ROPER TECHNOLOGIES INC

Previous wording

•economic disruption caused by armed conflicts (such as the war in Ukraine and the conflict in the Middle East), terrorist attacks, health crises, or other unforeseen geopolitical events; and

Current wording

•economic disruption caused by armed conflicts (such as the war in Ukraine and the conflicts in the Middle East), terrorist attacks, health crises, or other unforeseen geopolitical events; and

Previous wording

There were no material changes during the three months ended March 31, 2025 to the items that we disclosed as our critical accounting policies and estimates in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Current wording

There were no material changes during the six months ended June 30, 2025 to the items that we disclosed as our critical accounting policies and estimates in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Previous wording

Net revenues for the three months ended March 31, 2025 were $1,882.8 as compared to $1,680.7 for the three months ended March 31, 2024, an increase of 12.0%. The components of revenue growth for the three months ended March 31, 2025 were as follows:

Current wording

Net revenues for the three months ended June 30, 2025 were $1,943.6 as compared to $1,716.8 for the three months ended June 30, 2024, an increase of 13.2%. The components of revenue growth for the three months ended June 30, 2025 were as follows:

Previous wording

In our Network Software segment, net revenues in the first quarter of 2025 grew 1.4% to $375.9 as compared to $370.8 in the first quarter of 2024. The growth of 0.7% in organic revenues was led by our network software businesses serving the construction and freight match markets. These increases were partially offset by a decline in our alternate site group purchasing business, and a decline in our media and entertainment software business primarily related to end-market conditions. Gross margin decreased to 84.0% in the first quarter of 2025 as compared to 85.3% in the first quarter of 2024 due primarily to new product investment and reduced leverage. SG&A expenses as a percentage of net revenues decreased to 39.6% in the first quarter of 2025 as compared to 40.3% in the first quarter of 2024 due primarily to improved operating leverage. As a result, operating margin was 44.3% in the first quarter of 2025 as compared to 45.0% in the first quarter of 2024.

Current wording

In our Network Software segment, net revenues in the second quarter of 2025 grew 5.8% to $385.4 as compared to $364.2 in the second quarter of 2024. The growth of 4.7% in organic revenues was led by our network software businesses serving the construction, freight match, and alternate site healthcare markets, partially offset by a decline in our media and entertainment software business primarily related to end-market conditions. Gross margin decreased to 83.2% in the second quarter of 2025 as compared to 84.5% in the second quarter of 2024 due primarily to revenue mix. SG&A expenses as a percentage of net revenues decreased to 39.3% in the second quarter of 2025 as compared to 40.8% in the second quarter of 2024 due primarily to operating leverage on higher organic revenues. As a result, operating margin was 43.9% in the second quarter of 2025 as compared to 43.7% in the first quarter of 2024.

Previous wording

In our Technology Enabled Products segment, net revenues in the first quarter of 2025 grew 5.8% to $438.7 as compared to $414.7 in the first quarter of 2024. The growth of 6.0% in organic revenues was led by certain of our medical products businesses, highlighted by our precision measurement business, as well as growth in our water meter technology business. Gross margin increased to 58.7% in the first quarter of 2025 as compared to 57.6% in the first quarter of 2024 due primarily to improved leverage on higher organic revenues and revenue mix. SG&A expenses as a percentage of net revenues decreased to 23.6% in the first quarter of 2025 as compared to 24.8% in the first quarter of 2024 due primarily to operating leverage on higher organic revenues. The resulting operating margin was 35.0% in the first quarter of 2025 as compared to 32.8% in the first quarter of 2024.

Current wording

In our Technology Enabled Products segment, net revenues in the second quarter of 2025 grew 10.1% to $463.3 as compared to $420.8 in the second quarter of 2024. The growth of 9.1% in organic revenues was broad-based across the segment, led by our medical products businesses and our water meter technology business. Gross margin increased to 58.6% in the second quarter of 2025 as compared to 58.1% in the second quarter of 2024 due primarily to improved leverage on higher organic revenues and revenue mix. SG&A expenses as a percentage of net revenues remained relatively consistent at 23.1% in the second quarter of 2025 as compared to 23.2% in the second quarter of 2024. The resulting operating margin was 35.4% in the second quarter of 2025 as compared to 34.9% in the second quarter of 2024.

Previous wording

Corporate expenses increased to $71.3, or 3.8% of net revenues, in the first quarter of 2025 as compared to $61.5, or 3.7% of net revenues, in the first quarter of 2024. The dollar increase was due primarily to higher compensation expense, predominantly driven by increased stock-based compensation expense.

