Presentation for Trimble. I'm Rob Mason, the Senior Analyst, covering advanced industrial equipment, of which Trimble is a key part of the coverage. And just real quickly on Trimble, you know, we think of Trimble as driving efficiency in core workflows in several key industries with very domain-specific solutions linking the physical and the digital. Happy to have with me up on stage Phil Sawarynski, who's the CFO of Trimble. Phil's going to walk through a couple of slides, give us a quick overview of Trimble, and then we'll jump right into Q&A. Thanks, Phil. Good. Thanks, Rob. Let's get started. Seen the legal disclaimer there. How many of you know Trimble, and how many of you are just learning Trimble? Let's ask the first one. How many know Trimble? OK, so how many are learning Trimble? OK. Let me give you—let me talk to this slide a little bit. What I'll do is I'll talk about past, present, and future, how we think about Trimble. I've been at the company over 15 years, where we started 40-plus years ago around precise locations, so think GPS, GNSS technology. We started off mainly more hardware business, perpetual licenses. We grew over time. We did a lot of acquisitions. We grew organically. Over the years, we had arguably the greatest depth and breadth of products in some of the industries that we served. That's the time we've been in construction for a long time. We've been in agriculture and other businesses. Over that period of time, again, we've had a lot of product out there and a lot of solutions. Where that naturally lent itself to, circa 2018 or 2020, is what we started to do was our connect and scale strategy. What that means is connecting our solutions from a data standpoint, which makes it easier for our customers. I think in terms of if you're a general contractor and you have multiple products, you want to have them connected. You're trying to solve problems and create high ROI across your business in how you operate. The connection of the data, how it flows, how you get insights and information, and your action upon that provides a really high ROI. What we started to do was actually start to connect those workflows. What we also did was trying to make it easier to do business with our customers. When you have distinct products and point solutions, you may have multiple contracts. You have multiple terms and conditions. We wanted to make it easier. We also wanted to give our sales teams the insights on the customers, what they were buying and what they should be buying. Part of the connect and scale strategy was, again, connecting the data and the information and the workflows for our customers. It is also us in the back end connecting the system so that we had full visibility into our customers and allow us to create these cross-sell and these up-sell opportunities. You see here on the slide, when we talked at Investor Day across our construction and our transportation logistics business, we believe we have about $1.4 billion of opportunity just selling existing products to our existing customers. This connect and scale strategy and the digital infrastructure that we've been putting in place is an enabler to unlock that. When we think about the opportunity as longer term, our total for the business, there's over $70 billion of addressable market, of which only about 25% is penetrated. That gives us a lot of opportunity to continue to grow in the spaces that we're at. What does that result when we think about today? Over $2 billion of ARR, growing double digits and with higher gross margins and continuing to expand over time. Over this time, too, we've done some portfolio moves. I mentioned agriculture. We sold that business into a JV with AGCO. We still have a 15% stake. Earlier this year, we closed on our mobility business, which was in our transportation group, and sold that to Platform Science, which we own 32.5% of that combined entity. We have also transformed the portfolio over this time. In 2025, we are almost 80% software services recurring, with about 20% still hardware and perpetual. We do believe it is important to have that connectivity between the field and the office, the digital and physical, because data is moving. You are doing the data collection in the field. You are moving it back to the office to actually create your design, create your work in construction. You take that information and you put it back in the field because you actually have to build a physical offering. We think that's important and a competitive advantage and a unique product portfolio that Trimble only has. You see that manifesting itself. The portfolio changes, the connect and scale strategy. You see the growth in the business and the opportunities that we have to continue to grow. That's today. In our Investor Day in December, when we talk about the future, you see our goals down here. We use the 3-4-30 sort of construct, which is $3 billion of ARR, $4 billion in revenue, and 30% EBITDA margins by the end of 2027. Those are our financial goals as we think about the future. Next slide here, some specifics at the company level on the financials. What's interesting about this is if you look at the revenue slide, and I'll go back to like 2021, $3.6 billion. This is as reported. Sort of in three years, you see, oh, that's only flat revenue. That's as reported. That does not include the divestitures with AG, mobility is in the 2024 number. Look at those two numbers, then look to the right and look at the recurring revenue and how we've transformed the company from 2021, $1.4 billion to $2.2 billion in that same time frame. What I'd point out in this slide is the transformation of the company, the expansion in the EBITDA margins. You see