Roper Technologies (NASDAQ:ROP), a leader in diversified industrial technology with a market capitalization of $61.74 billion, reported its fourth-quarter 2024 earnings on January 30, 2025. The company exceeded analysts' expectations with an earnings per share (EPS) of $4.81, surpassing the forecasted $4.73. Roper's revenue also outperformed predictions, reaching $1.88 billion against the anticipated $1.84 billion. Despite these positive results, the stock saw a slight decline of 0.07% in aftermarket trading, closing at $575.25. According to InvestingPro analysis, the stock is currently trading near its Fair Value, with analyst price targets ranging from $540 to $778.
Key Takeaways
- Roper Technologies reported a higher-than-expected EPS of $4.81.
- Revenue for Q4 2024 reached $1.88 billion, beating forecasts.
- The stock experienced a minor decrease in aftermarket trading.
Company Performance
Roper Technologies demonstrated strong overall performance in 2024, with full-year revenue reaching $7 billion, marking a 14% year-over-year growth. The company's free cash flow increased by 16% to $2 billion, and EBITDA grew by 13% to over $2.8 billion. Organic revenue growth was reported at 6%, with significant contributions from the Application Software (ETR:SOWGn) segment, which saw a 21% increase in total revenue. InvestingPro data reveals the company maintains a strong financial health score of 2.82 (GOOD), supported by consistent dividend growth for 11 consecutive years and robust profit margins of 69.3%.
Financial Highlights
- Revenue: $1.88 billion for Q4 2024 (above forecast)
- Earnings per share: $4.81 (above forecast)
- Free Cash Flow: $2 billion (16% growth YoY)
- EBITDA: Over $2.8 billion (13% growth YoY)
Earnings vs. Forecast
Roper's Q4 earnings per share of $4.81 exceeded the forecasted $4.73 by approximately 1.7%. The revenue of $1.88 billion was 2.2% higher than the expected $1.84 billion. This earnings beat aligns with Roper's historical trend of exceeding market expectations, suggesting continued strong financial management and operational efficiency.
Market Reaction
Despite the positive earnings report, Roper Technologies' stock experienced a slight decline of 0.07% in aftermarket trading, closing at $575.25. This movement is relatively minor compared to the stock's 52-week range, which saw a high of $584.31 and a low of $499.47, indicating stable investor sentiment.
Outlook & Guidance
For 2025, Roper Technologies projects more than 10% total revenue growth and 6-7% organic revenue growth. The company expects adjusted EPS to be between $19.75 and $20.00. With $5 billion available for mergers and acquisitions, Roper anticipates an active M&A market in 2025-2026.
Executive Commentary
CEO Neil Hahn emphasized the company's strategic focus, stating, "We compound cash flow over a long arc of time by executing a low-risk strategy." He also highlighted Roper's advantage in leveraging Gen AI technologies, saying, "We are laser-focused on combining our intimacy, deep reservoir of data, and these Gen AI technologies."
Risks and Challenges
- Potential macroeconomic pressures affecting the U.S. market, where Roper derives over 85% of its revenue.
- Increasing competition in the application software segment.
- Pressure on private equity for liquidity could impact M&A opportunities.
- Potential restructuring costs, as evidenced by the recent $9 million restructuring in the Application Software segment.
Q&A
During the earnings call, analysts inquired about Roper's AI initiatives and their potential impact on future growth. Executives reiterated their commitment to innovation and internal talent development, which they see as crucial for maintaining competitive advantage. Additionally, questions about the M&A landscape were addressed, with management expressing optimism about upcoming opportunities.
Full transcript - Roper Technologies Inc (ROP) Q4 2024:
Conference Operator: Good morning. The Rubber Technologies Conference Call will now begin. Today's call is being recorded. All participants will be in a listen only mode. I would now like to turn the call over to Zack Moxie, Vice President of Investor Relations.
Please go ahead.
Zack Moxie, Vice President of Investor Relations, Roper Technologies: Good morning, and thank you all for joining us as we discuss the and full year 2024 financial results for Roper Technologies. Joining me on the call this morning are Neil Hahn, President and Chief Executive Officer Jason Conley, Executive Vice President and Chief Financial Officer Brandon Cross, Vice President and Principal 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 have prepared slides to accompany today's call, which are available through the webcast and are also available on our website.
And now if you 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. And now please turn to page 3.
Today, we will discuss our results primarily on an adjusted non GAAP and continuing operations basis. For the 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 a charge related to the settlement of the Power Plan 2020 litigation matter and lastly, financial impacts associated with our minority investment. 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
Neil Hahn, President and Chief Executive Officer, Roper Technologies: our
Zack Moxie, Vice President of Investor Relations, Roper Technologies: telephone participants. Neil? Thank you, Zack, and thanks
Neil Hahn, President and Chief Executive Officer, Roper Technologies: to everyone for joining our call. We're looking forward to sharing our and full year results with you this morning. As we turn to Page 4, you'll see the topics we plan to cover today. We'll start by highlighting our strong and full year 2024 financial and operating performance. We'll then go through results in greater detail, review our balance sheet, including our M and A capacity and discuss our very impressive cash flow growth and performance.
Then we'll discuss our segment highlights and introduce our 2025 in guidance. After closing remarks, we'll open up the call for your questions. So let's go ahead and get started. Next (LON:NXT) slide please. As we turn to Page 5, we want to highlight the 3 key takeaways for today's call.
First, our cash flow growth was strong, once again demonstrating our consistent and durable compounding capability. Second, we entered 2025 with improving momentum. And third, we now have over $5,000,000,000 of acquisition firepower at a time when the M and A markets are becoming increasingly more attractive. Now as it relates to our cash flow compounding capability, 2024 was another example of how our model works. We grew revenue 14% in the year, which was nicely balanced between organic and inorganic contributions and deployed $360,000,000,0.0 towards market leading vertical software businesses headlined by our acquisitions of ProCare and Transant Campus.
