Roper Technologies (ROP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 13% year-over-year to $1.76 billion, with organic revenue up 4% and adjusted EBITDA up 10% to $717 million; free cash flow grew 15% to $719 million.

• Net earnings from continuing operations for Q3 2024 were $368 million, with diluted EPS from continuing operations at $3.40; adjusted DEPS was $4.62, up 7%.

• Completed the Transact Campus acquisition for $1.5 billion, integrated with CBORD, and Procare acquisition, expanding the Application Software segment.

• Raised full-year guidance to the high end, reflecting strong performance, robust M&A pipeline, and the impact of acquisitions.

• Backlog increased 3.9% year-over-year to $3,026.1 million, reflecting strong demand and acquisition impact.

Financial highlights

• Q3 2024 revenue was $1,764.6 million (+12.9% YoY); organic growth was 4%; adjusted EBITDA reached $717 million (margin 40.7%).

• Adjusted DEPS was $4.62, above guidance; free cash flow hit a record $719 million, up 15%; gross margin was 69.2%.

• Net earnings from continuing operations: $368 million; operating cash flow for nine months was $1,671 million, up 18%.

• Net working capital as a percent of revenue (excluding acquisitions) was negative 19%, a Q3 record.

• Return on sales for Q3 2024 was 20.8%.

Outlook and guidance

• Full-year 2024 total revenue growth outlook raised to 13%+, with organic growth expected around 6%.

• Full-year adjusted DEPS guidance increased to $18.21–$18.25, at the high end of the prior range; Q4 adjusted DEPS expected between $4.70 and $4.74.

• Free cash flow margin expected to be north of 30% for the year.

• Guidance excludes impact of unannounced future acquisitions or divestitures.

• Management anticipates continued positive cash flows from operations, supporting debt reduction and ongoing acquisition activity.