the growth in the EPS per share. That's the present state. As I talked about the future state in 2027, we continue to see the growth in the software. We continue to see the gross margin expansion with the operating leverage that ultimately manifests itself into EBITDA margin expansions. Just quickly double-clicking here on the businesses themselves. We do have three businesses. Our AECO software business, and this is pretty much all the recurring revenue business. You can see the reach that we have when I talked about the products earlier and what we had built over time from the start of the company. We have over $1 trillion of funding going through our technology. There is a lot of the construction spend going through Trimble. We have a significant amount of the ENR customers. This is where we have the reach. Our heritage has allowed us to unlock now this cross-sell and up-sell opportunities with existing customers. That is the $1 billion you can see there. Our field systems is about 50% hardware now and 50% software services recurring. We continue to transition our perpetual licenses in the field systems business to ratable over time. We talked about Investor Day. There is a 200 basis point-300 basis points headwind on revenue because we are consciously converting our perpetual offerings into subscriptions. On the transportation logistics, you can see the density we have. For example, in our transportation business, we are 1,400 shippers, over 150,000 carriers in that platform. We have the depth, the breadth, and the reach and the products within the customers. This is what gives us the ability to continue to cross-sell, to up-sell, and continue the growth that we put out there at Investor Day. I think that is my high-level. Perfect. Fly-through of Trimble. We'll dive right in. Send your questions up if you have any. We'll work those in. Phil, let's just maybe touch on the current business environment first, just what you're seeing. The first quarter that you reported came in better than you expected on several metrics. At the same time, maybe out of prudence, you kind of held the guide. Just maybe speak to the puts and takes that you're seeing in the marketplace right now. Yeah. Again, we had a good quarter. We were above guided on revenue. It was a good quarter. I think we were cautious, just like everybody else. Come April, when there was a lot of tariff discussions, Liberation Day. Just when we think about the tariffs themselves at the last earnings call, think about it in sort of twofold. One was the direct impacts because we do have the hardware business. As I said, it's only about 20% of Trimble now. Our exposure is much less just in general around that. When you double-click on what the tariff exposure was, we said it's about $10 million a quarter. Relatively small on a $3.4 billion revenue business company. We're offsetting that with surcharges. The net impact on the financials is small. That's sort of the direct impact on the tariffs. The bigger question is the indirect tariff. What happens with the macros? What happens with the sentiment? In April, when we went through our earnings call, we saw pockets of opportunity. I'd say we still see project backlog. Our civil construction business on the hardware, our AECO business performed in Q1. You saw some more of a sentiment, which is just a cautiousness around what does that mean for the back half of the year, in particular in our field systems business, which is more of a book and burn business. That's where there could be a little bit more discretionary spending around that business. Customers just potentially worried about cash flow and sort of being a little bit conservative on sort of capital spends. With that macro uncertainty and given particularly the tariff situations, we just want to be conservative on our guide at that point and just see how things manifest itself. We're obviously eager to update it on our next earnings call based on what we're seeing. Very good. You already touched on it, the connect and scale, the business model transformation, everything that's happened there to date. A lot of that has been internal facing just in terms of getting the infrastructure, the internal plumbing rewired at Trimble to go forward with this type of business model. Where do you stand on that part of the effort, just kind of the heavy lifting on that side? Yeah, great question. There's sort of multiple facets. Where we started was with our AECO software business. We thought that was the biggest opportunity out of the gate. We also wanted to create proof points for ourselves along the way. We started in the AECO business. We're further along in that. We've rolled out our strategy and what we call our DX, which is sort of the digital infrastructure to support the connect and scale strategy. What that is, is really taking these individual legal entities and ERPs, combining them so that we can create a single, what we call our Trimble Construction One framework contract. What we want to do is put customers on that framework contract so that as we cross-sell and up-sell, we can just add those to the existing contract as opposed to having separate contracts. So again, reducing the friction there, being able to create natural bundles that make sense for our customers out of the gate. That is where we started with the digital infrastructure. North America, if I think about geographies now, we did North America. Obviously, you have seen the success that we have had there around the execution. We have recently rolled that out into Europe. We are doing a similar sort of motion in Europe, which is a TC1 contract and being able to cross-sell and up-sell into Europe. The next step for AECO is