TRIMBLE INC.

Previous wording

There have been no material changes to our critical accounting policies and estimates during the first three 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.

Current wording

There have been no material changes to our critical accounting policies and estimates during the first quarter of 2026. 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 2025 Form 10-K.

Previous wording

•Execute on our Connect & Scale strategy;

Current wording

•Continue to execute on our Connect & Scale strategy, incorporating AI capabilities;

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 $2,310.3 million, which represents growth of 6% year-over-year at the end of the third quarter of 2025. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 14%. 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 78% and 76% of total revenue for the third quarter of 2025 and 2024, and 78% and 75% of total revenue for the first three 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.

Current wording

Our focus on these growth drivers has led tosustained growth in revenue and profitability, evolving into a more streamlined and resilient 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 $2.4 billion, which represents growth of 12% year-over-year at the end of the first quarter of 2026. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 12%. 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 78% of total revenue for the first quarter of both 2026 and 2025. Additionally, we continue to maintain focus on increasing our mix of higher margin recurring revenue, which was accelerated by recent divestitures.

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” below 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“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 13 acquisitions and 23 divestitures that we have completed since 2020.

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 25 divestitures that we have completed since 2020.

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 and export control restrictions 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. We are also monitoring the impact of the U.S. federal government shutdown, which has not had a material impact on our business to date.

Current wording

Macroeconomic conditions continue to present significant challenges globally, driven by geopolitical tensions, such as the conflict in the Middle East, tariff and trade policies, exchange rate and interest rate volatility, and persistent inflationary pressures.

Previous wording

Third Quarter and First Three Quarters of 2025 as Compared to 2024

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First Quarter of 2026 as Compared to 2025

Previous wording

Organic product revenue increased for the third quarter primarily due to strong end-user demand for Civil Construction solutions. Organic product revenue was flat for the first three quarters due to strong end-user demand for Civil Construction solutions, mostly offset by lower demand in surveying.

Current wording

Organic product revenue increased for the first quarter primarily due to strong end-user demand for civil construction solutions and revenue growth in surveying products.

Previous wording

Organic subscription and services revenue increased for the third quarter and the first three quarters primarily due to strong subscription growth across all segments, with particular strength in both AECO and Field Systems and, to a lesser extent, software term license growth. The increase for the first three quarters was partially offset by the impact of prior year AECO software renewals.

Current wording

Organic subscription and services revenue increased for the first quarter due to subscription growth across all segments, most notably, in AECO.

Previous wording

Gross margin and gross margin as a percentage of revenue increased for the third quarter and first three 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.

Current wording

Gross margin and gross margin as a percentage of revenue increased for the first quarter due to the improved mix of higher margin subscription and software term license sales, as well as the divestiture of lower margin businesses.

Previous wording

Operating income increased for the third quarter and first three quarters primarily due to organic revenue and gross margin expansion, partially offset by the loss of divestiture income and higher operating expenses related to higher compensation costs. 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.

Current wording

Operating income and operating income as a percentage of revenue increased for the first quarter primarily due to organic revenue and gross margin expansion, and to a lesser extent, lower acquisition and divestiture transaction expenses. 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 slightly decreased for the third quarter and first three 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.

Current wording

R&D expense increased for the first quarter primarily due to foreign exchange rate fluctuation, increased compensation expenses, software costs, and professional service costs, partially offset by the impact of divestitures. We believe that developing and introducing new solutions, including AI, 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 and first three 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.

Current wording

S&M expense increased for the first quarter primarily due to marketing and consulting expenses related to revenue growth, as well as higher compensation expenses including commissions, 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.

Current wording

Total amortization expense of purchased intangibles slightly increased for the first quarter primarily due to foreign currency exchange impacts, partially offset by the expiration of prior years’ acquisition amortization.

Previous 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 “Segment and Geographic 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. These results are not necessarily in conformance with U.S. GAAP. For additional discussion of our segments, refer to Note 7, Segment and Geographic Information of this report.

