Trimble Q4 2025 Trimble Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Trimble Inc Earnings Call
Operator: Please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Rob Painter, President and CEO. Please go ahead.
Operator: Please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Rob Painter, President and CEO. Please go ahead.
Speaker #1: 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Rob Painter, President and CEO. Please press star.
Speaker #1: 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Rob Painter, President and CEO.
Speaker #1: ahead.
Speaker #2: Welcome, everyone. Before I get
Rob Painter: Welcome, everyone. Before I get started, our presentation and safe harbor statements are available on our website. Our financial review will focus on year-over-year non-GAAP performance metrics on an organic basis. In addition, we will focus on adjusted numbers that we believe more accurately portray the underlying performance of our business. This means we will exclude the divested agriculture and mobility businesses, as well as the 53rd week of fiscal 2024. For Q4, we will also adjust for the timing of 1 January term license renewals. As reported numbers, along with the reconciliation, are provided in the appendix of our slide presentation. Okay, let's get to it.
Rob Painter: Welcome, everyone. Before I get started, our presentation and safe harbor statements are available on our website. Our financial review will focus on year-over-year non-GAAP performance metrics on an organic basis. In addition, we will focus on adjusted numbers that we believe more accurately portray the underlying performance of our business.
Speaker #2: started, our presentation and Safe Harbor statements are available on our year-over-year non-GAAP performance metrics website. Our financial review will focus on on an organic basis.
Speaker #2: numbers that we believe more business. This means we will exclude the divested agriculture and mobility
Rob Painter: This means we will exclude the divested agriculture and mobility businesses, as well as the 53rd week of fiscal 2024. For Q4, we will also adjust for the timing of 1 January term license renewals. As reported numbers, along with the reconciliation, are provided in the appendix of our slide presentation. Okay, let's get to it.
Speaker #2: 2024. For the fourth quarter, we will also adjust businesses as well as the 53rd term license renewals. As for the timing of January 1st reported numbers, along with the reconciliation, they are provided in the appendix of our slide presentation.
Rob Painter: Our Q4 results delivered a top and bottom line beat, punctuating a strong close to a strong year and positioning us well to deliver in 2026 and through the 2027 plan we presented at our last Investor Day. The results of the quarter and the year demonstrate the durability of our focused portfolio and the compounding returns of our connect and scale strategy. As shown on slide 4, we delivered $970 million in revenue in the quarter, up 9%. For the year, revenue was $3.57 billion, up 10%. Our ARR grew 14% to $2.39 billion, with a notable 16% increase in our AECO segment and 20% increase in field systems.
Rob Painter: Our Q4 results delivered a top and bottom line beat, punctuating a strong close to a strong year and positioning us well to deliver in 2026 and through the 2027 plan we presented at our last Investor Day. The results of the quarter and the year demonstrate the durability of our focused portfolio and the compounding returns of our connect and scale strategy. As shown on slide 4, we delivered $970 million in revenue in the quarter, up 9%. For the year, revenue was $3.57 billion, up 10%. Our ARR grew 14% to $2.39 billion, with a notable 16% increase in our AECO segment and 20% increase in field systems.
Speaker #2: Results delivered a top and bottom line beat, punctuating a strong close to Q4 and accurately portraying the underlying performance of our business. Please go well to deliver in 2026 and, in addition, we will focus on adjusted results through the 2027 plan we presented day.
Speaker #2: The results of the quarter and the at our last investor Okay, let's portfolio and the compounding returns of our connect and scale strategy. As shown on slide year demonstrate the durability of our focused 4, we delivered strong year and positioning us 970 million in revenue in the quarter, up 9%.
Speaker #2: For the year, revenue was $3.57 billion, up from $2.39 billion, with a notable 16% to 20% increase in field, and 10% in systems. Earnings per share of $3.13 for the year, up 10%. Our ARR grew 14% to 12%.
Rob Painter: Earnings per share of $1 in the quarter was up 12% and $3.13 for the year, up 10%. Both were even higher on an organic basis. Connect and scale is both an application and a platform strategy. As slide 5 visualizes, our applications manifest as best-in-class hardware and software solutions, whereas platform manifests through connected workflows and ecosystems. Said another way, an application solves one problem, whereas a platform connects people, data, and workflows to address system complexity. Furthermore, a platform empowers an ecosystem where customers and partners can build and extend offerings and integrated workflows. Platforms get stronger and more valuable as more people use them, creating a network effect where all participants benefit. With this in mind, we allocate capital along this continuum of product development, go-to-market, and the underlying systems and processes to unlock our full potential.
Rob Painter: Earnings per share of $1 in the quarter was up 12% and $3.13 for the year, up 10%. Both were even higher on an organic basis. Connect and scale is both an application and a platform strategy. As slide 5 visualizes, our applications manifest as best-in-class hardware and software solutions, whereas platform manifests through connected workflows and ecosystems. Said another way, an application solves one problem, whereas a platform connects people, data, and workflows to address system complexity.
Speaker #2: Both were even higher on an increase in our AECO segment, and $1 in the quarter was up. Get to it. Organic. Our fourth quarter best-in-class hardware and software solutions, whereas platform visualizes, our applications manifest as ecosystems.
Speaker #2: Set another manifests through connected workflows and system complexity. empowers an ecosystem where customers and valuable as more people use them, creating application and a platform Furthermore, a platform problem, whereas a platform connects mind, we allocate capital along potential.
Speaker #2: Set another manifests through connected workflows and system complexity. empowers an ecosystem where customers and valuable as more people use them, creating application and a platform Furthermore, a platform problem, whereas a platform connects mind, we allocate capital along potential. this continuum of product development, By connecting the hardware and software of Trimble to connect the go-to-market, and the underlying systems and the physical and digital basis.
Rob Painter: Furthermore, a platform empowers an ecosystem where customers and partners can build and extend offerings and integrated workflows. Platforms get stronger and more valuable as more people use them, creating a network effect where all participants benefit. With this in mind, we allocate capital along this continuum of product development, go-to-market, and the underlying systems and processes to unlock our full potential.
Speaker #2: partners can build and extend offerings way, an application solves one flywheel. Slide 6 illustrates the financial outcomes of disciplined journey in 2020. We have expanded recurring revenue as a percentage reach.
Speaker #2: Partners can build and extend offerings. In this way, an application solves one flywheel. Slide 6 illustrates the financial outcomes of a disciplined journey in 2020. We have delivery along this entire 65%.
Speaker #2: processes to unlock our full solutions that increasingly compound customer outcomes, by leveraging unique data, connected solution capabilities, and our unmatched go-to-market a network effect where all participants benefit.
Rob Painter: By connecting the hardware and software of Trimble to connect the office and the field, we are connecting the physical and digital worlds. In turn, we are delivering solutions that increasingly compound customer outcomes by leveraging unique data, connected solution capabilities, and our unmatched go-to-market reach. We see AI as a force multiplier that accelerates value delivery along this entire flywheel. Slide 6 illustrates the financial outcomes of disciplined execution since we began our connect and scale journey in 2020. We have expanded recurring revenue as a percentage of total revenue from 40% to 65%. Software and services now represent 79% of total revenue. We have expanded gross margins by 1,300 basis points, which has given us tremendous degrees of freedom to invest for our future growth while expanding EBITDA margins by 400 basis points.
Rob Painter: By connecting the hardware and software of Trimble to connect the office and the field, we are connecting the physical and digital worlds. In turn, we are delivering solutions that increasingly compound customer outcomes by leveraging unique data, connected solution capabilities, and our unmatched go-to-market reach. We see AI as a force multiplier that accelerates value delivery along this entire flywheel.
Speaker #2: Office and the field, we are connecting by 1,300 basis. Connect and Scale is both an 40% to revenue. We have expanded gross margins—execution since we began our Connect and Scale. Software and services now—margins by 400 basis, growth while expanding EBITDA. We see AI as a force—points.
Rob Painter: Slide 6 illustrates the financial outcomes of disciplined execution since we began our connect and scale journey in 2020. We have expanded recurring revenue as a percentage of total revenue from 40% to 65%. Software and services now represent 79% of total revenue. We have expanded gross margins by 1,300 basis points, which has given us tremendous degrees of freedom to invest for our future growth while expanding EBITDA margins by 400 basis points.
Speaker #2: represent 79% of total approximately Our freedom to invest for our future in project management, of ongoing strategic progression collaboration and visualization, and retention in our core commercial base at AI.
Speaker #2: With this context workflows. In turn, we are delivering Platforms get stronger and more AECO. The team quarter. ARR at 1.48 billion delivered another outstanding 15%.
Rob Painter: With this context in mind, let's turn to a review of the segments, starting with AECO. The team delivered another outstanding quarter. ARR at $1.48 billion was up 16%, and revenue at $454 million was up 15%. Our ACV bookings remained strong, with the team delivering a record quarter, with cross-sell and upsell motions continuing to gain momentum, as evidenced by net retention in our core commercial base at approximately 110%. I'll highlight three examples of ongoing strategic progression in project management, collaboration, and visualization, and AI. In project management, our decision to allocate capital here over the last couple of years is yielding results. We delivered over 40% growth in bookings and over 50% growth in ARR. Throughout the year, we added hundreds of new customers and began our international expansion.
Rob Painter: With this context in mind, let's turn to a review of the segments, starting with AECO. The team delivered another outstanding quarter. ARR at $1.48 billion was up 16%, and revenue at $454 million was up 15%. Our ACV bookings remained strong, with the team delivering a record quarter, with cross-sell and upsell motions continuing to gain momentum, as evidenced by net retention in our core commercial base at approximately 110%.
Speaker #2: team delivering a record quarter with ACV bookings remained strong, with the was up 16%, and and revenue at 454 million was up cross-sell and upsell motions continuing to gain momentum.
Rob Painter: I'll highlight three examples of ongoing strategic progression in project management, collaboration, and visualization, and AI. In project management, our decision to allocate capital here over the last couple of years is yielding results. We delivered over 40% growth in bookings and over 50% growth in ARR. Throughout the year, we added hundreds of new customers and began our international expansion.
Speaker #2: management, our decision to allocate capital here over the last couple of years is yielding 40% growth in bookings and over 50% growth in in mind, let's turn to a ARR.
Speaker #2: results. new customers and began We delivered over people, data, and workflows to address our international expansion. Ease integrations, and bundled selling motions are driving growth and adoption.
Rob Painter: Ease of use, natively built workflow integrations, and bundled selling motions are driving growth and adoption. We're excited about our growth potential in project management and have our 2026 sales motions aligned to continue to win here. Trimble Connect has transcended its origins as a collaboration and model viewer to become the unifying pillar of our construction platform strategy. Connect turns field data, such as point clouds and imagery, from a job site into actionable insights in the office. It also takes detailed designs from the office to the field for fabrication, layout, and installation. By capturing the as-built reality from the field and fusing it with design models, we are creating the definitive digital record of the physical world. This positions Trimble not just as a tool provider, but as the data platform of record for the entire built environment.
Rob Painter: Ease of use, natively built workflow integrations, and bundled selling motions are driving growth and adoption. We're excited about our growth potential in project management and have our 2026 sales motions aligned to continue to win here. Trimble Connect has transcended its origins as a collaboration and model viewer to become the unifying pillar of our construction platform strategy.
Speaker #2: project management and have our win here. Trimble as a collaboration and model viewer to become the unifying pillar of our construction of use, natively built workflow clouds and imagery from a job site into actionable insights in the 2026 sales motions aligned to continue to Connect turns field data such as point As evidenced by net Throughout the year, we added hundreds of We're excited about our growth potential in layout, and installation.
Rob Painter: Connect turns field data, such as point clouds and imagery, from a job site into actionable insights in the office. It also takes detailed designs from the office to the field for fabrication, layout, and installation. By capturing the as-built reality from the field and fusing it with design models, we are creating the definitive digital record of the physical world. This positions Trimble not just as a tool provider, but as the data platform of record for the entire built environment.
Speaker #2: the field for fabrication, Stepping back to look at a set of metrics of performance and progression, slide 7 provides a 2025 refresh on the segment composition.
Speaker #2: By In project capturing the as-built reality from the Connect has transcended its origins field and fusing it with design office. models, we are creating the definitive digital record of the physical It also takes world.
Speaker #2: This positions Trimble not just as a tool provider, but as a platform strategy. The entire built environment. With respect to AI, Hensel Phelps, whom we highlighted during our call, uses the data platform of record for the construction industry—saving millions of dollars in labor hours with our submittals AI agent that automates processing of the data 110%. Construction.
Rob Painter: With respect to AI, Hensel Phelps, whom we highlighted during our Dimensions keynote, estimates they are saving $ millions in labor hours with our submittals AI agent that automates processing of the data and paperwork-intensive aspect of construction. In MEP estimating, we've deployed AI to identify and count electrical components directly from construction drawings, replacing a manual takeoff process. This feature already has thousands of monthly active users and delivers over a 50% productivity gain and is generating $ millions of incremental ARR. In addition, we have created in-app AI assistance into many of our products, some of which are orchestrating multi-agent workflows, and we can already measure tens of thousands of conversations and case deflection rates up to 20%. 2026 will be a year where we accelerate our agentic AI releases.
Rob Painter: With respect to AI, Hensel Phelps, whom we highlighted during our Dimensions keynote, estimates they are saving $ millions in labor hours with our submittals AI agent that automates processing of the data and paperwork-intensive aspect of construction. In MEP estimating, we've deployed AI to identify and count electrical components directly from construction drawings, replacing a manual takeoff process.
Speaker #2: paperwork-intensive aspect of MEP estimating we've deployed AI to identify and count electrical components directly from construction drawings, replacing a manual takeoff of total revenue from process.
Speaker #2: feature already has thousands of monthly active users and delivers gain and is generating millions of dollars of incremental of our products, some of which are orchestrating multi-agent over a 50% productivity workflows and we can already measure tens of thousands of conversations, and case deflection rates up to ARR.
Speaker #2: feature already has thousands of monthly active users and delivers gain and is generating millions of dollars of incremental of our products, some of which are orchestrating multi-agent over a 50% productivity workflows and we can already measure tens of thousands of conversations, and case created in-app AI assistance into many we accelerate our agentic AI releases.
Rob Painter: This feature already has thousands of monthly active users and delivers over a 50% productivity gain and is generating $ millions of incremental ARR. In addition, we have created in-app AI assistance into many of our products, some of which are orchestrating multi-agent workflows, and we can already measure tens of thousands of conversations and case deflection rates up to 20%. 2026 will be a year where we accelerate our agentic AI releases.
Speaker #2: In addition, we have Starting with the data of annual KPI updates Day. I'll start with three point that only 20% of our customers currently buy more than one opportunity.
Rob Painter: Stepping back to look at a set of metrics of performance and progression, Slide 7 provides a 2025 refresh on the segment composition. The key takeaways here include a well-balanced and diversified set of customers being served, with each pillar of the business having greater than $230 million of ARR, a geographic split that is centric to capturing the North American opportunity, while demonstrating a compelling global opportunity to expand reach, and a revenue mix that is almost entirely recurring. Slide 8 goes further to give a set of annual KPI updates that mark proof points against the growth drivers we put forward at Investor Day. I'll start with 3 KPIs that demonstrate the power of the $1 billion plus cross-selling opportunity we see in construction.
Rob Painter: Stepping back to look at a set of metrics of performance and progression, Slide 7 provides a 2025 refresh on the segment composition. The key takeaways here include a well-balanced and diversified set of customers being served, with each pillar of the business having greater than $230 million of ARR, a geographic split that is centric to capturing the North American opportunity, while demonstrating a compelling global opportunity to expand reach, and a revenue mix that is almost entirely recurring.
Speaker #2: The key takeaways here include a served, with each pillar of the well-balanced and diversified set of customers being business having greater than 230 million of ARR.
