Octave Intelligence plc completed its spin-off from Hexagon and reported softer top-line results but heavy non-cash charges for the quarter and six months ended June 30, 2026. Total revenue was $398.4 million for the quarter and $784.9 million year‑to‑date, down modestly as license and services revenue declined while subscriptions, especially SaaS, grew.
Gross profit was $305.7 million for the quarter with an improved gross margin of 77%. However, the company recorded large non‑cash impairment charges: $1.671 billion of goodwill and $463.7 million of trademarks, driving a six‑month net loss of $1.923 billion (vs. profit a year earlier) and reducing total assets and equity. Operating cash flow remained strong at $240.9 million for the six months.
In connection with the spin-off, Octave put in place new senior unsecured credit facilities and ended June 30, 2026 with $646.0 million of debt principal outstanding and $304.1 million of cash. A subsequent $57.3 million sale‑leaseback of its headquarters is expected to generate a gain and was used to repay revolver borrowings. An Irish High Court‑approved $6.0 billion capital reduction established distributable reserves for potential future dividends or share repurchases.
Octave Intelligence plc reported second quarter 2026 results showing a mixed picture of solid recurring growth and a very large non-cash impairment. Total revenue was $398 million, down 4% year over year as reported, while recurring revenue reached $283 million, up 6% on an as-reported and organic constant-currency basis. Annualized recurring revenue (ARR) was $1,143 million, a 7% increase from $1,066 million a year earlier, and management highlighted recurring revenue and ARR as the key indicators of underlying performance.
Profitability on a GAAP basis was heavily impacted by $2,135 million in non-cash impairment charges, producing an operating loss of $2,070 million and a net loss of $1,971 million, or $(7.34) per share. These charges included a $1,671 million goodwill impairment after market capitalization fell below carrying value and a $464 million impairment of trademarks tied to rebranding, and did not affect cash flow or debt covenants. Excluding these and other adjustments, adjusted income from operations was $116 million with a 29% adjusted operating margin, and adjusted net income was $95 million, or $0.36 per share.
Cash generation remained strong. Cash flow from operations was $125 million with a 31% margin and free cash flow was $93 million, a 23% margin. At June 30, 2026, the company held $304 million in cash and cash equivalents and $644 million of total debt, following completion of its spin-off from Hexagon AB and listing of its Class B ordinary shares in New York and Swedish depositary receipts in Stockholm. For full year 2026, Octave guided to $1.635–$1.665 billion in revenue, ARR of $1.185–$1.205 billion (6–8% organic constant-currency ARR growth), an adjusted operating margin of about 30% and free cash flow margin of about 20%.