ROPER TECHNOLOGIES INC

Roper Technologies, Inc. is a diversified technology company that operates market leading businesses designing and develop vertical software and technology enabled products for a variety of defensible niche markets. The company competes in many defensible niche markets and believes it is the market leader or a competitive alternative to the market leader in most of these markets. Roper has a global presence, with sales to customers outside of the U.S. totaling $1,029.7 ¹ in 2025. The company's international operations are subject to risks including adverse changes in political or economic conditions, trade protection measures, tariffs, and differing regulatory requirements.

Roper believes it is the market leader or a competitive alternative to the market leader in most of its markets. The company's market positions are attributable to applications expertise, the underlying critical nature of its offerings, and the inherent customer intimacy of its chosen niche markets. No single company competes with Roper over a significant number of product lines. Competitors might be large or small in size, often depending on the size of the niche market served. Roper competes primarily on product quality, performance, innovation, technology, price, applications expertise, system and service flexibility, distribution channel access, and customer service capabilities.

Roper generates revenue through three reportable segments classified based on business model and delivery of performance obligations: Application Software, Network Software, and Technology Enabled Products. The company pursues consistent and sustainable growth in revenue, earnings, and cash flow by enabling continuous improvement in the operating performance of its existing businesses and by acquiring businesses that offer high value-added software, services, technology-enabled products, and solutions. Recurring revenue is comprised of SaaS, annual term licenses, and software post-contract support; reoccurring revenue is comprised of transactional and volume-based fees; non-recurring revenue is comprised of multi-year term and perpetual software licenses, professional services, and hardware; and product revenue is from technology enabled products.

The Application Software segment had net revenues of $4,483.0 ² for the year ended December 31, 2025, representing 56.7% ³ of total net revenues. This segment includes businesses such as Aderant, CentralReach, Clinisys, Data Innovations, Deltek, Frontline, IntelliTrans, PowerPlan, Procare, Strata, Transact/CBORD, and Vertafore. These businesses provide comprehensive management software, SaaS and AI-enabled solutions for ABA therapy, diagnostic and laboratory information management software, enterprise software for government contractors, cloud-based software for K-12 school administration, transportation management software, financial and compliance management software, cloud-based software for early childhood education, financial analytics for healthcare, integrated campus technology and payment solutions, and cloud-based software for the property and casualty insurance industry.

The Network Software segment had net revenues of $1,600.8 ⁴ for the year ended December 31, 2025, representing 20.3% ⁵ of total net revenues. This segment includes ConstructConnect, DAT, Foundry, iPipeline, iTradeNetwork, MHA, SHP, SoftWriters, and Subsplash. These businesses provide cloud-based data and collaboration software for construction, electronic marketplaces for freight capacity matching, software for visual effects and 3D content, cloud-based software for life insurance, electronic marketplaces for food supply chain, healthcare services and software for alternate site markets, data analytics for post-acute healthcare, software for long-term care pharmacies, and AI-enabled SaaS for faith-based organizations. The Technology Enabled Products segment had net revenues of $1,818.7 ⁶ for the year ended December 31, 2025, representing 23.0% ⁷ of total net revenues. This segment includes CIVCO Medical Solutions, FMI, Inovonics, IPA, Neptune, Northern Digital, rf IDEAS, and Verathon, providing medical accessories, precision fluid control dispensers, wireless sensor networks, automated surgical scrub dispensing, water meters with AMR/AMI technologies, precision measurement systems, RFID credential readers, and medical devices for airway management and bladder volume measurement.

In the last three years, Roper has deployed approximately $8,960 ⁸ of capital toward acquisitions. In 2025, this included approximately $1,850 ⁹ for the acquisition of CentralReach, a leading provider of SaaS and AI-enabled solutions for ABA therapy clinicians, and approximately $800 ¹⁰ for the acquisition of Subsplash, a leading provider of AI-enabled SaaS and integrated giving solutions for faith-based organizations. In 2024, this included approximately $1,860 ¹¹ for the acquisition of Procare and approximately $1,600 ¹² for the acquisition of Transact Campus. In 2023, this included approximately $1,380 ¹³ for the acquisition of Syntellis. Additionally, Roper deployed approximately $1,470 ¹⁴ toward other bolt-on acquisitions. In October 2025, the Board of Directors approved a share repurchase program for the repurchase of up to $3,000.0 ¹⁵ of common stock. During the fourth quarter of 2025, Roper repurchased 1.121 ¹⁶ shares for an aggregate purchase price of $500.0 ¹⁷ and an average price paid per share of $445.87 ¹⁸. In November 2025, the Board of Directors increased the quarterly dividend paid January 16, 2026 to $0.91 ¹⁹ per share from $0.825 ²⁰ per share, an increase of 10% ²¹.

