Roper Technologies, Inc. (ROP) , on Aug 19, priced an offering of $2 billion for its senior unsecured notes in aggregate. The offering comprises $500 million of 4.500% senior notes due to expire on Oct 15, 2029, and $500 million of 4.750% senior notes due to expire on Feb 15, 2032. It also includes $1 billion of 4.900% senior notes set to expire on Oct 15, 2034. Subject to customary closing conditions, this offering is anticipated to close on Aug 21, 2024. As communicated by the company, notes due to expire ...

SARASOTA, Fla., Aug. 19, 2024 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (Nasdaq: ROP) (the "Company") announced today the pricing of its public offering of $500 million of 4.500% Senior Notes due 2029 (the "2029 notes"), $500 million of 4.750% Senior Notes due 2032 (the "2032 notes"), and $1 billion of 4.900% Senior Notes due 2034 (the "2034 notes" and, collectively with the 2029 notes and 2032 notes, the "notes"). The offering is expected to close, subject to the satisfaction of customary closing condit ...

Acquisition Overview - Roper Technologies, Inc. has acquired Transact Campus, Inc. for a total transaction value of $1.5 billion, which includes a $100 million tax benefit [1] - The acquisition will be financed through Roper's existing cash and revolving credit facility [1] Company Profile - Transact, based in Scottsdale, AZ, provides app-based campus transaction processing solutions, enabling cashless transactions for students both on and off campus [2] - The company also offers services such as security management, college store management, automated attendance monitoring, electronic payments, and tuition payment plans [2] Strategic Rationale - The acquisition aligns with Roper's strategy to expand its market share and customer base through targeted acquisitions [3] - Integrating Transact's expertise in campus technology and payment solutions is expected to enhance customer retention and improve cash conversion [3] Integration Plans - Transact will be incorporated into Roper's CBORD business, which offers foodservice, nutrition, access and security, and campus commerce solutions [4] - The combined entity will operate under both the Transact and CBORD brand names [4] Financial Expectations - The acquisition is subject to regulatory approvals and is expected to close in the immediate future [5] - Transact is projected to generate revenues of approximately $325 million and EBITDA of $105 million in 2025 [5] - Roper anticipates that Transact will achieve sustained high single-digit organic revenue growth over the long term [5] Market Performance - Roper Technologies currently holds a Zacks Rank of 3 (Hold) and has seen a stock price increase of 12.8% over the past year, compared to the industry's 18.3% growth [6] - The company is experiencing rising expenses due to supply-chain issues, which are impacting profitability [6]

SARASOTA, Fla., Aug. 15, 2024 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (Nasdaq: ROP) today announced that it has entered into a definitive agreement to acquire Transact Campus, Inc. ("Transact") for a net purchase price of $1.5 billion, including a $100 million tax benefit resulting from the transaction. The net purchase price represents approximately 14 times expected 2025 EBITDA. Transact is an award-winning provider of innovative campus technology and payment solutions, offering a comprehensive suite ...