Speaker #2: Geographic split that is centric to capturing the North American opportunity while expanding reach and a revenue mix that is almost entirely recurring. Slide 8 goes further to give a set demonstrating a compelling global opportunity to slide that mark proof points against the growth drivers we put forward at Investor KPIs that demonstrate the power of the $1 billion-plus cross-selling opportunity we see in this construction.
Rob Painter: Slide 8 goes further to give a set of annual KPI updates that mark proof points against the growth drivers we put forward at Investor Day. I'll start with 3 KPIs that demonstrate the power of the $1 billion plus cross-selling opportunity we see in construction.
Rob Painter: Starting with the data point, that only 20% of our customers currently buy more than one product, a clear sign of penetration opportunity. Next, customers with more than three products grew 18%, demonstrating our ability to run, land, and expand place. Finally, more than 70% of our ACV bookings came from cross-sell and upsell motions, demonstrating that our customers value the breadth and depth of Trimble solutions. In addition, the significance of Trimble Connect was demonstrated by an 18% growth in the number of projects in Connect. Moving to field systems, the physical business of Trimble outperformed in the quarter, with particular strength once again in civil construction. Revenue at $379 million was up 4%, and ARR at $409 million was up 20%. Kudos to the field systems team.
Rob Painter: Starting with the data point, that only 20% of our customers currently buy more than one product, a clear sign of penetration opportunity. Next, customers with more than three products grew 18%, demonstrating our ability to run, land, and expand place. Finally, more than 70% of our ACV bookings came from cross-sell and upsell motions, demonstrating that our customers value the breadth and depth of Trimble solutions.
Speaker #2: Next, customers with more than three products grew 18%, demonstrating our ability to run land and expand product. 70% of our ACV bookings came from cross-sell and upsell place.
Speaker #2: motions. Demonstrating that our A clear sign of penetration customers value the breadth and depth Connect was demonstrated by an 18% growth in the number of projects in addition, the significance of Trimble of Trimble solutions. Connect.
Speaker #2: motions. Demonstrating that our A clear sign of penetration customers value the breadth and depth Connect was demonstrated by an 18% growth in the number of projects in addition, the significance of Trimble of Trimble solutions.
Rob Painter: In addition, the significance of Trimble Connect was demonstrated by an 18% growth in the number of projects in Connect. Moving to field systems, the physical business of Trimble outperformed in the quarter, with particular strength once again in civil construction. Revenue at $379 million was up 4%, and ARR at $409 million was up 20%. Kudos to the field systems team.
Speaker #2: Strength once again in civil. Finally, more than the physical business of Trimble outperformed in Q4. $379 million was up 4%, and ARR at $409 million was up 20% in construction.
Speaker #2: strength once again in civil Finally, more than the physical business of Trimble outperformed in $379 million was up 4%, and ARR at $409 million was up construction.
Speaker #2: The field systems team—they did an exceptional job in 2025, execution, and continuing to demonstrate the strength of our innovation and lay the foundation for Connect and Worlds.
Rob Painter: They did an exceptional job in 2025, demonstrating the strength of our innovation and execution, and continuing to lay the foundation for connect and scale to differentiate at the intersection of the physical and digital worlds. I'll highlight a few examples of unique Trimble value delivery that field systems enables. Starting with our customer, JE Dunn, one of the largest and most sophisticated North American general contractors, who self-performs their concrete work. They work with Trimble software in the office to create precise 3D design models, then utilize Trimble Augmented Reality to see those models and context in the field. They deploy Trimble Total Stations to lay out these models in the physical world, and Trimble 3D laser scanners to capture as-built data for quality control, all of which is coordinated through Trimble Connect to create a Digital Twin.
Rob Painter: They did an exceptional job in 2025, demonstrating the strength of our innovation and execution, and continuing to lay the foundation for connect and scale to differentiate at the intersection of the physical and digital worlds. I'll highlight a few examples of unique Trimble value delivery that field systems enables. Starting with our customer, JE Dunn, one of the largest and most sophisticated North American general contractors, who self-performs their concrete work.
Speaker #2: I'll highlight a few examples of scale to differentiate at the intersection of the Revenue at field systems enables. physical and digital Starting with our customer JE unique Trimble value delivery that Dunn.
Speaker #2: They work with Trimble software in the office to create precise 3D design models. Then, they utilize Trimble augmented reality to see those models in context in the sophisticated North American general contractors field.
Rob Painter: They work with Trimble software in the office to create precise 3D design models, then utilize Trimble Augmented Reality to see those models and context in the field. They deploy Trimble Total Stations to lay out these models in the physical world, and Trimble 3D laser scanners to capture as-built data for quality control, all of which is coordinated through Trimble Connect to create a Digital Twin.
Speaker #2: They deploy Trimble Total, one of the largest and most world, and Trimble 3D laser stations to lay out these models in the physical quality control.
Speaker #2: All of which is coordinated through Trimble Connect to Twin. This unique Trimble workflow that links scanners to capture as-built data for work in the office and the field is driving productivity and quality while eliminating millions of dollars and significantly reducing their carbon footprint.
Rob Painter: This unique Trimble workflow that links work in the office and the field is driving productivity and quality while eliminating $ millions in rework, which in turn is significantly reducing their carbon footprint. Beyond self-performed concrete workflows, we have advanced our piling automation workflows for solar farm construction, and we developed a Mass Haul workflow to automate the infrastructure building process for mines, as well as for large commercial and industrial sites. AI acts as a force multiplier on top of these unique workflows. From AI classification of large data sets we collect in the field, to analytics across transportation infrastructure, building construction, mining, and utilities, to optimize workflows and enable our customers to make better decisions. This isn't just a vision. We already have tens of terabytes of Reality Capture data that have been uploaded to Trimble Connect, and we expect to double that in 2026.
Rob Painter: This unique Trimble workflow that links work in the office and the field is driving productivity and quality while eliminating $ millions in rework, which in turn is significantly reducing their carbon footprint. Beyond self-performed concrete workflows, we have advanced our piling automation workflows for solar farm construction, and we developed a Mass Haul workflow to automate the infrastructure building process for mines, as well as for large commercial and industrial sites. AI acts as a force multiplier on top of these unique workflows.
Speaker #2: Beyond self-performed concrete workflows, we have advanced to create digital piling automation workflows for solar farm construction, and we have also developed similar workflows for mines, as well as a mass haul workflow for large sites.
Speaker #2: AI acts as a force multiplier on top of these unique workflows. From AI classification of large data sets we collect in the field, to commercial and industrial analytics across transportation, it automates the infrastructure building process— infrastructure, building construction, mining, and workflows— and enables our customers to make utilities to optimize better decisions.
Rob Painter: From AI classification of large data sets we collect in the field, to analytics across transportation infrastructure, building construction, mining, and utilities, to optimize workflows and enable our customers to make better decisions. This isn't just a vision. We already have tens of terabytes of Reality Capture data that have been uploaded to Trimble Connect, and we expect to double that in 2026.
Speaker #2: This isn't just a vision. We already captured data that have been uploaded to Trimble—tens of terabytes of Reality Connect—and we expect to double that. Stepping back to look at a set of metrics of performance and progression, slide 9 provides a 2025 refresh on the segment composition.
Rob Painter: Stepping back to look at a set of metrics of performance and progression, slide 9 provides a 2025 refresh on the segment composition. The key takeaways here include a well-balanced and diversified set of capabilities we take to market, from GNSS and optical surveying instruments, to inertial navigation, and our unique positioning services that support precise positioning and navigation, to our on and off machine civil construction automation portfolio. Field systems is our most global business, and we continue to develop product and distribution to reach the global opportunity. Finally, the revenue composition demonstrates a significant milestone in 2025. The segment is now over 50% software and services, and 26% of our revenue is now recurring. Slide 9 also lays out a set of KPIs against the growth drivers we put forward at Investor Day.
Rob Painter: Stepping back to look at a set of metrics of performance and progression, slide 9 provides a 2025 refresh on the segment composition. The key takeaways here include a well-balanced and diversified set of capabilities we take to market, from GNSS and optical surveying instruments, to inertial navigation, and our unique positioning services that support precise positioning and navigation, to our on and off machine civil construction automation portfolio.
Speaker #2: The key takeaways here include a well-balanced and diversified set of capabilities we take to market. From GNSS and optical surveying instruments to inertial navigation, and our unique positioning services that support precise positioning and navigation, to our on- and off-machine civil construction automation portfolio.
Speaker #2: Field Systems is our most global business, and we continue to develop product and distribution to reach the global opportunity. Finally, the revenue composition demonstrates a significant milestone in 2025.
Rob Painter: Field systems is our most global business, and we continue to develop product and distribution to reach the global opportunity. Finally, the revenue composition demonstrates a significant milestone in 2025. The segment is now over 50% software and services, and 26% of our revenue is now recurring. Slide 9 also lays out a set of KPIs against the growth drivers we put forward at Investor Day.
Speaker #2: The segment is now services, and 26% of our revenue is now recurring. Slide 9 also lays over 50% software and 2026. We put forward at Investor conversions continue to expand our addressable market.
Rob Painter: During the year, our business model conversions continued to expand our addressable market, as evidenced by the fact that approximately half of our sales of Machine Control as a service are to new logos. It's the same phenomenon we see with our Trimble Catalyst subscriptions, where we are reaching new users and customers with this more affordable offering. Finally, the addition of new Trimble technology outlets is expanding our reach to serve the mixed fleet. Moving to transportation, ARR at $508 million was up 7%, and revenue at $136 million was up 4%. We continued to grow despite the challenged freight market. To highlight a couple of examples of connected scale at work, I'll start with our unique ability to cross-sell within the portfolio.
Rob Painter: During the year, our business model conversions continued to expand our addressable market, as evidenced by the fact that approximately half of our sales of Machine Control as a service are to new logos. It's the same phenomenon we see with our Trimble Catalyst subscriptions, where we are reaching new users and customers with this more affordable offering.
Speaker #2: As evidenced by out a set of KPIs against the growth drivers the fact that approximately half of our sales of machine control as a service are to new with our Trimble catalyst subscriptions, Day. logos.
Speaker #2: As evidenced by out a set of KPIs against the growth drivers the fact that approximately half of our sales of machine control as a service are to new with our Trimble catalyst subscriptions, Day.
Speaker #2: customers with this more affordable offering. Finally, the addition of It's the same phenomenon we see new Trimble technology outlets is expanding fleet. Moving $508 million was up 7%, and revenue at $136 million was up 4%.
Rob Painter: Finally, the addition of new Trimble technology outlets is expanding our reach to serve the mixed fleet. Moving to transportation, ARR at $508 million was up 7%, and revenue at $136 million was up 4%. We continued to grow despite the challenged freight market. To highlight a couple of examples of connected scale at work, I'll start with our unique ability to cross-sell within the portfolio.
Speaker #2: We continue to grow despite the transportation ARR. During the year, our business model challenged the freight market. To scale at work, I'll start with our unique ability to cross-sell within the portfolio.
Speaker #2: From the perspective of a highlight, a couple of examples of connected business. They see a set of our reach to serve the mix of carrier TMS, shipper TMS, dock and yard scheduling, final mile, maintenance, mileage, and beyond.
Rob Painter: From the perspective of a customer, they don't see divisions within the business. They see a set of capabilities, and those capabilities come in the form of carrier TMS, shipper TMS, dock and yard scheduling, final mile, maintenance, mileage, navigation, fuel tax reporting, freight audit, and beyond. Cross-selling looks like selling fleet maintenance into our TMS base, or selling mapping into our European customer base, or selling shipper TMS capabilities from Transporeon into the North American market. In parallel, we continue to natively integrate the data flows across these capabilities, and we apply AI as a force multiplier to deliver outcomes that we are uniquely positioned to deliver, given the breadth and depth of the global customer base and dataset we touch. Another example of being better together comes in the form of Freight Marketplace. In Q3, we announced Procter & Gamble as an anchor tenant.
Rob Painter: From the perspective of a customer, they don't see divisions within the business. They see a set of capabilities, and those capabilities come in the form of carrier TMS, shipper TMS, dock and yard scheduling, final mile, maintenance, mileage, navigation, fuel tax reporting, freight audit, and beyond. Cross-selling looks like selling fleet maintenance into our TMS base, or selling mapping into our European customer base, or selling shipper TMS capabilities from Transporeon into the North American market.
Speaker #2: navigation, fuel tax reporting, freight audit, together comes in the form of freight customer base and data set we quarter, we announced Procter & Gamble as an anchor tenant.
Speaker #2: Cross-selling looks like selling fleet maintenance into our TMS base. Our selling mapping into our European customer base. We're selling shipper TMS capabilities from market.
Speaker #2: In parallel, we continue to natively integrate the data flows And those capabilities come in the form across these capabilities and we apply AI as a force multiplier to deliver outcomes that we are uniquely positioned to deliver, given the breadth and depth of the global touch.
Rob Painter: In parallel, we continue to natively integrate the data flows across these capabilities, and we apply AI as a force multiplier to deliver outcomes that we are uniquely positioned to deliver, given the breadth and depth of the global customer base and dataset we touch. Another example of being better together comes in the form of Freight Marketplace. In Q3, we announced Procter & Gamble as an anchor tenant.
Speaker #2: In December, customer, they don't see divisions within the we won the business of one of the world's leading beverage companies to manage their US-based spot mini bid and strategic procurement.
Rob Painter: In December, we won the business of one of the world's leading beverage companies to manage their US-based spot, mini bid, and strategic procurement. By bringing billions of dollars of additional shipper freight spend into our marketplace, we believe we are well-positioned to capture additional business with the leading global shippers by connecting them with vetted carrier freight capacity. Stepping back to look at a set of metrics of performance and progression, slide 10 provides a 2025 refresh on the segment composition, which is almost entirely recurring revenue. The segment is well-balanced, with the carrier and shipper-centric solutions, and geographically balanced between Europe and North America. During the year, we expanded the power of our multi-sided marketplace, as evidenced by the addition of over 10,000 carriers and over 100 shippers.
Rob Painter: In December, we won the business of one of the world's leading beverage companies to manage their US-based spot, mini bid, and strategic procurement. By bringing billions of dollars of additional shipper freight spend into our marketplace, we believe we are well-positioned to capture additional business with the leading global shippers by connecting them with vetted carrier freight capacity.
Speaker #2: Bringing billions of dollars of additional shipper freight spend into our marketplace, we believe we are well positioned to capture additional business with marketplace. The leading global shippers by, in the third, carrier freight capacity.
Speaker #2: Stepping back to look at a set of By metrics of performance and progression, slide 10 provides a 2025 connecting them with vetted which is almost entirely recurring revenue.
Rob Painter: Stepping back to look at a set of metrics of performance and progression, slide 10 provides a 2025 refresh on the segment composition, which is almost entirely recurring revenue. The segment is well-balanced, with the carrier and shipper-centric solutions, and geographically balanced between Europe and North America. During the year, we expanded the power of our multi-sided marketplace, as evidenced by the addition of over 10,000 carriers and over 100 shippers.
Speaker #2: The segment is solutions and geographically balanced between Europe and North America. During the year, we expanded the power of our multi-sided marketplace, well-balanced with the carrier- and shipper-centric approach, as evidenced by the addition of over shippers.
Speaker #2: We also demonstrated the ability to grow our existing 10,000 carriers in over 100 refresh on the segment composition, customers. As evidenced by double-digit growth of Transporeon customers doing more than €1 million of ARR.
Rob Painter: We also demonstrated the ability to grow our existing customers, as evidenced by double-digit growth of Transportation customers doing more than EUR 1 million of ARR, and Maps and Enterprise customers doing both $100,000 and $1 million in ARR. With that, Phil, I'll turn it over to you.
