ROPER TECHNOLOGIES INC recently released its 10-Q report. Roper Technologies, Inc. designs and develops vertical software and technology-enabled products across the United States, Canada, Europe, Asia, and other international markets. Its businesses are organized into three segments: Application Software, Network Software, and Technology Enabled Products, with products and services sold through direct sales offices, representatives, resellers, and distributors.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Roper said the quarter and six-month discussion should be read alongside its 2025 annual report and the notes to the condensed consolidated financial statements. The filing includes a long list of forward-looking statements covering operating results, cash generation, debt reduction, acquisitions, litigation, cybersecurity, data privacy, AI, trade policy, foreign exchange, and macroeconomic conditions. Roper also said there were no material changes to its critical accounting policies during the first six months of 2026, except for its equity investment in Indicor.
Revenue and profit trends
For the second quarter ended June 30, 2026, net revenues rose 8.5% to $2.109 billion from $1.944 billion a year earlier. For the first six months, revenue increased 9.9% to $4.204 billion from $3.826 billion.
Gross margin for the company improved to 69.7% in the quarter from 69.2%, while operating margin slipped to 31.6% from 32.3%. For the six months, gross margin was 69.5% versus 69.0%, and operating margin was 31.2% versus 32.0%.
Interest expense increased to $111.4 million in the second quarter from $79.1 million a year earlier, reflecting higher average debt balances and a higher weighted-average interest rate on senior notes.
Segment results
Application Software Second-quarter revenue: $1.181 billion, up 7.8% Six-month revenue: $2.372 billion, up 9.7% Second-quarter organic growth: 4.5% Six-month organic growth: 4.8% Second-quarter operating margin: 27.4%, up from 26.9% Six-month operating margin: 27.1%, up from 26.4%
Roper said second-quarter growth in this segment was broad-based, led by businesses serving legal, project-based private sector, property and casualty insurance, higher education, and acute healthcare markets. The 2025 acquisitions of CentralReach and Orchard Software contributed to growth.
Network Software Second-quarter revenue: $430.9 million, up 11.8% Six-month revenue: $858.5 million, up 12.8% Second-quarter organic growth: 3.6% Six-month organic growth: 4.4% Second-quarter operating margin: 41.0%, down from 43.9% Six-month operating margin: 40.8%, down from 44.1%
Growth was led by 2025 acquisitions, especially Subsplash. Organic growth came from freight match, construction, and media and entertainment businesses, partly offset by declines in alternate site group purchasing and non-recurring professional services in life insurance and annuities.
Technology Enabled Products Second-quarter revenue: $497.2 million, up 7.3% Six-month revenue: $973.4 million, up 7.9% Second-quarter organic growth: 7.1% Six-month organic growth: 7.1% Second-quarter operating margin: 33.3%, down from 35.4% Six-month operating margin: 32.9%, down from 35.2%
Roper said growth was led by medical products businesses, including precision measurement and airway management, while water meter technology declined as expected. Margin pressure came from input costs in water meters and a mix shift toward consumables in medical products.
Corporate items and equity investment
Corporate expenses were $81.6 million in the second quarter, up from $79.7 million, mainly because of higher stock-based compensation, partly offset by lower acquisition-related expenses.
A major swing in the quarter came from equity investment activity, which produced a gain of $835.2 million, driven mainly by an $828.6 million increase in the fair value of Roper’s equity investment in Indicor. Roper said the valuation change reflected updated assumptions ahead of Indicor’s planned divestiture of its instrumentation businesses.
Income taxes as a percentage of pretax earnings fell to 10.7% in the quarter from 22.0%, mainly because of net tax benefits tied to a change in Roper’s outside basis in Indicor and legal entity restructuring.
Backlog
Backlog, defined as remaining performance obligations expected to be recognized within the next 12 months, rose 11.0% to $3.286 billion at June 30, 2026 from $2.961 billion a year earlier.
Backlog by segment: Application Software: $2.369 billion, up from $2.129 billion Network Software: $608.4 million, up from $534.0 million * Technology Enabled Products: $309.1 million, up from $298.0 million
Six-month segment detail
For the first half of 2026, Application Software revenue rose 9.7%, Network Software 12.8%, and Technology Enabled Products 7.9%. Roper said six-month organic growth was 4.8% in Application Software, 4.4% in Network Software, and 7.1% in Technology Enabled Products, with acquisitions contributing materially in the software segments. Following these announcements, the company's shares moved 0.7%, and are now trading at a price of $391.97. For the full picture, make sure to review ROPER TECHNOLOGIES INC's 10-Q report.
