TRIMBLE INC.

Previous 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.

Current wording

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

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.

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 $2.5 billion, which represents growth of 14% year-over-year at the end of the second 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 77% of total revenue for both the second quarter and the first two quarters of 2026. Additionally, we continue to maintain focus on increasing our mix of higher margin recurring revenue, which was accelerated by recent acquisitions and divestitures.

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 25 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 14 acquisitions and 25 divestitures that we have completed since 2020.

Previous wording

The recent conflict in the Middle East may result in increased inflationary pressure and economic uncertainty. Additionally, the heightened trade tensions and related uncertainty of tariffs, potential refunds of certain tariffs, and imposed export control restrictions between the United States and its trading partners create additional volatility. The extent and duration of the Middle East conflict and 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.

Current wording

The recent conflict in the Middle East may result in increased inflationary pressure and economic uncertainty. Additionally, the heightened trade tensions and related uncertainty of tariffs and imposed export control restrictions between the United States and its trading partners create additional volatility. The extent and duration of the Middle East conflict and 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.

Previous wording

If there was 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 developments.

Current wording

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 developments.

Previous wording

First Quarter of 2026 as Compared to 2025

Current wording

Second Quarter and First Two Quarters of 2026 as Compared to 2025

Previous wording

Total organic revenue increased for the first quarter from both strong product demand and subscription and services growth.

Current wording

Total organic revenue increased for the second quarter and first two quarters from both strong product demand and subscription and services growth.

Previous 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.

Current wording

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

Current wording

Organic subscription and services revenue increased for the second quarter and first two quarters 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 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.

Current wording

Gross margin and gross margin as a percentage of revenue increased for the second quarter and first two quarters primarily due to revenue growth and the improved mix of higher margin subscription and software term license sales.

Previous wording

Operating income increased for the first quarter primarily due to organic revenue growth. Operating income as a percentage of revenue slightly decreased primarily due to higher operating expenses in marketing and compensation to support long-term growth initiatives.

Current wording

Operating income as a percentage of revenue decreased for the second quarter due to higher operating expenses. Operating income as a percentage of revenue increased for the first two quarters primarily due to organic revenue growth and gross margin expansion.

Previous 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.

Current wording

R&D expense increased for the second quarter and first two quarters primarily due to increased software and cloud usage, compensation expenses, professional service costs, and foreign exchange rate fluctuation. The R&D expense increase for the first two quarters was partially offset by previous 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 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.

Current wording

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

Previous wording

G&A expense increased for the first quarter primarily due to higher compensation expenses including incentives, partially offset by lower professional services and transaction expenses.

Current wording

G&A expense increased for the second quarter and first two quarters primarily due to increased transaction costs, higher compensation expenses, and software expenditures.

Previous 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.

Current wording

Total amortization expense of purchased intangibles slightly increased for the second quarter and first two quarters primarily due to the addition of intangible assets from acquisitions.

Previous 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.

Current wording

Organic revenue increased for the second quarter and first two quarters due to strong demand for subscription offerings. Revenue growth benefited from cumulative growth along with an expansion of customers across many products, with the largest impacts resulting from Construction Management Systems, Architecture & Design, and Mechanical, Electrical, and Plumbing Solutions (“MEP”).

Previous wording

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

Current wording

Organic revenue increased for the second quarter and first two quarters primarily driven by hardware sales growth in Civil Construction and Surveying solutions due to strong end-user demand and competitive wins, and to a lesser extent, term license growth.

Previous wording

Organic revenue increased for the first quarter primarily driven by subscription revenue growth from Transporeon and MAPS.

Current wording

Organic revenue increased for the second quarter and first two quarters primarily driven by subscription revenue growth from Transporeon.

Previous 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.

Current wording

Operating income and operating income as a percentage of revenue increased for the second quarter and first two quarters primarily due to organic revenue growth and gross margin expansion. Operating income as a percentage of revenue for the first two quarters was favorably impacted by the divestiture of lower operating income margin business.

Previous 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.

Current wording

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

Previous 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.

Current wording

The decrease in cash used in financing activities was primarily driven by lower cash paid for repurchases of common stock compared to the prior year.

Previous 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.

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. In April 2026, we borrowed $250.0 million from our credit facilities to finance the acquisition of Document Crunch (see Note 9, Debt). As of July 3, 2026, $66.4 million was outstanding under our credit facilities.

Previous 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.

Current wording

The enacted OBBBA permanently repealed the domestic R&D capitalization requirement. As a result, we expect cash tax reductions of approximately $53.0 million in 2026.

Previous 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.

Current wording

We define Non-GAAP non-operating expense, net as GAAP non-operating expense, net, excluding goodwill impairment, acquisition/divestiture items, deferred compensation, and restructuring and other costs. We believe this measure helps investors evaluate our non-operating expense trends.

Previous 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.

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 (E), 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

We define Non-GAAP net income as GAAP net income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. This measure provides a supplemental view of net income trends, which are driven by non-GAAP income before taxes and our non-GAAP tax rate.

Current wording

We define Non-GAAP net income as GAAP net (loss) income, excluding the effects of goodwill impairment, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. This measure provides a supplemental view of net income trends, which are driven by non-GAAP income before taxes and our non-GAAP tax rate.

Previous wording

We define Non-GAAP diluted net income per share as GAAP diluted net income per share, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the Company.

Current wording

We define Non-GAAP diluted net income per share as GAAP diluted net (loss) income per share, excluding the effects of goodwill impairment, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the Company.

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 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.

Current wording

We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net, which excludes 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, 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 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.

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 and other cost-saving initiatives, 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 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.

Current wording

(F). 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

(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.

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.