TRIMBLE INC. (TRMB)

CIK: 0000864749. SIC: 3829 Measuring & Controlling Devices, NEC. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Manufacturing > SIC Major Group 38 > SIC 3829 Measuring & Controlling Devices, NEC

SEC company page: https://www.sec.gov/edgar/browse/?CIK=864749. Latest filing source: 0000864749-26-000015.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000864749.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2026-01-02.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and the related notes. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and those listed under “Risk Factors.” This section of this report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this report can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K, for the year ended January 3, 2025.

EXECUTIVE LEVEL OVERVIEW

Trimble is a leading technology solutions and platform provider, enabling office professionals and field workers to connect their workflows and industry lifecycles, driving a more productive, efficient, and sustainable future. With a focus on the industries that build, maintain, and move the world, the comprehensive depth and breadth of our solutions are transforming the way the world works, making it easier for Trimble customers to focus on what matters—getting the job done right.

Our representative customers include asset owners; general and specialty contractors; architects, engineers and designers; surveyors; energy and utility companies; transportation shippers and carriers, as well as state, federal, and municipal governments. Further information on our business is presented in Part I, Item 1, “Business” of this report.

Our growth strategy is centered on multiple elements:

•Continue to execute on our Connect & Scale strategy;

•Deliver customer outcomes that can enable productivity, quality, safety, transparency, and environmental sustainability;

•Focus on software and services;

•Address attractive markets with significant growth and profitability potential;

•Capitalize on domain knowledge and technological innovation that benefit a diverse customer base;

•Drive geographic expansion with a localization strategy;

•Optimize go-to-market strategies to best access our markets; and

•Pursue strategic and targeted acquisitions, divestitures, joint ventures, and investments.

Our focus on these growth drivers has led to sustained revenue and profitability, evolving into a more streamlined and resilient business model. We continue to experience a shift toward a more significant mix of recurring revenue as demonstrated by our success in driving annualized recurring revenue (“ARR”) of $2,392.3 million, which represents growth of 6% year-over-year at the end of 2025. Excluding the impact of foreign currency, acquisitions, and divestitures, organic ARR growth was 14%. This shift toward recurring revenue has positively impacted our revenue mix, growth, and profitability over time and is leading to improved visibility in our businesses. Our software, services, and recurring revenue represented 79% and 76% of total revenue for 2025 and 2024. Additionally, we continue to maintain focus on increasing our mix of higher margin recurring revenue, which was accelerated by the Ag divestiture that closed in the second quarter of 2024 and the Mobility divestiture that closed in the first quarter of 2025.

As our solutions have expanded, our go-to-market model has also evolved with a balanced mix between direct, distribution, and OEM customers as well as enterprise-level customer relationships.

Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, we refer to organic revenue growth, which is a non-GAAP measure. For a full definition of ARR, organic ARR, and organic revenue growth as used in this discussion and analysis, refer to the “Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” found later in this Item 7.

Impact of Recent Events on Our Business

Acquisitions and Divestitures

We acquire businesses that align with our long-term growth strategies including our strategic product roadmap and, conversely, we divest certain businesses that no longer fit those strategies. This is demonstrated by the 13 acquisitions and 23 divestitures that we have completed since 2020.

Mobility Divestiture

On February 8, 2025, we completed the sale of our Mobility business to Platform Science in exchange for equity ownership interests with a fair value of $253.9 million. The fair value was based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. Following the closing of the transaction, we own, or have rights

27

Table of Contents

to acquire, 32.5% of Platform Science’s expanded business comprised of (i) shares of preferred stock, with certain liquidation preferences, that represent 28.5% ownership, and (ii) common stock warrants allowing us the rights to acquire 4% of additional ownership.

Upon closing of the transaction, we deconsolidated $277.3 million of net assets including $145.3 million of goodwill, and we recorded our equity investment at its fair value under the measurement alternative election, which represents a non-cash investing activity. As a result, we recognized a cumulative, pre-tax loss of $30.6 million from the held for sale date in the third quarter of 2024 to the closing date. Mobility was reported as a part of our T&L segment.

The combined business aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems.

Ag Divestiture

On April 1, 2024, we completed the sale and contribution of our Ag business to AGCO in exchange for $1.9 billion of cash proceeds and an equity ownership interest in PTx Trimble, a JV that was formed by Trimble and AGCO, with a fair value of $275.6 million. The fair value was based on a combination of the equity value, primarily the transaction price, and an option pricing model for a put and call option. Following the closing of the transaction, we own 15% of the JV.

