Trimble (TRMB) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 annualized recurring revenue (ARR) of $2.18 billion, up 7% year-over-year and 15% organically, driven by a software-centric business model and strategic focus following major divestitures.

• Q1 revenue was $840.6 million, down 12% year-over-year but up 2% organically, with recurring revenue comprising 78–79% of total revenue.

• Net income rose to $66.7 million, with non-GAAP net income at $151.4 million and non-GAAP EPS at $0.61, ahead of expectations.

• Major divestitures included the Mobility business (Q1 2025) and Ag business (Q2 2024), resulting in significant changes to segment composition and equity investments.

• Significant progress in AI integration across operations and customer solutions, supporting productivity and efficiency.

Financial highlights

• Q1 revenue reached $841 million, up 3% organically and 10% after adjusting for term license timing; ARR reached $2,111 million (+17% organic as-adjusted).

• Gross margin improved to 66.7%–69.9%; adjusted EBITDA margin was 25.2%–25.9%; non-GAAP operating income margin was 23.6%–24.2%.

• Free cash flow for Q1 was $149 million, with a conversion rate of 1x net income; cash and cash equivalents at quarter end were $290 million.

• Share repurchases totaled $627–$627.4 million in Q1, with $372.6–$373 million authorization remaining.

• Net debt/TTM as-adjusted EBITDA at 1.3x; no borrowings under the $1.25 billion credit facility; $1.4 billion in senior notes outstanding.

Outlook and guidance

• Full-year 2025 revenue guidance: $3.35–$3.47 billion; non-GAAP EPS: $2.76–$2.98; organic ARR growth midpoint 14%.

• Q2 2025 revenue expected at $815–$845 million; non-GAAP EPS $0.59–$0.65; organic growth 2–6%.

• Guidance reflects completed mobility divestiture and is de-risked for macro uncertainty, with modest reduction in organic revenue growth offset by FX and Q1 outperformance.

• Operating margins expected to improve in 2H 2025 with recurring revenue growth and positive impact from term license revenue.

• Free cash flow for the year expected at ≈0.9x net income after adjusting for one-time tax and M&A costs.