Core Viewpoint - Roper Technologies, Inc. has announced a public offering of $2 billion in senior notes with varying maturities and interest rates, aimed at refinancing existing debt and supporting general corporate purposes [1][3]. Group 1: Offering Details - The company is offering $500 million of 4.250% Senior Notes due 2028, $500 million of 4.450% Senior Notes due 2030, and $1 billion of 5.100% Senior Notes due 2035 [1][2]. - Interest on the notes will be paid semi-annually starting March 15, 2026, with the 2028 notes maturing on September 15, 2028, the 2030 notes on September 15, 2030, and the 2035 notes on September 15, 2035 [2]. Group 2: Use of Proceeds - Net proceeds from the sale of the notes will be utilized to repay a portion of borrowings under the company's unsecured credit facility, repay outstanding Senior Notes due September 2025 and December 2025, and for general corporate purposes including future acquisitions [3]. Group 3: Management and Underwriters - BofA Securities, J.P. Morgan Securities, and Wells Fargo Securities are the active joint book-running managers for the offering, with additional roles assigned to other financial institutions [4]. Group 4: Company Background - Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000, known for its long-term track record of compounding cash flow and increasing shareholder value through disciplined capital redeployment towards high-quality acquisitions [7].

Core Insights - Roper Technologies is recognized as a highly successful serial acquirer in the market, achieving a mid-teen compounded annual return over the last decade through both organic growth and acquisitions [1] Group 1 - The company has demonstrated a strong track record of delivering returns, indicating effective management and strategic growth initiatives [1]

Group 1 - The new tax law, referred to as the "OBBB," is praised by companies for enhancing consumer capacity and releasing funds, allowing immediate expensing of domestic capital costs for various enterprises [1] - 19% of companies in the Russell 3000 index mentioned the new tax regulation during their earnings calls, indicating a significant awareness and potential impact on corporate strategies [1] - Companies can now fully deduct expenses related to R&D, new equipment, and property in one go, which is expected to save funds and accelerate equipment procurement and facility upgrades [1] Group 2 - Johnson & Johnson views the tax law favorably, linking it to their previously announced $55 billion investment plan in the U.S. and expressing optimism about job creation and innovation [2] - AT&T anticipates saving up to $8 billion in cash taxes from 2025 to 2027, planning to allocate approximately $3.5 billion to expand its fiber network [2] - PACCAR and General Dynamics report increased business inquiries due to released funds, with PACCAR projecting a 4% to 6% growth in parts sales this quarter [3] Group 3 - Companies like Booz Allen and United Rentals have raised their free cash flow expectations by $200 million and $400 million, respectively, due to tax incentives [3] - Northrop Grumman expects to receive $200 million to $250 million in cash tax benefits this year, while Roper Technologies anticipates a tax reduction of about $150 million and $120 million in benefits next year [3] - Some companies, such as Ford and Sherwin-Williams, are still assessing the financial impact of the new tax law, while Boeing does not foresee significant effects this year [3] Group 4 - The tax law may encourage companies to expand their operations in the U.S., but it could also lead to increased costs, complicating the overall financial landscape [4] - Ongoing tariff negotiations add complexity to the situation, suggesting that the financial benefits of the tax law may not be straightforward for all companies [4]

