Hello and welcome to Trimble First Quarter 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. As a reminder, this call is being recorded. I would now like to turn the call over to Rob Painter, President and CEO. Rob, you may begin. Welcome, everyone. Before I get started, our presentation and Safe Harbor Statement are available on our website. Our financial review will focus on year-over-year non-GAAP performance metrics on an organic basis. In addition, we will focus on adjusted numbers that we believe more accurately portray the underlying performance of our business. This means we will exclude our divested agriculture and mobility businesses. We also adjust for the approximately $50 million of January 1st term license revenue that was recognized in the first quarter of 2024 but not in the first quarter of 2025 because January 1st of 2025 fell into the fiscal fourth quarter of 2024. We exited 2024 on a strong footing, strategically, operationally, and financially. The results of the first quarter of 2025 are further evidence of the strength of our business. To understand how we are positioned to navigate the uncertainty of the moment is to understand the quality of our performance in the first quarter, which can be expressed in three words: clarity, durability, and momentum. Clarity manifests as the simplification and focus we have brought to our business over the last few years. On February 8th, we closed the sale of our transportation mobility business to Platform Science, further solidifying our strategic focus to compete and invest where we have a natural right to win. Starting with slide four, durability manifests through the quality of our business model, which we intentionally transformed over the last few years. Today, we are three-quarter software, two-thirds ARR, asset light, and operating with a strong balance sheet. We are in the business of selling productivity and efficiency outcomes to our customers, and our technologies are mission-critical. While visibility and predictability into the future is far from perfect, it is definitively higher and better than at any point in our 47-year history. In the first quarter, as detailed on slide five, momentum manifested in a beat across the board. Revenue at $841 million was up 3% organically and up 10% after adjusting for the timing of January 1. ARR at $2.11 billion was up 17% organically and was ahead of expectations across our segments. EPS at $0.61 was also ahead of expectations. Congratulations to our team and our partners. Despite the strong start to the year and our current momentum, we are maintaining our guidance for the year as we feel the prudent move is to inject a degree of conservatism into our outlook. Tariffs are modest in our software-centric business and have thus far been offset with pricing. We will all know more in three months, and we will recalibrate at that point. One area of Trimble where we are not cautious is in our AI journey, where we are moving with a clarity of purpose to better serve our customers while further strengthening our own business operations. We're not just talking; we are acting. In April, we held a virtual internal AI summit with nearly 2,500 internal attendees, where we spent a day reviewing priorities and work in progress. In addition, we have OKRs throughout the company to drive execution and accountability to AI outcomes. Slide six provides a framework for how we think about internal and external applications of AI on one axis and delivery of cost efficiencies and revenue growth on the other axis. This framing helps us allocate capital with intention. For example, our product managers are leveraging AI to develop marketing and technical requirements documentation. Our marketers are beginning to generate sales pipeline with agents mining data from our CRM systems. Our sellers are leveraging AI for sales coaching. Our customer success teams are leveraging AI for case deflection, and our software engineers are programming and testing with AI productivity tools. We are also releasing AI capabilities into our customer-facing solutions, from natural language prompted design to feature extraction out of 3D point clouds to automating invoices and even releasing standalone automation products to connect carriers and shippers. We believe we have a natural right to win in an AI forward, emphatically so given the unique scope and scale of Trimble in the physical and digital worlds. With that in mind, let's step back and share our view on the macros. In four words, opportunity coupled with uncertainty. On an absolute basis, the uncertainty of tariffs and trade policy puts sand in the gears and stokes fears of an economic downturn. Despite these fears, the business is resilient, and we outperformed in the quarter. On a relative basis, we look at how our business is competitively positioned. In this respect, if we hit a downturn, we believe we can outperform and win market share. Weak competitors will reduce investment or exit the market, and we have the ability to run cross-sell and upsell plays if new logo generation becomes more difficult. At our investor day in December, we talked about $1.4 billion of cross-sell opportunities in the portfolio. We also have the balance sheet to continue to take subscription models to market in our software and hardware offerings, thus delivering more affordable access to our technology. In summary, this leadership team has successfully managed through challenging environments by applying a simple and consistent principle: position ourselves to exit periods of challenge on a stronger competitive footing. Year to date, the opportunities have outweighed the uncertainties. Across end markets and geographies, we see pockets of strength at the same time we see pockets of modest weakness. In the last few weeks, I have met in person with dozens of global customers and partners in seven countries. Most of them were level-headed and taking a wait-and-see approach. We have seen modest softness in the public sector in the U.S. and slightly longer sales cycles with