Rob Painter: We also demonstrated the ability to grow our existing customers, as evidenced by double-digit growth of Transportation customers doing more than EUR 1 million of ARR, and Maps and Enterprise customers doing both $100,000 and $1 million in ARR. With that, Phil, I'll turn it over to you.
Speaker #2: In maps and enterprise customers doing both 100,000 and 1 million dollars in ARR. Phil, I'll turn it over to With that, Rob. Let me start with capital allocation, you.
Speaker #2: Thanks, consistent. During the fourth quarter, we repurchased approximately $148 million worth of shares, a direct reflection of our confidence in the long-term value of our business and our commitment to delivering disciplined shareholder returns.
Phil Sawarynski: Thanks, Rob. Let me start with capital allocation, which remains disciplined and consistent. During the fourth quarter, we repurchased approximately $148 million worth of shares, a direct reflection of our confidence in the long-term value of our business and our commitment to delivering shareholder returns. We retain a substantial $925 million under our current repurchase authorization, which gives us flexibility for opportunistic buybacks. Longer term, we continue to expect at least 1/3 of our free cash flow to be used for repurchasing shares as we look to provide returns for our shareholders. Our M&A strategy remains focused on strengthening our core market positions. We continue to screen for opportunities and high-growth capabilities that we integrate into our platforms, primarily in construction software, with an emphasis on tuck-in acquisitions. Let's review the fourth quarter of 2025, starting on Slide 11.
Phil Sawarynski: Thanks, Rob. Let me start with capital allocation, which remains disciplined and consistent. During the fourth quarter, we repurchased approximately $148 million worth of shares, a direct reflection of our confidence in the long-term value of our business and our commitment to delivering shareholder returns. We retain a substantial $925 million under our current repurchase authorization, which gives us flexibility for opportunistic buybacks.
Speaker #2: We retain a substantial 925 million under our current repurchase authorization which gives us flexibility for opportunistic buybacks. Longer term, we continue to expect at least a third of our free cash flow to be used for repurchasing shares as we look to provide returns for our shareholders.
Phil Sawarynski: Longer term, we continue to expect at least 1/3 of our free cash flow to be used for repurchasing shares as we look to provide returns for our shareholders. Our M&A strategy remains focused on strengthening our core market positions. We continue to screen for opportunities and high-growth capabilities that we integrate into our platforms, primarily in construction software, with an emphasis on tuck-in acquisitions. Let's review the fourth quarter of 2025, starting on Slide 11.
Speaker #2: remains focused on strengthening our core market positions. We continue to screen for opportunities in high-growth capabilities that we integrate into our platforms, primarily in-construction software with an the fourth quarter of 2025 starting emphasis on tuck-in on slide 11.
Speaker #2: Delivered organic revenue growth of 9%, which exceeded our outlook. Driven by the continued strength of AECO and field logistics, demonstrating resilience and positive growth within a constrained freight market.
Speaker #2: delivered organic revenue growth of 9%, which exceeded our We outlook. Driven by the continued strength of AECO and field logistics demonstrating resilience and positive growth within a constrained freight acquisitions.
Phil Sawarynski: We delivered organic revenue growth of 9%, which exceeded our outlook, driven by the continued strength of AECO and field systems, and with transportation and logistics demonstrating resilience and positive growth within a constrained freight market. ARR was toward the top end of our outlook at 14% to a record $2.39 billion. The continued growth in our recurring revenue base provides a predictable and resilient foundation for our business. Gross margins expanded to 74.6%, and we achieved EBITDA margins of 33.5%. Both were aided by 1 January term license renewals. Reported earnings per share was $1 for the quarter, $0.05 better than the midpoint and above the high end of our guidance.
Phil Sawarynski: We delivered organic revenue growth of 9%, which exceeded our outlook, driven by the continued strength of AECO and field systems, and with transportation and logistics demonstrating resilience and positive growth within a constrained freight market. ARR was toward the top end of our outlook at 14% to a record $2.39 billion.
Speaker #2: toward the top end of our outlook at 2.39 billion. The continued growth in our recurring revenue base provides a predictable and resilient foundation Gross margins expanded to for our business.
Phil Sawarynski: The continued growth in our recurring revenue base provides a predictable and resilient foundation for our business. Gross margins expanded to 74.6%, and we achieved EBITDA margins of 33.5%. Both were aided by 1 January term license renewals. Reported earnings per share was $1 for the quarter, $0.05 better than the midpoint and above the high end of our guidance.
Speaker #2: 74.6%, and we achieved EBITDA margins of 33.5%. Both were aided by January 1 term license renewals. Reported earnings Let's review guidance. Our quarter, 5 cents better than the 2025 full-year results serve as validation of the progression of our financial model, and confidence that we are on a trajectory to deliver our long-term model as presented at Investor Day of $3 billion in ARR, organic revenue growth of 10% 2027.
Phil Sawarynski: Our 2025 full-year results serve as validation of the progression of our financial model, and confidence that we are on a trajectory to deliver our long-term model as presented at Investor Day of $3 billion in ARR, $4 billion of revenue, and 30% EBITDA margins in 2027. For the full year, organic revenue growth of 10% surpassed the high end of our outlook. Gross margins expanded 150 basis points to 71.7%, and EBITDA margins expanded 150 basis points to 29.3%. EPS for the year was $3.13, and above the high end of our guide, and well above our long-term model of low to mid-teens growth when adjusting for the ag divestiture. Moving to the balance sheet and cash flow items on Slide 12.
Phil Sawarynski: Our 2025 full-year results serve as validation of the progression of our financial model, and confidence that we are on a trajectory to deliver our long-term model as presented at Investor Day of $3 billion in ARR, $4 billion of revenue, and 30% EBITDA margins in 2027. For the full year, organic revenue growth of 10% surpassed the high end of our outlook.
Speaker #2: outlook. Gross margins expanded per share was $1 for the 150 basis points to 71.7%, and EBITDA margins expanded 150 basis points to For the full year, 29.3%.
Phil Sawarynski: Gross margins expanded 150 basis points to 71.7%, and EBITDA margins expanded 150 basis points to 29.3%. EPS for the year was $3.13, and above the high end of our guide, and well above our long-term model of low to mid-teens growth when adjusting for the ag divestiture. Moving to the balance sheet and cash flow items on Slide 12.
Speaker #2: EPS for the year was $4 billion of revenue, and 30% $3.13, and above the high end of our guide and well above our long-term model of low the ag to mid-teens growth when adjusting for divestiture.
Speaker #2: Moving to the balance sheet and cash 12, our year-to-date reported free cash flow remains strong at $307 million of tax payments and other costs primarily related $361 million when considering the exited the year with a strong balance to divestitures.
Phil Sawarynski: Our year-to-date reported free cash flow remains strong at $361 million, when considering the $307 million of tax payments and other costs, primarily related to divestitures. We exited the year with a strong balance sheet that provides financial flexibility, with $253 million of cash and a leverage ratio of 1.1 times, which is well below our long-term target rate of 2.5 times. Moving to a segment review of the numbers. Let's start with AECO on Slide 13. AECO continues to perform and exceeded expectations with a record 1.475 billion of ARR, posting 16% ARR growth and 15% revenue growth for the quarter. Operating margin was at 44% and was aided by 1 January term license renewals.
Phil Sawarynski: Our year-to-date reported free cash flow remains strong at $361 million, when considering the $307 million of tax payments and other costs, primarily related to divestitures. We exited the year with a strong balance sheet that provides financial flexibility, with $253 million of cash and a leverage ratio of 1.1 times, which is well below our long-term target rate of 2.5 times.
Speaker #2: sheet that provides financial flexibility with $253 million of We our long-term target rate of 2.5 times. 1.1 times, which is well below to a segment review of the numbers, let's Moving start with AECO on slide 13.
Phil Sawarynski: Moving to a segment review of the numbers. Let's start with AECO on Slide 13. AECO continues to perform and exceeded expectations with a record 1.475 billion of ARR, posting 16% ARR growth and 15% revenue growth for the quarter. Operating margin was at 44% and was aided by 1 January term license renewals.
Speaker #2: AECO continues flow items on slide to perform and exceeded expectations with a record 1.475 billion of growth and 15% revenue growth for the quarter.
Speaker #2: ARR posting 16% ARR ARR up 20%, and operating Revenue is 30%. to The continued For the full year, revenue is up 5%, muted, the segment delivered revenue growth of 4% and ARR growth 31.1%. 15. of 7% for the quarter.
Speaker #2: ARR posting 16% ARR ARR up 20%, and operating Revenue is 30%. to The continued For the full year, revenue is up 5%, muted, the segment delivered revenue growth of 4% and ARR growth 31.1%. 15.
Speaker #2: ARR posting 16% ARR ARR up 20%, and operating Revenue is 30%. to The continued For the full year, revenue is up 5%, muted, the segment delivered revenue growth of 4% and ARR growth 31.1%.
Speaker #2: Operating margin was at 44% and was aided by January 1st term license renewals. For the full year, both AECO revenue and ARR grew at 16%, and operating margin was at 34.2%.
Phil Sawarynski: For the full year, both AECO revenue and ARR grew at 16%, and operating margin was at 34.2%. Next, field systems on Slide 14. Revenue was up 4% in Q4 while absorbing model conversions to recurring revenue. The continued execution resulted in another strong quarter of ARR growth at 20%, and operating margin was 30%. For the full year, revenue is up 5%, ARR up 20%, and operating margin expanded 100 basis points to 31.1%. Finally, transportation and logistics on Slide 15. In a freight environment that remains muted, the segment delivered revenue growth of 4% and ARR growth of 7% for the quarter. Operating margins were at 22.9%. For the full year, revenue grew 5%, ARR grew 7%, and operating margin was at 22.9%.
Phil Sawarynski: For the full year, both AECO revenue and ARR grew at 16%, and operating margin was at 34.2%. Next, field systems on Slide 14. Revenue was up 4% in Q4 while absorbing model conversions to recurring revenue. The continued execution resulted in another strong quarter of ARR growth at 20%, and operating margin was 30%.
Speaker #2: Next, field systems on up 4% in the fourth quarter while absorbing model conversions to recurring slide 14. strong quarter of ARR growth at revenue.
Phil Sawarynski: For the full year, revenue is up 5%, ARR up 20%, and operating margin expanded 100 basis points to 31.1%. Finally, transportation and logistics on Slide 15. In a freight environment that remains muted, the segment delivered revenue growth of 4% and ARR growth of 7% for the quarter. Operating margins were at 22.9%. For the full year, revenue grew 5%, ARR grew 7%, and operating margin was at 22.9%.
Speaker #2: Operating margins were at 22.9%. For the full year, revenue grew 5%, ARR grew 7%, and operating margin was at 22.9%. Operating In a freight environment that remains margin for both the quarter and the full year was slightly down year over year, primarily due to stranded costs related to the mobility divestiture.
Phil Sawarynski: Operating margin for both the quarter and the full year were slightly down year-over-year, primarily due to stranded costs related to the mobility divestiture. Turning to Slide 16, let's look ahead to 2026.... The midpoints of our 2026 full year guidance are $3.86 billion in revenue, which represents approximately 7.5% growth and $3.52 EPS. We expect ARR growth at 13% and EBITDA margins to expand approximately 50 basis points to 29.8%, as our model delivers strong operating leverage while allowing us to reinvest for future growth. From a cash flow perspective, we expect free cash flow to be approximately 1x net income, and that we can deliver free cash flow greater than the non-GAAP net income over the long term. Slide 17 breaks down these metrics by segment.
Phil Sawarynski: Operating margin for both the quarter and the full year were slightly down year-over-year, primarily due to stranded costs related to the mobility divestiture. Turning to Slide 16, let's look ahead to 2026.... The midpoints of our 2026 full year guidance are $3.86 billion in revenue, which represents approximately 7.5% growth and $3.52 EPS.
Speaker #2: Turning to slide 16, let's look ahead to 2026. Finally, transportation midpoints of our 2026 full-year guidance are $3.86 billion in revenue, which represents approximately 7.5%, and $3.52 EPS.
Speaker #2: Expect ARR growth at We 13%, and EBITDA margins to expand approximately 50 basis points to growth, and our model delivers strong operating leverage while allowing us to reinvest for future growth.
Phil Sawarynski: We expect ARR growth at 13% and EBITDA margins to expand approximately 50 basis points to 29.8%, as our model delivers strong operating leverage while allowing us to reinvest for future growth. From a cash flow perspective, we expect free cash flow to be approximately 1x net income, and that we can deliver free cash flow greater than the non-GAAP net income over the long term. Slide 17 breaks down these metrics by segment.
Speaker #2: From a cash flow perspective, we expect free cash flow to be approximately one times net income, and that we can deliver free cash flow greater than the non-GAAP net income over the long term.
Speaker #2: Slide 17 breaks down these metrics by segment. The trajectory across all three segments remained 2027. Finally, regarding our first quarter outlook on slide 18, we are fully aligned to deliver the Investor Day plan. We are setting our revenue midpoint at $905 million, which is growth.
Phil Sawarynski: The trajectory across all three segments remains fully aligned to deliver the Investor Day company targets for 2027. Finally, regarding our Q1 outlook on slide 18, we are setting our revenue midpoint at $905 million, which is approximately 8% growth, EPS midpoint at $0.71, and ARR growth at 13%. We expect EBITDA margins at 26.6%, which is a 70 basis points expansion year-over-year. Back to you, Rob.
Phil Sawarynski: The trajectory across all three segments remains fully aligned to deliver the Investor Day company targets for 2027. Finally, regarding our Q1 outlook on slide 18, we are setting our revenue midpoint at $905 million, which is approximately 8% growth, EPS midpoint at $0.71, and ARR growth at 13%. We expect EBITDA margins at 26.6%, which is a 70 basis points expansion year-over-year. Back to you, Rob.
Speaker #2: EPS midpoint at $0.71, up 13%. We expect EBITDA margins in the mid-teens, and ARR growth at 26.6%, which is a 70 basis point expansion year over year.
Speaker #2: Back to you, Rob. approximately 8%
Speaker #1: Thanks, Phil. I'll result of years of past work by benefits of our Connect and Scale. Close with a reflection on the compounding—the power of compounding takes patience—and the Trimble team.
Rob Painter: Thanks, Phil. I'll close with a reflection on the compounding benefits of our Connect and Scale strategy. The fruits of what we see today are the result of years of past work by the Trimble team. Unlocking the power of compounding takes patience and conviction to be just a little bit better every day. The strength and momentum we carry into 2026 gives us confidence that we have yet to see the biggest gains for what's possible when we connect people, data, workflows, and ecosystems in construction and transportation. That same principle of compounding applies to our financial returns, and that flywheel is turning. My gratitude to the Trimble team and partners, as well as our investors, who continue to support our strategy. Operator, let's open the line to questions.
Rob Painter: Thanks, Phil. I'll close with a reflection on the compounding benefits of our Connect and Scale strategy. The fruits of what we see today are the result of years of past work by the Trimble team. Unlocking the power of compounding takes patience and conviction to be just a little bit better every day.
Speaker #1: The unlocking and momentum we carry into 2026 gives us confidence that we have yet more possible when we connect people, data, workflows, and ecosystems in construction and transportation.
Rob Painter: The strength and momentum we carry into 2026 gives us confidence that we have yet to see the biggest gains for what's possible when we connect people, data, workflows, and ecosystems in construction and transportation. That same principle of compounding applies to our financial returns, and that flywheel is turning. My gratitude to the Trimble team and partners, as well as our investors, who continue to support our strategy. Operator, let's open the line to questions.
Speaker #1: That to see the biggest gains for what's same principle of compounding applies to our financial returns, and that gratitude to the Trimble team and partners, as well as our investors who continue to support flywheel is turning.
