Executive Summary

Q2 2025 delivered a clean beat and guidance raise: revenue $1.94B (+13% total; +7% organic), adjusted EPS $4.87, adjusted EBITDA $775M; full-year total revenue growth raised to ~13% and adjusted EPS to $19.90–$20.05; Q3 adjusted EPS guided to $5.08–$5.12 .
Segment performance was broad-based: Application Software +17% total (+6% organic), Network Software +6% total (+5% organic), TEP +10% total (+9% organic), with core margin expansion year-to-date and network growth reaccelerating as comps normalize and DAT execution improves .
Capital deployment remained active: announced $800M acquisition of Subsplash (AI-enabled faith-based engagement, ~high-teens organic growth) with ~$5B of remaining M&A firepower and pro forma leverage ~3.1x net debt/EBITDA; CentralReach closed April 23 and contributed in Q2 .
Cash flow and tax: adjusted FCF $403M (+10% YoY) and TTM FCF >$2.3B; repeal of Section 174 reduced 2025 cash taxes by ~$150M ($60M benefit in Q2) with ~$120M benefit carrying into 2026, supporting the raise and near-term cash efficiency .
Stock-relevant catalysts: beat vs consensus on revenue and EPS, raised FY guide, AI/productivity narrative strengthening (25 AI products in market/dev; 30% R&D productivity gains cited), and freight/network monetization actions at DAT improving trajectory .

What Went Well and What Went Wrong

What Went Well

Broad-based growth with margin discipline: Q2 revenue $1.94B (+13%) and adjusted EPS $4.87 above prior guide ($4.80–$4.84), with year-to-date core segment margin expansion of 70 bps; adjusted EBITDA margin 39.9% .
Application Software strong execution: total +17% and organic +6%, highlighted by Aderant’s best bookings quarter ever (AI-enabled solutions, cloud migration) and continued cloud migrations at Deltek (Costpoint embedded “Della” AI assistant) .
Capital deployment momentum: announced Subsplash at $800M (expected $115M revenue/$36M EBITDA for 12 months ending Q3 2026) to Network Software, with >$5B firepower and pro forma net debt/EBITDA ~3.1x .

What Went Wrong

Mixed contributions within portfolios: Foundry remained down YoY (first sequential ARR growth since strikes) and Frontline bookings softer amid K–12 uncertainty; Deltek GovCon demand timing depends on “Big Beautiful Bill” implementation .
Network still “bouncing along the bottom”: DAT freight market stable but subdued; improvements driven more by pricing/monetization and integrated products (Trucker Tools, Algo) than macro recovery .
Adjusted EBITDA margin contracted 60 bps YoY to 39.9% on reported basis (mix/acquisitions), despite core improvements; GAAP gross margin slightly below prior year .

Financial Results

Headline vs Prior Quarters and Estimates

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$1.8771* (Est. vs actual)	$1.8828	$1.9436
Adjusted DEPS ($)	$4.81	$4.78	$4.87
GAAP DEPS ($)	N/A	$3.06	$3.49
Adjusted EBITDA ($USD Millions)	$744	$740	$775
EBITDA Margin %	39.6%	39.3%	39.9%
Gross Margin % (Total company)	N/A	68.7%	69.2%
Organic Revenue Growth % (YoY)	7%	+5%	+7%
Acquisition Contribution %	+9%	+8%	+6%

Note: * Values retrieved from S&P Global.

Actual vs S&P Global Consensus

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus ($USD Billions)	$1.8370*	$1.8834*	$1.9276*
Revenue Actual ($USD Billions)	$1.8771*	$1.8828	$1.9436
EPS Consensus ($)	$4.7284*	$4.7439*	$4.8336*
Adjusted DEPS Actual ($)	$4.81	$4.78	$4.87

Highlights: Q2 beat on revenue ($1.944B vs $1.928B consensus) and adjusted EPS ($4.87 vs $4.83) .
Note: Values retrieved from S&P Global.

Segment Breakdown (Q2 2025 vs Q2 2024)

Segment	Revenue Q2 2024 ($M)	Revenue Q2 2025 ($M)	Total YoY Growth	Organic YoY Growth	Segment EBITDA/Operating Notes
Application Software	$931.8	$1,094.9	+17%	+6%	Segment operating margin 26.9% both years; core margin +70 bps in Q2
Network Software	$364.2	$385.4	+6%	+5%	EBITDA margin 54.6% in Q2; core margin +20 bps
Technology Enabled Products (TEP)	$420.8	$463.3	+10%	+9%	EBITDA margin 36.7% in Q2
Total	$1,716.8	$1,943.6	+13%	+7%	Gross margin 69.2% in Q2 2025

KPIs and Balance Sheet

KPI	Q2 2025
Adjusted Free Cash Flow ($M)	$403
TTM Free Cash Flow ($B)	>$2.3
Net Debt / EBITDA (x)	2.9x; ~3.1x pro forma Subsplash
Cash and Equivalents ($M)	$242
Revolver Draw ($B)	$1.4 on $3.5 facility
M&A Firepower ($B)	>$5

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted DEPS	FY 2025	$19.80–$20.05	$19.90–$20.05 (incl. ~$0.05 Subsplash dilution)	Raised (low end)
Total Revenue Growth	FY 2025	~12%	~13%	Raised
Organic Revenue Growth	FY 2025	+6–7%	+6–7%	Maintained
Adjusted DEPS	Q3 2025	N/A	$5.08–$5.12 (incl. ~$0.03 Subsplash dilution)	New
Effective Tax Rate	FY 2025	21–22%	21–22%	Maintained
Cash Taxes (Section 174 repeal impact)	FY 2025/2026	N/A	2025 cash taxes -$150M (Q2 benefit ~$60M); carryover ~$120M into 2026	New clarification
Dividend	Regular	Announced (Aug 6, 2025)	Ongoing	Maintained policy

