Roper Technologies 10-Q 2022-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2022.

For the transition period from to .

Commission File Number 1-12273

ROPER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

(941) 556-2601

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the registrant’s common stock as of October 28, 2022 was 106,052,054.

ROPER TECHNOLOGIES, INC.

REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Roper Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings (unaudited)

(in millions, except per share data)

See accompanying notes to Condensed Consolidated Financial Statements.

Roper Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (unaudited)

(in millions)

See accompanying notes to Condensed Consolidated Financial Statements.

Roper Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

(in millions)

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You should read the following discussion in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on form 10-K for the year ended December 31, 2021 (“Annual Report”) as filed on February 22, 2022 with the U.S. Securities and Exchange Commission (“SEC”) and the Notes to Condensed Consolidated Financial Statements included elsewhere in this report.

Information About Forward-Looking Statements

This report includes “forward-looking statements” within the meaning of the federal securities laws. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the SEC or in connection with oral statements made to the press, potential investors or others. All statements that are not historical facts are “forward-looking statements.” Forward-looking statements may be indicated by words or phrases such as “anticipate,” “estimate,” “plans,” “expects,” “projects,” “should,” “will,” “believes” or “intends” and similar words and phrases. These statements reflect management’s current beliefs and are not guarantees of future performance. They involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such risks and uncertainties include any ongoing impacts of the COVID-19 pandemic on our business, operations, financial results and liquidity, which will depend on numerous evolving factors that we cannot accurately predict or assess, including: the duration and scope of the pandemic, new variants of the virus and the distribution and efficacy of vaccines; the impact of vaccine mandates on our workforce in certain jurisdictions; any negative impact on global and regional markets, economies and economic activity; actions governments, businesses and individuals take in response to the pandemic; the effects of the pandemic, including all of the foregoing, on our employees, customers, suppliers, and business partners, and how quickly economies and demand for our products and services recover following the pandemic.

Examples of forward-looking statements in this report include but are not limited to statements regarding operating results, the success of our operating plans, our expectations regarding our ability to generate cash and reduce debt and associated interest expense, profit and cash flow expectations, the prospects for newly acquired businesses to be integrated and contribute to future growth and our expectations regarding growth through acquisitions and the ability to complete announced divestitures. Important assumptions relating to the forward-looking statements include, among others, demand for our products, the cost, timing and success of product upgrades and new product introductions, raw material costs, expected pricing levels, expected outcomes of pending litigation, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include but are not limited to:

• general economic conditions;

• difficulty making acquisitions and successfully integrating acquired businesses;

• any unforeseen liabilities associated with future acquisitions;

• limitations on our business imposed by our indebtedness;

• unfavorable changes in foreign exchange rates;

• failure to effectively mitigate cybersecurity threats, including any litigation arising therefrom;

• failure to comply with new data privacy laws and regulations, including any litigation arising therefrom;

• difficulties associated with exports/imports and risks of changes to tariff rates;

• risks and costs associated with our international sales and operations;

• rising interest rates;

• product liability and insurance risks;

• increased warranty exposure;

• future competition;

• the cyclical nature of some of our markets;

• reduction of business with large customers;

• risks associated with government contracts;

• changes in the supply of, or price for, labor, energy, raw materials, parts and components, including as a result of impacts from the current inflationary environment, ongoing supply chain constraints or additional or ongoing outbreaks of COVID-19;

• environmental compliance costs and liabilities;

• potential write-offs of our goodwill and other intangible assets;

• our ability to successfully develop new products;

• failure to protect our intellectual property;

• the effect of, or change in, government regulations (including tax);

• economic disruption caused by armed conflicts (such as the war in Ukraine), terrorist attacks, health crises (such as the COVID-19 pandemic) or other unforeseen geopolitical events; and

• the factors discussed in other reports we file with the SEC from time to time.

You should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update any of these statements in light of new information or future events.

Overview

Roper is a diversified technology company. We operate market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets.

We pursue consistent and sustainable growth in revenue, earnings and cash flow by emphasizing continuous improvement in the operating performance of our businesses. In addition, we utilize a disciplined, analytical and process-driven approach to redeploy our excess free cash flow toward high-quality acquisitions.

Discontinued Operations

During the second quarter of 2022, the Company entered into a definitive agreement to sell a majority equity stake in our industrial businesses, including its entire historical Process Technologies reportable segment and the industrial businesses within its historical Measurement & Analytical Solutions reportable segment, to affiliates of Clayton, Dubilier & Rice, LLC. The transaction, which is expected to close in the fourth quarter of 2022, is subject to customary closing conditions, including regulatory approvals. The businesses included in this transaction are Alpha, AMOT, CCC, Cornell, Dynisco, FTI, Hansen, Hardy, Logitech, Metrix, PAC, Roper Pump, Struers, Technolog, Uson, and Viatran (collectively the “Industrial Businesses”).

