Trimble at Piper Sandler Conference: Strategic Growth and Transformation

On Thursday, 11 September 2025, Trimble Inc. (NASDAQ:TRMB) participated in the Piper Sandler 4th Annual Growth Frontiers Conference, showcasing its strategic transformation and future growth plans. The discussion highlighted Trimble’s shift towards software-driven revenue and its ambitious financial targets, while also addressing challenges in the transportation market.

Key Takeaways

• Trimble’s "Connect and Scale" strategy aims to enhance efficiency by connecting workflows, data, and stakeholders.
• The company targets $3 billion in annual recurring revenue (ARR) and $4 billion in revenue by 2027.
• Nearly 80% of Trimble’s revenue is software-related, with two-thirds being recurring.
• The AECO segment is a significant growth driver, with high teens ARR growth and a $1 billion opportunity in cross-selling and upselling.
• The transportation segment is being restructured to replicate AECO’s success, despite current freight market challenges.

Financial Results

• Revenue Mix:

- Almost 80% of revenue is software-related.

- Approximately two-thirds of revenue is recurring.

- Gross margins exceed 70%.

• Long-Term Financial Targets (by 2027):

- $3 billion in ARR.

- $4 billion in total revenue.

- 30% EBITDA margins.

• AECO Segment:

- High teens ARR growth.

- 30% operating margins.

• Addressable Market:

- Company-wide: $72 billion, with 25% penetration.

- AECO: $50 billion, with 20% penetration.

• Transportation Segment:

- $400 million in cross-sell and upsell opportunities.

Operational Updates

• Organizational Structure:

- AECO sales force reorganized to focus on account-based selling.

- Transportation businesses combined under one team to follow AECO’s model.

• Productization:

- Trimble Construction One (TC1) reduces sales friction.

- Trimble Technology Outlets (TTOs) standardize technology across fleets.

• Field Systems:

- Transitioning from perpetual licenses to subscriptions.

- New subscription products like Catalyst GNSS.

- Satellite-based corrections attached to GNSS systems.

• Divestitures:

- Sold the agriculture business, retaining a 15% stake with AGCO Corporation.

- Sold the mobility business, maintaining a stake in a joint venture with Platform Science.

Future Outlook

• Growth Strategies:

- Cross-selling and upselling in AECO and Transportation.

- Expanding TC1 to new regions and businesses.

- Leveraging digital marketing and AI for efficiency.

• Market Opportunities:

- Expanding in underpenetrated construction software markets.

- Preparing for growth in transportation as the freight market rebounds.

• Business Strategy:

- "Connect and Scale" focuses on connecting workflows, data, and stakeholders for enhanced decision-making.

Q&A Highlights

• Addressable Market: Trimble’s large market is only 25% penetrated, offering significant growth potential.
• Subscription Model: Growth in Field Systems driven by converting licenses and new subscription products.
• Trimble Construction One: TC1 facilitates easy addition of new capabilities, with successful North American rollout and planned global expansion.

Readers are encouraged to refer to the full transcript for a comprehensive understanding of Trimble’s strategic initiatives and financial outlook.

Full transcript - Piper Sandler 4th Annual Growth Frontiers Conference:

Clark Jeffries, Software Research Analyst, Piper Sandler: Hello, hello. My name is Clark Jeffries. I’m a software research analyst here at Piper Sandler. Thank you for joining us. Very pleased to have Phil Sawarynski, CFO of Trimble Inc., joining us. Thank you for coming to Nashville.

Phil Sawarynski, CFO, Trimble Inc.: Oh, thanks for being here. It’s my first time. We were just commenting outside. Happy for the invite and happy to see, hopefully, a lot of new faces around as well as old faces, but glad to be here.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah, absolutely. Music City. The last two years have been very eventful for the company. I think it’s been a lot to sink your teeth into in terms of my role as an analyst. Even prior to these most significant transitions, transactions, there were 22 divestitures since 2020 at the time of the analyst day. Maybe we could start off with an overview of the business here in 2025. What is Trimble about and what is the opportunity for the company?

