トリンブル（TRMB）2026年第3四半期決算説明会：ARR見通しを引き下げ、EPSガイダンスを引き上げ

Trimble（NASDAQ: TRMB）は2026年第3四半期の売上高が前年同期比7%増の9億6,700万ドル、非GAAPベースのEPSが0.86ドルになったと発表しました。同社は通期の売上高見通しを維持し、EPS予想をわずかに引き上げたものの、主にポジショニングサービスおよび輸送事業の伸び悩みにより、ARR（年間リカーリングレベニュー）の成長率見通しを引き下げました。

要点

• 第3四半期の売上高は前年同期比7%増の9億6,700万ドル、非GAAP EPSは0.86ドルとなり、Trimbleの見通し範囲の中央値を上回りました。
• ARRは10%増の25億6,400万ドルと過去最高を記録しました。経営陣は通期のARR成長率見通しを従来の12%〜14%から約10%に引き下げました。
• 調整後EBITDAマージンは28.8%となり、見通しの上限近くに達しました。Trimbleは、前回のインベスター・デイで示されたモデルより1年前倒しとなる、通期マージン約30%の見通しを維持しています。
• AECO部門が引き続き主要な成長エンジンとなり、ARR成長率13%、売上高成長率9%、営業利益率は170ベーシスポイント上昇して33.5%となりました。
• Trimbleは2026年の売上高見通しの中央値を39億2,500万ドルに据え置き、非GAAP EPSの中央値を約17%増となる3.66ドルに引き上げました。
• 経営陣は、AIのマネタイズは導入が進むにつれてサブスクリプション、アドオン、従量課金クレジットを通じて拡大するものの、AIによる総売上高が2027年上半期に重要な成長ドライバーになるとは予想していないと述べました。

主要財務データ

事業および業績ハイライト

AECO

AECOのARRは前年同期比13%増の過去最高となる16億3,600万ドルに達し、四半期売上高は9%増加しました。営業利益率は170ベーシスポイント拡大して33.5%となりました。

経営陣によると、AECOのファンダメンタルズは引き続き堅調です。SketchUpを除く純維持率は約110%で、解約率を反映したグロス維持率は安定しており、新規純増ARRは2026年末時点で年間最高水準に達する見込みです。受注残高およびリカーリング受注残高はそれぞれ13%増加し、SaaSおよびサブスクリプションの受注残高はそれをやや上回るペースで成長しました。

Trimbleは、AECOが同社全体ARRの約65%を占めると見込んでいます。成長はアップセル、クロスセル、顧客による追加アプリケーションの導入によって支えられました。また経営陣は、データセンター、製造業の国内回帰（リショアリング／オンショアリング）、エネルギー関連プロジェクト、アジア太平洋地域における案件パイプラインおよび受注の好調さを挙げました。

フィールドシステム

フィールドシステムのARRは5%増加、売上高は7%増加、営業利益率は29.5%となりました。土木建設と地理空間（Geospatial）分野は引き続き好調でしたが、以下の3つの要因が下半期のARR成長の重荷となりました。

1. 低利益率のホワイトレーベル製品ラインからの計画的な撤退により、推計で年間2,000万ドルのARR成長の押し下げ要因が発生しました。
2. 農業分野、特に南米におけるポジショニングサービスが大幅に減速しました。
3. 地理空間および土木建設分野におけるセット提供ポジショニングサービス・サブスクリプションの更新率がTrimbleの想定を下回りました。

経営陣はポートフォリオ内のより好調な分野を強調しました。サービス型マシンコントロールのACV（年間契約額）受注は50%以上増加し、その3分の1以上の顧客が新規ロゴ（新規顧客）でした。建築建設向けフィールドシステムも引き続き高い2桁の成長率を記録しました。

輸送・物流

輸送・物流部門のARRは5%増、売上高は2%増を記録しました。営業利益率は50ベーシスポイント上昇して26.3%となりました。

Transporeonのグロス顧客維持率は100%に近い水準を維持し、ARRは約9%成長しました。しかし、欧州の貨物輸送量およびスポット価格の構成比は以前の水準を下回りました。経営陣は、輸送事業の戦略的見直しを、あらかじめ結論や時期を設けることなく継続していると述べました。

AIおよびTrimble Connect

Trimble Connectは第3四半期に300億回以上のAPI呼び出しを処理し（25%超の増加）、100万件以上のプロジェクトを新規追加しました。過去12か月間で約500万件のプロジェクトが追加され、リアリティキャプチャ・プラットフォーム・サービスに取り込まれたデータ量は55%増加しました。

複数の製品でAIの導入が進展しました：

• 積算ユーザーにおけるAIテイクオフの採用率は、月間アクティブユーザーの6%から19%へと上昇しました。
• Live count AI takeoffは、月間30万枚以上の図面において300万個以上のシンボルを処理しました。
• AIアシストによる積算作業により、手作業が60%以上削減されました。
• Tekla Model Assistantベータ版の月間アクティブユーザーは50%以上増加し、操作の成功率は95%を超えました。
• Document Crunchにおける自動レッドライニングセッション数は、第2四半期から3倍以上に増加しました。
• Trimbleの試算によると、ERPのAIアシストは、30万件の給与計算、75万件の請求書処理、15万件の経費領収書処理を通じて、顧客の作業時間を累計20万時間以上削減しました。

経営陣は、モデルの処理コストが現在、階層型料金、プロジェクトベース料金、または従量課金制に反映できるため、AI関連の粗利益率は少なくとも中立に保たれると説明しました。

業績予想（ガイダンス）

セグメント別では、Trimbleは2026年度のAECOの売上高成長率を10%台前半、ARR成長率を約13%、営業利益率を36%と予想しています。フィールドシステムは、一桁台後半の売上高成長率、一桁台前半のARR成長率、30%の営業利益率を見込んでいます。輸送・物流の売上高およびARRは一桁台半ばの成長率となり、営業利益率は25%となる見通しです。

2027年について、経営陣は2026年末の更新後ARR成長率からの減速はないと見込んでいます。ただし、Trimbleの2027会計年度のカレンダーに1月1日が含まれないことにより、相当な額の期間ライセンス更新売上の計上が2028会計年度へと繰り延べられます。同社はこのカレンダー効果により、2027年の売上高および営業利益の成長に約9,000万ドルの逆風が生じるものの、ARRおよびフリーキャッシュフローへの影響はないと見込んでいます。

