Good morning, everyone. I'm Brian Gesuale, Senior Analyst at Raymond James. We're delighted to have Trimble here to take you through their story. This has been a story of motion. We have a company that is divesting a major piece of its business and keeping a joint venture sleeve of that, which they'll talk about. We're very excited about the overall trends, the overall evolution there. We have the company's incoming CFO, Phil Sawarynski, here, trial by fire here to tell us, take us through the story. So, Phil, I'm going to turn it over to you.
Great. Thanks, Brian. Thanks for everyone for coming, your interest. Just curious, how many people know Trimble? Okay, so that's good because this probably isn't a one-on-one version. It's maybe a little more advanced than that, but I'll try to keep it relatively simple. So, yeah, Phil Sawarynski, been with the company 15 years. David Barnes in the back. He's the outgoing CFO. Currently transitioning for May is when the official transition occurs, but I guess I'm starting now, so be kind and be patient with me. This is the legalese. I'm sure everybody's read it in fine detail, so skip over that. So, as I talk through today, I'm going to look, there's basically five key messages here. First of all, Trimble, if you know us, our heritage, we were formed in 1978 by Charlie Trimble and a few others. We're an industrial tech company.
Our heritage, which will play into this theme, is around we start with positioning services. We've evolved that into more hardware and throughout the years became much more software-oriented and solution-oriented. What you'll see with our Connect & Scale strategy is that we're leveraging that heritage in order to continue to solve bigger and bigger problems with our customers, allow us to become easier to do business with with our customers. In that Connect & Scale strategy, we take what used to be point solutions. We're connecting our solutions, our workflows, our data, and allow higher ROI and higher value for our customers, all the while actually creating additional value for Trimble and Trimble's shareholders by being able to cross-sell, upsell, and with the existing customer base along with new logos. As Brian mentioned, one of the things we are doing is simplifying our portfolio.
We've done 21 divestitures over the last four years. The large one that he mentioned that we announced in September was formation of an AGCO JV with AGCO. Subsequent to that, we haven't closed yet, but we announced a reorganization. We used to have four segments. We're moving down to three. Those three are going to be much, much better from an operational standpoint. It'll create focus, and we'll talk about that in a little bit. It should add transparency for reporting. Again, you'll see how we segment into more software-centric hardware and then our transportation business. From a financial standpoint, we exited 2023 with about $2 billion of ARR. It's growing double digits. We continue to grow our margins. Our transition, as far as our revenue mix, much more recurring revenue. You see that continuing, that mix. We're an asset-light business.
When you put all that together, that manifests itself in higher cash flow generation, which then allows us to reinvest organically in the business, inorganically in the business. It allows us to pay down debt faster and return dollars to shareholders via share buybacks. Our capital allocation plans, we talked about this post the AGCO JV close, where we're anticipating about $1.5 billion of proceeds. And of that, we said $1.1 billion would go to debt repayment. The other $400 million plus our free cash flow in this year, we anticipate using virtually all or the bulk of our $800 million share repurchase authorization that we just announced. Okay, so let me talk a little high level about Trimble. So starting over at the purpose-driven, our mission is to transform the way the world works. We do that.
We add by via adding value to our customers and allowing them to do their life's work. We do this through productivity, quality, sustainability, and safety. We serve attractive end markets. We'll talk a little bit about this, primarily construction, geospatial, Ag through the JV, transportation. These are large, global, underserved, underpenetrated markets with technology. We're leading their transition as they digitize as well. We have a differentiated strategy. Trimble's heritage, as I mentioned, in the hardware in the field, we've evolved much more into the software, into the office. But we have that connectivity from the field to the office, the hardware, the software. We leverage that then into our Connect and Scale strategy, which I talked about, and I'll get into a little bit more. We have the right team. We have a global team of over 12,000 employees. We have a fantastic culture.
It's a high-performance culture. We have a world-class team. We have a compelling business model. As I mentioned, we continue to evolve more and more recurring revenue. That adds resilience to our financial model. Our asset-light business means less capital deployed into the business and more available to grow organically, inorganically, to return to shareholders. So here's some numbers. Since I talked a little more qualitatively, let's talk a little bit more numbers. So on the left-hand side, you'll see over 1,000 unique patents, over $660 million spent in R&D. We are a tech company. We're investing in the company. We have millions of customers and partners. We have millions of sensors in the field. So this is important. As I mentioned, we have the base. We have the depth and breadth, which is an enabler to our Connect and Scale strategy.