Of note, our 2024 cohort of acquisitions not only meet all our historical criteria, but also meets our higher growth and higher returns ambitions. As a result, we grew free cash flow 16% for the year, topping $2,000,000,000 for the first time in our history with free cash flow margins of 32%, another great year and our long history of cash flow compounding. As we look to 2025, we're excited to talk through the positive momentum we're experiencing. First, we're seeing accelerating demand for our mission critical solutions broadly across our businesses. Specifically throughout 2024, our enterprise bookings accelerated ending in the high teens growth area in This bookings momentum combined with consistently high gross and net retention supports the continued growth and expansion in high singles area for a $460,000,000,0.0 base of software recurring and reoccurring revenues.
Given this, we're initiating our 2025 total revenue guide to be north of 10% with organic revenue growth in the 6% to 7% range with adjusted depths between $19,.75 and $20 On the capital deployment front, our disciplined approach will greatly benefit our company and our shareholders this year. Specifically, we now have over $5,000,000,000 of available M and A firepower. This is particularly important given the backdrop of the current M and A market, 1 that is poised for high levels of deal activity over the next couple of years and more on this later. Great year team and look forward to seeing you at our leadership meeting next week. I'd like to ask everyone to turn to Page 6, where we'll discuss our long term growth algorithm.
In we concluded our first ever Investor Day with the components of our long term mid teens cash flow growth algorithm as you see here on the left. As you compare our 2024 performance on the right hand side to this, you'll note we're right in line with our strategy, namely posting 14% revenue growth, 41% core margin leverage and adding 800 basis points of growth to our capital deployment capability. This all yields 16% cash flow growth. Importantly, performance was quite similar with 15% revenue growth, solid operating leverage and consistently good cash flow growth. We execute our algorithm by running a dual threat offense, namely, first, driving consistent and improving levels of leveraged organic growth and second, deploying the enterprise's capital towards the best ideas that we consistently cultivate and execute upon.
Importantly, as we do this, we not only grow, but we improve the underlying quality of our enterprise and our portfolio across several dimensions, including growth, the level of recurring revenue and asset intensity. In short, this is how our model works. 2024 is no exception, a year where our say do ratio was quite high and importantly, we have strong momentum heading into '25. So with that, Jason, let me turn the call over to you, so you can walk through our quarterly and full year results. Jason?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Thanks, Neil. Let's turn to Page 7. We had an excellent finish to 2024 with being our highest revenue quarter of the year at 16%, bringing us to just under 1900000000.0 Acquisitions contributed a solid 9% as a full quarter of transact is flowing through along with sequential gains realized at ProCare. Organic revenue grew 7% with our software segments coming in line with expectations and our test segment slightly outperforming as I'll discuss shortly. EBITDA of $7.44,000,000 dollars was 13% over prior year and represented 39.6% of revenue.
Core EBITDA margin, which excludes the impact from our 2024 acquisitions was down 30 basis points compared to prior year. Of note, some of our software businesses mainly within our AS segment took $9,000,000 of targeted and opportunistic restructuring actions, which they absorbed in the and which will better position these businesses going forward. Deps of $4,.81 was above our guidance range of $4.7 to $4,.74 despite the costs associated with the restructuring. So all in, a very good quarter. Now, we'll flip to Page 8, where I'll briefly cover our segment performance.
Application Software posted 24% revenue growth with an 18% contribution from acquisitions and 6% from organic growth. Importantly, organic recurring and reoccurring revenue grew 8% in the quarter and the year, led by double digit SaaS growth as customers move from on premise to the cloud. EBITDA margin of 41.5% includes our twenty twenty four acquisitions that come into Roper at lower margin, but provide greater opportunity for margin expansion over time. Core margin is 30 basis points over prior year on a comparative basis. Turning to network software, revenue growth of 3% was in line with expectations and an improvement over the last couple of quarters as our Freight Match business returned to growth.
Neil will unpack the dynamics of 2025, but we expect the segment to post mid single digit growth in the year with exit velocity above that range. EBITDA margin here was a spectacular 57.4% in the quarter. TEP finished strong with 12% revenue growth in the quarter. Verathon capped off a terrific year with record revenue, EBITDA and cash flow. Also Neptune had outstanding operational execution across both mechanical and ultrasonic product lines.
And EBITDA margin here was 120 basis points over prior year at 34.8%. All right, now we'll turn to Page 9, we'll look at the full year results. All in all, this was a great year for Roper. We delivered on our long term growth algorithm with mid teens revenue and free cash flow growth. This is underpinned by a balanced contribution of acquisition and organic revenue growth, which combined came in at 14% to print at just over $7,000,000,000 of revenue, a new milestone for Roper.
Our disciplined capital deployment strategy generates consistent and repeatable performance, which has been demonstrated over time and is what our investors can expect going forward. Organic growth is also repeatable and fortified and we're well positioned for further improvement. As Neil mentioned, we ended the year with $460,000,000,0.0 of software recurring and reoccurring revenue that we expect to organically grow in the high single digit range in 2025. Further, it's a good time to remind everyone that over 85% of our revenue is in The U. S, which limits currency and potential tariff risk while capturing domestic opportunities that lie ahead.
EBITDA of over 2800000000.0 was 13% versus prior year with EBITDA core margin consistent with the prior year. So clicking into margins and operating leverage a bit. Core segment operating leverage was strong at 49% and including corporate G and A was 41%. We made significant progress in 2024 to build out expanded capital deployment and growth capabilities. So we see that continuing in 2025, but then moderating in 2026 and beyond with a return to leverage on corporate G and A.
Most importantly, free cash flow was outstanding in 2024 as Neil had mentioned, coming in at nearly $230,000,000,0.0 and up 16% or $3.20,000,000 dollars over prior year with 32% free cash flow margins. We finished the year above expectations, which positions us quite well going into 2025. And just looking back since 2021, our free cash flow has compounded 14% if adjusted for Section 174 that went into effect in 2022. We are really pleased with the steady and consistent growth in cash flow. And as we move forward, we expect free cash flow margins of 30% or more.
So beyond the numbers you see here, we see great things happening within Roper. We have significantly enhanced and expanded our capital deployment team and processes. Additionally, our multi year focus on talent is really taking shape as we're feeling the best business leaders in our history. And now we're starting to see those leaders hire great leaders. This is resulting in more data driven strategies and more deeply connected operating plans that give us confidence and long term acceleration of organic growth.
