Trimble Inc.

Q2 2026 Earnings Call — August 12, 2026

Analyst Jason Salino (KeyBank): Hey, thanks for taking my questions. You know, I think I heard you kind of explain why the field systems, you know, ARR was coming down a little bit. Maybe can you maybe just retouch on that a little and then specifically when we look at your ARR performance as a whole, you know, excluding field systems, how do you think that performed in the quarter?

Executive Rob (Title): Hey, Jason. Good morning. It's Rob. I'll start with this. We made the move from a position of strength within field systems. So it's a one-time decision, discreet decision to move from a white label provider to a proprietary version that comes online soon. That existing revenue is low margin revenue. And with the new revenue, that's going to be higher margin revenue. Importantly, that technology will natively integrate into our larger solution suite. And given that position of strength we have in field systems and you see that in that revenue growth for the quarter, for us this was actually a relatively straightforward decision to make to accelerate. You asked about ARR at the overall company level and at the segments. I feel really good about that. AECO up 14% ARR, performing at $1.577 billion. So that 14% to get to that is an impressive amount of net new ARR. And within the transportation and logistics business, we were on point there with the 7% growth in the ARR. So I'd say all according to plan and from that position of strength made that decision in field systems.

Analyst Jason Salino (KeyBank): Thanks, Rob. And then when we look at like the AECO segment specifically, I guess what are you hearing from the different segments as it relates to macro and tailwinds and headwinds and maybe just go a little deeper there. Thank you.

Executive Rob (Title): Sure, Jason. At the macro level, continue to like what we see in market strength. Won't surprise you, data centers, energy reshoring, onshoring, of manufacturing are all particularly strong. Infrastructure strength overall, which we see play through in field systems even more so. So broad-based strength at the macro level. North America, I'd say leading the way, obviously, in terms of the size and the continued strength. We also had a good quarter out of the Asia-Pacific region.

Analyst Jerry Revich (Wells Fargo): Yes, hi. Good morning, everybody. Nice quarter. Rob, I wanted to ask, can you just expand on the prepared remarks you made on transportation and logistics and what that might look like? Are you thinking about the whole segment, just a piece of it? And can you just give us a rough sense of expectations for evaluation if you're able and willing to share what the initial conversations have been so far.

Executive Rob (Title): Hey Jerry, thanks for the question and good morning. So let me say the interest started inbound. That interest was recent. We take our fiduciary obligation seriously and thus we communicated that we will undertake the review. I also want to emphatically say that we remain fully focused on executing our strategy within the Trimble platform. This is a great business. It's got a bright future. And so I'm not surprised that we got the calls. To close the loop, there is no predetermined outcome. There's no predetermined timeline. And the solve that we'll have in this work is through the lens of shareholder value. And that's the fiduciary obligation.

Analyst Jerry Revich (Wells Fargo): Okay, I appreciate that. And then again, can we shift gears in heavy civil and geospatial? You had a nice pickup in demand. Can you talk about the supply side of the equation? So we're seeing an acceleration in machine deliveries and tightness on the used market in particular. I'm wondering to what extent can your supply base ramp up given the demand picture into the back half of the year and beyond?

Executive Rob (Title): Jerry, I want to first shout out to our team, both in civil and geospatial. They've just done a terrific job with this business over the last few years. That outperformance in the corridor is on a pretty long string now of outperformance in the business. And it's more than the macros. The macros are certainly healthy, particularly in the infrastructure side and data centers. Energy. So we see that playing through the market and it's pretty global in nature. At an execution level within the business, the control that we can control, the team continues to innovate. We're expanding the network of the mixed fleet that we're able to support. We're expanding our points of distribution into the market. We're expanding the ecosystem development, so that translates into third-party extensibility built on top of our Earthworks platform within the civil business, and geospatial new product launches are driving business, and we're going to see even more as we move into the second half of the year, and particularly as we come into the conference season with Energeo in September and Trimble Dimensions in November.

Analyst Rob Wertheimer (Melius Research): Thank you. Hey, Rob. I had a question on just how you're thinking about capital allocation broadly. Obviously, it's incredibly dynamic. You're seeing, I guess, a lot of opportunities from AI. The market sees some threats, and so some assets are cheaper. So just in general, do you find it to be a more fruitful kind of search if you're looking at acquisitions? And then do you feel any different strategic need to assemble any other assets in the portfolio than they did a year or two ago?

Executive Rob (Title): Good morning, Rob. Great question. Broadly speaking, at a capital allocation front, we see it the same as ever. We focus first on investing back into the business, organically. Phil put forward the model we have on buyback. And then, of course, we have been an acquisitive company over time. If you look at the acquisition front, one of the dynamics we see at play at the moment in an AI forward world is there's more opportunity for us to create our own features and capabilities. So in the past where we might have looked for some tuck-in capabilities, we think we can do more of those ourselves. Today, so that actually would be one different commentary I have on the acquisition front. To the extent that we can build new sets of competencies or new markets to enter, we remain open to that, so we'll be active. I'd say we're always active on the M&A front, scanning the landscape. We actually have a venture arm in Trimble, so we pay attention and we're actively engaged. I would not say that the valuation environment has come down in the private market in any sort of fundamental way. And so we certainly weigh that against the buyback opportunity that Phil highlighted with the $1 billion reauthorization.

Analyst Josh Tilton (Wolf Research): Hey guys, thanks for taking my questions. Two quick ones for me. First one, maybe to follow up on Celino's question. And again, I apologize if I missed this and I also didn't run the math. So again, I apologize if it was clear that way. But had we not encountered this ARR divestiture and field systems, would we be reiterating the ARR guide for the full year at the midpoint? Or would we be raising the ARR guide for the full year at the midpoint?