going to be the APAC region. We are still going to be rolling that out in the future. When I think about the other businesses, we still are going to be looking at our field systems business and our transportation logistics business and then rolling out a similar type of framework. Field systems are a little different because that has an indirect go-to-market. There are some nuances there. Transportation logistics is very similar to AECO. We expect to have something really similar as far as the build-out and what we are doing within transportation logistics and replicating what we did in AECO. Those are sort of the main blocks from a geographic standpoint and from a business standpoint. There are a lot of other things that we are doing as well. We are continuing to advance on our e-commerce solutions to allow much more self-servicing from our customers. Think about adding additional licenses and being able to administer your licenses from a single portal and be able to add and move users without having to call Trimble, for example. There is a bunch of other work around the periphery that we are continuing to do as well as we move forward to make it ourselves much easier to do business with from a customer standpoint. It also reduces some of our costs because it is less touch points for us the more the customers can self-serve. OK. Just around that cost bucket of the transformation itself, is there incremental cost each year as you progress? Or is that cost kind of rolling backwards? Or where do we stand on that? Yeah. Yeah. As you can imagine, by doing this big of a digital transformation, there's a lot of capital costs that have to be amortized. That is in the outlook and the numbers we provided. I would actually expect that over time we actually become more efficient. Because if you think about trying to manage a significant amount of ERPs, a significant amount of legal entities, if you can bring that into a single standardized process and systems, that should actually give us some good OpEx leverage as we go forward. Again, you have some puts and takes. You're adding on some of the capital costs as you amortize that. I would expect us to get more efficient relative to where we stand to offset that as we go forward. Yeah. One of the dynamics from the transformation has been the shift towards more software, less hardware. At the same time, hardware is a critical component of the overall solution, probably a differentiating component of the Trimble solution. How do you think about, one, where to put the differentiation in your solution, whether it needs to be in the hardware or the software? How does that compare to the competitive landscape that you face in this business? Yeah. I think you hit it in the first, which is we believe it's a competitive advantage to have both. You have to be relevant in both. Our investments, we continue to invest and innovate into our hardware. We have our SX10 that we came out with, which is completely innovative, combined scanner total station that was never out there. We want to have the innovation on the hardware side. We continue to innovate and add capabilities, particularly around AI when we think about software. I think it's an and, not an or. Because they're both important, we've got the more capabilities we have in the field to be able to do the scanning, the reality capture that we can then take that and we can move that into a Trimble Connect, which is our collaboration tool. The architects, the engineers, the contractors, and the owners can all collaborate and see a model that is, we call, our source of truth. It is a singular model that everybody can work off of. You can comment. You can collaborate off of it. We want to have the capabilities on both sides of things as we think about where we're allocating capital. Just to touch on the AECO segment, which is mostly almost exclusively software, I suppose. Long string of kind of high teens, growth, ARR-type growth in that business, multiple quarters now. You just kind of talk about the underpinnings of that growth. How much is upsell, new logos, price? And how does that mix shift, if at all, on the look forward? Yeah, great question. Currently, roughly from a booking standpoint, we're about two-thirds existing logos, one-third new logos. I think part of this is the low-hanging fruit and some of the things I talked about with the connect and scale and getting the visibility into the customers and just putting that capability into our sales team's hand. Mark Schwartz, who runs the business, has done a great job where our account or our product-based sellers are now under a single sales team and their account-based selling. They have all the products to be able to sell those customers and be having the visibility of what are we selling to a customer today, what should we be selling to that customer, and what should they be using, and being able to go to those customers and show them the ROI between, again, the connected workflows and also the bundling and why it's easier. Having the suite of products at the Trimble level will give you higher ROI as you think about running your business versus just looking at single-point solutions. That's a really powerful tool. I think that starts to manifest itself in sort of that two-thirds, one-third, because I think that's a lower friction sale right now to be able to go after. As I think about just then sort of up-leveling that on the growth, which is where you started, I start with the addressable market and the penetration. We said at InvestorRates for AECO, it's about a $50 billion addressable market that's only 20% penetrated. We see that opportunity is to be able to continue to grow just from a penetration standpoint