Roper Technologies at TD Cowen Conference: Strategic Growth and AI Focus

On Thursday, 29 May 2025, Roper Technologies (NASDAQ:ROP) shared its strategic vision at TD Cowen’s 53rd Annual Technology, Media & Telecom Conference. The company emphasized its evolution towards vertical market software and technology, focusing on organic growth and strategic acquisitions. While Roper’s shift to AI-first strategies presents promising opportunities, challenges remain in maintaining high cash flow growth amid changing market dynamics.

Key Takeaways

• Roper is targeting high single-digit organic growth and aims to compound cash flow in the mid-teens over time.
• The company is prioritizing strategic acquisitions, including the recent purchase of Central Reach.
• AI is seen as a tool to enhance business operations and expand total addressable markets.
• Leadership changes and incentive alignment are central to driving organic growth.

Financial Results

• Organic Growth: Currently in the 7% to 7.5% range, with aspirations to reach high single digits.
• Total Shareholder Return (TSR): Compounded in the high teens over a long period without demanding accelerated business growth.
• Cash Flow: Focused on cash generation to support stock price increases.

Operational Updates

• Leadership Changes: Sixteen new leaders appointed over the past five years to boost organic growth.
• Incentive Alignment: Incentives are now tied more closely to long-term organic growth performance.
• M&A Strategy: Shift towards acquiring maturing leaders and implementing strategic bolt-on acquisitions.
• Central Reach Acquisition: Acquired to tap into the autism spectrum disorder market.

Future Outlook

• Organic Growth Target: Aims for high single-digit growth through strategic initiatives and acquisitions.
• M&A Focus: Continued focus on acquiring businesses with growth potential and margin expansion.
• AI Integration: Plans to integrate AI into business processes and product offerings to enhance efficiency and expand TAMs.

Q&A Highlights

• Central Reach: Recognized as a leader in software solutions for the autism spectrum disorder market, with multiple growth paths.
• Bolt-on Acquisitions: Emphasized as a low-risk strategy to boost organic growth and realize cost synergies.
• AI Strategy: Viewed as an opportunity to enhance existing businesses and expand TAMs, not a threat.

Roper Technologies’ strategic focus on AI and growth through acquisitions positions it well for future success. For more detailed insights, readers can refer to the full transcript below.

Full transcript - TD Cowen’s 53rd Annual Technology, Media & Telecom Conference 2025:

Michael: That’s right. That’s right. That’s all. Well, this is first time doing one of these. So welcome everyone.

So we have Jason here, CFO of Roper Technologies, as well as Zach, is Head of IR. And I guess maybe just to start off, we’d love to just hear a little bit more about the story, maybe introduce the company to people that are a little less familiar, and then we’ll take it from there.

Jason, CFO, Roper Technologies: Great. Thanks, Michael. Thanks for having us. And sorry, Joe, got caught up in the bus system here. So yes, so thanks for having us.

So Roper, it’s at the top level, it’s a very simple story. We’re a vertical market software and technology compounder. We sort of sustainably can compound cash flow in the mid teens over a longer time. We’ve done that historically. We plan to do that going forward.

And really, just like a lot of diversified industrials, not so many diversified software companies have this motion is we’ve got two ways to achieve that growth objective. One is through organic growth. So today, we own 28 business or so, depending on how you count it, that are sort of vertical market leaders in their respective markets. And we love these small TAMs that they participated in because we can grow with our customers and there’s just plenty of opportunities, very protected. We like that, but there’s also a lot of opportunity when you have market leadership.

And so today, they’re sort of in the mid single digit plus organic growth area, but obviously very cash efficient businesses, negative working capital, very little CapEx. So that sort of converts to high single digit organic cash flow. And we take all of that cash flow plus just some investment grade leverage to redeploy that to the next great vertical market software business, the most recent one being Central Reach, which I’m sure we’ll talk about. So with that, you just sort of get this continuous flywheel of cash flow compounding over time. I think the interesting part is these are wonderful businesses.