Upon closing of the transaction, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and we recorded our equity investment at its fair value under the equity method of accounting, which represents a non-cash investing activity. As a result, we recognized a pre-tax gain of $1.7 billion in the second quarter of 2024, which includes the gain for our retained 15% ownership interest in the JV. The sale and contribution of the Ag business excluded certain GNSS and guidance technologies. Ag was reported as a part of our Field Systems segment.

Macroeconomic Conditions

Macroeconomic conditions continue to present significant challenges globally, driven by geopolitical tensions, tariff and trade policies, exchange rate and interest rate volatility, and persistent inflationary pressures. The heightened trade tensions and related imposition of tariffs and export control restrictions between the United States and its trading partners, the extent and duration of these tariffs, and their impact on global economic conditions remain uncertain and depend on various factors, including international negotiations, policy responses, potential exemptions, and shifts in global supply and demand. If there was a deterioration in the global economy, the economies of the countries or regions where our customers are located or do business, or the industries that we or our customers serve, the demand for our products and services may decrease. We are closely monitoring global trade developments. Our strategy to shift away from a hardware-centric businesses towards a more significant mix of recurring revenue is intended to mitigate any potential negative impacts on our business operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenue, costs of sales, operating expenses, and related disclosures. We consider the accounting policies described below to be our critical accounting policies. These critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the consolidated financial statements, and actual results could differ materially from the amounts reported based on these policies. Our accounting policies are more fully described in Note 1 “Description of Business and Accounting Policies” in Item 8 of this report.

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Revenue is recognized net of allowance for returns and any taxes collected from customers. We enter into contracts that may include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations; however, determining whether promised products or services are accounted for as separate performance obligations may require significant judgment.

Judgment is also required to determine standalone selling prices (“SSP”) for promised goods or services. We use a range of amounts to estimate SSP and determine whether there is a discount to be allocated based on the relative SSP of the various products and services. We estimate SSP considering multiple factors including but not limited to, our internal cost, pricing practices, sales channel, competitive positioning, and overall market and business environments. As our offerings and markets change, we may be required to reassess our estimated SSP and, as a result, the timing and classification of our revenue could be affected.

28

Table of Contents

Income Taxes

We are a U.S.-based multinational company operating in multiple U.S. and foreign jurisdictions. Judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and may not accurately forecast actual tax audit outcomes. Determining whether an uncertain tax position is effectively settled requires judgment. Changes in recognition or measurement of our uncertain tax positions would result in the recognition of a tax benefit or an additional charge to the tax provision.

Income taxes are accounted for under the liability method, whereby deferred tax assets or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if we believe it is more likely than not such assets will not be realized.

We are subject to the periodic examination of our domestic and foreign tax returns by the IRS, state, local, and foreign tax authorities who may challenge our tax positions. We regularly assess the likelihood of adverse outcomes from these examinations in determining the adequacy of our provision for income taxes.

Goodwill, Divestitures, and Intangible Assets

When acquiring a business, we allocate the purchase consideration to the assets acquired (including intangible assets) and liabilities assumed based on their fair values at the acquisition date. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.

When divesting a business, a significant portion of the gain or loss may be impacted by the goodwill allocated to the divested business and the fair value of any equity interests acquired in exchange for the disposal group. We allocate a portion of the applicable reporting unit’s goodwill to the divested business using the ratio of the fair value of the divested business compared to the fair value of the reporting unit. The fair value of the reporting units, divested businesses, and acquired equity interests is generally determined using a combination of the discounted cash flow method and the guideline company method. The significant assumptions used in the discounted cash flow model to estimate the fair values include certain assumptions that form the basis of the forecasted results, specifically, revenue, revenue growth rates, and discount rates. These significant assumptions are forward looking and could be affected by future economic and market conditions.

We evaluate goodwill on an annual basis in our fourth quarter or more frequently if indicators of potential impairment exist. To determine whether goodwill is impaired, we first assess qualitative factors. Qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, or other relevant company-specific events. If it is determined more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount, we perform a quantitative analysis. Alternatively, we may bypass the qualitative assessment and perform a quantitative impairment test.

When performing a quantitative approach, we compare the reporting unit’s carrying amount, including goodwill, to the reporting unit's fair value. The estimation of a reporting unit's fair value involves using estimates and assumptions, including expected future operating performance using risk-adjusted discount rates. If the reporting unit's carrying amount exceeds its fair value, an impairment loss is recognized.

