Executive Summary

Q3 2025 delivered 14% revenue growth to $2.02B, organic growth of 6%, and adjusted DEPS of $5.14 (+11% YoY), alongside robust free cash flow of $842M (+17% YoY) .
Versus consensus, EPS modestly beat while revenue was slightly below; adjusted EBITDA was near expectations. Management cited timing impacts from the government shutdown at Deltek and a copper tariff surcharge at Neptune that slowed orders .
Guidance was tightened: FY25 adjusted DEPS narrowed to $19.90–$19.95 (from $19.90–$20.05), FY organic growth guided to ~6%, and Q4 adjusted DEPS set at $5.11–$5.16; a new $3B share repurchase authorization adds an incremental capital deployment lever .
Capital deployment remained active: ~$1.3B in Q3 for Subsplash and tuck-ins; DAT’s acquisition of the Convoy platform accelerates AI-enabled freight automation with long-term TAM expansion .
Potential stock reaction catalysts: first-ever buyback authorization ($3B), durable cash flow compounding, and visible AI product traction across multiple businesses .

What Went Well and What Went Wrong

What Went Well

Durable growth and cash generation: revenue +14% to $2.02B, adjusted EBITDA +13% to $810M, free cash flow +17% to $842M; “Roper delivered another strong quarter…with 14% revenue growth, 13% EBITDA growth, and 17% free cash flow growth” — Neil Hunn .
AI momentum: management highlighted accelerating AI feature releases and tangible adoption (e.g., 40 AI features at Deltek; CentralReach driving strong AI-enabled bookings; DAT’s AI/ML freight matching) .
Capital deployment and buyback: ~$1.3B deployed (Subsplash + tuck-ins) and board authorized $3B share repurchase, reflecting confidence in the compounding model and portfolio trajectory .

What Went Wrong

GovCon timing headwinds: Deltek softness as agencies paused activity amid the government shutdown; management expects improvement once appropriations finalize, but Q4 outcomes may vary within mid-single-digit organic scenarios .
Neptune order timing: copper tariff (effective Aug 1) prompted surcharges and renegotiations, “pushing orders to the right” despite share gains; Q4 TEP outlook trimmed to low single-digit organic growth .
Margin mix: adjusted EBITDA margin compressed 50 bps YoY to 40.2% due to mix and non-GAAP adjustments, despite core margin expansion in software segments .

Financial Results

Quarterly performance

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$1.883	$1.944	$2.018
GAAP Diluted EPS ($)	$3.06	$3.49	$3.68
Adjusted DEPS ($)	$4.78	$4.87	$5.14
Gross Margin (%)	68.7%	69.2%	69.5%
Adjusted EBITDA ($USD Millions)	$740	$775	$810
Adjusted EBITDA Margin (%)	39.3%	39.9%	40.2%
Free Cash Flow ($USD Millions)	$507	$403	$842

Notes: Q1/Q2 “Adjusted free cash flow” as presented; Q3 “Free cash flow” is reported figure .

Year-over-year (Q3 2024 → Q3 2025)

Metric	Q3 2024	Q3 2025
Revenue ($USD Billions)	$1.765	$2.018
GAAP Diluted EPS ($)	$3.40	$3.68
Adjusted DEPS ($)	$4.62	$5.14
Adjusted EBITDA ($USD Millions)	$717	$810
Adjusted EBITDA Margin (%)	40.7%	40.2%

Segment net revenues

Segment	Q1 2025	Q2 2025	Q3 2025
Application Software ($USD Millions)	$1,068.2	$1,094.9	$1,161.0
Network Software ($USD Millions)	$375.9	$385.4	$413.4
Technology Enabled Products ($USD Millions)	$438.7	$463.3	$443.1
Total ($USD Millions)	$1,882.8	$1,943.6	$2,017.5

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Operating Cash Flow ($USD Millions)	$528.7	$404 (GAAP) / $434 (Adj.)	$870
Capital Expenditure ($USD Millions)	$9.5	$16	$12
Capitalized Software ($USD Millions)	$12.4	$14	$16
Diluted Shares (Millions)	108.2	108.4	108.4
Net Debt / EBITDA (x)	—	~2.9x exiting Q2	~3.0x after Q3 deployment

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted DEPS ($)	FY 2025	$19.90–$20.05	$19.90–$19.95	Tightened lower; lowered high end due to ~$0.10 dilution from Q3 acquisitions
Total Revenue Growth (%)	FY 2025	~13%	~13%	Maintained
Organic Revenue Growth (%)	FY 2025	+6–7%	~6%	Lowered
Adjusted DEPS ($)	Q4 2025	—	$5.11–$5.16	New Q4 guide
Adjusted DEPS ($)	Q3 2025	$5.08–$5.12	Actual $5.14	Beat guide high end
Tax Rate (%)	FY 2025	21–22%	Lower end of 21–22%	Clarified lower end
Segment Organic Growth	Q4 2025	—	AS: mid-single-digit (range on Deltek); NS: high end of mid-single-digit; TEP: low single-digit	Segment outlooks added
Capital Deployment	Open-ended	M&A firepower >$5B (next 12 months)	$3B share repurchase authorization	Added buyback lever