Reflecting on my eighteen years with Roper, I can say this is a banner year for both strategic and operating progress. Now let's turn to Slide 10 to discuss our balance sheet. As I mentioned earlier, free cash flow was better than expected with 15% growth over prior year. Additionally, we exited our minority position in Certinia this quarter. As a reminder, Certinia is a professional services automation software company.
We partnered with PE firm Haveli to execute on a successful first chapter of a value creation plan. And in exiting our position, we received $2.46,000,000 dollars of proceeds, which is a 2x multiple of our invested capital over a fourteen month period. So a terrific financial outcome and a great learning opportunity to apply as we look at businesses that profitability improvement potential. Thank you to the team at Hevelli for the opportunity to partner and learn. At quarter end, our net leverage was 2.6 times and as of today, we have near full access to our $350,000,000,0.0 revolver.
So this plus our strong projected cash flow provides us with over $5,000,000,000 that we can deploy toward high quality acquisition opportunities this year. And just to note, 2024 market activity was a little quieter than we originally expected. Despite this, we were able to deploy $360,000,000,0.0 for some great vertical market software businesses highlighted by ProCare and TRANZACT. In 2025, we believe the log jam should break free from our direct conversations with PE sponsors and from what many are stating publicly, there is a pressing need to provide liquidity to limited partners. Therefore, we anticipate being very busy this year on the deal front.
So with that, I'll turn it back over to Neil. Neil?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Thanks, Jason. As we turn to Page 12, let's review our Application Software segment. Revenue for the year grew by 21% in total and organic revenue grew by 6%. EBITDA margins were 43% and core margins improved 40 basis points in the year. We like what we're seeing across the businesses in this segment.
From a market perspective, we exit '24 in a much improved state and enter '25 with momentum, which is highlighted by our organic bookings growing solidly in the double digits area. In addition, the recurring revenue base and retention levels remain quite healthy here. Another thing we like across this segment is the amount of business and talent building that occurred throughout the year. For example, Deltek made meaningful investments in their cloud tech stack, specifically with GenAI investments and saw meaningful improvement in enterprise bookings during the second half of the year. Importantly, this all occurred during our planned and scheduled CEO succession from Mike Corkery to Bob Hughes.
Similarly, Adderant was super good throughout 2024, while furthering their product lead with meaningful GenAI deployments and cloud migration activity. In 2024, was our leading net retention business, reflecting their strong market position, innovation capabilities and strong customer intimacy. Vertivore was superb in delivering their enterprise capabilities to the largest customers in the market, while seeing compelling and steady bookings throughout the year, leading to consistently strong ARR growth. As a release of PowerPlans, Joe and the team there did an excellent job deploying their first cloud native product and migrating several critical industry leading customers to this product. As a result, PowerPlans ARR growth was the best in its history as the market continues to respond to PowerPlans innovation.
As discussed at the onset of the call, we successfully deployed $360,000,000,0.0 towards vertical market software acquisitions with the largest 2 being ProCare and Transact Campus, both rolling up into this segment. Both were off the solid starts and we look forward to their meaningful contributions to this segment and the enterprise in the many years to come. Remaining businesses in this segment posted solid organic gains. Great job by our leaders and teams in this group throughout 2024, we're proud of you and your accomplishments. Now turning to the outlook for 2025, we expect to see consistent levels of organic growth towards the higher end of the mid singles range.
For the we expect margins for this segment to be down year over year on a reported basis similar to as Transact Campus acquisition revenues come in at a seasonally lower rate. Please turn with us to Page 13. Organic revenue in our Network Software segment grew 3% for 2024. As we've discussed all year, our network growth rate was impacted by the market in our freight matching businesses and the riders and actor strikes related to foundry. Excluding these businesses, the segment grew in the mid singles area, which demonstrates the underlying quality of this group.
EBITDA margins continue to be strong at 56.1%. Similar to that of our application software segment, we're excited by the progress made across this group of businesses. For example, while DAT navigated difficult freight market conditions, Jeff Clements, our new DAT leader did a tremendous job advancing the tech stack and market position of DAT. Of note, our network has never been more resilient and the threat from fraudulent actors has been meaningfully mitigated. During the we completed the DAT bolt on acquisition Trucker Tools.
Trucker Tools is a perfect complement to DAT's offering, providing real time visibility to the DAT network participants. As a reminder, DAT's strategy is to capitalize on its market leadership, providing continually increasing value to both sides of the freight network, helping to drive higher retention and enhanced network monetization. Very similar story at Foundry, while a difficult financial year due to the market conditions related to the strikes, Foundry continued to innovate at an accelerated pace with particular focus on GenAI and computational AI based features. This is 1 of the significant benefits of the Roper operating model. When 1 of our businesses hits a market issue, we continue to invest if not accelerate investment, so we can be the primary market share benefactors when the market recovers and this was certainly the case with DAT and Foundry in 2024.
We like what we saw across the balance of the companies here. Our pipeline aggressively upgraded their talent, better aligned their organizational structure with their customers' needs and had very solid ARR growth in 2024. Where we executed another planned succession to Buck Brody as Matt Straza took the reins at Frontline (NYSE:FRO) was super in the year. This organization continues to be a learning organization, improving lead generation quality and conversions, which led to solid revenue and ARR growth. Importantly, ConstructConnect is building a set of potentially transformative products leveraging AI technologies.
Finally, the alternate site healthcare software businesses were once again solid in the year. As we turn to the outlook, we expect to see revenue growth improve to be in the mid singles range for the full year benefited by DAT's network value capture and consistent performance across the remainder of this group. Given improvement throughout the year, we expect our 2025 organic exit run rate to be north of the mid singles area. Organic revenue growth in the will be a bit lower than the full year in the low singles range given the comp created by MHA a year ago. Prior to turning to our TEP segment, we'd like to spend a moment talking about the significant strides we made with our Gen AI development and deployment over the last year.
