Roper (ROP) 26 Oct 222022 Q3 Earnings call transcript

Good morning. The Roper Technologies Conference Call will now begin. Today's call is being recorded and all participants will be in listen-only mode. [Operator instructions] I would now like to turn the call over to Zack Moxcey, Vice President, Investor Relations. Please go ahead.

you quarter joining Technologies. financial thank discuss as and third the results morning all us for we Good for Roper

The me our Officer; Rob this call. a this release and call replay Jason Finance. Conley, press and on Earlier Neil and Officer; financial O'Callaghan, Joining President Chief press information Vice President Hunn, of Accounting Chief morning Financial issued Chief Shannon includes Executive release morning, today's Crisci, are Officer; results. we Vice announcing Vice and President also Executive for the President

We available have prepared slides available to are accompany today's call, through which webcast on are the our website. also and

Now safe if Page X. please to harbor We begin statement. turn with our you

subject in to this and described course on press SEC as our risks the today's will of make are During uncertainties page, and we filings. call, in release our forward-looking which statements

in listen guidance continuing otherwise now Page turn to to today's should operations discuss You results context will call And information. non-GAAP of and please an adjusted we our Unless that X. basis. the noted, on and

over will if remarks, After the questions are of you even completed now expense; Neil. we adjusted Page exclude items related quarter, activities. press flow the purchase they flow prepared related Neil? divestitures. third telephone and related our GAAP in cash though our take accounting requires results paid intangible in participants. following to consists to to our of we the of between divestiture I'll operating hand have GAAP to the on adjustments turn website. adjusted commission from this our our be the appendix as payments our the our items: for call X, assets; lastly difference Reconciliations expenses amortization to classified be For acquisitions; statement results and acquisition-related to transaction to release cash please cash and taxes presentation And these can found

good morning Thanks, everyone. Zack, and

agenda our ending usual each most quarter through the Page and we'll for recent commentary to outlook X, turn highlights we followed with for by increased walk our segments As for our year. color the of

ahead get go and Let's started.

Next slide please.

for financial our As X, had and we're we turn call performance further main operational another Page are, for we and quarter great the of year. increasing today's the first, outlook to takeaways

Second, leading Frontline earlier acquired this we software another business, month, Education. niche

firepower we substantial Third, new important continue more the future. the is $X and And been never quality our portfolio to evident, perhaps Roper have fourth of M&A and excited billion. north increasingly about higher more we've becoming most

performance basis that quarters, the outlook to on strength the Frontline, we've As on finally, revenues for segments growth it the our X% midpoint. base margin the active quality full performance revenue of moment. expectations we're guidance an grow north three basis, underlying we organic the a pleased together improved nicely an of the and that we're Based on year. as been our broad strength as our for DEPS XX% XX% only reasons in our did based increasing our QX, the the financial our in our relates quarter, And $X.XX Frontline and across And with we're M&A saw to year quarter, more and grow last grew in for at by operating those addition organic market. of increasing not with recurring in QX on organic the and that the commentary improved during well. but Consistent the several also business software in we was

over $X even the of reset we capital To just a have months, Firepower, deployment, in we few $X after Frontline this other Aderant. for $X over $XXX amount our for billion, last billion. $X.X bolt-ons: end, and large deployed one billion the and million still two Over for Deltek for available M&A billion

ensure be continue we always, and of markets, will disciplined in active super remain M&A to available very as patient deployment We saw highly QX you to as and optimal but the our in capital.

we and financial associate improving feel operating results. great of quality the and Finally, the about portfolio the

is to possible committed incredibly and teams by and our of All Thank associates. everyone. passionate made this you

Turning next the to page.

our As education is previously to on this is announced, software business, application note, to excited added to solutions SaaS we've casual U.S. you another a growth we're targeted Xth. digit niche software Of portfolio, market, characteristics organic an criteria, the north of of we K-XX purpose including high to Frontline exceptional a passionate being Frontline great and provider high solutions growth administrative built market. closed XX%, multiple leader, leader HCM the Frontline Roper not which for all the and leading introduce surprisingly durable recurring K-XX a outlook, transaction drivers which Education. October meets quality having team. and the acquisition clear that single delivers high revenue

