TRIMBLE INC.
For the period ended Apr 4, 2025. Filed May 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 4, 2025 · Filed May 12, 2025
TRMB$54.11+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-27; filed 2025-01-16.
0000864749-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue”Current report: 10-Q
Period ended 2025-04-04; filed 2025-05-12.
0000864749-25-000113
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue”The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 117 current paragraphs.
60 unchanged; 35 reworded; 22 added; 22 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
•Execute on our Connect & Scale strategy;
Current report
Mobility Divestiture
Current report
On February 8, 2025, we completed the sale of our Mobility business to Platform Science in exchange for equity ownership interests with a fair value of $253.9 million. The fair value was based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. Following the closing of the transaction, we own, or have rights to acquire,32.5% of Platform Science’s expanded business comprised of (i) shares of preferred stock, with certain liquidation preferences, that represent 28.5% ownership, and (ii) common stock warrants allowing us the rights to acquire 4% of additional ownership.
Current report
Upon closing of the transaction, we deconsolidated $277.3 million of net assets including $145.3 million of goodwill, and we recorded our equity investment at its fair value under the measurement alternative election, which represents a non-cash investing activity. As a result, we recognized a cumulative, pre-tax loss of $30.6 million from the held for sale date in the third quarter of 2024 to the closing date. Mobility was reported as a part of our T&L segment.
Current report
Ag Divestiture
Current report
On April 1, 2024, we completed the sale and contribution of our Ag business to AGCO in exchange for $1.9 billion of cash proceeds and an equity ownership interest in PTx Trimble, a joint venture (the “JV”) that was formed by Trimble and AGCO, with a fair value of $275.6 million. The fair value was based on a combination of the equity value, primarily the transaction price, and an option pricing model for a put and call option. Following the closing of the transaction, we own 15% of the JV.
Current report
Upon closing of the transaction, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and we recorded our equity investment at its fair value under the equity method of accounting, which represents a non-cash investing activity. As a result, we recognized a pre-tax gain of $1.7 billion in the second quarter of 2024, which includes the gain for our retained 15% ownership interest in the JV. The sale and contribution of the Ag business excluded certain GNSS and guidance technologies. Ag was reported as a part of our Field Systems segment.
Current report
Macroeconomic conditions continue to present significant challenges globally, driven by geopolitical tensions, tariff and trade policies, exchange rate and interest rate volatility, and persistent inflationary pressures. The heightened trade tensions and related imposition of tariffs between the United States and its trading partners, the extent and duration of these tariffs, and their impact on global economic conditions remain uncertain and depend on various factors, including international negotiations, policy responses, potential exemptions, and shifts in global supply and demand. These evolving dynamics may have a negative impact on our business operations; however, our shift away from hardware-centric business towards a more significant mix of recurring revenue is expected to decrease such impacts. We are closely monitoring global trade developments and considering ways to mitigate potential impacts on our business.
Current report
Note that the first quarter of 2025 began on January 4, 2025 compared to the first quarter of 2024, which began on December 30, 2023. This significantly impacted overall Company and AECO year-over-year comparisons due to the timing of revenue recognition for January 1 annual software term license renewals (“software renewals”). At an overall company level, the estimated impact of the software renewals was $49.6 million or a 5% negative impact on revenue growth. For AECO, the estimated impact was $49.0 million or a 14% negative impact on AECO segment revenue growth.
Current report
Organic total revenue increased for the first quarter due to strong subscription growth across all segments, partially offset by prior year software renewals.
Current report
Organic product revenue was flat for the first quarter primarily due to relatively strong end-user demand for Civil Construction solutions, offset by a decline in Surveying due to an unusually large order in the prior year.
Current report
Organic subscription and services revenue increased for the first quarter primarily due to subscription growth across all segments, with the biggest impact in AECO, partially offset by prior year software renewals.
Current report
Operating income decreased for the first quarter primarily due to the impact of divestitures and prior year software renewals, partially offset by organic growth.
