ROPER TECHNOLOGIES INC

Previous 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.

Current wording

There were no material changes during the nine months ended September 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 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:

Current wording

Net revenues for the three months ended September 30, 2025 were $2,017.5 as compared to $1,764.6 for the three months ended September 30, 2024, an increase of 14.3%. The components of revenue growth for the three months ended September 30, 2025 were as follows:

Previous wording

In our Application Software segment, net revenues in the second quarter of 2025 grew 17.5% to $1,094.9 as compared to $931.8 in the second quarter of 2024, led by acquisition contribution from Transact and CentralReach. The growth of 6.5% 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 remained consistent at 68.8% in both the second quarter of 2025 and 2024 due primarily to improved leverage on higher organic revenues, offset by a lower gross margin profile associated with the higher payments revenue mix at Transact. SG&A expenses as a percentage of net revenues remained consistent at 41.9% in both the second quarter of 2025 and 2024 due primarily to operating leverage on higher organic revenues, offset by higher amortization of acquired intangibles from the acquisition of CentralReach. As a result, operating margin was 26.9% in both the second quarter of 2025 and 2024.

Current wording

In our Application Software segment, net revenues in the third quarter of 2025 grew 17.9% to $1,161.0 as compared to $984.4 in the third quarter of 2024, led by acquisition contribution from Transact and CentralReach. The growth of 5.9% 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 increased to 69.0% in the third quarter of 2025 as compared to 68.3% in the third quarter of 2024 due primarily to improved leverage on higher organic revenues, partially offset by a lower gross margin profile associated with the higher payments revenue mix at Transact. SG&A expenses as a percentage of net revenues improved to 41.2% in the third quarter of 2025 as compared to 42.0% in the third quarter of 2024 due primarily to cost synergies resulting from the integration of Transact with CBORD and operating leverage on higher organic revenues, partially offset by higher amortization of acquired intangibles from the acquisition of CentralReach. As a result, operating margin was 27.8% in the third quarter of 2025 as compared to 26.4% in the third quarter of 2024.

Previous 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.

Current wording

In our Network Software segment, net revenues in the third quarter of 2025 grew 12.6% to $413.4 as compared to $367.1 in the third quarter of 2024, led by acquisition contribution from Subsplash. The growth of 6.0% in organic revenues was led by our network software businesses serving the alternate site healthcare, construction, and freight match markets, partially offset by a decline in our media and entertainment software business primarily related to end-market conditions. Gross margin decreased to 83.9% in the third quarter of 2025 as compared to 84.9% in the third quarter of 2024 due primarily to a lower gross margin profile associated with the higher payments revenue mix at Subsplash as well as revenue mix. SG&A expenses as a percentage of net revenues increased to 40.8% in the third quarter of 2025 as compared to 39.7% in the third quarter of 2024 due primarily to SG&A profiles associated with our third quarter 2025 acquisitions, Subsplash and Convoy, including higher amortization of acquired intangibles. As a result, operating margin was 43.1% in the third quarter of 2025 as compared to 45.2% in the third quarter of 2024.

Previous 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.

Current wording

Corporate expenses increased to $78.3, or 3.9% of net revenues, in the third quarter of 2025 as compared to $70.3, or 4.0% of net revenues, in the third quarter of 2024. The dollar increase was due primarily to higher stock-based compensation expense.

Previous 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.

Current wording

Interest expense, net, increased to $89.7 for the third quarter of 2025 as compared to $67.7 for the third quarter of 2024 due primarily to a higher weighted-average fixed-rate debt balance and interest rate.

Previous wording

Equity investments activity, net, was a gain of $16.6 in the second quarter of 2025 due to an $11.5 increase in the fair value of our equity investment in Indicor and $5.1 of dividend distributions received from Indicor. Equity investments activity, net, was a loss of $0.8 in the second quarter of 2024 due primarily to a $9.3 decrease in the fair value of our equity investment in Indicor, offset by $8.4 of dividend distributions received from Indicor. 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 gain of $12.9 in the third quarter of 2025 due primarily to a $16.3 increase in the fair value of our equity investment in Indicor. Equity investments activity, net, was a gain of $37.4 in the third quarter of 2024 due primarily to an 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

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.

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 13 of the Notes to Condensed Consolidated Financial Statements. Backlog increased 4.9% to $3,174.0 at September 30, 2025 as compared to $3,026.1 at September 30, 2024. Organic growth in backlog was driven by our software segments, partially offset by a decrease in our Technology Enabled Products segment associated with the normalization of supply chain ordering patterns.

Previous wording

Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024

Current wording

Nine Months Ended September 30, 2025 compared to the Nine Months Ended September 30, 2024

Previous wording

Net revenues for the six months ended June 30, 2025 were $3,826.4 as compared to $3,397.5 for the six months ended June 30, 2024, an increase of 12.6%. The components of revenue growth for the six months ended June 30, 2025 were as follows:

Current wording

Net revenues for the nine months ended September 30, 2025 were $5,843.9 as compared to $5,162.1 for the nine months ended September 30, 2024, an increase of 13.2%. The components of revenue growth for the nine months ended September 30, 2025 were as follows:

Previous 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.

