Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. The Roper Technologies Conference Call will now begin. Today's call is being recorded. [Operator Instructions]

I would like to turn the call over to Zack Moxcey, Vice President, Investor Relations. ahead. go Please

Zack Moxcey

thank discuss and Technologies. for us joining Good first you quarter we the Roper financial as morning all results for

The Joining our Officer; Jason this call. a this release and me replay Brandon Finance. Cross, press and call Earlier Neil and Officer; financial O'Callaghan, on President Principal press information Vice President Hunn, of Accounting Chief morning Financial used Chief Shannon includes Executive release morning, today's Conley, are Officer; results. we Vice announcing Vice and President also Executive for the President

We available have prepared slides available to are accompany today's call through which webcast on are the our website. also and

Now safe if Page X. please to harbor We begin statement. turn with our you

subject in to this and described course on press SEC as our risks the today's will of make are During uncertainties page, and we filings. call, in release our forward-looking which statements

in listen adjusted we now Page turn to to today's should results You on context our call And information. operations of basis. please and continuing discuss primarily Today, that X. the will non-GAAP an

investment be quarter, the press appendix the of results Indicor. and adjusted associated GAAP and difference financial intangible this our our of can our on in and between consists impacts with minority first presentation of Reconciliations the items: results assets found amortization following website. in the acquisition-related the in release For our

questions we take I'll call over the will Page our to Neil? hand And our if X, turn After prepared please now, remarks, to you telephone Neil. from participants.

Neil Hunn

good. is results you looking to QX forward hope with Thanks, We're Zach quite sharing were and doing well everyone morning. this we which our

financial discussion then our at up enterprise today's our and enterprise raised turn let's to As we highlights We'll agenda. look segment-specific turn start to wrap guidance. XXXX discussing our X, with results, and Page

with let's ahead go and that, started. get So

please. slide, Next

be to year full enhanced capital of guidance to Page main takeaways and turn obviously X for our portfolio financial our and revenue strong X, increasing year higher-quality, growth DEPS; off operational a we're second, well well; today's adjusted organic is to call start first, terms disciplined as is are, both really the performing very the continue positioned As and in for we deployment. third, we

As it grow we not but and the its long-standing Consistent to relates also with to total enterprise strong year, XX% and saw a base. of strategy, first organic we start improve revenue grow our our revenue recurring X%. only to takeaway, revenue simultaneously underlying quality our scale continue

strong flow very Importantly, had cash excess free in of we with margins XX%. performance cash flow

results high purpose-built higher-quality, Our at point to was a another perform this less our quarter are cyclical that consistently portfolio very proof level.

Finally and XX where strategy and learnings also unit and had talent. enablement development, quarter, during our Summit, across held of business ever we first topics, and shared we best Leadership together and strategy variety team the presidents including practices our a Roper

high While operating It trust week. teams sense the terrific true honoring autonomous model, of community. and was our corporate a left feeling a

guidance X% to to DEPS $XX.XX strong $XX.XX the Given organic X% increasing the year or be outlook we're full $XX.XX our to X% XXX increasing the to at to full our and basis from points X% year, start to growth to year midpoint.

the high-quality EPS opportunities. to an diluted relative remain capital finally, positioned deployment. previous be to evaluate Our well active quite was diligent many $XX.XX. we actively $XX.XX to continue guide in We as And market we

and you Jason, walk financial can quarter I'll our strong over position. Jason? turn call so our results through the first to you

Jason Conley

us morning. for Thanks, Neil and thanks, everyone, this joining

led contribution and offset a or at and very an $X.XX prior with by billion FX Turning headwind. by slightly growth QX XX% Revenue was this to combination Frontline a how X% strong up. Slide acquisitions, came from X. organic We're through year. in X% This X% pleased over of shaped was of

end demand customer and with margins a segments Broadly year XX% remain speaking, the quarter prior favorable strong. with $X.XX our $X.XX was EBITDA roughly was $X.XX. of and guidance expectations. high across and was line Growth range higher or our over X% $XXX $X.XX DEPS order the in flow of to prior of was better expected. of prior Free was cash million up of in flat year. broad-based $XXX pipelines the and little above XX% than million than year

million for free XXXX. revenue highlighted earnings and would In our patent up We call, be cash quarter, back XX% year. to over sales paid QX adjusted for dispute a that we dating the $XX a settlement, settlement Verathon certain this of XX% prior of so