Current report
Operating income as a percentage of revenue was relatively flat.
Current report
G&A expense decreased for the first quarter primarily due to the divestitures, partially offset by higher investment costs associated with our Connect & Scale strategy and higher incentive compensation.
Current report
Non-operating expense, net decreased for the first quarter primarily due to lower interest expense after the debt repayment made in 2024.
Current report
For the first quarterof 2025, our effective income tax rate was 22.8%, as compared to 21.6% in the corresponding period in 2024. The increase was primarily due to lower U.S. federal R&D credit, partially offset by higher stock-based compensation deductions.
Current report
Organic revenue was flat for the first quarter due to increased subscription revenue, which benefited from cumulative growth along with an expansion of customers across many products, with the largest impacts resulting from Viewpoint, Architecture & Design, and MEP products. The increases were largely offset by the impact of prior year software renewals, primarily for Structures products.
Current report
Operating income and operating income as a percentage of revenue decreased for the first quarter primarily due to the impact of prior year software renewals, partially offset by increased subscription revenue and associated gross margin expansion.
Current report
Organic revenue increased for the first quarter primarily due to relatively strong end-user demand for Civil Construction solutions, offset by a decline in Surveying due to an unusually large order in the prior year. Surveying end-user demand was relatively strong; however, dealers tightly managed and drew down on their pre-existing inventories.
Current report
Operating income and operating income as a percentage of revenue decreased for the first quarter primarily due to the loss of divestiture income.
Current report
The increase in cash used in investing activities was primarily related to the Mobility divestiture that closed in the current year.
Removed paragraphs (22)
Previous report
•Executing on our Connect and Scale strategy;
Previous report
Recent Business developments
Previous report
On October 2, 2024, we and Caterpillar announced the extension of our long-standing joint venture. The renewed agreement includes expanded distribution of grade control solutions in the construction sector to accelerate innovation and customer adoption. The renewed agreement aims to increase industry reach and provide customers broader availability of interoperable grade control solutions via a flexible platform for use by Caterpillar, Trimble, and other technology providers and equipment manufacturers.
Previous report
On October 22, 2024, we announced a new strategic relationship with John Deere that aims to accelerate the innovation and adoption of grade control technology for the construction industry. The availability of the Trimble Earthworks Grade Control technology integrated with the John Deere SmartGrade™ platform strives to make it easier for John Deere customers around the world to leverage the full benefits of machine control for increased productivity, efficiency, and decision-making.
Previous report
The assets and liabilities of Mobility are classified as held for sale beginning in the third quarter of 2024. A valuation allowance was established to reduce the carrying value of the disposal group assets to fair value. As a result, in the third quarter of 2024, we recorded a pre-tax loss of approximately $23.5 million included within Divestitures (loss) gain, net in our Condensed Consolidated Statements of Income. See Note 4 “Divestitures” of this report.
Previous report
On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, in exchange for $1.9 billion in cash proceeds, subject to working capital adjustments. Following the closing of this transaction, we own 15% and AGCO owns 85% of PTx Trimble. In addition to forming PTx Trimble, the parties concurrently entered into agreements that include the following: (i) long-term supply agreement for key GNSS and guidance technologies, (ii) technology transfer and license agreement, (iii) trademark license agreement, (iv) master sale and distribution agreement for positioning services, and (v) transition services agreement. Ag was reported as a part of our Field Systems segment.
Previous report
Upon closing of the transaction in the second quarter of 2024, we recognized a pre-tax gain of $1.7 billion. The gain included $275.6 million for the fair value of our retained 15% ownership interest in PTx Trimble, an LLC, which is reported as an equity method investment.
Previous report
We repaid $1.0 billion of our variable-rate debt through use of the net proceeds and expect to use the majority of the remaining proceeds after tax to repurchase stock.
