Trimble AI Agents Drive 50% Productivity Gains

Date of Call: Feb 10, 2026

Financials Results

• Revenue: Q4: $970M, up 9% YOY; Full year: $3.57B, up 10% YOY
• EPS: Q4: $1 per diluted share, up 12% YOY; Full year: $3.13 per diluted share, up 10% YOY
• Gross Margin: Q4: 74.6%; Full year: 71.7%, expanded 150 bps YOY
• Operating Margin: AECO segment: Q4 44%; Full year 34.2%. Field Systems: Q4 30%; Full year 31.1%. Transportation: Q4 22.9%; Full year 22.9% (down slightly YOY due to stranded costs).

Guidance:

• 2026 full year revenue guidance midpoint: $3.86B, ~7.5% growth.
• 2026 full year EPS guidance midpoint: $3.52.
• 2026 ARR growth expected: 13%.
• 2026 EBITDA margin expansion expected: ~50 bps to 29.8%.
• 2026 free cash flow expected ~1x net income, with long-term target > net income.
• Q1 2026 revenue midpoint: $905M, ~8% growth.
• Q1 2026 EPS midpoint: $0.71.
• Q1 2026 ARR growth expected: 13%.
• Q1 2026 EBITDA margin expected: 26.6%, a 70 bps expansion YOY.

Business Commentary:

Revenue and ARR Growth:

• Trimble Inc. reported $970 million in revenue for Q4 2025, up 9% year-on-year, and full-year revenue of $3.57 billion, up 10%.
• ARR grew 14% to $2.39 billion, with AECO segment up 16% and Field Systems up 20%.
• The growth was driven by strong performance in AECO and Field Systems, along with resilience in Transportation & Logistics despite a challenged freight market.

AECO Segment Performance:

• AECO segment delivered $454 million in revenue, up 15%, and ARR of $1.48 billion, up 16%.
• This was attributed to record ACV bookings, cross-sell and upsell motions, and the international expansion of project management solutions.

Field Systems Growth:

• Field Systems reported $379 million in revenue, up 4%, and ARR of $409 million, up 20%.
• Growth was driven by strong performance in machine control guidance as a service, automotive market corrections, and Geospatial services.

AI and Agentic Workflows:

• AI features, such as submittals AI agent and AI in MEP estimating, are generating millions in incremental ARR and improving productivity by over 50%.
• AI acts as a force multiplier on top of unique workflows, with tens of thousands of conversations in case deflection and up to 20% deflection rates.

Capital Allocation and Margin Expansion:

• Trimble repurchased $148 million worth of shares in Q4, with $925 million remaining under the current authorization.
• Gross margins expanded to 74.6%, and EBITDA margins were 33.5%, aided by January 1 term license renewals and disciplined capital allocation.

Sentiment Analysis:

Overall Tone: Positive

• Management stated: 'Our fourth quarter results delivered a top and bottom line beat, punctuating a strong close to a strong year.' and '2026 will be a year where we accelerate our agentic AI releases.' They also highlighted strong recurring revenue growth, margin expansion, and confidence in the long-term model, with a closing reflection on 'the compounding benefits of our Connect & Scale strategy.'

Q&A:

• Question from Jason Celino (KeyBanc Capital Markets Inc., Research Division): I wanted to ask about the Field Systems ARR growth. It's really impressive to see it accelerate to 20%. Maybe can you speak to some of the strength you saw in the quarter? And then when we think about guidance, it's assuming kind of deceleration in 2026 to that low to mid-teens. Is that just a function of tough comp? Or is there some dynamic with kind of the transition we should know about?
  Response: Strength driven by machine control as a service, automotive corrections, geospatial, and Catalyst (positioning as a service). The 2026 guide deceleration is due to a natural lapping effect from early-stage model conversions.

• Question from Jason Celino (KeyBanc Capital Markets Inc., Research Division): And then the construction and architecture industry seems very suitable for agentic given the many stakeholders and historically siloed processes. But the industry has historically been pretty slow at adopting technology. Can you discuss how you think the industry will ramp adoption of agentic and how that might compare with maybe other industries? And then as Trimble launches these new agentic features, how are you're looking to monetize them?
  Response: Adoption will accelerate on Trimble's existing platforms where they are the system of record/intelligence. Monetization includes consumption models (credits) and tiered offerings (best tier has AI capabilities).