Speaker #1: our strategy. Operator, let's open the line to
Speaker #3: We will now begin the
Operator: We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from Jason Celino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Operator: We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from Jason Celino with KeyBanc Capital Markets. Your line is open. Please go ahead.
Speaker #3: like to ask a question, please keypad. question, press star 1 To withdraw your again. Please pick up your handset when asking a question, and if you are muted unmute your device.
Speaker #3: Please My locally, please remember to roster. Our first stand by while we compile the Q&A
Speaker #3: Markets, your line is open. The next question comes from Jason.
Speaker #3: ahead.
Speaker #4: Hey,
Jason Celino: Hey, guys, good morning. I want to mess up the field systems ARR growth. You know, it was really impressive to see it accelerate to 20%. Maybe can you speak to some of the strengths 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 %. You know, is that just a function of tough comp, or is there some dynamic with kind of the transition we should know about?
Jason Celino: Hey, guys, good morning. I want to mess up the field systems ARR growth. You know, it was really impressive to see it accelerate to 20%. Maybe can you speak to some of the strengths 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 %. You know, is that just a function of tough comp, or is there some dynamic with kind of the transition we should know about?
Speaker #4: guys. Good morning. field systems, ARR growth. I want to nest up the It was questions. really impressive to see it accelerate to you speak to some of the strengths you saw in the quarter, and then when we think about guidance, it's assuming Yes.
Speaker #4: 20%.
Speaker #4: 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?
Speaker #5: Hey, good morning,
Rob Painter: Hey, good morning, Jason. It's Rob here. With the growth in the quarter, and you're right, it was impressive growth from the team. We continue to see strong performance in the machine control guidance-as-a-service. We continue to see growth, actually, in providing corrections into the automotive market and geospatial. We see growth in our Catalyst, which is positioning as-a-service. The software conversions continue to drive growth, really across the board strength. Relative to the guide in 2026, there is a lapping effect. As you know, as we've started the conversions and have been early in them, there's just a natural mathematical effect on that. So really continue at the fundamental level to expect to see strong growth in that.
Rob Painter: Hey, good morning, Jason. It's Rob here. With the growth in the quarter, and you're right, it was impressive growth from the team. We continue to see strong performance in the machine control guidance-as-a-service. We continue to see growth, actually, in providing corrections into the automotive market and geospatial.
Speaker #5: Jason, it's Rob here. With the growth in the quarter—and you're right, it was an impressive team—we continue to see growth from the machine control guidance as a service.
Speaker #5: Jason. It's Rob here. With the growth in the quarter, and you're right, it was an impressive team. We continue to growth from the machine control guidance as a service. see strong performance in the We can continue to see growth.
Speaker #5: And geospatial—we see maybe some growth in our Catalyst, which is positioning as a service. I'm actually providing—the software conversions continue to drive growth.
Rob Painter: We see growth in our Catalyst, which is positioning as-a-service. The software conversions continue to drive growth, really across the board strength. Relative to the guide in 2026, there is a lapping effect. As you know, as we've started the conversions and have been early in them, there's just a natural mathematical effect on that. So really continue at the fundamental level to expect to see strong growth in that. You know, when you up level to the segment level, you know, field systems crossed a threshold now of being over 50% software and services for the year. So very happy about that.
Speaker #5: It's really across the board strength. Relative to the guide in 2026, there is a lapping effect. As we've started the conversions and have been early mathematical effect on that.
Speaker #5: It's really across the board strength. Relative to the guide in 2026, there is a lapping effect. As we've started the conversions and have been early in them, there's just a natural level, to expect to see strong So really continue at the fundamental growth in that.
Speaker #5: And when you
Rob Painter: You know, when you up level to the segment level, you know, field systems crossed a threshold now of being over 50% software and services for the year. So very happy about that.
Speaker #5: Level, field systems crossed a threshold now of being over that.
Speaker #5: 50% software and services Wonderful.
Speaker #4: Okay. monetize them? Thank
Jason Celino: Okay, wonderful. Then, the construction and architecture industry is, you know, 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 looking to monetize them? Thank you.
Jason Celino: Okay, wonderful. Then, the construction and architecture industry is, you know, 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 looking to monetize them? Thank you.
Speaker #4: And then the
Speaker #4: It seems very suitable for Agentic, given the many stakeholders in the construction and architecture industry and historically siloed processes. But the industry has historically been pretty slow at adopting technology.
Speaker #4: Can you discuss how you think the industry will ramp for the year, adoption of Agentic, and how that might compare with maybe other industries?
Speaker #4: Can you discuss how you think the industry will ramp for the year. adoption of Agentic and how that might
Speaker #5: Hey, good are the exact right place for
Rob Painter: Hey, good question. We think that Trimble platforms are the exact right place for customers to adopt the agentic workflows that we can enable, let's say, as opposed to doing them outside of a Trimble platform. So we're already that system of records that becomes a system of intelligence. We already have a unique data set resident inside of Trimble that customers want to unlock. And when I spend time with customers, increasingly, they're talking about how do they unlock more out of the data they have and how they get AI usage on top of that data to help them address, let's say, the challenges and the opportunities that exist in the industry.
Rob Painter: Hey, good question. We think that Trimble platforms are the exact right place for customers to adopt the agentic workflows that we can enable, let's say, as opposed to doing them outside of a Trimble platform. So we're already that system of records that becomes a system of intelligence. We already have a unique data set resident inside of Trimble that customers want to unlock.
Speaker #5: question. We think that Trimble platforms
Speaker #5: Customers to adopt the Agentic workflows that new Agentic features—how are you looking to doing them outside? So, very happy about a Trimble platform.
Speaker #5: So you. we're already that system of a unique dataset resonant inside of Trimble that customers want to unlock and when I spend they're talking about how do they unlock more out of the data they have and how of intelligence.
Rob Painter: And when I spend time with customers, increasingly, they're talking about how do they unlock more out of the data they have and how they get AI usage on top of that data to help them address, let's say, the challenges and the opportunities that exist in the industry. So we think the best way to speed up the adoption in the industry of agentic AI is doing it on top of the existing platforms and solutions that they're already buying from us, where, you know, we have that trusted relationship and a unique and, and I think, proprietary data set upon which to build.
Speaker #5: To—and how do they—we can enable, let's say, as opposed to get AI usage on top of time with customers, increasingly that data to help them address, let's say, the challenges and the opportunities that exist in the industry.
Speaker #5: So, we think the best way to speed up the adoption in the industry—we already have it on top of the existing platforms and solutions that they're already buying from us.
Rob Painter: So we think the best way to speed up the adoption in the industry of agentic AI is doing it on top of the existing platforms and solutions that they're already buying from us, where, you know, we have that trusted relationship and a unique and, and I think, proprietary data set upon which to build.
Speaker #5: We have relationship and a unique of Agentic AI is doing and, I think, proprietary dataset upon which to that trusted build.
Speaker #6: Hey, Jason. It's Phil. Just to add—sorry, you had asked about the monetization. So, one thing I'll point out: with SketchUp, we introduced some new AI agents.
Phil Sawarynski: Hey, Jason, this is Phil.
Phil Sawarynski: Hey, Jason, this is Phil.
Jason Celino: Great.
Jason Celino: Great.
Phil Sawarynski: Just to add... Sorry, you had asked about the monetization. So one thing I'll point out, with SketchUp, we introduced some new AI agents, and what we started to do is actually include credits. So as you use the agents, you apply credits against them. Early stages, but as we think about the monetization, is moving a little bit more into that consumption as well.
Phil Sawarynski: Just to add... Sorry, you had asked about the monetization. So one thing I'll point out, with SketchUp, we introduced some new AI agents, and what we started to do is actually include credits. So as you use the agents, you apply credits against them. Early stages, but as we think about the monetization, is moving a little bit more into that consumption as well.
Speaker #6: And what we've started to do is actually include credits. So as you use the agents, you apply credits against them. Early stages, but as we think about the monetization, it is moving a little bit more into that consumption as—
Speaker #6: well. Okay.
Kristin Owen: ... Okay, very helpful. Thank you.
Kristin Owen: ... Okay, very helpful. Thank you.
Speaker #4: Very helpful. Thank
Speaker #4: you.
Speaker #3: Our
Operator: Our next question comes from Josh Tilton with Wolfe Research. Your line is open. Please go ahead.
Operator: Our next question comes from Josh Tilton with Wolfe Research. Your line is open. Please go ahead.
Speaker #3: Tilton with Wolf Research, your line is open. Please go ahead. The next question comes from Josh.
Speaker #5: Hey, guys. Are you assuming anything around the Fed? How do you think about some of those inputs in the—
Josh Tilton: Hey, guys, thanks for sneaking me in, and congrats on a strong end to the year.
Josh Tilton: Hey, guys, thanks for sneaking me in, and congrats on a strong end to the year.
Speaker #5: for sneaking me in and congrats on a strong end to the year.
Rob Painter: Thank you.
Rob Painter: Thank you.
Josh Tilton: 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 2025. How do we think about what those puts and takes are, for the guidance that you just set for 2026? Maybe a little more specifically, like, what are you assuming for the macro? What are you assuming around Fed? Like, how do we, how do we think about some of those inputs in the outlook, for next—for this year?
Speaker #5: 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.
Josh Tilton: 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 2025. How do we think about what those puts and takes are, for the guidance that you just set for 2026? Maybe a little more specifically, like, what are you assuming for the macro? What are you assuming around Fed? Like, how do we, how do we think about some of those inputs in the outlook, for next—for this year?
Speaker #5: How do we think about what those puts and takes are for the '26? Maybe a little more specifically, what are you—guidance that you just set for—assuming for the macro?
Speaker #5: year?
Speaker #6: Hey,
Rob Painter: Hey, Josh, thanks for the question. I'll start, and Phil, you can add on. You know, 2025 was clearly a very strong year of progression for us, strategically, operationally, built on what was also a strong 2024. When we think about 2026, we're also thinking about that in a longer-term context through the 2027 model we put forward at Investor Day. At a macro level, don't really see any fundamental differences in the market. So we're expecting and planning really a pretty consistent environment that's out there, and we can, you know, talk through the puts and takes on that. That includes, for example, at the US federal government level, really a very muted amount of business there.
Rob Painter: Hey, Josh, thanks for the question. I'll start, and Phil, you can add on. You know, 2025 was clearly a very strong year of progression for us, strategically, operationally, built on what was also a strong 2024. When we think about 2026, we're also thinking about that in a longer-term context through the 2027 model we put forward at Investor Day.
Speaker #6: Josh. Thanks for the question. I'll start and Phil, you can add on. 2025 is clearly a very
Speaker #6: operationally, built on what was also a strong year of 2024. When we think about 2026, we're also progression for us strategically, thinking about that on a longer-term context through outlook for this 2027 model we've put forward and strong investor day.
Rob Painter: At a macro level, don't really see any fundamental differences in the market. So we're expecting and planning really a pretty consistent environment that's out there, and we can, you know, talk through the puts and takes on that. That includes, for example, at the US federal government level, really a very muted amount of business there.
Speaker #6: At a macro level, don't really see any fundamental differences. In the market. So we're expecting and planning really a pretty consistent environment that's out there, and we can talk through the puts and takes on the US federal government very muted amount of business that.
Speaker #6: There, in transportation at the macro level, we expect to continue to level, really see a more talented freight market. That includes, for example, at— And if we look in construction, we see pockets of strength in data centers and infrastructure build.
Rob Painter: In transportation, at the macro level, expect to continue to see a more challenged freight market, and if we look in construction, you know, we see pockets of strength in data centers and infrastructure build. We see it in shipbuilding, we see it in onshoring and reshoring of manufacturing. And really, those are trends that we've been seeing here for the last couple of years. So as we continue to progress the strategy, we take that forward into the guide, and inside that guide, we want to make sure we leave ourselves room to operate the business comfortably and to be able to reinvest back into the business.
Rob Painter: In transportation, at the macro level, expect to continue to see a more challenged freight market, and if we look in construction, you know, we see pockets of strength in data centers and infrastructure build. We see it in shipbuilding, we see it in onshoring and reshoring of manufacturing. And really, those are trends that we've been seeing here for the last couple of years.
Speaker #6: We see the chip building. reshoring of manufacturing. We see it in onshoring and trends that we've been seeing here for the continue to progress the strategy.
Rob Painter: So as we continue to progress the strategy, we take that forward into the guide, and inside that guide, we want to make sure we leave ourselves room to operate the business comfortably and to be able to reinvest back into the business. You know, that flows in then to our point of view at both the ARR growth, revenue growth, down through the op margins.
Speaker #6: We take that forward into the guide, and inside that guide, we want to make sure we leave ourselves room to operate the business comfortably and to be able to reinvest back into the business.
Speaker #6: And that flows into our point of view at both the ARR growth, revenue growth down through the out margins. Super more bit of narrow deck says over 70% of ACV follow-up.
Rob Painter: You know, that flows in then to our point of view at both the ARR growth, revenue growth, down through the op margins.
Josh Tilton: Super helpful. And maybe just, like, one more bit of a narrow follow-up in AECO. I know the deck says over 70% of AEC bookings with existing customers, but when we think about, you know, I guess, just under 30% of AEC 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? Thanks, guys.
Josh Tilton: Super helpful. And maybe just, like, one more bit of a narrow follow-up in AECO. I know the deck says over 70% of AEC bookings with existing customers, but when we think about, you know, I guess, just under 30% of AEC 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? Thanks, guys.
Speaker #6: Bookings with existing customers. But when we think about, I guess, just under 30%. Then maybe just one in ACO. I know the new—where are those new customers coming from?
Speaker #6: Of AC bookings coming from over the competition? And maybe just remind us, what did that look like in the past? Thanks, guys.
Rob Painter: We'll start with where the customers come from, where new logos are coming from. We see that in two dimensions. One is geographic. So we're a very global business, you know, more than an AECO, more than half of it is North America. The global, you know, that's a different ratio than the global construction market, which is to say, we have lots of opportunities outside of North America when new logos, and we see that through the results. If you take it at a closer to a product level or even TC1 level, you know, bundled offerings, take project management as an example, added hundreds of new customers in 2025 into the business, and that played through that 50% ARR growth we talked about in that.
Rob Painter: We'll start with where the customers come from, where new logos are coming from. We see that in two dimensions. One is geographic. So we're a very global business, you know, more than an AECO, more than half of it is North America. The global, you know, that's a different ratio than the global construction market, which is to say, we have lots of opportunities outside of North America when new logos, and we see that through the results.
Speaker #5: Where the customers come from, where are new logos coming from—we see that. We'll start with in two dimensions. One is geographic, so very—more than half of it is in North America.
Speaker #5: The global that's a different ratio than the global construction global business, more than an ACO, market, which is to say we North America when new logos and we see that through the results.
Speaker #5: If you take it at a closer to a product level, offerings, take project have lots of opportunities outside of management as an example. Added hundreds of new customers in 2025 into the business.
Rob Painter: If you take it at a closer to a product level or even TC1 level, you know, bundled offerings, take project management as an example, added hundreds of new customers in 2025 into the business, and that played through that 50% ARR growth we talked about in that. So you can see that on two different axes. You have product penetration in the market, meets geographic penetration. And why customers are choosing Trimble?
Speaker #5: And that played through, or even TC1 level, bundled—we talked about in that. So you can see that on two different axes. You have meets, geographic penetration.
Rob Painter: So you can see that on two different axes. You have product penetration in the market, meets geographic penetration. And why customers are choosing Trimble? Well, you know, we've got 48 years now of building best-in-breed, best-in-class, purpose-built solutions for the end markets that we serve and those customers that we serve. In addition, TC1, Trimble Construction One, within AECO, has been a strong catalyst for that adoption, because when you're buying inside Trimble Construction One, and so you're buying inside the Trimble platform, you're buying a set of solutions that are natively integrated, that are helping you solve workflow challenges and opportunities, getting after those higher-order problems.