And I think Joe does a good job of when we buy a business, he’ll research it and kind of fact check how good is the business we own. I think he could probably attest that they are good businesses. So I think we buy these reasonable businesses that you can’t really otherwise own in public markets, right? They’re too small. They’re not going to go public.

And we tend to we make these businesses better over time. I think that’s sort of an underappreciated part of our story. And I think we’re sort of Garpy investors, you think about it, like we’re going to buy good businesses, but we’re to pay a reasonable price, we’re going to grow in our environment. And I think we’re really in the early innings of increasing the organic growth for our businesses. So we’ll probably talk about that today.

Our objectives are to capture more value out of capital deployment and then increase the organic growth of the businesses. And we’re sort of on that journey. It’s not an overnight thing that happens, but we are we’re certainly making a lot of progress there.

Michael: Great. I think that’s a great segue actually to your first question. Roper has been going through a software evolution over a long time. You had mentioned previously, too, that you’re trying to change the organic growth profile of the business. Would love to understand a little bit better from the existing business as well as you mentioned inorganic capital deployment is a huge part of the story, how we’re trying to increase the organic profile of the business over time.

Jason, CFO, Roper Technologies: Sure. Yes. And I mean, just maybe to level set. So Roper was able to sort of compound TSR in the high teens over a long arc of time without really asking their businesses to grow faster. And so as we set our strategy probably back in 2019, we said to sort of going forward in order to accomplish our TSR objectives, which is really through free cash flow, we’re going to want more organic growth out of the businesses and increased capital deployment effectiveness.

And on organic growth, I think the the reality is we did a deep dive strategy on the businesses and they’re still a lot of latent potential in the businesses. We never really asked our leaders to do this. And so we really set higher expectations. That was sort of the first step along this journey. And then it was around putting in new leaders, Right?

When you set that higher objective of leaders that really want to grow their business, they want to build their business, they’re going to have they’re going to be competitors, they’re going to be super dynamic, they’re going to be learners. So we’ve defined what a great leader looks like. And then we ended up, you know, basically over the last five years, we’ve we’ve put in 16 new leaders, I think. Is that right, Zach? Mhmm.

Over that time. So we’ve got we’ve profiled what that leader looks like. We sort of we sort of use selection criteria against that. We use an outside selection tool to do that. And then we have eight or nine of us interview.

So anyway, we feel like we have a great set of leaders on the field. Now they’re starting to hire great leaders. Right? We put based on year over year growth, we’ve now put a higher incentive for long term organic growth. So we’ve aligned incentives against their performance.

And we also had a lot of incentives that were more tied to Roper sort of time based Roper stocks, now it’s more based on their performance. So, I think we put all the ingredients together. We’re doing much more deep clinical review on strategy now, much more data informed. And so now we’ve got the strategy, now it’s all about execution. And so I think on that journey of how do we make our businesses better.

We’re doing that through things like how do we harness the power of Roper where we get pricing velocity excellence. And so that’s sort of the ending that we’re at now. We’ve stood up a continuous improvement function within Roper and think of them as a resource to the businesses to help them improve their processes. So all of these things take time, right? It’s not just one quick fix.

It’s the business has to identify where their growth vectors are going be in the next three to four years. How are they going to build capabilities around that? How are they going to build processes around that? So what you’ve seen, I think the results of that have been we were kind of in the 5% to six percent organic growth range about four or five years ago. There’s been some noise with COVID.

We’ve sort of posted some 8s and some 9s. We’ve been in the seven range. And that’s just because of some of that COVID noise. We think we’re kind of in the seven seven point five percent range today with aspirations to grow to high single digits over time. Clicking into the businesses that we’re looking to acquire.

So really if you think about it like what we had bought in the last decade had been businesses that were maybe three or four, you know, three terms private equity, call it. They had been pretty optimized. They were sort of mid single digit plus growth. Had some margin expansion opportunity, but not a ton. What we’re looking at today is to kind of go click earlier, buying businesses that may be one turn out of private equity, growing at a little bit of a faster market.