Executive Phil (Title): Hey Josh, it's Phil. Let me take that one. So yeah, the field system's impact for this very discrete item is about 400 to 500 basis points over the next few quarters for field systems specifically. It's about, call it a little under 100 basis points at the company level. So aside for those issues, if we would be reiterating the range that we have.

Analyst Josh Tilton (Wolf Research): Super helpful. And then maybe just a quick follow-up. I appreciate the incremental color on acknowledging the potential sale in transportation. I have to imagine that the inbounds that you're getting is because these buyers, I don't want to say see this as the bottom, right? But they must see a better environment in the future, hence wanting to buy the asset now and ride that positivity up as opposed to missing out on that opportunity. Can you maybe just dive one level deeper on what are they seeing that we should be seeing or paying attention to that maybe gives them hope that there is a better environment in your transportation market over the next 12 to 24 months than we saw over the last 12 months?

Executive Rob (Title): Josh, that's a great question. This is Rob. I'll take it. This is a great business. This business has great potential. We believe in the opportunity. With the inbound, we have a fiduciary obligation and we take our fiduciary obligation seriously. And we compare that to our own plan to execute our own strategy within the Trimble platform. And that's why I say we remain fully focused on executing the strategy because I go back to this being a great business with great potential. The solve is actually pretty easy in the end is what do we see as the highest shareholder value creation? and so we look at the stakeholders between our customers, our employees and our shareholders and we make the decision accordingly. And by the way, if there's a decision to make because there is no predetermined outcome and there's no predetermined timeline.

Analyst Quinn Fredrickson (Baird): Hi, good morning. First question just on AECO. Could you unpack the difference between organic revenue growth and ARR growth in the segment this quarter? It was just a little wider than I would have thought. I'm not sure if that's all the conversion uplift going away or if there's any other factors.

Executive Phil (Title): Hey, Quinn, it's Phil. Thanks for the question. So in AECO, we have some term licenses and multi-year term and also some pro-serve as well. The revenue is recognized up front with those items generally. And so the timing of those in any given quarter could be up or down and create a delta between the revenue and ARR. If you actually go and look in our past, particularly in Q2, we've seen this dynamic before, so it's nothing new. And this is why we focus on the ARR metric. And the 14% growth has been consistent in that range and in line with what our expectations are this year. and there's no change to our outlook or guide for AECO with that.

Analyst Quinn Fredrickson (Baird): That's helpful. Thanks, Phil. Second question, we're a few months into the Quad partnership. Is there any data you could share on new SketchUp user licenses and how that's trending relative to what you would hope for at this point in time?

Executive Rob (Title): Hey, Quyen, this is Rob. Good question. It is early to have any definitive. There are four things that I can say based on over 25,000 unique users that we've seen in Clogged using the connector. The first is around learning. We're learning how to build skills to make the connector even better. The second is that we're following the telemetry to generate the marketing motions to drive adoption. to turn a user into a customer. The third, what we're confirming is what we expected is that this is not going to replace the current workflows. A professional called grade work that's done, deterministic analysis that could be daylight modeling, structural analysis, energy modeling, that's still happening within SketchUp itself. And the fourth, as we...

Analyst Tammy Zakaria (JP Morgan): Hi, good morning. Very nice quarter. I wanted to follow up on slide eight of your presentation where you show how Trimble delivers value to data centers. Can you help us understand what is the duration of a typical data center project where you can stay involved? And is there a revenue curve that follows that has a phase when Trimble's value contribution peaks or is it pretty consistent from breaking the ground to handing over the project?

Executive Rob (Title): Good morning, Tammy. It's Rob. I'll take your question and it's an interesting one. So if you think about a project lifecycle, it often starts with capital program management. You know, the owner making a decision to invest in the capital into the data center itself. And we can service that need through Trimble technology with an O in AECO, and we do that today. So that happens before there's ever even any surveyors out in the field. And guess what? After you've decided to make the capital investment, you send the surveyors out at some point after that to actually create the digital model of the physical earth, you know, to have that topographic map of the as-is conditions. Once you have that work, you now need to send that digital model into a set of engineering and construction workflows because you need to do site preparation, which is an opportunity for our civil construction business to move the dirt and move it right the first time. As you lay that foundation, the concrete pad, Trimble is involved in that, not only in the design, but in the layout and the verification of that.

As you move from the pad into the building itself and into the interiors through the structural shell, through the mechanical electrical rough-in, through the full fit-out, we're involved in that from design solutions to estimating solutions to project coordination to field layout as well. And then at the end with the commissioning and the handover and that then the whole quality control loop we end up there as well so from that concept to completion Trimble is relevant involved and engaged in a data center to answer the other part of your question about the let's say the duration and how that flows in over time I would say that it can cover that full life cycle of a project so it doesn't all hit immediately at once there does tend to be some months of you'd say lag between when that's, and it could be months or quarters, by the way, from when the project is commissioned and approved all the way through when the various trades are taking on our technology. It's hard to see it in the numbers today because our customers have a very healthy amount, or most of our customers have a very healthy amount of backlog. Obviously, those who are serving data centers have healthy backlog.

And so we see it in the business that we're already doing with them today. So great question.

Analyst Tammy Zakaria (JP Morgan): Understood. And my second question, I think I heard you say you are going to reach the target of 30% a year early. So what's next? Is it time to maybe renew the 2027 target and extend to maybe 2029, 30? How are you thinking about it?