Previous report
Macroeconomic conditions, including geopolitical tensions such as the ongoing military conflicts in the Middle East and between Russia and Ukraine and related sanctions, exchange rate and interest rate volatility, and inflationary pressures, will continue to evolve globally. These macroeconomic conditions have had and may continue to have a negative impact on our results of operations.
Previous report
Organic total revenue increased for the third quarter and the first three quarters due to a higher mix of subscription and services revenue.
Previous report
Organic product revenue decreased for the third quarter and first three quarters primarily due to higher U.S. federal government sales of Surveying hardware in the prior year. Additionally, the decrease for the first three quarters was due to lower Ag demand in the first quarter.
Previous report
Organic subscription and services revenue increased for the third quarter and first three quarters primarily due to strong growth in subscription product offerings in AECO, and to a lesser extent, Positioning Services in Field Systems and Transporeon in T&L. Additionally, the increase for the first three quarters was due to strong growth in software term licenses in AECO. The recurring growth was driven by increased subscription and term license sales to new and existing customers, as evidenced by overall organic ARR growth of 14%.
Previous report
Operating income decreased for the third quarter primarily due to the Ag divestiture partially offset by organic growth. Operating income as a percentage of revenue increased for the third quarter primarily due to the gross margin expansion. Operating income and operating income as a percentage of revenue decreased for the first three quarters primarily due to the Ag divestiture, partially offset by organic revenue and gross margin expansion, and the impact of the Transporeon acquisition.
Previous report
G&A expense increased for the third quarter and first three quarters primarily due to divestiture transaction costs, partially offset by the impact of the Ag divestiture.
Previous report
Non-operating expense, net increased for the third quarter primarily due to the loss from the pending Mobility divestiture, partially offset by lower interest expense from the $1.3 billion repayment of debt. Non-operating income, net increased for the first three quarters primarily due to the Ag divestiture gain and lower interest expense, partially offset by a foreign currency hedging gain associated with the acquisition of Transporeon in the prior year that was included in Other (loss) income, net.
Previous report
For the third quarter, our effective income tax rate was 44.5%, as compared to 5.7% in the corresponding period in 2023 primarily due to certain disallowed losses related to the pending Mobility divestiture. For the first three quarters, our effective income tax rate was 25.9%, as compared to 16.5% in the prior year, primarily due to a geographic mix of gains from the Ag divestiture.
Previous report
Organic revenue increased for the third quarter and first three quartersdue to strong demand for subscription offerings, particularly for Viewpoint, Architecture and Design, and to a lesser extent, Structures and MEP offerings. Additionally, the increase for the first three quarters was driven by the growth in Structures annual term license software sales in the first quarter.
Previous report
Organic revenue decreased for the third quarter and first three quarters primarily due to higher U.S. federal government sales of Surveying products in the prior year, partially offset by Civil Construction sales growth in the current year. Prior year Civil Construction sales were lower due to dealer inventory destocking. Additionally, the decrease for the first three quarters was due to slower Ag demand in the first quarter.
Previous report
Operating income and operating income as a percentage of revenue decreased for the third quarter due to the impact of the Ag divestiture, partially offset by organic results, which were slightly up due to revenue mix and operating expense control despite revenue declines. In the first three quarters, the decrease was primarily due to the impact of the Ag divestiture.
Previous report
Operating income and operating income as a percentage of revenue increased for the third quarter and first three quarters primarily due to organic revenue growth and gross margin expansion. The increase for the first three quarters was also driven by the impact of the Transporeon acquisition.
Previous report
The increase in cash provided by investing activities was primarily due to the $1.9 billion of proceeds received from the Ag divestiture in the current year, as compared to the $2.0 billion payment in the prior year for the acquisition of Transporeon.
Previous report
Our 2024 senior notes totaling $400.0 million are maturing in December 2024. We anticipate using a combination of cash on hand, borrowing from our existing revolvers, or new debt to repay the 2024 senior notes.
Reworded paragraphs (35)
Previous wording
There have been no material changes to our critical accounting policies and estimates during the first three quarters of 2024. For a complete discussion of our critical accounting policies and estimates, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the 2023 Form 10-K.
