• Roper Technologies announces second quarter financial results

    المصدر: Nasdaq GlobeNewswire / 24 يوليو 2024 05:55:00   America/Chicago

    SARASOTA, Fla., July 24, 2024 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (Nasdaq: ROP) reported financial results for the second quarter ended June 30, 2024. The results in this press release are presented on a continuing operations basis.

    Second quarter 2024 highlights

    • Revenue increased 12% to $1.72 billion; organic revenue increased 4%
    • GAAP DEPS decreased 7% to $3.12; adjusted DEPS increased 9% to $4.48
    • GAAP net earnings decreased 7% to $337 million; adjusted net earnings increased 9% to $483 million
    • Adjusted EBITDA increased 13% to $695 million
    • Operating cash flow increased 20% to $384 million

    "Our portfolio of market-leading technology businesses delivered a solid quarter, highlighted by 12% revenue growth, 13% EBITDA growth, and 24% free cash flow growth," said Neil Hunn, Roper Technologies’ President and CEO. "Importantly, our second quarter free cash flow of $367 million brings our trailing-twelve-month adjusted free cash flow to $2.1 billion, representing 32% of revenue."

    "During the quarter, we saw improving demand for our enterprise software partially offset by production timing at Neptune. Given these factors, we are increasing the low end of our full year guidance. Additionally, we remain well positioned to execute our disciplined and process-driven capital deployment strategy, with a robust pipeline of attractive acquisition opportunities and substantial M&A capacity," concluded Mr. Hunn.

    Updating 2024 guidance

    Roper now expects full year 2024 adjusted DEPS of $18.10 - $18.25, compared to previous guidance of $18.05 - $18.25. The Company continues to expect full year total revenue growth of approximately 12% and organic revenue growth of approximately 6%.

    For the third quarter of 2024, the Company expects adjusted DEPS of $4.50 - $4.54.

    The Company’s guidance excludes the impact of unannounced future acquisitions or divestitures.

    Conference call to be held at 8:00 AM (ET) today

    A conference call to discuss these results has been scheduled for 8:00 AM ET on Wednesday, July 24, 2024. The call can be accessed via webcast or by dialing +1 800-836-8184 (US/Canada) or +1 646-357-8785, using conference call ID 31548. Webcast information and conference call materials will be made available in the Investors section of Roper’s website (www.ropertech.com) prior to the start of the call. The webcast can also be accessed directly by using the following URL https://event.webcast. Telephonic replays will be available for up to two weeks and can be accessed by dialing +1 646-517-4150 with access code 31548#.

    Use of non-GAAP financial information

    The Company supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial schedules or tables. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated.

    Minority interests

    Following the sale of a majority stake in its industrial businesses to CD&R, Roper holds a minority interest in Indicor. The fair value of Roper’s equity investment in Indicor is updated on a quarterly basis and reported as "equity investments (gain) loss, net." Roper also holds a minority interest in Certinia, a leading provider of professional services automation software. The Company’s investment is accounted for under the equity method and its proportionate share of earnings or loss associated with this investment is reported as "equity investments (gain) loss, net." Roper makes non-GAAP adjustments for the impacts associated with these investments.

    Table 1: Revenue and adjusted EBITDA reconciliation ($M)
    (from continuing operations)
     Q2 2023 Q2 2024 V %
    GAAP revenue$1,531  $1,717  12%
          
    Components of revenue growth     
    Organic    4%
    Acquisitions    8%
    Foreign exchange    —%
    Revenue growth    12%
          
    Adjusted EBITDA reconciliation     
    GAAP net earnings$361  $337   
    Taxes 103   88   
    Interest expense 35   68   
    Depreciation 9   9   
    Amortization 176   192   
    EBITDA$683  $694  2%
          
    Financial impacts associated with the minority
    investments in Indicor & Certinia A    		 (66)  1   
    Adjusted EBITDA$617  $695  13%
    % of revenue 40.3%  40.5% +20 bps


    Table 2: Adjusted net earnings reconciliation ($M)
    (from continuing operations)
     Q2 2023 Q2 2024 V %
    GAAP net earnings$361  $337 (7)%
    Financial impacts associated with the minority
    investments in Indicor & Certinia A    		 (53)  —  
    Amortization of acquisition-related intangible
    assets B    		 135   146  
    Adjusted net earnings$442  $483 9%
          


