ROP 10-K & 10-Q changes, risk factors and insider trading

Acquisitions involve risks, including difficulties in the integration of the operations, technologies, services, and products of the acquired companies and the diversion of management’s attention from other business concerns. Although our management will endeavor to evaluate the risks inherent in any particular transaction, including but not limited to cybersecurity risks,risks and susceptibility to market disruption from AI or otherwise, there are no assurances that we will properly ascertain all such risks. Acquisitions may involve significant cash expenditures, debt incurrences, equity issuances, and expenses. Difficulties encountered with acquisitions may have a material adverse effect on our business, financial condition, and results of operations.

Many of our products and services rely on proprietary technology; therefore, we believe that the development and protection of intellectual property rights through patents, copyrights, trade secrets, trademarks, confidentiality agreements, and other contractual provisions are important to the future success of our business. Despite our efforts to protect proprietary rights, unauthorized parties or competitors may copy or otherwise obtain and use our products or technology.technology, including through misappropriation through contractors or other third parties. Actions to enforce these rights may result in substantial costs and diversion of resources, and we make no assurances that any such actions will be successful.successful, particularly given evolving uncertainty regarding protection and ownership of AI-assisted outputs.

Our business operations are dependent upon information technology networks and systems to securely transmit, process, and store information and to communicate among our locations around the world and with clients, suppliers, and business partners. A shutdown of, or inability to access, one or more of our facilities, a power outage, or a failure of one or more of our information technology, telecommunications, or other systems could significantly impair our ability to perform such functions on a timely basis. Our compliance, cybercybersecurity and data privacy programs, cybersecurity technology, and risk management cannot eliminate all system risk. Credential compromise and identity-based attacks represent risks, and while we deploy identity threat protection and multi-factor authentication across our enterprise systems, determined attackers may still gain unauthorized access through sophisticated credential theft, session hijacking, social engineering, or privilege escalation techniques. Cybersecurity incidents,incidents including ransomware attacks, systemsinsider disruptionsthreats, orsystem interruptions,disruptions, cyberattacks,and configuration or human error, insider threat, and/or other external hazards or threatserrors could result in the misappropriation of assets or information, corruption of data,data and assets, or disruptions into our business strategy, results of operations, and financial condition.condition, and may require notification to customers and regulators with associated investigation, remediation, and monitoring obligations. These disruptions may include, but are not limited to, interruptions to business operations, loss of intellectual property, release of confidential information, malicious alteration or corruption of data or systems, costs related to remediation or the payment of ransom, litigation (including individual claims orclaims, consumer class actions, or commercial litigation,litigation), administrative, and civilcivil, or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs, and possible prolonged negative publicity. While we have experienced disruptions, and our Vertafore business was previously subject to litigation regarding the exposure of data which was dismissed, none of these matters had a significant impact on our business.

We rely on business partners such as third-party data centers and cloud platforms, such as Amazon Web Services, Google Cloud Platform, Microsoft Azure, and MicrosoftOracle AzureCloud to host certain enterprise and customer systems. Our software development and business operations rely on open-source components, third-party software libraries, and vendor dependencies that could contain undisclosed vulnerabilities, be subject to supply chain attacks, or become unavailable, potentially affecting our products, hosted services, and internal systems. Our ability to monitor such third parties’ security measures and the full impact of the systemic risk is limited.limited, and concentration with a limited number of providers increases exposure to outages and pricing changes. If any third-party system or cloud platform that we use is unavailable to us for any reason, our customers may experience service interruptions, which could significantly impact our operations, reputation, business, and financial results. Failure of our systems or those of our third-party service providers, may result in interruptions in our service and loss of data or processing capabilities, all of which may cause a loss in customers, refunds of product fees, and/or material harm to our reputation and operating results. While certain of our businesses have experienced temporary disruptions, their impact has been limited and did not have a significant impact on our businesses.

Global cybersecurity threats are rapidly evolving and attacks to identities, networks, platforms, systems, and endpoints can range from uncoordinated individual attempts to sophisticated and targeted measures known as advanced persistent threats, directed at the Company, its businesses, its customers, and/or its third-party service providers, including, but not limited to, cloud providers and providers of network management services. These may include such things as unauthorized access, phishing attacks, denial of service, insider threats, data exfiltration and extortion, introduction of malware or ransomware, and other disruptive problems caused by threat actors. We face emerging risks from AI-powered attacks, including deepfakes used to impersonate executives or customers, AI-assisted social engineering, prompt injection attempts against AI systems, and data poisoning targeting machine learning models. These sophisticated attack techniques may bypass traditional security controls. Additionally, zero-day vulnerabilities, which are previously unknown security flaws with no available patches, pose risks that cannot be fully mitigated through our standard vulnerability management processes, requiring rapid detection and response capabilities to minimize potential damage. While we have experienced and expect to continue to experience these types of cybersecurity threats and incidents, none of them to date have been material to the Company.