So if you look on the right, the revenue, and this is benchmarked against 2017, we've grown revenue over $1 billion in that time frame. Our ARR has grown from $780 million to almost $2 billion in the same time frame. Our margins expand 620 basis points from the 20.4% to the 26.6% that you see in the EBITDA margins. So I mentioned the industries that we are focused on and the end markets. This is the breadth and depth that I was talking about earlier. I'll just point out a couple of these. So on the construction side, over $500 billion worth of construction projects go through our ERP. We're in the majority of the ENR 400. In geospatial, we have hundreds of thousands of instruments in the field, transportation, over 90% of the top 200 trucking companies, and agriculture, over 400,000 displays in the field.
Again, this is the depth and breadth that we have today that we continue to build on with our Connect and Scale strategy. So let's talk a little bit about Connect and Scale. So this is a busy slide. I get that. I'll try to make it simple. So walking from your left to right, so our past, when we think about these point solutions, so Trimble, when I started many years ago, 15 years ago, we had really good point solutions. They started out as positioning. So think about survey equipment in order to find specific points on the earth. Evolved into machine control. So this is where we can drive tractors or we can drive construction equipment with sub-centimeter accuracy. We can control the blades on a dozer up and down vertically to make sure that the dirt is moved right the first time to a model.
That's continued to evolve into where we are today. Before I get to that, the selling model at the time, we had very multiple divisions selling these products. And from a customer standpoint, you had a customer that may have five different salespeople coming in and calling on them for very specific products. They may end up signing five different contracts with five different legal entities and then getting five different invoices. So part of our Connect & Scale strategy is to make it easier for our customers to do business with us. So now we're moving all of these point solutions into a single ecosystem. And what that allows us to do now is our customers can get one invoice. They deal with one sales account manager with support from others with the specific solutions.
We're making it a lot easier for our customers to do business with us. We're also giving them by the Connect side, we're connecting their data flows. We're connecting their workflows. We're taking all of these sensors and all of these workflows that we've had that were individual. We're connecting those. So when we think about solving bigger and bigger problems with our customers, we continue to solve the singular work streams and the point solutions with them. But where we're now migrating to is more system-wide efficiencies. And so we talk a lot about our competitive advantage. And because of the depth and breadth and the sensors in the field, the information that we have, we're able to work with our customers and make it at a system-wide level much easier for them to move information and data from application to application instead of manually doing it.
In the past, they would be trying to pick best of breed for each of these different work solutions. Where Trimble wins is when we sell them the bundle of the solutions to allow them to easily move that data and easily either manage a project or manage the life cycle of their asset. What this also does from a business model from Trimble is we're transforming into a much more recurring revenue model with these offerings. And this becomes more and more resilient, as I talked about before. So from a Trimble standpoint, from what it also does, it allows us to get better access and information about our customers. So we now are moving to an account-based selling and an account-based marketing tactic.
So our sales teams can now see, instead of account information or customer information sitting in several ERPs across the company, in one place what solutions they have, what solutions should they have. And so this allows us to cross-sell and upsell. And as demonstrated, we talked about our Q4 2023 numbers, where almost half of our ACV bookings was through our TC1 bundles, which is our Trimble Connected One. A quarter were cross-sells. So it's working. There's a lot of work to do. There's a lot more bundles to go in there. But we're constantly adding to that. We're constantly looking at what we call personas, which are the individuals within these companies that are actually using the product. So whether you're an architect, whether you're an engineer, whether you're a general contractor, right? We define these personas. We look across our portfolio.
We can define and come up with bundles that make sense and resonate for what they do. This is our competitive advantage. As we continue to go through the future, these platforms that we're continuing to build will just add to the ecosystem where we're adding more and more partners. We're adding more and more applications. We're adding more and more value so that our customers can actually solve bigger and bigger problems. To maybe bring this home in an example, I'll start with the bottom of the what. For example, if you're looking to build a building, first thing you do is you're going to architect. You're going to design it. Well, we have products within our SketchUp portfolio and our A&D group to do that. Next, you create a constructible model.
And you can see a picture here, which is a 3D model or constructible BIM. This is where the steel goes, where the HVAC goes, where the plumbing goes, right? This is what the contractors will actually use to build the building. So our advantage, when I talked about the digital to physical, this is the digital. You build a virtual model of what you're trying to actually build in the physical world. You can take that information, and we can take it to the where. So this is where the building's going to be built, where the four corners of the building are going to be, where the trenches need to go.
This is where our survey equipment comes into play. This is where our earth-moving equipment and our machine control comes into play, where we control excavators. So you can take the digital. You feed it into the physical.
