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]

Core Insights - Roper Technologies reported revenue of $1.72 billion for the quarter ended June 2024, reflecting a year-over-year increase of 12.1% [2] - The earnings per share (EPS) for the same quarter was $4.48, up from $4.12 in the previous year, indicating a positive growth trend [2] - The revenue surprise was -0.45% compared to the Zacks Consensus Estimate, while the EPS surprise was +0.45% [1] Revenue Breakdown - Revenue from Network Software & Systems was $364.20 million, slightly below the average estimate of $369.25 million, with a year-over-year change of +1.7% [4] - Revenue from Technology Enabled Products reached $420.80 million, also below the average estimate of $432.31 million, showing a year-over-year increase of +4.5% [4] - Application Software revenue was reported at $931.80 million, slightly above the average estimate of $929.15 million, with a significant year-over-year change of +21% [4] Operating Profit Analysis - Operating profit for Application Software was $251.10 million, exceeding the average estimate of $247.05 million [4] - Operating profit for Technology Enabled Products was $146.70 million, surpassing the average estimate of $144.15 million [4] - Operating profit for Network Software & Systems was $159.10 million, which was below the average estimate of $164.20 million [4] Stock Performance - Roper Technologies' shares have returned +2% over the past month, outperforming the Zacks S&P 500 composite's +1.8% change [5] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [5]

Core Insights - Roper Technologies reported quarterly earnings of $4.48 per share, exceeding the Zacks Consensus Estimate of $4.46 per share, and showing an increase from $4.12 per share a year ago [4] - The company generated revenues of $1.72 billion for the quarter, which was below the Zacks Consensus Estimate by 0.45%, but up from $1.53 billion year-over-year [5] - The current consensus EPS estimate for the upcoming quarter is $4.63, with expected revenues of $1.74 billion, and for the current fiscal year, the estimate is $18.17 on revenues of $6.92 billion [7] Company Performance - Roper Technologies has surpassed consensus EPS estimates in four of the last four quarters [8] - The stock has underperformed the market this year, gaining about 5.3% compared to the S&P 500's 16.5% increase [9] - The company currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [11] Industry Context - Roper Technologies operates within the Computers - IT Services industry, which is currently ranked in the top 42% of over 250 Zacks industries [12] - The industry has shown a strong correlation between earnings estimate revisions and stock movements, suggesting that trends in earnings estimates can impact stock performance [6][10]

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 (ROP) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with a consensus EPS estimate of $4.46, reflecting an 8.3% increase from the previous year [1][3]. Earnings Expectations - The company is expected to generate revenues of $1.72 billion, which represents a 12.6% increase compared to the same quarter last year [12]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable reassessment by covering analysts [13]. Earnings Surprise Potential - Roper Technologies has a positive Earnings ESP of +1.68%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [16]. - The company has a strong earnings surprise history, having beaten consensus EPS estimates in the last four quarters [18]. Analyst Insights - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [15]. - The stock currently holds a Zacks Rank of 3, which is considered a hold rating [7]. Market Reaction - The stock price may increase if the upcoming earnings report exceeds expectations, while a miss could lead to a decline in stock value [11].

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1] Company Overview - Roper Technologies, Inc. designs, manufactures, and distributes software and technology-enabled products across various markets, including legal, healthcare, government, food, transportation, oil & gas, and medical [8] - ROP is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of B [18] Growth Potential - ROP has a Growth Style Score of B, indicating a forecasted year-over-year earnings growth of 8.7% for the current fiscal year [9] - The Zacks Consensus Estimate for ROP's earnings has increased to $18.17 per share, with one analyst revising their estimate upwards in the last 60 days [19] Investment Strategy - The Zacks Rank utilizes earnings estimate revisions to help investors build successful portfolios, with a focus on stocks rated 1 (Strong Buy) or 2 (Buy) that also have Style Scores of A or B for optimal success [14][16] - Stocks with a 3 (Hold) rank should also have favorable Style Scores to maximize upside potential [16]

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]