Earnings Call Themes & Trends

Topic	Q1 2025 (prior two)	Q2 2025 (prior one)	Q3 2025 (current)	Trend
AI initiatives	~25 AI-enabled products; 30% R&D productivity at some units; early ARR impact; pivot to agentic AI across workflows	Added AI features (Deltek Della), broad portfolio traction	“Becoming AI-native”; examples at Adarat, CentralReach, Deltek, DAT; portfolio-wide SKUs scaling	Accelerating feature rollouts and commercialization
Deltek/GovCon	60% GovCon exposure; timing uncertainty (budget/shutdown/DOE) slowed bookings; recurring base strong	Expect BBB (OB3) defense/infrastructure spend to unlock demand; conservatism embedded	September softness ahead of shutdown; Q4 non-recurring variability; FY organic ~6%	Near-term pause; medium-term improvement expected
DAT strategy	Price/packaging and Trucker Tools; LoadLink integration; factoring tech (Algo)	Solid unit economics; network monetization; freight market at bottom	Deep-dive on automated marketplace; $100–$200 per load task labor savings potential; Convoy tech buy	Building end-to-end automation; long-tailed TAM expansion
Neptune/copper tariff	Meter-to-cash strategy (billing acquisition); demand improved through Q1	High-single-digit H2 organic growth; stronger Q3 expected	Tariff surcharge slowed order timing; Q4 low single-digit organic; orders “pushed right”	Temporary timing headwind; normalization expected
Capital deployment	>$5B firepower; CentralReach closed	Subsplash announced; >$5B capacity	~$1.3B deployed; $3B buyback authorized; >$5B next-12-month capacity	Active M&A plus opportunistic buyback
Healthcare/TEP	Verathon/NDI strength; TEP high-single-digit outlook	TEP: 9% organic; Verathon single-use products strong	Verathon/NDI strong; TEP organic +6%; tariff impact at Neptune	Consistent growth; mix/tariff timing influences
Education/K-12 & Higher Ed	Frontline and Transact seasonality; funding uncertainties	Frontline seasonality; Transact strong in Q3; payments attach	Transact/Frontline noted; Deltek non-recurring variability	Stable with typical seasonality

Management Commentary

“We are adjusting our full year 2025 DEPS guidance range to $19.90 - $19.95… and now expect organic revenue growth of approximately 6%” — Neil Hunn .
“Our board has authorized a $3 billion share repurchase program…opportunistically complement our M&A program” — Jason Conley .
“AI represents a meaningful expansion of our TAM…our businesses have an exceptionally high right to win” — Neil Hunn .
“DAT will generate $100 to $200 per load in savings for brokers…as it fully automates freight matching” — Neil Hunn .
“Neptune…implemented surcharges to offset the tariff's impact, which temporarily slowed order timing” — Neil Hunn .

Q&A Highlights

Buyback strategy: $3B authorization is opportunistic and complements a still M&A-first capital allocation; conviction in talent, strategy, and AI execution; total 3-year deployable capital ~$15–$20B .
AI monetization timing: broad SKUs rolling out now through H1 2026; meaningful P&L impact likely more in 2027 due to commercialization cycles .
Deltek de-risking: Q4 variability hinges on perpetual license activity; recurring base is strong; shutdown impact framed as timing, not demand .
Neptune orders: tariff surcharge led to renegotiations; orders pushed to the right; share modestly up; demand intact .
DAT economics: end-to-end automation and neutral “Switzerland” position enable adoption; Convoy added tech talent despite near-term losses given high-return outlook .

Estimates Context

Comparison to Wall Street consensus (S&P Global; consensus vs reported actuals):

Metric	Q1 2025 Consensus	Q1 2025 Actual	Q2 2025 Consensus	Q2 2025 Actual	Q3 2025 Consensus	Q3 2025 Actual	Beat/Miss
EPS ($)	4.74394*	4.78*	4.83364*	4.87*	5.11054*	5.14*	EPS Beat (all)
Revenue ($USD Billions)	1.88344*	1.883*	1.92758*	1.944*	2.02510*	2.0175*	Slight miss (Q3)
EBITDA ($USD Millions)	735.00*	738.90*	758.34*	772.00*	809.24*	804.10*	Near in-line (Q3)

Notes: Values retrieved from S&P Global. Company-reported adjusted EBITDA in Q3 was $810M , which may differ from consensus definitions.

Key Takeaways for Investors

Solid quarter with resilient cash generation and a modest EPS beat versus consensus, despite timing headwinds at Deltek and Neptune .
Guidance was prudently tightened (FY adjusted DEPS narrowed; organic growth set at ~6%) and Q4 set at $5.11–$5.16; execution remains on track into year-end .
First-ever $3B buyback adds flexibility; expect continued M&A-led deployment with >$5B next-12-month capacity, providing optionality for compounding .
AI is becoming a company-wide growth driver, with early commercial proof points and broader SKU rollouts; meaningful revenue contribution more likely in 2027 given commercialization cycles .
DAT’s strategic evolution to an automated freight marketplace is a multi-year TAM-expanding lever; Convoy adds tech depth despite near-term loss profile .
TEP outlook moderated short term (Neptune tariff surcharge timing) but fundamentals intact across Verathon/NDI; watch Q4 low-single-digit organic guide .
Near-term estimate revisions: likely EPS nudges higher post-beat; revenue/margin trajectories should reflect mix/timing dynamics at Deltek/Neptune; maintain focus on Q4 non-recurring variability and FY margin mix .

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Sources: Company 8-K press release and financial schedules; Q3 2025 earnings call transcript; prior quarters’ 8-Ks and transcripts; DAT and Subsplash press releases. All claims and figures are cited inline. Estimates are from S&P Global and marked with an asterisk.

ROPER TECHNOLOGIES INC (ROP)·Q3 2025 Earnings Summary