Still have all the characteristics of a more optimized business, but just earlier in its life cycle, so that we can sort of enjoy the growth in that business. So you get both sort of the growth aspect and then you typically get margin expansion as a result of that. The last two maturing leaders that we’ve acquired, this is what we’re calling them maturing leaders, was ProCare. We did it was the beginning of twenty twenty four. And then we just recently acquired Central Reef.

So you’re going to get margin expansion from those businesses just from growth. And so that’s the first archetype. The second is and it’s really one we’ve done quite a bit historically, but just more bolt ons. Bolt ons have been a story for Roper probably for the last ten years, but not as strategic, I would say. We’re really looking at every business, what’s their organic and inorganic strategy, where is an adjacency that we’d have a high right to win, and then we’re cultivating and targeting those lists.

So just being much intentional about our bolt ons. And the whole goal of the bolt on is to increase the organic growth for the platform. It’s not to do some sort of multiple arbitrage or what have you. Now as a result of those bolt ons, obviously, we get a lot of cost synergies or some cost synergies as a result. So they’re definitely higher return deals too.

So those are like the two that we’re like mainly been pivoting towards.

Michael: Great. And I think that sort of lends itself to, you know, different margin opportunities as well. You mentioned maybe acquiring companies a little bit earlier in the life cycle. But in terms of buying opportunities potentially a little bit earlier in the lifecycle, perhaps margins aren’t optimized at that point and scaling would help with those margins. Is there any appetite from acquiring a business, maybe has a little bit more of a turnaround potential to it, whether it’s an early stage or later stage type business.

What are your thoughts regarding anything like that?

Jason, CFO, Roper Technologies: Yeah. I think we always look at sort of cost synergies through a risk lens. I mean, obviously, it kind of starts with what’s the lowest risk, it’s G and A, then you sort of move on to maybe sales and marketing or marketing and then sales. I think if you’re looking at something that’s a turnaround, especially if it’s a product rewrite, we have no interest in that. There’s just too much risk to onboard.

Even if you can get it from a reasonable multiple, you just have too much tail risk on that. So the synergies that we’ve mainly been able to realize have been through the bolt ons. And we’ve had some very successful sort of combinations, if you will, with Strat and Centellus a couple of years ago. And then last year, we combined Transact with Seaboard. And so that’s where I see probably the most margin opportunity.

These maturing leaders, like I said, they get margin expansion through scale. We think that’s just sort of a better way to get margin.

: So then maybe on that point, just take us through Central Reach. How’d you identify that deal? What’d you like about it specifically? And like what hurdles did you have to get past to make the move there?

Jason, CFO, Roper Technologies: Yeah, so really excited to close on Central Reach last month. It’s just, you know, it sort of checks all the boxes for Roper. It’s sort of mission critical. Let me back up. So Central Reach is a leader in providing software solutions for the autism spectrum disorder market.

It’s got about 200,000 professionals that use the software every day. And what it’s doing is really allowing these clinics to be more efficient in the way they from the time they sort of set up a patient all the way through reimbursement. There’s digitization and through all of those workflows, there’s AI enabled digitization as well, which we really liked about the business. And so, it’s a great business in that it’s increasing efficiency. It’s helping realize more revenue for the business.

It’s in a great market. If you think about the sort of the tailwind there is really around there’s so much more demand than there is supply. So there’s fewer therapists than there are individuals that need the treatment. And you’re talking about 900,000,000 just to scale it, nine hundred million hours of demand and three hundred million hours of supply today. So we think that sort of tailwind can go for the next decade.

You also have reimbursement that’s sort of available, both commercial and Medicaid. And so those are all sort of positive parts about the market. And Central Reach, like many of our other businesses, are the market leader. And with consolidation, we tend to just kind of win with the winners, if you will. So we see benefit there.

And in terms of there’s just multiple paths to growth, so we like that. In terms of both cross sells, there’s a bunch of AI solutions that have been released in the last twelve months and we’re seeing tons of traction there. And that’s through scheduling, that’s through claims adjudication, note taking, right? Translating the notes from the session in a Gen AI format to make it much more seamless. And then, you know, just like I said, just kind of growing with the market.

