Roper Technologies reported net earnings of $1,168.5 million in the second quarter of 2026 against $378.3 million a year earlier, and diluted earnings per share of $11.62 against $3.49 — but the quarter carries an $835.2 million equity investment gain against $16.6 million a year earlier, and $828.6 million of that is a non-cash fair value mark-up on a minority stake the company does not operate. Roper's own adjusted measure, which excludes the Indicor mark and purchase-accounting amortization, was $5.38 per share, up 10% and above the $5.25–$5.30 guide. Strip the Indicor revaluation out of both periods and pretax earnings were $473.3 million versus $469.2 million, an increase of 0.9%, because a 40.8% jump in net interest expense to $111.4 million consumed essentially all of the 6.6% growth in operating profit. What actually moved per-share economics was the buyback: Roper repurchased 7.865 million shares for $2,724.1 million in the first half at an average of $346.34, cutting diluted shares outstanding 7.2% to 100.6 million. For a serial acquirer whose premium has always rested on redeploying cash into vertical software businesses, the more consequential disclosure is that acquisition spending fell to $27.5 million in the first half from $2,005.2 million a year ago — even as roughly $1.1 billion of after-tax Indicor proceeds is due to land in the second half.
Balance sheet and income statement figures are from Roper's Q2 2026 Form 10-Q filed July 31, 2026, in millions of U.S. dollars unless otherwise noted. Adjusted EPS, guidance, free cash flow and backlog figures are from Roper's Q2 2026 earnings release and call of the same date. Operating income figures derived from segment disclosures were cross-checked against Roper's SEC XBRL filing data.
1. Consolidated Balance Sheet
1-1. Key asset movements
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change |
|---|---|---|---|
| Cash and cash equivalents | 297.4 | 364.9 | +22.7% |
| Accounts receivable, net | 1,001.0 | 927.2 | −7.4% |
| Unbilled receivables | 124.0 | 153.8 | +24.0% |
| Inventories, net | 141.7 | 145.4 | +2.6% |
| Property, plant and equipment, net | 156.9 | 158.7 | +1.1% |
| Goodwill | 21,341.2 | 21,330.7 | −0.05% |
| Other intangible assets, net | 9,764.2 | 9,347.3 | −4.3% |
| Equity investment (Indicor) | 796.3 | 1,792.2 | +125.1% |
| Total assets | 34,577.0 | 35,169.5 | +1.7% |
Total assets grew $592.5 million, while the Indicor revaluation alone added $995.9 million — meaning every other asset in aggregate shrank by roughly $403 million, led by a $416.9 million decline in intangibles and a $73.8 million drop in receivables. Goodwill was essentially unchanged at $21,330.7 million — $17.6 million acquired, offset by currency and other adjustments — which is the balance-sheet signature of an acquisition program on pause. Other intangibles fell $416.9 million as $415.8 million of first-half amortization ran ahead of what little was added.
That composition deserves a hard look. Goodwill alone is 60.7% of total assets, and goodwill plus other intangibles is $30,678.0 million, or 87.2% of the balance sheet, against total stockholders' equity of $18,700.3 million. Tangible book value is roughly negative $12.0 billion. This is not unusual for a software roll-up under U.S. GAAP — acquired technology and customer relationships are capitalized while internally developed R&D is expensed as incurred — but it means the equity account offers no downside cushion, and Roper's annual impairment test, scheduled for the fourth quarter of 2026, is the single most consequential accounting judgment in the file. Management states no interim triggering event occurred in 2026.
Receivables moved the right way, though the filing does not say why. Accounts receivable fell 7.4% while first-half revenue rose 9.9%; the 10-Q offers no explanation, so collection timing, billing seasonality and mix are all live candidates and the improvement should not be read as a confirmed structural gain. Unbilled receivables rose 24.0% to $153.8 million. Roper does not break out the driver here either, though the increase is consistent with the growing project-based work in the Application Software segment; at 7.3% of quarterly revenue it is not yet large enough to distort the receivables picture.