    Table 3: Adjusted DEPS reconciliation
    (from continuing operations)
     Q2 2023 Q2 2024 V %
    GAAP DEPS$3.36  $3.12 (7)%
    Financial impacts associated with the minority
    investments in Indicor & Certinia A    		 (0.50)  —  
    Amortization of acquisition-related intangible
    assets B    		 1.25   1.35  
    Adjusted DEPS$4.12  $4.48 9%
          


    Table 4: Adjusted cash flow reconciliation ($M)
    (from continuing operations)
     Q2 2023 Q2 2024 V %  TTM 2024
    Operating cash flow$320  $384  20%  $2,168 
    Taxes paid in period related to
    divestiture    		 —   —      32 
    Adjusted operating cash flow$320  $384  20%  $2,200 
    Capital expenditures (15)  (7)     (59)
    Capitalized software expenditures (9)  (11)     (41)
    Adjusted free cash flow$295  $367  24%  $2,100 
             


    Table 5: Forecasted adjusted DEPS reconciliation
    (from continuing operations)
     Q3 2024 FY 2024
     Low end High end Low end High end
    GAAP DEPS C$3.16 $3.20 $12.76 $12.91
    Transaction-related expenses for
    completed acquisitions    		 —  —  0.01  0.01
    Financial impacts associated with the
    minority investments in Indicor & Certinia A    		TBD TBD TBD TBD
    Amortization of acquisition-related
    intangible assets B    		 1.34  1.34  5.33  5.33
    Adjusted DEPS$4.50 $4.54 $18.10 $18.25
            

    Footnotes:

    A.Adjustments related to the financial impacts associated with the minority investments in Indicor & Certinia as shown below ($M, except per share data). Forecasted results do not include any potential impacts associated with our minority investments in Indicor or Certinia, as these potential impacts cannot be reasonably predicted. These impacts will be excluded from all non-GAAP results in future periods.
              
      Q2 2023A Q2 2024A  Q3 2024E FY 2024E
     Pretax$        (66) $        1          TBD TBD
     After-tax$        (53) $        —          TBD TBD
     Per share$        (0.50) $        —          TBD TBD
              
    B.Actual results and forecast of estimated amortization of acquisition-related intangible assets as shown below ($M, except per share data). These adjustments are taxed at 21%.
              
      Q2 2023A Q2 2024A  Q3 2024E FY 2024E
     Pretax$        170          $        185          $        184         $        729        
     After-tax$        135          $        146          $        145         $        576        
     Per share$        1.25          $        1.35          $        1.34         $        5.33        
              
    C.Forecasted GAAP DEPS do not include any potential impacts associated with our minority investments in Indicor or Certinia. These impacts will be excluded from all non-GAAP results in future periods.

    Note: Numbers may not foot due to rounding.

    About Roper Technologies

    Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess capital toward high-quality acquisitions. Additional information about Roper is available on the Company’s website at www.ropertech.com.

    Contact information:
    Investor Relations
    941-556-2601
    investor-relations@ropertech.com

    The information provided in this press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth, profit and cash flow expectations. Forward-looking statements may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes," "intends" and similar words and phrases. These statements reflect management's current beliefs and are not guarantees of future performance. They involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties include our ability to identify and complete acquisitions consistent with our business strategies, integrate acquisitions that have been completed, realize expected benefits and synergies from, and manage other risks associated with, acquired businesses, including obtaining any required regulatory approvals with respect thereto. We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions and the conditions of the specific markets in which we operate, including risks related to labor shortages and rising interest rates, changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, cybersecurity and data privacy risks, including litigation resulting therefrom, risks related to political instability, armed hostilities, incidents of terrorism, public health crises (such as the COVID-19 pandemic) or natural disasters, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, including as a result of the current inflationary environment and ongoing supply chain constraints, environmental compliance costs and liabilities, risks and cost associated with litigation, potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products. Important risks may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

    Roper Technologies, Inc.   
    Condensed Consolidated Balance Sheets (unaudited)  
    (Amounts in millions)   
        
