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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 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 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 January 3, 2025.

EXECUTIVE LEVEL OVERVIEW

Trimble is a leading technology solutions and platform provider, enabling office professionals and field workers to connect their workflows and industry lifecycles, driving a more productive, efficient, and sustainable future. With a focus on the industries that build, maintain, and move the world, the comprehensive depth and breadth of our solutions are transforming the way the world works, making it easier for Trimble customers to focus on what matters—getting the job done right.

Our representative customers include asset owners; general and specialty contractors; architects, engineers and designers; surveyors; energy and utility companies; transportation shippers and carriers, as well as 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:

•Continue to 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 to sustained revenue and profitability, evolving into a more streamlined and resilient 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 $2,392.3 million, which represents growth of 6% year-over-year at the end of 2025. 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 79% and 76% of total revenue for 2025 and 2024. Additionally, we continue to maintain focus on increasing our mix of higher margin recurring revenue, which was accelerated by the Ag divestiture that closed in the second quarter of 2024 and the Mobility divestiture that closed in the first quarter of 2025.

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 13 acquisitions and 23 divestitures that we have completed since 2020.

Mobility Divestiture

On February 8, 2025, we completed the sale of our Mobility business to Platform Science in exchange for equity ownership interests with a fair value of $253.9 million. The fair value was based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. Following the closing of the transaction, we own, or have rights

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to acquire, 32.5% of Platform Science’s expanded business comprised of (i) shares of preferred stock, with certain liquidation preferences, that represent 28.5% ownership, and (ii) common stock warrants allowing us the rights to acquire 4% of additional ownership.

Upon closing of the transaction, we deconsolidated $277.3 million of net assets including $145.3 million of goodwill, and we recorded our equity investment at its fair value under the measurement alternative election, which represents a non-cash investing activity. As a result, we recognized a cumulative, pre-tax loss of $30.6 million from the held for sale date in the third quarter of 2024 to the closing date. Mobility was reported as a part of our T&L segment.

The combined business aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems.

Ag Divestiture

On April 1, 2024, we completed the sale and contribution of our Ag business to AGCO in exchange for $1.9 billion of cash proceeds and an equity ownership interest in PTx Trimble, a JV that was formed by Trimble and AGCO, with a fair value of $275.6 million. The fair value was based on a combination of the equity value, primarily the transaction price, and an option pricing model for a put and call option. Following the closing of the transaction, we own 15% of the JV.

Upon closing of the transaction, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and we recorded our equity investment at its fair value under the equity method of accounting, which represents a non-cash investing activity. As a result, we recognized a pre-tax gain of $1.7 billion in the second quarter of 2024, which includes the gain for our retained 15% ownership interest in the JV. The sale and contribution of the Ag business excluded certain GNSS and guidance technologies. Ag was reported as a part of our Field Systems segment.

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 and export control restrictions 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. If there was a deterioration in the global economy, the economies of the countries or regions where our customers are located or do business, or the industries that we or our customers serve, the demand for our products and services may decrease. We are closely monitoring global trade developments. Our strategy to shift away from a hardware-centric businesses towards a more significant mix of recurring revenue is intended to mitigate any potential negative impacts on our business operations.

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 policies 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, determining whether promised products or services are accounted for as separate performance obligations may require significant judgment.

Judgment is also required to determine standalone selling prices (“SSP”) for promised goods or services. 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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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.

Goodwill, Divestitures, and Intangible Assets

When acquiring a business, we allocate the purchase consideration to the assets acquired (including intangible assets) and liabilities assumed based on their fair values at the acquisition date. 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 69.1 % 65.1 %

Operating income as a % of revenue 16.5 % 12.5 %

Non-GAAP operating income as a % of revenue(1) 27.5 % 25.4 %

Non-GAAP diluted earnings per share (1) $ 3.13 $ 2.85 $ 0.28 10%

(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 to 53-week fiscal year ending on the Friday nearest to December 31, which for 2025 was January 2, 2026. 2025 was a 52-week year, and 2024 was a 53-week year. 2026 will be a 52-week year.