performance, in software especially We our saw cash good businesses. very

came collections related and expected. renewals QX in strong as Our

the last of collect mentioned Frontline I As third most will in quarter, quarter. the renewals

it's drag half. first bit a conversion of on the a So in

to So overall, a great XXXX. start really just

ratio net turning and our sheet. cash balance continues Slide shy our undrawn balance strengthen. billion us X.X through X, which down debt-to-EBITDA flow term. of spin our year-end. billion Now our to our $X.X just under which just at solid with capacity billion. billion balance $X was at off deploy billion more X.X coupled or This QX near puts of performance, the This, to debt $X.X Coming net cash to debt we'll from grown around gives yields revolver Gross sheet was $X.X $X.X to in has

of in opportunities. been number bolt-on we've quite evaluating To and that active platform XXXX, end, a

patient in As process. our capital will remain and we always, disciplined deployment

performance over back to about to outlook. and I'll talk it segment our turn that, Neil? With Neil

Neil Hunn

Thanks, Jason.

a turn solid. start EBITDA To Deltek. through an were segment. Page Deltek up our in here QX performance, on the this million, for Let's few segment X% Software were Revenues we'll XX.X%. and strong to of was with our basis $XXX walk Performance X was organic margins board. business' and Application highlight highlights across

quarter. across last but see SMB-sized sector decision-making had that quarter as largely mentioned contracting this quarter, and as slower with private did rectified Deltek solutions. customer was bookings customers the Deltek both we and in class double-digit some As enterprise government well strength

As usual, both Deltek with and remained at gross net consistent recent retention and history. strong

posted In of experienced and Aderant team. and continues the software entire perform MGA business tech-enabled at plan. of quite to and Of note, their tracking record Great bookings job needs adoption casualty firms, from acquisition to of and take law solution on ahead us. our to the a is particular compete be the Systems, insurance our quarter, and agencies, targeted to win well for bookings in focused quarter business or Aderant another solid recent the continued by Rafi software software general our proving highly and solutions. property Chris, and strategic is activity Aderant, Vertafore's success MGAs, Vertafore, continues of manage agents, SaaS competitors. share

the is well first Frontline the line us continues for ownership. to quarters education. of front of in empower couple perform of quite Frontline's to mission

of of administrative solutions frontline and mission-critical is school hiring better and teachers As these know, high particularly you of navigate K-XX of many and challenging importance are challenges. their Because equip staff to solutions school to customers. Frontline this, districts district software

in EBITDA XX For our basis points year-over-year, margins line expectations. with were down the segment,

businesses, momentum. software implementation CliniSys, and Care Acute up ramping Our especially Strata their on recent are Innovations Data bookings capacity based

margins to expect see We QX. similar in

recurring the the the expect leading in to segment year, to growth mid-single-digit our positions in balance area we Looking growth organic market see and of this based revenue. for on

and XX. million, up EBITDA for Revenues Turning $XXX Network on basis segment at were XX.X%. to organic X% margins an quarter in were strong Software the Page

Loadlink U.S. was and nicely with businesses, across Software and segment, DAT this freight and both to quarter. our in comments, which matching we'll Relative segment. broad-based Canadian business-specific the performance growth with grew Application our As start

conditions year, than in to market operation are freight the freight businesses and our this this While softer critical of are time spot the space execution last market.

cycle, and the tech between share terms to and volume of and wallet enabling is innovate DAT importantly, the spot a beneficiary strategy In connectivity help long-term of products the market addition shipments. brokers launch carriers. freight in secular value the with customer across on and and to continue economic of Throughout Loadlink current enhanced the and and freight focused product new offerings drive and future

the enables our expansions. strong customer coming annuities, business its network insurance XXXX high very a execution for with of life and software retention this off is iPipeline, quarter continued bookings, distribution channel and that and terrific level tech

Newk seat double-digit which strong revenue their the and Foundry [ph] continued of continued terrific enabled its string had for recurring in flagship performance growth product quarter growth.

in under model new mentioned of last we subscription pricing [ph] Foundry new quarter, plan. XX% their ahead had of their sold of the transition and QX Newk As seats their for commenced north

Finally, improving volumes census an MHA, quarter. and the SoftWriters was the in were benefited facilities businesses, onset assisted skilled the in care has patient occupancy pandemic. site Execution of our strong nursing, by SHP business in highest living health solid since the health alternate levels and reaching home the and

of balance the to the year. Turning

mid-single-digit across group. this expect broad sustained organic for growth growth and on based see to segment this We

quarter. EBITDA segment As Across Tech-enabled Page were execution in we the turn was our segment in basis. margins segment, for XX. on $XXX the an performance quarter were XX.X% business Revenues the solid. Products million, and up for the XX% to organic

to of now continue entirely the supply Though Importantly, the issues broad-based path chain more a see a wane. normalized to we're chain not environment. woods, can supply we out

