Good morning, and thank you all for joining us as we discuss the first quarter 2026 financial results for Roper Technologies. Joining me on the call this morning are Neil Hunn, President and Chief Executive Officer; Jason Conley, Executive Vice President and Chief Financial Officer; Brandon Cross, Vice President and Chief Accounting Officer; and Shannon O'Callaghan, Senior Vice President of Finance.

Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call.

We have prepared slides to accompany today's call, which are available through the webcast and are also available on our website. Now if you please turn to page two.

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

You should listen to today's call in the context of that information. Now please turn to page three.

Today, we will discuss our results primarily on an adjusted, non-GAAP, and continuing operations basis. For the first quarter, the difference between our GAAP results and adjusted results consists of the following items: amortization of acquisition-related intangible assets and financial impacts associated with our minority investment in Indicor.

Reconciliations can be found in our press release and in the appendix of this presentation on our website. Now if you'll please turn to page four, I'll hand the call over to Neil.

After our prepared remarks, we will take questions from our telephone participants. Neil?

Thank you, Zack, and thanks to everyone for joining our call. As we turn to page four, you'll see the topics we will cover today.

We'll start by highlighting our Q1 enterprise performance. Then Jason will walk through the enterprise financials, our balance sheet, and provide an update on our share repurchase program.

Then we'll discuss our segment highlights and outlook, and introduce our Q2 and increased full-year 2026 guidance. Finally, we'll close with a few summary points before opening the call for questions.

Let's go ahead and get started. Next slide, please.

As you turn to page five, I want to highlight three takeaways for today's call. First, we delivered a strong start to 2026 and are raising our full-year DEPS guidance.

Our Q1 results exceeded expectations across every key metric. Total revenue grew 11%, organic revenue grew 6%, EBITDA grew 8%, free cash flow grew 11%, and DEPS was $5.16.

Importantly, enterprise gross retention remains strong, consistently in the mid-90s area. On that foundation, enterprise software bookings were also strong, core up low double digits on a TTM basis.

This continues the momentum from our last call and bolsters our confidence for the balance of the year. On the back of this quarter's performance, we're raising our full-year DEPS guidance to a range of $21.80 to $22.05, up 50 cents at the midpoint, and more on this later.

Second, we're continuing to accelerate AI velocity across the portfolio. In Q1, AI innovation continued to broaden across our businesses, move deeper into core products, and increasingly show up in both product road maps and customer conversations.

Businesses like CentralReach, ConstructConnect, Vertafore, iPipeline, Aderant, DAT, Subsplash, and SoftWriters all released meaningful new AI-enabled product capabilities during the quarter. The signal from our own portfolio that AI can be a meaningful growth driver in vertical software keeps getting clearer by the day.

On the AI accelerator team at Roper, as a reminder, this is a central strike team that partners directly with our operating companies to accelerate AI product development and capture reusable patterns for deployment across the portfolio. The team is ramping quickly.

The team's first partnership was with Vertafore, helping deliver AI agents unveiled at their customer conference last week. This is exactly the kind of portfolio impact we envisioned when we invested in this team, and we expect the pace of partnerships with our operating companies to accelerate throughout the year.

Our third takeaway centers on capital deployment. Since November last year, we've repurchased 6 million shares for $2.2 billion, including 4.9 million shares for $1.7 billion year-to-date in 2026.

Importantly, our board authorized an additional $3 billion of repurchase capacity, giving us $3.8 billion of remaining authorization and north of $5 billion of total capital deployment capacity over the next 12 months. Our approach remains unchanged.

We are disciplined and unbiased between acquisitions and opportunistic buybacks, focusing on driving the best risk-adjusted long-term cash flow compounding per share for shareholders. Our M&A pipeline today is targeted, focused on high-quality strategic opportunities where we are developing deep relationships and real conviction, and we expect to remain active as disciplined, long-term buyers.

Before I turn it to Jason, one theme you'll hear throughout today's call: organizational velocity across our portfolio continues to build. The investments we've made over the past two years in leadership, in AI, in modern engineering practices, and in operational rigor are working and demonstrating meaningful results.

Our businesses are releasing innovation faster, executing sharper, and moving with more confidence, and that's what gives us conviction in the balance of the year and beyond. With that, Jason, let me turn the call over to you.

Thanks, Neil, and good morning, everyone. I'll take you through our first quarter financial performance starting on slide six.

As you heard, we delivered a strong first quarter, finishing well above the high end of our DEPS guidance range and ahead of expectations on organic growth. Revenue of $2.1 billion was up 11% with organic growth of 6% and acquisitions contributing 5%.

Importantly, recurring software revenue growth across our software segments was again strong at 7%, which continues to be the best indicator of business health and durability. EBITDA of $797 million was up 8% over prior year.

EBITDA margin was 38.1%. Our core EBITDA margin was down 70 basis points in the quarter, driven by lower gross margins in our Tech segment due to mix of more consumables at NDI and Verathon, coupled with higher input costs at Neptune.

Core EBITDA margin in our software segments expanded 40 basis points, which includes continued investment in AI. DEPS of $5.16 was above our guidance range of $4.95 to $5.00 and up 8% over prior year.

The upside was driven by the combination of stronger organic growth, a lower tax rate, and the benefit of lower share count resulting from our net purchasing activity in Q1. Free cash flow of $562 million was up 11% over prior year.

On a trailing 12-month basis, free cash flow is now $2.5 billion and has compounded at a 19% CAGR over the last three years, or 15% excluding the impact of Section 174. We continue to view free cash flow per share as the most important metric in evaluating our progress, and on that basis, we were up 15% versus the prior year given the combination of growing cash flow and a declining share count.

Relatedly, and for modeling purposes, we exited Q1 with 102.4 million shares outstanding. If you turn with me to slide seven, I'll walk through our financial position and capital deployment update.

