ROP - Earnings call transcript Q4 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 Zack Moxcey, Vice President, Investor Relations. ahead. go Please

Zack Moxcey

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

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

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

have available prepared And to are on slides which We turn to accompany website. through also call, today's our now are please X. and if you the webcast Page available

statement. safe begin our We with harbor

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

the today's now listen to please You to call Page turn And should of X. in that information. context

non-GAAP results, Today, operations we our discuss basis. will an primarily and continuing adjusted on

quarter, financial transaction-related settlement release consist assets, of appendix the Reconciliations For the litigation items: of XXXX and associated related presentation on our matter, this investments. of results the our with and and minority can completed lastly, in a PowerPlan found intangible the following acquisition-related charge the results GAAP be fourth impact press acquisitions, of to amortization in associated website. the adjusted our with expenses our between difference

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

Neil Hunn

forward to and fourth to everyone you for Thank our full this you, We're with quarter joining thanks our Zack, looking morning. call. sharing year results and

the We'll to highlighting performance. detail, We'll highlights our to the Then you'll see including review greater and flow our start quarter and discuss capacity year performance. strong our very then XXXX topics turn discuss impressive closing fourth operating and questions. we XXXX remarks, cover plan we guidance. for and through sheet, we'll QX go introduce open growth your in and full segment and X, After results by financial cash call up balance our M&A Page our As our today. we'll

let's started. So get and go ahead

Next slide, please.

we As today's for want takeaways highlight Page X key X, the to we to call. turn

cash our our compounding capability. and flow growth again once First, consistent demonstrating was strong, durable

Second, firepower we entered at with third, when of we over the billion XXXX M&A acquisition improving time have becoming are And a momentum. markets more $X attractive. increasingly now

which growth towards ambitions. example and Transact relates billion higher in market-leading capability. and Campus. acquisitions how it XX% higher Now to was software another our grew our revenue compounding the XXXX was as year, not our flow our criteria only balanced XXXX meet of our but deployed nicely of historical between also and works. headlined We Procare cash $X.X organic contributions, model meets businesses of cohort acquisitions note, our by Of all return vertical and inorganic

long history cash flow with As flow for year XX% XX%, in time margins of grew billion we $X cash history, of another year, our topping the in our a result, first free for free the cash great compounding. flow

through excited we to the to we're XXXX, we're talk As momentum look experiencing. positive

First, businesses. our across mission-critical for we're demand solutions seeing accelerating our broadly

expansion This accelerated, base high enterprise supports a of recurring ending bookings the Specifically, for growth high area revenues. and $X.X high the and reoccurring in in area retention combined bookings continued and our net billion teens throughout XXXX, QX. gross consistently and singles with momentum, software growth

organic of Given between in XX% X% guide to to $XX.XX initiating range, revenue with be and our north total this, X% XXXX DEPS revenue with growth the we're adjusted $XX.

our greatly benefit shareholders disciplined our company front, deployment year. our capital On this will and the approach

poised and for current year, later. and meeting forward we is firepower. week. more particularly team, the backdrop the given of that important, this years activity levels next This M&A of M&A of available Great high the leadership is deal on look now of over our have seeing Specifically, next to at market, $X over billion couple one you

everyone we'll the ask March long-term to discuss Investor turn to growth components like concluded of algorithm. with first In you X, long-term where Page here as see our we our growth flow Day the to of I'd cash mid-teens ever our 'XX, on algorithm, left.

revenue right compare the leverage adding core margin our on flow you'll This cash line all we're namely points 'XX this, yields posting deployment performance our note our growth of in As basis and growth. right-hand capability. XXX XX% XX% to side growth, strategy, with through capital you XX%

quite good consistently solid Importantly, revenue similar was XXXX's XX% growth, cash flow growth. and with performance operating leverage

and We And our consistent algorithm offense. Namely, capital execute driving deploying growth. towards leveraged best of we and improving ideas first, threat organic by that consistently execute upon. running second, the the levels cultivate dual enterprises a

and several how we short, only asset intensity. this, quality our a was do In strong our and [indiscernible] year across is we quite works. the XXXX grow, have we but heading of ratio no revenue dimensions, momentum not recurring of is the growth, as including and importantly, Importantly, high, level our portfolio model where we our enterprise 'XX. improve exception, this into underlying

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

Jason Conley

Neil. Thanks,

at through, X% under our an QX highest solid being turn Transact Page the quarter of excellent a us going is at We billion. Acquisitions bringing to with as gains $X.X sequential to year a full finish of had contributed quarter to XXXX, XX%, along Procare. Let's with realized revenue X. just

slightly our line shortly. with X% revenue and TEP coming discuss grew Organic with segments our I'll software segment outperforming as in expectations,

forward. within actions, quarter targeted our XX.X% was going over revenue. $XXX of in our restructuring they which down note, the year of from businesses better segment, acquisitions, basis EBITDA XX% AS opportunistic of Of to will position these some software and margin, excludes XXXX represented million absorbed $X impact compared the businesses, was took our and year. prior and mainly which Core million of EBITDA points fourth XX prior which

was our range $X.XX guidance the of restructuring. despite to associated $X.XX of the costs with above DEPS $X.XX

So all in, good quarter. a very

XX% QX performance. X% XX% Application I'll organic segment Software Now acquisitions I'll with from growth. and cover from Page briefly flip posted revenue contribution to X, growth, our an where

recurring X% grew reoccurring customers SaaS growth and from to revenue year double-digit in organic by as quarter the the move and on-premise the led Importantly, cloud.