2025 Compared to 2024

Revenue

Change versus 2024 % Change

Product Subscription and Services Total Revenue

Change in Revenue (12) % 2 % (3) %

Acquisitions 1 % 1 % 1 %

Divestitures (12) % (8) % (10) %

Organic growth (1) % 9 % 6 %

Note that the fiscal year of 2025 began on January 4, 2025 compared to the fiscal year of 2024, which began on December 30, 2023. This significantly impacted overall Company year-over-year comparisons, particularly for AECO organic subscription and services, due to: (a) the recognition in the first quarter of 2024 for January 1 annual software term license renewals (“January 1 software renewals”), and (b) the recognition of an additional week of subscription and services revenue in the fourth quarter of 2024, resulting from the 53-week year. For the total Company, the organic impact of the software renewals and additional week in 2024 was an approximate 2% negative impact on revenue growth for 2025.

Total organic revenue increased due to subscription and services growth, partially offset by the January 1 software renewals and the additional week.

Organic product revenue slightly decreased due to lower demand in surveying and positioning products, partially offset by strong end-user demand for Civil Construction solutions.

Organic subscription and services revenue increased primarily due to strong software term license and subscription growth across all segments, particularly in AECO. The increase was partially offset by the impact from the January 1 software renewals and the additional week.

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Gross Margin

Gross margin and gross margin as a percentage of revenue increased due to the improved mix of higher margin subscription and software term license sales, lower intangible amortization expense due to fully amortized intangibles, as well as the divestiture of lower margin businesses.

Operating Income

Operating income and operating income as a percentage of revenue increased primarily due to organic revenue and gross margin expansion, and to a lesser extent, lower acquisition and divestiture transaction expenses, partially offset by the loss of divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin divestiture income.

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)

Percentage of revenue 17.6 % 18.0 %

Percentage of revenue 18.0 % 16.4 %

Percentage of revenue 13.5 % 14.9 %

R&D expense decreased primarily due to divestitures, partially offset by increased compensation expenses. We believe that developing and introducing new solutions are critical to our future success, and we expect to continue the active development of new products.

S&M expense increased primarily due to higher marketing and consulting expenses related to revenue growth, as well as higher compensation expense, including commissions, partially offset by the impact of the divestitures.

G&A expense decreased primarily due to higher consulting and transaction expenses in the prior year and the impact of the divestitures, partially offset by additional software and technology expenses to support our Connect & Scale strategy and higher compensation expense.

Amortization of Purchased Intangible Assets

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

(In millions)

In 2025, total amortization expense of purchased intangibles decreased primarily due to the expiration of prior years’ acquisition amortization.

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Non-Operating (Expense) Income, Net

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

(In millions)

Loss from equity method investments, net (0.2) (48.1) 47.9 (100)%

Non-operating expense, net increased primarily due to the Ag divestiture gain in the prior year.

Income Tax Provision

Our effective income tax rate for 2025 and 2024 were 16.8% and 25.0%. The decrease in the tax rate was primarily due to gains from the Ag divestiture in 2024.

The OBBBA, signed into law on July 4, 2025, includes changes to U.S. federal tax regulations. We have accounted for its tax implications during 2025 based on our current interpretation of the legislation, and the impact to our 2025 tax rate is immaterial. The Company continues to evaluate the impact of the OBBBA and currently believes it will not have a material impact on our future effective income tax rate.

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 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 8 “Segment and 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 42 % 37 %

Segment operating income as a % of segment revenue 34.2 % 34.1 %

Field Systems

Segment revenue as a % of total revenue 43 % 42 %

Segment operating income as a % of segment revenue 31.1 % 28.8 %

T&L

Segment revenue as a % of total revenue 15 % 21 %

Segment operating income as a % of segment revenue 21.9 % 19.7 %

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

(In millions)

Unallocated general corporate expenses (122.6) (123.5)

Amortization of purchased intangible assets (172.0) (199.0)

Acquisition / divestiture items (19.1) (81.6)

Stock-based compensation / deferred compensation (151.5) (163.5)

Restructuring and other costs (53.5) (32.4)

Consolidated operating income 592.0 460.7

Total non-operating (expense) income, net (82.6) 1,545.2

Consolidated income before taxes $ 509.4 $ 2,005.9

AECO

% Change

Change in Revenue - AECO 10 %

Foreign currency exchange 0 %

Organic growth 10 %

Organic revenue increased due to strong demand for subscription offerings. Revenue benefited from cumulative growth along with an expansion of customers across many products, with the largest impacts resulting from Construction Management Systems, Architecture & Design, and MEP solutions. The increase was partially offset by an approximate 5% negative impact from the January 1 software renewals and the additional week.

