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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and the related notes. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and those listed under “Risk Factors.” This section of this report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this report can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K, for the year ended December 29, 2023.

EXECUTIVE LEVEL OVERVIEW

We are a leading provider of technology solutions that enable professionals and field mobile workers to improve or transform their work processes. Our comprehensive work process solutions are used across a range of industries including architecture, building construction, civil engineering, geospatial, survey and mapping, natural resources, utilities, transportation, and government. Our representative customers include construction owners, contractors, engineering and construction firms, surveying companies, energy and utility companies, trucking companies, and state, federal, and municipal governments. Further information on our business is presented in Part I, Item 1, “Business” of this report.

Our growth strategy is centered on multiple elements:

•Execute on our Connect & Scale strategy;

•Deliver customer outcomes that can enable productivity, quality, safety, transparency, and environmental sustainability;

•Focus on software and services;

•Address attractive markets with significant growth and profitability potential;

•Capitalize on domain knowledge and technological innovation that benefit a diverse customer base;

•Drive geographic expansion with a localization strategy;

•Optimize go-to-market strategies to best access our markets; and

•Pursue strategic and targeted acquisitions, divestitures, joint ventures, and investments.

Our focus on these growth drivers has led over time to growth in revenue and profitability and an increasingly diversified business model. We continue to experience a shift toward a more significant mix of recurring revenue as demonstrated by our success in driving annualized recurring revenue (“ARR”) of $2,257.8 million, which represents growth of 14% year-over-year at the end of 2024. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 14%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profitability over time and is leading to improved visibility in our businesses. Our software, services, and recurring revenue represented 76% and 67% of total revenue for 2024 and 2023. Additionally, we continue to maintain focus on increasing our mix of recurring revenue, which is accelerated by the Transporeon acquisition that closed in the second quarter of 2023 and the Ag divestiture that closed in the second quarter of 2024.

As our solutions have expanded, our go-to-market model has also evolved with a balanced mix between direct, distribution, and OEM customers as well as enterprise-level customer relationships.

Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, we refer to organic revenue growth, which is a non-GAAP measure. For a full definition of ARR, organic ARR, and organic revenue growth as used in this discussion and analysis, refer to the “Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” found later in this Item 7.

Impact of Recent Events on Our Business

Acquisitions and Divestitures

We acquire businesses that align with our long-term growth strategies including our strategic product roadmap and, conversely, we divest certain businesses that no longer fit those strategies. This is demonstrated by the 12 acquisitions and 23 divestitures that we have completed since 2020, including the Transporeon acquisition, the Ag divestiture, and the Mobility divestiture.

Mobility Divestiture

On September 14, 2024, we entered into a definitive agreement with Platform Science to sell our Mobility business. Subsequent to the end of the year 2024, the transaction closed on February 8, 2025 resulting in our ownership, or rights to acquire ownership of 32.5% of Platform Science’s expanded business with an approximate fair value of $248.7 million. The approximate fair value was determined based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. We received (i) shares of preferred stock of Platform Science, with

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certain liquidation preferences, that represent 28.5% of Platform Science’s expanded business and (ii) warrants allowing us the rights to acquire 4% of Platform Science’s expanded business. The combined businesses aim to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which gives customers access to more applications and offerings.

The assets and liabilities of Mobility were classified as held for sale beginning in the third quarter of 2024. A valuation allowance was established to reduce the carrying value of the disposal group assets to the approximate fair value of the consideration we would receive. As a result, we recorded a pre-tax loss of approximately $32.9 million included within Divestitures gain, net in our Consolidated Statements of Income in 2024.

Upon the closing of the transaction in the first quarter of 2025, we derecognized the assets and liabilities that were transferred and recorded our equity investment at its cost. Mobility was reported as a part of our T&L segment. See Note 4 “Divestitures” in Item 8 of this report.

Ag Divestiture

On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, in exchange for $1.9 billion in cash proceeds, subject to working capital adjustments. Following the closing of this transaction, we own 15% and AGCO owns 85% of PTx Trimble. In addition to forming PTx Trimble, the parties concurrently entered into agreements that include the following: (i) long-term supply agreement for key GNSS and guidance technologies, (ii) technology transfer and license agreement, (iii) trademark license agreement, (iv) master sale and distribution agreement for positioning services, and (v) transition services agreement. Ag was reported as a part of our Field Systems segment.

Upon closing of the transaction in the second quarter of 2024, we recognized a pre-tax gain of $1.7 billion. The gain included $275.6 million for our retained 15% ownership interest in PTx Trimble, an LLC, which is reported as an equity method investment.

The formation of PTx Trimble is expected to better serve farmers with factory fit and aftermarket applications in the mixed fleet precision agriculture market to help farmers drive productivity, efficiency, and sustainability. Additionally, the transaction is expected to (i) simplify our Connect & Scale strategy, (ii) reduce risk of channel transition in the agriculture market, and (iii) enhance our financial profile and flexibility with a resulting higher mix of software, services, and recurring revenue.

We repaid $1.0 billion of our variable-rate debt through use of the net proceeds and expect to use the majority of the remaining proceeds after tax to repurchase stock.

Macroeconomic Conditions

Macroeconomic conditions continue to present significant challenges globally, driven by geopolitical tensions, tariff and trade policies, exchange rate and interest rate volatility, and persistent inflationary pressures. The heightened trade tensions and related imposition of tariffs between the United States and its trading partners, the extent and duration of these tariffs, and their impact on global economic conditions remain uncertain and depend on various factors, including international negotiations, policy responses, potential exemptions, and shifts in global supply and demand. These evolving dynamics may have a negative impact on our business operations. In response, we are closely monitoring global trade developments and considering ways to mitigate potential impacts on our business.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenue, costs of sales, operating expenses, and related disclosures. We consider the accounting polices described below to be our critical accounting policies. These critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the consolidated financial statements, and actual results could differ materially from the amounts reported based on these policies. Our accounting policies are more fully described in Note 1 “Description of Business and Accounting Policies” in Item 8 of this report.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of allowance for returns and any taxes collected from customers. We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations; however,

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determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment.

Judgment is required to determine stand-alone selling price (“SSP”) for each performance obligation. We use a range of amounts to estimate SSP and determine whether there is a discount to be allocated based on the relative SSP of the various products and services. We estimate SSP considering multiple factors including but not limited to, our internal cost, pricing practices, sales channel, competitive positioning, and overall market and business environments. As our offerings and markets change, we may be required to reassess our estimated SSP and, as a result, the timing and classification of our revenue could be affected.

Income Taxes

We are a U.S. based multinational company operating in multiple U.S. and foreign jurisdictions. Judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual tax audit outcomes. Determining whether an uncertain tax position is effectively settled requires judgment. Changes in recognition or measurement of our uncertain tax positions would result in the recognition of a tax benefit or an additional charge to the tax provision.

Income taxes are accounted for under the liability method, whereby deferred tax assets or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if we believe it is more likely than not such assets will not be realized.

