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    TRMB
    Earnings call· Jun 2026(Q2 FY26)

    TRIMBLE Q2 FY26 earnings call TRMB

    Aug 12, 2026 Source

    Executive summary

    Trimble Q2 FY26 — Strong Organic Growth, Raised Full-Year Guidance, and Strategic Review of T&L

    Trimble delivered a strong quarter, exceeding top and bottom-line guidance driven by robust organic growth and accelerating AI transformation. The company raised its full-year outlook and announced a new share repurchase program, while also initiating a strategic review of its Transportation & Logistics business following inbound interest. Management emphasized the compounding value of its Connect & Scale strategy and early monetization efforts in AI.

    Highlights

    5

    • Organic revenue growth of 10% and EBITDA margins of 28.6% both beat the midpoint of guidance.

    • Total organic ARR grew 12%, with AECO up 14% and Field Systems up 12%.

    • Full-year revenue guidance raised by $50 million and EPS guidance raised by $0.10.

    • New $1 billion share repurchase authorization announced.

    • EBITDA margins expected to reach approximately 30% for FY26, one year ahead of the 2027 Investor Day target.

    Concerns

    2

    • Field Systems ARR guidance adjusted to high single digits to low double-digit growth due to replacement of a white-label product, creating a 400-500 basis point headwind for several quarters.

    • Free cash flow expected to be approximately 0.9x non-GAAP net income for FY26, down from approximately 1x due to incremental restructuring and one-time costs.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year Revenue
    $3.925 billion
    high materiality
    High
    Full-year EPS
    $3.65
    high materiality
    High
    Full-year ARR growth
    low to mid end of our range
    medium materiality
    Medium
    Full-year EBITDA margins
    approximately 30%
    high materiality
    High
    Full-year Free Cash Flow
    approximately 0.9x non-GAAP net income
    medium materiality
    Medium
    Q3 Revenue
    $965 million
    medium materiality
    High
    Q3 EPS
    $0.85
    medium materiality
    High
    Q3 ARR growth
    12%
    medium materiality
    High
    Q3 EBITDA margins
    28.6%
    medium materiality
    High
    Field Systems ARR growth
    high single digits to low double-digit growth
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    AECO
    Strong performance, record ARR, driven by cross-sell/upsell and practical AI releases. On track for 35% operating margin for the year.
    ARR: $1.577 billionARR Growth: 14%
    		$389 million9%—30.6% Operating Margin
    Field Systems
    Record-setting quarter, broad strength in data centers, utilities, energy infrastructure. Revenue growth had a 300 bps headwind from tariff refunds.
    ARR: $399 millionARR Growth: 12%
    		$442 million12%——
    Transportation & Logistics
    In line with expectations, initial green shoots in freight market, mid-teens growth in Transporting, healthy bookings. Operating margin expanded 240 basis points.
    ARR: $533 millionARR Growth: 7%
    		$141 million5%—24% Operating Margin

    Operational metrics

    24
    Total Organic Revenue Growth
    10%
    Q2 FY26

    Beat midpoint of guidance.

    EBITDA Margins
    28.6%120 basis point expansion compared to prior year
    Q2 FY26

    Beat midpoint of guidance.

    Total Organic ARR Growth
    12%
    Q2 FY26

    Company-wide organic ARR growth.

    AECO ARR Growth
    14%
    Q2 FY26
    Field Systems ARR Growth
    12%
    Q2 FY26
    Transportation ARR Growth
    7%
    Q2 FY26
    Non-GAAP Gross Margin
    71.8%expanded 120 basis points
    Q2 FY26

    Gross margins expanded 120 basis points to 71.8%

    Reported EPS
    $0.86$0.06 better than midpoint
    Q2 FY26

    Reported earnings per share was $0.86 for the quarter, $0.06 better than the midpoint and above the high end of our guidance.

    Cash and investments balance
    $214 million
    Q2 FY26

    with $214 million of cash

    Leverage Ratio
    1.1xwell below our long-term target ratio of 2.5x
    Q2 FY26

    a leverage ratio of 1.1x, which is well below our long-term target ratio of 2.5x.

    Share Repurchase Authorization
    $1 billion
    new authorization

    announced a new $1 billion share repurchase authorization

    Share Repurchases Executed
    $1.2 billion
    since beginning of 2025

    almost $1.2 billion of repurchases since the beginning of 2025.

    Field Systems Revenue Headwind (Tariff Refunds)
    300 basis points
    Q2 FY26

    despite a headwind of approximately 300 basis points due to tariff refunds

    Field Systems ARR Headwind (White-label replacement)
    400 to 500 basis points
    next few quarters

    This creates an approximately 400 to 500 basis point headwind to Field Systems ARR and to a lesser degree, the company for several quarters.

    Company-level ARR Headwind (White-label replacement)
    little under 100 basis points
    next few quarters

    It's about, call it, a little under 100 basis points at the company level.

    Implied Field Systems ARR Impact (White-label replacement)
    $16 million to $20 million
    FY26

    So that implies, call it, $16 million to $20 million on the ARR this year

    Trimble Connect Monthly Active Users
    3.7 million
    Q2 FY26

    more than 3.7 million monthly active users rely on Trimble construction solutions

    Trimble Connect Projects Added
    1 million
    Q2 FY26

    In the second quarter alone, Trimble Connect added over 1 million projects

    Trimble Connect API Calls
    30 billion
    Q2 FY26

    handled nearly 30 billion API calls

    Trimble Connect IoT Devices Connected
    60,000
    Q2 FY26

    connected 60,000 active IoT devices

    Reality Capture Platform Service Data Ingested Growth
    68%year-over-year
    Q2 FY26

    Our Reality Capture platform service grew ingested data volume by 68% year-over-year.

