ROP - Earnings call 3 2023 | Roper Technologies, Inc.

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Operator

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

I would now 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 third you quarter we the Roper financial as morning, all results for

Joining Officer; Jason this and me Brandon Finance. Cross, and call Neil and Officer; O'Callaghan, on President Principal Vice President Hunn, of Accounting Chief morning Financial Chief Shannon Executive Conley, are Officer; Vice Vice and President Executive the President

call. issued results. replay morning, we a today's The information release this announcing financial press Earlier our includes press also for release

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

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

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

today's to in call of the that listen should You information. context

now will turn and operations we basis. And adjusted discuss our Page Today, non-GAAP to primarily on continuing please X. results

be adjusted the Indicor, third of with the of our items: difference minority the impacts between associated For results quarter, and in of and website. in acquisitions intangible with our can investment financial a assets, results press lastly, from our sale this appendix presentation expenses of on assets. in Reconciliations our and following associated the the the consists transaction amortization release nonoperating acquisition-related restructuring-related and gain GAAP completed found our

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

Neil Hunn

each third this good. call. sharing and year, X for our looking We're forward morning, of quarter to quarters first with our quite everyone this results Zack, you, the were you thanks which like Thank to joining

Page at X, we let's look As turn agenda. today's to

outlining our with start up we'll After that, discussion increased discuss to results. usual, financial XXXX As will and guidance. the our most wrap segment-specific our enterprise then turn quarter's Jason highlights, recent we'll

ahead go and get started. Let's

please. slide, Next

governance today's financial very Page our businesses, a call takeaways X, the operationally, of to quarter; billion second, of increasing active front, demonstrating we're remain very be the year our our M&A last are: we first, definitively $X over for deploying X level deployment. and full leaders turn we continue for well strong perform continue at system; third, results, main about on very disciplined of we fourth, quarter high we to further portfolio quality and our As to another positioned capital the delivering guidance;

X%. revenue the revenue first performance, recurring strategy, to we XX% As long-standing enterprise continued takeaway, underlying the this Consistent with high but total scale saw digits only and single we to growing it growth continue not revenue organic software and relates growth in recurring revenue simultaneously strong quality our of quarter. our with organic improve also base our

cash. the Importantly,

with very we TTM XX% period throughout XX% cash we've the flow highlighting had year, As cash been and the in quarter. for growing free flow performance, strong most recent the

compelling quarter of main our to Turning bolt-ons businesses highly a creation we're buy are XXx to from able for and perspective Replicon, for These Deltek, and which the bolt-ons interesting these in last of second bit. a Strata acquisitions EBITDA. strategically are year's and of Syntellis each are these on $X led next over value More was by about billion both respectively. deployment as our takeaway,

Haveli to Ventures opportunity. business. in partner made a with Certinia, and addition, investment Atlantic General deploy We're In the creation value associated with $XXX minority to quarter, services in we excited the million this software professional thesis a unique automation

of debt $XX.XX $XX.XX midpoint at in total previous be and revenue growth $XX.XX year increasing our the the $X.XX be guidance our or organic growth of to Third, to our XX% we're revenue range guidance plus, increasing our plus, to year versus be full increasing X% to full up $XX.XX. to

well diligence very active for attractive evaluate be billion and we by positioned the we opportunities. remain of in We capital fourth, very as over continue deployment many M&A market further to $X firepower. having And

So our third with results let that, over strong quarter position. our and to you very financial through Jason, walk me Jason? call you, can so turn the

Jason Conley

and Thanks, to that morning call, thank our in your joined and interest for good Neil, those have Roper. you

was to our X% with I'll X, prior detail. Slide and take a organic by of Turning quarter enterprise in $X.XX year, contribution more acquisitions, through Revenue led a X% you results third growth bit Frontline. over billion from XX%

recurring software by in single-digit high organic This mentioned, enterprise the Neil software across in customer our area. strength was was new and logos revenue led As expansion businesses. growth net

in to continued organic businesses Verathon. growth highlighted with by XX% product quarter, our Additionally, the deliver Neptune and

quarter. nicely the note, quarter through of year. translated depths in XX%. EBITDA operating EBITDA $XXX or expanded $X.XX million This converted EBITDA, prior to versus Of our of all Margin to with earnings guidance of over $X.XX. on this $X.XX Revenue with minimal of acquisitions leverage impact our had to XX.X%, XX% recent

down accretion in revolver and from pay as deals XXXX realization. the synergy debt from expect these we We full benefit

cash and year. cash million flow million free generated flow, over was strong Free in quarter of in expectations. is with which line the We $XXX prior our very $XXX came up

our third most a in reminder, business flow Frontline of delivers its the quarter. As cash free

So a the that, terrific contribution growth. plus organic drove significant

a on trailing provides on shown flow cash basis, at a the relevant XX-month more slide, Looking comparison. as

flow XX% tucked the up renewals is free TTM third prior billion, the our cash over $X.XX which TTM With the was into quarter, Frontline period.

a of in for cash QX, XXXX. on north to expectation XX% strong flow deliver the With margins free we're track

on flow flow will our Taking our to results the a cash us guide in compounding a and In has TTM future. with is evident over free period, broader continue compounded XX% X-year into which view, is summary, line in cash growth. our focus EBITDA

