Financial Release

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Feb 10, 2021

Trimble Announces Fourth Quarter and Full Year 2020 Results

-- Record annualized recurring revenue of $1.3 billion, up 9 percent
-- Record annual operating cash flow of $672.0 million

SUNNYVALE, Calif., Feb. 10, 2021 /PRNewswire/ -- Trimble Inc. (NASDAQ: TRMB) today announced fourth quarter and fiscal year 2020 financial results.

Fourth Quarter 2020 Financial Highlights

GAAP revenue of $829.7 million, up 1 percent year over year, and non-GAAP revenue of $830.0 million, flat year over year. Fourth quarter 2020 was a 13-week quarter and fourth quarter 2019 was a 14-week quarter.
Annualized recurring revenue (ARR) of $1.3 billion, up 9 percent year over year
GAAP operating income was $121.9 million and non-GAAP operating income was $196.7 million
GAAP net income was $180.3 million and non-GAAP net income was $155.6 million
Diluted earnings per share was $0.71 on a GAAP basis, and $0.61 on a non-GAAP basis
Adjusted EBITDA was $216.5 million, 26.1 percent of non-GAAP revenue

Executive Quote
"Our fourth quarter results exceeded expectations, enabling us to finish the year with solid financial performance," said Rob Painter, Trimble's president and chief executive officer. "We experienced growth in annualized recurring revenue, adjusted EBITDA and operating cash flow. While we enter 2021 expecting ongoing market ambiguities, we enter with confidence and resolve to execute our Connect and Scale 2025 strategy."

Fiscal 2020 Financial Highlights

GAAP revenue of $3,147.7 million, and non-GAAP revenue of $3,152.0 million, both down 4 percent year over year. Fiscal 2020 was a 52-week year and 2019 was a 53-week year.
GAAP operating income was $419.8 million and non-GAAP operating income was $719.6 million
GAAP net income was $389.9 million and non-GAAP net income was $562.4 million
Diluted earnings per share was $1.55 on a GAAP basis, and $2.23 on a non-GAAP basis
Adjusted EBITDA was $798.7 million, 25.3 percent of non-GAAP revenue
Operating cash flow was $672.0 million, up 15 percent year over year
During fiscal 2020, Trimble repurchased approximately 1.9 million shares for $81.6 million. Approximately $90.7 million remains under the current share repurchase authorization as of the end of the fourth quarter.

Forward Looking Guidance
For the full year 2021, Trimble expects to report GAAP revenue between $3,299.7 million and $3,399.7 million and GAAP earnings per share of $1.31 to $1.54, and non-GAAP revenue between $3,300.0 million and $3,400.0 million and non-GAAP earnings per share of $2.25 and $2.45. GAAP guidance assumes a tax rate of 21 to 22 percent and non-GAAP guidance assumes a tax rate of 16 to 17 percent. Both GAAP and non-GAAP earnings per share assume approximately 254 million shares outstanding. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and other information relating to these non-GAAP measures are included in the supplemental reconciliation scheduled attached.

Investor Conference Call / Webcast Details
Trimble will hold a conference call on February 10, 2021 at 2:00 p.m. PT to review its fourth quarter and full year 2020 results. An accompanying slide presentation will be made available on the "Investors" section of the Trimble website, www.trimble.com, under the subheading "Events & Presentations." The call will be broadcast live on the web at http://investor.trimble.com. Investors without internet access may dial into the call at (800) 528-9198 (U.S.) or (702) 928-6633 (international). The passcode is 7490439. The replay will also be available on the web at the address above.

About Trimble
Trimble is transforming the way the world works by delivering products and services that connect the physical and digital worlds. Core technologies in positioning, modeling, connectivity and data analytics enable customers to improve productivity, quality, safety and sustainability. From purpose built products to enterprise lifecycle solutions, Trimble software, hardware and services are transforming a broad range of industries such as agriculture, construction, geospatial and transportation. For more information about Trimble (NASDAQ:TRMB), visit: www.trimble.com.

