Roper Technologies, Inc.
ROP · NASDAQ-GS
Next quarter
Expected to report Jan 26, 2027 — estimated from last year’s reporting date.
Consensus is $5.98 EPS for Dec 2026 across 7 estimates, ranging $5.96 to $6.02.
ROP Sep 2026
- 1.73%
- $5.79
- $5.89
- —
- $2.17B
Reported results
- $2.17B
- 70.11%
- $623.20M
- 28.70%
- $484.70M
- $4.88
Highlights
- Adjusted earnings: Adjusted diluted EPS rose 15% year over year to $5.89, beating the $5.79 consensus and Roper’s $5.75–$5.80 outlook; GAAP diluted EPS was $4.88, up 33%.
- Organic growth: Revenue increased 8% to $2.172 billion, including 7% organic growth and 1% from acquisitions; revenue was up about 3% sequentially from $2.11 billion in Q2.
- Raised outlook: Full-year adjusted EPS guidance increased to $22.35–$22.40 from $22.15–$22.30, a $0.15 midpoint increase; Q4 guidance is $5.95–$6.00.
- Segment mix: Application Software revenue grew 7% (6% organic), Network Software grew 8% (5% organic), and Technology Enabled Products grew 10% organically.
- AI launches: Management said 17 or 18 of its 21 software businesses have agentic solutions in market; AI-related offerings represented about 75% of CentralReach bookings and 25% of Aderant bookings.
- Capital deployment: Roper spent $436 million on three bolt-on acquisitions for iPipeline, Procare, and Strata; after Indicor-related proceeds, leverage fell by half a turn to 2.9x net debt to EBITDA.
- Cash generation: Q3 free cash flow was $805 million, or 37% of revenue, down 4% year over year due partly to bond-interest payment timing and delayed Illumia collections.
- Margin and earnings quality: Adjusted EBITDA rose 7% to $864 million, while its margin declined 40 basis points to 39.8%; GAAP net earnings rose 22% to $485 million, with the Indicor investment affecting reported results.
Analysis
Roper delivered a solid Q3, with adjusted diluted EPS of $5.89 ahead of the $5.79 consensus and the company’s $5.75–$5.80 outlook. Revenue of $2.172 billion grew 8% year over year, led by 7% organic growth, and was about 3% above Q2’s $2.11 billion. GAAP diluted EPS was $4.88, versus $3.68 a year ago and $11.62 in Q2; the sequential GAAP comparison is distorted by investment-related earnings in the prior quarter. Adjusted EPS growth of 15% is a clearer view of the quarter’s operating progress. Adjusted EBITDA increased 7% to $864 million, though margin contracted 40 basis points to 39.8%.
The print’s main themes were broad-based organic growth, early AI commercialization, and active capital allocation. Application Software grew 6% organically, Network Software 5%, and Technology Enabled Products 10%; Neptune’s mechanical-meter mix weighed on revenue and margins, while DAT showed improving supply-side conditions. Management cited AI offerings across nearly all software businesses, but adoption and monetization remain early. Roper raised full-year adjusted EPS guidance to $22.35–$22.40 and expects full-year organic revenue growth around 6%. It also deployed $436 million on acquisitions, received $1.2 billion in Indicor-related proceeds, and ended the quarter at 2.9x net debt to EBITDA.
Growth across segments
Revenue growth was broad, with organic growth led by Technology Enabled Products. Software recurring revenue also remained healthy: organic recurring revenue across the two software segments grew 8%, enterprise software retention remained in the mid-90s, and core enterprise bookings were up mid-single digits on a trailing-twelve-month basis.
- Application Software: Revenue was $1.240 billion, up 7% overall and 6% organically. Segment EBITDA margin was 43.7%, up 30 basis points.
- Network Software: Revenue was $446 million, up 8% overall and 5% organically. Segment EBITDA margin was 52.4%, down 130 basis points; management described core margins as essentially flat.
- Technology Enabled Products: Revenue was $486 million, up 10% organically. Segment EBITDA margin was 34.3%, down 90 basis points.
AI commercialization
Management framed AI as a growing product opportunity built on Roper’s vertical-market data, embedded workflows, and customer relationships, but emphasized that broad adoption is still ahead. Seventeen or 18 of the 21 software businesses have agentic offerings in market. Early customer response has been positive, while procurement, governance, and change management can add time to sales cycles.