We are subject to the periodic examination of our domestic and foreign tax returns by the IRS, state, local, and foreign tax authorities who may challenge our tax positions. We regularly assess the likelihood of adverse outcomes from these examinations in determining the adequacy of our provision for income taxes.

Business Combinations, Divestitures, and Goodwill and Purchased Intangible Assets

For business combinations, we allocate the purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.

When divesting a business, a significant portion of the gain or loss may be impacted by the goodwill allocated to the divested business and the fair value of any equity interests acquired in exchange for the disposal group. We allocate a portion of the applicable reporting unit’s goodwill to the divested business using the ratio of the fair value of the divested business compared to the fair value of the reporting unit. The fair value of the reporting units, divested businesses, and acquired equity interests is generally determined using a combination of the discounted cash flow method and the guideline company method. The significant assumptions used in the discounted cash flow model to estimate the fair values include certain assumptions that form the basis of the forecasted results, specifically, revenue, revenue growth rates, and discount rates. These significant assumptions are forward looking and could be affected by future economic and market conditions.

We evaluate goodwill on an annual basis in our fourth quarter or more frequently if indicators of potential impairment exist. To determine whether goodwill is impaired, we first assess qualitative factors. Qualitative factors include but are not limited to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, or other relevant company-specific events. If it is determined more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount, we perform a quantitative analysis. Alternatively, we may bypass the qualitative assessment and perform a quantitative impairment test.

When performing a quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit's fair value. The estimation of a reporting unit's fair value involves using estimates and assumptions, including expected future operating performance using risk-adjusted discount rates. If the reporting unit's carrying amount exceeds its fair value, an impairment loss is recognized.

We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable based on their future cash flows. The estimated future cash flows are primarily based on assumptions about expected future operating performance.

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RESULTS OF OPERATIONS

Overview

The following table shows revenue by category, gross margin and gross margin as a percentage of revenue, operating income and operating income as a percentage of revenue, diluted earnings per share, and annualized recurring revenue compared for the periods indicated:

(In millions, except per share amounts)

Revenue:

Gross margin as a % of revenue 65.1 % 61.4 %

Operating income as a % of revenue 12.5 % 11.8 %

Non-GAAP operating income as a % of revenue (1) 25.4 % 24.6 %

Non-GAAP diluted earnings per share (1) $ 2.85 $ 2.66 $ 0.19 7%

(1) Refer to“Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” of this report for definitions.

Basis of Presentation

We use a 52–53 week fiscal year ending on the Friday nearest to December 31, which for 2024 was January 3, 2025. 2024 was a 53-week year and 2023 was a 52-week year. 2025 will be a 52-week year.

Year 2024 Compared with Year 2023

Revenue

Change versus 2023 % Change

Product Subscription and Services Total Revenue

Change in Revenue (28) % 18 % (3) %

Acquisitions 2 % 2 % 2 %

Divestitures (21) % (1) % (10) %

Organic growth (9) % 17 % 5 %

Organic total revenue increased due to the increased mix of subscription and services revenue and the impact of the additional week in fiscal 2024.

Organic product revenue decreased due to lower Ag demand in the first quarter and higher U.S. federal government sales of Surveying hardware in the prior year.

Organic subscription and services revenue increased primarily due to strong growth in subscription and software term licenses in all segments, primarily AECO, and to a lesser extent, the impact of the additional week.

Gross Margin

Gross margin increased due to the organic growth of higher margin software and subscription sales, including the impact of the additional week, partially offset by the divestiture of Ag margin hardware sales.

Gross margin as a percentage of revenue increased due to the organic growth of higher margin software and subscription sales and the divestiture of Ag’s lower margin hardware sales.

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Operating Income

Operating income and operating income as a percentage of revenue increased primarily due to organic growth and associated gross margin expansion and to a lesser extent, the impact of the additional week. The increase was partially offset by the Ag divestiture and higher acquisition and divestiture transaction costs.

Research and Development, Sales and Marketing, and General and Administrative Expense

The following table shows research and development (“R&D”), sales and marketing (“S&M”), and general and administrative (“G&A”) expense along with these expenses as a percentage of revenue for the periods indicated:

(In millions)

Research and development $ 662.3 $ 664.3 $ (2.0) —%

Percentage of revenue 18.0 % 17.5 %

Percentage of revenue 16.4 % 15.3 %

Percentage of revenue 14.9 % 12.8 %

R&D expense decreased primarily due to the impact of the divestiture, partially offset by expense related to Transporeon, and to a lesser extent, the impact of the additional week. We believe that the development and introduction of new solutions are critical to our future success, and we expect to continue the active development of new products.

S&M expense increased slightly primarily due to higher compensation expense, including commissions, and the impact of the additional week, partially offset by the impact of the Ag divestiture.

G&A expense increased primarily due to divestiture transaction costs, and to a lesser extent, investments related to our Connect & Scale strategy and the impact of the additional week. The increase was partially offset by the impact of the Ag divestiture.

Amortization of Purchased Intangible Assets

The following table shows amortization of purchased intangible assets for the periods indicated:

(In millions)

In 2024, total amortization expense of purchased intangibles decreased primarily due to the expiration of prior years’ acquisition amortization, partially offset by the amortization of intangibles acquired from the Transporeon acquisition, which was not applicable in the first quarter of 2023.

Non-Operating Income (Expense), Net

The following table shows non-operating income (expense), net for the periods indicated:

(In millions)

(Loss) income from equity method investments, net (48.1) 28.1 (76.2) (271)%

Non-operating income, net increased primarily due to the Ag divestiture gain and lower interest expense. These increases were partially offset by lower joint-venture profitability, including $52.7 million of our proportionate share of PTx Trimble’s goodwill impairment and a prior year foreign currency hedging gain associated with the acquisition of Transporeon that was included in Other (loss) income, net.

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Income Tax Provision

Our provision for income taxes in 2024 increased by $455.8 million compared to 2023, primarily due to the gain from the Ag divestiture. Our effective income tax rate for 2024 and 2023 were 25.0% and 12.8%. The increase in the tax rate was primarily due to gains from the Ag divestiture.

Results by Segment

We report our financial performance, including revenue and operating income, based on three reportable segments: AECO, Field Systems, and T&L.

Our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”) views and evaluates operations based on the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformance with U.S. GAAP. For additional discussion of our segments, refer to Note 7 “Reporting Segmentand Geographic Information” in Item 8 of this report.

