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 touchstone telephone. I would now like to turn the call over to Jacques Moxie, Vice President of Investor Relations, please.

Thank you all for joining us as we discuss the second quarter 2025 financial results for Rupert Technologies. Joining me on the call this morning are Neil Hun, 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'Callaghan, 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 have prepared slides to accompany today's call, which are available through the webcast and are also available on our website. And now if you'll 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 second 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 minority investments, including cash taxes paid resulting from the sale of our minority interest in Certinia. 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'll take questions from our telephone participants.

Thank you, Zach, and thanks to everyone for joining us this morning. As we turn to page four, you'll see the topics we plan to cover today. We'll start with our second quarter highlights, including reviewing the platform acquisition we announced earlier today, Subsplash. Then we'll go through our segment results and our improved outlook for the full year, and then get to your questions. So let's go ahead and get started. Next slide, please. On page five, let me highlight the four key takeaways for today's call. We posted another solid quarter of financial results. Total revenue grew 13%. Organic revenue grew 7%. Software bookings grew in the high teens area, and we continue to deliver impressive cash flow with free cash flow margins coming in at 31% for the TTM period. Second, we announced earlier today the acquisition of another great vertical market software provider, Subsplash, which I'll get to in a bit, and the anticipated completion of the Subsplash acquisition. We're raising our full-year total revenue guidance and our full-year depth outlook. We continue to be very well positioned for capital deployment and continue to have more than $5 billion of available firepower over the course. Please turn to page six where we'll discuss Subsplash. They're serving faith-based organizations. Their digital engagement, church management, and integrated giving solutions, their purpose-built platform enables customers to serve congregations while engaging with members more effectively. This is with 20,000 faith-based organizations that help them become digitally native by deepening member engagement, reducing manual administrative burden through automation, streamlining content distribution, and integrating digital giving solutions, all supporting their customer's core mission. Simply put, SubSplash enables these organizations to allocate more time and resources to what matters most, ministering to and engaging with their congregation in a digitally native way, whether it be online or on an in-person basis. Further, as the company's AI native capabilities are further deployed, in terms of investment highlights, the purchase price is $800 million. We expect SubSplash to deliver $115 million of revenue and $36 million of EBITDA for the 12 months ending Q3 of 2026. Business meets all of our longstanding acquisition criteria. Leader in a niche, competes on the basis of customer intimacy, has strong gross margins, and converts high levels of cash flow. Subsplash reflects the maturing leader acquisition profile of being a higher organic growth business, in this case in the high teens area, and competes in a $2.5 billion U.S. TAM with about half being currently served and potential to meaningfully expand internationally. In addition, SubSplash is well positioned to materially improve their growth and EBITDA margins over the next three to five years, and we expect to deliver this by executing a handful of the available levers. As a result, we expect to see SubSplash's organic revenue growth convert to high 20% EBITDA growth over the next three to five years. We will finance this transaction with a revolver and report the results in our network software segment. SubSplash represents another powerhouse addition, delivering critical solutions to a customer base with deep, ongoing needs for these capabilities. To the SubSplash team, we're so excited. Thank you for all of the super important work you do for your customer community and for trusting Roper to become your permanent partner. So with that, let me turn the call over to Jason to walk through our P&O and balance sheet. Jason?

