ROP - Earnings call transcript Q3 2024 | 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 Zach Moxcey, Vice President and Investor Relations. ahead. go Please

Zack Moxcey

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

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

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

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

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

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

on results the GAAP difference and transaction of impacts the acquisition-related associated the with assets, financial website. release in quarter, adjusted results following campus. the our amortization presentation Transat between can appendix completed intangible the our of and of in and Reconciliations press investments; our restructuring-related third lastly, minority associated items: of found consist expenses For acquisition the with and this be

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

Neil Hunn

quarter forward We're for everyone this morning. and to Thank joining thanks to you you, sharing third our with call. looking results our Zach,

financial acquisition, highlighting recent our financial see year. our very call discuss to Also results Page second including through in we'll After walk review increased third balance capacity detail, Transact our highlights then sheet, a X, closing discuss our summary our our open performance, quarter flow we and our full most performance. everyone topics we'll I'll our and Then go today. the the through cash review the M&A our campus, questions. remarks, will strong turn greater of As we'll cover Jason then for your by for guidance

ahead go get and let's So started.

please. slide, Next

X As to we today's quarter QX. takeaways Page for turn expectation we and X, in again into the sequential growth are: revenue expect key another first, organic call an results solid heading delivered

business Second, purchase we the at acquisition, net completed a attractive very TransAct price. Campus attractive very a

be And relative on full deployment items the continue we our to well raising fourth, our we're year very to to positioned range. strategy. Third, end executing high of capital our

deeper XX%. Now XX%, takeaways. X We digging X% by organic a revenue by grew and bit revenue total key EBITDA into these by

cash basis. the free XX% Neptune than mechanical last quarter slightly in meter quarter's production flow better expectations our XX% and performed by a Operationally, grew we by in Importantly, TTM a on the as quarter, of challenges. result

completed the this high we're And TransAct also the see growth. quarter, last single-digits acquisition strong continue to area, of double-digit bookings Also importantly, we from up enterprise bookings growing quarter, momentum in software quarter's organic the in Campus. encouraged

guidance our the our for with Based to creation value in strong a shareholders Seaport end our which increasing is very discuss another integration high year TransAct of bit. combined margin full being yet XXXX well compelling the and enterprise Our is range. This opportunity we're are performance, business we'll underway. activities on debt

Transact outlook campus. increasing most growth recent XX% for our of acquisition, addition, to given In we're be addition the revenue plus our total

bookings without quarters, back-to-back organic see That not quarterly X% approximate organic although X% outlook maintaining do growth, market QX. for improve, sequentially growth just unexpected, we're bottom in question step NDI organic strong conditions, we enterprise growth If at the QX or to resolved our albeit given operational and our we quarters expect stabilizing returning organic Neptune momentum recognize we revenue to year. back issue freight growth said, and of bit, growth unsatisfied. Finally, a improving the back-to-back we posted

we're growth. behind a mostly reacceleration we're this confident our of us, seeing with So

we the M&A improve continues where large be on market, very to have pipeline highly to very finally, an And active that of opportunities. continue attractive a we one environment and

continue the be bullish quite We ability on front. to active to about be our M&A

as turn to that, over walk the you and results with So our as Jason, strong let year position. through quarterly Jason? financial can so well call you, our financial very full me

Jason Conley

Thanks, Neil, good and morning, everyone.

a and [indiscernible] X. Acquisitions by contributed was Revenue growth billion year. TransAct XX% prior X%. look Slide take at was Let's Campus organic and over led X% $X.XX and up

[indiscernible] Just area. low single-digit In new declines down high growth X% unpacking with the over sales. grew organic bit. single reiterate Nonrecurring growth by was revenue in led in digits, and revenue license Software, a recurring

Software, New the activity SaaS, value the revenue. lean on and recurring includes in of lifetime DET, growth customer higher area. a software growth while drag at temporary business ultimately creates for balance continues Network near-term nonrecurring to enterprise saw revenue mid-single-digit towards Link [indiscernible]. headwinds of The which X% segment slight In yielding

[indiscernible]. later, see some prior of Organic comp QX. Verathon freight was As at growth discuss in in will X% year stabilization we by and underpinned improvement Neil expect challenges at markets strength and NDI

XXXX challenges. quarter, had in we last customer As significant very created discussed program that comparison NDI year-to-date a

and production importantly, expect meter QX. mechanical Separately growth the resolved in Neptune we challenges its rapidly a However, in quarter. return to

over the seasonally annual and driven of note, period from payments EBITDA term above DEPS, contributed fees third at year, acquisition Of $X.XX, The of tuition annual was posted and of licenses. $X.XX is highest margin renewals in stub which the in by Transact to as XX.X%. the the $XXX range $XXX million guidance we was million. came our $X.XX EBITDA prior XX% quarter

strong Excluding Transact, over came margin Software beat from in our guidance our segment. performance Application

flow with was over flow. once in QX highest quarter Transact up of start fast cash year. free again to step cash ownership seasonally Turning this accretive $XXX We of for our off million, and to being business. ever a XX% period with prior cash free the had strong