The following table is a summary of revenue and operating income by segment compared for the periods indicated:

(In millions)

AECO

Segment revenue as a % of total revenue 37 % 29 %

Segment operating income as a % of segment revenue 34.1 % 29.6 %

Field Systems

Segment revenue as a % of total revenue 42 % 52 %

Segment operating income as a % of segment revenue 28.8 % 30.7 %

T&L

Segment revenue as a % of total revenue 21 % 19 %

Segment operating income as a % of segment revenue 19.7 % 16.4 %

The following table is a reconciliation of our consolidated segment operating income to consolidated income before taxes:

(In millions)

Unallocated general corporate expenses (123.5) (116.0)

Amortization of purchased intangible assets (199.0) (212.3)

Acquisition / divestiture items (81.6) (72.4)

Stock-based compensation / deferred compensation (163.5) (151.1)

Restructuring and other costs (32.4) (50.1)

Consolidated operating income 460.7 448.8

Total non-operating income (expense), net 1,545.2 (91.8)

Consolidated income before taxes $ 2,005.9 $ 357.0

AECO

% Change

Change in Revenue - AECO 22 %

Divestitures (1) %

Foreign currency exchange 1 %

Organic growth 22 %

Organic revenue increased due to strong demand for subscription offerings, particularly for Viewpoint, Architecture and Design, and to a lesser extent, MEP and Structures offerings. Additionally, the increase was driven by the impact of the

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additional week of subscription and term license revenue in the fourth quarter, including Structures annual term license renewals on January 1, 2025.

Operating income and operating income as a percentage of revenue increased primarily due to strong organic revenue growth and gross margin expansion, partially offset by increased operating expense associated with double digit revenue growth.

Field Systems

% Change

Change in Revenue - Field Systems (22) %

Acquisitions 1 %

Divestitures (19) %

Organic growth (4) %

Organic revenue decreased primarily due to higher U.S. federal government sales of Surveying products in the prior year, partially offset by Civil Construction and Advanced Positioning sales growth in the current year. Additionally, the decrease was due to slower Ag demand in the first quarter of 2024, before the business was divested in the second quarter of 2024.

Operating income and operating income as a percentage of revenue decreased primarily due to the impact of the Ag divestiture.

T&L

% Change

Change in Revenue - T&L 10 %

Acquisitions 6 %

Divestitures (1) %

Organic growth 5 %

Organic revenue increased primarily driven by Transporeon, MAPS, and Enterprise subscription revenue growth, partially offset by lower Mobility sales.

Operating income and operating income as a percentage of revenue increased primarily due to organic revenue growth and gross margin expansion. The increase was also driven by the impact of the Transporeon acquisition, which closed in the second quarter of 2023.

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LIQUIDITY AND CAPITAL RESOURCES

At the End of Year 2024 2023 Dollar Change % Change

(In millions, except percentages)

As a percentage of total assets 7.9 % 2.5 %

(In millions)

Net cash provided by operating activities $ 531.4 $ 597.1 $ (65.7) (11) %

Net increase (decrease) in cash and cash equivalents $ 508.9 $ (32.1)

(1) Includes $9.0 million and $9.1 million of cash and cash equivalents classified as held for sale as of January 3, 2025 and December 29, 2023.

Operating Activities

The decrease in cash provided by operating activities was primarily driven by higher tax payments associated with the Ag divestiture gain, and higher accounts receivable due to the impact of the additional week in the fourth quarter of 2024. The decrease was partially offset by lower net working capital requirements associated with a greater mix of subscription and services revenue and higher deferred revenue due to the impact of the additional week.

Investing Activities

The increase in cash provided by investing activities was primarily due to the $1.9 billion of proceeds received from the Ag divestiture in the current year, as compared to the $2.0 billion payment in the prior year for the acquisition of Transporeon.

Financing Activities

The increase in cash used in financing activities was primarily driven by the $1.7 billion repayment of debt in the current year, as compared to the prior year’s $2.0 billion of proceeds from the issuance of debt for the acquisition of Transporeon, partially offset by the $500.0 million repayment of debt.

Cash and Cash Equivalents

We believe that our cash and cash equivalents and available borrowing capacity under our existing lines of credit, along with cash provided by operations, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, including expenditures related to our Connect & Scale strategy, debt service, acquisitions, and any stock repurchases under the stock repurchase program.

Our 2022 credit facility allows us to borrow up to $1.25 billion, with an option to increase the borrowings up to $1.75 billion with lender approval. As of January 3, 2025, there was no outstanding debt under the 2022 credit facility.

Our 2024 senior notes totaling $400.0 million matured and were paid in December 2024.

In the second quarter of 2024, we completed the Ag divestiture and received $1.9 billion of cash proceeds, subject to working capital adjustments. The total tax payment for the transaction is $367.8 million, of which $122.0 million was paid in 2024, with the remaining amount to be paid in 2025. We used a portion of the proceeds to repay $1.0 billion of term loans and expect to use the majority of the remaining proceeds after tax to repurchase stock.

Our material cash requirements include the following contractual and other obligations and cash needs:

Leases

We have operating leases primarily for certain of our major facilities including corporate offices, research and development facilities, and manufacturing facilities. Operating leases represent undiscounted lease payments and include short-term leases. At the end of 2024, we had fixed lease payment obligations of $182.1 million, with $39.4 million payable within the next 12 months. Refer to Note 9 “Leases” in Item 8 of this report for additional information regarding our leases.

Tax Payable

At the end of 2024, we had income taxes payable of $325.0 million, which are payable within the next 12 months.

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In addition, we have unrecognized tax benefits of $78.2 million included in Other non-current liabilities, including interest and penalties. At this time, we cannot make a reasonably reliable estimate of the period of cash settlement with tax authorities regarding this liability. Refer to Note 13 “Income Taxes” in Item 8 of this report for additional information regarding our taxes.

Other Purchase Obligations and Commitments

Purchase obligations and commitments primarily relate to investments in our platform associated with our Connect & Scale strategy and non-cancellable inventory commitments. At the end of 2024, we had operating purchase obligations and commitments of $470.7 million, with $235.4 million payable within the next 12 months. Other than the items discussed above, we do not have any off-balance sheet financing arrangements or liabilities.

Debt

At the end of 2024, we had outstanding fixed-rate senior notes with varying maturities for an aggregate principal amount of $1.4 billion. Future interest payments total $517.7 million, with $78.2 million payable within the next 12 months. During 2024, we made $1.7 billion in debt payments through the use of the net proceeds from the Ag divestiture and cash on hand. Refer to Note 8 “Debt” in Item 8 of this report for additional information regarding our debt.

Stock Repurchase Program

Subsequent to the end of the year 2024, the Board of Directors authorized a common stock repurchase authorization of up to $1.0 billion, which replaces the existing 2024 Stock Repurchase Program in the first quarter of 2025. We may repurchase stock from time to time through accelerated stock repurchase programs, open market transactions, privately negotiated transactions, block purchases, tender offers, or other means. The stock repurchase program does not obligate us to acquire any specific number of shares. Refer to Note 15 “Common Stock Repurchase” in Item 8 of this report for additional information regarding our stock repurchase program.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

The impact of recent accounting pronouncements is disclosed in Note 1 “Description of Business and Accounting Policies” in Item 8 of this report.

SUPPLEMENTAL DISCLOSURE OF NON-GAAP FINANCIAL MEASURES AND ANNUALIZED RECURRING REVENUE

To supplement our consolidated financial information, we included non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP. We believe non-GAAP financial measures provide useful information to investors and others in understanding our “core operating performance”, which excludes (i) the effect of non-cash items and certain variable charges not expected to recur; and (ii) transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. Lastly, we believe that our core operating performance offers a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors.