We seek to deploy measures to protect, detect, respond, and recover from cybersecurity threats and incidents, including identity and access controls, employee training, data protection, vulnerability management, incident response, secure product development, continuous monitoring of our networks, platforms, endpoints, and systems, and maintenance of ransomware resilient backup and recovery capabilities. Our customers are increasingly requiring cybersecurity protections and mandating cybersecurity standards in our products and services, and we may incur additional costs to comply with such demands. Despite these efforts, we can make no assurances that we will be able to mitigate, detect, prevent, timely and adequately respond, or fully recover from the negative effects of cyberattacks, cybersecurity incidents, or other security compromises, and such attacks, compromises, or cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties) and the disruption of business operations. The potential consequences of a material cybersecurity incident include financial loss, reputational damage, damage to our IT systems, data loss, litigation with third parties,litigation, theft of intellectual property, regulatory fines, customer attrition, diminution in the value of our investmentinvestments in research and development,development (“R&D”), and increased cybersecurity protection and remediation costs due to the increasing sophistication and proliferation of threats,costs, which inmay turnnot be fully covered by insurance and could adversely affect our competitiveness and results of operations. Any imposition of liability, particularly liability that is not covered by insurance or is in excess of insurance coverage, could materially harm our operating results and financial condition.

Our business exposes us to product liability risks in the design, manufacture, and distribution of our products. Manufacturing or design defects could lead to recalls or safety alerts relating to our products (either voluntary or as required by regulatory authorities), and could result, in certain cases, in the removal of a product from the market which could result in significant costs, lost sales and customers, enforcement actions and/or investigations, as well as negative publicity and damage to our reputation. Personal injuries relating to the use of our products can also result in product liability claims being brought against us. We currently have product liability insurance; however, we may not be able to maintain our insurance at a reasonable cost or in amounts sufficient to adequately protect us against losses.losses, and alleged defects or vulnerabilities in products may lead to claims for data loss, business interruption, or privacy violations that may not be fully covered by insurance. We also maintain other insurance policies, including directors’ and officers’ liability insurance and cybersecurity insurance. We believe we have adequately accrued estimated losses, principally related to deductible amounts under our insurance policies, with respect to all product liability and other claims, based upon our past experience and available facts. However, a successful product liability or other claim or series of claims brought against us could have a material adverse effect on our business, financial condition, and results of operations. In addition, a significant increase in our insurance costs or the imposition of a liability that is not covered by insurance or is in excess of insurance coverage, could have an adverse impact on our operating results.

In some of our businesses, we derive a significant amount of revenue from large customers. The loss or reduction of any significant contracts with any of these customers could reduce our net revenues and cash flows. Additionally, many of our customersproducts aresupport projects for government entities. In many situations, government entities can unilaterally terminate or modify our existing contracts without cause and without penalty to the government agency.agency, and government contracts may be subject to specialized compliance obligations, audits, investigations, and bid processes that can delay awards and increase costs.

Several of our subsidiaries have transactions and balances denominated in currencies other than the U.S. dollar. Most of these transactions and balances are denominated in British pounds, Canadian dollars, or euros. Sales by our operating companies whose functional currency is not the U.S. dollar represented 9% and 11% of our total net revenues for both the years ended December 31, 20242025 and 2023,2024, respectively. Unfavorable changes in exchange rates between the U.S. dollar and those currencies could reduce our reported net revenues and net earnings.

We face intense competition from numerous competitors in our various businesses. Our products compete primarily on the basis of product quality, performance, innovation, technology, price, applications expertise, system and service flexibility, distribution channel access, and established customer service capabilities. We may not be able to compete effectively on all of these fronts or with all of our competitors. Moreover, competition may require us to adjust prices to stay competitive. In addition, new competitors may emerge, and product lines may be threatened by new technologiestechnologies, including AI, or market trends that reduce the value of these product lines. To remain competitive, we must develop new products, respond to new technologies, and enhance our existing products in a timely manner.

As of December 31, 2024,2025, we had $7,623.0 inour total consolidated indebtedness.debt excluding unamortized debt issuance costs was $9,355.9. In addition, we had approximately $3,369$2,644 of undrawn availability under our unsecured revolving credit facility. Subject to restrictions contained in our credit facility, we may incur additional indebtedness in the future, including indebtedness incurred to finance acquisitions.

Our total assets reflect substantial intangible assets, primarily goodwill. At December 31, 2024,2025, goodwill totaled $19,312.9$21,341.2 as compared to $18,867.6$19,881.5 of total stockholders’ equity, and represented approximately 62% of our total assets of $31,334.7.$34,577.0. The goodwill results from our acquisitions, representing the excess purchase price over the fair value of the net identifiable assets acquired. We assess at least annually whether there has been an impairment in the value of our goodwill and other indefinite-lived intangible assets. If future operating performance at one or more of our business units were to fall significantly below current or expected levels, if competing or alternative technologies emerge, if discount rates rise, or if business valuations decline, we could incur a non-cash charge to operating income. Any determination requiring the write-off of a significant portion of goodwill or unamortized intangible assets would negatively affect our results of operations, the effect of which could be material.

