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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-04-25 · 120 added, 126 removed, 322 unchanged (43% of the section changed)

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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 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.

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

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.

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;

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:

• Execute on our Connect & Scale strategy;

• Continue to execute on our Connect & Scale strategy;

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

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• 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.

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 h as positively impacted our revenue mix, growth, and profitability over time and is leading to improved visibility in our businesses.

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 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 .

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.

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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.

This is demonstrated by the 13 acquisitions and 23 divestitures that we have completed since 2020.

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 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.

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 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.

See Note 4 “Divestitures” in Item 8 of this report.

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 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.

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.

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.

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

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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.

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.

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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;

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.

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.

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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.

We are a U.S.

based multinational company operating in multiple U.S.

We are a U.S.-based multinational company operating in multiple U.S.

and foreign jurisdictions.

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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.

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.

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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.

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.

Year 2024 Compared with Year 2023

2025 Compared to 2024

Change versus 2024

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Organic growth (1) % 9 % 6 %

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 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.

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.

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 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.

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

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Total $ 1,759.8 $ 1,814.0 $ (54.2) (3)%

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.

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

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Total amortization expense of purchased intangibles as a percentage of revenue 5 % 5 %

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

Non-Operating (Expense) Income, Net

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

2025 2024 Dollar Change % Change

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Interest expense, net (74.4) (90.7) 16.3 (18)%

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

Other (loss) income, net (3.9) 31.9 (35.8) (112)%

Total non-operating income (expense), net $ 1,545.2 $ (91.8) $ 1,637.0 (1783)%

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.

Loss from equity method investments, net

(0.2) (48.1) 47.9 (100)%

Other loss, net

(11.0) (3.9) (7.1) 182%

Total non-operating (expense) income, net $ (82.6) $ 1,545.2 $ (1,627.8) (105)%

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

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 2025 and 2024 were 16.8% and 25.0%.

The increase in the tax rate was primarily due to gains from the Ag divestiture.

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

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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.

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.

For additional discussion of our segments, refer to Note 7 “ Reporting Segment and Geographic Information” in Item 8 of this report.

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:

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Consolidated operating income 592.0 460.7

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

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

Consolidated income before taxes $ 509.4 $ 2,005.9

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Change in Revenue - AECO

Divestitures (1) %

Foreign currency exchange 0 %

Organic growth

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

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.

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

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Organic growth 5 %

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.

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.

Change versus 2024 2025

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Divestitures (35) %

Foreign currency exchange 1 %

Organic growth 2 %

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.

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.

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.

LIQUIDITY AND CAPITAL RESOURCES

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

Net cash provided by (used in) investing activities 1,861.1 (2,068.1) 3,929.2 (190) %

Net cash (used in) provided by financing activities (1,864.2) 1,431.5 (3,295.7) (230) %

Net cash (used in) provided by investing activities (37.0) 1,861.1 (1,898.1) (102) %

Net cash used in financing activities

(868.4) (1,864.2) 995.8 (53) %

Effect of exchange rate changes on cash and cash equivalents 24.8 (19.4) 44.2 (228) %

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.

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 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.

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 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.

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 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.

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 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.

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.

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.

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:

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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.

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.

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Future interest payments total $439.5 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 9 “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.

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.

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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;

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.

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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.

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.

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Amortization of purchased intangible assets (A) 65.2 93.3

Acquisition / divestiture items (B) — 0.5

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

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$ 988.1 27.5 % $ 937.2 25.4 %

NON-OPERATING (EXPENSE) INCOME, NET:

NON-OPERATING EXPENSE, NET:

GAAP non-operating (expense) income, net:

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$ (72.4) $ (84.1)

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

INCOME TAX PROVISION:

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

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

Non-GAAP income tax provision:

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Restructuring and other costs (D) 60.3 96.5

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

Non-GAAP tax adjustments (E)

Non-GAAP net income:

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Acquisition / divestiture items (B) 0.11 (6.50)

Dollar % of Dollar % of

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

Stock-based compensation (C) 0.61 0.64

Restructuring and other costs (D) 0.25 0.39

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

Non-GAAP tax adjustments (E)

Non-GAAP diluted net income per share:

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Acquisition / divestiture items (B) 19.1 81.6

Stock-based compensation (C) 163.5 151.1

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

Restructuring and other costs (D) 53.5 32.4

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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 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.

6 unchanged sentences

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 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 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.

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

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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.

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

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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 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 investment gains/losses.

4 unchanged sentences

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 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.

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.

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.

GAAP and non-GAAP tax rate percentages .

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis