Roper (ROP) 21 Jul 232023 Q2 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 like to turn the call over to Zack Moxcey, Vice President, Investor Relations. sir. ahead, go Please

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

The President, our Officer; Chief this call. a Financial release Joining are replay Brandon Finance. Cross, press Jason call Earlier the and Officer; financial O'Callaghan, Executive and Principal press information Vice President, Hunn, of Accounting Conley, and me used Officer; Shannon includes Chief release morning, today's President, this Vice results. we Vice announcing Executive and on also Neil for morning 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 two. 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 to today's should You context call information. of that the

three. primarily non-GAAP will turn And we discuss Today, please continuing results our and to now adjusted an operations page on basis.

quarter, second our in found items: adjusted our consists intangible the between the Reconciliations impacts investment press with be our For in and Indicor. of release appendix this and our assets presentation following can of acquisition-related associated minority of amortization the in GAAP results the website. financial the results and difference on

our Neil? now, remarks, participants. we to please the questions page After our turn to if telephone Neil. prepared you call will And four, I'll over hand from take

everyone to thanks and our Difficulty] joining [Technical call. for

QX looking quite results you good. We’re with this morning, our sharing were which like forward to quarter second

After we'll increased up and then our our specific segment let's start ask turn second highlights guidance. to look enterprise XXXX wrap As at that, we our results. today's with four, share our turn Jason financial to outlining enterprise I'll to quarter page discussion agenda.

So started. go ahead and get let's

please. slide, Next

perform quality our another five, strong businesses. page portfolio of takeaways the had well we are: call first, to for of continue demonstration turn very second main four quarter, today's extremely the to and we As a of

increasing debts. we're our in full-year terms and and both adjusted of guidance total growth Second, organic revenue

very outline reasons why the Third, for of capital well AI. we by positioned this We're disciplined promise Generative excited deployment. today. fourth, very remain And technology and

As it only first a recurring total start grow but and scale quarter, X%. organic enterprise, and we solid revenue second base. the improve strong to quality to year the grow and our saw continue a longstanding we our underlying its Consistent takeaway, not to XX% relates also simultaneously revenue strategy revenue with

very performance flow free Importantly, strong the we flow quarter. with cash cash had XX% in growing

built our portfolio quarter quality, another this higher at cyclical results proof was are high less perform that a point Our purpose to very level. consistently

be second of to total the $XX.XX the midpoint strong versus quarter, the of increasing guidance be our increasing revenue $XX.XX. around revenue our growth or and previous $X.XX $XX.XX growth full-year our XX%, to we're debt to our $XX.XX to be full-year increasing X% around guidance Given to range up organic in at

the knowledge as to application both we're relative create Gen we use vertical to and market technologies specialized specific enabling feel Third, AI, our businesses, structurally provide to our excited we and customer continue by technology high this and positions advantaged context these to We be many quality to diligence value more and on and internal this actively positioned relative call. to active during capital productivity And finally, well remain today's gains in opportunities. evaluate we as deployment. we market

second so our through over can you results I'll Jason? position. our quarter strong very walk the turn to you Jason, call and financial

doing Thanks, Neil, this well I hope and morning. everyone is

by Organic recurring tech and the which another XX% in across segment. the quarter six, X% up growth enterprise was growth X%, over revenue seconf in our software XX% XXXX. Revenue was was slide led Turning in good $X.XX billion, to year. outsized at came post which enable prior was product growth

XX%. and expanded interest $X.XX of above leverage of guidance and operating $X.XX range across in EBITDA our the the quarter. three was above with segments all was expense. lower growth EBITDA given line rate of higher million $XXX impact Notably, a XX% offsetting the of tax high-end to year. margin prior XX% increased with DEPS in growth EBITDA DEPS net

Moving to free cash flow.