enterprise customers. On the other hand, Germany's announcement of infrastructure spend has been a positive. We see global strength in customer segments such as small to mid-sized construction companies and in industry segments such as data centers, renewables, and mining. With that context, let's talk about each of our segments, starting with AECO and a quote from an engineering customer who said the following: "With all these technologies connecting together with AI and Internet of Things, having all your solutions under one platform just makes sense." This sentiment is indicative of the success we are having with Trimble Construction One and our cross-selling efforts. In the quarter, ARR outperformed, up 19% to a record $1.29 billion. ACB bookings remained strong, growing in the mid-teens. Indicators we pay special attention to include ACB bookings, pipeline, net retention, and the lifetime value to customer acquisition cost ratio. All these indicators are healthy at the moment. In the last weeks, we have launched the 2025 versions of our BIM and engineering and architecture and design solutions, both of which are bringing new AI features to market. Moving to field systems, I'll start with a quote from a customer talking about the value proposition of our machine control and guidance as a service offering. "The Trimble offering allows me to sleep better at night. With a subscription, budgeting equipment costs on bids is easier, and it makes us more competitive. I don't have to worry about outdated software or communication between systems or that the technology we just spent thousands of dollars on is now obsolete. That's a subscription advantage that is irreplaceable." The business outperformed in the quarter, with particular strength in civil construction and advanced positioning. The subscription offering in the quote contributed 25% ARR growth in the segment to a record $358 million. An interesting and important fact is that 50% of our customers who bought machine controls as a service in the quarter were new logos, once again affirming that smart business model transformations expand addressable markets. In early April, our field systems team was at the Bauma Trade Show in Munich, where our technology was present on more than 20 OEM booths, signifying the importance of Trimble in the ecosystem and demonstrating our commitment to serve the mixed fleet. Moving to transportation, I'll start by quoting a longtime customer who said, "We are impressed by the high quality of work and expertise that Trimble brings to our digitalization." This quote is indicative of the fundamental transformation happening in our served industries, which transcends economic cycles, thus providing context for continued growth in an underlying freight recession. ARR and transportation grew 7% to a record $459 million. The split of revenue in this business is 40% Europe, Middle East, and Africa, 57% North America, and 3% rest of world. Our systems are mission-critical, which we believe provides a downside ballast if China, U.S. trade further deteriorates. With respect to KPIs in the segment, they are the same ones we think about in AECO, including ACB bookings, which exceeded our expectations in the quarter and which we expect to grow double digits this year. For market health, we look at tender rejection rates along with spot pricing for more real-time market conditions, and both are relatively steady. In the transport business, we can also see pretty clear industry segment trends. For example, in Europe, we can confirm what appears to be somewhat self-evident. The automotive segment is down, while retail and construction materials are up. In summary, clarity, durability, and momentum in the form of a strong start to the year give us confidence and conviction to stay the course. Phil, over to you. Thanks, Rob. A few items to cover before turning to the slides. On April 25th, we filed our 2024 10-K with no changes to the financials that we presented earlier this year. In addition, we recently announced a change in our auditors for the 2025 fiscal year. We're excited to welcome KPMG as our new auditor. We thank Ernst & Young for their service, and I want to offer a particularly large thank you to the Trimble team for all the hard work and dedication throughout, and we are looking forward to a successful transition. Turning to our operations, let's start with tariffs as they stand today. The total impact adds approximately $10 million per quarter to our cost of goods in the field systems segment. We've already implemented surcharges to offset this, thus we expect no impact to profitability. We are managing discretionary spend and directing capital to the most attractive market opportunities, such as data centers and infrastructure, while continuing to invest in the transformation and growth of our core business. We bought back $627 million of shares in the first quarter and have the remaining $373 million of authorization available. We continue to believe that repurchasing Trimble stock is an attractive opportunity for capital deployment given our share price today. With respect to M&A, we are primarily focused on small tuck-ins with opportunities for fast integration where we can quickly cross-sell and upsell our customer base, yielding a rapid return on investment without deploying significant capital. Let's review the first quarter of 2025 starting on slide seven. As we noted previously, we have approximately $50 million of term license renewals that are recognized on January 1. These happened in the first and fourth quarters of 2024, but not in the first quarter of 2025. The right way to look at the business progression is to normalize for this dynamic. Unless otherwise noted, I will be talking about our as-adjusted numbers, which remove the effects of the recent divestitures, which we further adjust for the January 1st term license renewals. As reported numbers, along with the reconciliation, are provided in the appendix. Organic revenue was up 10%, and ARR was strong, up 17% to a record $2.11 billion. Gross