Roper Technologies (ROP) — Company Research

Last Updated: 6 July 2026

Roper Technologies (NASDAQ: ROP) is the Sarasota, Florida holding company that acquires and operates asset-light, mission-critical software and technology businesses serving defensible niche markets — from construction and government project software (Deltek) to healthcare data (Strata, CliniSys), transportation and utilities. It runs a disciplined, cash-compounding acquisition model: redeploy prodigious free cash flow into high-return vertical-software businesses. Full-year 2025 revenue rose 12% to $7.90bn, yet the shares have fallen roughly 40% from their 2025 highs after cautious 2026 guidance. This research reviews the numbers, the valuation and the risks. For live price action see our Live Charts, and check the Economic Calendar for events that move the market.

1. Company Snapshot

2. Bull & Bear Case

Bull Case

• A proven cash-compounding machine: Roper deployed $3.3bn on acquisitions in 2025 and converts the majority of EBITDA into free cash flow ($2.47bn in FY2025), which it redeploys into asset-light, high-return vertical-software businesses — a model that has compounded value for three decades.
• High-quality recurring revenue: The Application and Network Software segments (together ~77% of revenue) are dominated by sticky, recurring software with segment operating margins of 27–44%, giving Roper defensive, subscription-like economics.
• Strong cash conversion and profitability: FY2025 adjusted EBITDA rose 11% to $3.14bn and free cash flow rose 8% to $2.47bn, funding acquisitions, a growing dividend and buybacks simultaneously.
• Meaningful de-rating: After a roughly 40% fall from its highs, ROP trades at about 16.6x management's FY2026 adjusted-EPS guidance — a marked discount to the premium multiple it historically commanded.
• Insider conviction and raised guidance: CEO Neil Hunn bought $4.5m of stock in the open market in November 2025, and management raised its full-year 2026 adjusted-EPS guidance at the Q1 print in April 2026.

Bear Case

• Cautious 2026 outlook from three businesses: The January 2026 guidance disappointment traced to Deltek (federal-spending uncertainty), Neptune (post-COVID water-meter normalisation and tariffs) and Procare (delayed software/payments rollouts) — a reminder that even a diversified portfolio has soft spots.
• GAAP earnings dwarfed by amortisation: Heavy amortisation of acquired intangibles ($858m in 2025) means GAAP EPS of $14.20 is far below adjusted EPS of $20.00, and GAAP net income was flat to slightly down despite 12% revenue growth.
• Rising leverage: Total debt climbed to $9.3bn (from $7.6bn) after the 2025 deal spree, and net interest expense rose to $325m — the acquisition model depends on continued access to cheap capital.
• Modest organic growth: Organic revenue growth is only around 5–6%; the headline double-digit growth relies on continuous M&A executed at sensible prices.
• Still not cheap on GAAP: Even after the fall, ROP trades around 25x trailing GAAP earnings, leaving little room for execution missteps.

3. Business Segments

4. Business Model & Moat

How it makes money. Roper is a decentralised holding company. It buys businesses that lead small, defensible niches — usually software with high recurring revenue and low capital intensity — leaves their management teams in place, and channels the cash they generate to headquarters for redeployment into the next acquisition. Roughly three-quarters of revenue is software, much of it subscription or maintenance-based.

Unit economics. The model is deliberately asset-light: FY2025 capital expenditure was just $66m (plus $45m of capitalised software) on $7.90bn of revenue, so almost all EBITDA converts to cash. Group operating income was $2.24bn and adjusted EBITDA $3.14bn (a ~40% margin), producing $2.47bn of free cash flow.

The moat. Two layers. At the operating-company level, each business is embedded in mission-critical workflows (legal time-and-billing, government project accounting, insurance distribution, utility billing) with high switching costs and durable niche leadership. At the group level, the moat is the capital-allocation engine itself: a disciplined, process-driven acquisition and cash-redeployment machine refined over decades and hard for others to replicate at scale.

Capital allocation. The entire strategy is capital allocation. In FY2025 Roper deployed $3.3bn on acquisitions, repurchased $500m of stock and paid $355m of dividends. It funds this with internal free cash flow supplemented by debt (total debt $9.3bn against $0.3bn of cash), and has raised its dividend for more than 30 consecutive years.

5. Financial Health

All figures from Roper's earnings releases and SEC filings (10-K/10-Q, US GAAP; fiscal years end 31 December, presented on a continuing-operations basis after the 2021–22 portfolio reshaping). Adjusted EPS is the company's non-GAAP adjusted diluted EPS (DEPS).

¹ FY2021 figures reflect continuing operations after Roper's major 2021–22 portfolio reshaping (including the sale of TransCore and the majority of its industrial/process businesses), so a like-for-like 2020 comparison is not meaningful. Long-term debt is the sum of the current portion and the non-current portion of long-term debt, net.

