Roper Technologies, Inc. is a diversified technology company that operates market-leading businesses focused on designing and developing vertical software and technology-enabled products for various niche markets. The company is structured into three main reportable segments: Application Software, Network Software, and Technology Enabled Products. Roper's strategy emphasizes sustainable growth through continuous improvement and strategic acquisitions, maintaining high margins and a mix of recurring revenue **[0000882835-24-000008_rop-20231231.htm:6]** **[0000882835-24-000008_rop-20231231.htm:29]** **[0000882835-24-000008_rop-20231231.htm:7]** **[0000882835-24-000008_rop-20231231.htm:5]**.

1. **Application Software** - Develops and provides vertical software solutions for niche markets, including businesses like Aderant, CBORD, Clinisys, and Deltek, which contribute significantly to the company's operations.
   - **Aderant** - Offers comprehensive legal practice management software.
   - **CBORD** - Specializes in campus card systems and food service management solutions.
   - **Clinisys** - Provides laboratory information management systems.
   - **Deltek** - Delivers enterprise software and information solutions for project-based businesses.

2. **Technology Enabled Products** - Designs and manufactures technology-enabled products, including businesses such as CIVCO Medical Solutions and Verathon, which enhance operational efficiency and effectiveness.
   - **CIVCO Medical Solutions** - Produces medical devices and accessories for ultrasound and other imaging modalities.
   - **Verathon** - Develops medical devices and software solutions for airway management and bladder volume measurement.

3. **Network Software** - Offers network software solutions that facilitate connectivity and data management, featuring products from ConstructConnect, DAT, and Foundry.
   - **ConstructConnect** - Provides construction project information and software solutions.
   - **DAT** - Offers transportation and logistics software solutions.
   - **Foundry** - Develops creative software for digital design, media, and entertainment industries.

79024e52788243849b9c11d7f014e7fba6975f5972fdcaf4da42cdc6286bd6de

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

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c8f6e5b76b744677415ec55ea495ebaf69ab7fa009c4ad5a92b3b5ab32fa4166

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Application Software | **740**  **[ROP_3182576_2]**  | **761.4**  **[0000882835-23-000025_rop-20230331.htm:15]**  | **770**  **[ROP_3255144_2]** **[ROP_3385318_3]**  | **803.4**  **[0000882835-23-000052_rop-20230930.htm:21]**  | **852**  **[ROP_3371356_3]**  | **895.2**  **[0000882835-24-000018_rop-20240331.htm:16]**  | **931.8**  **[0000882835-24-000037_rop-20240630.htm:20]**  | **984.4**  **[0000882835-24-000044_rop-20240930.htm:21]**  |
| Network Software     | **350**  **[ROP_3182576_2]**  | **354.5**  **[0000882835-23-000025_rop-20230331.htm:15]**  | **358**  **[ROP_3255144_3]** **[ROP_3385318_4]**  | **364.1**  **[0000882835-23-000052_rop-20230930.htm:21]**  | **363**  **[ROP_3371356_3]**  | **370.8**  **[0000882835-24-000018_rop-20240331.htm:17]**  | **364.2**  **[0000882835-24-000037_rop-20240630.htm:20]**  | **367.1**  **[0000882835-24-000044_rop-20240930.htm:21]**  |
| Technology Enabled Products | **340**  **[ROP_3182576_2]**  | **353.8**  **[0000882835-23-000025_rop-20230331.htm:15]**  | **403**  **[ROP_3385318_5]**  | **395.9**  **[0000882835-23-000052_rop-20230930.htm:21]**  | **399**  **[ROP_3371356_3]**  | **414.7**  **[0000882835-24-000018_rop-20240331.htm:17]**  | **420.8**  **[0000882835-24-000037_rop-20240630.htm:20]**  | **413.1**  **[0000882835-24-000044_rop-20240930.htm:21]**  |

5a5a552f940a81e76dec35e9e9ad5ec0bb2f7a93a694886bbe1eb359ef6ba386

| Metric (Backlog [$ million]) | Q4 2022 **[0000882835-23-000016_rop-20221231.htm:38]** | Q1 2023 **[0000882835-23-000025_rop-20230331.htm:17]** | Q2 2023 **[0000882835-23-000045_rop-20230630.htm:20]** | Q3 2023 **[0000882835-23-000052_rop-20230930.htm:22]** | Q4 2023 **[0000882835-24-000008_rop-20231231.htm:36]** | Q1 2024 **[0000882835-24-000018_rop-20240331.htm:17]** | Q2 2024 **[0000882835-24-000037_rop-20240630.htm:22]** | Q3 2024 **[0000882835-24-000044_rop-20240930.htm:23]** |
|------------------------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|-------------|
| Roper Technologies           | 2,912.6     | 2,872.5     | 2,746.8     | 2,913.7     | 3,156.6     | 2,932.4     | 2,836.4     | 3,026.1     |

504e6378bdcdd6e3a7571b8bdee121292cd919c13b6134d7bc76676e4341642d

United States

Non-U.S.

- Canada

- Europe

- Asia

- Middle East

- Rest of the World

Eliminations

Total Revenue

0347e04a885691eff75f67f5c3e01eeab0c407e035b352b2b067ed1ea9095065

1. Given that organic revenue growth has been 4% for back-to-back quarters  **[ROP_3403371_8]** , what gives you confidence that growth will reaccelerate in Q4 and beyond, especially considering ongoing challenges in segments like Foundry and Freight Matching  **[ROP_3403371_7]** ?

2. With the Foundry business expecting the impact of industry strikes to carry into next year and recovery not until 2025  **[ROP_3403371_7]** , how are you mitigating the risks of prolonged underperformance in this segment, and what contingency plans do you have if the post-production pipelines take longer to recover?

3. You mentioned leadership changes at Procare and Frontline to improve go-to-market capabilities and growth orientation  **[ROP_3403371_15]** ; can you elaborate on what drove these changes and what specific improvements you expect under the new leadership?

4. Despite continued pressure in your Freight Matching businesses and expectations of stable but muted freight market conditions  **[ROP_3403371_7]** , what is your strategy to navigate these challenges, and how are you positioning DAT and Loadlink for future growth?

5. Considering that Northern Digital declined as expected due to customer program timing  **[ROP_3403371_7]**  and you anticipate recovery beginning in Q4   , what is your level of confidence in the timing of these customer programs, and are there any risks that could delay the anticipated rebound?

