Roper Technologies, Inc.

Good morning. The Rupert Technologies Conference call will now begin. Today's call is being recorded. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star zero on your telephone keypad. I would now like to turn the call over to Zach Moxie, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you all for joining us to discuss the first quarter 2025 financial results for Rupert Technologies. Joining me on the call this morning are Neil Hunn, President and Chief Executive Officer, Jason Conley, Executive Vice President and Chief Financial Officer, Brandon Cross, Vice President and Principal Accounting Officer, and Shannon O'Countan, Senior Vice President of Finance. Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call. We've prepared slides to accompany today's call, which are available through the webcast and are also available on our website. And now, please turn to page two. We begin with our safe harbor statement. During the course of today's call, we will make forward-looking statements which are subject to risks and uncertainties as described on this page, in our press release, and in our SEC filings. You should listen to today's call in the context of that information. And now please turn to page three. Today, we will discuss our results primarily on an adjusted, non-GAAP, and continuing operations basis. For the first quarter, the difference between our GAAP results and adjusted results consists of the following items. Amortization of acquisition-related intangible assets. transaction-related expenses associated with completed acquisitions, and lastly, financial impacts associated with our minority investment in Indicor. Reconciliations can be found in our press release and in the appendix of this presentation on our website. And now, if you please turn to page four, I'll hand the call over to Neil. After our prepared remarks, we will take questions from our telephone participants.

Neil? Thank you, Zach, and thanks to everyone for joining our call. As we turn to page four, you'll see the topics we plan to cover today – We'll start with our Q1 highlights, which included reviewing our most recent acquisition, Central Reach. Then we'll go through our segment results and a modestly improved outlook for the year, and then get to your questions. So let's go ahead and get started. Next slide, please. As we turn to page five, let me highlight the four key takeaways for today's call. First, our quarterly financial results were solid with Q1 total revenue growing 12%, organic revenue growing 5%, as expected, and cash flow growing 12% over the last 12 months. Secondly, we successfully completed last week the acquisition of Central Reach, which I'll discuss in a bit. Third, given our solid start to the year and the completion of the Central Reach acquisition, we're raising our full-year total revenue guidance and modestly increasing our full-year debt outlook. And finally, we continue to be very well positioned for capital deployment with more than $5 billion of available firepower over the course of over the next 12 months. As we turn to page six, allow me to remind everyone about the durability of our business model. As a cash flow compounder, it is critical our underlying cash flow generation capability of our enterprise is, in fact, durable. While no business is immune from the current macroeconomic, trade, and policy environment, we feel our enterprise is far better suited than most to withstand the uncertainty. To this end, over 85% of our revenues are generated in the U.S., and over 85% of our software revenues recur. Our enterprise solutions are mission critical, and this criticality is best demonstrated by our 95% gross retention. More importantly, we have a very efficient business model that long-term converts about 30% or at such better of a revenue to free cash flow. All of this is further enhanced by our capital deployment optionality. So with this reminder, let's now discuss the newest acquisition to our family company, Central Reach. As we turn to page seven, I'll start with what Central Reach does. Central Reach is the market-leading cloud-native software solution that enables applied behavior analysis or ABA therapy providers to deliver care for individuals with autism spectrum disorder. On a daily basis, about 200,000 professionals use Central Reach's platform to perform their daily tasks. such as setting up clients, running their practice, scheduling care, collecting clinical data, and processing reimbursement claims. Central Reach's offerings enable an overworked population of therapists to deliver more and better care to the autism community. This is all done in a cloud-native modern tech platform that utilizes GenAI on a robust basis. As it relates to the deal, We paid $1.65 billion net of a $200 million tax benefit. We expect Central Reach to deliver about $175 million of revenue and $75 million of EBITDA for the TPM period ending June 2026. Further, we expect Central Reach's revenue and EBITDA to continue to grow in the 20% area or a touch higher once it turns organic for reporting purposes. As you can see, Central Reach meets all of our longstanding acquisition criteria. Leader in an edge market, competes on the basis of customer intimacy, has strong gross margins, and converts high levels of cash flow. In addition, Central Reach reflects our new maturing leader criteria of being a higher growth business, in this case, in the 20% area. We finance the acquisition, with our revolver and report the results in our application software segment. Now, turning to page eight, we'll briefly walk through the long-term drivers of Central Reach's growth. As you can see at the top here, Central Reach is the leader in a market with strong, sustainable tailwinds. First, there is a long-term persistent shortage of ABA therapists compared to patient demand. To scale this for you, for the U.S. alone, the current annual demand is approximately 900 million hours, where only about 300 million therapist hours are currently being supplied. We estimate the care gap to exist for the next decade, both in the U.S. and throughout the developed world. And finally, Central Reach is winning with the winners, meaning their clients tend to be the industry aggregators, so as Central Reach's customers grow, so does Central Reach. As we talked about on the prior page, central region solutions are mission critical to delivery of care. Their tools help measure outcomes, ensure compliance, and realize reimbursement. Perhaps more so, central region solutions unlock operational efficiencies, which allow for more care hours to be delivered to a grossly underserved patient population. Finally, SocialReach has multiple levers available to both grow revenue and expand margins. Some of these levers include expanding their product portfolio, cross-selling their new AI-powered solutions, continuing to win new logos, opportunistically pursuing adjacent markets, such as speech and occupational therapies, and bringing their solutions to international markets. Importantly, while we grow this business, we expect to see continued margin expansion. In short, This is a powerhouse business that is a critical solution to a huge challenge the world is facing. To the Central Reach team, so excited for you to join Roper. Thank you for all you do for the autism community and for trusting Roper to become your permanent partner. With that, let me turn the call over to Jason to talk through our P&L and our balance sheet. Jason?