We review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable based on their future cash flows. The estimated future cash flows are primarily based on assumptions about expected future operating performance.

29

Table of Contents

RESULTS OF OPERATIONS

Overview

The following table shows revenue by category, gross margin and gross margin as a percentage of revenue, operating income and operating income as a percentage of revenue, diluted earnings per share, and annualized recurring revenue compared for the periods indicated:

2025

2024

Dollar Change

% Change

(In millions, except per share amounts)

Revenue:

Product

$

1,135.2 

$

1,284.0 

$

(148.8)

(12)%

Subscription and services

2,452.1 

2,399.3 

52.8 

2%

Total revenue

$

3,587.3 

$

3,683.3 

$

(96.0)

(3)%

Gross margin

$

2,477.9 

$

2,396.3 

$

81.6 

3%

Gross margin as a % of revenue

69.1 

%

65.1 

%

Operating income

$

592.0 

$

460.7 

$

131.3 

29%

Operating income as a % of revenue

16.5 

%

12.5 

%

Diluted earnings per share

$

1.76 

$

6.09 

$

(4.33)

(71)%

Non-GAAP operating income (1)

$

988.1 

$

937.2 

$

50.9 

5%

Non-GAAP operating income as a % of revenue(1)

27.5 

%

25.4 

%

Non-GAAP diluted earnings per share (1)

$

3.13 

$

2.85 

$

0.28 

10%

Annualized Recurring Revenue (“ARR”) (1)

$

2,392.3 

$

2,257.8 

$

134.5 

6%

(1)    Refer to “Supplemental Disclosure of Non-GAAP Financial Measures and Annualized Recurring Revenue” of this report for definitions.

Basis of Presentation

We use a 52 to 53-week fiscal year ending on the Friday nearest to December 31, which for 2025 was January 2, 2026. 2025 was a 52-week year, and 2024 was a 53-week year. 2026 will be a 52-week year.

2025 Compared to 2024

Revenue

2025

Change versus 2024

% Change

Product

Subscription and Services

Total Revenue

Change in Revenue

(12)

%

2 

%

(3)

%

Acquisitions

1 

%

1 

%

1 

%

Divestitures

(12)

%

(8)

%

(10)

%

Organic growth

(1)

%

9 

%

6 

%

Note that the fiscal year of 2025 began on January 4, 2025 compared to the fiscal year of 2024, which began on December 30, 2023. This significantly impacted overall Company year-over-year comparisons, particularly for AECO organic subscription and services, due to: (a) the recognition in the first quarter of 2024 for January 1 annual software term license renewals (“January 1 software renewals”), and (b) the recognition of an additional week of subscription and services revenue in the fourth quarter of 2024, resulting from the 53-week year. For the total Company, the organic impact of the software renewals and additional week in 2024 was an approximate 2% negative impact on revenue growth for 2025.

Total organic revenue increased due to subscription and services growth, partially offset by the January 1 software renewals and the additional week.

Organic product revenue slightly decreased due to lower demand in surveying and positioning products, partially offset by strong end-user demand for Civil Construction solutions.

Organic subscription and services revenue increased primarily due to strong software term license and subscription growth across all segments, particularly in AECO. The increase was partially offset by the impact from the January 1 software renewals and the additional week.

30

Table of Contents

Gross Margin

Gross margin and gross margin as a percentage of revenue increased due to the improved mix of higher margin subscription and software term license sales, lower intangible amortization expense due to fully amortized intangibles, as well as the divestiture of lower margin businesses.

Operating Income

Operating income and operating income as a percentage of revenue increased primarily due to organic revenue and gross margin expansion, and to a lesser extent, lower acquisition and divestiture transaction expenses, partially offset by the loss of divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin divestiture income.

Research and Development, Sales and Marketing, and General and Administrative Expense

The following table shows research and development (“R&D”), sales and marketing (“S&M”), and general and administrative (“G&A”) expense along with these expenses as a percentage of revenue for the periods indicated:

2025

2024

Dollar Change

% Change

(In millions)

Research and development

$

630.7 

$

662.3 

$

(31.6)

(5)%

Percentage of revenue

17.6 

%

18.0 

%

Sales and marketing

$

646.0 

$

603.8 

$

42.2 

7%

Percentage of revenue

18.0 

%

16.4 

%

General and administrative

$

483.1 

$

547.9 

$

(64.8)

(12)%

Percentage of revenue

13.5 

%

14.9 

%

Total

$

1,759.8 

$

1,814.0 

$

(54.2)

(3)%

R&D expense decreased primarily due to divestitures, partially offset by increased compensation expenses. We believe that developing and introducing new solutions are critical to our future success, and we expect to continue the active development of new products.