the is quarter cash of quarter, As always delivered conversion our as year. a over year lowest which in reminder, in federal prior We $XXX XX% we tax the up million second make two was quarter free the payments. flow

and QX our annual QX I customers' in cash and is is As weighted Frontline’s previously in K-XX this seasonally line mentioned, flow renewals. QX, with to especially

half. So we expect a meaningful increase flow second in the to cash

XXXX recall quarter this of that view slide, when flow in flow this a had of benefited million, XXXX. broader strong which of tax about one-time item. benefit of million second Vertafore we therefore had cash We've $XXX performance multi-year acquired Taking very and the for XXXX normalizing cash on $XX tax cash

flow year, cash be revenue. free the For are that we XX% will confident greater than of

Turning seven. our sheet slide to balance on

of at billion billion $X.X and acquisition under end remain and quite EBITDA quarter billion significant the TTM many times million. $X.X $X.XX cash the our leverage our with net Also processes. remains capacity To fully at undrawn. $X.X have Our of we X.X debt against of active of revolver just in bespoke sits about summarize,

a the which is of with million To or to million Deltek acquisition bolt-on price platform our to tax end, addition QX, will net the this benefit. the $XXX on Deltek in cash in segment we a that close long-term expect purchase exciting details around of Neil $XXX discuss for a discussion. about business Replicon,

back to our over So performance I'll Neil? it segment about with talk and outlook. turn to that, Neil

Jason. Thanks,

our we up our on the EBITDA margins QX basis turn and performance organic continue quarter. In Revenues for this walk an X% Software in increased companies. were entire the to XX.X% here Application segment, consistently of segment. see million, $XXX Let's strong to page group and nine to through across highlights

and Deltek. We'll businesses. sector was contracting with once government both across solid our start Deltek again private

in the professional of to services it's levels. quarter for as continues today. Deltek Replicon Deltek, earlier, announced timekeeping bolt-on high offerings our is a on workforce focused SaaS largest and Jason Importantly, see and firms at management SaaS Roper’s Also momentum and the Deltek to remain Replicon rates market leading acquisition mentioned strategy. retention complementary solution historically highly with build and we

contribute expect the and year quarter. $XX of to million deal during of the $XX We to million of close we next and EBITDA Replicon north third revenue expect

Finally, as we relates to it Deltek, wanted moment. on brag a to for them

During the companies. four the Deltek, at award Area for Post quarter, Washington the workplace large the top D.C. number Metro

create have held long-term As the that case a you closely know, advantage this Deltek. talent competitive is culture and and we can for certainly belief

levels, growth contributor margin continues advantage ownership with and to Roper's congrats success company the retention During recurring rate, structure structural that to talent your Deltek and has build. increased Congrats is its a organic big to that revenue Deltek, team. to the Mike entire and

the Today, and of AI of continues enabler, solutions. during to law and with Aderant to software time launched matching quarter, business counsel be entry, two AR their guidelines and extend Aderant cash their the saw the bookings plans enabling Also continued MADDI receipt this management Generative and adoption is quarter, our to the In and MADDI. coming months. over importantly solutions focused excellent. SaaS outside Aderant, docketing the needs cross-sell success record firms on in

a extract integrated how challenge to that or legal across a face, the on requirements to guidelines clients in is requirements. AI large firm Onyx today uses by widely law and outside Aderant’s to namely Generative Over powered have Onyx. AI the It's time product XXXs be all firms the contractual convert Onyx example MADDI massive for into Generative of processes, navigate such potential. space market business fairly entry One MADDI firms. bespoke used counsel true time law billing will has changer. billing tremendous common platforms. solves that billing their in of a game a and them impose law Today, to tools for X,XXXs navigate client terms

businesses specific structurally excited More and potential business and broadly Certainly technology. to We of large with our the given we're generative deeply computational models. this. Generative we're advantaged working about that more AI and and specifically believe model or that workflows businesses on need with AI, train verticalized our across AI. Gen wish language given Roper, the all are opportunities our much and context the Internally, enabled target come closely product on associated application productivity dated to

the in asset across Vertafore our us MGA continues software Solutions great core be for performance property to their P&C business casualty bolt-on. tech-enabled segment a Vertafore, insurance our to performance solid agencies. back with and recent at business Now and

also Data businesses performed each in the very Healthcare/IT well and Innovations quarter Our Clinisys, with growth franchises, in our Healthcare/IT Strata. of