Operating income and operating income as a percentage of revenue increased primarily due to revenue and gross margin expansion, partially offset by the January 1 software renewals and additional week. Operating income as a percentage of revenue for 2025 was relatively flat.

Field Systems

% Change

Change in Revenue - Field Systems — %

Acquisitions 1 %

Divestitures (6) %

Organic growth 5 %

Organic revenue increased primarily due to strong end-user demand and competitive wins for Civil Construction solutions. The increase was partially offset by lower demand in Surveying.

Operating income and operating income as a percentage of revenue increased primarily due to organic revenue and gross margin expansion, partially offset by the loss of Ag divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin Ag divestiture income.

T&L

% Change

Change in Revenue - T&L (30) %

Acquisitions 2 %

Divestitures (35) %

Foreign currency exchange 1 %

Organic growth 2 %

Organic revenue increased primarily driven by MAPS and Transporeon subscription revenue growth, partially offset by the impact from the prior year’s additional week. The impact of the additional week was an approximate 1% negative impact on segment revenue growth for 2025.

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Operating income decreased primarily due to the loss of Mobility divestiture income. Operating income as a percentage of revenue increased primarily due to the loss of lower margin Mobility divestiture income.

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LIQUIDITY AND CAPITAL RESOURCES

At the End of Year 2025 2024 Dollar Change % Change

(In millions, except percentages)

As a percentage of total assets 2.7 % 7.9 %

Principal balance of outstanding debt $ 1,400.0 $ 1,400.0 $ — — %

(In millions)

Net cash provided by operating activities $ 386.2 $ 531.4 $ (145.2) (27) %

Net (decrease) increase in cash and cash equivalents $ (494.4) $ 508.9

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

Operating Activities

The decrease in cash provided by operating activities was primarily driven by higher tax payments related to the Ag divestiture, and to a lesser extent, higher incentive bonus payments. The decrease was partially offset by lower interest payments.

Investing Activities

The increase in cash used in investing activities was primarily related to the $1.9 billion of proceeds received from the Ag divestiture in the prior year.

Financing Activities

The decrease in cash used in financing activities was primarily driven by the $1.7 billion repayment of debt in the prior year, offset by $688.4 million higher cash paid in repurchases of common stock compared to the prior year.

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 additional software and technology expenditures related to our Connect & Scale strategy, debt service, acquisitions, and any stock repurchases under the stock repurchase program.

In December 2025, we entered into a credit agreement for a five-year unsecured revolving loan facility in an aggregate principal amount of $1.25 billion (the “2025 Credit Facility”), which replaced the 2022 credit facility (the “2022 Credit Facility”). The 2025 Credit Facility contains an option to increase the borrowing to up to $1.75 billion with lender approval. As of January 2, 2026, there was no outstanding debt under the 2025 Credit Facility.

In the second quarter of 2024, we completed the Ag divestiture and received $1.9 billion of cash proceeds, subject to working capital adjustments. Approximately half of the proceeds were used in 2024 to pay down debt and make a tax payment of $122.0 million related to the divestiture transaction. The remaining proceeds were used in 2025 to repurchase stock and pay the remaining $277.4 million final tax payment for the Ag divestiture, which was made during the second quarter of 2025.

The recently enacted OBBBA permanently repeals the domestic R&D capitalization requirement. As a result, we expect cash tax reductions of approximately $53 million in 2025 and approximately $53 million in 2026.

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 2025, we had fixed lease payment obligations of $208.8 million, with $46.7 million payable within the next 12 months. Refer to Note 10 “Leases” in Item 8 of this report for additional information regarding our leases.

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Tax Payable

At the end of 2025, we had income taxes payable of $17.7 million, which are payable within the next 12 months.

