TRIMBLE ANNOUNCES THIRD QUARTER 2022 RESULTS– Record annualized recurring revenue of $1.55 billion, up 16 percent on an organic basis,
–Third quarter total revenue of $885 million, down 2 percent on a year-over-year basis, up 6 percent year-over-year on an organic basis,
–Record GAAP gross margin of 58.2% and record non-GAAP gross margin of 60.9%

WESTMINSTER, Colo., Nov. 2, 2022 /PRNewswire/ — Trimble Inc. (NASDAQ:TRMB) today announced financial results for the third quarter of 2022.

Third Quarter 2022 Financial Highlights

• Revenue of $884.9 million, down 2 percent on a year-over-year basis, up 6 percent year-over-year, excluding the effects of divestitures, acquisitions, and foreign currency translation
• Annualized recurring revenue (ARR) was $1.55 billion, up 13 percent year-over-year, up 16 percent on an organic basis
• GAAP operating income was $122.4 million and non-GAAP operating income was $209.9 million
• GAAP net income was $85.8 million and non-GAAP net income was $164.0 million
• Diluted earnings per share was $0.34 on a GAAP basis and $0.66 on a non-GAAP basis
• Adjusted EBITDA of $228.1 million, 25.8 percent of revenue
• Share repurchases of $90.0 million

Executive Quote

“Trimble is transforming and digitizing industries that support how we live, what we eat, and how we move,” saidRob Painter,Trimble’s president and chief executive officer. “Our third quarterresults simultaneously reflect the quality of the Trimble financialmodel and the reality of evolving macroeconomic challenges. We remaincommitted to executing our Connect and Scale strategy, which enhancesproductivity and sustainability outcomes for our customers.”

Forward Looking Guidance

For the full-year 2022, Trimble now expects to report revenue between $3,665 million and $3,715 million and GAAP earnings per share of $1.76 to $1.81, and non-GAAP earnings per share between $2.61 and $2.67.GAAP guidance assumes a tax rate of 23.5 percent and non-GAAP guidanceassumes a tax rate of 18.3 percent. Both GAAP and non-GAAP earnings pershare assume approximately 250 million shares outstanding. Areconciliation of the non-GAAP measures to the most directly comparableGAAP measures and other information relating to these non-GAAP measuresare included in the supplemental reconciliation scheduled attached.

Investor Conference Call / Webcast Details

Trimble will hold a conference call on November 2, 2022 at 8:00 a.m. ETto review its third quarter 2022 results. An accompanying slidepresentation will be made available on the “Investors” section of theTrimble website, www.trimble.com, under the subheading “Events & Presentations.” The call will be broadcast live on the web at https://investor.trimble.com. Investors without internet access may dial into the call at (888) 660-6347 (U.S.)or (929) 201-6594 (international). The conference ID is 1043223. Thereplay will also be available on the web at the address above.

About Trimble

Trimble is an industrial technology company transforming the way theworld works by delivering solutions that enable our customers to thrive.Core technologies in positioning, modeling, connectivity and dataanalytics connect the digital and physical worlds to improveproductivity, quality, safety, transparency and sustainability. Frompurpose-built products to enterprise lifecycle solutions, Trimble istransforming industries such as agriculture, construction, geospatialand transportation. For more information about Trimble (NASDAQ:TRMB),visit: www.trimble.com.