world-class new execution thanks and businesses. note, software A a XX%, QX acquisitions, record. working percent have Of product to of tech finance family, job. chart our of as excluding over was Roper also net bottom-right cash laser-focused special flow a a revenue, capital X-year and returns across tremendous XX-month a on free cash provides teams cash simply period. negative The the view a our who flow trailing We great across growth, are

into at The XX%. The with mid-teens expect cash in the year-to-date the in Section is our flow strong of flow at XX% XXX we've flow to XXXX CAGR area. season renewal QX cash many that our software businesses the results from period adjust be the corresponding north effect We for cash compounded as XXXX, for of places revenue. margin QX, And we year. XX% of percentage free a in went

discuss now sheet. Turning our to balance Slide I'll X,

rate the X-, the quarter debt if a tenors quarter, partially net billion fund for trailing a we used Transact and a X- on This $X of revolver, proforma blended quarter $XXX XX-year bit of Xx we end acquisitions. and the X.X%. of at issued So the to was which pay million. market across of In and $X.XX leverage for yields billion of the down lower EBITDA entered has the balance and $X.X recent of billion the deal end bond

us deploy towards of and strong cash capacity billion forward, acquisitions. flow provides As we high-quality our leverage investment-grade to use $X with or move of more

and compelling Neil to with business. Seaboard I'll it With to its over Transact turn about talk end, combination the our that deal Neil?

Neil Hunn

Jason. Thanks,

the to acquisition our is turn to Transact most recent fantastic another review. campus Let's portfolio. addition Roper

business. million start a benefit We of paid the $XXX investment Let's tax for with highlights. $X.X the net billion

paid deliver about to Transact means we revenue $XXX $XXX next expect We EBITDA million and million XXx about EBITDA. of year, which of

business the a cash team. we criteria, adjusted this combined On report our customer passionate We our flow Software an Transact solutions, market, our accretive. year And a mission-critical, contribute debt stand-alone will acquisition this Transact software on leadership is expect be verticalized year. TransAct as in immediately next all competes and to to Seaboard segment. based is accretive year operates niche delivers skilled, asset-light long-standing led and by business next intimacy, meets model depths with basis, leader adjusted at breakeven Application to

company areas. what provider is software mission-critical purpose-built payments education about to a higher of Transact talk Let's and institutions integrated focused X does. the leading and in

related universities We itself quite long-term of on-campus to X% experience and Identity tuition of the is tailwind attractive combined required in the midst students. Management First, second, size to estimate working market the to growing generation market to $X.X to be in attract annum. and the of retain and next the range improve Campus X% in billion management. secular The the and per

integrating business Transact without As a combine solutions. university our leading of these business Seaboard campus its will Seaboard we're previously Transact. provider to creating mentioned,

area. in growth We of rate expect to high a the organic the single-digit be combined long-term business

underway, well has positive. initial and team plan XXXX leadership $XX of the go-forward synergy has customer The been cost is million announced, set been quite feedback the

a is As compelling you Transact for Roper highly opportunity value and can creation our see, shareholders.

let's Page X.X%. margins quarter. our points review Application grew to Revenue segment in and we were As by turn Software in grew and XX XX% basis the revenue XX.X% here margins by EBITDA organic total improved core XX, results.

would to share a Before getting into like seeing macro we're trends specific business segment. across the details, I few this

quarter in continue in the to performance bookings growth the in we see organic area following First, enterprise double-digit QX. growing improving HSD

sluggishness quarter this Importantly, first be XXXX saw waning. appears the class we during the customer year enterprise to and of

single-digit in this the area in reoccurring the continue strong revenue we see in to growth Finally, recurring and high growing in quarter. segment

we'll commentary, with patterns. specific Turning to business start our unit

Our had the focused of and law incredibly on software market firms. great in business quarter. the continues another large perform Aderant needs well to

Gen have development Over the in past particular, with features. few quarters, Aderant's product velocity improved highlighted we and AI-powered

in already expanded contracting this is business contracting, customer ongoing including our their to markets very improved reminder, which see. Gen activity Deltek, momentum, enterprise within in quarter, a quarter In Deltek their their base. engineering AI nice existing well. and continued their encouraging continued to progress class software the momentum customer strong expanded is as and in and and new government Now particular, customer functionality. adding strong government as cloud-based Deltec new serving architecture, innovation bookings the software adding construction Also, embedded was activity products and additions

continues fixed is on tax with heavy renewal to to in experience, Frontline PowerPlan, had our to Matt operating a Of their nicely has new their software improving financial job Joe and serving tremendous CEO. the done announce upsell, coloring customer job note, as financial and perform X flow. software and X excited his and continues and activity. high seasonally Frontline's strong cash velocity planning impress or improving innovation PowerPlan activity delivered industries their we're team [indiscernible] years cross-sell excellent by last Great Atlanta. and asset results. over that

helm may at promoted ConstructConnect. wonderful we a the the did is Buck the having then has excited Roper though assume across job Brody, Deltek's to been on years. a mostly ConstructConnect's at the be some Roper. CEO one the Matt to As and Roper CFO as of about Frontline. Also first joined go-to promoted last recall, growth-oriented the within of past certainly of ConstructConnect ecosystem, was not market over we're note, leader, you role. the Buck This of CFO, we'll leader Matt this and CEO time promote at leaders as XX

remain the for continue about We quite future to bullish frontline.