EBITDA into margin of includes margin XX.X% our acquisitions Roper for provide lower that time. opportunity at expansion XXXX greater come over but margin

Core year points XX margin basis. a on prior basis is comparative over

XXXX, X% with to growth. in of Turning quarters Neil was mid-single-digit segment returned growth we post expect above the last business Software. to of an exit Revenue Freight of our unpack year the to range. with over Network expectations improvement line will the Match and couple the in growth that as velocity but dynamics

EBITDA margin quarter. here the was spectacular, XX.X% in

the across in and And finished product capped revenue, with terrific operational at both here with EBITDA points quarter. ultrasonic TEP Verathon XX% outstanding year record strong and lines. cash XX.X%. EBITDA flow. mechanical year basis had revenue execution off a XXX prior was Also, growth margin Neptune over

right. All

mid-teens in to We'll in by this year with free on the for and at organic Now results. billion algorithm a underpinned is acquisition new a was came growth, of delivered for long-term contribution combined, of full $X we'll which turn a at revenue This all, over at balanced All milestone revenue, look just our growth Roper. XX% growth. to print flow and X. Page year cash revenue Roper. great We

which been our for capital over Organic is and repeatable deployment investors strategy going and disciplined also generates forward. growth can Our has demonstrated we're improvement. time is performance, fortified further positioned and consistent and expect what repeatable well

the billion U.S. our tariff in a which with of year As XXXX. $X.X we expect currency single-digit we high and revenue everyone that ahead. while it's lie XX% is of software over grow opportunities ended time limits that capturing Neil that in the the organically domestic good mentioned, in and reoccurring to Further, revenue potential risk remind range recurring to

prior with prior year of $X.X year. EBITDA billion with XX% was margin core EBITDA consistent the over versus

clicking operating progress XX%. growth at We corporate deployment significant margins leverage So a and capital was expanded to including build G&A, XX%, capabilities. Core made XXXX operating in bit. was segment strong and into leverage out and

then in a XXXX, to that XXXX in beyond continuing see and on So leverage but we return corporate G&A. moderating with

in outstanding up mentioned, free and going in XX% year finished Most flow into million year above well prior XXXX. over cash We XXXX, us coming with billion cash $X.X as $XXX margins. nearly flow importantly, or the was quite expectations, at positions free XX% Neil had which

just And XXX flow Section XXXX, our since free went that XXXX. has cash looking in adjusted if back compounded for effect into XX%

as expect And really in and or XX% flow. forward, flow we margins more. free the consistent we of cash pleased We move are with steady growth cash

see you great numbers we the Roper. here, beyond within happening things see So

deployment have significantly team and processes. enhanced our expanded capital and We

growth. and to starting data-driven XX plans the feeling really more in more organic a us that Additionally, now give shape Roper, leaders operating Reflecting both of is This strategies our deeply we're is connected And for strategic great we're on resulting those on multiyear say is taking leaders. our banner focus acceleration talent in business leaders and hire history. this can my best as see years in I progress. operating year confidence with long-term

discuss sheet. to Now turn let's our Slide XX balance to

over As prior better I was XX% year. mentioned earlier, QX flow than expected with free cash growth

Certinia exited position this we minority in quarter. our Additionally,

Xx million our As received of in execute our of multiple plan. partnered which a a [indiscernible] We invested of reminder, over a a chapter is with creation company. is software value successful exiting to automation a XX-month a first Certinia services proceeds, we Haveli on professional capital $XXX And period. position,

we and to learn. the So partner learning opportunity opportunity Thank growth a that higher the Haveli as financial businesses potential. at profitability look for improvement a team apply have to terrific great profiles you outcome and at to and

was At full our our of near $X.X as to leverage we revolver. today, billion And quarter X.Xx. end, access have net

us strong than some with to high-quality Procare deploy And this, Transact. originally flow by great $X projected plus quieter deploy for year. little and to vertical businesses was we acquisition that cash were this a can note, opportunities So $X.X Despite toward this XXXX we market provides software able activity billion just billion expected. market highlighted our we over

] jam From what deal is believe the stating partners. year to publicly, [ many XXXX, should limited ] we there [ on direct are the and break front. free. provide pressing busy from this In liquidity our with need a conversations being we log to very PE anticipate sponsors Therefore,

that, to back with Neil. Neil? it turn So I'll over

Neil Hunn

Thanks, Jason.

year like the segment. for let's review and basis seeing segment. X%. margins year. grew XX We we in As organic in grew total to by Page in across improved XX% businesses the turn revenue and Software were we're this EBITDA XX% margins Application points what our core Revenue by XX, the

we in half entered area. double-digit organic From 'XX bookings 'XX exit the with in improved our solidly a which by momentum, is market much perspective, highlighted state a second and growing

recurring levels and the revenue addition, base retention In here. healthy quite remain

that building talent like this throughout Another across occurred amount the we of and is thing the segment year. business

Deltek made the example, cloud and in For their half with in meaningful stack, Gen bookings during specifically investments the enterprise AI saw tech of meaningful investments improvement second year.