The Indicor line is the quarter's centerpiece. Roper held a 43.4% interest in Indicor Equity, LLC at June 30, down from 43.8%, carried at fair value under the fair value option. On May 5, 2026, Indicor agreed to sell its instrumentation portfolio to AMETEK, Inc. for an enterprise value of approximately $5.0 billion, with closing expected in the second half of 2026 subject to regulatory approval. Roper re-cut its market-multiple assumptions to reflect the implied transaction value and booked an $828.6 million fair value increase in the quarter ($995.9 million for the half). The mark is not purely paper: on closing, Roper expects pre-tax cash proceeds of approximately $1.3 billion, an estimated $1.1 billion net of income taxes. A second, less visible driver: Roper's obligation to make quarterly payments to Clayton Dubilier & Rice — payable in cash or in kind by transferring Indicor equity — was suspended indefinitely as a result of the planned divestiture, and that relief is embedded in the valuation. The company classifies this as a Level 3 measurement and explicitly warns that alternative assumptions "could produce significantly different results."
1-2. Debt structure — financial versus operating liabilities
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change |
|---|---|---|---|
| Total debt, net of financing costs | 9,301.0 | 11,319.4 | +21.7% |
| — Fixed-rate senior notes (net of financing costs; $8,500.0 principal both dates) | 8,451.0 | 8,469.4 | +0.2% |
| — Revolving credit facility | 850.0 | 2,850.0 | +235.3% |
| Operating liabilities (payables, deferred revenue, accruals) | 3,511.4 | 3,252.4 | −7.4% |
| Deferred tax liabilities | 1,883.1 | 1,897.4 | +0.8% |
| Total liabilities | 14,695.5 | 16,469.2 | +12.1% |
The entire increase in liabilities is financial, not operational, and it is concentrated in one instrument. Revolver borrowings went from $850.0 million to $2,850.0 million — a $2.0 billion net draw that funded the buyback. Against a $3,500.0 million facility with $7.0 million of letters of credit outstanding, that leaves roughly $643 million of undrawn capacity. Roper has used 81% of its revolver, and revolver debt now carries floating rates while the $8,500.0 million of senior notes is fixed. Two offsets belong in the same frame: $718.3 million of debt is classified current and due within twelve months, but the expected $1.1 billion of net Indicor proceeds in the second half would cover that maturity and still leave room to repay revolver borrowings — if the deal closes on schedule. Working the other way, the board added $3,000.0 million of repurchase authorization in April, leaving $2,775.9 million available at June 30; whether the revolver is paid down or drawn further is a capital-allocation choice, not a mechanical outcome.
Net debt rose to $10,954.5 million from $9,003.6 million, taking net debt to total net capital to 36.9% from 31.2%. The credit agreement covenant requires total debt to total capital of no more than 0.65 to 1.00. Roper does not disclose its covenant-basis calculation, but on reported book values the ratio computes to roughly 37.7%, and the company states it was in compliance with all debt covenants throughout the period. The March 30, 2026 refinancing replaced the prior facility with a five-year $3,500.0 million revolver plus an accordion for up to $1,000.0 million more.
One market signal is worth noting, with a caveat about what it does and does not mean: the fixed-rate senior notes carry an estimated fair value of $8,154.1 million against $8,500.0 million of principal, or about 95.9% of par, down from 97.5% at December 31. That discount reflects market yields moving above the notes' fixed coupons; it is a mark on outstanding paper, not evidence about Roper's own cash coupon, and it does not corroborate management's separate disclosure that interest expense rose partly on "a higher weighted-average interest rate on our senior notes." The cash cost is the harder number: interest expense of $210.7 million in the first half against $142.0 million a year ago is now running at roughly 5.0% of revenue versus 3.7%, and that gap is the most durable drag in the model.