Safe Harbor

Certain statements made in this press release are forward-lookingstatements within the meaning of Section 21E of the Securities ExchangeAct of 1934, as amended, and are made pursuant to the safe harborprovisions of the Securities Litigation Reform Act of 1995. Thesestatements include expectations about our future financial andoperational results. These forward-looking statements are subject tochange, and actual results may materially differ due to certain risksand uncertainties. The Company’s results may be adversely affected ifthe Company is unable to market, manufacture and ship new products,obtain new customers, effectively integrate new acquisitions orconsummate divestitures in a timely manner. The Company’s results wouldalso be negatively impacted due to weakness and deterioration in the USand global macroeconomic outlook, including slowing growth, inflationarypressures and increases in interest rates, which may affect demand forour products and services and increase our costs, adversely affectingour revenues and profitability, adverse effects of the COVID-19pandemic, supply chain shortages and disruptions, adverse geopoliticaldevelopments and the potential impact of volatility and conflict in thepolitical and economic environment, including the Russian invasion of Ukraineand its direct and indirect impact on our business, foreign exchangefluctuations, the pace we transition our business model towards asubscription model, and the imposition of barriers to internationaltrade. Any failure to achieve predicted results could negatively impactthe Company’s revenue, cash flow from operations, and other financialresults. The Company’s financial results will also depend on a number ofother factors and risks detailed from time to time in reports filedwith the SEC, including its quarterly reports on Form 10-Qand its annual report on Form 10-K. Undue reliance should not be placedon any forward-looking statement contained herein. These statementsreflect the Company’s position as of the date of this release. TheCompany expressly disclaims any undertaking to release publicly anyupdates or revisions to any statements to reflect any change in theCompany’s expectations or any change of events, conditions, orcircumstances on which any such statement is based.

FTRMB

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) (Unaudited)
	Third Quarter of		First Three Quarters of
	2022		2021		2022		2021
Revenue:
Product	$          503.9		$          551.2		$       1,690.0		$       1,685.5
Service	158.3		159.9		477.4		484.3
Subscription	222.7		190.3		652.4		563.3
Total revenue	884.9		901.4		2,819.8		2,733.1
Cost of sales:
Product	240.7		266.7		819.0		808.4
Service	53.9		55.5		180.6		173.1
Subscription	55.0		52.7		154.3		162.3
Amortization of purchased intangible assets	19.9		22.0		63.4		66.1
Total cost of sales	369.5		396.9		1,217.3		1,209.9
Gross margin	515.4		504.5		1,602.5		1,523.2
Gross margin (%)	58.2 %		56.0 %		56.8 %		55.7 %
Operating expense:
Research and development	127.0		132.5		407.4		400.2
Sales and marketing	137.1		125.5		407.9		373.1
General and administrative	109.6		85.2		318.0		270.2
Restructuring charges	8.2		1.5		20.5		7.5
Amortization of purchased intangible assets	11.1		12.3		34.5		39.0
Total operating expense	393.0		357.0		1,188.3		1,090.0
Operating income	122.4		147.5		414.2		433.2
Non-operating income, net:
Divestitures gain, net	6.0		19.1		103.1		41.5
Interest expense, net	(15.6)		(15.9)		(46.9)		(49.4)
Income from equity method investments, net	6.8		8.5		22.3		30.3
Other income (expense), net	(1.7)		(2.5)		(14.7)		0.9
Total non-operating (expense) income, net	(4.5)		9.2		63.8		23.3
Income before taxes	117.9		156.7		478.0		456.5
Income tax provision	32.1		32.7		113.9		79.0
Net income	85.8		124.0		364.1		377.5
Net gain attributable to noncontrolling interests	—		—		—		0.1
Net income attributable to Trimble Inc.	$            85.8		$          124.0		$          364.1		$          377.4
Earnings per share attributable to Trimble Inc.:
Basic	$            0.35		$            0.49		$            1.46		$            1.50
Diluted	$            0.34		$            0.49		$            1.45		$            1.48
Shares used in calculating earnings per share:
Basic	247.5		251.8		249.1		251.5
Diluted	248.9		254.5		250.8		254.3

CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)
	As of		As of
	Third Quarter of		Year End
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$                               308.7		$                               325.7
Accounts receivable, net	566.1		624.8
Inventories	391.1		363.3
Other current assets	169.4		136.8
Total current assets	1,435.3		1,450.6
Property and equipment, net	221.0		233.2
Operating lease right-of-use assets	122.3		141.0
Goodwill	4,037.1		3,981.5
Other purchased intangible assets, net	511.7		506.6
Deferred income tax assets	448.6		502.0
Other non-current assets	301.7		284.7
Total assets	$                            7,077.7		$                            7,099.6
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term debt	$                               343.6		$                                     —
Accounts payable	194.8		207.3
Accrued compensation and benefits	156.7		231.0
Deferred revenue	544.5		548.8
Other current liabilities	205.4		201.5
Total current liabilities	1,445.0		1,188.6
Long-term debt	1,244.6		1,293.2
Deferred revenue, non-current	92.3		83.0
Deferred income tax liabilities	162.2		263.1
Income taxes payable	40.9		54.5
Operating lease liabilities	103.9		121.4
Other non-current liabilities	144.0		151.1
Total liabilities	3,232.9		3,154.9
Stockholders’ equity:
Common stock	0.2		0.3
Additional paid-in-capital	2,027.3		1,935.6
Retained earnings	2,152.0		2,170.5
Accumulated other comprehensive loss	(334.7)		(161.7)
Total stockholders’ equity	3,844.8		3,944.7
Total liabilities and stockholders’ equity	$                            7,077.7		$                            7,099.6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)
	First Three Quarters of
	2022		2021
Cash flow from operating activities:
Net income	$                  364.1		$                  377.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	30.1		30.9
Amortization expense	97.9		105.1
Deferred income taxes	(41.3)		(8.9)
Stock-based compensation	93.2		95.1
Divestitures gain, net	(103.1)		(43.6)
Other, net	22.7		5.7
(Increase) decrease in assets:
Accounts receivable, net	13.2		33.7
Inventories	(99.5)		(28.4)
Other current and non-current assets	(31.7)		(42.5)
Increase (decrease) in liabilities:
Accounts payable	(3.8)		50.8
Accrued compensation and benefits	(52.9)		25.1
Deferred revenue	14.3		(8.4)
Other current and non-current liabilities	(18.1)		3.1
Net cash provided by operating activities	285.1		595.2
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired	(318.1)		(1.2)
Purchases of property and equipment	(36.6)		(31.4)
Net proceeds from divestitures	214.3		67.3
Net proceeds from sale of property and equipment	0.1		20.7
Other, net	(11.9)		(4.4)
Net cash (used in) provided by investing activities	(152.2)		51.0
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings	(4.8)		1.1
Repurchases of common stock	(394.7)		(140.0)
Proceeds from debt and revolving credit lines	529.3		198.9
Payments on debt and revolving credit lines	(235.9)		(421.7)
Other, net	(8.9)		(1.5)
Net cash used in financing activities	(115.0)		(363.2)
Effect of exchange rate changes on cash and cash equivalents	(34.9)		(7.5)
Net (decrease) increase in cash and cash equivalents	(17.0)		275.5
Cash and cash equivalents – beginning of period	325.7		237.7
Cash and cash equivalents – end of period	$                 308.7		$                 513.2

REPORTING SEGMENTS GAAP TO NON-GAAP RECONCILIATION (In millions) (Unaudited)
		Reporting Segments
		Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation
THIRD QUARTER OF 2022:
Segment revenue		$              363.6		$              184.2		$              191.7		$              145.4
Segment operating income		$                96.7		$                61.5		$                64.2		$                16.0
Segment operating income as a % of segment revenue		26.6 %		33.4 %		33.5 %		11.0 %
THIRD QUARTER OF 2021:
Segment revenue		$              349.7		$              205.4		$              184.8		$              161.5
Segment operating income		$              100.6		$                64.9		$                60.6		$                15.3
Segment operating income as a % of segment revenue		28.8 %		31.6 %		32.8 %		9.5 %

		Reporting Segments
		Buildings and Infrastructure		Geospatial		Resources and Utilities		Transportation
FIRST THREE QUARTERS OF 2022:
Segment revenue		$           1,143.8		$              585.4		$              636.4		$              454.2
Segment operating income		$              318.8		$              177.2		$              212.3		$                37.0
Segment operating income as a % of segment revenue		27.9 %		30.3 %		33.4 %		8.1 %
FIRST THREE QUARTERS OF 2021:
Segment revenue		$           1,057.6		$              606.8		$              587.5		$              481.5
Segment operating income		$              301.1		$              179.7		$              211.2		$                36.5
Segment operating income as a % of segment revenue		28.5 %		29.6 %		35.9 %		7.6 %

