Snapshot
Roper Technologies Inc reported $2.10B of revenue in Q1 2026, up 11.3% year over year, with diluted EPS of $4.87 and an operating margin of 27.2%.
- Revenue
- $2.10B
- YoY growth
- +11.3%
- Diluted EPS
- $4.87
- Operating margin
- 27.2%
What management said
- •For the first quarter, the difference between our GAAP results and adjusted results consists of the following items: amortization of acquisition-related intangible assets and financial impacts associated with our minority investment in Indicor.
- •We'll discuss our segment highlights and outlook and introduce our Q2 and increased full-year 2026 guidance.
- •First, we delivered a strong start to 2026 and are raising our full-year debt guidance.
- •Total revenue grew 11%, organic revenue grew 6%, EBITDA grew 8%, free cash flow grew 11%, and DEPS was $5.16.
- •On that foundation, enterprise software bookings were also strong, core up low double digits on a TTM basis.
- •On the back of this quarter's performance, we're raising our full-year DEPS guidance to a range of $21.80-$22.05, up $0.50 at the midpoint, and more on this later.
- •The signal from our own portfolio that AI can be a meaningful growth driver in vertical software keeps getting clearer by the day.
- •Importantly, our board authorized an additional $3 billion of repurchase capacity, giving us $3.8 billion of remaining authorization and north of $5 billion of total capital employment capacity over the next 12 months.
- •We're disciplined and unbiased between acquisitions and opportunistic buybacks, focusing on driving the best risk-adjusted long-term cash flow compounding per share for our shareholders.
- •Our M&A pipeline today is targeted, focused on high-quality strategic opportunities where we're developing deep relationships and real conviction, and we expect to remain active as disciplined long-term buyers.
- •As you heard, we delivered a strong first quarter, finishing well above the high end of our debt guidance range and ahead of expectations on organic growth.
- •Revenue of $2.1 billion was up 11%, with organic growth of 6% and acquisitions contributing 5%.
What went well
- •Roper delivered a strong start to 2026, with Q1 results exceeding expectations across every key metric: total revenue grew 11%, organic revenue grew 6%, EBITDA grew 8%, free cash flow grew 11%, and DEPS was $5.16, above the guidance range of $4.95-$5.00.
- •Enterprise software bookings were strong, with core bookings up low double digits on a trailing-twelve-month basis, while enterprise gross retention remained consistently in the mid-90s.
- •AI commercialization showed concrete traction: CentralReach grew recurring software revenue well north of 20% with expanding margins, and AI and AI-influenced bookings reached 75% of new business in the quarter, up from essentially zero one to two years ago.
- •Aderant delivered a record quarter with a new Q1 bookings record and strong SaaS momentum, and the company repurchased 6 million shares for $2.2 billion since November, bringing share count back to a level not seen since 2017.
- •Free cash flow reached $2.5 billion on a trailing-twelve-month basis, compounding at a 19% CAGR over three years, and free cash flow per share grew 15% year over year.
- •The Technology-Enabled Products segment grew 7% organic, significantly better than expected, driven by record demand at NDI for electromagnetic tracking solutions and solid Verathon growth on D-Flex and GlideScope demand.
What went wrong
- •Core EBITDA margin was down 70 basis points in the quarter, driven by lower gross margins in the Technology-Enabled Products segment from a consumables mix shift at NDI and Verathon and higher input costs at Neptune.
- •Neptune faced input cost pressure from bronze/copper ingot inflation, and revenue declined low single digits on lower mechanical meter volumes; management is not underwriting a Neptune recovery in 2026 guidance.
- •Deltek's GovCon enterprise business remained soft, with the awaited inflection still not materializing amid federal procurement disruption, agency reorganizations, and budget uncertainty delaying large enterprise perpetual deals.
- •A sharp diesel price spike late in the quarter compressed carrier margins at DAT, and guidance continues to assume no meaningful freight market recovery.
