Robert G. Painter
President and Chief Executive Officer at Trimble
Welcome, everyone. Before I 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 the prior year, unless otherwise noted. In addition, our P&L commentary will emphasize comparables on an as adjusted basis, which excludes our agriculture business.
Let's start on Slide 4. During the third quarter, we continued to advance our Connect & Scale strategy. The Connect aspect of the strategy guides us to digitally connect users, data and workflows across stakeholders in the engineering and construction and transportation and logistics industries. The Scale aspect of the strategy guides us to develop increasingly common back-end systems and shared technology platforms while deploying more consistent processes around focused and accountable teams. Our strategy is working and it is delivering unique present and future value to our customers as well as sustainable value creation to our shareholders.
In the quarter, we outperformed expectations at the top and bottom line and we are raising our top and bottom line guidance for the year. Congratulations and thank you to the entire Trimble team. The numbers reflect hard and intentional work in the quarter as well as over the last 4.5 years. Three messages to convey here. First, we delivered ARR of $2.187 billion in the quarter, up 14% organically. This kind of growth at scale doesn't happen without an enormous commitment to our Connect & Scale strategy. We also delivered a record gross margin of 68.5%. That compares to a gross margin of 57.7% in 2019.
While the record numbers speak for themselves, it is important to recognize that this is a result of a journey we undertook a number of years ago and we are proud of our progress. Second, the structural improvement and the quality of the Trimble business model reflects focus and choice. Choice manifests as disciplined capital allocation. In the last four years, we have divested 22 businesses. In September, we announced our intention to sell our mobility business to Platform Science and to become a major shareholder in the combined business. We are playing in the zones where we believe we have the strongest right to win.
As soon as we conclude the audit process with EY, we will return to share buyback as we believe this is a high-return on investment use of shareholder capital at our current valuation. As a reminder, we have $625 million remaining under our current authorization. Finally, the sum of our efforts over the last year is manifesting as a more simplified Trimble managed and led by a highly focused, engaged and hungry team.
Moving to Slide 5, we cover the financial highlights from the quarter. 4% revenue growth exceeded our expectations as did EBITDA at a strong 27.1% and EPS at $0.70, which performed above the high end of our guidance range. To give a quick snapshot of a few of these metrics without the mobility business, ARR would have grown 16% instead of 14% and revenue would have grown 5% instead of 4%. Before moving to comment on segment performance, I'll provide an update on the status of our financial audit procedures. During the August earnings call, I thought we were approximately a month or so away from being done. I was obviously wrong.
In September, we held our Annual Shareholder Meeting reflecting the progress made and the ongoing confidence we continue to have that our financial results will be the same as we previously reported. Since then, EY has continued to perform additional audit procedures. There is only one right answer. We work collaboratively to provide them the information they need. While our team and the EY team are making progress on completing the audit procedures, we now believe that EY will not complete their work in time for us to refile our financial statements ahead of NASDAQ's November 11 deadline.
Procedurally speaking, what will happen first is the formality of a notice from NASDAQ saying we are subject to delisting. We then communicate this via 8-K and a press release. After that, NASDAQ has a structured stay and appeals process for dealing with this exact topic. We feel confident that we are well-positioned to be granted an extension, which will provide EY additional time to complete their work and for us to file our financials, thereby regaining NASDAQ compliance.
Let's now talk about the business, starting on Slide 7 with the AECO segment. Congratulations to the team for delivering another record quarter of ARR at $1.21 billion, higher than all but one of our industry peers. The team grew the business 18% organically, which is at the high end of growth of our scaled industry peers and they are doing this in a profitable manner achieving over 29% operating income for the segment in the quarter. We look at Rule of 40 as an instructive measure where we sum ARR growth and operating margins. We are operating at a Rule of 47 delivering strong net retention and an attractive lifetime value to customer acquisition cost ratio.
This provides us degrees of freedom on how we think about investing in the business to continue differentiating as we do with the breadth and depth of our offerings, including Trimble Construction One. Our portfolio is also quite balanced with each component of A, E, C and O now operating above $200 million in ARR. I often describe this segment as the tip of the sphere of our Connect & Scale strategy and the strategy is definitively working in AECO. While we still have a lot of work ahead of us, the results of today give me confidence in delivering the results of tomorrow.
Let's turn to Slide 8 and talk about the Field Systems business. Revenue was in line with our expectations, down 2%. ARR outperformed growing 19% demonstrating the intentional work of the team to move more of our value to the software aspect of our systems to do so in the cloud and to monetize as a subscription offering. ARR growth came from strong sales of our Catalyst solution, which delivers positioning as a service, our machine control as a service offering and through ongoing growth in our traditional positioning services business. The team did this while delivering 33% operating income margin demonstrating the ability to control cost in an unforgiving market environment.
Strategically speaking, digital twins is a popular buzzword these days. In a Trimble context, I'd like to think we were the original digital twin company. The job of a serving and mapping professional is to create a digital model of the physical earth. Our reach into the physical world connected to our digital footprint and round trip back to the physical world is what is singularly unique about our company. In the quarter, we released a new solution to enable this workflow. I'm really excited about this launch. It's called Trimble Reality Capture Service and what it does is link data captured in the field from terrestrial, mobile and aerial modalities, then links it to Trimble Connect, which enables cloud-based visualization and collaboration at scale. We think this will prove to be one of those only Trimble innovations and we are excited to see how the market adopts this technology and guides us to develop it further.
Another strategic milestone came in the form of the renewal and extension of our 20 plus year joint venture with Caterpillar. Slide 9 provides additional details on the renewal. The most important element to convey is our shared vision to accelerate innovation and customer adoption of mixed fleet machine control solutions and construction ecosystem technology. For Trimble customers, the goal is simple, broader availability and access to our technology. Our recent partnership announcement with John Deere is evidence that we intend to achieve this goal. Also, our ability to link machine control solutions to Trimble Construction One offerings is another only Trimble proof point.
Closing our segment commentary on Slide 10, transportation and logistics beat our top and bottom line expectations. Transporeon delivered double-digit ARR growth and Maps delivered high single-digit ARR growth. Excluding the mobility business, organic ARR growth in this segment was 9%. Operating margins of 21% were the highest we have achieved in many years. While the freight recession persists, the Transporeon team delivered a record level of third quarter bookings, which was also the second largest in the history of the business. In a dynamic macro environment, the team has done a great job with solid execution and an advantaged business translating into profitable growth and consistent share gains.
Strategically speaking, the big news of the quarter was our announcement that we signed a deal to sell our mobility business to Platform Science and that we intend to become a major shareholder in the business. Further details are covered on Slide 11. For the combined business, this will create a scaled and focused software business that has a unique combined breadth of solutions needed to compete in the current environment. For Trimble, we will maintain a commercial relationship with the ongoing business. And at a company level, this enables us to further simplify and focus our attention and efforts in the areas where we have the most compelling right to win.
Before handing over to Phil, in the last call, I talked about how I see Trimble as an AI winner. In the quarter, we continued to progress our AI efforts, both internally and externally facing. In this call, I'll end with a perspective on the macro-environment. Geographically, the bookings we see in North America as the strongest market and Asia Pacific excluding India as the weakest market at the moment. By end markets, construction and transportation overall represent our bookends. Construction sub-segments such as renewables, mega projects and infrastructure remain relatively strong. Residential remains challenged as do transportation end markets. In all environments, we anchor to our unique value proposition. What we sell enables work to be done better, faster, safer, cheaper and greener. The business is there. We need to be showing up in the right market segments with the right solutions and the right go-to-market motions.
Phil, over to you.
