Roper Technologies (NYSE: ROP) reported Q4 EPS of $3.56, $0.08 better than the analyst estimate of $3.48. Revenue for the quarter came in at $1.51 billion versus the consensus estimate of $1.53 billion.

Fourth Quarter 2020

Fourth quarter GAAP and adjusted revenue increased 8% to $1.51 billion, while organic revenue decreased 2%. GAAP and adjusted gross margin expanded 20 basis points to 64.2% and 64.3%, respectively.

GAAP diluted earnings per share ("DEPS") was $2.41, a 71% decrease, and adjusted DEPS was $3.56, a 5% increase. Prior year GAAP results included a pretax gain of $801 million associated with the divestiture of Gatan.

EBITDA increased 7% to $552 million and EBITDA margin decreased 40 basis points to 36.6%. Operating cash flow and free cash flow increased 23% to $574 million and $558 million, respectively.

"Roper had a great 2020, highlighted by tremendous operational execution and disciplined capital deployment," said Neil Hunn, Roper's President and CEO. "Against the unprecedented backdrop of COVID, we meaningfully enhanced the quality of our enterprise. We saw solid growth in our software recurring revenue while investing for accelerated growth across the broader portfolio. In addition, we took advantage of attractive market conditions to successfully deploy $6 billion of capital toward high-quality software acquisitions. Importantly, our free cash flow grew 16% in 2020."

GUIDANCE:

Roper Technologies sees Q1 2021 EPS of $3.26-$3.32, versus the consensus of $3.48.

Roper Technologies sees FY2021 EPS of $14.35-$14.75, versus the consensus of $14.63.

"We enter the new year well positioned to continue driving double-digit cash flow compounding for our shareholders," said Mr. Hunn. "Our expanded recurring revenue base exiting 2020 provides a tailwind, and we are seeing improvement in licenses and services pipelines, which should further accelerate growth. Furthermore, our high-margin product businesses are poised to rebound after COVID restrictions meaningfully impacted most of last year. Finally, we expect our 2021 results will be enhanced by contributions from our high-quality software acquisitions completed in the second half of 2020."

Roper expects full year adjusted DEPS of $14.35 - $14.75 with first quarter adjusted DEPS of $3.26 - $3.32.

The Company's guidance excludes the impact of unannounced future acquisitions or divestitures.

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