GAAP TO NON-GAAP RECONCILIATION (Dollars in millions, except per share data) (Unaudited)
					Third Quarter of		First Three Quarters of
					2022		2021		2022		2021
					Dollar Amount	% of Revenue		Dollar Amount	% of Revenue		Dollar Amount	% of Revenue		Dollar Amount	% of Revenue
REVENUE:
	GAAP revenue:			$    884.9			$    901.4			$ 2,819.8			$ 2,733.1
		Purchase accounting adjustments	(A)		—			—			—			0.3
	Non-GAAP revenue:			$    884.9			$    901.4			$ 2,819.8			$ 2,733.4
GROSS MARGIN:
	GAAP gross margin:			$    515.4	58.2 %		$    504.5	56.0 %		$ 1,602.5	56.8 %		$ 1,523.2	55.7 %
		Purchase accounting adjustments	(A)		19.9			22.0			63.4			66.4
		Stock-based compensation / deferred compensation	(C)		3.4			2.7			8.7			7.3
		Restructuring and other costs	(D)		(0.1)			—			1.0			0.2
	Non-GAAP gross margin:			$   538.6	60.9 %		$    529.2	58.7 %		$ 1,675.6	59.4 %		$ 1,597.1	58.4 %
OPERATING EXPENSES:
	GAAP operating expenses:			$    393.0	44.4 %		$    357.0	39.6 %		$ 1,188.3	42.1 %		$ 1,090.0	39.9 %
		Purchase accounting adjustments	(A)		(11.1)			(11.2)			(34.5)			(35.6)
		Acquisition / divestiture items	(B)		(9.1)			(0.2)			(20.3)			(10.3)
		Stock-based compensation / deferred compensation	(C)		(28.3)			(29.4)			(74.2)			(91.8)
		Restructuring and other costs	(D)		(15.8)			(1.7)			(37.4)			(7.7)
	Non-GAAP operating expenses:			$   328.7	37.1 %		$   314.5	34.9 %		$ 1,021.9	36.2 %		$   944.6	34.6 %
OPERATING INCOME:
	GAAP operating income:			$    122.4	13.8 %		$    147.5	16.4 %		$    414.2	14.7 %		$   433.2	15.9 %
		Purchase accounting adjustments	(A)		31.0			33.2			97.9			102.0
		Acquisition / divestiture items	(B)		9.1			0.2			20.3			10.3
		Stock-based compensation / deferred compensation	(C)		31.7			32.1			82.9			99.1
		Restructuring and other costs	(D)		15.7			1.7			38.4			7.9
	Non-GAAP operating income:			$    209.9	23.7 %		$    214.7	23.8 %		$    653.7	23.2 %		$   652.5	23.9 %
NON-OPERATING INCOME (EXPENSE), NET:
	GAAP non-operating income, net:			$      (4.5)			$       9.2			$     63.8			$     23.3
		Acquisition / divestiture items	(B)		(5.6)			(19.0)			(103.0)			(41.8)
		Deferred compensation	(C)		0.2			0.2			10.5			(4.0)
		Restructuring and other costs	(D)		—			—			0.1			—
	Non-GAAP non-operating expense, net:			$      (9.9)			$      (9.6)			$    (28.6)			$    (22.5)
						GAAP and Non- GAAP Tax Rate %			GAAP and Non- GAAP Tax Rate %			GAAP and Non- GAAP Tax Rate %			GAAP and Non- GAAP Tax Rate %
						(G)			(G)			(G)			(G)
INCOME TAX PROVISION:
	GAAP income tax provision:			$     32.1	27.2 %		$     32.7	20.9 %		$    113.9	23.8 %		$     79.0	17.3 %
		Non-GAAP items tax effected	(E)		22.3			10.1			34.7			29.6
		Difference in GAAP and Non-GAAP tax rate	(F)		(18.4)			(6.3)			(33.9)			1.9