Neptune, backlog for the our to levels. meter and record set records great. they product water In continues quarter, be just performance business, revenue technology and had

compete job to residential continues budgets which the as see tends and year-to-year commercial and to market are Neptune be Great to and momentum Importantly, meters. they on customers' or remain not fixed and macroeconomic this ultrasonic We congrats. Neptune broader in increasing tied steady Neptune's demand cycles. market and trends as quite their for static bullish typically Neptune at

well the quarter in strong growth. order with was Verathon as double-digit

the across both reoccurring video bronchoscope [ph] purchases. innovation scan as or strength single-use and capital well Verathon products, Specifically, or bladder as saw B-flex GlideScope

and Verathon few help continue gains share for scheduled X momentum. product their will which launches market Importantly, months has next the

quarter Northern measurement and multiple continue is across into their share Digital and medical the discipline NDI's see leader level be surgery cardiac-specific and and them terrific will future. robotic-assisted EM to such OEMs market solutions. NDI's was focus long strong operational by for enable to technology for technologies measurement enabling to scores as product modalities. these high the the and and solutions of or in continued used also NDI demand optical market

low outlook Our outlook orders of well and as in at this on as based has manufacturing across the area strong segment for be to continued year businesses. improved the our double-digit growth improving Neptune productivity medical is balance for an improved product and the

to guidance. please and review XX XXXX let's Page Now turn our increased

For XXXX, revenue north be we XX%. to total expect of growth

revenue X% in be we're X% to X%. outlook from guidance updating an original increase our of X% to our addition, organic range, growth the In to

of this DEPS from in to to DEPS rate our increasing is tax our the to XX% guidance $X.XX guidance $XX.XX guidance second to quarter, up $X establishing $XX.XX to be to we're $XX.XX, we're assuming result, is our Specific guidance range be and of range. a in in area. the $XX.XX the As a XX% in the that

XX answering your to to forward will Page please then with Now turn questions. and look and I us Jason

started. Page we As with the leave to turn XX, want X to we you with points we same which

We start. to recurring $X.XX was revenue This revenues great underpinned a to X% growth off and revenue saw increase X% is the XXXX growth. quarter. First, with billion organic in XX% growth

In addition, quite were margins strong.

and financial our underlying importantly, cash proof expectations yet of improved translated the quarter's cash capabilities growing operational growth businesses. our growth revenue frankly, another with of point and higher-quality This performance flow impressive Most of XX%. to portfolio is our free flow our

you flow measure the we as growth As view performance. best know, cash of

the X% the the and DEPS stream an Second, our and start between based to our to be to our and outlook revenue to nature year on higher full year, growth organic $XX.XX. increasing be the recurring our revenue we between full $XX.XX solutions importance are strong year increasing of X% customers, of our

have of we continue as to billion active M&A our $X of Finally, capital be we north activities available with firepower. deployment

we As and of of ensure always, during opportunities, optimal Day universe Investor deployment though, our very remain month, pipeline large disciplined we and we as patient a highly last capital. to super have available our discussed

questions for ever of first York your if strategic the to last flip could Investor thank month and online to you we turn who us we as or in our Day. flywheel, those final joined you to slide, Now want New our

cash capital improve that we overview share businesses, nature operating compelling our were process-driven Roper, mid-teens and in portfolio you high-quality flow ability excited strategy, of with long-term approach our business deployment compounds long-form our During of area. the that to of our model are the our long-term to businesses,

in So, your Roper. you And that, with continued it thank interest to your open up for questions. let's

Operator

first comes Markets. The Capital the Instructions] line [Operator from Dray of question Deane with RBC

