Roper(ROP)2025-04-28 21:11Financial Data and Key Metrics Changes - Total revenue for Q1 2025 grew by 12% to 740,000,000, up over 9% year-over-year, with a reported EBITDA margin of 39.3%, down 90 basis points from the prior year [18][19] - Diluted EPS was 4.70 to 507,000,000, down 1% year-over-year, impacted by a legal settlement [20][21] Business Line Data and Key Metrics Changes - Application Software segment revenue grew by 19% in total and 6% organically, with EBITDA margins at 41.4% [23] - Network Software segment organic revenue grew by 1%, with EBITDA margins remaining strong at 55.3% [28] - TEP segment revenue grew by 6% on both total and organic bases, with EBITDA margins at 36.2% [31] Market Data and Key Metrics Changes - Over 85% of revenues are generated in the U.S., with over 85% of software revenues recurring [8] - Central Reach, acquired for 175,000,000 in revenue and 5,000,000,000 of available capital for acquisitions [6][41] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment, noting that while there is uncertainty, the pipeline remains robust [49] - The company expects organic growth rates to remain in the mid-single digits for the year, despite some challenges in specific segments like Deltek [66] Other Important Information - The acquisition of Central Reach is seen as a strategic move to enhance the company's offerings in the autism care market, with expected growth drivers including a shortage of ABA therapists [12][15] - The company is actively pursuing additional acquisition opportunities, with a strong pipeline of potential deals [22][42] Q&A Session Summary Question: What is the perspective on private equity behavior? - Management noted a slowdown in deal activity due to macro uncertainty but highlighted a robust pipeline and ongoing conversations with sponsors [48] Question: What is the exposure of Deltek to government contracting? - Deltek's business is 60% focused on federal government contractors, with current uncertainties affecting growth rates [51][52] Question: Will free cash flow return to growth in June? - Management indicated that free cash flow is expected to be back-end weighted, with stronger performance anticipated in the second half of the year [56][58] Question: How does Central Reach's AI revenue look? - Central Reach's AI products are new and not yet a material revenue source, but they are expected to be significant growth drivers moving forward [81] Question: What is the outlook for core EBITDA margins? - Core EBITDA margins are expected to improve slightly throughout the year, with acquisition margins anticipated to increase as well [85]