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Next slide, please.

highly of we moment could and As XX the respective we XX tech the niche their that To to of are transformation take quality turn end, standalone portfolio. save higher highlight enabled be vast vertical recent businesses size businesses to or and our successful in our leading a want our leaders for Page of majority X, Each product smaller markets. company. Roper their software a

needs intimate the mission have customers them. critical our Our businesses serve and with relationships of

market solutions customer competitive for leadership basis software the purpose-built Our intimacy and advantage. are long-term our

This is of level higher our is growth. accident. no Next organic

expectation performance revenue XX% doing the of and the within A component We're enterprise a level in raised margin approaching and friendly way. improve growth our capabilities. organic of higher is have our large this growth software structurally story XX% organic balance each recurring for their to long-term for sheet businesses companies, the about a our each of of businesses. We for

operational business and water levels orientation generate products. portfolio our customer and software models Today, that result flow, with high are efficiency, levels of margin cash blessed prepaid balance free businesses sheets. of XX% our and addition, XX% medical of In their is their a

versus transition, over XXXX meaningfully put less our the healthcare, market Rob given our our for company to volume-based government longer either food you cyclical model. contracting, of portfolio our summary let that, more we've given portfolio in ones companies. no us. reflect subscription our this Today, some resilient highly are roughly for To dynamics project-oriented. been financial education, growth cyclical utilities increased sheet We revenue we essentially walk and future never and markets Rob? in these position. versus on legal, serve, of of larger XX% our and to the name today's today through fixed perspective, XXXX was portfolio the higher With to we excited more quality, When exists call and me turn Roper balance or

Thanks, Page our Neil. highlights. to covering everyone. financial and X QX Good morning Turn

financial X.X% As continuing $XX said, by prior Application all results revenue Technology grew with three margin on the shifted a reporting Products XX% organic helping businesses. our QX strength currency XX.X%, mix XX% robust has year. industrial grew was fluctuations. and resulting organically. of of XX and was free adjusted billion. points XX% of to EBITDA XX% last was now grew acquisition million, basis. domestic impacts our business and across approximately Adjusted year. $X.XX, XX% to XX% Zack U.S. toward flow Software FX growth. results are our shield increased headwind broad-based sale increased our revenue the guidance announced contributions. operations million basis EBITDA each majority as Total higher from in segments: was which The revenue $XXX our post Network reminder, Notably, than X% QX increased $X.XX any range offset X%, or a Software XX% above The to of represents of a Enabled DEPS well was above revenue meaningfully more our cash

last Excluding cash reported the our quarterly heading we free XXX convention, quarter, million quarter, the great change $XXX tax as Section out momentum and related divestitures. of those payments flow, discussed tax cash XX%. recent our an to In Per overall, grew been QX. third said, we our normal have law adjusted additional so payments into of made Neil excellent flow quarter,

X, complete financial balance quarter, sheet a revolving early Frontline credit cash Turn the our acquisition of on and a in facility. fourth slide. strong looking utilizing did Page our at We to combination our position. the Next draw

our today, draw sits and of revolver at As $X.X billion. balance

to expect in pay fully balance our the quarter. close should proceeds from We down with which the industrial the fourth revolver late sale,

to those transaction pro into industrial receipt expect net we'd a the our proceeds, EBITDA the So mid-Xs. ratio debt after year in end recent acquisitions to forma with of for account taking the

Our cash deployment. generation refreshes capital strong for our consistently capacity quickly

$X additional the XXXX. we on the active now So the looking deploy capital forward, M&A plus we ability end have to an and front through of of remain billion

back it So to with turn our segment over review Neil performance. that, to I'll

Thanks, Rob.