1-3. Capital structure
Total stockholders' equity fell 5.9% to $18,700.3 million from $19,881.5 million despite $1,677.4 million of first-half net earnings — arithmetic driven entirely by the treasury account. Retained earnings rose $1,491.9 million to $18,697.6 million after roughly $185.5 million of declared dividends ($0.91 per share in the second quarter alone, $91.1 million). Additional paid-in capital rose 3.0% to $3,391.9 million on stock compensation. Treasury stock went from negative $516.1 million to negative $3,254.8 million, a $2,738.7 million swing, with treasury shares rising from 2.7 million to 10.5 million.
Roper explicitly states it has "no current plans to retire repurchased shares," so these sit in treasury rather than being cancelled. Shares outstanding fell to 98.9 million from 106.6 million. Accumulated other comprehensive loss widened to $135.5 million from $101.4 million on $34.1 million of adverse currency translation — modest relative to the balance sheet. Offshore cash was $174.6 million, or 47.8% of total cash, down from 57.6% at year-end; the share fell because of a $140.0 million repatriation, not because foreign balances shrank, which in dollar terms they did not.
2. Consolidated Statements of Earnings
2-1. Headline results
| Item | Q2 2025 ($M) | Q2 2026 ($M) | Change |
|---|---|---|---|
| Net revenues | 1,943.6 | 2,108.9 | +8.5% |
| Gross profit | 1,345.4 | 1,470.2 | +9.3% |
| Gross margin | 69.2% | 69.7% | +50bp |
| Income from operations | 548.3 | 584.7 | +6.6% |
| Operating margin | 28.2% | 27.7% | −48bp |
| Interest expense, net | (79.1) | (111.4) | +40.8% |
| Equity investment gain, net | 16.6 | 835.2 | — |
| Effective tax rate | 22.0% | 10.7% | −11.3pp |
| Net earnings | 378.3 | 1,168.5 | +208.9% |
| Diluted EPS ($) | 3.49 | 11.62 | +232.9% |
| Diluted shares (M) | 108.4 | 100.6 | −7.2% |
Revenue growth of 8.5% decomposes into 4.9% organic, 3.4% from acquisitions and 0.2% from currency. For the half, growth of 9.9% was 5.3% organic, 4.1% acquisitions and 0.5% currency. Set that against Roper's longer arc: revenue compounded at 13.7% annually from $5,371.8 million in 2022 to $7,902.5 million in 2025. The current pace is a deceleration, and the reason is visible in the investing section of the cash flow statement rather than the operating results — the acquisition contribution is thinning because Roper has bought almost nothing this year. Management's own framing is more open-ended: the 10-Q states the company "maintain[s] an active acquisition program" but that it is "not feasible to reasonably estimate if or when any such acquisitions will occur." Read as a pause with an undated end, not a strategy change.
Operating leverage inverted this quarter. Revenue grew 8.5% while operating profit grew 6.6%, a ratio of 0.78 — each point of revenue produced less than a point of profit. Gross margin actually improved 50 basis points to 69.7%, so the compression sits below the gross line: segment-level SG&A rose to 38.1% of revenue from 36.9%, driven principally by amortization of intangibles acquired in the 2025 CentralReach and Subsplash deals. (That 38.1% is the segment measure and excludes corporate expense of $81.6 million, or 3.9% of revenue; add the two and total SG&A was 42.0% of revenue against 41.0% a year earlier, which is what reconciles the 69.7% gross margin to the 27.7% operating margin.) This is the arithmetic of acquisitive growth — the revenue arrives immediately, the purchase-accounting amortization arrives with it, and the margin gap closes only as those intangibles run off.