Speaker #5: And why are customers choosing Trimble? Well, we've got 48 years now of building best-in-breed, best-in-class products, that 50% ARR growth, and the end markets that we serve.
Rob Painter: Well, you know, we've got 48 years now of building best-in-breed, best-in-class, purpose-built solutions for the end markets that we serve and those customers that we serve. In addition, TC1, Trimble Construction One, within AECO, has been a strong catalyst for that adoption, because when you're buying inside Trimble Construction One, and so you're buying inside the Trimble platform, you're buying a set of solutions that are natively integrated, that are helping you solve workflow challenges and opportunities, getting after those higher-order problems.
Speaker #5: And as purpose-built solutions for the product penetration in the market customers that we serve, in One, within addition, TC1, Trimble Construction catalyst for that adoption, because when Construction One or inside, you're buying inside the Trimble platform, you're buying a set, you're buying inside Trimble integrated that are helping you solve workflow challenges. AECO has been a strong and opportunities.
Speaker #5: Getting after those higher-order problems. of solutions that are natively We're doing the things that we can uniquely do to connect work in the office and the field and beyond AECO, connect hardware and software across all of Trimble to connect the work and the physical and the digital worlds.
Rob Painter: You know, we're doing the things that we can uniquely do to connect work in the office and the field, and beyond AECO, connect hardware and software, across all of Trimble to connect the work in the physical and the digital worlds. The sum of that is what's driving those bookings, both at the new logo and existing.
Rob Painter: You know, we're doing the things that we can uniquely do to connect work in the office and the field, and beyond AECO, connect hardware and software, across all of Trimble to connect the work in the physical and the digital worlds. The sum of that is what's driving those bookings, both at the new logo and existing.
Speaker #5: Some of that is what's driving those bookings, both at the new logo and existing.
Speaker #6: Super helpful. Thank you, guys.
Josh Tilton: Super helpful. Thank you, guys.
Josh Tilton: Super helpful. Thank you, guys.
Operator: Our next question comes from Chad Dillard with Bernstein. Your line is open. Please go ahead. Chad has disconnected. Our next question comes from Kristin Owen with Oppenheimer. Your line is open. Please go ahead.
Operator: Our next question comes from Chad Dillard with Bernstein. Your line is open. Please go ahead. Chad has disconnected. Our next question comes from Kristin Owen with Oppenheimer. Your line is open. Please go ahead.
Speaker #3: question comes from Chad Dillard with go Our next ahead. Chad has disconnected. Our next question comes from Kristen Owen with Oppenheimer. Your line is open.
Speaker #3: Please go
Speaker #7: Hi. Good morning. Thank you so
Kristin Owen: Hi, good morning. Thank you so much for the question. 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, you know, the new logos versus existing customers, and I were 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? You know, how much is price, how much is account accretion, et cetera, et cetera. How do I take these KPIs and really contextualize them in the guidance?
Kristin Owen: Hi, good morning. Thank you so much for the question. 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, you know, the new logos versus existing customers, and I were 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? You know, how much is price, how much is account accretion, et cetera, et cetera. How do I take these KPIs and really contextualize them in the guidance?
Speaker #7: much for the question. ahead. Rob, I wanted to follow up here on slide eight, really appreciate a lot of these KPIs and giving some visibility into have for you, though, is if I take some of these data points around net retention, the new logos versus this.
Speaker #7: growth algorithm that sort of points us mid-teens guidance that you've provided for 2026, how do I think about those individual moving parts? How much is price?
Speaker #7: How much is to the take these KPIs and really contextualize them in the guidance?
Rob Painter: ... Yeah. So, hey, Kristen, so thanks for the question. So let's maybe work backwards from the guide implies a mid-teens growth in the ARR in the business, which is also, by the way, consistent with what we put forward at Investor Day. When you do the stack on net retention, you start with looking at the gross retention. So the churn is in that mid-single-digit range to begin with. When you go up the stack on that, and what you can connect the dots on is that, with 70% of the AECO bookings being with existing customers, that's both- that's the sum of cross-sell and upsell. And we actually see a ratio of, you know, higher upsell to the cross-sell.
Rob Painter: ... Yeah. So, hey, Kristen, so thanks for the question. So let's maybe work backwards from the guide implies a mid-teens growth in the ARR in the business, which is also, by the way, consistent with what we put forward at Investor Day. When you do the stack on net retention, you start with looking at the gross retention.
Speaker #6: Kristen. So thanks for the question.
Speaker #6: So, maybe work backwards implies a mid-teens. Yeah. The business, which is also, by the way—hey, from the guide stack on net retention, you start growth in the ARR, and consistent with what we put forward at—looking at the gross retention.
Rob Painter: So the churn is in that mid-single-digit range to begin with. When you go up the stack on that, and what you can connect the dots on is that, with 70% of the AECO bookings being with existing customers, that's both- that's the sum of cross-sell and upsell. And we actually see a ratio of, you know, higher upsell to the cross-sell.
Speaker #6: So, the one of the questions that I churn is in that mid-single-digit range to begin with. When you now go up the stack on that, what you can connect the dots on is that with 70% of the ACV bookings being with existing, of cross-sell and upsell.
Speaker #6: And we actually see a ratio of higher existing base. We have a customer. By the way, when we're continuing to penetrate the upsell to the cross-sell.
Rob Painter: So we're continuing to penetrate the existing base we have of customers. By the way, when we cross-sell in to customers, that then creates the next upsell opportunity. There's a flywheel that happens with that. Pricing is relatively modest. I call that in the low single-digit range on the stack up through that net retention, yeah, through the stack to get to total Net Retention. I'm sorry. Those are the sum of the pieces. And so then you see some of the other statistics on there, you know, whether it's the number of customers using more than one product or the growth in customers with more than three products, you know, those support that cross-sell upsell part of the Net Retention stack.
Rob Painter: So we're continuing to penetrate the existing base we have of customers. By the way, when we cross-sell in to customers, that then creates the next upsell opportunity. There's a flywheel that happens with that. Pricing is relatively modest. I call that in the low single-digit range on the stack up through that net retention, yeah, through the stack to get to total Net Retention.
Speaker #6: opportunity. There's a flywheel that happens with that. Pricing is in low single-digit range. On the stack up through that customers, that's both the sum net yes, through the stack to get So the relatively modest.
Rob Painter: I'm sorry. Those are the sum of the pieces. And so then you see some of the other statistics on there, you know, whether it's the number of customers using more than one product or the growth in customers with more than three products, you know, those support that cross-sell upsell part of the Net Retention stack.
Speaker #6: The sum of the pieces, to total net retention—I'm sorry, those are. And so then you see some of the other statistics on there.
Speaker #6: Whether it's the number of customers using more than one product or the growth in customers with more than three products, those support cross-sell upsell part of the net retention
Speaker #6: Whether it's the number of customers using more than one product or the growth in customers with more than three products, those support cross-sell upsell part of the net retention stack.
Speaker #7: Okay. I call that in the
Kristin Owen: Okay, great. Maybe just one additional clarification there. On the activity rate, you know, 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.
Kristin Owen: Okay, great. Maybe just one additional clarification there. On the activity rate, you know, 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.
Speaker #7: rate, were we to see a pickup in clarification there. construction activity or infrastructure On the activity activity, how would that integrate into the
Speaker #7: follow-up. Well, hey, any additional
Rob Painter: Well, hey, any additional positive inflections on overall new construction, of course, would be a positive for us. We would see it in the bookings before we'll see it in the ARR, so call that a positive that we would probably comment on into 2027 as opposed to 2026. There, we look to places like Europe, and let's talk about infrastructure in Germany. Like, that'd be a place where we look out for additional business. Another submarket would be residential, where that's a turn for the positive. You know, if we see interest rates go down, and then the residential market come back, there, that could be a positive that we would see.
Rob Painter: Well, hey, any additional positive inflections on overall new construction, of course, would be a positive for us. We would see it in the bookings before we'll see it in the ARR, so call that a positive that we would probably comment on into 2027 as opposed to 2026. There, we look to places like Europe, and let's talk about infrastructure in Germany.
Speaker #5: positive inflections construction, of course, would be a positive for us. We would see that on into 2027 as opposed to 2026. There we look to
Speaker #5: places like Europe and let's talk about infrastructure in Germany. That'd be a place where we look out for additional business. Another sub-market would be it in the bookings before we'll see it in residential, where that's a turn for the positive that we would probably comment algorithm?
Rob Painter: Like, that'd be a place where we look out for additional business. Another submarket would be residential, where that's a turn for the positive. You know, if we see interest rates go down, and then the residential market come back, there, that could be a positive that we would see.
Speaker #5: down and then the residential market come back, that could be a positive. That we would see, I think we would see that more in positive. 2027 than we would in 2026.
Speaker #5: down and then the residential market come back, that could be a positive. That we would see, I think we would see that more in positive.
Rob Painter: I think we would see that more in 2027 than we would in 2026, and we would see that both in AECO and field systems. So that's the, I guess, how I think about the activity rate. I think you said you had one other follow-up?
Rob Painter: I think we would see that more in 2027 than we would in 2026, and we would see that both in AECO and field systems. So that's the, I guess, how I think about the activity rate. I think you said you had one other follow-up?
Speaker #5: And we and field systems. So that's the, I guess, how I think about the activity rate. I think you said you had one other follow-up?
Speaker #5: would see that both in AECO
Speaker #7: Yes.
Kristin Owen: Yes, sorry. The other follow-up here is the AI question. Maybe just in 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 EMC customers, you know, 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. That's my follow-up. Thank you.
Kristin Owen: Yes, sorry. The other follow-up here is the AI question. Maybe just in 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 EMC customers, you know, 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. That's my follow-up. Thank you.
Speaker #7: Sorry. The other follow-up here is the AI, and then I have a separate framing in terms of the context of the question. If we see interest rates go, maybe just customers are looking to adapt their business models.
Speaker #7: I mean, we've how your heard some large integrated ENC customers publicly discussing their ambitions to bring in their own AI-enabled where Trimble sits in that discussion.
Speaker #7: That's my you.
Speaker #6: Yeah. Hey, I start with trillions, billions, millions, and thousands. Trillions through Trimble, tens of billions of freight run through Trimble.
Speaker #6: Yeah. Hey, I start with trillions, billions, millions, and thousands. Trillions
Rob Painter: Yeah. Hey, I start with trillions, billions, millions, and thousands. Trillions of dollars of construction run through Trimble, tens of billions of freight run through Trimble. We have millions of customers of Trimble software and hundreds of thousands of instruments and machines in the real physical world, operate on Trimble. So we're quite, we have quite a presence in a global sense. If I think about segmenting a customer base, you know, we have everywhere from, let's say, small customers, all the way through the largest enterprises in the world.
Rob Painter: Yeah. Hey, I start with trillions, billions, millions, and thousands. Trillions of dollars of construction run through Trimble, tens of billions of freight run through Trimble. We have millions of customers of Trimble software and hundreds of thousands of instruments and machines in the real physical world, operate on Trimble. So we're quite, we have quite a presence in a global sense. If I think about segmenting a customer base, you know, we have everywhere from, let's say, small customers, all the way through the largest enterprises in the world.
Speaker #6: customers of Trimble software and hundreds of solutions so I'm just trying to understand thousands of instruments and machines in the real physical on world operate Trimble.
Speaker #6: sense, if I think about segmenting a So we're quite we have quite a customer base, we have customers all the way through everywhere from, I'd say, small the largest enterprises in the follow-up.
Rob Painter: And I think as you move along a stack like that in a customer segmentation, you'll have customers that have naturally different levels of, let's say, AI ambitions that they can put forward and kind of resources they can even dedicate to that. And there's no question that customers, especially as you move into the large enterprise customers, are looking to unlock more efficiency and more insights out of the data, and then to see AI as a force multiplier to help unlock that data. So much of what we do at Trimble is that core system of record, system of intelligence, we operate the common and connected data environment with Trimble Connect.
Rob Painter: And I think as you move along a stack like that in a customer segmentation, you'll have customers that have naturally different levels of, let's say, AI ambitions that they can put forward and kind of resources they can even dedicate to that. And there's no question that customers, especially as you move into the large enterprise customers, are looking to unlock more efficiency and more insights out of the data, and then to see AI as a force multiplier to help unlock that data.
Speaker #6: stack like that and the customer segmentation, you'll have
Speaker #6: customer that have naturally different Thank levels of, let's say, AI ambitions that they can put world. And I think as you move along a that.
Speaker #6: I mean, there's no question that customers, unlock more efficiency and more enterprise customers, are looking to insights out of the data and then to see AI as a force multiplier to forward and kind of resources they can help unlock that that core system data.
Speaker #6: So much of what we do at Trimble is of record system of even dedicate to intelligence. We operate the common and especially as you move into the large Trimble Connect.
Speaker #6: So much of what we do at Trimble is of record system of even dedicate to intelligence. We operate the common and especially as you move into the large connected data environment with There's naturally an enormous amount of data from the physical and digital worlds that's resident on Trimble.
Rob Painter: So much of what we do at Trimble is that core system of record, system of intelligence, we operate the common and connected data environment with Trimble Connect. So there's naturally an enormous amount of data from the physical and digital worlds that's resident on Trimble, and we see, our customers looking to unlock, the potential based on the data they already have, with Trimble.
Rob Painter: So there's naturally an enormous amount of data from the physical and digital worlds that's resident on Trimble, and we see, our customers looking to unlock, the potential based on the data they already have, with Trimble. And, and, but then I should also say, in connecting non-Trimble data into that, it's a fragmented, industry. It's a fragmented, relatively fragmented technology landscape, as well. So that, thus, we have, a posture and a bias of being open to third-party solutions to enrich the datasets and therefore to enable, the, the customers. So we see ourselves as, really the logical extension of, of a, of our customers' AI ambitions, to build and extend that on top of Trimble.
Speaker #6: And we see our customers looking to Trimble. But then I should also say, in connecting non-Trimble data into that, it's a fragmented industry. It's a fragmented relatively fragmented technology landscape as well.
Speaker #6: unlock the potential based on the data they already have with So thus, we have a posture to third-party solutions to enrich the enable the customers.
Rob Painter: And, and, but then I should also say, in connecting non-Trimble data into that, it's a fragmented, industry. It's a fragmented, relatively fragmented technology landscape, as well. So that, thus, we have, a posture and a bias of being open to third-party solutions to enrich the datasets and therefore to enable, the, the customers. So we see ourselves as, really the logical extension of, of a, of our customers' AI ambitions, to build and extend that on top of Trimble.
Speaker #6: So we see ourselves as really the logical extension of, and a bias of being open, Trimble. Separately, we'll build and extend that on top of customers taking their own data sets and, therefore, to AI initiatives to leverage data they have from Trimble.
Rob Painter: Separately, will customers take their own, let's say, AI initiatives to leverage data they have from Trimble? I absolutely think that they will do that. And that's our opportunity to build more of those agents and those agentic workflows on top of it, so that our customers don't have to do it themselves. So we see all of this as a net opportunity for us.
Rob Painter: Separately, will customers take their own, let's say, AI initiatives to leverage data they have from Trimble? I absolutely think that they will do that. And that's our opportunity to build more of those agents and those agentic workflows on top of it, so that our customers don't have to do it themselves. So we see all of this as a net opportunity for us.
Speaker #6: I absolutely think that they will do that. And that's our opportunity to build more of those agents and those are our customers' AI ambitions. Agentic workflows on top of it themselves.
Speaker #6: So we see all of this
Speaker #7: Thank
Kristin Owen: Thank you.
Kristin Owen: Thank you.
Speaker #1: Our next question comes from Jonathan Ho with William Blair. Your of it so that our customers don't have to do line is open. Please go
Speaker #1: Our next question comes from Jonathan Ho with William Blair. Your of it so that our customers don't have to do line is open. Please go ahead.