through quarter. Application the revenue basis been this was EBITDA highlights is recurring XQ Let's our continued models. turn quarters an running. for strong increased migration and customer it's several here XX% revenue, up Revenues margins and organic to walk Page our revenue XX.X%. we our on which saw Software were $XXX this and were X% million, segment, Across about segment. of XX SaaS segment consistent this for to retention delivery strength is This X% broad group in financial companies, Across the recurring of the for growth quite by enabled and

business bookings with with start growth, new law servicing continues had human Technologies solutions both insurance in Europe for manufacturing SaaS and another we strong recruiting towards growth and Innovations share a software Aderant, Across firms. to by acquired nutrition in DI provider Deltek strong had cross-selling CliniSys continued market share and market Vertafore for highlight quarter and and to PNC Strata healthcare customer nice markets. CBORD, healthcare Deltek, gaining viGlobal gains QA the margin leading the new quarter few strength. customer to end access we a and tool for solutions. continues Vertafore, targeted continues solid systems. momentum segment. to revenue and adds, wallet in us enterprise particular activity. Aderant, and we evidenced As market strength migration solid see product of education its the great TIP of exhibit a fit as to large GovCon software class our we'll continue demonstrate software Data across performance. global renewal the and by continue adds see and for demand who and their CliniSys software to Also across and be across success resources management market both operational their leading strength businesses, and and market

be in QX. will Frontline reported in segment Finally, this starting

we to area. Looking organic at in growth of X% the quarter X% to expect see year, outlook final for the the the

were margins in Software quarter EBITDA our this XX% Revenues XX% up an is in strong the million, XX.X%. XX. Page The for at revenue. by basis growth $XXX to organic recurring in segment XX% Network Turning organic were segment underpinned on and growth

continue As the saw and dig customer U.S. into freight these carrier businesses quarter. The slowing business while we side Canadian conditions increases the our specific adds to marketing fantastic. be a nice and of touch performance, favorable, during on the new ARPU remained network businesses matching

extremely Moving their was of financial strength. rooted business single is site combined focus and and businesses live-action these importantly digits enables market ARR a strong long-term that SoftWriters the their to to and frame and and Foundry's that our frame remained retention Net conditions. filming capability again. graphics favorable our retention in each strong be SHP demonstrated in led was foundry, healthcare in businesses – very grew by software innovation in Growth success rates double computer-generated alternate on high. across again fast-paced

our additions, and each our tech the network that had processes, business SaaS ARR the iTrade, quarter. iPipeline, life customer growth business which chain Finally, enables food quoting helped strong supply drive and solid underwriting insurance in

the outlook to organic X% segment. for growth XX% quarter, Turning we for fourth see to to this expect the

our to very organic were turn XX% in the up products nice quarter organic in easing segment chain we the this supply As nicely see growth quarter. to segment $XXX increased million, an revenues XX% tech-enabled to It's Page margins challenges. on for basis. EBITDA and XX, in XX.X%

easing demonstrable relates experienced and we especially to as remain, it chipsets. challenges conditions chain supply While chips

conditions improve. to We continue will optimistic cautiously are

Neptune, end set backlog. again with start and Let's which records for once orders quarter

in accelerating continues are by Verathon simply portfolio: grew static strong. the solutions. innovation of connectivity measurement, nicely three successfully use end, maintaining meter this few a by quarters product terms of share leading all momentum bladder To cellular their running, technology. has that and to demand meter For product volume components been simultaneously experience and static lead times both to in reading while was Neptune able driven new Neptune industry products quarter single They launching video bronchoscopes. across gain market

As demand it solutions. relates their new precision revenues to strong Northern as Digital, experience for they for record measurement quarterly they set a continued

organic the a outlook to the into this QX. heading year final growth X% difficult is Our quarter have for X% comp segment for we more as of

review to Now, the increased Page and turn please balance XX of for outlook the our and let's year. updated

reminder, last and $XX.XX quarter, to between we a outlook increased our be As $XX.XX. adjusted DEPS

carry we addition together quarter. to increase We year of guidance be momentum full $XX.XX, Embedded are strong quarter this to X% performance is guidance between now our in in Education. QX, once $XX.XX growth discussed again the X% the in guidance from growth is third of and Frontline organic with last an increasing $X.XX an our increase of increase X% organic mid-point. by plus the This at driven guidance and

be range in As we to $X.XX the $X.XX. we're look to quarter, DEPS guidance and of the fourth establishing

we'll and questions. get your comments concluding we're to Now

want As we you with to we Page we key with XX, started. leave the turn same which to points

another increasing great operational financial and are the for our quarter we had performance, we year. outlook of and First,

