Core Insights - Roper Technologies reported solid execution in its fourth-quarter and full-year 2025 results, although organic growth was below expectations, leading to a more conservative outlook for 2026 [5][7] Financial Performance - Fourth-quarter revenue reached $2.06 billion, marking a 10% year-over-year increase, with acquisitions contributing 5% and organic growth at 4% [4][7] - Adjusted EBITDA for the quarter was $818 million, up 10%, with a core EBITDA margin expansion of 60 basis points, representing a 54% incremental margin [3] - Full-year 2025 revenue totaled $7.9 billion, up 12% year over year, with acquisitions contributing nearly 7% and organic growth around 5.5% [9] Cash Flow and Capital Deployment - Free cash flow for FY2025 was nearly $2.5 billion, representing 31% of revenue, with expectations for higher growth in 2026 due to working capital and cash tax improvements [6][10] - Roper invested $3.3 billion in vertical software acquisitions in 2025 and repurchased $500 million in Q4, ending the year with a net leverage ratio of 2.9x [12] 2026 Guidance - The company provided a conservative 2026 outlook, projecting full-year revenue growth of about 8% and adjusted diluted earnings per share (DEPS) between $21.30 and $21.55 [7][13] - Management emphasized that the guidance does not assume recoveries in Deltek's GovCon market or significant revenue from AI initiatives [19] Segment Performance - In Application Software, fourth-quarter revenue grew 10%, with a segment margin expansion of 70 basis points to 42.2% [2] - Network Software revenue rose 14% in the quarter, with organic growth of 5%, although margins declined to 52.8% due to recent acquisitions [8] AI Initiatives - Management discussed AI as a significant opportunity, focusing on mission-critical workflows and the establishment of an AI Accelerator team to drive development and commercialization [15][16] - The company aims to report credible AI-related revenue over time, with 2025 focused on product development and 2026 on commercialization [16] Strategic Focus - Roper intends to maintain a disciplined approach between acquisitions and share repurchases, emphasizing the best risk-adjusted path to durable cash flow per share [17]

Core Viewpoint - Roper Technologies, Inc. (ROP) is set to release its fourth-quarter 2025 results on January 27, with expectations of steady earnings and revenue growth, supported by strong performance in its Application Software and Technology Enabled Products segments [1][2]. Financial Performance Expectations - The Zacks Consensus Estimate for Roper's fourth-quarter revenues is $2.09 billion, reflecting an 11.4% increase from the prior-year quarter [2][9]. - The consensus estimate for adjusted earnings is $5.14 per share, indicating a 6.9% growth from the year-ago quarter [2]. Segment Performance Insights - The Application Software segment is expected to generate $1.19 billion in sales, a 12.9% rise year-over-year, driven by SaaS adoption and GenAI innovations [4][9]. - The Technology Enabled Products segment is projected to achieve $460 million in sales, marking a 2.9% increase from the previous year, supported by demand for ultrasonic meters and cloud-based solutions [5]. - The Network Software segment's sales are estimated at $424 million, benefiting from strong demand in construction and freight match markets, as well as GenAI-powered solutions [6]. Acquisition Impact - Recent acquisitions, including Subsplash and CentralReach, are expected to enhance Roper's top-line performance due to their modern technology platforms and strong recurring revenue bases [7][8][9]. Margin Considerations - Despite positive growth factors, rising operating costs related to the amortization of acquired assets may negatively impact Roper's margin performance [8][10].