Thanks, Neil, and good morning, everyone. I'll now take you through our Q2 financial highlights on slide 7. The second quarter was another solid installment in what we believe will be a good year for Revenue of $1.94 billion was up 13% over prior year and well balanced, with 7% organic growth and a 6% increase from acquisitions, with central reach results contributing since the April 23rd close date. Organic growth was strong across the portfolio, demonstrating resilient demand for our mission critical solutions. Importantly, and as expected, network software year-over-year growth notably improved from Q1, given more normal comps at MHA, increased freight match unit economics, and recovery at Foundry. EBITDA of $775 million was up 12% and generated EBITDA margin of 39.9%. Core enterprise operating margin was flat to the prior year, with core segment margin up 40 basis points. This follows a similar pattern to Q1, bringing our year-to-date core segment margin expansion to 70 basis points. For the diluted EPS, we delivered $4.87 versus our guidance range of $4.80 to $4.84 on strong revenue growth and excellent core operating leverage. Finally, free cash flow of $400 million was up 10% versus prior year, which drives TTM free cash flow to over $2.3 billion. The recent passage of the Big Beautiful Bill Act provided a permanent repeal of Section 174, Capitalization of R&D Expenditures. We are therefore reducing our cash tax payments for 2025 by around $150 million to reflect the cumulative reversal of capitalization, of which about $60 million benefited our second We will also see a benefit of $120 million carried into next year due to deduction limitations in 2025. Adjusting out the Section 174 impact, our three-year TTM free cash flow CAGR would be about 14%. Overall, good news in offsetting some near-term deal dilution and fueling our growth equation. Now let's turn to Slide 8 to discuss our strong financial position. Order with a healthy balance sheet and substantial capacity for continued capital deployment. We exited at 2.9 times net debt to EBITDA and pro forma for subsplash, this would be around 3.1 times. Additionally, our cash balance was $242 million, and our revolver had $1.4 billion drawn against our $3.5 billion credit. Closing this month, as Neil outlined, this gives us over $5 billion in M&A firepower. Financial capacity positions us very well to continue executing on our disciplined capital employment strategy. To that end, while the sponsor-to-sponsor market is still somewhat muted, we are active on a number of both platform and bolt-on transactions that reflect the characteristics of higher growth and increasing long-term value capture, with subsplash being a case in point. With that, I'll turn it back over to Neil for our segment highlights and guidance update. Neil? Thanks, Jason.