Speaker #1: Our next question comes from Jonathan Ho with William Blair. Your of it so that our customers don't have to do line is open. Please go
Operator: Our next question comes from Jonathan Ho with William Blair. Your line is open. Please go ahead.
Operator: Our next question comes from Jonathan Ho with William Blair. Your line is open. Please go ahead.
Jonathan Ho: Hi, good morning, and let me echo, congratulations as well. Given your changes in mix to recurring, you know, 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?
Jonathan Ho: Hi, good morning, and let me echo, congratulations as well. Given your changes in mix to recurring, you know, 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?
Speaker #6: me echo congratulations us. as well. 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?
Speaker #6: And what happen?
Speaker #5: Hey, good morning, Jonathan. Thanks for as a net opportunity for the
Rob Painter: ... Hey, good morning, Jonathan. Thanks for the question. Hey, at the mix level, I think it's easier to take it through the segments because AECO has really converged, as has transportation logistics. So I would think of those as having converged, the ARR and revenue growth rates. I mean, it can be ±100 basis points or so, but I call that in the noise. So you really isolate then to field systems, where there's a spread between the two. And you know, in that respect, you can see it in the numbers when, with the revenue in the business, well, being $454 million in the quarter...
Rob Painter: ... Hey, good morning, Jonathan. Thanks for the question. Hey, at the mix level, I think it's easier to take it through the segments because AECO has really converged, as has transportation logistics. So I would think of those as having converged, the ARR and revenue growth rates. I mean, it can be ±100 basis points or so, but I call that in the noise. So you really isolate then to field systems, where there's a spread between the two. And you know, in that respect, you can see it in the numbers when, with the revenue in the business, well, being $454 million in the quarter...
Speaker #5: mix, level, I think it's easier to take it through the segments because AECO has really converged as has transportation logistics. So I would think of those as having converged the ARR and revenue minus 100 bips or so, but growth rates.
Speaker #5: I call that in the noise. So you really isolate then to I mean, it can be plus or field systems where there's a spread between the two.
Speaker #5: Numbers, when with the revenue in the business, while—and in that being $454 million in the quarter, or sorry, excuse me, $379 million in the quarter.
Rob Painter: Or sorry, excuse me, $379 million in the quarter, and you see the ARR at $409 million. So, you know, over $1.5 billion for the year of revenues. In other words, it's a smaller portion of the segment, you know, it's in the mid-20s ARR percent of total revenue. So we continue to drive conversions in field systems, both software conversions, because that's where you'd see the perpetual software that we have. And field systems continue to drive those conversions to recurring, but also importantly, the hardware aspects of the business.
Rob Painter: Or sorry, excuse me, $379 million in the quarter, and you see the ARR at $409 million. So, you know, over $1.5 billion for the year of revenues. In other words, it's a smaller portion of the segment, you know, it's in the mid-20s ARR percent of total revenue. So we continue to drive conversions in field systems, both software conversions, because that's where you'd see the perpetual software that we have. And field systems continue to drive those conversions to recurring, but also importantly, the hardware aspects of the business.
Speaker #5: And you see the ARR respect, you can see it in the at 409 million. So over a billion it's a smaller portion of the segment.
Speaker #5: It's in the mid-20s ARR percent of total revenue. So we continue to drive conversions in field systems—both software conversions, because that's where you'd see the perpetual software that we have—and field systems continue to drive those conversions to recurring.
Speaker #5: But also importantly, the hardware aspects of the business. And we're talking about 150 bips or so of headwind in field systems. Through the conversions, and we continue to expect to see that into 2026.
Rob Painter: You know, we're talking about 150 basis points, or so, of headwind in field systems through the conversions, and we continue to expect to see that into 2026, and I think we'll be talking about the same thing in 2027, and we're for sure going to stay the course.
Rob Painter: You know, we're talking about 150 basis points, or so, of headwind in field systems through the conversions, and we continue to expect to see that into 2026, and I think we'll be talking about the same thing in 2027, and we're for sure going to stay the course.
Speaker #5: And I think we'll be talking about the same And we'll for sure going to stay the course.
Speaker #1: Got it. And then just in terms of
Jonathan Ho: Got it. And then, you know, just in terms of Agentic AI, I just wanted to ask more broadly, you know, whether you see, you know, sort of stronger adoption in your base in 2026. Does this, you know, maybe look like a turning point? And, you know, how does your margin structure look like for, you know, sort of Agentic AI revenue relative to SaaS revenue? Thank you.
Jonathan Ho: Got it. And then, you know, just in terms of Agentic AI, I just wanted to ask more broadly, you know, whether you see, you know, sort of stronger adoption in your base in 2026. Does this, you know, maybe look like a turning point? And, you know, how does your margin structure look like for, you know, sort of Agentic AI revenue relative to SaaS revenue? Thank you.
Speaker #1: broadly whether stronger adoption in your base in 2026. This is maybe look point. And how does your like a turning margin structure look like for sort of agentic AI revenue relative to SaaS revenue?
Speaker #1: Thank thing in 2027.
Speaker #5: I think the strategic adoption in our customer
Rob Painter: I think the strategic adoption in our customer base in 2026 will, you know, for sure correlate to the rollout we have of Agentic AI capabilities, and I think you're going to see a lot more from us in 2026. So much of what we've been doing over the last 18 months, I'd call it more of the infrastructure building and beta applications out. And, you know, Phil mentioned an AI capability a few minutes ago. So we have capabilities in the market, but actually not a lot, you know, relative to what's in the pipeline for us. So what you're going to see us releasing this year, you know, we expect to turn into adoption in the customer base.
Rob Painter: I think the strategic adoption in our customer base in 2026 will, you know, for sure correlate to the rollout we have of Agentic AI capabilities, and I think you're going to see a lot more from us in 2026. So much of what we've been doing over the last 18 months, I'd call it more of the infrastructure building and beta applications out.
Speaker #5: Base in 2026 will for sure correlate to the rollout we have of agentic AI capabilities. And I think you're going to see a lot more from us, you know, in 2026.
Speaker #5: base in 2026 will for sure correlate to the rollout we have of agentic AI capabilities. And I think you're going to see a lot more from us you.
Speaker #5: months, I'd call it more of the infrastructure and Phil mentioned an AI ago. So we have capabilities in the to what's in the pipeline for we've been doing called the last 18 capability a few minutes expect to turn into adoption in the customer base.
Rob Painter: And, you know, Phil mentioned an AI capability a few minutes ago. So we have capabilities in the market, but actually not a lot, you know, relative to what's in the pipeline for us. So what you're going to see us releasing this year, you know, we expect to turn into adoption in the customer base.
Speaker #5: So what you're going to see us releasing this year we building and good best tiers. And so we've beta applications out those best of the tiers.
Rob Painter: And then building on Phil's earlier comments on the monetization, we're going to expect to see more consumption, and that we also monetize through the tiers, the tiered offerings and good best tiers. And so we've put, you know, AI capabilities in those best of the tiers. So we want to incent and, and motivate adoption at that level. So there's a hybrid of where it's both recurring and, and consumption. And we're still learning here, you know, how to get that mix right. Relative to the margins and, say, the incremental margins, of course, AI, agentic AI, generative AI does have a variable cost associated with it. It's not. It's not for free.
Speaker #5: And then building on Phil's earlier comments on market, but actually not a lot. the monetization, us. through the tiers, the tiered offerings, a that.
Rob Painter: And then building on Phil's earlier comments on the monetization, we're going to expect to see more consumption, and that we also monetize through the tiers, the tiered offerings and good best tiers. And so we've put, you know, AI capabilities in those best of the tiers. So we want to incent and, and motivate adoption at that level.
Speaker #5: We also monetize, want to incent, and we’re going to expect to see more consumption and motivate adoption at that level. So there's a hybrid where it's both recurring and consumption.
Rob Painter: So there's a hybrid of where it's both recurring and, and consumption. And we're still learning here, you know, how to get that mix right. Relative to the margins and, say, the incremental margins, of course, AI, agentic AI, generative AI does have a variable cost associated with it. It's not. It's not for free.
Speaker #5: And we're still learning here—how to get that mix right relative to the margins, and, say, the incremental margins. Of course, AI, agentic AI, generative AI, does have a variable cost associated with it.
Speaker #5: It's not for economics are, of course, different in an AI which by the way, we think is something that forward, an AI forward world, favors the position that we have as a company in having capabilities within Transforion.
Rob Painter: So the unit economics are, of course, different in an AI forward world, which, by the way, we think is something that favors the position that we have as a company and having capabilities like within Transporeon. It was already a consumption model. You know, 60% of that revenue through Transporeon is consumption, 40% is subscription. This is a muscle that we already have in the company, so we're not starting from scratch and having to learn how to do consumption. So again, just to summarize, a mix of within the subscriptions as well as consumption.
Rob Painter: So the unit economics are, of course, different in an AI forward world, which, by the way, we think is something that favors the position that we have as a company and having capabilities like within Transporeon. It was already a consumption model. You know, 60% of that revenue through Transporeon is consumption, 40% is subscription. This is a muscle that we already have in the company, so we're not starting from scratch and having to learn how to do consumption. So again, just to summarize, a mix of within the subscriptions as well as consumption.
Speaker #5: It was already a consumption model. 60% of that revenue through Transforion is consumption. 40% is subscription. This is a company. So we're not starting from scratch and having to learn how to muscle that we already have in the do consumption.
Speaker #5: So again, just to summarize a mix of within the subscriptions, You're
Speaker #5: consumption.
Speaker #1: you.
Speaker #1: you.
Jonathan Ho: Thank you.
Jonathan Ho: Thank you.
Rob Painter: You're welcome.
Rob Painter: You're welcome.
Speaker #1: Our next Barrenburg. Your line is open. Please go Thank question comes from Naso Ng with ahead.
Operator: Our next question comes from Nay Soe Naing with Berenberg. Your line is open. Please go ahead.
Operator: Our next question comes from Nay Soe Naing with Berenberg. Your line is open. Please go ahead.
Nay Soe Naing: Hello, good morning, and thank you for taking my questions. The first one I have is around the Agentic AI rollout that's coming through later this year. You know, pretty excited about them, looking forward to them. I'm just wondering, are there any particular areas of the new software portfolio that you will focus on with these AI agents, you know, between AECO and TNL, and then even within AECO, you know, which stage of the life cycle, consumption life cycle that you will look to focus on?
Nay Soe Naing: Hello, good morning, and thank you for taking my questions. The first one I have is around the Agentic AI rollout that's coming through later this year. You know, pretty excited about them, looking forward to them. I'm just wondering, are there any particular areas of the new software portfolio that you will focus on with these AI agents, you know, between AECO and TNL, and then even within AECO, you know, which stage of the life cycle, consumption life cycle that you will look to focus on?
Speaker #8: you for taking my as well as questions. The first one I have is around the agentic AI rollout that's coming through later this year.
Speaker #8: Really Hello. excited about them. Good morning. And thank Looking forward to them. I'm just wondering, are there any particular areas of the new software portfolio that you would focus on, these AI agents?
Speaker #8: Between AECO and within TNL and then even AECO, which stage of the lifecycle construction lifecycle is that on?
Speaker #5: Hey, thanks for the think you're going to see more coming out from us
Rob Painter: Hey, thanks for the question, and good morning. Yeah, I think you're going to see more coming out from us in 2026. You hit it correctly within AECO and transportation, and logistics. If we think about the life cycle or the parts of AECO, where you might expect to see more or less coming from us, actually, it's across the board is the punchline. I really wouldn't say it's concentrated in any one part of the business, and I'd say pretty similar within transportation and logistics. There are so many opportunities we see where to apply the technology and the capabilities. And so I think you're going to hear pretty broad applications from us.
Rob Painter: Hey, thanks for the question, and good morning. Yeah, I think you're going to see more coming out from us in 2026. You hit it correctly within AECO and transportation, and logistics. If we think about the life cycle or the parts of AECO, where you might expect to see more or less coming from us, actually, it's across the board is the punchline.
Speaker #5: transportation, and question. And good morning. in 2026. Yeah, I the lifecycle or the parts about You hit it see more or less of AECO where you might expect to coming from us.
Speaker #5: Actually, it's across the logistics, if we think broad. That's the punchline. I really wouldn't say it's the business. And I'd say it's pretty similar within transportation and not concentrated in any one part of logistics.
Rob Painter: I really wouldn't say it's concentrated in any one part of the business, and I'd say pretty similar within transportation and logistics. There are so many opportunities we see where to apply the technology and the capabilities. And so I think you're going to hear pretty broad applications from us.
Speaker #5: There are so many opportunities. We see where to apply the technology and the capabilities. And so I think you're going to hear you would look to focus pretty broad applications from us.
Speaker #5: And in many respects, I just think as that force of AI multiplier. It's an extension. It's a natural extension of what we're already doing to help our customers deliver the work better, faster, safer, cheaper, and greener.
Rob Painter: You know, in many respects, I just think of AI as that force multiplier. It's an extension, it's a natural extension of what we're already doing to help our customers deliver the work better, faster, safer, cheaper, and greener. So it's really just embedding it so much into the work that we already have and to accelerate outcomes for our customers. And by the way, that's very customer-facing. I should also say, internally, we have an enormous amount of work on as well to help us optimize our own internal operations, whether that's in R&D, whether that's in customer service and customer support, whether that's in driving marketing workflows to enable the sellers to grow the pipeline that we give to them. So internal, external-facing use is pretty broad-based.
Rob Painter: You know, in many respects, I just think of AI as that force multiplier. It's an extension, it's a natural extension of what we're already doing to help our customers deliver the work better, faster, safer, cheaper, and greener. So it's really just embedding it so much into the work that we already have and to accelerate outcomes for our customers.
Speaker #5: So it's really just embedding it so much into the work that we already have and accelerate outcomes for our customers. And by the way, that's very customer-facing.
Rob Painter: And by the way, that's very customer-facing. I should also say, internally, we have an enormous amount of work on as well to help us optimize our own internal operations, whether that's in R&D, whether that's in customer service and customer support, whether that's in driving marketing workflows to enable the sellers to grow the pipeline that we give to them. So internal, external-facing use is pretty broad-based.
Speaker #5: I should also say internally, we have an enormous amount of work on as well to help us optimize our own internal operations, whether that's in R&D, whether that's in customer service and customer support, whether that's in driving marketing workflows to enable the sellers to grow the external-facing uses, pretty pipeline that we broad-based.
Speaker #8: Got it. That's really helpful.
Rob Mason: Got it. That's really helpful. Thank you. 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, like, kind of similar to, you know, 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 your technology to be AI ready going forward, or are you already quite there?
Nay Soe Naing: Got it. That's really helpful. Thank you. 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, like, kind of similar to, you know, 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 your technology to be AI ready going forward, or are you already quite there?
Speaker #8: Thank you. And my second question is also again related to AI. you could share with I was wondering if us the technology infrastructure readiness for these AI give to them.
Speaker #8: You've made significant investments in your stack to be cloud-ready over the last few years. Going forward, will you need to make a similar level of investment in your technology to be AI-ready?
Speaker #8: Or are you already quite there?
Speaker #5: I think we're already on a So internal, path with the technology readiness. I mean, we're going to continue to invest in that. And inside that operating leverage is that we're continuing to innovate in the solutions and then within the platform capabilities of is we're not just starting Trimble.
Rob Painter: I think we're already on a path with the technology readiness. I mean, we're gonna continue to invest in that and, you know, and inside the guide that we put forward and the operating leverage is, you know, we've left ourselves room to make sure that we're continuing to innovate in the solutions and then within the platform capabilities of Trimble. I think the very good news is we're not just starting on this, that we've been investing the last couple of years, so there's a run rate aspect to this. And a lot of what we've been doing the last couple of years, I would really categorize it more as having built the infrastructure, the wiring, the plumbing, and agentic platform upon which we can, at a more scalable level, build the actual agentic workflows.
