Trimble cuts growth outlook as European freight market slows

Trimble reported higher third-quarter revenue and adjusted earnings per share on Wednesday, but lowered its full-year recurring revenue growth forecast due to challenges in the European freight market and reduced demand for positioning services. The technology company, based in Westminster, Colorado (NASDAQ: TRMB), reported $967 million in revenue for Q3, up 7% year-over-year, with earnings of 86 cents per share, meeting Wall Street expectations.

Annual recurring revenue (ARR) grew 10% to $2.564 billion, slightly below management's expectations. Trimble maintained its full-year revenue forecast at $3.925 billion and raised its adjusted earnings outlook, but reduced its expected ARR growth to around 10%, down from the previous forecast of 12% to 14%. CEO Rob Painter said Trimble's performance showed resilience despite a tough supply chain environment and softer European demand, partially offset by strength in the U.S. The transportation and logistics segment reported 2% revenue growth and 5% ARR growth, with operating margin increasing 50 basis points to 26.3%.

Painter noted that the European transportation market remained mixed, with freight volumes and spot pricing conditions impacting the company's recurring revenue performance. Despite these challenges, Trimble sees mid-single-digit growth in transportation and logistics revenue and ARR for the year, raising its operating margin expectation for the segment to 25%.

The company also highlighted growth in AI-powered freight procurement, with revenue from autonomous freight procurement and quotation solutions increasing more than 20% year-to-date. Trimble expanded its connected fleet and yard technology, with PC*MILER web services processing over 5.5 billion routing requests monthly and recent enhancements including advanced batch analytics and preferred-route settings.

Additionally, the Dock and Yard platform provides greater visibility and helps reduce truck waiting times. Trimble's AECO business remained the largest growth engine, with ARR growth of 13% to a record $1.636 billion and operating margin expanding to 33.5%.