Organic revenue growth is a non-GAAP measure that refers to revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. We believe organic revenue growth provides useful information in evaluating the results of our business because it excludes items that are not indicative of ongoing performance or impact comparability with the prior year. We provide reconciliation tables showing the change in revenue growth to organic revenue growth in the “Results of Operations” section found earlier in this Item 7.

In addition to providing non-GAAP financial measures, we disclose ARR to give the investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue. ARR is calculated by taking our subscription and maintenance and support for the current quarter and adding the portion of the contract value of all our term licenses attributable to the current quarter, then dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. Organic ARR refers to annualized recurring revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. ARR and organic ARR should be viewed independently of revenue and deferred revenue as they are performance measures and are not intended to be combined with or to replace either of those items.

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The non-GAAP financial measures, definitions, and explanations to the adjustments to comparable GAAP measures are included below:

Years

Dollar % of Dollar % of

(In millions, except per share amounts) Amount Revenue Amount Revenue

REVENUE:

GROSS MARGIN:

Amortization of purchased intangible assets (A) 93.3 108.7

Acquisition / divestiture items (B) — 0.5

Stock-based compensation / deferred compensation (C) 17.4 15.0

Restructuring and other costs (D) 3.6 (0.1)

OPERATING EXPENSES:

Amortization of purchased intangible assets (A) (105.7) (103.6)

Acquisition / divestiture items (B) (81.6) (71.9)

Stock-based compensation / deferred compensation (C) (146.1) (136.1)

Restructuring and other costs (D) (28.8) (50.2)

OPERATING INCOME:

Amortization of purchased intangible assets (A) 199.0 212.3

Acquisition / divestiture items (B) 81.6 72.4

Stock-based compensation / deferred compensation (C) 163.5 151.1

Restructuring and other costs (D) 32.4 50.1

NON-OPERATING (EXPENSE) INCOME, NET:

GAAP non-operating (expense) income, net: $ 1,545.2 $ (91.8)

Acquisition / divestiture items (B) (1,688.5) (36.5)

Deferred compensation (C) (4.9) (5.8)

Restructuring and other costs (D) 64.1 1.3

Non-GAAP non-operating expense, net: $ (84.1) $ (132.8)

GAAP and Non-GAAP Tax Rate % GAAP and Non-GAAP Tax Rate %

(G) (G)

INCOME TAX PROVISION:

Non-GAAP items tax effected (E) (288.1) 56.9

Difference in GAAP and Non-GAAP tax rate (F) (64.7) 35.6

NET INCOME:

Amortization of purchased intangible assets (A) 199.0 212.3

Acquisition / divestiture items (B) (1,606.9) 35.9

Restructuring and other costs (D) 96.5 51.4

Non-GAAP tax adjustments (E) - (F) 352.8 (92.5)

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share: $ 6.09 $ 1.25

Amortization of purchased intangible assets (A) 0.80 0.85

Acquisition / divestiture items (B) (6.50) 0.14

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Years

Dollar % of Dollar % of

(In millions, except per share amounts) Amount Revenue Amount Revenue

Stock-based compensation (C) 0.64 0.58

Restructuring and other costs (D) 0.39 0.21

Non-GAAP tax adjustments (E) - (F) 1.43 (0.37)

Non-GAAP diluted net income per share: $ 2.85 $ 2.66

ADJUSTED EBITDA:

Amortization of purchased intangible assets (A) 199.0 212.3

Acquisition / divestiture items (B) 81.6 72.4

Restructuring and other costs (D) 32.4 50.1

Depreciation expense and cloud computing amortization 49.3 46.9

Income from equity method investments, net 13.9 28.1

Non-GAAP Definitions

Non-GAAP gross margin

We define Non-GAAP gross margin as GAAP gross margin, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs.We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business.

Non-GAAP operating expenses

We define Non-GAAP operating expenses as GAAP operating expenses, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs. We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue.

Non-GAAP operating income

We define Non-GAAP operating income as GAAP operating income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs.We believe our investors benefit by understanding our non-GAAP operating income trends, which are driven by revenue, gross margin, and spending.

Non-GAAP non-operating expense, net

We define Non-GAAP non-operating expense, net as GAAP non-operating income (expense), net, excluding acquisition/divestiture items, deferred compensation, and restructuring and other costs.We believe this measure helps investors evaluate our non-operating expense trends.

Non-GAAP income tax provision

We define Non-GAAP income tax provision as GAAP income tax provision, excluding charges and benefits such as net deferred tax impacts resulting from the non-U.S. intercompany transfer of intellectual property, deferred tax impacts from global intangible low-taxed income, and significant reserve releases upon the statute of limitations expirations. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation and a difference in the GAAP and non-GAAP tax rates.

Non-GAAP net income

We define Non-GAAP net income as GAAP net income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments.This measure provides a supplemental view of net income trends, which are driven by non-GAAP income before taxes and our non-GAAP tax rate.

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Non-GAAP diluted net income per share

We define Non-GAAP diluted net income per share as GAAP diluted net income per share, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments.We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the Company.

Adjusted EBITDA

We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net, excluding our proportionate share of items such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business because it facilitates operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense, net), income taxes, depreciation, amortization of purchased intangibles and cloud computing costs, and income from equity method investments, net.

Explanations of Non-GAAP adjustments

(A).Amortization of purchased intangible assets. Non-GAAP gross margin and operating expenses exclude the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed.

(B).Acquisition / divestiture items. Non-GAAP gross margin and operating expenses exclude costs consisting of external and incremental costs resulting directly from acquisitions, divestitures, and strategic investment activities such as legal, due diligence, integration, and other closing costs, including the acceleration of acquisition stock awards and adjustments to the fair value of earn-out liabilities. Non-GAAP non-operating expense, net, excludes one-time acquisition/divestiture charges, including foreign currency exchange rate gains/losses related to an acquisition, divestiture gains/losses, and strategic investmentgains/losses. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(C).Stock-based compensation / deferred compensation. Non-GAAP gross margin and operating expenses exclude stock-based compensation and income or expense associated with movement in our non-qualified deferred compensation plan liabilities. Changes in non-qualified deferred compensation plan assets, included in non-operating expense, net, offset the income or expense in the plan liabilities.

(D).Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring and other costs comprised of termination benefits related to reductions in employee headcount and closure or exit of facilities, expenses related to the 2023 re-audit, as well as a $20 million commitment to donate to the Trimble Foundation that was paid over four quarters ending in the first quarter of 2023. Non-GAAP non-operating expense net, excludes our proportionate share of items recorded in income from equity method investment items, such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs.

(E).Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) through (D) on non-GAAP net income.

(F).Difference in GAAP and non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP tax rates applied to the non-GAAP operating income plus the non-GAAP non-operating expense, net. The non-GAAP tax rate excludes charges and benefits such as (i) deferred tax impacts from tax amortization relating to a non-U.S. intercompany transfer of intellectual property, (ii) deferred tax impacts from global intangible low-taxed income, and (iii) significant reserve releases upon statute of limitations expirations.