Current wording

In our Application Software segment, net revenues in the nine months ended September 30, 2025 grew 18.2% to $3,324.1 as compared to $2,811.4 in the nine months ended September 30, 2024, led by acquisition contribution from Transact, CentralReach, and Procare. The growth of 6.1% 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 68.4% in the nine months ended September 30, 2025 as compared to 69.0% in the nine months ended September 30, 2024 due primarily to a lower gross margin profile associated with the higher payments revenue mix at Transact, partially offset by improved leverage on higher organic revenues. SG&A expenses as a percentage of net revenues improved to 41.5% in the nine months ended September 30, 2025 as compared to 42.3% in the nine months ended September 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. These benefits were partially offset by higher amortization of acquired intangibles from the acquisition of CentralReach. As a result, operating margin was 26.9% in the nine months ended September 30, 2025 as compared to 26.7% in the nine months ended September 30, 2024.

Previous wording

In our Network Software segment, net revenues in the six months ended June 30, 2025 grew 3.6% to $761.3 as compared to $735.0 in the six months ended June 30, 2024. The growth of 2.7% 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 media and entertainment software business primarily related to end-market conditions. Gross margin decreased to 83.6% in the six months ended June 30, 2025 as compared to 84.9% in the six months ended June 30, 2024 due primarily to revenue mix. SG&A expenses as a percentage of net revenues decreased to 39.5% in the six months ended June 30, 2025 as compared to 40.5% in the six months ended June 30, 2024 due primarily to operating leverage on higher organic revenues. As a result, operating margin was 44.1% in the six months ended June 30, 2025 as compared to 44.4% in the six months ended June 30, 2024.

Current wording

In our Network Software segment, net revenues in the nine months ended September 30, 2025 grew 6.6% to $1,174.7 as compared to $1,102.1 in the nine months ended September 30, 2024, led by acquisition contribution from Subsplash. The growth of 3.8% in organic revenues was led by our network software businesses serving the construction, freight match, and alternate site healthcare markets. These increases were partially offset by a decline in our media and entertainment software business primarily related to end-market conditions. Gross margin decreased to 83.7% in the nine months ended September 30, 2025 as compared to 84.9% in the nine months ended September 30, 2024 due primarily to revenue mix as well as a lower gross margin profile associated with the higher payments revenue mix at Subsplash. SG&A expenses as a percentage of net revenues improved to 39.9% in the nine months ended September 30, 2025 as compared to 40.3% in the nine months ended September 30, 2024 due primarily to operating leverage on higher organic revenues, partially offset by higher amortization of acquired intangibles and SG&A profiles associated with acquisitions. As a result, operating margin was 43.8% in the nine months ended September 30, 2025 as compared to 44.7% in the nine months ended September 30, 2024.

Previous wording

In our Technology Enabled Products segment, net revenues in the six months ended June 30, 2025 grew 8.0% to $902.0 as compared to $835.5 in the six months ended June 30, 2024. The growth of 7.5% in organic revenues was led by our medical products businesses, highlighted by our precision measurement business, and growth in our water meter technology business. Gross margin increased to 58.6% in the six months ended June 30, 2025 as compared to 57.9% in the six months ended June 30, 2024 due primarily to improved leverage on higher organic revenues and revenue mix. SG&A expenses as a percentage of net revenues decreased to 23.4% in the six months ended June 30, 2025 as compared to 24.0% in the six months ended June 30, 2024 due primarily to operating leverage on higher organic revenues. The resulting operating margin was 35.2% in the six months ended June 30, 2025 as compared to 33.9% in the six months ended June 30, 2024.

Current wording

In our Technology Enabled Products segment, net revenues in the nine months ended September 30, 2025 grew 7.7% to $1,345.1 as compared to $1,248.6 in the nine months ended September 30, 2024. The growth of 7.1% in organic revenues was broad-based across the segment, led by our medical products businesses, highlighted by our precision measurement business, and growth in our water meter technology business. Gross margin increased to 58.3% in the nine months ended September 30, 2025 as compared to 57.7% in the nine months ended September 30, 2024 due primarily to revenue mix. SG&A expenses as a percentage of net revenues improved to 23.5% in the nine months ended September 30, 2025 as compared to 23.7% in the nine months ended September 30, 2024 due primarily to operating leverage on higher organic revenues. The resulting operating margin was 34.8% in the nine months ended September 30, 2025 as compared to 34.0% in the nine months ended September 30, 2024.

Previous wording

Corporate expenses increased to $151.0, or 3.9% of net revenues, in the six months ended June 30, 2025 as compared to $124.2, or 3.7% of net revenues, in the six months ended June 30, 2024. The dollar increase was due primarily to higher compensation expense, including higher stock-based compensation expense.

Current wording

Corporate expenses increased to $229.3, or 3.9% of net revenues, in the nine months ended September 30, 2025 as compared to $194.5, or 3.8% of net revenues, in the nine months ended September 30, 2024. The dollar increase was due primarily to higher compensation expense, predominantly higher stock-based compensation expense.

