Hexagon Is Increasingly Shifting Its Business Portfolio to Software

Hexagon, based in Sweden, is a global provider of hardware, software, and services across industries such as construction, manufacturing, oil and gas, agriculture, and mining. Hardware includes sensors, measuring devices, and other equipment typically used in conjunction with its software products. Sensors collect data and positioning information for equipment, which is fed into software that helps manage and optimize operations. Services are typically maintenance contracts on the hardware. Currently, the company’s revenue is around 40% hardware, 40% software, and 20% services. Hexagon generates around 80% of revenue through its direct salesforce, which we think is an advantage versus competitors who typically rely more on partners and distributors.