そのカレンダー影響を除いた場合、経営陣は2027年のEPS成長率が長期目標である「10%台前半から半ば」の上限付近になると予想しています。Trimbleは第4四半期決算発表時により詳細な見通しを提供する予定です。

リスクおよび注視事項

• 特にフィールドシステムおよび輸送・物流において、ARR成長率がTrimbleの以前の予想を下回って推移しています。
• 南米における農業向けポジショニング需要が減退しており、経営陣はマクロ経済の回復時期を予測できないと述べました。
• セット提供ポジショニング・サブスクリプションの初年度更新率が同社の想定を下回りました。
• フィールドシステムおよびTransporeonにおいて欧州市場の軟調さが続いており、中東情勢の緊迫化とそれに伴うインフレ影響が欧州の圧迫要因となりました。
• 為替変動および小規模な事業売却が、通期の報告ベース売上高の逆風となっています。
• AIのマネタイズは初期段階にあり、経営陣はより広範な価値享受に先立ち、導入率とエンゲージメントの向上を優先しています。

アナリスト質疑応答のハイライト

• AECO部門の見通し：経営陣は、安定した維持率、新規純増ARRの増加、13%の受注残高増加、継続的なアップセルに支えられ、事業は引き続き健全であると述べました。欧州の軟調な動向は、AECO部門ではなく主にフィールドシステムとTransporeonに集中していました。
• AIのマネタイズ：Trimbleは、指名ユーザーライセンス、製品階層、従量課金クレジットを組み合わせたハイブリッドモデルを採用しています。SketchUp AIのクレジット使用量は前四半期比で倍増し、自動貨物手配および見積もりの売上高は前年同期比で20%以上増加しました。
• 2027年の効率化：経営陣は、事業運用の見直しやAIによる生産性向上によって、カレンダー要因による約9,000万ドルの営業利益への逆風の大部分を相殺できるとの見解を示しました。ただし、節減された費用の一部は再投資されます。
• 製品開発およびM&A：Trimbleは、ボルトオン買収の検討において、自社開発か買収か（build-versus-buy）の基準をより厳格に適用しています。経営陣は、AIネイティブな開発により、従来であれば買収していたかもしれない製品を社内で開発できるようになっていると述べました。
• 市場開拓（Go-to-Market）戦略：次のフェーズでは、特に大企業顧客やオフィスから現場までの統合ワークフローにおいて、AECOの直販とフィールドシステムの代理店チャネルとの間の連携強化に焦点を当てます。

決算説明会（電話会議）全文トランスクリプト

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the Trimble Third Quarter 2026 Financial Results Call. [Operator Instructions]

I will now hand the conference over to Rob Painter, President and Chief Executive Officer. Please go ahead.

Robert Painter

Welcome, everyone, and thanks for joining today.

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.

Let's start with our 3 key messages on Slide 5. First, financial performance. We are delivering short-term and long-term value creation for our customers and for our shareholders. For years, we've talked about our 343 operational cadence where we embrace the end of managing to the short and the long term with 3 months, 4 quarters, 3 years in mind. Second, our right to win. Strategy is the art of doing the things you can uniquely do to win in the market. That manifests as our Connect & Scale strategy, which is a platform strategy. The opportunity is immense as we connect the physical and digital worlds in our served markets. Third, AI. On top of our right to win, the market opportunity compounds with the investment we are making in AI to deliver differential outcomes, thereby accelerating and reinforcing connect and scale. We're excited about our future.

Today, we'll walk through progression on each of these 3 topics, starting with financial performance on Slide 6, where I will hit a few highlights. In the quarter, we delivered both revenue and EPS in line and above the midpoint of our guidance range against a backdrop of a challenging supply chain environment and a tepid European market, both offset by strength in the U.S. kudos to our teams and partners as they continue to well outperform the global market. For the full year, we are holding our revenue guide and slightly increasing our EPS guide. Our full year guidance points to greater than 9% organic revenue growth, EBITDA margins expanding to approximately 30% and EPS growth in the mid- to high teens. All of which demonstrates the strength of our innovation and execution.

I want to emphasize that our EBITDA margin performance is 1 year ahead of our last Investor Day model. In addition, we initiated a set of efficiency and cost reduction measures that will enable us to expand margins while simultaneously increasing our investment in AI native innovation. AI is inspiring us to redesign how we work across the company from go-to-market to product development to customer success. ARR was modestly below our expectations, and we are updating our full year ARR outlook. AECO growth remains robust, and that is important because AGCO represents approximately 65% of our ARR. AECO ARR organic growth was 13% compared to 14% in the first half of the year. We expect similar strength in the fourth quarter. This would result in net new ARR of greater than $200 million, an increase against 2025, and we are pleased with that consistent execution.

In Field Systems, which is 15% of the company's ARR, we are experiencing headwinds in the second half of 2026 from 3 discrete items. First, as we discussed last quarter, the intentional shift of a white label product line to our own solution is a $20 million drag to ARR growth for the year. Exiting the product line is the right decision as we were reselling a third-party offering at very low margins, and we are confident in our ability to regain the margin and revenue. Second, growth in our positioning services business, which provides high accuracy, reliable location data and real-time GNSS positioning across a number of industries has slowed meaningfully in the agriculture market, particularly in South America. Third, ARR growth reflected lower-than-anticipated subscriptions on our bundled positioning services offerings across geospatial and civil construction as first year attached cohorts came up for renewal.

To put this into a broader perspective, our team has grown ARR by more than 40% over the last 2.5 years, and we are growing our most strategic offerings. For example, our machine control as a service offering grew ACV bookings in the quarter by more than 50%, generating a significant share of new logos in the process. Another example is Trimble Business Center where we have more than doubled named account users through conversions of support and maintenance to subscription. In Transportation & Logistics, ARR growth was slightly below our first half where the European freight market remains somewhat mixed. Our gross customer retention in Transporeon is close to 100% and ARR grew approximately 9%, but volumes and spot price mix were below levels we saw earlier in the year, which impacts our ARR.