We $X.X taking $XXX net leverage ended X X.Xx. leaves revolver. look at our our this with debt slide the about position. on EBITDA here, financial Next a over drawn Page million about With $X.X including on of us of trailing quarter net billion, of billion, with

more quarter. the the or $X to Looking foreseeable billion period $X in deploying deploy after over forward, we third even have billion capacity

optimization strategic our As choices. growth always, guides flow cash

balance that are markets while may the primed, our slowly it capital quarter. activity disciplined thawing, be be with and over private we when will patient end, last sheet deployment. picking up comes to So To

With to segment it that, and Neil? turn results back through outlook. over go the Neil I'll to

Neil Hunn

Thanks, Jason.

and Strata delivering U.S. Let's details, Page solutions and turn with has To combination in of our to with years segment our we'd to remind like hospitals the analytics decision Syntellis through before Strata an X walk to and business. performance as we leader health of everyone, been financial start Roper for part SaaS-based support And planning, X. overview systems. of acquisition our a

management leading hospitals, institutions. to Syntellis is enterprise and higher and a financial education solutions provider of data performance SaaS-based

lagging U.S.-based many face costs continue staffing market resulting you and macro systems know, shifts, hospitals As trends, setting challenges health issues. to labor reimbursement from rates, of intense care and rising from pressure

relationships and Together, The and business has the financial enterprise uniquely of operational health difficult about Strata combined the be will able Syntellis these country's systems. challenges. help XX% address to systems with health

Stand-alone, Syntellis meets niche business business application-specific all leader our and organic delivers is model. a a operates HSD acquisition an growth in market, solutions, an criteria, mission-critical extremely asset-light

together combined base, product combined opportunities. combined gets product Taken the customer profile more in the financial the terms of attractive development future it and offering, the combined only with Strata,

higher $XX price, inclusive Syntellis expect announcement. improve about our valuation we million purchase will than For this next the cost EBITDA and $XXX net XXx synergies. and of deal of of about $X.XX of year's to at only deliver million Considering revenue $X billion note, EBITDA EBITDA XXXX, Of there. time about the from the million is is

having days. creation relative first Operationally, plan, the of XX have ahead implemented about synergy quite cost the the schedule moved the near-term to opportunities teams expeditiously value are XX% of and within

the been In customer overwhelmingly positive. addition, feedback has

Finally, is value strategic the customers opportunity to a Martino, highly ideas. compelling leadership Strata's creation new for turning new are our this by attention product our team combined CEO, Net-net, development combined and headed shareholders. John their

to that, with and XX Software let's Application segment. And our now turn walk through Page

were segment Third and organic the quarter revenues on to quarter. margins X% an up EBITDA basis for $XXX in million, Application XX.X% increased Software

given remain We'll of their continue private start spending channel backdrop see the sustained with rates and solutions. Retention government Deltek Deltek high. GovCon entirety SMB Enterprise segment in with in sector the the Deltek. the activity in solid federal momentum sluggish across of They their to was uncertainty. quarter

for GenAI-enabled VantagePoint capability It's business further of features their product. adoption over released processing Importantly, IQ for the and of collection Deltek see LLM-based to a last months, good couple GovWin the portfolio. GenAI data the within

on timekeeping and on professional call, closed Also quarter's Deltek's albeit in Deltek than outlined we later management complementary last to solution is is To acquisition of a SaaS Replicon, as about remind you, firms anticipated. quarter, focused and workforce services the strategy. the a month highly Replicon market-leading

Replicon to of expect contribute and next year. to revenue million EBITDA We of $XX $XX million north of continue

saw Aderant cross-sell excel to needs and very Aderant, the our a SaaS success of of quarter, software In solutions. and continues the third focused law in business continued strong the their on delivered quarter bookings quarter. and firms record adoption

mature their fee time market gain importantly, line. during see enables innovation Great and traction GenAI MADDI. entry Aderant. enabler, Aderant passive Also rapid the to continue this to and through generative product release assistance with at most iTimekeep earner product product Aderant's recent Aderant's AI quarter,

property insurance business performance us, core a business with for great across Vertafore, software our solid business our bolt-on. continues and that and tech solutions recent P&C MGA casualty their enables agencies be to

solutions. quarter of gain the was decision support the their from adoption acquisition, to Syntellis leading independent continued planning market financial in Strata, strong and and

in the flow, and had Frontline mentioned, quarter. season delivered Finally, cash as strong customer Jason enterprise significant the to renewal

the the to mid-single-digit final for to quarter see to revenue area organic of be Looking segment. expect we in year, the the growth

Page XX. Turning to

and revenues up Software million, an quarter organic basis were margins Third $XXX were Network X% XX.X%. segment for our on EBITDA

businesses, broader of grew continued and our quarter matching Canadian the in markets. and logistics freight Let's the challenges DAT start both despite U.S. with and freight the Loadlink, which across

job This businesses margins invest cost quarter product in in the to their a new continuing have led to Over of quarter. done two, the or development. fantastic last baselining structures strong while these segment

is a and quarter, the highlighted solutions development, as product targeted combat a to we initiatives to DAT industry freight among which GenAI-enabled that plagues Relative launched entire other last fraud, industry. problem touch

made this of noticed activity Within DAT's customers a and release, great recognized accomplishment. have in has first month the dent fraudulent significant DAT and

of and is to Roper macroeconomic across innovate on share cycles, to gains. deliver market This customer a ultimately leading opportunities, through and consistently how why businesses to market which continue us example enables shiny and