We exited Q1 at 3.1 times net debt-to-EBITDA, which is up modestly from 2.9 times at year-end given the $1.5 billion we deployed toward share repurchases in the quarter. We have $383 million of cash and $2 billion drawn on our $3.5 billion revolver.

Importantly, we closed on a new 5-year, $3.5 billion revolving credit facility during the quarter, which provides ample liquidity and improved pricing and terms. This also enhances our cost-of-capital strategic advantage in the face of an increasingly constrained private credit market that other market participants looking to make acquisitions will be facing.

Even after significant repurchase activity in Q1, we maintain over $5 billion of annualized capacity for capital deployment, which speaks to the strength of Roper's cash generation engine. Neil highlighted the share repurchase activity in the opening.

To put it in perspective, our cumulative 6 million of share repurchases is about 6% of shares outstanding and brings us back to a share count we have not seen since 2017. Additionally, our board approved expanding our share repurchase authorization by another $3 billion, which provides capital deployment flexibility and reflects continued confidence in our vertical market software position, enhanced capabilities, and execution velocity to capture the AI opportunities in front of us.

On M&A, the pipeline of high-quality opportunities remains very attractive. As we've discussed, we believe the structural dynamics in the PE-backed software market and a constrained private credit market continue to create a compelling environment for Roper.

We remain active and disciplined. With that, I'll turn it back over to Neil to discuss the segment performance and outlook.

Neil?

Thanks, Jason. As we turn to page nine, let's review our Application Software segment.

Revenue for the quarter grew 12% in total, and organic revenue growth was 5%. EBITDA grew 13%, EBITDA margins were 42%, and core margins improved 50 basis points year-over-year.

The quality growth here is notable. Recurring and reoccurring revenue, about 85% of the segment, grew in the mid-single-digit-plus range, while nonrecurring was essentially flat.

Stepping back at the segment level, three themes stand out for the quarter. First, enterprise gross retention remains strong, consistently in the mid-90s area.

On that foundation, enterprise bookings were also strong in the quarter, consistent with the momentum we described in our January call and supportive of our confidence for the balance of the year. Second, our SaaS transitions continued to advance meaningfully.

Several of our larger businesses made real progress on ground-to-cloud conversions and on bringing new cloud-native products to market. Third, AI progress continued to build.

The signal is shifting from product investment to product shipping, and you'll see this clearly in the three company highlights to follow. First, Aderant delivered a record quarter, strong revenue growth, and a new Q1 bookings record.

Strength was broad-based, with particularly strong SaaS momentum on Sierra, Onyx, and viGlobal. Aderant also launched AI-driven talent evaluation within viGlobal, continued the rollout of its Striden AI platform, and completed a record number of Sierra cloud migrations in the quarter.

Simply put, Aderant is winning in the legal market and doing so from a position of strength. Second, Vertafore delivered a solid quarter, steady mid-single-digit revenue growth with EBITDA ahead of revenue.

Recurring revenue continued to build across agency, MGA, and carrier, with MGA again leading on double-digit growth driven by strong bookings and high retention. Last week, at their Accelerate user conference in Las Vegas, Vertafore unveiled its new Velocity AI platform along with a suite of AI agents embedded across the product portfolio, from ReferenceConnect and reconciliation to submission processing and email agent automation.

AI is a meaningful TAM expansion opportunity for Vertafore, and they're quickly moving to capture it. As I mentioned earlier, this is where the Roper AI accelerator team had its first impact and is exciting to see.

Third, CentralReach continues to execute ahead of our deal model. Recurring software revenue grew well north of 20% with margins expanding, demonstrating the operating leverage in this business as it scales.

Most importantly, CentralReach continues to be one of our strongest AI proof points. AI-generated session notes have dropped from 5 to 10 minutes to about 30 seconds, giving clinicians back roughly eight hours a week to work with autism learners.

BCBAs are saving 140-plus hours a year on report authoring and review, and daily claims generation is 6 times faster. Customers are responding.

AI and AI-influenced bookings were 75% of new business in the quarter, up from zero two years ago. This is a textbook example of how the AI right to win we believe exists across our portfolio.

CentralReach sits inside mission-critical workflows, has proprietary data, and is translating that advantage into real, growing AI revenue. Prior to turning to the outlook for this section, I'll provide an update on Deltek and the GovCon market.

Importantly, Deltek grew recurring revenue in the mid-single-digit-plus range in the quarter, driven by strong private sector demand, partially offset by continued softness in GovCon enterprise. SaaS remains strong with ground-to-cloud conversions trending positively.

Consistent with January, we're still waiting for the GovCon inflection. This is not new.

We continue to work through the tail of last year's disruptions to federal procurement, agency reorganizations, and broader budget uncertainty, which is delaying decision-making, particularly on large enterprise perpetual deals. Longer term, we remain encouraged.

The One Big Beautiful Bill is a meaningful positive for defense and government contracting spend, though the benefit reaches us only after our customers win awards and invest in systems, and that takes a bit of time. Consistent with January, we are not baking into our guidance any GovCon inflection or any OBBB benefit and rather will adjust as conditions warrant.

Turning to our outlook for Application Software, we expect organic growth for the balance of the year to be in the mid-single-digit-plus range, lower in Q2 on some nonrecurring timing, improving in the back half as CentralReach turns organic and easing nonrecurring comps. Please turn with us to page 10.

Total revenue growth in our Network Software segment was 14%, and organic revenue grew 5% in the quarter. The quality growth mirrored Application Software: organic recurring grew mid-single digit-plus, nonrecurring declined mid-singles as customers moved to our cloud offerings, and bookings remained strong here.

EBITDA margins were 50.7%, down 460 basis points year-over-year, while core margins held steady, down just 20 basis points. The gap reflects two dynamics: our acquisition of Subsplash, a faster-growth business with a lower but steadily improving margin profile, and our ongoing investment in DAT, particularly Convoy.

