Roper(US:ROP)2025-10-31 21:09Revenue Growth - Net revenues for Q3 2025 were $2,017.5 million, a 14.3% increase from $1,764.6 million in Q3 2024[84] - Application Software segment revenues grew 17.9% to $1,161.0 million, driven by acquisitions and a 5.9% organic growth[84] - Network Software segment revenues increased 12.6% to $413.4 million, with a 6.0% organic growth despite a decline in media and entertainment software[85] - Technology Enabled Products segment revenues rose 7.3% to $443.1 million, supported by a 6.1% organic growth[86] - Net revenues for the nine months ended September 30, 2025, increased by 13.2% to $5,843.9 million compared to $5,162.1 million for the same period in 2024[92] - Application Software segment net revenues grew 18.2% to $3,324.1 million, with organic revenue growth of 6.1% driven by healthcare, insurance, and legal markets[92] - Network Software segment net revenues increased by 6.6% to $1,174.7 million, with organic revenue growth of 3.8% despite declines in media and entertainment software[93][94] - Technology Enabled Products segment net revenues rose 7.7% to $1,345.1 million, with organic revenue growth of 7.1% led by medical products and water meter technology[95] Profitability Metrics - Gross margin for total revenues was 69.5% in Q3 2025, up from 69.2% in Q3 2024[84] - Operating margin for total revenues was 32.3% in Q3 2025, compared to 32.1% in Q3 2024[84] - Operating margin improved to 26.9% for the Application Software segment, while the Network Software segment's operating margin decreased to 43.8%[92][94] Expenses and Debt - Corporate expenses rose to $78.3 million, or 3.9% of net revenues, compared to $70.3 million, or 4.0% of net revenues, in Q3 2024[87] - Interest expense, net, increased to $89.7 million in Q3 2025 from $67.7 million in Q3 2024[87] - Total debt increased to $9,454.1 million as of September 30, 2025, compared to $7,623.0 million at December 31, 2024, due to new senior notes issuance and borrowings[108] Cash Flow and Working Capital - Cash provided by operating activities increased by 8% to $1,802.3 million, primarily due to higher net earnings and tax benefits from the repeal of R&D capitalization requirements[100] - Net working capital improved to negative $1,342.0 million as of September 30, 2025, from negative $1,434.6 million at December 31, 2024[107] - The company expects to generate positive cash flows from operating activities, allowing for debt reduction in accordance with repayment schedules[114] Tax Benefits - Income taxes as a percentage of pretax earnings decreased to 20.0% in Q3 2025 from 21.3% in Q3 2024[89] - The enactment of the OBBBA is expected to provide a cash tax benefit of approximately $150 million for 2025, with an additional $120 million expected in 2026[111] Backlog - Backlog increased 4.9% to $3,174.0 million as of September 30, 2025, from $3,026.1 million in 2024[90]