Frontline deliver mission for also of the to Frontline's education. empower continues to frontline is us.

importance know, you frontline school of hiring and and these of staff challenging and solutions district of the administrative to to As equip K-XX school software solutions is this, critical challenges. customers. Because high better navigate teachers frontline their of mission district are many particularly

strong. consistently frontline's As retention is such, net

for we the of segment. area very second-half to be segment. growth to this the to Looking for organic the the year, see results strong expect Overall, in revenue and outlook mid-single-digits

to page basis our Turning an at X% the million, and on were in organic EBITDA quarter up Network Software margins XX.X%. segment Revenues were XX. for strong $XXX

solid our we'll & despite American and with segment. Relative growth was and of DAT As specific both segment, Loadlink, across matching Canadian start are businesses operation quarter and to spot continued the I'll of market. critical the logistics remind across freight the freight broader North performance and business the with U.S. which challenges comments, our Software you to Application our in execution that grew the markets. freight businesses,

of the across the importantly and & and and of continue a offerings long-term spot is innovate to freight terms volume new value customer addition of enhanced Loadlink future great economic beneficiary help and products and the to wallet. Throughout in drive share secular and In cycle DAT ships. market launch

science AI launching solution like of This DAT addition deploy fraud. combat targeted enabled which industry is Generative speak, scale data the computational other their over last we they to iQ, solutions set at in and to existing three As four freight years. initiatives a or DAT AI is driven among

by of its had software the business expansion product revenue tech and enables which By channel nice gains strong that network strong very and growth. flagship ARR pipeline, the performance double-digit in annuities continued driven growth continued terrific insurance and customer our recurring life enabled activity. had for string for Nuke, quarter Foundry retention distribution their

units quarter model transition foundry last the mentioned commenced ahead and transition of new their we the their their new subscription first-half north of Nuke their under sold pricing for had XX% plan. of of As year

the in business led quarter. Finally, and was health since improving facilities occupancy our were levels home in the Execution the benefited solid strong SHP the SoftWriters the and nursing care of highest has by assisted health skilled pandemic. volumes census businesses and alternate reaching patient an living site and by onset

we this the the segment see to based to organic of sustained year, ARR on mid-single-digit expect second-half momentum. growth Turning for

the for in organic up XX% this quarter exceptional. Across margins million, segment, segment $XXX and to were the turn strong at an XX, As XX.X% for for we on were EBITDA was page quarter. revenues product execution tech-enabled our basis. this performance business segment

the broad-based ease. chain issues Importantly, supply to continued

Neptune, be our water they meter, to the and record great. technology In continues revenue business product performance. had quarter,

to increasing commercial which Neptune continues and Neptune for and or their residential about they compete. static demand remain and momentum bullish Importantly, meters. see market in We the ultrasonic

typically Neptune's Given as steady tends cycles. and to macroeconomic customers’ or broader quite budgets tied this trends market to be are year-to-year not fixed

Verathon growth was awesome the well double-digit operational in and with order as tremendous quarter execution.

single purchases. or across or bladder products, Specifically, reoccurring video capital as B-Flex scan innovation and Verathon as their strength GlideScope, Bronchoscope saw well both use

to expect Recall, through we or smaller the series of were work lap IPA, revenue tough for business. Digital fantastic high-single-digit group setting in nagging year. record second-half we margin revenue revenue QX quarter growth. strong organic of and the Inovonics NDI a a Northern from prior Relative in challenges. to see have of rf chain the and IDEAS A the supply to a was they comp quarter the also here, year, as substantially businesses the

guidance. organic XX, revenue, second for please to strong and revenue, adjusted guidance raising turn XXXX performance, our increased we're full-year review Now DEPS. and our quarter Based our XXXX on page let's total

we total quarter. growth to plus now XX%, XX% XXXX, increase For be an expect last revenue from around