The future success of our business will depend, in part, on our ability to design and manufacture new competitive products, including the development of software, and to enhance existing product and software offerings.offerings, including through the development and deployment of AI. This product development may require substantial internal investment. There can be no assurance that unforeseen problems will not occur with respect to the development, performance, or market acceptance of new technologies, products, or software or that we will otherwise be able to successfully develop and market new products and software. Failure of our product or software offerings to gain market acceptance or our failure to successfully develop and market new products and software could reduce our margins, which would have an adverse effect on our business, financial condition, and results of operations.

Changes in the supply of, or price for, raw materials, partsparts, and components used in our products, or third-party services used in the delivery of our SaaS solutions could affect our business.

The availability and prices of raw materials, parts, and components are subject to curtailment or change due to, among other things, suppliers’ allocations to other purchasers, interruptions in production by suppliers, supply chain delays and disruptions, component shortages, changes in exchange rates, and prevailing price levels. In addition, some of our products are provided by sole source suppliers and our SaaS offerings are increasingly reliant on a limited number of third-party cloud computing platforms.platforms, and transitioning to alternative suppliers or platforms may require significant time, redesign, and capital investment, or may not be feasible for certain products or services. Any changechanges in the supply of, or price for, these parts and components, as well as any increases in commodity pricesprices, or the price and availability of, or any decrease in the reliability of, third-party cloud computing platforms could affect our business, financial condition, and results of operations.

Our operatingnon-operating results may be adversely impacted by the performance of Indicor, in which we own a minority interest.

In 2022, we divested a majority equity stake in our industrial businesses to CD&R and retained a minority equity interest in the new parent entity, Indicor. Although we have certain limited consent, board representation, and other governance rights under existing contractual arrangements, we are a minority owner of Indicor and do not control its management, its policies, or the operation of its business, and have no further funding requirements associated with our investment. As a result, our ability to realize the ultimate anticipated benefits of the transaction depends upon the operation and management of Indicor by CD&R and the Indicor management team. In addition, Indicor is an industrial businesscompany that is subject to risks that are different than the risks associated with our existing businesses. Many of these risks are outside of CD&R’s or Indicor’s control and could materially impact Indicor’s business, financial condition, and results of operations. Moreover, CD&R may have economic or other business interests that are inconsistent with ours, and we may be unable to prevent strategic decisions that may adversely affect the value of our investment in Indicor. We have applied the fair value option to value our equity investment in Indicor. The assessment of fair value requires significant judgments to be made. Although we believe that our judgments and assumptions are reasonable, changes in estimates or the application of alternative assumptions could produce significantly different results. In the event of a decrease in fair value, we would incur a non-cash charge within non-operating income with a corresponding reduction in the balance of our equity investment. See Note 109 of the Notes to Consolidated Financial Statements included in this Annual Report for additional information on this equity investment.

There has been, and likely will continue to be, increased regulation with respect to the collection, use, and handling of an individual’s personal and financial information. Regulatory authorities around the world have passed or are considering legislative and regulatory proposals concerning data protection, privacy, and data security. In the U.S., ata leastgrowing 20number of states have individually passed comprehensive privacy legislation in directly regulating the collection, use, and sharing of personal information. In addition, there has been an increased focus on industry-specific privacy laws, including in the housing, financial, healthcare, and educational sectors. These statutes and regulations create civil penalties for violations, and in the case of California and some sector-specific laws, create a limited private right of action for data breaches that increase the risk of data breach litigation. Absent a preemptive Federal privacy law, as more states pass privacy legislation, there is a strong possibility that we will be required to comply with a patchwork of inconsistent privacy regulations.

Globally, personal information collected within the European Union and the United Kingdom remains subject to the GDPR, which is a UK and European Union-wide legal framework that governs data collection, use, and sharing of an individual’s personal data and creates a range of consumer privacy rights. GDPR provides significant penalties for non-compliance (up to 4% of global annual revenue) and EU data protection authorities have already issued significant fines. Canada (Quebec) has also significantly updated its privacy laws.

The interpretation and application of consumer and data protection laws and industry standards in the U.S., Europe, and elsewhere can be uncertain and currently is in flux.flux, including standards that may require contractual updates, technical safeguards, and other measures. Cloud-based solutions may be subject to further regulation,regulations, such as the EU Data Act, including data localization requirementsrequirements, restrictions on long-term contracts, and other restrictions limiting the international transfer of data. The operational and cost impact of these cannot be fully known at this time. In addition to the possibility of fines, the application of these existing laws in a manner inconsistent with our current data and privacy practices requires that we change our data and privacy practices, which could have an adverse effect on our business and results of operations. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. Also, any new law or regulation imposing greater fees or taxes or restriction on the collection, use, or transfer of information or data internationally or over the Internet, could result in a decline in the use of our products and services and adversely affect our sales and results of operations. Finally, as we increasingly provide technological solutions, our customers and regulators will expect that we can demonstrate compliance with current data privacy and security regulations as well as new industry-developed standards, and our inability to do so may adversely impact sales of our solutions and services to certain customers. This is particularly true for customers in highly-regulated industries, such as the healthcare industry and government contractors, and could result in regulatory actions, fines, and legal proceedings as well as negative impacts to our brand, reputation, and business.