Mike occurred to and during CEO this Corkery scheduled our all Importantly, succession planned Bob from Hughes.

was net was our migration while Aderant lead their good deployments with activity. market strong intimacy. XXXX, and In Similarly, Aderant business, innovation AI Gen super capabilities furthering their customer position, XXXX product throughout meaningful strong cloud leading retention reflecting and

their capabilities in superb seeing steady while market delivering strong ARR the was throughout Vertafore the compelling the to leading bookings in enterprise to and consistently year, largest growth. customers

deploying to and relates this Joe to several their migrating there team job customers did excellent it PowerPlan, product industry-leading first native and cloud critical product. an As the

to growth result, respond continues in As ARR was best its the PowerPlan's innovation. market as history to PowerPlan's a the

we the in of to onset off are the Transact the their tube towards software successfully the market and $X.X this the vertical to largest segment. many at [ Campus, segment Both being discussed with we look rolling solid to into Procare up to ] billion call, years acquisitions deployed and forward enterprise As come. contributions meaningful starts, the both and

Great and in accomplishments. job 'XX. of solid leaders of group throughout teams you The segment posted remaining this businesses gains. your and organic We're proud our this by

turning outlook to the 'XX. Now for

the range. see to the expect mid-singles higher consistent levels of We end of towards organic growth

in Campus Please with Transact for this similar rate. Page us segment be turn on quarter, revenues XX. basis, margins a a come year-over-year the reported lower seasonally at to expect QX For to down acquisition first as to we

Organic revenue X% segment grew XXXX. in Software for our Network

the strikes to by the As discussed freight impacted matching businesses after riders in and all network was and our we've year, our Foundry. rate related growth [ ] market

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

segment, Software of Application the Similar to by businesses. group of made that progress our this we're excited across

note, and Clemens, tech our For fraudulent network DAT. navigated stack example, and been a freight market while market actors DAT mitigated. [ advancing the meaningfully DAT leader, been new has difficult tremendous conditions, more job ] of Jeff threat has position Of resilient did our from the never

During a DAT the acquisition, perfect Tools participants. offering, DAT Trucker quarter, DAT's complement bolt-on the Trucker network we Tools. to to real-time the fourth visibility completed providing is

to higher monetization. retention As sides a its value providing of reminder, DAT's freight network, capitalize continually market the to strategy drive is increasing to leadership, and on helping enhanced network both

story of similar Very Foundry.

a in market this model. at AI-based operating invest, XXXX. benefactors on be year due When an market if particular the investment, was we issue, While the one recovers, the to with primary is the innovate Gen a not strikes, market so share AI features. This certainly related to case to difficult of we Foundry and with our businesses continue DAT hit conditions the market of and when significant and the accelerate could continued focus Foundry financial of the computational accelerated pace one Roper benefits to

the pipeline, aggressively had their here. customers' in We their ARR better very the structure we solid their like saw what talent, organizational By across companies needs growth upgraded aligned of balance with and XXXX.

to In a Matt the the where organization and Strazza conversions, be lead improving year. quality to organization, executed took succession which revenue learning super growth. to as led Brody at was generation This another reign frontline ARR in ConstructConnect, and Buck we continues planned solid

of technologies. Importantly, ConstructConnect transformative leveraging set potentially AI a is building products,

healthcare in site the software again once Finally, solid alternate the were businesses year.

across by see As expect remainder we and turn year, the of capture to growth in outlook, DAT's mid-singles we for consistent this network performance be to the group. the improve full value the benefited range to revenue

year improvement revenue than year by the our the lower area. be in XXXX north the rate Organic we created singles of first run low to the the the Given year, expect exit a will quarter in QX throughout comp mid-singles full range a MHA organic growth bit given ago. be

the talking a development strides and to segment, moment spend we'd our with turning last the TEP about deployment to made Prior like significant we to over AI Gen our year.

of know, our of our notion knowledge businesses. businesses advantage differentiated or each you deep customers' needs Roper As on businesses, is the unique competitively competes intimacy. intimacy customer This primarily of workflows the our of and and and super

content and this direction the increasingly steps laser Aderant, Foundry, To series and XXXX. Aderant, Vertafore, compliant technology assistance fidelity these and to becoming made more meaningful throughout exciting reservoir is at AI/LLMs are deliver that sure. compelling improving forms at Now are intimacy, at and regard, automated and many beginning in combining some, on data Gen Gen and insurance and product deep detection Gen automation of in and this of client innovate takeoff commoditized specific DAT, automated fraud exciting deployments real-time focused cost-effective, name time -- our technologies we XXXX. automation solutions, we for at AI Deltek AI time in Gen post-production more future AI at construction at The creation ConstructConnect, entries in

we by Revenues margins results. with results segment's continue XX.X%, review the global future. at Throughout of driven was in lead awesome bullish won in and year and to level basis, Verathon full a laryngoscope. discernment EBITDA organic grew Now and for team's their came let's please exceptional U.S. Verathon's in in great just TEP extending XXXX, about in marketplace, strength and XX, and start video the and to leader here becoming here. market which on We'll Page single-use Verathon tenacity. total the turn Obviously, discipline, bronchoscopes market their the simply share our Verathon, is 'XX. share be just X%

and to momentum software meter of from the very demand ever. very, year management data ultrasonic was Great meter by they're offerings. job than Neptune Neptune their strong They stronger And market year, full increasing view, the exiting an continue and see good. the operational adoption static For team.