- •Network software EBITDA margins were down 460 basis points year over year, reflecting the lower-margin Subsplash acquisition and ongoing investment in DAT/Convoy.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Diluted EPS (adjusted) | Full-year 2026 | — | $21.80-$22.05 (up $0.50 at midpoint) | Raised |
| Diluted EPS (adjusted) | Q2 2026 | — | Guidance introduced | New |
| Organic revenue growth | Full-year 2026 | — | 5%-6% (mid-single digit plus) | Reiterated |
| Application software organic growth | Balance of 2026 | — | Mid-single digit plus; lower in Q2 on non-recurring timing, improving in back half | Maintained |
| Network software organic growth | Balance of 2026 | — | Mid-single digit plus | Maintained |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total revenue | +11% | Organic growth of 6% plus 5% contribution from acquisitions; recurring software revenue grew 7%. |
| Application software revenue | +12% total, +5% organic | Recurring revenue (about 85% of segment) grew mid-single digit plus while non-recurring was essentially flat; strength at Aderant, Vertafore, and CentralReach. |
| Network software revenue | +14% total, +5% organic | Organic recurring grew mid-single digit plus; non-recurring declined as customers moved to cloud; Subsplash acquisition contributed to total growth. |
| Technology-Enabled Products revenue | +9% total, +7% organic | Exceptional demand at NDI for electromagnetic tracking and strong Verathon demand, better than expected. |
| EBITDA | +8% | EBITDA margin of 38.1%; core EBITDA margin down 70 bps on TEP gross margin mix and Neptune input costs, partially offset by 40 bps software margin expansion. |
| Free cash flow | +11% | Reached $562 million in the quarter; free cash flow per share up 15% on growing cash flow and declining share count. |
| Neptune revenue | Declined low single digits | Lower mechanical meter volumes partially offset by strong static meter growth; better than expected. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| AI velocity and commercialization across the portfolio | Discussed in January call | AI shifting from product investment to product shipping; CentralReach, Aderant, DAT and others delivering live AI-enabled SKUs with hard-dollar ROI | rising |
| Roper AI accelerator strike team | Completed listening tour last quarter | Deployed into the field with first partnership at Vertafore (six AI agents launched), expanding from one to six engagements with ~10X productivity gains observed | rising |
| Share repurchase and capital deployment | — | 6 million shares repurchased for $2.2 billion since November; board added $3 billion authorization, leaving $3.8 billion remaining and over $5 billion of annualized deployment capacity | rising |
| M&A pipeline and private markets | Discussed prior quarters | Pipeline targeted and proprietary; constrained private credit and LP pressure improving setup for high-quality assets at differentiated values; timing TBD | steady |
| SaaS / ground-to-cloud transitions | Discussed in prior quarters | Adds 50-100 bps of growth per year over the next 5-10 years; AI features may accelerate the timeline; Aderant and PowerPlan furthest along | rising |
| GovCon / Deltek inflection | Discussed in January | Still awaiting inflection; private sector strong, GovCon enterprise soft; no GovCon inflection or OBBB benefit baked into guidance | steady |
Q&A summary
On AI embeddability into existing platforms and how the company plans to monetize AI capabilities.
Hunn said native, on-stack AI embedded into workflows is a winning incumbent advantage that creates a 'product magic' experience. Monetization will not be one-size-fits-all: some businesses (SoftWriters, Convoy/DAT) will price on consumption, but more broadly it will likely be a subscription with overage based on AI utilization, since customers want predictable budgeting. Conley added that CentralReach is furthest along, with all AI incremental and priced based on learners.
On conviction in the full-year 5%-6% organic guide after a 6% Q1, given easier back-half comps.
Conley called it a strong, encouraging start but noted it is only one quarter in. Q2 has mechanical headwinds (non-recurring timing in application software, a high-water-mark comp in TEP), while the second half improves as CentralReach and Subsplash turn organic and AS comps ease, supporting holding the range.
On the private M&A markets given ongoing volatility and whether the outlook has changed.
Hunn said activity went from the busiest in a long time to the least busy after the public market drawdown, but Roper remains active with more proprietary, targeted deals. The M&A setup has improved over the last 90 days as LP pressure persists and private credit constraints add pressure, potentially allowing acquisition of high-quality assets at differentiated values; timing is undetermined.
On whether AI spending by frontier model providers is squeezing incumbent software budgets, especially in legal and healthcare.
Hunn said no impact on the budgetary spend Roper competes for. IT-spend surveys can be misleading because the point of AI is to monetize labor spend, a different bucket of opportunity, and Roper is not seeing budget reallocation away from its products, especially in legal and healthcare.
On the sustainability of Aderant's multi-year momentum and SaaS transition.
Hunn described Aderant's evolution: first out-competing rivals to grow large-law share from 35%-40% to 60%-65%, then adding bolt-on modules organically and inorganically, then cloud-enabling the product set, and now layering in AI tailwinds. He sees a multiple-growth-driver story in early innings (third or fourth) with a long way to go.
On the ROI to Roper of increased AI development investment needed to keep the same customers versus prior years.
Conley said development is seeing demonstrable efficiencies from frontier models, with more roadmap consumed for the same OpEx, and reinvested productivity does not fundamentally change the P&L structure or margin profile. He added AI tools use smaller, local language models consuming few tokens, keeping it margin-accretive.