In addition, we have unrecognized tax benefits of $79.7 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 14 “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 non-cancellable agreements with certain software and service providers and inventory commitments. At the end of 2025, we had operating purchase obligations and commitments of approximately $519.3 million, with $303.7 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 2025, we had outstanding fixed-rate senior notes with varying maturities for an aggregate principal amount of $1.4 billion. Future interest payments total $439.5 million, with $78.2 million payable within the next 12 months. Refer to Note 9 “Debt” in Item 8 of this report for additional information regarding our debt.

Stock Repurchase Program

In December 2025, the Board of Directors approved the December 2025 Program to repurchase our common stock of up to $1.0 billion, which replaces the prior February 2025 Program approved 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 16 “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 measures. 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 certain 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 revenue 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.

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

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Years

Dollar % of Dollar % of

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

REVENUE:

GROSS MARGIN:

Amortization of purchased intangible assets (A) 65.2 93.3

Stock-based compensation / deferred compensation (C) 15.7 17.4

Restructuring and other costs (D) 6.8 3.6

OPERATING EXPENSES:

Amortization of purchased intangible assets (A) (106.8) (105.7)

Acquisition / divestiture items (B) (19.1) (81.6)

Stock-based compensation / deferred compensation (C) (135.8) (146.1)

Restructuring and other costs (D) (46.7) (28.8)

OPERATING INCOME:

Amortization of purchased intangible assets (A) 172.0 199.0

Acquisition / divestiture items (B) 19.1 81.6

Stock-based compensation / deferred compensation (C) 151.5 163.5

Restructuring and other costs (D) 53.5 32.4

NON-OPERATING EXPENSE, NET:

GAAP non-operating (expense) income, net: $ (82.6) $ 1,545.2

Acquisition / divestiture items (B) 8.4 (1,688.5)

Deferred compensation (C) (5.0) (4.9)

Restructuring and other costs (D) 6.8 64.1

Non-GAAP non-operating expense, net: $ (72.4) $ (84.1)

Tax Rate % Tax Rate %

(F) (F)

INCOME TAX PROVISION:

Non-GAAP items tax effected (E) 74.0 (352.8)

NET INCOME:

Amortization of purchased intangible assets (A) 172.0 199.0

Acquisition / divestiture items (B) 27.5 (1,606.9)

Restructuring and other costs (D) 60.3 96.5

Non-GAAP tax adjustments (E) (74.0) 352.8

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share: $ 1.76 $ 6.09

Amortization of purchased intangible assets (A) 0.71 0.80

Acquisition / divestiture items (B) 0.11 (6.50)

Stock-based compensation (C) 0.61 0.64

Restructuring and other costs (D) 0.25 0.39

Non-GAAP tax adjustments (E) (0.31) 1.43

Non-GAAP diluted net income per share: $ 3.13 $ 2.85

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Years

ADJUSTED EBITDA:

Amortization of purchased intangible assets (A) 172.0 199.0

Acquisition / divestiture items (B) 19.1 81.6

Stock-based compensation / deferred compensation (C) 151.5 163.5

Restructuring and other costs (D) 53.5 32.4

Depreciation expense and cloud computing amortization 48.8 49.3

Income from equity method investments, net 9.3 13.9

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, 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 (expense) income, 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 the GAAP income tax provision adjusted for the tax effects of the non-GAAP pre-tax adjustments (A) through (D), excluding certain tax charges and benefits such as net deferred tax impacts resulting from tax amortization related to a non-U.S. intercompany transfer of intellectual property and certain acquisitions, deferred tax impacts from global intangible low-taxed income, significant reserve releases upon the expiration of statute of limitations and audit closures, and tax law changes. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation.

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.

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.

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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), 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 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 costs composed of termination benefits related to reductions in employee headcount, closure or exit of facilities, and cancellation of certain contracts, and other costs composed of one-time incremental expenses resulting from the re-audit and related remediation of control deficiencies. 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 represents the income tax effect of non-GAAP pre-tax adjustments, excluding certain tax charges and benefits, which reconcile the GAAP income tax provision to the non-GAAP income tax provision.

(F).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 the 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 that 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 2025, revenue was favorably impacted by $22.8 million, and operating income was unfavorably impacted by $4.1 million.