Second, knit business, we Frontline acquired Education. another software leading

continue substantial have we ever of Third, more M&A billion. higher is to most And important, new portfolio perhaps visible. the fourth, Roper becoming $X quality the north firepower

growth relates by the EBITDA to we organic previously start, We're XX%. lifting organically and grew revenues it discussed. full As on and XX% based our by factors DEPS strong guidance our year

capital active. Regarding we have deployment, been

deployed couple the these past are quality our months just of of we $X identification selections being this rewarded the billion. To high prudence Over patience and over end, through assets.

available large $X north M&A a have of billion. to continue of We amount capacity

disciplined M&A you in as saw to markets, our highly of always, ensure super we available be in but active remain QX, as and the optimal continue to very capital. deployment patient We

more enterprise. new never have more Finally, quality and the increasingly most and perhaps important, our higher about of becoming we the evident, been portfolio the Roper excited is future

acquiring let we've done compound strategy growing everyone leading turn We for niche that cash over and the years what XX This same. As to will our by your us we questions, technology remind continue do. to businesses. market and is flow is

market-leading highly value In niches. We which building. our margin, We businesses resilient, businesses that high a and addition, focuses operate creation based levels intimacy, governance unchanged. on long-term revenue, recurring yields of and customer portfolio operating rates. of organic on operate remains structure strong model competes and defensible of our highly a decentralized has Each business growth

focuses improving. on a bar for very high sets performance Our culture and continually

humility. of grow, culture all are We to our paid which reinforces transparency, nimbleness, and

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thanks us questions. to open So with joining let's for your this up and that, morning,

you. Thank

portion RBC question We call. Capital ahead. from go first Please Instructions] to Markets. will now question-and-answer at comes of Today's the [Operator Deane Dray go our

Thank you. everyone. Good morning

Deane. morning good Hey,

Deane. morning Good

it's macro, below in of in velocity I any the upside, side, any radar Hey, changes anything we're this of seeing been with know it numbers of the orders, whether customer given kind on screen? reported not adds, uncertain software your contracts, the had customer today there all behavior but new

digits in think attribute XX%. to that are manner. serve. mean, less contracting, in I the generally the So end they nothing lessened Deane, insurance, we Right? customers markets. the education, or are forces impactful in we up markets that ARRs, Right? about meaningful utilities think, macro government double healthcare, sustained food, first think So Yes, those I I a

can So there be that's strength. always quarter-to-quarter But a some leading is indicator of certainly the there noise.

softening, And this that looking instance, for quarter. minus we're recovered so off quarter last PowerPlan at, some but

look at, stage. of this a it's so in not things pockets say there but manner sustained to And is not nothing we at

where the growing take buy private follow-up because growth these doesn't public. never of expand barriers rates to of clear, And entry to we're on businesses? you the companies improve unicorns so That's And fastest longer to a fit has just your for have going just hear. organic that are top is criteria equity initiative you this part that line the term high not the acquisition looking kind to that structurally great can of to as been

say been long-term is of top in but when real, never the kind organic you you've improvement what line focused target So on sexy the growth, growth?

since draw the I been over This we place since have same is we you the or became the four Yes, team thing really about last years and CEO today. COO in talking we've five and back.

governance cycle. organic we've at GDP historically now right, out to about certainly for to the that. history execute outlook We've then and we that a is mid-single expectation to how about the digits through where – win, So, to to organic we've in we talent of strategy through a plus years, our increased growth discipline to are portfolio portfolio, long here looking advantage. system starting to strategy this portfolio the at process signs it's always more little three this and we're the said been of as [ph] about bit our talked and how do of thinking of to existing to this to improve grower, four NASOM in outlook and desire continue and the how – we've improvement. play as businesses, restructured We've competitive manner, a as see and for sort long-term And talked or use improve how build team with that a some

ongoing that encouraged, of but never ends. body we're it's an So, work

comes Thank at from Scott Research. Please you. ahead. And our today next question Davis go Melius

Hey, good morning guys.

Scott. Hey,

morning. Good

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you, I'll perfect you to information. have Sure. Appreciate opportunity talk about never the tell that.