high driven In had Turning is level expansion tech to a iPipeline strong our distribution that on laser-focused execute for that they business gains ARR software at annuity iPipeline's retention and insurance to life to customer network core is market directly growth the very life their and insurance the and activity. iPipeline, annuities. share. channel attributable customer and quarter, by strategy gain continues nice enables This base. our

over in a on is notion in businesses during the closely focus choice, years, that held has iPipeline, choice. the value on further core intimacy. this, Investor this strategic the compete Customer intimacy our customer at last X We concept requires the of win job, gains. Roper team. year. A enables to earlier talked market and we about based concept share Day focus our X excelled and Great and which of

writers' Foundry, industry that regard. subscription in our in the the coming is paused Notwithstanding, business postproduction aggressively their offering continues the strikes. model will both media entertainment their business software continued was resolves. ahead customer model and Foundry compete transition months and innovate to plan as a product of strike given and share Hollywood and Though for actors' actors' demand to temporarily wallet

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

the For continued this on on Foundry. based strike freight single-digit we actor's for year, market challenging quarter expect impact growth low see the the of and segment final conditions to

segment let's segment. basis. Page and up for through Now $XXX XX.X% turn margins to our were were at on walk the XX% EBITDA an quarter. in the the strong TEP in quarter XX million, Revenues organic

with start financial technology business. operational Neptune, water of We'll fantastic and delivered performance. our meter and another quarter Neptune

data macroeconomic Neptune in remain As this has are broader compete, and meters demand or management adoption to tends quarters, market meter software. commercial Neptune be for cycles. given about increasing residential momentum static and been steady the trends case and they bullish ultrasonic Neptune's customers' fixed for strong to quite We the the or and typically continues and see year-to-year as not to which for budgets several market their tied

growth was order awesome execution. well quarter and the Verathon double-digit operational tremendous in with as

quarter supply nagging double-digit series this they innovation segment. the working as the video strength well Specifically, products, last of RF Relative IPA the fantastic Verathon final saw or and substantially group to bronchoscope purchases. single-use capital growth low of reoccurring were through of to businesses see chain both year, quarter, across smaller A BFlex here, as challenges. expect as GlideScope Inovonics, a IDeas for or organic BladderScan were we and

on to our third quarter turn and total guidance strong XX, XXXX full revenue raising please Now XXXX let's organic for through go Based Page increased we're our guidance. year adjusted and our performance, debts. revenue,

growth For XXXX, be about from XX% revenue total to expect now XX% we an last plus, quarter. increase

addition, we're last ZIP year to an our and our be quarter for X% in revenue raising X% code, organic in In about from full X%-plus a to the year. outlook increase guide original X%

As a of $XX.XX $XX.XX. up our guidance the of $XX.XX for guidance in range result our we're be of outlook, prior to and improved year increasing revenue to from debt $XX.XX, the our

high Assumed end XX% is to in to rate of trending this XX% our guidance the the range. tax

in to guidance $X.XX. For quarter, the $X.XX the range fourth DEPS establishing of and adjusted we're be

XX, your points we'll Page to the same you started. we which want with then to leave We and over to turn questions. please look X answering forward with Now

First, third single-digit And we quarter. underpinned billion. growth software in revenues recurrent increased with organic growth. growth to solid quarter, yet revenue revenue delivered another $X.XX was the and X% high This organic XX%

at XX% on in notably quarter growing strong TTM a and basis. flow outstanding, the XX% addition, margins cash XX.X% EBITDA In and were was

the Second, about X million These EBITDA Syntellis XXx the of capital will quite successfully compelling. EBITDA, Replicon. deals $X deployed year deliver next about in we billion of $XXX led and quarter, by and priced are year's next bolt-ons of

were and increasing our the total our year the debt quarter deployment of our firepower. with activities be $X active recurring growth outlook year north Third, billion customers finally, full organic we quarter's $XX.XX. to and M&A we and deployment, the of revenue to solutions revenue full based our strong our available nature outlook as And $XX.XX to between on our of notwithstanding $X this and be increasing have of billion capital importance performance, stream continue of

very as the been our discussing As is and available of pipeline disciplined remain will rewarded. as deployment, firmly continued did large several just with We opportunities, and patience, patient quarters, past case of we've believe always the over though, the that have deployment we highly we acquisitions. the ensure super Replicon a be with capital, to always, we Syntellis as optimal capital

turn addition I'd we team. like to Before the share your exciting executive to an to questions, Roper

Most our private forward-leaning our that and We're and increase our and Janet will Janet leader Glazer Janet corporate acquisition global team several of team, and leadership our at our posture Fidelity. excited aboard. manager business outreach M&A with is has equity development joined resources, During team our units sponsors and corporate was our and super the portfolio cultivation businesses. welcome joined leading efforts. quarter, recently, their partner sector a leadership with to Janet

of at if Now by portfolio to of time final application-specific you do is Roper remind strategic market-leading arc cash to as flow we to We we'd businesses. vertically-oriented questions, a long over the turn and that slide, simple. we could your our flip and a what flywheel, compound like everyone operating

underlying a chose is company operate growth add cash quality on the great run strategy their rates centralized flow improve business Finally, process-driven next capital a our businesses customer the win can our part Roper, of businesses on structurally environment intimacy, to on decentralized to and our a how yet business based flywheel. focus Once and we to so deployment compete to we we finding

over long we cash compound together, a mid-teens our time. flow the in area of Taken arc

