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TRIMBLE INC. (TRMB) Q1 2026 Earnings Summary

Executive Summary

  • Primary Q1 2026 documents (press release 8‑K 2.02 and earnings call transcript) are not yet available; consensus expects revenue of $0.89B* and EPS of $0.72* for Q1 2026, following Q4 2025 consensus of $0.95B* revenue and $0.96* EPS. Values retrieved from S&P Global.
  • Trend into Q1 2026 is supported by strong execution in 2H25: Q3 2025 non‑GAAP EPS $0.81 on $901.2M revenue with record ARR $2.31B and record quarterly gross margin; FY25 guidance was raised twice (Aug and Nov) on broad‑based outperformance .
  • Management guided an “early look” for 2026 revenue growth in the mid‑ to high‑single digits, framing 2026 as a stepping stone to the “3/4/30” FY2027 targets ($3B ARR, $4B revenue, 30% EBITDA) .
  • Near‑term catalysts: Q1 2026 ARR trajectory and margin mix (subscription growth vs product), clarity around federal demand normalization and tariff headwinds, and AI feature monetization and cross‑sell momentum in AECO/Field Systems .

What Went Well and What Went Wrong

What Went Well

  • ARR scaled to records: Q2 2025 ARR $2.21B and Q3 2025 ARR $2.31B, reflecting durable subscription mix and Connect & Scale strategy execution .
  • Margin expansion: Q2 2025 non‑GAAP gross margin 70.6% and adjusted EBITDA margin 27.4%; Q3 2025 non‑GAAP gross margin 71.2% and adjusted EBITDA margin 29.9%, driven by subscription and software mix .
  • Management confidence and strategic clarity: “Our third quarter results delivered a top and bottom line beat and we are once again raising guidance… clarity, durability, and momentum” — CEO Rob Painter . “Early look at 2026 revenue has us in the mid to high single digit range” — CFO Phillip Sawarynski .

What Went Wrong

  • Federal demand softness: “Federal business is down significantly YoY… expect stronger opportunities on DoD vs civilian” and timing depends on budget processes; FedRAMP is strategic but no 2026 revenue planned .
  • Tariff cost headwinds: ~$10M per quarter in Field Systems COGS; mitigated by surcharges to protect profitability, but remains a macro uncertainty .
  • Transportation end‑market remains in a “stubborn freight recession,” with growth coming from execution (Freight Marketplace, AI procurement/quotation) rather than macro tailwinds .

Financial Results

Consolidated Revenue and EPS (chronological: oldest → newest)

MetricQ1 2025Q2 2025Q3 2025Q4 2025 (Consensus)Q1 2026 (Consensus)
Revenue ($USD Millions)$840.6 $875.7 $901.2 $948.3*$892.3*
GAAP Diluted EPS ($)$0.27 $0.37 $0.46 ——
Non-GAAP Diluted EPS ($)$0.61 $0.71 $0.81 $0.96*$0.72*

Values retrieved from S&P Global for consensus estimates (asterisked values).

Margins and Cash Metrics

MetricQ2 2025Q3 2025
GAAP Gross Margin %68.3% 68.9%
Non-GAAP Gross Margin %70.6% 71.2%
Adjusted EBITDA Margin %27.4% 29.9%
Non-GAAP Operating Margin %25.4% 28.2%
ARR ($USD Billions)$2.21 $2.31
Free Cash Flow ($USD Millions, YTD)$89.6 (H1) $206.2 (First three quarters)

Segment Breakdown (Revenue and Operating Margin %)

SegmentQ2 2025 Revenue ($M)Q2 2025 Op Margin %Q3 2025 Revenue ($M)Q3 2025 Op Margin %
AECO$350.3 30.4% $358.5 31.8%
Field Systems$392.7 30.8% $408.7 33.4%
Transportation & Logistics$132.7 21.6% $134.0 25.8%

Selected KPIs

KPIQ2 2025Q3 2025
Recurring Revenue Share of Revenue63% (management commentary) 63% (management commentary)
Software & Services Share of Revenue79% 78%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$3.48–$3.56 $3.545–$3.585 Raised
Non-GAAP EPS ($)FY 2025$2.90–$3.06 $3.04–$3.12 Raised
GAAP EPS ($)FY 2025$1.55–$1.70 $1.69–$1.77 Raised
Revenue ($B)Q4 2025—$0.927–$0.967 New quarterly guide
Non-GAAP EPS ($)Q4 2025—$0.91–$0.99 New quarterly guide
2026 Revenue GrowthFY 2026—Mid to high single digits (early look) Initial outlook

Note: FY25 guidance reflects Mobility divestiture closure (Feb 8, 2025) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q3 2025)Current Period (Q1 2026)Trend
AI/Technology InitiativesAI embedded across products (ProjectSight, autonomous procurement; internal AI enablement), data moat “trillions/billions/millions/thousands” Emphasis on AI adoption, industry LLM potential, quality of data and governance; AI monetization in tiers and standalone products in T&L Not yet reportedStrengthening narrative, broader monetization lens
Supply Chain & TariffsTariff impact ~$10M/quarter in Field Systems; mitigated via surcharges Continued caution; prudent guidance due to macro/tariff uncertainty Not yet reportedOngoing headwind but managed
Federal/Public Sector DemandFederal softness; DOTs strong, elongated cycles; FedRAMP strategic posture, no 2026 revenue planned Federal weakness “contained,” single‑digit millions impact; hope for budget resolution Not yet reportedMixed: federal weak, state DOT strong
Product PerformanceAECO bookings up mid‑teens; SketchUp awards; Field Systems strength incl. renewables/data centers AECO/Field Systems outperformed; record margins; T&L profitable growth despite freight recession Not yet reportedBroad‑based execution continues
Regional TrendsEurope energy/defense healthy; US data centers/infrastructure strong; India/Middle East bullish Similar pockets of strength; cautious on transportation macro Not yet reportedStable regional pockets
Regulatory/LegalSection 174 repeal: $50M 2025 cash flow benefit, additional ~$80M over subsequent years Continued prudent posture Not yet reportedTailwind to cash flow
R&D ExecutionInternal AI training, tech conference (AI ~50% content) Ongoing AI build vs buy; org design for AI leverage Not yet reportedExecution focus

Management Commentary

  • Strategic message: “Our third quarter results delivered a top and bottom line beat and we are once again raising guidance for the year. The story of Trimble this year can be summarized in three: clarity, durability, and momentum.” — CEO Rob Painter .
  • AI positioning: “We believe we are uniquely positioned… AI is a logical extension of Connect & Scale… the unique corpus of data… creates a powerful competitive moat.” — CEO Rob Painter .
  • 2026 setup: “An early look at 2026 revenue has us in the mid to high single digit range… stepping stone to 2027 3/4/30 framework.” — CFO Phillip Sawarynski .
  • T&L execution: “At a $500M ARR level, this makes us one of the largest transportation supply chain technology companies… Freight Marketplace with P&G as anchor shipper.” — CEO Rob Painter .

Q&A Highlights

  • Government/Federal impact: Management quantified federal softness as “single digit millions” in 2H25 and highlighted stronger DoD vs civilian prospects; FedRAMP pursued as a broader security posture, not near‑term revenue driver .
  • OEM and mixed fleet strategy: Expanded OEM collaborations (Vermeer, Kobelco, Hyundai) and Trimble Technology Outlets to reach mixed fleets; aftermarket focus and ease‑of‑use innovations expanding addressable market (e.g., excavators, pavers) .
  • Margin progression and investment: Operating leverage tracked ahead of 30–40% multi‑year baseline; management balances AI investment with long‑term margin goals; reminders on 53rd week and term license timing effects .
  • T&L macros: No meaningful macro green shoots; execution levers (product integration, Freight Marketplace) supporting profitable growth despite freight recession .

Estimates Context

  • Q4 2025 consensus: Revenue $948.3M*, EPS $0.96*, based on 11 revenue and 12 EPS estimates*.
  • Q1 2026 consensus: Revenue $892.3M*, EPS $0.72*, based on 6 revenue and 7 EPS estimates*.
  • Implications: Street models Q1 2026 sequential revenue down vs Q4 2025* and up vs Q1 2025 actual ($840.6M) . FY2026 revenue growth commentary (mid‑ to high‑single digits) aligns with consensus stepping down from Q4 seasonality into Q1 and rebuilding through FY26 .

Values retrieved from S&P Global for consensus estimates (asterisked values).

Key Takeaways for Investors

  • ARR durability is central; watch Q1 2026 ARR print and non‑GAAP margin mix as leading indicators of FY26 mid‑ to high‑single‑digit growth trajectory .
  • AECO and Field Systems remain the growth/margin engines; continued non‑GAAP gross margin expansion above 70% and EBITDA near 30% provide valuation support through cycles .
  • Federal softness is “contained,” with state DOT strength offsetting; Q1 2026 commentary on budget normalization and FedRAMP posture could temper macro risk premia .
  • Tariff headwinds persist but are largely mitigated via surcharges; monitor Field Systems COGS and pricing discipline for margin resilience .
  • T&L growth is execution‑driven (Freight Marketplace, AI procurement/quotation); any macro stabilization would be upside to segment margins .
  • FY25 guidance was raised twice on beats; early FY26 outlook supports the 2027 “3/4/30” thesis—updates in Q1 2026 will be a catalyst for estimate revisions .
  • Trading lens: Near‑term stock moves likely tied to Q1 2026 ARR/margin delivery vs Street, clarity on federal/tariff impacts, and AI feature monetization cadence (tiers vs consumption in T&L) .

Documents read in full:

  • Q3 2025 press release: revenue, ARR, margins, guidance, GAAP→non‑GAAP reconciliation .
  • Q3 2025 8‑K (Item 2.02): financial statements, segment data, reconciliation .
  • Q3 2025 earnings call transcript: strategic narrative, segment execution, 2026 “early look,” macro/tariffs, federal demand, AI posture .
  • Q2 2025 press release and transcript: revenue, ARR, margins, segment performance, tariff cash impacts, guidance raise .
  • Q1 2025 press release: baseline revenue/EPS for YoY reference .

Note: Q1 2026 press release (8‑K 2.02), earnings call transcript, and other Q1 2026 press releases were not found (not yet published); trend and estimates context provided using available company documents and S&P Global consensus.

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