Robert G. Painter
President & Chief Executive Officer at Trimble
Welcome everyone. Before I get started, our presentation is available on our Web site; and we ask that you refer to the Safe Harbor at the back. Our financial commentary today will reflect non-GAAP performance metrics, including organic growth comparisons, which will relate to the corresponding period of last year, unless otherwise noted.
The Trimble 3-4-3 operating model simultaneously balances a view on looking forward three months, four quarters and three years. As I think about framing today's commentary on 2022, I think there is a parallel to look back three months at our fourth quarter, four quarters to look back at the year 2022, and three years back to 2020 when we began our Connect and Scale journey.
COVID, supply chain disruptions and net divestitures over these last three years has created a dynamic that makes it challenging to discern the signal from the noise in any given quarter, especially when looking at the year-over-year trends; whereas the long baseline reveals the definitive patterns of progression.
As I reflect on the fourth quarter of 2022, let's begin on Slide 2 with our key messages, which are consistent with the commentary from the prior quarter. Our key growth metric is annualized recurring revenue, which met our expectations and grew 16% to a record level of $1.60 billion. Congratulations to the team for delivering this record performance, which compares to $1.19 billion of ARR at the end of 2019.
Total revenue for the year was a record $3.68 billion, up 7% over 2021, and up 6% compounded since 2019, growing through COVID and business model transitions. Total revenue in the quarter was $857 million, flat with last year, and towards the lower end of our guidance range.
The delta between the ARR and total revenue performance reflects a slowdown in hardware sales through our dealer partners, as dealers continued to sell-through their inventory while processing mixed macroeconomic sentiment. For perspective, over the last three years, the sum of our civil, agriculture and survey hardware and related software has grown at a 12% compound annual growth rate, with agriculture growing above and survey growing below this baseline.
Gross margin finished at a record level of 61.8%, exceeding our expectations, reflecting software mix, the cumulative impact of model conversions and abating supply chain disruptions. For the year, we achieved a 60% gross margin, a record annual level, up 170 basis points year-over-year, which compares to 57.7% gross margin in 2019.
EBITDA margin of 24.3% met our expectations in the quarter and ended at 25% for the year, up 210 basis points as compared to 22.9% in 2019. Finally, earnings per share of $0.60 was exactly at the midpoint of our guidance for the quarter.
Moving to Slide 3, let's look at the progression of our Connect and Scale strategy through the lens of our reporting segments, beginning with Buildings and Infrastructure. The big event for the team was our Trimble Dimensions user conference in November, where we had over 5,700 attendees from the global engineering and construction industry, which provided a great forum to reconnect with our customers and partners.
We launched many new innovations, including the Trimble Construction Cloud, powered by Microsoft Azure, which is an industry cloud built to streamline construction projects by connecting users, data and workflow. We also announced extensions of our machine control technology platform to new OEMs and new machine types, further expanding our reach to connect the physical and digital worlds.
The highlight financial achievement in the quarter was delivering over 20% organic growth in ARR, in addition to record levels of ACV software bookings and record levels of cross-sell bookings. We also had a strong start for our newly acquired Bid2Win business, where we've had some early cross-sell wins.
As we have previously discussed, we continue to allocate incremental capital towards our own digital transformation, as well as our go-to-market efforts, which are generating strong interest from our customers and partners and demonstrating encouraging signs of internal productivity and efficiency. The work we are doing in this business will be highly leveraged across the entirety of the company.
In Geospatial, revenue was down further than expected, as dealers moderated their inventory levels in the face of softening demand and macro uncertainty. Looking at the indicators, we see softness in residential, and while a portion of the expansion of infrastructure is getting consumed by inflation, underlying optimism remains in the market.
For perspective, I look at the three-year CAGR that I talked about on Slide 2 in order to calibrate the long baseline performance. Strategically speaking, in 2022 we continued to launch new innovations in GNSS, 3D laser scanning and handheld data collectors, and we achieved a double-digit increase in ARR as our business model strategy takes hold.
In Transportation, we delivered revenue and ARR growth in line with expectations, in addition to delivering the fourth quarter in a row of operating margin expansion. Connect and Scale progression also came in the form of continued development of connected workflows, such as Connected Maintenance, Connected Locations and Engage Lane.
The big story, of course, in the fourth quarter was the announcement of the Transporeon acquisition. To refresh memories, Transporeon operates a leading cloud-based transportation management platform, powering a global network of 145,000 carriers and 1,400 shippers. The platform integrates with more than 3,000 systems and powered more than 25 million transactions in 2022. For me, this is the very definition of a Connect and Scale business.
I had a chance to spend a few days in Europe with Stephan Sieber and the Transporeon team in January, and my level of conviction of strategic and cultural fit has only increased. We are still working through regulatory approvals and expect to close the deal in the first half of this year. We are excited to get to work together.
In Resources and Utilities, revenue and ARR growth were led by our positioning services, utilities and forestry businesses. Our definition of utilities covers our work with electrical and water utilities, but our positioning services business can also be thought of as a utility, in this case, precision GPS as a utility.
In October, we announced that we crossed a hurdle of 34 million hands-free miles driven with General Motors and their Super Cruise program. Our precise GPS technology enables a vehicle to maintain its lane position in various environments, and we are working on several other Tier 1 and OEM program opportunities.
Moving to agriculture, revenue was flat year-over-year, and up when excluding Russia and Ukraine. The three-year, double-digit CAGR growth on Slide 2 is instructive for calibrating the long baseline growth of the agriculture business. With a product lens on Connect and Scale, we are now bundling our guidance hardware, software and our positioning services, providing both easier access to the technology and a better value proposition for our customers.
With a go-to-market lens on Connect and Scale, users and customers are at the center of our strategy. In pursuit of this strategy, we announced this week that we are taking a different approach to our go-to-market relationship with CNH Industrial. Moving forward, our distribution to aftermarket customers, after a 12-month transition period, will be done entirely through independent dealer partners, with the product bearing the Trimble brand.
Less than 20% of our revenue in the Resources and Utilities segment goes through CNH to their dealer network today. We expect to maintain this revenue and address aftermarket demand and the needs of farmers through our direct relationships with our independent dealer network. This evolved approach to distribution will also enhance our ability to offer OEM brand agnostic solutions to customers to help them orchestrate their field operations with mixed fleets of equipment.
Our new approach to aftermarket distribution will improve our ability to sell our full range of technology solutions to aftermarket customers, including guidance, selective spraying, variable rate application, water management and our Connected Farm works center software solution. Our evolving strategy will also enhance our ability to cooperate with OEMs across the industry for their needs for factory-fit equipment.
Let me now turn the call over to David to take us through the numbers.