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

Operator

Julian Instructions] Mitchell comes with from The [Operator question Barclays. first

Julian Mitchell

QX point business sales a really on a you what of markets, October in onetime network there? question, Foundry guide high? of sort them anything that of focus And is type second. freight pace QX rearview softness then headwind? more or to wanted finer a a network much just headwind from on how software to trying And decline of that of in there margins in so software of the have for sort month made the I put the Maybe was One

Neil Hunn

question. for your thanks Julian,

in in a take done business order. just where in So and remarks, I'll QX, tried today. DAT of the Loadlink job margins have cost is great the I how reverse aligning and try my to structure The and them QX prepared cover

bit And the what wanted that ahead they that's of so so they're to drove margins. actually a be where regard, little in

will but to The QX. is much much in Relative very content mean general and sort -- leading Foundry's Foundry, sort to much normal levels. itself QX flowing are into of resolve QX, an half still in strike of back right very demand QX, in actors acting. knows. build I it's through for pipeline. writers Foundry maybe Then will that but consensus of They and the dip need pipelines there's writing, active is the now, the And aren't one sort of post-production. will second never

maybe of sort the it's impacting. QX QX, QX, So

group in that expect wait the the capacity of in to who we coming for got But volumes. of about normal the It's knows some remind and been last years. Relative it's history has exceptional. been that the DAT and continue of first sort a just terms in if a to of we've if DAT bouncing of reshaping. DAT in sort here into of really Loadlink, the in industry growth. uptick will, and just They yellow has super trend bottom, weeks to sort seen slight long just I'll a steady off market remarkable -- or over handful very get started quarter. growing. the bottom of been couple here. grew innovate behavior maybe different They It's DAT. abnormal We've October, you of part the we're along the to the being October of

to you want add If that, Jason?

Jason Conley

right? a this exceptional growth. XXXX, you'd the see of I we mean have if has sort think substantially, abnormality, No, you straight that's from draw been up business the So I line right. of lot out. been of exceptional come market, A they're And this for period. the again, XX the absent last years, it's steady good us just growth sort carriers in a exiting over

say strong. retention just And been extremely I the what on has Foundry, that the we've would of gross business observed back is

this so a We have that have and back year, off pause if moved model they're to on to maintenance, to subscription subscription. a get on come going customers they gives

to the pick going hopefully. year, done, strike actors' good is business feel we to So is -- back next up that once

Julian Mitchell

more, maybe go start. Certinia my quick to a given you structure just then the approach Syntellis for a to And unusual It like Roper attributes off something sounds interest on a into this minority is in-house. But bring question slightly follow-up. strong when maybe

sort explain So structure. maybe went this of of that just Certinia any of the why scale or business? the And you for sense size of

Neil Hunn

Yes.

in if came then So so Haveli, Bain, the we're who can well. some the and we history the principally we -- at Haveli practice the they of our them us led of see quite was of individuals, to know founders situation. one tech partners Vista long with and partners, Haveli actually the of lend joined the It together as expertise to of approached both person

by opportunity We're compelling value very help. we're creation to by It's here. intrigued value a being intrigued opportunity. the able So creation

We're book mentioned. of more a large transaction. we'll also long a Julian, a thing of people looking a you a unique of group to like opportunity, do minority learn is that doing investments. lot of of not I And smart is this. this then type the like mean beginning This the history It's things or a of two this as along not way. have

of the not to and it on private think I in but far be sort And private going be few on pacing of the business of the we're volume -- going scale, the it's opportunistic, business, at sort in keep be this. of the anything between our domain. it's we'll to continue We'll terms and so scale to

Operator

Poliniak comes from with Wells next The question Fargo. Allison

Allison Poliniak-Cusic

technology-enabled were driving up space? the the specific seems back tick you any sort in Going of outperformance of second it expecting like to the know you and the Neptune terms of vertical half year. in sector in that Verathon. certainly I products, a But mentioned where this

Neil Hunn

the on just up very there, broke you end sorry, Allison. I'm

I that say it, so it healthy. backlog The market next and year. of -- just is continues a to is are of market patterns mean, very consistent Neptune to bit -- I carrying are based be into customers and would robust, So ordering -- sort lots reiterate

Verathon, and bronchoscopes towards single-use control. So gains there's dynamic market because and reusables market from the market cooperative a also in we for sure. With moving infection product in share of is the advantage have category

a definitely quarter. very is market are it's growth player a So we that this the soon #X market on knock to in, maybe that be wood,

And so vitality. means the tremendous just and execution both product team, that's market go-to-market it tons product, but of by related,

mentioned few And product in the many that a mountain we and couple quarter quarters. clearing to a and supply in businesses great segment, that through problems of regard third second just smaller just That's we RF also a chain businesses. of those -- businesses. have the less couple market for -- then And more are quarter a plague

Allison Poliniak-Cusic

to Understood. And M&A. then turning just

sort private seen to those still that talk little to Are maybe in the just we've they mentioned a multiples starting quarter? here? markets past Can of of as bit sort you're you You come attractive need do what through as see Or they this starting to fall. there?