Stepping back at the segment level, we see similar themes playing out here that we described in Application Software. First, enterprise bookings were strong, and gross retention remained high across our network businesses, together giving us improved visibility into the balance of the year.

Second, AI progress is tangible and shipping to customers today. Let me highlight three businesses in this segment.

First, DAT is executing well against a mixed freight backdrop. ARPU expansion continues, and adoption of our digital freight marketplace solutions remains strong.

On the macro, spot rates are up 20% to 30% year-over-year, and the carrier side of our ecosystem grew in Q1 for the first time in several years, real green shoots, particularly in the second half of the quarter. That said, a sharp diesel spike compressed carrier margins late in the quarter, and our guidance continues to assume no meaningful freight market recovery.

Our early-stage investment, Convoy, inside DAT represents a material TAM expansion opportunity. Today, DAT is a subscription-based, two-sided network.

Brokers and carriers pay to access the largest freight marketplace in North America. With Convoy, DAT is evolving into a full end-to-end agentic and ML-powered marketplace, participating in the workflow and the economics of the transaction itself, a meaningfully larger and more valuable business over time.

The innovation that enables this transformation exists and is working in the market, and we continue to enhance and extend the tech. In the most recent quarter, DAT's RateView AI agent moved into live production, replacing manual rate lookups with instant conversational lane rate guidance.

Convoy Load Notes is turning brokers' free-form emails and chat messages directly into bookable loads, eliminating manual data entry. LoadLink's Voice to Post is enabling hands-free load posting.

The AI work at DAT is not theoretical. It's shipping in production and delivering incredible value to customers today.

Turning to ConstructConnect, another strong quarter with recurring revenue up double digits and continued breakout from Boost, their AI-based takeoff solution. AI Auto-Count, which reads construction schedules, launches this quarter.

Most importantly, ConstructConnect has now moved its entire product and engineering organization into agentic coding processes and tools, shipping 4 times the features versus a year ago. Broadening this across the portfolio to drive multifold product velocity gains is a key priority and an exciting one for enterprise.

Third, Foundry returned to year-over-year revenue growth in Q1, with Nuke closing the quarter at record ARR. Net retention returned above 100% for the first time since the 2023 actors' and writers' strikes, and our recent GripTape acquisition extends Foundry's leadership into AI orchestration across the visual effects and animation pipeline, enabling studios to securely coordinate multiple AI models and agents in their production and post-production workflows.

Finally, and prior to turning to our segment outlook, I'd like to make a couple of quick callouts. SoftWriters launched its AI-enabled order entry product last week, a meaningful workflow enhancement for long-term care pharmacies, and Subsplash released Trends AI, giving ministry customers the ability to generate custom data insights through natural language prompts, a key unlock for this customer constituency.

Turning to our outlook for Network Software, we expect organic growth for the balance of the year to be in the mid-single-digit-plus range. A couple of quick callouts: Subsplash turns organic in Q4, and margins will reflect continued investment in our freight platform acquisitions through the balance of the year.

Now please turn to page 11, and let's review our Tech-Enabled Products segment. Revenue here grew 9% in total and 7% organic, significantly better than expected, driven by strength at NDI and Verathon.

EBITDA margins were 33.6%, down 260 basis points year-over-year, reflecting two dynamics. First, input cost pressure at Neptune, principally bronze ingot inflation, and second, a mix shift at both NDI and Verathon towards faster-growing consumables, which carry lower gross margins but more durable, reoccurring revenue profiles.

Let me start with NDI: another record quarter driven by exceptional demand for their electromagnetic tracking solutions across cardiac, neurological, and orthopedic precision measurement applications. The EP market in particular is a strong multi-year growth vector for NDI.

Procedure volumes continue to grow, leading OEMs are introducing new tracking-enabled catheter platforms, and NDI has a unique right to win at the sensor layer. Great job by Dave and the entire team at NDI.

Turning to Neptune, revenue declined low single digits in the quarter, which was better than expected, driven by strong execution from Don and the entire team in Tallassee. The market dynamics were largely as expected, with lower mechanical meter volumes partially offset by strong static meter growth.

Importantly, Neptune's cloud-based software adoption continues to scale nicely, though off a small base. Consistent with our Q4 commentary, we're not underwriting a Neptune recovery in our 2026 guidance and will continue to monitor underlying demand.

Rounding out the segment, Verathon delivered solid growth, supported by strong Bflex and GlideScope demand, and we're optimistic about new product launches planned for the balance of the year. Turning to our TEP outlook, we expect organic growth for the balance of the year to be in the mid-single-digit range, lower in the second quarter as we face a tougher Q2 comp.

We expect net raw material pressure to continue in the second quarter and improving in the back half of the year. With that, please turn with us to page 13.

On this slide, we'll cover our Q2 and full-year 2026 guidance. Specifically, we're raising our full-year 2026 DEPS guidance to $21.80 to $22.05, up from $21.30 to $21.55, a 50-cent increase at the midpoint, which passes through our Q1 beat and the impact of our already executed share buyback.

We're maintaining our full-year total revenue growth guidance of approximately 8% and organic revenue growth of 5% to 6%. For the full year, we continue to assume a tax rate in the 21% area and a bit below that in Q2.

For Q2, we're establishing adjusted DEPS guidance of $5.25 to $5.30. To reiterate key assumptions from our segment commentary: full-year guidance assumes no meaningful improvement at Deltek's GovCon market or DAT's freight market, and modest top-line weakness at Neptune versus a year ago.

Finally, on capital deployment, we're entering the balance of 2026 with meaningful optionality. We have $5 billion of firepower available over the next 12 months, a targeted M&A pipeline, and $3.8 billion of remaining share repurchase authorization, giving us substantial flexibility to act opportunistically.

