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August 8, 2025 • 3 min read
Roper Technologies (NYSE: ROP) is a unique player in the tech world. Instead of chasing the latest consumer trends, it operates as a diversified compounder, acquiring and nurturing a portfolio of niche, market-leading software and technology-enabled product businesses. The company's strategy focuses on generating high-margin, recurring revenue and strong cash flow.
In its latest quarterly report filed with the SEC, Roper provides a window into its performance for the second quarter of 2025. Let's dive into the numbers to see how this strategy is playing out.
Roper reported total revenue of $1.94 billion for the quarter, a solid 13.2% increase from the $1.72 billion in the same period last year. This growth wasn't uniform across the company; the primary engine was its largest division, Application Software.
This performance underscores the success of Roper's core strategy: acquiring high-quality software businesses and integrating them into its ever-expanding portfolio.
An income statement traces the path from sales to bottom-line profit. The following flow diagram visualizes this journey for Roper's second quarter, showing where every dollar of revenue came from and how it was allocated to costs, expenses, and ultimately, earnings.
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As the chart illustrates, Roper is a highly profitable enterprise. The company achieved a gross profit of $1.35 billion, translating to a robust gross margin of 69.2%. This high margin is a hallmark of the asset-light, software-focused business model that Roper champions.
After accounting for all operating costs, including $797 million in Selling, General & Administrative (SG&A) expenses, income from operations stood at $548.3 million. This results in an operating margin of 28.2%, a clear indicator of the company's operational efficiency. It's worth noting that the combined operating profit of the three business segments was $628 million; the difference is due to $79.7 million in unallocated corporate expenses, which are costs not assigned to a specific division.
After interest expenses of $79.1 million and taxes, Roper's net income landed at $378.3 million, or 19.5% of its total revenue—an enviably high net margin. For shareholders, this translated to diluted earnings per share of $3.49, up from $3.12 in the prior-year quarter.
Roper Technologies' Q2 2025 results paint a picture of a company executing its strategy with precision. The continued strength of its software segments, bolstered by strategic acquisitions, is driving impressive top- and bottom-line growth.
The company's model relies on generating substantial cash flow to pay down debt from acquisitions and fund future purchases. While its performance is strong, the key to its long-term success will be its ability to seamlessly integrate new businesses and maintain its high-margin profile. Investors will be watching closely to see if Roper can continue compounding its success, quarter after quarter.
Last updated: August 8, 2025