As we turn to page 10, let's review our application software segment. Revenue for the quarter grew by 17% in total, and organic revenue grew by 6%. EBITDA margins were 42.9%, and core margins improved 70 basis points in the quarter. We'll start with Deltek. Deltek grew in the mid-singles range in the quarter, both recurring and total revenues. As highlighted on the slide, Deltek continues to have strong migration to their cloud offerings while the business continues to innovate at a rapid pace and has benefited by very strong growths and net retention. Contracting outlook, we believe the big, beautiful bill's spending priorities and sheer volume will be a catalyst for market growth, which has been tepid for the last 24 months or so. The timing of market reacceleration is still to be determined, but we believe it will occur over the course of the next few quarters. Importantly, during the quarter, Dell Tech made substantial progress in regard to their AI-based product capability and recently announced their new flagship GovCon product, CostPoint, fully embeds their AI assistant, Della, did agents to streamline repetitive processes and help users make faster, better, informed decisions, and lots more to come for sure. Adderant continues to be incredibly strong and posted their best bookings quarter in the company's history. The booking strength is broad-based, fueled by their AI-enabled solutions, and is a combination of market share gains, cloud migration, and SaaS growth. Congrats and thanks to Chris and the entire team at Adderant. keep up the amazing work continues once again to be steady and solid for us we continue to see consistent ARR growth and strong customer retention here with strength across their agency MGA and carrier solutions this growth is enabled by their strong go-to-market capabilities and their long term commitment to product strength we look forward to talking about this and their AI IA-enabled solutions and subsequent calls. It continues to be outstanding. As we mentioned, last quarter, the team has done a great job at making the revenue stream more recurring in nature. In addition, they continue to get amazing feedback with their innovative cloud offerings, which are driving strong SaaS migration activity. They continue to win in the market with their new SaaS solution and near 100% gross retention. And Transact Seaboard continue to perform very well in their respective markets. We also saw very good results from the healthcare IT portion of this segment, strata, data innovations, and clinicists. Central reach is awesome in the early days, has exceptional momentum, record expansion activity, and a 70% enterprise new client win rate all in a quarter. Thanks to the outlook for the second half of the year, we continue to expect organic revenue growth to be in the mid-single-digit plus area. Please turn with us to page 11. Total revenue in our network segment grew 6%, and organic revenue 5% in the quarter. EBITDA margins remained strong at 54.6%, and core margins improved 20 basis points. For the individual businesses, we'll start with DAT. DAT was solid in the quarter and had strong ARPU improvements. The market continues to be stable, albeit bouncing along the bottom. In the quarter, we integrated LoadLink, our Canadian freight match business with DAT. We expect the integration to deliver, over time, a more unified and efficiently deployed North American freight match network. DAT continues executing exceptionally well on their core strategy of driving enhanced network value for both brokers and carriers. The approach positions us to better monetize our entire network ecosystem. Supporting this strategy, DAT made significant progress integrating trucker tools, our Q4 bolt-on acquisition, and completing the acquisition of Alco, an AI-native factoring technology solution. Combined with the DAT Network Foundation, these integrated products and assets now deliver substantially more value to both carriers and brokers. Looking forward, DAT will maintain their aggressive execution of this network value enhancement strategy, positioning the business for continued growth and improved monetization across all. The tech was solid for us in the quarter. Their growth was fueled by strong customer bookings activity and improved customer retention. Of note, this business continues to make good progress with their emerging AI-enabled takeoff and estimating solution. We declined in the quarter as expected, but we continue to see market recovery signs as they grew their sequential AR for the first time since the Actors and Writers strikes. Good to see recovery start here. Also in the quarter, Foundry's new product, Nuke Stage, started gaining traction in the market, specifically with a very large studio and several smaller customers. Nuke Stage enables the power of post-production compositing to occur in the production phase of the pipeline, an exciting new capability that will help drive cost savings for the industry. Our network healthcare businesses, MHA, SHP, and softwriters, were very good in the quarter. As we return to the outlook for the second half of the year, we expect to see revenue growth in the mid-single-digit plus range. Please turn to page 12 and let's review our TEP segment's quarterly results. Revenue here grew 10% and organic revenue grew 9%. Eventim margins came in at 36%, which was once again just solid for us. Neptune continues to do a great job with our ultrasonic meter go-to-market execution and continue to see strength in their data and software offerings. Verathon continues to execute at a high level as well. In particular, in the quarter, Verathon saw continued strength in their single-use, reoccurring solutions, both Bflex and Glidescope. NDI was really good in the quarter. As discussed in prior quarters, NDI delivers proprietary and world-class precision measurement technologies to a wide variety of healthcare OEMs, which in turn enables the OEMs to deliver guidance-enabled solutions across many healthcare markets such as orthopedic surgery, interventional radiology, and cardiac ablation. Strong execution which led to growth across Civco, FMI, Ennevonics, IPA, and turning to the outlook for the single-digit organic growth for the second half of the year with a stronger third quarter and a more difficult fourth quarter comp. Before turning to our guidance outlook, I'd like to reflect on our AI perspective, its transformational potential for customers and our enterprise, and the steps we're taking to build lasting advantage, applying AI to address high-impact, customer-specific challenges. That AI-based innovation substantially expands our business's TAMs will be a core catalyst for our next chapter of growth. The magic, if you will, of AI emerges at the intersection of the workflows our customers rely on daily and our deep vertical market expertise in early traction from compliance solutions to AI enhanced products to AI assistants and intelligent agents that streamline tasks we're building solutions that deliver tangible high value outcomes today we have approximately 25 AI enabled products either in market or in development importantly our AI innovations create positive halo effect across many of our businesses driving booking activity for our broader products. It's a fun moment to be at the forefront of innovation, redefining and automating workflows across our vertical markets while unlocking new growth and building durable competitive advantages. Exciting stuff, for sure. So with that, please turn with us to page 14. Let's turn to our Q3 and increased full-year 2025 guidance. Given our strong Q2 performance and anticipated closing of the subsplash acquisition, we're increasing our total revenue growth guide to be in the 13% range. For the full year, it remains unchanged. Full year depth outlook to be 1990 to 2005, which includes about a nickel of subsplash dilution. The guide continues to assume a full year effective tax rate in the 21% to 22% area. We expect adjusted depths to be between $5.08 and $5.12, while absorbing $0.03 of subsplash dilution. Please turn us to page 15, and then we'll open it up with the same key takeaways with which we started. First, our second quarter financial results were quite good. Second, we announced the acquisition of another market-leading vertical market software business. From the start of the year, we're raising our FOIA guidance. And finally, we remain well-positioned for further capital deployment. As results, we grew total revenue 13% and organic revenue 7% in the quarter and delivered 31% free cash flow margins in the TTM period. We're delighted with our acquisition of SubSplash. As discussed, this vertical market leader is mission critical to the delivery of digital engagement, church management, and payments to 20,000 faith-based organizations and has several embedded growth drivers that will support its high teens revenue growth and expanding margin profile. Next, we're raising our full-year outlook, and finally, we continue to be very well positioned with more than $5 billion of available M&A firepower to deploy capital towards leading vertical market software businesses. Our M&A pipeline continues to be very active, and our teams are engaged on several opportunities to pursue these opportunities with our unbiased and disciplined approach. Before turning to your questions, and if you could flip to the final slide, our strategic the compounding flywheel, we like to remind everyone that what we do at Roper is simple. We compound cash flow over a long arc of time by executing a low-risk strategy and running our dual-threat offense, a business model that begins with operating a portfolio of market-leading, application-specific, and vertically-oriented businesses. Once a company is part of Roper, we operate a decentralized environment so our businesses can compete and win based on customer intimacy. Businesses on how to structurally improve their long-term and sustainable organic growth rates and underlying business quality. A centralized, process-driven capital employment strategy that focuses in a deliberate and disciplined manner on cultivating, curating, and acquiring the next great vertical market leading business to add to our cash flow compounding flywheels. Taken together, we compound our cash flow over a long arc of time in the mid-teens area, meaning we double our cash flow every five years or so. With that, we'd like to thank you for your continued interest and support and open the floor to your questions.

