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01/09 19:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Trimble's earnings call highlights strong financial performance, increased revenue and EPS guidance, and a positive outlook on AI and innovation. The Q&A section reveals analyst confidence in growth strategies, though some uncertainties remain regarding 2026 margins and specific EPS details. New OEM partnerships and focus on ARR growth are positive indicators. Overall, the sentiment is positive, with potential for stock price appreciation.
Revenue $901 million in the quarter, up 11% year-over-year. The increase was driven by the strength of AECO and Field Systems segments.
ARR (Annual Recurring Revenue) $2.31 billion, up 15% year-over-year. The AECO segment showed a notable 17% increase, reflecting strong engagement and expansion with the core commercial customer base.
EPS (Earnings Per Share) $0.81, up 16% year-over-year. The increase was attributed to the structural quality of the business model and higher recurring revenue.
Gross Margins 71.2%, expanded by 90 basis points year-over-year. This reflects continued model progression.
EBITDA Margins 29.9%, expanded by 160 basis points year-over-year. The improvement was driven by a greater mix of higher-margin recurring revenue.
Free Cash Flow $206 million year-to-date, considering a $277 million cash tax payment related to the agriculture divestiture. This highlights strong cash flow performance.
Leverage Ratio 1.2x, well below the long-term target rate of 2.5x, indicating financial flexibility.
AECO Segment Revenue $358 million, up 17% year-over-year. Growth was driven by strong ACV bookings and customer engagement.
Field Systems Revenue $409 million, up 8% year-over-year. Growth was driven by strength in geospatial and civil solutions.
Transportation & Logistics ARR $501 million, up 7% year-over-year. Growth was achieved despite a challenging freight market.
SketchUp 2026: Launched with real-time viewing capabilities to enhance collaboration and usage.
ProjectSight: AI-enabled project management solution launched in Europe and Australia.
Vermeer Pile Drivers: Introduced a solution that automates machine movement and optimizes pile depth, reducing operator requirements.
NASCAR and Liverpool FC Partnerships: Trimble technology to be used in infrastructure design and construction for Liverpool FC.
Global Customer Wins: Projects include rail in Japan, airports in Quebec and Colorado, and transportation authorities in Norway, Paris, and the U.S.
ARR Growth: ARR grew 15% to $2.31 billion, with a 17% increase in AECO segment.
Recurring Revenue: Accounted for 63% of Q3 revenue, with software and services making up 78% of total revenue.
Gross Margins: Expanded by 90 basis points to 71.2%.
AI Integration: AI is being integrated across the business to drive internal efficiencies and product innovation.
Connect & Scale Strategy: Guiding transformation and delivering outcomes to global customers.
Impact of U.S. federal government shutdown: The company anticipated lower government revenue early in the year and quantified the impact as single-digit millions in the back half of 2025.
Challenged freight market: The Transportation segment is growing profitably but faces challenges due to a difficult freight market.
AI disruption potential: While AI is seen as an opportunity, the company acknowledges the potential for disruption and is working to integrate AI across its business to mitigate risks.
Economic uncertainties in end markets: The company benefits from serving diverse end markets, but economic uncertainties in sectors like infrastructure, residential, and energy could pose risks.
Supply chain and operational disruptions: The company’s reliance on global supply chains and physical industries like construction and transportation could expose it to disruptions.
Revenue Guidance: The company has increased the midpoint of its full-year 2025 revenue guidance by $45 million to $3.565 billion. An early look at 2026 revenue projects mid- to high single-digit growth.
Earnings Per Share (EPS) Guidance: The full-year EPS midpoint outlook has been raised by $0.10 to $3.08.
Annual Recurring Revenue (ARR) Growth: The company maintains its organic ARR growth midpoint at 14% for 2025 and aims to achieve $3 billion in ARR by fiscal 2027.
Long-Term Financial Targets: The company is confident in achieving its fiscal 2027 targets, which include $3 billion in ARR, $4 billion in revenue, and 30% EBITDA.
Capital Allocation: The company plans to use at least one-third of its free cash flow for share repurchases over the long term.
Market Trends and AI Integration: The company sees AI as a significant opportunity and is integrating it across its business to drive internal efficiencies, product innovation, and customer value. AI is expected to enhance productivity and extend leadership in its markets.
Segment-Specific Growth: AECO segment achieved 17% ARR and revenue growth in Q3 2025. Field Systems posted 18% ARR growth, and Transportation & Logistics achieved 7% ARR growth despite a challenging freight market.
Strategic Plans for 2026: The company is positioning itself for growth and strategic progression in 2026, with more details to be provided in February.
Share Repurchase: During the third quarter, we repurchased $50 million worth of shares, a direct reflection of our confidence in the long-term value of our business and our commitment to delivering shareholder returns. This leaves approximately $273 million under our current repurchase authorization. Longer term, we continue to expect at least 1/3 of our free cash flow to be used for repurchasing shares.
Trimble's earnings call highlights strong financial performance, increased revenue and EPS guidance, and a positive outlook on AI and innovation. The Q&A section reveals analyst confidence in growth strategies, though some uncertainties remain regarding 2026 margins and specific EPS details. New OEM partnerships and focus on ARR growth are positive indicators. Overall, the sentiment is positive, with potential for stock price appreciation.
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