We will remain disciplined and unbiased between acquisitions and opportunistic buybacks based on what drives the highest and most durable cash flow per share compounding. Now please turn to page 14, and then we'll open it up for your questions.

We'll conclude with the same three takeaways with which we started. First, we delivered a strong start to 2026 with 11% revenue growth, 6% organic revenue, and 11% free cash flow growth.

Retention and bookings remain strong and position us well heading into the balance of the year. Based on this, we've raised our full-year DEPS guidance by 50 cents at the midpoint.

Second, we're accelerating AI innovation across the portfolio. CentralReach, ConstructConnect, Vertafore, DAT, Aderant, and others continue to move AI deeper into their products and increasingly into customer activity, and our AI accelerator team continues to build velocity across the portfolio.

Finally, on capital deployment, as we discussed earlier, our board authorization of an additional $3 billion of share repurchase capacity gives us $3.8 billion of remaining authorization. Alongside that, we have $5 billion of capital deployment firepower available over the next 12 months supporting our targeted M&A pipeline.

We will remain disciplined and unbiased between acquisitions and opportunistic buybacks based on what drives the highest and most durable cash flow per share compounding. As we wrap up, some additional color on the M&A market.

A quarter ago, our pipeline was at record levels. Shortly after our call, the broader public software valuation drawdown caused sellers to pause most active processes.

We remain active, and our pipeline leans more proprietary. That said, we expect M&A activity to pick back up, timing of which is still to be determined, but when it moves, a large number of opportunities are likely to emerge, and we're in an advantaged position to capitalize on this.

We remain very bullish about being a high-conviction acquirer of vertical market software businesses with deep proprietary moats where AI accelerates growth. The signal on that thesis from our own portfolio is becoming clearer and clearer.

In closing, the ingredients for accelerated cash flow per share compounding are coming together. Our portfolio is the strongest it has ever been.

Our organizational velocity is accelerating. AI is both TAM-expanding and growth-enabling, and we're excited to see our product work translate into higher growth.

Our capital deployment capacity and flexibility are significant differentiators, and our discipline is unchanged. This is how we compete and win, and how we continue to compound for our shareholders.

With that, operator, please open the line for questions.

Hey, gentlemen, really appreciate it. Nice job here.

Maybe, Neil, starting for you, I think it was clear in your commentary you kind of talked about the accelerating pace of innovation, the right to win and kind of TAM-expansive nature of AI. If we think about kind of the embeddability piece and monetization of the platform, I guess maybe how that layers in incremental conviction as well, too, right?

Is that something that can lower friction around adoption? Is that something that can increase kind of the likelihood of success and value alignment with customers?

Maybe how the platform positioning and embeddability of agents maybe layers in kind of incremental confidence in that right to win around agents?

Yeah. You're asking about embeddability.

You're a little muted on that. I want to make sure I'm answering the right question.

The ability to kind of embed it into the existing platform, right, and kind of pass the value.

Absolutely. Yeah.

A few things I'd start with on this. It really starts with what sort of we talk about internally all the time about the product magic.

We're able to create products now across many, if not all, of our software businesses where when the customer sees in early betas and early trials what the product can do, their eyes sort of pop out of their head. It's truly a magical experience, I didn't know software could do that.

Right? That's what gets us really excited.

We just saw it last week, for instance, at the Vertafore customer conference, just sort of as an example. In terms of monetization generally, so that's one.

I'll start there. Second is we believe that the right to win here is sort of on-stack AI embedded natively in workflows is a winning play, a huge incumbent advantage, is the second thing.

Third thing, monetization, I think for us is there's not going to be a one-size-fits-all. There are some businesses today that already price on a consumption basis.

Think like SoftWriters in pharmacy automation or what Convoy does at DAT. I think those will be monetized on a consumption basis.

Also, those customers' unit economics generally are driven on their own consumption, it aligns with the customer unit economics. I think more broadly, though, the monetization is going to be one that sort of, as you allude in your question, balances adoption and long-term monetization.

I think that's going to not be largely consumption-based. Our customers very much are saying very clearly they need to be able to plan for and budget what the spend is going to be.

It'll likely be some sort of a subscription with an overage based on utilization of the AI tools. I think that aligns nicely with adoption because then customers are going to be focused on how to realize the magic value, if you will, and not be worried every time they press a button it costs money, but then when that gets fully adopted and it's deeply embedded in the workflows, we'll be able to sort of grow with that utilization.

I would just add that our CentralReach business is furthest along in this journey. They've been out in the market with AI products for a year and a half or two years, and all of their AI is incremental.

It's based on learners, which you could say is some form of consumption, right? It's not based on practitioners, but learners, and customers are seeing real value as Neil highlighted on the prepared remarks in terms of workflow efficiency and better revenue realization.

Very helpful. Thank you both.

Maybe, Jason, kind of just sticking with you quickly as well, too. Obviously, kind of reiterating the full-year revenue guide, 5% to 6% 5% to 6% organic.

We just did 6% this year. We've got some mechanics kind of layering in and easier comps in the back half as well, too, but maybe kind of just give us a broader sense of how the start of the year kind of layers in conviction and maybe the kind of conservative view that we continue to take to the guidance framework here going forward.

Thank you.

Yeah. Look, it's a strong start to the year.

Very encouraged by what we've seen. We're just one quarter in, we want to sort of see how things play out.

As Neil talked about, we have a couple, like you said, mechanical things in the second quarter, nonrecurring in AS will have will be a little bit more impacted than the first than the first quarter. Then we're just tech and TEP, we're comping a high watermark in Q2, but that'll that'll ease off in the second half.

Then as as we've talked about, the second half will improve in software with Subsplash and and CentralReach turning organic. Then we have just some easing comps in AS.

All that just sort of, blends into our, holding the the range at this point, but we'll see how it plays out.

Great. Thank you very much.

Hi, this is Luvia on for Brent Thill. Thank you for taking the question.