Phil Sawarynski, CFO, Trimble Inc.: Yeah, great question. Maybe to get to the present, I’ll start a little bit with the past. If you’re familiar with Trimble, I’ve been with the company now closing in on 16 years. I started the ag business. When I think back about my tenure and even before that, the company was very successful. We had a lot of product innovation, both organically, so our ag business was built organically, and a lot of inorganic. We did a significant amount of acquisitions over that time. We had an incredible amount of depth and breadth of product over that amount of time. As we built those, circa 2020, Rob Painter is our CEO now, started as CFO. We saw the opportunity to engage in an evolution of where we’re going as a company, and we called it Connect and Scale. We can talk about that as we go forward.

This is really our strategy where we had a significant amount of products. I would argue the most depth and breadth of product in the industries that we serve from a technology perspective. What we want to do is bring those together as far as thinking about platform plays and ecosystem plays and the connectivity of workflows, the connectivity of data, and data being just so important where we’re at today and where we’re going, particularly as we’ll talk about with AI. With that transformation of the company also came some portfolio changes, as you mentioned. We recently divested our ag business. We have a 15% stake in a joint venture with AGCO Corporation. We divested our mobility business, which is now we own a stake of the combined entity with Platform Science.

I’d characterize this as a little bit more of us simplifying and focus on how we are operating going forward. It really also changed the financial model. When we think about that, now we are almost 80% software related, and almost two-thirds of that is referring to two-thirds of the company’s revenue is recurring revenue, north of 70% gross margin. The financial profile that we have in the business gives us a lot more visibility into our future. It gives us a lot of opportunity. We can talk about Connect and Scale. I’m sure you’re going to ask another question on that. With a lot of the infrastructure things that we are doing in the back end from an administrative standpoint and how we can actually tap into the addressable markets we serve, we’re really excited about where we’re positioned.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah, absolutely. Certainly, you know, the recurring revenue mix continued to accrete, the product mix and the margin improvement. It’s been all like a very eventful year to follow from the outside. Maybe when we talk about the three buckets that the business is organized in, I think from a practical standpoint, maybe you can just, who are the main key customers across these different segments? When you talk about the benefits of being involved in this deep portfolio, is there overlap across the segments? Just maybe let’s profile these customers in AECO, field systems, and transportation.

Phil Sawarynski, CFO, Trimble Inc.: Sure. Yeah. The three segments, AECO is primarily focused on construction software. That’s been, taking a quick step back, when we did the ag divestiture, we looked at that. We had an opportunity to resegment the business. Now you’re seeing them a little bit different than what we’ve portrayed in the past. I think you’re also seeing a lot more representative of more of the transportation, AECO, pure software businesses, field systems as a combined software and hardware business. AECO, construction software focused, A, architects, E, engineers, C, contractors, and O, owners. The field systems business is both hardware and software. The ARR there has been growing really well. We’re doing conversions in that business, but we’re also developing new products that are out of the gate subscriptions. When we think about those two segments, there’s a lot of overlap in the customers. We report that way for various reasons.

One being, one is more of a direct model, one’s more through dealers in field systems. The overlap and that connectivity, and when we talk about Connect and Scale, that connectivity spans beyond the segments. We really like what we’re doing. We really like the competitive mode that we believe we have with the hardware and the software within those two. The third segment you talked about was transportation. This is really the movement of goods, primarily around more long-haul trucking. We really like that business. As we mentioned, we divested the mobility business. That’s a pure software business now. I think there’s a lot more overlap. As we talk with the customers and as we talk about the Connect and Scale strategy, I think in our competitive events, that’s really critical, particularly as we think about field systems and AECO.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah. Let’s talk about Connect and Scale. Could you maybe sort of describe the strategy in aggregate and maybe some specifics of how this really works? If you’re a construction entity, what’s the benefit of having the field systems, the sort of sensor to software experience? It seems like it’s a differentiated approach in the market. I’d love to just go deep on Connect and Scale for a moment.

