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Trimble CEO on how COVID-19 is driving digital engagement

Rob Painter, Trimble CEO joins the Yahoo Finance Live panel to discuss the digital acceleration and what Trimble is doing to transform the way the world works.

Video Transcript

- You know, this year, even jobs that used to require direct in-person supervision, like construction projects, have been seeing somewhat of a shift to cloud-based remote solutions thanks to technology. That's been a big boost to companies like Sunnyvale, California-based software management technology company Trimble, who's seen shares rise nearly 200% since the market lows back in March.

Joining us now for more on how the physical projects space is embracing tech is Trimble CEO Rob Painter. And Rob, appreciate you taking the time to chat here today. One of the questions I had here in terms of what you've seen-- again, you transitioned from CFO to CEO back in January, so I imagine it's a tough year to start, but what have you seen in companies embracing that technology through this recovery, and how it looks different now relative back to, I guess, earlier in the pandemic, when we were also seeing cases on the uptick?

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ROB PAINTER: Well, the nature of the markets that we serve at Trimble is there markets such as construction, agriculture, or transportation. These are the large global industries that are underserved and underpenetrated with technology. And so pre-pandemic, there's been a macro context, a secular trend to digitization, which has only increased and accelerated during the pandemic, as companies have had to adapt their work practices to work remotely, to work safely, and to be able to continue to do so productively.

- Rob, when you look at those two sectors that you highlighted there between agriculture and construction, I mean, these are jobs that still need a very physical component to all of it. So what's been the shift in the thinking? On the one hand, you've got to go back and do the work that can only be done in person, but on the other hand, I imagine there's a lot of companies that are reassessing efficiencies, productivity on the digital side.

ROB PAINTER: Yeah, well, you know, at Trimble, what we're doing is connecting the physical and the digital worlds. And that looks like connecting the hardware at Trimble with the software that connects the office in the field that connects people and machines. And so what we see, for example, in construction, is the cloud-based construction technology is moving companies from paper and manual-based processes to digital-based processes, where machine automation technology is making new operators of farm equipment and construction equipment good, and it's making good operators great.

We're using mixed reality technologies. We're using technologies that are also enabling customers of ours in transportation to be able to adapt to their supply chains as they move. And so these supply chains are moving very fast, where you have some sectors of the economy that have slowed down and you have others that have accelerated greatly. And so this real-time ability to adapt is really driving some fundamental changes in how companies operate.

- Rob, you talked about automation there. You know people are going to listen to that and say, well, what does this mean for some of these jobs that have been done in person that largely have not been able to operate the way they used to because of this remote environment we're in? What kind of impact are you seeing on the workforce as a result of these investments companies have made to speed up automation that was already kind of in motion, even before COVID?

ROB PAINTER: Yeah, so you know, as new workers enter the workforce, what we see is really more of a readiness and a willingness to be able-- and an expectation, in fact, to work in a digital context. So for those who enter the workforce, we are accelerating the pace at which people are able to become productive members of the workforce. And for those who have been a member of the workforce for a long time, they're able to do their work more efficiently and more productively.

And so it really is helping companies work through this difficult context. You know, certainly project managers on construction sites, who are used to being in-person to seeing how their projects are performing, they're having to do it remotely. And they're having to-- and the only way to do that is to deploy technologies such as what we have at Trimble. And so it really goes back to how do you make the end experience good and how do you make the good great by virtue of the technology.

- Yeah, Rob, one of the questions I have, too, is obviously that's the way that things might be done now, but once we return to normal, there's a big question out there of will they go back to just monitoring projects in person when they can. You guys reported your latest quarter earlier this month, and you showed that annual recurring revenue was up 10% year over year.

You guys also didn't give fourth quarter guidance. That's obviously something we've seen from a few companies out there. But as you're trying to kind of look to what the other side of this in 2021 looks like, what are your expectations in terms of retaining some of those customers that have dipped a toe in using some of the software once they can just go back to the old ways of doing things?

ROB PAINTER: Yeah, I mean, the mindset we have is not to create a new normal, but to really think of it as what's a better normal. And the value proposition that customers are getting from the use of these technologies is it's making the work better, faster, safer, cheaper, greener. And that's an enduring value proposition. And so really, it's our expectation that we'll continue to see use of the technology and faster adoption of the technology as we go forward.

And we see it reflected in the business model of Trimble. As you mentioned, our recurring revenue was up double-digit year over year, and more than a third of our overall revenue today is recurring. More than half of our total revenue is software today. And so, you know, we're really, we think, at the leading edge of the digital transformation in these industries.

- All right, the CEO of Trimble taking over in a pandemic. Appreciate you coming on here to chat with us today. Be well.

ROB PAINTER: Thank you. Thank you both.