Deane Dray

New in everyone see to great was month. last York It

sign some fallout quarter we a is is of watching, maybe any of from kind bank logos. the how there everyone the the slower and contracts, an construction turmoil and last can start to what This of or forth. maybe Deltek new read a any just from off in through played decision markets of customer But idea Just that give time slowing in on of making, update it's be kind might decision-making. follow-up with bit so out, us on

there would helpful. color be any Just

Neil Hunn

it. about a the to signal. the very group Sure, understand small Happy of to context, Deane. Yes. about, trying be years to talking really time customers we cyclicality these To cyclical. niche executives tremendous it's our the also amount we leadership where our to work to out that of not spent spent the trying teams, that in portfolio something tend and set obvious the several last the we're markets talk

for signal but nonexistent well. largely, the quarter, comments, on three about in we talked slower itself is prepared quarters said faint. a ago, or rectified So same the quarter that quarter. itself as us that It's not Two fully about this PowerPlan, rectified we having customer it's Deltek certainly not the faint. recent going thing Last them most talked the subsequent we demand, and it's as some

of casualty meaningfully formation written couple as applications of expected moderated certainly sort number that insurance quarters, of the at sign macro things we other to of have But a steady. business grow, touch. growth insurance got Some for life business in of declines carriers and that listen carrier we to, the DAT, a QX. property seen of the that continued amount or

-- to a relative you signal's Jason, the we the half So add and certainly concern to continue to to faint at slowdown. the that? it year, the But listen outlook of for but want planned have moment. for we anything second

Jason Conley

were digits in I our Yes up just single would software quarter. say the high bookings year-over-year

was saying. some put math he just behind what that So

Deane Dray

industry. appreciate second products just helpful low That's just And of that really in and see a kind to organic guide tech-enabled in expectation, Great. the up digits. be to Neptune bit sensitivity. well That walk that the for in the see year tends do portfolio on And question, with we steady. double there it and of continues through look, was then nice the the to the revenue back really boost

that must it you're side, how on So also acceleration medical the is be and seeing too? this

Neil Hunn

year. Neptune, outlook Yes. and -- the There's parts macro of for at then product There's corporate, X medical to businesses, parts they Neptune than into we little at just incredible thought confidence the performance can the chew factory small they X, and continued increased products segment. all into a which has growth out coming of more of then us the of bit have couple terrific originally and that Neptune of -- year. the backlog order sort the this this gives we, RF to a balance maybe

We challenges improved RF and less RF year. directly riddled then CIVCO Verathon, the Ideas, volumes businesses, that would businesses, to product procedure all assume have year, those down the product we medical QX. Inovonics that X% directly It's they the NDI. a and as We supply At flowed through been know, year. little with last through better continue chain at meaningfully And in and coming and the been this range. continue actually the medical for bit than to X% in into were plan that and

little the us confidence board that gives across the bit segment. the uplift in take to guide it's a up that So

Operator

is Research. with question next Davis of the The Melius from line Scott

Scott Davis

-- some I I that's this know it's had freight you truckers particular But quarter. there isn't when know changing particular you any game any not for tough have and quarter. think in matching about time the business

quarter. there tough really would truck linked there driven in of cautious, et direct kind like I'm you Is -- the your I comps, any been matching problems is is but business doesn't major assume and DAT of freight to little the of just a had this link guidance kind miles has market? Some seem a cetera. there? BXC it How the

Neil Hunn

quarter. in grew grew it Year-over-year, sequentially. DAT the Yes.

there We're It's the the mile and driven, a freight things. to -- operates, indirect historically where both more reason link. we're between a the fixed less not The this It's per secular growth One paid metric. an cyclical the is is So but couple and cyclical a on which not utilization the it broker link. share nature volumes. paid carrier tends in winning side. of you have the of any side DAT be on market market total spot is market the just than driver, tension subscription

participant volume is, So of simple spot long becoming that. is that is for you time. generally of into the more the And market the version market as easier more over and coming is of have enables spot liquid or arc in why the transact because a DAT it tech enabler to which itself,

contract pricing pricing. the the the in contract on daily, it's understanding the what versus thing rolling spot pricing second booming market is between changes and waning basis. a role the pricing a in between dynamic about The -- dynamic pricing changes plays a where market, Spot spot and year

the when actually carriers and freight rates some invites is that DAT's more And supply, have pricing is X hot, the can so save spot It the And and more growth you seeing have years market. contract shippers for freight demand into actually, very driven coming obviously into slows, market. the that addition. money. the market in spot contract the the as you of last When of come up of there market couple spot at the you what's have capacity so for market that's moment, start carriers below you

you floor provides demand it the So a of for carriers.

nicely couple of in grow for And reasons. upmarket in the downmarket so historically, very DAT grows and slower those

Scott Davis

time, over I talked question. drive Neil? that does change gain you I and better how here a does game guess, predictor liquidity going but business you Like and a That's anyways. interesting. think just become this a -- that to of the time? kind How share [indiscernible] do help over does it Hate technology, I'm and to AI the guys about, change What's enabler help big is