Executive Rob (Title): I expect that we'll do an investor day next year. I mean, that would be the right amount of timing. And we're not ready to talk about 2027 guides. But what I would say to address the comment you made is that I would emphatically say I am proud of this team for delivering the EBITDA target, which could potentially be a year ahead of what we put forward. That's a big deal. That's a big deal for us. And I hope our shareholders see that as a big deal as well, that this business is performing and performing expectations. And it is extremely reasonable to assume that we will continue to drive operating leverage going forward and expand upon that as we move the business into 2027 and beyond. So it's a great place to be and just as optimistic about the ongoing upside potential.

Analyst Naeso Nang (Berenberg): Hi, good morning. Thank you for taking my questions. My first one is on I appreciate the fact that your AI strategy today is primarily focusing on customer adoption today but would love to get an update on how you're thinking about your monetization strategies going forward. I ask that because last week one of your peers mentioned that they're looking to monetize AI features starting from next year and another peers recently came out with AI specific and some of the other stuff put in packages as well. So any directional update that we could have on the monetization strategies would be very helpful.

Executive Rob (Title): Thanks for the question. This is Rob. I'll take it. And it was a little hard to hear, but I think you're asking about the AI monetization. And I'll start by saying it's definitely a learning journey. And I can tell you that we're monetizing today. We're monetizing on a standalone basis and we're monetizing through hybrid license and consumption models. It just takes time to show up when you're a scaled company like Trimble. The near-term priority we have is to drive adoption, to drive workflow engagement across our expanded surface area, and then to leverage telemetry to measure the real-world value that we're creating for our customers. And as that usage continues to scale, we're going to learn. We're going to adapt our pricing. We'll adapt our packaging. and we expect to see that through a combination of tiered subscription bundles that looks like the good, better, best offerings that we talked about before. We definitely expect to see hybrid models with license and consumption-based usage models on a go-forward basis like we have in the Transporeon business today. It's already a transaction-based model that we have. So we're building capabilities and those capabilities give us optionality. I like where we are on this journey right now.

Analyst Chad Dillard (Bernstein): Hey, good morning, guys. I just want to revisit that product change in field systems. So first of all, what was the product? And then if I'm I look at the run rate it seems like it's a 75 million dollar headwind so just trying to figure out like what the denominator is like what's what's the total size and then if you could you know unpack um that 400 to 500 basis points um you know impact over the next couple of quarters feel like what's churn what else is it thank you.

Executive Rob (Title): Good morning Chad, thanks for the question this is Rob I'll start and then Phil will give you the quantitative, which is different than what you put forward. I mean, at the qualitative level, within the civil business, we have a lot of different technologies. Here, we're talking about essentially field data processing. And that is a service that that's the specific service that we're bringing in house with proprietary technology. And again, doing this from a position of strength and with the momentum we have in the business. We always had a plan and we've been developing this ourselves as we decided to bring it forward. So why don't you take the quant?

Executive Phil (Title): Yeah. Hey, thanks, Chad. So when I talked about the 400 to 500, that's specific to the field systems ARR. So the ARR field systems last year was about 400 million. So the 400 to 500 basis points...

Executive Rob (Title): Thanks for joining us. Great question, Chad. So when you ask about revenue from usage-based models, let me give you an example within the Transporeon business. We're talking over $150 million of transaction-based revenue that we have in that business today. That is a usage-based model. So when I talk about having the DNA and building on the DNA that we have, it's not just a future thing because we have it. We already have that today. When we have in SketchUp in the fourth quarter of last year launched a hybrid model with the license and then AI-based usage on top of that. That is, again, it's in the market. It's not a futures thing that comes. So it's important for me, hopefully, to be able to communicate well here that the usage-based revenue is something that we already know how to do. As we take this more broadly, let's say with AI, let's call it AI pure consumption-based, we also are building the underlying engines to be able to do all the billing mechanisms and to be able to do that on a global level. That is a lot of work to put that forward.

When we think about the KPIs and how they're changing in the business, some of the KPIs, actually a lot of the KPIs are the same as they ever were. The KPI such as net retention. We pay a lot of attention to the net retention. We see our gross retention holding where it was. We're not losing customers. So the net retention, the bridge from gross to net gets into the cross-sell, the upsell, the pricing and beyond. That's exactly where it has been. When we get into the, I'll say specifically on the AI capabilities and features that we're adding, we're paying a lot of attention to the adoption, which is to say, how are they being used? The telemetry helps us with that. So getting that indication that the discovery is happening, that the usage is happening, and not just that it's used once, that you track the daily or the weekly active usage. That's a measure of engagement. And those would be the predictive indicators for where we go forward as it starts to get, let's say, revenue of a size and ARR of a size that we can report on.

Analyst Kristen Owen (Oppenheimer): Hi, good morning. Thank you for taking the question. Just wanted to follow up on the back half guidance. You've got a couple of moving pieces here between the tariff-free funds here in Q2 and then the ARR transition in field systems. So I just wanted to understand, did anything change in the back half assumptions for the year? Just help bridge that gap for us, please.

Executive Phil (Title): Hey Kristen, it's Phil. So the tariff refund, that's more of a Q2 issue. Not an issue, it was a bit of a, it was a headwind on the revenue for field systems. That's really more discreet to Q2 and the bulk of our refunds coming in in Q2. So we really don't expect a material impact on that going forward. So effectively think about that as behind this. As I think about the back half of the year, so no change to how we were thinking about the back half of the year when we started the year. and actually in fact the raise in the guide, the $50 million on the revenue and the $0.10 on the EPS would actually imply that we are raising the back half of the guide relative to the flow through from Q2. So see a lot of strong momentum in the business and as we enter the second half of the year.

