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Roper Technologies’ (ROP - Free Report) fourth-quarter 2023 adjusted earnings of $4.34 per share beat the Zacks Consensus Estimate of $4.33. On a year-over-year basis, earnings increased 11%.
Roper’s net revenues of $1,613.5 million beat the consensus estimate of $1,575 million. The top line increased 12.8% year over year. Organic sales in the quarter increased 8% year over year, owing to strength across the three segments. Acquisitions boosted sales by 4%.
Segmental Performance
Roper divested its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. Beginning the second quarter of 2022, the company started reporting under three segments — Application Software, Network Software and Technology Enabled Products.
Application Software’s revenues totaled $851.8 million, representing 52.8% of the quarter’s top line. Our top-line estimate for the quarter was $815.6 million. On a year-over-year basis, the segment’s revenues increased 15%. Organic sales in the quarter increased 7%.
Network Software & Systems generated revenues of $362.7 million, accounting for 22.5% of fourth-quarter revenues. Our top-line estimate for the quarter was $366.1 million. Segmental revenues grew 3% year over year. Organic sales in the quarter increased 3%.
The Technology Enabled Products segment generated revenues of $399.0 million, accounting for 24.7% of the quarter’s revenues. Our top-line estimate for the quarter was $381.5 million. Sales were up 17% year over year. Organic sales in the quarter grew 17%.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
In the reported quarter, Roper’s cost of sales increased 13.9% year over year to $488.3 million. Gross profit in the quarter grew 12.3% to $1,125.2 million while the gross margin decreased to 69.7% from 70% in the year-ago quarter.
Selling, general and administrative expenses increased 12.3% to $662.4 million. Adjusted EBITDA was $659 million, indicating year-over-year growth of 11.3%. The margin decreased 60 basis points to 40.8%. Interest expenses decreased 6.9% year over year to $50.1 million.
Balance Sheet & Cash Flow
Exiting 2023, Roper had cash and cash equivalents of $214.3 million compared with $792.8 million at the end of December 2022. Long-term debt (net of current portion) was $5,830.6 million compared with $5,962.5 million at the end of the fourth quarter of 2022.
Roper generated net cash of $2,035.1 million from operating activities in 2023, indicating an increase of 177% from the year-ago level. Capital expenditure totaled $68 million compared with $40.1 million in the year-ago quarter.
In 2023, ROP rewarded its shareholders with a dividend payment of $290.2 million, up 10.6% year over year.
Outlook
ROP predicts adjusted earnings per share (EPS) from continuing operations to be in the $17.85-$18.15 range. The mid-point of the guided range — $18 per share — lies above the Zacks Consensus Estimate of earnings of $17.96 per share. Total revenues are expected to increase 11-12% and organic revenues are anticipated to increase 5-6% in 2024 from the year-ago reported numbers.
For the first quarter, Roper anticipates adjusted EPS to be in the band of $4.30-$4.34. The consensus estimate for the same is pegged at $4.28.
Zacks Rank & Other Stocks to Consider
Roper currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Computer and Technology sector have been discussed below.
The consensus estimate for ACMR’s earnings has increased 3.1% for 2023 in the past 60 days. Shares of ACM Research have risen 44.6% in the past year.
Alkami Technology, Inc. (ALKT - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 59.2%, on average.
In the past 60 days, the consensus estimate for ALKT’s 2023 earnings has remained steady. The stock has soared 50.1% in the past year.
AMETEK, Inc. (AME - Free Report) presently carries a Zacks Rank of 2. AME has a trailing four-quarter average earnings surprise of 4%.
In the past 60 days, the consensus estimate for AMETEK’s 2023 earnings has remained steady. The stock has risen 14.3% in the past year.
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Roper (ROP) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Roper Technologies’ (ROP - Free Report) fourth-quarter 2023 adjusted earnings of $4.34 per share beat the Zacks Consensus Estimate of $4.33. On a year-over-year basis, earnings increased 11%.
Roper’s net revenues of $1,613.5 million beat the consensus estimate of $1,575 million. The top line increased 12.8% year over year. Organic sales in the quarter increased 8% year over year, owing to strength across the three segments. Acquisitions boosted sales by 4%.
Segmental Performance
Roper divested its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. Beginning the second quarter of 2022, the company started reporting under three segments — Application Software, Network Software and Technology Enabled Products.
Application Software’s revenues totaled $851.8 million, representing 52.8% of the quarter’s top line. Our top-line estimate for the quarter was $815.6 million. On a year-over-year basis, the segment’s revenues increased 15%. Organic sales in the quarter increased 7%.
Network Software & Systems generated revenues of $362.7 million, accounting for 22.5% of fourth-quarter revenues. Our top-line estimate for the quarter was $366.1 million. Segmental revenues grew 3% year over year. Organic sales in the quarter increased 3%.
The Technology Enabled Products segment generated revenues of $399.0 million, accounting for 24.7% of the quarter’s revenues. Our top-line estimate for the quarter was $381.5 million. Sales were up 17% year over year. Organic sales in the quarter grew 17%.
Roper Technologies, Inc. Price, Consensus and EPS Surprise
Roper Technologies, Inc. price-consensus-eps-surprise-chart | Roper Technologies, Inc. Quote
Margin Profile
In the reported quarter, Roper’s cost of sales increased 13.9% year over year to $488.3 million. Gross profit in the quarter grew 12.3% to $1,125.2 million while the gross margin decreased to 69.7% from 70% in the year-ago quarter.
Selling, general and administrative expenses increased 12.3% to $662.4 million. Adjusted EBITDA was $659 million, indicating year-over-year growth of 11.3%. The margin decreased 60 basis points to 40.8%. Interest expenses decreased 6.9% year over year to $50.1 million.
Balance Sheet & Cash Flow
Exiting 2023, Roper had cash and cash equivalents of $214.3 million compared with $792.8 million at the end of December 2022. Long-term debt (net of current portion) was $5,830.6 million compared with $5,962.5 million at the end of the fourth quarter of 2022.
Roper generated net cash of $2,035.1 million from operating activities in 2023, indicating an increase of 177% from the year-ago level. Capital expenditure totaled $68 million compared with $40.1 million in the year-ago quarter.
In 2023, ROP rewarded its shareholders with a dividend payment of $290.2 million, up 10.6% year over year.
Outlook
ROP predicts adjusted earnings per share (EPS) from continuing operations to be in the $17.85-$18.15 range. The mid-point of the guided range — $18 per share — lies above the Zacks Consensus Estimate of earnings of $17.96 per share. Total revenues are expected to increase 11-12% and organic revenues are anticipated to increase 5-6% in 2024 from the year-ago reported numbers.
For the first quarter, Roper anticipates adjusted EPS to be in the band of $4.30-$4.34. The consensus estimate for the same is pegged at $4.28.
Zacks Rank & Other Stocks to Consider
Roper currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Computer and Technology sector have been discussed below.
ACM Research, Inc. (ACMR - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 195.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for ACMR’s earnings has increased 3.1% for 2023 in the past 60 days. Shares of ACM Research have risen 44.6% in the past year.
Alkami Technology, Inc. (ALKT - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 59.2%, on average.
In the past 60 days, the consensus estimate for ALKT’s 2023 earnings has remained steady. The stock has soared 50.1% in the past year.
AMETEK, Inc. (AME - Free Report) presently carries a Zacks Rank of 2. AME has a trailing four-quarter average earnings surprise of 4%.
In the past 60 days, the consensus estimate for AMETEK’s 2023 earnings has remained steady. The stock has risen 14.3% in the past year.