guide. In raising to X% zip quarter in to X% addition, X% X% be an and our we're codes, X% last our increase full-year from in to the outlook organic original revenue

our improved $XX.XX, for and our of be debt $XX.XX range $XX.XX. of we're result revenue $XX.XX in the to outlook, a prior guidance As guidance increasing to of our up

our guidance be the high-end third Assumed this range. the Specific to of debt we're to the guidance tax to our range XX% $X.XX in is a in trending and $X.XX. to rate quarter, establishing XX%

leave which us to with we'll look same answering then turn XX, with we you questions. please and to four want Now started. to forward your the page with We points

revenue growth the growth billion. quarter and X% This First, started growth. revenues and solid was year quarter, strong $X.XX to we software the results. delivered increased recurring XX% second with we X% underpinned organic revenue saw In organic

strong In addition, EBITDA margins were XX.X%. quite at

revenue the solutions our $XX.XX. of recurring customers, the strong $XX.XX outlook performance, of quarter be our to outlook our organic we're on full-year nature and second importance revenue our increasing the DEPS and full-year our between total growth based stream Second, to and increasing and

relates by forward application we're Third, the in quarters it and ideas. excited productivity new context updates to to look We to product specificity coming of years. sharing potential provide our as internal AI, and development and both using progress for Generative

to And M&A finally, be firepower. deployment north as $X billion of we continue with we capital active our have available activities of

optimal several As very highly we we've our large super patient opportunities, of the been the remain to a months, we though and deployment pipeline past as capital. have discussing over available ensure disciplined continued of always,

of we'll you once those the first who past Day XXXs have joined the and York the want flywheel, the if for flip months. turn us slide as strategic in for Now our and questions Investor over we ever watched our replay few thank to to final you again to New who your

During our our that the area. long-term of operating long-term improve process long businesses; to capital our Roper, compelling compounds and strategy, mid-teens our that businesses, form with driven in were we quality of flow deployment overview approach our excited nature portfolio high you to of ability model business the cash our share

for that, you with continued your So in your thank to it Roper. up let's interest And open questions.

you. thank Yes,

now Instructions] comes our portion Mitchell will question-and-answer of Barclays. We [Operator Julian the the first to question call. with And from go

mid-single-digit in had very you a Network just Maybe only growth. XXX up performance Hi, Software, around good over strong of margin first question organic the points morning.

So are Loadlink that you wondered or in growth & that one-time? mix anything first-half? about was of in then division, versus I thinking driving there just if kind perhaps DAT on also second-half anything how And

Julian. morning, It's good Hey, Jason.

had we lot businesses. I So performance think across mean, I strong of a yes, the the

seeing business. just the across benefits standout by deal. the and And is last -- that I from the our beyond one -- acquired closed it's think said, year bolt-on I we're segment. we ConstructConnect a that, We the that like then realizing

And for match businesses. Loadlink, relative second-half our to your question, & DAT freight second

and the well be high-single-digits. whole business very in analytics the posture grew broker data part to continue year. cautious side part that effect quarter, that DAT of We've held trading are as the of we the market, all on DAT. business remains excess market rates. retention conservative. the and know, and The We there the super has weighing the carrier the solid, the But performed high carriers been of a it out of

playing with modeled long that in it's we've in a thought we just line generally So in maybe with we'll year expectations. better, in but line stay what and Sarasota's touch all here out Sarasota,

we'll the of second-half were there with And I what negative turn spot the or happens Yellow for relative the both DAT, either if to to for [EPSI] so happens a mean, something on wildcard could big (ph). and what those. pickup be see one market, is

called look at as just then And tough the the you. out third we comp second-half TEP for Thank quarter. interesting. in That's guidance, you

often a anything on? increase I if just thing Or kind mid-single-digit this construct sequentially. in check if half. QX. really looks on DEPS sequentially back to you've It I conservatism had in QX year. doesn't guidance wanted quarter EPS the that going like implies there's the one just other Historically, fourth up in go the type Just wondered of much specific for was

a sort still bit conservatism at specific mean, we've sequentially. really little talked at wouldn't to We've I had that the and I I seasonal mid-single-digits. point but of, we've think about just Neptune. networks shutdown historically, got, Nothing about any

acceleration your but question, unusual first the there. year, fourth quarter, sorry, you So nothing have is seen maybe in prior might What Julian? coming really some in the

was on if be to in kind sounds no was should around of just like call it quarter fourth -- there really Oh, that but the doesn't fairly anything out, of seasonality. terms it typical year this

Correct.