Neil Hunn

a tech core I the currents At average, currents lot all XX carrier cross in that. it, that a that between calls Obviously, big to space. there's Yes. trying and I this broker part of of on of and what to -- broker tech to actually we're X. between mean their phone map a load. enable still is think product is road take is DAT and to there's do a go today, X a

AI to AI it's trucks time where at into that. AI going Cincinnati, AI lot does back be So going the whatever later have principle, to today. the in there's going on Tuesday there the to for is. match, in go match But there's How of X. pickup true to the it technology is and that it investment or in there's hours wants Chicago, from is frame routing, make the There's Chicago in the a efficient go can industry X the most a more of the that's where the unlock future -- take

Scott Davis

Okay, that's helpful.

Operator

The Terry Tillman from question Truist. line the of next with comes

Terry Tillman

on quarter. Congrats the

acquisition. So the that was is first Frontline question, I the because the last platform guess, major on

all was in it million I those think I suite, And $XXX and revenue, EBITDA. you is HCM targets. And new tracking said just and talked new they think to you is expected XQ. a curious million the XXs What about period, a of stub there. about CRO it a how was also I'm did $XXX notice contribution it there's announced I

seems going it there's on. some things like So dynamic

I then Jason. Just Frontline a maybe double-clicking follow-up and for on had

Neil Hunn

-- take You you do one. first the the

Jason Conley

I take one. Yes. the first

So they're on their tracking forecast.

the business third and renewals quarter. has As they're large fourth you in know, that a

the revenue their pick business definitely the EBITDA up there sequentially but half and $XXX to for of million. second expect $XXX numbers million, on track we'll in so And are

Neil Hunn

certainly leadership times the and And or new leaders, to we're products year the Operations in as changes to new have Officer It's a the case. a ownership. the first CFO, so of new our couple new often There's few Yes. Client happen of COO; Scott, relates Curtis, that new and case joined. a Bill Chief excited it

that was group first ownership about choice to I'm the so -- strategic expected, an joined And thing It's of excited they've of in and of we the team. excited quarters that couple Frontline of made. is particularly that's us. we're have this incredible proud The that

is to As from of limited not do do out of choice too we that's many very so see and a made, that lot they well. private things them try a equity pattern companies come

a very quickly, R&D of have and of so XX% or choice experience down resource little doubled sense of when take makes out And made the on bit a XX% and go-to-market you coverage Frontline client which complete customers. to productivity actually

principal here strategy on And the is entire strategy cross-selling, focus up-selling. to or the

a on to to deliver tremendous need to focus experience sell to hence, client need deployment innovate be and You products, more and able them the experience, to hence R&D.

and in we that's choice the what for there made love So the yields that future. been excited

Terry Tillman

were I to from guess the great call out settlement. Jason just follow-up That's is for a able the you adjustment color.

in low So think of flow maintaining free kind at mid-teens it of was a the and XXs cash we free margin? low on the flow up XX% margin. Should in terms free XXs that a of growth remainder terms for flow of the that cash cash about year

Jason Conley

to deliver free XX% Yes, that's right. north cash We're track of on flow.

As Frontline. I with mentioned, we're at the going track renewals better to second than the on half half first the still But be there. is yes,

Operator

of Steve next the line question from comes Tusa with The JPMorgan.

Steve Tusa

of Clinisys, but couple mention Deane's think then guys going what out seeing kind what's another your businesses that And question ones. of there? on the didn't to one you ConstructConnect, there. perhaps A are of big around I you

Neil Hunn

Sure.

be countercyclical a talked about the tends to So past, as business. in ConstructConnect, we

familiar, simplicity those for project every of ConstructConnect in a are planning phase. the commercial less has For construction that's perfect that near database

the amount in less subs is that value can the do. slow project And queue. quite if there in utility paying planning what's building development to general a that. quite work and market utility a future manufacturer, you're When hot, and construction of for projects starts down, you're There's general of in are contractor, have trade the contractor, purposes generally purposes, fee a subscription a for bidding increased understanding product stage a contractors so the is work more in for When that in planning. interested they

clear test back So when it. and attached back has look over a I cycles, countercyclical a demand to ConstructConnect it couple of behavior

it. think, will we the So coming be to market,

It's a ConstructConnect maybe hopes. modestly growth more of has single-digit underperformed business. matter, low As our been general a

confident the and expectation be there. mid. quite And that will there that it to climb is Our strategy we're should to get current with

years great the a a from next level. is prowess ago, have discipline, go-to-market sort the Deltek Straza, operational of Matt the We leader just couple the at that strategy, out came of

quite been of going the there. grew. CliniSys to mid The And that great. short who in has business, Sunquest who's we're to the our without nothing quarter. so the business Simpson, been we're be has error. reach almost of been done The business European terrific. It's confident able that has integrated U.S. with expectations just -- combined business grew

for haven't time We the been of able say business. given U.S. to some quite that drag the