     June 30, 2024 December 31, 2023
    ASSETS:   
        
    Cash and cash equivalents$251.5  $214.3 
    Accounts receivable, net 739.9   829.9 
    Inventories, net 128.8   118.6 
    Income taxes receivable 48.0   47.7 
    Unbilled receivables 123.8   106.4 
    Other current assets 198.2   164.5 
    Total current assets 1,490.2   1,481.4 
        
    Property, plant and equipment, net 116.4   119.6 
    Goodwill 18,313.1   17,118.8 
    Other intangible assets, net 8,645.3   8,212.1 
    Deferred taxes 30.7   32.2 
    Equity investments 842.8   795.7 
    Other assets 409.0   407.7 
    Total assets$29,847.5  $28,167.5 
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY:   
        
    Accounts payable$149.4  $143.0 
    Accrued compensation 189.5   250.0 
    Deferred revenue 1,468.3   1,583.8 
    Other accrued liabilities 469.7   446.5 
    Income taxes payable 30.9   40.4 
    Current portion of long-term debt, net 500.0   499.5 
    Total current liabilities 2,807.8   2,963.2 
        
    Long-term debt, net of current portion 6,923.9   5,830.6 
    Deferred taxes 1,585.4   1,513.1 
    Other liabilities 391.4   415.8 
    Total liabilities 11,708.5   10,722.7 
        
    Common stock 1.1   1.1 
    Additional paid-in capital 2,923.0   2,767.0 
    Retained earnings 15,374.3   14,816.3 
    Accumulated other comprehensive loss (142.8)  (122.8)
    Treasury stock (16.6)  (16.8)
    Total stockholders’ equity 18,139.0   17,444.8 
    Total liabilities and stockholders’ equity$29,847.5  $28,167.5 
        


    Roper Technologies, Inc.     
    Condensed Consolidated Statements of Earnings (unaudited)    
    (Amounts in millions, except per share data)    
            
     Three months ended
    June 30,    		 Six months ended
    June 30,
      2024  2023   2024   2023 
    Net revenues$1,716.8 $1,531.2  $3,397.5  $3,000.9 
    Cost of sales 523.5  464.1   1,023.2   915.2 
    Gross profit 1,193.3  1,067.1   2,374.3   2,085.7 
            
    Selling, general and administrative expenses 699.1  631.8   1,398.8   1,249.4 
    Income from operations 494.2  435.3   975.5   836.3 
            
    Interest expense, net 67.5  34.8   120.7   72.2 
    Equity investments (gain) loss, net 0.8  (66.0)  (56.2)  (64.8)
    Other expense, net 0.6  2.8   1.8   5.1 
            
    Earnings before income taxes 425.3  463.7   909.2   823.8 
            
    Income taxes 88.2  102.7   190.1   178.5 
            
    Net earnings from continuing operations 337.1  361.0   719.1   645.3 
            
    Loss from discontinued operations, net of tax —  —   —   (1.2)
    Gain on disposition of discontinued operations,
    net of tax    		 —  3.9   —   3.9 
    Net earnings from discontinued operations —  3.9   —   2.7 
            
    Net earnings$337.1 $364.9  $719.1  $648.0 
            
    Net earnings per share from continuing
    operations:    		       
    Basic$3.15 $3.38  $6.72  $6.06 
    Diluted$3.12 $3.36  $6.66  $6.02 
            
    Net earnings per share from discontinued
    operations:    		       
    Basic$— $0.04  $—  $0.03 
    Diluted$— $0.04  $—  $0.02 
            
    Net earnings per share:       
    Basic$3.15 $3.42  $6.72  $6.09 
    Diluted$3.12 $3.40  $6.66  $6.04 
            
    Weighted average common shares outstanding:       
    Basic 107.1  106.6   107.0   106.4 
    Diluted 107.9  107.4   107.9   107.2 


    Roper Technologies, Inc.        
    Selected Segment Financial Data (unaudited)        
    (Amounts in millions; percentages of net revenues)        
                    