Correct.

Thank Great. you.

Thanks. Yes.

Thanks, Julian.

And comes the you. Thank with Deane Dray question Markets. Capital next RBC from

Good Thank morning, everyone. you.

morning. Good

morning. Good

tone were I just way think the and of with making. the you Analyst start reference decision customer I quarter conversions, very that slower There we that tone seeing the a some the Day upside the you look also at this quarter outlook, But specifically, was would in of and first can logos the and Hey, broadly at business, in business. just kind but please? measure organic the has And SaaS that of improved? side with new on that

Yes. I would characterize it.

software Our -- about into playing expected businesses are coming the bit expecting out slowdown. as year, right, we little a of a

also have activities deferred. are forward. cautious expansion that making amount sales, So decisions with are also then we the new net see that just has but pushes look impact have is a as having more has less, of just delayed activity little our our customers of bit being you the it higher retention, decision And as gross out they we because customers

any sprinkled expected. of businesses So we our as our It's that's across not out one universe acute about playing and just of is portfolio. the

out sort Relative quarter. to And but and small especially fantastic. the the had in just rarely on supply businesses it performance we lot TEP, in just did called terrific We second very a they mean, had clear remains a very lot Verathon chain demand medical of the the and businesses do call up that especially the CIVCO, the supply in we of at I first-half, quarter. strong performance in operational of out we chain three slide, was

talk evaluating Yes. impact a M&A the to as follow-up, is you're That's and candidates. about AI really having just can good hear. we how And

on barriers is towards types to expertise vertical. these So entry of focused eye the is Roper deep there domain an deep

might of terms where you changed how might to at model do do How AI threat a the how these? what their business has at and look where look there? just and AI in be advance So and how candidates you

Yes.

has is Generative certainly years. consideration it's computationally, for this a few a a think newer AI We're consideration I been today. year.

thing play about is AI best the think M&A our our is suited. to is I generative where and AI just into happens the strategy that computation portfolio, nice of strength it

So more verticalized, more application-specific, more intimacy with customers.

is our so suited approach And given technologies. well the of M&A these development

looking And envision for into We're a If to us there's decades, the as out. we're lean this heard say Carlo, doomsday, capital not going just we're zero our deployment. can always, a then you've in that. Monte in we

we're consider extent at generative always zero up not to that. look way. Carlo, as the going can because Monte AI, to in dream we'll And of -- So any look at then we we the it in computational

a that's thing So new for us. not

Jason? add, to Anything

sort content from, business, think steered type No, I always right. of I any just Generative And is of that's the that and we've this advent think AI AI. away and with accentuates

Thank you.

Thank from Joe Vruwink, Company. you. next & And the W. question Robert comes Baird

everyone. hi, Great.

morning. good Hey,

Hey, unit to I together. go presidents business If good last the morning. you and Summit referenced quarter, the I back Leadership think coming

doing quarter, announcement more Vertafore served markets opportunities to it was when Roper actually incremental end can jointly broader are comes divisions, things today? it product. on a and uncover two may an iPipeline offering operating best across the these maybe partnering practices to suite This about So there to certain share and by that possible together? together connect Is product be

Yes.

and and teams, what connection be most failure. definitely how you learn inspire sharing and sharing it's from benefits do leadership demonstrably businesses be getting practices, there's our with to disconnected you the terrific It's for they going are be do how do and lanes. think of swim going in about I to less It's together teams on best our how failures because in product sharing to leaders for manage, lead, more the markets more philosophy, you performance independent going unequivocally.