as we continue to innovate and add more capabilities. That also gives us additional runway. I think about it, first of all, what's the addressable market? Is this a market share play? Maybe a little bit, but it's largely a penetration play. We just need to adopt the or have the customers adopt more and more of the technology. Maybe one of the things I'll point out on that as a good example is we came out at our Dimensions, which is our user conference in November, with ProjectSight, which is our project management software. We came out with a free version of that. The point of that was to actually get customers that were potentially using spreadsheets or less sophisticated technology to manage their projects to give them an opportunity to very easily onboard them. They can be up and running in a very short amount of time. They can use the technology and get them to start to understand that there are high ROI solutions out there versus what they've been using. This is really one of our ways that we're actively pursuing, trying to get higher penetration with some of our products. Yeah. Maybe along that line, you commented on the first quarter that SMBs, small, medium size, you had greater traction or you saw greater traction. Is that a direct correlation to that? Or do you think it's just where they are in the buying cycle? These are smaller deals. Maybe larger deals, selling cycles are a little more elongated in this environment. Just kind of tie that, whether it's to the freemium version or ProjectSight or. Yeah. And that one, from the freemium version, I think that one we really are counting the success in the number of accounts that we're bringing on. The way it works is you've got a couple of projects that you're limited to. We want to get folks on board, understand the technology. Eventually, we monetize it by either moving to the paid version or you churn. I think we're still early on from a monetization standpoint there. What we are seeing is we've got a couple thousand additional new accounts. We are seeing customers sign up for it, which we see as a really positive proof point. Going back to your question, where we see the puts and takes, what we talked about is earlier, what we saw was this elongated sales cycle. It was with the macro uncertainty, the particularly large enterprise customers in our owner segment, some of the state and local DOTs, we saw those being a little bit elongated and a little bit different. The larger customers tend to already have some sort of technology, and they're looking at potentially replacing it. Just the nature of some conservatism is just, let's see what the market's going to do and the macros are going to do. I don't necessarily need to change right now because I already have something. I think that's where we saw some of that on the DOT side, the local DOT side. It was uncertainty around Fed funding and what was going to actually flow. Just trying to understand what was going to happen from that standpoint. We saw a little bit slower sales cycles there that we talked about. You're right, where we saw a lot of the opportunity within the AECO is with the SMB contractors. Part of that is adopting new technology because they typically haven't applied a lot of technology. When you think about moving up and continuing to, if they're growing their business, is applying more technology, we sell ROI. Once you're getting them in the door, whether it's via the free version or ProjectSight or just having the conversations with them, they're seeing the benefit of that. We can see the penetration there and where we saw the success in Q1. Maybe just last question around AECO. It's almost pure software from a segment standpoint, rule of 45 type business already today. But its EBITDA margins, segment margins, maybe below some software pure plays. But it's also the area you're getting the highest growth. How do we think about how you're balancing growth investments versus margin expansion in that segment going forward? We definitely believe that the highest value is growing the AR business due to the compounding effect over time with our net retention rates. We are purposefully allocating our capital from an expense standpoint into the AECO business because that is the highest growth rate. We had 19% ARR growth in Q1, and we want to continue that growth rate there. We are purposefully putting a disproportionate amount. Actually, if you look at the incremental OpEx at the company level, the vast majority of that is actually going into the AECO business to drive the ARR growth. We see that as the path to significant value creation for the company. That is why you see a little bit. Maybe you are not seeing the EBITDA margin because we are making a conscious decision to drive that. I think you really need to look at the ARR growth versus the revenue growth, even though it's 17% versus 19% at the business level. Yeah, that's been our focus. We believe that, again, that's the highest value. The field system segment, more balanced in terms of hardware, software. Also in this last quarter, you had 25% ARR growth in that business too. It stepped up. Just how are you thinking about, and that's also a segment you've made some changes in the go-to-market channel strategies. You speak about how you expect those to play out here over the next year or two, what the end result will be from those changes. Yeah. That's a good one. Let me unpack the ARR first and the field systems. There's a couple of things that are driving that. We were at 25% for Q1 was the growth. I think about it in a couple of ways. There's new products that are coming out of the gate, and we're just offering it as a subscription. We did that last year. That