Trimble (NASDAQ:TRMB) closed fiscal 2025 with what management described as a “top-and-bottom-line beat” in the fourth quarter, driven by continued strength in its AECO segment and improving recurring revenue trends across the portfolio. President and CEO Rob Painter said the quarter “punctuat[ed] a strong close to a strong year” and positioned the company to execute against the 2027 targets outlined at its investor day.
Painter noted the company’s financial discussion emphasized year-over-year non-GAAP performance on an organic basis, excluding the divested agriculture and mobility businesses, the 53rd week of fiscal 2024, and (for the fourth quarter) the timing impact of Jan. 1 term license renewals.
Fourth-quarter results and portfolio shift toward recurring revenue
Painter highlighted the longer-term impact of the company’s “connect and scale” strategy, including an increase in recurring revenue as a percentage of total revenue from 40% to 65% since 2020. Software and services now represent 79% of total revenue, while gross margins expanded by 1,300 basis points over the period, which the company said has supported both investment capacity and margin expansion.
CFO Phil Sawarynski said fourth-quarter organic revenue growth of 9% exceeded the company’s outlook, while ARR growth of 14% was near the top end of guidance. He reported gross margin of 74.6% and EBITDA margin of 33.5%, both aided by Jan. 1 term license renewals. Reported EPS of $1.00 was $0.05 above the midpoint and above the high end of the company’s guidance range.
Segment performance: AECO strength, Field Systems conversions, and transportation resilience
AECO posted ARR of approximately $1.48 billion (up 16%) and quarterly revenue of $454 million (up 15%). Sawarynski said operating margin in the segment was 44%, aided by the Jan. 1 renewal timing. Painter also cited approximately 110% net retention in the core commercial base and said the quarter included a record ACV bookings performance, supported by cross-sell and upsell momentum.
Painter pointed to several product areas underpinning AECO progress:
- Project management: management said it delivered more than 40% growth in bookings and more than 50% growth in ARR, adding “hundreds of new customers” and beginning international expansion.
- Trimble Connect: described as the “unifying pillar” of its construction platform strategy, linking field reality capture data with office design models to create a digital record of job sites.
- AI features: Painter cited customer examples and product metrics, including a Submittals AI agent that Hensel Phelps estimated is saving “millions of dollars in labor hours,” and an AI-enabled MEP estimating feature with “thousands of monthly active users,” more than a 50% productivity gain, and “millions of dollars of incremental ARR.”
Field Systems reported quarterly revenue of $379 million (up 4%) and ARR of $409 million (up 20%). Operating margin was 30% in the quarter, and for the full year revenue was up 5% while ARR grew 20%, with operating margin expanding 100 basis points to 31.1%. Management emphasized that the segment crossed a milestone in 2025, becoming over 50% software and services, with 26% of revenue recurring.
On the Q&A, Painter attributed Field Systems ARR strength to continued performance in machine control guidance as a service, growth in providing corrections into automotive and geospatial markets, expansion of the Trimble Catalyst positioning subscription, and ongoing software conversions. He said 2026 ARR guidance implies deceleration largely due to a “lapping effect” from early conversion activity, rather than a change in underlying demand.
Transportation and logistics posted ARR of $508 million (up 7%) and revenue of $136 million (up 4%), with Sawarynski noting operating margin of 22.9%. Management said the segment continued to grow despite a “muted” freight environment, and Painter emphasized cross-selling across carrier and shipper offerings and continued native integration of data flows. He also highlighted progress in the company’s freight marketplace, including Procter & Gamble as an anchor tenant announced in the third quarter and a win in December with “one of the world’s leading beverage companies” for U.S. spot, minibid, and strategic procurement.
Capital allocation, cash flow, and balance sheet
Sawarynski said Trimble repurchased about $148 million of shares in the fourth quarter and had $925 million remaining under its authorization. Over the long term, he said the company continues to expect to allocate “at least a third” of free cash flow to share repurchases. He also said the company’s M&A focus remains on strengthening core market positions, primarily through tuck-in acquisitions in construction software.
For the year, the company reported free cash flow of $361 million, which included $307 million of tax payments and other costs primarily related to divestitures. Trimble ended the year with $253 million of cash and a leverage ratio of 1.1x, which management said was below its long-term target of 2.5x.
In a later Q&A, Sawarynski added that 2026 free cash flow growth expectations reflect profit growth, the absence of certain prior-year cash tax headwinds, and additional benefit from what he called the “repeal of the 174,” which he said reduces cash taxes in 2026. He said uses of cash going forward would largely be repurchases or M&A after reinvestment in the business.
2026 outlook and AI monetization approach
Looking ahead, Sawarynski guided to 2026 revenue midpoint of $3.86 billion (about 7.5% growth) and EPS midpoint of $3.52. The company expects 13% ARR growth and EBITDA margins of about 29.8%, roughly 50 basis points higher year over year, while continuing to reinvest for growth. For the first quarter of 2026, the company forecast revenue midpoint of $905 million (about 8% growth), EPS midpoint of $0.71, ARR growth of 13%, and EBITDA margin of 26.6% (a 70 basis point expansion).
Painter said the company’s macro assumptions for 2026 are generally consistent with recent trends, including “a more challenged freight market” and “pockets of strength” in construction such as data centers, infrastructure build, chip building, and onshoring/reshoring of manufacturing. He also described U.S. federal government business levels as “very muted.”
On AI, management said it plans to accelerate “agentic AI” releases in 2026 across AECO and transportation and logistics, and discussed a mix of monetization models. In response to an analyst question, Sawarynski said Trimble has started including usage credits for certain SketchUp AI agents and is considering more consumption-based monetization over time. Painter added the company also expects to monetize via tiered packaging, placing AI capabilities in higher tiers, while noting that agentic AI carries variable costs that change unit economics compared to traditional SaaS.
Painter also said Trimble continues to invest in AI infrastructure and platform readiness, characterizing recent work as “building the infrastructure, the wiring, the plumbing” for scalable agentic workflows. He described both customer-facing and internal uses, citing examples such as customer support case deflection rates “up to 20%,” and said some engineers are already using AI tools with “double-digit increases in productivity.”
About Trimble (NASDAQ:TRMB)
Trimble Inc (NASDAQ: TRMB) is a technology company that develops hardware, software and services to improve the productivity and connectivity of customers across the construction, agriculture, geospatial, transportation and logistics, and natural resources sectors. The company’s offerings center on advanced positioning technologies — including GNSS/GPS receivers, inertial sensors and laser scanning — integrated with application-specific software and cloud services to enable precise measurement, modeling, machine control and workflow automation for field and office operations.
Trimble’s product portfolio spans surveying and geospatial instruments (total stations, mobile mapping and terrestrial laser scanners), construction solutions (machine control systems, site positioning and estimating), agriculture systems (auto-steer, guidance and application-control platforms), and fleet and transportation telematics.
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