Our growth. businesses excellent delivered by innovation healthcare in Strata and were data and also IT led strong the quarter

Finally, to well. Procare continues execute

capabilities part deal of as nature its generation leadership. to tied our to market the faster leader go-to-market growth well processes as as execution portfolio, or from Procare evolving our is of Importantly, to working maturing governance improve lead

here, We seeing we're although days. early really it's like what

see X% the impact the turn of to relates XX. Freight with segment the growth. our for quarter businesses it Network on experience we was Organic strikes. final the As in to and Matching Software year, our through from we Page and recent impacted organic revenue continue Please fact the expect to grew guidance quarter in actors to rider mid-single-digit and the the pressure foundry by work revenue

area, grew mid-singles at Excluding Matching group demonstrates of underlying quality XX.X%. which this the the and continue be of businesses. our to segment businesses Freight foundry, margins in strong EBITDA the

impact said, dig as continuing market market Let's we from DAT for further to expected adverse the on conditions see both start to slightly Loan, the of into the and brokers. signs which due businesses, freight businesses. That declined their Freight Matching challenging carriers and details stabilization and continue that

softer this philosophy. period, development DAT to During invest accelerate continues to new product

postproduction meaningfully this ML-powered our high-quality the software visual foundry, production the continued Foundry to quarter, effects. for and roll turn let's out innovative updates entertainment business. to and enhancing creative functionality product media process Now

phase, expected. pipelines which impacts in Given tight customers we creative We to continued XXXX. post-production strikes, recent the expect hangover into strikes Foundry from sometime continue industry through to conditions during the declined the be to to matriculate quarter related carry as the economic year the the the expect until as next Foundry's navigate now to

of execution with organically continued ConstructConnect As grew this mid-singles quarter mentioned, results solid improved its In and solid in of the particular, financial across march bookings portfolio. the balance this momentum. segment

to market takeoff In lead addition, their with continues the solutions. estimating ConstructConnect power Gen AI and

Finally, from improved performed by led our businesses health solutions senior benefited occupancy. and care at our further SoftWriters and well MHA, alternate-site software SHP, care

of single-digit to but final but revenue continue conditions. area Turning quarter improve to low a organic the expect market year, stable the bit, the experience remain need in we to freight as we

Now our please total quarter, performing the rapidly and turn and and meter segment's in We'll Page better grew at here slightly issue X% resolved results. TEP XX EBITDA Neptune. came Neptune review our than margins anticipated. start let's in within basis, XX.X%. on production with to organic mechanical we Revenue

to on was commitments. Neptune challenge, manufacturing their all bespoke short-term the during customer able Importantly, deliver

solid positioning both see for foreseeable well for to the very demand continues static Neptune Neptune addition, mechanical meters and future. In

turn Verathon note, offerings. Verathon solid across we'll for that and to exceptionally BFlex growth bronchoscopes. pleased market the perform particular to to U.S. Of our continues single-use with Verathon. leader report GlideScope share well is we're Next, in the product

Five as the that by OEM strong based MDI led program that we comp. had done. said, our belief team, declined to activity Northern difficult strong That we a not share timing very claimed ago, in we now and quarter incumbent Verathon we order Digital, with job and is win market GlideScope position, have this the right to our on high given in Great the remained position a leadership years market quarter. entered Verathon a expected customer

declined Finally, year [indiscernible] against each difficult comps. prior

businesses last year. these chain recovering As reminder, from a started supply challenges

operationally program timing fourth turn NDI's XX. to Page improve quarter, For the to Neptune and growth we high expect With track back given that, to began single-digit customer on to normalize. is please

performance our growth outlook the strong our X% the fourth of on let's to addition application year be and Cmpus, of year north growth our outlook. Based and year and full margin remain we're guidance increasing in to discuss area. Transat Now we full expect review XXXX XX%, quarter segment total organic consistent

the expect we're In end $X.XX the and in death $XX.XX, raising range an to for of our of the full be be previous at guidance midpoint. increase year. addition, our to neutral of high Please range, we full Transact the $XX.XX year note,

in the Our tax XX% guidance continues assume to a to XX% effective range. full year rate

note, expect synergy Please $X.XX the Transact we meaningfully quarter, in to about to Also, fourth a DEPS $X.XX be our acquisition be impact the For reminder, between as plan quarter. dilutive $X.XX. adjusted will XXXX. and of our newest the million $XX skews

Page up to us and we then which turn with open questions. please we'll the same with key takeaways Now your XX, for it conclude started. We'll

of heading acceleration a into sequential delivered an results we QX. expect solid growth in and First, quarter organic revenue financial

we the completed Second, of acquisition commenced Campus the Seaboard. and with integration Transact

strategy. well outlook our And deployment to year. increasing we positioned are the we're Third, capital our for full fairly finally, relative

XX%. increasing quarter, delivered the revenue For X% revenue we while total EBITDA growth organic XX% our and

enterprise software to our ARR single-digit in growth. see high and we continue bookings area Of grew note, a double-digit