Neil Hunn

like That's really I about There's the to pipelines amount starting. referred them. the market thinking tremendous the it's activity, it spring. question. to Jason getting are start Yes. filling there sort forming bankers, a so increasing like onto coiled like activity, from of sponsors a LPs some pressure -- is to back investment are of is processes mean the The liquidity

new to need they raising The about starting sponsor funds, to that. is think do liquidity

the a to there's lot market. about So spread back question remains the buyers sellers. and that between The into is precursor come bid-ask activity required of transactions the still see

very we'll is You is don't, If -- to well, can where there's to don't and we deals to us. is market small, we'll be compelling value Replicon right? remain patient. we more super opportunities be have going patient. opportunities. we we to number still don't We like -- The they're do find and continue know to Syntellis, we going chase the them. coming If market. We this know printed the yet -- clear to anticipate date still of So

Operator

The from next with RBC Dray question Capital comes Deane Markets.

Deane Dray

her hiring addition on I've she'll many to the known I be think congrats team. years, First, Janet. a great

congrats. So

Neil Hunn

We're that. sort she's looking looking saying blushing. the script, exact her, of she's at not at her, -- for Thanks on she's we're and

to part as team So great the she's going be sure. for of

Deane Dray

That's fabulous. All right.

first, any there I the of macro Have changes out margin some logos? been question. a service of of the seeing So understandable at customer and wanted in their just decision-making, kind more any back, given behavior? called are go there. the uncertainties customer you which pace You Deltek, But is government side, to new of broad brush, changes

Neil Hunn

out year. of it's really played So we the a been anticipated as course over the bag. It's mixed

markets, look at at at and government side the level. the in SMB, Just level company contracting one less for government on sector, services the strong enterprise across PS, enterprise contracting private professional strong the Deltek, both strong on

and So In what's bag. macro on and to to related going federal budgets is case, the it government there. around the mixed it's what's happening that and a less really tied uncertainty more

pipeline. the across strength see You

You see Those strength are Aderant. at customer healthy very bases.

Obviously, a than just really a portfolio. is macro across mixed at of DAT with markets where talked just a broad things bespoke it's the brush so really is sort are, weakness it collection So freight it of we the bag. about that given

Deane Dray

initiatives you you're called maybe was that might All from how the -- Or identify and an in And the mostly and help DAT within kind playing Aderant. Are on there good the are to sense headquarter pursuing, maybe that opportunities? companies? of anything second maybe And then to more insights. bottom-up some by side, sounds year expertise several interesting see today update from -- adoption GenAI. like hear. That's us these love Roper is it on initiatives It some here more is just penetrated you right. out now, you're to companies would of offense question of getting of this, it kind what give a a and

Neil Hunn

Sure. Yes.

playing right? the definitely this a or this will way It's technology we're all think language live we a the cetera. and and change conducted fab. GenAI right? So to view think models, We transformational the that et will next a foundational is is not our offense So hyping technology, business of here. trendy over our We paradigm the personal course lives years, large technology be of XX that's on a X

Mike we're of really of Maripuri, perspective, what a top-down up, of deputized, should for GenAI education I will. our our a combination across top-down variety an you is we've series topics So Corkery, doing we've group bottoms to lead if From executives, Deane, couple companies. organized say, a for -- a Satish

So we've what is evolving done a or methods with do or into deploys and productivity -- from of X meetings, to new weeks organization started both but series we've And out of still how got deployment, and X X spaced X you or They're where deploy, product X, X go. every around Zoom it's more GenAI. more the and how ideas.

think our creative impacts positively. So how XX,XXX people our the is operations the impact they at customers it hope thinking this to spurns how it Roper about with that that it creates across -- positively,

will learning, we're a it accelerating ultimately, the but bottoms-up be you if So will. ground-XX ideas,

some be the and other But the bottoms-up as players employee leadership security do field things at center good Roper, might couple the with we for safety purposes. a all generated will the ideas deployment models or of of Ultimately, the team contracts and larger with and cybersecurity, the from base. around

Operator

The next question comes from Vruwink with Joe Baird.

Joseph Vruwink

Great. attrition time? And given services expect that and consistent generally make digits. already the would is is single future? to license to over growth, guess is then probably software expected software you just slides, of the spread then, X%. spread organic I that reported the that's question, going your high organic in in the And And In you growth, be that be the recurring professional distinction the course, the foreseeable

Jason Conley

always there I out, pronounced AS probably talked was perpetual bit more -- that because had will we Foundry we to we Jason. going pushed from have some a say It it's a quarter little would deals in Joe, be subscription. just this and about spread.

yes, always like a third though. little will a pronounced be there -- So probably the more bit spread. than quarter it's It's I said,

Joseph Vruwink

ramping in had can now an back wanted I gone I'm just to then support And live. provide bookings capacity on quarters AS those strong ago go if assets. whether of that maybe services a care health Okay. maybe couple have wondering you you awards your to that was mentioned update

the maybe stand apparatus, how what via guess, segment? broader are health M&A. broader there? increasing then in And there a exposure relative to the organic as AS care profile now Obviously, you does seeing I growth you're

Neil Hunn

Yes.

was installs, region, to the our a global They've laboratory quarter a correctly. the in professional ramp there. job principally services think, It power they serves nice be competing me my relative larger Benelux around the French was memory winning company's in to and tend bookings services services I CliniSys. done did where build, also if business, the largest tremendous in market, job that -- quarter that, and So the -- U.K., and they second laboratory the their bookings just history, in is at plan,

have process deals the in is capacity, the formed So utilized. being sort of the in