So, really excited about that. This is a business that we looked at, oh, probably for the last year. And so, it’s just really part of the cultivation work that we’re doing, that we have been doing, but we’re doing increasingly more in the last few years with sort of increasing the talent in our M and A department to really go deep with a lot of sponsors on the portfolio and find out areas that we can get a first look at. So this is one where we had developed a relationship with the management team and really did a lot of our homework. Know, it really matters when you do your homework and you ask good questions, that kind of wins over the other side.

And so we were able to just sort of move swiftly as we do and close on the deal.

: Yeah, like to me, that’s a very down the middle Roper deal, right? Like a niche software platform, I could see where the growth paths. You’ve also started to do a little bit more bolt ons now, you mentioned that when I ran in here. What allowed you to shift that strategy a little bit? And now, like, you’re weighing two bolt ons versus one big one, like, where’s the preference if there is one?

Jason, CFO, Roper Technologies: Sure. My preference, I mean, depends on the value, right? You probably have to do five for one. Yeah, yeah. I would prefer to do bolt ons just because you get, you know, you sort of increase the organic growth of the platform, as I said, and you get some synergy opportunity.

It’s low risk. I mean, think everything we do is low risk, but you even get more sort of certainty there with bolt ons. So I would say, kind of pre Neil CEO days, the bolt ons were sort of opportunistic. They were, I would say, probably more on arbitrage side of things, not as strategic. But what we learned even acquiring Deltek and some of these other software players, had real opportunity to do some, Addern’s another one, where we had real opportunity to buy some product into the distribution that we have.

And so we got comfortable and confident as we saw success there that we really should be more intentional about this. Because prior, we’d kind of let the businesses sort of do it on their own, and we didn’t really say, you should have an inorganic strategy. Now we have that for every single business. And so we just see that there’s a ton of opportunity to capture there. And so that was really the confidence, the capability, And now we have a pretty well worn M and A process and diligence process around that such that we sort of reduce risk on any bolt on that we do.

: So is that being driven a little bit more by the central function than it used to be on the bolt on side?

Jason, CFO, Roper Technologies: I would say we’ve initiated it more, but it’s a partnership, right? It’s a monthly call that Janet and her team will have with each of the businesses around, okay, here are the, after we’ve selected the targets, who’s sort of on first in terms of the conversations we want to have with the right stakeholders, be it the founder or whoever it is, such that we’re sort of keeping things warm. And that it’s just like, the coordination’s really important there, because you don’t want to trip over each other. And then once we get into diligence, it’s definitely a partner partnership. We’ll do all the compliance related diligence.

Businesses will typically, you know, they’ll own the financial model. They’ll own the commercial side of it with our support.

: So you originally did a couple of them for DAT with Trucker Tools and Outco. So maybe how did those, like what was the impetus for those? And then take us through like kind of that process.

Jason, CFO, Roper Technologies: Yeah, no, it’s a great example where we’ve sort of, we’ve set the strategy for DAT. We have a great new leadership team, Jeff Clements He became the CEO just probably, I don’t know, half half a year ago to a year ago. He joined us as our as a product leader and then transitioned to the CEO. But they have taken a real strategic view. This by the way, Jeff has a huge, like, network background.

He worked at eBay. He stood up the e commerce at Walmart. So he really understands networks. So we really did a deep dive on how can we increase sort of the network value for all stakeholders and just sort of realize more in this. Because we’ve got this captive audience of brokers and carriers.

So how do we sort of increase that? So this was specifically around what are some of the pain points for, in this case, it’s brokers, right? So with Trucker Tools, there’s a lot of fraud in the spot market. So shippers want to know where their cargo is. So they’re going to the broker saying, you need to tell me where your trucks are.

Well, the broker’s like, I don’t have that information. But with Trucker Tools, they do have the information. And so they’re able to sort of track that. So that’s a key, just again, it’s an enabler. And then we recently acquired a business called Outgo.