During 2021, the Company signed definitive agreements to divest our TransCore, Zetec and CIVCO Radiotherapy businesses (“2021 Divestitures”). As of March 31, 2022, Roper had completed the 2021 Divestitures.

The financial results of these businesses are presented as discontinued operations and certain prior period amounts have been reclassified to conform to current period presentation. Information regarding discontinued operations is included in Note 5 of the Notes to Condensed Consolidated Financial Statements.

Update to Segment Reporting Structure

During the second quarter of 2022, we updated our reportable segment structure following the announcement of the transaction to sell a majority stake in our Industrial Businesses. The Company’s new reporting segment structure is classified based on business model and delivery of performance obligations. The three updated reportable segments (and businesses within each) are as follows:

–Application Software - Aderant, CBORD, CliniSys, Data Innovations, Deltek, IntelliTrans, PowerPlan, Strata, Vertafore

–Network Software - ConstructConnect, DAT, Foundry, iPipeline, iTradeNetwork, Loadlink, MHA, SHP, SoftWriters

–Technology Enabled Products - CIVCO Medical Solutions, FMI, Inovonics, IPA, Neptune, Northern Digital, rf IDEAS, Verathon

The day-to-day operations of our businesses, our organizational structure, and our strategy remain unchanged. All prior periods have been recast to reflect the changes noted above.

Critical Accounting Policies

There were no material changes during the nine months ended September 30, 2022 to the items that we disclosed as our critical accounting policies and estimates in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Recently Issued Accounting Standards

Information regarding new accounting pronouncements is included in Note 2 of the Notes to Condensed Consolidated Financial Statements.

Impact of COVID-19 on our Business

The extent to which the COVID-19 pandemic impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the outbreak and its severity, the actions to contain the virus and its variants including the distribution, administration and efficacy of available vaccines, the impact of vaccine mandates on our workforce, and how quickly and to what extent normal economic and operating conditions can resume. As a result of the effects of the COVID-19 global pandemic our ability to obtain products or services from certain suppliers and to operate at certain locations has been and could again in the future be impacted. If COVID-19 and its variants continue to spread, particularly in countries with low vaccination rates, certain countries may experience more severe and lasting impacts from the pandemic. To the extent we have operations and/or customers in these countries, we may experience adverse impacts on our businesses located in such countries.

Results of Continuing Operations

All currency amounts are in millions, percentages are of net revenues

Percentages may not sum due to rounding.

The following table sets forth selected information for the periods indicated.

Three months ended September 30, 2022 compared to three months ended September 30, 2021

Net revenues for the three months ended September 30, 2022 increased by 9.6% as compared to the three months ended September 30, 2021. The components of revenue growth for the three months ended September 30, 2022 were as follows:

In our Application Software segment, revenues were $644.0 in the third quarter of 2022 as compared to $600.2 in the third quarter of 2021. The growth of 6.8% in organic revenues was broad-based across the segment led by our businesses serving the acute healthcare, property and casualty insurance, higher education and government contracting markets. Gross margin decreased to 68.4% in the third quarter of 2022 as compared to 69.7% in the third quarter of 2021 due primarily to increased headcount to support growth and a higher mix of SaaS and professional service revenue across a number of businesses. Selling, general and administrative (“SG&A”) expenses as a percentage of revenues decreased to 41.4% in the third quarter of 2022 as compared to 42.4% in the third quarter of 2021 due primarily to operating leverage on higher organic revenues. The resulting operating margin was 27.0% in the third quarter of 2022 as compared to 27.4% in the third quarter of 2021.

In our Network Software segment, revenues were $346.6 in the third quarter of 2022 as compared to $316.0 in the third quarter of 2021. The growth of 10.4% in organic revenues was led by our network software businesses serving the freight match, media and entertainment and life insurance markets. Gross margin of 84.8% in the third quarter of 2022 was consistent with 84.7% in the third quarter of 2021. SG&A expenses as a percentage of revenues decreased to 42.1% in the third quarter of 2022 as compared to 44.6% in the third quarter of 2021 due primarily to operating leverage on higher organic revenues. As a result, operating margin was 42.7% in the third quarter of 2022 as compared to 40.0% in the third quarter of 2021.