margins expanded 180 basis points to 69.9%, which shows our continued model progression despite the greater hardware mix with the field systems performance. We achieved EBITDA margins of 25.9%, which is a 100 basis points expansion year over year. Reporting earnings per share was $0.61 for the quarter. Moving to the balance sheet and cash flow items on slide eight, our reported free cash flow for the quarter was $149 million, which represents a conversion rate of one times net income. Our balance sheet is strong with $290 million of cash and a leverage ratio of less than 1.3 times, which is well below our long-term target rate of 2.5 times. From a liquidity standpoint, we are asset and working capital light and have the full $1.25 billion of availability on our revolving credit facility. Let's shift to a segment review of the numbers before we close with guidance, starting with AECO on slide nine. AECO delivered a record $1.29 billion of ARR, posting 19% ARR growth for the quarter. Operating income at 27.3% increased 50 basis points year over year. We continue to expect the segment to expand margins by about 100 basis points for the full year. The business continues to operate well above the rule of 40 and was greater than the rule of 45 in the first quarter. Next, field systems on slide ten. Revenue is up 6% and ARR growth up 25% for the quarter, where we continue to successfully execute our business model conversions. Our civil construction business was particularly strong, and ARR was driven by positioning services and sales of subscription offerings. Overall, dealer inventories went down for the quarter for our businesses and are sized appropriately for the demand, taking into account the uncertainty in the market. Operating income at 29.7% increased 280 basis points, driven by the increasing higher margin recurring mix. Finally, transportation and logistics on slide 11. Revenue and ARR were up 6% and 7% respectively for the quarter. The segment is now greater than 90% recurring revenue following the divestiture of the mobility business. We made good progress bringing the global transportation teams together in the first quarter as we execute our connect and scale strategy, which allows us to access the $400 million of cross-sell/upsell opportunities within the segment. Operating margins at 21.2% are expected to improve in the next three quarters as we continue to execute the strategy. Let me turn to guidance on slide 12. We are maintaining our full year as reported 2025 guidance with the midpoint at $3.42 billion of revenue and $2.87 of earnings per share. We are also maintaining our organic ARR growth as adjusted guidance midpoint of 14%. With the macro uncertainty Rob mentioned, we are de-risking our guidance by modestly reducing our organic revenue growth, driven mostly by non-ARR revenue in field systems and to a lesser extent transportation. This is offset by the revenue benefits we see with the change in foreign currency exchange rates along with the first quarter outperformance. We will revisit our guidance with second quarter results when we expect to have greater clarity. Looking at the calendarization, the fourth quarter of 2025 benefits from January 1st in the quarter, which is expected to bring approximately $60 million of high-margin term license revenue. We provide an updated view of this calendarization in the earnings supplement on our investor site. On an as-adjusted basis, our EPS guide implies low to mid-teens EPS growth year over year, which is consistent with our long-term model. From a cash flow perspective, our full year view is updated to be $0.9 times net income after adjusting for the $253 million cash tax payment for gain on sale of the Ag JV and approximately $35 million in M&A costs. Relative to the prior guide, we are expecting higher cash taxes and one-time items. We continue to expect that we can deliver free cash flow greater than non-GAAP net income over the long term. For the second quarter guidance on slide 14, we expect as reported revenue to be in the $815-$845 million range and EPS of $0.59-$0.65, which is consistent with the numbers we provided earlier in the year. We expect organic growth in the second quarter to be in the 2%-6% range. With that, I'll turn it back to Rob. Durability in our business. This happened by design, not by accident. We are positioned to withstand market headwinds. Momentum. We saw ROI on mission-critical applications. Our connect and scale strategy works, and we will continue to prosecute our strategy. Clarity of purpose. We have always managed with a mindset to exit challenging times on a stronger competitive basis than when we entered it. Control what we can control, embrace our values, follow the money, control our costs, execute our OKRs, lead. Operator, let's open the line to questions. We will now begin a question and answer session. If you would like to ask a question, star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please limit yourself to one question and one follow-up. Your first question comes from the line of Kristen Owen with Oppenheimer. Kristen, please go ahead. Hi, good morning. Thank you for taking the question, and congratulations on a nice start to the year. Rob, I want to double-click on the field systems business because when I look at the results of some of your large peers, it almost seems like night and day in terms of your relative performance and resilience, even against sort of the broader macro uncertainty. I am wondering if you can walk us through what is working there and if there are any shifts you are seeing in the competitive environment. I am going to ask my follow-up now because they are somewhat related. You have restructured the Cat JV, and since then, you have announced a number of these new OEM and distribution partners on the civil construction side. I'm just hoping you can contextualize those partnerships for us, help us understand go-to-market strategy, and how to think about that growth contribution to the portfolio over time. Thanks. I know it's a lot there. Hey, Kristen. Thanks