My son recently had hypospadias repair and now has a cyst close to the incision. is this an emergency?

No: No it is not unless it is inflammed, angry looking and painful, or in other words it looks like it is infected.

No, unless can't pee: Hopefully this is a small epidermal inclusion cyst which can easily be removed at your convenience, unless your son complains of pain or difficulty urinating. A urethral diverticulum, or outpouching can sometimes be mistaken for a cyst. This would better be corrected sooner rather than later.