[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]

Core Insights - Subsplash has entered into a definitive agreement to be acquired by Roper Technologies, aiming to drive long-term innovation in the faith and non-profit sector [1] - Subsplash has established itself as a leading technology company, delivering over 30 first-offerings to the faith market and focusing on growth, efficiency, and community engagement [2] - The acquisition is expected to enhance Subsplash's ability to serve its clients and expand its offerings, aligning with its mission to equip every church with advanced technology [4] Company Overview - Subsplash is recognized as an industry leader in SaaS, fintech, and AI, with a digital engagement platform utilized by over 20,000 churches and ministries globally [6] - The company is dedicated to providing mission-driven organizations with centralized systems for audience engagement, including mobile apps, AI, websites, and online giving solutions [6] Strategic Partnerships - Subsplash has a history of strategic partnerships, notably with K1, which significantly accelerated its growth and reinforced its vision to equip every church [3] - The leadership at Roper Technologies expressed admiration for Subsplash's commitment to humility and innovation, indicating a strong alignment in values between the two companies [4] Roper Technologies Overview - Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000, known for its disciplined approach to acquisitions and a strong track record of compounding cash flow and shareholder value [5] - The company focuses on developing vertical software and technology-enabled products for niche markets, positioning itself as a strategic partner for Subsplash [5]

Core Viewpoint - Roper Technologies reported strong financial results for the quarter ended June 2025, with significant year-over-year growth in revenue and earnings per share, exceeding market expectations [1][3]. Financial Performance - Revenue for the quarter was $1.94 billion, reflecting a year-over-year increase of 13.2% [1]. - Earnings per share (EPS) for the quarter was $4.87, compared to $4.48 a year ago, marking an increase [1]. - The reported revenue surpassed the Zacks Consensus Estimate of $1.93 billion by 0.9% [1]. - The EPS also exceeded the consensus estimate of $4.82, delivering a surprise of 1.04% [1]. Segment Performance - Revenue from Application Software was $1.09 billion, matching the average estimate and showing a year-over-year change of 17.5% [4]. - Revenue from Technology Enabled Products was $463.3 million, slightly above the average estimate of $453.67 million, with a year-over-year increase of 10.1% [4]. - Revenue from Network Software reached $385.4 million, exceeding the average estimate of $381.2 million [4]. - Operating profit for Application Software was $294.6 million, surpassing the average estimate of $282.52 million [4]. - Operating profit for Technology Enabled Products was $164.1 million, above the estimated $155.13 million [4]. - Operating profit for Network Software was $169.3 million, slightly below the average estimate of $171.2 million [4]. Stock Performance - Roper Technologies' shares have returned -3.1% over the past month, contrasting with the Zacks S&P 500 composite's +5.4% change [3]. - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3].

Roper Technologies (ROP) came out with quarterly earnings of $4.87 per share, beating the Zacks Consensus Estimate of $4.82 per share. This compares to earnings of $4.48 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +1.04%. A quarter ago, it was expected that this industrial equipment maker would post earnings of $4.73 per share when it actually produced earnings of $4.78, delivering a surprise of +1.06%.Over the last four q ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $1,940 million, representing a 13% increase year-over-year, with 7% organic growth and 6% from acquisitions [12][34] - EBITDA for the quarter was $775 million, up 12%, resulting in an EBITDA margin of 39.9% [13][34] - Free cash flow reached $433 million, a 10% increase compared to the previous year, driving TTM free cash flow to over $2,300 million [14][34] Business Line Data and Key Metrics Changes - Application Software segment revenue grew by 17% in total, with organic revenue growth of 6% and EBITDA margins at 42.9% [17][34] - Network segment revenue increased by 6%, with organic revenue growth of 5% and EBITDA margins at 54.6% [22][34] - TEP segment revenue grew by 10% with organic revenue growth of 9% and EBITDA margins at 36.7% [28][34] Market Data and Key Metrics Changes - The acquisition of Subsplash, a cloud-native software provider for faith-based organizations, was announced for $800 million, expected to generate $115 million in revenue and $36 million in EBITDA for the twelve months ending Q3 2026 [9][10] - The U.S. total addressable market (TAM) for Subsplash is estimated at $2.5 billion, with significant potential for international expansion [10] Company Strategy and Development Direction - The company is focused on capital deployment, with over $5 billion available for acquisitions in the next twelve months [8][34] - The strategy emphasizes acquiring vertical market leaders and enhancing organic growth through AI and technology integration [30][34] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting resilience in certain sectors like education and healthcare [40][55] - The anticipated impact of the "Big Beautiful Bill" is expected to unlock government contracting opportunities, particularly for Deltek [52][55] Other Important Information - The company is seeing strong momentum in AI initiatives, with approximately 25 AI-enabled products either in market or in development [31][34] - The recent tax legislation is expected to reduce cash tax payments by around $150 million for 2025, benefiting the company's cash flow [14] Q&A Session Summary Question: Can you provide insights on customer focus around productivity and AI? - Management noted high teens bookings in Q2, indicating strong demand for productivity gains through AI tools, particularly in less macro-sensitive sectors [39][40] Question: What is the positioning of payments functionality across the suite? - Payments opportunities are seen as earned through software, with a strategic decision to layer more payments functionality across various platforms [44][45] Question: Did tariff headlines impact business trends? - The impact of tariffs is relatively small, and while there is uncertainty in K-12 education, overall bookings activity remains strong [50][51] Question: What contributed to the high teens bookings? - Strong performance in Aderant and solid healthcare bookings were highlighted as key contributors to the positive trend [58][59] Question: How is AI impacting R&D and revenue? - Significant productivity gains in R&D were reported, with expectations for revenue implications to grow as more AI products are developed [61][62] Question: How does the company decide on investments versus bottom-line returns? - The current focus is on driving growth and competitive advantage rather than prioritizing immediate bottom-line returns [67] Question: What are the dynamics driving Adderant's record quarter? - Adderant's growth is attributed to market share gains and a strong move to cloud solutions, supported by AI-based products [92]