do won't. sense, it. sense, there's that we we'll If certainly if So makes make doesn't it something

about organically from and The happened push without it the businesses iPipeline is between this the center. good news particular Vertafore any

drive for authentic you to value and that's So going our it's customers. know

helpful. Okay. That's

of on Just AI. topic the generative

they biased so growth. As avenues your context provide net new need, many How the you higher that retention about in just and is businesses, for aspects. if you growth participating think the say, applications in retention anything, do

a discussed really that some separate does So that there core? monetization of the products today, happen? Or early is strengthen with can the

no. No,

no the long-term can definitely generative there's customer the with our of are with that's XX-years, It think relationships. bullet value last share long capture created happen in our least And game, over to the relationship silver for run. time. things I that short the computation on we're There's by that We created. such build value monetization AI. just But play there's amounts at could both will doing massive happen. for value of able our we're, of be customers fair that

forward. a that I know as businesses inside there's walls capture of we So as our value don't Generative to or would going the all why using And four amount different be any of well. tremendous know, productivity AI then

Thank Great. you much. very

Thank you.

Thanks, Joe.

Poliniak Thank Allison next the from you. And Wells with question Fargo. comes

that's business unique you the saw that I and sort business. you're stepping with just doing the announcement it something sort IntelliTrans? Or out morning. IntelliTrans that that of that of sort product with of good is Hi, have? to there? to sensor partnering leverage asset-light thoughts Is something Any

we very, do that's enterprise-wide if down. wouldn't was, that bespoke IntelliTrans. It's I we to it very not mean what strategy is there to would an push No, anything anathetical Roper about. nor there's to -- like

very it's So to Gold IntelliTrans question, for star the by asking IntelliTrans. bespoke way.

helps covering transports. It also

continues just products, -- and So on business to outperform organically. that then tech-enabled

us that and this QX of you mentioned the any of, reach QX color that in kind cadence Thanks. to Is drove You comps target? between there to, QX. quarter? what can sort difficult more give outperformance And

Yes.

Jason. is this So

We it's sales pretty was is -- quarters. really up care over board. plan. is Their doing think I I in are well backlog. across in would consistent execute Neptune cadence terms continues Health of had say really the QX the really procedures. in What to of in terms a their daily outperformance their well the

-- some finally our that some Difficulty] our kind businesses So And basis just of executing backlog on cleared. got product book-and-ship there. a had of [Technical then

QX. So drove the that really

with fairly backlog We growth consistent. And organic then a had the last It's should we year. lot quarter of high-margin second-half, that what very third like just I said, in had clear products. be the

we're quarter. lapping of sort the that comp that's the in third So issue

you. Thank Great.

Thank you.

from comes Terry Tillman question with next the Truist. And you. Thank

Can you hear morning. all gentlemen? me, Good Yes.

hear can you perfect. We

good. Yes, all

technically questions, of the Neil, and on two back such. the question, Friday, the questions, just app not side. relative Happy first curious almost business it's businesses, actually Maybe to going call and biggest X.X software if Wonderful. on I'm your biggest health is but it demand. I'm on Jason, Deltek, one

asked how earlier macro, side? private Somebody about government versus sector the but performing is side

second question of is think first and that with seems the million. part something you it about like And Replicon, $XX I it's said

have that think some synergy business, And that good could product $XX I unleashing you that kind large You pretty revenue then into have of, opportunities. do a million how about Deltek installed base? And follow-up.