And this is a fintech company basically enabling factoring to happen in spot market. So it really helps carriers get cash faster. And so if you think about it, they go into the load board, they can already see that algo is a, they can click on the algo and they can go write it in. So it’s just kind of like a one stop shop.

: Algo is the financing mechanism itself?

Jason, CFO, Roper Technologies: It is today. So at some point, so it’ll come onto our balance sheet for a little while, but we ’ll assume to get a partner, so we’re not funding But super excited about the tech. We had partners that we used for this before, for factoring, so we had sort of a rev share agreement. And we saw tremendous growth with those partners. So we’re really excited about owning this part of the ecosystem now.

: Yeah, that makes sense. I mean, just since I’ve covered the company, the portfolio has changed quite a bit. I know you talked about it with Michael before I got here on the move towards software. But you still have a decent amount of larger product businesses. And you’ve divested some similar types of things in the past.

Like how do you see those businesses within the context of the current portfolio?

Jason, CFO, Roper Technologies: I mean, think they’re great vertical market technology businesses, right? I mean, a lot of it’s tech enabled products. And so to us, we see similar sort of characteristics in terms of there’s a lot of reoccurring revenue. The businesses are growing tremendously. They’re winning in their markets.

So to us, the whole point of divesting the energy and industrial businesses was to remove the cyclicality out of the portfolio. I think we’ve effectively done that. And so we’re delighted to, as long as investors are happy with it, we’re happy with it. And we’ll just continue to own them because they’re a key part of our growth and they’re just wonderful businesses. Anything you add there?

: No. I mean, that point though, you’re kind of in an interesting spot, right? So when I launched a new industrial company, now it’s a software company, but you kind of have the benefits of dual class ownership essentially across multiple verticals. And I guess, how do you weigh a potential divestment of something versus losing the ability of some portion of your investor class to like be allowed to invest in you?

Jason, CFO, Roper Technologies: Yeah, I guess I don’t think of it that way. I just look at it through the lens of like how do we optimize free cash flow compounding. I mean, frankly, I think if we can get to the generalist portfolio manager, think they’ll be fair, in my view, you can challenge me on this, but it’ll be fairly indifferent to what sector you’re in. It’s more about the model and sort of how we build businesses and the types of businesses we own versus sort of what the portfolio is made up of. As long there’s certain industrial logic, which I think to me is the market leadership, the high margins, all those things are sort of continuous throughout the portfolio.

: I’d be curious for the context

Zach, Head of IR, Roper Technologies: of Yeah, no, would agree. I think that, you know, we’ve never defined ourselves by our end business first. I mean, businesses obviously matter a lot to us, but at our core, we’re a cash flow compounder. And that resonates with all audiences. And I think what we’ve done is, you know, there’s parts of our story that you might have to emphasize a certain aspect of it a little bit differently.

Certain metrics you hear us talk about a little bit more as it relates to software investors. You know, we’re talking more about gross retention and sort of that, you know, bookings growth, that sort of a thing. So I think we can highlight different parts of our businesses to speak the language of the respective audiences. I would agree with Jason in the end, there’s not a huge divide in terms of it. And I can, you know, with my role going to a lot of these conferences, can tell you there are quote unquote technology focused investors going to more multi industry conferences and vice versa.

Was at one yesterday, it was a tech conference and there were, you know, industrial investors there. So I think that we’ll talk to people wherever they are and whatever their focus might be and I think there’s less of a hard line between the two in our experience.

: So it’s more just using appropriate verbiage for the that you’re talking to, I guess, to tell the same story?

Michael: Yep.

: Fair enough. Cash flow, you mentioned that at your core, you’re a cash flow compounder. I know that we’ve written about that, we’ve talked about it a lot. I guess I’ve heard CRI mention less over the last several years. I know it’s still kind of like the way you operate, but intentional?

Like how should we think of Was there kind of a shift nuance there?

Jason, CFO, Roper Technologies: I think it’s a nuance shift. Think, so cash return on investment. So cash is still there. Cash is so important. Cash flow growth is super important.