(G).GAAP and non-GAAP tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We use certain derivative financial instruments to manage these risks. We do not use derivative financial instruments for speculative purposes. All financial instruments are used in accordance with policies approved by our board of directors.

Market Interest Rate Risk

Our cash equivalents consisted primarily of interest and non-interest bearing bank deposits as well as bank time deposits. The main objective of these instruments is safety of principal and liquidity while maximizing return, without significantly increasing risk. Due to the nature of our cash equivalents—that they are readily convertible to cash—we do not anticipate any material effect on our portfolio due to fluctuations in interest rates.

Foreign Currency Exchange Rate Risk

We operate in international markets, which expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S. Dollar and various foreign currencies, the most significant of which is the Euro.

Historically, the majority of our revenue contracts are denominated in U.S. Dollars, with the most significant exception being Europe, where we invoice primarily in Euro. Additionally, a portion of our expenses, primarily the cost to manufacture, cost of personnel to deliver technical support on our products and professional services, sales and sales support, and research and development, are denominated in foreign currencies, primarily the Euro.

Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations, which can affect our operating income. As exchange rates vary, operating income may differ from expectations. In 2024, changes in foreign currency exchange rates had a favorable impact of $2.7 million on revenue and $5.9 million on operating income.

We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on cash, debt, and certain trade and intercompany receivables and payables, primarily denominated in Euro, Canadian Dollars, New Zealand Dollars, British Pound, and Australian Dollars. These contracts reduce the exposure to fluctuations in foreign currency exchange rate movements, as the gains and losses associated with foreign currency balances are generally offset with the gains and losses on the forward contracts. We occasionally enter into foreign currency exchange contracts to hedge the purchase price of some of our larger business acquisitions.

Our foreign currency contracts are marked-to-market through earnings every period and generally range in maturity from one to two months. We do not enter into foreign currency contracts for trading purposes. Foreign currency contracts outstanding at the end of 2024 and 2023 are summarized as follows:

NominalAmount FairValue NominalAmount FairValue

(In millions)

Forward contracts:

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Item 8. Financial Statements and Supplementary Data

TRIMBLE INC.

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets 42

Consolidated Statements of Income 43

Consolidated Statements of Comprehensive Income 44

Consolidated Statements of Stockholders’ Equity 45

Consolidated Statements of Cash Flows 46

Notes to Consolidated Financial Statements 47

Note 1. Description of Business and Accounting Policies 47

Note 2. Earnings per Share 52

Note 3. Acquisitions 52

Note 4. Divestitures 53

Note 5. Intangible Assets and Goodwill 55

Note 6. Certain Balance Sheet Components 56

Note 7. Reporting Segment and Geographic Information 56

Note 9. Leases 60

Note 10. Commitments and Contingencies 61

Note 11. Fair Value Measurements 61

Note 12. Deferred Revenue and Remaining Performance Obligations 61

Note 13. Income Taxes 62

Note 14. Employee Stock Benefit Plans 64

Note 15. Common Stock Repurchase 66

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 67

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TRIMBLE INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

ASSETS

Current assets:

Cash and cash equivalents $ 738.8 $ 229.8

Operating lease right-of-use assets 123.5 124.0

Other purchased intangible assets, net 998.1 1,243.5

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Short-term debt $ — $ 530.4

Accrued compensation and benefits 227.2 181.2

Liabilities held for sale 62.6 48.3

Deferred revenue, non-current 95.6 98.3

Deferred income tax liabilities 199.9 287.8

Other non-current liabilities 145.5 165.7

Commitments and contingencies (Note 10)

Stockholders’ equity:

Accumulated other comprehensive loss (381.9) (152.1)

Total liabilities and stockholders' equity $ 9,488.3 $ 9,539.3

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF INCOME

Revenue:

Cost of sales:

Amortization of purchased intangible assets 93.3 108.7 85.0

Operating expense:

Amortization of purchased intangible assets 105.7 103.6 46.6

Non-operating income (expense), net:

(Loss) income from equity method investments, net (48.1) 28.1 31.1

Other (loss) income, net (3.9) 31.9 (0.8)

Total non-operating income (expense), net 1,545.2 (91.8) 58.2

Earnings per share:

Shares used in calculating earnings per share:

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments (227.2) 86.4 (81.6)

Net change related to derivatives and other (2.6) (3.6) 8.4

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Shares Amount Additional Paid-In Capital

(In millions)

Other comprehensive loss — — — — (73.2) (73.2)

Stock-based compensation — — 137.3 — — 137.3

Other comprehensive income — — — — 82.8 82.8

Stock-based compensation — — 149.1 — — 149.1

Other comprehensive loss — — — — (229.8) (229.8)

Stock-based compensation — — 152.2 — — 152.2

See accompanying Notes to the Consolidated Financial Statements.

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TRIMBLE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flow from operating activities:

(Increase) decrease in assets:

Other current and non-current assets (116.3) (67.2) (46.3)

Increase (decrease) in liabilities:

Accrued compensation and benefits 56.5 20.8 (54.2)

Other current and non-current liabilities (52.5) (2.4) (29.5)

Cash flow from investing activities:

Acquisitions of businesses, net of cash acquired (22.0) (2,088.9) (373.5)

Purchases of property and equipment (33.6) (42.0) (43.2)

Net cash provided by (used in) investing activities 1,861.1 (2,068.1) (226.3)

Cash flow from financing activities:

Issuance of common stock, net of tax withholdings (6.5) 6.7 (13.6)

Payments on debt and revolving credit lines (2,199.4) (2,292.9) (590.2)

Net cash (used in) provided by financing activities (1,864.2) 1,431.5 (199.0)

Effect of exchange rate changes on cash and cash equivalents (19.4) 7.4 (20.6)

Net increase (decrease) in cash and cash equivalents 508.9 (32.1) (54.7)

Cash and cash equivalents - beginning of period (1) 238.9 271.0 325.7

Cash and cash equivalents - end of period (1) $ 747.8 $ 238.9 $ 271.0

Supplemental cash flow disclosure:

Cash tax paid, net, excluding tax for the Ag divestiture 106.1 168.0 197.3

Cash tax paid for the Ag divestiture 122.0 — —

Non-cash equity investment (Note 4)

(1) Includes $9.0 million and $9.1 million of cash and cash equivalents classified as held for sale as of January 3, 2025 and December 29, 2023.

See accompanying Notes to the Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS AND ACCOUNTING POLICIES

Trimble Inc. (“we” or “our” or “us”) is incorporated in the State of Delaware since October 2016.

We are a leading provider of technology solutions that enable professionals and field mobile workers to improve or transform their work processes. We focus on transforming the way the world works by delivering products and services that connect the physical and digital worlds. We generate revenue primarily through the sale of our hardware, software, subscriptions, maintenance and support, and professional services.

Basis of Presentation

These Consolidated Financial Statements include our results of our consolidated subsidiaries. Intercompany accounts and transactions have been eliminated.

