Overview of Roper Technologies' 2025 Performance

Roper Technologies' revenue from continuing operations grew 12.3% to $7.90B in 2025, driven by both acquisitions and organic performance. Acquisitions contributed 6.7 percentage points to the year's growth, while organic revenue grew 5.4%. All three of the company's segments posted organic growth.

Despite the revenue increase, net earnings from continuing operations were $1.53B in 2025, down from $1.55B in 2024. The decline was primarily due to a significant decrease in gains from equity investments compared to the prior year, when the company recorded a large gain on an asset sale, as well as higher interest expense from increased debt used to fund acquisitions. Operationally, segment operating margins were roughly flat, with expansion in Application Software and Technology Enabled Products offset by a decline in Network Software.

Roper remained active in its acquisition strategy, deploying capital to acquire several software businesses. The company also increased its debt and initiated a new $3.0B share repurchase program during the year.

Segment Performance

Application Software

The Application Software segment's revenue grew 15.9% to $4.48B for the year ended December 31, 2025. Acquisitions, notably Transact and CentralReach, were the primary driver, contributing 10.2% to growth.

• Organic Growth: Organic revenue grew 5.4% in 2025. This growth was broad-based, led by businesses serving the acute healthcare, property and casualty insurance, and legal markets. The growth was partially offset by a decline in non-recurring revenue from the business serving the government contracting market.
• Profitability: The segment's operating margin increased slightly to 26.8% in 2025 from 26.5% in 2024.
  • Gross margin was stable at 68.5% in 2025, as improved leverage on higher organic revenue was offset by the lower-margin profile of the newly acquired Transact business, which has a higher mix of payments revenue.
  • SG&A expenses as a percentage of revenue improved, driven by operating leverage and cost synergies from the integration of Transact with CBORD. This was partially offset by higher amortization expenses from the acquisition of CentralReach.

Network Software

The Network Software segment's revenue grew 8.5% to $1.60B for the year ended December 31, 2025. Acquisitions, led by Subsplash, contributed 4.4% to this growth.

• Organic Growth: Organic revenue grew 4.1% in 2025, driven by the freight matching, construction, and alternate site healthcare software businesses. This was partially offset by a decline in the media and entertainment software business, which the company attributes to end-market conditions.
• Profitability: The segment's operating margin declined to 43.5% in 2025 from 45.2% in 2024.
  • Gross margin decreased to 84.1% from 85.0% in the prior year, which the company attributes to the margin profiles of its 2025 acquisitions, particularly the payments revenue mix at Subsplash.
  • SG&A expenses as a percentage of revenue also increased due to higher amortization and the cost structure of the newly acquired businesses.

Technology Enabled Products

The Technology Enabled Products segment's revenue grew 7.3% to $1.82B for the year ended December 31, 2025. Organic growth accounted for most of this, at 6.5%.

• Organic Growth: The 6.5% organic growth in 2025 was broad-based and led by the medical products businesses, particularly the precision measurement business, as well as the access management businesses.
• Profitability: The segment's operating margin increased to 34.5% in 2025 from 33.9% in 2024. The improvement was driven by better leverage on higher organic revenue at the precision measurement business and favorable revenue mix.

Profitability and Other Financial Drivers

Several factors below the operating line significantly impacted Roper's net earnings in 2025.

• Interest Expense: Net interest expense increased to $325.0M in 2025 from $259.2M in 2024. The increase was caused by a higher average debt balance, used to fund acquisitions, and a higher interest rate on that debt.
• Equity Investments: The company recorded a net gain from equity investments of only $25.5M in 2025, compared to a gain of $234.6M in 2024. The 2024 gain was driven by a $135.6M gain on the sale of its equity investment in Certinia, which did not recur. The 2025 gain was primarily a $24.0M increase in the fair value of its minority equity investment in Indicor.
• Income Taxes: The effective tax rate for 2025 decreased to 20.6% from 21.2% in 2024. The company attributes this to a net tax benefit from a legal entity restructuring and a reduction in state taxes. Additionally, the repeal of the requirement to capitalize R&D expenditures under Section 174 resulted in a cash tax benefit of approximately $150M in 2025.

Capital Allocation and Financial Position

Roper continued its active capital allocation strategy, focusing on acquisitions funded by new debt, while also initiating shareholder returns.

• Acquisitions: Cash used for investing activities in 2025 was $3.39B, primarily for acquisitions including CentralReach, Subsplash, Convoy, and Orchard Software.
• Debt: Total debt increased to $9.36B at the end of 2025 from $7.67B at the end of 2024. To fund its activities, the company issued $2.0B of new senior notes and drew a net $725.0M on its revolving credit facility, while repaying $1.0B of senior notes at maturity.
• Share Repurchases: In October 2025, the Board authorized a new $3.0B share repurchase program. The company repurchased $500.0M of its stock in the fourth quarter of 2025.
• Backlog: Total backlog, representing performance obligations expected to be recognized as revenue within 12 months, increased 10.3% to $3.42B at year-end 2025. The growth was driven by acquisitions and organic growth in the software segments.