Financial Performance - Net revenues for Q2 2024 were $1,716.8 million, a 12.1% increase from $1,531.2 million in Q2 2023[63] - Net revenues for the six months ended June 30, 2024, were $3,397.5 million, an increase of 13.2% compared to $3,000.9 million for the same period in 2023[70] - The company reported an organic revenue growth of 4.1% for the total business in Q2 2024[63] - Backlog increased by 3.3% to $2,836.4 million as of June 30, 2024, compared to $2,746.8 million as of June 30, 2023, driven by acquisitions and organic growth in the Application Software segment[68] Segment Performance - Application Software segment revenue grew by 21.0%, while Network Software and Technology Enabled Products segments grew by 1.7% and 4.5%, respectively[63] - Gross margin for the Application Software segment increased to 69.3% for the six months ended June 30, 2024, compared to 68.6% for the same period in 2023[70] - The Technology Enabled Products segment saw a gross margin increase to 58.1% in Q2 2024 from 57.6% in Q2 2023[65] Margins and Expenses - Gross margin for the total business was 69.5% in Q2 2024, slightly down from 69.7% in Q2 2023[61] - Operating margin for the total business improved to 32.4% in Q2 2024 compared to 32.2% in Q2 2023[61] - Operating margin improved to 26.9% for the six months ended June 30, 2024, compared to 25.7% for the same period in 2023[70] - Selling, general and administrative expenses as a percentage of net revenues decreased to 37.1% in Q2 2024 from 37.5% in Q2 2023[61] - SG&A expenses as a percentage of net revenues decreased to 42.5% for the six months ended June 30, 2024, from 42.9% for the same period in 2023[70] Earnings and Interest - Net earnings from continuing operations were 19.6% of revenues in Q2 2024, down from 23.6% in Q2 2023[61] - Interest expense increased to $67.5 million in Q2 2024 from $34.8 million in Q2 2023 due to higher borrowings[66] - The interest expense, net, increased to $120.7 million for the six months ended June 30, 2024, compared to $72.2 million for the same period in 2023[73] Cash Flow and Debt - Cash provided by operating activities increased by 17% to $915.6 million for the six months ended June 30, 2024, compared to $785.0 million for the same period in 2023[75] - Total debt, net of deferred financing costs, was $7,423.9 million as of June 30, 2024, compared to $6,330.1 million as of December 31, 2023[79] Investments and Acquisitions - Equity investments (gain) loss, net, was a gain of $56.2 million for the six months ended June 30, 2024, compared to a gain of $64.8 million for the same period in 2023[74] - The company maintains an active acquisition program, with future acquisitions dependent on various factors including market conditions[82] Market Risk - No material changes in market risk disclosures during the six months ended June 30, 2024[85]

Core Viewpoint - Roper Technologies reported strong second-quarter 2024 results with adjusted earnings per share of $4.48, exceeding estimates and reflecting a 9% year-over-year increase [1] Financial Performance - Net revenues for Roper reached $1,716.8 million, a 12% increase year-over-year, although it fell short of the consensus estimate of $1,724 million [10] - Adjusted EBITDA grew 13% year-over-year to $695 million, with a margin increase of 20 basis points to 40.5% [6] - The cost of sales rose 12.8% year-over-year to $523.5 million, while gross profit increased 11.8% to approximately $1.19 billion, resulting in a slight decrease in gross margin to 69.5% from 69.7% [5] Segment Performance - Application Software segment revenues totaled $931.8 million, accounting for 54.3% of total revenues, with a year-over-year increase of 21% and organic revenue growth of 5% [2] - Network Software & Systems generated revenues of $364.2 million, representing 21.2% of total revenues, with a 2% year-over-year growth [3] - Technology Enabled Products segment revenues were $420.8 million, making up 24.5% of total revenues, with a 4% year-over-year increase [4] Shareholder Returns - Roper rewarded shareholders with a dividend payment of $160.6 million in the first half of 2024, reflecting a 10.9% increase year-over-year [7] Outlook - For the third quarter, Roper anticipates adjusted earnings per share to be in the range of $4.50-$4.54, an increase from previous projections [16] - For the full year 2024, Roper expects adjusted earnings per share from continuing operations to be between $18.10-$18.25, with total revenues projected to increase by 12% [20]