When you're building the building, you can use our scanners. We have laser systems, which actually can tell the workers where exactly in the wall or in the beam that you need to drill a hole. That comes from the digital model to the physical. They actually build the physical building. When they're done or during the progress, they're actually using Trimble scanners in order to scan and create a 3D model. It allows them to compare the 3D model of the as-built to the 3D model of the as-designed. You can see whether or not you're consistent with the two. Or if there's a difference, then you can address it right away. When you're done with the project, you can, again, use the Trimble 3D scanner and scan it. Then you have an actual record for the owners of what was actually built.
I think about we did a remodel on our house a few years ago. I remember got a bid from a couple of contractors, picked the one that we thought was the best. They started opening up Sheetrock and looking. And guess what? None of the stuff they thought was behind the wall was behind the wall. We didn't have a good model. It's a very simple version. But this happens every day in this space, right? So it's really important in the future is to have a true 3D as-built model. And by connecting the physical and the digital, which Trimble does, that's how you get there. I'll point up to the why. During the project, you may have a general contractor. A general contractor needs to manage his or her business. They need to know what their costs are in the project.
They want to know how to schedule their equipment and their people and their trades. They also want to know, did they get it right? How did that compare to the estimate? The data flow also through this project can get feeds back to the ERP, our Viewpoint solution. We have other solutions around the bidding and the estimating as well. So this allows, by having this seamless information flow, it also allows the contractors to get better at what they do, where they're making money, where they're not making money, how can they do a better job bidding and estimating a project. So it's this whole continuum, which, again, we're solving big problems, not just point problems anymore. OK. So I'm going to pivot here. We talked about the Ag JV. We announced this in September. So this is the right answer for Trimble.
It's the right answer for AGCO. It's the right answer for the AG customers. From a Trimble standpoint, it streamlines our portfolio. As I discussed, we're simplifying. It reduces our exposure to a hardware-centric AG market, which is cyclical. One of the key points is we retain our GNSS IP. This is core technology to Trimble. Trimble retains it. Moving all the way to the right, it de-risks Trimble. We announced the termination of our CNH corporate contract. We knew there was going to be a transition for the channel. This de-risks us with that channel transition. As we continue, as I mentioned, the business model continues to evolve. With the AG business moving into the JV, you can see pro forma, our software services recurring revenue, is moving to almost 75%. Our recurring revenue makes pro forma 60%.
I already talked about the $1.5 billion in net proceeds that we're going to pay down debt and repurchase shares. Now we'll talk a little more financials for Trimble. I'll actually focus more on the right-hand side, which is our model progression. If you look at our revenue between 2018 and 2023, up $700 million. Our ARR from $1.1-$1.98 billion. That's an 80% increase. Our percentage of software services revenue was up from 52%-67%, 15 points of increase. Both the gross margin is expanding via the mix. Our EBITDA is growing 400 basis points. You're seeing margin expansion. The operating leverage is 44%. Operating leverage is defined as the change in the dollars of operating margin divided by the change in the incremental revenue.
So that means for every dollar of incremental revenue over these five years that Trimble has delivered, $0.44 is going to the bottom line, to the operating margin. A couple others that I'll point out on this slide, the free cash flow, $555 million. So the model progression, the asset-light business, you can see less than 0% of TTM net revenue is net working capital. That manifests itself into $555 million of free cash flow. And that number is actually low because we had a lot of transactional fees related to the Transporeon acquisition in 2023. So talking moving to 2024, so the first thing I'll point out is all of our numbers actually assume that the AGCO JV is going to close at the beginning of Q2 2024. We said first half of this year. There's still regulatory that we're working through.
But for modeling purposes, we said the beginning of Q2 2024. We talked about the debt paydown and the share repurchases over the year. Our revenue around $3.57-$3.67. Our EPS is expected to grow even with the dilution from the Ag JV. The free cash flow, the 0.85x conversion, we talked about that. Again, there are transaction fees in that. We would expect that to be closer to 1x on a go-forward basis. The as-adjusted, so the as-reported, that's with one quarter of the JV and the rest with the JV out. The as-adjusted is a look if we didn't have is a more apples-to-apples look. We presented that in the reconciliations at our earnings call. So we're looking at $2 billion of ARR growing, with $2 billion from 2023 growing 11%-13%. Our revenue on an as-adjusted basis, so again, this would exclude Ag.