for the questions, and good morning. I'll start with the addressable market view. At that level, the market is large, global, underserved, and underpenetrated. At a customer lens, they demand solutions to serve mixed fleets. We start there. Within the portfolio, what's working, I look at the intersection of product and channel, and I think we have the best-performing product in the market and the best global dealer channel in the world. At a product level, let's double-click there. We can, for example, look at SiteWorks, and our SiteWorks line of guidance supports the mid-tier machines. At Bauma, we announced support for tilt buckets on excavators, which is a need for Europe. We continue to progress on the product side to perform and to meet the opportunities out there in the market. For example, excavators are the largest machine count in the world, so the better we can serve and penetrate that market, the more we can grow our business. I talked about the business model a little bit in the prepared remarks. That subscription offering, we see that expanding the addressable market. That's something uniquely we can do. We look at workflow there. Think about linking what we're doing to link our B2W Track product to what we're doing out in the field and machine control, so that we can connect production and compare it to plan and then create action out of that. That's moving from the product or the solution up to the workflow. I would be remiss not to congratulate the team, Ron and Scott and the team. I've just said really consistent leadership and strategy and deserve a lot of credit for driving the business forward. Really proud of the results that this team and our partners delivered and have been delivering. You asked about go-to-market and where we are on that. The basis of our go-to-market, of course, is the SITECH channel, and it will continue to be so into the future. At an OEM level, we renewed our Caterpillar relationship last year, as you know, and big congrats to Jim and Joe in that transition. They have just gone at the CEO level. In the fall, we announced a relationship with John Deere and working with their smart grade line of guidance and technology. At Bauma, we announced a Liebherr relationship partnership for their factory-ready dozers. In fact, at Bauma, we had technology on over 20 different booths. Finally, we have established and are establishing a set of technology outlets, four of which have already been signed up. These technology outlets are meant to expand the reach for OEMs that we're working with, with a vision in mind to increase the adoption and penetration of the technology in the market. The pieces are really working well together now and very happy with the results of the business and proud of the team for delivering these results. Thank you for that, Paul. I'll leave it there. Thank you. Your next question comes from the line of Jason Salino with Keefe, Bruyette & Woods. Jason, please go ahead. Good morning, Rob. Good morning, Phil. This is actually Devon on for Jason Salino this morning. Thanks for taking our questions. I wanted to ask about kind of what you're hearing from customers within AECO, among construction owners and engineers. How are they thinking about their business and near-term project outlook? Have you seen any noticeable increase in budget scrutiny or sales cycle elongating in the month of April? Have those trends kind of continued into May? Just any color there would be helpful. Hi, good morning. This is Rob. I'll take the question. Overall, in AECO, it's steady as she goes. The performance in the first quarter speaks for itself: a 19% growth in ARR and ACB bookings in the high teens. What we've seen into the quarter in the last few weeks is consistent and supports the guide we have, whether you want to call that for the second quarter or for the rest of the year. Like at any time, there are for sure pockets of strength and pockets of weakness, and I would say that's true really in any market. For sure, the market is dynamic, and there's a bit of heightened uncertainty. We've seen a little longer sales cycles from the largest customers we have. I kind of call that that enterprise level of customer. We haven't seen companies changing decisions. We've seen them take longer to make decisions, but nothing that fundamentally moves the needle on our business when I say that. On the flip side of that, we continue to see pockets of strength, whether it's data centers, renewables. You go over to Europe, and you've got a different dynamic than what you'd have in the U.S., and with Germany announcing a potential half a trillion dollar infrastructure bill, that's put some wind in the sails of confidence out there in the market. A little bit of, I'd say, some signals on both sides of it, but that's positive, and we see opportunity through that uncertainty. What we've seen quarter to date supports the outlook we have for the quarter and for the year. That's really helpful context. Just a quick follow-up. I know you've called out really healthy metrics that you're seeing across the business: organic ARR growth accelerated by a point in the quarter. Have you seen any maybe deals that might have gotten pulled forward just because of the geopolitical challenges and concerns, but any deals might have shifted one way or the other that might have drove the strength in the quarter? Thanks. Yeah, it's a great question. I would separate software business from hardware business on that. If there's such a thing as a pull forward on a software sale, I'll take it all day long, but I don't actually think that that happened because we haven't changed pricing in software that would, I think, make that happen. It's really more of a relevant question on the hardware business, which is less than 25% of the revenue we have in the company now. We think that there may have been a few million, like maybe less than $5 million of pull forward in the quarter. At the same time, though, a really important metric we look at is our dealer inventories, and they went down in the