5ec25f8c14e1523ca9dca220038b56a532e11e55325a9e3130d0c8048ec2ffef

a524ae194e9376e01b6c4d0de14eb9b4a05e2a161efc8ae4f4844498914e43f0

Roper Technologies

56960b43ca7a362c67e8c9976141e579b763c3b61b1ba7829e6bd6180ff45b4e

5be3f4e9f4a6c9af323733be6cfe28d8c3b6001b77728732a5194c6d7292959c

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

52cf057200528919959084e68a541df0b5362cc35d1f3b9bd5afbd04e1bf4221

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024 and FY 2024
- **Guidance**:
  - **Full Year 2024 Guidance**:
    - Total year growth outlook: **north of 13%**  **[ROP_3403371_8]** .
    - Full year organic growth: **approximately 6%**  **[ROP_3403371_8]** .
    - Full year adjusted DEPS: **$18.21 to $18.25**  **[ROP_3403371_8]** .
    - Full year effective tax rate: **21% to 22%**  **[ROP_3403371_8]** .
    - Free cash flow margin: Expected to be **north of 30%** for the year  **[ROP_3403371_2]** .
  - **Fourth Quarter 2024 Guidance**:
    - Adjusted DEPS: **$4.70 to $4.74**  **[ROP_3403371_8]** .
    - Organic revenue growth: Expected to improve but remain in the low single-digit area  **[ROP_3403371_7]** .
  - **Additional Notes**:
    - The acquisition of Transact Campus is expected to be **$0.03 dilutive** in the fourth quarter  **[ROP_3403371_8]** .
    - Transact Campus is expected to deliver about **$325 million of revenue and $105 million of EBITDA** next year  **[ROP_3403371_3]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Full Year 2024 Guidance**:
    - Total Revenue Growth: **12%**  **[ROP_3394109_5]** **[ROP_3394109_6]** .
    - Organic Revenue Growth: **6%**  **[ROP_3394109_5]** **[ROP_3394109_6]** .
    - Adjusted EPS: Raised at the bottom end to be in the range of **$18.10 to $18.25**  **[ROP_3394109_5]** **[ROP_3394109_6]** .
  - **Effective Tax Rate**:
    - Assumed to be in the range of **21% to 22%** for the full year  **[ROP_3394109_5]** .
  - **Third Quarter 2024 Guidance**:
    - Adjusted EPS: Expected to be between **$4.50 and $4.54**  **[ROP_3394109_5]** .
  - **Free Cash Flow Margins**:
    - Expected to be **30% or more** for 2024  **[ROP_3394109_2]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024 and Q2 2024
- **Guidance**:
  - **Full Year 2024 Guidance**:
    - Total Revenue Growth: Expected to grow in the **12% area**, up from the initial guidance of 11% to 12%  **[ROP_3381141_4]** .
    - Organic Revenue Growth: Expected to grow about **6%**, up from the original guidance of 5% to 6%  **[ROP_3381141_4]** .
    - Adjusted DEPS: Expected to be in the range of **$18.05 to $18.25**, up from the previous guidance of $17.85 to $18.15  **[ROP_3381141_4]** .
    - Effective Tax Rate: Assumed to be in the range of **21% to 22%** for the full year  **[ROP_3381141_4]** .
  - **Q2 2024 Guidance**:
    - Adjusted DEPS: Expected to be in the range of **$4.42 to $4.46**  **[ROP_3381141_4]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024 and Q1 2024
- **Guidance**:
  - **Total Revenue Growth**: Expected to be between **11% and 12%**, including the impact of Procare Solutions  **[ROP_3371356_6]** .
  - **Organic Revenue Growth**: Expected to be between **5% and 6%** for the full year  **[ROP_3371356_6]** .
  - **Adjusted DEPS**: Expected to be in the range of **$17.85 to $18.15**, which includes about **$0.10 to $0.15** of DEPS dilution associated with the Procare deal  **[ROP_3371356_6]** .
  - **Tax Rate**: Assumed to be in the **21% to 22%** range  **[ROP_3371356_6]** .
  - **First Quarter Adjusted DEPS**: Expected to be in the range of **$4.30 to $4.34**  **[ROP_3371356_6]** .
  - **Free Cash Flow Margin**: Expected to be **30% or more** in 2024  **[ROP_3371356_4]** .

63391fd694cb7b79d8a5213d4aed2f5df9578e2d048c98f7dc6b1baf144eb108

65cf12b30b7e101868bd6c97b157f2a764a97bddc96ca7acd8e7e6367fdbf3bb

| Name               | Position                                              | Start Date | Short Bio                                                                                                                                                                                                                                                                                                                                                       |
|--------------------|-------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| L. Neil Hunn       | President and Chief Executive Officer                 | Aug 2018   | L. Neil Hunn has served as the **President and Chief Executive Officer** of Roper Technologies, Inc. since **August 2018**. He was previously the Executive Vice President and Chief Operating Officer from 2017 to 2018, and Group Vice President of Roper's medical segment from 2011 to 2018. Before joining Roper, he held roles at MedAssets, CMGI, and Parthenon Group  **[0000882835-24-000008_rop-20231231.htm:26]** **[0001193125-24-117847_d751262ddef14a.htm:9]** **[0000882835-23-000016_rop-20221231.htm:28]** . |
| Jason P. Conley    | Executive Vice President and Chief Financial Officer  | Feb 2023   | Jason P. Conley has served as **Executive Vice President and Chief Financial Officer** of Roper Technologies, Inc. since **February 2023**. He was Vice President and Chief Accounting Officer from 2021 to February 2023, and Vice President and Controller from 2017 to 2021. Before joining Roper, he worked at Honeywell International and Deloitte  **[0000882835-24-000008_rop-20231231.htm:26]** **[0000882835-23-000016_rop-20221231.htm:28]** .                |
| John K. Stipancich | Executive Vice President, General Counsel, and Corporate Secretary | 2018       | John K. Stipancich has served as **Executive Vice President, General Counsel, and Corporate Secretary** at Roper Technologies, Inc. since **2018**. He was Vice President, General Counsel, and Corporate Secretary from 2016 to 2018. Before joining Roper, he held various leadership roles at Newell Brands Inc., including Executive Vice President and Chief Financial Officer  **[0000882835-24-000008_rop-20231231.htm:26]** **[0000882835-23-000016_rop-20221231.htm:28]** . |