Current wording

Corporate expenses increased to $79.7, or 4.1% of net revenues, in the second quarter of 2025 as compared to $62.7, or 3.7% of net revenues, in the second quarter of 2024. The dollar increase was due primarily to higher compensation and acquisition-related expenses.

Previous wording

Interest expense, net, increased to $62.9 for the first quarter of 2025 as compared to $53.2 for the first quarter of 2024 due primarily to a higher weighted-average fixed-rate debt balance and interest rate, partially offset by a lower weighted-average revolving credit facility balance.

Current wording

Interest expense, net, increased to $79.1 for the second quarter of 2025 as compared to $67.5 for the second quarter of 2024 due primarily to a higher weighted-average fixed-rate debt balance and interest rate, partially offset by a lower weighted-average revolving credit facility balance and interest rate.

Previous wording

Backlog is equal to our remaining performance obligations expected to be recognized as revenue within the next 12 months as discussed in Note 11 of the Notes to Condensed Consolidated Financial Statements. Backlog increased 3.5% to $3,033.8 at March 31, 2025 as compared to $2,932.4 at March 31, 2024 due primarily to organic growth in our Application Software and Network Software segments as well as acquisitions in our Application Software segment, partially offset by a decrease in our Technology Enabled Products segment associated with the normalization of supply chain ordering patterns.

Current wording

Backlog is equal to our remaining performance obligations expected to be recognized as revenue within the next 12 months as discussed in Note 11 of the Notes to Condensed Consolidated Financial Statements. Backlog increased 4.4% to $2,961.3 at June 30, 2025 as compared to $2,836.4 at June 30, 2024 due primarily to organic growth and acquisitions in our Application Software segment as well as organic growth in our Network Software segment, partially offset by a decrease in our Technology Enabled Products segment associated with the normalization of supply chain ordering patterns.

Previous wording

In our Application Software segment, net revenues in the first quarter of 2025 grew 19.3% to $1,068.2 as compared to $895.2 in the first quarter of 2024, led by acquisition contribution from Transact and Procare. The growth of 5.9% in organic revenues was broad-based across the segment, led by our businesses serving the acute healthcare, project-based business/government contracting, and property and casualty insurance markets. Gross margin decreased to 67.5% in the first quarter of 2025 as compared to 69.9% in the first quarter of 2024 due primarily to a lower gross margin profile associated with the higher payments revenue mix at Transact and Procare. SG&A expenses as a percentage of net revenues decreased to 41.6% in the first quarter of 2025 as compared to 43.1% in the first quarter of 2024, due primarily to operating leverage on higher organic revenues and a lower SG&A profile associated with the higher payments revenue mix at Transact and Procare. The resulting operating margin was 25.9% in the first quarter of 2025 as compared to 26.8% in the first quarter of 2024.

Current wording

In our Application Software segment, net revenues in the six months ended June 30, 2025 grew 18.4% to $2,163.1 as compared to $1,827.0 in the six months ended June 30, 2024, led by acquisition contribution from Transact, Procare, and CentralReach. The growth of 6.2% in organic revenues was broad-based across the segment, led by our businesses serving the acute healthcare, property and casualty insurance, and legal markets. Gross margin decreased to 68.1% in the six months ended June 30, 2025 as compared to 69.3% in the six months ended June 30, 2024 due primarily to a lower gross margin profile associated with the higher payments revenue mix at Transact and Procare, partially offset by operating leverage on higher organic revenues. SG&A expenses as a percentage of net revenues decreased to 41.7% in the six months ended June 30, 2025 as compared to 42.5% in the six months ended June 30, 2024, due primarily to operating leverage on higher organic revenues and a lower SG&A profile associated with the higher payments revenue mix at Transact and Procare. These benefits were partially offset by higher amortization of acquired intangibles from the acquisition of CentralReach. As a result, operating margin was 26.4% in the six months ended June 30, 2025 as compared to 26.9% in the six months ended June 30, 2024.

Previous wording

Equity investments (gain) loss, net, was a loss of $44.4 in the first quarter of 2025 due primarily to a $44.1 decrease in the fair value of our equity investment in Indicor. Equity investments (gain) loss, net, was a gain of $57.0 in the first quarter of 2024 due primarily to a $64.4 increase in the fair value of our equity investment in Indicor, partially offset by our proportionate share of net loss associated with the investment in Certinia of $7.6 in accordance with the equity method of accounting. Changes in the fair value of our Indicor investment are primarily due to fluctuations in the equity values of comparable guideline public companies.