Company Overview - Roper Technologies, Inc. is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000 [2] - The company has a long-term track record of compounding cash flow and shareholder value [2] - Roper operates market-leading businesses that design and develop vertical software and technology-enabled products for various niche markets [2] Investment Strategy - Roper employs a disciplined, analytical, and process-driven approach to redeploy excess capital towards high-quality acquisitions [2] Upcoming Events - Roper Technologies will present at the Oppenheimer 28th Annual Technology, Internet & Communications Conference on August 11, 2025, at 3:45 PM (Eastern Time) in a virtual format [1] - A link to the webcast presentation will be available in the "Investors" section of the company's website [1]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, show significant year-over-year revenue and profit growth, driven by both organic performance and acquisitions, with total assets and liabilities increasing primarily due to acquisition-related goodwill and debt financing, while operating cash flow remained strong, funding substantial acquisition activities [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $1,943.6 | $1,716.8 | +13.2% | $3,826.4 | $3,397.5 | +12.6% | | **Gross Profit** | $1,345.4 | $1,193.3 | +12.7% | $2,639.1 | $2,374.3 | +11.2% | | **Income from Operations** | $548.3 | $494.2 | +11.0% | $1,074.1 | $975.5 | +10.1% | | **Net Earnings** | $378.3 | $337.1 | +12.2% | $709.4 | $719.1 | -1.3% | | **Diluted EPS** | $3.49 | $3.12 | +11.9% | $6.55 | $6.66 | -1.7% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Account | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $1,654.3 | $1,542.7 | +$111.6 | | **Goodwill** | $20,507.6 | $19,312.9 | +$1,194.7 | | **Other Intangible Assets, net** | $9,627.4 | $9,059.6 | +$567.8 | | **Total Assets** | $33,220.4 | $31,334.7 | +$1,885.7 | | **Total Current Liabilities** | $3,564.5 | $3,832.2 | -$267.7 | | **Long-term Debt, net** | $7,859.2 | $6,579.9 | +$1,279.3 | | **Total Liabilities** | $13,586.5 | $12,467.1 | +$1,119.4 | | **Total Stockholders' Equity** | $19,633.9 | $18,867.6 | +$766.3 | - The increase in **Goodwill** and **Other Intangible Assets** is primarily attributable to business acquisitions completed during the first half of 2025[11](index=11&type=chunk)[45](index=45&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $932.8 | $915.6 | | **Net cash used in investing activities** | $(2,051.3) | $(1,887.4) | | *Acquisitions of businesses, net* | $(2,005.2) | $(1,858.3) | | **Net cash provided by financing activities** | $1,140.2 | $1,015.4 | | *Borrowings under revolving line of credit, net* | $1,275.0 | $1,090.0 | | **Net increase in cash and cash equivalents** | $54.2 | $37.2 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events, including major business acquisitions like CentralReach for $1.85 billion, a legal settlement costing $24 million, strong performance across all three reportable segments, and a backlog of $4.6 billion in remaining performance obligations, with a subsequent event noting a new tax law change expected to provide a cash tax benefit - On April 23, 2025, Roper acquired CentralReach Holdings, LLC for a net purchase price of **$1.85 billion**, funded by its revolving credit facility, adding **$1.05 billion** in goodwill[24](index=24&type=chunk)[25](index=25&type=chunk) - Two bolt-on acquisitions, Muni-Link and Outgo, were completed in H1 2025 for a total of **$157.4 million**[26](index=26&type=chunk) - Subsequent to the quarter end, in July 2025, Roper completed three more acquisitions: Subsplash (~**$800 million**), Orchard Software (~**$175 million**), and Convoy (~**$250 million**)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - In January 2025, the company's subsidiary PowerPlan, Inc. settled a lawsuit for **$24.0 million** on a pretax basis[55](index=55&type=chunk) - As of June 30, 2025, total remaining performance obligations were **$4.58 billion**, of which **$2.96 billion** (Backlog) is expected to be recognized as revenue over the next 12 months[58](index=58&type=chunk) - On July 4, 2025, the U.S. government enacted the OBBBA, which repeals the requirement to capitalize and amortize domestic R&D expenditures, providing the company with a cash tax benefit[62](index=62&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a strong second quarter with **13.2% total revenue growth**, driven by **6.7% organic growth** and contributions from recent acquisitions, with all three segments reporting solid organic growth, and the company's financial condition remaining robust, with strong operating cash flow used to fund an active acquisition pipeline, leading to increased debt levels, while the outlook acknowledges geopolitical and economic uncertainties but expresses confidence in