Analyst Kristen Owen (Oppenheimer): That's super helpful. Thank you for that. And then if I could ask you, you showed some really interesting data points on ACO growth. And the one that stood out to me is the million incremental projects that you're seeing in Trimble Connect. Can you maybe help us understand what's filling the top of the funnel there? What's the sales motion? You talked about some of the MCP early indicators, but just help us understand what's driving that incremental growth in Trimble Connect. Thank you.

Executive Rob (Title): Kristen, thanks for the question. It's Rob, and I'm glad you asked because it is a great statistic for us. The users that we have that come in to Connect and the projects that come in come through our modeling solutions. They come in through project management solutions. They come in the field from our machine control users, our surveyors, the folks doing reality capture out in the field. So the users create projects. Those projects are initiated and managed in Trimble Connect. That is indicative of the network effects that we see in the business. It's just, it's really compelling to see the adoption of this common and connected data environment and to see it globally. I mean, this is not even, it's not a regional topic. It's a global topic. And then, you know, the projects get added. That drives those API calls, the 30 billion API calls. There's an intensity of that usage and the collaboration and the coordination that happens amongst stakeholders leveraging the Connect, Trimble Connect environment. So, and by the way, that is both serving AECO and field systems. That was what I wanted to set up as an overall engineering and construction commentary early in the prepared remarks. So really great things happening for us. It's something that is We believe very uniquely Trimble, that ability to link the work and the office and the field, the hardware and the software of Trimble, thereby connecting the physical and the digital world.

Analyst Nicholas Ignary (Barclays): Hey, guys. Good morning. Thanks for taking my question. So, product revenue grew faster than subscription and services for the second straight quarter, which is sort of a reversal from the software-led narrative investors have become accustomed to. Can you just help us understand what specifically drove the stronger product performance, and should we view this as a temporary trend or something more structural?

Executive Phil (Title): Hey, Nicholas. It's Phil. Let me take this one. Yeah, so this is really driven by the performance in our field systems. Our AECO business is, aside from the pro serve, virtually all software. The field systems is the one that has more of the product revenue of it. And just with the strong performance of that business, the mix of that has changed where the product revenue is a little bit more and continue to see the momentum in that business and team has done a really good job.

Analyst Nicholas Ignary (Barclays): Okay, great. Thanks for the color there. And then just Document Crunch has now been part of the portfolio for a few months. And I think slide 15 noted strong performance in the quarter. I was just hoping you can further unpack that performance there and maybe just tell us what you guys have learned so far about customer demand.

Executive Rob (Title): Thanks for the question. This is Rob. I appreciate you asking about Document Crunch. This is a great team. Great energy, great engagement I see between the teams. So just come in and just in a really perfect way. Our sellers have a lot of interest and it's such a natural fit within the Trimble Construction one bundled set of solutions, you know, that commercial framework that we have. So we've got a lot of seller interest. We've got a lot of customer interest. on the product front. The Document Crunch team came out with their next generation solution that is being very well received in the market and by customers. And when you think about this area of contract management and the risk intelligence around those contracts and really get your head around the data of just how litigious the industry can be and what the cost of those claims is, can be when they arise. The value proposition for having this AI-based risk management approach is a really incredible value proposition. And then tie that into the proprietary set of data we have at Trimble from project management and to the financials and to that awareness of what's happening in the field.

And it just really brings things together very nicely. The other thing we love about this team coming into the Trimble family is that we're putting more capital into this business in the form of people. This is an AI native team. We're leveraging this team and the DNA they have to develop new features and capabilities that we may have in the past gone out and looked to acquire into some new categories where we think we can do it ourselves, leveraging this team. And that is one of the things we always look out for in acquisitions like this. So thanks for the opportunity to put color around that.

Analyst Clark Jeffries (Piper Sandler): Hello. Thank you for taking the question. I just wanted to clarify around the timing or how the behavior of the replacing of the white label products, the internal solution will develop. Will that be a on renewal or is there just kind of a cutover point at some point in time during the second half? Just wondering if the impacts are completely contained to second half or if it's even some into 27 on renewal.

Executive Phil (Title): Hey, Clark, this is Phil. Yeah, so think about it in terms of effectively exiting your product so it's winding down this year through this year, which is why it has a bigger impact on the second half of this year. We're building the new product. We should have that released soon. and then there's going to be a ramp up as we start to sell that product. So that's why there's a bit of a lagging effect between the time right now where there's the wind down and then we build up into 2027 with the replacement product.

Analyst Clark Jeffries (Piper Sandler): Perfect. And then just a question on the comment around it being higher margin revenue. Is that going to be manifested in the gross margin line? Is that where most of the margin benefit comes from? And then just and maybe getting ahead of ourselves if there's an ALSA plan in the future. But certainly one of the biggest parts of the margin story over the past few years has been the gross margin accretion, the growing recurring revenue in the base. T&L had been one of the biggest sources of gross margin improvement. When you think about what the portfolio is and fuel systems and AECO gross margin trajectories, Do you still feel strongly about the gross margin story looking beyond 2026 and anything we should consider when thinking about the margin drivers just in the 27 with the early achievement on the EBITDA line? Thank you.