We use a 52–53 week fiscal year ending on the Friday nearest to December 31. 2024 was a 53-week year and 2023 and 2022 were 52-week years ending on January 3, 2025, December 29, 2023, and December 30, 2022. Unless otherwise stated, all dates refer to our fiscal year and fiscal periods.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates and assumptions are used for (i) revenue recognition, including determining the nature and timing of satisfaction of performance obligations and determining standalone selling price of performance obligations; (ii) inventory valuation; (iii) valuation of investments; (iv) valuation of long-lived assets and their estimated useful lives; (v) goodwill and other long-lived asset impairment analyses; (vi) stock-based compensation; and (vii) income taxes. We base our estimates on historical experience and various other assumptions we believe to be reasonable. Actual results that we experience may differ materially from our estimates.

Reportable Segments

As a result of the Ag divestiture and our Chief Operating Decision Maker’s (“CODM”) revised organizational structure, effective in the first quarter of 2024, we reorganized our businesses under a new segment structure. This structure brings similar businesses together, which is expected to enhance our ability to achieve scale and growth consistent with our strategy. We report our financial performance, including revenue and operating income, based on three updated segments: (i) Architects, Engineers, Construction and Owners (“AECO”), (ii) Field Systems, and (iii) Transportation and Logistics(“T&L”). Prior years’ information have been adjusted to reflect the change in segment reporting.

Our CODM views and evaluates operations based on the results of our reportable operating segments under our management reporting system.

Revenue Recognition

Significant Judgments

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of allowance for returns and any taxes collected from customers. We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations; however, determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment.

Judgment is required to determine SSP for each performance obligation. We use a range of amounts to estimate SSP and determine whether there is a discount to be allocated based on the relative SSP of the various products and services. We estimate SSP considering multiple factors including but not limited to, our internal cost, pricing practices, sales channel, competitive positioning, and overall market and business environments. As our offerings and markets change, we may be required to reassess our estimated SSP and, as a result, the timing and classification of our revenue could be affected.

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Nature of Goods and Services

We generate revenue primarily from products and services and subscriptions; each of which is a distinct performance obligation. Descriptions are as follows:

Product

Product revenue includes hardware and perpetual software licenses.

Hardware is recognized when the control of the product transfers to the customer, which is generally when the product is shipped. We recognize shipping fees reimbursed by customers as revenue and the cost for shipping as an expense in Cost of sales when control over products has transferred to the customer.

Software including perpetual licenses is recognized upon delivery and commencement of the license term. In general, our contracts do not provide for customer specific acceptances.

Subscription and Services

Subscription and services revenue includes SaaS and hosting services, term licenses, hardware and software maintenance, and support and professional services.

SaaS may be sold with devices used to collect, generate, and transmit data. SaaS is distinct from the related devices. SaaS is provided on either a subscription or a consumption basis. In addition, we may host the software that the customer has separately licensed. Hosting services are distinct from the underlying software. Subscription terms generally range from month-to-month to one to three years. Subscription revenue is recognized monthly over the subscription term, commencing from activation. Revenue related to SaaS on a consumption basis is recognized when the customer utilizes the service based on the quantity of the services consumed.

Term license subscriptions contain an on-premise term license component as well as maintenance and support. Term licenses are distinct and recognized upon transfer and commencement of the subscription license term. Maintenance and support are recognized ratably over the subscription term. The subscription term generally ranges from one to three years.

Hardware maintenance and support, commonly called extended warranty, entitles the customer to receive replacement parts and repair services. Extended warranty is separately priced and is recognized on a straight-line basis over the extended service period, which begins after the standard warranty period, ranging from one to two years depending on the product line.

Software maintenance and support entitles the customer to receive software product upgrades and enhancements on a when and if available basis and technical support. Software maintenance is recognized on a straight-line basis commencing upon product delivery over the post-contract support term, which ranges from one to three years, with one year being most common.

Professional services include installation, training, configuration, project management, system integrations, customization, data migration/conversion, and other implementation services. The majority of professional services are not complex, can be provided by other vendors, and are readily available and billed on a time-and-material basis. Revenue for distinct professional services is recognized over time, based on work performed.

Deferred Costs to Obtain Customer Contracts

Sales commissions incurred in obtaining contracts that include maintenance or subscription revenue are deferred if the contractual term is greater than a year or if renewals are expected, and the renewal commission is not commensurate with the initial commission. These commission costs are deferred and amortized over the estimated benefit period, which is either the contract term or the shorter of customer life or product life, which ranges from three to seven years.

At the end of 2024 and 2023, deferred costs to obtain customer contracts were $124.3 million and $96.4 million. These costs are included in Other non-current assets in the Consolidated Balance Sheets. Amortization expense related to deferred costs to obtain customer contracts was $55.2 million, $39.5 million, and $32.0 million for 2024, 2023, and 2022. This expense is included in Sales and marketing expense in our Consolidated Statements of Income.

Accounts Receivable, Net

Accounts receivable, net, includes billed and unbilled amounts due from customers. Unbilled receivables include revenue recognized that exceeds the amount billed to the customer, provided the billing is not contingent upon future performance, and we have the unconditional right to future payment with only the passage of time required. Both billed and unbilled amounts due are stated at their net estimated realizable value.

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We maintain an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. Each reporting period, we evaluate the collectability of our trade accounts receivable based on a number of factors, such as age of the accounts receivable balances, credit quality, historical experience, and current and future economic conditions that may affect a customer’s ability to pay. At the end of 2024 and 2023, the allowances for credit losses were immaterial.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost. Adjustments are also made to reduce the cost of inventory for estimated excess or obsolete balances. Factors influencing these adjustments include declines in demand that impact inventory purchasing forecasts, technological changes, product lifecycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. If our estimate used to reserve for excess and obsolete inventory differs from what is expected, we may be required to recognize additional reserves, which would negatively impact our gross margin.

Property and Equipment, Net

Property and equipment are depreciated using the straight-line method over the shorter of the estimated useful lives or the lease terms when applicable. Useful lives generally range from four to six years for machinery and equipment, five to ten years for furniture and fixtures, two to five years for computer equipment and software, thirty-nine years for buildings, and the life of the lease for leasehold improvements. Included in the software category, internal-use software includes certain costs to purchase, develop, and implement the software during the application development phase.

Cloud Computing Arrangements

Costs incurred for certain cloud-based software hosting arrangements are capitalized for application development activities, and for preliminary project and post-implementation activities. Our capitalized development costs are amortized using the straight-line method over the remaining non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The capitalized costs are included in “Prepaid expenses” and “Other non-current assets” in our Consolidated Balance Sheets. Capitalized costs net of accumulated amortization were $64.1 million and $58.0 million at the end of 2024 and 2023. Amortization expense was $16.3 million, $8.7 million, and $4.5 million in 2024, 2023, and 2022.

Leases

We determine if an arrangement is a lease at inception. Operating leases with lease terms greater than one year are included in Operating lease right-of-use (“ROU”) assets, Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Present value is determined by using our incremental borrowing rate based on the estimated rate of interest for collateralized borrowings over a similar term of the lease payments at the commencement date. The operating lease ROU assets include adjustments made for uneven rents, lease incentives, and lease impairments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lease agreements that include both lease and non-lease components are accounted for as part of the overall lease arrangement.