XX% impressive and quarter cash a in flow on TTM Importantly, the was XX% basis. growing free

leading compelling to we that execution payments most a creates The completed with combination the is campus helps low, of synergy present already actions, of shareholder issue risk a quite more acquisition has solve and a Seaboard The been the return. leading attractive Campus. Transact Next, integrated making universities which software student very business experience compelling. here cost of

year X% outlook total maintaining revenue for XX% outlook. north Next, and we're increasing growth our full be our to organic revenue of approximate

of our the we're addition, outlook high to full year prior our In debt increasing guidance. end

deployment. over for to continue very of with strong capital to billion $X markets be financial M&A The we active. continue capacity maintain a Finally, position

acquisition our part pursue pipeline excited robust to our with a our of quite unbiased to We disciplined we're attractive this and We opportunities approach. bullish that strategy. of about remain have ability execute

Roper We if time Now so a the you as of to can we'd flip we structurally do organic businesses portfolio oriented underlying quality. our by on and final sustained and vertically compounding we decentralized we businesses Roper, long-term that turn over is to businesses. operate customer operating flow intimacy. Culture our and win and a everyone business environment, at flywheel, longer strategic your simple. improved is compete the what questions, company cash growth to market-leading like a our of and remind compound have Once application-specific could rates slide, part based

Finally, flow wheel. run compounding we a and process-driven deployment that centralized strategy a cash disciplined great capital finding manage our focuses manner deliberate on in to next business [indiscernible] the

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

questions. support operator. for your like and ahead, that, interest go you continued the we'd With thank for Please open to and floor your

Operator

[Operator Dray first Deane from RBC. Instructions] Your question comes with

Deane Dray

can around application that Campus Transact stand-alone business is software the being and strategy clustered preferring never siloed businesses the And start right way. businesses. historically, the I we with really SeaBoard with Maybe more know Roper combined

You done never synergy I've coming this back estimate office talked you've insurance about of purchasing, transaction out in it an before, -- You've acquisition? is seen scale, of more time. opportunistic Does some think a and medical combined this long customers. I business, done a don't a you've cost

we've there this areas? here, look before, attractive more and but to just seen subtle synergies this is combined of these there. growth Maybe obvious. the at blocks look is So willingness out difference start being a But maybe the

Neil Hunn

answer is I talk the yes. that, The about appreciate to opportunity Deane. short

to So and what back there we bit ago, capital strategy businesses faster-growing we focus a months think, a are leaders. more, [indiscernible] Investor on then our even I going our Day to outlined, multiactivity call modest of evolution a bit so that XX also or deployment

very Strata, with was that our bought leader, if business done since to Transact. acquisitions was combined done, maturing our archetype we've look growing faster so first And at and We which you is slightly that Trasact. it [indiscernible] similar then, ProCare, we've since

think be done acquisitions, back I we've of out platforms to you XXXX, and XX-ish a If go that. handful of there'll

bolt-ons, So or recent driving pencil once we bolt-on right think bolt-ons fair for for would are and driving number the a turns business have -- that increases close adjacencies that organic of we leaned I the on a have the to that into buy to the growth ours win say the organic. likelihood accelerated to is high

and of development that out of are deployment a partnering the it's We've the doing in has. very got that the folks businesses Jana part we've focused on our strategy yes, our team capital with work much So lot tooled marketplace.

yes, So we've execution started intent, strategic it's a the pathway. and

Deane Dray

hear. you guys X%. and free That's maybe XX% putting Jason, on compounding got I And spotlight it and up with flywheel DEPS because the flow what for quarter like appreciate great flow you this the up free cash cash to that's seems

talk and any to sort cash contribution just that this a in there about Frontline So typically that was seasonal higher spread flow third quarter, contribution of the free quarter. has

there? dynamics any Just

Jason Conley

in maybe of So the had just QX It's, a years mentioned, is mean, flow a Frontline I seasonally from it's we as renewal I and QX and now of mean, us. the couple our But our strongest definitely a through is points now strong ago we QX have, since I little tremendous the Transact, couple of then. execution aside quarter. cash Transact the quarter. bit, strongest for quarter. acquired growth with addition [indiscernible] of which seasons,

I to be businesses. So almost say as QX well. just expected across the board would of for improved our is number a strong DSO And

I debt. outsized to old-fashioned growth drove is that what good execution, relative that just so And think,

Operator

Your next Brent Jefferies. from comes question with Thill

Brent Thill

challenges turning in Jason, and to that if And like headwinds, we're of you're just And what why macro the tone think you're seem Neil, through of reasons some that just you in dig in you seeing a recovery? the what then confident of bit. of curious you if just just the that you mentioned some are can buyers? we some I'm they're some for confident these saw? into -- speak Neptune the maybe how can

Neil Hunn

Sure.

the I'll the second So first start take one, take Jason, to I'll one.

really everybody. matter and the So a on hard do. cyclicality to the handful of last be lot over what worked of out We [indiscernible] we of years

we we markets end sell we serve, there's there's mission about insurance, what think education, contracting, and care, critical you to deliver what and is software. health legal If

turned off not subscription-oriented versus on the macro. And then of most pricing on So is transactional. based we're generally our

but muting really would So there's not immune measured sort of last it. in about highlight of we've X to of the levels since the regard. that been But talking that a year. I beginning couple we macro, we're

it, the down think First and slowed slowdown. quarters rates X we're the economic where of the some in and interest that psychology just ago, about activity the talking extent, that software. across this was I buying it It enterprise time modern the even was economic to slowdown most call anticipated history

of last very double-digit activity last based cautiously this of single-digit end Pipelines quarter enterprise growth in couple optimistic the quarters year. software trending quarter. the growth. into look We're in the the on area high bookings area the of robust

to -- execute those we need pipelines. So that

So we're encouraged by that.

