Roper Technologies Announces Updated Segment Structure

Roper Technologies, Inc.

SARASOTA, Fla., June 30, 2022 (GLOBE NEWSWIRE) -- Roper Technologies, Inc. (NYSE: ROP) announced today that it has updated its reportable segments. The three updated reportable segments are as follows:

• Application Software – Aderant, CBORD, CliniSys, Data Innovations, Deltek, IntelliTrans, PowerPlan, Strata, Vertafore

• Network Software – ConstructConnect, DAT, Foundry, iPipeline, iTradeNetwork, Loadlink, MHA, SHP, SoftWriters

• Technology Enabled Products – CIVCO Medical Solutions, FMI, Inovonics, IPA, Neptune, Northern Digital, rf IDEAS, Verathon

Beginning with the second quarter of 2022, the Company will report its quarterly and full year financial statements under the new segment structure with prior periods recast to reflect the change.

Discontinued Operations

On June 1, 2022, Roper announced an agreement to sell a majority stake in its industrial businesses, including its entire historical Process Technologies reportable segment (AMOT, CCC, Cornell, FTI, Metrix, PAC, Roper Pump, and Viatran) and the industrial businesses within its historical Measurement & Analytical Solutions reportable segment (Alpha, Dynisco, Hansen, Hardy, Logitech, Struers, Technolog, and Uson). Beginning in the second quarter of 2022, Roper plans to report the results of these businesses as discontinued operations.

Use of Non-GAAP Financial Information

The Company supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial schedules or tables. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated.

Unaudited Historical Financial Information

The Company has included below unaudited historical financial segment information recast to give effect to the new reportable segment structure.

Table 1: GAAP Segment Financials ($M)
(Unaudited)
	2019 A			2020															2021															2022
	FY			Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Revenue
Application Software	$	1,573		$	402		$	395		$	444		$	545		$	1,786		$	573		$	588		$	600		$	605		$	2,367		$	628
Network Software		889			263			257			266			283			1,069			287			298			316			323			1,224			338
Technology Enabled Products		1,095			292			300			292			283			1,167			295			304			316			329			1,243			313
Total	$	3,558		$	957		$	952		$	1,002		$	1,111		$	4,022		$	1,155		$	1,190		$	1,232		$	1,257		$	4,834		$	1,280
Gross Profit
Application Software	$	1,058		$	269		$	272		$	306		$	375		$	1,222		$	397		$	407		$	418		$	420		$	1,643		$	435
Network Software		764			218			213			221			236			888			239			250			267			272			1,029			285
Technology Enabled Products		652			178			191			179			170			718			180			182			186			188			735			177
Total	$	2,474		$	664		$	676		$	707		$	781		$	2,828		$	816		$	839		$	872		$	880		$	3,407		$	897
Operating Profit B
Application Software	$	406		$	97		$	113		$	125		$	132		$	468		$	154		$	153		$	164		$	162		$	633		$	172
Network Software		355			91			87			97			107			383			106			111			126			134			477			137
Technology Enabled Products		370			101			114			105			92			412			106			102			104			103			415			100
Total	$	1,131		$	290		$	314		$	327		$	331		$	1,263		$	365		$	367		$	395		$	399		$	1,525		$	409

