Nasdaq:ROP
ROPER TECHNOLOGIES INC
A diversified technology conglomerate delivering mission-critical cyber and data solutions with a robust backlog and profitable free cash flow generation.
Key Metrics
Investment Thesis
Bull Case
Investors may buy ROPER for its diversified revenue base that mitigates sector-specific downturns, supported by a massive deferred revenue backlog ensuring long-term visibility; The company's ability to generate significant free cash flow allows it to continue its strategic acquisition strategy while rewarding shareholders with consistent dividends and buybacks; Strong gross profit margins of nearly 70% indicate pricing power and efficient delivery of high-value software solutions in lucrative government contracts.
Bear Case
Bearish investors should consider the substantial goodwill balance of $21.34B, which represents over 60% of intangible assets and poses impairment risks if acquired technologies underperform; The large retained earnings deficit of $17.21B suggests historical capital allocation issues or significant past write-downs that could weigh on future equity metrics; Heavy reliance on government and defense contracts introduces regulatory and political risks that could abruptly alter revenue projections for specific business units.
About ROPER TECHNOLOGIES INC
ROPER TECHNOLOGIES INC operates as a diversified technology solutions provider serving diverse markets including government defense, commercial enterprise, and healthcare sectors. The company leverages its extensive portfolio of acquired software firms to deliver integrated cybersecurity, data analytics, and mission-critical applications. With strong recurring revenue streams from current deferred revenue and consistent profitability, the firm demonstrates resilient growth despite high acquisition activity.
Analysis
Management Discussion
Management executed a robust year with net profit of $1.54B against revenue growth to $7.90B, successfully balancing aggressive M&A activity which generated $3.29B in acquisitions with strong operational cash flow from operations of $2.54B; The company maintained healthy liquidity with ending cash of $297.4M while funding share repurchases of $500M and dividends of $355M, demonstrating confidence in its balance sheet despite a large retained earnings deficit; Operating profit of $2.24B reflects effective cost management relative to general and administrative expenses of $3.24B.
Industry Overview
The technology solutions industry is characterized by rapid innovation in cybersecurity, artificial intelligence, and cloud computing, driven by increasing digital threats and the need for data-driven decision-making. Companies in this space face high competition but can sustain margins through specialized expertise and deep integration with client ecosystems. Consolidation is common as established players acquire niche innovators to expand their portfolios and market reach.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $5.37B | $6.18B | $7.04B | $7.90B |
| Cost of Revenue | $1.62B | $1.87B | $2.16B | $2.43B |
| Gross Profit | $3.75B | $4.31B | $4.88B | $5.47B |
| Operating Expenses | $2.23B | $2.56B | $2.88B | $3.24B |
| Operating Income | $1.52B | $1.75B | $2.00B | $2.24B |
| R&D | $529.8M | $646.1M | $748.1M | $852.5M |
| G&A | $2.23B | $2.56B | $2.88B | $3.24B |
| Stock-Based Comp | $118.5M | $123.5M | $145.9M | $166.3M |
| D&A | $650.1M | $755.2M | $812.8M | $898.2M |
| Depreciation | $37.3M | $35.4M | $37.1M | $39.8M |
| Amortization | $612.8M | $719.8M | $775.7M | $858.4M |
| Other OpEx | $-529.8M | $-646.1M | $-748.1M | $-852.5M |
| Non-Operating Income | $-242.5M | $-2.1M | $-29.6M | $-299.3M |
| Interest Expense | $192.4M | $164.7M | — | — |
| Pre-Tax Income | $1.28B | $1.74B | $1.97B | $1.94B |
| Income Tax | $296.4M | $374.7M | $417.9M | $399.8M |
| Continuing Ops | $985.6M | $1.37B | $1.55B | $1.54B |
| Discontinued Ops | $3.56B | $15.8M | $0 | $0 |