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was that competitively we thinner thinner in fair a very why the process price asset. are result, meaningfully so we and the for believe And competitively, able to get that's

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sort the mind It's to get of is new year our of one of you're not mostly base and customer the Inside every bifurcate very adding all cross-selling baked XX% net we're your retention customers and if to of difficult would of us in businesses, it to price. in for upselling When the and software it software. sort growth. total you offset price every are to Keep attrite. trip software to growth bit. – that There little a gives volume algorithm you

past. it's has it the and and to consistent be more up be model pricing so with the in a is may capture model. little And And workings mean, the I there software. not completely pricing labor a would inner software value inside – of the gone prices, bit just native generally

product essentially job our the increases to margin our the have the of As it businesses, customers. to done cost with relates fabulous passing a through businesses product

little a quarters the in out you [indiscernible]. that margins quarter in As is backlog built this in That to several next showed up lags bit. over as the will It the continue know shipped. was bleed that years early

with so the And teams that. nice done have job a

Thank today Giordano Cowen. ahead. from comes you. Please question And our with Joe next go

guys. morning good Hey,

good morning. Hey,

morning. Good

very to about Deane's starting are type their to kind to of layoffs these business different. businesses to we the slow. follow those Obviously you have start tech announcements like were as extrapolating at of kind But on if question, starts of and at just down least to you Hey, economy, scenario do think you playbook. businesses? announcements this permeate things companies see kind okay, here of and some kind what and broader we're much your us businesses Like, through do of that to play that these like is and with that. this of we like how that about impact software how here means we Like, like the seeing run is throughout

so, specific, company is it Yes, right.

going company demands. to their as So every is adjust market

I matter talent to that easier for business because a as good that a us our hire labor As softens for the large it need as employment general view thing makes we hire. and tech it to

in they Here and customers. them one. Right? delivering is two, business. Point for to are run we is keep point need mind selling do the to what We our their thing

subscription. we they our mission-critical and to are what model is pricing So do fixed vastly

transaction volume it's So based. not or

So be cycle short we should relatively fluctuations muted sort indicators. to macroeconomic the and of

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in M&A, itself. you we haven't where as than think about derated, dealers a going might look forward then just you of situation in or some been where multiples hire the Roper at the stock is given And

stock like are So, certain actionability of where things the about given thinking you of trades? just how kind

scale the the next And that It's finding going is the and XX been XX years, focused there enterprise. both forward. best asset the the always at find. years can improving prices difference of we the quality will We're in best be and on it no

comes next at today go question Christopher our from Thank And ahead. Please Glynn Oppenheimer. you.

Thanks. Good morning.

Good morning.

is seem step strong nicely on bit kind there the kind if there discuss NSS mixed of shift curious want of that's incrementals. of to to Was kind episodic sticky. just I very a margin or a out

think really incremental. don't really I strong I businesses these Rob. to call mean, it's through had with software with anything growth out. organic great comes we Chris, Hey Yes. that

EBITDA XX margins. just So I the year, at here. we in think, looking last were year the XX.X fourth we I'm Last ended to back quarter

terms similar segment. I for a the quarter quarter in EBITDA So was nice probably fourth of yes, no, performance, the think, margin for it

million frontline there. and take the Okay. increase million that's of if EBITDA interest be might And some we $XXX $XXX maybe expected there's about EBITDA net then thinking accretion,

how just put curious to So that together.

Yes, that's right.

million fourth the about quarter we've in of $XX million, about incremental excuse for is EBITDA So And of Frontline. for me, $XX interest. there got

I we're revolver look where before expense so for to now, If of interest the were the draw fourth then mentioned that would revolver paying in we quarter we quarter and industrial than assuming earlier, the interest at away. did go the much closes you on the sale late that and as we're

math that was So is of $X.XX I think increase the on about $X.XX of guidance our sort Frontline.

Depreciation or year. million is a about million $X $X

Jason. Thanks Yes.