Phil Sawarynski, CFO, Trimble Inc.: Yep. Connect and Scale, think about Connect as the connectivity of the workflows, connectivity of the data, connectivity of the stakeholders as we think about an ecosystem. You have multiple stakeholders in a particular project, if we want to use that as an example. We still live in a physical world. What we think is, and what we’ve seen is that connection between the digital and the physical is something that is a differentiator for us and is unique about Trimble because we can use our scanners on the field system side, for example, to pick up the environment and the reality today in an accurate fashion. That can then be transferred into a digital model, which then becomes a source of truth. When we think about the connective tissue, let’s say, for all of this, we talk about our Trimble collaboration tool, which is Trimble Connect.

That, where you can actually ingest 3D models from the field, we can use that. When you think about the stakeholders that are actually part of that, it’s not just about a contractor making themselves more efficient. It’s about the contractor engaging with the architect, with the engineer, and with the owner. You think about the A, the E, the C, the O. We have that connective tissue with Trimble Connect. That allows that source of truth for everybody to be working on the same model and the same work, which I think is really important because now you’re really talking about a full ecosystem as you think, as we connect the data and the workflows there. We’re really solving high-order issues and inefficiencies from that perspective.

Going back to the connectivity between the field and the office, we really like that part of the business because we are the ones that are collecting data with our equipment. That data is what actually feeds into Connect, which is what feeds into this ecosystem to allow all the stakeholders to actually participate in the decision-making. It also gives us, as we think about AI, by having that data and by us actually collecting it, it allows us to apply AI tools to that data to allow our customers to have faster decisions, more efficient decisions, know how to proactively manage their business instead of reactively. We think we’re really well positioned with that digital to digital physical office-to-field connectivity that we have that I think is very unique to Trimble.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah. I think I’ve heard it a couple of times at this conference. It feels like in software, the real differentiator going forward in this world of AI is, are you a creator of data? You know, are you creating something that isn’t within the realm of foundational models or the corpus of the internet? Are you providing something new as a data ingest point? Certainly fascinating. I think the construction space overall, we’ve seen it’s been one of the slowest to digitize. I think it’s largely because of this fragmented industry, a lot of different stakeholders, a lot of different sizes of organizations. It’s a lot more complicated than a lot of horizontal software apps have to deal with. Maybe wrapping up this kind of background, let’s talk about some long-term financial outcomes investors should be benchmarking the company against.

You had an analyst say relatively recently, maybe we can talk about some long-term financial targets in the kind of new Trimble structure.

Phil Sawarynski, CFO, Trimble Inc.: Yep. Investor Day, we did late last year, I think it was December of last year. We put out a very simple framework, which was 3, 4, 30: $3 billion of ARR, $4 billion of revenue, 30% EBITDA margins in the 2027 timeframe. That’s a really, really simple where we’re guiding to where we’re going in a multi-year context. I really like to start our first half performance was really strong and basically across the board, even in a freight recession or a freight, at least a downturn in the freight market, the transportation business performed, AECO business performed very well, and it’s been continued to perform. The civil business has been really strong with the project backlogs in field systems.

As I think about what we put out on Investor Day back in December with that 3, 4, 30, and how we started this year, really pleased with the progress and getting off on the right foot, at least so far.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah, absolutely. Especially the subscription offering seems like something that’s just been very, very successful in bringing to market, especially in field systems. Let’s maybe talk about AECO because I think construction software may be where investors have the most experience in terms of public comparables and maybe what a vertical software company looks like in construction. You’ve been able to have high teens ARR growth in that segment for years at this point, and 30% operating margins. When you did this resegmentation, I think people had this aha moment of, oh, this is a top three construction software company, operating with these kinds of margins. How has the business been able to achieve that, the high growth rates in ARR, and what’s the biggest growth contributor in more recent history, but also maybe looking forward to the next few years?