    Trimble Connect Data Ingested Volume
    over a petabyte
    quarterly

    We are now adding over a petabyte of real-world construction data to Trimble Connect every quarter.

    Transportation & Logistics Transaction-based Revenue
    over $150 million
    annualized

    We're talking over $150 million of transaction-based revenue that we have in that business today.

    Claude Connector Unique Users
    over 25,000
    early stage

    over 25,000 unique users that we've seen in Claude using the Connector.

    Industry KPIs

    7
    MetricValueDetails
    Revenue growth$972 millionUSD
    Arr net new arr$2.509 billionUSD
    Customer account count3.7 millionusers
    Gross retention renewal rateholding
    Operating FCF margin rule of 4028.6%%
    Ai product adoption monetizationover 25,000users
    Net revenue net dollar retentionholding

    Orderbook & backlog

    4
    Total ARR$2.509 billionQ2 FY26

    12% growth

    The continued growth in our recurring revenue base provides a predictable and resilient foundation for our business.

    AECO ARR$1.577 billionQ2 FY26

    14% growth

    Achieved a record $1.577 billion of ARR, posting 14% ARR growth

    Field Systems ARR$399 millionQ2 FY26

    12% growth

    ARR reached $399 million, up 12%

    Transportation & Logistics ARR$533 millionQ2 FY26

    7% growth

    ARR reached $533 million, up 7%

    Product announcements

    5
    ProductTypeDetails
    AI-enhanced construction job costing and financial management solutionlaunch
    AI takeoff capabilitiesexpansion
    AI feature extractionexpansion
    Arc Agentlaunch
    AI native autonomous procurement solutionlaunch

    Deals & partnerships

    1
    Document CrunchDelivers AI-based contract risk intelligence.

    Acquisition of a company providing AI-based contract risk intelligence, outperforming expectations.

    Risks & headwinds

    3
    Field Systems ARR Headwind (White-label replacement)several quarters

    400 to 500 basis point headwind to Field Systems ARR and to a lesser degree, the company for several quarters.

    Mitigation: The replaced product was low-margin; the new internal solution will be higher-margin and integrate natively, positively impacting profitability long-term.

    Free Cash Flow Impact (Restructuring/One-time costs)Full-year 2026

    approximately 0.9x non-GAAP net income, down from approximately 1x

    Mitigation: Due to incremental restructuring and other onetime costs. Expects FCF > non-GAAP net income over the long term.

    Tariff Refunds Impact on Field Systems RevenueQ2 FY26

    approximately 300 basis points

    Mitigation: Do not expect to materially impact future quarters. Corresponding offset in COGS, no impact to operating income.

    What to watch in Q3 FY26

    5

    Field Systems ARR Growth Recovery

    next quarter and beyond
    Current12% (Q2 FY26), guided high single-digit to low double-digit for FY26
    TargetStabilization and acceleration above current guided range

    Why it matters

    This metric reflects the impact of replacing a white-label product and its long-term profitability benefits.

    We are adjusting the field systems ARR guidance to high single digits to low double-digit growth due to our decision to replace a white label product with an internally developed solution. This creates an approximately 400 to 500 basis point headwind to Field Systems ARR and to a lesser degree, the company for several quarters.

    Q&A highlights

    5

    Clarification on Field Systems ARR headwind and overall ARR performance excluding Field Systems.

    Rob Painter explained the Field Systems decision was a one-time move from a low-margin white-label product to a higher-margin proprietary solution, made from a position of strength. Phil Sawarynski quantified the impact as 400-500 bps headwind for Field Systems ARR, translating to just under 100 bps at the company level. Overall ARR performance (AECO up 14%, T&L up 7%) was strong and according to plan.

    “The Field Systems impact for this very discrete item is about 400 to 500 basis points over the next few quarters for Field Systems specifically. It's about, call it, a little under 100 basis points at the company level.”

    asked by Jason Celino · answered by Robert Painter

    1 min read5 chapters

    Detailed Narrative

    01

    AI Transformation and Connect & Scale Strategy

    Trimble is accelerating its AI transformation, deploying agentic workflows to enhance customer productivity and internal efficiencies. The Connect & Scale strategy is gaining momentum, leveraging connected data and workflows across its ecosystem, particularly in engineering and construction. The company is building specialized agents on its platform to unlock customer productivity, with monetization expected through subscriptions and usage-based consumption.

    02

    Strategic Review of Transportation & Logistics

    Following inbound interest, Trimble's Board and management, with Goldman Sachs, will undertake a strategic review of the Transportation & Logistics business. Management emphasized that there is no predetermined outcome or timeline, and the focus remains on maximizing shareholder value while continuing to execute the strategy within the Trimble platform.

    03

    AECO and Field Systems Performance

    The AECO segment saw strong performance with 9% revenue growth and 14% ARR growth, driven by cross-sell and upsell motions, and practical AI releases. Field Systems achieved 12% revenue and ARR growth, supported by broad market strength in data centers, utilities, and energy infrastructure. The company is replacing a low-margin white-label product in Field Systems with an internally developed solution, which will create a near-term ARR headwind but positively impact profitability long-term.

    04

    Capital Allocation and Share Repurchase

    Trimble announced a new $1 billion share repurchase authorization, reinforcing its commitment to return at least one-third of free cash flow to shareholders. The company has repurchased nearly $1.2 billion since early 2025, demonstrating an opportunistic approach to buybacks.

    05

    Customer Examples of Value Creation

    Management highlighted four customer examples across data center construction, steel detailing, MEP contracting, and utility work, demonstrating how Trimble Connect and AI-enabled solutions drive significant time savings, accuracy, and labor productivity by linking physical and digital workflows.

    AI-generated summary of the company’s earnings call. Not investment advice.