Julian Thank you. question go And from of our next Please comes ahead. today Mitchell Barclays.

good Hi, morning.

any six Just one wanted consecutive you've two the to I or it changing? driving consistently Network see is different few around organic to it's leadership what next quarters, in And had top Software of same times is circle because of of the kind to curious Software was double you it growth. line, the businesses digit driving of on which now that kind I or sales the of along back Network extent different sort thoughts And and growth? think horses businesses terms the pulling quarters at organic

Yes, amplify anything sure. I to it then Rob correct crack ask he and wants take if a I'll say. or at

good. of performance just about businesses. been many pretty for fantastic it's to been of We've be freight the It's strength match, the So right? across for set Canadian us. It a quarters consistent talked continues U.S. various

but a or Even the is about this year. we we've growth good. – over there the number very strong two quarters it's two quarter last quarters, so sort quarter of down expect of rate the career ads, to three course this would how a of still new talked talked bit slowing of and next a we've quarter last that little the slow For was bit,

The sort very iTrade, generally the that had. SoftWriters, and Foundry, are that match consistent have performers tailwind pipeline of don't SHPI other freight businesses, solid businesses that macro have just have been

any change add from expect businesses. those want comment? meaningful wouldn't Anything or to you we So

think No, fair. I that's

most had manufacturers Technology inflation, chain cost just issues have supply Products, you from starting And looks it some for you. to like. from Thank are like time. then Enabled Those challenges ease on

us ahead, expect understand supply the leverage then quarter, next XX are should help TEP of easing? for but challenges not growth those months? let's easier the chain in assuming pace maybe next what got kind operating you've supply volume segment, And So inflation, you what we and of so chain much assuming say

of improvement leverage me, take chain about and that let OP pacing Rob and couple around I'll or first the question leverage supply the EBITDA there. – parts comment excuse

So, been two inbound just outbound it's been been cost sort the to for part most from have one order set and modestly been for gated of in ship, expedited or businesses the chain, shipping the context short a but time to the for supply periods of we us we've about to it's the – a able but about higher both logistics component products. of and in

to improved be intra-quarter. quarter. We quarter the going meaningfully it during assuming difficult This quarter chips and went demonstrably supply chain it's improved into around especially the

of that longer lead components chain well. that, those are have don't QX. to beyond. it's that a certain like ease around but still the and supply There's out So abating still principally appear bit little part happens motors to things challenges element that of China, think that as of and continues expectation assume be our per times, QX We in se come

order taking As it good a relates increases to price very bit the price little have the talked about offset of sort companies to pushing that price lags started or and showing it couple quarters the not the deliver order between a up and but take handful a you handful, increases, before of you component at the when through, quarter. we a cost this and been – by that

great and they're that has orders carry great how they're and been about performing There's really, here. backlog just so momentum – to Neptune momentum Neil add and – should really that seeing Yes. should certainly talked I'll that. great well. still forward. great

little was leverage so I organically Neil of think continue margins to segment. the strong these it the mentioned, quarter. We the supply mean, XX% that and that in over a would businesses be with should EBITDA leverage bit long-term as tick-up issues as in the here grow So chain easing I north XX% leverage EBITDA

comes And our question Please Morgan. Tusa from J.P. today ahead. you. of Steve go Thank next

morning. Hey, good

good Hey, Steve. morning,

that don't ongoing it's think modestly like in fourth you line quarter. is your, in back but an sometimes I the have to the, know, Just on, know I if only so $X.XX I $X.XX what's earnings your front like sequential adds in down Yes, maybe the that. increase something increase like or

anything think generally flat seasonality just obviously has changed everything XQ or to around EPS? is but kind bit, I from of moving XQ kind a of else

Yes.

the quarters. tap if you look volume, is versus fourth I quarter third at guide the think lower revenue little a

some supply ease divested. shifted it's just with think with – I you're have I chain little have different that's the earlier. You don't much those the a mean shifted stuff energy right? portfolio, big Other right. – that fourth businesses seasonality We it's and businesses quarter, a the all just – been that, mentioned some than bit

is expect on you baseline then baseline just on what maybe of end you what's negative Right. And fourth quarter the just free the us pretty you you I close there? in can you for or just quarter fourth getting quarter the and cash the actually we're would've, for What guys on just year? flow for guide know revenue us but don't going to could year; deferred the

Yes.