quarter. The retail sales, therefore, outpaced even the wholesale sales that we had to our channel. Just to make sure that I'm clarifying that, we sell our hardware predominantly through the dealer channels today, and the software we sell direct. Thank you so much for the color and for taking my questions. Thank you. Your next question comes from the line of Tami Zakaria with J.P. Morgan. Tami, please go ahead. Hey, good morning to Team Trimble and congrats on the strong start to the year. My first question is on the $10 million tariff impact. I'm assuming you're taking pricing to offset that. Is that $10 million coming from mainly China? I'm basically trying to understand what the $10 million impact per quarter could look like if China tariffs come down from the current 145% rate, or are there other countries in that $10 million? Hey, Tami, it's Phil. Thanks for the question. The $10 million is really the product that comes into the U.S., and it's mainly more of the Canada and Mexico products that aren't USMCA compliant. Most of the China products we get are really cables and batteries and lower dollar items that we pass through some of that pricing there, but it's not a big portion of our COGS. The main items that are driving that $10 million are coming from Canada, Mexico into the U.S. that aren't USMCA compliant. Understood. That's clear. Thank you so much. My other question is, can you remind us what revenue exposure we have to federal sources and whether we should expect any impact from any dose-related cost cuts in the coming quarters? Yeah. We were not very bullish on the government business coming into the year, and it was actually a very small amount in our original guide. We have actually removed a little bit more in the current guide as well. Our exposure is very small for the rest of the year in the, call it, single-digit millions. If there are any further cuts, it will be a material impact. Perfect. Thank you. Your next question comes from the line of Jonathan Ho with William Blair. Jonathan, please go ahead. Hi, good morning. I just wanted to understand a little bit better your comments around AI. Could you talk a little bit about what you're seeing in terms of the potential here for customers to maybe reevaluate their solutions and how maybe this benefits Trimble from the competitive stance? Hey, Jonathan, good morning. It's Rob. I'll take the question. From a competitive stance and a strategy view, the thing that is so unique about Trimble is the scope and scale of the data that we see across the industry life cycle continuums, whether that's in transportation, connecting the carriers and shippers over that plan, procure, execute life cycle, or it's in construction, connecting the architects, engineers, contractors, and owners across the life cycle from plan, design, to build, to operate. That scope and scale is unique, and we talk about it in forms of trillions, billions, millions, and thousands. We manage over $1 trillion of construction through Trimble. We manage tens of billions of freight through Trimble. We have millions of users of our software around the world and hundreds of thousands of instruments and the machines in the real world use and operate on Trimble technology. There is something that is really unique with respect to the corpus of data that we have. We see customers increasingly talking about—they may not use the exact words—talking about moving from task optimization to systems optimization, solving higher-order problems, thinking about workflow and ecosystems, not just tasks or products. In an AI sense, I think this is a great setup for our company and the value that we can provide to our customers. Increasingly, in the customer conversations I have, they start and end by talking about data and how can they unlock more of their data and get more insights out of it, and how do they operate in common and connected data environments to link Trimble and non-Trimble data together so that they can achieve the productivity, quality, safety, transparency, and sustainability they need out of their work. With that all as a backdrop, I'm really bullish about the work that our teams are doing in the AI realm. There's a whole aspect of what we're doing internally. You're asking more of an external customer-facing question. We already are delivering capabilities that are AI-driven capabilities to our customers, whether it's natural language-based design to AI-based rendering and design packages, whether it's feature extraction out of 3D point clouds in a geospatial context, or automating the connection between procurement and quotation between shippers and carriers. To me, I'm really pleased with the work that the team is doing, and we are still so early in our journey. I think it's a great setup here for the path ahead of us. That makes a ton of sense. Can you also give us a bit more detail on the machine control as a service and how much of new business is maybe coming in through this? Are there any potentials to flip existing hardware customers? Any color would be appreciated. Thank you. Yeah, on that one, what we saw in the quarter is really interesting. Actually, it's not just the quarter. We've seen this over the last few years we've been doing this. The business does continue to grow. The team had a record level of bookings. We call it Works Plus as the offering. The new logos that we won, or excuse me, the customers that we won in the quarter, 50% of them, in fact, more than 50%, were new logos. That's super interesting and compelling to me. To me, that's demonstrable evidence that the business model can expand the size of the addressable market. We've seen that in every single software product where we've made these transitions, as we've seen the unit counts go up as it becomes more accessible. What's also interesting, and it links to the back half of your question, is that we've seen it be used in competitive swap-outs. There's really, I see an increasing level of competitors that we are able to swap out, and this business model contributes to it. I