Key Points
- Adjusted diluted EPS of $4.48 beat estimates by $0.02.
- Total revenue rose 12% to $1.72 billion.
- GAAP diluted EPS decreased by 7%.
Roper Technologies (ROP -0.00%), a leader in software and technology-enabled products, released its second-quarter 2024 report on July 24. In the period, the company achieved significant growth in revenue, adjusted earnings, and cash flow, but also suffered a decline in GAAP net earnings. Its adjusted diluted EPS of $4.48 topped the consensus estimate of $4.46, and revenue rose 12% year over year to $1.72 billion. However, GAAP diluted EPS declined from $3.36 in the prior-year period to $3.12.
| Metric | Q2 2024 Result | Q2 2024 Analyst Estimate | Q2 2023 Result | % Change (YoY) |
|---|---|---|---|---|
| Adjusted diluted EPS | $4.48 | $4.46 | $4.12 | 9% |
| Total revenue | $1.72 billion | $1.73 billion | $1.53 billion | 12% |
| GAAP diluted EPS | $3.12 | - | $3.36 | (7%) |
| GAAP net earnings | $337 million | - | $361 million | (7%) |
| Operating cash flow | $384 million | - | $320 million | 20% |
| Adjusted EBITDA | $695 million | - | $617 million | 13% |
| Source: Analyst estimates for the quarter provided by FactSet. |
Roper provides vertically integrated software applications and technology solutions for companies in a variety of niche markets. It has made strategic acquisitions a key cornerstone of its growth strategy. Its diversified end markets and global reach buffer it against localized economic disruptions.
Quarterly Highlights
Roper's 12% year-over-year revenue increase in the quarter was driven by 4% organic growth -- the remainder came from acquisitions such as Syntellis Performance Solutions, which it purchased in August 2023. Adjusted earnings and EBITDA grew by 9% and 13%, respectively.
However, GAAP diluted EPS fell by 7% to $3.12. This decline contrasts with the robust 24% growth in free cash flow.
The company’s three main segments showed mixed performance:
Application software: $931.8 million in revenue, 68.8% gross margin.
Network software: $364.2 million in revenue, 84.5% gross margin.
Technology enabled products: $420.8 million in revenue, 58.1% gross margin.
A significant one-time event in the quarter was Roper's successful acquisition of Procare Solutions for $1.86 billion. Management increased the lower end of its full-year guidance, underscoring its confidence in its operational strength.
Looking Ahead
Roper projects adjusted diluted EPS for Q3 2024 to be between $4.50 and $4.54, and expects full-year adjusted diluted EPS in the range of $18.10 to $18.25. Management also anticipates around 12% revenue growth for the year, consistent with its Q2 performance.