We tremendously U.K. the continue to be in just strong

of know, As laboratory something strategic X you we in we're like the or X as to XX% vendors of the U.K. NHS network XX% X or run IT the

The continues. pan-European strength

For that Paris system health in the of system. the offering we fact for outside France, that some the run that product of APP, care. the in the strength in is of instance, comes now largest from And laboratories have U.S., health a we

et water, showing which toxicology, is signs environmental, promise. think early So of cetera some

congratulations lot excited a Andy, to what at to Simpson happens so and And and Clinisys. we're of see the CFO

Steve Tusa

one free bit but were something. or bigger quarter, flow. deferred A very least a And bit maybe taxes expecting. drag versus surprise, a then cash It's one last cash just what we of Great. pretty upside lower at little a strong from on

you sequentially how couple and quarters there parts moving the on about over next of that to the trend cash. free talk expect Just

Jason Conley

Sure. Yes, I that, take Steve. can

in flat tax deferred second is So of quarter and see renewals. make we of fourth or, the quarter taxes, you'll right? And revenue that quarter. consumption with quarter I the on tax the in was the payments: deferred was, fourth. in revenue guess, X federal third they -- of then the the and in Frontline, the third outside line down that then because in It typically spike overall, in fairly It cash those with first to expectations. one So back payments was one the yes, up

of free will up I be QX to just mentioned XX% track on as then expect for year, earlier, down cash we And the flow sequentially margin, north just there. overall, full So year-over-year. but so

Steve Tusa

Yes, was . great. just software? that single-digit organic number, quick one. for sorry, high And one number The then an last bookings

Neil Hunn

Yes.

Operator

Mitchell the The of next with Julian question from line comes Barclays.

Julian Mitchell

Just on a products tech-enabled question first.

sort and lot of big right less lot a the revenue with a visibility of there's of once flush as then of look manufacturers seeing you're kind component that hardware on shortages So flows our ease now in forward obviously a through. group

tap very strong -- wanted just revenue in QX. performance to So

the of outlook. just down to just the orders trends is year-end and confident of there, next sort confidence into of right sustainable very as a You're the drill bit not through X just in and quarters' little kind Maybe backlog now supply eases. that strength flush of more sort the kind chain

Neil Hunn

Yes.

also backlog than So it's quite X this X something then stability thing order of quizzing been was none, of -- couple way very on that backlog orders are any the we strong. is there our fallout. things with we've really greater and virtually order been the quarter. and fall So -- a in the The by out of right? companies none things, there's the the backlog, has Book-to-bill been

good it indication So that gives backlog. flush us, just a a think, it's I not

I waiting year the balance as order is mean, what's the timing. in queue and at have sort normal to duration they into know order -- what think point, customers us don't of -- I going when that the to of I terms just of At for across to any we're a back happen, lot is supply. going happened the a though, some don't is get whole the to make In that not more time duration of us, know sure we're extended, of want right, complex, be point

And we're are. compress. because It's but natural of to that's -- there'll we that of it's time because fully of timing, to going to when happen it be know So don't going orders, we about aren't a candidly, a worried be sort period expecting where when reaction it.

that's commentary segment. in so for -- whole a the also We Neptune

quite work the products, isn't we out businesses. -- don't that opposite. medical huge really -- a For There of out those of backlog

RF that -- supply then and businesses. product at And solved so really that bespoke the the doesn't the we exist. you're addressing chain there. businesses X or And to for unique were question dynamic They challenges

some to it now so thing than a of will start but be that's what And quarter. backlog clearing in half the was we more able second

Julian Mitchell

of back And That's of and it's touched have circling or to for in twice. sort just are that been Within of very and Loadlinked -- and try give DAT dialing But balance of already a Software. or on to sort don't the DAT Loadlink? helpful. growth sort finer Network year, put one outlook how once for cyclical segment the the Not pieces on of then percentage me more what number. for at point the businesses the on you within the potentially mid-single-digit -- software you

curious growth of example. Just digit, for of the sort versus mid-single segment

Neil Hunn

Yes.