Table 2: Adjusted Segment Financials ($M)
(Unaudited)
	2019 A			2020															2021															2022
	FY			Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Revenue
Application Software	$	1,574		$	402		$	395		$	447		$	550		$	1,794		$	574		$	588		$	600		$	605		$	2,368		$	628
Network Software		899			266			258			266			283			1,073			287			298			316			323			1,224			338
Technology Enabled Products		1,095			292			300			292			283			1,167			295			304			316			329			1,243			313
Total	$	3,568		$	959		$	953		$	1,006		$	1,116		$	4,034		$	1,156		$	1,190		$	1,232		$	1,257		$	4,835		$	1,280
Gross Profit
Application Software	$	1,058		$	269		$	272		$	309		$	380		$	1,230		$	398		$	407		$	418		$	420		$	1,644		$	435
Network Software		774			220			214			221			236			892			239			250			267			272			1,029			285
Technology Enabled Products		652			178			191			179			170			718			180			182			186			188			735			177
Total	$	2,485		$	667		$	678		$	710		$	786		$	2,840		$	817		$	839		$	872		$	880		$	3,408		$	897
Operating Profit B
Application Software	$	406		$	97		$	113		$	128		$	135		$	474		$	153		$	152		$	163		$	161		$	628		$	171
Network Software		365			94			89			97			107			386			106			111			126			134			477			137
Technology Enabled Products		370			101			114			105			92			412			106			102			104			103			415			100
Total	$	1,141		$	292		$	315		$	330		$	334		$	1,272		$	364		$	365		$	393		$	398		$	1,521		$	407
Segment EBITDA
Application Software	$	633		$	155		$	171		$	200		$	241		$	767		$	258		$	257		$	267		$	265		$	1,047		$	277
Network Software		485			134			129			139			149			551			147			153			168			174			642			178
Technology Enabled Products		408			110			122			114			100			445			114			110			112			111			448			107
Total	$	1,526		$	399		$	422		$	453		$	490		$	1,764		$	519		$	520		$	547		$	551		$	2,136		$	563

Table 3: Adjusted Revenue Growth
(Unaudited)
Application Software
	2020															2021															2022
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Organic Growth	5	%		1	%		(1)	%		(2)	%		1	%		3	%		9	%		10	%		10	%		8	%		9	%
Acquisitions/Divestitures	2	%		2	%		12	%		36	%		13	%		39	%		38	%		23	%		—	%		23	%		1	%
Foreign Exchange	—	%		(1)	%		1	%		1	%		—	%		1	%		2	%		1	%		—	%		1	%		(1)	%
Total Revenue Growth	6	%		2	%		11	%		35	%		14	%		43	%		49	%		34	%		10	%		32	%		9	%
Network Software
	2020															2021															2022
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Organic Growth	3	%		2	%		—	%		4	%		2	%		3	%		10	%		16	%		13	%		11	%		16	%
Acquisitions/Divestitures	34	%		24	%		13	%		3	%		17	%		4	%		3	%		1	%		—	%		2	%		2	%
Foreign Exchange	—	%		—	%		—	%		—	%		—	%		1	%		2	%		1	%		—	%		1	%		—	%
Total Revenue Growth	36	%		26	%		13	%		8	%		19	%		8	%		15	%		19	%		14	%		14	%		18	%
Technology Enabled Products
	2020															2021															2022
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Organic Growth	10	%		7	%		6	%		4	%		7	%		—	%		—	%		8	%		16	%		6	%		7	%
Foreign Exchange	—	%		(1)	%		—	%		1	%		—	%		1	%		1	%		—	%		—	%		1	%		—	%
Total Revenue Growth	9	%		6	%		6	%		5	%		7	%		1	%		1	%		8	%		16	%		7	%		6	%
Roper Consolidated
	2020															2021															2022
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			FY			Q1
Organic Growth	6	%		3	%		1	%		2	%		3	%		2	%		6	%		11	%		12	%		8	%		10	%
Acquisitions/Divestitures	9	%		6	%		9	%		16	%		10	%		17	%		17	%		11	%		—	%		11	%		1	%
Foreign Exchange	—	%		(1)	%		—	%		1	%		—	%		1	%		2	%		1	%		—	%		1	%		—	%
Total Revenue Growth	14	%		9	%		10	%		19	%		13	%		21	%		25	%		23	%		13	%		20	%		11	%