the Northern growth or things QX from very launch NDI. to XXXX. NDI difficult in a Digital challenging a resulted customer for large comparable returned the in following to product future year that due in Good

with Congrats. very ended IPA and financial if CIVCO great, not year Finally, the good, results.

expect this segment. growth As high we see we to single-digit revenue to XXXX, for look

to So with Page with that, please turn us XX.

what discussed Let's north guidance. organic any guide the XX%, total we're capital revenue range. QX previously full initiating our in excludes grow the this financial and segment to guidance of on revenue in turn future XXXX X% XXXX our Based benefits. Embedded is deployment to we year to in growth overviews, which X%

full adjusted Finally, range we be expect year DEPS in to the of $XX. and $XX.XX

continues the guide to full tax to Our assume effective year a XX% area. in rate XX%

we segment. $X.XX $X.XX expect acquired in we in between For be margins DEPS Network as our the lower adjusted Application tougher and and first quarter, Software a absorb comp to

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

cash compounding capabilities. flow growth our consistent once demonstrating was again our First, strong, and durable

we at with are momentum. attractive. Second, improving third, of the markets XXXX $X M&A acquisition entered firepower have increasingly over time billion when a now And we becoming

As the free it grew organic XX% relates we model, to and X% our back growth. revenue XX% total cash flow revenue of cash compounding flow on

M&A deployed which also Our portfolio. helped towards vertical compounding quality leaders, billion improved our our drive flywheel $X.X market but capability of the

our Importantly, are and exit positive we with momentum. the quite strong, year fundamentals

saw fourth our in basis, We the reacceleration billion growth a see base. and continue second double-digit reoccurring software half, to organic to recurring full and our $X.X on of year Also area, grew our a growth revenue bookings the we high in better single-digit X%. enterprise quarter revenue in

to Importantly, capacity, capital earlier. leadership we XXXX, better a strides our get deploying solutions. meaningful key AI-based and as capabilities and We developing In which Gen operating deployment we made enterprise expanded we upgraded highlighted model and our talent, our of grow. continues few advance

market to active firepower and are be markets the deploy of ] are liquidity. businesses. pressure $X with very partners limited to positioned towards well placing M&A given private pace appear capital we GPs on increasing than M&A their very vertical equity [ accelerating leading The for Finally, billion software available are more

acquisition Our M&A building is robust busy opportunities. and very a of attractive team cultivating pipeline

to we're pursue approach. our As opportunities disciplined unbiased with and these usual, excited

Now we could strategic do by executing of and offense. running at as if flip flywheel. to we turn what to threat arc flow Roper and that remind low-risk slide, like We long time our We'd you a dual your our compounding is cash over to a the questions, final simple. compound everyone strategy

so Roper, company a have Once a powerful with vertically model First, that part begins is operating of our market-leading, businesses we customer application-specific the based a oriented and compete to how long-term operate our coach on of on improve growth intimacy. proven can organic businesses business and and decentralized We and sustainable business quality. businesses. win portfolio environment structurally their underlying we rates

deployment Second, and that flow on the deliberate cultivating, vertical a flywheel. add next we to acquiring run strategy disciplined businesses our cash focuses compounding process-driven and in to great capital centralized a manner curating market-leading

Taken double X compound in together, flow of our the cash the mid-teens or we area, our we long cash so. over flow meaning time arc every years

and Operator, thank like go for floor that, with ahead. please So we'd to the interest you your continued your to open questions. and support,

Operator

first Ken our comes Oppenheimer. And Instructions] Wong line the [Operator of question from of

Hoi-Fung Wong

X% getting ask be to state. wanted that that growth from outlook. Are Fantastic. to that's just is there into one-off organic tailwinds the impacting about steady should that headwinds, thinking I number? about X% How that notable any clean we

Jason Conley

last the nothing first onetime segment. this talked Ken, question. about Thanks quarter just our in this We is quarter. NS the We in nature. Jason. talk did about No, in for

onetime had through. sort a of that thing Our MHA business popped

AS that QX quarter the to as in more revenue, we first little single-digit lower about pick will talked and recurring through organic NS. be then bit that QX. So in will But at high growth up start

in you year second, quarter the of I first our which this Procare and the up. talked cleanest early in TEP said experienced. COVID XXXX in that Nothing converting more baseline our growth of to strong bookings supply you'll And of the expect organic We XXXX, see is coming late inflect quarter, the into then think sort we really since still unusual noise all just is chain some we of revenue, segment. in second the start as before, that, the half we've enterprise. kind that this across think about in second about So and

So for about feel good we year. this the setup

Hoi-Fung Wong

then And Jason. quick a Fantastic, follow-up. just

leader of As for log M&A far deals, look as any you stand-alone growth in the at in the unclogging jam as category more bolt-ons types? look preference or potential pipeline 'XX,

Neil Hunn

Ken, I'll it's Neil. that one. take

we of and in fair directly, M&A team added talked companies and amount side. lot and So with they've spade bolt-on lot and on the a platform on past relationships -- capability of sponsors, the our we year, group the in both building capacity work, this prepared of our done remarks, side a with a

platforms. billion everything hopefully do of view got deploy, to a be X makes point you when we'll able then that and or Now sense $X X find from to bolt-on

Sort of balance two. between it it's very be situation dependent, will but yes, a the

