Trimble Inc. Reports 9% Revenue Decline in Q3 2024, Highlights Strategic Changes

Trimble Inc. reported its financial results for the third quarter of 2024, revealing a total revenue of $875.8 million, a decrease of 9% compared to $957.3 million in the same quarter of 2023. The decline was primarily driven by a 31% drop in product revenue, which fell to $307.6 million from $444.0 million, while subscription and services revenue increased by 11% to $568.2 million. For the first three quarters of 2024, total revenue was $2.7 billion, down 6% from $2.87 billion in the prior year. The company's net income for the quarter was $40.6 million, or $0.16 per diluted share, a significant decrease from $74.9 million, or $0.30 per diluted share, in the third quarter of 2023.

The financial performance reflects several strategic changes within the company. Trimble completed the divestiture of its Ag business in April 2024, which contributed to a pre-tax gain of $1.7 billion. This divestiture, along with the acquisition of Transporeon GmbH in April 2023, has reshaped Trimble's operational focus. The company has reorganized its business segments into Architects, Engineers, Construction and Owners (AECO), Field Systems, and Transportation and Logistics (T&L), aiming to enhance growth and operational efficiency.

Operationally, Trimble reported a significant increase in annualized recurring revenue (ARR), which reached $2.19 billion, reflecting a 13% year-over-year growth. The company noted that subscription and services revenue now represent 76% of total revenue for the third quarter, up from 67% in the same period last year. The total employee headcount remained stable, with no significant changes reported. However, the company did classify certain assets and liabilities related to its Mobility business as held for sale, anticipating a transaction with Platform Science expected to close in the first half of 2025.

The filing also highlighted challenges faced by Trimble, including a higher effective income tax rate of 44.5% for the third quarter, compared to 5.7% in the prior year, largely due to disallowed losses related to the pending Mobility divestiture. The company’s total liabilities decreased significantly to $3.99 billion from $5.04 billion at the end of 2023, primarily due to the repayment of debt following the Ag divestiture. Trimble's cash and cash equivalents increased to $1.04 billion, up from $238.9 million at the end of 2023, providing a stronger liquidity position.

Looking ahead, Trimble remains focused on executing its Connect and Scale strategy, which emphasizes geographic expansion, software and service growth, and strategic acquisitions. The company anticipates that the ongoing macroeconomic conditions, including geopolitical tensions and inflationary pressures, may continue to impact its operations. However, Trimble is optimistic about its ability to leverage its diversified business model and recurring revenue streams to drive future growth.