Roper Technologies announces third quarter financial results
SARASOTA, Fla., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NASDAQ:ROP) reported financial results for the third quarter ended September 30, 2024. The results in this press release are presented on a continuing operations basis.
Third quarter 2024 highlights
Revenue increased 13% to $1.76 billion; organic revenue increased 4%
GAAP DEPS increased 6% to $3.40; adjusted DEPS increased 7% to $4.62
GAAP net earnings increased 6% to $368 million; adjusted net earnings increased 7% to $499 million
Adjusted EBITDA increased 10% to $717 million
Operating cash flow was $755 million; adjusted operating cash flow increased 17%
"Our portfolio of market-leading technology businesses delivered another solid quarter, highlighted by 13% total revenue growth, 10% EBITDA growth, and 15% free cash flow growth," said Neil Hunn, Roper Technologies' President and CEO. "We are, again, increasing our full year guidance to the high end of the range, supported by our third quarter results, the continued expansion of our recurring revenue base, and improving demand for our businesses' mission critical solutions."
"During the third quarter, we completed the acquisition of Transact Campus, which has been combined with our CBORD business. This acquisition adds another high-quality vertical software business to our portfolio with highly compelling value creation opportunities for our shareholders. We remain well positioned to execute our disciplined and process-driven capital deployment strategy, with significant M&A firepower and a robust pipeline of acquisition opportunities," concluded Mr. Hunn.
Updating 2024 guidance
Roper now expects full year 2024 adjusted DEPS of $18.21 - $18.25, compared to previous guidance of $18.10 - $18.25. The Company increased its full year total revenue growth outlook to 13%+ and continues to expect organic revenue growth of approximately 6%.
For the fourth quarter of 2024, the Company expects adjusted DEPS of $4.70 - $4.74.
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, October 23, 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 50829. 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 50829#.
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, 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, net." Roper makes non-GAAP adjustments for the impacts associated with these investments.
Table 1: Revenue and adjusted EBITDA reconciliation ($M)(from continuing operations)
Q3 2023
Q3 2024
V %
GAAP revenue
$
1,563
$
1,765
13
%
Components of revenue growth
Organic
4
%
Acquisitions
9
%
Foreign exchange
—
%
Revenue growth
13
%
Adjusted EBITDA reconciliation
GAAP net earnings
$
346
$
368
Taxes
97
99
Interest expense
42
68
Depreciation
9
9
Amortization
182
197
EBITDA
$
676
$
741
10
%
Restructuring-related expenses associated with the Syntellis ('23) and Transact ('24) acquisitions
9
9
Transaction-related expenses for completed acquisitions
5
5
Financial impacts associated with the minority investments in Indicor & Certinia A
(34
)
(37
)
Gain on sale of non-operating assets
(3
)
—
Adjusted EBITDA
$
652
$
717
10
%
% of revenue
41.7
%
40.7
%
(100 bps)
Table 2: Adjusted net earnings reconciliation ($M)(from continuing operations)
Q3 2023
Q3 2024
V %
GAAP net earnings
$
346
$
368
6
%
Restructuring-related expenses associated with the Syntellis ('23) and Transact ('24) acquisitions
7
7
Transaction-related expenses for completed acquisitions
4
4
Financial impacts associated with the minority investments in Indicor & Certinia A
(28
)
(29
)
Gain on sale of non-operating assets
(3
)
—
Amortization of acquisition-related intangible assets B
140
149
Adjusted net earnings
$
465
$
499
7
%
Table 3: Adjusted DEPS reconciliation (from continuing operations)
Q3 2023
Q3 2024
V %
GAAP DEPS
$
3.21
$
3.40
6
%
Restructuring-related expenses associated with the Syntellis ('23) and Transact ('24) acquisitions
0.06
0.07
Transaction-related expenses for completed acquisitions
0.03
0.03
Financial impacts associated with the minority investments in Indicor & Certinia A
(0.26
)
(0.27
)
Gain on sale of non-operating assets
(0.02
)
—
Amortization of acquisition-related intangible assets B
1.30
1.38
Adjusted DEPS
$
4.32
$
4.62
7
%
Table 4: Adjusted cash flow reconciliation ($M)(from continuing operations)
Q3 2023
Q3 2024
V %
Operating cash flow
$
631
$
755
20
%
Taxes paid in period related to divestiture
16
—
Adjusted operating cash flow
$
647
$
755
17
%
Capital expenditures
(13
)
(23
)
Capitalized software expenditures
(9
)
(13
)
Adjusted free cash flow
$
625
$
719
15
%
Table 5: Forecasted adjusted DEPS reconciliation(from continuing operations)
Q4 2024
FY 2024
Low end
High end
Low end
High end
GAAP DEPS C
$
3.29
$
3.33
$
12.64
$
12.68
Restructuring-related expenses associated with the Transact acquisition
—
—
0.07
0.07
Transaction-related expenses for completed acquisitions
—
—
0.05
0.05
Financial impacts associated with the minority investments in Indicor & Certinia A
TBD
TBD
TBD
TBD
Amortization of acquisition-related intangible assets B
1.41
1.41
5.45
5.45
Adjusted DEPS
$
4.70
$
4.74
$
18.21
$
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.
Q3 2023A
Q3 2024A
Q4 2024E
FY 2024E
Pretax
$
(34
)
$
(37
)
TBD
TBD
After-tax
$
(28
)
$
(29
)
TBD
TBD
Per share
$
(0.26
)
$
(0.27
)
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%.
Q3 2023A
Q3 2024A
Q4 2024E
FY 2024E
Pretax
$
177
$
189
$
193
$
745
After-tax
$
140
$
149
$
153
$
588
Per share
$
1.30
$
1.38
$
1.41
$
5.45