Turning to Slide 7. Let's pivot to review how AI compounds the value of our connected scale strategy and how we progressed and delivered in the quarter across 3 pillars: Connect, Scale and AI. Starting with the first pillar of Connect. Our strategy is anchored by connection where ground truth forged in the field is connected to best-in-class capabilities in the office. To give an example of innovation delivered in the quarter in construction, the field systems team announced the launch of our ST30 smart target, a new generation surveying system. This system breaks new ground by integrating optical and subscription-based GNSS functionality into a single smart target solution. The ST30 integrates with our field office and cloud software solutions to provide trustworthy and traceable accuracy, while its tilt compensation adds both productivity and safety to enhance the overall integrity of collected data.

The integrated GNSS will be available next year as an upgrade and will streamline site operations and allow users to work beyond the constraints of optical line of sight. What that means for the strategy is we further extend the reach of capturing more ground truth with higher fidelity and we connected to our office software to enrich workflows, and we extend functionality for subscription upgrades. The team also launched the first of our next-generation Maxwell 8-based GNSS receivers. These receivers were launched in response to the growing prevalence of intentional jamming and spoofed signals. Trimble continues to lead the way in delivering resilient precise positioning solutions demonstrating market leadership and providing ground truth to our global customers.

Within this pillar of Connect, we are connecting high-value workflows that solve higher order customer problems. Take construction, we are unifying data across the broadest range of stakeholders in our industries, architects and designers, engineers, contractors and owners from concept to completion. Value grows as participants connect as the network effects of our platform take hold. You can see an example of this on Slide 8, with our customer, MJ Church in the U.K., where they ran the M27 Junction 10 project with Trimble Connect as its operational heartbeat, tank survey, design, machine control and mixed reality into a federated model, dozens of file formats were unified. Digital models for each phase move from the office to the field instantly. Every shift began with a virtual walk-through and the team finished 1 day ahead of a 9-day possession. They are repeating the approach on the A47 road. Only Trimble is delivering value like this.

In Transportation & Logistics, we held user conferences in both Europe and the U.S., where we had the opportunity to showcase dozens of innovations to thousands of customers and partners and where customers were able to share how they are leveraging our technology to make their businesses better. A prime example is how we are connecting back office route planning directly to in-cab execution. Processing over 5.5 billion routing request monthly, we recently introduced advanced batch analytics and preferred route settings in PC Miler web services platform for both shippers and carriers. This allows fleets to analyze lane profitability in the office and push that exact optimized route directly to the driver's copilot navigation app.

Guaranteeing this level of execution consistency not only improves driver safety, but also significantly enhances our TMS offerings by ensuring those back office systems are powered by reliable ground truth execution data from the road. Another example is our latest expansion of Trimble Docking Yard, which tackles the costly disconnects and manual guesswork that occur, the moment a truck reaches a facility. We are bringing the entire yard cycle into one connected flow, starting before the truck even arrives. Our real-time slot management and carrier portal align appointments with actual facility capacity, while our real-time yard management provides site teams with early visibility and the changing ETAs to resolve disruptions before they become delays. Reductions in waiting time means customers need less trucks to move the same amount of freight, thus optimizing asset utilization and helping address the driver shortage problem.

Let's move to the second pillar on Slide 7 and talk about scale, where we hold a structural data advantage at the intersection of the physical and digital worlds. Within Trimble Systems resides deep context and domain knowledge that cannot be replicated. Trillions of dollars of construction projects, billions of dollars of freight spend, millions of users of our software and millions of transactions running through our platforms and hundreds of thousands of machines and instruments in the real physical world. The scale of this footprint is expanding, and the value of this data is compounding. One of the most important parts of my job is spending time with customers around the world. What I increasingly hear from them is a desire to unlock more from their data.

I also hear them emphasizing the importance of trust in a world that is moving fast. Trust and data, trust and models, trust and security, trust at scale. This is exactly what our customers expect when they buy from Trimble. Because our customers connect to their most sensitive data, only to a platform they trust, our approach to managing AI risk is anchored on recognized frameworks, standards and regulations. In Construction, the Trimble Connect platform has long held compliance and risk management certifications, including ISO 27001 and SOC 2 Type 1 and I'm proud to say that we have reached initial implementation status for FedRAMP moderate. As we layer Agentic AI into and throughout the platform's capabilities, our commitment to trust, safety and security remain our #1 priority.

Trimble's approach to managing AI risk is anchored on recognized international standards, frameworks and regulations. The Trimble Connect platform has passed independent third-party audits for ISO 42001 and with official certification expected later this month. If that sounds like a lot, it is, we take governance and resilience at global scale seriously, and we are confident and competitively distinguishes Trimble. Within this pillar of scale, resides conviction that if you're going to be a platform company, you have to have an open and extensible ecosystem that others can build on and upon, which you can compound value for network participants.

In transportation & Logistics, this is at the very core of what Transporeon provides for the business, a multisided marketplace with thousands of third-party integration, running tens of millions of transactions per year. In construction, we hold our Trimble Dimensions user conference next week, where we expect over 7,000 attendees, both on-site at the conference and at our off-site demonstration test site. On-site, we will hold our first-ever developer Summit within the conference where we have hundreds of registrants and dozens of sessions scheduled. At our off-site, we will showcase how we have expanded our partnerships with OEMs as well as providers of automation and autonomy. These ecosystem extensions are built on top of our market leading grade control engine. And all of this data is capable of flowing into Trimble Connect where its impact can be amplified.

Speaking of amplification, let's move to our third pillar, AI. AI is not an abstract add-on at Trimble. It is directly grounded in physical site reality. By capturing spatial ground truth in the field and feeding it seamlessly into our industry platforms, our connected data becomes the trusted data layer for physical industries where AI compounds its value by making that data uniquely actionable. With intention, our near-term focus is to broaden and deepen adoption, engagement and customer productivity while building the foundation for monetization as usage patterns mature.