e507862d1ad64cce04b07471221bd1480d9145f679968d8d2114310172c4b56d

**Quarterly guidance for Q4 2024:**
- **Adjusted DEPS**: $4.70 to $4.74  **[ROP_3403371_8]**  (no prior guidance)  
- **Organic revenue growth**: low single-digit area  **[ROP_3403371_7]**  (no prior guidance)  
- **Acquisition impact (Transact Campus)**: expected to be $0.03 dilutive  **[ROP_3403371_8]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Total year growth**: north of 13%  **[ROP_3403371_8]**  (raised from 12%  **[ROP_3394109_5]** **[ROP_3394109_6]** )  
- **Organic revenue growth**: approximately 6%  **[ROP_3403371_8]**  (no change from 6%  **[ROP_3394109_5]** **[ROP_3394109_6]** )  
- **Adjusted DEPS**: $18.21 to $18.25  **[ROP_3403371_8]**  (raised from $18.10 to $18.25  **[ROP_3394109_5]** **[ROP_3394109_6]** )  
- **Effective tax rate**: 21% to 22%  **[ROP_3403371_8]**  (no change from 21% to 22%  **[ROP_3394109_5]** )  
- **Free cash flow margin**: north of 30%  **[ROP_3403371_2]**  (no change from 30% or more  **[ROP_3394109_2]** )  
- **Transact Campus revenue**: about $325 million  **[ROP_3403371_3]**  (no prior guidance)  
- **Transact Campus EBITDA**: about $105 million  **[ROP_3403371_3]**  (no prior guidance)  

25947dae7c4ea0c3bf5abf80d443753ca96d4649f0d70f4f22d8dca873144a28

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 2002  **[0000882835-24-000008_rop-20231231.htm:47]**  | Present  | Current auditor   |

ec6087fad9c66daab803dd01e4d5cbffb7d565f5e251dea2f95a0955dc3b2e99

- Total Revenue: $1,764.6 million (+13% YoY)  **[0000882835-23-000052_rop-20230930.htm:15]** **[0000882835-24-000044_rop-20240930.htm:21]**   
- Application Software: $984.4 million (+23% YoY)  **[0000882835-23-000052_rop-20230930.htm:15]** **[0000882835-24-000044_rop-20240930.htm:21]**   
- Operating Income (EBIT): $496.6 million (+11% YoY)  **[0000882835-23-000052_rop-20230930.htm:2]** **[0000882835-24-000044_rop-20240930.htm:2]**   
- Net Income: $367.9 million (+6% YoY)  **[0000882835-23-000052_rop-20230930.htm:2]** **[0000882835-24-000044_rop-20240930.htm:2]**   
- Diluted EPS: $3.40 (+7% YoY)  **[0000882835-23-000052_rop-20230930.htm:2]** **[0000882835-24-000044_rop-20240930.htm:2]**   
- Interest Expense: $67.7 million (**+60% YoY**)  **[0000882835-23-000052_rop-20230930.htm:2]** **[0000882835-24-000044_rop-20240930.htm:2]**   

b97cbead8ff6c4feeb8dcc5a677fe7ce40167d72504c4ce6574da443df865829

- **Upcoming increases in interest expenses due to issuance of new debt may negatively impact cash flows in 2025.** Roper issued a couple of billion in new bonds, with the first coupon payments due in February and April 2025, which could impact cash flow compared to 2024.  **[ROP_3413722_25]**
- **Lower EBITDA margins expected in the first half of 2025 due to seasonality of acquisitions.** The acquisition of Transact Campus, which has its largest margin quarter in Q3, will result in lower margins in Q1 and Q2, potentially weighing on profitability.  **[ROP_3413722_27]**
- **Potential risks from AI advancements lowering barriers to entry, leading to increased competition.** Despite management's confidence, AI technologies could make it easier for new entrants to challenge Roper's market positions in its verticals.  **[ROP_3413722_15]**

f97f336b39b245b6554364898b83609754020a12fa914379c5236ac1f9bbf5fb

1. **M&A Pipeline and $5 Billion Deployment**  
   **Q:** Will you prioritize growth bolt-ons or category leaders with $5bn to deploy?  
   **A:** With **$5 billion** to deploy, we're focused on both bolt-on acquisitions and finding one or two platform companies. Our M&A team has added capacity and built relationships with sponsors and companies directly. It's situation-dependent, but we'll balance between bolt-ons and platforms to deploy our capital wisely.  **[ROP_3413722_11]** 

2. **Organic Growth Outlook and One-Offs**  
   **Q:** Is the 6%-7% organic growth outlook clean or affected by one-offs?  
   **A:** The 6%-7% organic growth outlook is clean, with no significant one-time items affecting it. While our NS segment had a one-time impact in the first quarter due to our MHA business, this will normalize as we progress. We expect organic growth to pick up from Q2 onward, especially with Procare coming in organically in the second quarter and bookings converting to revenue. **2024 is our cleanest baseline year since 2019**, free from COVID and supply chain noise.  **[ROP_3413722_10]** 

3. **Equity Issuance for M&A**  
   **Q:** Would you consider issuing equity for acquisitions given the opportunity set?  
   **A:** Our first source of capital is the **$5 billion** on our balance sheet and debt capacity. If the market presents highly compelling deals, we'd consider using equity, but the bar is higher due to the higher cost of capital. We're eager to deploy our existing $5 billion to drive our compounding machine, and we'll remain steady in capital deployment through good times and bad.  **[ROP_3413722_23]** 

4. **Potential Headwinds in GovCon at Deltek**  
   **Q:** Are there risks in Deltek's GovCon business from U.S. policy changes?  
   **A:** It's early to assess the impact of U.S. policy changes on Deltek's government contracting customers. However, increased accountability, performance-based pricing models, and system modernization requirements actually play to Deltek's strengths. Our recent acquisition of **ProPricer** positions us well for performance-based pricing. Bookings in government contracting have been robust, indicating positive customer sentiment.  **[ROP_3413722_14]** 

5. **AI Impact on Competitiveness**  
   **Q:** Does AI make it easier for competitors to challenge your position?  
   **A:** We're vigilant about potential AI-driven competition but believe we're uniquely advantaged. Our intimate customer relationships and nuanced, specific solutions make us well-positioned to leverage AI effectively. Our scale advantage as market share leaders allows us to invest in AI to deepen our moats. We'll remain paranoid and encourage our companies to invest appropriately to compete and win.  **[ROP_3413722_15]** 

6. **Enterprise Software Bookings Strength**  
   **Q:** What's driving the strength in enterprise software bookings?  
   **A:** The strength is attributed to a more stable macro outlook and having better leaders with precise, right-to-win strategies. Companies like Deltek, Aderant, PowerPlan, DAT, and ConstructConnect are seeing benefits from these methods. Additionally, we're transitioning over **$900 million** of on-premise maintenance to the cloud at over 2x ARR, providing a significant tailwind.  **[ROP_3413722_17]** 

