Roper(ROP) - 2024 Q3 - Quarterly Report

Financial Performance - Net revenues for Q3 2024 were $1,764.6 million, a 12.9% increase from$ 1,563.4 million in Q3 2023[87]. - Organic revenue growth for the total company was 4.1%, with Application Software segment achieving 5.5% organic growth[87]. - Net revenues for the nine months ended September 30, 2024, were $5,162.1 million, a 13.1% increase from$ 4,564.3 million in the same period of 2023[96]. - In the Application Software segment, net revenues grew to $2,811.4 million, with organic revenue growth of 5.3% driven by various markets[96]. Margins and Expenses - Gross margin for the total company decreased to 69.2% in Q3 2024 from 70.1% in Q3 2023[85]. - Selling, general and administrative expenses as a percentage of net revenues decreased to 37.1% in Q3 2024 from 37.6% in Q3 2023[85]. - Operating margin for the total company was 32.1% in Q3 2024, slightly down from 32.5% in Q3 2023[85]. - The gross margin for the nine months ended September 30, 2024, increased slightly to 69.0% from 68.9% in the prior year, attributed to operating leverage on higher organic revenues[96]. - The operating margin for the nine months ended September 30, 2024, was 26.7%, an increase from 25.8% in the same period of 2023[96]. Debt and Interest - Interest expense increased to$ 67.7 million in Q3 2024 from $42.4 million in Q3 2023 due to higher debt balances[90]. - Total debt, net of deferred financing costs, was$ 8,376.6 million as of September 30, 2024, up from $6,330.1 million at the end of 2023[110]. - The rate of debt reduction and associated interest expense will be influenced by financing and operating requirements of new acquisitions, performance of existing companies, and geopolitical and economic uncertainties[114]. Cash Flow and Corporate Strategy - Cash provided by operating activities increased by 18% to$ 1,671.0 million for the nine months ended September 30, 2024, compared to $1,415.7 million in 2023[103]. - The company expects existing cash balances and cash generated from operations will be sufficient to fund operating requirements for the foreseeable future[108]. - The company anticipates generating positive cash flows from operating activities, which will allow for the reduction of outstanding debt according to the repayment schedule[114]. - The company maintains an active acquisition program, with future acquisitions dependent on various factors including market conditions[113]. Other Key Developments - Backlog increased by 3.9% to$ 3,026.1 million as of September 30, 2024, compared to $2,913.7 million a year earlier, driven by organic growth and acquisitions in the Application Software segment[94]. - Net earnings from continuing operations were 20.8% of revenues in Q3 2024, down from 22.1% in Q3 2023[85]. - Corporate expenses rose to$ 70.3 million, maintaining 4.0% of net revenues in Q3 2024[90]. - Equity investments gain, net, was $37.4 million in Q3 2024, up from$ 33.9 million in Q3 2023, primarily due to a $37.6 million increase in the fair value of the investment in Indicor[91]. - The company completed the divestiture of a majority equity stake in its industrial businesses in 2022, with results reported as discontinued operations[80]. - There were no material changes in market risk disclosures during the nine months ended September 30, 2024[116].