that for as revenue. the our flow cash quarter quarter. working usually the divestitures most fact get it's in the best quarter renewals In the for best the businesses, payments making Obviously, of we're mean, when that strong capital setting quarters well. should software that's on fourth I our aside So still be the we fourth always deferred on

behind as we working but really good conversion next then don't great So well really, flow, us it's for payments usually great moving about guide portfolio to cash we year compound cash with quarter. and very capital and look if capital have so our certainly a tax even a now flow you feel characteristics, better we we cash are positioned working these abilities And to forward continue get we forward. cash

question And with go you. today Allison from ahead. Please Poliniak Wells Fargo. comes Thank our next

morning. good Hi,

Good Yes. morning.

there? those which historically. particularly to back are businesses, ads, network doing with the and talk to to Could would've capture is freight the markets market strong easily, Just touched look customer pretty go specifically that is you Roper Just want both any on iTradeNetwork evolving then to matching in share share you businesses you or it I for maybe thought new thoughts. something had and software

each ago and doing on on and match Rather and to the freight business, of down are their different the a analytics more years a three something product terrific North their or short was delighted like yes, longer their but wants what version call where both DAT, channel unpack to the is all based talk tiers I DAT between So freight XX% they're At a today the there's product then job the ago, about strategy. DAT we into. this years American way form the and done sort is creating they've value could on bookings product five that on you and match go-to-market freight of or customer product zero. e-commerce also their a to buy it the iTrade through lot – one match, would

customers look with So they've value the you because them to more the like of barriers really increase elected package get been sort been do a removed business ARPU from the have of and network. XX% increases higher ARPU when because the has there's at to to

bespoke trading it. of released could job motion easier wonderful this probably XX has with that supplier that's the enable of it and the the but company been a simplest about like new iTrade. ago, buy unique a of to year-and-a-half the it's is The done over way – is product the they've network same to do all mostly side course the the a the for businesses describe there DAT offering I go-to-market So part the network been to

management it for five tool chain – lighter been network the quarters as a just like four of released. and it's it's weight supply so software of consistent last been half over think it's the or very as So a booking,

the of And that recurring there? assume thanks. been look level the our of as growth then numbers? we just revenue recurring strong. as Great, Do we thoughts any a think organic, to Just in revenue that QX software has similar businesses we quite

comment? to You want

Yes.

recurring? or QX

for Yes. the seen. trends on recurring that – revenue similar that very Should to we've positive be be be there sure. should overall That continue

next go ahead. Thank at Joe Goldman today Please Sachs. comes you. Ritchie from And question our

morning everyone. Thanks. Good

Hey Joe.

lot rates of was your the last I at So bunch for there they clearly as look time long-term I at kind of growth. high-single, just quarter the in wondering a a a call maybe are, and XX like about those? because companies over that we of businesses are businesses if you there that think questions on now beginning over growth low-double digits just guys, And it X% time the, make up you broker; evolved portfolios talked you and long-term are their the could maturity? through some talk to of let's expect the where grow, just

Yes.

at earlier, of back start the right very place we think is as I right? XXXX. and look it's we So the was to if cyclicality different the projects don't have mentioned Roper you removal now a because XX% cyclicality, portfolio where Roper to is is that that of

one-year goes you have don't where have down So that, grows situation something so next the then year. you and might XX% now that the XX%

digit So portfolio X% plus bad or really let could Neil be in organic I'll double great or it and X% in whole of a on And that. mid-single something certainly expand might digits. sort be and the minus year up year is a

companies where Joe. been three in One would tight, improve very XX terms working look Everything companies we're to growth add and we've else at you is averages it's, XX the There's not has tight we've organic as I a X% to It's done, think that. different. it's it's a bar a of What Yes. – something acquisitions two mid-singles points distribution of and growth rate. XX I very the growing a that, growing you got not high-single into XX% maybe companies bill only the business. announced digit when

it cycle more characteristics a so a operating on bit want And organic you'd top then growth think cash see all a through leverage that of as translate We'd see as matter, organically. casual going digit So that. occur, M&A mid-single has that to layer little to flywheel. with to general the of – is that's portfolio the growth you got to