S&M expense increased primarily due to higher marketing and consulting expenses related to revenue growth, as well as higher compensation expense, including commissions, partially offset by the impact of the divestitures.

G&A expense decreased primarily due to higher consulting and transaction expenses in the prior year and the impact of the divestitures, partially offset by additional software and technology expenses to support our Connect & Scale strategy and higher compensation expense.

Amortization of Purchased Intangible Assets

The following table shows amortization of purchased intangible assets for the periods indicated:

2025

2024

Dollar Change

% Change

(In millions)

Cost of sales

$

65.2 

$

93.3 

$

(28.1)

(30)%

Operating expenses

106.8 

105.7 

1.1 

1%

Total amortization expense of purchased intangibles

$

172.0 

$

199.0 

$

(27.0)

(14)%

Total amortization expense of purchased intangibles as a percentage of revenue

5 

%

5 

%

In 2025, total amortization expense of purchased intangibles decreased primarily due to the expiration of prior years’ acquisition amortization.

31

Table of Contents

Non-Operating (Expense) Income, Net

The following table shows non-operating (expense) income, net for the periods indicated:

2025

2024

Dollar Change

% Change

(In millions)

Divestitures gain, net

$

3.0 

$

1,687.9 

$

(1,684.9)

(100)%

Interest expense, net

(74.4)

(90.7)

16.3 

(18)%

Loss from equity method investments, net

(0.2)

(48.1)

47.9 

(100)%

Other loss, net

(11.0)

(3.9)

(7.1)

182%

Total non-operating (expense) income, net

$

(82.6)

$

1,545.2 

$

(1,627.8)

(105)%

Non-operating expense, net increased primarily due to the Ag divestiture gain in the prior year.

Income Tax Provision

Our effective income tax rate for 2025 and 2024 were 16.8% and 25.0%. The decrease in the tax rate was primarily due to gains from the Ag divestiture in 2024.

The OBBBA, signed into law on July 4, 2025, includes changes to U.S. federal tax regulations. We have accounted for its tax implications during 2025 based on our current interpretation of the legislation, and the impact to our 2025 tax rate is immaterial. The Company continues to evaluate the impact of the OBBBA and currently believes it will not have a material impact on our future effective income tax rate.

Results by Segment

We report our financial performance, including revenue and operating income, based on three reportable segments: AECO, Field Systems, and T&L.

Our chief operating decision maker (“CODM”) views and evaluates operations based on the results of our reportable operating segments under our management reporting system. These results are not necessarily in conformance with U.S. GAAP. For additional discussion of our segments, refer to Note 8 “Segment and Geographic Information” in Item 8 of this report.

The following table is a summary of revenue and operating income by segment compared for the periods indicated:

2025

2024

Dollar Change

% Change

(In millions)

AECO

Segment revenue

$

1,498.6 

$

1,358.6 

$

140.0 

10%

Segment revenue as a % of total revenue

42 

%

37 

%

Segment operating income

$

512.1 

$

463.6 

$

48.5 

10%

Segment operating income as a % of segment revenue

34.2 

%

34.1 

%

Field Systems

Segment revenue

$

1,539.5 

$

1,535.9 

$

3.6 

—%

Segment revenue as a % of total revenue

43 

%

42 

%

Segment operating income

$

478.1 

$

442.0 

$

36.1 

8%

Segment operating income as a % of segment revenue

31.1 

%

28.8 

%

T&L

Segment revenue

$

549.2 

$

788.8 

$

(239.6)

(30)%

Segment revenue as a % of total revenue

15 

%

21 

%

Segment operating income

$

120.5 

$

155.1 

$

(34.6)

(22)%

Segment operating income as a % of segment revenue

21.9 

%

19.7 

%

32

Table of Contents

The following table is a reconciliation of our consolidated segment operating income to consolidated income before taxes:

2025

2024

(In millions)

Total segment operating income

$

1,110.7 

$

1,060.7 

Unallocated general corporate expenses

(122.6)

(123.5)

Amortization of purchased intangible assets

(172.0)

(199.0)

Acquisition / divestiture items

(19.1)

(81.6)

Stock-based compensation / deferred compensation

(151.5)

(163.5)

Restructuring and other costs

(53.5)

(32.4)

Consolidated operating income

592.0 

460.7 

Total non-operating (expense) income, net

(82.6)

1,545.2 

Consolidated income before taxes

$

509.4 

$

2,005.9 

AECO

Change versus 2024

2025

% Change

Change in Revenue - AECO

10 

%

Foreign currency exchange

0 

%

Organic growth

10 

%

Organic revenue increased due to strong demand for subscription offerings. Revenue benefited from cumulative growth along with an expansion of customers across many products, with the largest impacts resulting from Construction Management Systems, Architecture & Design, and MEP solutions. The increase was partially offset by an approximate 5% negative impact from the January 1 software renewals and the additional week.

Operating income and operating income as a percentage of revenue increased primarily due to revenue and gross margin expansion, partially offset by the January 1 software renewals and additional week. Operating income as a percentage of revenue for 2025 was relatively flat.

Field Systems

Change versus 2024

2025

% Change

Change in Revenue - Field Systems

— 

%

Acquisitions

1 

%

Divestitures

(6)

%

Organic growth

5 

%

Organic revenue increased primarily due to strong end-user demand and competitive wins for Civil Construction solutions. The increase was partially offset by lower demand in Surveying.

Operating income and operating income as a percentage of revenue increased primarily due to organic revenue and gross margin expansion, partially offset by the loss of Ag divestiture income. In addition to organic revenue and gross margin expansion, operating income as a percentage of revenue was favorably impacted by the loss of lower margin Ag divestiture income.

T&L

Change versus 2024

2025

% Change

Change in Revenue - T&L

(30)

%

Acquisitions

2 

%

Divestitures

(35)

%

Foreign currency exchange

1 

%

Organic growth

2 

%

Organic revenue increased primarily driven by MAPS and Transporeon subscription revenue growth, partially offset by the impact from the prior year’s additional week. The impact of the additional week was an approximate 1% negative impact on segment revenue growth for 2025.

33

Table of Contents

Operating income decreased primarily due to the loss of Mobility divestiture income. Operating income as a percentage of revenue increased primarily due to the loss of lower margin Mobility divestiture income.

34

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

At the End of Year

2025

2024

Dollar Change

% Change

(In millions, except percentages)

Cash and cash equivalents (1)

$

253.4 

$

747.8 

$

(494.4)

(66)

%

As a percentage of total assets

2.7 

%

7.9 

%

Principal balance of outstanding debt

$

1,400.0 

$

1,400.0 

$

— 

— 

%

Years

2025

2024

Dollar Change

% Change

(In millions)

Net cash provided by operating activities

$

386.2 

$

531.4 

$

(145.2)

(27)

%

Net cash (used in) provided by investing activities

(37.0)

1,861.1 

(1,898.1)

(102)

%

Net cash used in financing activities

(868.4)

(1,864.2)

995.8 

(53)

%

Effect of exchange rate changes on cash and cash equivalents

24.8 

(19.4)

44.2 

(228)

%

Net (decrease) increase in cash and cash equivalents

$

(494.4)

$

508.9 

(1) Includes $9.0 million of cash and cash equivalents classified as held for sale as of January 3, 2025.

Operating Activities

The decrease in cash provided by operating activities was primarily driven by higher tax payments related to the Ag divestiture, and to a lesser extent, higher incentive bonus payments. The decrease was partially offset by lower interest payments.

Investing Activities

The increase in cash used in investing activities was primarily related to the $1.9 billion of proceeds received from the Ag divestiture in the prior year.

Financing Activities

The decrease in cash used in financing activities was primarily driven by the $1.7 billion repayment of debt in the prior year, offset by $688.4 million higher cash paid in repurchases of common stock compared to the prior year.

Cash and Cash Equivalents

We believe that our cash and cash equivalents and available borrowing capacity under our existing lines of credit, along with cash provided by operations, will be sufficient in the foreseeable future to meet our anticipated operating cash needs, including additional software and technology expenditures related to our Connect & Scale strategy, debt service, acquisitions, and any stock repurchases under the stock repurchase program.

In December 2025, we entered into a credit agreement for a five-year unsecured revolving loan facility in an aggregate principal amount of $1.25 billion (the “2025 Credit Facility”), which replaced the 2022 credit facility (the “2022 Credit Facility”). The 2025 Credit Facility contains an option to increase the borrowing to up to $1.75 billion with lender approval. As of January 2, 2026, there was no outstanding debt under the 2025 Credit Facility.