• Question from Joshua Tilton (Wolfe Research, LLC): Congrats on a strong end to the year. I'll start with a pretty high-level one, maybe for next year. I think coming into this year, there were some puts and takes on some conservatism in the guidance for '25. How do we think about what those puts and takes are for the guidance that you just set for '26? Maybe a little more specifically, like what are you assuming for the macro? What are you assuming around Fed? Like how do we think about some of those inputs in the outlook for this year?
  Response: Macro assumptions consistent with 2025: muted U.S. federal government business, challenged freight market, but pockets of strength in data centers, infrastructure, shipbuilding, and reshoring. Guidance leaves room to operate and reinvest.

• Question from Joshua Tilton (Wolfe Research, LLC): And maybe just like one more bit of a narrow follow-up. In AECO, I know the deck says over 70% of ACV bookings with existing customers. But when we think about, I guess, just under 30% of ACV bookings coming from new, where are those new customers coming from? Like why are they choosing you over the competition? And maybe just remind us what did that look like in the past?
  Response: New logos come from geographic expansion (beyond North America) and product penetration (e.g., hundreds added in project management). Customers choose Trimble due to 48 years of best-in-class solutions, natively integrated platforms, and unique ability to connect office/field workflows.

• Question from Kristen Owen (Oppenheimer & Co. Inc., Research Division): Rob, I wanted to follow up here on Slide 8. Really appreciate a lot of these KPIs and giving some visibility into this. One of the questions that I have for you, though, is if I take some of these data points around net retention, the new logos versus existing customers, and I want to roll that up into a comprehensive ARR growth algorithm that sort of points us to the mid-teens guidance that you've provided for 2026. How do I think about those individual moving parts, how much is price, how much is account accretion, et cetera, et cetera? How do we take these KPIs and really contextualize them in the guidance?
  Response: Net retention stack: mid-single-digit churn, ~70% ACV bookings from existing (cross-sell/upsell with higher upsell ratio), low single-digit pricing. This supports mid-teens ARR growth guide.

• Question from Kristen Owen (Oppenheimer & Co. Inc., Research Division): Okay. Great. Maybe just one additional clarification there. On the activity rate, were we to see a pickup in construction activity or infrastructure activity, how would that integrate into the algorithm? And then I have a separate follow-up.
  Response: Positive inflection in new construction would boost bookings/ARR, more visible in 2027 (e.g., infrastructure in Europe, residential rebound), less so in 2026.

• Question from Kristen Owen (Oppenheimer & Co. Inc., Research Division): Yes. Sorry. The other follow-up here is the AI question. Maybe just framing it in terms of the context of how your customers are looking to adapt their business models. I mean we've heard some large integrated E&C customers publicly discussing their ambitions to bring in their own AI-enabled solutions. So I'm just trying to understand where Trimble sits in that discussion.
  Response: Trimble is the system of record/intelligence with vast customer data; customers look to unlock data insights via AI on Trimble's platform. Trimble also builds AI agents for customers who prefer not to do it themselves.

• Question from Jonathan Ho (William Blair & Company L.L.C., Research Division): Given your changes in mix to recurring, how do we think about sort of the broader convergence between your ARR growth and overall revenue growth given that mix shift? And what are some of the puts and takes for that to happen?
  Response: ARR/revenue convergence in AECO and Transportation; divergence in Field Systems due to model conversions (recurring ARR vs. hardware revenue). Conversions create headwinds but expand addressable market and enable bundling.

• Question from Jonathan Ho (William Blair & Company L.L.C., Research Division): And then just in terms of agentic AI, I just wanted to ask more broadly whether you see sort of stronger adoption in your base in 2026? Does this maybe look like a turning point? And how does your margin structure look like for sort of agentic AI revenue relative to SaaS revenue?
  Response: Adoption correlates with 2026 agentic AI rollouts; consumption and tiered monetization will apply. AI has variable costs but company has existing consumption muscle (e.g., Transporeon).