mean, the overall strategy does as well. The business model makes it more affordable for the customers to make these fleet swaps to move to Trimble. What you should expect to see and hear from us over time is, with that basis of the subscription offering, think about the land and expand plays to be able to deliver more value in the form of additional software and workflow that we can put on top of that base. Thank you. Your next question comes from the line of Rob Wertheimer with Melius Research. Rob, please go ahead. Thanks. Good morning. I had a couple of questions just on digging in a little bit to the stickiness of the software business. I guess the first would be just that we're now a few quarters into slow down, inflection, decline, and interest-rate-sensitive construction. I'm wondering if you've seen any material change in churn among your kind of smaller-end contractor customers, smaller-end customers of whatever sort in software construction. Secondly, Rob, I think you touched on your scale and your ability to sort of gain share in downturns. I'm wondering if you had any expanded comments on what you were thinking might struggle in the software ecosystem if the downturn comes, if it's a moment for things to flock to the bigger platforms. Maybe just talk about what you're thinking about there, and I'll stop. Thank you. Hey, Rob, thanks for the question. Yeah, the stickiness of the software, I think the best place I can start would be an AECO comment where the net retention over a trailing 12-month basis is held steady at about 110%. That's already a great number in and of itself, and it's holding steady. That's the best evidence I can give in terms of gross retention and continuing to upsell and cross-sell in the portfolio. You asked about smaller customers in turn. Actually, we've seen more growth in the smaller customer base and the small-mid-size customer base in the construction realm anyway, because that we see as a very untapped market. Actually quite bullish about the ability to increase the level of penetration in that market. At the same time, I understand it's logical to think about the balance sheets of smaller players in the world as compared to the larger ones. One thing that's a ballast, I think, for the whole industry is there's significant backlog overall. Now, as you know, that's differential depending on which state or which part of the world you're in, which end markets you focus on. I'm taking a broad paintbrush to say that there's a healthy amount of backlog. It's not the first thing we think about is balance sheet liquidity of our smaller customers. They're doing well, and we see actually quite a lot of growth there. You asked about gaining share in a downturn and to put a little more color on that. The construction ecosystem, technology ecosystem is a vibrant ecosystem. There's a lot of really interesting companies out there. We have a venture capital arm where we've invested in a few companies. I think if you step back and look at that ecosystem, like most startups, most won't make it. That's the nature of the game. Those that do, I think many of them turn out to be features as opposed to businesses that to get to that, there's one thing to get to the first one that's a $5 million of revenue. What tends to gate a lot of those companies is go-to-market from getting the $10 million or getting to the $100 million of ARR. That's when you find, in many cases, they really act more as features on a bigger platform as opposed to standalone products. We've done a few tuck-ins ourselves in the last couple of years in AECO. In each case, what we've seen is when we put a capability under our go-to-market arm, whether that's in field HR capabilities or in payments, as two examples, we've significantly accelerated the size of those businesses by plugging it into our go-to-market engine. I would posit that in a tougher economic environment, it's going to be harder for the smaller companies to raise money and to have the balance sheets to withstand storms if they come. Now, maybe they won't come, but if they come, I think we're in a position to do quite well and to gain share in a downturn. Perfect. Thank you. Your next question comes from the line of Chad Dillard with Bernstein. Chad, please go ahead. Hey, good morning, guys. What are you messaging to distributors about the tariff-driven pricing actions? How much are you raising price? When does this hit? Is it a surcharge? Is it a formal price raise? For the $10 million that you call out, do you expect to pass that entirely on, or is there some sharing between yourself, the distributor, the customer? Just trying to think through that. Hey, Chad. Good morning, and thanks for the question. It's Rob. It's a pretty easy answer. It's North America only. It's a surcharge. The surcharge level is 4%. Put 4% in context of what we might normally see as pricing in a given year. That is, let's say, doable. We've seen the market move to that price. It's actually quite straightforward. Okay. Simple enough. Just on transporting, can you just give a little bit of color on what you saw in the market and how you're thinking about that business for the balance of the year? Yeah, good question. In that business, let's say at financial performance level, the business grew high single-digit on a year-over-year basis. When we look forward to the rest forward into 2025, we still believe we've got the pipeline to drive double-digit growth in the bookings of the business. On a year-over-year basis, the profitability of the business increased. Increasingly, we're not looking at it as just transporting. We look at it in the context of the overall segment. Probably over time, we'll talk less and less about transporting on its own. That is because we're connecting more of the transporting products, whether that's visibility or marketplace capabilities, in with our TMS, our transportation management system capabilities that we have and doing more things together. The organization has mostly moved, actually, already to a functional organization. As we go to