Roper Technologies, Inc. Common Stock 2026 Q3 Earnings Call

Please go ahead. Good morning, and thank you all for joining us as we discuss the third quarter 2026 financial results for Roper Technologies.

Joining me on the call this morning are Neil Hunn, President and Chief Executive Officer, Jason Conley, Executive Vice President and Chief Financial Officer, Brandon Cross, Vice President and Chief Accounting Officer, and Shannon O'Callaghan, Senior Vice President of Finance. Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call. We prepared slides to accompany today's call, which are available through the webcast and are also available on our website. Now, if you'll please turn to page 2. We begin with our safe harbor statement. During the course of today's call, we will make forward-looking statements which are subject to risks and uncertainties as described on this page, in our press release, and in our SEC filings.

You should listen to today's call in the context of that information. Now please turn to page 3. Today, we will discuss our results primarily on an adjusted non-GAAP basis. For the third quarter, the difference between our GAAP results and adjusted results consists of the following items: amortization of acquisition-related intangible assets, transaction-related expenses associated with completed acquisitions, financial impacts associated with our minority investment in Indicor, and lastly, cash collected on Outgo's beneficial interest, which is the residual amount owed to Outgo after it sells receivables to a third party and is classified within cash flows from investing activities. Reconciliations can be found in our press release and in the appendix of this presentation on our website. Now if you please turn to page 4, I'll hand the call over to Neil. After our prepared remarks, we'll take questions from our telephone participants.

Neil? Thank you, Zack, and thanks to everyone for joining us this morning.

You can see our agenda on page 4, so let's get into it. Next slide, please. As we turn to page 5, I want to highlight three takeaways. First, we delivered solid third-quarter results, including 7% organic revenue growth and increased DEPS guidance for the year. Second, AI momentum continues to build, and we're pleased with the progress in the quarter. Our businesses are bringing new products to market, and we're increasingly encouraged by the breadth of that progress and what these products will do for our customers. Third, we're active again on the acquisition front, completing three bolt-ons with our long-standing capital allocation discipline. Starting with our results. Total revenue grew 8%, organic revenue grew 7%, EBITDA grew 7%, and DEPS grew 15%.

At a high level, we had a strong quarter. To spike out a few of our larger businesses, we had another encouraging quarter for Deltek, although we continue to take a wait-and-see approach. We continue to see nice supply-side recovery at DAT. Unfortunately, Neptune continues to face subdued meter market conditions. Based on these results, we are also increasing our full-year DEPS guidance. It was a solid quarter, and Jason Conley will walk you through the financial details in a moment. Turning to AI. Since our last call, our businesses have introduced a broad range of products that apply AI to the specialized tasks and workflows our customers manage every day. Let me share a few examples. First, Vertafore launched agents for submission processing, benefit plans, and docket research, and has now added two agents that automate policy processing for independent agencies.

Since the beginning of the year, Vertafore has developed and launched 12 workflow automation agents with many, many more in development. At Aderant, seven AI agents are now in early access to help law firms bill more accurately and collect cash faster. The appeals agent helps draft billing appeals, the collection agent prioritizes overdue accounts, and the time agent improves billing descriptions. These are practical uses of AI to reduce administrative work and help law firms run more efficiently. Another example is PowerPlan, where a new intelligent unitization product tackles a significant industry challenge. More than $180 billion of capital investments awaiting detailed asset classification across the U.S. electric utilities. Our purpose-built AI capability analyzes project and accounting data and recommends how cost should be allocated to individual assets.

By accelerating that process, it helps utility recover their capital investments and earn returns sooner, bringing forward revenue, earnings, and cash flow, and the productivity gains are substantial. Customers are completing this work in minutes that previously took days or weeks. This is another powerful example of our focus across Roper, putting AI to work to help our customers grow, perform better, and operate more efficiently. Great work by Rafi and the team at PowerPlan. At Strata, Financial Decision Intelligence helps healthcare finance teams identify what needs attention and understand what is driving performance. In a few minutes, I am going to double-click on this specifically. At CentralReach, ReportDraftAI is designed to improve provider productivity and economics. Clinical reauthorization reports typically take 9-12 hours per learner, much of which is non-billable.

By automating data gathering and preparing a draft for clinician input and review, the product frees up substantial capacity for billable care, creating opportunities for providers to serve more learners, supporting revenue growth, and improving operational efficiency with their existing clinical teams. Foundry introduced new AI capabilities for visual effects, while Subsplash launched work management products that bring AI and automation into church operations. What is encouraging is both the breadth of this activity and how specific these products are to the markets we serve. They address work our customers know well, work that takes time, requires specialized knowledge, and matters how their organizations operate. We continue to see a substantial opportunity to help customers do work more efficiently and effectively, and we are excited to partner with our customers from across the enterprise to realize the promise of AI.

Our confidence that opportunity is grounded in the same advantages that have always made our vertical market software businesses strong. Deep domain expertise, embedded workflows, unique data assets, trusted customer relationships, and scale distribution. Our businesses know their customers' workflows and where AI can save time and improve decisions. Each business develops products close to its customers, while our AI accelerator team helps speed development and share reusable approaches across the portfolio. We are still early in commercialization and are starting to see adoption and monetization of our AI solutions. Importantly, our products change how customers do work, so adoption will develop over time. As customers use our products, that experience will help our businesses refine the products and expand our capability remit. There is more work ahead, but we love the progress.

We have new products reaching customers across a broad range of markets and a meaningful opportunity to build from here. We continue to execute our disciplined capital allocation strategy and are encouraged that we are able to execute three bolt-on acquisitions during the quarter. Specifically, we deployed $436 million towards bolt-on acquisitions for iPipeline, Procare, and Strata. The common theme is expanding the capabilities and reach of our existing businesses and in complementary products, expertise, and customer relationships in markets we know well. Each acquisition builds on our existing domain expertise and distribution, creating more opportunities to serve customers and drive long-term organic growth. Our approach remains consistent. Evaluate each opportunity carefully and deploy capital where we see attractive long-term returns. A solid quarter with another impactful step on our AI journey.

With that, let me turn the call over to Jason to walk through our financial results, capital allocation activity, and balance sheet position.

Jason? Thanks, Neil, and good morning, everyone.