Rob Painter: I think we're already on a path with the technology readiness. I mean, we're gonna continue to invest in that and, you know, and inside the guide that we put forward and the operating leverage is, you know, we've left ourselves room to make sure that we're continuing to innovate in the solutions and then within the platform capabilities of Trimble.
Rob Painter: I think the very good news is we're not just starting on this, that we've been investing the last couple of years, so there's a run rate aspect to this. And a lot of what we've been doing the last couple of years, I would really categorize it more as having built the infrastructure, the wiring, the plumbing, and agentic platform upon which we can, at a more scalable level, build the actual agentic workflows.
Speaker #5: on this. We've been investing the last couple of years. So there's a run rate aspect to this. And a lot of what I think very good news the guide that we put forward in having built the infrastructure or the wiring, the plumbing and really categorize it more as agentic platform upon which we can, at a more scalable level, build the actual agentic workflows.
Speaker #5: So there is a good amount of laying of pipe we've been doing the last couple of years, I would doing actually really a lot in 2025, much more so than 2024, which is why we believe we're positioned to be able to accelerate releases in and wire that we've been
Rob Painter: So there is a good amount of laying of pipe and wire that we've been doing. I'd say really a lot in 2025, much more so than 2024, which is why we believe we're positioned to be able to accelerate releases in 2026.
Rob Painter: So there is a good amount of laying of pipe and wire that we've been doing. I'd say really a lot in 2025, much more so than 2024, which is why we believe we're positioned to be able to accelerate releases in 2026.
Speaker #5: 2026. That makes a lot of sense.
Rob Mason: That makes a lot of sense. Thank you very much, and congrats on the quarter.
Nay Soe Naing: That makes a lot of sense. Thank you very much, and congrats on the quarter.
Speaker #8: Thank you very much. And congrats on the—
Speaker #5: Thank you. Thank you.
Rob Painter: Thank you. Thank you.
Rob Painter: Thank you. Thank you.
Speaker #1: Our next question comes from Tammy Zakaria with J.P. Morgan. Your line is open—please go ahead.
Operator: Our next question comes from Tami Zakaria with J.P. Morgan. Your line is open. Please go ahead.
Operator: Our next question comes from Tami Zakaria with J.P. Morgan. Your line is open. Please go ahead.
Tami Zakaria: Hey, good morning. Thank you so much for taking my question. I wanted to... I'm sorry if I missed it, but wanted to get an update on TC-1. Could you remind us, if it's available globally everywhere now, and are all software solutions in AECO on it? If not, what's the timeline?
Tami Zakaria: Hey, good morning. Thank you so much for taking my question. I wanted to... I'm sorry if I missed it, but wanted to get an update on TC-1. Could you remind us, if it's available globally everywhere now, and are all software solutions in AECO on it? If not, what's the timeline?
Speaker #9: Good morning. Thank you so much for taking—hey, my question. I wanted to—I'm sorry if I missed it, but wanted to get an update on T31.
Speaker #9: 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
Rob Painter: Hey, Tami. Good morning. You were breaking up a little bit, but I think I got the gist of the question. So Trimble Construction One continues to be a strong driver of the growth in the business, both the bookings. We see the majority of the ARR that we have today in AECO is under a TC-1 agreement, which means it's a commercial framework agreement. We have rolled TC-1 out into Europe. I'd say we're still in motion in Asia Pacific with the rollout of TC-1, so there is some more geographic expansion that we'll continue to do, which, you know, also gives us confidence in the path forward for the growth in the business.
Rob Painter: Hey, Tami. Good morning. You were breaking up a little bit, but I think I got the gist of the question. So Trimble Construction One continues to be a strong driver of the growth in the business, both the bookings. We see the majority of the ARR that we have today in AECO is under a TC-1 agreement, which means it's a commercial framework agreement.
Speaker #5: think I got the gist of the morning. You were breaking up a little bit, but I Hey, Tammy. Good continues to Trimble Construction One continues to be a strong driver of the growth in the business, both the bookings we see the majority of the ARR that we have today in AECO is under a TC1 agreement, which means it's a commercial framework rolled TC1 out into Europe.
Rob Painter: We have rolled TC-1 out into Europe. I'd say we're still in motion in Asia Pacific with the rollout of TC-1, so there is some more geographic expansion that we'll continue to do, which, you know, also gives us confidence in the path forward for the growth in the business. And so much of what TC-1 does is that commercial framework; it eliminates friction from the next level of cross-sell that happens. So under a TC-1 frame, you may just be buying one product.
Speaker #5: I'd say we're still in motion in Asia Pacific with the rollout of TC1. question. more geographic So there is some expansion that will continue to do, which also gives us confidence in So TC1 the path forward for the growth in the business.
Speaker #5: And so much of what TC1 does is that commercial framework is it eliminates friction from the next level of cross-sell that happens. So under a TC1 frame, you may buying one or two initially within a prepackaged bundle that we have.
Rob Painter: And so much of what TC-1 does is that commercial framework; it eliminates friction from the next level of cross-sell that happens. So under a TC-1 frame, you may just be buying one product. You may be buying one or two initially within a prepackaged bundle that we have. Once you've got that frame agreement in place, you've got one set of terms and conditions. So the ability to then come by the next application that we have on the Trimble becomes a lot easier, both for the sellers as well as for the customers, because of that groundwork that's been laid. So it's a, it's a very positive aspect of the, of, of the business and still has a lot of room to run for us to grow.
Rob Painter: You may be buying one or two initially within a prepackaged bundle that we have. Once you've got that frame agreement in place, you've got one set of terms and conditions. So the ability to then come by the next application that we have on the Trimble becomes a lot easier, both for the sellers as well as for the customers, because of that groundwork that's been laid. So it's a, it's a very positive aspect of the, of, of the business and still has a lot of room to run for us to grow.
Speaker #5: Once you've got just be buying one product. that frame agreement in place, you've got one set of terms and conditions. So the ability to then come You may be by the next application that we have on the Trimble becomes a lot easier, both for the sellers as well as for the customers because of that groundwork that's been laid.
Speaker #5: So it's a very positive aspect of the business and still has a lot of room to run for us, too.
Speaker #5: grow. Our next
Operator: Our next question comes from Rob Mason with Baird. Your line is open. Please go ahead.
Operator: Our next question comes from Rob Mason with Baird. Your line is open. Please go ahead.
Speaker #1: question comes from Rob Mason with Baird. Your line is open. Please go
Speaker #1: ahead.
Speaker #10: Yes.
Rob Mason: Yes, good morning. Thanks for taking the question. Rob, you had already discussed the, you know, the burden, model conversion burden you're carrying in the field systems business. But I recall coming into the year as well, you know, we talked about a headwind from, just changes in the Cat JV, but, you know, machine control was very strong throughout the year. I'm just curious, was that the, you know, was a couple of points headwind expected? Was that the actual experience? Did that play out, and how does that carry or not into this year, 2026?
Rob Mason: Yes, good morning. Thanks for taking the question. Rob, you had already discussed the, you know, the burden, model conversion burden you're carrying in the field systems business. But I recall coming into the year as well, you know, we talked about a headwind from, just changes in the Cat JV, but, you know, machine control was very strong throughout the year. I'm just curious, was that the, you know, was a couple of points headwind expected? Was that the actual experience? Did that play out, and how does that carry or not into this year, 2026?
Speaker #10: question. Rob, you had already discussed the burden model conversion burden you're carrying in the field systems Good morning. Thanks for taking the into the year as well, we talked about a headwind from just changes in the CAD/JV.
Speaker #10: business. But I recall coming the year. I'm just curious, was that it was a couple of points headwind expected. Was that the actual experience?
Speaker #10: Did that play out? And how does that carry or not into this year of
Speaker #10: '26? Hey, Rob.
Rob Painter: Hey, Rob, thanks for the question. The short answer is yes, it played out as we expected. I mean, it was entirely around software conversions and entirely in addition to, like, the machine control, guidance as a service. By the way, we call it Works Plus, it's what we call it to customers. And it's been just as successful, actually, more successful than we expected. And that drives some of the headwinds through those conversions into the revenue.
Rob Painter: Hey, Rob, thanks for the question. The short answer is yes, it played out as we expected. I mean, it was entirely around software conversions and entirely in addition to, like, the machine control, guidance as a service. By the way, we call it Works Plus, it's what we call it to customers. And it's been just as successful, actually, more successful than we expected. And that drives some of the headwinds through those conversions into the revenue.
Speaker #5: Thanks for the question. Yeah, the short answer is yes, it played out as we expected. I mean, around software it was entirely conversions and entirely in control guidance of the service.
Speaker #5: By the way, we call it addition to the machine WorksPlus. It's what we call it on the customers. And it's been just as successful, actually, more successful than we expected.
Speaker #5: And that drives some of the headwinds through those conversions into the revenue. But there's also something that I'd say on top to me, which is positive, which is that it really is not a headwind.
Rob Painter: But there's also something that's, I'd say, on top, to me, which is positive, which is, that it really is not a headwind, it's incremental with the conversions, and that is when we look at the machine control and guidance offering, you know, we see that we've seen that 50% of the wins that we get are to new logos. That's an addressable market expansion. And that's not a headwind to the growth, because that's incremental business that we're getting. And so that really was also part of the upside that we saw within the AR growth versus what we had in the year. So, really enthusiastic about where we see these business model conversions helping us expand both customers and then usage within customers, have penetration within those customers.
Rob Painter: But there's also something that's, I'd say, on top, to me, which is positive, which is, that it really is not a headwind, it's incremental with the conversions, and that is when we look at the machine control and guidance offering, you know, we see that we've seen that 50% of the wins that we get are to new logos. That's an addressable market expansion.
Speaker #5: It's incremental with the conversions. And that is when we look at the machine control and guidance offering. Fifty percent of the wins that we get are to expansion.
Rob Painter: And that's not a headwind to the growth, because that's incremental business that we're getting. And so that really was also part of the upside that we saw within the AR growth versus what we had in the year. So, really enthusiastic about where we see these business model conversions helping us expand both customers and then usage within customers, have penetration within those customers.
Speaker #5: And that's not a headwind to the growth see that we've seen that that we're getting. And so that really was also part of the upside.
Speaker #5: That we saw because that's incremental business within the ARR growth versus what we had in new logos. That's an enthusiastic about where we see these business model the year.
Speaker #5: So really your ERP, which we also do, and you want to—last thing I'll say—when we do these models, link that to the machines you have in the field, which we also equip, doing civil with technology.
Speaker #5: expand both customers and then usage within customers. Penetration addressable market really kind of a double conversions helping us conversions, it makes it easier to bundle additional hardware and So let's say you're a customer within those customers.
Speaker #5: expand both customers and then usage within customers. Penetration addressable market really kind of a double conversions helping us conversions, it makes it easier to bundle additional hardware and So let's say you're a customer within those customers. software capabilities together.
Rob Painter: So there's really a kind of double positive embedded in with that. And then last thing I'll say, on when we do these model conversions, it makes it easier to bundle additional hardware and software capabilities together. So, you know, let's say you're a customer doing civil estimating, and you wanna link that to your ERP, which we also do, and you wanna link that to the machines you have out on the field, which we also equip with technology. You make it a lot easier to come in with a bundled offering that can cross between that office and the field, and then it shows up for us in two reporting segments of AECO and Field Systems. But of course, from a customer's perspective, it's just Trimble.
Rob Painter: So there's really a kind of double positive embedded in with that. And then last thing I'll say, on when we do these model conversions, it makes it easier to bundle additional hardware and software capabilities together. So, you know, let's say you're a customer doing civil estimating, and you wanna link that to your ERP, which we also do, and you wanna link that to the machines you have out on the field, which we also equip with technology.
Speaker #5: You make it a lot easier to come in with a that office and the field, and then it shows up for us. And two reporting segments of AECO and field systems.
Rob Painter: You make it a lot easier to come in with a bundled offering that can cross between that office and the field, and then it shows up for us in two reporting segments of AECO and Field Systems. But of course, from a customer's perspective, it's just Trimble.
Speaker #5: But of course, from a customer's want to link that to So there's
Rob Mason: That's good insight, Rob. And then Phil, just your overall margin guidance for 2026. You know, 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 two. You talked about stranded costs earlier. Are those-- You know, 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.
Speaker #10: That's
Rob Mason: That's good insight, Rob. And then Phil, just your overall margin guidance for 2026. You know, 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 two. You talked about stranded costs earlier. Are those-- You know, 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.
Speaker #10: your overall margin perspective, it's just guidance for
Speaker #10: 26. I would say, as I expected, when I look across it, it looks like more basis in the T&L segment than the other two.
Speaker #10: You talked about good insight. stranded costs earlier. Are points expansion expected Trimble. stranded costs out? And those is that reflected of getting some of those segments and the expectations there, then to the extent maybe a little color of just not as much margin expansion in field systems if there's any
Speaker #10: investment going on which will also help with the margins and
Speaker #10: there. put high leverage off of that
Speaker #5: Yeah. Thanks, Rob. So yeah, we anticipate with the
Phil Sawarynski: Yeah. Thanks, Rob. So yeah, we anticipate with the growth in the T&L business that we can continue to put higher high leverage off of that business to be able to expand. There is an element of the stranded costs, as you're correct, as we enter the year. We expect to get some of that out throughout the year, which will also help with margins in T&L. And then overall, at the company level, I mentioned this, for the 2026 guide, we do expect about 50 basis points of expansion at the EBITDA. So as Rob mentioned earlier, what's nice about our financial models, we're able to reinvest in the business for the growth, but also show the margin expansion with the op leverage.
Phil Sawarynski: Yeah. Thanks, Rob. So yeah, we anticipate with the growth in the T&L business that we can continue to put higher high leverage off of that business to be able to expand. There is an element of the stranded costs, as you're correct, as we enter the year. We expect to get some of that out throughout the year, which will also help with margins in T&L.
Speaker #5: Business, that we can continue to business to be able to expand. There is an element of the stranded costs, as you're correct, as we enter the year.
Speaker #5: We expect to get some
Phil Sawarynski: And then overall, at the company level, I mentioned this, for the 2026 guide, we do expect about 50 basis points of expansion at the EBITDA. So as Rob mentioned earlier, what's nice about our financial models, we're able to reinvest in the business for the growth, but also show the margin expansion with the op leverage.
Speaker #5: overall, at the company level, I mentioned this for the '26 guy. We do expect about 50 basis points of expansion at the EBITDA. So as Rob And then mentioned earlier, what's nice about our financial models, we're able to reinvest in the business for the growth, but also show the margin expansion with the op leverage.
Speaker #5: overall, at the company level, I mentioned this for the '26 guy. We do expect about 50 basis points of expansion at the EBITDA. So as Rob And then mentioned earlier, what's nice about our financial models, we're able to reinvest in the business for the growth, but also show the margin expansion with the op leverage.
Speaker #1: Our next question comes from Guy Hardwick with Barclays. Your line is open. Please go ahead.
Operator: Our next question comes from Guy Hardwick with Barclays. Your line is open. Please go ahead.
Operator: Our next question comes from Guy Hardwick with Barclays. Your line is open. Please go ahead.
Speaker #11: Hi. Good morning.
Guy Hardwick: Hi, good morning, Rob, Phil, and Michael.
Guy Hardwick: Hi, good morning, Rob, Phil, and Michael.
Speaker #11: Michael. Good morning.
Rob Painter: Good morning.
Rob Painter: Good morning.
Speaker #5: Good morning,
Phil Sawarynski: Good morning, Guy.
Phil Sawarynski: Good morning, Guy.
