Roper Clocks 22% Revenue Growth In Q3, Divests Business, Cuts FY21 Outlook

Roper Technologies Inc ROP reported third-quarter FY21 revenue growth of 22% year-on-year to $1.46 billion, missing the consensus of $1.61 billion. 

Segments: Application Software revenue grew 34.7% Y/Y $603.4 million with a 69.6% gross margin, up 90 basis points. Network Software & Systems revenue rose 19.2% Y/Y to $343.4 million, with a corresponding segment gross margin at 82.8%, up 120 basis points.

Measurement & Analytical Solutions segment revenue increased 9.9% Y/Y to $392.4 million with a 57.1% gross margin, down 230 basis points. Revenue from the Process Technologies segment improved 17.4% Y/Y to $123.6 million with a 54.7% gross margin, up 240 basis points.

Organic revenue growth was 12% and was underpinned by continued solid increases in software recurring revenue, CEO Neil Hunn said. In addition, demand was strong across the portfolio and product businesses executed well through the global supply chain challenges.

The adjusted EPS of $3.91 beat the consensus of $3.83. Roper generated $447 million in operating cash flow. It held $352.5 million in cash and equivalents.

Outlook: It slashed the adjusted FY21 EPS guidance to $14.08 - $14.12, down from the previous guidance of $15 - $15.25.

It sees Q4 EPS of $3.62 - $3.66 below the consensus of $3.96.

Divestment: Roper agreed to sell its CIVCO Radiotherapy business to Blue Wolf Capital Partners LLC affiliate in an all-cash transaction valued at $120 million. Roper will retain its CIVCO Medical Solutions business.

New board members: Irene Esteves and Thomas P. Joyce, Jr. joined Roper's board. Esteves most recently served as CFO of Time Warner Cable. Joyce most recently served as CEO and director of Danaher Corporation, from which he retired last year.

Price action: ROP shares closed higher by 1.33% at $481.24 on Thursday.