In our Technology Enabled Products segment, revenues were $359.7 in the third quarter of 2022 as compared to $315.9 in the third quarter of 2021. The growth of 15.1% in organic revenues was primarily due to our water meter technology business and medical products businesses. Gross margin decreased to 57.7% in the third quarter of 2022 as compared to 58.8% in the third quarter of 2021 as operating leverage and price were offset by higher material and freight costs. SG&A expenses as a percentage of revenues decreased to 22.6% in the third quarter of 2022 as compared to 25.9% in the third quarter of 2021 primarily due to operating leverage on higher organic revenues. The resulting operating margin was 35.2% in the third quarter of 2022 as compared to 33.0% in the third quarter of 2021.

Corporate expenses increased to $55.2, or 4.1% of revenues, in the third quarter of 2022 as compared to $47.9, or 3.9% of revenues, in the third quarter of 2021. The dollar increase was due primarily to higher professional service and acquisition related expenses partially offset by lower compensation expense.

Net interest expense decreased to $41.3 for the third quarter of 2022 as compared to $58.2 for the third quarter of 2021 due to lower weighted average debt balances and higher interest income earned on our cash and cash equivalents.

Other income, net, of $3.6 for the third quarter of 2022 was composed primarily of foreign exchange gains at our non-U.S. based subsidiaries. Other expense, net, for the third quarter of 2021 of $2.1 was composed primarily of asset disposals and foreign exchange losses at our non-U.S. based subsidiaries.

Income taxes as a percent of pretax earnings decreased to 22.1% in the third quarter of 2022 as compared to 26.4% in the third quarter of 2021. The rate was favorably impacted by the recognition of a net tax benefit related to a reduction in certain state income tax rates.

Backlog is equal to our remaining performance obligations expected to be recognized within the next 12 months as discussed in Note 13 of the Notes to Condensed Consolidated Financial Statements. Backlog increased 23% to $2,420.9 at September 30, 2022 as compared to $1,974.2 at September 30, 2021. Organic growth in backlog was 21% and acquisitions contributed 2%.

Nine months ended September 30, 2022 compared to nine months ended September 30, 2021

Net revenues for the nine months ended September 30, 2022 increased by 10.2% as compared to the nine months ended September 30, 2021. The components of revenue growth for the nine months ended September 30, 2022 were as follows:

In our Application Software segment, revenues were $1,899.7 in the nine months ended September 30, 2022 as compared to $1,761.2 in the nine months ended September 30, 2021. The growth of 7.6% in organic revenues was broad-based across the segment led by our businesses serving property and casualty insurance, government contracting, and acute healthcare markets. Gross margin decreased to 68.8% in the nine months ended September 30, 2022 as compared to 69.4% in the nine months ended September 30, 2021 due primarily to increased headcount to support growth and a higher mix of SaaS and professional services revenue. SG&A expenses decreased as a percentage of revenue to 41.9% in the nine months ended September 30, 2022 as compared to 42.7% in the nine months ended September 30, 2021 due primarily to operating leverage on higher organic revenues. The resulting operating margin was 26.9% in the nine months ended September 30, 2022 as compared to 26.8% in the nine months ended September 30, 2021.

In our Network Software segment, revenues were $1,028.0 in the nine months ended September 30, 2022 as compared to $901.3 in the nine months ended September 30, 2021. The growth of 13.9% in organic revenues was led by our network software businesses serving the freight match, life insurance and media and entertainment markets. Gross margin increased to 84.4% in the nine months ended September 30, 2022 as compared to 84.0% in the nine months ended September 30, 2021 due to favorable revenue mix. SG&A expenses decreased as a percentage of revenues at 43.4% in the nine months ended September 30, 2022 as compared to 45.9% in the nine months ended September 30, 2021 due to operating leverage on higher organic revenues combined with revenue mix. As a result, operating margin was 41.1% in the nine months ended September 30, 2022 as compared to 38.1% in the nine months ended September 30, 2021.

In our Technology Enabled Products segment, revenues were $1,013.2 in the nine months ended September 30, 2022 as compared to $914.7 in the nine months ended September 30, 2021. The growth of 11.6% in organic revenues was primarily due to our water meter technology business and medical products businesses. Gross margin decreased to 56.9% in the nine months ended September 30, 2022 as compared to 59.8% in the nine months ended September 30, 2021 due primarily to higher material, component and freight costs as our businesses navigate the widespread global supply chain challenges and unfavorable revenue mix. SG&A expenses as a percentage of revenues decreased to 23.5% in the nine months ended September 30, 2022 as compared to 25.7% in the nine months ended September 30, 2021 due to operating leverage on higher organic revenues and favorable revenue mix. The resulting operating margin was 33.3% in the nine months ended September 30, 2022 as compared to 34.1% in the nine months ended September 30, 2021.

