Trimble's Q2 Earnings Beat Expectations, Recurring Revenue Hits Record $2.21B

Trimble reported Q2 EPS of $0.71, up 14.5% YoY, and revenue of $875.7 million, beating estimates. Annualized recurring revenue grew to $2.21 billion, supported by double-digit organic growth. The company's pivot to a software- and subscription-oriented model contributed to record recurring revenue and rising margins. However, free cash flow dropped sharply YoY due to higher tax payments and one-off costs. Management raised its full-year 2025 outlook, citing progress in key strategic priorities.

Trimble Inc. (Market cap: $20.58 billion) reported robust second-quarter 2025 financial results, surpassing both earnings and revenue forecasts. The company's earnings per share (EPS) of $0.71 beat the forecast of $0.63 by 12.7%, while revenue reached $876 million, exceeding expectations of $835.81 million [1]. The stock price rose 5.2% in pre-market trading, reflecting investor confidence in the company’s performance and outlook.

Key Takeaways:
- Trimble’s EPS of $0.71 surpassed expectations by 12.7%.
- Revenue grew 9% year-over-year to $876 million.
- Stock price increased 5.2% in pre-market trading.
- Annual Recurring Revenue (ARR) increased by 14% organically.
- Raised full-year revenue guidance to $3.52 billion.

Trimble demonstrated solid growth in Q2 2025, with a 9% organic increase in revenue compared to the same quarter last year. The company continues to benefit from its strong position in the construction and transportation markets, supported by its expanding software and services offerings. The focus on recurring revenue streams, which accounted for 63% of Q2 revenue, has bolstered stability and growth prospects.

Financial Highlights:
- Revenue: $876 million, up 9% year-over-year.
- Earnings per share: $0.71, up 15% year-over-year.
- Gross margins: Expanded 210 basis points to 70.6%.
- EBITDA margins: 27.4%, a 170 basis points expansion.

Trimble’s actual EPS of $0.71 exceeded the forecasted $0.63, representing a 12.7% positive surprise. Revenue also beat expectations by 4.77%, with actual figures at $876 million against a forecast of $835.81 million. This performance highlights Trimble’s ability to effectively manage costs and drive growth in key market segments.

Market Reaction:
Trimble’s stock price rose 5.2% in pre-market trading, reaching $87, near its 52-week high of $87.5. The positive market reaction reflects investor confidence in Trimble’s robust financial performance and optimistic guidance. The stock’s movement aligns with broader market trends, where tech and industrial sectors have shown resilience.

Outlook & Guidance:
Trimble has raised its full-year revenue guidance to $3.52 billion and increased the EPS guidance midpoint to $2.98. For Q3, the company expects revenue between $850 million and $890 million, with EPS guidance ranging from $0.67 to $0.75. Trimble is targeting $3 billion in Annual Recurring Revenue and $4 billion in total revenue by 2027, with a 30% EBITDA margin.

While the company trades at relatively high EBIT and EBITDA multiples according to InvestingPro analysis, these valuations reflect strong growth expectations. Discover comprehensive valuation metrics and access the detailed Pro Research Report, available for Trimble and 1,400+ other US stocks on InvestingPro.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-trimble-beats-q2-2025-forecasts-stock-rises-93CH-4173602