Balance-sheet and cash-flow picture: at 31 December 2025 Roper held $297m of cash against total debt of $9.30bn ($8.60bn long-term plus $0.71bn current) — net debt of roughly $9.0bn, about 2.9x adjusted EBITDA, reflecting the $3.3bn of 2025 acquisitions. FY2025 operating cash flow was around $2.58bn against just $66m of capex and $45m of capitalised software, giving free cash flow of $2.47bn (up 8%). Amortisation of acquired intangibles was $858m — the main bridge between GAAP net income ($1.54bn) and adjusted net income ($2.16bn).

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

7. Growth Drivers

Four engines matter from here. First and foremost, capital deployment: Roper enters each year with roughly $3–5bn of firepower (free cash flow plus debt capacity) to acquire vertical-software businesses, and management has repeatedly said its pipeline of actionable deals is strong — the single biggest driver of long-term value creation. Second, organic software growth: the recurring-revenue base compounds at mid-single digits through price increases, seat expansion and cross-sell, with newer platforms (Deltek, Vertafore, Strata, CentralReach, Transact Campus) still ramping. Third, margin and cash-conversion durability: the asset-light mix keeps free-cash-flow conversion high, feeding the flywheel. Fourth, the healthcare and government-software verticals — data, compliance and payments platforms — offer structural tailwinds once the near-term federal-spending and implementation headwinds at Deltek and Procare normalise. Management's FY2026 framework points to roughly 8% total revenue growth, 5–6% organic, and adjusted EPS of $21.80–$22.05.

8. Peer Comparison

9. Insider Activity

The CEO's November 2025 open-market purchase of $4.5m of stock during the sell-off is a discretionary, conviction-signalling buy rather than routine vesting. Separately, Mr Hunn received a scheduled annual grant of 67,495 stock options at a $353.87 exercise price on 10 March 2026 as part of ordinary compensation. Beyond these, no other material insider buying or selling has been disclosed in recent months.

10. Key Risks

• Acquisition-execution risk (Strategic): Roper's growth depends on continually finding, pricing and integrating good businesses; a scarcity of reasonably priced deals, or a poorly performing large acquisition, would slow the compounding engine.
• Leverage and interest cost (Financial): Total debt of $9.3bn (about 2.9x adjusted EBITDA) and $325m of annual net interest expense make the model sensitive to credit availability and rates; an aggressive deal year could push leverage higher.
• Federal-spending exposure (Macro): Deltek serves government contractors, and 2025–26 federal budget uncertainty and DOGE-related disruption weighed on that business — a headwind that could persist.
• Organic-growth dependence (Operational): With organic growth only 5–6%, weakness across several operating companies at once (as seen at Deltek, Neptune and Procare) can meaningfully dent group results and sentiment.
• Valuation and de-rating risk (Financial): Even after a ~40% fall the shares carry a premium GAAP multiple; further multiple compression or an earnings disappointment would pressure the price.
• Goodwill and intangible impairment (Operational): The balance sheet carries very large goodwill and intangibles from decades of deals; underperformance at acquired businesses could trigger impairments.

11. Recent Developments

• 12 Nov 2025 — CEO open-market purchase. President and CEO Neil Hunn bought 10,000 shares for roughly $4.52m (~$452/share) amid the share-price weakness, a notable insider conviction signal.
• 27 Jan 2026 — FY2025 results and cautious 2026 guidance. Revenue rose 12% to $7.90bn and adjusted EPS 9% to $20.00, but initial FY2026 guidance (~8% growth, adjusted EPS $21.30–$21.55) landed below expectations, with softness flagged at Deltek, Neptune and Procare; the shares sold off sharply.
• 10 Mar 2026 — Annual equity grant. The CEO received a scheduled grant of 67,495 stock options at a $353.87 exercise price as part of ordinary compensation.
• 23 Apr 2026 — Q1 2026 beat and raised guidance. Revenue grew 11% to $2.10bn with 6% organic growth and adjusted EPS of $5.16; management raised full-year 2026 adjusted-EPS guidance to $21.80–$22.05, though the stock saw a "sell-the-news" reaction.
• Jun 2026 — Continued weakness. Despite the operational beat, one-year total shareholder return remained down roughly 42% as investors weighed the cautious growth outlook against the de-rated valuation.

12. Key Dates

• 08 Jul 2026 — Ex-dividend date for the quarterly cash dividend (~$0.91 per share)
• 23 Jul 2026 — Q2 2026 results (scheduled, before US market open; earnings call 8:00am ET)
• 22 Oct 2026 — Q3 2026 results expected (estimated; prior-year cadence: reported 23 Oct 2025)

Roper typically raises its dividend each November with the new rate paid from the following January. Discuss ROP with other members on the ChartsView Forum, and track industrial and software-sector catalysts on our Economic Calendar.

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