As you know, each of our businesses primarily competes on the notion of customer intimacy. This intimacy or super deep knowledge of our customers' businesses, needs and workflows is the unique and competitively differentiated advantage of Roper and our businesses. Now that Gen AI LLMs are improving in fidelity and becoming increasingly more commoditized and cost effective, we are laser focused on combining our intimacy, deep reservoir of data and these Gen AI technologies to innovate and deliver compelling solutions and we made meaningful steps in this direction in 2024. To name some, Gen AI product assistance at Deltek and Adderance, the beginning of automated and specific client compliant time series time entries at Adderance, real time fraud detection at DAT, post production content creation automation at Foundry, automated construction takeoff at ConstructConnect, insurance forms automation at Vertifor and many more exciting Gen AI technology deployments throughout 2025. The future is exciting in this regard for sure.
Now please turn to Page 14 and let's review our TEP segment's full year results. Revenues here grew 9% on a total and organic basis and EBITDA margins came in at 35.2%, just great results here. We'll start with Verathon, which was simply awesome in 2024. Strength is driven by the team's exceptional level of discipline, discernment and tenacity. Throughout 2024, just won in the marketplace, becoming the market share leader in The U.
S. For single use bronchoscopes and extending their global market share lead in video laryngoscopy. Obviously, we continue to be bullish about Verathon and their future. For the full year, Neptune was very, very good. They continued to see strong ultrasonic static meter demand and increasing adoption of their meter data management software offerings.
And from an operational and market momentum view, they're exiting the year stronger than ever. Great job by the Neptune team. NDI or Northern Digital returned to growth in following a very challenging year due to the difficult comparable that resulted from a large customer product launch in 2023. Good things in the future for NDI. Finally, CIVCO and IP ended the year with very good, if not great financial results.
Congrats. As we look to 2025, we expect to see high single digit revenue growth for this segment. So with that, please turn with us to Page 16. Let's turn to our and full year 2025 guidance. Based on what we previously discussed in the segment overviews, we're initiating our 2025 financial guidance to grow total revenue north of 10%, which excludes any future capital deployment benefits.
Embedded in this guide is organic revenue growth in the 6% to 7% range. Finally, we expect full year adjusted depth to be in the range of $19,.75 and $20 Our guide continues to assume a full year effective tax rate in 21% to 22% area. For the we expect adjusted depths to be between $4.7 and $4,.74 as we absorb lower acquired margins in Applications Software and a tougher comp in our Network segment. Now please turn us to Page 17 and then we'll open it up for your questions. We'll conclude with the same 3 key takeaways with which we started.
First, our cash flow growth was strong, once again demonstrating our consistent and durable compounding capability. Second, we entered 2025 with improving momentum. And third, we now have over $5,000,000,000 of acquisition firepower at a time when the M and A markets are becoming increasingly more attractive. As it relates to our cash flow compounding model, we grew free cash flow 16% on the back of 14% total revenue and 6% organic revenue growth. Our M and A capability deployed $360,000,000,0.0 towards vertical market leaders, which helped drive our compounding flywheel, but also improved the quality of our portfolio.
Importantly, our fundamentals are strong and we exit the year with quite positive momentum. We saw a reacceleration of our organic revenue growth to 7%. Also on a full year basis, we grew our enterprise software bookings in the double digit area better in the and continue to see high single digit growth in our $460,000,000,0.0 recurring and reoccurring revenue base. Importantly, our enterprise continues to get better as we grow. In 2024, we upgraded key leadership talent, a few of which we highlighted earlier.
We expanded our capital deployment capabilities and capacity, advanced our operating model and made meaningful strides developing and deploying gen AI based solutions. Finally, we are very well positioned with more than $5,000,000,000 of available M and A firepower to deploy capital towards leading vertical market software businesses. The M and A markets are very active and appear to be accelerating pace given the increasing pressure limited partners are placing on their private equity GPs for liquidity. Our M and A team is very busy cultivating and building our robust pipeline of attractive acquisition opportunities. As usual, we're excited to pursue these opportunities with our unbiased and disciplined approach.
Now as we turn to your questions and if you could flip to the final slide, our strategic compounding flywheel, we'd like to remind everyone that what we do at Roper is simple. We compound cash flow over a long arc of time by executing a low risk strategy and running our dual threat offense. First, we've a proven powerful business model that begins with operating a portfolio of market leading, application specific and vertically oriented businesses. Once the company is part of Roper, we operate a decentralized environment, so our businesses can compete and win based on customer intimacy. We coach our businesses on how to structurally improve their long term and sustainable organic growth rates and underlying business quality.
Second, we run a centralized process driven capital deployment strategy that focuses in a deliberate and disciplined manner on cultivating, curating and acquiring the next great vertical market leading businesses to add to our cash flow compounding flywheel. Taken together, we compound our cash flow over the long arc of time in the mid teens area, meaning we double our cash flow every five years or so. So with that, we'd like to thank you for your continued interest and support and open the floor to your questions. Operator, please go ahead.
Conference Operator: Thank you so much. We will now go to our question and answer portion of the call. We request that our callers limit their questions to 1 main question and 1 follow-up. And our first question comes from the line of Ken Wong with Oppenheimer. Your line is now open.
Ken Wong, Analyst, Oppenheimer: Fantastic. Thank you for taking my question. I just wanted to ask about that 6% to 7% organic growth outlook. How clean is that number? Are there any notable 1 off headwinds, tailwinds that we should be thinking about that's impacting that from getting to the steady state?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Hey, Ken, this is Jason. Thanks for the question. No, nothing 1 time in nature. We did talk about just in the in our NS segment, we talked about this last quarter, our MHA business had a 1 time thing that sort of popped through. So little bit a lower organic growth in the at AS and MS, but then that'll start to pick up as we talked about high single digit recurring revenue that'll be more in through So as you think about ProCare coming in organic in the and then just some of the bookings we talked about in the converting into revenue sort of more in the that you'll start to see that inflect up.
Nothing really unusual in our TEP segment. We still expect strong growth across the enterprise. And I think we've said this before, this 2024 is kind of our cleanest baseline year since 2019 with just all of the COVID and supply chain noise that we experienced. So we feel good about the setup for this year.