Operator

line comes Joe from the Giordano And Cowen. our from next question of TD

Joseph Giordano

coincidentally, water house at meter. company in putting new now, my So Neptune a the right literally is

I guidance that's So factored hope quarter there. into next the

Neil Hunn

mechanical. Ask a

Joseph Giordano

I'll what looks it see like done. when Great. it's

differently and what you in was for here. on to guys there to it's and to terms making either wondering it what terms some price of a deploying profitable capabilities and ability So and in tools the are quantify done there's you or more for of of good I more if margins AI businesses hear your way guys efficient? was internally is new charge

Neil Hunn

Yes.

momentum. week, learning, was more just even building which X use the cases it last things lower the is a commoditized. deploy makes focused specific X examples you 'XX, from in in say here, momentum went market This with on the I'll a can cost. from but early view, very is world Obviously, point great of this or of more encouraging means we're of year in product the cheaper, We So breakthroughs, for models them through

just CTOs their We're are there. on call on what thoughts thinking. with got several early the yesterday our of it's So our teams

about super encouraging it's So the future.

-- but definitively we can got hard point save of funny, in I'll where seen instance bookings seen 'XX, And millions the point they specific on it's Amazon, of the that that assistant this, there to they're Dela of tell up many that's we've bookings in we've very to. Aderant. increase, because We at mathematical, it effect Deltek the for we is terms revenue many leader pick of at or at because costs, to halo a this have. you millions

the on do see about have at more how it the serve can support, how real right? up enterprise. customer R&D about we're productivity our We but gains from starting our we take initially road -- how we gains on And how more thinking the cost we out on productivity a, How customers looking at efficiently of side, take can we to side, breakthrough not the can and map, chew of to is we're look be it. offensive

Joseph Giordano

Yes, makes might that there some guess little sense. headwinds, like from piece the of that are I Deltek. one people then all be could And concerned U.S. sort a follow-up. standpoint, a The GovCon just policy a be at business

seen there? And you've like valid if what that how that's curious And out? play Just concern? a if is, does it

Neil Hunn

Yes.

policy, how be have there's more performance-based the manage do more Deltek and wonderful change a for contractors We are performance-based. strengths and and more is you it's into U.S. important all know are you, be They accountability, about contractor, Deltek just audit their because to going to to going models government All the that increase. going out. modernize principles compliance. how federal early the accountability couple company super a shake their with systems. guiding tell is of acquired the called customers, which ProPricer, those a it's pricing. to are contractors those, really Pricing that to may plays I'll So to more which may of

the But that the good. So end how pretty very feels early to of will know day, it's flow. at this

contracting and contracting QX and part through first QX been government Deltek of robust. and quite [indiscernible] as over QX in bookings the Importantly, activity have

customers, about So at their seem with speaking wallets relatively bullish through have this, opportunity. the least the

Operator

Your next comes [indiscernible]. from of question the line

Unknown Analyst

differentiate of able on AI you're we've vendors, recently the positive, model, thinking the commoditize quite comments, from horizontal Just that this about layer. you what ends from enterprise following at some we seen process heard vendors language being up models, to small the large business up your

you you're end in you some and because I typically moats with, the more case, easier that the think Roper's would to do regulatory happening that's incumbent, I in you up the of model expect business deepening you would focus, Does your it you come say in unique those? would product tackle make distribution you're the others space? because Or burden, the have progress have say, starting AI processes. for dealing and

Neil Hunn

So all the paranoid winner. our is through Where engaged be good we companies the this this position to a on process, it we're question. to strategy precisely in on question the that on and super AOP with we're 'XX process very land through

bill to the And for use One our it's comment We're intimate I'll is not, really we create really for -- mean I is with the in tried Aderant remarks couple prepared you a instance, about of requirements. about. I compliant are reasons. customers. example. this not how do It's how law client's what talk specific firm specific about, that's to that's we for creating billing a nuanced intimacy, specific very We're thing. bill. a we specific client does a about as talk services professional project-based a a And that

be new forward and data technologies that the the with haven't advantaged tools, the problems the believe So at the have to able available enabling time. with be to here the solved, to at the that uniquely intersection we intersection solvable we're able intimacy, of it'd now of been we be solve

we we that's leader. participate, our important least in to thing one verticals market share we are every in other companies, the note, our are, at of The

the of the other have we're competitor. Xx relevant share cases, largest X.Xx in size some cases, next or in advantage ] of, market X.X, [ We

in be small So we advantage have scale able to niches these to investments. make these

pace the remain we're vigilant make course press and so paranoid able going of win. investments to companies our to travel. to and be encourage And and sense But compete makes like that to we the at and a

Unknown Analyst

That's color. great Okay.

forward, for last On next bookings year, been pretty would going the few you have but run impressive. now imagine the rating outlook quarters I are high-teens

just in addressed maybe think I year rate on? something it borne the sort are baking Deltek. risk you a run outcome AS of the raises organic. I maybe points mid-single-digit But you risks hedge? digits, double to any if later and are consideration if that just probably you I any aren't gets you guess, starting out, than know for a better get

Jason Conley

Yes, Joe. It's Jason.