same it's the color -- to So a it. you I'll give

the of the stop what think specifics mentioned this here of than DAT business the the we a like in quarter, year. difference -- about the is the we what last I you company of what bullish as like is for is Sarasota. there are But look more opinion a to on DAT and we'll year between is of at outlook going short much level. giving Sarasota leadership balance year

proof they want carrier balance especially that like, count posture of had flatten, have relative looks from uniquely basically in we assumed and to on we see very the to to not We We nice to for -- QX the what a improve. continue conservative level have while year. a DAT the the started carrier continue that decline point

get actually they little assume worse. we -- a continue bit We

Operator

with line comes Joe The Giordano next Cowen. from question the of

Joe Giordano

like company the kind like product talking about about of unexpectedly talk levels component -- we but in another medical side on parts of this inventory of like big just so. So medical, kind had

anticipated. their customers of ask that's you wanted relevant products to than just I of guys the guessing question. but their like just I'm not to more really So -- some their have

Neil Hunn

product business, a It's on not product our particularly correct me relevant. sells the component component, it's principally There's think one product one their this in these scores product, OEMs Digital, the critical Northern I -- as of ship without necessary were to I They that a remarks, medical OEMs. obviously. mentioned through, cannot prepared medical just

for system. commentary The channel not the customer. inventory only where of know the us place Digital it's quarter in from most -- that's might -- So It's was sure that been buffer. really feel of where is worried it directly there team to they a and Otherwise, we're happens. Northern -- all the this but is to that's fair hard there through if a have consumer in exactly the customer amount as

Joe Giordano

Yes, that's what I figured.

Okay. -- -- are And for of on the question are rates your like like stuff, curious, is looking M&A. competitors then just PE a from side I'm who kind on landscape over. the uncertainty I like the the problem Like them? directionally the for market like volatility all at debt like to know Is of rates the the that in in a on like the at is impact for just or around to rates all? having ability an And lock rates, and lock desire

Neil Hunn

that -- The then in going be. and buyers slow. been of mentioned it's bid-ask deals that the And the sellers. just number very mean, exit what reason you I uncertainty Yes. printed been this for spread to just reason to of the quarters between has that on low values continues are also last a couple for exist. there's

analysis, the thing multiple. sensitive whole the value, and most exit a doing IRR variable your you're your is If exit

so Private -- deals And all equity recaps. deals a uncertainty, there's hasn't or of just been been of lot handful that strategic have in a in equity, private there happened.

would it for was was times Vertafore, out saw We opportunity. in I though, pattern of creates us. August-ish COVID. when in what, mean, we of our and volatility, you quickly, XXXX tell did say, an I'll very opportunity that it this And recognition coming history it

And could and this moments investment-grade levels nimble like variety a our of opportunistic so quite be to because we reasons. where for it's flexible is this -- leverage opportunities debt, exist our commitment and that

course optimistic of the themselves. So present year this will cautiously those that over we're

Operator

Allison The comes the Poliniak Wells line next of with from question Fargo.

Allison Poliniak

few today the next Just along is pipeline seeing made, platform you'd lean versus in what you just some probably there towards just of that Or sort opportunities on you're even more you the lines could that months? side mentioned know I are M&A, you there any a sort guess platform execute? of have of bolt-ons. and have the the you're confidence certainly that that bolt-ons I comments seeing

Neil Hunn

Yes.

level way I on bolt-on Day, historically. the best one because that as There's bit our to too are much I the the -- we of have to our with think near-term might there's a to activity would on what add-on seen pipeline they deals as strategically, nice to side companies. in wouldn't having characterize strategically we it. be the current talked more M&A existing in currently against -- to in bolt-on deployed than Those But certainly or of read to a we is it's into our we're not normally strategy. going additive always those of sometimes late we'd sometimes. like bolt-on come to but It tend platforms a capital -- we work a stages on it's handful able There's the of see side. pretty are synergies it force be But that some evaluating. the the more falls that. that evaluating. it about just it bit we're and There very handful see or detailed Investor be balance, more

Allison Poliniak

And the ramp should That's I . about it's that, then care. does How obviously, balance get it. that acute know helpful. Application that Got running, ramp? When mentioned, year? the we you Software, capacity think of QX. impacting slowly the in