All right, thank you. We will now go to our question and answer portion of the call. We request that our callers to limit their questions to one main question and one follow-up. If you would like to ask a question, you may do so by pressing star key, followed by the digit 1 on your touch-down telephone. If you're using a speakerphone, please pick up your handset before pressing any keys. And to withdraw your question, please press star, then the digit 2. Again, we request that our callers limit their questions to one main question and one follow-up. With that, our first question comes from the line of Dylan Becker with William Blair. Please go ahead.

Hey, gentlemen. I appreciate that question here. Maybe, Neil, starting for you, kind of the resiliency and strength across the software segments of the business, can you kind of just give us a general breakdown of, again, the emphasis that your customers are kind of focusing on around productivity kind of in a current context, how that's layering in momentum around AI and maybe this prolonged period of uncertainty, if there's any easing that you're seeing there as they can't necessarily sit on their hands from a decision standpoint forever.

Yeah, so appreciate the question. So first, you know, it was nice to see the high teams bookings in the second quarter. It gives you a sense that in the nooks and crannies of the market that our businesses serve, things are okay. Also, I remind you and everybody that the end market exposure we have generally, not exclusively, but generally are less tied to macro. Think, you know, education, legal, you know, insurance. I mean, these are areas that healthcare, for sure, that are generally less macro sensitive, but they don't ignore the macro sensitivity, but that. The other thing, as you say, and this is not unique to us, there's just an unprecedented generational opportunity in front of us, all our businesses, to really drive so much productivity gained inside of our customers with the use of our AI tools. I'm sure others will have questions on this, but lots of momentum in terms of the knowledge that's being built up inside the company and that translating the products into the market and many more products are development. So that's very exciting. For instance, in Adderant, it was one of our faster growing businesses in the quarter. They were probably our first company to get actual AI-based products, automation-based products into the market. And you see that translating into their bookings activity, not just for the AI-specific product, but for the drag along of existing tech stack with it as well.

All right. Very helpful. Thank you.

And then maybe on within some of the recent acquisitions as well, too, more of a kind of a payments orientation outgo, obviously, within DAT as well. I guess, can you just kind of give us a broader overview? You have a lot of value across the network and platform. You're driving incremental adoption, kind of how you're thinking about the positioning of embedded and layering in kind of more payments functionality across the suite and how that can kind of tie into broader team expansion. Thank you.

Yeah, so certainly with ProCare, certainly with SubSplash a little bit, or with Transact and Seaboard, there is a payment element. The thing that's central to all three of those is that the payments, the right to the payments opportunity is earned through the software, and that's very much the case across all three. So we view it as a software-led, heavy R&D-led to earn the rights. It's a very natural control point to have the payments. I'd say it's not a thematic. I would not read too much into the last three transactions for, if you count ALCA, have a payments angle that we have a strategic decision that we want to layer more payments. I think it's more coincidental than anything else. The other thing about payments is it does create, you know, payments and software and other network effect as well. It just creates a ton of stickiness. These businesses tend to have very high both gross and net retention. Alco is a little bit different. Alco is really the first tech-only, tech-forward, tech-native, I should say, factoring software that's used in the transportation space for the carriers that is really a slick user interface, a slick back-end to enable just an ease of factoring. And so it certainly is. It enables commerce and payments, but it's a slightly different payment set up.

