Trimble Inc.

Thank you. I would now like to turn the conference over to Rob Painter, President and Chief Executive Officer. Rob, you may begin your conference.

Welcome, everyone.

Before I get started, our presentation is available on our website, and we ask that you refer to the safe harbor at the back. Our financial commentary will reflect non-GAAP performance metrics, including organic growth comparisons, which refer to the corresponding period of last year, unless otherwise noted. In addition, our P&L commentary will primarily emphasize our as-adjusted numbers, which exclude our agriculture business, better reflecting Trimble on a go-forward basis. Starting on slide four, during the first quarter, we continued to advance our Connect and Scale strategy, which involves digitally connecting workflows within targeted industry segments and creating scale across Trimble through shared technology platforms. Our strategy delivers outcomes in the form of unique value to our customers. and sustainable value creation to our shareholders. We want to convey three key messages today, starting with the solid performance in the quarter, where all three segments performed ahead of expectations, as detailed on Slides 5 and 6. $2.03 billion of ARR grew 13% organically. As-adjusted revenue grew 8% organically. As-adjusted gross margins were a record 67.5%. As-adjusted EBITDA margin expanded 290 basis points to 27.9%. and free cash flow was strong at $227 million. We are confirming our previous total year guidance despite unfavorable currency moves, and we will provide an update in our next call as we build confidence in the months ahead. Key message number two is a strategic portfolio highlight. In the first quarter, we divested certain water monitoring assets, our 21st divestiture in the last four years. And on April 1st, we closed our PTX Trimble joint venture. I'm proud to have established this precision ag joint venture with Eric Hansoyda and his team at Agco. This is a high-character team with a bold vision. These moves simplify and focus our organization and provide cash to strengthen our balance sheet and support our capital allocation strategy. Key message number three on slide seven is that our new reporting segments are in place, which align to our new organizational structure. We provided historical data on the segments to our investors on April 12th. It takes an enormous amount of work to effect change on this scale, and I'm grateful to our Trimble colleagues for their courage and dedication. The sum of these actions will simplify and focus our business, thereby enabling us to reset to a new and better baseline as we aim to perform to our full potential. As evidence, on an as-reported basis, our first quarter revenue was 73% software services and recurring and 58% recurring. While on an as-adjusted basis, our first quarter was 77% software services and recurring and 63% recurring. Turning to the segments, let's start on slide eight with our AECO segment. Connect and scale is well in motion here, and it is working. Connect is about connecting users, data, stakeholders, and workflow across the industry lifecycle continuum. Our right to win starts with the breadth, depth, and connectedness of our offerings. It bookends by delivering solutions that connect the physical and digital worlds. Scale is about making Trimble easier to do business with and enabling efficient and effective growth. In the quarter, we moved our go-to-market team to an account-based selling model. We expanded our prepackaged Trimble Construction One offerings, and we released our next version of Systems Transformation, which is providing us new insights into our customers. Mark Schwartz and his team delivered record first-quarter bookings, an 18% increase in ARR, and margin expansion of 430 basis points. This business is a multi-year overnight success, and we trust the new reporting structure now gives enhanced visibility to the quality of the business we have been transforming over the last few years. To emphasize the point, this is a scaled $1.1 billion ARR segment operating as a rule of 40-plus business, in fact, a rule of 50-plus in the quarter. Market conditions remain favorable at the moment, with strength in subsegments such as reshoring and onshoring of manufacturing, EV and battery plants, data centers, and renewable energy projects. The physical side of our business is largely conveyed in our new field systems reporting segment, with key highlights on slide 9. This business is predominantly hardware, but that discrete word underplays the importance of this business to our strategy. Think of this as industrial IOTs. the data collection node in the physical world that provides us the ability to connect the physical and digital worlds. In this business, we are continuing to transform our selling models, moving towards hybrid models where we increasingly monetize aspects of the solution as recurring revenue. Thus, the segment revenue splits approximately 50-50 as hardware and software. On an as-adjusted basis, which excludes our agriculture business, Rambizio and his team grew revenue by 1% while increasing operating margins by 250 basis points to 26.9%. Software services and recurring revenue are 48% of the business and ARR grew 14%. Evidence of our connect and scale strategy in motion in this segment. Market conditions remain mixed and overall slightly positive. We see strength in the same sub-segments as AECO, including infrastructure spend. On the cautious side, We see economic weakness in pockets of Europe and Asia Pacific, most notably through lower OEM retail unit sales and continued weakness in residential construction. We are closely monitoring U.S. GDP growth along with global interest rate dynamics and how that will impact capital purchases. Closing our segment commentary on slide 10, transportation and logistics began the year with a solid start. We closed the Transporean acquisition last April. Thus, it is excluded from the organic comparison in the first quarter. On the heels of record fourth-quarter bookings, the Transporeon team delivered a record first-quarter bookings. Chris Keating and his team reorganized their go-to-market strategy and recommitted to process excellence and organizational focus. They are also delivering innovation, most notably through AI-driven product releases and autonomous procurement and autonomous quotation, which have found product market fit. They predominantly deliver this bookings growth in a European region that continues to experience a freight recession, thus demonstrating that selling a winning value proposition and backing it up with innovation and process improvement can generate positive results, even in a tough market environment. They also delivered a multi-hundred thousand dollar annualized contract value global cross-sell win, selling autonomous procurement to an existing enterprise software customer that is notably in North America. We've also begun cross-selling our MAPS solutions into Transparency's European customer base. We remain confident this is an exciting Trimble business with a compelling right to win and an attractive business model that enables a series of land and expand product-led growth opportunities. In context of the bookings and ARR growth, we will continue to allocate capital to our go-to-market expansion. In the rest of the segment, the 4% organic revenue growth was driven by our enterprise and MAPS teams, which each grew double digits. Excluding Transporeon, we have delivered consistent margin expansion since the end of 2021. Including Transporeon, the segment expanded margins by 480 basis points in the quarter. Before I turn it over to Phil for his first call as our incoming CFO, let me once again express my gratitude to David Barnes for his service and partnership over these last few years. Phil, over to you.