generating positive cash flows to reduce debt [Results of Operations](index=20&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue increased **13.2% YoY** to **$1.94 billion**, with organic growth of **6.7%**, where the Application Software segment grew **17.5%** (**6.5% organic**), Network Software grew **5.8%** (**4.7% organic**), and Technology Enabled Products grew **10.1%** (**9.1% organic**), and for the first six months, total revenue grew **12.6%** (**5.8% organic**), with backlog increasing **4.4% YoY** to **$2.96 billion** | Segment | Total Growth | Acquisition Impact | FX Impact | Organic Growth | | :--- | :--- | :--- | :--- | :--- | | **Application Software** | 17.5% | 10.6% | 0.4% | 6.5% | | **Network Software** | 5.8% | 1.1% | 0.0% | 4.7% | | **Technology Enabled Products** | 10.1% | 0.9% | 0.1% | 9.1% | | **Roper Total** | **13.2%** | **6.2%** | **0.3%** | **6.7%** | - Application Software organic growth was broad-based, led by businesses serving acute healthcare, property and casualty insurance, and legal markets[74](index=74&type=chunk) - Network Software organic growth was led by businesses serving construction and freight match markets[75](index=75&type=chunk) - Technology Enabled Products organic growth was led by medical products and water meter technology businesses[76](index=76&type=chunk) - Backlog (remaining performance obligations expected to be recognized in the next 12 months) increased **4.4%** to **$2,961.3 million** at June 30, 2025, compared to the prior year[81](index=81&type=chunk) [Financial Condition, Liquidity, and Capital Resources](index=23&type=section&id=Financial%20Condition%2C%20Liquidity%2C%20and%20Capital%20Resources) The company's liquidity remains strong, with operating cash flow increasing **2%** to **$932.8 million** for the first six months of 2025, where cash was primarily used for acquisitions, funded by borrowings under the revolving credit facility, leading total debt to increase to **$8.86 billion**, raising the net debt to total net capital ratio to **30.5%**, and a new tax law (OBBBA) is expected to provide a significant cash tax benefit of approximately **$150 million** in 2025 - Cash from operating activities increased by **2%** to **$932.8 million** in H1 2025 compared to H1 2024[90](index=90&type=chunk) - Cash used in investing activities was primarily for the acquisitions of CentralReach, Muni-Link, and Outgo[91](index=91&type=chunk) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total debt, net** | $8,859.0 | $7,623.0 | | **Net debt** | $8,616.6 | $7,434.8 | | **Net debt / Total net capital** | 30.5% | 28.3% | - The enactment of the OBBBA tax law is expected to provide a full-year 2025 cash tax benefit of approximately **$150 million**[98](index=98&type=chunk) [Outlook](index=25&type=section&id=Outlook) The company acknowledges potential adverse effects from geopolitical and economic uncertainties, including inflation and supply chain disruptions, and plans to continue its active acquisition program, financed through various means, with management anticipating positive cash flows will be sufficient to reduce outstanding debt, though the rate of reduction will depend on acquisition activity and overall financial performance - Management identifies geopolitical and economic uncertainties, such as inflation, supply chain disruptions, and armed conflicts, as potential risks to business prospects[99](index=99&type=chunk) - The company maintains an active acquisition program and expects future cash flows from operations to permit the reduction of outstanding debt[100](index=100&type=chunk)[101](index=101&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk disclosures during the six months ended June 30, 2025, as compared to the information provided in its 2024 Annual Report on Form 10-K [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal controls over financial reporting during the quarter [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 9 of the Notes to Condensed Consolidated Financial Statements - Details on legal proceedings are located in Note 9 of the financial statements, which discusses the settlement of the PowerPlan, Inc. lawsuit[108](index=108&type=chunk)[55](index=55&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On May 15, 2025, the company transferred **12,930 shares** of common stock from treasury as equity consideration for the acquisition of Outgo, with this transaction exempt from registration under Section 4(a)(2) of the Securities Act of 1933 - On May 15, 2025, **12,930 shares** of treasury stock were used as equity consideration for the acquisition of Outgo[110](index=110&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no director or officer of the company adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to compensation plans, officer certifications, and XBRL data files