And X.X% good the we we the we think exact second of AS. finished year. on gross to think revenue I bookings I and the be XXXX at retention year in half had in strong had

all growth of part that's So equation. the

we better be that. to So than we're think going

rate. to so I roll obviously, you see I chance think it's think just to continue converts could want mean, about out. to that the we impact, if unless the just growth plays quarter momentum a organic But again, immediate little Procare But upside. help for will I there half I in think see first we're than that is is we think in perpetual. the revenue it's half, year going how the going to second yes, second some be to if the slower the how saw

which, The we one if if have isn't upside, for is is, remain could strong, bias I [indiscernible] the there the hope year. But some year in and term. would then we long upside perpetual, Enterprise candidly, there's to there say, a over there a just

Operator

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

Terrell Tillman

the could there the enterprise bit any the my maybe kind -- to [indiscernible] I'm call talk good guess what's it's you stock macro to as of of poignant help you is question, enhance what you bookings actually first out follow-up. Zack, of do that's some just in booking execution? on leaders starting that the sometimes thirdly, out drivers and or software is, to enterprise Because I strength. have change into maybe action. rank like some some of go-to-market of of little the Jason are shoots businesses, see software I Could this the -- kind And conversion But on leadership, SaaS. curious you front I and double-click most the what strength? appreciate -- it's Neil, optimization. a think then And green a from you to

Neil Hunn

Okay, raised all points best Terry. my do I'll there. you hit just the to

outlook time to year would certainly compared of So the where it's first, more macro last is from versus sure. stable we feel I point this positive say for view, a a we macro, which for now, were

attribute model lot a deliver. more we leaders and success precise, to choice-based, prepared of in be I the execution remarks. strategies we're the it, having right-to-win to mentioned Jason We with an based able to having think better mentioned

for and It's to And and it's And able being are the and so Roper. little organic mature growth there's takes improved part seeing happens that crank. work a methods means longest, bit to because have great over all of time, of been but and clear these a time placed turn where fast It the obvious. we rate, continue we benefits. this methodically build way it we've this sustainable to to enduring no

a through be every that where and Deltek, go really terms company but what examples of DAT, highlights PowerPlan, the we're can there's is the long in starting of all getting I -- better, sort of mean and the are mean, I this seeing sort mark some organic. of click is those medium to we're would acceleration for The other, over ConstructConnect, seeing to few. NDI, list at -- in you name Verathon sure, Aderant, certainly, there's

just question, general And was it's about I don't know a then if SaaS I think there conversions. question a

We Xx continue $XXX north driver cloud maintenance moving productizing clip on-premise a we're that a us. in terms of of that's million of north and There's growth in at the longer-term still of ARR. the of for process to --

so amount a time. perpetual that's been down has of nice The going over And tailwind.

extent sort over in embedded be curve, ] we've to last of the So just to there's the our years. a happens few J results [

a And nice tailwind. it's so longer-term

Terrell Tillman

this as a start maybe of is that When some if and it don't value Yes. the question, actually with monetization relates And packaging of would but how impactful? to initiatives. kind this then DAT. pricing know -- hitting and hard just, I Jason, is and

Jason Conley

Yes. Sure. Yes.

there'll they end market side fourth and and the in bit and network, reliability the or all half action board. of of year at another a well. half partners perspective first trading year, doing sort think the perspective an of half on which a relates fraud sometime quarter, what we're I on more of the the a load of what the talked then on the had probably, in And Neil this the be this the just and the about, little just the as increasing network, of So it then the to one safety from performance is

innovations There's lot of innovate. to have this going releases coming, a year. continuing they're just So more to

happening what's excited about DAT. really So at we're

Neil Hunn

in Yes, while adder to bolt-on in this the quarter a did the Trucker think all DAT, terrific put we're this small potential one I'll to the on for to visibility Tools. just be we a real-time has plug just We network network, the participants.

the in with and and really with of to the we able and carrier side the network both the monetize having have then there, exciting sides, broker bolt-on. more Trucker value to being concept delivering from which have Tool potential does it this of on base the We customer

Operator

question from of Brent the Thill Jefferies. of is next Our line

Brent Thill

piece some figure to you AI, that. behaviors? engagements? backburner. the what distraction you any seems the buyers of the among to on when more is it in with the a there's Are Neil, your that of They're Or engagements, from software in think insulated? out is the seeing like in you that, [indiscernible] do distracting just are sales light more business, more What this AI CIO focused about trying seeing

Neil Hunn

or of been we to also And majority We've half the like, saying us the and of and that. the and all what the on in SAP That are it distracted and apply economic whatever was that been on to. that ride a we interest on large first very a I take don't was last next Yes. specific going this vast that. But the at of on. that our of attribute inflation, and -- cause asking for -- record They none as they're we've that maybe enable to first be, then system Gen what's new of came was going competing half there's enabling to I part customers quite macro root to technology AI hold would of all large as rates, part looking settings. late, that have mean of do to when bit, year seen just everybody not a the question of

and be. are or might get the it system we are they lead network their that system or generation record of the We need whatever to operate the

Brent Thill

of And and on, lanes than do going, similar Are in that year. know done can't of focus kind M&A the seems Okay. cleanup something magnitude you've of this lanes? you you direction of focused in the to comments the happen tell M&A different open on area of think your the we about How past? you guess are I year? expect the doing unlock industry the given to around kind I can kind that the of you're what things this magnitude us but and appreciate the should kind this