• Question from Nay Soe Naing (Joh. Berenberg, Gossler & Co. KG, Research Division): The first one I have is around the agentic AI rollout that's coming through later this year. Really excited about them looking forward to them. I'm just wondering, are there any particular areas within the software portfolio that you would focus on these AI agents between AECO and T&L and then even within AECO, which stage of the life cycle, construction life cycle that you would look to focus on?
  Response: AI applications will be broad across AECO and Transportation & Logistics; not concentrated in any one lifecycle stage. AI acts as a force multiplier across existing workflows.

• Question from Nay Soe Naing (Joh. Berenberg, Gossler & Co. KG, Research Division): Got it. That's really helpful. And my second question is also again related to AI. I was wondering if you could share with us the technology infrastructure readiness for these AI features kind of similar to the investments that you've made in your technology stack to be cloud-ready, the investment you made in the last few years. Would you need to do similar level of investments in the technology to be AI-ready going forward? Or are you already quite there?
  Response: Technology readiness is sufficient; investments in wiring/plumbing over the last few years position the company to accelerate agentic AI releases in 2026.

• Question from Tami Zakaria (JPMorgan Chase & Co, Research Division): I'm sorry if I missed it, but I wanted to get an update on TC1. Could you remind us if it's available globally everywhere now? And are all software solutions in AECO are on it? If not, what's the time line?
  Response: TC1 is rolled out in Europe, in motion in Asia Pacific, and majority of AECO ARR is under TC1 agreements. It reduces friction for cross-selling and has significant growth potential.

• Question from Robert Mason (Robert W. Baird & Co. Incorporated, Research Division): Rob, you had already discussed the burden -- model conversion burden you're carrying in the Field Systems business. But I recall coming into the year as well, we talked about a headwind from just changes in the Cat JV. But machine control was very strong throughout the year. I'm just curious, was that -- it was a couple of points headwind expected. Was that the actual experience? And how does that carry or not into this year '26?
  Response: Software conversion headwind from Cat JV played out as expected; machine control as a service (Works Plus) was more successful. Conversions expand addressable market (50% new logos) and enable bundling.

• Question from Robert Mason (Robert W. Baird & Co. Incorporated, Research Division): That's good insight, Rob. And then, Phil, just your overall margin guidance for '26, I would say, as I expected, when I look across the segments and the expectations there, it looks like more basis points expansion expected in the T&L segment than the other 2. You talked about stranded costs earlier. Are those -- is that reflective of getting some of those stranded costs out? And then to the extent maybe a little color, just not as much margin expansion in Field Systems if there's any investment going on there?
  Response: T&L margin expansion aided by growth leverage and reduction of stranded costs. Company-wide EBITDA margin expected to expand ~50 bps in 2026, balancing reinvestment for growth.

• Question from Guy Drummond Hardwick (Barclays Bank PLC, Research Division): Just wondering if you could point to any contribution to ARR or ACV from AI products, whether it's agentic AI or AI products so far, whether it's in reality capture autonomous procurement or anything else? And I have a follow-up.
  Response: Autonomous procurement in T&L generates double-digit millions in revenue. AI-enabled revenue exceeds $100M across the business (e.g., reality capture automation, SketchUp agents).

• Question from Guy Drummond Hardwick (Barclays Bank PLC, Research Division): That's great. Just as a follow-up, Robbie, you mentioned a little earlier about the efficiencies of using AI internally. Trimble has shown great leverage over R&D and G&A this quarter and the full year. How much do you think AI has contributed to that? And maybe a sense of how much -- give us a sense of how much you can contribute in 2026?
  Response: AI contributes to efficiencies across COGS (case deflection), R&D (productivity gains), sales/marketing (pipeline generation), and future G&A. Company continues to invest while reaping benefits.

• Question from Kristen Owen (Oppenheimer & Co. Inc., Research Division): Just a simple one here. You did guide to significant growth in your free cash flow generation in 2026. Even when we take out that cash tax payment, can you just contextualize the free cash flow growth for us? And then given what's happened in the vertical SaaS space year-to-date, how you're thinking about deploying that cash?
  Response: Free cash flow growth driven by profit growth, absence of prior year tax headwind, and benefit from repealed 174 deduction. Cash deployment focused on buybacks and M&A after reinvestment.