certainly for on tonnage factor the macro and carrier the loosely of the headline the but macro the roads. number transportation of Loadlink takes carriers our follows and the second amount sides with of over both market D&T subscription-oriented that the is that broker, flows businesses. the us The the They're both network, in

compared as that come negative pressure actually probably carriers XX weeks in year. And is to low weeks to that. of it's so the normalized been of in We've which the of last more -- network, to brokerage just as on put down, so prior XX are number seen there's could handful year, tonnage that last has the participants the

So we're stabilizing seeing very much freight in the market. it

be have would the infected that those macros Jason? So business. our

Jason Conley

talk Neptune a Yes. And to just little bit. about

we static recall, line. ultrasonic the the you stood up if quarter, last So line or second

production. in some meter And so we constraints had our mechanical

That's well. for And to some production fourth that and trends creating we the remedied. implemented. corrective root machines repermission like trends through causes of would plastic the had quarter on We as issues yield the and molding some beyond. September some [indiscernible] so the we're form been saw We of output identifying constraints report the how as actions

what based just we getting good it's about feel QX saw we the through and we So issue, production teams. good so this on meter Demand is really confidence feel it. in the and there, really mechanical strong

Neil Hunn

the remarks, commitment. The thing in a Jason as to prepared on to able said deliver add on I customer is I'd Neptune XXX% Neptune, only

-- -- root this improve shop getting continue cause. again going get no was a job floor and great the further and gain to the even [indiscernible] there's So on and team issue did Kaiser there. just to

Operator

Your next Mitchell from question comes Julian with Barclays.

Julian Mitchell

of as up macro to to it network just context Maybe the pertains on software sort follow the specifically. one

As may of you much this growth about we're gauge thinking in out that sort of not beyond to year thinking recovery the strikes at you're software, ongoing how see aggregate sort quarter slope network next cautioned trying Foundry because of the hangover.

of you businesses Just just and Match some portion, maybe wondered could Loadlink on what think you sideways it's frame Foundry much it sort we sequentially sort down Do Freight time? moving in expectation XXXX? just how and are that the DAT as plausible now, is? And see the of keep for

Unknown Executive

take part. I'll So the first

and it work Loadlink, to changed intention So be that on was DAT our we choice call stabilizing. this

tonnage anything it be are volumes to this load into modest assumed network position the participation for return we that other until going in confidence plan the next stabilized going just see pathway much packaging over improvement year price. of a plan very anticipate said, That high a to to road a and have with stabilized So no through -- DAT to growth carrier levels network. -- We in market. or from was are some

heading month. And modest so that into our we'll AOP a that will next some of said, growth like confidence year occur pretty at next degree DAT sections we have, I high have

to Foundry, to it's the employment waiting the And post-production return its for historical just on then levels.

we It's below the pipeline, levels employment pre-pandemic we're or time some XXXX. to think pretty need I that the matriculate and so I XX% just got be through should content in strike, will is just production, of post about being produced. say,

a definitely taken than the few So longer quarters Jason? year. earlier in anticipated it's we

Jason Conley

n Yes.

is low Matches for Freight So down singles sort year. of this

momentum Foundry, the think think fourth us. and in is been down that's the Neil of it's said, as we and and And dependent for digits year. will start market for the consistent to QX for this the definitely into is pacing been on that quarter NS next that up, trend year double just pretty then On low year, point sort there. general, throughout the I

the a expected more half So in said, of as But Neil we little bit taken a has recovery a second longer. bit this of it year. little of

trends -- think for of year, So just remind to the year. we as item first we sort about MHA this quarter, called onetime next you, out think had I the we an

that we expect beyond this segment. in year steady the growth So that, for

Julian Mitchell

my switching just to follow-up, margins then maybe And EBITDA back the TEP. at

have year-on-year those a sort quarters. been So for few down of

moving You've issues, production the mentioned efficiency chain clearly, sort supply of around.

we ahead maybe expansion year-on-year coming As at to can the margins of return kind that what's the quarters? confidence look TEP, in

Unknown Executive

and right. been and we year, You're, businesses liberation second a some double-digit us. investing there just because med I year, we're our mean, product always for our chain had bit consistent big last the down if you a we little obviously we're businesses. third This for recall, quarter, had product grower bit. NDI for -- supply down, had a it's little of and negative mix, growth

continuing EBITDA broadly, So going to just we're thinking the But margin. I invest MDI. year, think in flat we're for be to

And back the up in so quarter. fourth it inflect should

Operator

Terry next with Securities. Truist Your Tillman comes question from

Terrell Tillman

is question software primary My enterprise bookings. the Zach. actually and Jason Neil, on

single don't said you could double you digits, I share in from terms budget of think I what of high digits. that. some for up flush what there kind know I is you're assume of looking

the So activates some if to follow-up. on a revenue? next potentially or just that either of depending half, comment how up, bookings there's an more And year think on just importantly, I the you that? half are first second if have in inflection a then you picking can Or make do

Neil Hunn

It's fourth not To quarter. necessarily a probably you're behavior. Yes. right. budget provide some color more just quarter customer The there, mean, I is flush. I think our biggest Terry. It's typically

obviously have plays last The out. been of we're that keen how strong. So to couple see quarters

little I bit think of just a color.

