Trimble (TRMB 0.81%), a leader in connected workflow technology for industries like construction, agriculture, and transportation, reported its earnings for the second quarter of fiscal 2025 on August 6, 2025. The most notable news from the quarter was a broad-based beat on expectations: it delivered non-GAAP earnings per share of $0.71, above the $0.63 consensus, and revenue of $875.7 million, compared to the $835.1 million anticipated by analysts. This marked a 14.5% rise in non-GAAP earnings per share year-over-year, with revenue up nominally. Record annualized recurring revenue and rising margins underscored the company’s pivot to a software- and subscription-oriented model. However, Free cash flow dropped sharply year-over-year, reflecting higher tax payments and one-off costs. Overall, the quarter showed progress in key strategic priorities, leading management raised its full-year 2025 outlook.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.71 | $0.63 | $0.62 | 14.5% |
| Revenue (GAAP) | $875.7 million | $835.1 million | $870.8 million | 0.6% |
| Annualized Recurring Revenue | $2.21 billion | N/A | 4.7% | |
| Gross Margin (Non-GAAP) | 70.6% | 66.5% | 4.1 pp | |
| Operating Income (Non-GAAP) | $222.6 million | $194.4 million | 14.5% | |
| Free Cash Flow (First Two Quarters) | $89.6 million | $300.3 million | (70.2%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Trimble and Recent Business Focus
Trimble specializes in technology for connecting digital and physical workflows, serving industries such as construction, geospatial, agriculture, transportation, and logistics. Its platform combines sensors, software, cloud-based services, and hardware to enable clients to improve accuracy, productivity, and sustainability.
In recent years, Trimble’s main focus has been its transition from hardware to software and recurring services. This strategic shift has supported higher margins and more predictable revenue. The company’s most important success factors right now include scaling subscription platforms, software adoption, innovative product integration (including artificial intelligence), and leveraging a global network of partners to expand market reach. Integrating digital and physical workflow solutions across verticals is central to its competitiveness and growth strategy.
Quarter Highlights: Data, Segment Performance, and Key Developments
Trimble’s latest quarter was defined by strong progress on recurring revenue, rising profitability, and continued operational transformation. Annualized recurring revenue (ARR)—a measure showing how much annual revenue the company expects from its recurring business, reached a record $2.21 billion, up 5.0% from the prior year. Organic growth (excluding divestitures and currency effects) in this metric was particularly strong at 13%. Approximately 75% of Trimble’s total revenue came from recurring sources. Subscription and services revenue climbed, offsetting a year-on-year decline in hardware product sales (GAAP), which fell from $320.4 million to $292.8 million.
The company’s margin expansion was one of the most notable developments. Gross margin (the percentage of revenue left after direct costs) hit a record 70.6% on a non-GAAP basis, up from 66.5% a year ago. while Adjusted EBITDA—earnings before interest, taxes, depreciation, and amortization—rose to 27.4% of revenue, up nearly 3 percentage points year over year. The company cited growth in software and services as a main driver. This shift not only supports margin gains, as evidenced by Trimble's gross margin of 66.7% GAAP (69.2% non-GAAP), but also insulates the company from market swings that typically affect hardware sales.
Performance varied across Trimble’s three operating segments. The AECO (Architecture, Engineering, Construction & Owner) segment posted revenue of $350.3 million, up 16.8% year over year, with operating margin jumping 4 points to 30.4%. The Field Systems segment, which delivers solutions for surveying, positioning, and civil construction work, brought in $392.7 million in revenue, up 3.5% year over year, while achieving a stronger 30.8% operating margin. Adoption of subscription-based offerings like Machine Control-as-a-Service—in which customers pay recurring fees for advanced equipment control technology—continued to accelerate, bringing in new customers and stabilizing revenue. Transportation & Logistics saw a drop in revenue due to the divestiture of its Mobility business but maintained strong profitability, with recurring revenue now making up over 90% of sales.
During the quarter, Trimble continued to build on its key strategies. Integrating digital and physical workflows remains a core focus, demonstrated by the expansion of Trimble Construction One (TC1)—a software bundle that connects project workflows for construction clients. Over 20 bundles are now deployed, supporting cross-selling and global adoption, especially in Europe. Research and development investments held steady, with $163.3 million spent, underlining ongoing work in artificial intelligence and innovation. In terms of partnerships, Trimble deepened relationships with equipment makers like Caterpillar and John Deere, and completed the sale of its Mobility business, further sharpening its focus on high-margin, recurring business models. Management also noted enhanced market activity in European verticals, especially in Germany due to infrastructure investment plans.
Free cash flow, which represents cash left over after routine business expenses and capital spending, declined to $89.6 million for the first two quarters of 2025, down from $300.3 million a year earlier. The drop came from higher cash taxes related to divestitures and other one-time items. The company repurchased $50.0 million in shares, bringing the year-to-date total to $677.4 million. These buybacks reflect capital return efforts but have also reduced cash reserves and slightly increased short-term debt.
Financial Outlook and What to Watch
Management raised its full-year 2025 guidance. Revenue for FY2025 is now forecast at $3.48–$3.56 billion (GAAP), up from the previous midpoint of $3.42 billion. Non-GAAP EPS is now expected to land in the $2.90–$3.06 range for FY2025. For Q3 2025, the company expects revenue between $850 and $890 million and non-GAAP earnings per share of $0.67–$0.75. The guidance for full-year 2025 factors in the completed Mobility divestiture and anticipated contributions from term license renewals in the high-margin fourth quarter.
Looking ahead, investors should watch Trimble’s progress with subscription and software adoption, margin improvement, and deal momentum for its workflow integration platforms. Management highlighted some longer sales cycles among large enterprise customers and noted that one-time costs from divestitures will continue to affect margins into 2025. The company is also facing slower hardware sales and macroeconomic risks, such as tariffs, but is offsetting these costs through surcharges of approximately $10 million per quarter. With recurring revenues made up roughly 75% of total revenue and persistent investment in innovation, Trimble’s ability to convert this operational progress into sustained free cash flow recovery will be key moving forward.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
