TRIMBLE INC.
For the period ended Jul 4, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
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.
Jul 4, 2025 · Filed Aug 6, 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 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”Current report: 10-Q
Period ended 2025-07-04; filed 2025-08-06.
0000864749-25-000245
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.
83 unchanged; 24 reworded; 10 added; 10 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 (10)
Current report
Total organic revenue increased for the second quarter and the first two quarters primarily due to subscription and services growth, partially offset by decreased product revenue, mostly in hardware sales. In addition, the revenue increase for the first two quarters was partially offset by the impact of prior year AECO software renewals.
Current report
Organic product revenue decreased for the second quarter and the first two quarters primarily due to Surveying, which had an unusually large order in the prior year, partially offset by relatively strong end-user demand for Civil Construction solutions. Product revenue was also negatively impacted by the conversion of software perpetual licenses to term licenses for Civil Construction and Surveying products.
Current report
Non-operating expense, net increased for the second quarter and first two quarters primarily due to the Ag divestiture gain in the prior year.
Current report
For the second quarter of 2025, our effective income tax rate was 21.3%, as compared to 25.3% in the corresponding period in 2024. For the first two quarters, our effective income tax rate was 21.9%, as compared to 25.1% in the prior year. The decrease was primarily due to gains from the Ag divestiture in 2024.
Current report
The OBBBA, signed into law on July 4, 2025, includes changes to U.S. federal tax regulations. We have accounted for its tax implications based on our current interpretation of the legislation in the second quarter of 2025, and the impact to our tax rate for this period is immaterial. The Company continues to evaluate the OBBBA and does not currently believe it will have a material impact on our effective income tax rate.
Current report
Operating income and operating income as a percentage of revenue increased for the second quarter due to organic revenue and gross margin expansion. Operating income and operating income as a percentage of revenue increased for the first two quarters due to organic revenue and gross margin expansion, partially offset by the loss of Ag divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin Ag divestiture income.
Current report
Organic revenue increased for the second quarter and first two quarters primarily driven by MAPS and Transporeon subscription revenue growth.
Current report
Operating income decreased for the second quarter and first two quarters primarily due to the loss of the Mobility divestiture income. Operating income as a percentage of revenue increased for the second quarter and first two quarters primarily due to the loss of lower margin Mobility divestiture income.
Current report
The decrease in cash provided by operating activities was primarily driven by higher tax payments related to the Ag divestiture, and to a lesser extent, higher incentive bonus payments. The decrease was partially offset by lower interest payments.
Current report
The recently enacted OBBBA permanently repeals the domestic R&D capitalization requirement. As a result, we expect cash tax reductions of approximately $32 million in 2025 and approximately $80 million in subsequent years.
Removed paragraphs (10)
Previous report
Organic total revenue increased for the first quarter due to strong subscription growth across all segments, partially offset by prior year software renewals.
Previous report
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 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.
Previous report
Operating income as a percentage of revenue was relatively flat.
Previous report
Non-operating expense, net decreased for the first quarter primarily due to lower interest expense after the debt repayment made in 2024.
Previous 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.
Previous 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.
Previous report
Organic revenue increased for the first quarter primarily driven by Transporeon and MAPS subscription revenue growth.
Previous report
Operating income and operating income as a percentage of revenue decreased for the first quarter primarily due to the loss of divestiture income.
Previous report
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.
Reworded paragraphs (24)
Previous 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.
Current wording
There have been no material changes to our critical accounting policies and estimates during the first two quarters 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
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.
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 $2,210.4 million, which represents growth of 5% year-over-year at the end of the second quarter of 2025. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 13%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profitability over time and is leading to improved visibility in our businesses. Our software, services, and recurring revenue represented 79% and 75% of total revenue for the second quarter of 2025 and 2024 and 78% and 74% of total revenue for the first two quarters of 2025 and 2024. Additionally, we continue to maintain focus on increasing our mix of higher margin recurring revenue, which was 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
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.
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 13 acquisitions and 23 divestitures that we have completed since 2020.
Previous wording
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 wording
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 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.
Previous wording
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 wording
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. If there were to be a deterioration in the global economy, the economies of the countries or regions where our customers are located or do business, or the industries that we or our customers serve, the demand for our products and services may decrease. We are closely monitoring global trade developments and have contingency plans in place to respond to a variety of potential market scenarios.
Previous wording
First Quarter of 2025 as Compared to 2024
Current wording
Second Quarter and First Two Quarters of 2025 as Compared to 2024
Previous wording
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 wording
Note that the fiscal year of 2025 began on January 4, 2025 compared to the fiscal year of 2024, which began on December 30, 2023. This significantly impacted overall Company and AECO year-over-year comparisons in the first quarter and first two quarters 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 3% negative impact on revenue growth for the first two quarters. For AECO, the estimated impact was $49.0 million or an 8% negative impact on AECO segment revenue growth for the first two quarters.
