Advanced high-strength steels (AHSS) have become increasingly popular in the automotive industry due to their high yield and ultimate tensile strengths, enabling the production of lighter car body structures while meeting safety standards. However, they have some setbacks compared to conventional steels, such as edge cracking through sheet thickness caused by forming components with shear-cut edges. When characterizing the formability of sheet metal materials, the hole expansion test is an industry-standard method used to evaluate the stretch-flangeability of their edges. However, accurately visualizing the first cracking is usually tricky and may be subjective, often leading to inconsistent results and low reproducibility with some impact of the operator on both direct and post-processing measurements. To address these issues, a novel digital image processing method is presented to reduce operator reliance and enhance the accuracy and efficiency of the hole expansion test results. By leveraging advanced image processing algorithms, the proposed approach detects the appearance of the first edge cracks, enabling a more precise determination of the hole expansion ratio (HER). Furthermore, it provides valuable insights into the evolution of the hole diameter, allowing for a comprehensive understanding of the material behavior during the test. The proposed method was evaluated for different materials, and the corresponding HER values were compared with the traditional method.