01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Roper Technologies, Inc. reported net revenues of $1,764.6 milliona for the three months ended September 30, 2024, compared with $1,563.4 million a year earlier, and net earnings of $367.9 million versus $347.2 million.
For the nine months, net revenues were $5,162.1 millionb (vs. $4,564.3 million) and net earnings were $1,087.0 million (vs. $995.2 million). Diluted EPS was $3.40 for the quarter and $10.06 for the nine months. Organic revenue growth was 4.1% for the quarter and 5.4% for the nine months, with acquisitions contributing the rest of the growth, most notably Procare and Transact.
The company deployed significant capital during the period. It acquired Procare Software for $1,860 millionc (February 2024) and Transact Campus for $1,607 million (August 2024), and it issued $2.0 billion of senior notes in August 2024. Cash provided by operating activities from continuing operations was $1,671.0 million for the nine months, up from $1,415.7 million.
Total debt, net of deferred financing costs, rose to $8,376.6 milliond from $6,330.1 million at year-end 2023, and net debt to total net capital was 30.5%, compared with 26.0% at December 31, 2023. Backlog (remaining performance obligations expected within 12 months) increased 3.9% to $3,026.1 million.
Management stated that it expects operating cash flows to permit debt reduction under the repayment schedule, while noting that the pace of reduction depends on acquisition financing needs and broader economic conditions. A pending antitrust action against subsidiary PowerPlan, Inc. seeks damages of approximately $66 million; management believes the outcome should not have a material adverse effect.
02—Key points
Key Highlights
- Q3 2024 net revenues rose 12.9% to $1,764.6 million, with organic growth of 4.1% and acquisitions contributing 8.7 points.
- Q3 2024 net earnings were $367.9 million (diluted EPS $3.40), up from $347.2 million (diluted EPS $3.23) a year earlier.
- Nine-month operating cash flow from continuing operations was $1,671.0 million, up from $1,415.7 million.
- Acquisitions of Procare ($1,860 million) and Transact ($1,607 million) drove 2024 goodwill and intangible additions of $2,158.5 million and $1,467.0 million, respectively.
- Total debt, net of deferred financing costs, increased to $8,376.6 million; net debt to total net capital rose to 30.5% from 26.0%.
- Backlog increased 3.9% to $3,026.1 million, led by the Application Software segment.
- Application Software operating margin rose to 26.4% in Q3 2024 from 25.8%, while Network Software held at 45.2%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Roper Technologies kept $0.21.
- Revenue$1.76B100.0%
- Cost of revenue−$542.9M30.8%
- Gross profit$1.22B69.2%
- Operating costs−$725.1M41.1%
- Operating income$496.6M28.1%
- Interest, other & tax−$128.7M7.3%
- Net income$367.9M20.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.76B$1.56B | +12.9% |
| Cost of Revenue | $542.90M$467.10M | +16.2% |
| Gross Profit | $1.22B$1.10B | +11.4% |
| SG&A Expenses | $725.10M$650.20M | +11.5% |
| Operating Income | $496.60M$446.10M | +11.3% |
| Net Income | $367.90M$347.20M | +6.0% |
| EPS (Basic) | $3.43$3.25 | +5.5% |
| EPS (Diluted) | $3.40$3.23 | +5.3% |
| Shares Outstanding (Basic) | 107.20M106.70M | +0.5% |
| Shares Outstanding (Diluted) | 108.10M107.60M | +0.5% |
05—Questions
Frequently Asked Questions
What drove the revenue increase in the third quarter of 2024?
Net revenues increased 12.9% to $1,764.6 million. Acquisitions contributed 8.7 percentage points of the growth and organic growth contributed 4.1 points, led by Application Software, which grew 5.5% organically.
How did Roper finance its 2024 acquisitions?
The company issued $2,000.0 million of senior notes in August 2024 (4.500% due 2029, 4.750% due 2032 and 4.900% due 2034) and drew on its unsecured credit facility, where borrowings were $925.0 million at September 30, 2024.
Is Roper's debt load rising?
Yes. Total debt, net of deferred financing costs, was $8,376.6 million at September 30, 2024, up from $6,330.1 million at December 31, 2023. Net debt to total net capital was 30.5%, compared with 26.0% at year-end 2023. Management expects operating cash flow to reduce debt over time.
What is the status of the PowerPlan antitrust litigation?
Lucasys Inc. alleges that PowerPlan, Inc. engaged in anticompetitive practices and seeks damages of approximately $66 million, plus treble and punitive damages. PowerPlan denies the allegations. Both parties have moved for summary judgment, and a decision is pending. Management believes the ultimate liability should not have a material adverse effect.
What drives the change in the Indicor equity investment gain?
Roper holds a 46.0% equity interest in Indicor Equity, LLC, which it accounts for at fair value. The fair value rose $37.6 million in the third quarter of 2024 and $92.7 million for the nine months, with $9.5 million of dividends received for the nine months, partly offset by a $9.8 million equity-method loss on Certinia.
06—Continue