In the second quarter of 2024, we completed the Ag divestiture and received $1.9 billion of cash proceeds, subject to working capital adjustments. Approximately half of the proceeds were used in 2024 to pay down debt and make a tax payment of $122.0 million related to the divestiture transaction. The remaining proceeds were used in 2025 to repurchase stock and pay the remaining $277.4 million final tax payment for the Ag divestiture, which was made during the second quarter of 2025.

The recently enacted OBBBA permanently repeals the domestic R&D capitalization requirement. As a result, we expect cash tax reductions of approximately $53 million in 2025 and approximately $53 million in 2026.

Our material cash requirements include the following contractual and other obligations and cash needs:

Leases

We have operating leases primarily for certain of our major facilities, including corporate offices, research and development facilities, and manufacturing facilities. Operating leases represent undiscounted lease payments and include short-term leases. At the end of 2025, we had fixed lease payment obligations of $208.8 million, with $46.7 million payable within the next 12 months. Refer to Note 10 “Leases” in Item 8 of this report for additional information regarding our leases.

35

Table of Contents

Tax Payable

At the end of 2025, we had income taxes payable of $17.7 million, which are payable within the next 12 months.

In addition, we have unrecognized tax benefits of $79.7 million included in Other non-current liabilities, including interest and penalties. At this time, we cannot make a reasonably reliable estimate of the period of cash settlement with tax authorities regarding this liability. Refer to Note 14 “Income Taxes” in Item 8 of this report for additional information regarding our taxes.

Other Purchase Obligations and Commitments

Purchase obligations and commitments primarily relate to non-cancellable agreements with certain software and service providers and inventory commitments. At the end of 2025, we had operating purchase obligations and commitments of approximately $519.3 million, with $303.7 million payable within the next 12 months. Other than the items discussed above, we do not have any off-balance sheet financing arrangements or liabilities.

Debt

At the end of 2025, we had outstanding fixed-rate senior notes with varying maturities for an aggregate principal amount of $1.4 billion. Future interest payments total $439.5 million, with $78.2 million payable within the next 12 months. Refer to Note 9 “Debt” in Item 8 of this report for additional information regarding our debt.

Stock Repurchase Program

In December 2025, the Board of Directors approved the December 2025 Program to repurchase our common stock of up to $1.0 billion, which replaces the prior February 2025 Program approved in the first quarter of 2025. We may repurchase stock from time to time through accelerated stock repurchase programs, open market transactions, privately negotiated transactions, block purchases, tender offers, or other means. The stock repurchase program does not obligate us to acquire any specific number of shares. Refer to Note 16 “Common Stock Repurchase” in Item 8 of this report for additional information regarding our stock repurchase program.

EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

The impact of recent accounting pronouncements is disclosed in Note 1 “Description of Business and Accounting Policies” in Item 8 of this report.

SUPPLEMENTAL DISCLOSURE OF NON-GAAP FINANCIAL MEASURES AND ANNUALIZED RECURRING REVENUE

To supplement our consolidated financial information, we included non-GAAP financial measures, which are not meant to be considered in isolation or as a substitute for comparable GAAP measures. We believe non-GAAP financial measures provide useful information to investors and others in understanding our core operating performance, which excludes (i) the effect of certain non-cash items and certain variable charges not expected to recur; and (ii) transactions that are not meaningful in comparison to our past operating performance or not reflective of ongoing financial results. Lastly, we believe that our core operating performance offers a supplemental measure for period-to-period comparisons and can be used to evaluate our historical and prospective financial performance, as well as our performance relative to competitors.

Organic revenue growth is a non-GAAP measure that refers to revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. We believe organic revenue growth provides useful information in evaluating the results of our business because it excludes items that are not indicative of ongoing performance or impact comparability with the prior year. We provide reconciliation tables showing the change in revenue growth to organic revenue growth in the “Results of Operations” section found earlier in this Item 7.

In addition to providing non-GAAP financial measures, we disclose ARR to give the investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue. ARR is calculated by taking our subscription and maintenance and support revenue for the current quarter and adding the portion of the contract value of all our term licenses attributable to the current quarter, then dividing that sum by the number of days in the quarter and then multiplying that quotient by 365. Organic ARR refers to annualized recurring revenue excluding the impacts of (i) foreign currency translation, and (ii) acquisitions and divestitures that closed in the prior 12 months. ARR and organic ARR should be viewed independently of revenue and deferred revenue as they are performance measures and are not intended to be combined with or to replace either of those items.