Table 4: Adjusted Segment & Consolidated Financials Reconciliation
(Unaudited)
Application Software Reconciliation ($M)
	2019				2020																				2021																				2022
	FY				Q1				Q2				Q3				Q4				FY				Q1				Q2				Q3				Q4				FY				Q1
GAAP Revenue	$	1,573			$	402			$	395			$	444			$	545			$	1,786			$	573			$	588			$	600			$	605			$	2,367			$	628
Purchase accounting adjustment to acquired deferred revenue		1				—				—				3				5				8				1				—				—				—				1				—
Adjusted Revenue	$	1,574			$	402			$	395			$	447			$	550			$	1,794			$	574			$	588			$	600			$	605			$	2,368			$	628
GAAP Gross Profit	$	1,058			$	269			$	272			$	306			$	375			$	1,222			$	397			$	407			$	418			$	420			$	1,643			$	435
Purchase accounting adjustment to acquired deferred revenue		1				—				—				3				5				8				1				—				—				—				1				—
Adjusted Gross Profit	$	1,058			$	269			$	272			$	309			$	380			$	1,230			$	398			$	407			$	418			$	420			$	1,644			$	435
Adjusted Gross Margin		67.2	%			66.9	%			69.0	%			69.1	%			69.1	%			68.6	%			69.4	%			69.3	%			69.7	%			69.4	%			69.4	%			69.3	%
GAAP Operating Profit B	$	406			$	97			$	113			$	125			$	132			$	468			$	154			$	153			$	164			$	162			$	633			$	172
Purchase accounting adjustment to acquired deferred revenue & commission expense		—				—				—				3				3				6				—				(1)				(1)				(1)				(5)				(1)
Adjusted Operating Profit	$	406			$	97			$	113			$	128			$	135			$	474			$	153			$	152			$	163			$	161			$	628			$	171
Adjusted Operating Margin		25.8	%			24.2	%			28.7	%			28.6	%			24.6	%			26.4	%			26.7	%			25.9	%			27.1	%			26.5	%			26.5	%			27.2	%
Adjusted Operating Profit	$	406			$	97			$	113			$	128			$	135			$	474			$	153			$	152			$	163			$	161			$	628			$	171
Amortization		207				53				53				67				98				271				98				98				98				99				393				100
Depreciation		19				5				5				5				8				22				7				7				6				6				26				6
Adjusted EBITDA	$	633			$	155			$	171			$	200			$	241			$	767			$	258			$	257			$	267			$	265			$	1,047			$	277
Adjusted EBITDA Margin		40.2	%			38.7	%			43.3	%			44.7	%			43.8	%			42.8	%			44.9	%			43.7	%			44.5	%			43.8	%			44.2	%			44.1	%
Network Software Reconciliation ($M)
	2019				2020																				2021																				2022
	FY				Q1				Q2				Q3				Q4				FY				Q1				Q2				Q3				Q4				FY				Q1
GAAP Revenue	$	889			$	263			$	257			$	266			$	283			$	1,069			$	287			$	298			$	316			$	323			$	1,224			$	338
Purchase accounting adjustment to acquired deferred revenue		10				2				1				—				—				4				—				—				—				—				—				—
Adjusted Revenue	$	899			$	266			$	258			$	266			$	283			$	1,073			$	287			$	298			$	316			$	323			$	1,224			$	338
GAAP Gross Profit	$	764			$	218			$	213			$	221			$	236			$	888			$	239			$	250			$	267			$	272			$	1,029			$	285
Purchase accounting adjustment to acquired deferred revenue		10				2				1				—				—				4				—				—				—				—				—				—
Adjusted Gross Profit	$	774			$	220			$	214			$	221			$	236			$	892			$	239			$	250			$	267			$	272			$	1,029			$	285
Adjusted Gross Margin		86.1	%			82.9	%			83.1	%			83.1	%			83.3	%			83.1	%			83.3	%			84.0	%			84.6	%			84.4	%			84.1	%			84.2	%
GAAP Operating Profit B	$	355			$	91			$	87			$	97			$	107			$	383			$	106			$	111			$	126			$	134			$	477			$	137
Purchase accounting adjustment to acquired deferred revenue		10				2				1				—				—				4				—				—				—				—				—				—
Adjusted Operating Profit	$	365			$	94			$	89			$	97			$	107			$	386			$	106			$	111			$	126			$	134			$	477			$	137
Adjusted Operating Margin		40.6	%			35.2	%			34.3	%			36.3	%			37.9	%			36.0	%			36.7	%			37.3	%			40.0	%			41.4	%			39.0	%			40.4	%
Adjusted Operating Profit	$	365			$	94			$	89			$	97			$	107			$	386			$	106			$	111			$	126			$	134			$	477			$	137
Amortization		112				38				38				40				39				156				39				39				39				39				156				40
Depreciation		8				2				2				2				2				9				2				2				2				2				8				2
Adjusted EBITDA	$	485			$	134			$	129			$	139			$	149			$	551			$	147			$	153			$	168			$	174			$	642			$	178
Adjusted EBITDA Margin		53.9	%			50.5	%			50.0	%			52.1	%			52.6	%			51.4	%			51.1	%			51.3	%			53.0	%			54.1	%			52.4	%			52.7	%
Technology Enabled Products Reconciliation ($M)
	2019 A				2020																				2021																				2022
	FY				Q1				Q2				Q3				Q4				FY				Q1				Q2				Q3				Q4				FY				Q1
GAAP Revenue	$	1,095			$	292			$	300			$	292			$	283			$	1,167			$	295			$	304			$	316			$	329			$	1,243			$	313
GAAP Gross Profit	$	652			$	178			$	191			$	179			$	170			$	718			$	180			$	182			$	186			$	188			$	735			$	177
GAAP Gross Margin		59.5	%			60.8	%			63.6	%			61.4	%			60.1	%			61.5	%			60.9	%			59.8	%			58.8	%			57.3	%			59.1	%			56.5	%
GAAP Operating Profit B	$	370			$	101			$	114			$	105			$	92			$	412			$	106			$	102			$	104			$	103			$	415			$	100
GAAP Operating Margin		33.8	%			34.7	%			37.8	%			36.1	%			32.4	%			35.3	%			35.8	%			33.6	%			33.0	%			31.5	%			33.4	%			31.8	%
GAAP Operating Profit	$	370			$	101			$	114			$	105			$	92			$	412			$	106			$	102			$	104			$	103			$	415			$	100
Amortization		29				6				6				6				6				24				6				6				6				6				23				6
Depreciation		9				2				2				2				2				9				2				2				2				2				9				2
EBITDA	$	408			$	110			$	122			$	114			$	100			$	445			$	114			$	110			$	112			$	111			$	448			$	107
EBITDA Margin		37.2	%			37.6	%			40.6	%			39.0	%			35.3	%			38.2	%			38.6	%			36.3	%			35.5	%			33.9	%			36.0	%			34.3	%