So of good from operational sort X those businesses. foresight

health care I it's stand-alone And it's then single-digit exposure, mean, Syntellis, growth high relative with business. a to -- I mean

new period. a customer the excited synergy they the base mean persona further companies, between than health we our customers they've have the work, about the of have X what XX% to ownership but do. we're with and companies And the just super got customer, systems -- of most same -- that the the monetize over ideas is is both was that in CFO, very as not can and excited business about same of persona. Strata combined I the the bit development which persona the now it's product Our better company, cost little the

Operator

The Davis Melius next from comes Scott Research. question from

Scott Davis

deal of different you're maybe ago? of Guys, kind competitor shop a just less in environment, this overall you competing doing PE versus year get against just up? of when you when type to less or And -- compete things of Is showing bolt-on-ish in a rate these a two if of types sense are more for there a there's those transactions. trying competition kind

Neil Hunn

proprietary case haven't were would though I in competing depth we're And a a an would is if both still market matter, and So Syntellis, of deals even against little sort what in cut more And sense In a the really is, of deal. many all to we the the check. the most likely a I general community, time, deal a say proprietary that long we're as thinner. frothy field it of was mean of seen the case, right? through for in owner reach just asset, the a you parties. made a able run this that seller sponsor market,

I that set maybe thinner, So the little competition but mean, it's of same is regard, the characters. in a

Scott Davis

foundry, solid mix, can strike to a Not Makes give everything. impact overall. us in X% sense of would wasn't of the very the the been sense. growth of kind pick foundry Okay. growth. much materiality on, If the higher just and segment you quarter But have than

Jason Conley

mean a our second relative it's Mid-singles. single-digit for it's bit. the I guide. -- last to I'd Yes, half, say little impact revenue like

Operator

question with next from Truist. The Tillman comes Terry

Terrell Tillman

renewing and of The first when milestones question We have is cash I'm flow. in you cash those on get the I'm Frontline. are the not If saw flow mistaken, they're you important kind season. quarter. important curious, the this strong renewal

then So see interest did is Frontline? growth expansion expanding part how what more And modules, second first going just new in of what you in seats, or the happens products business taking my pricing? adding question with is and or

Neil Hunn

Okay.

in I retention net was So -- was mean, retention. right with and The Frontline, a year. on it we plan, with historical renewals good last line first mentioned, year. the and were consistent just as Gross

retention. cross-selling the quarter was net was consistent to with line relative XXX, for very XXX of for So rates, historical sort in ], upsell, the in [ Frontline,

to It which goes the education. Again, for serve. of they as Frontline frontline she they customers criticality the what just So the in empower steady goes. does of

So good. it's

very X at the prior with it's gets It's new of run small this sort push the course deals still much execution. a in a year. Hard the in or years. deals me, small of or Frontline. recall the rate Actually not year. just to the little better it's too And of little any slower talking bit to a a show They're so normally on have that of of The into given goes -- new number -- good lack just right, X reading then there's macro a the terms been than business It deals large up year. They're deals. but cross-selling as of pipeline. to a just we're customers, things could it -- of small in of handful we're a been starting loss the a larger excuse net about to In numbers, Frontline numbers, that. lot

Terrell Tillman

product? our rates? good I I into it guess on how Okay. Does foresee this just much mean move does management the hat momentum should my that needle? 'XX? data have on follow-up we And you meter this is Do hang attach continuing Neptune.

Neil Hunn

Yes.

year. we've momentum just Neptune the good as So obviously, carrying they go expect a the of of positioning, our Neptune, for a And next matter, year have the lot process have. got market through we to they Neptune all and have, companies and to in the But another got capacity takes. understand competitive puts the planning the our has given backlog advantage backlog, general

business. part Related to software, the of it's and data master been management important this an

more the do and we capability more collection system it to into or data be and gigantic of a start billing to get be process volume a to to have have As cash the system. data, technology on put to meter push off more able able to theaters, the to meters you

call of it's business, didn't the a deals have part pretty decent a of and part size the XX capable years Neptune business. business, of And part worthy the to that in highly it's always It's group ago, out and one that fast-growing this, so software with at a a smaller quarter. it's exist -- but the we growing

So I appreciate question. the

Operator

The next with Christopher Oppenheimer. question comes Glynn from

Christopher Glynn

about guidance or the been was some release has include, So in doesn't press that I obviously, curious asked. divestitures. future language acquisitions a lot

a divestiture couple recently You've had over a of passed broad year pretty by. period of stroke

the if putting the that press release. curious So on word -- in that intent

Neil Hunn

Christopher. language, just standard It's

So to nothing read into that.

Operator

The next comes Giordano with question from Cowen. Joe

Joseph Giordano

M&A, get like those would on But of like than or familiar in more larger-scale bringing something kind of that murky kind bit. macro you a become kind markets more probably of outcome have an up So this adjacency like you're attractive uncertain, know here, an around do like you open more little a with more certainty incrementally times we're of little more, a into is you like that it in why kind in like something because I environment the -- bolt-ons if bit going these to just general? markets just perhaps less of large kind

Neil Hunn

largest our You was Well, in Joe, of I recognition us, times would was that. our say Syntellis, pandemic, a it Because the we mean, back would summer for times were terrific opportunity in very we to Frontline, capital I yes of pattern says need and balance of we uncertainty great our to very us, business like like the else history flexibility, and nobody relative so our -- to year, and deal. I business asset Vertafore. of sheet those uncertainty, first deployment, the in are our similar. XXXX, go and right? Like for us, do different that. sellers to sell. when great all, no mean, strength this for reasons it's I a last late

as looking stability right? a And it to will, formula understanding observable is going we're built forces, grow relates from a position, retention. gross to a the in to business competitive you clear platform to bolt-on, be stability, we've for But be that, competitive for small that competitive ability over which if deployed high markets looking -- leadership from. and net is a markets, humbly, That's picker. stable part advantages. understanding it as forces, of for We're understand and years, great, Now a the XX or

things And that that. in see so we'll we certainly uncertain times, these if lean like into

