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Trimble Q3 Earnings Beat: Can Raised FY24 Guidance Drive Shares?
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Trimble (TRMB - Free Report) delivered non-GAAP earnings of 70 cents per share in the third quarter of 2024, surpassing the Zacks Consensus Estimate by 12.9%. The reported figure increased 2.9% year over year.
Revenues of $875.8 million beat the Zacks Consensus Estimate by 1.1% but declined 8.5% year over year (3% up on an organic basis).
Product revenues (35.1% of total revenues) were $307.6 million, down 30.7% year over year. Subscription and services revenues (64.9% of total revenues) increased 10.7% year over year to $568.2 million.
TRMB generated annualized recurring revenues (ARR) of $2.19 billion, which increased 13% year over year (up 14% on an organic basis).
Trimble shares fell 0.81% in pre-market trading following the third-quarter results on Thursday.
TRMB shares have overperformed the Zacks Industrial Products sector year to date. The stock has appreciated 36.6% against the sector’s return of 17.4%. The raised 2024 guidance is expected to continue the momentum in Trimble’s shares.
TRMB’s Quarterly Details
The AECO (Architecture, Engineering, Construction, and Owners) segment’s revenues (34.9% of total revenues) were $306 million, up 13.5% year over year.
The AECO segment delivered 18% ARR growth, led by successful product and go-to-market innovations, contributing to strong Annual Contract Value booking growth and the adoption of common back-end systems.
Field Systems revenues (42.8% of total revenues) of $374.6 million fell 24.4% year over year. The segment achieved 19% ARR growth, driven by Positioning Services, Trimble Catalyst positioning-as-a-service, Works Plus and the launch of the subscription version of Trimble Business Center.
T&L revenues (22.3% of total revenues) of $195.2 million climbed 1.5% year over year. The segment saw 5% ARR growth, with Transporeon achieving a double-digit rise and Maps experiencing high-single-digit ARR growth.
In the third quarter of 2024, the non-GAAP gross margin was 68.5%, expanding 350 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 42.8% of total revenues, up 410 bps year over year.
The non-GAAP operating margin was 25.7%, contracting 30 bps year over year.
Trimble’s Balance Sheet Remains Strong
At the end of the third quarter of 2024, cash and cash equivalents were $1036.9 million, up from $944.1 million at the end of the second quarter of 2024.
Total debt was $1.79 billion at the end of the third quarter, remaining unchanged from the previous quarter.
The free cash flow was $88.5 million compared with the previous quarter’s $73.3 million.
TRMB Raises 2024 Guidance
For the fourth quarter of 2024, Trimble expects revenues of $925-$965 million.
The non-GAAP operating margin is likely to be 28.5-30%.
The company anticipates non-GAAP earnings per share between 83 cents and 91 cents.
For 2024, Trimble expects revenues between $3.625 billion and $3.665 billion on a reported basis, indicating year-over-year growth of more than 3.5-4.5%. Adjusted revenues are anticipated between $3.54 billion and $3.58 billion, implying organic growth of more than 6-7%.
ARR is likely to grow more than 11-13% on a reported and organic basis.
Trimble anticipates an adjusted operating margin of 25.8-26.1%.
Non-GAAP earnings are expected between $2.79 and $2.87 per share.
Image: Bigstock
Trimble Q3 Earnings Beat: Can Raised FY24 Guidance Drive Shares?
Trimble (TRMB - Free Report) delivered non-GAAP earnings of 70 cents per share in the third quarter of 2024, surpassing the Zacks Consensus Estimate by 12.9%. The reported figure increased 2.9% year over year.
Revenues of $875.8 million beat the Zacks Consensus Estimate by 1.1% but declined 8.5% year over year (3% up on an organic basis).
Product revenues (35.1% of total revenues) were $307.6 million, down 30.7% year over year. Subscription and services revenues (64.9% of total revenues) increased 10.7% year over year to $568.2 million.
TRMB generated annualized recurring revenues (ARR) of $2.19 billion, which increased 13% year over year (up 14% on an organic basis).
Trimble Inc. Price, Consensus and EPS Surprise
Trimble Inc. price-consensus-eps-surprise-chart | Trimble Inc. Quote
Trimble shares fell 0.81% in pre-market trading following the third-quarter results on Thursday.
TRMB shares have overperformed the Zacks Industrial Products sector year to date. The stock has appreciated 36.6% against the sector’s return of 17.4%. The raised 2024 guidance is expected to continue the momentum in Trimble’s shares.
TRMB’s Quarterly Details
The AECO (Architecture, Engineering, Construction, and Owners) segment’s revenues (34.9% of total revenues) were $306 million, up 13.5% year over year.
The AECO segment delivered 18% ARR growth, led by successful product and go-to-market innovations, contributing to strong Annual Contract Value booking growth and the adoption of common back-end systems.
Field Systems revenues (42.8% of total revenues) of $374.6 million fell 24.4% year over year. The segment achieved 19% ARR growth, driven by Positioning Services, Trimble Catalyst positioning-as-a-service, Works Plus and the launch of the subscription version of Trimble Business Center.
T&L revenues (22.3% of total revenues) of $195.2 million climbed 1.5% year over year. The segment saw 5% ARR growth, with Transporeon achieving a double-digit rise and Maps experiencing high-single-digit ARR growth.
In the third quarter of 2024, the non-GAAP gross margin was 68.5%, expanding 350 basis points (bps) year over year.
On a non-GAAP basis, operating expenses accounted for 42.8% of total revenues, up 410 bps year over year.
The non-GAAP operating margin was 25.7%, contracting 30 bps year over year.
Trimble’s Balance Sheet Remains Strong
At the end of the third quarter of 2024, cash and cash equivalents were $1036.9 million, up from $944.1 million at the end of the second quarter of 2024.
Total debt was $1.79 billion at the end of the third quarter, remaining unchanged from the previous quarter.
The free cash flow was $88.5 million compared with the previous quarter’s $73.3 million.
TRMB Raises 2024 Guidance
For the fourth quarter of 2024, Trimble expects revenues of $925-$965 million.
The non-GAAP operating margin is likely to be 28.5-30%.
The company anticipates non-GAAP earnings per share between 83 cents and 91 cents.
For 2024, Trimble expects revenues between $3.625 billion and $3.665 billion on a reported basis, indicating year-over-year growth of more than 3.5-4.5%. Adjusted revenues are anticipated between $3.54 billion and $3.58 billion, implying organic growth of more than 6-7%.
ARR is likely to grow more than 11-13% on a reported and organic basis.
Trimble anticipates an adjusted operating margin of 25.8-26.1%.
Non-GAAP earnings are expected between $2.79 and $2.87 per share.
Zacks Rank & Other Stocks to Consider
Currently, Trimble carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader Computer and Technology sector are Shopify (SHOP - Free Report) , StoneCo (STNE - Free Report) and Olo (OLO - Free Report) . Shopify sports Zacks Rank #1 (Strong Buy), and Fortinet and NVIDIA both carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have risen 4.9% year to date. SHOP is set to report third-quarter 2024 results on Nov. 12.
Fortinet’s shares have gained 38.2% year to date. FTNT is set to post its third-quarter results on Nov. 7.
NVIDIA shares have surged 193.8% year to date. NVIDIA is set to report third-quarter 2024 results on Nov. 20.