actually had a big boost because you could only buy it as a subscription. We're starting to lap ourselves this year on that. We believe that we're going to moderate to more like the mid-teens this year for that as we go throughout the year. There's also conversions that we're doing. I mentioned this earlier, but we have a lot of perpetual licenses that we're converting to term and ultimately subscriptions. It's about 200 basis point-300 basis points of headwind on the revenue growth. So we're also doing some of that conversions. But we believe that mid-teens sort of growth is at the long term. And throughout the 2027, I think we're sort of low to mid-teens as we see things moderate in that business. But there is a little bit of some specific dynamics over the past year, which is why we had that 25% growth in Q1. Yeah. To the extent you've broadened your ability to touch OEMs in that business, how should we think about those newer OEMs starting to ramp up as well as their channel and aftermarket exposures? What Rob's alluding to is we've had a long-term relationship with Caterpillar. We have a JV with them. Over time, we've continued to evolve that contract and the relationship. Last year, we had a shared vision of more technology adoption in the machines. We changed the contract a little bit because what Trimble wanted to do is really, we want to lead from the technology standpoint. When you think about the customers, our customers, a lot of our contractors have mixed fleets. What they'd like to do is actually standardize on the technology. What we've done is we're working on expanding the Trimble distribution network. Previously, a lot of our aftermarket in the civil construction would go through SITECH, which were arms of the Caterpillar dealers. What we're doing is we're expanding that now into what we call our Trimble technology outlets, which allows us to better address the mixed fleets by putting technology on other OEM products and allowing our general contractors that have mixed fleets to actually be able to standardize on Trimble technology regardless of what the brand is. On the flip side, Caterpillar is pushing to get more factory adoption on the technology, which we think is a win-win for both of us because ultimately what we're trying to do is serve the customers and really drive technology to them and preferably the Trimble technology as being their unified platform. Yeah. Yeah. I want to touch on the transportation segment real quickly. You've had a double-digit bookings growth in the transport part of that business. What's that mostly driven by? Because that serves a market that the freight market has not been all that vibrant, both here and in Europe. How have you been able to drive kind of double-digit bookings growth? It's a similar theme is that there's a penetration play. There's a significant amount of freight that's not driven through our platform in Europe. For those of you that aren't familiar, we bought a company called Transport a few years ago. It's a European-based company. It's really connecting shippers and carriers and being able to reduce a lot of friction in the transactions to be able to move freight, particularly in Europe. Where a lot of the bookings growth is, is we continue to work with the shippers and the carriers and want to continue to grow the density of that platform. As you said, we're in a freight recession effectively and have been for a while. We've continued to grow, which I think is just a testament to the business and the leadership there. What we're focused on is we want to come out of any sort of recession a better company and a stronger company. Focusing on the bookings growth, it's certainly helping in the near term, that's manifesting itself in the revenue growth. We really think long term because as we get out of a freight recession and we start to see the growth, about two-thirds of the transporting business is transactional. When that volume growth goes up, we monetize each transaction that is procured through our platform. As the volume goes up, that's incremental revenue. That's where we can see a disproportionate amount of both revenue growth. That's really high margin because the incremental cost to deliver that is very, very small. That is where really we want to position ourselves right now so that one is obviously for the near term. We also think about things in long term. We believe that once we exit a freight recession in Europe, that that really can provide an inflection on that business. Yeah. In the last minute, Phil, I wanted to just touch on capital allocation. Historically, Trimble, as you noted, has been very acquisitive. Where does M&A fit into the capital strategy at the moment? What are you trying to achieve with M&A? It's absolutely part of our DNA as a company. We'll continue to do M&A. What we've been focusing on right now are smaller tuck-ins. Part of the strategy is we think about, and I'll use Viewpoint as the example, it's a foundational ERP product. What we can do is find new capabilities via inorganic, bring those in very quickly, integrate them in the system. That now gives another capability for our sellers to go right back to our existing customers, say, now we have an integrated offering. Here's a capability. It has a high ROI. You have a TC1 contract. We can easily add this new capability to your contract. That gives us the ability to cross-sell and upsell with new capabilities. Smaller, very tightly tight fits on the bolt-ons. That's the playbook that we've been operating on. Yeah. Okay. Very good. We are at time. We'll break there. There is a breakout session in the Aster A room afterward if you have any additional questions. Thank you. Thank you.