The as-adjusted is roughly $3.5-$3.6 billion, 6%-9% total growth, 4%-7% organic. The revenue mix, talked about this earlier, would be 60% recurring revenue post-JV and 75% software services recurring, 100-200 points of gross margin expansion for 2024. One of the things we did, we talked about, was the new segmentation. Again, this is to simplify, add transparency, add more operational focus. Our AECO business on the top, the architects, engineers, contractors, owners. This is largely a software business or is a software business. It is our construction software. This is where the bulk of the Connect and Scale strategy will show itself.
When we look at this business and as we report on this, you're going to see that by combining this, again, with the Connect & Scale, a lot of our expectations is the metrics around the ARR, the upsell, the cross-sell, the churn, remaining performance obligations, right? This is a software business. We look at it as a software business. We want to perform as a software business. The Field Systems is a lot of our hardware and what we call our software-enabled hardware. And you can see it's about 50% still software services recurring. But this is more of a channel in our legacy hardware business. And as we, again, with the performance focus from our operational performance focus with this business, by combining these and having hardware under a single leadership, we're taking the best practices across the company and around forecasting and planning.
So if you remember, over the last couple of years, we talked about supply chain issues and how after COVID, with the supply chain freeing up, a lot of our customers ended up buying ahead or placing orders well ahead. That all flowed through. And then the hardware came down, right? So our predictability and our volatility around the hardware was not great, to be blunt. But putting this under one roof, where we now and applying the best practices, we now have better visibility into our dealer stocking. And we also can have better visibility into what our customer end customer demand is. On the Transportation and Logistics side, just going through the box of the telemetry, that's our mobility business. Our transportation management system is our enterprise business. Our maps business is trucking. It's like a Google Maps for trucking.
The transport management is our Transporeon acquisition in Europe. As we think about these businesses going forward, again, I talked about the AECO being a software business. The Field Systems will be reported. It's more of a hardware business. You'll still see probably a little bit of lumpiness in there. We talked about some government orders, for example. It's hard to predict. Last year was a banner year for us. This year, we're predicting less. It has to do with the buying cycles of the government and the availability of funds. There'll be more transparency in being able to see the ups and downs in that business. In transportation, I'll just mention Transporeon. Transporeon is a business. It's a platform business. When we think about AECO, what we're doing on Connect & Scale, Transporeon, it's very our plans there are very applicable.
Transporeon is a platform business. It's mostly European-centric. But we can do the same things that we're doing around AECO, where we can look at upsells, cross-sells, new products. We're looking from an M&A standpoint across the board. What we tend to look at now is more tuck-in acquisitions. And so these are small acquisitions that we can add to our platform and quickly put the application on top or cross-sell with existing applications. So this becomes an easy upsell. We talked about in our AECO, we did a small acquisition late last year, very small. And we immediately integrated it. We added that to the portfolio. And within less than a quarter, we doubled the users and doubled the customers. So very quickly integrating that, very quickly able to upsell and cross-sell product.
And that's the model we anticipate as we go forward, both with our AECO business and our transportation logistics business, particularly the platform side of things. So I'm not sure. I think that's my last slide. And I apologize. I may have gone through quickly.
That's the last one?
Let me just check. Yeah. I think that's it.
No, that's perfect. Phil, maybe time for just one or two questions. I'd like to ask about the AECO business. Can you maybe just give people a sense for the market exposure? I get a lot of questions about residential exposure and then also maybe regulatory tailwinds that may be helping that segment over time.
Yeah. So I'll say the residential, generally the residential across Trimble is we have about 10% of the business is exposed to the residential. A lot of it actually, from a residential standpoint, manifests itself in our Field Systems around our surveyors because as in residential, if you're actually building new—excuse me, new developments—the first thing you do is you have a surveyor go out. They're trying to plot the actual development and then each of the parcels within that, right? So that's where you see a lot of it is around our survey business generally. And then your second question, regulatory?
Regulatory. So when we think of infrastructure spend and stuff like that, that would begin to kind of permeate the business.
Yeah. So I think I'll answer that in a couple ways. So it's definitely help.
And I would say the infrastructure spend, again, with our hardware businesses and our machine control, a lot of that's a little bit more from year to year on a short-term basis, maybe a little more lumpy. When we start talking about AECO, though, we believe that that's actually a secular value play. And we sell ROI. And so whether it's if there's positive funding from an infrastructure standpoint, that certainly helps. But on the flip side, when things are tighter and contractors are out trying to win new deals, they need to be cost competitive. And the way you become cost competitive is you implement technology. You get the ROI there. You can be more competitive. And you can actually win more bids. And so that's why we see that as a more secular play.
But there certainly could be some tailwinds around the infrastructure spending as it filters through the system.
Fantastic. We're going to adjourn to the breakout room.