The non-GAAP financial measures, definitions, and explanations to the adjustments to comparable GAAP measures are included below:

36

Table of Contents

Years

2025

2024

Dollar

% of

Dollar

% of

(In millions, except per share amounts)

Amount

Revenue

Amount

Revenue

REVENUE:

GAAP revenue:

$

3,587.3 

$

3,683.3 

GROSS MARGIN:

GAAP gross margin:

$

2,477.9 

69.1 

%

$

2,396.3 

65.1 

%

Amortization of purchased intangible assets

(A)

65.2 

93.3 

Stock-based compensation / deferred compensation

(C)

15.7 

17.4 

Restructuring and other costs

(D)

6.8 

3.6 

Non-GAAP gross margin:

$

2,565.6 

71.5 

%

$

2,510.6 

68.2 

%

OPERATING EXPENSES:

GAAP operating expenses:

$

1,885.9 

52.6 

%

$

1,935.6 

52.6 

%

Amortization of purchased intangible assets

(A)

(106.8)

(105.7)

Acquisition / divestiture items

(B)

(19.1)

(81.6)

Stock-based compensation / deferred compensation

(C)

(135.8)

(146.1)

Restructuring and other costs

(D)

(46.7)

(28.8)

Non-GAAP operating expenses:

$

1,577.5 

44.0 

%

$

1,573.4 

42.7 

%

OPERATING INCOME:

GAAP operating income:

$

592.0 

16.5 

%

$

460.7 

12.5 

%

Amortization of purchased intangible assets

(A)

172.0 

199.0 

Acquisition / divestiture items

(B)

19.1 

81.6 

Stock-based compensation / deferred compensation

(C)

151.5 

163.5 

Restructuring and other costs

(D)

53.5 

32.4 

Non-GAAP operating income:

$

988.1 

27.5 

%

$

937.2 

25.4 

%

NON-OPERATING EXPENSE, NET:

GAAP non-operating (expense) income, net:

$

(82.6)

$

1,545.2 

Acquisition / divestiture items

(B)

8.4 

(1,688.5)

Deferred compensation

(C)

(5.0)

(4.9)

Restructuring and other costs

(D)

6.8 

64.1 

Non-GAAP non-operating expense, net:

$

(72.4)

$

(84.1)

Tax Rate %

Tax Rate %

(F)

(F)

INCOME TAX PROVISION:

GAAP income tax provision:

$

85.4 

16.8 

%

$

501.5 

25.0 

%

Non-GAAP items tax effected

(E)

74.0 

(352.8)

Non-GAAP income tax provision:

$

159.4 

17.4 

%

$

148.7 

17.4 

%

NET INCOME:

GAAP net income:

$

424.0 

$

1,504.4 

Amortization of purchased intangible assets

(A)

172.0 

199.0 

Acquisition / divestiture items

(B)

27.5 

(1,606.9)

Stock-based compensation

(C)

146.5 

158.6 

Restructuring and other costs

(D)

60.3 

96.5 

Non-GAAP tax adjustments

(E)

(74.0)

352.8 

Non-GAAP net income:

$

756.3 

$

704.4 

DILUTED NET INCOME PER SHARE:

GAAP diluted net income per share:

$

1.76 

$

6.09 

Amortization of purchased intangible assets

(A)

0.71 

0.80 

Acquisition / divestiture items

(B)

0.11 

(6.50)

Stock-based compensation

(C)

0.61 

0.64 

Restructuring and other costs

(D)

0.25 

0.39 

Non-GAAP tax adjustments

(E)

(0.31)

1.43 

Non-GAAP diluted net income per share:

$

3.13 

$

2.85 

37

Table of Contents

Years

2025

2024

ADJUSTED EBITDA:

GAAP operating income:

$

592.0 

16.5 

%

$

460.7 

12.5 

%

Amortization of purchased intangible assets

(A)

172.0 

199.0 

Acquisition / divestiture items

(B)

19.1 

81.6 

Stock-based compensation / deferred compensation

(C)

151.5 

163.5 

Restructuring and other costs

(D)

53.5 

32.4 

Non-GAAP operating income:

988.1 

27.5 

%

937.2 

25.4 

%

Depreciation expense and cloud computing amortization

48.8 

49.3 

Income from equity method investments, net

9.3 

13.9 

Adjusted EBITDA

$

1,046.2 

29.2 

%

$

1,000.4 

27.2 

%

Non-GAAP Definitions

Non-GAAP gross margin

We define Non-GAAP gross margin as GAAP gross margin, excluding the effects of amortization of purchased intangible assets, stock-based compensation, deferred compensation, and restructuring and other costs. We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business.