•trade protection measures, tariffs, and import or export requirements, including volatility and uncertainty about what actions may be taken by governments with respect to tariffs or trade relations, what products may be subject to such actions, and what actions may be taken by foreign countries in retaliation to proposed or imposed U.S. tariffs;

•differing and unexpected changes in regulatory requirements, including any measures implemented to address AI, data privacy, cybersecurity, and impacts of climate change.

If terrorist activity, armed conflict,conflicts, directed cyberattacks, political instability, public health crises, such as epidemics or pandemics, or extreme weather events or other natural disasters occur in the U.S. or other locations, such events may negatively impact our operations, cause general economic conditions to deteriorate, or cause demand for our products to decline. A prolonged economic slowdown or recession could reduce the demand for our products, and therefore, negatively affect our future sales and profits. Any of these events could have a significant impact on our business, financial condition, or results of operations.

Political and geopolitical conditions in the markets in which our products and services are sold have been and could continue to be difficult to predict, resulting in adverse effects on our business. The results of elections, geopolitical events and tensions, and wars and other military conflicts (such as the ongoing conflicts in Ukraine and the Middle East) in these markets have in the past impacted and could continue to impact how existing laws, regulations and government programs or policies are implemented or result in uncertainty as to how such laws, regulations, programs or policies may change, including with respect to the negotiation of new trade agreements, new, expanded or retaliatory tariffs against certain countries or covering certain products or materials (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada, Mexico, the UK, and other countries and any retaliatory actions taken by such countries). Changes in political administrations or government shutdowns in the U.S. andor elsewhere may lead to variability in, or reallocation of, government spending priorities, or a reduction or delay in government spend,spending, which has had, and could continue to have an adverse impact on our businesses that serve governmental entities or governmental contractors. In addition, certain geopolitical events have resulted in and could continue to result in, among other things, cyberattacks, supply disruptions, lower consumer demand, increaseincreases in global economic uncertainty, and changes to foreign exchange rates and financial markets, and expanded regulatory sanctions and export controls, any of which may adversely affect our business and supply chain.

We are currently, and may in the future become, subject to legal proceedings and commercial or contractual disputes. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual disputes with our suppliers or customers, intellectual property matters, data privacy matters, third partythird-party liability, including product liability claims, and employment claims.

All currency amountsAmounts are in millions unless specifiedspecified, except per share data

In November 2022, Roper completed the divestiture of a majority equity stake in its industrial businesses, including its entire historical Process Technologies reportable segment and the industrial businesses within its historical Measurement & Analytical Solutions reportable segment (collectively “Indicor”), to Clayton, Dubilier CD& Rice, LLC.R. Following the sale of the majority equity stake, Roper retained a minority equity interest in Indicor. See Note 109 of the Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding Roper’s minority equity interest in Indicor.

The financial results of Indicor and the 2021 Divestitures are reported as discontinued operations for all periods presented. Unless otherwise noted, discussion within Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to continuing operations. Refer to Note 3 of the Notes to Consolidated Financial Statements included in this Annual Report for further information regarding discontinued operations.

GAAP offers acceptable alternative methods for accounting for certain issues affecting our financial results, such as determining inventory cost, depreciating long-lived assetsassets, and recognizing revenue. Other than the changes during 2023 as further described in Note 109 of our Notes to Consolidated Financial Statements with respect to the methodology used to value our equity investment in Indicor, we have not changed the application of acceptable accounting methods or the significant estimates affecting the application of these principles in the last three years in a manner that had a material effect on our Consolidated Financial Statements.

(1)Includes results from the acquisitions of Horizon Lab Systems, LLC from January 3, 2022, Common Cents Systems, Inc. from April 6, 2022, MGA Systems Holdings, Inc. from June 27, 2022, Common Sense Solutions, Inc. from July 12, 2022, viDesktop Inc. from August 19, 2022, TIP Technologies, Inc. from September 23, 2022, Frontline from October 4, 2022, Promium, L.L.C. from May 2, 2023, Syntellis from August 7, 2023, Replicon Inc. from August 21, 2023, ProPricer from December 26, 2023, Procare from February 26, 2024, Transact from August 20, 2024, and Surefyre, Inc. from November 4, 2024.2024, CentralReach from April 23, 2025, Orchard Software from July 28, 2025, HerculesAI from August 8, 2025, Spectrum AI, Inc. from August 15, 2025, and Valuation Pricing Director Limited from October 23, 2025.

(2)Includes results from the acquisitionacquisitions of Trucker Tools, LLC from December 17, 2024.2024, Outgo from May 15, 2025, Subsplash from July 25, 2025, and Convoy from July 30, 2025.

In our Application Software segment, net revenues forgrew the year ended December 31, 2024 were $3,868.3 as compared15.9% to $3,186.9$4,483.0 for the year ended December 31, 2023.2025 as compared to $3,868.3 for the year ended December 31, 2024, led by acquisition contribution from Transact and CentralReach. The growth of 5.6%5.4% in organic revenues was broad-based across the segment led by our businesses serving the project-based business/government contracting, acute healthcare, property and casualty insurance, and legal markets.markets, partially offset by a decrease in organic non-recurring revenue driven primarily by our business serving the government contracting market. Gross margin decreasedincreased slightly to 68.5% for the year ended December 31, 2025 as compared to 68.4% for the year ended December 31, 2024 as compared to 68.9% for the year ended December 31, 2023,2024, due primarily to improved leverage on higher organic revenues, which was offset by a lower gross margin profile associated with the higher payments revenue mix at Procare and Transact, our 2024 acquisitions, whose results reduced gross margin by 180 basis points. This decrease was partially offset by improved leverage on higher organic revenues.Transact. Selling, general and administrative (“SG&A”) expenses as a percentage of net revenues decreasedimproved to 41.6% in the year ended December 31, 2025 as compared to 42.0% in the year ended December 31, 2024 as compared to 43.1% in the year ended December 31, 2023,2024, due primarily to lower SG&A profiles at Procare and Transact, which collectively reduced SG&A as a percentage of net revenues by 70 basis points, operating leverage on higher organic revenues,revenues and cost synergies resulting from the integration of Syntellis.Transact with CBORD, partially offset by higher amortization of acquired intangibles from the acquisition of CentralReach. The resulting operating margin was 26.8% in the year ended December 31, 2025 as compared to 26.5% in the year ended December 31, 2024 as compared to 25.8% in the year ended December 31, 2023.2024.

In our Network Software segment, net revenues weregrew 8.5% to $1,600.8 for the year ended December 31, 2025 as compared to $1,475.6 for the year ended December 31, 20242024, asled comparedby toacquisition $1,439.4contribution forfrom the year ended December 31, 2023.Subsplash. The growth of 2.5%4.1% in organic revenues was led by our network software businesses serving the freight match, construction, and alternate site healthcare, life insurance/annuities, and constructionhealthcare markets, partially offset by a decline in our businesses serving the media and entertainment andsoftware freight match markets primarilybusiness related to end marketend-market conditions. Gross margin remaineddecreased relativelyto consistent84.1% atfor the year ended December 31, 2025 as compared to 85.0% for the year ended December 31, 20242024, asdue comparedprimarily to 85.1%gross formargin profiles associated with our 2025 acquisitions, predominantly driven by the yearpayments endedrevenue Decembermix 31,at 2023.Subsplash. SG&A expenses as a percentage of net revenues decreasedincreased to 40.6% in the year ended December 31, 2025 as compared to 39.9% in the year ended December 31, 2024, asdue comparedprimarily to 41.2%higher amortization of acquired intangibles and SG&A profiles associated with our 2025 acquisitions. The resulting operating margin was 43.5% in the year ended December 31, 2023,2025 dueas primarilycompared to expense reductions resulting from cost structure rationalization at our businesses serving the freight match market and operating leverage on higher organic revenues. The resulting operating margin was 45.2% in the year ended December 31, 2024 as compared to 43.9% in the year ended December 31, 2023.2024.

In our Technology Enabled Products segment, net revenues weregrew 7.3% to $1,818.7 for the year ended December 31, 2025 as compared to $1,695.3 for the year ended December 31, 2024 as compared to $1,551.5 for the year ended December 31, 2023.2024. The growth of 9.3%6.5% in organic revenues was broad-based across the segment, led by our medical products businesses, excludinghighlighted by our precision measurement business, and growth in our water meter technology business. These increases were partially offset primarily by a decline in our access management businesses. Gross margin increased to 58.1% for the year ended December 31, 2025 as compared to 57.6% for the year ended December 31, 2024 as compared to 57.1% for the year ended December 31, 2023,2024, due primarily to improved leverage on higher organic revenues andat our precision measurement business as well as revenue mix. SG&A expenses as a percentage of net revenues remainedimproved consistentslightly atto 23.6% in the year ended December 31, 2025 as compared to 23.7% in both the yearsyear endingended December 31, 20242024, anddue 2023.primarily to operating leverage on higher organic revenues, mostly offset by revenue mix. The resulting operating margin was 34.5% in the year ended December 31, 2025 as compared to 33.9% in the year ended December 31, 2024 as compared to 33.4% in the year ended December 31, 2023.2024.

Corporate expenses increased by $40.7$22.8 to $290.2, or 3.7% of net revenues, in 2025 as compared to $267.4, or 3.8% of net revenues, in 2024 as compared to $226.7, or 3.7% of net revenues, in 2023.2024. The dollar increase was due primarily to higher stock-based compensation expense as well as expense associated with settled litigation.expense.

Interest expense, net, increased byto $94.5,$325.0 orfor athe 57.4%year increase,ended December 31, 2025 as compared to $259.2 for the year ended December 31, 2024 as compared to $164.7 for the year ended December 31, 2023.2024. The increase was due primarily to a higher weightedweighted-average averagefixed-rate debt balancesbalance and lessfixed-rate debt interest incomerate, earnedpartially offset by lower weighted-average borrowings on our cashrevolving andcredit cash equivalents.facility.

Our 20242025 effective income tax rate of 21.2%20.6% decreased as compared to our 20232024 tax rate of 21.5%,21.2%, due primarily to favorable rate impacts from the releaserecognition of valuationa allowances,net tax benefit associated with legal entity restructuring and a reduction in state taxes, partially offset by athe reductionnon-recurrence inof stock-basedprior compensationyear taxvaluation benefits.allowance releases.