So in questions, our the and prepared about Deltek degrees. across we'll we as But call two XX sector. that performance demand, contracting remarks, solid the both talked private was government

the ‘XX and We the relative QX pipeline ceiling. in in definitely pocket build an encouraged are government air contracting. lull a was quarter contracting or little There for government of to a in the bit debt by early

And pipeline so was slightly to relative get maybe to it better so nice encouraging early was normalized see. to back build, than activity that normalize see activities or to

for You've sure. out, got to how see that plays

we this bolt-on. Replicon, really you know, like

As we It's at without done to said, $XXX million we've bolt-on it's net the million, attachment $XXX tax time benefit. entry an of ERP. the largest

only not contracting. sold demanded time today highly a in is It So PS in world. government solution the is

in about. that part government have market $X of over not a underwritten we other million it opportunity. million is expectation the to But certainly not revenue the this Deltek get is time core of so the product And contracting. we talked takes $XX That's synergy or into

the potential you question. for actionable more the more being bolt-ons and bespoke pipeline situations, it's I working Then on deals. you're cetera. is there's technically the the of like Got M&A that it. idea ago, third to you through et guess compared opportunities yes, this on suggest and But the -- generous, And talked about kind of just versus would XX-days platform thanks

a the maybe ranking temperature types. of gauge two on Just stack the

Yes.

it's interesting XX-days. an So been

be So active. to we continue

that Our because for deals last sizable of in bolt-ons seller's expectation that the couple XX-days, happen, more More are there a not broadly private sure. the on over the still buyer the we skews value. fact universe the pipeline towards encouraged are did by rejected market

the view not consummate. And so we in did as that ultimately deal

So being we going actually around a to valuations more that that as with early indicator as encouraging capital. normalized pull an are sign of view cost in an to

encouraged But pipeline we're the our leans opportunities. that. So by into bolt-on still,

great. Thank That’s you.

say. mean, Yes, Speakers] Yes, would I I [Multiple down year-over-year. are dramatically

need closer. just so now, of there's getting at go. a assets we it's years point, think X.X lot it's so And to that, And some been

Thanks.

the you. with Christopher Oppenheimer. Thank next question comes from And Glynn

morning. Good Thanks.

morning. Good

touch I Curious or And also, from for followed labor you transition that? strike any comments risk? the wanted to the if on foundry. any on there's revisit perturbations could risk plan of if

Sure.

familiar them foundry, it, and single entertainment, a and used take with it's computer-generated for push you for compositing, business aren't that process those media image called live and image So a where together in that's post-production a in a action the scenes.

is streaming Thrones almost was So Thrones, think with or production any series. composite Game software as of high-end used as Game foundry of pretty much in every seen

is think So trike had both time as I writer's We've the since it and turns out, an XXXX. this strike actor's first concurrently. a

of ceased. still production There is a current content pipeline the of things is So in active post. very

be extends production will it back next to the in resolved catch be this impacted they'll If and likely year, then be year as sort be case, that's next on beyond The yes, is the foundry some of no extent has little impact foundry. there'll foundry up. negatively year. if it year. And then strikes will very so this And expectation current currently impact

lot a just for item that's us. So of

their question, for of commenced core model And this year transition Nuke. pricing product subscription the a your second to Foundry

a can are it a there buy subscription. as or -- this either year, So you license

basis on we As about XX% of north were XX%, year. a this mentioned, units sold subscription of the new

be next nice ahead buy And a then our digits. license it's growing beginning plan. the double transition in of So to subscription is it XXX% opportunity ARR year, will format.

little a planned. better bit going than So

Thanks for that.

You bet.

next the And question from Tusa JPMorgan. Steve you. Thank comes with

Hey, guys. Good morning.

Good morning.

morning. Good

you Are okay?

I Am okay?

okay. Yes,

okay. there, froggy little a sound You

[Multiple it's no, the Thanks no, no, early. Speakers] I for appreciate it. a No, bit little

that? just couple revenue businesses about year-over-year Can about what's the had second drag quarter? deferred quarter of are third guys Maybe the things. software the just organic a then driving you talk So what for have Thanks. for And bookings talk cash? free in you just in the expect just what you first-half,

Yes.

a of So in mentioned where new third the is Roper, Frontline all we before, quarter. their right, renewals for happen dynamic,

really give I month-to-date, just seasonality. if cash have first-half, historically tracking you strong in we the second-half And very already we're strong So actually on they mean also, I you perspective think just that. consumed renewals will, to for the a there.