Phil Sawarynski, CFO, Trimble Inc.: Yeah, it’s a great question. Where I would start with is the addressable market. On Investor Day at the company level, we said $72 billion of addressable market that was only 25% penetrated. If I double click into AECO, it said $50 billion of addressable market that’s only 20% penetrated. This is $40 billion out there for us to go and apply to the people that aren’t using the technology that should be using it today. That gives me a lot of confidence that the market is there for us to go after. Quite frankly, when you probably look at some of our peers, everybody’s growing and growing in different ways. If you look at volume versus pricing, for example, at the end of the day, there’s a market out there for us to go after.

If I take another click on that and I look at AECO specifically around the cross-sell and upsell opportunity, we put out there a billion dollars. With the existing customers that we have today, we believe there’s the opportunity to sell another billion dollars worth of product to them. Just the existing customers we have today, not even looking at new logos. That gives me a lot of comfort that the market’s there, that the customers are there. We talk about the execution, because I think that’s really where you’re seeing a lot of the success of Trimble and with the evolution is how we are executing. When we resegmented, some of the things, I’ll point to two things. One is we reorganized, and we now have a singular sales organization within the AECO business that are account-based sellers. We’re selling to accounts as opposed to individual products.

We do have folks there that are product experts, obviously, but we’re really focused on looking at the customer, understanding how they’re using the products, understanding what they should be using from Trimble, and being able to cross-sell and upsell those products. We talk about our Trimble Construction One offering. Trimble Construction One is more of a blanket term around all of the things we’re doing with Connect and Scale and having a singular construction platform. What’s important about that is we create a framework contract that is a singular contract for the customers that allows them to add additional capabilities onto their existing capabilities and lowering that sales friction and the purchasing friction. If I go back to where I started the conversation with where we were years ago, we may have had different products and different salespeople talking to the same customer, selling individual products under individual contracts.

Now, we’ve really, really reduced the friction and changed the conversation with the customers as well by having more higher order and high-level discussions around really optimizing how you run your business. That interconnectivity of multiple products and how the data and the workflows actually work through a Trimble on Trimble advantage is really compelling as you think more holistically at the system level versus a bespoke product level. We’ve seen really good traction where we’ve, out of the gate, we’re selling the vast majority of our products or bundles rather than individual products as with the new bookings. A lot of our customers are buying, actually, the majority of our customers have at least, you know, sort of two to four products or two or more products. The strategy is really working. The execution is there.

There’s an opportunity for us to continue to run with the addressable market with the cross-sell and upsell. The reorg is an enabler. The last part of it is really the infrastructure that we’ve been building is bringing all that information together so that our sellers can actually have the visibility into all the products we’re selling our customers. We can create a sales plan around those customers in order to unlock that cross-sell and that upsell opportunity. It’s multifaceted, but I think what it really comes down to is the execution on the plan, the strategy, I think it’s not what we’ve been demonstrating, and it’s continuing the execution.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah, that was a very great overview of really the kind of internal changes to promote the cross-sell. I wanted to ask about the productization maybe before we switch to field systems or transportation. Trimble Construction One (TC1) has been something, you know, I think comes up on every earnings call. It’s a very prominent productization bundle choice. Can you maybe talk a little bit about the brief history on the productization benefit? You know, are there some other levers that are down the road in terms of distributing the bundling strategy to more regions, sort of aligning maybe what you have done in maybe North American AECO to sort of the global org? Love to have some context there.

Phil Sawarynski, CFO, Trimble Inc.: Yeah, so they’re all intertwined. Maybe on its simplest form, I’ll just start there. Again, this is a framework contract. You sign a Trimble contract, whether it’s one product, whether it’s five out of the gate, it gives the opportunity to continue to add new and new capabilities, with very low sales friction from that perspective. We started in North America, as you said, and we wanted to build the infrastructure, the ecosystem. We thought that from a prioritization standpoint, that’s where our largest footprint is and wanted to start there. We’re continuing to add capabilities as we think about the full technology stack. I talked a little bit about the sales team in the organization, but as we talk about more and more digital marketing and campaigns there, leveraging AI within our internal opportunities to continue to drive sales and marketing efficiency, more importantly, the growth.