Neil, just curious to hear your thoughts on the private markets given ongoing volatility. Can you just tell us a little bit more about what you're seeing right now and if it's changed your outlook at all?

Talking about private markets on M&A, Luvia?

Correct.

Sure. As I mentioned in the prepared remarks, with the public market drawdown, it's gone from the busiest we've been in a long time to the least busy.

We're still busy, we're still active, and as I mentioned, it's more proprietary, it's certainly more targeted. We think the M&A setup's actually improved a bit for us over the last 90 days in the context that the LP pressure that we've talked about now for a couple years continues to exist.

That has not changed in any capacity. If anything, it's maybe increased over the course of the next 90 days.

The other thing that's happened that's been widely reported, people understand, is now we've got the private credit dynamic that also is putting pressure on the asset class. For us, we think the combination of those two is likely to service more quality assets in the processes, and we're a very advantaged buyer in that regard, but the timing's still to be determined.

We're modeling out what these maturities look like on the private credit side. There's not a meaningful maturity cliff this year, but if you're a private equity sponsor seller, you want to think about divesting an asset well before a maturity, so that's something that Janet and her team are sort of aligning up.

We think there's an opportunity here to get potentially, I should underscore potentially, to acquire AA-plus assets at differentiated values given the backdrop and the dynamics here. The timing of this is to be determined, but we'll stay active in process and prosecute the opportunities in front of us.

I would just reiterate, we refinanced our 5-year revolver this quarter at a very good cost to capital, sort of tightened up the spread a little bit, shout out to Shannon and Dave Baker for getting that done this quarter. Just a great job there.

Just positions us well. We have a lot of balance sheet flexibility and we'll be able to move quickly when opportunities arise.

Got it. That's helpful.

Then just on Deltek's government contracting business, did you see any impact in the quarter at all from the war in the Middle East, and is it having any impact on your outlook for the remainder of the year?

We asked that very specific question in our call-down with Deltek, and the short answer is very little, if any. There certainly is a sliver of the sort of aerospace defense subsector of government contractors that are focused on munitions and sort of war effort.

That's a small sliver of the population of the broader, let's say, contractor population. It had, if an effect, a minimally negative impact just in terms of those contractors are focused on the war effort and not on contracting for ERP software, but it wasn't material in the quarter.

Great. Thanks so much.

You bet.

Great. Thank you.

I think all application software is facing this question around whether AI-related spending grabs an outsized wallet share and maybe the incumbents get squeezed along the way. I think the interesting thing about Roper is you have exposure to markets like legal and healthcare.

I think those are the two biggest vertical AI adopters so far, and yet, I think your respective software exposure there is still doing pretty well. What's your take on this topic, and have you seen any changes year-to-date as we've also seen a big ARR numbers come through from the frontier model providers that make you more concerned in coming quarters?

No, I would say the punchline on that, the TL;DR is no. No impact on sort of the budgetary spend that we sort of compete for.

I think the double-click on that is the obvious answer, which is and this is a personal opinion, that I think a lot of these surveys around IT spend are a little misleading because the whole point of the AI effort is to go monetize labor spend. It's about a whole different bucket of opportunity to capture and provide value to the end market.

Across the whole platform, we're not seeing sort of an impact to us relative to allocation of budget, especially not in legal and healthcare. As we talked about, Aderant, which just amazing in the quarter, it's been an amazing few years here with Aderant.

Great. That's helpful.

Then, I heard enterprise bookings up low double digits over the trailing 12 months. I'm curious what they were in the quarter, and I think your definition excludes price.

Maybe can you just comment on pricing power in the aggregate?

It was certainly above the double digits. We had an easier Q1 comp last year.

I think the TTM is definitely the right way to think about it. Then it does not include price.

You're right. Price has held up very well.

I think what we've said historically, we're very thoughtful across the portfolio about pricing, and you have to earn the right, and companies are doing that, as part of our strategic plan work that we do is understanding that dynamic. We've continued to do that methodically over the last half decade or so.

The only thing I'd add on pricing, in addition to what Jason said, is we actually think, relative to what the market will bear on pricing, we have underutilized that lever in growth, and so it's not like a pan-portfolio go raise pricing. That's not how we operate at Roper.

As Jason said, it's where you have earned the right with your product, your product value, and your customer relationships to take a little bit more pricing, then we are doing that. It's a very strategic, it's a very earned process, and we would hope that we would see I don't know if it's 50 or 100 basis points over the portfolio of software and pricing impact increase over the next couple, three years.

Thank you.

You bet.

Thanks for taking my question and follow-up. I wanted to build on the prior question on legal tech because, yeah, it's in the media reports and some remarkable growth from some of these SaaS natives there.

I'm curious, though, Neil, you've called out Aderant, a couple years of amazingness, and it does seem like it's like clockwork showing up in this segment-level slides every quarter on record this or that. How much more sustainability is there in terms of just the momentum in terms of getting folks to move to SaaS and just can this train keep going just on the momentum with Aderant, and then I had a follow-up?

Sure. Chris and the team there have done a great job.

I'll give you a longer answer here. Aderant has been really good for a very long time for us.

What's been happening underneath the hood has evolved to sort of keep it good. It started with how do we just take it to our competitor and outcompete them in the marketplace?

That's how we went from 35%, 40% market share in large law to 60%, 65%. We just absolutely compete and won, and Chris and his predecessor team did a wonderful job in that sort of era of growth.

That era of growth, we could see was going to end at some point, we had to evolve. That's where we sort of said, "Okay, we have this installed base of customers.

How do we sell them more things?" We then prosecuted both an organic and inorganic strategy to add the number of bolt-on products that we could or sort of integrated modules that we could sell to this large law customer base that made strategic sense.

We prosecuted and are prosecuting that strategy. Then came along cloud, right?