So that, of a working much some quarter in timing the to second-half. second plus some I -- of the better the capital think just points of

incentive. out pay legal we We -- had -- that usually we First-half, had settlement. we year, this

of to that points that seasonal this change year. So sort for

still so XX% to to track free on And cash flow north of we're deliver revenue. of

on. you trends then about And asked the

if we and sort was at in we in quite sequentially activity. kind It's of area, about enterprise up slowdown of is new for a in maybe had. up what Not as strong first and with low-singles bit line quarter, which as it the So our obviously second-half the for software year-over-year. look like bookings, embedded

Thanks, Appreciate it. guys. Great.

Yes.

Thank you. from And Brent Jefferies. the next question comes with Thill

portfolio, the thinking portfolio are the be you're through? those is questions. to of [Dave] gave. appreciate Speakers] you appreciate of curious approaching Hey, some good case This you guys. sort of Just the how playbook just some out Brent. I was I for AI are that that I on the curious, (ph) taking AI across studies. you of some for there [Multiple that Maybe laying on companies I guys and guys appreciate some morning, is one-off theme. color

Yes.

no, education say, across accelerated Playbook, I fronts, multiple would So yes.

of content and it? productivity. get lead is ownership What's a the by What the possible? are the R&D, learnings What you are highly issues? customer productivity, how is risks? series productivity how doing that are subscribed marketing is marketing businesses. IP do get you What do teach-ins productivity, service our with We're in -- what So

how we're And across of the accelerating learning the so sort that's enterprise.

That's guys maybe ask you helpful. Got being it. about to wanted And the then just about talk portfolio macro insulated. mostly often

be? have they've a think maybe you bit that as I been hey, that feared. thought, up little there showing kind any But were were surprising macro as stuck immune than little think of you a been bit maybe have many bad to maybe been hasn't the these that, have and where softened more macro a things through as out companies little guys as have

mean, we it's moderated, I DAT which think, a bit growing. quite It's of our year, solid. just one exceptional a I this is Neptune quarter. last that of And talked We attention then last truly the the about really obviously, couple gets grew. surprise, our years. is so to lot still And I mean, no. Jason, Look, that business, nothing. --

in so As is but the prepared housing year-to-year generally and remarks, fixed budgets people to said some it is very which be the not tied Jason, surprises? case, anything, tend to their customers' not. think starts, we

so. think don't I

really on piece. surprising cyclical There's nothing the

per I but Yes. around a out, point clear mentioned macro Shannon a ceiling. not se, has debt bit pointed contracting, there's maybe earlier, little It's not that's the government mean, at I as on Deltek.

it. understood. guys. Appreciate you, I Thank

Yes.

Thanks.

Sachs. from comes next And Ritchie Thank you. the with Joe question Goldman

Thanks. Good morning, guys.

Good morning.

Good morning.

as being about like Hey, the second think free so forward seasonality you changed round flow maybe to little forward going Should of out maybe as XX% cash modeling them kind margin think we the that that that a margin now quarter kind cash about free of around business? just flow has going like point a bit.

federal to going payments. make specific be margin it's year. to lower. But X I'm point not mean do tax sure I I if we for every a

So the obviously always year. to second quarter. drags be the lower that But so it's on going full just than

it. So that's how I would model

impact that to easing that you potentially going is That's to the about kind the chain is year? there this headwind a the that of occurred the talked supply we I potentially then then helpful. I second-half as And products going about technology-enabled part bit curious, Okay. -- guess, of quarter? as you guess Great. way right. think I'm is lastly, little then forward. growth quarter, tougher the And continue? and just of this quantify a All comps

the might That for be balance might that parse a segment. be recurring a hard. I how then sort at We chain to might mean would the the supply Verathon that -- SIFCO got is normal to then strength And and be might mid-single-digit be we that, growth release. have much balance and bit pull be little -- but top of on may of

we Okay, guys. always I offline. can think follow-up you, Thank

bet. You

Thanks, Joe.

remarks. Zack Thank it you. closing session. turn I our this back will for Moxcey concludes now any And question-and-answer to

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