Roper Technologies (NASDAQ:ROP) reported first-quarter 2026 results that exceeded management’s expectations across key metrics and prompted the company to raise its full-year earnings outlook, citing strong recurring revenue trends, steady retention, and continued momentum in enterprise software bookings.
First-quarter results beat guidance as organic growth holds at 6%
Executive Vice President and CFO Jason Conley said revenue rose 11% year over year to $2.1 billion, including 6% organic growth and 5% contribution from acquisitions. He highlighted recurring software revenue growth of 7% across Roper’s software segments, calling it the “best indicator of business health and durability.”
Adjusted EPS was $5.16, above the company’s $4.95 to $5.00 guidance range and up 8% from the prior year. Conley attributed the upside to “stronger organic growth, a lower tax rate, and the benefit of lower share count” from repurchases. Free cash flow rose 11% to $562 million, and Conley said trailing 12-month free cash flow reached $2.5 billion. Roper ended the quarter with 102.4 million shares outstanding.
Guidance raised on Q1 outperformance and buyback impact
Management raised full-year 2026 adjusted diluted EPS (DEPS) guidance to $21.80 to $22.05, up from $21.30 to $21.55, reflecting the first-quarter beat and the effect of repurchases already completed. The company maintained its outlook for total revenue growth of approximately 8% and organic revenue growth of 5% to 6%.
For the second quarter, Roper guided adjusted DEPS to $5.25 to $5.30. Conley said the company’s Q2 outlook reflects timing headwinds, including non-recurring activity in Application Software and a difficult comparison in Technology-Enabled Products. In response to a question on macro factors, Conley said the Q2 dynamics were “just timing” and “nothing geopolitical at all.”
Neil Hunn, president and CEO, emphasized that full-year guidance continues to assume “no meaningful improvement” in Deltek’s government contracting (GovCon) environment or a recovery in DAT’s freight market, and also assumes “modest top-line weakness at Neptune versus a year ago.”
Segment performance: retention and bookings remain key themes
In Application Software, Hunn said revenue grew 12% overall with 5% organic growth. Segment EBITDA rose 13%, margins were 42%, and core margins improved 50 basis points. He said recurring revenue (about 85% of the segment) grew “mid-single-digit plus,” while non-recurring revenue was “essentially flat.”
Hunn cited three segment themes: enterprise gross retention “consistently in the mid-90s area,” strong enterprise bookings, and continued progress in SaaS transitions. He pointed to Aderant’s “record quarter” with a Q1 bookings record and SaaS momentum, as well as Vertafore’s mid-single-digit revenue growth and the unveiling of its “Velocity AI platform” and embedded AI agents at the company’s customer conference.
Hunn also highlighted CentralReach, saying recurring software revenue grew “well north of 20%” with margin expansion, and that “AI and AI-influenced bookings were 75% of new business in the quarter.” He described workflow efficiency gains from AI-generated session notes and automation features. Conley later noted CentralReach’s AI monetization is incremental and “based on learners.”
On Deltek, Hunn said recurring revenue grew “mid-single digit plus,” driven by private sector demand partially offset by continued softness in GovCon enterprise. He said Roper is “still waiting for the GovCon inflection” and is not incorporating any potential benefit from the “One Big Beautiful Bill” into guidance, noting any impact would arrive only after customers win awards and invest in systems.
In Network Software, total revenue rose 14% and organic growth was 5%. Segment EBITDA margin was 50.7%, down year over year, while core margins were down just 20 basis points. Hunn attributed the reported margin decline to the addition of Subsplash (lower margin but “steadily improving”) and ongoing investment in DAT, particularly Convoy.
Hunn said DAT executed well in a mixed freight environment, with spot rates up 20% to 30% year over year and carrier-side growth in the ecosystem during Q1 “for the first time in several years,” though a late-quarter diesel spike pressured carrier margins. He described Convoy as a “material TAM expansion opportunity” and pointed to AI features moving into production, including “RateView AI agent,” “Convoy Load Notes,” and “Loadlink Voice to Post.”