Current wording

Equity investments activity, net, was a loss of $27.8 in the six months ended June 30, 2025 due primarily to a $32.6 decrease in the fair value of our equity investment in Indicor, partially offset by $5.1 of dividend distributions received from Indicor. Equity investments activity, net, was a gain of $56.2 in the six months ended June 30, 2024 due primarily to a $55.1 increase in the fair value of our equity investment in Indicor. Changes in the fair value of our Indicor investment are primarily due to fluctuations in the equity values of comparable guideline public companies.

Previous wording

Income taxes as a percentage of pretax earnings decreased to 20.8% for the first quarter of 2025 as compared to 21.1% for the first quarter of 2024. The 2025 rate was favorably impacted by increased stock-based compensation tax benefits.

Current wording

Income taxes as a percentage of pretax earnings increased to 21.5% for the six months ended June 30, 2025 as compared to 20.9% for the six months ended June 30, 2024, due primarily to the release of valuation allowances in 2024, partially offset by increased stock-based compensation tax benefits.

Previous wording

Selected cash flows for the three months ended March 31, 2025 and 2024 were as follows:

Current wording

Selected cash flows for the six months ended June 30, 2025 and 2024 were as follows:

Previous wording

Operating activities – Net cash provided by operating activities decreased by 1% to $528.7 in the three months ended March 31, 2025 as compared to $531.5 in the three months ended March 31, 2024 primarily due to the cash payment of $24.0 related to settled litigation, payments associated with incentive compensation, and higher cash taxes paid, partially offset by higher net earnings net of non-cash expenses.

Current wording

Operating activities – Net cash provided by operating activities increased by 2% to $932.8 in the six months ended June 30, 2025 as compared to $915.6 in the six months ended June 30, 2024 primarily due to higher net earnings net of non-cash expenses, and a benefit to cash income taxes paid of approximately $60 in the second quarter of 2025 in connection with the repeal of the requirement to capitalize and amortize domestic R&D expenditures under Internal Revenue Code Section 174. These increases were partially offset by less cash provided by net working capital primarily related to changes in the balances of accounts receivable and accrued expenses, including the payment of $24.0 related to settled litigation, and $30.2 of cash taxes paid in 2025 associated with our sale of the equity investment in Certinia in 2024.

Previous wording

Investing activities – Cash used in investing activities during the three months ended March 31, 2025 was primarily for the acquisition of Muni-Link. Cash used in investing activities during the three months ended March 31, 2024 was primarily for the acquisition of Procare.

Current wording

Investing activities – Cash used in investing activities during the six months ended June 30, 2025 was primarily for the acquisitions of CentralReach, Muni-Link, and Outgo. Cash used in investing activities during the six months ended June 30, 2024 was primarily for the acquisition of Procare.

Previous wording

Financing activities – Cash used in financing activities during the three months ended March 31, 2025 was primarily for net repayments on our unsecured revolving credit facility and dividend payments. Cash provided by financing activities during the three months ended March 31, 2024 was primarily from net borrowings under our unsecured revolving credit facility to fund the acquisition of Procare, partially offset by dividend payments.

Current wording

Financing activities – Cash provided by financing activities during the six months ended June 30, 2025 was primarily from net borrowings under our unsecured revolving credit facility to fund the acquisition of CentralReach, and net proceeds from stock-based compensation, partially offset by dividend payments. Cash provided by financing activities during the six months ended June 30, 2024 was primarily from net borrowings under our unsecured revolving credit facility to fund the acquisition of Procare, and net proceeds from stock-based compensation, partially offset by dividend payments.

Previous wording

The interest rate on borrowings under the $3,500.0 unsecured revolving credit facility is calculated based upon various recognized indices plus a margin as defined in the credit agreement. At March 31, 2025, we had no borrowings outstanding under our unsecured revolving credit facility and $6.8 of outstanding letters of credit. Subsequently, our acquisition of CentralReach on April 23, 2025 was funded using borrowings under our unsecured revolving credit facility.

Current wording

The interest rate on borrowings under the $3,500.0 unsecured revolving credit facility is calculated based upon various recognized indices plus a margin as defined in the credit agreement. At June 30, 2025, we had $1,400.0 of borrowings outstanding under our unsecured revolving credit facility and $7.0 of outstanding letters of credit. Subsequent to June 30, 2025, our acquisitions of Subsplash on July 25, 2025, Orchard Software on July 28, 2025, and Convoy on July 30, 2025 were funded using borrowings under our unsecured revolving credit facility.