market, we can take the full set of capabilities in a more coherent way to market. I guess the other thing I can add, Chad, is within transporting, we get an interesting view in the world from the shippers and what volume of goods that they're moving. In the prepared remarks, when I mentioned that we can see automotive units down, that's because there's less automotive transports happening on the transporting platform. Conversely, we can see in retail and consumer products, we can see the transport units continuing to grow on a year-over-year basis. That insight can shape how we allocate capital internally for which end markets to go after and which geographies to go after. The transporting, as you know, is also majority European-based today. That gives us, I'd say, actually probably a little bit incremental level of confidence for that business as compared to North America. I mean, both markets are in a freight recession, but at the moment, I like some of the setup of Europe, especially if Germany had to do the infrastructure bill. That's all for me. Thank you. Your next question comes from the line of Robert Mason with Baird. Robert, please go ahead. Yes, good morning. The field systems' 25% ARR growth kind of steps off the page. It's pretty impressive. I was going to see if you could drill down a little further into that. You called out both on the positioning service as well as the civil construction side. How did the growth shake out there? Are we working off a smaller base in some of the newer offerings, driving the organic growth to that 25% level? Part of the reason I ask is it seems like we should expect some moderation through the year just based on the guidance and how we should think about cadencing there as well. Hey, Rob. Thanks for the question. The shift to ARR in the business has been very intentional. It's for sure not by accident. The teams have done a lot of work to transition business models. We stand at $358 million of ARR. That's a lot of ARR. That's less than the $1.29 billion of ARR in AECO or the $459 million of ARR in the transportation and logistics businesses. That 25% has an aspect of strong execution, and I'll come back to that. It also has an aspect of us being newer in the transition. There is a lapping effect by the second half of the year that'll bring us down to the guide that Phil put forward in that business. Still, though, a very healthy level of growth. Another reason to like that ARR within field systems is I think over time there's been a view on us as cyclicality within a hardware business. And to an extent, that's true. At the same time, we see a secular adoption of technology. To the extent that there's that undertone of cyclicality, this ARR provides, let's say, mutes that level of underlying tone of cyclicality that would be in the business, which is another reason to like what we're doing there with ARR in field systems. With respect to calling out some of the specific areas of growth, I talked about Works Plus. That's machine control and guidance offering. We continue to grow there. In our survey business, we have a product or a solution called DA2, or also called Catalyst. Think of that as positioning as a service in a GIS application on a global basis that continues to have very strong growth. In our positioning services business, as you know, we deliver centimeter-level accuracy on a ubiquitous basis around the world, whether that's on farms or surveyors or construction sites. That's been a great business for us for a long time. We've expanded those capabilities in the automotive market, and we see growth there in that automotive end market. Think about lane detection and safety systems there on paths towards automation. Even we've got examples in our survey business of taking product and moving it fully to a ratable basis. A good amount of things happening, whether it's a full offering of the entirety of the system or it's a split hybrid offering where you're paying a nominal amount upfront for the hardware and then the rest through the software. At a certain level, that makes sense because increasingly in the world, we think about software-defined systems, software-defined hardware. I think we're pretty well ahead of the curve in the competitive environment with the way we're approaching this market, and the other results speak for themselves at the moment. Yes. That's great. Rob, you referenced Germany in particular. We'll see how their plan plays out. Could you just speak to how you think you're positioned there? I know some of your bundles vary by region, but just in that region in particular, when you would expect to potentially see some uplift around what they're talking about? Yeah. Hey, I was just in Germany at Bauma, and then actually was there again about a week ago. At Bauma, I'd really give a shout-out not only to our team, but our partners at SITECH Deutschland. They're just doing a terrific job executing. The SITECH team operates at scale. It's the largest competitor in the market, and that relative market share, I think, matters. They were able to pull off an off-site, even at Bauma, to do an off-site to see the technology in action on a small job site. That goes so far in terms of driving business. In fact, they did drive millions of euros of new business. You can see that just, I'll call it the quality of the execution that I mentioned in one of the answers, the SiteWorks product and bringing ability to support tilt buckets, which is very much a European need, including in Germany. Giving them additional products and capabilities drives optimism in the market. Now, some of that optimism in fairness could be coming off of low lows. I'll take that, though, to the extent that any optimism there is a good thing. It speaks for itself, probably, in a civil business that's going to correlate to infrastructure. Any sign of support for that, regardless if the package, you're right. It hasn't happened yet. I'd say just the talk of it is a new kind of conversation in the country, and that has provided a level of optimism. On the