Hunn said ConstructConnect delivered another strong quarter, including double-digit recurring revenue growth and product velocity improvements after shifting its product and engineering organization into “agentic coding processes and tools.” He also said Foundry returned to year-over-year revenue growth, with record ARR in Nuke and net retention back above 100% for the first time since the 2023 strikes, adding that Griptape extends Foundry into AI orchestration across visual effects and animation workflows.
In Technology-Enabled Products, revenue increased 9% overall and 7% organically, which Hunn said was “significantly better than expected,” driven by strength at NDI and Verathon. EBITDA margin was 33.6%, down 260 basis points, reflecting bronze ingot inflation at Neptune and a consumables mix shift at NDI and Verathon.
Hunn called NDI’s quarter another record, citing demand for electromagnetic tracking solutions across cardiac, neurological, and orthopedic applications. Neptune’s revenue declined low single digits, “better than expected,” with lower mechanical meter volumes partially offset by static meter growth. Hunn said Roper is not underwriting a Neptune recovery in 2026 guidance. He also said Verathon’s results were supported by demand for D-Flex and GlideScope, with new product launches expected later in the year.
AI acceleration and commercialization: embedded workflows, varied pricing models
Hunn said AI innovation is broadening across the portfolio and increasingly “showing up in both product roadmaps and customer conversations.” He pointed to new AI-enabled capabilities released during the quarter across businesses including CentralReach, ConstructConnect, Vertafore, iPipeline, Aderant, DAT, Subsplash, and SoftWriters.
In response to questions on adoption and monetization, Hunn said Roper views “on-stack AI embedded natively into workflows” as an incumbent advantage. He said monetization will not be “one size fits all,” with some offerings priced on consumption, but he expects many customers will prefer budgeting predictability, potentially through “a subscription with an overage based on utilization of the AI tools.”
Hunn also said 2026 will be a “massive learning year” across the company in terms of AI commercialization, including positioning, pricing, implementation, utilization, and renewals. He acknowledged some cases may require forward deployed engineers and change management, but suggested it may be “more of a reallocation” of resources than a significant cost increase.
Hunn provided additional detail on Roper’s centralized AI accelerator team, describing its goals as coaching, partnering to build, and developing shared components where appropriate. He said opportunity prioritization is based on “size of prize and impact,” and that a partnership with Vertafore produced “10X kind of productivity gains” in development speed and quality, with more operating company partnerships expected during the year.
Capital deployment: $3 billion added to repurchase authorization, M&A remains targeted
Roper continued to emphasize capital deployment flexibility. Hunn said the company has repurchased 6 million shares for $2.2 billion since November, including 4.9 million shares for $1.7 billion year to date in 2026. Conley said the repurchases represent about 6% of shares outstanding, returning Roper’s share count to a level “not seen since 2017.”
The board authorized an additional $3 billion of repurchase capacity, bringing remaining authorization to $3.8 billion. Hunn said the company has “north of $5 billion” of total capital employment capacity over the next 12 months and remains “disciplined and unbiased between acquisitions and opportunistic buybacks.”
Conley said the company ended Q1 with net leverage of 3.1x and noted Roper closed a new five-year, $3.5 billion revolving credit facility during the quarter, describing it as providing ample liquidity with “improved pricing and terms.” He added that the facility strengthens Roper’s ability to act in an environment where private credit is becoming more constrained for other acquirers.
On the M&A environment, Hunn said the pipeline shifted after a public software valuation drawdown caused sellers to pause processes, but he believes ongoing LP pressure and tighter private credit dynamics could eventually surface more quality assets. He said Roper’s pipeline is now “more proprietary” and “more targeted,” and the company intends to remain an active, disciplined buyer.
About Roper Technologies (NASDAQ:ROP)
Roper Technologies, Inc (NASDAQ: ROP) is a diversified technology company that acquires and manages businesses delivering specialized software, engineered products and data-driven analytics to niche markets. Its subsidiaries develop enterprise and cloud-based software, scientific and analytical instruments, industrial and medical devices, and other applied technologies designed to solve specific operational, regulatory and commercial challenges for customers. The company emphasizes recurring revenue streams from software licenses, subscriptions and service contracts alongside sales of hardware and instruments.
Roper operates a decentralized operating model in which acquired businesses retain entrepreneurial autonomy while benefiting from centralized capital allocation, legal and financial support.