7. **EBITDA Margin Outlook**  
   **Q:** How should we think about EBITDA margins for 2025?  
   **A:** Core margins will be up slightly, especially at the segment level. Acquisitions, particularly Transact, will impact margins, with lower margins in the first half and higher in the second half as **50% of Transact's EBITDA** comes in the third quarter. Overall, we expect margins to be flat in the first half and improve in the back half, aligning with your perspective.  **[ROP_3413722_27]** 

8. **Restructuring Charges and Cost Savings**  
   **Q:** Can you expand on the $9 million restructuring charges?  
   **A:** The **$9 million** restructuring was primarily in our AS segment, mainly at Deltek. With new leadership under Bob Hughes, we're realigning investments toward product development and growth initiatives. We'll see some flow-through in 2025, with reinvestments back into the business. This is part of our proactive belt-tightening to optimize efficiency.  **[ROP_3413722_21]** 

9. **Integration of Transact and CBORD**  
   **Q:** How is the Transact integration with CBORD progressing?  
   **A:** Integration is going well. We've identified **$20 million** in cost synergies that will start rolling through in the first quarter. We've strengthened the executive team and are focusing on creating a professional services organization to manage cloud migrations efficiently. The market feedback is positive, with excitement from both Transact and CBORD customers about our cloud-native solutions, which will drive cross-sell opportunities in the coming years.  **[ROP_3413722_22]** 

10. **Cash Flow Strength and Seasonality**  
    **Q:** Was the strong cash conversion of 32% in Q4 overdriven, and how should we view seasonality?  
    **A:** The **32%** cash conversion was driven by a strong renewal season, with record DSO reductions at Deltek and Aderant. It's slightly better than expected and may normalize a bit in Q1, but there's nothing unusual. We also issued a couple of billion in new bonds, with coupon payments starting in early 2025. Overall, it was a very strong year for cash flow.  **[ROP_3413722_25]** 

11. **DAT Pricing Initiatives**  
    **Q:** When will DAT's pricing and monetization initiatives impact results?  
    **A:** In Q4, DAT implemented pricing actions on half of the market and will address the remaining half in the first half of this year, with additional actions at year's end. These initiatives focus on enhancing network safety and reliability, combating fraud, and improving load board performance. We expect these innovations and upcoming releases to positively impact results throughout the year.  **[ROP_3413722_18]** 

12. **TEP Segment and Neptune Outlook**  
    **Q:** What's the outlook for Neptune in the TEP segment for 2025?  
    **A:** We expect strength in the TEP segment, with Neptune comprising about **40%** of it. We're guiding to high single-digit growth, and Neptune is set to contribute positively. Supply chain lead times have normalized, and early signs indicate distributors are restocking significantly. We anticipate returning to pre-COVID operations, working off a 1-2 month backlog while continuing to grow.  **[ROP_3413722_28]** 

13. **Talent Upgrades and Internal Development**  
    **Q:** How do you approach talent sourcing internally versus externally?  
    **A:** We've been aggressively deploying our talent offense, focusing on selecting, developing, and engaging talent with the right behavioral attributes. While we initially hired externally, our development efforts are yielding encouraging results. For example, Brody, who started in our office, progressed to CEO of ConstructConnect. Our first call is always internal talent, which serves us well from a risk management perspective.  **[ROP_3413722_24]** 

b6b4fc31ed65b90ad97671b68ebf92694c37d18e1b2601dbbe5700609d8683f1

ROP's Q4 shows 32% cash conversion, 6-7% organic growth guidance for 2024, and $5B in capital to deploy. Management calls 2024 the cleanest baseline since 2019. Keep an eye on rising interest expenses in 2025 from new debt issuance, but near-term fundamentals remain strong.

fd4ce2f8fba8e9338fd41803c35ba9ad7e74ea0893eedd60e967b0016771d6ad

ee3de66b75a61045a9f8bc782b31fac734450d9aa3bf03e2f2ca6bae330b00bc

**Quarterly guidance for Q1 2025:**
- **Adjusted DEPS**: $4.70–$4.74  **[ROP_3413722_8]**  (no change from $4.70–$4.74  **[ROP_3403371_8]** )

**Annual guidance for FY 2025:**
- **Total revenue growth**: north of 10%  **[ROP_3413722_8]**  (lowered from north of 13%  **[ROP_3403371_8]** )  
- **Organic revenue growth**: 6%–7%  **[ROP_3413722_8]**  (raised from ~6%  **[ROP_3403371_8]** )  
- **Adjusted DEPS**: $19.75–$20.00  **[ROP_3413722_8]**  (raised from $18.21–$18.25  **[ROP_3403371_8]** )  
- **Effective tax rate**: 21%–22%  **[ROP_3413722_8]**  (no change from 21%–22%  **[ROP_3403371_8]** )  
- **TEP segment**: high single-digit revenue growth  **[ROP_3413722_8]**  (no prior guidance)  
- **Application software segment**: organic growth toward the higher end of mid-single-digit range  **[ROP_3413722_6]**  (no prior guidance)  
- **Network software segment**: mid-single-digit growth  **[ROP_3413722_4]**  (no prior guidance)

a50fee5e1239ac5e2cd03ed41a4879887d3534aad2659e923268af6fa94af477

bb59032928c87716b62cbb0e69b69685be265f6aa059986b55e3597d369dac2e

| Year | Amount Due (millions) | Debt Type               | Interest Rate (%) | % of Total Debt                                                                 |
|----------|---------------------------|-----------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2025     | 300                       | Fixed-rate senior notes     | 3.850                | 3.6% = (300 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2025     | 700                       | Fixed-rate senior notes     | 1.000                | 8.4% = (700 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2026     | 700                       | Fixed-rate senior notes     | 3.800                | 8.4% = (700 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2027     | 700                       | Fixed-rate senior notes     | 1.400                | 8.4% = (700 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2028     | 800                       | Fixed-rate senior notes     | 4.200                | 9.5% = (800 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2029     | 500                       | Fixed-rate senior notes     | 4.500                | 6.0% = (500 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2029     | 700                       | Fixed-rate senior notes     | 2.950                | 8.4% = (700 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2030     | 600                       | Fixed-rate senior notes     | 2.000                | 7.2% = (600 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2031     | 1,000                     | Fixed-rate senior notes     | 1.750                | 11.9% = (1,000 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                   |
| 2032     | 500                       | Fixed-rate senior notes     | 4.750                | 6.0% = (500 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                      |
| 2034     | 1,000                     | Fixed-rate senior notes     | 4.900                | 11.9% = (1,000 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:13]** **[0000882835-24-000044_rop-20240930.htm:26]**                                   |
| N/A      | 925                       | Unsecured credit facility   | N/A                  | 11.0% = (925 / 8,376.6) * 100 **[0000882835-24-000044_rop-20240930.htm:26]**                                             |