Previous wording

In relation to our total cash and cash equivalents, amounts held at our foreign subsidiaries represented 51.5% or $191.9 at March 31, 2025 as compared to 69.5% or $130.8 at December 31, 2024. The increase in foreign cash was due primarily to the cash generated at our foreign subsidiaries during the three months ended March 31, 2025, partially offset by cash repatriation of $10.0. We intend to repatriate substantially all historical and future earnings.

Current wording

In relation to our total cash and cash equivalents, amounts held at our foreign subsidiaries represented 71.2% or $172.5 at June 30, 2025 as compared to 69.5% or $130.8 at December 31, 2024. The increase in foreign cash was due primarily to the cash generated at our foreign subsidiaries during the six months ended June 30, 2025, partially offset by cash repatriation of $135.7. We intend to repatriate substantially all historical and future earnings.

Previous wording

We were in compliance with all debt covenants related to our unsecured credit facility throughout the three months ended March 31, 2025.

Current wording

We were in compliance with all debt covenants related to our unsecured credit facility throughout the six months ended June 30, 2025.

Previous wording

Net working capital (total current assets, excluding cash, less total current liabilities, excluding debt) was negative $1,356.8 at March 31, 2025 as compared to negative $1,434.6 at December 31, 2024. The change in net working capital was primarily driven by the timing of payments associated with incentive compensation, the reduction in deferred revenue predominantly due to the timing of SaaS renewals associated with Frontline, the payment for settled litigation, and payment timing associated with prepaid expenses, partially offset by an increase in income taxes payable and a decrease in accounts receivable. Total debt, net of deferred financing costs was $7,456.4 at March 31, 2025 as compared to $7,623.0 at December 31, 2024. Our leverage is presented in the following table:

Current wording

Net working capital (total current assets, excluding cash, less total current liabilities, excluding debt) was negative $1,152.8 at June 30, 2025 as compared to negative $1,434.6 at December 31, 2024. The change in net working capital was primarily driven by the reduction in deferred revenue predominantly due to the timing of SaaS renewals associated with Frontline, the timing of payments associated with incentive compensation, changes in tax-related balances, and the payment for settled litigation, partially offset by a decrease in accounts receivable. Total debt, net of deferred financing costs was $8,859.0 at June 30, 2025 as compared to $7,623.0 at December 31, 2024. Our leverage is presented in the following table:

Previous wording

Capital expenditures were $9.5 for the three months ended March 31, 2025 as compared to $9.3 for the three months ended March 31, 2024. Capitalized software expenditures were $12.4 for the three months ended March 31, 2025 as compared to $9.6 for the three months ended March 31, 2024. We expect the aggregate of capital expenditures and capitalized software expenditures for 2025 to be comparable to prior years as a percentage of net revenues.

Current wording

Capital expenditures were $26.0 for the six months ended June 30, 2025 as compared to $15.9 for the six months ended June 30, 2024. Capitalized software expenditures were $26.8 for the six months ended June 30, 2025 as compared to $20.5 for the six months ended June 30, 2024. We expect the aggregate of capital expenditures and capitalized software expenditures for 2025 to be comparable to prior years as a percentage of net revenues.

Previous wording

Current geopolitical and economic uncertainties, including inflation, tariffs and changes in trade policy, supply chain disruptions, and labor shortages, could adversely affect our business prospects. An armed conflict (such as the ongoing war in Ukraine, as well as the conflict in the Middle East), significant terrorist attack, other global conflict, widespread cybersecurity event or information technology failure, or public health crisis could cause changes in world economies that would adversely affect us. It is impossible to isolate each of these potential factor’s future effects on current economic conditions or any of our businesses. It is also impossible to predict with any reasonable degree of certainty what or when any additional events may occur that also would similarly disrupt the economy and have an adverse impact on our businesses.

Current wording

Current geopolitical and economic uncertainties, including inflation, tariffs and changes in trade policy, supply chain disruptions, and labor shortages, could adversely affect our business prospects. An armed conflict (such as the ongoing war in Ukraine, as well as the conflicts in the Middle East), significant terrorist attack, other global conflict, widespread cybersecurity event or information technology failure, or public health crisis could cause changes in world economies that would adversely affect us. It is impossible to isolate each of these potential factor’s future effects on current economic conditions or any of our businesses. It is also impossible to predict with any reasonable degree of certainty what or when any additional events may occur that also would similarly disrupt the economy and have an adverse impact on our businesses.