." For Hexagon, software/services margins should hold, but hardware-bearing components (GNSS antennas, ruggedized devices) may face price/cost tension.
Precision agriculture remains a headwind
  • Downcycle persists; stabilization later — Deere Production & Precision Ag -16% YoY; CNH Industrial -16% Ag sales. Keep Hexagon's precision ag contribution conservative into H2; recovery looks more 2026.
Public safety/SIG pipelines strong
  • Accelerating software demand and visibility — Motorola Solutions Software & Services +15% YoY, record orders, backlog $14.1bn, FY25 outlook raised. Read-across is constructive for Hexagon SIG (CAD/RMS, VMS/PSIM) backlog conversion and ARR.
ALI: steady SaaS growth and renewals
  • EAM/digital twin demand solid — Bentley ARR +11.5%, net retention 109% supports mid‑single‑digit or better organic for Hexagon ALI SaaS (HxGN EAM, SDx2). IBM's consensus revisions higher also suggest enterprise O&M/IT budgets remain supportive for EAM peers.
    • Bentley Q2 2025 Aug 6, 2025
    • IBM consensus snapshots (see table)
Peer trend timeline and implications
Recent peer prints favor software-led growth with region and cost caveats.
Peer Period Report date Key trend (YoY/seq) Rate-of-change Hexagon implication
Siemens DI Q3 FY25 Aug 7, 2025 Software orders surged; automation stabilized Acceleration vs Q2 MI software up; factory spend improving in China (link)
PTC Q3 FY25 Jul 30, 2025 ARR +9.3% cc; guide raised Stable HSD Supports MI recurring growth (link)
Dassault Q2 2025 Jul 24, 2025 Subscriptions +10%; 3DEX +20% Slight acceleration Positive MI software mix (link)
Renishaw FY25 Sep 18, 2025 APAC +7% cc; EMEA flat Improvement in APAC MI metrology better in China; Europe cautious (link)
Nikon Q1 FY26 Aug 7, 2025 Components +9.6%; tariffs headwind Mixed Hardware margins watch (link)
Trimble Q2 2025 Aug 6, 2025 Organic +8%; ARR +13% Re-acceleration Geosystems ARR strength (link)
Topcon Q1 FY25 Jul 28, 2025 Positioning rev -9.7% Deceleration Hardware recovery uneven (link)
Autodesk Q2 FY26 Aug 28, 2025 Rev +17%; AECO strong Acceleration Supports reality capture/cloud usage (link)
Bentley Q2 2025 Aug 6, 2025 ARR +11.5%; NRR 109% Stable LDD ALI SaaS tailwind (link)
Epiroc Q2 2025 Jul 18, 2025 Orders +2% org.; +1% seq Improvement Positive mining/autonomy demand (link)
Caterpillar Q2 2025 Aug 5, 2025 Resource sales -4%; margins hit by tariffs Margin decel Hardware cost pressure risk (link)
Deere Q3 FY25 Aug 14, 2025 Prod & Precision Ag -16% Still negative Precision ag drag persists (link)
CNH Q2 2025 Aug 1, 2025 Ag sales -16% Still negative Confirms ag downcycle (link)
Motorola Q2 2025 Aug 7, 2025 S&S +15%; record orders Acceleration Strong SIG pipeline/backlog (link)
Consensus revisions context
Revisions since mid‑July indicate firmer end‑market expectations in AEC/public safety and steady plant/EAM; OEM machinery earnings trimmed on costs.
Peer Metric (FY25E) Jul 17 Oct 17 % chg Read‑across
Trimble (AECO) Revenue ($bn) 1.47 1.49 +1.4% Supports Geosystems AEC demand
Trimble (AECO) Op. income ($m) 469.5 484.7 +3.2% Mix toward software margins
Motorola Net sales ($bn) 11.41 11.65 +2.1% Stronger SIG budgets
Motorola EPS ($) 14.69 14.94 +1.7% Visibility improving
Bentley Revenue ($bn) 1.48 1.49 +0.7% ALI ARR resilience
Bentley EPS ($) 1.17 1.20 +2.6% Operating leverage tailwind
IBM EPS ($) 10.94 11.17 +2.1% EAM budgets supportive vs HxGN EAM peers
Caterpillar Revenue ($bn) 63.16 64.67 +2.4% Demand intact
Caterpillar EPS ($) 18.58 17.67 -4.9% Margin pressure echoes tariff risk
Schneider EPS (€) 9.28 8.98 -3.2% Industrial automation still mixed
What this may mean for Hexagon's print
  • MI: modest acceleration vs H1 with software mix — Expect HSD software growth and APAC-led metrology improvement to outweigh ongoing EMEA/auto softness. Watch ETQ/Q‑DAS attach and China durability.
  • Geosystems: steady-to-better, ARR-led — Infra/data-center work supports subscriptions and usage; hardware instruments/machine control recover selectively by region. Pricing and localization should help protect GM amid tariffs.
  • AS: mining/autonomy underpin growth; precision ag drags — Revenues should benefit from miners' digital/autonomy projects and assured PNT; precision ag remains a small but negative contribution near term.
  • ALI and SIG: recurring engines provide visibility — ALI SaaS and SIG software backlogs should support stable mid‑single‑digit or better growth and margin resilience, aiding group mix.
Key watch items into the print
  • Hardware margins vs tariffs — Validate pricing/localization offsets in Geosystems and MI hardware given peers' tariff commentary (Caterpillar; Nikon).
  • Regional mix — Track APAC vs EMEA in MI/Geosystems; peers show China improving, Europe flat (Renishaw).
  • ARR/renewals — Peers' strong ARR/backlog (Trimble, Bentley, Motorola) suggest healthy renewal cycles; quantify ARR mix shift and net retention.
Uncertainty / Limitations
  • Large, lumpy software deals (e.g., Siemens DI) can distort quarterly rates; treat as directional.
  • Precision ag cycle timing is sensitive to crop prices, dealer inventory and financing; visibility limited.
  • FX and tariff impacts differ by vendor footprint and may not map 1:1 to Hexagon.
  • Some peers provide limited segment granularity in press releases; deeper detail sits in calls/filings.
Primer included 14 read-across items in this report of total 14 items available from its research.
This content is provided for general information only. It is not investment research and does not constitute advice, a recommendation, or a solicitation to trade. Primer can make mistakes - please verify independently.
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