So we feel comfortable. very

cash mid-teen We have embedded algorithm growth strategy. of a flow compounding in our that's sort

following big packages beneficiary That's I some being question, super of my you a I helpful. guys thought have potentially then historically of the Got that as it. of hadn't guess been stimulus passed. And

like then of you're example, some but and yet And like, so do this and the to of just you perhaps we that as talking see there's of as education about XXXX? stimulus we'll a acquisition this, in lot K-XX seaboard now an guys wondering funding as with a beneficiary these I'm stimulus measures spending seen see come actually yourselves that of through start some Frontline, haven't where

a even answer beneficiary think We a the or the We're minor not no. way in is stimulus funds. way meaningful in COVID any or of

the of diligence spent one-time were for we on to certainly items For while that dollars, the COVID student stimulus studied hesitant those K-XX were super process one-time getting a to one-to-one type They Frontline instance, device and for instance. one-time money. and principally with with buy package software instance the were vast funds on-boarded districts ratios to a recurring districts funds, during extensively vast, majority

there's goes the we any durability Seaboard, in meaningful same good of believe don't beneficiary that's we Frontline the drivers So think a business. to the thing of growth thing, what a that was facilities not and and as mean at and have does, a and and management been integrated Ed about it's Seaboard as security beneficiary. management I for they campuses meaningful higher K-XX these access food well way

a is no short So answer.

Bernstein. question Brendan Luecke our Alliance next go And today from Please ahead. you. comes Thank with

my quick environment. Thanks for Good morning, the A ones taking on few question. M&A all.

been big deals. shy the up have environment? been your target leverage the path – you changed haven't Has rate ratio higher levering for all in you So with

of independent rate environment. No. The is leverage ratio completely the

particularly dried And higher environment, PE a you great. feel over an do funds, market with have Okay, up? within rate advantage it then you the IPO

we're interest are, Obviously reasons cash are that the capital said XX% generated believe – XX% we we higher to sheet. that. rates is of that the a XX% XX% balance benefactor internally of to from a deploy is for our from XX% long that our We've flow.

private they debt is deploy in competing percent versus are be the may equity every variable XX-plus we're at rate deal against moment. So who what of

term their much indexed values So they anything more that indexed more rates are see. are we would much and shorter than to

yield... high very And

high yield. very …and

closed. have markets been those that And

environment for in We've beneficiaries that we're if are think been view and you'd would accordingly, we on our valuations these higher adjust long if rates time. that. rate because big, sustained, so then view a very a and sustained think consistent over we they're So a think see one that's that's time, of

Asset Clear at today go And Please our comes Harbor ahead. you. Thank Management. next question Alex from Blanton

you until thank Good second say I morning. Monitoring around you cut before my you mic off please? wait my would question,

Yes, sir no problem.

had on portion in because had the of segment growth. catch due is you The What things just question was of up chain enabled XX% first delayed that supply been tech chain? that supply catching the a to

quarter as Alex, go job. I I they tell most that's a a one well. a hard had what a did precision. because great you did – to that Neptune mean, got right nice we the to they exactly you of and give had Northern things job chain lot did. did better. reverse a level better supply the will in Verathon Digital

of be that. attributed the certainly beat chunk a would So to

Yes.

What the squared away. company new big acquisition the your pace on do dried or this, $X acquisition you get You time? you had acquisition in like billion a of when and a little that of you Would expect things pause transition front or expect you've the this past to have a in until secondly And you've do use that year? lot a in into the to Okay. some made coming powder. that of in

still fact redeploying we did our there's and a are in addition low Yes, relatively because normal no to Alex those cadence. we so because our proceeds leverage the from benefiting to still that divestitures certainly pause are really we're need these for deliver rates

So pause. to really no reason

very be the and of the reduce a not leverage. larger to Today of where to some in pause to you've situation be after did to there's quarters activity. time very take we'll had couple active any some a as the remain where seen up Like us patient. we're we're lever going that active very, sort in might and It deals deals of going a we in we take remain to But active. soon. We going we're we're mentioned, markets. very So M&A do Neil certainly might sort

there's And looking supply at? that backlog a of companies good to you're

deals Yes. are quite slide then are The in yes. market and is, of processes large, the number that

Okay. Thank you.

Thanks Alex. welcome. You're

This session. concludes our question-and-answer

remark. back turn any now Moxcey will for We to closing Zack

for We joining with us forward look to next everyone our speaking today. during earnings you call. Thank you

all concluded thank The now you. attending today's for presentation. you and conference is we Thank

not have may wonderful your You day. lines a and expect