Net revenues for the year ended December 31, 2025 were $7,902.5 ²² as compared to $7,039.2 ²³ for the year ended December 31, 2024, an increase of 12.3% ²⁴. Net earnings from continuing operations were $1,536.3 ²⁵ for 2025 compared to $1,549.3 ²⁶ for 2024. Diluted earnings per share from continuing operations were $14.20 ²⁷ in 2025 versus $14.35 ²⁸ in 2024. Cash provided by operating activities increased by 6% ²⁹ to $2,540.3 ³⁰ in 2025 as compared to $2,393.2 ³¹ in 2024. Total debt excluding unamortized debt issuance costs was $9,355.9 ³² at December 31, 2025 (32.0% ³³ of total capital) as compared to $7,669.2 ³⁴ at December 31, 2024 (28.9% ³⁵ of total capital).

Roper expects the effective tax rate for 2026 to be approximately 21% to 22% ³⁶. The company expects the aggregate of capital expenditures and capitalized software expenditures as a percentage of annual net revenues to be between 1.0% and 1.5% ³⁷ in the future. Management expects annual cash tax payments as a percentage of pre-tax earnings to be relatively consistent on a go-forward basis.

Roper's growth strategy is highly dependent on its ability to acquire and successfully integrate new businesses. The company intends to seek additional acquisition opportunities, both to expand into new markets and to enhance its position in existing markets. Roper's businesses realize growth from new and existing customers in their niche markets through successfully executing go-to-market strategies, developing new products and applications, and delivering professional services. Increasingly, this includes AI-enabled products and functionality embedded within customers' mission-critical workflows. By leveraging deep domain expertise, proprietary data, and long-standing customer relationships, Roper believes these AI capabilities enhance product differentiation and drive incremental automation and improved customer outcomes which support expanded monetization opportunities.

Roper is increasingly incorporating AI solutions into its platforms, offerings, services, and operations, and expects that AI will continue to become a more integral part of its business over time. The company faces risks that competitors or other third parties may incorporate AI into their products or operations more quickly or successfully, or develop superior products and services with the aid of AI, which could impair its ability to compete effectively. The rapid pace of AI advancement may make it difficult to maintain competitive advantages, and AI capabilities could quickly become commoditized, reducing Roper's ability to differentiate its offerings.

Roper's 2025 effective income tax rate was 20.6% ³⁸ and its 2024 effective income tax rate was 21.2% ³⁹. The company expects the effective tax rate for 2026 to be approximately 21% to 22% ⁴⁰. The enactment of the One Big Beautiful Bill Act on July 4, 2025, repealed the requirement to capitalize and amortize domestic R&D expenditures under Section 174, which resulted in a cash tax benefit of approximately $150 ⁴¹ in 2025. The remaining cash tax benefit associated with the enactment of the OBBBA is expected to be utilized over the next three to five years.

Capital expenditures were $47.4 ⁴² and $66.0 ⁴³ during 2025 and 2024, respectively. Capitalized software expenditures were $57.3 ⁴⁴ and $45.0 ⁴⁵ during 2025 and 2024, respectively. In the future, Roper expects the aggregate of capital expenditures and capitalized software expenditures as a percentage of annual net revenues to be between 1.0% and 1.5% ⁴⁶. As of December 31, 2025, Roper employed approximately 19,400 ⁴⁷ people worldwide on a consolidated basis, of which approximately 13,100 ⁴⁸ were employed in the U.S. and approximately 6,300 ⁴⁹ were employed outside of the U.S.

