TRMB - Trimble Inc. (TRMB) Q4 2023 Earnings Call Transcript
2024-02-12 12:21:03 ET
Trimble Inc. (TRMB)
Q4 2023 Earnings Conference Call
February 12, 2024, 08:00 AM ET
Company Participants
Rob Painter - Chief Executive Officer
David Barnes - Chief Financial Officer
Conference Call Participants
Kristen Owen - Oppenheimer
Jerry Revich - Goldman Sachs
Jonathan Ho - William Blair
Tami Zakaria - JPMorgan
Chad Dillard - Bernstein
Joshua Tilton - Wolfe Research
Rob Wertheimer - Melius Research
Presentation
Operator
Good morning, and welcome to the Trimble Fourth Quarter and Full Year 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
Rob Painter, Chief Executive Officer of Trimble, you may begin your conference.
Rob Painter
Welcome, everyone.
Before we get started, our presentation is available on our website and we ask that you refer to the safe harbor at the back. Our financial commentary will reflect non-GAAP performance metrics, including organic growth comparisons, which refer to the corresponding period of last year, unless otherwise noted.
Strategic progression takes place as a series of a thousand little steps, periodically punctuated by non-linear moves and events.
Reflecting on the quarter and the year, 2023 represented a transformative year for Trimble. Within the portfolio, the Transporeon acquisition and the announcement of the agriculture joint venture with AGCO represent two of the larger moves in the history of our company. Reflecting on our Connect & Scale strategy over a five-year timeframe, the structural improvement in the business is self-evident and is the result of methodical work over the last few years by our colleagues and partners.
Annualized recurring revenue finished 2023 at a record $1.98 billion, up 13% organically, and represents the single biggest lever we have to increase shareholder value. This compares with ARR of $1.1 billion five years ago. Recurring revenue was 49% of our total revenue in 2023 and 53% in the fourth quarter versus 31% in 2018. Remaining performance obligations closed the year at $1.8 billion.
Gross margin closed at a record 64.7% in 2023, up 470 basis points over 2022. This compares to 58% five years ago. This is definitive structural improvement. EBITDA margin closed at a record 26.6% for the year. In dollars, we crossed the threshold of $1 billion of EBITDA. This compares to EBITDA of 22.6% five years ago.
Operating leverage has been 44% over a five-year timeframe. We are running with negative working capital, and we closed with free cash flow of $555 million, up 60% over prior year....
Trimble Inc. (TRMB) Q4 2023 Earnings Call Transcript