Roper Technologies (ROP) Q4 2023 earnings summary

Executive summary

• FY 2023 adjusted revenue rose 15% to $6.178B, with 8% organic growth; adjusted EBITDA increased 16% to $2.511B and free cash flow rose 32% to $1.962B.

• Strong execution, recurring-revenue expansion, mission-critical demand and strategic investment supported durable organic growth and positive momentum entering 2024.

Financial highlights

• Q4 adjusted revenue increased 13% to $1.613B, including 8% organic growth; gross profit was $1.125B and gross margin was 69.7%.

• Q4 adjusted EBITDA rose 11% to $659M; adjusted net earnings increased 12% to $471M and adjusted DEPS rose 11% to $4.37.

• FY adjusted net earnings rose 18% to $1.795B and adjusted DEPS increased 17% to $16.71; GAAP diluted EPS rose 38% to $12.74.

• Q4 continuing-operations net earnings were $377.5M; FY continuing-operations net earnings were $1.37B.

• FY GAAP operating cash flow was $2.04B and adjusted operating cash flow was $2.07B, up 33%; Q4 figures were $622M and $638M, respectively.

Outlook and guidance

• FY 2024 guidance, including Procare, calls for total revenue growth of 11–12%, organic revenue growth of 5–6%, and adjusted DEPS of $17.85–$18.15.

• Q1 2024 adjusted DEPS guidance is $4.30–$4.34; guidance excludes unannounced future acquisitions or divestitures.

• Segment organic growth outlook: Application Software MSD, Network Software LSD, and Technology Enabled Products HSD, with stronger Q1 growth expected for the latter.

• Procare was expected to close in Q1 2024 and contribute ~$260M revenue and ~$95M EBITDA for the 12 months ending Q1 2025; expected to be accretive to 2024 free cash flow and 2025 adjusted DEPS.

• Forecast adjusted DEPS excludes potential minority-investment impacts and Procare-related intangible amortization while acquisition valuation remains incomplete.