Deltek Enterprise that little mentioned a [indiscernible] better. You got bit

little happened from of to bit the a the strong, was really delta. was about what QX, So QX if think you in Verathon Also, space. that specifically carrier

We expansions, them. for a has carriers good focus broker an area is that have been also but been

we've as with see there. some wins new but of [indiscernible] strong, has expansion customers new both So Cloud then then really some balance good logo existing to mentioned, wins good Sierra the see and products. And to logo it's really of been their

to important, to new the win And the with I year to plays that in what foreign good of revenue, matriculate about is the it's going of last So part and that couple we're as into into in mentioned, market how then -- how they're see will logos. we in continuing the but terms with saw next that think of be quarters. we encouraged sort when

Jason Conley

Yes.

We And are will which yes, I timing we're and revenue. that -- lives. depends customer next frames watching into definitely go of obviously, enterprise bookings that we mean, it's carefully. implementation continue But year, to trend matriculate momentum the a on have time

Terrell Tillman

secondary you get to commentary of of level and hear. good you you moves my question, earlier commented into talent That's kind management business kind And make. just Neil, when

changes? Frontline double-click about that, you some maybe even idea kind what of well, just those drove some I ProCare leadership talked think the and of better a you they doing or and expect and changes I with there, could little what guess into Frontline hey, go-to-market is I and bit doing be could think kind you of but ProCare they're to

Neil Hunn

Sure.

ProCare. X are things. there different I'll start So with

go-to-market improve process to the opportunity modernize diligence whatever So pick, identified there's that or our you ProCare, we to choice want whoever in an function.

the company. made Obviously, diligence a in that. And for with go-to-market an that with promote internal change leadership finding the a team ProCare, from the ProCare, leadership of there. ownership, what's signed was and at happening those months they lever was with change within couple by leadership so value We like creation which within shared the of agreed we way,

calls opportunities, rates angle, and all some underlying outbound you starting we're Then a closures, yield some call they can attach there's staff gain attacking scripts happening. early around -- encouragement, And and between a inbound, was There's business the the between is but actually days which there's generation to development way opportunity. starting it's fruit. that very start to upselling, compensation

team attached attacked a value lever of it we again, finding the was there diligence where pretty to a quickly. creation thought So sort it and

typically different. it's So

he to our indicated So leader wanted retired existing retire. or

terrific opportunity much job in organization was as job a Deltek, as Roper-style an way and -- that, [indiscernible] a I we go-to-market constructing hired his is growth-oriented did had we wonderful business of So then history leader he's very of mentioned, opportunity that the long leader. a a the just very with, have first there, run, terms the in a came did with CEO run a

that something of then the became [indiscernible] fact And growth so [indiscernible] assets, or Frontline. is is CFO the CFO given want like it's then of And the mean, of of X the growth of and days. job early that months ConstructConnect our the into became Frontline at one a ConstructConnect. we the I matter attractive more that he's And there. CEO leader very

in risk price hire leader businesses. business promote perspective, a FP&A able larger inside rotate from we're versus So essentially is an Roper to the outside the one of our and sort leaders of CEO,

organization win-win individuals. it's and for the So a

Operator

Scott Your Davis next question comes from with Research. Melius

Scott Davis

there. But incrementally? pretty Wanted everybody much harder just of there the of to there? more of the get software, -- just just years, kind do see you in little lot back be in for guys price not we normal more to bit to particularly a high-level obviously, any into back was normal out couple to have example, what Are you you we a of a high-level price but -- found but XXXX, question, would last of picture, price increase kind walk cadence, when

Neil Hunn

seem as few a question I -- to I well. ago price I asking would recall years a would say

[indiscernible]. for on a we had So in us, have always pricing software, mechanism the

or a retention. we had general percent As matter, so gross XX

offset going do percent. or We're the level and with algorithm, feature in support majority we So expectation we we R&D it's what so you view, get itself it's each It's of in cross-sell we're the in have product of of vast just going that. price. to point unit the customers, price business to enterprise, at trip the with obviously top from that there X net with the range efforts new the blended on that across a new the and in net from retention X.XX-ish to

in ago. reverting get muscle years at and understood say, get with and in muscle would so obviously so we few have well -- an just and outsized didn't example, to I is they would better that normal. software very We that built built. it's gotten better, PowerPlan, over we've the But pricing it's last the I past, say That, like years did a that

businesses, take new different. launch I DEPS a little price would the they the On a when product. businesses say, that's Most would of

a to [indiscernible] there's regular opportunity or year across. more Now XX way every so just inflationary the or normalized of months pass

Unknown Executive

unpacking part think, all we've it' lot criteria what reviews [indiscernible] some confidence each and point typically, helpful because for been of about the just that's of detailed customer like. or you're and of key sort plan thinks at in been a Neil's time. Yes, done just about proposition, well. value businesses, customer hospitals that's a purchasing with our helped more it's the new really versus by rhythm level them provided into products for on software, the the and A price long But -- insight of strategic the bound contracts some that of and as understand I what is that some