Day, help the best turn help brought Janet they've talked time, deals because deployment capital of part grow gigantic do same to, what strategy. at a activity, to part That's for is faster. bolt-on historically we investment the in we our are value-creative they trying our lean lead They as businesses, our At we that Investor to do more strategy, done. about once organic, to our of to in we've been

do -- the interplay understand the we'll you the between either, two. of so sort And but between dynamic

Joseph Giordano

implications we Yes. What And are the of the last, like That coming don't at have government a a still business? speaker have then year. we sense. end on makes that may just House, the Deltek's something the of of shutdown

Neil Hunn

into current I the of environment. think that all is factored

over the this think cautious -- just the class just been activity. uncertainty -- I in the large enterprise year. -- contractors, starts They've are based government cautious have being it or fits their government very on and

government this continued sort think catalyst is this good I news it's for year, the back will and of but to of itself then certainly spending, that gets baked And in a this eventually clear in. It's reflected balance So uncertainty. for the our will and outlook be the Deltek. --

Joseph Giordano

Great Deane's great for miss I'll client, a comments. her on home We'll Janet. hire just but echo for good a hire you her and as guys.

Neil Hunn

Thank you.

Operator

Tusa Steve question next The JPMorgan. comes from with

C. Stephen Tusa

we how great as the you Congrats XQ -- can perspective the quarter kind here. And -- guys expect front what we look working what obviously, working capital? you the similar about capital Yes. from to how we Should do of we Like Janet I a in now? performance we about is another fourth working to saw guys -- kind third comes well. line there should anything back the should quarter, in How it in guess, gives just about just history? quarter? do think when Like capital that we the -- talked at of like cash have seasonality think to history? strong

Neil Hunn

Yes. before I mean was quarter Frontline, year. the our strongest QX of

cash. enterprise renewals right? We give, They're to to Frontline be a at be have not this it They'll of kind year. again expect large don't flattish going I back. is going businesses strong we think give lot just our of mean software to on really I

quarter to for sort good we still be expect So of We and year. the free flow going how close north fourth about this of XX% margins out year. the it's feel cash to

expect obviously same we the was QX strong, and QX. so And in

C. Stephen Tusa

tax a aware outside of? or be working And cash timing anything QX in perspective capital have to from else year-over-year of we

Neil Hunn

Yes. really. Not

C. Stephen Tusa

Okay.

benefits? income then capital net growth working effectively, some So and

Neil Hunn

Right.

C. Stephen Tusa

Okay. up Great. and enterprise following software. the And on environment then just

like there's -- of softening, there's You pockets guys I mentioned think.

there bit businesses are the out just Just guys the would kind clarify a software -- mixed, is lot environment you holding of just from you're broadly into deeper could but maybe really customers up what of like there well. seeing seems the little a 'XX? characterize like How you there? economy It

Neil Hunn

There's the turned that's like on. markets, our pricing, built that leads again, very of so taken I everybody, we're mean we're of our got record. a the just to on of something been a system algorithm. durability, to we're freight we -- -- business fringe, routine mean high mission-critical, the be customers What of it's has growth not off right? that's out just We're that highly business. think retention. Most generally We speaking, sort and I cyclicality it's So the need model remind we've on is -- not operate I the do like software right, incurring. can in

And set very so this is -- the macro durable is businesses. it's a of

we're So the point to or there talking of impact relative here about two of all this. a or

software from large market. that year the we say getting would going -- of we buy is uncertainty some beginning a ] our we call rid generally, macroeconomic in talked is expected about the for this January Because to brush, the software just And broad said not Steve, new isn't -- from room a bit there with we quite pan of is call, a you're what little There slower. impact. [ what be

out selling net what's been. So going the always essentially retention and to area so to on and going is customers. not grow little out impact enterprise. up large retention should And then bit because -- has then with new is going not net as many lower, code sell gross it be same growth as our to And we're a in the that's much you're to your across played Cross-selling things, -- as you're we little expect that it bit is the algorithm not be a is higher.

But of pockets differences. there's

of Aderant. ton strength at a got You've

and You Deltek. Gatan have weakness of in a little bit

you You've sorry, got tons DAT ConstructConnect, headwind. the have iPipeline, help me at improving strength with iPipeline, of but -- in strength -- strength then at

mixed is things. of really a bag it So

Operator

The with next from Sachs. question Ritchie comes Joe Goldman

Joseph Ritchie

forward you sometime future. look And reconnecting congrats Janet. to both, I near to the in

question, on a for talking second. bolt-ons first my Just the maybe just

Syntellis Replicon highlighted clearly and So today.

your do where see opportunity the bolt across you to most potentially portfolio, on? As look you