Ken Wong, Analyst, Oppenheimer: Okay, fantastic, Jason. And then just a quick follow-up. As far as unclogging the M and A logjam in 2025, as you look at the pipeline of potential deals, any preference for growth bolt ons or looking more standalone category leader types?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Ken, it's Neil. I'll take that 1. So our team and we talked on the prepared remarks, we added a fair amount of capacity and capability in our M and A group this past year and they've done a lot of spade work, building a lot of relationships with sponsors, with companies directly, both on the platform side and on the bolt on side. Now when you got 5000000000 to deploy, we'll be able to do everything that makes sense from a bolt on point of view and then hopefully find 1 or 2 platforms sort of is very situation dependent, but yes, it will be a balance between the 2. Perfect.
Thanks a lot.
Conference Operator: Thank you so much. And our next question comes from the line of Joe Giordano of TD comments. Your line is now open.
Joe Giordano, Analyst, TD Comments: Hey guys, good morning.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Good morning, Joe. So
Joe Giordano, Analyst, TD Comments: like, coincidentally, the water company is at my house literally right now putting in a new Neptune meter. So I hope that's factored into the next quarter guidance there guys.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Static or mechanical. That's right.
Joe Giordano, Analyst, TD Comments: I'll see what it looks like when she's gone. All right. Great. So it was good to hear some of the AI tools you guys are deploying here. I was wondering if there's a way to quantify either in terms of ability to price differently and charge for new capabilities and what it's done there or what it's done internally for you guys in terms of margins and making your businesses more profitable and more efficient?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes. So I'll say in 2024, it was a great year of learning, early momentum. We went through 7 or 8 examples of things we're in the market with from a product point of view. But the momentum is just building from here. Very encouraging breakthroughs, obviously, that the world's focused on in this last week, which makes the models even cheaper, more commoditized, which means you can deploy them in more specific use cases for lower costs.
So it's got our teams thinking. We're just on a call with several of our CTOs yesterday on what their early thoughts are there. So it's super encouraging about the future. I'll tell you in terms of the specific mathematical, can we point to it in 2024, it's very hard to point to. We got this many millions of revenue or we save that many millions of costs, but there is definitively a halo effect where we've seen bookings increase, for instance, at Amazon (NASDAQ:AMZN), that's funny, at Adderant.
And because they're the leader on this, we've seen bookings pick up at Deltek because of the Dell (NYSE:DELL) assistant that they have. And on the productivity side, real breakthrough gains on customer support, starting to see gains on the R and D side, but we're not looking at it initially from a how do we take costs out of the enterprise. We look at it about how can we serve our customers more efficiently and how can we chew up more of our roadmap, right? How can we have take the productivity to be offensive is how we're thinking about it.
Joe Giordano, Analyst, TD Comments: Yes, that all makes sense. And then follow-up, the 1 business that I guess people are a little concerned there might be some sort of headwinds just from a U. S. Policy standpoint could be like the GOVCOM piece of Deltek. Just curious what you've seen there and if that's a valid concern or if it is like how does that play out?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes. So Deltek, and their customers, which are federal government contractors, U. S. Contractors and Doge and all the policy, it's super early to know really how it's going to shake out. And I'll tell you the guiding principles of those, a couple that are important is the accountability for contractors are going to increase, pricing models may change to be more performance based, they may have to modernize their systems.
All that plays into the strengths of Deltek because with more accountability, there's going to be more audits compliance. We just acquired a wonderful company called Propricer, which is about how do you manage more performance based pricing. So that feels pretty good. But it's very early to know at the end of the day how this will flow. Importantly, bookings and government contracting in and and activity through the first part of at Deltek, junk government contracting have been quite robust.
So the customers speaking with their wallets at least through this have seemed relatively bullish about the opportunity.
Joe Giordano, Analyst, TD Comments: Thanks guys. Appreciate the color.
Conference Operator: Thank you so much. Your next question comes from the line of Joe Bruehling of Baird. Your line is now open.
Joe Bruehling, Analyst, Baird: Great. Hi, everyone. Thanks for taking my questions. Just following up on your AI comments. So we heard recently from some of the large enterprise vendors, horizontal vendors that this ends up being quite positive thinking about what we've seen from small language models.
You commoditize the model. You're able to differentiate at the business process layer. I would say in Roper's case, you're typically dealing with, I would say, more unique and regulatory burdensome business processes. Does AI make it easier for others to come in and tackle those? Or do you think because you're the incumbent, you have the starting product focus, you have the distribution that you would expect you end up deepening your moats because of the progress that's happening in the model space?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: So we're super paranoid on this question and engaged with our companies all through 2024 through the AOP process, through the strategy process precisely on this question. Where we land on it is that we're in a very good position to be the winner. And it's really I tried to comment in the prepared remarks for a couple of reasons. 1 is, we are really intimate with our customers. I mean, this is not for instance, I'll use the Adder example.
We're not about how do you create a project based professional services bill. We're about how does a specific law firm create a specific bill for a specific client that's compliant to that client's billing requirements. It's a very nuanced specific thing. As we talk about intimacy, that's what we talk about. So at the intersection of the intimacy, the intersection of the data we have and now with the new enabling tools, we believe that we're uniquely advantaged to be able to solve problems that here before have available to solve be solvable with the technologies available at the time.
The other thing that's important to note, at least in our verticals we participate, we are in every one of our companies, we are the market share leader. We have relevant market share advantage of in some cases, 1.2, in other cases, we're twice or 2.5 times the size of the next largest competitor. So we have scale advantage in these small niches to be able to make these investments. And so we like the course of travel, but we're going to remain vigilant and paranoid and encourage and press our companies to make the investments at a pace that makes sense to be able to compete and win.
Joe Bruehling, Analyst, Baird: Okay. That's great color. On the outlook for next year, I would imagine you aren't run rating high teens bookings going forward, but the last few quarters now have been pretty impressive. I think if you just run rate double digits, it probably gets to something better than a mid single digit outcome for AS organic. I guess, are you starting the year baking in any sort of hedge?