Executive Phil (Title): Yeah. Hey, Clark. So I don't think we're ready to guide on specifically on 2027, but let me talk a little more generally in the questions. So for the specific product, the answer is yes, I would expect that when we launch that product, as it builds up, that that would be accretive to gross margin. Now again, sizing that on a very large-scale business is, you know, it'll have a positive impact, but it may not be materially picked up in the gross margin as we think about the size of the field systems business. And as I think about more broadly speaking on the gross margin, our software is certainly growing faster generally. Obviously, the field systems products, as we...

Q1 2026 Earnings Call — May 6, 2026

Kristen Owen (Oppenheimer): Hi, good morning, and thank you for the question. Nice start to the year, guys. It sounds like things are kind of all rolling in the same direction. You lifted your guidance for ACO and field systems. You beat by seven cents. You lifted the guide by four. So I'm just kind of wondering what are the back half scenarios or how should we think about the level of conservatism that you're baking into the guide given the strong start to the year?

Phil (Executive): So let me start with we're in line with our previous guide from earlier this year. Actually, in fact, we raised the guide for the year, and we're on track to be – to be at or ahead of our 3-4-30 model that we put out in Investor Day. I'd say we have the most visibility we've ever had at the company level with the transformation and the ARR mix. But we do have less visibility on the hardware business. And in light of the conflict we see in the Middle East and uncertainty around tariff policies, along with upper comps in the back half, we've incorporated those puts and takes into our guide. And we'll update you in a few months as we get more visibility on the ARR.

That's very helpful. And then I wanted to dive into some of the consumption model changes that you talked about, Rob, in your prepared remarks. You know, I'm hoping to understand any early indications of how your customers are utilizing tokens for the AI tools that are currently embedded in your products. Just any sort of qualitative or quantitative data that you can provide on utilization trends or where you're seeing tokens being purchased. How are those early learnings informing your commercialization of AI across the platform? Thank you.

Rob (Executive): Good morning, Kristen. I'll start by discreetly answering the token question. Quantitatively, what we can see is that the usage is growing and that almost all of those credits that are associated with those named user licenses are being consumed. And that's good because it tells us they're actually being used. Qualitatively, what I really like are the learnings we're getting from doing this because the development, the deployment, and the monetization motions are all different. Now, if we up-level the conversation, I think the real conversation to have is around the commercialization of AI across the platform because the tokens themselves are a tactic of commercialization. And, of course, we're going to expect to see more of them going forward, and we're building the capabilities in order to do that. But at the same time, we'll deploy many additional commercial tactics.

So I'll give you two examples. First one was discrete consumption and transactions. So if you take autonomous procurement and autonomous quotation within transportation, I think that's a great example of that because what we're monetizing through those particular product motions is happening at a higher rate than the traditional non-AI transactions capabilities that we have. And we can charge more because we're demonstrating a higher ROI over our customers when we do that. A second example is we'll create monetization through the good, better, best product motions where we put AI into those better and best upsell motions. And I highlighted four examples. I think it was on slide five of the presentation that give examples of this. And one of those examples would be automated feature extraction out of the large point clouds that we deliver to our customers. So in that example, that automation of the feature extraction, which turns hours and days of work into minutes of work, we're monetizing that through that better and the best product sets that we deliver to our customers. And in fact, in that example, we're actually also enabling our customers to create their own proprietary data sets for their own unique work on feature extraction. So many different motions and tactics that we'll apply to achieve and reach that vision of commercializing the value that we're delivering to our customers through AI.

Rob Wertheimer (Mellius Research): Thank you. I had two questions on trend at ACO and then on monetization along the line to what you were just talking about. On trend line, obviously ARR growth was strong. The comp on core is a little bit abnormal. And so I wonder if you could just talk about revenue trends of the quarter, just any sense of that. And then as we go through the year, there are questions on a competitor call yesterday about whether construction is improving or not. There's lots of mixed indicators. I wonder if you might weigh in there.

Phil (Executive): Let me start as we think about the year and the guide for ACO. So let me start with connecting this to some numbers. As I look at the net new ARR, that is growing and has grown in Q1, and we expect that to continue to grow throughout the year. Historically, we also benefited a little bit from a tailwind due to the conversion uplifts. So we moved from maintenance and support into subscriptions. There was a bit of an uplift. So if I look over history, again, that was a bit of a tailwind. Still a small amount of that left, but the impact is a bit less. But the Q1 results in the full-year guide are fully in line with our expectations and the model we put out in Investor Day with that mid-teens ARR growth and mid-teens revenue growth. So, again, I think we're in line with the prior guide and in line with our multi-year model that we put out there.

Perfect. And then, Rob, you were just touching on this, but I'm just thinking about how you monetize some of the capabilities you're bringing. You're maybe passing through tokens. I don't know if there's a margin there, but maybe you're hoping to win new logos from competitors, new people entering an ecosystem because the capabilities are bigger and easier. I wonder if you could just talk about what you see as the biggest opportunities as your capabilities expand.

Rob (Executive): The frame I have on Scrum on monetization starts with value delivery and value capture. So the extent to which we're creating positive outcomes and positive ROI for our customers, we backwards integrate from that into then what would be the fair share for our value capture out of that. So we're mostly focused on the AI capabilities we can create for ourselves on leveraging the Trimble platform and the unique data set and scope and breadth and depth that we have globally. In doing so, we believe, yes, that we can capture new addressable market. We think we can take market share over time. I mentioned three different types of motions, monetization motions in answering that last question. Another one would be if you think about the announcement we made with SketchUp and Claude a few days ago and the integration there is, you know, another motion we see where we can monetize is by creating new users, creating new customers, expanding that addressable market with Claude users who weren't already SketchUp users. So by creating models out of Claude, you need to bring those into a SketchUp model to be able to do more with that.

