Roper Technologies (NASDAQ:ROP) reported second-quarter results that topped its internal expectations and raised its full-year outlook, citing solid organic growth, continued strong retention and accelerating artificial intelligence product development across its portfolio.
President and Chief Executive Officer Neil Hunn said the company delivered “solid results and are raising our outlook for the year,” while also pointing to growing AI momentum and continued disciplined capital allocation. Total revenue rose 9% to $2.1 billion, while organic revenue increased 5%. EBITDA grew 5% to $815 million, with an EBITDA margin of 38.6%. Adjusted diluted earnings per share were $5.38, above the company’s guidance range of $5.25 to $5.30 and up 10% from the prior year.
Roper Raises Full-Year Guidance
Roper increased its full-year adjusted diluted earnings per share guidance to a range of $22.15 to $22.30, up $0.30 at the midpoint from its prior forecast and $0.80 above its original January guide. The company also raised its revenue outlook, now expecting total revenue growth north of 8% and organic revenue growth in the 6% range.
For the third quarter, Roper established adjusted diluted EPS guidance of $5.75 to $5.80. The company said its outlook excludes any proceeds from Indicor’s divestiture of its instrumentation businesses.
Hunn said the improved outlook reflects first-half performance, better-than-expected results at Neptune, early signs of stabilization at Deltek and improving freight market indicators at DAT. However, management was cautious about declaring full recoveries in certain markets. Hunn said Deltek’s government contractor market showed “encouraging signs,” but added that Roper wants to see the sales pipeline convert consistently over the next few quarters before changing its outlook.
AI Product Releases Accelerate Across Portfolio
Management devoted a significant portion of the call to AI and agentic software initiatives across Roper’s businesses. Hunn said the company’s product release cadence accelerated during the quarter, with new or expanded AI capabilities launched at Deltek, Vertafore, Strata, Aderant, Procare, CentralReach, DAT, SoftWriters, iTrade, Foundry and ConstructConnect.
Hunn said Roper’s vertical software businesses are positioned to benefit from AI because of “deep domain expertise, embedded customer workflows, unique data assets, high-trust customer relationships, and scale distribution.” He said adoption is still developing because many products change how customers perform work, but added that the company is seeing positive early signals.
Vertafore was highlighted as an example of Roper’s AI strategy. Hunn said Vertafore launched its Velocity AI platform with six initial agentic SKUs focused on insurance distribution workflows, including digital servicing, smart submissions, accounting automation, producer workflows and business intelligence. He said examples include a reconciliation agent that can reduce work from up to an hour to minutes and a submission processing agent that can reduce processing time from roughly an hour to about two minutes.
During the Q&A session, Hunn said the company is still learning how to commercialize these AI offerings, including pricing, deployment and driving utilization. He said AI will not be a material revenue contributor in the second half of the current year, but momentum is “unmistakably” building inside the organization.
Segment Results Show Mixed Margin Trends
In the application software segment, revenue grew 8% overall and 5% organically. EBITDA margin was 42.8%, while core margins declined 20 basis points year over year. Hunn said organic recurring and reoccurring revenue, which represents about 85% of the segment, continued to grow in the mid-single-digit-plus range, while non-recurring revenue declined in the low single digits.
Management said Aderant had another strong quarter, Deltek was solid with strength in private sector solutions, Vertafore delivered continued ARR growth, Strata performed well and CentralReach continued to deliver strong growth and margin improvement. Procare was described as “a work in progress,” though Hunn said the team is advancing its product strategy and improving execution.
In network software, total revenue grew 12% and organic revenue increased 4%. Organic recurring revenue grew in the high single digits, offset by weaker reoccurring and non-recurring revenue at MHA and iPipeline. EBITDA margin was 50.9%, down 370 basis points year over year, though core margins improved 30 basis points. Management attributed the margin gap to the Subsplash acquisition and continued investment at DAT, including Convoy.
Hunn said DAT is seeing better freight market indicators, including increased carrier additions, stronger spot pricing relative to contract rates and rising carrier rejection rates. However, he said load volumes still need to improve before management becomes “fully bullish” on the recovery.
In the technology-enabled products segment, total and organic revenue each grew 7%. EBITDA margin was 34.5%, down 220 basis points year over year. Conley said the pressure was concentrated in the segment and reflected higher input costs at Neptune, particularly bronze ingot inflation, as well as mix shifts at NDI and Verathon toward faster-growing consumables that carry lower gross margins but more durable recurring revenue profiles.
Buybacks Continue, But M&A May Become Priority
Roper repurchased 3.6 million shares during the quarter for $1.2 billion at an average price of approximately $341 per share. Since the program began, the company has repurchased 9 million shares for $3.2 billion, representing more than 8% of shares outstanding over eight months, according to Conley.
The company ended the quarter with net debt to EBITDA of 3.4 times, $365 million of cash and $2.9 billion drawn on its $3.5 billion revolver. Roper also expects gross proceeds of approximately $1.4 billion, or an estimated $1.2 billion after tax, from Indicor’s announced sale of its instrumentation businesses to AMETEK, expected to close in the second half of the year.
Hunn said Roper’s capital allocation framework remains unchanged, with the company seeking the best long-term cash flow per share compounding opportunities. While recent share repurchases were attractive, he said management expects merger and acquisition opportunities to become more compelling as private valuations adjust. Roper is “cautiously optimistic” about deploying $5 billion or more toward acquisitions over the next 12 to 18 months, provided assets meet its strategic and risk-adjusted financial criteria.
Given expected improvement in the M&A market and current leverage levels, Hunn said near-term capital deployment will favor deleveraging over additional opportunistic buybacks.
About Roper Technologies (NASDAQ:ROP)
Roper Technologies, Inc (NASDAQ: ROP) is a diversified technology company that acquires and manages businesses delivering specialized software, engineered products and data-driven analytics to niche markets. Its subsidiaries develop enterprise and cloud-based software, scientific and analytical instruments, industrial and medical devices, and other applied technologies designed to solve specific operational, regulatory and commercial challenges for customers. The company emphasizes recurring revenue streams from software licenses, subscriptions and service contracts alongside sales of hardware and instruments.
Roper operates a decentralized operating model in which acquired businesses retain entrepreneurial autonomy while benefiting from centralized capital allocation, legal and financial support.