Backlog is equal to our remaining performance obligations expected to be recognized as revenue within the next 12 monthsmonths, as discussed within Note 1 of the Notes to Consolidated Financial Statements. Backlog decreasedincreased 1.6%10.3% to $3,424.6 at December 31, 2025 as compared to $3,105.4 at December 31, 2024 as compared to $3,156.6 at December 31, 2023 due primarily to a decrease in our Technology Enabled Products segment associated with the normalization of supply chain ordering patterns, partially offset by acquisitions and organic growth in our Applicationsoftware Software segment.segments.

All currency amountsAmounts are in millions unless specifiedspecified, except per share data

InvestingCash used in investing activities –during 2025 was primarily for the acquisitions of CentralReach, Subsplash, Convoy, and Orchard Software. Cash used in investing activities from continuing operations during 2024 was primarily for business acquisitions, most notably Procare and Transact, partially offset by proceeds from the sale of our equity investment in Certinia. Cash used in investing activities from continuing operations during 2023 was primarily for business acquisitions, most notably Syntellis and Replicon.

Net working capital (total current assets, excluding cash, less total current liabilities, excluding debt) was negative $1,434.6$1,389.7 at December 31, 20242025 as compared to negative $1,196.6$1,434.6 at December 31, 2023,2024, due primarily to increased deferred revenue as well as increases in accrued liabilities driven by accrued compensation and interest, partially offset by an increase in accounts receivable.receivable, changes in tax-related balances, and an increase in prepaid expenses and other current assets, partially offset by increases in deferred revenue and other accrued liabilities. Consistent negative net working capital demonstrates Roper’s continued focus on asset-light business models.

Total debt excluding unamortized debt issuance costs was $7,669.2$9,355.9 at December 31, 20242025 (28.9%32.0% of total capital) as compared to $6,360.2$7,669.2 at December 31, 20232024 (26.7%28.9% of total capital). Our total debt increased at December 31, 20242025 as compared to December 31, 20232024 due primarily to the issuance of $2,000.0 of senior notes,notes in August 2025, and $725.0 of net borrowings under our unsecured revolving credit facility, partially offset by $500.0$1,000.0 of senior notes repaid at maturity and $235.0 of net repayments on our unsecured revolving credit facility.maturity. The net proceeds from the issuance of senior notes were used to repay a portion of the borrowings outstanding under our unsecured credit facility,facility includingassociated borrowingswith incurredour to2025 fund the purchase price of the Transact acquisition,acquisitions, as well as to repay a portion of the senior notes due in September 15, 2024.2025. The remaining portion of senior notes due in September 15,2025 2024and the senior notes due in December 2025 were repaid using borrowings under our unsecured credit facility.

We may redeem some or all of each outstanding series of senior notes at any time or from time to time, at 100% of their principal amount, plus a make-whole premium based on a spread to U.S. Treasury securities. We are also entitled to redeem some or all of each outstanding series of senior notes at 100% of their principal amount plus accrued and unpaid interest, on or after applicable dates in advance of maturity.

Cash and cash equivalents held at our foreign subsidiaries totaled $171.2 at December 31, 2025 as compared to $130.8 at December 31, 20242024, asan compared to $148.3 at December 31, 2023, a decreaseincrease of 11.8%.30.9%. The decreaseincrease was primarily due to cash repatriationgenerated ofat $270.9,our foreign subsidiaries, partially offset by cash generatedrepatriation atof our foreign subsidiaries.$305.7. We intend to repatriate substantially all historical and future earnings.foreign earnings that can be repatriated without incremental U.S. federal tax cost.

We anticipate that our businesses will generate positive cash flows from operating activities, and that these cash flows will permit the reduction of currently outstanding debt in accordance with the repayment schedule. However, the rate at which we can reduce our debt during 20252026 (and reduce the associated interest expense) will be affected by, among other things, the financing and operating requirements of any new acquisitions, the financial performance of our existing companies, any allocation of capital toward share repurchases, the impact of geopolitical and economic uncertainties, and the financial markets generally. None of these factors can be predicted with certainty.

Information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Information About Forward-Looking Statements,” in Part I, Item 2 of this Quarterly Report and in Part I, Item 1A of our 2025 Annual Report on Form 10-K. ThereWe are providing the following information regarding changes that have occurred to the previously disclosed risk factors in our 2025 Annual Report on Form 10-K. Except for such additional information, there have been no other material changes during the threesix months ended MarchJune 31,30, 2026 to the risk factors reported in our 2025 Annual Report on Form 10-K.