1. For the year ended December 31, 2019, the Technology Enabled Products segment excludes the results of the divestitures completed in 2019 for (i) the Scientific Imaging businesses, sold to Teledyne on February 5, 2019 and (ii) Gatan, sold to AMETEK on October 29, 2019.

2. Segment operating profit is before unallocated corporate general and administrative expenses.
   

Note: Numbers may not foot due to rounding.

About Roper Technologies

Roper Technologies is a constituent of the S&P 500 and Fortune 500. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess free cash flow toward high-quality acquisitions. Additional information about Roper is available on the Company’s website at www.ropertech.com.

Contact Information:
Investor Relations
941-556-2601
investor-relations@ropertech.com

The information provided in this press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth, profit and cash flow expectations. Forward-looking statements may be indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “expects,” “projects,” “should,” “will,” “believes,” “intends” and similar words and phrases. These statements reflect management’s current beliefs and are not guarantees of future performance. They involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties include any ongoing impacts of the COVID-19 pandemic on our business, operations, financial results and liquidity, which will depend on numerous evolving factors which we cannot accurately predict or assess, including: the duration and scope of the pandemic, new variants of the virus and the distribution and efficacy of vaccines; any negative impact on global and regional markets, economies and economic activity; actions governments, businesses and individuals take in response to the pandemic; the effects of the pandemic, including all of the foregoing, on our customers, suppliers, and business partners, and how quickly economies and demand for our products and services recover after the pandemic subsides. Such risks and uncertainties also include our ability to identify and complete acquisitions consistent with our business strategies, integrate acquisitions that have been completed, realize expected benefits and synergies from, and manage other risks associated with, the newly acquired businesses, as well as complete any announced divestitures, including obtaining any required regulatory approvals with respect thereto. We also face other general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions and the conditions of the specific markets in which we operate, changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, cybersecurity and data privacy risks, including litigation resulting therefrom, risks related to political instability, armed hostilities, incidents of terrorism, public health crises (such as the COVID-19 pandemic) or natural disasters, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, including as a result of the current inflationary environment and ongoing supply chain constraints, environmental compliance costs and liabilities, risks and cost associated with litigation, potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products. Important risks may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.