That’s where we’ve been focused, a lot of our investments are. Now, where we’re continuing to roll it out is to the other businesses. I mentioned transportation logistics being another software segment. I expect a very similar playbook to be run. We’ve demonstrated the success in AECO. We have continued opportunities in AECO. We run it within TNL. It is a similar motion. We brought together those businesses under one leadership and one organization. You’re seeing that playbook being replicated. You’re going to see some of the efforts within the field systems. As I mentioned before, there’s a blurry line between the two segments and how those interconnect, because in a lot of cases, they’re the same customers and they’re looking for the workflows. That information can come out of the data collection, the hardware, and the other software offerings within field systems.

Then the geographic expansion, as you said, we started in North America. We’re rolling out into Europe and then expect APAC and eventually globally. It’s going to be the same motion as we think about it. We want to lower the friction with the customers. We’re going to give the sales team the full visibility into these customers and how they should be selling. We want our customer success folks to have the access to understand the telemetry of how people are using our product to make sure that they’re successful in their use of products. It reduces churn, it improves the interaction with us and our customers, which at the end of the day is really what we’re focused on, is we want our customers to be successful. All of this stuff really starts with that.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah. Let’s maybe turn to field systems because I think, you know, AECO and transportation, even touching on the TC1-esque strategy that might go to transportation, this feels really like the base level of fitness. This is taking your recurring revenue segments and making them punch harder and be more successful. Field systems is a product shift. It’s very interesting because, you know, the last few quarters, this is a 75% non-recurring segment. The last five quarters, ARR growth accelerated, even peaking in the mid-20s. It felt like something was flipped overnight to make the productization move a lot faster in field systems. Could we talk about what’s changing in field systems as the highest non-recurring segment? How is packaging and productization changing there?

Phil Sawarynski, CFO, Trimble Inc.: Yeah, great question. What we’re doing is very intentional. That is, we are, and I’ll put it into three buckets if I think about the recurring revenue growth. One is the conversions, which is we’re taking existing perpetual licenses that we had been selling, converting those into terms or pure subscriptions. That’s some of what we talked about on Investor Day. We’re on a 200 to 300 basis point headwind as we convert those. That’s one element of the ARR growth. The second element is, I mentioned this earlier, but a lot of the new products that are coming out of the gate as subscriptions, and we’ve seen really good success. We had a product that’s called Catalyst GNSS subscription, which is, you can use your cell phone with a low-cost antenna and get high accuracy GNSS from that realm. That came out of the gate as a subscription.

It’s very successful. It actually unlocked an addressable market for us because of the price points with the subscription. We’re able to find these more price-conscious, whether it’s regions, geographies, or customers, and have an attractive and compelling product there for them at a price that they’re comfortable with. We saw really good traction there. Another thing that we’re doing within field systems is we’re attaching what’s called our satellite-based corrections to get high accuracy based on the satellite versus a terrestrial network. We’ve been doing effectively what we call 100% attached. All the GNSS systems that come out are going to have that. What ends up happening, the customers get to use that. They see the benefits of it. They buy that as a pure subscription as a renewal. We had a lot going on, in which way we saw a lot of the accelerated rates.

We’re starting to lap ourselves, which is why we’re talking about sort of mid-teens, but at the end of the year, which is a little bit lower than what we’ve been. It’s more because we’ve had such accelerated growth that we’re lapping ourselves with some of these discrete decisions that we made over the last year or two.

Clark Jeffries, Software Research Analyst, Piper Sandler: Yeah. Maybe we could talk about how are the JVs and the partners kind of responding to this? I think maybe traditionally or historically, they like to get paid with a big lump transaction up front. You know, maybe you can think, you could talk through what’s the approach to JVs and field systems? How strategic are these partnerships? Are they, you know, approaching this sort of hardware as a service or these other monetization models well? Is there going to be some teachings that you’re going to have to do to the ecosystem to get them to work with you on those new monetization models?