The two items below the operating line are where the reported numbers stop describing the business. The $835.2 million equity gain is non-cash and relates to an asset Roper does not consolidate. The 10.7% tax rate reflects "net tax benefits recognized in connection with a change in our outside basis in Indicor" plus legal entity restructuring — also Indicor-driven, and also non-recurring. Normalizing both periods by removing the equity investment result and applying the prior-year 22.0% effective rate produces estimated earnings of roughly $3.67 per diluted share against $3.38, up about 8.6%. On that basis the entire increase is attributable to the smaller share count; underlying pretax profit was up 0.9%. Roper's own adjusted figure of $5.38 is higher than either because it also adds back purchase-accounting amortization — the single largest reason the GAAP and adjusted paths diverge, and the item most worth watching as the 2025 deal cohort seasons.
2-2. Segment performance
| Segment (Q2) | Revenue 2025 | Revenue 2026 | Growth | Organic | Op margin 2025 | Op margin 2026 |
|---|---|---|---|---|---|---|
| Application Software | 1,094.9 | 1,180.8 | +7.8% | +4.5% | 26.9% | 27.4% |
| Network Software | 385.4 | 430.9 | +11.8% | +3.6% | 43.9% | 41.0% |
| Technology Enabled Products | 463.3 | 497.2 | +7.3% | +7.1% | 35.4% | 33.3% |
| Segments total | 1,943.6 | 2,108.9 | +8.5% | +4.9% | 32.3% | 31.6% |
The segment margins above are before corporate expense, which is why the blended 31.6% lands above the 27.7% consolidated operating margin.
Application Software, 56% of revenue, was the only segment to expand margin — up 50 basis points to 27.4% on broad-based organic strength in legal, project-based private sector, property and casualty insurance, higher education and acute healthcare, with CentralReach and Orchard Software adding acquired growth. Gross margin rose to 69.8% from 68.8%.
Network Software is the segment to watch. Reported growth of 11.8% was the fastest in the group, but organic growth was the slowest at 3.6%, and operating margin fell 290 basis points to 41.0%. Gross margin actually improved to 84.3% from 83.2% on fully amortized intangibles; the damage was in SG&A, which jumped to 43.4% of revenue from 39.3% on the cost profile of the 2025 acquisitions, Subsplash chief among them. Underneath, the organic result mixes growth in freight match, construction, and media and entertainment against declines in the alternate site group purchasing business and lower non-recurring professional services revenue at the business serving the life insurance and annuities market. The pattern — acquired revenue at a heavier cost base diluting a 44%-margin franchise — is the price of the 2025 deal cohort, and it reverses only as those intangibles amortize off.
Technology Enabled Products was the cleanest operating story and the weakest margin story. Growth of 7.3% was almost entirely organic at 7.1%, led by medical products, precision measurement and airway management, partly offset by an expected decline in water meter technology. But gross margin fell to 56.9% from 58.6% on input cost pressure in water meters and a medical mix weighted toward consumables, and SG&A rose to 23.6% of revenue from 23.1% on lost leverage in the same water meter business — together taking operating margin down 210 basis points to 33.3%. This is the one segment where the margin pressure is operational rather than accounting, which makes it the more informative of the two declines.
2-3. What the cash and the guide say
Cash generation did not have the same problem the income statement did. First-half operating cash flow rose to $1,061.6 million from $932.8 million, against capital expenditures of $25.3 million and capitalized software of $30.9 million — a capital-light conversion profile intact. Backlog rose 11.0% to $3,286.0 million from $2,961.3 million, on both acquisitions and organic software growth, which supports the near-term revenue line.
Management raised full-year adjusted DEPS guidance for the second time this year, to $22.15–$22.30, with total revenue growth guided above 8% and organic around 6%; the third-quarter adjusted DEPS guide is $5.75–$5.80. Note what that raise does and does not resolve. It is an adjusted number — it does not address the 0.9% underlying pretax growth, the interest line now running at 5.0% of revenue, or the fact that per-share progress this year came from retiring 7.2% of the share count with borrowed money. The three swing factors from here are whether the Indicor deal closes and the $1.1 billion net lands, whether that cash goes to the revolver or to more buyback, and whether the acquisition program restarts before the amortization drag from the 2025 cohort finishes rolling through the margin.