I know you just addressed Deltek, but maybe any risk points that are a consideration and if the risks aren't borne out, you maybe get raises later on?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Yes. Hey, Joe, it's Jason. I think we finished 2024 at 5.6% to be exact on AS. And I think we had strong gross revenue retention in the year. We had good bookings in the second half of the year.
So that's all part of the growth equation. So we think we're going to be better than that. And I think it's just we're going to want to see how the first half plays out. I mean, obviously, I think if you think about the year again, ProCare is going to roll organic in the so that'll help the growth rate. But yes, I think if we continue to see the momentum we saw in the second half, there could be some chance for upside, but how that converts to revenue
Perry Tylman, Analyst, Stuwirth Securities: is a little slower
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: than just immediate impact unless just perpetual. The 1 upside I would say in the year is if GovCon Enterprise remains strong and there's a bias to perpetual, which candidly we hope there isn't just over a long term. But if there is, then we could have some upside there for the year.
Joe Bruehling, Analyst, Baird: Thank you.
Conference Operator: Thank you so much. Our next question comes from the line of Perry Tylman of Stuwirth Securities. Your line is now open.
Perry Tylman, Analyst, Stuwirth Securities: Yes. Hey, Neil, Jason and Zack, it's good to see this dual threat offense in action. I guess maybe my first question and it's appreciate the call out on the enterprise software booking strength. But what I'm curious is could you stack rank a little bit from as you talk to the leaders of the businesses, what's kind of is there any macro that's actually starting to help, green shoots on that front or just some execution because sometimes you do change out some of the leaderships, enhance go to market optimization. And then thirdly, like conversion to SaaS, could you maybe kind of double click into what you think are some of the most poignant drivers of this enterprise software booking strength?
And I have a follow-up.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Okay. Terry, I'll do my best to hit all the points you just raised there. So first, I would say from a macro point of view compared to where we were this time last year versus now, we certainly feel it's a more stable outlook for the macro, which is positive for sure. Jason mentioned, I mentioned in the prepared remarks, we think we attribute a lot of the success we're having to having better leaders with more precise choice based right to win based strategies and an execution model to be able to deliver. And so where we've been able to mature this and have these methods and means be in place the longest, we are seeing the benefits.
And it's clear and obvious. It's a great part of Roper. It takes a little bit of time for all this to work because there's no fast way to build enduring sustainable improved organic growth rate, but it happens methodically over time and we continue to turn that crank. The examples in that would be certainly what we're seeing at Deltek, Aderant, PowerPlan, DAT, ConstructConnect, the same few. I mean, there's other Verathon for sure, NDI.
There's I mean you can go through the list and every company is getting better, but those are some of the highlights in terms of where the all this is really starting to sort of click and we're seeing over the long a medium arc sort of acceleration organic. And then I think there was a question, I don't know if it's just a general question about SaaS conversions. We continue that's a longer term growth driver for us. They're still north of $900,000,000 of on premise maintenance that we're in the process of productizing and moving to the cloud at a north of 2 times CLIP in terms of ARR. And so that's a nice tailwind.
The amount of perpetual has been going down over time. So to the extent there's a J curve, we've sort of just happened to have been embedded in our results over the last few years. And so it's a nice longer term tailwind.
Perry Tylman, Analyst, Stuwirth Securities: Yes. Thanks for that. And then just Jason as it relates to VAT, I don't know if this is maybe this is a hard question, but pricing and packaging and value kind of monetization with some of the initiatives, when would that actually start hitting and how impactful? Thank you.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Yes. Sure. Yes. So, I think in the they had an action on half of the market or half of the side of the network and then there'll be another 1 sometime in the year probably and then a little bit more at the end of this year as well. So, and it all relates to what Neil talked about, which is just increasing the sort of the safety and the reliability of the trading partners on the network, just what we're doing from a fraud perspective and performance perspective on the load board.
So just continuing to innovate. There's more innovations coming, a lot of releases they're going to have this year. So we're really excited about what's happening at DAT.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes. While we're just on DAT, I'll put a plug in for this small bolt on we did in the quarter, Trucker Tools. We think this 1 has the potential to just be a terrific adder to the network, real time visibility to all the network participants. We have the concept of having the customer base we have on the carrier and the broker side and then delivering more value to both sides in which the network with Trucker Tool does and being able to monetize it from there, really exciting potential with this bolt on.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Thank you.
Conference Operator: Thank you. Our next question is from the line of Brent Sales, Jefferies. Please ask your question.
Brent Sales, Analyst, Jefferies: Good morning. Neil, when you think about AI, it just seems like there's a distracting light among some of the software buyers and trying to figure out what to do with that. Are you seeing any of that distraction in your engagements, in the sales engagements? Or is this your verticals more insulated? They're more focused on the business value, the AI piece is more back burner.
What are you seeing from that these CIO behaviors?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes. We've also been asking that question quite a bit and we've not seen a distracted I mean maybe in the first half of last year when this was all new and everybody's just canvassing like hold on what's going on that was part of the macro that was going on as part of that interest rates, economic inflation all that. But as of late there's been none of that and I would attribute the root cause of that to be we are the system of record for the vast majority of what our customers do and they're looking to us to enable take the enabling technology of Gen AI and then apply it to very specific settings. They don't have a competing large SAP or large whatever that we sit we ride on next to. We are the system of record or we are the system that they need to operate the network or get their lead generation or whatever it might be.
Brent Sales, Analyst, Jefferies: Okay. And appreciate kind of your comments on M and A and the magnitude of things that can unlock this year. I guess, this kind of area around focus and what you're focused on, I know you can't tell us the lanes you're going. But should we expect kind of similar lanes? Are you open to doing something different than you've done in the past?
How do you think about kind of the direction given the magnitude of the M and A cleanup that seems to happen in the industry this year?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: No, we're always have been and will continue to be like wildly focused on what it is that we do, right? So for platforms, it is small market, vertical market leaders that have enduring competitive advantage. You can understand and observe the competitive forces that is the leader, that has growth that is compelling to us, where we can potentially add more capital to bolt ons. I mean, that is what we do, and we will continue to be business pickers first and foremost and not sort of be thematic vertical investors like we want to put X dollars into this theme. We're just going to always be business pickers.