And your next question comes from the line of Brent Thiel with Jeff Rees. Please go ahead.

Good morning. Neil, throughout the quarter, I'm just curious, did you see any signs of the tariff headlines or government spending blown on impact anything or perhaps throughout the quarter maybe things got better as you went through in the back of the quarter? Or can you just give us a sense of what you saw in terms of the business trends through the quarter and how that's trending so far in July?

Yeah, so just the broader macro, this is relatively small. I think we said last quarter it's in the $10 million to $15 million range. It's still in that. The team's working very hard to mitigate. They've mitigated some of that. And supply chain mitigated some of that in pricing. So I think it's too early to call it non-effect. But relative to others, it's quite small. Relative to the broader other uncertainty, in pockets, you know, there's uncertainty in K-12 education, so it's just sort of had a muted effect on bookings activity across the industry, and Frontline had a slower bookings quarter, but that's in the backdrop of high teens across the whole enterprise for enterprise bookings. Otherwise, I mean, government contracting inside of Deltec remains muted as we expected it to occur with the BBB coming through and sort of not knowing what that was going to look like as well as the sort of hangover or lasting effects of Doge. But I said in the comments relative to Deltec, we think the big, beautiful bill is what the industry has been looking for for the last 24 months or so to unlock and sort of get things moving again, given that, one, there's just a lot of spending in the bill relative to this government contracting, but more importantly, or maybe equally as importantly, is the category of spends from civilian to defense. You know, DOD, DHS goes from a relatively low spend where it's contractor spend to a higher contractor spend. So definitely civilian spending is a low contract percentage and defense spending is a high contract percentage. So it should be the unlock. The timing Timing is to be determined, because they're still got to get contract and get the spending into the market, but it should be measured in a small number of quarters, hopefully.

Yeah, and the timing is definitely the question, because you've got agencies that don't have employees that we normally interact with. So you've got just a tactical problem at this point. But the demands there, the pipeline's very strong at Dell Tech.

Great, thanks.

As we switch questions, I should conclude with, I mean, we're talking about this. We're getting ready for a call. The call-down to our businesses on the macro topic was our business units were cautiously optimistic coming out of the calls, and we were going into the calls not exactly sure we're going to hear, and we left equally and cautiously optimistic about the go-forward period.

All right. Thank you. And your next question comes from the line of Joe Brewink with Baird. Please go ahead.

Great. Thanks for taking my questions. I wanted to drill down on the high teams bookings. That seems like a very impressive number, just given the year ago period was an inflection higher in its own right. And it seems like maybe, you know, GovCon or Frontline were not contributors to this quarter. So maybe the question is, what did contribute to the positive trend? And at this point, given bookings have been better now for five quarters, I suppose, do you kind of have the backlog you need to inflect your organic recurring revenue growth closer to the double-digit level?

Thanks, Joe, Jason. Yeah, no, I think it was a very strong quarter. I think you were correct in highlighting the two areas. It was at Dell Tech and Frontline. Otherwise, very strong. We mentioned that Adderant had their biggest bookings quarter in history. They landed one of the largest ground-to-cloud conversions and just strength across some of their AI solutions, cross-selling there. You know, healthcare was solid, I'd say, not spectacular, not above the range, but solid. So I think, you know, as we look into it, It really supports our second-half guide. I think, you know, as you know, a lot of the bookings activity bends to Q4, so that's playing more for 26. But, you know, this, like, after kind of a little bit more of a muted first quarter, having the high teens kind of supports where we thought, you know, where we'd be year-to-date. And so I think that's positive to get back on playing.

And then on AI, it strikes me even relative to last quarter, there's just a lot more happening, a lot more references to what the individual business units are working on. Do you maybe have a better sense of how that starts to impact the P&L? How is it impacting like R&D spend? Are you getting engineering productivity through your own use of tools? And then when might the revenue implications start to show up?