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 that are primarily denominated in Euro, New Zealand Dollars, Canadian Dollars, Brazilian Real, 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 2025 and 2024 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. Equity Investments 53

Note 6. Intangible Assets and Goodwill 54

Note 7. Certain Balance Sheet Components 55

Note 8. Segment and Geographic Information 55

Note 11. Commitments and Contingencies 59

Note 12. Fair Value Measurements 59

Note 13. Deferred Revenue and Remaining Performance Obligations 60

Note 14. Income Taxes 60

Note 15. Employee Stock Benefit Plans 64

Note 16. Common Stock Repurchase 66

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 185) 67

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TRIMBLE INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

ASSETS

Current assets:

Cash and cash equivalents $ 253.4 $ 738.8

Assets held for sale — 312.0

Other purchased intangible assets, net 924.1 998.1

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accrued compensation and benefits 211.7 227.2

Liabilities held for sale — 62.6

Deferred revenue, non-current 104.7 95.6

Deferred income tax liabilities 190.5 199.9

Other non-current liabilities 285.0 268.9

Commitments and contingencies (Note 11)

Stockholders’ equity:

Accumulated other comprehensive income (loss) 10.5 (381.9)

Total liabilities and stockholders' equity $ 9,312.0 $ 9,488.3

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 65.2 93.3 108.7

Operating expense:

Amortization of purchased intangible assets 106.8 105.7 103.6

Non-operating (expense) income, net:

(Loss) income from equity method investments, net (0.2) (48.1) 28.1

Other (loss) income, net (11.0) (3.9) 31.9

Total non-operating (expense) income, net (82.6) 1,545.2 (91.8)

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 393.1 (227.2) 86.4

Net change related to derivatives and other (0.7) (2.6) (3.6)

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 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

Other comprehensive income — — — — 392.4 392.4

Stock-based compensation — — 157.6 — — 157.6

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 (72.9) (116.3) (67.2)

Increase (decrease) in liabilities:

Accrued compensation and benefits (22.5) 56.5 20.8

Other current and non-current liabilities (30.7) (52.5) (2.4)

Cash flow from investing activities:

Divestitures of businesses, net of cash divested (4.4) 1,923.4 17.0

Acquisitions of businesses, net of cash acquired (4.4) (22.0) (2,088.9)

Purchases of property and equipment (25.3) (33.6) (42.0)

Net cash (used in) provided by investing activities (37.0) 1,861.1 (2,068.1)

Cash flow from financing activities:

Issuance of common stock, net of tax withholdings 0.6 (6.5) 6.7

Payments on debt and revolving credit lines (577.2) (2,199.4) (2,292.9)

Net cash (used in) provided by financing activities (868.4) (1,864.2) 1,431.5

Effect of exchange rate changes on cash and cash equivalents 24.8 (19.4) 7.4

Net (decrease) increase in cash and cash equivalents (494.4) 508.9 (32.1)

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

Cash and cash equivalents - end of period (1) $ 253.4 $ 747.8 $ 238.9

Supplemental cash flow disclosure:

Cash tax paid, net, excluding tax for the Ag divestiture 150.1 106.1 168.0

Cash tax paid for the Ag divestiture 277.4 122.0 —

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”) has been incorporated in the State of Delaware since October 2016.

Trimble is a leading technology solutions and platform provider, enabling office professionals and field workers to connect their workflows and industry lifecycles, driving a more productive, efficient, and sustainable future. With a focus on the industries that build, maintain, and move the world, the comprehensive depth and breadth of our solutions are transforming the way the world works, making it easier for Trimble customers to focus on what matters—getting the job done right.

Our representative customers include asset owners; general and specialty contractors; architects, engineers and designers; surveyors; energy and utility companies; transportation shippers and carriers, as well as state, federal, and municipal governments. 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 the results of our consolidated subsidiaries. Intercompany accounts and transactions have been eliminated.

We use a 52 to 53-week fiscal year ending on the Friday nearest to December 31. 2025and 2023 were 52-week years that ended on January 2, 2026 and December 29, 2023, and 2024 was a 53-week year that ended on January 3, 2025. 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 prices of promised goods or services; (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

We report our financial performance, including revenue and operating income, based on three segments: (i) Architects, Engineers, Construction and Owners, (ii) Field Systems, and (iii) Transportation and Logistics.