The CRI strategy, was super effective and you know, still is a big part of our ethos was to buy businesses that have, you know, sort of better, more negative, you know, sort of working capital than the business that we own. And that was the strategy up until we kind of got into this realm where how many more negative, like companies that we can, that pay annually, know, customers pay annually in advance can we buy? Yep. And so that sort of could naturally just limit the amount of business you can look at. So as long as they are sort of generating cash as they grow, like we’re good with that.

And so that’s really the shift is like we, CRI was able to, and by the way, the strategy of doing that was to re rate the multiple which we did. And so, we still think there might be a little bit of multiple re rate if we increase organic growth. But really now, it’s all about cash flow growth, right? Just as we grow cash flow, then, you know, the stock price will increase. So, that’s really the So, we Everything we Every business we look at from a deal perspective, we do go through CR.

We look at it as a key input, but it doesn’t have to like drive the whole decision.

: Okay. So you I mean, I know the object in the past was to like buy things that would move CRI up the curve to re rate to that point, right? So now is it, it’s less, it has to be more CRI, like, it doesn’t have to necessarily accrete the CRI, just has to be attractive to CRI and compound the cash flow.

Jason, CFO, Roper Technologies: That’s right. It’s all about, like, kind of year five, you know, EBITDA multiples and sort of how we about returns.

: When did that really like kind of click that we’re moving off of that a little bit?

Jason, CFO, Roper Technologies: Oh, it’s around the ’20, I would say ’21 timeframe. Okay. Yep.

: I guess we should talk AI and it’s probably the biggest question we get. You know, a couple years ago when we started with the whole AI boom, was honestly one of the reasons we downgraded at the time was the questions we were getting from people, we didn’t agree with them, but I was like, if I’m gonna have to answer these questions every day, stock’s gonna have a hard time working. So I think the thesis back then, and we subsequently upgraded to one of our top picks, to be clear on the same page, but AI was gonna like eat your businesses. Sure. That was the thesis.

Just, let’s start there. Like, why, how do you respond? How did you respond to that? What have you seen over the last couple of years?

Jason, CFO, Roper Technologies: Well, I mean, I think everybody was still trying to figure out what this could mean for all markets, you know, eighteen months ago. Think we were all experimenting at the time. And I think what we came to learn and got conviction about is that the tech has been democratized around being able to do if we’re going to be disrupted, we have the right to win before anybody else, right? Because the tech’s available. And so, I think being a vertical market software player, like, you’ve got access to the data, you’ve got the context, And so it’s really our markets to win.

And I think, if anything now, like we’re more convicted about the TAM expansion opportunity because of the agentic workflows that we can help to monetize, right, through labor replacement and the like. So we’re getting more convicted as we’re seeing more as we’re seeing the technology evolve and the closer we are to it, the closer we are to our business models, the ability to develop products that, you know, we’re in a very good spot there. Yeah.

: What are maybe a couple examples of how you’re utilizing this as a tool to help you make these businesses better rather than being a threat from an outsider?

Jason, CFO, Roper Technologies: Yeah, look, I mean, it’s For us, it’s all For first it was education and now it’s really like harnessing the power of collectively across Roper. Every week, Neil is like sharing kind of new thoughts about how different business models can be disrupted. All of our businesses are now going through and like kind of reimagining not only what their business is going to look like, but their customers’ business is going to look like and how they’re going to participate in that. So they’re all re underwriting that just from a business strategy standpoint. Going to have we have agreements with all the major enterprise players now.

So all of our businesses are in and working in a shelled a Roper environment, but they have their own sort of instance. So we’re leaning in heavily to that. And now we’re starting to share use cases across Roper. I think Adderant was one of the first to come out, and we’ve got ConstructConnect that’s making a ton of progress on real time expansion for them around I can give you the specific, but we can keep going to Frontline has an AI first strategy. So it’s sort of all happening real time here and we’re super encouraged by what can happen.

I’ll give you the one for instance on like the TAM expansion. So, ConstructConnect is a business that does pre construction. They basically provide preconcession data. So that’s their primary business. So they get data for both public, which is publicly available projects, but also private is sort of the secret sauce.