In Transportation & Logistics, we recently launched Arc Agent, a transportation industry AI platform that connects to live data sources and build skills on top of them such as connecting live vehicle GPS telemetry with remaining driver hours of service and then correlating that with TMS dispatch and warehouse dock schedules to trigger automated exception resolutions. In the quarter, we launched in-cab AI-based driver intelligence as well as Appian fleet assistant for real-time fleet optimization. Over the last few quarters, I have talked about our autonomous freight marketplace solutions for procurement and quotation. Year-to-date revenue is up over 20% in this category, and our bookings growth shows significant potential for strong revenue growth next year, demonstrating the value behind automating spot market carrier selection and rate negotiation.

In Construction, we are extending the Trimble Connect platform with a unified and deeply integrated agentic AI layer so agents can be built and governed to take action with the same truck, security and permissions as the rest of Trimble. Customers will increasingly reach those agents through a single front door, Trimble Assist, inside the products they already use. I'll give a number of examples of AI and action across our construction applications this quarter, starting with project management, where our 360 capture solution automatically overlay site photos to 2D drawings, eliminating manual photo tagging for field teams. Paired with an AI-powered punch list capability for the closeout inspections that catch unfinished work, field staff can cut walk times from over 2 hours to about 20 minutes.

Document controllers and project engineers can now set up drawings in a few seconds with AI title block processing, down from 2 minutes. In MEP, our expanded live count AI takeoff has processed more than 3 million symbols across more than 300,000 monthly drawings. A feature release this quarter lets estimators train AI models on their own company symbol libraries, cutting manual take off time by more than 60%, and AI takeoff adoption among estimating users tripled from 6% to 19% of monthly active users. For surveyors, new AI feature extraction and Trimble Business Center detects pavement distress and checks curve and ADA ramp compliance without manual field review. In Steel & Concrete, monthly active users of the Tekla model assistant beta grew more than 50% in the quarter with actions in Tekla Structures succeeding more than 95% of the time.

In risk and compliance management, auto red lining sessions and Document Crunch more than tripled versus Q2. Finally, in financials, customers using our ERP AI assistants have by our estimate, saved more than 200,000 hours by automating 300,000 payroll runs, 750,000 invoices and 150,000 expense receipts. This translates into millions of dollars of labor savings which we view as crucial in an industry plagued by labor shortages. The innovation is exciting to witness and it gets even more impressive when considering the potential to leverage this data at the platform level.

Trimble Connect is our construction platform, and Slide 9 shows a visual of how we are connecting stakeholders across the construction continuum. In the third quarter alone, the Trimble Connect platform handled more than 30 billion API calls, up more than 25%, representing the importance customers and developers place on integration with Trimble's ecosystem. Behind that, the platform added more than 1 million projects in the quarter. In the last 12 months, almost 5 million projects were added to Connect and our reality capture platform service grew ingested data volume by 55%. With that application and platform progression in mind, we believe agents work at their best when deeply integrated into the products, data and services our customers already use customized to their full context, trustworthy with privacy built in rather than bolted on and easily created and shared across an organization.

Think of a customer interacting with this Trimble scheduling agent that inherits the user's permissions, the company's business rules and the project context, all stored and managed within the Trimble Connect platform. With access to data and bulls from across the platform, the agent can reason on ground truth data extracted from the contracts, BIM, estimates and metals, ERP, field sensors and more to monitor the project schedule and deliver actionable insights that are bespoke to the stakeholders whose ability to deliver outcomes is amplified by the intelligence that only Trimble can deliver.

To emphasize the point on our market approach, our near-term priority is to compound adoption and customer value with monetization following through subscriptions, add-ons, consumption and other models as usage patterns mature. We are exactly where we expected to be, which includes making our Trimble Connect platform capabilities accessible through a unified agentic AI layer. While we scale the ability for our customers to more effectively utilize credits as a consumption currency for AI and API usage at scale.

I'll close my comments on this AI pillar with a comment on efficiencies within our own 4 walls. We should go without saying that the strong majority of committed code we produce is now AI generated. We see development teams working on greenfield activities, cutting development cycles down by months and quarters. To get the most of leveraging AI efficiencies is a human topic, not so much a technology topic. The key is not applying a new technology to an old architecture, rather, it's applying a new technology to a new architecture. We are in flight around reorganizing more of our product development teams around a new architecture, one that we believe will unlock velocity at scale while doing so in a leaner fashion.

Phil will now take you through what this means for the Trimble model. Phil, over to you.

Phillip Sawarynski

Thanks, Rob. Let me start with reviewing our third quarter numbers on Slide 11. We posted revenue of $967 million, up 7% and earnings per share at $0.86, in line and above the midpoint of our guidance. We delivered record ARR of $2.564 billion, up 10%. Gross margins were lower by 70 basis points to 70.5% due to higher hardware mix. Finally, we achieved strong EBITDA margins of 28.8%, which was toward the high end of our guidance range.

Moving to the balance sheet and cash flow items on Slide 12. Our reported free cash flow remained strong at $644 million through the first 3 quarters. Our balance sheet provides financial flexibility with $215 million of cash and a leverage ratio of 1.2x, which is well below our long-term target ratio of 2.5x. We repurchased $224 million of shares in the quarter and have $768 million remaining on our repurchase authorization. Since the beginning of 2025, we have repurchased over $1.4 billion worth of stock.

Next, let's review segment details on Slide 13. AECO delivered another strong quarter with a record $1.636 billion of ARR posting 13% ARR growth and 9% revenue growth for the quarter. Operating margin increased 170 basis points to 33.5% and is on track to deliver approximately 36% operating margin for the year, which is 100 basis points ahead of our prior expectations and a terrific milestone. Field Systems ARR was up 5% and revenue was up 7% in the quarter, with continued strength in Civil Construction and Geospatial. Operating margin was 29.5%, Transportation & Logistics delivered 5% ARR growth, 2% revenue growth and 50 basis points of operating margin expansion to 26.3%.

Turning to Slide 15, let's review our updated outlook for the year. We are maintaining the midpoint of our 2026 full year revenue guidance at $3.925 billion despite headwinds from foreign exchange and to a lesser extent, a small divestiture. This represents greater than 9% organic growth. We are also slightly increasing the midpoint of our earnings per share guidance to $3.66, which represents approximately 17% growth. We expect ARR growth at approximately 10% compared to our prior outlook of 12% to 14%, primarily due to the market impacts we discussed affecting the positioning services and transportation businesses. We maintain our EBITDA margin guidance of approximately 30%. We expect free cash flow to be approximately 0.9x non-GAAP net income and we continue to expect free cash flow to be greater than non-GAAP net income over the long term.

Slide 16 breaks down the full year metrics by segment. AECO is a scaled, growing and attractive margin business with over $1.6 billion of ARR. We are guiding revenue growth in the low teens and ARR growth of approximately 13%. Driven by the strong performance this year, we are raising our operating margin target for AECO by 100 basis points to 36%. In Field Systems, we expect revenue growth in the high single digit, ARR growth in the low single digits and operating income of 30%. We expect Transportation & Logistics revenue and ARR to grow in the mid-single digits, and we increased the operating income margin expectation to 25%.

With respect to discrete fourth quarter guidance, let's turn to Slide 17. We are setting the midpoints of our guidance at $1.046 billion for revenue, up 8%, earnings per share at $1.16, up 16% and ARR growth at approximately 10%. We expect EBITDA margins between 34% and 35%, which at the midpoint is approximately 100 basis points expansion from the prior year.

Before turning back to Rob, I would like to talk briefly about 2027 on 3 fronts, starting first with ARR. Our updated 2026 exit growth rate represents a good starting point with no expected deceleration next year. Our second is to point out the absence of a January 1 in our 2027 fiscal year, which will occur in fiscal 2028 rather than the fourth quarter of fiscal 2027, when a material amount of term license revenue is recognized due to renewals. This calendar impact means we will have a headwind to 2027 revenue and operating income growth of approximately $90 million. ARR and free cash flow will be unaffected. When adjusting for this dynamic, we expect revenue to be in line with our long-term plan. The third item relates to the efficiencies Rob mentioned earlier. We believe these operational moves will enable us to deliver strong earnings per share growth next year. Excluding the $90 million operating income impact from the absence of January 1, we expect EPS growth at the high end of our long-term algorithm of low to mid-teens growth. We will dial in the model further on our fourth quarter earnings call in February.

Back to you, Rob.

Robert Painter

Thanks, Phil. Overall, I am pleased with our performance in the quarter, notwithstanding the near-term ARR headwinds. I'm confident and energized by the progress we are making to accelerate our right to win, excited about the customer engagement we are building across our platform and inspired by the momentum we are building with AI releases grounded in physical site reality.

Next week, November 9 through 11, we will showcase our latest construction innovations at our Trimble Dimensions user conference at the Venetian in Las Vegas, including our first Developer Summit. Thank you to our Trimble team, our global partners and our shareholders for your ongoing support. Operator, let's open the line to questions.

Operator

[Operator Instructions] Your first question from the line of Jason Celino with KeyBanc Capital Markets.

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Jason Celino

Maybe an obvious question. I think you mentioned seeing some tepid European market trends. Was this comment more broad-based? Or was it more specific to the AECO segment. It's just I saw the AECO ARR growth guide come down a little bit. So curious if that was the main driver for that.

Robert Painter

Jason, it's Rob. With respect to Europe, we saw it more in field systems and in the Transporeon side of the transportation business, the AECO business, very solid. And really, that's a hold of the view we have on the AECO. So all good there.

Jason Celino

Okay. All right. And then, Rob, I think you mentioned an interesting stat. You said that API calls were up 25%. I thought that was an interesting data point. I imagine the growth drivers of API calls are obviously new customer growth, product expansion and then customers using their own agents or using your agents. Maybe can you give us a frame of reference on maybe how much this data point might have uptick versus past trends? And then remind us how you're monetizing API usage.

Robert Painter

Jason, good question. With respect to the API calls going up, I think that's a really good sign of Trimble Connect as a platform. So I was specifically talking about Connect, which is our platform for construction at Trimble. It reflects the corpus of data that is inside of Connect that reflects the scale of users that we have in it in Connect and a number of projects. So I referenced 1 million projects added in the quarter. I mean, if over the life of Connect since we started connect over 10 years ago, we've had 50 million registered users in that time frame. I think we're about over 1 million monthly active users around 1 million monthly active users today. There's a lot of work that happens inside of Connect.

And that is where we see the intensity of the API call usage. And that we see as a really good sign, especially as we put more and more of our applications and to connect and now enter AI and the MCP connectivity, server connectivity, more data able to connect across the life cycle with the stakeholders in the industry, that's a great sign for us of just how important Connect is proving to be for our customers for them to be able to do their work and to be able to do it better, faster, safer cheaper and greener. With respect to monetization of those API calls, you're going to see more and more of that from us over time. And we talk about a hybrid model where we believe we'll monetize AI usage at the intersection of the named user license with the ability to have credits on top of that.

Operator

Your next question from the line of Jonathan Ho with William Blair.

Jonathan Ho

Thank you for the additional color on the ARR portion of the business. Just regarding sort of your revised outlook and guidance, can you give us maybe a little bit of color on maybe a waterfall of the relative impact from the 3 items that you mentioned as well as help us understand what changed relative to the prior expectations?

Phillip Sawarynski

Jonathan, this is Phil. Let me -- so let me talk about the couple of -- let me go around the businesses, first of all. So AECO, Rob mentioned this, but the business is strong. We see no change in the fundamentals of that business. The net retention, excluding SketchUp, is about 110%, which has been very consistent. Our gross retention has been stable there. Our net new ARR is actually growing throughout the year and we'll exit at the highest level of the year. And then in the AECO, there's also a bit of a roundup and round down. But with the strong performance of that business, we've increased the operating margin by 100 basis points to 36%. So that's AECO.

When I talk about the Field Systems for context of field systems is about 15% of the company's ARR. And within that, there's the 3 businesses. The Civil Construction, Geospatial and Advanced Positioning. Advancement Positioning is where we sell the satellite-based correction and that gives our users higher accuracy without needing a local infrastructure and that also gives better performance. But a significant portion of that business is actually selling the corrections into the ag market and in particular, in South America, and that's gotten worse. And then to a lesser extent, over a year ago, we started including the corrections as a standard on your offering at the point of sale with our construction hardware. And what we're seeing playing out is that is that the conversion rates which we modeled, which were based on our previous experience in the ag market are actually lower than expected. There's still contributing to the growth, but they're lower than what we modeled.