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 promised good or service. 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 subscriptions and services; 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 generally occurs 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 of the 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. SaaS 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 2025 and 2024, deferred costs to obtain customer contracts were $161.9 million and $124.3 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 $60.1 million, $55.2 million, and $39.5 million for 2025, 2024, and 2023. This expense is included in Sales and marketing expenses 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.

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

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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 2025 and 2024, 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 expensed 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 $61.2 million and $64.1 million at the end of 2025 and 2024. Amortization expense was $21.0 million, $16.3 million, and $8.7 million in 2025, 2024, and 2023.

Leases

We determine if an arrangement is a lease at inception. Operating leases with lease terms greater than one year result in the recognition of operating lease right-of-use (“ROU”) assets and lease liabilities.

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

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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. 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 and mapping products. Total related party revenue from our investees was $124.1 million, $108.8 million, and $87.7 million for 2025, 2024, and 2023.

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 $83.8 million, $57.9 million, and $57.3 million for 2025, 2024, and 2023.

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 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.

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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 circumstances 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 2025 and 2024.

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, New Zealand Dollars, Canadian Dollars, Brazilian Real, 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 2025 and 2024, there were no derivatives outstanding that were accounted for as hedges.

Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes references to software development stages and requires software costs to be capitalized when (i) management authorizes and commits to funding a software project, and (ii) the project is probable of completion. The ASU is effective for interim and annual reports beginning in 2028, with early adoption permitted. The ASU may be applied on a prospective, modified prospective, or retrospective basis. We are currently evaluating the impact of adopting this ASU.

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In July 2025, the FASB issued ASU 2025-05, Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU allows a practical expedient election to simplify the expected credit loss estimation for short-term accounts receivable and contract assets by assuming conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for interim and annual reports beginning in 2026 on a prospective basis, with early adoption permitted. We do not expect material changes from adopting this ASU.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses. The ASU requires additional disclosures by disaggregating 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 total amount of selling expenses. The ASU is effective for our annual report on Form 10-K beginning in 2027 and subsequent interim reporting periods, with early adoption permitted. The ASU may be applied either prospectively or retrospectively. We are currently evaluating the impact of adopting this ASU.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU updated 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 pre-tax income (or loss) and income tax expense (or benefit). We adopted the ASU in the fourth quarter of 2025 on a prospective basis. See Note 14 “Income Taxes” in Item 8 of this report for additional disclosure.

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 239.2 245.5 247.9

Effect of dilutive securities 2.3 1.7 1.2

Weighted-average shares of common stock outstanding - diluted 241.5 247.2 249.1

Diluted earnings per share $ 1.76 $ 6.09 $ 1.25

Antidilutive weighted-average shares (1) 0.5 1.4 1.9

(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

There were no material acquisitions in 2025.

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

In 2023, we acquired three businesses, including an all-cash acquisition for Transporeon GmbH. The total purchase consideration for Transporeon was €1.9 billion or $2.1 billion, which included the repayment of outstanding Transporeon 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.

The remaining two business acquired in 2023 with total purchase consideration of $47.0 million contributed less than 1% of our total revenue during 2023 in the aggregate.

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Acquisition costs of $1.0 million, $9.1 million, and $35.0 million in 2025, 2024, and 2023, were expensed as incurred and included in Cost of sales and General and administrative expenses in our Consolidated Statements of Income.

NOTE 4: DIVESTITURES

Mobility Divestiture

On February 8, 2025, we completed the sale of our Mobility business to Platform Science in exchange for equity ownership interests with a fair value of $253.9 million. The fair value was based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. Following the closing of the transaction, we own, or have rights to acquire, 32.5% of Platform Science’s expanded business comprised of (i) shares of preferred stock, with certain liquidation preferences, that represent 28.5% ownership, and (ii) common stock warrants allowing us the rights to acquire 4% of additional ownership.