This was a constituency that did not want to move to the cloud, then COVID happened. Then we rapidly cloud-enabled the totality of the product set, and then we're now in the still early innings, maybe third or fourth inning, maybe not even that late, of moving this customer constituency to the cloud with that lift and shift.

Now we have the tailwind of the AI benefit. It's a multiple growth driver story, and I think there's quite a long way to go on this.

Part of the benefit of owning any business for a long arc of time is you're always looking out horizon two and horizon three for what you have to be there organically or inorganically to sustain or improve growth rates.

Yep. Very helpful.

Thank you. The follow-up is just what we're seeing, though, is with particularly not necessarily generative, but agentic, that's a pretty big lift in shift and change management, customers being comfortable having things go autonomous and even getting it beyond kind of the experimental state.

Are you seeing with some of the businesses you actually have to put in forward-deployed engineers or kind of change how you go to market or help the customers and it does create some kind of incremental costs or just handholding, just anything about how you help them consume this agentic stuff? Thanks.

I think the short answer is yes. I think we mentioned last quarter that this year is going to be just a mass of learning here for us across the enterprise on the commercialization bucket of these AI tools, of which FDEs are certainly a component.

How do you position it? How do you sell it?

How do you price it? How do you get it implemented?

How do you get utilization pull-through? How do you drive renewal rates high?

That whole customer journey is going to be across the portfolio, a huge set of learnings for us. I'll spare you the details on inside the portfolios, but we have businesses where the uptake's just been very natural.

We haven't had to have the forward-deployed engineers because when you press the magic button and you get productivity savings, that productivity savings is taken in the customer's operations to something that they can go do tomorrow. In other cases, there's some trepidation.

If I press this button, do I lose my job? You've got to sort of go through the whole change management process of that.

I think in almost every case, our customers don't lose their job. It's how do you sort of do task replacement, task augmentation, they can go play offense inside their customer to go compete and win.

It's certainly a sort of something you have to overcome in that regard. We do expect across a certain part of the portfolio to do some version of a forward-deployed engineer.

Thanks, Neil.

Final thing I'd say on that is I think it's kind of from an investment point of view, it's probably more of a reallocation or rebalancing of investment from customer support, customer service to FDE, I don't know if it's a huge cost increase. It's just a resource allocation dynamic.

Got it. Thanks.

Hey, guys. Good morning.

Morning.

Just curious on you're talk about embeddability and subscription plus overage in the future. I get the view of I don't want our customers to think every time they click a button it costs them money.

I fully get that. If these things become embedded and the efficiencies potentially require less people at your customers, how do you kind of judge the ROI of the investment necessary to kind of stay in the same place?

The product is getting better, but you're getting the same kind of subscriptions and it's costing you more to maybe achieve that now than it did in the past. How do you kind of evaluate the ROI on the required spend to kind of get to that place?

I think these are very hard-dollar ROIs. We've said publicly, for instance, at DAT Convoy to manually broker a load, it's somewhere between $100 and $200 of labor to do that.

You use our load automation, it's somewhere in the $40 range. It's a demonstrable hard-dollar ROI.

Similar things can be said at, for instance at Vertafore, one of the agentic tools they released last week, it's a reconciliation tool. The time and motion study is it's 17 minutes per reconciliation.

Our tool does it in 30 seconds. Then you do these scores of these a day, you can sort of see the time savings and then you can get to a financial ROI.

These are pretty hard ROI and products that sales teams are taking that message to the market to a customer base.

Joe, I would just say we're using local smaller language models, maybe even older versions, you're not consuming a lot of tokens when you're doing this activity. You can continue to change the prompts to make it more efficient over time.

Even at Vertafore, we've taken that cost of goods down meaningfully in a matter of weeks. I think it's still very accretive from a margin perspective.

That's kind of what I'm getting at more of the ROI from Roper's standpoint. I get the ROI from the customers.

It's more if we're spending money to develop new AI tools that are then embedded in the product that we're already offering, how is the ROI on the increased investment you need in 2026 versus the investment you needed in 2021 to get the same customer and keep the same customer happy?

I would just say on the development front, we're seeing demonstrable efficiencies right with the frontier models itself. We're getting a lot more output and a lot more road map consumed.

You can talk about just OpEx investment, we're assuming productivity, but we're taking that back into the road map. I don't think it changes fundamentally our P&L structure in our margin profile.

Cool. Thanks, guys.

Joe, apologies for missing the thrust of your question.

No problem, Neil.

Yeah.

On the AI strike team led by Shane and Eddie that you put together, it sounds like they completed their listening tour last quarter and have now been put out into the field. It sounds like some early successes at Vertafore.

If you could just touch on how they ended up sort of stack-ranking the opportunities that they see in front of them, and then maybe the scope of their involvement, and how much it's led to an improvement in velocity.

Delighted to double-click into that. Just the just to remind everybody sort of the the three objectives of this AI this Roper sort of accelerator team.

One and first and foremost is to sort of coach and teach, right? This is about enablement of our 21 software companies to do what they've already learned on their own relative to AI and agentic development and then do it even better.

That's number one. Second is to partner shoulder to shoulder and build.

Then the third one is to, where appropriate, build sort of shared componentry that we can where we can share some common runtime or routines on the AI front across the Roper companies where it makes sense. That's sort of the the goal and focus of this group.

In terms of the the where we're we're allocating the team, this is very much, an executive leadership team focus. It is basically size of prize and and and impact is how we're sort of force-ranking force-ranking this.

In terms of Vertafore, it is one of our largest opportunities, if not the largest opportunity we have from an agentic automation point of view. I think there was six or six or I think six agents released last week at their Accelerate conference.

That is just the big very, very beginning. The model that and then we of this quarter will sort of broaden that from one and one engagement with one business till be it's now six as the team grows, and and we have the, now five additional businesses that are sort of in the early stages of partnering with.

