Story Stocks^®

Roper Technologies (ROP), a developer of enterprise-level software products, delivered a robust 2Q25 beat-and-raise performance, building on the momentum from its strong Q1 report on April 28, 2025. This performance reflects ROP’s ability to sustain double-digit revenue growth, with 7% organic growth and 6% from acquisitions, underscoring the pivotal role of strategic acquisitions in its growth strategy. The Q2 results were announced alongside the $800 mln acquisition of Subsplash, a provider of AI-enabled, cloud-based software and fintech solutions for faith-based organizations, which is expected to enhance ROP’s recurring revenue base and expand margins through its high-teens organic growth profile and advanced AI capabilities.

• Growth in Q2 was well-balanced across ROP’s three segments, with the Application Software segment, the largest contributor, posting the strongest yr/yr revenue growth of 17% to $1.09 bln. Key drivers for the Application Software segment’s performance likely include sustained demand for ROP’s mission-critical solutions, such as those provided by Aderant, which saw solid logo demand and customer expansion in legal software.
• Additionally, recent acquisitions like Procare Solutions and Transact Campus, integrated in 2024, have bolstered the segment’s portfolio by adding cloud-based software for education markets, contributing to both revenue growth and recurring revenue streams. The acquisition of CentralReach in April 2025, a provider of cloud-native software for autism and developmental disability care, further strengthened this segment, with expected revenue contributions of $175 mln and EBITDA of $75 mln in the 12 months ending 2Q26, driven by over 20% organic growth.
• The Network Software and Technology Enabled Products segments also contributed to ROP’s strong Q2 performance, though with more moderate growth. Network Software achieved approximately 6% yr/yr revenue growth to $385.4 mln, likely driven by steady demand for ROP’s niche software solutions in healthcare, finance, and logistics, which benefit from high retention rates and recurring revenue models.
• Meanwhile, the Technology Enabled Products segment posted approximately 10% yr/yr revenue growth to $463.3 mln, propelled by demand for specialized solutions in water, energy, and transportation markets. Acquisitions such as Syntellis Performance Solutions in 2023 likely played a role, alongside organic growth from ROP’s ability to convert end-market potential into profitable expansion through process-driven innovation.
• ROP’s rising AI capabilities are a significant tailwind for its growth, enhancing its portfolio of software and technology-enabled products across all segments. AI-driven solutions are embedded in offerings like Aderant’s legal software, which leverages AI to streamline case management and improve client outcomes, and CentralReach’s platform, which uses AI to optimize therapy workflows for autism care providers. These products contribute to ROP’s high retention rates (approximately 95% enterprise gross retention) and recurring revenue base, which exceeds 85% in its vertical software businesses, providing predictable cash flows and growth visibility.
• The Subsplash acquisition, set to close in July 2025, will further amplify ROP’s AI-driven growth by integrating Subsplash’s AI-enabled tools, which enhance engagement for over 20,000 faith-based organizations through personalized content and fintech solutions.

With back-to-back beat-and-raise performances in Q1 and Q2, ROP is on a roll, fueled by a potent combination of AI enhancements and a disciplined M&A strategy. The company’s ability to integrate high-growth acquisitions like Subsplash and CentralReach, while leveraging AI to strengthen its recurring revenue base, positions it well for sustained value creation.