03522d338f5cc1f767b20fd54ee0a8750e09cef6970bd14469924c9eb74659d9

b78aad47742537066a6581bcdcba4ab2f1844be8ba78f6ba185de7f7ca4c8e74

478302b7a3ded49c4b7e6f26ba3adf850e6235685b74a949ece834ae9eb659b4

- **Strong Growth in Enterprise Software Bookings**: Roper's enterprise software bookings showed **double-digit growth** in the current quarter, following **high single-digit growth** in the previous quarter, indicating robust pipelines and optimism for future revenue growth.  **[ROP_3403371_11]**
- **Significant M&A Capacity and Plans**: Roper has over **$4 billion** in M&A capacity and plans to be active in pursuing attractive acquisition opportunities in a favorable market, with a robust pipeline in the near term.  **[ROP_3403371_24]**
- **Resolved Production Issues at Neptune with Strong Demand**: The production constraints at Neptune have been remedied, and the company is confident in meeting **strong demand** with improved production output in the **fourth quarter and beyond**.  **[ROP_3403371_11]**

b5f676c9c42af0e64a5a39108b954bb1dc9a3e18d490cecab203419b8273fee9

- **Procare Solutions acquisition to drive growth and earnings accretion:** Procare is expected to grow at a **mid-teens rate** with improving margins, becoming **EPS accretive after 2024** due to its **very good cash conversion dynamics** and potential **tax benefits** in the coming years.  **[ROP_3371356_24]**
- **Strategic focus on increasing organic growth rates to 8–9%:** Roper has improved its organic growth rate from **5–6% to 7–7.5%** and aims for **8–9%**, leveraging process discipline, strategic execution, and talent management across its **28 companies** to drive durable long-term growth and outpace competitors.  **[ROP_3371356_18]**
- **Strong performance and growth prospects in key businesses Neptune and Verathon:** Both Neptune and Verathon outperformed their segment growth; Neptune expects long-term growth rates in the **high single digits**, while Verathon anticipates **low double-digit** organic growth, driven by R&D productivity and market momentum across their three product categories.  **[ROP_3371356_15]**

709e941fc19df2696fe4b7accecce7ab53d825dd45c3ddaf8d410811df774ff9

- **Continued decline in the Freight Matching businesses (DAT & Loadlink) due to challenging freight market conditions**, with expectations for further declines throughout the year.  **[ROP_3381141_22]** **[ROP_3381141_6]**  Management confirmed that these businesses will "continue to be down" and possibly "a touch lower than Q1"  **[ROP_3381141_22]** , and they are expecting "down low singles for the year".  **[ROP_3381141_6]**
- **Organic growth expected to slow from 8% in Q1 to 6% for the full year**, potentially indicating growth headwinds in certain segments.  **[ROP_3381141_25]**  Despite an 8% organic growth in Q1, the company is forecasting 6% for the year due to factors such as "products segment... comps normalize out" and "muted" freight conditions.  **[ROP_3381141_25]**
- **Dependence on recent acquisitions like Procare for growth**, as seen in the Application Software segment where growth was driven by the Procare acquisition.  **[ROP_3381141_11]**  Management noted that the higher growth was due to Procare "coming online," contributing significantly to recurring revenues  **[ROP_3381141_11]** , which may suggest that organic growth without acquisitions could be lower.

2a5b54ef185650098f17c82d9fe43625138b645b2306b1bb1f4ecd185614af5a

- **Roper's enterprise software bookings increased high single digits** in the quarter, showing strong momentum, with multiple businesses like **Aderant, Strata, Vertafore, and Frontline** contributing to this growth.  **[ROP_3394109_14]** **[ROP_3394109_9]** **[ROP_3394109_10]**
- **Aderant is experiencing increased customer adoption of its cloud solutions**, indicating a multiyear journey of migrating on-premise customers to the cloud and unlocking expansion sales opportunities.  **[ROP_3394109_14]**
- **Roper is successfully integrating generative AI capabilities** across its product offerings, with customers looking to Roper for innovation, supporting continued investment and no diversion of IT spending.  **[ROP_3394109_14]** **[ROP_3394109_9]**

a0855fc585d1a9f9f33a2355633c3f84d547b92c05b1c790fafadbb5b7f546ca

- The acquisition of Procare Solutions is expected to be **dilutive to adjusted EPS in 2024 by $0.10 to $0.15**, due to increased interest expenses from funding the acquisition with debt.  **[ROP_3371356_26]**
- **Procare's business is primarily domestic**, with **no significant international presence**, and **international expansion is not expected in the near term**, potentially limiting growth opportunities.  **[ROP_3371356_5]**
- The Application Software segment is experiencing **subdued activity with large enterprise customers**, with **enterprise bookings growing only at low single digits**, which may impact overall growth.  **[ROP_3371356_13]**

45af58cde43363e27b957cec156b37a946cb56da365e313127bee5b2d1681799

1. **Neptune Production Issues**

   **Q:** What's causing the production issues at Neptune, and when will it be resolved?

   **A:** Roper's Neptune business is experiencing production inefficiencies with its mechanical water meters due to a loss of focus while expanding static ultrasonic capacity. The issue doesn't require breakthrough improvements, just a return to prior efficiency levels. The company has implemented countermeasures and expects the problem to be resolved within the year, with a catch-up in the fourth quarter. Demand remains strong, and there's no issue with capacity on the mechanical side.  **[ROP_3394109_7]** **[ROP_3394109_11]** **[ROP_3394109_20]** 

2. **Enterprise Software Bookings Growth**

   **Q:** Can you discuss the high single-digit growth in enterprise software bookings?

   **A:** Roper's enterprise software bookings grew by **high single digits organically**, indicating positive momentum for future revenue. This growth was broad-based, with strong contributions from businesses like Strata, Aderant, Vertafore, and Frontline. Deltek's bookings were still down slightly, but overall, the company is optimistic about the software segment's outlook into 2025.  **[ROP_3394109_9]** **[ROP_3394109_10]** **[ROP_3394109_19]** 