The final thing is about speed. I think the unlock here is at least I think Amy and the team at Vertafore would agree is, our team, the the Roper team, sort of partnered very much partnered, you can imagine a leadership resources on our team working hand-in-hand with engineers on the Vertafore team on how to do this AI development, one, because there's a there's a little bit of art to this and not just science.

Number two, there is a speed coefficient that our team brings given their history about sort of modern-day like current, very contemporary practices of agentic development and just the pace. Then and then there's just good old-fashioned change management.

How do you sort of break bottlenecks and barriers to go fast? We saw, literally, I know it's sort of an overused term, but 10x kind of productivity gains partnering with Vertafore on some of this development in terms of speed and and quality.

We're super encouraged. It's very early days.

I don't want Shane and Eddie to hear this and think they've manifested fully. They've got a lot of work to do, but that could not have gone better in my view in the first six months.

That's great to hear. Then I wanted to ask kind of more broadly, when you look across the portfolio, it seems like AI commercialization is in sort of different stages.

You got businesses like Aderant, CentralReach, that seem to be resounding successes. Others seem to be coming up right behind them.

When you look across that landscape, any pattern matching in terms of why some of these businesses seem to be moving a little faster than others? Is it primarily customer-driven or what would you attribute the relative successes there to?

Jason, I'll give you an opportunity if you want to add anything. I think if there's a pattern match there, when you have 21 software companies in the business, and while we want everyone to be going as fast as they possibly can, you have an array of where people are in their maturity.

Where we're most advanced, they're the ones that got after and were able to sort of get the agentic SKUs into the market first. We talk a lot about CentralReach and Aderant and Convoy and DAT, they're the tip of the spear.

Now we have 10 or 12 companies, maybe a couple more, just now getting to market with real agentic magic SKUs versus chatbots and embedded sort of GenAI search inside of existing products where the value unlock is. We also take this a little bit offline about sort of more deeper operational pattern recognition, but that's what I would say about the commercialization phase is who sort of had product ready first.

That's right. I think the benefit of being part of Roper, we set them in a couple months ago and we did an AI sort of showcase for those that were further along, it just helps with the learning acceleration.

I would agree with Neil that it's those that embraced and saw a true customer problem early on and then got after a little sooner. Others are coming up the curve very quickly.

Great. Thanks for taking the questions.

You bet.

Hello. Thank you for taking the question.

I just wanted to follow up on the comments around ground-to-cloud conversions advancing meaningfully. Would love to understand the impact of SaaS transitions broadly in the Application Software segment.

Is that contributing points of growth today? You made the comment around 85% of the segment is in the mid-single-digit-plus range in growth, while nonrecurring was essentially flat.

I just wanted to know if it's something that would be of increasing benefit or already playing out in that segment, and then one follow-up.

Happy to take the question. Just as you think about the percentage of products that are cloud-enabled, it's two-thirds or so today.

We have about a billion of maintenance, and we think that that will convert over, say, the next 5 to 10 years or so, and that should convert at 2 to 2.5 times lift from maintenance to SaaS. Today, if you think about the percentage that we have to go, we're sort of in the first or second inning of that journey.

It does add, call it, 50 to 100 basis points of growth a year, should for the next 5 to 10 years.

The only thing I'd add is when we've talked about this in the past, Clarke, we've also said we are very much pacing this ground-to-cloud conversion at our customers' pacing. We're not forcing it to them.

I'll say with the advent of AI, I should have mentioned earlier on the monetization, another monetization method for AI is embedding the AI sort of features in the cloud product, and that is a very compelling pull to make this transition go a little bit faster. Instead of 8 to 10 years, maybe it's 4 to 6.

I don't know what the right number is, but we would expect to see that go a little bit faster. The other thing is we've made a tremendous amount of investment over the last three years getting product-enabled.

That was because we're going at customer pacing, there wasn't urgency to get products enabled, and now we are extraordinarily product-enabled, basically pretty feature parity, if not more so, in the cloud product than on-prem. I think the setup here is a little bit better than it was a few years ago.

I would just say Aderant's a little further along, as you know. PowerPlan's in the early innings, but definitely much more cloud-enabled today than they were.

Then when you think about those that are a little bit further behind, it's more healthcare, but that's Clinisys business in labs, that's just kind of the nature of that end market. We see the areas of Deltek, Aderant, and PowerPlan being those that'll be more near-term in terms of cloud migration.

Perfect. It all makes sense.

Then one thing that kind of stood out to me was the margin impact in Application Software segment, the margin impact of businesses owned for less than four quarters was actually positive year-over-year. Just wanted to unpack that.

Is the takeaway here that even the earlier-stage acquisitions last year are getting to margin parity quickly?

In Application Software, it's our CentralReach business, and the business has ample R&D investment. I think R&D as a percent of revenue is 20%, but they just have extremely strong incrementals.

They're a cloud-native platform, and so as they expand, they have very good incrementals there. When we talk about the acquisitions in our Network Software segment, we've talked about the business Convoy that we added onto DAT.

It's a technology investment. We're super committed to that investment to automate the spot freight market over time, so that actually has a drag on margins.

That plus our Subsplash business, which is a lower-margin, faster-growing business that as they grow, they will scale margins. You can see in our Network segment, it does have a pretty meaningful drag on margins.

Now, over time, as Convoy continues to grow, that should be a tailwind as we go into the out years. This year, it is a little bit of a drag on margins.

Perfect. Thank you very much.

You bet.

Hey, guys. Thanks for sneaking me in here and congrats on a really strong start to the year.

I will keep it to one given the hour. My question is just basically, you're very clear that the guidance still doesn't assume a recovery at Deltek and DAT for the rest of the year.

Can you just remind us the confidence that you have in the rest of the application network software business and kind of offsetting that weakness throughout the year?