Neil Hunn

market No. always this can we're have do, focused first I We've continue it that us been to add be wildly forces and put what leader be potentially just more to growth and vertical that advantage, through we going for pickers. will has business pickers that competitive theme, into right? can thematic understand So to and we X is enduring to bolt-ons. where capital not always what mean be and want to like do, have will that investors, small we vertical platforms, and competitive foremost, observe dollars we of is like is you market, continue business sort be on that leaders is is we that the it the compelling

deals of to course based ultimately that the the where on the next how or it's takes be Now determined over two. manifest us, year

Operator

comes the Markets. Our from Dray of Deane RBC line of Capital question next

Deane Dray

interested out I this. But nothing the amount, What's restructuring. do bottom Like I'm it of was how how the know in And guessing had with million expand up. to genesis really big interested Could of not initiated. you that? headquarters. $X this I'm that but be a This it's dollar you was many just payback? in all did businesses? on call

Jason Conley

Yes, take can that, Deane. I

largest our coincides couple make coming look in, some And just think in I was at want It reinvestments taking the AS this with Deltek. a yes, So back in Hughes of was where it was mostly Bob a they businesses. segment at to business. the and

going but flow-through like growth. reinvestment we'll have things obviously, get some some to back like So product, in things XXXX, into

opportunistic And just wanted a I it, that. that I too, good -- to and where, a do just guess a so couple could year was ones, rolling And into I finish an just had that make again, to take actions the opportunity smaller sure couple 'XX. then we of some they having had to

Neil Hunn

I good, would just healthy characterize belt it as tightening.

Deane Dray

to give that the of could of kind out Good of just Transact what where any update and with play year? specifics might And with Just during the you us initiatives, an kind hear. CBORD? regarding this integration course separately, how

Jason Conley

Sure.

synergies the of in those rolling this the through We've start million mainly year. first of well. So, quarter so identified far, really $XX it's going cost and will

-- manage services sort cloud they're the joined. is set, and solution, campus So It's in actually been executive as creation Services ID a that of The that's new some their lot to going value plan. the That's got to capabilities creating just moving professional the part team of added customers well. way. They've of a has can Head having team. a with accretive that they've organization more that a new an

an ERP time. but over think, And not that's just I that should on over efficiencies of create a overall, time, We've then making immediately, across business, lot underwritten the integration. going and progress really, to the cut

we're And so excited yes, about.

solution whether native what Transact. has product map the cloud a really I from think perspective, the been from they're the road can positive market around do feedback going from showing

it's the on-prem going customer some this think not we is that's but you're I couple here. create excited, seeing right to tailwinds CBORD cross-sell to years in that's is so next And way just increasingly And "Hey, the the customers go." the base of think only great now Transact saying, so

Operator

the Scott next Our of of Melius Research. question comes from Davis line

Scott Davis

it would The kind in year well. the sense? opportunity such. situation, certainly you it more set were this -- on and last where consider last is if few increasingly unique were would And feels positive equity, outlook M&A as gotten of 'XX. quarters, Neil, make Would you've enough a kind over the But active issuing and of like sequentially, the wide you

Neil Hunn

capital continue So our balance of the obviously, debt at the of to cost present is billion then $X capacity. higher. the even is our bar would capital equity, is deals consider use quality the compelling very return source be is the in the higher market because that first certainly, but sheet to to and the of higher, then, going point, is higher, asset the us, If we bar

all into process. goes that So the decision-making

even delighted there be the machine in difficult last compounding the I in we That in lot we'll the this be the clear, years, to on clear years, And $X billion the be mean to that let's done deploy wasn't work where got our well. as let's of years us. But we able for going make have. for drives a record. couple

most sort is our of even the benefits always the relationships, being when good. where of market, So as times maybe the that's us not in sort are

deployers So times capital and of good steady bad. we'll just through be

Jason Conley

in the to a of these to And to going right. take It's That's than immediate. is for going all metabolism year of happen. also assets not be say equity private more that just I'd that

I So don't to once. it's think all going be at

Neil Hunn

It 'XX will clear sure. This will clearing, be in and a not 'XX 'XX. for

Scott Davis

Okay.

other So on the sense there's of side. no panic

think a year Okay, do a internal think kind internal versus like and got filling or talent I talent? jobs, upgrades. the You you you Just just I curious internal maybe All I and higher in -- external, just kind right. there's -- kind guys about of optimal about think business given versus internal, what fill some do you -- about that, do external winners certainly that mentioned so. don't when be of when or feel if external like that. you believe talent how you of And you're mostly enough think more in ratio you or mix? guys about about you. been But have talking should that winners, your building you're know, of of kind rate But how that.

Neil Hunn

can learners leaders we long-term and that make excited behavioral about And we're geeked talked of then of talent. talent X behavioral and talent, years, or our to aggressively attributes the call and we've that We're offense to underlying look attributes business and today build often, as attributes, focused development actionable of have, our the have -- field what term up the we that engagement No. long we for. the that's competitive, be we think of selection capabilities or be the completely and deploying widely curious on talent really X need

got So its signs we But encouraging, then of this, part has frontline. So By talent development the this then [indiscernible] started the have is we way, had DAT leading started and now in Brody ConstructConnect been We of Roper go the -- Brody we that's ConstructConnect. office, early CFO and was move are the that Strazza right? the outside, ConstructConnect. CEO to to now right? offense

not that's within and would always were me broader leadership gets first moves surprise as So if And other you deeper there call. it and to the if better. will, bench, portfolio be the going our

an If larger go at one and leader of the when view, a needed you around. the right? think frontline, CEO frontline, ConstructConnect, Strazza our we of talent the just to to were able the versus at of to risk it all the management hire the point Scott, of management a replace market works the to risk [ view, the CFO, of a it to move about upgrade of we're from then ] we sort the Brody businesses, of CFO, point FP&A to head out So FP&A CEO