Yeah, so we are definitively getting the internal productivity gains that you'd expect any company to get. 30% in one of our larger software businesses, 30% productivity gains in R&D, for instance. There's productivity gains across customer support, go-to-market, obviously content generation. There's a long way. There's still way more to go get in that regard. And, in fact, we have a due for our businesses where they're sort of re-underwriting or re-imagining their entire business to be AI native. The first part of that is for the customer value chain, sort of first, second, third derivative. The second part that's a fast follow is leaning in very aggressively on the productivity gains. In terms of when all this goodness hits the P&L, it's tens of millions. in terms of ARR today, that's direct AI native products that didn't exist, you know, a year or two ago. It's a multiple of that or two. It's hard to track, but a multiple or two of that in terms of the pull along of the rest of the other tech stack. But we are fundamental believers that this is a compounding effect. It's compounding effect in terms of the knowledge inside the business, the skill, the curiosity. It's a compounding effect of availing the resources and the dollars both from freeing up legacy roadmap work to this work and also just having the dollars gain that we talked about at the beginning of this answer. And then that gets compounding in terms of releases and revenue recognition. So it's going to be small for this year and it'll gain momentum and we get it next year. Like I said, 25 products either in market or in development. That number is going to be much larger in three months. It'll be much larger in six months, so much so that we'll stop giving you the number because everything's just going to plur together in terms of everything's just going to be AI data. But we're super, super bullish, and man, is it fun to be innovating in this market right now.

Great. Thanks, Noel, for that.

And your next question comes from the line of Brad Reback with Steeples. Please go ahead.

Great. Neil, following up on that 30% productivity gain comment. How do you decide what falls to the bottom line and what gets invested back into faster organic growth?

The strong push to the businesses at the moment, we've been very consistent with this answer, is we want to do more for the next period of time than try to get it to the bottom line. There's so much to do, so much opportunity to drive product roadmap, to drive go-to-market expansion, whatever it is at the individual business level. So that is the mantra for the time being is do more and drive competitive advantage.

That's great. On the AI monetization side of the equation, there's a lot of debate going on inside of software, especially as it relates to seed-based models. Do you have a good sense yet of early successes and the best way to price these products, or is that still very much a work in progress?

I think it's a work in process, and I definitely don't believe that, or we don't believe there's going to be a one-size-fits-all. So we have products today that, again, in the early days, you have particularly at Dell Tech that are existing subscriptions that's driving an upgrade to the cloud, which is monetizing that way. That is certainly not going to be the long-term method for all, but that is clear and obvious for the customer base and that customer base right now. You have others that have a sort of a subscription with sort of a consumption overage. And then you have some that are straight consumption. And so it's going to be bespoke to the business, to the customer. But if I had to say there's one that there's general some gravitation to, it's going to be sort of a subscription with a consumption over the top of it. But it's hard. We're early days in this. But those are our initial thoughts.

Perfect. Thank you very much.

And your next question comes from the line of Joshua Tilton with Wolk Research East Ahead.

Hey, guys. Can you hear me? Hey, Josh.

Great. Just two quick ones for me. My first one, I just want to follow up on the Dell Tech subject. And I guess what I'm trying to understand is if I look last quarter, it feels like you guys pretty much called out similar growth, so no change in the growth of the business from 2Q to 1Q. But you also talked to, you know, embedding some more conservatism in your outlook for Deltec last quarter because of all the uncertainty. So I guess what I'm trying to understand is, you know, is Deltec just performing ahead of what you initially expected when you kind of set our expectations 90 days ago?

I wouldn't say that. I think the beautiful bill is giving us, I mean, it's coming into that. But now you're seeing just more activity, especially in defense, which plays strongly to Deltec. I think the area that – so we're more bullish, but I don't think it's a bullish for 25 comment. It's more about when we can actually get those orders secured from our customers. So there may be some upside in the fourth quarter depending on timing, but we haven't yet sort of contemplated that because it's just been a very uncertain dynamic in that market.

Yeah, and the upside would come in a form of perpetual, which is in Q4, so that's obviously hard to predict at this stage. The other part is that Dell Tech is only 60% GovCon. 40% is in professional services markets, and that part of the business has been very strong.

