Trimble shares drop 17% after Q3 profit and sales miss

Shares fell 17.3% in regular trading as of 3:59 p.m. ET, from a regular-session close of $65.61.

Trimble missed third-quarter profit and sales estimates on Nov. 4, when it reported non-GAAP earnings of 86 cents per share against the 88 cents consensus estimate. Revenue of $966.8 million also fell short of the $992.07 million consensus estimate.

The company also narrowed its full-year 2026 forecast for revenue and non-GAAP earnings per share.

Trimble is a global technology company that enables essential industries including construction, geospatial and transportation, according to its press release.

Revenue rose 7% from $901.2 million a year earlier, and 7% on an organic basis, which excludes currency effects and acquisitions and divestitures closed in the prior 12 months.

Here's how the company did:

• Non-GAAP diluted EPS: 86 cents per share vs. 81 cents a year earlier, 88 cents expected
• Revenue: $966.8 million vs. $901.2 million a year earlier, $992.07 million expected
• GAAP diluted EPS: 25 cents per share vs. 46 cents a year earlier
• GAAP net income: $59.1 million vs. $111.5 million a year earlier

Annualized recurring revenue, or ARR, which the company defines as the estimated annualized value of its recurring revenue, reached $2.56 billion. That was up 11% from a year earlier, and up 10% on an organic basis.

President and CEO Rob Painter said, "Our third quarter results surpassed expectations on both revenue and earnings per share, while delivering record annualized recurring revenue of $2.56 billion."

Segment results

Here's how the company's segments did during the quarter:

• AECO: revenue of $395.0 million vs. $358.5 million a year earlier; operating income of $132.2 million vs. $113.9 million
• Field Systems: revenue of $435.8 million vs. $408.7 million; operating income of $128.7 million vs. $136.7 million
• T&L: revenue of $136.0 million vs. $134.0 million; operating income of $35.7 million vs. $34.6 million

Field Systems revenue rose from a year earlier, but its operating income declined over the same period.

Costs and charges

Restructuring costs within operating expense were $24.9 million in the quarter, compared with $14.2 million a year earlier.

In the first nine months, Trimble recorded a $562.0 million goodwill impairment charge tied to its T&L segment. The release explains the charge: "The impairment was triggered by a sustained decline in market capitalization and stock price reflecting heightened macroeconomic uncertainty and lower market multiples for software businesses."

GAAP net loss for the first nine months was $313.7 million, against net income of $267.4 million a year earlier.

Net income swung from a profit of $98.9 million in the first quarter of fiscal 2026 to a loss of $471.7 million in the second quarter, according to its SEC filings.

2026 guidance

For full-year 2026, the company expects revenue of $3.91 billion to $3.94 billion, within the $3.90 billion to $3.95 billion range it gave on Aug. 12.

It expects non-GAAP earnings of $3.63 to $3.69 per share, narrowed from the $3.60 to $3.70 range it gave on Aug. 12.

For the fourth quarter, Trimble expects revenue of $1.03 billion to $1.06 billion and non-GAAP earnings of $1.13 to $1.19 per share, on approximately 231 million shares outstanding.

Cash and capital returns

During the third quarter, Trimble repurchased about 4.0 million shares for $231.7 million. Repurchases of common stock totaled $552.9 million over the first nine months.

Adjusted EBITDA, which the company defines as non-GAAP operating income plus depreciation, cloud computing amortization and income from equity method investments, was $278.5 million, or 28.8% of revenue, compared with $269.4 million a year earlier.

Free cash flow for the first three quarters was $643.6 million. The company spent $236.5 million on acquisitions of businesses over the same period.

The company will host a conference call on Nov. 4 at 8:00 a.m. ET to review the results.