Non-GAAP operating expenses

We define Non-GAAP operating expenses as GAAP operating expenses, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs. We believe this measure is important to investors evaluating our non-GAAP spending in relation to revenue.

Non-GAAP operating income

We define Non-GAAP operating income as GAAP operating income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, and restructuring and other costs. We believe our investors benefit by understanding our non-GAAP operating income trends, which are driven by revenue, gross margin, and spending.

Non-GAAP non-operating expense, net

We define Non-GAAP non-operating expense, net as GAAP non-operating (expense) income, net, excluding acquisition/divestiture items, deferred compensation, and restructuring and other costs. We believe this measure helps investors evaluate our non-operating expense trends.

Non-GAAP income tax provision

We define non-GAAP income tax provision as the GAAP income tax provision adjusted for the tax effects of the non-GAAP pre-tax adjustments (A) through (D), excluding certain tax charges and benefits such as net deferred tax impacts resulting from tax amortization related to a non-U.S. intercompany transfer of intellectual property and certain acquisitions, deferred tax impacts from global intangible low-taxed income, significant reserve releases upon the expiration of statute of limitations and audit closures, and tax law changes. We believe this measure helps investors because it provides for consistent treatment of excluded items in our non-GAAP presentation.

Non-GAAP net income

We define Non-GAAP net income as GAAP net income, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. This measure provides a supplemental view of net income trends, which are driven by non-GAAP income before taxes and our non-GAAP tax rate.

Non-GAAP diluted net income per share

We define Non-GAAP diluted net income per share as GAAP diluted net income per share, excluding the effects of amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring and other costs, and non-GAAP tax adjustments. We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of measuring non-GAAP operating performance by ownership in the Company.

38

Table of Contents

Adjusted EBITDA

We define Adjusted EBITDA as non-GAAP operating income plus depreciation expense, cloud computing amortization, and income from equity method investments, net, excluding our proportionate share of items such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs. Other companies may define Adjusted EBITDA differently. Adjusted EBITDA is a performance measure that we believe offers a useful view of the overall operations of our business because it facilitates operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense), income taxes, depreciation, amortization of purchased intangibles and cloud computing costs, and income from equity method investments, net.

Explanations of Non-GAAP adjustments

(A).Amortization of purchased intangible assets. Non-GAAP gross margin and operating expenses exclude the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed.

(B).Acquisition / divestiture items. Non-GAAP gross margin and operating expenses exclude costs consisting of external and incremental costs resulting directly from acquisitions, divestitures, and strategic investment activities such as legal, due diligence, integration, and other costs, including the acceleration of acquisition stock awards and adjustments to the fair value of earn-out liabilities. Non-GAAP non-operating expense, net, excludes one-time acquisition/divestiture charges, including foreign currency exchange rate gains/losses related to an acquisition, divestiture gains/losses, and strategic investment gains/losses. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance.

(C).Stock-based compensation / deferred compensation. Non-GAAP gross margin and operating expenses exclude stock-based compensation and income or expense associated with movement in our non-qualified deferred compensation plan liabilities. Changes in non-qualified deferred compensation plan assets, included in non-operating expense, net, offset the income or expense in the plan liabilities.

(D).Restructuring and other costs. Non-GAAP gross margin and operating expenses exclude restructuring costs composed of termination benefits related to reductions in employee headcount, closure or exit of facilities, and cancellation of certain contracts, and other costs composed of one-time incremental expenses resulting from the re-audit and related remediation of control deficiencies. Non-GAAP non-operating expense net, excludes our proportionate share of items recorded in income from equity method investment items, such as goodwill impairment, amortization of purchased intangibles, stock-based compensation, and restructuring costs.

(E).Non-GAAP items tax effected. This amount represents the income tax effect of non-GAAP pre-tax adjustments, excluding certain tax charges and benefits, which reconcile the GAAP income tax provision to the non-GAAP income tax provision.

(F).Tax rate percentages. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes.

39

Table of Contents