Trimble’s transportation revenue falls 3% in Q4

Trimble Inc. on Wednesday reported transportation revenue decreased 3% year over year (y/y) to $150 million during the fourth quarter.

For full-year 2022, transportation revenue totaled $604.2 million, a 5% y/y decrease from ’21.

Trimble is a Westminster, Colorado-based provider of technology solutions for trucking companies, freight brokerages and 3PLs. In addition to transportation, the company also also operates in industries such as buildings and infrastructure, geospatial hardware and software, and resources and utilities.

Despite the decline in fourth-quarter and full-year transportation revenue, officials for Trimble touted the segment’s organic growth and annual recurring revenue (ARR).

“Our fourth-quarter results in the transportation segment reflected improvement across a number of dimensions,” Trimble CFO David Barnes said during a call with analysts. “Organic revenue grew 5% driven by higher year-on-year sales of enterprise and map software solutions.”

Barnes said ARR for the segment grew at a mid-single-digit rate in the quarter.

“Revenue trends and our mobility offerings improved sequentially from prior quarters, driven in part by higher sales to our largest OEM customer,” Barnes said. “Operating margins of 14.5% were the highest since 2019 and reflect strong performance by our team at managing costs.”

Trimble (NASDAQ: TRMB) reported fourth-quarter adjusted earnings per share of 60 cents and revenue of $856.5 million. The results missed Wall Street consensus estimates of 61 cents per and revenue estimates of $877.2 million.

Full -year total revenue was $3.68 billion, a 0.5% decline compared to 2021.

For 2023, Trimble’s guidance outlook calls for revenue between $3.7 billion and $3.8 billion and adjusted earnings per share of $2.66 to $2.86.

North America remains Trimble’s largest market by revenue during Q4 at $456 million, a 1% decline compared with Q4 2021. The second-largest market was Europe at $239 million, a 17% y/y decline.

In December, Trimble acquired Transporeon, a Germany-based logistics company that uses a cloud-based transportation management system to connect carriers, logistics service providers and shippers. The all-cash deal was valued at $1.98 billion.

Transporeon’s platform, boasting a network of 145,000 carriers, 1,400 shippers, mainly in Europe, processed more than 25 million transactions in 2022.

Rob Painter, Trimble’s president and CEO, said the company anticipates rolling out Transporeon’s cloud-based solutions to the North America transportation market once the deal is finalized.

“[Transporeon] is definitively a platform company really in the mode of connecting scale,” Painter said. “They have a set of connected capabilities, if they’re selling it through a dedicated sales force there’s a land and expand play within that. There’s strong net retention. There’s strong gross retention in the business. I see as much that we can take from Transporeon to Trimble as much as I think that we could take aspects of Trimble into the Transporeon business.”

Trimble Inc.	Q4/22	Q4/21	Y/Y % Change
Total revenue	$856.5M	$926M	(8%)
Transportation revenue	$150M	$155M	(3%)
Buildings/infrastructure revenue	$350.2M	$365.1M	(4%)
Geospatial revenue	$171.1M	$221.1M	(23%)
Resources/utilities revenue	$185.2M	$183.8M	1%
Adjusted EBITDA	$208.4M	$222.9M	(7%)
Operating income	$187.8M	$204.5M	(8%)
Adjusted EPS	$0.60	$0.62	(3%)