     Three months ended June 30, Six months ended June 30,
      2024   2023   2024   2023 
     Amount % Amount % Amount % Amount %
    Net revenues:               
    Application Software$931.8   $770.3   $1,827.0   $1,531.7  
    Network Software 364.2    358.1    735.0    712.6  
    Technology Enabled
    Products    		 420.8    402.8    835.5    756.6  
    Total$1,716.8   $1,531.2   $3,397.5   $3,000.9  
                    
                    
    Gross profit:               
    Application Software$641.1 68.8% $531.0 68.9% $1,266.8 69.3% $1,051.5 68.6%
    Network Software 307.8 84.5%  303.9 84.9%  624.1 84.9%  603.3 84.7%
    Technology Enabled
    Products    		 244.4 58.1%  232.2 57.6%  483.4 57.9%  430.9 57.0%
    Total$1,193.3 69.5% $1,067.1 69.7% $2,374.3 69.9% $2,085.7 69.5%
                    
                    
    Operating profit*:               
    Application Software$251.1 26.9% $201.2 26.1% $490.7 26.9% $394.4 25.7%
    Network Software 159.1 43.7%  153.1 42.8%  326.1 44.4%  300.6 42.2%
    Technology Enabled
    Products    		 146.7 34.9%  139.1 34.5%  282.9 33.9%  254.6 33.7%
    Total$556.9 32.4% $493.4 32.2% $1,099.7 32.4% $949.6 31.6%
                    
    * Segment operating profit is before unallocated corporate general and administrative expenses and enterprise-wide stock-based compensation. These expenses were $62.7 and $58.1 for the three months ended June 30, 2024 and 2023, respectively, and $124.2 and $113.3 for the six months ended June 30, 2024 and 2023, respectively.


    Roper Technologies, Inc. 
    Condensed Consolidated Statements of Cash Flows (unaudited)
    (Amounts in millions)
     Six months ended
    June 30,
      2024   2023 
    Cash flows from operating activities:   
    Net earnings from continuing operations$719.1  $645.3 
    Adjustments to reconcile net earnings from continuing operations to cash
    flows from operating activities:    		   
    Depreciation and amortization of property, plant and equipment 18.5   17.3 
    Amortization of intangible assets 377.2   350.6 
    Amortization of deferred financing costs 4.5   5.1 
    Non-cash stock compensation 73.3   63.5 
    Equity investments gain, net (56.2)  (64.8)
    Income tax provision 190.1   178.5 
    Changes in operating assets and liabilities, net of acquired businesses:   
    Accounts receivable 96.7   46.7 
    Unbilled receivables (17.7)  (14.9)
    Inventories (11.0)  (5.9)
    Accounts payable 4.5   17.9 
    Other accrued liabilities (47.3)  (91.0)
    Deferred revenue (122.6)  (98.3)
    Cash income taxes paid (284.3)  (231.5)
    Other, net (29.2)  (33.5)
    Cash provided by operating activities from continuing operations 915.6   785.0 
    Cash used in operating activities from discontinued operations —   (1.7)
    Cash provided by operating activities 915.6   783.3 
        
    Cash flows from (used in) investing activities:   
    Acquisitions of businesses, net of cash acquired (1,858.3)  (17.3)
    Capital expenditures (15.9)  (24.9)
    Capitalized software expenditures (20.5)  (19.3)
    Distributions from equity investment 8.4   12.1 
    Other, net (1.1)  (2.9)
    Cash used in investing activities from continuing operations (1,887.4)  (52.3)
    Cash provided by disposition of discontinued operations —   2.0 
    Cash used in investing activities (1,887.4)  (50.3)
        
    Cash flows from (used in) financing activities:   
    Borrowings under revolving line of credit, net 1,090.0   — 
    Cash dividends to stockholders (160.6)  (144.8)
    Proceeds from stock-based compensation, net 75.9   60.8 
    Treasury stock sales 10.3   8.4 
    Other (0.2)  (0.2)
    Cash provided by (used in) financing activities 1,015.4   (75.8)
        
    Effect of exchange rate changes on cash (6.4)  12.8 
        
    Net increase in cash and cash equivalents 37.2   670.0 
        
    Cash and cash equivalents, beginning of period 214.3   792.8 
        
    Cash and cash equivalents, end of period$251.5  $1,462.8 
        

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