Upon closing the transaction, we deconsolidated $277.3 million of net assets, including $145.3 million of goodwill, and we recorded our equity investment at its fair value under the measurement alternative election, which represents a non-cash investing activity. As a result, we recognized a cumulative, pre-tax loss of $30.6 million from the held for sale date, of which $32.9 million was recognized in 2024. Mobility was reported as a part of our Transportation and Logistics (“T&L”) segment.

The combined business aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems.

Ag Divestiture

On April 1, 2024, we completed the sale and contribution of our Ag business to AGCO in exchange for $1.9 billion of cash proceeds and an equity ownership interest in PTx Trimble, a joint venture (the “JV”) that was formed by Trimble and AGCO, with a fair value of $275.6 million. The fair value was based on a combination of the equity value, primarily the transaction price, and an option pricing model for a put and call option. Following the closing of the transaction, we own 15% of PTx Trimble.

Upon closing the transaction, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and we recorded our equity investment at its fair value under the equity method of accounting, which represents a non-cash investing activity. As a result, we recognized a pre-tax gain of $1.7 billion in the second quarter of 2024, which included the gain for our retained 15% ownership interest in the JV. The sale and contribution of the Ag business excluded certain GNSS and guidance technologies. Ag was reported as a part of our Field Systems segment.

Other Divestitures

In 2025, the Mobility divestiture was the only divested business.

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

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

NOTE 5: EQUITY INVESTMENTS

The following table presents our equity investments in non-marketable securities:

(In millions)

Equity method investments $ 340.4 $ 334.6

Equity Method Investments

Equity method investments primarily represent joint operating ventures in privately-held companies with ownership rights varying from 5% to 50%. The Company applies the equity method of accounting for these investments by recording our proportionate share of net earnings or losses of investees in non-operating (expense) income, net and by monitoring these investments for any impairments.

Of the total carrying amount of equity method investments, our 15% investment in PTx Trimble was $216.8 million and $222.3 million at the end of 2025 and 2024.

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Other Investments

Other investments are related to privately-held companies without readily determinable fair values, with our ownership rights varying from 1% to 32.5%. The Company applies the measurement alternative for these investments, which requires measurement at initial cost, less any impairments, adjusted for observable price changes. Adjustments are recorded in Other (loss) income, net, which were immaterial for the periods presented.

Of the total carrying amount of other investments, our 32.5% investment in Platform Science was $253.9 million at the end of 2025.

NOTE 6: INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The following table presents a summary of our intangible assets:

As of the end of 2025 and 2024, $125.7 million and $182.8 million of fully amortized intangible assets were written off.

The estimated future amortization expense of intangible assets at the end of 2025 was as follows:

(In millions)

Goodwill

The changes in the carrying amount of goodwill by segment for 2025 were as follows:

AECO Field Systems T&L Total

(In millions)

Decreases due to divestitures — — (3.6) (3.6)

Foreign currency translation and other adjustments 50.9 19.0 185.0 254.9

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NOTE 7: CERTAIN BALANCE SHEET COMPONENTS

The components of inventories, net were as follows:

(In millions)

Work-in-process 5.1 5.2

The components of property and equipment, net were as follows:

Property and equipment:

Depreciation expense was $27.8 million, $33.0 million, and $38.3 million for 2025, 2024, and 2023.

The components of accumulated other comprehensive income (loss), net of related tax were as follows:

(In millions)

Accumulated foreign currency translation adjustments $ 7.9 $ (385.2)

Gain on cash flow hedge 3.6 4.1

Net unrealized actuarial losses (1.0) (0.8)

Total accumulated other comprehensive income (loss) $ 10.5 $ (381.9)

NOTE 8: SEGMENT AND GEOGRAPHIC INFORMATION

We determined our operating segments based on how our Chief Executive Officer, who is our CODM, views and evaluates operations. Various factors, including market separation and customer-specific applications, go-to-market channels, and products and services, were considered in determining these operating segments. Our CODM uses segment revenue and operating income to assess segment performance and to allocate resources. The CODM evaluates segment revenue and operating income by considering periodic forecast-to-actual variances and trends, as well as overall strategic initiatives. Asset information by segments is not regularly reviewed by the CODM.

In each of our segments, we sell many individual products. For this reason, it is impracticable to segregate and identify revenue for each of the individual products or group of products we sell.

Our reportable segments are described below: