Trimble Q3 Earnings Beat Estimates, Revenues Increase Y/Y

Core Insights - Trimble (TRMB) reported third-quarter 2025 non-GAAP earnings of 81 cents per share, exceeding the Zacks Consensus Estimate by 12.5% and reflecting a 15.7% year-over-year increase [1][9] Revenue Performance - Total revenues reached $901.2 million, surpassing the Zacks Consensus Estimate by 3.41% and increasing 3% year over year, with a 10% organic growth driven by strong performance in the AECO segment and continued growth in Field Systems despite a challenging freight market [2] - Product revenues accounted for 33.6% of total revenues, totaling $302.5 million, down 1.7% year over year, while subscription and services revenues, making up 66.4% of total revenues, increased 5.4% year over year to $598.7 million [3] - Annualized Recurring Revenues (ARR) reached $2.31 billion, marking a 6% year-over-year increase and a 14% organic growth [3] Segment Analysis - AECO segment revenues, which constituted 39.8% of total revenues, were $358.5 million, up 17.2% year over year, with 17% organic growth in ARR [4] - Field Systems revenues, representing 45.4% of total revenues, increased 8% year over year on an organic basis to $408.7 million, with 18% organic ARR growth [4] - Transportation & Logistics (T&L) revenues, accounting for 14.9% of total revenues, declined 31.4% year over year to $134 million, although the segment registered 7% adjusted organic ARR growth [5] Operating Metrics - Non-GAAP gross margin for Q3 2025 was 71.2%, expanding 280 basis points year over year [6] - Adjusted EBITDA was $269.4 million, with an adjusted EBITDA margin of 29.9%, up 160 basis points year over year [6] - Non-GAAP operating margin improved to 28.2%, expanding 250 basis points year over year, while operating expenses accounted for 43% of revenues, up 20 basis points year over year [6] Balance Sheet Overview - As of the end of Q3 2025, cash and cash equivalents were $232.7 million, down from $265.9 million at the end of Q2 2025, while total debt decreased to $1.39 billion from $1.51 billion [8] Future Guidance - For Q4 2025, Trimble expects revenues between $927 million and $967 million, with non-GAAP earnings projected in the range of 91 to 99 cents per share [11] - For the full year 2025, revenues are anticipated to be between $3.545 billion and $3.585 billion, with non-GAAP earnings expected to range from $3.04 to $3.12 per share [11] - Looking ahead to 2026, Trimble forecasts mid- to high single-digit revenue growth, and for 2027, it expects $3 billion in ARR and $4 billion in revenues with a 30% EBITDA margin [12]