| Net Income | $4.54B | $1.38B | $1.55B | $1.54B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $4.54B | $1.38B | $1.55B | $1.54B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $1.93B | $1.48B | $1.54B | $1.93B |
| Cash & Equivalents | $792.8M | $214.3M | $188.2M | $297.4M |
| Accounts Receivable | $724.5M | $829.9M | $885.1M | $1.00B |
| Inventory | $111.3M | $118.6M | $120.8M | $141.7M |
| Prepaid Expenses | — | — | $195.7M | $235.8M |
| Other Current Assets | $303.8M | $318.6M | $152.9M | $252.2M |
| Long-Term Assets | $25.05B | $26.69B | $29.79B | $32.65B |
| PP&E (Net) | $85.3M | $119.6M | $149.7M | $156.9M |
| Intangibles | $8.03B | $8.21B | $9.06B | $9.76B |
| Goodwill | $15.95B | $17.12B | $19.31B | $21.34B |
| Operating Leases | $196.1M | $189.8M | $189.4M | $220.0M |
| Other LT Assets | $255.2M | $250.1M | $308.1M | $370.3M |
| Total Assets | $26.98B | $28.17B | $31.33B | $34.58B |
| Current Liabilities | $2.89B | $2.96B | $3.83B | $3.73B |
| Current Debt | $699.2M | $499.5M | $1.04B | $705.2M |
| Current Leases | $46.4M | $43.3M | $46.2M | $48.3M |
| Deferred Revenue | $1.37B | $1.58B | $1.74B | $1.91B |
| Taxes Payable | $16.6M | $40.4M | $68.4M | $28.0M |
| Other Current Liab | $231.0M | $267.2M | $299.6M | $293.2M |
| Long-Term Liabilities | $8.05B | $7.76B | $8.63B | $10.97B |
| Long-Term Debt | $5.96B | $5.83B | $6.58B | $8.60B |
| LT Operating Leases | $164.2M | $158.7M | $154.8M | $185.2M |
| Other LT Liab | $1.81B | $1.64B | $1.75B | $2.02B |
| Total Liabilities | $10.94B | $10.72B | $12.47B | $14.70B |
| Shareholders' Equity | $16.04B | $17.44B | $18.87B | $19.88B |
| Paid-In Capital | $2.51B | $2.77B | $3.01B | $3.29B |
| Retained Earnings | $13.73B | $14.82B | $16.03B | $17.21B |
| AOCI | $-187.0M | $-122.8M | $-166.5M | $-101.4M |
| Total L&E | $26.98B | $28.17B | $31.33B | $34.58B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $4.54B | $1.38B | $1.55B | $1.54B |
| Non-Cash Adjustments | $-3.92B | $483.0M | $629.9M | $721.1M |
| Working Capital Changes | $107.2M | $167.9M | $214.0M | $282.9M |
| Cash from Operations | $734.6M | $2.04B | $2.39B | $2.54B |
| Cash from Investing | $1.21B | $-2.13B | $-3.47B | $-3.39B |
| Share Buybacks | — | — | — | $500.0M |
| Dividends Paid | $262.3M | $290.2M | $321.9M | $355.0M |
| Cash from Financing | $-1.47B | $-499.5M | $1.07B | $923.6M |
| FX Effect | $-37.5M | $12.2M | $-20.3M | $33.3M |
| Net Change in Cash | $441.3M | $-578.5M | $-26.1M | $109.2M |
| Beginning Cash | $351.5M | $792.8M | $214.3M | $188.2M |
| Ending Cash | $792.8M | $214.3M | $188.2M | $297.4M |
Frequently Asked Questions
How does ROPER TECHNOLOGIES INC make money?
Cybersecurity Solutions providing threat detection and response capabilities; Data Analytics & AI offering advanced intelligence platforms for enterprise clients; Mission-Critical Applications delivering specialized software for defense, logistics, and healthcare operations.
What are the main risks for ROP?
Significant integration risks associated with frequent acquisitions, including the recent $3.29B acquisition activity which can lead to cultural clashes or failed synergies; Exposure to government budget cuts or policy shifts within the defense and intelligence sectors which could impact a portion of revenue; High leverage with long-term debt of $8.60B creating sensitivity to interest rate fluctuations and refinancing requirements.
What is ROP's competitive advantage?
Extensive organic growth through a history of strategic acquisitions totaling over $3.29B, creating a diverse product portfolio that reduces reliance on any single client or sector; Strong recurring revenue model evidenced by current deferred revenue of $1.91B providing predictable cash flow visibility; High barriers to entry in niche defense and government markets requiring deep specialization and security clearances.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.