So we'll watch that to see if that's another avenue by which we can gain new customers. So we see opportunities to increase the size of the addressable market. We see opportunities to monetize through our fair share capture of the value of an ROI that we deliver to our customers. And we'll see over time how that plays out into market share.

Jason Salino (KeyBank Capital Markets): Hey, great. Thanks for taking my question. Rob, to that point, you know, on that SketchUp, Claude, you know, partnership that you have, you know, it sounds like the goal is to maybe try to convert, you know, Claude users to SketchUp users, because I imagine they'll need, you know, SketchUp seat. Is there any consumption, you know, credits, you know, you were talking about aligned with this partnership, or is it more, you know, on the license component? And then it wasn't lost on me that, you know, you were one of the only, you know, initial partners with this initial announcement. You know, there's one other, but, you know, could this, is this a table stakes kind of feature? You know, how do you think the, you know, partnerships with the frontier models kind of evolve for you and kind of the markets?

Rob (Executive): Good morning, Jason. Thanks for the questions. You know, I think that this is going to be more table stakes to have different motions and way to reach the market. And we embrace that. So expect to see more from us across the portfolio. You know, that's one example where you can start with the modeling in Claude. I flipped that around the inverse, you know, what we launched in Q4 was SketchUp AI, where you can do that, what we call vibe modeling, natural language prompts, within SketchUp itself to do the modeling. So you want to offer it in multiple avenues, and we'll see going more, I call it atomic level, at the capabilities. We want to be able to do that in Trimble Connect, for example, off of our own agentic AI platform. So multiple paths to market. We're learning a lot. We're learning a lot internally. We'll learn a lot by following our customers and how they use it. We'll learn the motions and, I'd say, optimize the motions of how to convert users and then to bring them into the Trimble ecosystem.

And once you're in that ecosystem, let's say if you've done a model through Cloud, and then I talked about in the prepared remarks, if you want to do rendering or daylight analysis on that, you know, that creates capabilities for us to upsell and deliver more value to the customers once they're coming into SketchUp. So coming at it from multiple angles, I do think it's table stakes that we're engaged on a number of levels. And I'm really proud of the team for the entrepreneurial spirit they're displaying. They're really, really going after it.

And then I might have missed it, but, you know, the field services strength in the quarter, I'm curious if any of this was, you know, demand that was pulled, pulled forward might not be the right word, but maybe deals had closed, you know, earlier than expected. It's just I look at, you know, high oil prices, high memory prices. I wonder, you know, if clients are trying to maybe get ahead of some of those things.

Rob (Executive): So within field systems, the demand was strong intrinsically in the quarter, so we saw no pull forward in the quarter whatsoever. The two pillars of strength in the quarter, first ones in civil construction, that really has just been continuing the trend of the last few years. I know you were at Klan Expo. You saw our booth. Trumbull was on 24 other OEM partner booths at ConExpo. The level of innovation the team continues to deliver extensibility for swing booms on excavators, ground penetrating radar integrated into machine control is impressive to see reaching the machine types like compact track loaders, new OEM partnerships, new go-to-market partnerships with their Trimble technology outlets. The sum of activity is creating the demand from the product innovation side as well as the go-to-market reach. The survey team also had and delivered a strong quarter. I'd say also off the back of new platforms, data collector platforms, they've built and continue to go to market. Excellent. So really strong execution in the quarter. Really just a terrific grant for the team.

Neso Nang (Barenburg): Hi, good morning. Thanks for taking my question too, if I may. The first one, if I could start with the ACO. You've talked about the strength in your Trimble Connection, Trimble Construction 1 and Trimble Connect outside of the US. I was wondering if any highlights that you could call out that's really driving that up for cross-field motion as well. And then in the regions outside of North America, if you could maybe talk a little bit about the competitive dynamics that you were seeing as well, that would be really helpful. Thank you.

Rob (Executive): Hey, good morning. This is Rob. I'll take the question. So with respect to terminal construction one, we launched the capabilities in Asia Pacific in the quarter. Still, it's obviously still early as a result of that, but that to me is a real highlight because we've seen the positive benefits of that through North America and Europe. Within Europe, we brought project site to Europe in the last few, in the last couple of quarters. The team is doing a really nice job starting to take that to market. In fact, I think the European growth was even faster than the North American growth in the quarter, and that would be indicative of the cross-sell and up-sell motion. Competitively, this is a unique set of capabilities we have at Trimble inside of that TC1 offering the breadth and depth of what we can bring to our customers, much less when we now intersect what we can do with field systems and AECO. So uniquely positioned at a competitive standpoint, strong highlights that, to me, with the cross-sell and up-sell that translated into the strength, not only at the ARR and revenue beat, but also the bookings that support that ongoing growth here for the rest of the year. That's really helpful. Thank you.

My second question is about around the SketchUp to cloud connector. Really exciting. I think someone's already flagged it as well. Only a few software vendors follow this approach in this design software space. I guess I was just thinking more in terms of risk. I was wondering, you know, how would it work in terms of the data created? in SketchUp through one of the users coming through Claude. Does Anthropic, does it have access to that data? And is it any possibility that they might be able to replicate some of the SketchUp features through the data access that they might have going forward? Or is it something that maybe we shouldn't worry about it at all?