Contradiction Point 1

AECO ARR Growth Trajectory and Confidence

Contradiction on the confidence level and drivers for sustaining AECO ARR growth.

What factors drove the 20% Field Systems ARR growth this quarter, and is the 2026 guidance's expected deceleration due to tough comparisons or a transition? - Jason Celino (KeyBanc Capital Markets)

2025Q4: The strong growth was driven by... software conversions driving growth across the board. The expected deceleration in 2026 guidance is due to a lapping effect from early software conversions... - Robert Painter(CEO)

How is progress toward 2027 shaping up in 2026, and are you ahead or behind on key metrics? - Guy Drummond Hardwick (Barclays Bank PLC)

2025Q3: Strength was broad-based across the AECO portfolio... The strong 2025 performance improves confidence in achieving the 2027 targets. - Phillip Sawarynski(CFO)

Contradiction Point 2

Duration of Subscription Transition Headwinds in Field Systems

Contradiction on when the headwinds from business model conversions in Field Systems will subside.

Can you discuss the factors driving the 20% acceleration in Field Systems ARR growth and the rationale for the expected deceleration to low to mid-teens in 2026? Is this due to challenging comparisons or other dynamics? - Jason Celino (KeyBanc Capital Markets)

2025Q4: The expected deceleration in 2026 guidance is due to a lapping effect from early software conversions... The segment is now over 50% software and services. - Robert Painter(CEO)

How long will the subscription transition headwinds in Field Systems persist, and will the 2026 growth acceleration stem from easing headwinds or other factors? - Nay Soe Naing (Joh. Berenberg, Gossler & Co. KG)

2025Q3: The transitions within Field Systems are expected to continue through 2027. - Phillip Sawarynski(CFO)

Contradiction Point 3

Artificial Intelligence (AI) Product Contribution to ARR/ACV

Contradiction on whether AI products are a material contributor to current ARR/ACV metrics.

Has any AI product, such as agentic AI, reality capture, or autonomous procurement, contributed to ARR or ACV so far? - Guy Drummond Hardwick (Barclays)

2025Q4: Specific AI products contributing directly: Autonomous procurement in Transportation generates double-digit millions in revenue... AI is embedded in over $100M of business across the company... - Robert Painter(CEO)

What are the benefits of AI integration for Trimble's platform, and how is customer adoption progressing? - Jonathan Frank Ho (William Blair & Company L.L.C.)

2025Q2: It's early in the journey... The focus is on helping customers unlock their data for better decision-making. - Robert G. Painter(CEO)

Contradiction Point 4

Monetization Model for AI Capabilities

Shift from a focus on tiered subscriptions to introducing consumption-based models for AI.

How do you expect the construction and architecture industry to adopt agentic technology compared to other sectors, and how will Trimble monetize its new agentic features? - Joshua Tilton (Wolfe Research)

2025Q4: Monetization includes early-stage AI agent credits (e.g., in SketchUp) and a move toward consumption-based models, in addition to tiered subscriptions. - Phillip Sawarynski(CFO)

How do you approach AI revenue models, buy versus build strategies, and identify immediate opportunities for development and adoption? - Charles Albert Edward Dillard (Sanford C. Bernstein & Co., LLC.)

2025Q2: Current monetization is via tiered subscriptions (with AI in the "best" tier) and stand-alone AI products. Consumption-based models are a future path. - Robert G. Painter(CEO)

Contradiction Point 5

2026 EBITDA Margin Expansion Guidance

Inconsistency in the magnitude of expected EBITDA margin expansion for 2026.

Does Phil's 2026 margin guidance anticipate higher basis point expansion in the T&L segment compared to others, and how do stranded costs and potential investments in Field Systems impact this outlook? - Robert Mason (Baird)

2025Q4: The company is expected to ~50 bps of EBITDA margin expansion in 2026 as the company reinvests for growth while showing operating leverage. - Phillip Sawarynski(CFO)

Will Blackwell's Q4 revenue be additive, and what is the expected exit rate for gross margins? - Stacy Rasgon (Bernstein Research)

2025Q2: Gross margins for Q3 are expected around 75%, with full-year guidance in the mid-70s. - Colette M. Kress(CFO)