Current wording
There have been no material changes to our critical accounting policies and estimates during the first quarter of 2025. For a complete discussion of our critical accounting policies and estimates, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the 2024 Form 10-K.
Previous wording
•Focus on delivering customer outcomes that can enable productivity, quality, safety, transparency, and environmental sustainability;
Current wording
•Deliver customer outcomes that can enable productivity, quality, safety, transparency, and environmental sustainability;
Previous wording
•Increasing focus on software and services;
Current wording
•Focus on software and services;
Previous wording
•Focus on attractive markets with significant growth and profitability potential;
Current wording
•Address attractive markets with significant growth and profitability potential;
Previous wording
•Domain knowledge and technological innovation that benefits a diverse customer base;
Current wording
•Capitalize on domain knowledge and technological innovation that benefit a diverse customer base;
Previous wording
•Geographic expansion with a localization strategy;
Current wording
•Drive geographic expansion with a localization strategy;
Previous wording
•Optimized go-to-market strategies to best access our markets; and
Current wording
•Optimize go-to-market strategies to best access our markets; and
Previous wording
•Strategic and targeted acquisitions, divestitures, joint ventures, and investments.
Current wording
•Pursue strategic and targeted acquisitions, divestitures, joint ventures, and investments.
Previous wording
Our focus on these growth drivers has led over time to growth in revenue and profitability and an increasingly diversified business model. We continue to experience a shift toward a more significant mix of recurring revenue as demonstrated by our success in driving annualized recurring revenue (“ARR”) of $2,186.7 million, which represents growth of 13% year-over-year at the end of the third quarter of 2024. Excluding the impact of foreign currency, acquisitions, and divestitures, ARR organic growth was 14%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profita bility over time and is leading to improved visibility in our businesses. Our software, services, and recurring revenue represented 76% and 67% of total revenue for the third quarter of 2024 and 2023 and 75% and 66% of total revenue for the first three quarters of 2024 and 2023. Additionally, we continue to maintain focus on increasing our mix of recurring revenue, which is accelerated by the Transporeon acquisition that closed in the second quarter of 2023 and the Ag divestiture that closed in the second quarter of 2024.
Current wording
Our focus on these growth drivers has led over time to growth in revenue and profitability and an increasingly diversified business model. We continue to experience a shift toward a more significant mix of recurring revenue as demonstrated by our success in driving annualized recurring revenue (“ARR”) of $2,176.5 million, which represents growth of 7% year-over-year at the end of the first quarter of 2025. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 15%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profita bility over time and is leading to improved visibility in our businesses. Our software, services, and recurring revenue represented 78% and 73% of total revenue for the first quarter of 2025 and 2024. Additionally, we continue to maintain focus on increasing our mix of recurring revenue, which is accelerated by the Ag divestiture that closed in the second quarter of 2024 and the Mobility divestiture that closed in the first quarter of 2025.
Previous wording
Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, we refer to organic revenue growth, which is a non-GAAP measure. For a full definition of ARR, organic ARR, and organic revenue growth as used in this discussion and analysis, refer to the“Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” found later in this Item 2.
Current wording
Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, we refer to organic revenue growth, which is a non-GAAP measure. For a full definition of ARR, organic ARR, and organic revenue growth as used in this discussion and analysis, refer to the“Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” below in this Item 2.
Previous wording
We acquire businesses that align with our long-term growth strategies, including our strategic product roadmap and, conversely, we divest certain businesses that no longer fit those strategies. This is demonstrated by the 12 acquisitions and 22 divestitures that we have completed since 2020, including the Transporeon acquisition and the Ag divestiture.
Current wording
We acquire businesses that align with our long-term growth strategies, including our strategic product roadmap and, conversely, we divest certain businesses that no longer fit those strategies. This is demonstrated by the 12 acquisitions and 23 divestitures that we have completed since 2020, including the Ag divestiture in the second quarter of 2024 and the Mobility divestiture in the first quarter of 2025.
