Trimble Q3 Revenue Rises 7% as 2026 ARR Outlook Falls to 10%

Trimble Inc. (TRMB) said third-quarter fiscal 2026 revenue grew 7% organically and non-GAAP earnings increased, but it now expects full-year organic annualized recurring revenue growth of about 10%, below its previous 12% to 14% forecast. The company attributed the revised ARR outlook to lower-than-expected growth in Field Systems and Transportation & Logistics.

Third-quarter revenue rose to $967 million from $901 million a year earlier, while total ARR reached $2.56 billion, up 10% organically. Non-GAAP diluted earnings per share increased 6% to $0.86 from $0.81. Trimble said revenue and EPS were in the upper half of its guidance ranges.

Profitability declined from the prior-year quarter, reflecting product mix and a difficult comparison in Field Systems. Non-GAAP gross margin fell 70 basis points to 70.5%, non-GAAP operating margin decreased 100 basis points to 27.2%, and adjusted EBITDA margin declined 110 basis points to 28.8%.

AECO leads recurring-revenue growth

Architecture, Engineering, Construction and Owners, or AECO, remained Trimble’s strongest source of recurring growth. Segment revenue increased 9% organically to $395 million, while ARR rose 13% organically to $1.64 billion. Operating income climbed 16% to $132 million, and the operating margin expanded 170 basis points to 33.5%.

Trimble said recurring-revenue growth was supported by Trimble Construction One bundles and cross-selling, along with consistent net retention. For the full year, the company expects AECO revenue of approximately $1.69 billion, low-teens organic revenue growth, about 13% organic ARR growth and an operating margin of roughly 36%.

Field Systems generated $436 million in third-quarter revenue, up 7% organically, with solid growth in Civil Construction and Geospatial. Trimble identified data-center construction, utilities and energy infrastructure as key areas of demand. ARR increased 5% organically to $407 million, with growth moderating despite continued strength in core offerings such as WorksPlus.

Field Systems operating income declined 6% to $129 million, while its margin contracted 390 basis points to 29.5%. The company cited product mix, trade-show timing and a strong prior-year comparison. Its full-year outlook calls for approximately $1.68 billion in revenue, high-single-digit organic revenue growth, low-single-digit organic ARR growth and an operating margin of about 30%.

Transportation & Logistics revenue increased 2% organically to $136 million, and ARR grew 5% organically to $521 million. Trimble said the freight market remained challenging, although AI-enabled offerings grew more than 20%. Operating income rose 3% to $36 million, with the margin expanding 50 basis points to 26.3%.

For the full year, Trimble expects Transportation & Logistics revenue of approximately $555 million, mid-single-digit organic growth in both revenue and ARR, and an operating margin of roughly 25%. The segment figures exclude the mobility business divested in the first quarter of 2025 where applicable.

Full-year revenue and earnings outlook

Trimble forecast fiscal 2026 revenue of $3.91 billion to $3.94 billion, representing total growth of 10% to 11% and organic growth of 9% to 10% on an as-adjusted basis. The company expects a non-GAAP operating margin of 28.2% to 28.5%, an adjusted EBITDA margin of 29.8% to 30.0%, and non-GAAP EPS of $3.63 to $3.69. Management said it continues to expect mid-to-high-teens EPS growth and has achieved its full-year EBITDA margin target one year ahead of plan.

Free cash flow is expected to equal approximately 0.9 times non-GAAP net income, or approximately one times after adjusting for nonrecurring acquisition, divestiture and restructuring expenses. The outlook assumes net interest expense of about $82 million, an average share count of 234 million and a 17.2% tax rate.

For the fourth quarter, Trimble projected revenue of $1.031 billion to $1.061 billion, organic growth of 6% to 10%, and organic ARR growth of approximately 10%. It expects a non-GAAP operating margin of 32.8% to 33.4%, an adjusted EBITDA margin of 34.1% to 34.7%, and non-GAAP EPS of $1.13 to $1.19.

Year-to-date operating cash flow was $665 million, compared with $226 million in the prior-year period, while free cash flow rose to $644 million from $206 million. The 2025 comparison included a $277 million tax payment related to the agriculture divestiture. Trimble repurchased $224 million of stock during the third quarter and had $768 million remaining under its authorization. Net debt stood at $1.32 billion, equivalent to 1.2 times trailing 12-month as-adjusted EBITDA.

Trimble said it is investing in AI to increase customer adoption, engagement and productivity, while building a foundation for potential monetization as usage patterns mature. The company is also using AI to pursue internal efficiency and product simplification.

The outlook remains subject to risks including changing trade policies, supply-chain disruptions, weaker demand, inflation, interest-rate and foreign-exchange movements, dealer inventory levels, geopolitical conflict and the pace of Trimble’s transition toward subscriptions. The company also identified risks related to AI developments, acquisitions and divestitures, joint ventures, and its ability to remediate material weaknesses in internal controls over financial reporting.