Core Insights - The author has a strong educational background with a master's degree in Analytics and a bachelor's degree in Accounting, indicating a solid foundation for investment analysis [1] - The author has over 10 years of experience in the investment arena, starting as an analyst and progressing to a management role, showcasing a deep understanding of the industry [1] - The author expresses a personal interest in dividend investing, suggesting a focus on income-generating investments [1] Company and Industry Summary - The author holds long positions in several companies including CTAS, JNJ, WST, O, HRL, LOW, PEP, and ROP, indicating a diversified investment strategy [2] - The article reflects the author's personal opinions and does not involve compensation from the companies mentioned, suggesting an independent analysis [2] - The disclosure emphasizes that past performance is not indicative of future results, highlighting the inherent uncertainties in investment decisions [3]

Group 1 - The analyst has over 15 years of experience in investing and has provided research services to mid-sized hedge funds with assets under management between $100 million and $500 million [1] - The focus is on medium-term investing, targeting ideas with catalysts to unlock value or short selling in case of downside catalysts [1] - The analyst has a generalist approach but has primarily analyzed the industrial, consumer, and technology sectors, indicating higher conviction in these areas [1]

Core Insights - Roper Technologies reported strong second-quarter results with adjusted earnings per share of $4.87, exceeding the street estimate of $4.83, and quarterly sales of $1.94 billion, surpassing the analyst consensus of $1.92 billion [1][2] Financial Performance - The company expects fiscal 2025 adjusted earnings per share to be in the range of $19.90-$20.05, an increase from the previous range of $19.80-$20.05, compared to the analyst consensus of $19.92 [2] - Roper Technologies raised its full-year total revenue growth outlook to approximately 13% or $7.95 billion, up from the previous outlook of around 12% or $7.88 billion, and above the analyst consensus estimate of $7.86 billion [2] - The company anticipates adjusted EPS for the third quarter to be between $5.08 and $5.12, aligning with the $5.08 analyst consensus estimate [3] Management Commentary - The President and CEO of Roper Technologies, Neil Hunn, highlighted a strong quarter with 13% total revenue growth, 7% organic revenue growth, and 10% free cash flow growth, emphasizing the company's focus on innovation and investment for long-term growth [4] - Hunn expressed excitement about the role of AI capabilities in enhancing solutions and creating new opportunities across the company's portfolio [4] Analyst Reactions - Following the earnings announcement, analysts adjusted their price targets for Roper Technologies, with RBC Capital maintaining an Outperform rating and raising the price target from $695 to $703, and Truist Securities maintaining a Buy rating with a price target increase from $675 to $685 [5][10]

Core Insights - K1 Investment Management's portfolio company Subsplash has entered into a definitive agreement to be acquired by Roper Technologies, marking K1's third exit to a publicly traded strategic buyer in the past year [1][4] - Subsplash is a leading AI-powered engagement platform designed for mission-driven organizations, serving over 20,000 faith-based organizations globally [2][5] - Since K1's initial investment in 2019, Subsplash has grown its annual recurring revenue (ARR) by approximately 7 times, enhancing its product capabilities and market strategy [3] Company Overview - Subsplash, co-founded by CEO Tim Turner, offers an integrated suite of AI capabilities, including mobile apps, media delivery, digital giving, and church management tools [2][5] - The company has introduced new features in live streaming, church management, and AI-powered content, solidifying its position as a category leader [3] Investment Insights - K1 has successfully executed five exits to strategic buyers and three to publicly traded acquirers in the last year, indicating a strong performance despite challenging market conditions [4][6] - Notable recent exits include Irwin sold to FactSet, GoCanvas sold to Nemetschek Group, and Axcient sold to ConnectWise, contributing to a record year of distributions for K1 in 2024 [4][6] Strategic Focus - K1 emphasizes backing founder-led companies and scaling them into category leaders, as demonstrated by the success of Subsplash [4][6] - The firm has invested in over 250 companies since its inception, focusing on high-growth B2B software businesses [6][7]

Core Insights - Roper Technologies reported adjusted earnings of $4.87 per share for Q2 2025, exceeding the Zacks Consensus Estimate of $4.82, marking a 9% year-over-year increase [1][10] - The company's net revenues reached $1.94 billion, surpassing the consensus estimate of $1.93 billion, with a 13% year-over-year growth driven by 7% organic growth and 6% from acquisitions [2][10] Segment Performance - Application Software segment generated revenues of $1.09 billion, accounting for 56.3% of total revenues, with a 17% year-over-year increase and 6% organic growth, supported by strong performance from Deltek, PowerPlan, Aderant, and Vertafore [3][10] - Network Software & Systems reported revenues of $385.4 million, representing 19.8% of total revenues, with a 6% year-over-year growth and 5% organic growth, driven by ConstructConnect and DAT businesses [4] - Technology Enabled Products segment achieved revenues of $463.3 million, making up 23.9% of total revenues, with a 10% year-over-year increase and 9% organic growth, led by Verathon and Neptune businesses [5] Financial Metrics - Roper's cost of sales increased by 14.3% year over year to $598.2 million, while gross profit rose by 12.7% to approximately $1.35 billion, resulting in a slight decrease in gross margin to 69.2% [6] - Selling, general and administrative expenses increased by 14% year over year to $797.1 million, with adjusted EBITDA growing by 12% to $775 million, and a margin decrease of 60 basis points to 39.9% [6] - Cash and cash equivalents at the end of Q2 2025 were $242.4 million, up from $188.2 million at the end of December 2024, while long-term debt rose to $7.86 billion from $6.58 billion [7] Cash Flow and Shareholder Returns - Roper generated net cash of $932.8 million from operating activities in the first half of 2025, reflecting a 1.9% increase year over year, with capital expenditures totaling $26.0 million [8] - The company rewarded shareholders with a dividend payment of $177.2 million in the first half of 2025, representing a 10.3% year-over-year increase [8] Outlook - Roper has raised its 2025 outlook, expecting adjusted earnings per share to be in the range of $19.90-$20.05, up from the previous estimate of $19.80-$20.05, with total revenues anticipated to increase by 13% [11] - For Q3 2025, Roper anticipates adjusted earnings to be between $5.08 and $5.12 per share [11]