3. **Deltek GovCon Weakness and Outlook**

   **Q:** What's driving the bookings weakness in Deltek's GovCon segment, and will it improve?

   **A:** The slowdown in Deltek's GovCon segment, especially among large enterprise customers, is due to **government spending uncertainty**. However, there was some encouraging enterprise bookings activity in the second quarter. The company doesn't anticipate seasonal or election-related impacts and notes that achieving FedRAMP compliance will unlock SaaS migration opportunities in this segment.  **[ROP_3394109_13]** 

4. **Aderant's Cloud Transition**

   **Q:** How is Aderant progressing with its customers moving to the cloud?

   **A:** Aderant continues to gain market share and is in the early stages of a **multi-year journey** to transition customers from on-premise to cloud solutions. Approximately a few dozen conversions have occurred over the last few years, and the adoption of cloud services is accelerating, opening up expansion opportunities.  **[ROP_3394109_14]** 

5. **Freight Market Outlook**

   **Q:** What's the outlook for the network software business amid the freight market conditions?

   **A:** The network software business has been impacted by the freight recession over the past several quarters. While volumes were flat in the quarter, there are some early signs of improvement, such as stable to slightly improving spot market volumes and increased freight rejection rates. The company believes they're bouncing along the bottom and isn't projecting a recovery until they see more definitive signs.  **[ROP_3394109_12]** 

6. **M&A Market Opportunities**

   **Q:** Are you optimistic about M&A opportunities this year?

   **A:** Roper remains very optimistic about M&A opportunities, noting a significant amount of **pent-up demand** and an encouraging volume of potential deals. Market dynamics, including more reasonable valuations as sponsors adjust expectations, are favorable. The company is proactively engaging with sponsors to pursue high-quality assets.  **[ROP_3394109_16]** 

7. **Pricing Power in Software Businesses**

   **Q:** Is it getting harder to achieve year-over-year price increases in software?

   **A:** Roper hasn't experienced outsized pricing benefits in its software businesses over the last couple of years. Pricing remains a part of the growth strategy to offset attrition on the ARR base, but the company didn't rely heavily on price increases historically and doesn't expect significant changes going forward.  **[ROP_3394109_15]** 

8. **ConstructConnect and Deltek Construction Markets**

   **Q:** Are you seeing any impact from weakening construction starts on ConstructConnect and Deltek?

   **A:** Both ConstructConnect and Deltek's construction vertical are performing well. Deltek continues to see strong pipeline activity and bookings in its construction segment, focusing on small and medium-sized customers. ConstructConnect has achieved **double-digit bookings growth** for four consecutive quarters, driven by strategic focus on trade contractors and building product manufacturers, as well as strong execution.  **[ROP_3394109_18]** 

9. **Neptune Product Mix and Margins**

   **Q:** What's the current mix between ultrasonic and mechanical meters at Neptune, and are there margin differences?

   **A:** While specific mix details are not disclosed for competitive reasons, the market is clearly moving towards static ultrasonic meters. Currently, the margin profiles of the ultrasonic and mechanical products are **similar-ish**.  **[ROP_3394109_17]** 

10. **CrowdStrike Incident Impact**

    **Q:** Has the CrowdStrike incident earlier this week impacted your businesses?

    **A:** The incident has been a **non-event** for Roper. Based on available information, the company doesn't anticipate any impact on its businesses.  **[ROP_3394109_8]** 

52599e8d7ddb38f7b5ab13cc0ab942e705b910ce5c96a584d5fab06b1a8116b4

- **Leadership changes at key businesses ProCare and Frontline reflect underlying performance challenges and potential instability**. At ProCare, Roper identified a need to improve the go-to-market function shortly after acquisition, leading to leadership changes ( **[ROP_3403371_15]** ). Similarly, Frontline underwent leadership changes due to the retirement of its existing leader, and the new CEO is only "two months into the job," indicating potential risks associated with management transitions ( **[ROP_3403371_15]** ).
- **The CEO acknowledges that improving organic growth rates across the portfolio takes time**, suggesting that current growth levels are below desired targets and may impact near-term performance. They are "four or five years in across the portfolio" for strategy implementation, indicating a lengthy process to achieve higher growth ( **[ROP_3403371_23]** ).
- **Potential risks from increased competition due to generative AI technologies**. The CEO admits that while they believe incumbency is an advantage, "we can't develop software as fast or faster than any startup can build software from a generative point of view," highlighting the risk that new entrants could disrupt their markets ( **[ROP_3403371_18]** ).

e7e1059579795a6154127db9a07ca539c1fb4808ab500fc8ef75d7cb6f5b6b0e

1. **Procare Acquisition Impact**  
   **Q:** What's the financial impact of the Procare acquisition?  
   **A:** The acquisition of Procare is expected to close in March and will result in a **$0.10 to $0.15 EPS dilution** for 2024 due to interest expenses on the debt used to finance the deal.  **[ROP_3371356_10]** **[ROP_3371356_23]**  They anticipate **$75 million of EBITDA** from Procare in 2024, with minimal seasonality.  **[ROP_3371356_10]** 

2. **Organic Growth Guidance**  
   **Q:** Why is organic growth guidance lower for 2024?  
   **A:** The company expects organic growth of **7% to 7.5%** for 2024, down from previous years' **8% to 9%**, due to a slowdown in freight markets affecting their Network Software segment and subdued large enterprise activity in Application Software.  **[ROP_3371356_12]**  They aim to reach their long-term aspiration of **8% to 9%** organic growth in the coming years.  **[ROP_3371356_12]** 

3. **Procare's Future Contribution**  
   **Q:** Will Procare be accretive to earnings in 2025?  
   **A:** Yes, Procare is expected to contribute positively to earnings after 2024, with **mid-teens growth** and strong cash conversion dynamics, benefiting the company's growth going forward.  **[ROP_3371356_24]** 

4. **Network Software Outlook**  
   **Q:** What is the outlook for the Network Software segment?  
   **A:** The Network Software segment is expected to have low single-digit organic growth due to continued softness in the freight markets impacting DAT and Foundry's transition to a subscription model.  **[ROP_3371356_11]** **[ROP_3371356_14]**  They assume muted conditions throughout the year without a second-half pickup.  **[ROP_3371356_11]** 

5. **Application Software Performance**  
   **Q:** What are the expectations for Application Software growth?  
   **A:** Application Software is expected to grow in the **mid-single digits**, with recurring revenue strong but nonrecurring revenue flat due to the shift to SaaS.  **[ROP_3371356_14]**  Deltek showed strong performance in Q4, but subdued enterprise activity in previous quarters tempers the outlook.  **[ROP_3371356_13]** 