	Non-GAAP income tax provision:			$     36.0	18.0 %		$     36.5	17.8 %		$   114.7	18.3 %		$   110.5	17.5 %
NET INCOME:
	GAAP net income attributable to Trimble Inc.:			$     85.8			$    124.0			$    364.1			$   377.4
		Purchase accounting adjustments	(A)		31.0			33.2			97.9			102.0
		Acquisition / divestiture items	(B)		3.5			(18.8)			(82.7)			(31.5)
		Stock-based compensation / deferred compensation	(C)		31.9			32.3			93.4			95.1
		Restructuring and other costs	(D)		15.7			1.7			38.5			7.9
		Non-GAAP tax adjustments	(E) – (F)		(3.9)			(3.8)			(0.8)			(31.5)
	Non-GAAP net income attributable to Trimble Inc.:			$    164.0			$    168.6			$    510.4			$   519.4
DILUTED NET INCOME PER SHARE:
	GAAP diluted net income per share attributable to Trimble Inc.:			$     0.34			$     0.49			$     1.45			$     1.48
		Purchase accounting adjustments	(A)		0.13			0.13			0.39			0.40
		Acquisition / divestiture items	(B)		0.01			(0.07)			(0.33)			(0.12)
		Stock-based compensation / deferred compensation	(C)		0.13			0.12			0.38			0.37
		Restructuring and other costs	(D)		0.06			0.01			0.15			0.03
		Non-GAAP tax adjustments	(E) – (F)		(0.01)			(0.02)			—			(0.12)
	Non-GAAP diluted net income per share attributable to Trimble Inc.:			$     0.66			$     0.66			$     2.04			$     2.04
ADJUSTED EBITDA:
	GAAP net income attributable to Trimble Inc.:			$     85.8			$   124.0			$    364.1			$   377.4
		Non-operating income (expense), net, income tax provision, and net gain attributable to noncontrolling interests			36.6			23.5			50.1			55.8
	GAAP operating income:			122.4			147.5			414.2			433.2
		Purchase accounting adjustments	(A)		31.0			33.2			97.9			102.0
		Acquisition / divestiture items	(B)		9.1			0.2			20.3			10.3
		Stock-based compensation / deferred compensation	(C)		31.7			32.1			82.9			99.1
		Restructuring and other costs	(D)		15.7			1.7			38.4			7.9
	Non-GAAP operating income:			209.9			214.7			653.7			652.5
		Depreciation expense and cloud computing amortization			11.4			10.2			32.9			31.2
		Income from equity method investments, net			6.8			8.5			22.3			30.3
	Adjusted EBITDA:			$    228.1	25.8 %		$    233.4	25.9 %		$    708.9	25.1 %		$   714.0	26.1 %
					Year 2022
					Low End	High End
FORECASTED DILUTED NET INCOME PER SHARE:
	Forecasted GAAP diluted net income per share attributable to Trimble Inc.:			$     1.76	$  1.81
		Purchase accounting adjustments	(A)		0.52	0.52
		Acquisition / divestiture items	(B)		(0.32)	(0.32)
		Stock-based compensation / deferred compensation	(C)		0.50	0.50
		Restructuring and other costs	(D)		0.19	0.19
		Non-GAAP tax adjustments	(E) – (F)		(0.04)	(0.03)
	Forecasted non-GAAP diluted net income per share attributable to Trimble Inc.:		2.61	2.67