•risks related to changing U.S. and foreign trade policies, including increased trade restrictions or tariffs (including repealthe non-renewal or non-renewala repeal of the United States-Mexico-Canada Agreement);

ThereExcept as described in Note 10 with respect to our equity investment in Indicor, there were no material changes during the threesix months ended MarchJune 31,30, 2026 to the items that we disclosed as our critical accounting policies and estimates in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Three Months Ended MarchJune 31,30, 2026 compared to the Three Months Ended MarchJune 31,30, 2025

Net revenues for the three months ended MarchJune 31,30, 2026 were $2,095.3$2,108.9 as compared to $1,882.8$1,943.6 for the three months ended MarchJune 31,30, 2025, an increase of 11.3%.8.5%. The components of revenue growth for the three months ended MarchJune 31,30, 2026 were as follows:

In our Application Software segment, net revenues in the firstsecond quarter of 2026 grew 11.5%7.8% to $1,191.5$1,180.8 as compared to $1,068.2$1,094.9 in the firstsecond quarter of 2025, led by contributions from 2025 acquisitions, most notably CentralReach.2025. The growth of 5.2%4.5% in organic revenues was broad-based across the segment, led by our application software businesses serving the legal, project-based private sector, property and casualty insurance, higher education, and propertyacute healthcare markets. Growth from acquisitions was led by our 2025 acquisitions of CentralReach and casualtyOrchard insurance markets.Software. Gross margin increased to 69.0%69.8% in the firstsecond quarter of 2026 as compared to 67.5%68.8% in the firstsecond quarter of 2025 due primarily to improved leverage on higher organic revenues as well as revenue mix.revenues. SG&A expenses as a percentage of net revenues increased to 42.2%42.3% in the firstsecond quarter of 2026 as compared to 41.6%41.9% in the firstsecond quarter of 2025 due primarily to higher amortization of acquired intangibles from the 2025 acquisition of CentralReach, partially offset by improved operating leverage on higher organic revenues. As a result, operating margin was 26.8%27.4% in the firstsecond quarter of 2026 as compared to 25.9%26.9% in the firstsecond quarter of 2025.

In our Network Software segment, net revenues in the firstsecond quarter of 2026 grew 13.8%11.8% to $427.6$430.9 as compared to $375.9$385.4 in the firstsecond quarter of 2025, led by contributions from 2025 acquisitions, most notably Subsplash. The growth of 5.2%3.6% in organic revenues was broad-based across the segment, led by our network software businesses serving the freight match, construction, and media and entertainment markets. These increases were partially offset by declines in our alternate site healthcaregroup markets.purchasing business and non-recurring professional services revenue at our business serving the life insurance/annuities market. Gross margin increased to 84.3% in the firstsecond quarter of 2026 as compared to 84.0%83.2% in the firstsecond quarter of 2025 due primarily to lower amortization associated with fully amortized acquired intangibles and improved leverage on higher organic revenues,intangibles, partially offset by margin profiles associated with our 2025 acquisitions, most notably payments revenue mix from Subsplash andas well as the Convoy platform within our freight match software business. SG&A expenses as a percentage of net revenues increased to 43.6%43.4% in the firstsecond quarter of 2026 as compared to 39.6%39.3% in the firstsecond quarter of 2025 due primarily to SG&A profiles associated with our 2025 acquisitions, including higher amortization of acquired intangibles. As a result, operating margin was 40.6%41.0% in the firstsecond quarter of 2026 as compared to 44.3%43.9% in the firstsecond quarter of 2025.

In our Technology Enabled Products segment, net revenues in the firstsecond quarter of 2026 grew 8.5%7.3% to $476.2$497.2 as compared to $438.7$463.3 in the firstsecond quarter of 2025. The growth of 7.1% in organic revenues was led by our medical products businesses, highlighted by our precision measurement and airway management businesses. These increases were partially offset by aan expected decline in our water meter technology business. Gross margin decreased to 56.9% in the firstsecond quarter of 2026 as compared to 58.7%58.6% in the firstsecond quarter of 2025 due primarily to input cost pressures at our water meter technology business and revenue mix within our medical products businesses weighted more towards consumables and input cost pressures at our water meter technology business.consumables. SG&A expenses as a percentage of net revenues increased to 24.4%23.6% in the firstsecond quarter of 2026 as compared to 23.6%23.1% in the firstsecond quarter of 2025 due primarily to reduced operating leverage associated with our water meter technology business. The resulting operating margin was 32.4%33.3% in the firstsecond quarter of 2026 as compared to 35.0%35.4% in the firstsecond quarter of 2025.

Corporate expenses increased to $77.8$81.6 in the firstsecond quarter of 2026 as compared to $71.3$79.7 in the firstsecond quarter of 2025. The dollar increase was due primarily to higher stock-based compensation expense, partially offset by alower reductionacquisition-related in fees for professional services.expenses. As a percentage of net revenues, corporate expenses decreased to 3.7%3.9% of net revenues in the firstsecond quarter of 2026 as compared to 3.8%4.1% of net revenues in the firstsecond quarter of 2025.

Interest expense, net, increased to $99.3$111.4 for the firstsecond quarter of 2026 as compared to $62.9$79.1 for the firstsecond quarter of 2025 due primarily to higher average debt balances and a higher weighted-average interest rate on our senior notes.

Income taxes as a percentage of pretax earnings decreased to 19.9%10.7% for the firstsecond quarter of 2026 as compared to 20.8%22.0% for the firstsecond quarter of 2025, primarily due primarily to favorablenet ratetax impactbenefits recognized in connection with a change in our outside basis in Indicor, resulting from the recognitionIndicor ofInstrumentation atransaction netdescribed taxabove, benefit associated withand legal entity restructuring, partially offset by a reduction in stock-based compensation tax benefits.restructuring.