Operator

Tusa of the from comes question line JPMorgan. next Our Steve of

C. Stephen Tusa

this seasonality the cash? guys do how at kind Are Really in strong is you change the year Or that XX%. but the some then the that we about quarter. and XX% normal there second was it's fourth going about is into as quarter you that? bit we think on that And to cash quarter? move Should above . above about point algorithm? first think meaningfully XX%, we in as Obviously, driven over of for XX% a something the

Jason Conley

finish Syntellis, integration Neptune the mean have and and If just got by specific from record DSO. Aderant I in emerging was also just a with Verathon had great year renewal sort and companies, yes, were really of end out call this And year. even to of us. Deltek the line mean, I season they for everything a spectacular. strong So to Strata I drove down this the

better work than little bit a great just So we thought. here,

just might and I'd first new due will did think, like, little a bit. our nonoperating bonds front, April this just little But out coupon unusual. So a nothing a in be of payment issue we of couple super -- may year. come of QX February billion of come and it the say I on

of more mean, that's really strong a versus year. it's a I 'XX just So 'XX item. But overall,

C. Stephen Tusa

last just Yes. one And you, then for Neil. one

signs from progress any And making at AI. see margin, are your the where seeing You you sure this perspective some there guys relatively in I'm you obviously have any to on for that are investing. any competition shares? And market these whatsoever? Are always on lot and incremental perhaps from what guys businesses any disruption? you've that guys threats -- that are high where by businesses coming reviews, had is businesses are questions. watch been integrating strong the there of you clearly But where, obviously, But you reacting a for very and asked

Neil Hunn

Yes.

So the them level. view. I time moved of lot actually off we the teeny-tiny had market. And the doing point at now comers watch not the think threat did that portfolio list, I then we level it's the the that watch to we better there threat things, at to year very would end small on All want IP list one landscape work of in say worrying of startups if And yes. our spend existential an a that are portfolio then a actually the from there's proliferate vendors. that bespoke, last year, are vendors, was I and understand in company a landscape ownership long-term there hey, tailwind AI the ago consolidate say, and certain verticals, than would medium

the sort it that be trend. to gives winner opportunity us so an because of the just of And benefactor or

Operator

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

Julian Mitchell

firm-wide outlook. wanted to XXXX, acquisition the including a There's a margin been any lot think headline on questions. I revenue-related margin the just I core was EBITDA But in touch. down of Maybe color start flat, with

think we're that So . our kind headline in back sort of half slightly, about and margins? down the margin sort as back then maybe to EBITDA flat of and of that thinking core margin way think should half we then first up the margins year-on-year the Is about half? XXXX, loaded and up with

Jason Conley

Core the about little in of first segment bit. you up with the the be quarter, it nicely. talked, at largest their I will Transact especially coming. think I Yes, margins in third is up a especially, summarized level, And quarter. quarter be then especially said, half well. you EBITDA that comes Transact's it'd acquisitions, XX% margin like

the So first, in a little lower second. in bit the lower

described I you've on. is yes, the it So think way spot

Julian Mitchell

follow-up That's TEP just great. And then the segment. on my

haven't on We many questions had yet. that

of here, about the So meters thinking you're inventory of noise of trying to business Neptune? understand, revenue outlook reductions. around think kind home maybe various customer kind a you're there's little sort expecting as in what bit, some for and I

a are how also QX? about maybe about base. color backlog XXXX the TEP thinking for off percent revenue? how elevated but year-on-year Neptune did QX, down any think in it And very So XX-ish on I perform you in was

So just kind or book-to-bill there? move of how have orders

Neil Hunn

take part take first the the I'll the Jason Yes, ask backlog. part second and to regarding

XX% of the segment. like think, it's something in strength their Neptune hey, segment. And So is, the I

to them HSD year we're expect in certainly we so ] be to the good where we're the area. [ And when guiding guiding in

about -- that's in -- our noise the talked rearview thing talked other in prior sort just all products, the that We of was some we in comps The We there had NDI. about year. mirror. the

grow So we just from across here. group it's base clean pretty have the growth to a and consistent

Jason Conley

lead I than, higher times backlog bit little we've that's over a chain I that and few things still pre-COVID. just think out. [indiscernible] supply the last mean there happened normalized the backlog, Yes. years. say, about We have and on talked

early a indicates in that weeks positive. distributors market the restocking and I the the that year Don that's this signs are And So his ] ago significantly kickoff and in this say, [ would year. just a strength had few of continued just team lot sales

is backlog us kind see to continue were to off X-month without just working backlog. off will a of where pre-COVID, at X- that get work back growth which we right, So we of fine, it which is to and

Operator

And our session. this concludes question-and-answer

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

Zack Moxcey

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

Operator

Thank Thank gentlemen. great has ladies and presenters, you, now may a now disconnect. and The Have concluded. you for and you thank day. attending, conference you,

Roper (ROP) 30 Jan 252024 Q4 Earnings call transcript