FOOTNOTES TO GAAP TO NON-GAAP RECONCILIATION

This press release includes GAAP financial measures as well asNon-GAAP financial measures.  We believe these non-GAAP financialmeasures, which are not meant to be considered in isolation or as asubstitute for comparable GAAP provide useful information to investorsand others in understanding our “core operating performance”, whichexcludes the effect of non-cash items and certain variable charges notexpected to recur, not meaningful in comparison to our past operatingperformance or not reflective of ongoing financial results. Lastly, webelieve that our core operating performance offers a supplementalmeasure for period-to-period comparisons and can be used to evaluate ourhistorical and prospective financial performance, as well as ourperformance relative to competitors.

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

Non-GAAP Definitions

Non-GAAP revenue

We define Non-GAAP revenue as GAAP revenue, excluding the effects ofpurchase accounting adjustments for acquisitions occurring prior to2021.  We believe this measure helps investors understand theperformance of our business including acquisitions, as non-GAAP revenueexcludes the effects of certain acquired deferred revenue that waswritten down to fair value in purchase accounting.  Management believesthat excluding fair value purchase accounting adjustments more closelycorrelates with the ordinary and ongoing course of the acquiredcompany’s operations and facilitates analysis of revenue growth andtrends.

Non-GAAP gross margin

We define Non-GAAP gross margin as GAAP gross margin, excluding theeffects of purchase accounting adjustments, stock-based compensation,deferred compensation, and restructuring and other costs.  We believeour investors benefit by understanding our non-GAAP gross margin as away of understanding how product mix, pricing decisions, andmanufacturing costs influence our business.

Non-GAAP operating expenses

We define Non-GAAP operating expenses as GAAP operating expenses,excluding the effects of purchase accounting adjustments,acquisition/divestiture items, stock-based compensation, deferredcompensation, and restructuring and other costs.  We believe thismeasure is important to investors evaluating our non-GAAP spending inrelation to revenue.

Non-GAAP operating income

We define Non-GAAP operating income as GAAP operating income,excluding the effects of purchase accounting adjustments,acquisition/divestiture items, stock-based compensation, deferredcompensation, and restructuring and other costs.  We believe ourinvestors 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 expenses, net as GAAP non-operatingexpenses, net, excluding acquisition/divestiture items, deferredcompensation, and restructuring and other costs.  We believe thismeasure helps investors evaluate our non-operating expense trends.

Non-GAAP income tax provision

We define Non-GAAP income tax provision as GAAP income tax provision,excluding charges and benefits such as net deferred tax impactsresulting from the non-U.S.intercompany transfer of intellectual property, tax law changes, andsignificant one-time reserve releases upon the statute of limitationsexpirations.  We believe this measure helps investors because itprovides for consistent treatment of excluded items in our non-GAAPpresentation and a difference in the GAAP and non-GAAP tax rates.

Non-GAAP net income

We define Non-GAAP net income as GAAP net income, excluding theeffects of purchase accounting adjustments, acquisition/divestitureitems, stock-based compensation, restructuring and other costs, andnon-GAAP tax adjustments.  This measure provides a supplemental view ofnet income trends, which are driven by non-GAAP income before taxes andour non-GAAP tax rate.

Non-GAAP diluted net income per share

We define Non-GAAP diluted net income per share as GAAP diluted netincome per share, excluding the effects of purchase accountingadjustments, acquisition/divestiture items, stock-based compensation,restructuring and other costs, and non-GAAP tax adjustments.  We believeour investors benefit by understanding our non-GAAP operatingperformance as reflected in a per share calculation as a way ofmeasuring non-GAAP operating performance by ownership in the company.

Adjusted EBITDA

We define Adjusted EBITDA as non-GAAP operating income plusdepreciation expense and income from equity method investments, net. Other companies may define Adjusted EBITDA differently.  Adjusted EBITDAis not intended to purport to be an alternative to net income oroperating income as a measure of operating performance or cash flow fromoperating activities as a measure of liquidity.  Adjusted EBITDA is aperformance measure that we believe offers a useful view of the overalloperations of our business because it facilitates operating performancecomparisons by removing potential differences caused by variationsunrelated to operating performance, such as capital structures (interestexpense), income taxes, depreciation, and amortization of purchasedintangibles and cloud computing costs. 

Explanations of Non-GAAP adjustments

(A)  Purchase accounting adjustments.  Purchase accounting adjustments consist of the following:  

i.  Acquired deferred revenue adjustment. We adopted ASU 2021-08 in the fourth quarter of 2021 for allacquisitions occurring in 2021 and going forward, which requires theapplication of ASC 606, Revenue from Contracts with Customers, torecognize and measure contract assets and contract liabilities on theacquisition date.  For acquisitions occurring prior to 2021, non-GAAPrevenue excludes the adjustment to our revenue as a result of measuringthe contract liability at fair value on the acquisition date.   

ii.  Amortization of acquired capitalized commissions. Purchase accounting generally requires entities to eliminatecapitalized sales commissions balances as of the acquisition date. Non-GAAP operating expenses exclude the adjustments that eliminate thecapitalized sales commissions.  For acquisitions occurring prior to2021, non-GAAP operating expenses exclude the adjustment of acquiredcapitalized commissions amortization.  

iii.  Amortization of purchased intangible assets. Non-GAAP gross margin and operating expenses exclude the amortizationof purchased intangible assets, which primarily represents technologyand/or customer relationships already developed.  

(B)  Acquisition / divestiture items.  Non-GAAPgross margin and operating expenses exclude acquisition costs consistingof external and incremental costs resulting directly from merger andacquisition and strategic investment activities such as legal, duediligence, integration, and other closing costs, including theacceleration of acquisition stock options and adjustments to the fairvalue of earn-out liabilities.  Non-GAAP non-operating expense, net,excludes unusual one-time acquisition/divestiture charges as well asdivestiture and strategic investment gains/losses.  These are one-timecosts that vary significantly in amount and timing and are notindicative of our core operating performance.

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

(D)  Restructuring and other costs.  Non-GAAPgross margin and operating expenses exclude restructuring and othercosts comprised of termination benefits related to reductions inemployee headcount and closure or exit of facilities, executiveseverance agreements, costs incurred in exiting business activities in Russia and Belarus, other business exit costs, as well as a $20 million commitment to donate to the Trimble Foundation to be paid over four quarters beginning in the second quarter of 2022.   

(E)  Non-GAAP items tax effected.  This amountadjusts the provision for income taxes to reflect the effect of thenon-GAAP items (A) – (D) on non-GAAP net income.   

(F)  Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and non-GAAP taxrates applied to the non-GAAP operating income plus the non-GAAPnon-operating expense, net. The non-GAAP tax rate excludes charges andbenefits such as net deferred tax impacts resulting from a non-U.S.intercompany transfer of intellectual property and significant one-timereserve releases upon statute of limitations expirations.   

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

OTHER KEY METRICS

Annualized Recurring Revenue 

In addition to providing non-GAAP financial measures, Trimbleprovides an ARR performance measure in order to provide investors with asupplementary indicator of the value of the Company’s current recurringrevenue contracts.  ARR represents the estimated annualized value ofrecurring revenue, including subscription, maintenance and supportrevenue, and term license contracts for the quarter.  ARR is calculatedby adding the portion of the contract value of all of our term licensesattributable to the current quarter to our non-GAAP recurring revenuefor the current quarter and dividing that sum by the number of days inthe quarter and then multiplying that quotient by 365.  ARR should beviewed independently of revenue and deferred revenue as it is aperformance measure and is not intended to be combined with or toreplace either of those items. 

Organic Annualized Recurring Revenue

Organic annualized recurring revenue refers to annualized recurringrevenue excluding the impacts of (i) foreign currency translation, and(ii) acquisitions and divestitures.

Organic Revenue

Organic revenue refers to revenue excluding the impacts of (i)foreign currency translation, and (ii) acquisitions and divestitures.

 View original content:https://www.prnewswire.com/news-releases/trimble-announces-third-quarter-2022-results-301665615.html

SOURCE Trimble

Michael Leyba, Investor Relations, 415-309-3127,michael_leyba@trimble.com; Lea Ann McNabb, Media, 408-481-7808,leaann_mcnabb@trimble.com