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI initiatives & productivity	Early deployments across Deltek, Aderant, Foundry; learning year; bookings halo	~25 AI-enabled products in market/dev; 30% R&D productivity gains; pricing models evolving (subscription + consumption likely)	Accelerating adoption and monetization
Network freight/DAT	Freight match challenged; actions on pricing/monetization; Trucker Tools bolt-on	Market stable at bottom; DAT RPU up; integrating LoadLink/Trucker Tools; acquiring Algo to expand carrier value stack	Gradual recovery and monetization
Government contracting (Deltek)	Robust pipelines; policy impact unclear; perpetual upside possible	BBB (Big Beautiful Bill) seen as unlock; timing uncertain; conservatism maintained	Cautious optimism
Foundry/media	Impact from strikes; investing through downturn	First sequential ARR growth since strikes; Nuke Stage gaining traction	Early recovery signs
Education (K–12/Higher Ed)	Stable macro vs prior year; SaaS conversions tailwind	K–12 uncertainty muted bookings at Frontline; Higher Ed performance pressure aligns with Transact value	Mixed
Healthcare & Medicaid	Strong Verathon/Neptune; neutral net impact over long-term	Medicaid roll-offs net ~$flat to up dollars; muted impact to CentralReach; Medicare-indexed businesses less affected	Neutral to modest tailwinds
Capital deployment	$5B firepower; active pipeline; CentralReach close	Subsplash announced; pro forma leverage ~3.1x; pipeline active across platforms and bolt-ons	Active

Management Commentary

“We posted another solid quarter… Total revenue grew 13%. Organic revenue grew 7%… free cash flow margins coming in at 31% for the TTM period.” .
On AI: “Today, we have approximately 25 AI-enabled products either in market or in development… building durable competitive advantages.” .
On Subsplash: “Purchase price is $800 million… expect $115 million of revenue and $36 million of EBITDA for the 12 months ending Q3 of 2026… high-teens organic growth” .
On cash taxes/Section 174: “Reducing our cash tax payments for 2025 by around $150 million… about $60 million benefited our second quarter… $120 million carrying to next year” .
On guidance: “Increasing our full year DEPS outlook to $19.90–$20.05… Q3 adjusted DEPS $5.08–$5.12” .

Q&A Highlights

AI execution and monetization: Management emphasized doing “more” with productivity gains (not dropping to bottom line yet) and evolving pricing toward subscription-plus-consumption as appropriate; ARR from AI features is “tens of millions” today with a broader halo on bookings .
Tariffs/macro: Tariff exposure small (~$10–$15M); teams mitigating via supply chain and pricing; overall macro sentiment “cautiously optimistic” .
Deltek outlook: BBB expected to unlock demand with shift toward defense contractor spend; timing uncertain; outlook maintains conservatism; potential Q4 perpetual upside .
Network integration: DAT integrating LoadLink and Trucker Tools; Algo adds factoring tech for carriers; focus on longer-term network value capture .

Estimates Context

Q2 beat: Revenue $1.9436B vs $1.9276B consensus*; adjusted EPS $4.87 vs $4.8336 consensus* .
Recent quarters: Q1 revenue essentially in line ($1.8828B actual vs $1.8834B consensus*), EPS beat ($4.78 vs $4.7439*); Q4 beat on both revenue ($1.8771B vs $1.8370B*) and EPS ($4.81 vs $4.7284*) .
Implications: Street likely nudges FY revenue and EPS higher given guide raise and AI/productivity traction; watch for modest margin mix headwinds from acquisitions and deliberate reinvestment.

Note: Values retrieved from S&P Global.

Key Takeaways for Investors

Q2 was a textbook execution quarter: clean beat, raised FY guide, broad segment growth, and tangible AI/productivity narrative—supportive for near-term sentiment and estimate revisions .
Application Software momentum (Aderant, Deltek cloud/AI) plus CentralReach contribution should sustain mid-single-digit+ organic into 2H; watch any BBB-driven Q4 perpetual upside .
Network trajectory is improving via monetization (pricing/RPU), integrations (LoadLink, Trucker Tools), and Algo; freight remains subdued—recovery optionality adds upside leverage .
Cash flow strength and Section 174 repeal boost near-term cash efficiency; M&A capacity >$5B enables continued portfolio upgrading (Subsplash now, others likely) .
AI is building into a durable moat: 25 products in market/dev, early ARR, and measurable productivity gains—expect ongoing bookings halo and gradual P&L impact through 2026 .
Valuation sensitivity: With margin mix from acquisitions and reinvestment, focus on core margin expansion and TEP/Network margin resiliency to justify multiple stability .
Trading setup: Near term skew positive on beat/raise and M&A narrative; monitor freight prints, BBB implementation timing, and Foundry recovery cadence for sustained momentum .

Sources

Q2 2025 earnings press release and 8-K: Revenue/EPS/EBITDA/margins/guidance, segment tables, balance sheet and cash flow .
Q2 2025 earnings call transcript: Segment details, AI initiatives, DAT/Foundry updates, guidance, Section 174 impacts .
Q1 2025 press release: trend and prior guidance .
Q4 2024 earnings call transcript: revenue growth mix, margins, bookings momentum and AI commentary .
Subsplash acquisition PR (K1): transaction confirmation .
S&P Global consensus estimates: revenue and EPS actual/consensus for Q4 2024, Q1 2025, Q2 2025 (values marked with *) (Values retrieved from S&P Global).

ROPER TECHNOLOGIES INC (ROP)·Q2 2025 Earnings Summary