Jonathan Ho

Got it. Got it. And just as a quick follow-up. -- you talked very favorably about some of the AI adoption that you're seeing. Is there any way for us to think about sort of quantification for what that looks like, maybe not for the balance of the year, but into 2027, does this start to look a bit more material? Just trying to understand some of the drivers and opportunities there.

Robert Painter

Jonathan, thanks. This is Rob. We went through a number of examples of innovations and progress we're making in AI on the call, and that was just a small slice of what the teams are producing right now. And I see that both at individual application level, at a work flow level, at an ecosystem level. We see it connecting physical and digital workflows in both construction and transportation. It's exciting to see what's happening. And it's been more interesting to get these in our customers' hands. And so the frame we have is we want to drive adoption. We want to drive engagement. And we'll follow -- monetization will follow as those usage patterns make themselves clear and mature a bit.

I wouldn't expect that a quantification like in aggregate for that to be a needle mover in the, call it, the first half of next year. I think as we progress through next year, somewhere in the second half of the year, I think it might be a little easier to start to have a little bit of a better sense of what it is doing in aggregate. But I can tell you, like we see pockets of evidence were of growth. So if we take, for example, the SketchUp business, specifically architecture design business, when we have a hybrid model for the AI capabilities that we're delivering. So you bought a hybrid in the sense that you buy the named user license have a good, better, best tier inside that named user license, you get a package of credit. And when you go beyond those credits, you then can buy more credits and we saw quarter-over-quarter, 100% growth and those credits. I think that's a good sign for us that the technology is being used.

If we look in transportation and autonomous procurement and autonomous quotation, those products have been -- in the market, we saw 20% growth year-over-year in that space. We've got bookings that are strong year-to-date, which gives us confidence that, that business will continue to grow next year. So this isn't just futures. Like there is revenue today in the business. The Document Crunch acquisition that we completed last quarter has a project-based AI value delivery. That business is well on track with the deal underwriting model. We had significant growth happening in that business on a percentage basis. Aggregated up and when you're talking over $2.5 billion of ARR, it does get a little hard to move those needles. But I can tell you, it is gaining traction.

Operator

Your next question from the line of Jerry Revich with Wells Fargo.

Jerry Revich

Rob, Phil, I'm wondering if you could just talk about the pipeline that you have in AECO. I appreciate the ARR revision is pretty small, dollar-wise off of a larger base. I'm wondering as you look at the pipeline, what does that tell you about the growth profile for ARR for AECO over the next 12 to 18 months? And separately, from a margin standpoint as we think about the businesses using more AI credits? What are the implications for the margin profile for you folks when you do sell those credits? Can we just step through the economics there, if you don't mind?

Robert Painter

Great. Jerry, thanks for the question. And so let's talk about AECO. Think about pipeline feeding bookings, which creates the revenue. At a pipeline level, when we look at the markets that we're serving, they're global. And the fundamentals remain large, global, underserved and are penetrated. Strong value proposition, unique offering at the intersection of the physical digital, the hardware, software, the office and the field. Asia Pacific pipeline and bookings, I think we're the strongest growers year-over-year in the quarter. I think that somewhat reflects bringing TC1 into the Asia Pacific market. So that's creating pipeline for our sellers.

What also is creating that pipeline is, I'll call it the modernization and up-leveling of our marketing efforts. It's just really impressive to see the full slate of tactics that the team has already been executing and has in store and it all gets better to create that pipeline through the investments we've made in our back-office systems and unifying our CRM systems over the last year, which is getting more and more intelligent and guess what AI is helping feed that as well. So the pipeline looks good as we look at the bookings and that flow through, that's probably a good place to pause and comment that we continue to see strength in data centers, reshoring, onshoring of manufacturing, energy, whether that's renewables or oil and gas. So good pockets of strength on the bookings front as well as geographically. All that then feeds into the model that Phil took you through with the net retention and the gross retention, cross-sell, upsell efforts continue to work and drive bookings and revenue, ARR growth in the business.

And then all of that then not only sets up for the second half of the year or this fourth quarter as we lay out in guidance and into 2027, our conviction that we'll continue to grow.

Phillip Sawarynski

And Jerry, just one other point to add as we think about that. Our backlog, as we have it right now, is actually up 13% and the recurring backlog is also 13%. And if you actually double-click within there, the SaaS and subscription backlog is actually up a little bit higher than that. So that's another indicator of -- as we think about going into 2027.

Jerry Revich

Super. And can you just comment on the second question on margins, please, as you have more AI agent revenue. What does that mean for your unit profitability or margins?

Robert Painter

Sorry, yes. I'd say the short term -- near term on that one, we see the gross margins in the business holding. Obviously, there comes a cost associated with hitting the models. Right now, it's -- we're able to price that through. Remember, we're pricing it through a number of factors, whether it's in that good, better, best tiering or if it's consumption -- work that's consumption-based or project-based for that matter. So what we see in front of us where we see, at a minimum, neutral to the margins.

Operator

Your next question from the line of Quinn Fredrickson with Baird.

Quinn Fredrickson

Just wanted to start off within the field business and the 2 discrete headwinds you mentioned in positioning services. Do you see those continuing into 2027? I just asked because you mentioned you have visibility to sales growth in line with your long-term plans, the January 1 impact. So does that presume these headwinds clear at some point in '27? Or is just the rest of the business strong enough to offset?

Robert Painter

I'll start, Quinn, this is Rob. With respect to, let's say, the ag market, that one, I don't know how to call the macro on ag, so I'm not going to attempt to do that. What I will do is talk about the growth that we have in the rest of the portfolio. So the machine control as a service business is ACV bookings growth actually ARR growth as well was over 50%. And what we see when -- as we've gone through to this model, excuse me, over the last few years, more than 1/3 of the customers that we win with this offering are new logos. But that tells us that we're expanding the addressable market. That gives us conviction as we move into next year.

We have a portfolio that we call building construction field systems where we've worked on a survey instruments, as you instead of really thinking of them as outdoors, we take them indoors, more for layout inside of a building frame. And that business continues to grow strong, strong double digit. So we see the bookings that we have there that gives us visibility into next year. So we add that -- and then software conversions, I'll just give you one more, as we continue to move from subscription from on-prem to subscription, we see the bookings there, and we have the conviction that we'll continue to grow there. And we learned, obviously, we can take the playbooks that we've had throughout the rest of the company here to learn for that. So that's the stack, Quinn, that as out.

Quinn Fredrickson

Got it. Okay. And then second question, I think in your commentary, you alluded to some restructuring or reorganization, just any quantification of any benefits, how much of the savings will be retained versus reinvested as well as how to think about the cadence of those actions?

Phillip Sawarynski

Yes. Quinn, this is Phil. Thanks for the question. Yes, so we did some work this year. There's puts and takes along this, but the easiest way to think about it going into 2027 is that we indicated about $90 million of a headwind on operating income from this -- from not having a January 1 in 2027. So a lot of the changes in the puts and takes would be around that neighborhood to around, call it, $80 million to $90 million is what we would expect. Now there's going to be other things that come back as we reinvest in the business as well, but that's about the [indiscernible].

Operator

Your next question from the line of Alex Sklar with Raymond James.

Alexander Sklar

Great. Rob, maybe first one for you, just with Dimensions coming up next week. I want to dig into new product velocity after bringing that Document Crunch team. Where does that integration stand today? And how are you thinking about organic product expansion motion to kind of grow your share of customer wallet? How much more needs to be done there?

Robert Painter

Thanks. Great question. So hey, we're very excited for Trimble Dimensions next week. We are going to be leaning into the platform story that we have at Trimble, the unique one, met that at the intersection of the physical and digital. As you can imagine, we'll have a lot to say as it relates to AI, we have, I think, it's 800 sessions that are scheduled. So not only that is that us being able to talk about new products, our customers, leading a lot of those sessions. We're running an off-site in addition to the into the on-site.

So the new product, the velocity will -- our customers and folks like yourself can make it out there, and we'll be able to see what we're doing, both in the office and in the field. And if we take Document Crunch, specifically, this is a fantastic team. We've put more capital behind this team. They are actually, I think, kind of helping a lot of the rest of the business see what's possible as it relates to product velocity, in an AI native fashion. A lot of inspiration there. We've actually given that business and the leader of that business, additional responsibility into -- for payments as well as there's a couple of new products that we're going to launch at Dimensions next week.

One of them specifically a year ago, we would have been looking at acquiring a business and fast forward in an AI world. We've built it ourselves and are ready to take it out next week. So a lot of -- really, just -- I can't say enough good things about the Document Crunch team, Josh and everyone in that business. And then more broadly, just as mentioned, it's going to be a fun week.

Alexander Sklar

Okay. Great color. And then I'm not sure who wants to take this one. But digging into the AECO segment, can you parse out some of the trends you're seeing from that core kind of TC1 enabled multiproduct base versus the kind of 1 to 2 product customers as the divergence in trends related to retention or cross-sell that widening at all?

Robert Painter

I'll take that one. I'd say it's quite consistent with what we see. The upsell motion actually was where we had the most growth in this last quarter, upsell growth outpaced cross-sell growth by a little bit. So that means we're deepening the penetration within our existing customers. We're winning new seats. So that's a good sign of deepening adoption within our customers. And what we tend to see is that a cross-sell motion, a onetime period creates the upsell motion in a future period. There's a certain logic to that, to see that play out. And what that means then is we continue to see steady growth of customers going from 1 to 2, 2 to 3, 3 to 4, et cetera, products or applications that they're using from us.

So continue to feel really good about the fundamentals that we have there in the business. And then actually, also I want to highlight beyond the AECO, truth of the matter is the customer doesn't care about AECO or Field. It's Trimble construction capabilities. And at that intersection point, we think there's really exciting things that we can continue to do to unlock that work in the field. So think about the surveyors, collecting data, machine control, streaming real-time positional awareness and linking that into the office with the systems that are managing those projects and the schedules in those financials. That BIM model meets the financial model meets execution and progress in the field. That's special, that's unique and something we think we can only do.

Operator

Your next question from the line of Rob Wertheimer with Melius Research.

Robert Wertheimer

You guys have unpacked the fuel system fairly well. And I don't suppose it's a surprise really that the South American ag is weak. On the bundled offering in construction, was there a geographic overlay because it seems like North American construction is picking up pretty well. And then just out of curiosity, is that -- it seems like you bundle it with new machine sales subscription, but was there anything else in there where you're wrapping other products from Trimble into that? And I'll stop there.

Robert Painter

Rob, so on the bundled offerings, are you referring specifically with some machine control offerings out of field? Or do you mean it more broadly?

Robert Wertheimer

Yes. Yes, I just didn't know if you were able to wrap the machine control/credit services and field than anything else, [indiscernible].

Robert Painter

Got it. Got it. I'm estimating, so from the B2W acquisition we did a few years ago, estimating and then in-field track capabilities as a natural has been the most natural place where we're bundling at the point of sale or doing a co-sell motions with the direct and the indirect team, the referrals. So estimate -- we're doing estimating for civil construction and earthmoving specifically. It's logical that one who is buying our machine control systems and also needs to create estimates for that earthworks.

The other -- the next thing that's very logical to connect to that is project management. So you're right, you're managing the work and then project management in the office and the field. So those become the bundles, Rob, and I would say those still, I think, are in their very early days. So we think we have a lot of room to run there to perfect that motion. And then you can imagine, once you do that, the next the next move on the Board is connect that to the financial system and take a North America market, for example, we uniquely have density in that construction financials. And by the way, also within financials, I don't just mean ERP, I also mean payments because earth mining contractors generally get paid based on how much earth or how much dirt they're moving. And then you can see how that would flow back into our ability to manage the projects and the financials of the payments.

Robert Wertheimer

All right. Perfect. That's interesting. And then just in general, though, in the weakness that you saw in outside of ag and Field Systems, was there any Europe -- any geographic overlay on that, that would further explain?