Previous wording
On September 14, 2024, we entered into a definitive agreement with Platform Science to sell our Mobility business, which is part of our T&L segment. The pending transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings. As part of the agreement, we will own, and have rights to acquire,32.5% of Platform Science’s expanded business upon the closing of the pending transaction, for an approximate fair value of $248.7 million. We will receive (i) shares of preferred stock of Platform Science, with certain liquidation preferences, that represent 28.5% of Platform Science’s expanded business and (ii) warrants allowing us the rights to acquire 4% of Platform Science’s expanded business. We expect the pending transaction to close in the first half of 2025, subject to customary closing conditions and regulatory approval.
Current wording
The combined business aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems.
Previous wording
The formation of PTx Trimble is expected to better serve farmers with factory fit and aftermarket applications in the mixed fleet precision agriculture market to help farmers drive productivity, efficiency, and sustainability. Additionally, the transaction is expected to (i) simplify our Connect and Scale strategy, (ii) reduce risk of channel transition in the agriculture market, and (iii) enhance our financial profile and flexibility with a resulting higher mix of software, services, and recurring revenue.
Current wording
The formation of the JV is expected to better serve farmers with factory fit and aftermarket applications in the mixed fleet precision agriculture market to help farmers drive productivity, efficiency, and sustainability.
Previous wording
Third Quarter and First Three Quarters of 2024 as Compared to 2023
Current wording
First Quarter of 2025 as Compared to 2024
Previous wording
Gross margin decreased for the third quarter and first three quarters primarily due to the Ag divestiture partially offset by organic growth.
Current wording
Gross margin decreased for the first quarter primarily due to the margin associated with the divestitures and prior year software renewals, partially offset by the growth of higher margin subscription sales.
Previous wording
Gross margin as a percentage of revenue increased for the third quarter due to the organic growth of higher margin software and subscription sales, and from the Ag divestiture’s lower margin hardware sales. Additionally, the increase for the first three quarters was due to the impact of the Transporeon acquisition, which was not applicable in the first quarter of the prior year.
Current wording
Gross margin as a percentage of revenue increased for the first quarter due to growth of higher margin subscription sales and the divestiture of lower margin businesses, partially offset by the impact of prior year software renewals.
Previous wording
R&D expense decreased for the third quarter primarily due to the impact of the Ag divestiture, and for the first three quarters, the divestiture impact was partially offset by expense related to Transporeon. We believe that the development and introduction of new solutions are critical to our future success, and we expect to continue the active development of new products.
Current wording
R&D expense decreased for the first quarter primarily due to the impact of the divestitures, partially offset by higher compensation expense. We believe that the development and introduction of new solutions are critical to our future success, and we expect to continue the active development of new products.
Previous wording
S&M expense increased for the third quarter primarily due to higher compensation expense, including commissions, offset by the impact of the Ag divestiture. S&M expense was flat for the first three quarters, as the divestiture impact was offset by expense related to Transporeon and higher compensation expense, including commissions.
Current wording
S&M expense increased for the first quarter primarily due to higher compensation expense, including commissions, as well as higher marketing and consulting costs related to AECO revenue growth, partially offset by the impact of the divestitures.
Previous wording
Total amortization expense of purchased intangibles decreased for the third quarter and first three quarters primarily due to the expiration of prior years’ acquisition amortization, and to a lesser extent, the impact of divestitures. Additionally, the decrease for the first three quarters was offset by the amortization of intangibles acquired from Transporeon.
Current wording
Total amortization expense of purchased intangibles decreased for the first quarter primarily due to the expiration of prior years’ acquisition amortization.
Previous wording
Our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), views and evaluates operations based on the results of our reportable operating segments under our management reporting system. For additional discussion of our segments, refer to Note 7 “Segment Information” of this report.