- Early bookings: AI-specific or AI-related offerings accounted for about 75% of CentralReach bookings and about 25% of Aderant bookings, according to management. These are bookings measures, not reported AI revenue.
- Product examples: Vertafore launched six agents in the quarter and has launched 12 workflow automation agents since the start of the year; Aderant had seven agents in early access. PowerPlan’s intelligent unitization product applies AI to utility project-accounting data, and Strata’s Financial Decision Intelligence became generally available on September 1.
- Monetization approach: Roper described fixed consumption bundles, direct usage-based pricing, and AI features tied to cloud migrations as its main models. Management said gross margins on agentic tools are currently comparable to software gross margins.
Earnings and cash flow
Adjusted earnings advanced faster than adjusted EBITDA, while the EBITDA margin edged lower. GAAP earnings also reflect changes in the fair value of Roper’s minority Indicor investment, which the company excludes from non-GAAP results.
- Adjusted results: Adjusted net earnings rose 5% to $586 million and adjusted EPS increased 15% to $5.89, compared with $5.14 a year earlier.
- GAAP results: Net earnings increased 22% to $485 million and diluted EPS rose to $4.88 from $3.68. The quarter included a $56 million gain on the Indicor investment, versus a $13 million gain in Q3 2025.
- Cash generation: Free cash flow was $805 million, 37% of revenue and down 4% year over year. Management attributed the decline partly to bond coupon timing and a temporary collection lag at Illumia during an ERP implementation; it expects some improvement in Q4, with possible spillover into Q1.
- Nine-month cash flow: Operating cash flow was $1.882 billion for the first nine months, compared with $1.802 billion in the prior-year period.
Guidance raised
Roper lifted its full-year adjusted EPS range after Q3 adjusted EPS exceeded its expectations. The increase was $0.15 at the midpoint versus the prior range and $0.95 versus the original 2026 outlook. The company expects total revenue growth above 8% for the year, with organic growth around 6%.
- Q4 adjusted EPS: $5.95–$6.00; management expects the tax rate to be 20%–21%.
- Q4 organic growth outlook: Application Software is expected to remain in the mid-single-digit-plus range; Network Software should be somewhat higher than Q3 and in the mid-single-digit-plus range; Technology Enabled Products is expected to be in the mid-single digits.
- Guidance exclusions: The full-year range excludes unannounced acquisitions or divestitures, future proceeds from the pending sale of Indicor’s Cornell Pump and Roper Pump businesses, and potential share repurchases.
Capital allocation
Roper paired three tuck-in acquisitions with balance-sheet reduction, using proceeds from Indicor’s sale of its instrumentation businesses to support both. Management said the acquisitions extend existing capabilities and customer reach, and that each is growing faster than its acquiring platform; the near-term EPS effect is expected to be slightly dilutive, with benefits from synergies more apparent next year.
- Acquisitions: $436 million was deployed for Playground at Procare, C. Myers at Strata, and Origo at iPipeline.
- Indicor proceeds: Roper received $1.2 billion from the instrumentation-business transaction. A further roughly $600 million of pretax proceeds is expected in Q4 from the pending sale of Indicor’s remaining flow-control businesses, subject to regulatory clearance.
- Balance sheet and capacity: Net debt to EBITDA ended the quarter at 2.9x, down half a turn during the quarter. Roper reported more than $6 billion of capital deployment capacity over the next 12 months.
- Repurchases: The company repurchased $2.727 billion of shares in the first nine months of 2026; management said it had paused buybacks in Q3 while preserving them as an alternative if acquisition opportunities do not materialize.
Business-level crosscurrents
Management’s outlook was constructive overall but varied by business. Deltek improved, DAT benefited from a supply-side recovery, and Neptune remained the clearest near-term drag within Technology Enabled Products.
- Deltek: Management cited another encouraging quarter, stronger private-sector performance, and solid government-contracting bookings over the last couple of quarters. Cloud migration interest is increasing, helped by the planned end of support for the on-premises Costpoint solution in Q1 2028, though the market remains uncertain.
- DAT: Growth accelerated with network expansion, higher average revenue per user, and adoption of its digital freight marketplace. Management sees supply-side improvement but wants stronger load volume before calling it a broader recovery.
- Neptune: Q3 meter volumes were close to expectations, but the mix shifted toward lower-priced, lower-margin mechanical meters as some static-meter projects were pushed out. Management expects that mix to continue into Q4 and now sees second-half revenue slightly down versus its prior expectation for modest growth; it views the pressure as temporary.