So they have all of this data that they can use to then inform another product they have, which is an estimating tool, essentially. So it can take a blueprint and do the lift off to estimate what that project’s gonna cost. And so we’ve been able to use this tons of rich data that we have to feed LLMs to then inform this product called Boost. So take off Boost product. And and what that’s gonna enable it to do is essentially, you’ve got a $10,000,000,000 or more market of estimators out there that’ll now be have the ability to be more efficient or have it built, even more importantly, take some cost out

: of that And that a service that was not available as part of the core product?

Jason, CFO, Roper Technologies: It was a service, but it was still very manual. So it was basically a software tool, not an actual AI take off solution. Interesting. And

Zach, Head of IR, Roper Technologies: I’d just add real quickly. Mean, you’ve covered us for a while. You know, like our model is very much a decentralized operating structure. This is an instance where there’s much more push from the center than really anything that we’ve had. And I think that reflects the magnitude of the opportunity that we see and also the importance of acting urgently for our businesses.

So we’re not being overly prescriptive. There’s not like a playbook that all 29 are gonna follow. They’re all gonna, you know, craft that based on their deep knowledge of their individual markets and all that. But we’re definitely, as Jason said, trying to educate ARM, you know, make sure everybody’s ready to act

: quickly on much can you do centrally for that? Is it, are there different, I mean, different models or different businesses? Like, is the push just a mandate to figure out a way to harness this and kind of go out and do it? Or is there like centralized resources and things like that?

Jason, CFO, Roper Technologies: Yeah, I mean, I’ll give you like, the other thing we’re doing is we’re doing a value chain analysis for our top six businesses. Where we’re like, going through clinically, like, what is this going to mean for their customers? And then, like, how is that going to inform product strategy? And then how is that going to evolve our product roadmaps for those businesses? So we’re not prescribing it, but we’re sitting partnering with them to go through that analysis make sure that we do it.

I think what we’re also seeing just on the internal efficiencies is like Claude, as an example, Claude Code is now being adopted across a number of our businesses because Deltek did a webinar two months ago on specific use cases of why this is working, not just from the leader, but from several of the developers. So just that power of like being in a portfolio of companies where they can learn and kind of have the free flowing information has been super helpful as well.

: How do you, when you’re evaluating targets now, I assume this has to be like a critical piece as to ensuring that this can’t be disintermediated for whatever reason by something like that? How does the evaluation process change?

Jason, CFO, Roper Technologies: Yeah, think that’s a % right. I mean, even if it’s seed based, we have to kind of look, okay, well it’s seed based, but is there an opportunity? What’s going to, again, what’s going to happen with their customers? What’s that workflow going to look like? And how does, how are agents potentially going to play a part in that?

And then how elastic will that be in terms of being able to charge for that? I think that’s one aspect. The other is, what’s the mindset of the company around AI? Right? I mean, you have to get there’s some lead time around that to get leaders bought in and the company bought in.

So like, are they an AI first? Are they taking an AI first approach to running their business? And you’ve to look past sort of the investment banker sale on that. Like, is it truly something that’s going to be like something that we can gravitate towards? And so, Central Reach is a great example of that, where not only are they their business model is serving therapists that have to tactile, like sit with their patients, so that’s not going to be disrupted, right?

And then they have this AI first mindset where they had an AI leader that was separate from their development leaders. They had this like very interesting way of developing products. There’s conflict, good healthy conflict between software development and AI. And so we’ve actually thought that was a great model We’ve shared that around the portfolio.

: For what it’s worth, and I can say this as an industrial guy, all the pushback we get currently on AI as a threat comes from industrial analysts. And the software analysts who definitely know more software than I do, think that there’s no risk of that. So that’s an interesting dynamic We have only a few seconds left here. I’ll turn it over to any last minute questions from the audience. I think otherwise that’s a good place to leave it.

Alright, well, thank you guys for joining us. You, Michael, for standing in. We’ll see you guys through the rest of the conference. Thank Thank

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