Previous wording
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 wording
Organic subscription and services revenue increased for the second quarter and the first two quarters primarily due to strong subscription growth, and to a lesser extent, software term license growth with the largest impact in AECO. The increase for the first two quarters was partially offset by the impact of prior year AECO software renewals.
Previous 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.
Current wording
Gross margin and gross margin as a percentage of revenue increased for the second quarter and first two quarters primarily due to the improved mix of higher margin subscription and software term license sales, lower intangible amortization cost due to fully amortized intangibles, as well as the divestiture of lower margin businesses.
Previous 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.
Current wording
Operating income increased for the second quarter and first two quarters primarily due to organic revenue and gross margin expansion, partially offset by the loss of divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin divestiture income.
Previous 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.
Current wording
R&D expense slightly increased for the second quarter primarily due to higher compensation expense, partially offset by the impact of the divestitures. R&D expense decreased for the first two quarters primarily due to the impact of the divestitures, partially offset by increased compensation expenses. 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 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.
Current wording
S&M expense increased for the second quarter and first two quarters primarily due to higher compensation expense, including commissions, as well as higher marketing and consulting costs related to revenue growth, partially offset by the impact of the divestitures.
Previous wording
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 wording
G&A expense decreased for the second quarter and first two quarters primarily due to higher consulting and transaction costs in the prior year and the impact of the divestitures, partially offset by higher investment costs associated with our Connect & Scale strategy and higher incentive compensation.
Previous wording
Total amortization expense of purchased intangibles decreased for the first quarter primarily due to the expiration of prior years’ acquisition amortization.
Current wording
Total amortization expense of purchased intangibles decreased for the second quarter and first two quarters primarily due to the expiration of prior years’ acquisition amortization.
Previous wording
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 wording
Organic subscription and services revenue increased for the second quarter and the first two quarters primarily due to strong subscription revenue, and to a lesser extent, software term licenses. Revenue benefited from cumulative growth along with an expansion of customers across many products, with the largest impacts resulting from Construction Management Systems, Architecture & Design, MEP, and Structures solutions. The increase for the first two quarters was partially offset by the impact of prior year software renewals for Structures products.
Previous wording
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 wording
Operating income and operating income as a percentage of revenue increased for the second quarter primarily due to increased revenue and gross margin expansion. Operating income and operating income as a percentage of revenue decreased for the first two quarters primarily due to the impact of prior year software renewals, partially offset by increased subscription revenue.
Previous wording
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 wording
Organic revenue increased for the second quarter and first two quarters primarily due to relatively strong end-user demand and competitive wins for Civil Construction solutions, offset by a decline in Surveying due to unusually large orders in the prior year. Revenue was also negatively impacted by the conversion of software perpetual licenses to term licenses for Civil Construction and Surveying products.
Previous wording
The increase in cash used in investing activities was primarily related to the Mobility divestiture that closed in the current year.
Current wording
The increase in cash used in investing activities was primarily related to the $1.9 billion of proceeds received from the Ag divestiture in the prior year.
Previous 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.
Current wording
The decrease in cash used in financing activities was primarily driven by the $1.3 billion repayment of debt in the prior year, offset by $677.4 million in repurchases of common stock in the current year, as compared to $175.0 million of repurchases in the prior year.
Previous wording
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.
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 July 4, 2025, $50.0 million was outstanding under the 2022 credit facility, and $71.0 million was outstanding under our uncommitted credit facilities.
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. 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.
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 divestiture transaction. The remaining proceeds were used in 2025 to repurchase stock and to pay the remaining $277.4 million final tax payment for the Ag divestiture, which was made during the second quarter of 2025.
Previous wording
To supplement our consolidated financial information, we included non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP. We believe non-GAAP financial measures provide useful information to investors and others in understanding our “core operating performance”, which excludes (i) the effect of non-cash items and certain variable charges not expected to recur; and (ii) transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. Lastly, we believe that our core operating performance offers a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors.
Current wording
To supplement our consolidated financial information, we included non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP measures. We believe non-GAAP financial measures provide useful information to investors and others in understanding our “core operating performance”, which excludes (i) the effect of non-cash items and certain variable charges not expected to recur; and (ii) transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. Lastly, we believe that our core operating performance offers a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors.
Previous 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.
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 revenue 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 non-operating expense, net as GAAP non-operating income (expense), net, excluding acquisition/divestiture items, deferred compensation, and restructuring and other costs. We believe this measure helps investors evaluate our non-operating expense trends.
Current wording
We define Non-GAAP non-operating expense, net as GAAP non-operating (expense) income, net, excluding acquisition/divestiture items, deferred compensation, and restructuring and other costs. We believe this measure helps investors evaluate our non-operating expense trends.