Corporate expenses increased to $159.0, or 4.0% of revenues, in the nine months ended September 30, 2022 as compared to $145.8, or 4.1% of revenues, in the nine months ended September 30, 2021. The dollar increase was due primarily to higher professional service and acquisition related expenses partially offset by lower compensation expense.

Net interest expense decreased to $138.6 for the nine months ended September 30, 2022 as compared to $178.2 for the nine months ended September 30, 2021 due to lower weighted average debt balances and higher interest income earned on our cash and cash equivalents.

Other income, net, of $0.2 for the nine months ended September 30, 2022 was composed primarily of foreign exchange gains at our non-U.S. based subsidiaries partially offset by a one-time charge associated with a transaction to transfer the remainder of our exposure related to asbestos claims to a third party. Other income, net, of $25.0 for the nine months ended September 30, 2021 was composed primarily of a gain on sale of minority investment.

Income taxes as a percent of pretax earnings were 24.2% for the nine months ended September 30, 2022 as compared to 22.9% for the nine months ended September 30, 2021. The rate was unfavorably impacted by the recognition of a net tax expense associated with an internal restructuring plan related to the pending sale of the Industrial Businesses.

Financial Condition, Liquidity and Capital Resources

All currency amounts are in millions

Selected cash flows for the nine months ended September 30, 2022 and 2021 were as follows:

Operating activities - Net cash provided by operating activities from continuing operations decreased by 52% to $550.2 in the nine months ended September 30, 2022 as compared to $1,142.6 in the nine months ended September 30, 2021, due primarily to (i) the timing of cash taxes paid in connection with the 2021 Divestitures, (ii) higher cash taxes associated with changes to Internal Revenue Code Section 174 and (iii) less cash provided by working capital primarily associated with higher incentive compensation payments in the first quarter of 2022 associated with 2021 performance. These cash outflows were partially offset by higher net income from continuing operations net of non-cash expenses.

Investing activities - Cash used in investing activities from continuing operations during the nine months ended September 30, 2022 is due to business acquisitions and capital expenditures. Cash used in investing activities from continuing operations during the nine months ended September 30, 2021 was due primarily to capital expenditures and business acquisitions, partially offset by proceeds from the sale of a minority investment.

Financing activities - Cash used in financing activities from continuing operations for the nine months ended September 30, 2022 was primarily due to repayments on maturities of certain senior notes, repayments on our unsecured credit facility and dividend payments, partially offset by net proceeds from stock based compensation. Cash used in financing activities for the nine months ended September 30, 2021 was primarily due to net repayments on our unsecured credit facility and dividend payments, partially offset by net proceeds from stock based compensation.

Discontinued operations - Cash provided by discontinued operations for the nine months ended September 30, 2022 was primarily due to proceeds from the sale of TransCore and Zetec slightly offset by less cash provided by discontinued operations which was impacted by the timing of our divestiture activity. Cash provided by discontinued operations during the nine months ended September 30, 2021 was primarily due to net income net of non-cash expenses.

Effect of foreign currency exchange rate changes on cash - Cash and cash equivalents decreased during the nine months ended September 30, 2022 by $64.4 due primarily to the strengthening of the U.S. dollar against the functional currencies of our European and United Kingdom subsidiaries. Cash and cash equivalents decreased during the nine months ended September 30, 2021 by $4.9 due primarily to the strengthening of the U.S. dollar against the functional currencies of our European subsidiaries.

Total debt at September 30, 2022 consisted of the following:

The interest rate on borrowings under the $3,500.0 unsecured credit facility is calculated based upon various recognized indices plus a margin as defined in the credit facility which replaced our previous credit facility on July 21, 2022. At September 30, 2022, we had no outstanding borrowings under our unsecured credit facility and $20.8 of outstanding letters of credit.

Cash at our foreign subsidiaries at September 30, 2022 increased to $321 as compared to $311 at December 31, 2021 due primarily to the cash generated at our foreign subsidiaries during the nine months ended September 30, 2022, partially offset by the repatriation of $169 during the nine months ended September 30, 2022. We intend to repatriate substantially all historical and future earnings.

We expect existing cash balances, together with cash generated by our operations and amounts available under our credit facility, will be sufficient to fund our operating requirements for the foreseeable future.

We were in compliance with all debt covenants related to our unsecured credit facility throughout the nine months ended September 30, 2022.