Financial Data and Key Metrics Changes - The company reported a total revenue of $1.72 billion, representing a 12% increase compared to the prior year [71] - Organic revenue growth was 4%, while EBITDA grew by 13% with margins expanding to 40.5% [70][88] - Free cash flow increased by 24% in the quarter and 35% on a trailing twelve-month (TTM) basis, with TTM free cash flow margins at 32% [70][126] Business Line Data and Key Metrics Changes - The Application Software segment saw total revenue growth of 21%, with organic revenue growth of 5% and EBITDA margins at 43.6% [2] - The TEP segment grew 5% on an organic basis, maintaining strong EBITDA margins at 36.2% [79] - The freight matching businesses, DAT and Loadlink, experienced a slight decline due to challenging market conditions [77] Market Data and Key Metrics Changes - The company expects the TEP segment to grow in the mid-single to high-single digits for the remainder of the year, slightly below previous expectations due to production efficiency timing at Neptune [8] - The freight market is showing signs of stabilization, with spot market volumes stable to slightly improving [109] Company Strategy and Development Direction - The company is increasing the low end of its full-year guidance, reflecting confidence in its outlook despite production efficiency challenges at Neptune [86] - A focus on M&A opportunities remains strong, with a robust pipeline of attractive acquisition targets [10][86] - The company is committed to long-term sustainable growth through disciplined capital deployment and innovation investments [11][100] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the freight market and the potential for growth in enterprise software bookings [109] - The company is addressing production efficiency issues at Neptune, with expectations for resolution by the end of the third quarter [57][102] - There is a strong demand for the company's solutions, particularly in the government contracting and healthcare sectors [74][120] Other Important Information - The company maintains a strong financial position with over $4 billion available for capital deployment [10] - The introduction of GenAI-powered capabilities across various software platforms is expected to enhance customer value and operational efficiency [91][118] Q&A Session Summary Question: What are the production efficiency issues at Neptune? - Management indicated that the production efficiency on the mechanical side was below expectations due to a focus on adding static capacity, but countermeasures are in place to resolve this [12][102] Question: Is there any impact from the recent CrowdStrike incident? - Management stated that there were no new vulnerabilities identified across their businesses related to the incident [132] Question: How is the company addressing AI investments and customer needs? - The company is actively engaging with customers to integrate GenAI into their product offerings, which has led to increased enterprise software bookings [134] Question: What is the outlook for the freight market? - Management noted that the freight market is stabilizing, with some signs of improvement, but they are cautious about making optimistic forecasts until more data is available [109]

Revenue Growth - Revenue increased 12% to $1.72 billion, with organic revenue growth of 4%[18] - The company anticipates full year total revenue growth of approximately 12% and organic revenue growth of approximately 6%[19] - Total net revenues for the three months ended June 30, 2024, increased to $1,716.8 million, up from $1,531.2 million in the same period last year, representing a growth of 12.1%[35] Earnings Performance - GAAP net earnings decreased 7% to $337 million, while adjusted net earnings increased 9% to $483 million[18] - Adjusted EBITDA rose 13% to $695 million, representing 40.5% of revenue[26] - Net earnings from continuing operations for the three months ended June 30, 2024, were $337.1 million, a decrease from $361.0 million in the same quarter of 2023, reflecting a decline of 6.5%[35] - Basic net earnings per share from continuing operations for the three months ended June 30, 2024, were $3.15, down from $3.38 in the prior year[35] - Net earnings from continuing operations for the six months ended June 30, 2024, were $719.1 million, compared to $645.3 million in 2023, representing an increase of approximately 11.5%[48] Cash Flow and Liquidity - Operating cash flow increased 20% to $384 million, contributing to a trailing-twelve-month adjusted free cash flow of $2.1 billion, or 32% of revenue[1] - Free cash flow for Q2 2024 was $367 million, reflecting a 24% increase year-over-year[1] - Cash provided by operating activities from continuing operations was $915.6 million, up from $785.0 million in the previous year, indicating a growth of about 16.6%[48] - The company experienced a net increase in cash and cash equivalents of $37.2 million, a significant decrease compared to $670.0 million in the previous period[48] - Cash and cash equivalents at the end of the period were $251.5 million, down from $1,462.8 million at the end of the previous year[48] Expenses and Investments - Selling, general and administrative expenses for the three months ended June 30, 2024, were $699.1 million, compared to $631.8 million in the same period last year, an increase of 10.7%[35] - Cash used in investing activities from continuing operations of $(1,887.4) million, significantly higher than $(52.3) million in the prior year[48] - Amortization of intangible assets rose to $377.2 million from $350.6 million, indicating ongoing investment in intangible resources[48] - Non-cash stock compensation increased to $73.3 million from $63.5 million, reflecting adjustments in employee compensation strategies[48] Assets and Liabilities - Total assets as of June 30, 2024, increased to $29,847.5 million, compared to $28,167.5 million as of December 31, 2023, marking a growth of 5.96%[34] - Cash and cash equivalents rose to $251.5 million as of June 30, 2024, up from $214.3 million at the end of 2023, indicating an increase of 17.3%[34] - Accounts receivable decreased to $739.9 million from $829.9 million, reflecting a decline of 10.8%[34] - Goodwill increased to $18,313.1 million as of June 30, 2024, from $17,118.8 million at the end of 2023, reflecting an increase of 7.0%[34] Future Guidance - For Q3 2024, the company expects adjusted DEPS of $4.50 - $4.54[2] - Full year 2024 adjusted DEPS guidance raised to $18.10 - $18.25, compared to previous guidance of $18.05 - $18.25[19] Strategic Opportunities - The company reported a robust pipeline of attractive acquisition opportunities and substantial M&A capacity[18] - Financial impacts associated with minority investments in Indicor and Certinia were noted, with adjustments made in non-GAAP measures[6]