In October 2025, the Board of Directors approved a share repurchase program for the repurchase of up to $3,000.0 ⁵⁰ of common stock. During the fourth quarter of 2025, Roper repurchased 1.121 ⁵¹ shares for an aggregate purchase price of $500.0 ⁵² and an average price paid per share of $445.87 ⁵³. As of December 31, 2025, $2,500.0 ⁵⁴ of the originally authorized amount remained available. From January 1, 2026 to February 20, 2026, Roper repurchased 3.723 ⁵⁵ shares for an aggregate purchase price of $1,313.5 ⁵⁶ and an average price paid per share of $352.80 ⁵⁷. As of February 20, 2026, $1,186.5 ⁵⁸ of the originally authorized amount remained available. Roper has declared a cash dividend in each quarter since its February 1992 initial public offering and has annually increased its dividend rate since. In November 2025, the Board increased the quarterly dividend paid January 16, 2026 to $0.91 ⁵⁹ per share from $0.825 ⁶⁰ per share, an increase of 10% ⁶¹.

Roper faces structural headwinds including intense competition from numerous competitors in its various businesses, and new competitors may emerge, and product lines may be threatened by new technologies, including AI, or market trends that reduce the value of these product lines. The company's international operations are subject to risks including adverse changes in political or economic conditions, trade protection measures, tariffs, and differing regulatory requirements. A prolonged economic slowdown or recession could reduce the demand for Roper's products and negatively affect future sales and profits. Political and geopolitical conditions in the markets in which Roper's products and services are sold have been and could continue to be difficult to predict, resulting in adverse effects on its business.

Roper's growth strategy includes acquisitions, and there are no assurances that it will be able to successfully identify suitable candidates, negotiate appropriate terms, obtain financing on acceptable terms, complete proposed acquisitions, receive the necessary regulatory approvals, successfully integrate acquired businesses, or expand into new markets. Once acquired, operations may not achieve anticipated levels of revenues, profitability, or cash flows. Acquisitions involve risks, including difficulties in integration and the diversion of management's attention. The company's level of indebtedness and debt servicing costs could limit its ability to borrow additional funds, complete future acquisitions, pay dividends, and make capital expenditures, and could increase its vulnerability to adverse economic conditions.

Roper's growth strategy is highly dependent on acquisitions, and there are no assurances it will successfully identify suitable candidates, complete acquisitions, or integrate them successfully, with risks including difficulties in integration and diversion of management attention ⁶². The company's total consolidated debt excluding unamortized debt issuance costs was $9,355.9 ⁶³ as of December 31, 2025, and this indebtedness could limit its ability to borrow additional funds, complete future acquisitions, pay dividends, and make capital expenditures, and increase its vulnerability to adverse economic conditions ⁶⁴. Goodwill totaled $21,341.2 ⁶⁵ at December 31, 2025, representing approximately 62% ⁶⁶ of total assets of $34,577.0 ⁶⁷, and any future write-off of a significant portion of goodwill or unamortized intangible assets would negatively affect results of operations ⁶⁸. Roper faces intense competition and new competitors may emerge, and product lines may be threatened by new technologies, including AI, or market trends that reduce the value of these product lines ⁶⁹. The company's international operations are subject to risks including adverse changes in political or economic conditions, trade protection measures, tariffs, and differing regulatory requirements, with 13% ⁷⁰ of net revenues generated from customers outside of the U.S. in 2025 ⁷¹.

Management's message emphasizes Roper's proven, long-term, successful track record of compounding cash flow and increasing shareholder value. The company pursues consistent and sustainable growth in revenue, earnings, and cash flow by enabling continuous improvement in the operating performance of its businesses and by acquiring businesses that offer high value-added software, services, technology-enabled products, and solutions. Management expects the effective tax rate for 2026 to be approximately 21% to 22% ⁷². Management expects the aggregate of capital expenditures and capitalized software expenditures as a percentage of annual net revenues to be between 1.0% and 1.5% ⁷³ in the future. Management expects annual cash tax payments as a percentage of pre-tax earnings to be relatively consistent on a go-forward basis. The strategic priorities emphasized include pursuing acquisitions to expand into new markets and enhance existing market positions, developing new products and applications including AI-enabled capabilities, and maintaining a decentralized operating model with empowered business unit managers.