Roper Technologies, Inc.

This is our first report on Roper Technologies, a diversified software and tech investment company. The company ended 2022 on a positive note with revenue of over $1.4 billion, up 14% higher than the prior year. Strong portfolio-wide organic growth of 7% was boosted by a 10% increase in software recurring revenue. Currency was a 2-point negative, while acquisitions generated 8 points of growth, led by its Frontline business. In market-dominant and application-specific software businesses, they effectively invested $4.3 billion. They also have a sizable M&A firepower well north of $4 billion. Aderant and Deltek kept up the momentum of their SaaS conversion, and both businesses expanded well due to good customer additions and retention. Deltek excelled in its end markets for the private sector. However, Deltek had some slower decision-making about new bookings for their GovCon products in the enterprise market. Furthermore, the Network Software segment experienced good growth, with revenue increasing by 9% to $350 million. Their freight-matching businesses, which continued to provide greater ARPU from premium services to offset declining carry activity, were the main growth drivers. We initiate coverage on the stock of Roper Technologies, Inc. with a ‘Hold’ rating.