software side of the business, I'd say the market continues to be healthy. Think about vertical construction in that respect, and we have a number of capabilities. They are a different set of capabilities than we have in North America. It's a little more engineering-centric than construction-centric. There, the team really, I just think they do a nice job of controlling the things they can control. That includes how we go to market, how we transform that, and how we package our offerings through the TC1 bundle. They all seem to be working at the moment. Very good. Thank you. You're welcome. Your next question comes from the line of Jerry Revich with Goldman Sachs. Jerry, please go ahead. Yes, hi. Good morning, everyone. Hi, Jerry. Rob, I wonder if we just go back to AECO, really outstanding ARR, organic growth in the quarter. Can you just talk about how much TC1 contributed? What was that cross-selling contribution versus other drivers of the acceleration in an environment where a lot of businesses are not accelerating? Just to put some context around your comments around longer sales cycle that you're seeing, is that to imply that ARR growth for AECO could slow somewhere to the mid-teens in the second quarter based on what you're seeing? Can we just put a finer point on just quantifying what that longer sales cycle means in your prepared remarks? Thanks. Hey, Jerry. Thanks for the question. Okay. ARR in the first quarter up 19%, ACB bookings in the high teens. If we look at those ACB bookings and double-click, about two-thirds of those bookings are TC1 bookings. TC1 now is the majority of the bookings that we have. TC1 itself is a commercial framework for how we do business. In some cases, you could be on a TC1 framework and still buying an individual solution. Let's say the good news within that would be that it gives us an easier way to cross-sell and upsell to that customer because they already have the foundational basis of the contract. Of course, what we think about most are the bundles within TC1. There we've got over 20 purpose-built bundles. We continue to roll those out globally. More and more of those bundles are making their way to Europe, and all of that helps drive those TC1 bookings. The TC1 bookings themselves, on a year-over-year basis, were well in excess of the overall bookings in the queue being in the high teens. I just can't stress enough how important this is to us and how good this has been for our efforts to go after that cross-sell and upsell, which at Investor Day, we quantified as about a billion-dollar opportunity. There is a lot to like within TC1 and what the team is doing. I also want to mention it's not just linkages within AECO, but think about TC1 linkages to field systems, linking that estimating or tracking capability that may be technically in an AECO software to what we're doing with the field instruments that show up in field systems. A customer is not going to care about which segment of Trimble they're doing business with. They're doing business with Trimble. These are workflows that we can uniquely deliver. Expect to see more connections of TC1 bundles into the civil market here this year and beyond. You asked about sales cycles. I've seen it more on the very largest customers within AECO. To be even more specific, think about buying ERPs, construction ERPs. Construction ERP, if you delay your decision by some weeks, you haven't fundamentally altered your ability to deliver value. It kind of doesn't surprise me that we've seen a little bit of hesitation in terms of, and that's at the largest end of the market. When we see things like that happen, we are pretty good about moving the motions to other parts that are moving faster. We've seen more growth in small to mid-size contractors. We'll move the people and the capital to where the business is and where it's ready to go. That business at the enterprise level, it hasn't gone away. It doesn't shape or translate in any kind of meaningful difference of view that we have. The nature of an ARR business is you can't really go down all that fast, especially in the second quarter. Feel good about the business that we have in front of us and the trajectory of that. I'd say in the public sector as well, that one, by the way, Phil commented on the business we do with the federal government. We also sell to state and local governments. Some of those have been a little bit slower, but they've been offset by where we've seen the pockets of strength, whether that's at industry segments or it's at customer-size segments. I hope that helps, Jerry, give you some color. It's super helpful, Rob. Thank you. In terms of T&L margins, Phil, obviously, you've got a transition going on with the Dave S& Jerry. Can you just talk about where the quarter came in relative to your plan? It looks like maybe there's some work to do to get to the full-year guide that's better than normal seasonality. Can you just expand on the timing of when those trending costs go away and how it's playing out versus your plan? Yeah. Thanks, Jerry. As we think about it, as you said, with the mobility divestiture, we do have some stranded costs this year. We are going to start out the year around that 21%, and our guide is still at that 24% for the year. We continue to see the margin improvement. Think about Transporean and the bookings and strength that we had over the last year. As we talked about, bookings take a while to manifest because of the ramp time. We start to see the inflection sort of as we progress throughout the year. That helps with the margin expansion as we continue to move throughout the year with that. As far as the stranded costs, as you know, some of that is around software contracts and other things that are hard to get out of immediately. That will take a little bit of time. We do expect that to still be a headwind in 2025. As we start to move into 2026, along with some of the actions and things like that we're taking, we think it'll be neutral as we go forward after 2025. The downside of those software contracts. Thank you.