Net working capital (total current assets, excluding cash and current assets held for sale, less total current liabilities, excluding debt and current liabilities held for sale) increased to negative $918.9 at September 30, 2022 as compared to negative $990.9 at December 31, 2021 primarily driven by a decrease in accrued compensation, deferred revenue due to software renewal timing and greater inventory build in response to the widespread global supply chain challenges partially offset by a decrease in accounts receivable. Total debt was $6,659.5 at September 30, 2022 as compared to $7,921.8 at December 31, 2021, due primarily to repayments on certain senior notes and net repayments under our unsecured credit facility. Our leverage on a continuing operations basis is shown in the following table:

Capital expenditures were $30.0 for the nine months ended September 30, 2022 as compared to $19.9 for the nine months ended September 30, 2021. Capitalized software expenditures were $21.9 for the nine months ended September 30, 2022 as compared to $22.2 for the nine months ended September 30, 2021. We expect the aggregate of capital expenditures and capitalized software expenditures for the balance of the year to be comparable to prior years as a percentage of revenues.

On June 23, 2022, the Company elected to exercise its optional redemption rights to redeem all of its outstanding 3.125% Notes due 2022 (the “Notes”) in the original aggregate principal amount of $500.0, and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee under the indenture governing the Notes (the “Indenture”), issued redemption notices to registered holders of the Notes. The date fixed for the redemption of the Notes was August 15, 2022 (the “Redemption Date”). The Notes were redeemed at 100% of the aggregate principal amount of the Notes, plus accrued and unpaid interest thereon to, but not including, the Redemption Date in accordance with the terms and conditions set forth in the Indenture.

On August 15, 2022, $300.0 of 0.450% senior notes due 2022 were repaid at maturity using cash on hand.

On July 21, 2022, the Company entered into a new five-year unsecured credit facility (the “Credit Agreement”) among Roper, the financial institutions from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Wells Fargo Bank, N.A., as syndication agents, and Mizuho Bank, Ltd., MUFG Bank, Ltd., PNC Bank, National Association, TD Bank, N.A., Truist Bank and U.S Bank, National Association, as documentation agents, which replaced the existing $3,000.0 unsecured credit facility, dated as of September 2, 2020, as amended. The new facility comprises a five-year $3,500.0 revolving credit facility, which includes availability of up to $150.0 for letters of credit. Loans under the facility will be available in dollars, and letters of credit will be available in dollars and other currencies to be agreed. The Company may also, subject to compliance with specified conditions, request additional term loans or revolving credit commitments in an aggregate amount not to exceed $500.0.

Off-Balance Sheet Arrangements

At September 30, 2022, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Outlook

Current geopolitical and economic uncertainties, including the current inflationary environment, supply chain disruptions and labor shortage, could adversely affect our business prospects. The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business. An armed conflict (such as the ongoing war in Ukraine), significant terrorist attack, other global conflict, or public health crisis could cause changes in world economies that would adversely affect us. It is impossible to isolate each of these potential factor’s future effects on current economic conditions or any of our businesses. It is also impossible to predict with any reasonable degree of certainty what or when any additional events may occur that also would similarly disrupt the economy and have an adverse impact on our businesses.

We maintain an active acquisition program; however, future acquisitions will be dependent on numerous factors and it is not feasible to reasonably estimate if or when any such acquisitions will occur and what the impact will be on our business, financial condition and results of operations. Such acquisitions may be financed by the use of existing credit lines, future cash flows from operations, announced divestitures, future divestitures, the proceeds from the issuance of new debt or equity securities or any combination of these methods, the terms and availability of which will be subject to market and economic conditions generally.

We anticipate that our businesses will generate positive cash flows from operating activities, and that these cash flows will permit the reduction of currently outstanding debt in accordance with the repayment schedule. However, the rate at which we can reduce our debt (and reduce the associated interest expense) will be affected by, among other things, the financing and operating requirements of any new acquisitions, the financial performance of our existing companies and the impact of the COVID-19 pandemic on our business prospects and the financial markets generally. None of these factors can be predicted with certainty.

See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report. There were no material changes during the nine months ended September 30, 2022.

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q (“Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation as of the Evaluation Date, these officers have concluded that the design and operation of our disclosure controls and procedures are effective.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes to our internal controls during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings can be found in Note 11 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q and is incorporated by reference herein.

Information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information About Forward-Looking Statements,” in Part 1 - Item 2 of this Form 10-Q and in Part 1 - Item 1A of our 2021 Annual Report on Form 10-K. Other than as supplemented in Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, there have been no other material changes to our risk factors previously disclosed in the 2021 Annual Report on Form 10-K.

• The related exhibits and schedules are not being filed herewith. The Company agrees to furnish supplementally a copy of any such exhibits and schedules to the Securities and Exchange Commission upon request.

† Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Roper Technologies, Inc.