Robert Painter

Well, I call it Europe and field systems, I called that out in my opening remarks. And I go back to the first quarter when we've talked about the war in the Middle East and how that would play out. And I had a degree of caution in the back half of the year if the award didn't end that's definitively not good. It's not good for our business in the Middle East and we see the inflation that, that has rippled through Europe. So I'd say that was modestly weaker and then that was offset, as you noted, with the strength in the U.S.

Operator

Your next question from the line of Kristen Owen with Oppenheimer.

Kristen Owen

I recall that we talked a little bit about this last quarter, but maybe just coming back to it, help us understand that gap that we're seeing in AECO revenue versus ARR growth? And then just given the term license calendar piece, does that gap start to narrow in 2027?

Phillip Sawarynski

Kristen, this is Phil. Let me take that one. So yes, the main dynamics on that delta is -- well, there's 2 pieces to it. I'll call it. The timing of the term licenses, the term license is we recognize that revenue upfront. We smooth that out for ARR. And so that timing in any given quarter can be up or down. There's also a facet of that. that if we sell some multiyear terms, there's even more revenue in a given quarter.

The other piece of it is professional services that we have still in AECO, a large portion, particularly in our owners business. That's been declining as we move more and more from customization into more standard cloud offerings. And so that obviously is not tied to ARR. So that's why we are focused on ARR that really normalizes those dynamics. And if I look over a longer term, if I just look at our full year, for example, this year, the gap actually closes, we're guiding in the low to mid-teens for the revenue growth and about 13% for ARR. So that does get closer if you look at it over a multi-quarter period.

Kristen Owen

Great. And then I did want to follow up to the extent that you're able to give an update on the transportation business. Obviously, conditions in Europe have changed. Diesel prices have come up. So just any sort of update that you can provide on the alternative discussion there.

Robert Painter

Kristen, this is Rob. The answer is this business as usual us. And I hope you got a sense from my prepared remarks that there are a lot of really good things happening in the business. I'm having both of those user conferences in the quarter grounded us and the importance of what we do. The European market has its puts and takes with the diesel prices. There's aspects that, of course, are not good. And then there's other aspects which create business for us. So the message overall is the same as last quarter. There's no predetermined outcome or time line as it relates to the review.

Operator

Your next question from the line of Mark Schappel with Loop Capital Markets.

Mark Schappel

As you look ahead into 2027, Rob, could you just talk about any changes that you anticipate on your go-to-market strategy in particular, maybe you could talk about how you're thinking about sales coverage or channel partnerships, cross-selling and maybe where you see some of the greatest opportunity for improvement there.

Robert Painter

Great question. I give the teams -- all our teams, great credit for the transformation they've made over the years on the go-to-market side of the house. I'm really moving from product-based selling to platform selling to that named account, user selling, which is absolutely crucial if you're going to drive the cross-sell opportunities, you're going to best serve the customers for what they buy from us.

I'd say the next wave of what I would characterize as our opportunity to level up would be at the intersection of the direct and the indirect. So with the AECO and Field, where we serve common customers we're able to do that, I think, quite well at the enterprise account level. And I've seen that get better and better throughout the year. So I would expect to see good things from the team there. And maybe it's somewhere late '27 to '28 were at scale, I would say, without much of the handholding that it works on its own. But that intersection point, direct, indirect serving large account opportunities it's going well, and I think that we're going to be able to unlock even quite a lot more of that next year, and there's even an intersection point with our form of forward deployed engineers working with that. When we're doing that, it's just really exciting to see what customers are unlocking with our technology.

Operator

Your next question from the line of Chad Dillard with Bernstein.

Charles Albert Dillard

So Rob, I wanted to go back to your prepared remarks when you were talking about the different capabilities of AI in your products. You mentioned that there's millions of dollars of labor savings. So I guess my question is, number one, how much does Trimble or how much is Trimble entitled to capture? And then number two, can you talk about the adoption of those capabilities by our customers by region?

Robert Painter

So it really is just -- it's fine, it's exciting, it's compelling to see what these capabilities are achieving and what they're accomplishing. Again, I'll keep coming back to the spring that we want to drive adoption engagement. There's a lot we're learning. There's a lot of our customers are learning. With respect to, I'll say, a thought on value -- I'll call it, value capture, how we think about that. We think about quantifying value delivery and then getting our fair share of that value capture. So the equation for us has got to start with the value that's created for the customers, and then we work backwards from there. So that's more of really a thematic answer that I'd give you.

And you can see order of magnitude improvements as you transcend from, call it, a point solution productivity and to workflow, solving those higher order problems. And there are aspects, you could say, somewhat separate, but related, where we can see savings in labor hours, say, if you're using Document Crunch and you're doing where AI is automating red lining there's less human intervention needed for that. Or on the ERP side, I referenced automation and payroll and invoices and expense reporting that we think is saving hundreds of thousands of hours and therefore, millions of and labor hours. So we think about it -- we definitely think about, so I'll say, labor savings for our customers, which matters so much in this market that is tight on labor, understand that, quantify that and then work backwards to our value capture and that value capture, at a minimum, we would want to be within a frame of how we've historically done that with a bias to that being even higher.

Charles Albert Dillard

Great. That's helpful. And then maybe wanted to talk about your M&A pipeline and your approach. So I guess like how do you think about the split between buy versus build, especially now that we've -- you're shifting more towards AI capabilities as products.

Robert Painter

Yes. Chad, it's a great question. I mean, first, within the capital allocation frame with the M&A pillar, we believe in disciplined M&A, but fits our strategy, and it has to absolutely fit our strategy, and we differentially think about the intersection of the physical and the digital. So in other words, differential interest and capabilities that headed that intersection point.

My answer today on buy versus build, I think, is different than it would have been a couple of years ago. Where today, we have a sharper lens on acquisitions that might have been more -- I would have described as tuck-in the past. We're asking ourselves a lot more questions if we can build instead of buy and then next, we get the user conference. We'll have at least one, maybe more examples to be able to share. We're announced -- we're making announcements on some what we call them capabilities or features or products that we've been able to build fast, and we're building them inside of our platform and native way connecting them. That's different. That's pretty exciting.

Operator

We have reached the end of the Q&A session, and that does conclude today's call. Thank you all for attending. You may now disconnect.