Previous wording

Interest expense, net, increased to $142.0 for the six months ended June 30, 2025 as compared to $120.7 for the six months ended June 30, 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 $231.7 for the nine months ended September 30, 2025 as compared to $188.4 for the nine months ended September 30, 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.

Previous 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.

Current wording

Equity investments activity, net, was a loss of $14.9 in the nine months ended September 30, 2025 due primarily to a $16.3 decrease in the fair value of our equity investment in Indicor. Equity investments activity, net, was a gain of $93.6 in the nine months ended September 30, 2024 due primarily to an 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

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

Current wording

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

Previous 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.

Current wording

Operating activities – Net cash provided by operating activities increased by 8% to $1,802.3 in the nine months ended September 30, 2025 as compared to $1,671.0 in the nine months ended September 30, 2024 primarily due to higher net earnings net of non-cash expenses, and a benefit to cash income taxes paid 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 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.

Current wording

Investing activities – Cash used in investing activities during the nine months ended September 30, 2025 was primarily for the acquisitions of CentralReach, Subsplash, Convoy, and Orchard Software. Cash used in investing activities during the nine months ended September 30, 2024 was primarily for the acquisitions of Procare and Transact.

Previous 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.

Current wording

Financing activities – Cash provided by financing activities during the nine months ended September 30, 2025 was primarily from the issuance of $2,000.0 of senior notes in August 2025, net borrowings under our unsecured revolving credit facility primarily to fund the acquisitions of CentralReach and Subsplash, and net proceeds from stock-based compensation, partially offset by $700.0 of senior notes repaid at maturity in September 2025 and dividend payments. Cash provided by financing activities during the nine months ended September 30, 2024 was primarily from the issuance of $2,000.0 of senior notes in August 2024, net borrowings under our unsecured revolving credit facility to fund the acquisitions of Procare and Transact, and net proceeds from stock-based compensation, partially offset by $500.0 of senior notes repaid at maturity in September 2024 and 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 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.

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 September 30, 2025, we had $710.0 of borrowings outstanding under our unsecured revolving credit facility and $7.1 of outstanding letters of credit.

Previous 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.

Current wording

In relation to our total cash and cash equivalents, amounts held at our foreign subsidiaries represented 49.6% or $158.7 at September 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 nine months ended September 30, 2025, partially offset by cash repatriation of $235.7. 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 six months ended June 30, 2025.

Current wording

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

Previous 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:

Current wording

Net working capital (total current assets, excluding cash, less total current liabilities, excluding debt) was negative $1,342.0 at September 30, 2025 as compared to negative $1,434.6 at December 31, 2024. The change in net working capital was primarily driven by changes in tax-related balances, increases in accounts receivable as well as prepaid expenses and other current assets, and the payment for settled litigation, partially offset by an increase in deferred revenue predominantly due to the timing of SaaS renewals associated with our Frontline business.

Previous 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.

Current wording

Capital expenditures were $37.6 for the nine months ended September 30, 2025 as compared to $39.2 for the nine months ended September 30, 2024. Capitalized software expenditures were $42.8 for the nine months ended September 30, 2025 as compared to $33.4 for the nine months ended September 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

The enactment of the OBBBA on July 4, 2025 introduced various tax reform provisions, among which include the repeal of the requirement to capitalize and amortize domestic R&D expenditures. Currently, the OBBBA is expected to provide a full year 2025 cash tax benefit of approximately $150, with a cash tax benefit of approximately $120 expected in 2026. We continue to assess the broader impacts of the OBBBA.

Current wording

The enactment of the OBBBA on July 4, 2025 introduced various tax reform provisions, among which include the repeal of the requirement to capitalize and amortize domestic R&D expenditures. Currently, the OBBBA is expected to provide a full year 2025 cash tax benefit of approximately $150, with a cash tax benefit of approximately $120 expected in 2026. The legislation has multiple effective dates and is not expected to have a significant impact on effective tax rate in future years. We continue to assess the broader impacts of the OBBBA as further information becomes available.

Previous wording

We anticipate that our businesses will generate positive cash flows from operating activities, and that these cash flows will permit the reduction of currently outstanding debt in accordance with the repayment schedule. However, the rate at which we can reduce our debt (and reduce the associated interest expense) will be affected by, among other things, the financing and operating requirements of any new acquisitions, the financial performance of our existing companies, the impact of the aforementioned geopolitical and economic uncertainties, and the financial markets generally. None of these factors can be predicted with certainty.

Current wording

We anticipate that our businesses will generate positive cash flows from operating activities, and that these cash flows will permit the reduction of currently outstanding debt in accordance with the repayment schedule. However, the rate at which we can reduce our debt (and reduce the associated interest expense) will be affected by, among other things, the financing and operating requirements of any new acquisitions, the financial performance of our existing companies, any allocation of capital toward share repurchases, the impact of the aforementioned geopolitical and economic uncertainties, and the financial markets generally. None of these factors can be predicted with certainty.