Scott Davis

innovation? I generative view more in because a come opposite think is this the And and time easier your guys just do does products. said a about you've spend got Okay. that's a ago. the but lot can and of you your and chance shorter? product of But relates on your the to there's around But now already people in couple Yes, shorten software market the launching slide debate it's How on AI consistent development of just to AI, with essentially that? as sense. the you decks AI, your it, certainly with are it kind barrier can a makes you cycles you and more that dig lot to product with it of years because wonder have raise Or that somewhat time generative relationship lower-priced into just a entry customer to what

Neil Hunn

are you is starting up all, mean I I We mean, new you I the will. just I think the Roper, the but is from in the say, have is, whether real would remind very think you generate thing. hype. everybody doing, it's do I side I raises sort the to than sort form much naturally existing high X slowing, it's is it think very would stuff. entry an -- not barrier to -- it things this in -- cases, are to of accelerator right? of that I being And the trough REIT whole reality positions catch use think the cases a AI, level, internal if with definitely think to and we others we're software number well, the regards that X highest is the a only productivity about what externally is while of the have first you think it [indiscernible] to treated., but a questions. advancing I our much businesses if it's is of the or product I these we're mean, or first. use that customer-facing market of better dissolution,

The first [indiscernible] have to is elements you need questions.

not question, tools the question need the that a very more compliant very a services, is Nuance very know what You legal business shine. create law to does A right? question the right? is for for backbone need the question that firm specific the the simple how we the question is for project-based create really, -- It's are.Giving create And tools we have really a bill? what technologies, but large where specific ask. And so It's to you the do answering, ERP law watch bill how also have to billing. data very, the The the is generative to you generative you firms, example, how question, professional-based then bespoke better professional is a

matters have the really you in unless regard. So that incumbency

any from have develop point the software data. but data questions you it's will. view, to generative of sort than fast about the Obviously, generally of -- we the ask, the the verticalized So or and incumbency and and software startup the not a of faster to we incumbency can't if businesses as and specific software can build which

Operator

comes Your JPMorgan. with Steve from next question Tusa

C. Stephen Tusa

following year. NSS Just the on up question on -- business the on for Julian's next

for first So that accelerating? mid-single-digit in that range much next which be headwind able is will that then a MHA And And into of are kind businesses year? quarter? how the to business get benefit of you

Neil Hunn

I XXXX we're the pretty guidance any I we fact normalized think, offer in to short even as the Steve, like from seeing across and which we want think implying bookings I broadly, enterprise they year year. the normalized, What enterprise stop say, in just would next to grow. that a

a seen You've QX. reacceleration heading into

trends but in there sort just think issuing of QX XX%, stop the quarter. want sort to those carry I next we guidance to We of expect

Unknown Executive

That's right.

in of that new our think QX. [indiscernible] MHA, couple call a drag of can I MHA we points

C. Stephen Tusa

Got it.

in How were Okay. than the seasonality? given QX? the Maybe is been it just seasonally, kind lastly of seasonally much behave cash. And obviously, Or past on there in but you flat basically like the different then up. with definitely now down in just to here seasonality of Frontline? does unusual not Last down, because it's that result steps new QX? really it something by strong year, kind the it's us was help

Neil Hunn

Yes. our QX is used and strongest. QX I to said, be our now, like strongest

the the in will in. Transact we came we -- be as fourth increase same got I did won't see Obviously, the third. quite think it we quarter --

obviously well. collections So as was strongest the quarter helpful, that but that's

much QX it as as but quarter. So up not the will fourth be in

C. Stephen Tusa

Got it.

just didn't the one Any Vertafore. slides. see I it Sorry, there? more, in updates

Neil Hunn

had prepared Vertafore think couple in -- had very the very, of I quarter. they his remarks, nice a Jason in mentioned wins

customer XX feature will saves insurance had sort You can't to. quite have yet, about And And them for really called of book. that a the we plan. but BenefitPoint, the they an medical health product impactful managing a able very talk is which benefit like release. the Also, -- per product per product minutes automation they leading be

of hours bit. worked our release. They on of is huge productivity this customers. It's is this a a to tens that quite of for were of So thousands sort this given

in development view, product happening steady as wins and nice goes. point a the what's exciting like of new So of it couple

Operator

Joe comes next with Your from Cowen. question TD Giordano

Joseph Giordano

been So the is production hear to have on fixed. Neptune, good issues

are a really sector everyone backlogs a for for like Just curious, guess, you from hearing orders and multiyear Are we've incoming business? high. of in mix, been getting like I new Neptune? kind like order flow Like that about I in in any some sense that period like know standpoint of had the huge change booking patterns almost

Neil Hunn

it's you what and I would described. say, what we very much expect just

X-week XX order the to of XX volume, pre-pandemic, lead [indiscernible]. is months had duration our was number or gapped order business. much mean this weeks. very times a -- to or backlog and book out if the pandemic, XX lead COVID, you we We that peak time activity not. will, the maybe the -- So order business. during orders But XX I the now got order a during

-- So a just of booking we're whatever booking out. months it's instead they're looking -- X or out, X are year customers -- not a

and order competitive again nothing are in duration is that That nothing in is all shipped an that as being expected. terms purposes, to healthy. But So of coming for account-by-account the meters from - number basis.