Jason Conley

expecting thought with and EBITDA I Yes, pick But implementations. large the quarter, the margins did will line they in were that's half. we it we're parts expectations those then right. up had finally got quarter CBORD of be it second we the mean, to some projects. for about pull-ins, back and first security the second same those have for some Also, integrated some in in

be to about margins EBITDA flat expect can you year-over-year. So

Operator

from question with Joe next comes Vruwink of Baird. line the The

Joe Vruwink

environment. the you're these generally kind at you like you're IT Do particular up is come be think maybe consolidating going like right now. of what dynamic share the of to industry wallet playing you growth education for is observation just up that of Hope one well. broader this I relative look examples would share One examples kind And you hearing where mind underlying then And holding the actually of they're think where It out? K-XX the serve, to wallet any your and spend bit we're is so record system a spend companies, seem some around does in industries companies seeing this there's far? well. I pretty so

Neil Hunn

would in mean, say of we to highest would by Day, all -- the I we're detail mean, communication at can mission-critical to this say we be I it take would I -- say we're company of level have say of our So go in of some in the that we right? I Yes. yes, interesting. the off-line extent -- company system Investor sort we But and record sort level, software software. of

mean, spend where On the life great net customer XXXs, a X-X, low think long application of gone whatever, just for like then XXX, from cross-selling which company I the of from Vertafore a size example if a they work doubled The base companies create like so is that can these XXX, a all sense gone X. to XXX,XXX time the software I about think number low has gives you that Frontline X to number Aderant into. their rest ownership the Deltek or period. side, retention over you -- we've We've

the more come of bookings that example you which XX% out the of -- most new and from so you share get of XX% the history Frontline it's to or it's now which is plus, is they've where cross-selling, XX% their work And of best done all our all called I wallet. our And companies, how of their the more think one it's of about -- upselling. over customers basically like do capturing

systems state-by-state X from in where regulatory environment. based ago, in want or that vendor, XX% competitive -- particular, buy excuse XX%. And right, case, environment, of And or to a consolidated years health number systems was you're a today, Frontline's the more on it's fragmented XX% K-XX me, education

So the education Frontline. like space towards the companies -- is towards coming market in

Joe Vruwink

Okay, great. quick I And Frontline. that's on one a then, guess,

year In free And is cash XX% typically do of so that cash than flow, cash kind so more of burn XQ, XQ, terms frame. can in of of time probably the XX% sequencing think they full we flow that generation of XQ, XQ, business's business, XQ? hitting margin

Jason Conley

A Joe. about of I then or more little in think burn to Yes, QX. QX, in that's a right way and it, bit QX inflow bit QX a little less and cash think of little big cash in the a a in QX --

Operator

The Alex Blanton the Clear question with line of Harbor comes from next Asset Management.

Alex Blanton

selling that? benefit week of have the Rice cash they from sold $XXX And the ask [ph], operations any on they and do sale Doble answered my they been from controls. wanted million. Like Most this Honeywell, your to questions I but of to compressor you your how announced just piece? it get about for Are -- Clayton you

Neil Hunn

I Alex, this. talk about appreciate to opportunity the

of involved So we We're are it. certainly XX% Indicor. with owners

had We to to for oily have more From first conversation work is principal what with was value of and piece the do part Indicor quarterly Board meetings. make the this less about portfolio being creation with the industrial. it [indiscernible] we very Indicor, plan some

to be x to for and a this highly very competitive year's we're a number to able a asset so And strategic was -- this XX delighted that sell the was EBITDA. was the this process an of was business It strategic folks industry. in

to The I this mattered That think to Indicor redeploy for Honeywell benefit and take of it get the now of is we business. XX% a a then capital great businesses industrial a M&A and a the that plan. next company to us. owner become type as and this the great when home company X whole is lot a monetize creation value X company industrial years. create compounder And industrial to flywheel in public the we'll tech will that's build hopefully through and

Alex Blanton

from this get cash deal? you Do any Okay.

Jason Conley

for Alex, sale. distribution stay liability the the get, tax we cash us the cash the of to only we'll business. is have is going of But in The most a to

get we'll that closes, it the cash So in whenever half. second sometime

Operator

Instructions] concludes question-and-answer our session. This [Operator

for back closing Moxcey any return now to Zack will We remarks.

Zack Moxcey

look We to Thank with you, next . speaking you for forward our today. during everyone, us call joining earnings

Operator

for concluded. today's That attending now Thank has you presentation. conference

may disconnect. You now

Roper (ROP) 27 Apr 232023 Q1 Earnings call transcript