Roper Technologies (NYSE: ROP) outlined its artificial intelligence strategy and a shifting approach to mergers and acquisitions at the Piper Sandler 5th Annual Growth Frontiers Conference on Tuesday, September 15, 2026, held in Nashville.
The company reported annual revenue of approximately $9 billion, with an EBITDA margin near 40%, a gross profit margin approaching 70%, and free cash flow margins exceeding 30%. Free cash flow has compounded in the mid-teens over the past two decades, and the current free cash flow yield stands at roughly 7%. Roper raised its dividend for 13 consecutive years.
Roper’s portfolio comprises 29 businesses — 21 vertical market software companies and eight product and vertical technology firms — spanning healthcare, government technology, education, institutional technology, insurtech, and industrial technology. The typical total addressable market in Roper’s segments is small, with the largest reaching approximately $4 billion.
About $10 billion in capital has been deployed across acquisitions. Since a strategic shift in 2023 that targeted earlier-lifecycle companies more aggressively, bolt-on transactions have grown from roughly 10% of M&A capital to about one-third. A transition in GICS classification followed the sale of industrial businesses in 2022.
On the AI front, Roper has been advancing commercialization for roughly two and a half years. The company operates an AI accelerator team of 25 to 30 people working closely with four to five portfolio businesses on product roadmaps, AI software development methodologies, and early agent creation. Agentic development, Roper said, can improve the software development lifecycle by approximately tenfold.
Specific AI initiatives across the portfolio include:
CentralReach, which provides autism therapy software, adopted a freemium model to accelerate AI adoption for scheduling, claims processing, and first-pass claim approval improvements, reducing administrative burden for therapists.
Vertafore, an insurance software provider, has developed around 10 agents, with four to five already in market. Its Velocity AI platform serves as an orchestration layer aimed at automating manual brokerage processes such as carrier forms and portal management.
Strata, which focuses on health system financial planning, is testing a Financial Decision Intelligence product with large health systems, with bookings expected within the year.
DAT and Freight Match are building agentic automation for broker workflows, though adoption may be limited to roughly 10% of use cases due to change-management concerns.
Deltek, whose Costpoint ERP serves the RFP proposal business, faces approximately 10% revenue pressure from AI-enabled tools leveraging public request-for-proposal data. Roper is countering that pressure by leveraging its integrated Costpoint ERP data.
Regarding broader market dynamics, Roper noted that private equity cohorts from 2021 and 2022 vintages carry a lower cost of capital. A private credit "cliff" is expected in 2028 and 2029, and an more active M&A environment was anticipated closer to 2027 rather than late 2026.
The stock closed at $388.52 on September 15, with a PEG ratio of 0.23.