Previous wording

Organic revenue increased for the third quarter and the first three 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 three quarters was partially offset by the impact of prior year software renewals for Structures products.

Current wording

Organic revenue increased for the first quarter due to strong demand for subscription offerings 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, Structures, and Architecture & Design.

Previous wording

Organic revenue increased for the third quarter and first three quarters primarily due to strong end-user demand and competitive wins for Civil Construction solutions. The increase for the first three quarters was partially offset by lower demand in surveying.

Current wording

Organic revenue increased for the first quarter primarily due to strong end-user demand for Civil Construction and Surveying solutions.

Previous wording

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 wording

The increase in cash provided by operating activities was primarily driven by higher operating income, lower cash taxes paid, and lower incentive bonus payments.

Previous 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.

Current wording

The decrease in cash used in investing activities was primarily due to higher cash divested in the prior year as part of the Mobility divestiture.

Previous 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 $727.4 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 $304.6 million in lower cash paid for repurchases of common stock compared to 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 & 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 additional software and technology 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 for up to $1.75 billion with lender approval. As of October 3, 2025, there was no outstanding debt under the 2022 credit facility.

Current wording

In December 2025, we entered into the 2025 Credit Facility, which replaced the 2022 Credit Facility. The 2025 Credit Facility contains an option to increase the borrowing from $1.25 billion up to $1.75 billion with lender approval. As of April 3, 2026, $10.0 million was outstanding under the 2025 Credit Facility.

Previous wording

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.

Current wording

The enacted OBBBA permanently repealed the domestic R&D capitalization requirement. As a result, we expect cash tax reductions of approximately $53 million in 2026.

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 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.

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 certain 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

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.

Current wording

We define non-GAAP income tax provision as the GAAP income tax provision adjusted for the tax effects of the non-GAAP pre-tax adjustments (A) through (D), excluding certain tax charges and benefits such as net deferred tax impacts resulting from tax amortization related to a non-U.S. intercompany transfer of intellectual property and certain acquisitions, deferred tax impacts from net CFC tested income, significant reserve releases upon the expiration of statute of limitations and audit closures, and tax law changes. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation.

Previous wording

(B). Acquisition / divestiture items. Non-GAAP gross margin and operating expenses exclude costs consisting of external and incremental costs resulting directly from acquisitions, divestitures, and strategic investment activities such as legal, due diligence, integration, and other closing costs, including the acceleration of acquisition stock awards and adjustments to the fair value of earn-out liabilities. Non-GAAP non-operating expense, net, excludes one-time acquisition/divestiture charges, including foreign currency exchange rate gains/losses related to an acquisition, divestiture gains/losses, and strategic investment gains/losses. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

Current wording

(B). Acquisition / divestiture items. Non-GAAP gross margin and operating expenses exclude costs consisting of external and incremental costs resulting directly from acquisitions, divestitures, and strategic investment activities such as legal, due diligence, integration, and other costs, including the acceleration of acquisition stock awards and adjustments to the fair value of earn-out liabilities. Non-GAAP non-operating expense, net, excludes one-time acquisition/divestiture charges, including foreign currency exchange rate gains/losses related to an acquisition, divestiture gains/losses, and strategic investment gains/losses. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

Previous wording

(D). Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring costs composed of termination benefits related to reductions in employee headcount and closure or exit of facilities; and other costs composed of one-time incremental expenses resulting from the re-audit and related remediation of control deficiencies.

Current wording

(D). Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring costs composed of termination benefits related to reductions in employee headcount, closure or exit of facilities, and cancellation of certain contracts, and other costs composed of one-time incremental expenses resulting from the re-audit and related remediation of control deficiencies. 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

(E). Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) through (D) on non-GAAP net income.

Current wording

(E). Non-GAAP items tax effected. This amount represents the income tax effect of non-GAAP pre-tax adjustments, excluding certain tax charges and benefits, which reconcile the GAAP income tax provision to the non-GAAP income tax provision.

Previous 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.

Current wording

(F). 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.