Roper(ROP) - 2024 Q1 - Quarterly Results

Financial Performance and Outlook First Quarter 2024 Financial Highlights Roper Technologies reported a strong start to 2024, with significant growth across key metrics in the first quarter, including a 14% increase in total revenue and a 16% rise in adjusted EBITDA, supported by the acquisition of Procare and continued customer demand Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Growth vs. Q1 2023 | | :--- | :--- | :--- | | Revenue | $1.68 billion | +14% | | Organic Revenue | N/A | +8% | | GAAP DEPS | $3.54 | +33% | | Adjusted DEPS | $4.41 | +13% | | GAAP Net Earnings | $382 million | +34% | | Adjusted EBITDA | $676 million | +16% | | Operating Cash Flow | $531 million | +14% | - The CEO highlighted strong execution, innovation, and investment to drive long-term growth, with the acquisition of Procare completed during the quarter expected to create significant value[3] - The company emphasizes its strong M&A capacity and a robust pipeline of acquisition opportunities, reinforcing its disciplined capital deployment strategy[3] 2024 Financial Guidance Roper Technologies has raised its full-year 2024 adjusted DEPS guidance, reflecting strong first-quarter performance and continued business momentum, while also issuing guidance for the second quarter of 2024, excluding any potential future acquisitions or divestitures Updated Full Year 2024 Adjusted DEPS Guidance | Guidance | Previous | Current | | :--- | :--- | :--- | | Adjusted DEPS | $17.85 - $18.15 | $18.05 - $18.25 | - For the second quarter of 2024, the company expects adjusted DEPS to be in the range of $4.42 - $4.46[5] Forecasted GAAP vs. Adjusted DEPS for 2024 | Period | GAAP DEPS Forecast | Adjusted DEPS Forecast | | :--- | :--- | :--- | | Q2 2024 | $3.07 - $3.11 | $4.42 - $4.46 | | FY 2024 | $12.71 - $12.91 | $18.05 - $18.25 | Financial Statements Analysis This section provides a detailed breakdown of Roper's financial performance through reconciliations of non-GAAP measures, segment data, and consolidated statements, highlighting a 16% increase in Adjusted EBITDA to $676 million, a 15% rise in free cash flow to $513 million, and revenue growth across all business segments, led by Application Software Reconciliation of GAAP to Non-GAAP Measures The company provides detailed reconciliations for key non-GAAP metrics to offer greater insight into operational performance, with Q1 2024 Adjusted EBITDA growing 16% to $676 million, margins expanding by 60 basis points to 40.2%, Adjusted DEPS increasing 13% to $4.41, and free cash flow rising 15% to $513 million Q1 2024 vs Q1 2023 Non-GAAP Reconciliation Summary ($M) | Metric | Q1 2023 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | GAAP Revenue | $1,470 | $1,681 | 14% | | Adjusted EBITDA | $582 | $676 | 16% | | Free Cash Flow | $445 | $513 | 15% | Q1 2024 vs Q1 2023 DEPS Reconciliation | Metric | Q1 2023 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | GAAP DEPS | $2.66 | $3.54 | 33% | | Adjusted DEPS | $3.90 | $4.41 | 13% | Segment Performance All three of Roper's segments reported year-over-year growth in both net revenues and operating profit for the first quarter of 2024, with the Application Software segment being the largest contributor to revenue and showing the highest growth rate, while the Network Software segment maintained the highest operating profit margin at 45.0% Segment Net Revenues (in millions) | Segment | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Application Software | $895.2 | $761.4 | +17.6% | | Network Software | $370.8 | $354.5 | +4.6% | | Technology Enabled Products | $414.7 | $353.8 | +17.2% | | Total | $1,680.7 | $1,469.7 | +14.4% | Segment Operating Profit (in millions) | Segment | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Application Software | $239.6 | $193.2 | +24.0% | | Network Software | $167.0 | $147.5 | +13.2% | | Technology Enabled Products | $136.2 | $115.5 | +17.9% | | Total | $542.8 | $456.2 | +19.0% | Consolidated Financial Position As of March 31, 2024, Roper's total assets stood at $29.98 billion, an increase from $28.17 billion at the end of 2023, primarily driven by increases in Goodwill and Other intangible assets reflecting recent acquisition activity, while total liabilities also rose to $12.18 billion from $10.72 billion, mainly due to an increase in long-term debt to finance acquisitions Condensed Balance Sheet Highlights (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total current assets | $1,425.7 | $1,481.4 | | Goodwill | $18,310.8 | $17,118.8 | | Total assets | $29,978.5 | $28,167.5 | | Total current liabilities | $2,909.5 | $2,963.2 | | Long-term debt, net | $7,222.3 | $5,830.6 | | Total liabilities | $12,180.9 | $10,722.7 | | Total stockholders' equity | $17,797.6 | $17,444.8 | Consolidated Earnings For the first quarter of 2024, Roper reported net revenues of $1.68 billion, a 14.4% increase from the prior year, with gross profit rising to $1.18 billion and income from operations growing to $481.3 million, resulting in a substantial 34.4% increase in net earnings from continuing operations to $382.0 million and a diluted EPS of $3.54 Q1 Earnings Summary (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net revenues | $1,680.7 | $1,469.7 | | Gross profit | $1,181.0 | $1,018.6 | | Income from operations | $481.3 | $401.0 | | Net earnings from continuing operations | $382.0 | $284.3 | | Diluted EPS from continuing operations | $3.54 | $2.66 | Consolidated Cash Flows In the first quarter of 2024, cash provided by operating activities increased by 14% to $531.5 million, with the company utilizing $1.86 billion for business acquisitions, a significant increase from the prior year, largely funded by $1.39 billion in net borrowings under its revolving line of credit Q1 Cash Flow Summary (in millions) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Cash provided by operating activities | $531.5 | $463.7 | | Cash used in investing activities | $(1,878.6) | $(26.8) | | Acquisitions of businesses | $(1,858.7) | $(1.1) | | Cash provided by (used in) financing activities | $1,336.9 | $(52.5) | | Net (decrease) increase in cash | $(15.9) | $388.8 | Other Information About Roper Technologies Roper Technologies is a diversified technology company, part of the Nasdaq 100, S&P 500, and Fortune 1000, whose strategy involves operating leading businesses that develop vertical software and technology-enabled products for various defensible niche markets, employing a disciplined approach to redeploying excess capital into high-quality acquisitions to compound cash flow and shareholder value - Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000 indices[19] - The company's business model focuses on operating market-leading vertical software and technology-enabled product businesses within defensible niche markets[19] - A core part of Roper's strategy is the disciplined, analytical, and process-driven redeployment of excess capital toward high-quality acquisitions[19] Forward-Looking Statements This section serves as a legal disclaimer, cautioning that the press release contains forward-looking statements based on management's current beliefs, which are not guarantees of future performance, highlighting that actual results could differ materially due to various risks and uncertainties, including the ability to integrate acquisitions, general economic conditions, supply chain constraints, and cybersecurity risks - Forward-looking statements regarding operating results and acquisition prospects are subject to risks and uncertainties that could cause actual results to differ materially[21] - Identified risks include challenges in completing and integrating acquisitions, impacts of general economic conditions, foreign exchange fluctuations, cybersecurity threats, and supply chain disruptions[21]