Business Combinations

We allocate the fair value of purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.

Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.

Acquisition costs are expensed as incurred.

Goodwill

We evaluate goodwill on an annual basis or more frequently if indicators of potential impairment exist. To determine whether goodwill is impaired, we first assess qualitative factors. Qualitative factors include but are not limited to macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, or other relevant company-specific events. If it is determined more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount,

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we perform a quantitative analysis. Alternatively, we may bypass the qualitative assessment and perform a quantitative impairment test.

When performing a quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit’s fair value. The estimation of a reporting unit’s fair value involves using estimates and assumptions, including expected future operating performance using risk-adjusted discount rates. If the reporting unit’s carrying amount exceeds its fair value, an impairment loss is recognized.

Intangible Assets

Intangible assets acquired in a business combination are recorded at fair value. Our intangible assets are amortized using the straight-line method over their estimated useful lives, which range from three to eleven years and have a weighted-average useful life of approximately nine years. We write off fully amortized intangible assets when those assets are no longer used.

We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable based on their future cash flows. The estimated future cash flows are primarily based upon assumptions about expected future operating performance.

Equity Investments

We have investments in various unconsolidated entities. These investments represent non-marketable securities and include joint operating ventures and strategic investments. We use the equity method of accounting for investments in common stock holdings where we have significant influence, such as for our 15% investment in PTx Trimble. Our proportionate share of income or loss for equity method investments is recorded in income (loss) from equity method investments, net.

For all other investments, we use the measurement alternative election. Under the measurement alternative, investments without readily determinable fair values are measured at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. To determine if a transaction is deemed a similar investment, we consider the rights and obligations of the investments. All gains and losses on these investments are recognized in other income (loss), net.

We assess all equity investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

We enter into related party transactions with certain of our investees. These transactions are recorded based on the nature of the arrangements and primarily include sales and purchases involving GNSS technology and guidance products, positioning services, grade control solutions, and surveying products. Total related party revenue from our investees was $108.8 million, $87.7 million, and $102.3 million for 2024, 2023, and 2022.

Foreign Currency Translation

Assets and liabilities recorded in foreign currency are translated to U.S. dollars at the exchange rates on the balance sheet date. Revenue and expenses are translated at average monthly exchange rates during the year. Translation adjustments resulting from this process are recorded to other comprehensive income.

Advertising and Promotional Costs

Advertising and promotional costs are expensed as incurred. Advertising and promotional expense was approximately $57.9 million, $57.3 million, and $50.9 million for 2024, 2023, and 2022.

Stock-Based Compensation

Stock-based compensation expense is based on the measurement date fair value of the awards, net of expected forfeitures. Expense is generally recognized on a straight-line basis over the requisite service period of the stock awards. The estimate of the forfeiture rate is based on historical experience.

Research and Development Costs

Research and development costs are expensed as incurred. Development costs for software to be sold subsequent to reaching technical feasibility were not significant and were expensed as incurred. We offset research and development expense with any unconditional third-party funding earned and retain the rights to any technology developed under such arrangements.

Income Taxes

Income taxes are accounted for under the liability method, whereby deferred tax assets or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more

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likely than not that such assets will not be realized. Our valuation allowance is primarily attributable to state research and development credit carryforwards, foreign net operating and capital losses, and our investment in PTx Trimble.

Relative to uncertain tax positions, we only recognize a tax benefit if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual tax audit outcomes. Changes in recognition or measurement of our uncertain tax positions would result in the recognition of a tax benefit or an additional charge to the tax provision. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

We are subject to income taxes in the U.S. and numerous other countries and are subject to routine corporate income tax audits in many of these jurisdictions. We generally believe that positions taken on our tax returns are more likely than not to be sustained upon audit, but tax authorities in some circumstance have, and may in the future, successfully challenge these positions. Accordingly, our income tax provision includes amounts intended to satisfy assessments that may result from these challenges. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our income tax provision, net income, and cash flows.

Concentrations of Risk

Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk.

We are also exposed to credit risk in our trade receivables, which are derived from sales to end-user customers in diversified industries as well as various resellers. We perform ongoing credit evaluations of our customers’ financial conditions and limit the amount of credit extended, when deemed necessary, but generally do not require collateral.

In addition, we rely on a limited number of suppliers for a number of our critical components.

Guarantees, Including Indirect Guarantees of Indebtedness of Others

In the normal course of business to facilitate sales of our products, we indemnify other parties, including customers, lessors, and parties to other transactions with us with respect to certain matters. We may agree to hold the other party harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In connection with divesting some of our businesses or assets, we may also indemnify purchasers for certain matters in the normal course of business, such as breaches of representations, covenants, or excluded liabilities. In addition, we enter into indemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations to our agents.

It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made under these agreements were not material; thus, no liabilities have been recorded for these obligations in the Consolidated Balance Sheets at the end of 2024 and 2023.

Derivative Financial Instruments

We enter into foreign exchange forward contracts to minimize the short-term impact of foreign currency fluctuations on cash and certain trade and intercompany receivables and payables, primarily denominated in Euro, Canadian Dollars, New Zealand Dollars, British Pound, and Australian Dollars. These contracts reduce the exposure to fluctuations in foreign currency exchange rate movements, as the gains and losses associated with foreign currency balances are generally offset with the gains and losses on the forward contracts. We occasionally enter into foreign currency contracts to minimize the impact of foreign currency fluctuations on the purchase price of pending acquisitions. We do not enter into foreign currency forward contracts for trading purposes.

At the end of 2024 and 2023, there were no derivatives outstanding that were accounted for as hedges.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses. The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement. The disaggregation includes: (i) amounts of purchased inventory, employee compensation, depreciation, amortization, and other related costs and expenses; (ii) an explanation of costs and expenses that are not disaggregated on a quantitative basis; and (iii) the definition and

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total amount of selling expenses. The ASU is effective for our Annual Report on Form 10-K beginning in 2027 and subsequent interim reports. Early adoption is permitted. The ASU should be applied prospectively. Retrospective application is permitted for all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU updates the annual income tax disclosures by requiring (i) specific categories and greater disaggregation of information in the rate reconciliation, (ii) income taxes paid disaggregated by taxing authority and jurisdiction, and (iii) disclosures of pretax income (or loss) and income tax expense (or benefit). Additionally, certain existing disclosure requirements are removed. The ASU is effective for our Annual Report on Form 10-K beginning in 2025 and is applied prospectively. Early adoption and retrospective application are permitted. We are currently evaluating the impact of adopting this ASU on our financial reporting disclosures.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU updates reportable segment disclosure requirements primarily through (i) enhanced disclosures about significant segment expenses and (ii) optional disclosures of more than one measure of segment profit or loss if the CODM uses those measures to assess segment performance and allocate resources.

We adopted the ASU in the fourth quarter of 2024 retrospectively to all our prior periods presented since the beginning of 2022. See Note 7 “Reporting Segment and Geographic Information” in Item 8 of this report for additional disclosure, including significant segment expenses.