6. **M&A Strategy and Leverage**  
   **Q:** How is the M&A pipeline and approach to leverage?  
   **A:** The M&A pipeline is active with quality opportunities, including potential bolt-on acquisitions and maturing leader profiles.  **[ROP_3371356_9]** **[ROP_3371356_16]**  The company maintains a long-term leverage policy of **3x to 3.5x** and balances risk in capital structure when financing deals.  **[ROP_3371356_16]** 

7. **SaaS Transition Impact**  
   **Q:** How does SaaS transition affect growth?  
   **A:** Transitioning customers from on-premise to SaaS models is a net growth driver, with on-premise maintenance revenue of over **$900 million** converting at over **2x** to ARR when moving to SaaS.  **[ROP_3371356_14]** **[ROP_3371356_21]**  While Foundry's shift to a full subscription model in 2024 will cause a temporary J-curve effect, the overall impact is positive.  **[ROP_3371356_14]** 

8. **Tech-Enabled Products Growth**  
   **Q:** What is the growth outlook for Neptune and Verathon?  
   **A:** Both Neptune and Verathon had strong growth, with Neptune expected to have long-term growth in the **high single digits** and Verathon aiming for **low double-digit** long-term organic growth.  **[ROP_3371356_15]** 

9. **Freight Market Impact on DAT**  
   **Q:** How does freight market weakness affect DAT?  
   **A:** When freight markets are strong, DAT grows in line or ahead; when markets are weak, DAT's growth slows.  **[ROP_3371356_19]**  The current freight market slowdown is expected to impact DAT's performance in 2024.  **[ROP_3371356_19]** 

10. **Supply Chain and Margins**  
    **Q:** Will resolving supply chain issues benefit margins in 2024?  
    **A:** Resolving supply chain issues helps with inventory turns and working capital, but margin improvements may be offset by product mix changes, such as growth in lower-margin single-use products.  **[ROP_3371356_17]** 

e425a4307c00554baf6fc13024ae7748bbe29a55f04b2a4bcc3363b8c61fe5ed

1. **M&A Pipeline and Competition**  
   **Q:** What's driving optimism in M&A opportunities?  
   **A:** Management is optimistic due to a large number of deals entering the market, with pipelines being full. Reduced competition from private equity firms, which are becoming net sellers rather than buyers, is leading to better valuations. They remain disciplined in capital allocation, considering each deal individually.  **[ROP_3381141_12]** 

2. **AI Strategy and Growth Impact**  
   **Q:** How will AI affect organic growth?  
   **A:** The company is integrating AI tools across its 28 businesses to enhance productivity and add value for customers. Early successes include code assistance and marketing content generation. Products using AI, such as those from Aderant, Deltek, DAT, ConstructConnect, and Foundry, are seeing accelerated bookings and, in some cases, higher price points due to the added value.  **[ROP_3381141_13]** 

3. **Procare Acquisition Contribution**  
   **Q:** How did Procare perform this quarter?  
   **A:** Procare contributed a little over **$20 million** in revenue with EBITDA margins in the **mid-30%** range, meeting expectations. Its revenue is consistent monthly, with little seasonality. Integration is progressing well, with positive momentum toward growth milestones.  **[ROP_3381141_8]** 

4. **Procare Growth Outlook**  
   **Q:** What's the growth outlook for Procare?  
   **A:** Procare is expected to achieve **mid-teens organic growth**, outpacing the market growth rate of around **10%**. With a **1.5x** relative market share, it is poised to gain more share. Future bolt-on acquisitions are anticipated to be modest.  **[ROP_3381141_14]** 

5. **Freight Matching Business Outlook**  
   **Q:** What's the outlook for the Freight Matching business?  
   **A:** The Freight Matching business is expected to be down **low single digits** for the year, aligning with prior expectations. Carrier conditions have been stable, and this stability against prior year comparisons shapes the annual outlook.  **[ROP_3381141_6]** 

6. **Flat Q2 EPS Guidance**  
   **Q:** Why is Q2 EPS guidance flat sequentially?  
   **A:** Flat Q2 EPS guidance is consistent with historical patterns, where Q1 to Q2 is usually stable on a segment EBITDA basis. Last year's sequential increase was due to strong deliveries from Verathon, a dynamic not present this year. Management remains confident in the full-year guidance and progression through 2024.  **[ROP_3381141_7]** 

7. **Neptune's Growth Factors**  
   **Q:** What's driving Neptune's growth?  
   **A:** Neptune is growing due to working through a significant backlog and fulfilling delayed maintenance from COVID-19 disruptions. Approximately **5 to 5.5 years** of demand is being met over **4 years**, boosting growth. There's also momentum from new technologies like solid-state ultrasonic meters and improved network connectivity solutions.  **[ROP_3381141_9]** 

8. **Increase in Recurring Revenue**  
   **Q:** What's driving higher recurring revenue in application software?  
   **A:** The increase is primarily due to Procare, with about **75%** of its revenue coming from payments. This contribution is now reflected in the recurring revenue line, boosting growth in this area.  **[ROP_3381141_11]** 

9. **SaaS Transition Progress**  
   **Q:** How far along is the SaaS transition?  
   **A:** With over **$900 million** in maintenance revenue, only mid to high single-digit percentages have been converted to SaaS so far. Significant progress is underway in businesses like Deltek and Aderant, the latter having over **80%** of bookings in the cloud. There's substantial opportunity remaining in the transition.  **[ROP_3381141_19]** 

10. **Impact of Job Market on Software Business**  
    **Q:** Are job market trends affecting software revenue?  
    **A:** The company hasn't observed significant impacts from shifts in the job market. Very little revenue is based on seat pricing, and where it exists, they're transitioning to different metrics to avoid being affected by changes in workforce compositions.  **[ROP_3381141_16]** 

ea093824d63ac33068c2a4123ff19c9ae0755dae0674bde52d7726c4331ee5ee

1. **Shift in Acquisition Strategy**  
   **Q:** Is there a change in strategy with the Transact Campus acquisition?  
   **A:** Yes, Roper has evolved its capital deployment strategy to focus more on multi-activity and faster-growing leaders. Since their Investor Day 18 months ago, they've made acquisitions like combining businesses similar to Transact Campus and ProCare, which are slightly faster-growing businesses. They've leaned into bolt-on acquisitions close to their existing businesses to accelerate organic growth once the bolt-on turns organic.  **[ROP_3403371_9]** 