I'd say just if we go through the segments. In Application Software, we feel good about sort of what's going to happen in the second half.

We just talked about CentralReach just having a really strong start under our ownership, and a lot of that's recurring, and so that's just going to flow through in the second half. We've talked about being 80 basis points or so of accretion in the second half for that segment.

We still feel good about that. Then in Network, DAT's looking good in the first quarter.

We'll see sort of how things play out. Foundry will continue to be sort of getting better throughout the year.

They had a great start to the year. Then Subsplash turns organic in the fourth quarter, and that's for sure accretive to the segment.

Feel good about the rest of the segment or the rest of the business.

Makes sense. Thank you, guys.

You bet.

Hey, great. Like Josh, thanks for sneaking me in.

Just one for me. It sounds like the kind of the downtick in 2Q is just purely due to tough comps, but just wanted to kind of make sure and clarify.

Any geopolitical, macro dynamics that you guys baked into that assumption as well, given kind of the current situation that arose?

No, not at all. It's just timing really in the AS segment, it's our nonrecurring perpetual activity.

That's squarely what it is. We clear visibility to that.

Then in TEP, no. I think we're comping 9% quarter is a high watermark last year, it's just a sort of a comp in the second quarter in TEP.

It'll get better in the second half. Nothing geopolitical at all.

We're mostly US, as so we don't see anything in the Middle East.

Fantastic. Thanks a lot, guys.

Hi, good morning. Thanks very much for the question.

Maybe first off, just wanted to try and put a finer point on the full-year guidance. Is it fair to say that the sort of core EBITDA guide is essentially unchanged and it's really a kind of share count-driven guide and maybe help us understand what the share count assumption is now at the sort of guidance midpoint and I think the guide embeds no extra buybacks beyond today.

Just wanted to check that.

That's correct. We had about a couple hundred million of share repurchase between the end of the quarter and today.

I think as I mentioned, the ending share count for Q1 is 102.4. Then you got some obviously dilution to add on top of that.

That's what we're assuming. You're right.

We've mainly flown through the first quarter beat and then the buyback activity for the balance of the year.

The first-quarter beat for us, Julian, was partially from normal operating and partially buyback.

Yeah, 50/50.

That's helpful. Thank you.

Within the network business, DAT has had a very tough sort of demand or macro backdrop, and it's been executing well within that. Finally, the last six months, there's better signals in the freight markets in the US.

Maybe sort of flesh out a little bit more what you're seeing in that business and sort of what's dialed in for that transport link business in the US for the balance of the year, please.

As we mentioned in the call, in the guide, there's not an assumption for improvement. Also, I'll just double-click a little bit on the prepared comments.

For the first time in, I'm looking at Jason, in a couple, three years, we've had the carrier count side of the network increase, which is certainly a green shoot that we've been waiting quite a time. Now we've had some head fakes intra-quarter on that number in the past, and so we're going to remain cautious.

Also, the input costs, the diesel costs, certainly not helpful, carrier margins or profitability would be a little bit challenging. We're cautiously optimistic that there might be a freight recovery.

Rejection rates got better. The rates got better, as we talked about, 20% to 30% better.

We'll see how it plays out, but we've underwritten no improvement in the outlook.

That's great. Thank you.

Yep.

Thank you. This is Kenny Sim on for Dean.

I wanted to ask about Neptune business. One of your peers has some meaningful project disruption in the quarter for their water meter business.

Have you seen anything similar in terms of industry dynamic or even any market share changes during the quarter?

Appreciate the question. For us in our Neptune business, we would say largely no.

We've not seen any project delays. Now, the backdrop on that slightly different than the competitor you described.

Neptune plays in the segments that are on the smaller municipalities, we have never had a large amount of project-based work, generally speaking. It's really not an apples-to-apples sort of question.

I think the other part of this is we had pretty decent sort of short-cycle demand in the quarter. I think that's largely because we, and I'm not commenting about our competitor because we don't know their business the way they do, but Neptune did a good job managing channel inventory in 2025.

The hope or expectation is we'll be able to ship closer to retail in 2026 on the short-cycle side, and I think we saw that play out at least early in the year in Q1.

Thank you. If I just have a follow-up, if you can unpack the cost pressure dynamics for the Neptune business or even at the overall TEP segment level, either in the magnitude or the timeline to offsetting those, that would be helpful as we kind of think about the segment's incremental margins moving forward.

Sure, I'll take a crack at this, but definitely want to ask Jason to sort of correct and sort of amplify anything. On Neptune, it's really the ingot cost.

What we decided to do, I think Don and the team did a very sort of wise thing here, we did, you remember, 3Q, really July of last year, we pushed a sort of tariff or a raw material sort of surcharge into the market, it really had a negative demand impact in the short run. The signal from the customer was, "Hey, we certainly appreciate, we've got on board sort of global price inflation, but we'd rather do it through regular way pricing versus surcharging."

We expect, by the way, the baseline assumption we have is ingot cost is going to stay high. This is with all the data centers and just the demand for copper, this is a derivative impact of that.

Our baseline assumption is this input cost is going to stay high for a while, it'll just be corrected or the margin will be captured through regular way pricing, which takes a couple quarters to sort of work through backlog and get into the market. We're taking a longer view on that.

In terms of the balance of the segment, it's really both Northern Digital and Verathon. These are businesses that are, per our strategy, per the market opportunity, are becoming more reoccurring in nature, reoccurring consumables, which is a great thing about the predictability of growth and the absolute levels of growth in the businesses, but the consumables come with a lower GP percentage.

GP dollars are going up, the GP percentages may be a little pressured on those two businesses. Now, they also do a very good job managing below GP to EBITDA or OP, where we don't think there'll be a lot of OP compression over a long arc of time because they do have natural leverage in the business.

Those are the dynamics at play. Jason, anything you want to amplify there?

No, I think you've covered it. Thanks.

Thank you.

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