Rob (Executive): I don't see a near-term concern on that relative to what Claude or another LLM provider could do in that respect. What we like about it is, in fact, we see more opportunity to expand the addressable market for people who are not Trimble customers today. What they have to do to be able to use the service is to create a Trimble identity. So that's important so we can actually know who the user is. So we believe we can capture customers and users who haven't used the tool before. So we've seen that opportunity to expand the size of the addressable market. And it becomes relatively easy to do that modeling because you're doing so through text prompts in order to create that model. So then our opportunity then from a downstream monetization play is to create new SketchUp users and then to upsell those SketchUp users into inside, excuse me, the terminal construction one offering.

Jerry Revich (Wells Fargo): Yes, hi. Good morning, everyone. Rob, I wonder if we could just talk about just a minute on all of the data that you folks have and the value of bringing that together using the AI tools. Is there a way to quantify in terms of the number of projects that you folks have in the system, et cetera, just to build comfort around the ability to essentially leverage AI to drive incremental ARR as opposed to the risk factors that everybody's looking at?

Phil (Executive): Hey, good morning, Jerry. You know, you've heard me talk before about trillions, billions, millions, and thousands, trillions of dollars of construction run through Trimble today, tens of billions of freight run through Trimble. We have millions of users of our software and hundreds of thousands of instruments, machines in the real physical world operate on Trimble. That is singularly unique. If we talk about, I'll double click within that and we take Trimble Connect, which provides that single source of truth, create that digital twin between the physical and digital. Today, inside of Trimble Connect, more than 30 million projects have been created. There's been over 50 million users in Trimble Connect since inception. We have thousands of integrations, third-party integrations, into the individual applications we have across Trimble. We have over 130 extensions, integrations that have been created inside our Trimble marketplace, which is part of Trimble Connect. In fact, at the mentions at our user conference in November, which we'd love to see you and the community attend, we're actually going to hold our first developer conference as part of that.

So you take this unique set of proprietary data, the density of that data, this is singularly unique, creating the ecosystem and the partner network to build upon this is why we see such an opportunity for AI to be a logical extension of our Connect and Scale strategy, really not even a separate initiative. So we really think there's a lot of compelling aspects here for us and for our customers.

Super. And then from a margin standpoint, I was really impressed with transportation and logistics performance in the quarter. I don't know if the margin's exceeded your internal plan, but if you could just unpack the drivers of margins in the quarter, and I think typically you do see a step up in margins in the business 2Q versus 1Q, and I just want to make sure there's nothing in the base that's extraordinary as we think about the bridge in that business from here.

Phil (Executive): Yeah, thanks for the question. I'm really pleased with the team. As we lap ourselves, we had the mobility divestiture last year, and so there were some stranded costs within that business that the team had worked on throughout the year. And so really, really happy with the performance. We're guiding to about the same rate at the end of the year, throughout the year, 24%. So I think you can view this as structural as we go throughout the year.

Tammy Zakaria (JP Morgan): Hi, good morning. Very nice results. Congrats on that. So this is a question from me who's not a designer and I don't use SketchUp or Claude to draw 3D models. So I apologize for the simplistic nature of the question. But about the Claude partnership, it sounds very interesting and I appreciate the TAM increased potential, but could you sort of explain how do you have confidence that cloud users would eventually migrate to using SketchUp instead of just staying on cloud that probably keeps getting better at giving customized designs on the platform? Or maybe a better way to ask is what's there in SketchUp now that cloud doesn't and will not be able to help with?

Rob (Executive): Hey, Tammy. Good morning. Thanks for the question. And I will be your personal sales rep to sell you a license of SketchUp and make you a user. Until then, imagine going to Claude and through natural language prompting, you don't have to be a user of the underlying modeling technology. So you're new to the software and you want to create a model. You can do so through just typing the prompt of what you want. If you want a new patio for the backyard and it's of a certain size and, let's say, dimensionality and style that you want to put in there. OK, so the squad's going to deliver you a model. We believe that that's not enough. You need to do something with that model. If you just wanted a picture of the model, you could create that in Cloud, but that's not actually going to translate into the workflow. What you then do is if you've created that design of that model in Cloud, you bring it into the SketchUp ecosystem in order to iterate on it. Because the one thing we know with the design is it's not static. You don't just do a prompt and then you're done. You want to iterate on that. You want to collaborate on that.

Like one of the real powers of SketchUp is the ability to have multi-user collaboration. And think about the coordination that an architect has with an engineer, much less a contractor or the owner. You're not going to do that through the LLM. You're doing that through SketchUp and then leveraging Trimble Connect to drive that collaboration. And when you want to perform that professional grade analysis and you want to do the energy modeling of that or the rendering on that model, you're going to come into the authoring application or the authoring tool, which is SketchUp, to do that.

So I go back to the ability to have started, and Claude, in this example, is we're lowering the barrier to entry to create that next generation of AI-first professionals who can then bring those models into SketchUp for the next iterations of that. So I hope that helps you a little bit understand that, is that it's insufficient to complete a workflow with that initial model that you've created in an LLM. I agree with, I think, the assertion you're making is that it's going to get better over time. And you can imagine then we'll put more capabilities into those engines up front over time. And we want to bring more Trimble capabilities throughout our ecosystem that direction as well. And so much of that, again, I see as an ability to create new users for our tools. And remember that within the tools we have themselves, whether it's SketchUp or every other software application we're delivering at Trimble, we also have AI inside of those tools. So think of Claude inside AI, Claude inside of SketchUp as opposed to SketchUp inside of Claude. We work it from multiple angles.

That is extremely helpful. Thank you so much and my second question. I wanted to double click on fill systems. The year started off really strong, but you're still targeting low to mid single digit organic growth. Can you remind us what you're expecting for two Q and to get to your full year guide, we need to see a lot of slow down versus the first quarter number you had so. Is it conservatism? Are you seeing an impact from the Iran war in 2Q and you expect that to stay for the rest of the year? So any color on fuel systems?