NOTE 2: EARNINGS PER SHARE

Basic earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period plus additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive shares of common stock include outstanding stock options, restricted stock units (“RSUs”), contingently issuable shares, and shares to be purchased under our employee stock purchase plan.

The following table shows the computation of basic and diluted earnings per share:

(In millions, except per share amounts)

Numerator:

Denominator:

Weighted-average shares of common stock outstanding - basic 245.5 247.9 248.6

Effect of dilutive securities 1.7 1.2 1.6

Weighted-average shares of common stock outstanding - diluted 247.2 249.1 250.2

Diluted earnings per share $ 6.09 $ 1.25 $ 1.80

Antidilutive weighted-average shares (1) 1.4 1.9 1.3

(1) Antidilutive stock-based awards are excluded from the calculation of diluted shares and diluted earnings per share because their impact would increase diluted earnings per share.

NOTE 3: ACQUISITIONS

In 2024, we acquired one business, with total purchase consideration of $26.3 million. In the aggregate, the businesses acquired contributed less than 1% of our total revenue during 2024.

In 2023, we acquired Transporeon GmbH in an all-cash transaction. Transporeon is a Germany-based company and leading cloud-based transportation management software platform that connects key stakeholders across the industry lifecycle to positively impact the optimization of global supply chains, which aligns with our Connect & Scale strategy. Transporeon is reported as part of our T&L segment.

The total purchase consideration was €1.9 billion or $2.1 billion, which included the repayment of outstanding Transporeon

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debt of $339.6 million. In allocating the purchase price, we recorded $1,390.1 million of goodwill, $939.8 million of identifiable intangible assets, $9.3 million of net tangible assets, and $256.6 million of deferred tax liability.

In addition to Transporeon, we acquired two businesses in 2023 with total purchase consideration of $47.0 million. In the aggregate, the two businesses acquired contributed less than 1% of our total revenue during 2023.

In 2022, we acquired two businesses, with total purchase consideration of $379.5 million. The largest acquisition was Bid2Win Software, LLC, a leading provider of estimating and operations solutions for the heavy civil construction industry. In the aggregate, the businesses acquired contributed less than 1% of our total revenue during 2023.

Acquisition costs of$9.1 million, $35.0 million, and $20.4 million in 2024, 2023, and 2022, were expensed as incurred and are included in Cost of sales and General and administrative expenses in our Consolidated Statements of Income.

Pro Forma Financial Information

The unaudited pro forma financial information presented in the following table was determined by combining the historical financial information of Trimble and Transporeon along with the effects from business combination accounting and the associated debt resulting from this acquisition as if the companies were combined beginning in the first quarter of 2022. This information is presented for informational purposes only, and it is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of that date. This information should not be used as a predictive measure of our future financial position, results of operations, or liquidity.

Year of

(In millions)

NOTE 4: DIVESTITURES

Mobility Divestiture

On September 14, 2024, we entered into a definitive agreement with Platform Science to sell our Mobility business. Subsequent to the end of the year 2024, the transaction closed on February 8, 2025 resulting in our ownership, or rights to acquire ownership of 32.5% of Platform Science’s expanded business, with an approximate fair value of $248.7 million. The approximate fair value was determined based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. We received (i) shares of preferred stock of Platform Science, with certain liquidation preferences, that represent 28.5% of Platform Science’s expanded business and (ii) warrants allowing us the rights to acquire 4% of Platform Science’s expanded business. The combined businesses aim to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.

The assets and liabilities of Mobility were classified as held for sale beginning in the third quarter of 2024. A valuation allowance was established to reduce the carrying value of the disposal group assets to the approximate fair value of the consideration we would receive. As a result, we recorded a pre-tax loss of approximately $32.9 million included within Divestitures gain, net in our Consolidated Statements of Income in 2024.

Upon the closing of the transaction in the first quarter of 2025, we derecognized the assets and liabilities that were transferred and recorded our equity investment at its cost under the measurement alternative election. Mobility was reported as a part of our T&L segment.

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The following table presents the major classes of assets and liabilities classified as held for sale at the end of 2024, including the valuation allowance.

At the End of Year

(In millions)

Cash and cash equivalents $ 9.0

Accounts receivable, net 87.6

Inventories, net 22.8

Other current assets 8.7

Other non-current assets 65.1

Valuation allowance (22.9)

Total Assets held for sale $ 312.0

Accounts payable $ 8.0

Deferred revenue, current 22.8

Other current liabilities 20.3

Deferred revenue, non-current 5.2

Other non-current liabilities 6.3

Total Liabilities held for sale $ 62.6

Ag Divestiture

On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, to PTx Trimble, an LLC. Following the closing of the transaction, we own 15% and AGCO owns 85% of PTx Trimble. The agreement provides AGCO with a call option and Trimble with a put option with respect to our retained interest in PTx Trimble. Ag was reported as a part of our Field Systems segment.

Upon closing of the transaction in the second quarter of 2024, we received $1.9 billion of cash proceeds from AGCO, subject to working capital adjustments. As a result, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and recognized a pre-tax gain of $1.7 billion. The gain included $275.6 million for our retained 15% ownership interest in PTx Trimble, which is reported as an equity method investment and represents a non-cash investing activity. The fair value of our equity method investment was determined by using a combination of the equity value, primarily based on the transaction price, and an option pricing model for a put and call option. At the end of 2024, the fair value of our equity method investment was $222.3 million, which included a $52.7 million charge for our proportionate share of PTx Trimble’s goodwill impairment in the fourth quarter.

In addition to forming PTx Trimble, the parties concurrently entered into agreements that included the following:

•a seven-year renewable supply agreement (the “Supply Agreement”) through which we will provide key GNSS and guidance technologies to PTx Trimble for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions;

•a technology transfer and license agreement to govern the licensing of certain non-divested intellectual property and technology for use by PTx Trimble in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by PTx Trimble;

•a trademark license agreement to govern the licensing of certain Trimble trademarks for use by PTx Trimble in the agriculture field;

•a master sale and distribution agreement through which PTx Trimble will serve as our channel partner for positioning services in the agriculture market; and

•a transition services agreement to provide contract manufacturing services for the divested products for two years following the closing of the transaction.

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Other Divestitures

In addition to the Mobility divestiture and Ag divestiture, we divested two businesses in 2024 with total proceeds of $13.3 million.

In 2023, we divested five businesses with total proceeds of $18.7 million.

In 2022, we divested six businesses with total proceeds of $226.3 million. The largest divestiture was the sale of Time and Frequency, LOADRITE, Spectra Precision Tools, and SECO accessories businesses to Precisional LLC, an affiliate of The Jordan Company, for $205.1 million in cash, which included a working capital adjustment.

NOTE 5: INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The following table presents a summary of our intangible assets:

As of the end of 2024 and 2023, $182.8 million and $267.8 million of fully amortized intangible assets were written off.

The estimated future amortization expense of intangible assets at the end of 2024 was as follows:

(In millions)