Safe Harbor
Certain statements made in this press release are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations about our future financial and operational results. These forward-looking statements are subject to change, and actual results may materially differ due to certain risks and uncertainties. The Company's results may be adversely affected if the Company is unable to market, manufacture and ship new products, obtain new customers, or effectively integrate new acquisitions. The Company's results would also be negatively impacted by further deterioration in economic conditions as a result of the COVID-19 pandemic, adverse geopolitical developments, further weakening in the macro environment, foreign exchange fluctuations, critical part supply chain shortages, the pace we transition our business model towards a subscription model, and the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the Company's revenue, cash flow from operations, and other financial results. The Company's financial results will also depend on a number of other factors and risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10- K. Undue reliance should not be placed on any forward-looking statement contained herein. These statements reflect the Company's position as of the date of this release. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company's expectations or any change of events, conditions, or circumstances on which any such statement is based.

FTRMB

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) (Unaudited)

	Fourth Quarter of						Fiscal Years
	2020			2019			2020			2019
Revenue:
Product	$	490.4		$	466.5		$	1,828.0		$	1,934.8
Service	165.1			184.4			644.8			686.2
Subscription	174.2			173.1			674.9			643.3
Total revenue	829.7			824.0			3,147.7			3,264.3
Cost of sales:
Product	224.3			220.9			855.0			939.4
Service	59.4			61.7			234.5			253.9
Subscription	55.2			58.6			211.0			196.0
Amortization of purchased intangible assets	22.3			22.8			92.3			94.1
Total cost of sales	361.2			364.0			1,392.8			1,483.4
Gross margin	468.5			460.0			1,754.9			1,780.9
Gross margin (%)	56.5		%	55.8		%	55.8		%	54.6		%
Operating expense:
Research and development	125.8			119.6			475.9			469.7
Sales and marketing	120.1			128.3			467.0			504.2
General and administrative	79.7			90.7			300.9			330.6
Restructuring charges	5.7			16.8			25.8			26.8
Amortization of purchased intangible assets	15.3			16.4			65.5			73.7
Total operating expense	346.6			371.8			1,335.1			1,405.0
Operating income	121.9			88.2			419.8			375.9
Non-operating income (expense), net:
Interest expense, net	(17.9)			(20.2)			(77.6)			(82.4)
Income from equity method investments, net	9.5			5.3			39.4			35.8
Other income, net	14.8			2.0			13.4			15.5
Total non-operating income (expense), net	6.4			(12.9)			(24.8)			(31.1)
Income before taxes	128.3			75.3			395.0			344.8
Income tax (benefit) provision	(52.4)			(204.1)			4.4			(169.7)
Net income	180.7			279.4			390.6			514.5
Net gain attributable to noncontrolling interests	0.4			0.1			0.7			0.2
Net income attributable to Trimble Inc.	$	180.3		$	279.3		$	389.9		$	514.3
Earnings per share attributable to Trimble Inc.:
Basic	$	0.72		$	1.12		$	1.56		$	2.05
Diluted	$	0.71		$	1.11		$	1.55		$	2.03
Shares used in calculating earnings per share:
Basic	250.8			249.5			250.5			250.8
Diluted	253.5			251.6			252.3			252.9

CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

At the End of Fiscal Year	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	237.7	$	189.2
Accounts receivable, net	620.5		608.2
Inventories	301.7		312.1
Other current assets	121.5		102.3
Total current assets	1,281.4		1,211.8
Property and equipment, net	251.8		241.4
Operating lease right-of-use assets	128.9		140.3
Goodwill	3,876.5		3,680.6
Other purchased intangible assets, net	580.1		678.7
Deferred income tax assets	510.2		475.5
Other non-current assets	248.0		212.4
Total assets	$	6,876.9	$	6,640.7
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt	$	255.8	$	219.0
Accounts payable	143.2		159.3
Accrued compensation and benefits	166.8		123.5
Deferred revenue	560.5		490.4
Other current liabilities	185.0		198.1
Total current liabilities	1,311.3		1,190.3
Long-term debt	1,291.4		1,624.2
Deferred revenue, non-current	53.3		51.5
Deferred income tax liabilities	300.3		318.2
Income taxes payable	62.2		69.1
Operating lease liabilities	109.2		114.1
Other non-current liabilities	150.6		152.9
Total liabilities	3,278.3		3,520.3
Stockholders' equity:
Common stock	0.3		0.2
Additional paid-in-capital	1,801.7		1,692.8
Retained earnings	1,893.4		1,602.8
Accumulated other comprehensive loss	(98.5)		(176.8)
Total Trimble Inc. stockholders' equity	3,596.9		3,119.0
Noncontrolling interests	1.7		1.4
Total stockholders' equity	3,598.6		3,120.4
Total liabilities and stockholders' equity	$	6,876.9	$	6,640.7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

	Fiscal Years
	2020		2019
Cash flow from operating activities:
Net income	$	390.6	$	514.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	39.7		39.4
Amortization expense	157.8		167.8
Provision for credit losses	7.1		6.5
Deferred income taxes	(52.9)		(220.2)
Non-cash restructuring expense	11.4		2.1
Stock-based compensation	83.0		75.0
Income from equity method investments, net of dividends	(21.0)		(7.8)
Provision for excess and obsolete inventories	16.2		7.3
Other, net	16.5		(10.4)
(Increase) decrease in assets:
Accounts receivable, net	(14.0)		(96.0)
Inventories	(5.0)		(21.3)
Other current and non-current assets	2.5		11.0
Increase (decrease) in liabilities:
Accounts payable	(15.7)		14.5
Accrued compensation and benefits	34.9		(46.4)
Deferred revenue	65.7		148.2
Other current and non-current liabilities	(44.8)		0.8
Net cash provided by operating activities	672.0		585.0
Cash flow from investing activities:
Acquisitions of businesses, net of cash acquired	(201.9)		(220.8)
Purchases of property and equipment	(56.8)		(69.0)
Other, net	26.9		14.5
Net cash used in investing activities	(231.8)		(275.3)
Cash flow from financing activities:
Issuance of common stock, net of tax withholdings	10.0		29.1
Repurchases of common stock	(81.6)		(179.8)
Proceeds from debt and revolving credit lines	1,173.8		1,195.4
Payments on debt and revolving credit lines	(1,486.0)		(1,322.9)
Other, net	(16.5)		(14.4)
Net cash used in financing activities	(400.3)		(292.6)
Effect of exchange rate changes on cash and cash equivalents	8.6		(0.4)
Net increase in cash and cash equivalents	48.5		16.7
Cash and cash equivalents - beginning of period	189.2		172.5
Cash and cash equivalents - end of period	$	237.7	$	189.2

REPORTING SEGMENTS GAAP TO NON-GAAP RECONCILIATION (In millions) (Unaudited)

		Reporting Segments
		Buildings and Infrastructure			Geospatial			Resources and Utilities			Transportation
FOURTH QUARTER OF FISCAL 2020 :
Revenue		$	321.3		$	193.5		$	155.2		$	159.7
Acquired deferred revenue adjustment	(A)	0.1			—			0.1			0.1
Non-GAAP revenue		$	321.4		$	193.5		$	155.3		$	159.8

Operating income before corporate allocations		$	97.1		$	65.1		$	50.6		$	10.2
Acquired deferred revenue adjustment	(A)	0.1			—			0.1			0.1
Amortization of acquired capitalized commissions	(B)	(1.2)			—			—			(0.1)
Non-GAAP operating income before allocations		$	96.0		$	65.1		$	50.7		$	10.2

Operating margin (% of segment external net revenue)		30.2		%	33.6		%	32.6		%	6.4		%
Non-GAAP Operating margin (% of segment Non- GAAP external net revenue)		29.9		%	33.6		%	32.6		%	6.4		%