Phil (Executive): I'd say, you know, the first quarter obviously reflected what we saw last year, particularly in civil construction. So the market continues to be strong, particularly in that business. Rob mentioned geospatial performed well in the first quarter. As we start to think about the rest of the year in that business, this is the one that has the least visibility with the hardware particularly. And we start to get into last year, we had really strong second half of the year. So part of this is the year-over-year, the comps. And part of this is the Middle East, getting around the tariff policy, just some of the macros. I'd say, you know, so we've incorporated the risk, but we also incorporate the opportunities as we think about the guide and where the strength of the market is. At this point, again, we started the year very well, but we'll continue to keep an eye on it on market and update you in a few months.

Joshua Tilton (Wolf Research): Hey guys, thanks for sneaking me in. Congrats on a good quarter and just two quick ones for me. The first one is kind of a follow up question. So I think the question a lot of my peers have been trying to ask you on the call so far, and I think that's around the Claude integration announcement. And I think what a lot of people are trying to understand is just as you, you know, as you integrate more and more with Claude, you are increasing your users productivity. And I think people are trying to understand how are you guys setting up yourselves to capture that increase in productivity that the cloud connector will provide your average SketchUp user and I think the second question that I have just a quick follow-up is on that last field system comment that you mentioned is it fair to assume that there is more conservatism in the field systems outlook today than there was 90 days ago given everything that's going on in the world and the visibility that you just spoke?

Rob (Executive): With respect to field systems, I'd say what I want you to assume is that we've actually increased the guide for the year. So I want you to see that we don't see that anything has fundamentally changed in the market. We're three months, from a reporting standpoint, we're three months into the year. We've got nine more to go. Let's see where things are, how they're shaking out in three months from now. So no fundamental change in view in the field systems business. In fact, if anything, you could say it's better because of the raise, some of the raise we put through. That's what you need to hear on that one.

With respect to Claude and as we integrate Trimble capabilities with LLMs and increase our users' productivity, what I want you to hear there is we start by increasing our users' productivity within the tools they already use from us today. That's the primary place we start. When I think about going the other way and when we're working with Claude with this SketchUp example or other examples that I think you'll see in time to come, we think of those as opportunities to create new users. We think of that as opportunities for our existing users to start, if that's where they want to start, and then bring those models into SketchUp. I just can't stress enough that for the professional user, let's separate maybe the professional user from the consumer user of SketchUp. At that professional user level, you need to bring those files into our ecosystem. If you're going to iterate, if you're going to collaborate, and if you're going to perform professional grade analysis. That's the difference between the professional user and, let's say, the maker, the consumer user of SketchUp. I totally embrace SketchUp consumers. That is the bulk of the user count that we have in that community, and it creates that brand and the content that we have in it. We really monetize at the professional grade level. That is a fundamentally different set of workflow, and hopefully that helps answer the question.

Chad Dillard (Bernstein): Hey, good morning, guys. I'm going to continue on the SketchUp and Claude line of questioning. So a few for me. So I guess, first of all, from an economic standpoint, assuming you guys price for this ad feature, how do you guys think about the split up between what Trimble gets versus what Claude gets? Who owns the data? And I'm just trying to understand, like, how does this compress the learning curve going to more of an agentic approach? And maybe lastly, you know, this is, you know, SketchUp was kind of like the first deployment, but where else do you see this sort of, you know, relationship evolving across your different product sets?

Rob (Executive): Okay, there's a few topics in there. Hopefully I can capture them here. The data is the customer's data. So I always want to orient starting there. And that customer is creating a model, an example that we talked about today. That model is downloadable, and you can bring it into SketchUp. From an economic standpoint, let me highlight two different motions we have. One motion is the announcement we had in Q4 of last year where we have SketchUp AI. It's an add-on subscription to the SketchUp license you already have. And with that SketchUp AI license, it's only $11.99 a month for that add-on license. You get a set of credits for it or tokens, but think of it as credits that you get. So from that economic standpoint, that is directly to Trimble. It's all Trimble, and obviously there's a variable cost when we're on the consumption side of that. But we built that into the pricing model.

What we are asking about with Claude, if you start in Claude and you create that model that's downloadable, what we really see is the economic model there is to create users downstream. That's the way I would think about that. And how can we create those users downstream? Well, at least today, we start by requiring them to have a Trimble ID. And when you have that Trimble ID, that's how you're able to download that SketchUp model and then bring it into and to SketchUp as the authoring tool. So there's multiple paths to monetization. I think about in one of the first, I think it was the second question we got this morning. When we talk about tokens, I see that as a tactic. That's one of multiple tactics that we have. We'll have tactics of monetization where we bundle AI capabilities into the good, better, best offerings. Clearly, we want to upsell customers into the better and the best. We'll provide a higher value. We'll monetize there. We'll monetize purely as standalone transaction or consumption. And one of the reasons we were attracted to the Transporian acquisition when we did it is there's well over $100 million of transactional revenue that comes from that business.

We don't have to imagine a world with transactional revenue. We have a world with transactional or consumption-based revenue. And inside of that, we've got autonomous, which in other words, those are AI-first products that we're monetizing on a consumption-based level. So we're open to multiple doors and avenues as the tactics to monetize the capabilities that we're bringing to market. And we think we can do so in a way that expands the size of the addressable market while we're doing it. And all of this is early days, and we see it as virtue that we're out there in the market, that we're testing, that we're learning, and that we're leading.