Current wording
Our CODM views and evaluates operations based on the results of our reportable operating segments under our management reporting system. For additional discussion of our segments, refer to Note 7 “Reporting Segment and Geographic Information” of this report.
Previous wording
Operating income and operating income as a percentage of revenue increased for the third quarter and first three quarters primarily due to strong organic revenue growth and gross margin expansion, partially offset by increased operating expense associated with revenue growth.
Current wording
Operating income and operating income as a percentage of revenue increased for the first quarter due to organic revenue growth and gross margin expansion, including a higher mix of software and subscription revenue, partially offset by the loss of lower margin divestiture income.
Previous wording
Organic revenue increased for the third quarter and first three quarters primarily driven by Transporeon, MAPS, and Enterprise subscription revenue growth, partially offset by lower Mobility sales.
Current wording
Organic revenue increased for the first quarter primarily driven by Transporeon and MAPS subscription revenue growth.
Previous wording
(1) Includes $17.1 million and $9.1 million of cash and cash equivalents classified as held for sale as of September 27, 2024 and December 29, 2023.
Current wording
(1) Includes $9.0 million of cash and cash equivalents classified as held for sale as of year end 2024.
Previous wording
The decrease in cash provided by operating activities was primarily driven by lower operating income resulting from the Ag divestiture and higher tax payments. The decrease was partially offset by reductions in net working capital requirements associated with a greater mix of subscription and services revenue.
Current wording
The decrease in cash provided by operating activities was primarily driven by higher tax and incentive bonus payments, partially offset by reductions in net working capital requirements associated with a greater mix of software and subscription revenue.
Previous wording
The increase in cash used in financing activities was primarily driven by the $1.3 billion repayment of debt and $175.0 million repurchases of common stock in the current year, as compared to the prior year’s $2.0 billion of proceeds from the issuance of debt for the acquisition of Transporeon, partially offset by the $500.0 million repayment of debt.
Current wording
The increase in cash used in financing activities was primarily driven by $627.4 million in repurchases of common stock in the current year, as compared to $175.0 million of repurchases in the prior year.
Previous wording
We believe that our cash and cash equivalents and available borrowing capacity under our existing lines of credit, along with cash provided by operations, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, including expenditures related to our Connect and Scale strategy, debt service, acquisitions, and any stock repurchases under the stock repurchase program.
Current wording
We believe that our cash and cash equivalents and available borrowing capacity under our existing lines of credit, along with cash provided by operations, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, including expenditures related to our Connect & Scale strategy, debt service, acquisitions, and any stock repurchases under the stock repurchase program.
Previous wording
Our 2022 credit facility allows us to borrow up to $1.25 billion, with an option to increase the borrowings up to $1.75 billion with lender approval. As of September 27, 2024, there was no outstanding debt under the 2022 credit facility.
Current wording
Our 2022 credit facility allows us to borrow up to $1.25 billion, with an option to increase the borrowings for up to $1.75 billion with lender approval. As of April 4, 2025, there was no outstanding debt under the 2022 credit facility.
Previous wording
In the second quarter of 2024, we completed the Ag divestiture and received $1.9 billion of cash proceeds, subject to working capital adjustments. The total tax payment for the transaction is $379.8 million, of which $87.1 million was paid in the second and third quarters of 2024, with the remaining amount to be paid over the next three quarters. We used a portion of the proceeds to repay $1.0 billion of term loans and expect to use the majority of the remaining proceeds after tax to repurchase stock.
Current wording
In the second quarter of 2024, we completed the Ag divestiture and received $1.9 billion of cash proceeds, subject to working capital adjustments. Approximately half of the proceeds were used in 2024 to pay down debt and make a tax payment of $122.0 million related to the transaction. In the first quarter of 2025, we used $627.4 million of proceeds to repurchase stock. We expect to use the remaining proceeds to pay for $253.0 million of taxes becoming due in the second quarter of 2025.