Joseph Giordano

sense. makes That Yes.

call election nervous one Just about curious out get way across or them you of other? the if from that like anything one like excited portfolio, of is guess talk the I when maybe leaders, outcome, -- excited like or just any the about the if I of like in to think you way or a super the kind businesses, potential any are Deltek spree spending your Like government. inflationary the super another you

Neil Hunn

negative and others by As to impacted, the spends, either positively a to determines always the administration matter, I general the remind spend. political of say, we're I you Delta, I'd the administration is want that mean, very nature really and government no. not relative

Obama So education, was back in the defense, if you area health go way care. Bush was

spend change is our flow just contracts capabilities of the government spending flow positioned So when has federal where the going. the

based target, business understood change stage relatively and at their the would 'XX, And appropriations election. actually this will, is to relatively X-meter we're the so starting say think aren't well see least for going that's on contracting are to activity you well just the of little I pretty some 'XX bit, government why is. a for starting fall what the if I enterprise That's understood. to at

Operator

next comes Joe Your with Ritchie Sachs. from question Goldman

Joseph Ritchie

high ambitions more there think going over like first of ambitions have as the Do period. in these you a Or by to is faster Neil, at the forward? to my bit help type achieve term, little kind maybe have subtraction maybe of some you question, number a single clip group longer addition just portfolio of you portfolio the grow place? organic you So longer-term a digit right the

Neil Hunn

at approach No was mean, the like, time, a right? single-digit I What high portfolio There's business, it's think sticky there's reached our it for tends growth. we like relative our organic growth growth in to be have maybe X business ago, it cited Verathon now, company I'll low and no downside for here we full better. a has great about higher some we growth potential a the there we teens, of -- is that quite business opportunity some think, And happen -- years confidence time. its again. we year. Day, think sustainably for we low cite inside I every X its do quite Investor takes that doesn't as sustainable, or -- business Roper to our for and us, of it organic it to example incepts

build strategy to that. office, [indiscernible] the It the in seed to get the strategy takes improvement. across the and X takes culture unfortunately, right, -- it to enable the years deeply talent for portfolio time We're X or

slightly And question in growth. high towards definitely the I traction, some we're Seaboard, growth to of in Transact and And gaining is, higher being I like definitely deploy -- organic want we so teens. X able singles; to today as as our but businesses; we tilting think definitely our we're think capital, odds ProCare first of the terms in mentioned, improve addition,

So of up portfolio. little mix there's a bit over to the of in be going terms time

Joseph Ritchie

recognize sense. see net pause maybe strong. Xx still up makes leverage to it. That that now next following X yourself to you bit activity is M&A you doing the your that with call a last start of then in the Do point, next a see pipeline Got lot it, I to around any little near And just could get Or as delever X transactions the on -- in opportunistic? leverage, expect more term, you in and the months?

Neil Hunn

plus of XX Yes. lots we've We're this the of we got the sponsors world, Jason what's over sit I next active sell. of the one M&A capacity market. largest course market. it very mean the CNBC so. earlier months or $X about billion very European a It's alluded, [indiscernible] -- on There's asked sell, sellers, M&A and of as in as in week attractive sponsors the sell, today

[indiscernible] of lot a So matters LP pressure there's a lot.

X. or here that are essentially there's years' worth so And X of or pressing year deals next X

be And active very attractive a that. market, to so and we it's plan in

Operator

Glynn comes Oppenheimer. question with Your from Christopher

Christopher Glynn

to was out ItI the also dynamics ask about deep there. going

supply the side. answered You

side, that the diluted very On where per to seeing is deal? activity buyer demand still you're favorable

Neil Hunn

ultimately competitive out I that Yes, basis. opportunities M&A quasi In we think or facts. those a would say terms we would implementing recall the per more the are a time. proprietary proprietary call are our and mean, Transact know. I I basis, It's the to on that's teams did hard intensity proprietary of engaged some I deal deal in it's on -- so I But can question. that quite

we're to little are with think I going opportunities the to that to pipeline. be on many bit coming so speculate a

be might that an [indiscernible] I to little competitive lead all bit which a lower little discerning absolute processes, hard to early but think to a going know intensity, case. more be to

Christopher Glynn

in gating a increased what's 'XX? lot in process. of projects, compliance terms Deltek the and mega letting or platforms general are for that one stimulus Are seeing those of that? of and the exposure, then And Okay. And GovCon implication hurdles the in you momentum any

Neil Hunn

what of about especially the the slow on green been would in to would enterprise refer on, the to quarters last government for class. talking I go the the uncertainty, we're it the or of has on just based X X before the quarter X the uncertainty -- I back relative, shoots here government. some spending, based say we slowish We saw quarters about X operation

exact of that's again larger the The starting our that specific might things, are some customers of it of other underpinnings Deltek. Some in be of to of but be drivers, not purview. acquisitive be infrastructure, the might some

Operator

session. question-and-answer our concludes This

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

Zack Moxcey

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

Operator

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

may disconnect. You now

Roper (ROP) 23 Oct 242024 Q3 Earnings call transcript