Speaker #5: Guy. Rob Fill and
Guy Hardwick: Just wondering whether you could point to any contribution to ARR or ACV from AI products, or whether it's Agentic AI or AI products so far, whether it's in RealityCapture, Autonomous Procurement, or anything else? And I have a follow-up.
Speaker #11: Just wondering if you
Guy Hardwick: Just wondering whether you could point to any contribution to ARR or ACV from AI products, or whether it's Agentic AI or AI products so far, whether it's in RealityCapture, Autonomous Procurement, or anything else? And I have a follow-up.
Speaker #11: AI products, whether it's agentic AI far, whether it's in reality capture or or AI products so else. And I have a ARR or ACV from follow-up.
Rob Painter: So we see, if we take Autonomous Procurement within the transportation, that's probably the one we've talked about the most throughout 2025. It's a discrete standalone product that's generating double-digit millions of revenue. Phil mentioned a release from SketchUp within the architecture business, which is obviously within AECO. Those early days, but I mean, we did see, you know, it launched in Q4, you know, we could see the new customers we were getting. It's a monthly subscription for that service.
Rob Painter: So we see, if we take Autonomous Procurement within the transportation, that's probably the one we've talked about the most throughout 2025. It's a discrete standalone product that's generating double-digit millions of revenue. Phil mentioned a release from SketchUp within the architecture business, which is obviously within AECO. Those early days, but I mean, we did see, you know, it launched in Q4, you know, we could see the new customers we were getting. It's a monthly subscription for that service.
Speaker #5: take autonomous procurement within
Speaker #5: most throughout 2025. It's a
Speaker #5: discrete standalone product. That's could point to any contribution to transportation, that's probably the one we've talked about the of revenue. Phil generating double-digit millions mentioned a release from SketchUp within the architecture business, which is obviously within AECO.
Speaker #5: The autonomous procurement or anything early days, but I mean, we did see in when we launched in the fourth quarter, we could see the new customers we were getting as a monthly subscription for it more is if we think about that service.
Rob Painter: Where I see it more is if we think about, you know, if we, if we sort of flip the definition and we look at the percent of revenue that's got AI associated with it, now we're talking, you know, well over $100 million of business at Trimble that's, that, that is e-enabled or somehow powered, let's say, by AI features. And I go back to that good, better, best tier that we have of offerings, where we're, where we're putting more of those AI capabilities. You mentioned RealityCapture, which is largely within the Field Systems business. We're very bullish about that capability, because, you know, what a surveyor is fundamentally doing is creating a digital model of the physical earth.
Rob Painter: Where I see it more is if we think about, you know, if we, if we sort of flip the definition and we look at the percent of revenue that's got AI associated with it, now we're talking, you know, well over $100 million of business at Trimble that's, that, that is e-enabled or somehow powered, let's say, by AI features.
Speaker #5: if we sort of flip the definition and we look at the percent of revenue that's got AI associated with it, now we're talking well over 100 million dollars business at Where I see that's enabled or somehow powered, let's say, by AI features.
Speaker #5: And I go back to that good, better, best tier that we have of offerings. Where we're putting more of those AI capabilities. You mentioned reality capture which is largely within the field systems business.
Rob Painter: And I go back to that good, better, best tier that we have of offerings, where we're, where we're putting more of those AI capabilities. You mentioned RealityCapture, which is largely within the Field Systems business. We're very bullish about that capability, because, you know, what a surveyor is fundamentally doing is creating a digital model of the physical earth.
Speaker #5: We're very bullish about that capability because what a surveyor is fundamentally doing is creating a digital model of the physical earth. There's an extraordinary amount of data that surveyors—
Rob Painter: There's an extraordinary amount of data that's collected by surveyors. And they're not collecting data for the sake of collecting data. They need to turn it into actionable information. To turn it into actionable information, you know, that pulls that data increasingly to the cloud. And then when you get to the cloud, you wanna be able to do automated feature extraction, as an example, off of that data set. That automated feature extraction is a form of AI. And we're able to, you know, to sell that capability because of just the raw efficiencies you get through the automation of that processing of these enormous data sets.
Rob Painter: There's an extraordinary amount of data that's collected by surveyors. And they're not collecting data for the sake of collecting data. They need to turn it into actionable information. To turn it into actionable information, you know, that pulls that data increasingly to the cloud. And then when you get to the cloud, you wanna be able to do automated feature extraction, as an example, off of that data set. That automated feature extraction is a form of AI. And we're able to, you know, to sell that capability because of just the raw efficiencies you get through the automation of that processing of these enormous data sets.
Speaker #5: And they're not collecting data for the sake of collecting data. They need to turn it into actionable information. To turn it into actionable information, that pulls that data increasingly to the cloud.
Speaker #5: And then when you get to the cloud, you want to be able to do automated feature extraction as an example off of that data set.
Speaker #5: Of that automated feature AI. And we're able to sell that capability because of just the raw efficiencies you get through the automation of that processing of these enormous data—enormous data sets—and yes, they're that, and turning that into the next AI-enabled... you're now taking downstream workflow.
Rob Painter: And then once you process those enormous data sets, and yes, they're AI-enabled, you're now taking that and turning that into the next downstream workflow. And this, to me, is one of the many things that is so unique about the capability set we have at Trimble, is to extend that workflow from that field back to the office and then back again to the field.
Rob Painter: And then once you process those enormous data sets, and yes, they're AI-enabled, you're now taking that and turning that into the next downstream workflow. And this, to me, is one of the many things that is so unique about the capability set we have at Trimble, is to extend that workflow from that field back to the office and then back again to the field.
Speaker #5: And this, to me, is where one of the many things that is so unique about the capability set we have at Trimble is to extend that workflow from that field back to the office and then back again to the field.
Guy Hardwick: Thank you. That's, that's great. Just as a follow-up, Rob, you mentioned a little earlier about the efficiencies of using AI internally. Trimble's shown great leverage over R&D and G&A this quarter and the full year. How much do you think AI has contributed to, to that? And maybe a sense of how much—give a sense of how much it could contribute to 2026.
Speaker #10: Thank
Guy Hardwick: Thank you. That's, that's great. Just as a follow-up, Rob, you mentioned a little earlier about the efficiencies of using AI internally. Trimble's shown great leverage over R&D and G&A this quarter and the full year. How much do you think AI has contributed to, to that? And maybe a sense of how much—give a sense of how much it could contribute to 2026.
Speaker #10: a follow-up, Rob, you mentioned it 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.
Speaker #10: How much do you think AI is contributing to that, and maybe there's a sense of how much you can give—a sense of how much it contributes to sets—and then once you process those...
Speaker #10: 2026?
Speaker #5: I mean, if we look down
Rob Painter: ... I mean, well, if we look down the, the stack, I would say we do see it up and down. I mean, if we're, I'll extend actually the question a bit. And if I look in, if I look in COGS, you know, we can see in pockets of the business, in the AECO, a case deflection up to 20%. So for our folks who are working on customer support, they're able to spend time working on the higher order problems. You know, I think we get better work out of folks as well as more efficiency out of them.
Rob Painter: ... I mean, well, if we look down the, the stack, I would say we do see it up and down. I mean, if we're, I'll extend actually the question a bit. And if I look in, if I look in COGS, you know, we can see in pockets of the business, in the AECO, a case deflection up to 20%. So for our folks who are working on customer support, they're able to spend time working on the higher order problems. You know, I think we get better work out of folks as well as more efficiency out of them.
Speaker #5: do see it up and down. I mean, if we're I'll extend actually the question a bit and if I look in if I look in COGS, we can the stack, I would say we see in pockets of the business in the AECO, a case deflection up to 20%.
Speaker #5: So for our folks who are working on customer support, they're able to spend time working on the higher-order problems. I think we get better work out of folks as well as more efficiency out of them.
Speaker #5: If we look through R&D, 95% plus of our engineers are using the technology today. And we see double-digit increases in the productivity, which is to say we're getting more development done, and that development takes the form both of—let's call it—features that are underlying plumbing too, because it's a lot of work to make sure we're able to deliver customer-facing features, as well as connect the data and have the right data taxonomies, and investing back into cyber and all the wiring we need to do to be able to deliver the connected workflows.
Rob Painter: If we look through R&D, you know, 95%+ of our engineers are using the technology today, and we see double-digit increases in the productivity, which is to say we're getting more development done. And that development takes the form both of, let's call it features that are customer-facing features, as well as the underlying plumbing to, because it's a lot of work to make sure we're able to connect the data and have the right data taxonomies and investing back into cyber and all the wiring we need to do to be able to deliver the connected workflows.
Rob Painter: If we look through R&D, you know, 95%+ of our engineers are using the technology today, and we see double-digit increases in the productivity, which is to say we're getting more development done. And that development takes the form both of, let's call it features that are customer-facing features, as well as the underlying plumbing to, because it's a lot of work to make sure we're able to connect the data and have the right data taxonomies and investing back into cyber and all the wiring we need to do to be able to deliver the connected workflows.
Speaker #5: And we look through sales and marketing, we record all our apply AI on top of that to be able sellers' calls and we're able to to provide feedback and coaching to level up, help level up the sellers and marketing AI run across the data sets we have to find and create pipeline for those sellers with an upgraded marketing technology stack that we released in 2025.
Rob Painter: We look through sales and marketing, you know, we've recorded all our sellers' calls, and we're able to apply AI on top of that to be able to provide feedback, and coaching, to level up, help level up the sellers. And marketing, you know, AI run across the data sets we have, to find and create pipeline, for those sellers, with a, you know, an upgraded marketing technology stack that, we released in 2025. That's an AECO comment when I say that. And then at a G&A level, I would say, you know, we expect a lot more to come in the next couple of years, out of where we can unlock more efficiencies. You know, we continue to invest. So while we're getting efficiencies, we're also continuing to invest.
Rob Painter: We look through sales and marketing, you know, we've recorded all our sellers' calls, and we're able to apply AI on top of that to be able to provide feedback, and coaching, to level up, help level up the sellers. And marketing, you know, AI run across the data sets we have, to find and create pipeline, for those sellers, with a, you know, an upgraded marketing technology stack that, we released in 2025.
Speaker #5: That's an AECO comment when I say that. And then at a G&A level, I would say we expect a lot more to come in the next couple of years.
Rob Painter: That's an AECO comment when I say that. And then at a G&A level, I would say, you know, we expect a lot more to come in the next couple of years, out of where we can unlock more efficiencies. You know, we continue to invest. So while we're getting efficiencies, we're also continuing to invest.
Speaker #5: Out of where we can unlock more efficiencies, we continue to invest so while we're getting efficiencies, we're also continuing to invest when we look at the bookings growth we have which obviously translates into the ARR growth we have and we think about it from a lifetime value of our customer acquisition cost, that tells us to keep investing in the business and we've got the degrees of freedom to make sure that we're building the AI platform where our customers want to come and do their work.
Rob Painter: You know, when we look at the bookings growth we have, which obviously translates into the ARR growth we have, and we think about it from a lifetime value of our customer acquisition cost, you know, that tells us to keep investing in the business, and we've got the degrees of freedom to make sure that we're building the AI platform where our customers wanna come and do their work. You know, yes, we think about playing offense as well as defense. Super aware of a competitive landscape, and, you know, we see a lot of strength and confidence in what we do, but we're also humble to make sure that we continue to invest, grow, and improve ourselves.
Rob Painter: You know, when we look at the bookings growth we have, which obviously translates into the ARR growth we have, and we think about it from a lifetime value of our customer acquisition cost, you know, that tells us to keep investing in the business, and we've got the degrees of freedom to make sure that we're building the AI platform where our customers wanna come and do their work.
Rob Painter: You know, yes, we think about playing offense as well as defense. Super aware of a competitive landscape, and, you know, we see a lot of strength and confidence in what we do, but we're also humble to make sure that we continue to invest, grow, and improve ourselves.
Speaker #5: Yes, we think about playing offense as well as defense, super aware of a competitive landscape, and we see a lot of strength and confidence in what we do, but we're also humbled to make sure that we continue to invest and grow and improve ourselves.
Speaker #10: Thank you.
Kristin Owen: Thank you.
Guy Hardwick: Thank you.
Speaker #11: Our next question comes from Kristen Owen with Oppenheimer. Your line is open. Please go
Rob Mason: Our next question comes from Kristin Owen with Oppenheimer. Your line is open. Please go ahead.
Rob Mason: Our next question comes from Kristin Owen with Oppenheimer. Your line is open. Please go ahead.
Speaker #11: ahead. Hey, guys.
Kristin Owen: Hey, guys. Thank you again for the follow-up. Just a simple one here. You did guide to significant growth in your free cash flow generation in 2026. And 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 task space year to date, how you're thinking about deploying that cash? Thank you.
Kristin Owen: Hey, guys. Thank you again for the follow-up. Just a simple one here. You did guide to significant growth in your free cash flow generation in 2026. And 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 task space year to date, how you're thinking about deploying that cash? Thank you.
Speaker #12: Thank you again for the follow-up. Just a simple one here. You did guide to significant growth in your free cash flow generation in 2026.
Speaker #12: Even when we take out that cash tax payment, can you just contextualize the free cash flow growth for us and then give them what's happened in the vertical tax base year to date, how you're thinking about deploying that cash?
Speaker #12: Thank
Speaker #12: you. Hey, Kristen.
Rob Painter: Hey, Kristin, this is Phil. Yeah, so there's a couple elements. It obviously starts with the profit growth for the year, from the free cash flow, and then you mentioned the benefit. We, not a benefit, but we don't have the, headwind or the usage for the taxes this year. On the other side, we do get, additional benefits from the repeal of the 174, and so there's a little bit of, less cash taxes that we have to pay that also helps with that number in 2026. And then, your second question as far as the use of cash. Yes, so I think I'll start with the higher level, our capital allocation, how we think about that, and that's really the looking at the highest returns for our shareholders.
Phil Sawarynski: Hey, Kristin, this is Phil. Yeah, so there's a couple elements. It obviously starts with the profit growth for the year, from the free cash flow, and then you mentioned the benefit. We, not a benefit, but we don't have the, headwind or the usage for the taxes this year. On the other side, we do get, additional benefits from the repeal of the 174, and so there's a little bit of, less cash taxes that we have to pay that also helps with that number in 2026. And then, your second question as far as the use of cash.
Speaker #5: This is Phil. Yeah. So there’s a couple of elements. It obviously starts with the profit growth for the—then you mentioned the benefit, we—not a benefit, but we don’t have year.
Speaker #5: The headwind is the usage for the taxes this year. On the other hand, from the free cash flow side, we do get additional benefits from the repeal of the 174.
Speaker #5: And so there's a little bit less cash taxes that we have to pay that also helps with that number in 2026. And then your second question, as far as the use of cash.
Speaker #5: Yes. So I think I'll start with the higher level or capital allocation. Now we think about that. And that's really looking at the highest returns for our shareholders and the different elements or certainly we look at repurchases.
Phil Sawarynski: Yes, so I think I'll start with the higher level, our capital allocation, how we think about that, and that's really the looking at the highest returns for our shareholders. You know, the different elements are certainly we look at repurchases, we look at M&A, after we reinvest in the company. So we've talked about that via the P&L. So as we think about 2026 going forward, I would be looking at for uses of cash, either repurchases or M&A, largely.
Rob Painter: You know, the different elements are certainly we look at repurchases, we look at M&A, after we reinvest in the company. So we've talked about that via the P&L. So as we think about 2026 going forward, I would be looking at for uses of cash, either repurchases or M&A, largely.
Speaker #5: We look at M&A after we reinvest in the company. So, we've talked about that via the P&L. So as we think about 2026 going forward, I would be looking at, for uses of cash, either repurchases or M&A.
Speaker #5: Largely.
Rob Mason: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