2. **Enterprise Software Bookings Momentum**  
   **Q:** Are enterprise software bookings improving, indicating growth next year?  
   **A:** Enterprise software bookings have picked up, with high single-digit growth last quarter and double-digit growth this quarter.  **[ROP_3403371_11]** **[ROP_3403371_14]**  Pipelines look robust heading into the end of the year. This momentum may lead to revenue growth next year, depending on implementation time frames and customer go-lives.  **[ROP_3403371_14]** 

3. **Macro Headwinds and Business Recovery**  
   **Q:** How are macro headwinds affecting business recovery?  
   **A:** Roper has worked to reduce cyclicality by focusing on mission-critical software in stable end markets like education, legal contracting, healthcare, and insurance. While not immune to macro factors like interest rates and economic slowdown, they are cautiously optimistic as enterprise software bookings improve and the freight market stabilizes.  **[ROP_3403371_11]** 

4. **Outlook for Foundry and Freight Match Businesses**  
   **Q:** What is the outlook for Foundry and Freight Match businesses next year?  
   **A:** The Freight Match businesses, including DAT and Loadlink, are stabilizing.  **[ROP_3403371_12]**  DAT expects modest growth next year, even without improvement in carrier network participation, through pricing and packaging.  **[ROP_3403371_12]**  Foundry is waiting for post-production employment to return to historical levels, which may take until **2025** due to the impact of strikes, leading to limited growth in the near term.  **[ROP_3403371_12]** 

5. **M&A Activity and Capital Deployment Plans**  
   **Q:** Will Roper pause M&A activity as it delevers?  
   **A:** No, Roper has over **$4 billion** of M&A capacity for the next 12 months.  **[ROP_3403371_24]**  The company is very active in the M&A market, which is attractive due to a high number of sellers. They plan to continue pursuing acquisitions, especially in faster-growing businesses.  **[ROP_3403371_24]** 

6. **Pricing Environment and Margins**  
   **Q:** Is it harder to get price increases now? Back to normal pricing?  
   **A:** Roper has always had pricing mechanisms in place, with about **95%** gross retention in software.  **[ROP_3403371_16]**  While they did get outsized pricing in software in the past, it's now reverting to normal levels. In their DEPS businesses, pricing is more normalized, with regular inflationary adjustments every year or 18 months.  **[ROP_3403371_16]** 

7. **Impact of Generative AI on Competitive Landscape**  
   **Q:** Does generative AI raise barriers to entry or lower them?  
   **A:** Generative AI raises barriers to entry for Roper's businesses.  **[ROP_3403371_18]**  Incumbents like Roper have advantages due to their data and understanding of specific customer needs. They can leverage AI to enhance their offerings, while new entrants may lack the domain-specific data and customer relationships.  **[ROP_3403371_18]** 

8. **Neptune Production Issues and Order Patterns**  
   **Q:** Are Neptune's production issues resolved, and how are order patterns?  
   **A:** Yes, Neptune's mechanical meter production issues have been resolved, and the company is meeting customer commitments.  **[ROP_3403371_11]** **[ROP_3403371_21]**  Order patterns are as expected; while order durations have shortened from 12–18 months during COVID to **6–9 months** now, the order volume remains healthy.  **[ROP_3403371_21]** 

9. **TEP EBITDA Margins and Improvement Expectations**  
   **Q:** Will TEP EBITDA margins return to year-over-year growth?  
   **A:** TEP's EBITDA margins were down due to prior supply chain benefits and investments in NDI.  **[ROP_3403371_12]**  For the year, margins are expected to be flat, but they should improve in the fourth quarter and beyond as these headwinds subside.  **[ROP_3403371_12]** 

10. **Cash Flow Seasonality and Expectations**  
    **Q:** How will cash flow behave seasonally in Q4 compared to Q3?  
    **A:** Q3 is now Roper's strongest cash flow quarter due to contributions from Frontline and Transact.  **[ROP_3403371_10]** **[ROP_3403371_19]**  While Q4 is expected to be strong, cash flow won't increase as much as in Q3.  **[ROP_3403371_19]** 

11. **Leadership Changes at ProCare and Frontline**  
    **Q:** What's behind the leadership changes at ProCare and Frontline?  
    **A:** At ProCare, they identified opportunities to improve the go-to-market function and made leadership changes to drive value creation.  **[ROP_3403371_14]** **[ROP_3403371_15]**  At Frontline, the previous leader retired, and they promoted internally, bringing in a growth-oriented leader with a strong track record. These changes aim to enhance performance and growth at both businesses.  **[ROP_3403371_15]** 

12. **Long-Term Organic Growth Targets and Portfolio**  
    **Q:** Does Roper have the right portfolio to achieve higher organic growth?  
    **A:** Roper believes there is opportunity for every business to improve.  **[ROP_3403371_23]**  They have confidence in their ability to enhance organic growth through strategic initiatives and talent development. Additionally, they are tilting their capital deployment towards slightly higher-growth businesses, which will adjust the portfolio mix over time.  **[ROP_3403371_23]** 

13. **Vertafore Updates and Product Developments**  
    **Q:** Any updates on Vertafore's performance and products?  
    **A:** Vertafore had significant wins in the quarter and released impactful product updates.  **[ROP_3403371_19]**  Their BenefitPoint product enhancements save **45 minutes per customer per benefit plan**, translating to tens of thousands of hours saved for customers.  **[ROP_3403371_19]** 

14. **Impact of Election Outcome on Businesses like Deltek**  
    **Q:** Are any businesses concerned about the upcoming election's impact?  
    **A:** No, Roper's businesses are generally not impacted by election outcomes.  **[ROP_3403371_22]**  For Deltek, government spending continues regardless of administration; only the nature of spending changes. Appropriations for **2025** are well understood and not expected to change based on the election.  **[ROP_3403371_22]** 

b605b9ebd8ff5aac35e5f344d1af09e61009564c2c696fb32124968ece805c71

- **Production efficiency issues at Neptune's mechanical meter production** are causing revenue delays, pushing some Q3 revenue into Q4 and impacting margins.  **[ROP_3394109_7]**
- **Application Software margins are expected to decline year-over-year in Q3**, with management anticipating stronger performance only in Q4.  **[ROP_3394109_11]**
- **Continued pressure in the freight market** is adversely impacting DAT and Loadlink businesses, with the company "bouncing along the bottom" and not expecting improvement in the outlook until it actually materializes.  **[ROP_3394109_12]**

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Roper Technologies Inc (ROP)

Financials