Core Insights - Roper Technologies, Inc. (ROP) is expected to report strong second-quarter performance driven by growth in its Application Software segment, particularly from Deltek, Strata, PowerPlan, and Aderant businesses [2][4] - The Zacks Consensus Estimate for ROP's revenues is $1.72 billion, reflecting a 12.6% increase year-over-year, while adjusted earnings are estimated at $4.46 per share, indicating an 8.3% growth from the previous year [3][5] Application Software Segment - The Deltek business is anticipated to benefit from solid demand for SaaS solutions, while Aderant's growth is attributed to the adoption of GenAI innovations [2] - Strata is expected to perform well due to strong demand for decision support and financial planning solutions in the healthcare sector [4] Financial Performance Estimates - Total revenues for the second quarter are projected at $1.7 billion, marking a 12.6% year-over-year increase, with adjusted earnings expected to be $4.43 per share, a 7.6% rise from the prior year [5] - The Network Software segment is estimated to generate revenues of $372.4 million, reflecting a 4% increase year-over-year [19] Cost and Margin Considerations - Operating costs are expected to rise, particularly due to increased amortization of acquired assets and higher selling, general, and administrative expenses, which are projected to reach $732.5 million, a 15.9% increase year-over-year [20] Acquisition Impact - Recent acquisitions, including Procare Solutions and Syntellis Performance Solutions, are anticipated to enhance Roper's software offerings and expand its SaaS portfolio [11] Earnings Surprise Potential - Roper has a positive earnings surprise history, having outperformed consensus estimates in the last four quarters with an average beat of 2% [9]

Core Viewpoint - Roper Technologies, Inc. is well-positioned for growth driven by the adoption of generative AI, strong demand in water management products, and a robust M&A strategy [7][10][18] Revenue Growth - The company reported a 14.3% year-over-year revenue growth to $1.68 billion in Q1 2024, with a 15.8% increase in recurring software revenue [8] - Organic growth, excluding acquisitions, increased by 8% year-over-year [8] - The Application Software segment achieved a 17.6% year-over-year revenue growth, supported by acquisitions and strong customer retention [8] - The Technology Enabled Products segment delivered a 17% year-over-year organic growth due to high demand for ultrasonic meters [9] Generative AI Strategy - Roper has launched various generative AI-equipped software tools since Q2 2023, enhancing customer productivity and retention [3][4] - The company is focused on developing new software solutions to meet increasing customer needs in the generative AI space [4] M&A Activity - Roper's M&A strategy contributed 7 percentage points of sales growth in 2023 and 6 percentage points in Q1 2024 [10] - Recent acquisitions include Syntellis and Procare, expected to contribute $185 million and ~$260 million in revenue, respectively [10] Margin Analysis - The total adjusted EBITDA margin increased by 60 basis points year-over-year to 40.2% in Q1 2024 [12] - The Application Software segment saw a 10 basis points year-over-year increase in adjusted EBITDA margin, while the Network Software segment experienced a 280 basis points increase [15] Valuation Outlook - Roper is currently trading at a 30.40x FY24 consensus EPS estimate, slightly above historical averages [17] - The potential for re-rating exists due to the company's exposure to AI trends, which could enhance growth prospects [18]