Exchange: LSE | Sector: Industrials | Industry: Industrial Capital Goods
Q3 2025
Published: Oct 23, 2025
Earnings Highlights
Revenue of $2.02B up 14.3% year-over-year
EPS of $3.68 increased by 8.1% from previous year
Gross margin of 69.5%
Net income of 398.50M
"N/A" - N/A
Roper Technologies Inc (0KXM.L) QQ3 2025 Earnings Analysis — Record Margin Strength and Diversified Growth Engine in Industrials
Executive Summary
Roper Technologies reported a strong QQ3 2025 (quarter ended September 30, 2025) with revenue of $2.018 billion, up 14.3% year over year and 3.8% quarter over quarter. The company delivered an exceptionally high gross margin of 69.54%, supported by a favorable product mix that blends high-margin software/analytical solutions with engineered hardware. Operating income reached $573 million, yielding an operating margin of 28.40%, while net income was $398.5 million and diluted EPS was $3.68–$3.71. Cash generation remains a key strength, with operating cash flow per share of $8.09 and free cash flow per share of $7.98, underpinning a conservative balance sheet (debt to capitalization ~31.4%, cash per share $2.98) and a payout ratio of 22.3%. The quarterly results reflect continued demand across Roper’s diversified industrial software and capital goods portfolio, underscoring resilience in a varied end-market mix. Management commentary from the call (not available in the provided transcript) would typically highlight pricing discipline, recurring revenue contribution, and ongoing efficiency programs as levers for sustaining margins. Given the solid cash flow, modest leverage, and strong long-term growth drivers from software monetization and precision tooling, Roper remains well-positioned within Industrials to fund future capex, maintain dividends, and pursue selective acquisitions. This analysis also notes the absence of a provided earnings call transcript in the data, limiting verbatim management quotes for inclusion.
Net Income: $398.5M; Net Margin 19.75%; YoY +8.32%; QoQ +5.34%
Financial Highlights
- Revenue: $2.0175B; YoY +14.33%; QoQ +3.80%
- Gross Profit: $1.403B; Gross Margin 69.54%; YoY +14.84%; QoQ +4.28%
- EBITDA: $1.038B; EBITDA Margin 51.44%
- Operating Income: $573M; Margin 28.40%; YoY +15.38%; QoQ +4.50%
- Net Income: $398.5M; Net Margin 19.75%; YoY +8.32%; QoQ +5.34%
- EPS (GAAP): $3.71; Diluted: $3.68; YoY EPS +8.10%; QoQ +5.40%
- Cash Flow: Operating Cash Flow/Share $8.09; Free Cash Flow/Share $7.98; Cash/Share $2.98; Payout Ratio 22.3%
- Balance Sheet: Current Ratio 0.58; Quick Ratio 0.53; Cash Ratio 0.102; Debt/Total Capitalization 0.314; Interest Coverage 6.39
- Working Capital Metrics: DSO 46.9 days; DIO 20.6 days; DPO 24.5 days; CCC ~43 days
- Valuation Snapshots (vs peer group): EV/EBITDA and other multiples vary across peers in the Industrials/Capital Goods space, reflecting different business models and software content across the group.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.02B
14.33%
3.80%
Gross Profit
1.40B
14.84%
4.28%
Operating Income
573.00M
15.38%
4.50%
Net Income
398.50M
8.32%
5.34%
EPS
3.71
8.10%
5.40%
Key Financial Ratios
currentRatio
0.58
grossProfitMargin
69.5%
operatingProfitMargin
28.4%
netProfitMargin
19.8%
returnOnAssets
1.15%
returnOnEquity
1.99%
debtEquityRatio
0.46
operatingCashFlowPerShare
$8.09
freeCashFlowPerShare
$7.98
dividendPayoutRatio
22.3%
priceToBookRatio
2.68
priceEarningsRatio
33.63
Net Income vs. Revenue
Expense Breakdown
Management Commentary
transcriptHighlights: "Management call transcript not provided in the data set. Unable to extract verbatim quotes or themes from the earnings call. If a transcript becomes available, we will incorporate management commentary on demand trends, pricing discipline, mix shift toward higher-margin software solutions, and any guidance updates."
N/A
— N/A
N/A
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Forward Guidance
- Guidance absence: There is no explicit forward-looking guidance in the supplied data. Given the strong topline growth, margin resilience, and robust FCF, the model implies continued upside from software monetization, cross-selling across verticals, and disciplined operating expense management.
- Industry and company-specific drivers: Demand for automated and software-enabled capital goods remains a key long-term tailwind; expansion of cloud-based analytics and enterprise management software can sustain higher-margin mix.
- Outlook assessment: If management reiterates a commitment to free cash flow optimization, modest capex, and a balanced capital allocation approach (dividends plus selective M&A), investors should monitor: (1) year-over-year revenue growth in core software/engineering segments, (2) working capital dynamics and cash conversion cycle, (3) cadence of R&D/S&M investments and resulting contribution to gross margin, (4) any changes in leverage and interest expense as financing needs evolve.
- Key factors to monitor for investors: end-market capital expenditure trends in health care, life sciences, and industrial automation; pricing power across enterprise software and services; sustainment of margins amid potential input cost volatility; and any strategic acquisitions that could augment software content or geographic reach.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0KXM.L Focus
69.54%
28.40%
1.99%
33.63%
0HAV.L
52.60%
20.70%
5.27%
24.35%
0J6Z.L
1.00%
2.48%
2.73%
20.10%
0J8W.L
44.50%
27.40%
25.60%
0.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bulls-on-Roper: The QQ3 2025 result confirms a high-margin, cash-generative growth engine supported by a diversified portfolio of software and engineered products. The company generated $2.02B revenue with a 69.5% gross margin and delivered $398.5M in net income, translating to an EPS of $3.68–$3.71. The firm’s ability to convert earnings into substantial free cash flow per share ($7.98) and maintain a conservative balance sheet supports a meaningful, value-creating capital allocation plan (dividends and potential opportunistic acquisitions). The primary risks include cyclical exposure to industrial capex and the need to sustain margin momentum amid a changing mix. Against peers in Industrials/Capital Goods, Roper’s margin profile and software content appear favorable, though valuation multiples are highly contingent on software mix and market growth assumptions. Investors should monitor: (1) any management guidance on cadence of revenue growth and segment mix, (2) working capital dynamics and cash conversion efficiency, (3) leverage evolution and capex plans, and (4) potential acquisitions that could further elevate software/recurring revenue exposure.
Key Investment Factors
Growth Potential
Diversified portfolio with high-margin software/content and engineered solutions supports durable long-term growth. Potential upside from cloud-based analytics monetization, cross-selling across verticals, and bolt-on software acquisitions.
Profitability Risk
Cyclicality in industrial capex, exposure to FX movements, supply chain variability, and potential price/competitive pressure in mature hardware segments. Working capital sensitivity due to the current ratio below 1.
Financial Position
Strong cash flow generation (OCF per share $8.09, FCF per share $7.98) supports shareholder returns and moderate leverage (debt to capitalization ~31%). Balance sheet remains liquid with cash per share ~$2.98 and a payout ratio of 22.3%.
SWOT Analysis
Strengths
Very high gross margin (~69.5%) driven by software/analytical solutions and high-margin engineered products
Robust free cash flow per share ($7.98) and operating cash flow per share ($8.09) support strong capital allocation
Diversified, multi-vertical portfolio reduces reliance on a single end-market
Healthy earnings cadence with solid YoY and QoQ growth in revenue and earnings
Moderate leverage with strong interest coverage (6.39x) and prudent balance sheet management
Weaknesses
Current ratio (~0.58) indicates tighter short-term liquidity relative to peers with stronger liquidity
Working capital efficiency could be a focus given CCC ~43 days and DSO ~47 days
Opportunities
Expansion of software ecosystem and recurring-revenue mix; potential bolt-on acquisitions to accelerate software penetration
Continued pricing discipline and efficiency improvements to sustain margins
Expansion into adjacent industrial software verticals and services markets
Threats
Cyclicality of capital spending in industrials; competition in software-enabled automation; supply chain volatility and input cost pressures; FX exposure given global operations