Now where that ultimately takes us, it's to be determined based on how the deals manifest over the course of next year or two.
Brent Sales, Analyst, Jefferies: Great. Thanks.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes.
Conference Operator: Thank you. Our next question comes from the line of B. Andre of RBC Capital Markets. Please ask your question.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Thank you. Good morning, everyone. Hey, Dean. Good morning.
Joe Giordano, Analyst, TD Comments: Good morning.
Dean Andre, Analyst, RBC Capital Markets: Hey, I know it's not a big dollar amount, but you did call out that $9,000,000 of restructuring. Could you expand on that like how many businesses, what's the payback? And I'm really interested in the genesis of this. I'm guessing this had nothing to do with headquarters. This was all bottom up, but just be interested in how it was initiated.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Yes, I can take that Dean. So yes, it was a couple of businesses. It was mostly in our AS segment and the largest was at Deltek. And I think just this coincides with Bob Hughes coming in, taking a look at where they want to make some reinvestments back in the business. So obviously going to get some flow through in 2025, but we'll have some reinvestment back into things like product, things like growth.
And so that was just an opportunity optimistic opportunity to do that. And then we had a couple I guess had a couple of smaller ones too where it was again just having a good finish to the year and wanted to just make sure that they could take some actions rolling into 2025.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: I would just characterize it as good healthy belt tightening.
Dean Andre, Analyst, RBC Capital Markets: Good to hear. And just separately, could you give us an update with any kind of specifics regarding the TRANZACT integration with Seaboard? Just what kind of initiatives, where and how might that play out during the course of this year?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Sure. So far it's going really well. We've identified the $20,000,000 of cost synergies and those will mainly start rolling through in the So that's going well. The team has been set and they've actually added some new capabilities. The executive team, they've got a new Head of Services that just joined.
That's part of the valuation plan is sort of creating a as they're moving a lot more customers to the cloud with their campus ID solution, having a professional services organization that can manage that in a accretive way. And then just really, I think overall making a lot of progress on the integration. We've underwritten an ERP that's going to cut across the business and that should create efficiencies over time, not immediately, but over time. And so yes, we're excited about I think the feedback from the market has been really positive around whether they're going from a product roadmap perspective, showing what the cloud native solution can do from transact. And so I think it's not only the transact customer base that's on premise is excited, but now you're increasingly seeing the Seaboard customers saying, hey, this is the right way to go.
And so we think that's just going to create some great cross sell tailwinds in the next couple of years here.
Dean Andre, Analyst, RBC Capital Markets: Great. Thank you.
Conference Operator: Thank you. Our next question comes from the line of Scott Theaves of Newell's Research. Your line is now open.
Zack Moxie, Vice President of Investor Relations, Roper Technologies: Hey, good morning
Neil Hahn, President and Chief Executive Officer, Roper Technologies: guys. Good morning, Scott.
Dean Andre, Analyst, RBC Capital Markets: Hi, the last few quarters kind of sequentially you've gotten increasingly more positive
Brent Sales, Analyst, Jefferies: on M and A and
Dean Andre, Analyst, RBC Capital Markets: the outlook and such and you certainly were active over the last year as well. But would this is kind of a unique situation it feels like in 2025. Would you consider issuing equity, Neal, if the opportunity set were wide enough where it would make sense?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: So, obviously, the first source of capital is going to be the $5,000,000,000 in our balance sheet and our debt capacity. If the market then at that point continue to present very compelling deals to us, then certainly we would consider the use of equity, but the bar is higher, the return bar is higher, the asset quality is even higher because the cost of capital is higher. So that all goes into the decision making process. But let's be clear, we'll be delighted to be able to deploy the $5,000,000,000 that we have. That drives the compounding machine for us.
And even in difficult years, let's just make this clear for the record. I mean, in the years where there wasn't a lot going on in the last couple of years, we got our work done as well. So that's where our relationships sort of always being in the market sort of benefits us maybe even the most is when the times are not as good. And so we'll just be steady deployers of capital through good times and bad.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: That's right. And I'd also just say that the metabolism of all these assets in private equity is not going to be immediate. It's going to take more than a year for that to happen. So I don't think it's going to be all at once.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes, this will not clear in 2025. It will be a 2025 and 2026 clearing for sure.
Dean Andre, Analyst, RBC Capital Markets: Okay. So there's no sense of panic on the other side. Okay, I got you. All right. And just kind of a you guys have been talking about talent upgrades, I don't know for maybe more than a year or so.
But when you think about talent and what do you think about kind of a ratio of internal when you're filling jobs, external versus internal, do you feel like you're building enough internal talent? You kind of mentioned that winners hire winners and I certainly believe in that. But do you guys think about that like how that fill rate should be internal versus external or if there's some optimal or mostly external just given your business mix? Just kind of curious how you think about that.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: No, we're for five or six years been really deploying aggressively what we call our talent offense that's focused on selection of talent, development talent and the engagement of talent. And we have as we've talked about widely and often, we have the attributes, the behavioral attributes of our field leaders that need to be competitive, curious learners that can think long term and make that long term actionable today and then be completely geeked up and excited to build the underlying capabilities of the business or behavioral attributes we look for. So we started this, we had to go outside, right? But then the development part of this talent offense has been its early signs are encouraging, right? So we have Straza that moved to frontline.
We got Brody that's now leading ConstructConnect. By the way, Brody started the Roper office with the CFO in Antibonics and DAT, then ConstructConnect and now is the CEO of ConstructConnect. So it would not surprise me if there were other leadership moves within the portfolio as the bench, if you will, gets deeper and broader and better. And that's always going to be our first call. If you think about it just from a risk management point of view, Scott, when we were needed to sort of replace the upgrade the talent at frontline, we're able to move Straub to the frontline, the CFO Brody to the CEO of ConstructConnect, the Head of FP and A to the CFO and then we go out to the market to hire an FP and A leader versus a CEO of 1 of our larger businesses, right.
So risk management point of view, it works all around.
Dean Andre, Analyst, RBC Capital Markets: Good color. Congrats on the quarter. Good luck this year, guys. Thank you.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Thanks so much. Thank
Conference Operator: you. Our next question comes from the line of Steve Tusa of JPMorgan. Your line is now open.