FOURTH QUARTER OF FISCAL 2019 :
Revenue		$	313.6		$	168.7		$	135.6		$	206.1
Acquired deferred revenue adjustment	(A)	0.2			—			2.5			—
Non-GAAP revenue		$	313.8		$	168.7		$	138.1		$	206.1

Operating income before corporate allocations		$	92.4		$	41.1		$	35.5		$	30.6
Acquired deferred revenue adjustment	(A)	0.2			—			2.5			—
Amortization of acquired capitalized commissions	(B)	(1.5)			—			—			—
Non-GAAP operating income before allocations		$	91.1		$	41.1		$	38.0		$	30.6

Operating margin (% of segment external net revenue)		29.5		%	24.4		%	26.2		%	14.8		%
Non-GAAP Operating margin (% of segment Non- GAAP external net revenue)		29.0		%	24.4		%	27.5		%	14.8		%

		Reporting Segments
		Buildings and Infrastructure			Geospatial			Resources and Utilities			Transportation
FISCAL YEAR 2020 :
Revenue		$	1,230.7		$	650.5		$	627.3		$	639.2
Acquired deferred revenue adjustment	(A)	0.3			—			2.7			1.3
Non-GAAP revenue		$	1,231.0		$	650.5		$	630.0		$	640.5

Operating income before corporate allocations		$	343.0		$	184.4		$	218.4		$	49.0
Acquired deferred revenue adjustment	(A)	0.3			—			2.7			1.3
Amortization of acquired capitalized commissions	(B)	(5.2)			—			(0.1)			(0.2)
Non-GAAP operating income before allocations		$	338.1		$	184.4		$	221.0		$	50.1

Operating margin (% of segment external net revenue)		27.9		%	28.3		%	34.8		%	7.7		%
Non-GAAP Operating margin (% of segment Non- GAAP external net revenue)		27.5		%	28.3		%	35.1		%	7.8		%

FISCAL YEAR 2019 :
Revenue		$	1,254.2		$	649.4		$	568.4		$	792.3
Acquired deferred revenue adjustment	(A)	4.0			—			3.0			—
Non-GAAP revenue		$	1,258.2		$	649.4		$	571.4		$	792.3

Operating income before corporate allocations		$	322.1		$	132.2		$	166.2		$	125.9
Acquired deferred revenue adjustment	(A)	4.0			—			3.0			—
Amortization of acquired capitalized commissions	(B)	(6.2)			—			(0.1)			—
Non-GAAP operating income before allocations		$	319.9		$	132.2		$	169.1		$	125.9

Operating margin (% of segment external net revenue)		25.7		%	20.4		%	29.2		%	15.9		%
Non-GAAP Operating margin (% of segment Non- GAAP external net revenue)		25.4		%	20.4		%	29.6		%	15.9		%

		GAAP TO NON-GAAP RECONCILIATION (Dollars in millions, except per share data) (Unaudited)

				Fourth Quarter of									Fiscal Years
				2020					2019				2020				2019
				Dollar Amount		% of Revenue			Dollar Amount		% of Revenue		Dollar Amount		% of Revenue		Dollar Amount		% of Revenue
REVENUE:
	GAAP revenue:			$	829.7				$	824.0			$	3,147.7			$	3,264.3
		Acquired deferred revenue adjustment	(A)	0.3					2.7				4.3				7.0
	Non-GAAP revenue:			$	830.0				$	826.7			$	3,152.0			$	3,271.3

GROSS MARGIN:
	GAAP gross margin:			$	468.5	56.5		%	$	460.0	55.8	%	$	1,754.9	55.8	%	$	1,780.9	54.6	%
		Acquired deferred revenue adjustment	(A)	0.3					2.7				4.3				7.0
		Amortization of purchased intangible assets	(C)	22.3					22.8				92.3				94.1
		Acquisition / divestiture items	(D)	—					—				1.7				—
		Stock-based compensation / deferred compensation	(E)	2.0					1.5				7.2				5.9
		Restructuring charges	(F)	0.1					0.9				0.8				1.1
		COVID-19 expenses	(G)	0.1					—				0.4				—
	Non-GAAP gross margin:			$	493.3	59.4		%	$	487.9	59.0	%	$	1,861.6	59.1	%	$	1,889.0	57.7	%

OPERATING EXPENSES:
	GAAP operating expenses:			$	346.6	41.8		%	$	371.8	45.1	%	$	1,335.1	42.4	%	$	1,405.0	43.0	%
		Amortization of acquired capitalized commissions	(B)	1.3					1.5				5.5				6.3
		Amortization of purchased intangible assets	(C)	(15.3)					(16.4)				(65.5)				(73.7)
		Acquisition / divestiture items	(D)	(5.0)					(9.0)				(19.7)				(20.5)
		Stock-based compensation / deferred compensation	(E)	(26.5)					(23.8)				(83.2)				(75.3)
		Restructuring charges / executive transition costs	(F)	(6.2)					(16.8)				(27.4)				(26.8)
		COVID-19 expenses	(G)	1.7					—				(2.8)				—
	Non-GAAP operating expenses:			$	296.6	35.7		%	$	307.3	37.2	%	$	1,142.0	36.2	%	$	1,215.0	37.1	%

OPERATING INCOME:
	GAAP operating income:			$	121.9	14.7		%	$	88.2	10.7	%	$	419.8	13.3	%	$	375.9	11.5	%
		Acquired deferred revenue adjustment	(A)	0.3					2.7				4.3				7.0
		Amortization of acquired capitalized commissions	(B)	(1.3)					(1.5)				(5.5)				(6.3)
		Amortization of purchased intangible assets	(C)	37.6					39.2				157.8				167.8
		Acquisition / divestiture items	(D)	5.0					9.0				21.4				20.5
		Stock-based compensation / deferred compensation	(E)	28.5					25.3				90.4				81.2
		Restructuring charges / executive transition costs	(F)	6.3					17.7				28.2				27.9
		COVID-19 expenses	(G)	(1.6)					—				3.2				—
	Non-GAAP operating income:			$	196.7	23.7		%	$	180.6	21.8	%	$	719.6	22.8	%	$	674.0	20.6	%

NON-OPERATING INCOME (EXPENSE), NET:
	GAAP non-operating income (expense), net:			$	6.4				$	(12.9)			$	(24.8)			$	(31.1)
		Acquisition / divestiture items	(D)	(14.7)					0.4				(12.2)				(12.1)
		Deferred compensation	(E)	(2.7)					(2.5)				(7.5)				(6.3)
	Non-GAAP non-operating expense, net:			$	(11.0)				$	(15.0)			$	(44.5)			$	(49.5)

						GAAP and Non-GAAP Tax Rate %					GAAP and Non-GAAP Tax Rate %				GAAP and Non-GAAP Tax Rate %				GAAP and Non-GAAP Tax Rate %
						(K)					(K)				(K)				(K)
INCOME TAX (BENEFIT) PROVISION:
	GAAP income tax (benefit) provision:			$	(52.4)	(40.8)		%	$	(204.1)	(271.0)	%	$	4.4	1.1	%	$	(169.7)	(49.2)	%
		Non-GAAP items tax effected	(H)	2.3					8.2				48.5				29.6
		Difference in GAAP and Non- GAAP tax rate	(I)	15.8					21.1				(4.9)				55.6
		IP restructuring and tax law change impacts	(J)	64.0					206.3				64.0				206.3
	Non-GAAP income tax provision:			$	29.7	16.0		%	$	31.5	19.0	%	$	112.0	16.6	%	$	121.8	19.5	%

NET INCOME:
	GAAP net income attributable to Trimble Inc.:			$	180.3				$	279.3			$	389.9			$	514.3
		Acquired deferred revenue adjustment	(A)	0.3					2.7				4.3				7.0
		Amortization of acquired capitalized commissions	(B)	(1.3)					(1.5)				(5.5)				(6.3)
		Amortization of purchased intangible assets	(C)	37.6					39.2				157.8				167.8
		Acquisition / divestiture items	(D)	(9.7)					9.4				9.2				8.4
		Stock-based compensation / deferred compensation	(E)	25.8					22.8				82.9				74.9
		Restructuring charges / executive transition costs	(F)	6.3					17.7				28.2				27.9
		COVID-19 expenses	(G)	(1.6)					—				3.2				—
		Non-GAAP tax adjustments	(H) - (J)	(82.1)					(235.6)				(107.6)				(291.5)
	Non-GAAP net income attributable to Trimble Inc.:			$	155.6				$	134.0			$	562.4			$	502.5

DILUTED NET INCOME PER SHARE:
	GAAP diluted net income per share attributable to Trimble Inc.:			$	0.71				$	1.11			$	1.55			$	2.03
		Acquired deferred revenue adjustment	(A)	—					0.01				0.02				0.03
		Amortization of acquired capitalized commissions	(B)	—					(0.01)				(0.02)				(0.02)
		Amortization of purchased intangible assets	(C)	0.15					0.16				0.62				0.66
		Acquisition / divestiture items	(D)	(0.04)					0.04				0.04				0.03
		Stock-based compensation / deferred compensation	(E)	0.10					0.09				0.33				0.30
		Restructuring charges / executive transition costs	(F)	0.02					0.07				0.11				0.11
		COVID-19 expenses	(G)	(0.01)					—				0.01				—
		Non-GAAP tax adjustments	(H) - (J)	(0.32)					(0.94)				(0.43)				(1.15)
	Non-GAAP diluted net income per share attributable to Trimble Inc.:			$	0.61				$	0.53			$	2.23			$	1.99

ADJUSTED EBITDA:
	GAAP net income attributable to Trimble Inc.:			$	180.3				$	279.3			$	389.9			$	514.3
		Non-operating income (expense), net, income tax provision (benefit), and net gain attributable to noncontrolling interests		(58.4)					(191.1)				29.9				(138.4)
	GAAP operating income:			121.9					88.2				419.8				375.9
		Acquired deferred revenue adjustment	(A)	0.3					2.7				4.3				7.0
		Amortization of acquired capitalized commissions	(B)	(1.3)					(1.5)				(5.5)				(6.3)
		Amortization of purchased intangible assets	(C)	37.6					39.2				157.8				167.8
		Acquisition / divestiture items	(D)	5.0					9.0				21.4				20.5
		Stock-based compensation / deferred compensation	(E)	28.5					25.3				90.4				81.2
		Restructuring charges / executive transition costs	(F)	6.3					17.7				28.2				27.9
		COVID-19 expenses	(G)	(1.6)					—				3.2				—
	Non-GAAP operating income:			196.7					180.6				719.6				674.0
		Depreciation expense		10.3					9.7				39.7				39.4
		Income from equity method investments, net		9.5					5.3				39.4				35.8
	Adjusted EBITDA:			$	216.5				$	195.6			$	798.7			$	749.2

				Fiscal Year 2021
				Low End		High End
FORECASTED DILUTED NET INCOME PER SHARE:
	Forecasted GAAP diluted net income per share attributable to Trimble Inc.:			$	1.31	$	1.54
		Acquired deferred revenue adjustment	(A)	—		—
		Amortization of acquired capitalized commissions	(B)	(0.02)		(0.02)
		Amortization of purchased intangible assets	(C)	0.55		0.55
		Acquisition / divestiture items	(D)	0.06		0.06
		Stock-based compensation / deferred compensation	(E)	0.36		0.36
		Restructuring charges / executive transition costs	(F)	0.05		0.05
		Non-GAAP tax adjustments	(H) - (J)	(0.06)		(0.09)