Backlog is equal to our remaining performance obligations expected to be recognized as revenue within the next 12 months as discussed in Note 13 of the Notes to Condensed Consolidated Financial Statements. Backlog increased 11.8%11.0% to $3,392.1$3,286.0 at MarchJune 31,30, 2026 as compared to $3,033.8$2,961.3 at MarchJune 31,30, 2025 due primarily to acquisitions and organic growth in our software segments.

All currency amounts are in millions, except per share data or as otherwise specified

Selected cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025 were as follows:

Cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 was primarily for a business acquisition, capitalized software expenditures, capital expenditures, and capitala expenditures.business acquisition. Cash used in investing activities during the threesix months ended MarchJune 31,30, 2025 was primarily for the acquisitionacquisitions of Muni-Link.CentralReach, Muni-Link, and Outgo.

Cash used in financing activities during the threesix months ended MarchJune 31,30, 2026 primarily consisted of repurchases of our common stock as well as dividend payments, partially offset by net borrowings under our unsecured revolving credit facility. Cash usedprovided inby financing activities during the threesix months ended MarchJune 31,30, 2025 was primarily forfrom net repaymentsborrowings onunder our unsecured revolving credit facility to fund the acquisition of CentralReach, and net proceeds from stock-based compensation, partially offset by dividend payments.

Net working capital (total current assets, excluding cash, less total current liabilities, excluding debt) was negative $1,332.8$1,198.6 at MarchJune 31,30, 2026 as compared to negative $1,389.7 at December 31, 2025. The change in net working capital was primarily driven by a decrease in deferred revenue predominantly due to the timing of SaaS renewals associated with our Frontline business, and the timing of payments associated with incentive compensation and interest payments on our senior notes,compensation, partially offset by a decrease in accounts receivable and changes in tax-related balances.receivable.

On March 30, 2026, wethe Company entered into the Credit Agreement, which replaced the previous $3,500.0 unsecured credit facility, dated as of July 21, 2022. The Credit Agreement comprises a five-year $3,500.0 unsecured revolving credit facility, which includes availability of up to $150.0 for letters of credit. Loans under the unsecured credit facility are available in dollars, and letters of credit will be available in dollars and other currencies to be agreed. We may also, subject to compliance with specified conditions, request additional term loans or revolving credit commitments in an aggregate amount not to exceed $1,000.0.

The interest rate on borrowings under the new $3,500.0 unsecured revolving credit facility is calculated based upon various recognized indices plus a margin as defined in the Credit Agreement. At MarchJune 31,30, 2026, we had $7.1$7.0 of outstanding letters of credit.

We were in compliance with all debt covenants related to our new and previous unsecured credit facilities throughout their respective periods of effectiveness during the threesix months ended MarchJune 31,30, 2026.

Total debt, net of deferred financing costs was $10,464.0$11,319.4 at MarchJune 31,30, 2026 as compared to $9,301.0 at December 31, 2025. Our total debt increased at MarchJune 31,30, 2026 as compared to December 31, 2025 due primarily to net borrowings of $1,150.0$2,000.0 on our unsecured revolving credit facility. Our leverage is presented in the following table:

In relation to our total cash and cash equivalents, amounts held at our foreign subsidiaries represented 51.9%47.8% or $198.8$174.6 at MarchJune 31,30, 2026 as compared to 57.6% or $171.2 at December 31, 2025. The increase in the amount of foreign cash and cash equivalents was primarily due to cash generated at our foreign subsidiaries during the threesix months ended MarchJune 31,30, 2026, partially offset by cash repatriation of $40.0.$140.0. We intend to repatriate substantially all historical and future foreign earnings that can be repatriated without incremental U.S. federal tax cost.

Capital expenditures were $14.3$25.3 for the threesix months ended MarchJune 31,30, 2026 as compared to $9.5$26.0 for the threesix months ended MarchJune 31,30, 2025. Capitalized software expenditures were $15.4$30.9 for the threesix months ended MarchJune 31,30, 2026 as compared to $12.4$26.8 for the threesix months ended MarchJune 31,30, 2025. We expect the aggregate of capital expenditures and capitalized software expenditures for 2026 to be comparable to prior years as a percentage of net revenues.

On July 4, 2025, the U.S. government enacted H.R. 1, the One Big Beautiful Bill Act (the “OBBBA”),Act, which introduced tax reform provisions that amend, eliminate, or extend certain tax rules under the Inflation Reduction Act and the Tax Cuts and Jobs Act. Legislative changes include the repeal of the requirement to capitalize and amortize domestic research and development expenditures under Internal Revenue Code Section 174. The legislation includes multiple effective dates and, as enacted, did not have a material impact on our effective tax raterates infor the firstthree quarteror ofsix 2026months ended June 30, 2026, and is not expected to have a significant impact on our annual effective tax rate in full year 2026 or thereafter. We continue to assess the broader impacts of the OBBBA.

In April 2026, our Board approved an additional $3,000.0 in share repurchase authorization under the program. As of April 30, 2026, total share repurchase authorization of $3,471.6 remained available for future repurchases under the program.