Zack Moxie, Vice President of Investor Relations, Roper Technologies0: Hey, good morning.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Hey, good morning, Steve. It's good to hear you. Good morning, Steve. Good to hear you. Good morning.
Good morning. Good morning. Good morning. Good morning, Steve. Good morning.
Good morning, Steve. Good morning. Good morning, Steve. Good to hear you. Good morning.
Good morning. Good morning, Steve. Good morning. Good morning, Steve. Good morning.
Zack Moxie, Vice President of Investor Relations, Roper Technologies0: Are you at some point going to change that algorithm? Or is there something about the 30 2 that was a bit overdriven in the And then how do we think about that? Should we think about that as kind of normal seasonality this year for you guys as
Dean Andre, Analyst, RBC Capital Markets: we move into the and
Perry Tylman, Analyst, Stuwirth Securities: the on cash?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: So, yes, I mean, this was a really strong renewal season for us. If I had to call out specific companies, I mean, Deltek and Adderant just drove down record DSO and even Strata emerging from the integration with Satellis, they sort of got everything in line by the end of this year and had just a great finish to the year. Verathon and Neptune were also spectacular. So just great work here, a little bit better than we thought. So it may come a little might come out of just a little bit.
So but nothing super unusual. I'd just say on the non operating front, we did issue a couple of billion of new bonds and our first coupon payment will be due in like I think Feb. 0 and April 0 of this year. So that's more of a 25 versus 24 item. But I mean overall it's just this really strong year.
Zack Moxie, Vice President of Investor Relations, Roper Technologies0: Yes. And then just 1 last 1 for you, Neil. You guys are clearly making some progress on integrating AI. Are there any businesses where I'm sure you're in your reviews, you've asked a lot of these questions. But is there any businesses where you see perhaps threats where at the margin, you guys are obviously on the watch for any incremental competition coming from this and disruption?
And any signs of that whatsoever and obviously you guys are reacting by investing. But what are you seeing from that perspective for businesses that have always been very strong and had relatively high market shares?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: Yes. So I would say, we spend a lot of time at the portfolio level worrying if there's an existential threat at the portfolio level. And last year, there was 1 company that we had on the watch list, did the work and then moved them off the watch list from a threat point of view. I actually think it's medium to long term a tailwind now that we understand the landscape and the IP ownership landscape better than a year ago in that end market. And then I would say, hey, in certain of our verticals, are there teeny tiny startups that are doing very bespoke small AI things?
Yes. But all the customers are actually want to consolidate vendors, not proliferate vendors. And so it just gives us an opportunity to sort of be the benefactor of the winner because of that trend.
Zack Moxie, Vice President of Investor Relations, Roper Technologies0: Yes, that makes a lot of sense. All right. Thanks for the answer. Appreciate it.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: You bet.
Conference Operator: Thank you. The next question comes from the line of Julien Mitchell of Barclays (LON:BARC). Your line is now open.
Zack Moxie, Vice President of Investor Relations, Roper Technologies1: Hi, good morning. Maybe just wanted to start with any color on the EBITDA margin outlook. There's been a lot of revenue related questions. But in 2024, I think the core margin firm wide was flat, headline including acquisition down a touch. So as we're thinking about 2025, should we think about sort of core margins maybe up slightly and then the headline margin flat and that sort of back half loaded with first half margin down year on year and then up in the back half?
Is that the way to kind of think our EBITDA margins?
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Yes, I think you summarized it well. Core margin will be up a little bit. I talked especially at the segment level, be up nicely and then acquisitions, like you said, especially in the with TRANZACT coming to this. TRANZACT's largest margin quarter is the where about 50% of their EBITDA comes in that quarter. So lower in the a little bit lower in the So yes, I think the way you've described it is spot on.
Zack Moxie, Vice President of Investor Relations, Roper Technologies1: That's great. And then my follow-up just on the TEP segment, we haven't had many questions on that yet. So trying to understand as you're thinking about kind of the revenue outlook here, maybe home in a little bit what you're expecting for Neptune. I think there's some noise around various kind of meters businesses and sort of customer inventory reductions. So how are you thinking about Neptune for 2025 revenue?
And also maybe any color on how did the TEP backlog perform in I think it was down about 30 ish percent year on year in but also very elevated base. So just kind of how have orders or book to bill moved there?
Neil Hahn, President and Chief Executive Officer, Roper Technologies: I'll take the first part and ask Jason to take the second part regarding the backlog. So, hey, if there's strength in the segment and Neptune is I think something like 40% of the segment and so we certainly expect them to be good in the year when we're guiding to where we're guiding in the HSD area. The other thing that's just there was some noise in the comps in the prior year. We talked about NDI, we talked about RF products, all that sort of in the rearview mirror. So we just have a clean base to grow from and it's pretty consistent growth across the group here.
Jason Conley, Executive Vice President and Chief Financial Officer, Roper Technologies: Yes. I mean, just on backlog, I think we've talked ad nauseam about the supply chain lead times and things that happened over the last few years and that's normalized out. We still have a little bit higher backlog there than say pre COVID. So that's positive. And I would just say early signs in this year that a lot of the distributors are restocking significantly and the sales kickoff that Don and his team had a few weeks ago indicates just continued strength in the market this year.
So it'll kind of get us back to where we were pre COVID, which is fine, right, which is that we work off a one to two month backlog and just continue to see growth without working on off of a backlog.
Zack Moxie, Vice President of Investor Relations, Roper Technologies1: That's great. Thank you.
Neil Hahn, President and Chief Executive Officer, Roper Technologies: You're welcome.
Conference Operator: Thank you so much. And this concludes our question and answer session. We will now return back to Zack Moxie for any closing remarks.
Zack Moxie, Vice President of Investor Relations, Roper Technologies: Thank you, everyone, for joining the call today. We look forward to speaking with you during our next earnings call.
Conference Operator: Thank you, presenters. And thank you, ladies and gentlemen. The conference is now concluded. Thank you for attending. And you may now disconnect.
Have a great day.
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