Previous wording
In addition to providing non-GAAP financial measures, we disclose Annualized Recurring Revenue (“ARR”) to give the investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue. ARR is calculated by taking our subscription and maintenance and support for the current quarter and adding the portion of the contract value of all our term licenses attributable to the current quarter, then dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. Organic ARR refers to annualized recurring revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. ARR and organic ARR should be viewed independently of revenue and deferred revenue as they are performance measures and are not intended to be combined with or to replace either of those items.
Current wording
In addition to providing non-GAAP financial measures, we disclose ARR to give the investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue. ARR is calculated by taking our subscription and maintenance and support for the current quarter and adding the portion of the contract value of all our term licenses attributable to the current quarter, then dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. Organic ARR refers to annualized recurring revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. ARR and organic ARR should be viewed independently of revenue and deferred revenue as they are performance measures and are not intended to be combined with or to replace either of those items.
Previous wording
We define Non-GAAP gross margin as GAAP gross margin, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs. We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business.
Current wording
We define Non-GAAP gross margin as GAAP gross margin, excluding the effects of amortization of purchased intangible assets, stock-based compensation, deferred compensation, and restructuring and other costs. We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business.
Previous wording
We define Non-GAAP income tax provision as GAAP income tax provision, excluding charges and benefits such as net deferred tax impacts resulting from the non-U.S. intercompany transfer of intellectual property, tax law changes, and significant one-time reserve releases upon the statute of limitations expirations. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation and a difference in the GAAP and non-GAAP tax rates.
Current wording
We define Non-GAAP income tax provision as GAAP income tax provision, excluding charges and benefits such as net deferred tax impacts resulting from the non-U.S. intercompany transfer of intellectual property, deferred tax impacts from global intangible low-taxed income, and significant reserve releases upon the statute of limitations expirations. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation and a difference in the GAAP and non-GAAP tax rates.
Previous wording
We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net, excluding our proportionate share of items such as amortization of purchased intangibles, stock-based compensation, and restructuring costs. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business because it facilitates operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense), income taxes, depreciation, and amortization of purchased intangibles and cloud computing costs.
Current wording
We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net, excluding our proportionate share of items such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business because it facilitates operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense), income taxes, depreciation, amortization of purchased intangibles and cloud computing costs, and income from equity method investments, net.
Previous wording
(D). Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring and other costs comprised of termination benefits related to reductions in employee headcount and closure or exit of facilities, executive severance agreements, business exit costs, as well as a $20 million commitment to donate to the Trimble Foundation that was paid over four quarters ending in the first quarter of 2023. Non-GAAP non-operating expense, net, excludes our proportionate share of items recorded in income from equity method investment items, such as amortization of purchased intangibles, stock-based compensation, and restructuring costs.
Current wording
(D). Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring and other costs comprised of termination benefits related to reductions in employee headcount and closure or exit of facilities and incremental expenses resulting from the 2023 re-audit. Non-GAAP non-operating expense net, excludes our proportionate share of items recorded in income from equity method investment items, such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs.
Previous wording
(F). Difference in GAAP and non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP tax rates applied to the non-GAAP operating income plus the non-GAAP non-operating expense, net. The non-GAAP tax rate excludes charges and benefits such as (i) deferred tax impacts from tax amortization relating to a non-U.S. intercompany transfer of intellectual property and R&D cost capitalization impact to global intangible low-taxed income, and (ii) significant one-time reserve releases upon statute of limitations expirations.
Current wording
(F). Difference in GAAP and non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP tax rates applied to the non-GAAP operating income plus the non-GAAP non-operating expense, net. The non-GAAP tax rate excludes charges and benefits such as (i) deferred tax impacts from tax amortization relating to a non-U.S. intercompany transfer of intellectual property, (ii) deferred tax impacts from global intangible low-taxed income, and (iii) significant reserve releases upon statute of limitations expirations.
Previous wording
(G). GAAP and non-GAAP tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes.
Current wording
(G). Tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes.