Trimble (TRMB) Q2 2026: A Beat, A Raise, And A $562M Write-Down

Trimble Inc. (TRMB) Q2 2026 — Q2 2026 (quarter ended July 3, 2026): revenue $972.0M vs a $952.1M bar, up 11% reported and 10% organic. Non-GAAP diluted EPS $0.86 vs $0.802, above the company's own $0.78-$0.82 guide. Non-GAAP gross margin 71.8%, a record. Adjusted EBITDA $278.0M at 28.6%. ARR $2.509B, up 14%. A $562.0M goodwill impairment on T&L took GAAP EPS to $(2.02). FY26 guidance raised. New $1.0B buyback. The stock hit $61.91 intraday and closed $56.35, down 2.81%. Trimble beat on revenue and earnings, raised full-year guidance, pulled its 30% EBITDA margin target forward a year and authorised a new $1.0 billion buyback - and the stock gapped up to $61.91 and closed down 2.81% at $56.35. The same 8-K booked a $562.0 million goodwill impairment against Transportation & Logistics, the segment now under a Goldman-advised strategic review. Footnote (E) says the write-down was triggered by 'a sustained decline in market capitalisation and stock price'. The accounting followed the tape down, on the morning the sale process was confirmed. THE CALL: HOLD (3/5, A GOOD BUSINESS AT A FAIR PRICE - THE WRITE-DOWN IS THE TELL, NOT THE BEAT) — base-case value ~$53.0 vs ~$56.35 today. KEY METRICS: - CALL: HOLD, 3/5 conviction. Probability-weighted fair value ~$53 against the $56.35 August 12 close, 5.9% below. Base case $55.52 on 7.5% owner-earnings growth, a 9.0% discount rate and 3.0% terminal growth; bear $38.16; bull $70.10. An independent sum-of-the-parts at 5.5x AECO, 3.0x Field Systems and 3.0x T&L, less capitalised corporate cost, lands at $53.31. Wall Street: Strong Buy, 13 analysts polled by S&P Global as of 22 July 2026, average target $81.27, low $61, high $94. - THE ADJUSTED EPS GAP: the FY26 guide of $3.60-$3.70 is non-GAAP and adds back roughly $170M a year of stock-based compensation - about $0.73 a share on 234M shares. Charge it as the real cost it is and owner earnings are ~$2.92, so the 15.4x that every bull cites is really 19.3x. Enterprise value is $14.43B: 3.68x the $3,925M FY26 revenue midpoint, 12.8x our $1,130M adjusted EBITDA estimate, and $5.75 per dollar of the $2,509M ARR. - THE RAISE, RECOMPUTED: FY26 revenue guidance moved from $3,835-3,915M to $3,900-3,950M, a $50M midpoint raise of 1.3%; adjusted EPS from $3.47-$3.64 to $3.60-$3.70. But GAAP EPS guidance went from $2.05-$2.21 to a LOSS of $0.07-$0.12. Solve the range for Q4 and it implies $1,047.6M, up 8.0%, so second-half revenue growth of about 7.6% against 11.4% in the first half. Segments: AECO $388.5M +10.9% at a 30.6% margin, Field Systems $442.5M +12.7% at 32.9%, T&L $141.0M +6.3% at 24.0%. - THE BUYBACK, READ PROPERLY: the new $1.0 billion authorisation replaces and cancels a prior one that still had $608.2M remaining, so genuinely incremental capacity is $391.8M - about 3% of the $13.2B market value, not 7.6%. Trimble did repurchase $329.0M in the first half and diluted shares fell from 239.6M to 233.0M, down 2.8%. First-half free cash flow was $501.8M on $13.2M of capex, though $250.4M of that came from receivables converting. Net debt $1,244.9M, about 1.1x EBITDA. What to watch: UP: terms out of the T&L review above 4x revenue, which on a ~$564M run-rate is $2.3B for 14.5% of the business; second-half growth beating the ~7.6% the raised guide implies; AECO holding its 30.6% margin; a price nearer $48, where it traded on 17 June. DOWN: the review ending with no transaction, leaving a $562M mark and no offset; H2 growth undershooting 7.6%; another impairment against the remaining $4.83B of goodwill. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.