Phil Sawarynski, CFO, Trimble Inc.: Yeah, what I’d like to do is separate a little bit because the JVs, as I think about the JVs, they’re a little bit different on what we do. A lot of it’s more technology-based than go-to-market-based. If I just focus maybe on the second part of your question on the distribution, really excited. We have several elements. You mentioned we have some partnerships and some things we sell through OEM distribution. What we’ve done, particularly with our relationship with our JV there, is we have a shared vision, which is we want the customers to adopt higher-level technology. When you start with serving the customers, you work backward, how best to do that? There are things that are going to go on in the factory fit and have been going on from that perspective that come out of our JV.

One of the focuses that you’ve probably seen recently is we’ve been announcing what’s called TTOs, which are Trimble Technology Outlets. Really, from a lot of our customers, they’ve got mixed fleets and they have different brands and they want to standardize on the technology. We’re really focused on that. This is why we’re signing up other logos and other brands, because ultimately, if you’re a contractor, you own your own fleet, you may have actually different brands. What you want to do is standardize your workflows, standardize how you actually operate. That’s what we’re trying to unlock. What you’re seeing with some of the evolution and some of the relationships is us being able to go after and serve our customers better from that perspective.

From the dealers, as we sign these up, to your question, yes, there’s an education and some working around the subscription offerings as we work through that. Some of the dealers that we have as well in distribution are already Trimble dealers. We’ve worked closely with them for many, many years. There’s some training, but they’re embracing the models well. We’re seeing really good success. One other thing I’ll point out, you mentioned some of the hardware subscriptions that we’re actually, again, seeing that that actually unlocks some additional addressable market for us. In fact, half of our bookings with our WorksPlus subscription, which is the combined hardware subscription, are actually new logos and customers that we haven’t been working with in the past. We’re seeing the benefit. It’s not just about converting a customer.

It’s actually about us increasing our addressable market and accessing customers we may have not been able to access in the past because the price points and the entry points are easier to overcome.

Clark Jeffries, Software Research Analyst, Piper Sandler: All right. Last few minutes here, I do want to touch on transportation. You did have a major transaction there. As you point out, it’s a little bit of a freight recession in that post-COVID, we’ve had some normalization about volumes, pricing, and it’s dynamic. At a high level, what can go right for transportation? I think the analysts today pointed out that we can get great incremental margins out of this business, but it seems like there’s more to unlock on the top line. Maybe we can just talk about what you’re hoping that could go right. Is it bundling? Is it productization? Is it even go-to-market focus? Love to just touch on that.

Phil Sawarynski, CFO, Trimble Inc.: Yeah, so look, we’re really optimistic around our transportation business. We like the setup. The business is, I talk about execution, the business has been performing in a down freight market, quite frankly. Where we’re really setting ourselves up for is when the market comes back. That’s what we, I think you’re alluding to at Investor Day. We combine the businesses under one team. As I mentioned, we look at the AECO playbook and what we’re doing there. We’re looking to replicate that in TNL. Ultimately, in the short term, what we’re looking to do with the systems and the people in the organization is to unlock that $400 million. We put out there $400 million of cross-sell and upsell opportunities within the transportation logistics business. We want to set up the structure to be able to really go after that.

That’s what we’re aggressively looking at in the short term. In the long term, when the market comes back, as you talked about, particularly in our transport business, it’s more of a volume business. We monetize based on the number of transactions and the number of shipments that are procured through the platform. As the market comes back, naturally, more volumes are going to flow through the system. That volume is at really high incremental margins at that point because there’s no additional touch points from a sales perspective. It’s just more volume flowing through the system.

What we control today is not necessarily the market itself, but what we can control is our ability to go out and sign up more customers, both on the shipper side and the carrier side, add more density to the platform, continue to perform in the environment that we’re in, and then, you know, hopefully accelerate when the market comes back because of the model that we put in place.

Clark Jeffries, Software Research Analyst, Piper Sandler: All right. Phil, we’re out of time, but absolutely great to have you in Nashville and looking forward to hearing more.

Phil Sawarynski, CFO, Trimble Inc.: Great. Thanks, all.

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