Neil Hunn

and what don't we will the in is right? we're do, So say do do not buy. that. and from going of early We're to our doing So here's that, one we stages not center-led companies, we should want process to you something a of any Sarasota do not

to strategy. of asking will we as vast, their We cycle and the not they through both going is we're majority our planning that. an have do inorganic vast do are strategic to What businesses organic go an

it through inorganic figure build then we'll so vetting opportunities we have of we'll and forward And we'll lean understand and as go then From exercise, be out there. go that -- we'll strategic should the the areas discussion, there, to or expansion the organic inorganic. then from

process. the that's So

are mean larger not it's As very for was will, Deltek, a the us, a matter, an or start, I Vertafore. you and the think size obvious where the there compelling sort But if limited businesses average ones. was business Strata mean most general of we'll opportunity. ones, Frontline, to a largest I

vast majority, I ultimately the we portfolio. nother XX companies of think have as is a Whether will, have execute inorganic whole least our maybe formed will majority against thing, XX many as again, or some strategies not that of vast the we'll growth we'll the at strategy. but if across you have,

Joseph Ritchie

helpful, And That's a it. guess question. follow-on maybe Got Neil. just I

As you rates, renewal think about you Frontline. mentioned

into fourth around weighted Or you renewals going I So more guess, tends give -- you'd like the your XQ in for very be year? color where the I like to more tend Frontline. typical your staying next see us more high think quarter? on, any it to confidence Across does can retention any rate quarter portfolio, just the be

Neil Hunn

Vertafore, fourth season us for very strong Deltek, is renewal a Joe. Yes, quarter Yes, Aderant. at

but but our positive and already renewals. fourth the quarter. obviously, Frontline balanced these year is the we has and with quarter that's I'd this say off across more -- operating But had there. the we're kicked strong in expect hearing third for the for feedback. quarter changed businesses, renewal dynamic the it the fourth So some in But calls quarter, process We

Operator

with Brett from The Linzey question comes Mizuho. next

Brett Linzey

a on Congrats nice quarter.

Neil Hunn

you. Thank

Brett Linzey

ConstructConnect. to wanted to just come Hey, back

some little strength. construction weaker, of was rates on comment, data, point the said improving I is I particularly on. think a just higher improving so put finer given the in previous you bit a that just incoming activity, hoping and you'd

be there. just you're what I'd curious So seeing

Neil Hunn

Yes.

the just commercial remind leader construction to everybody, So is ConstructConnect in informatics.

So construction. set, stages in the this data used of in it's planning

part goes So shovel we of compete. the one and the not in that's once ground, a do industry which in the different

So it's of do think that's even backlog, manufacturer to so the about a in handful and actually environment dampening for been you're a has if a we've or years. responding not the driver building have to demand It work last for that -- business. RFPs, so our there's actually product you a much contractor you're

fewer and When having to that projects, into harder to is are the of business work the contractors plays there's ConstructConnect. opportunities then strength find, find harder

market first to point, to demand is the improving It seeing strength have us. because to countercyclical the So drivers. tends there coming some why we're is

a have go-to-market a happened we to having have construction, we've talk job tremendous But got having when efficient, taking -- and that's to business doing business, team more in They're about talk product of efficient. motion having about more that's with the a a message this that's we improvements out efficient, ConstructConnect. that the motion more operational complexity marketing Matt Straza his at

we better a so job when we're is the to coming demand. to doing market are that capturing And -- do going us,

a it's So market and of combination both operations.

Brett Linzey

about next about October in full outlook. is differences moving question the these want off But software, give levels don't high percent terms to margin last And Got here particularly in year? you within for I of understand it. then network mix I just in mean, color. expansion, do framework a build and next I appreciate pieces, we margins year. just businesses, there the the thinking incremental the on the margin to think for guidance

Neil Hunn

think early I broadly, been we've to is, a leverage mean, I But sort operating that XX% talk is our year. about this next model it's long-term little of I margins what and Yes. mean year. to for close

still but will though above bit probably early maybe a be network, on that little You're it's too right, it to next year, tell.

Operator

comes The next from Wolfe with Hewitt Brad question Research.

Bradley Hewitt

of Is that there relationship noticed potentially read with terms the on there I Acquisitions, Haddock, time? seeing Board your is Certinia So in through deepen to anything and evolve of of Tim over Certinia. that VP

Neil Hunn

too that. much into read wouldn't I

the observer. comes member have a you us and part Board Board a Board our the We learning And also from delivering knowledge, partially and interaction. through of to enterprise will, if enterprise that

that into the relationships. Obviously, -- one process. the leads he And had than anything He helped so was read diligence. would I shepherd was other the M&A team the not Tim who the

read just he's second member. that transaction. a named step I one is a so anything into And wouldn't step into a this Board

Bradley Hewitt

That's switching And gears. Okay. maybe then helpful.

now In following you've of the kind that. terms that targeted of number on XX% free there's perspective. reassessed you conversion, to EBITDA from outperform kind and have Indicor whether cash you longer-term flow of executed guys guys scope that curious sale, and typically have conversion if just about on of of historically, But a

Neil Hunn

said EBITDA, obviously, of think mean to changing, With of it. I rates way at it I've good And we about in revenue it's XX% of it margin a about kind look at change. point certain the interest of kind that of but north I being time, Yes. a as as time, flow right it's is free things with for a -- kind revenue. to in think over of percent year, not look on cash a a could

north is revenue of about of sort percent our a how of So think we XX% target. is it,

Operator

our question-and-answer concludes session. This

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

Zack Moxcey

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

Operator

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

may disconnect. now You

Roper (ROP) 25 Oct 232023 Q3 Earnings call transcript