Makes sense. Maybe just to put a finer point on that, I guess, does the outlook still embed that conservatism that you spoke to last quarter? Okay, and then maybe just a quick follow-up. So congrats on the acquisition. I feel like it is definitely the ultimate network software. The one question I have is you guys spoke to confidence in improving the growth profile of the business. We're already at high teams. Can you just talk to what you saw during the diligence that maybe gives you confidence that you can improve that profile going forward?

Yeah, no, so I think it's we feel confident in the ability to sustain the growth rate but improve the margin profile. I'll stop there.

Oh, I'd love to hear that as well, please.

I'll hear it as much. So, hey, just to give you a sense on the growth rate of the business, so faith-based organizations, churches, are in their modernization or digitization, if you will. I mean, the TAM is only 50% served from a tech point of view, and really just now the technology is, vendors and vendors in the space can sort of have a modern church management that manages the church, manages the engagement with the guests, as well as the closed-loop donation, donor sort of economics, and sort of how that ties together in a single platform. So there is just a general wave that we get to ride there. Second is Subsplash is, I would call it really the second-generation technology platform that's in the market. So very similar to, gosh, a decade ago with our Strata business where we bought the new tech stack it has a it's demonstrated its ability to gain market share in this growing market which is why this business will continue to grow above the market at the top line now on the margin structure um there is uh you know the prior owner k1 did a great job from from growing this business from a small business to a slightly larger business but left lots of opportunity uh to sort of, if you would just generically call it professionalize the business. Tim's done a great job running the business for sure, but there's opportunities in almost every part of the cost bar you look at. Cost of sales, go-to-market, R&D, the way you can improve the payments, sort of what's underneath the hood relative to the payments infrastructure. So there's a dozen plus more levers available. We've underwritten to about half of those in the margin improvement where, over the course of the next three to five years it'll look like a not quite as high as the network margin but but a meaningfully improve substantially improve from where it is final thing I'll say on that is just remind everybody our strategy for the last couple three years is to buy these maturing leader profiles which this is just that and so you get a business that is earlier in its lifecycle relative to the Sam Tam conversion and then they get the scale another cost structure which unlocks more value for our shareholders over time.

Very helpful. Glad I asked you to follow up.

Thank you. And your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead.

First question, on the big, beautiful bill, clearly some impact on Dell Tech, timing unknown. As we think about some of your other segments, have you guys thought through what tailwinds, headwinds might potentially impact some of the other sectors that you guys cater to?

Yeah, so quite a bit, as you'd expect. So I think we've drained the Deltek, so I'll leave that unless you have follow-up questions there. Obviously, we have a lot of exposure to health care, but whether it's all indirect to the payer, to Medicaid, everything's indirect, obviously. We serve providers of health care, either through health care IT or with medical products. As you dig into sort of what the 10-year Medicaid sort of impact is going to be, roughly 12, the estimate is roughly 12 million people will roll off of Medicaid, but somewhere between 5 and 7 million of those will go on to some other commercial or ACA coverage. So the net effect of total dollars is going to be, our estimate is flat to up over this period of time. So we would expect there to be, you know, minimal, if any, impact, call it just neutral for a franchise. On healthcare IT for my entire career, 25 years or so, and the one constant is there is always reimbursement pressure on the providers, whether it's commercial, Medicaid, Medicare, whatever it is, and it's just a way of life. And when you serve that community, if you do one of two things, you generally are going to be in a good spot, which is if you deliver a tangible hard dollar ROI, which essentially all of our healthcare IT assets do, or if you deliver a clinical benefit that is unique and compelling, which every one of our medical product businesses do. And so it's sort of a neutral. And then on K-12 and higher ed, we would call that neutral-ish as well. Certainly K-12, there's small dollars that are tilting towards private, but for the larger K-12 public enterprise, it's largely a non-event. And on higher ed, it puts more pressure on performance, if you will, for the higher ed institutions, which plays into the theme of our transact investment, which is better engagement of the students so they can attract the students and retain the students, which is exactly what our software and capability does there.

And I would just add on health care, our central reach business, the Medicaid impact is more to adults than children and most of the end consumers and children. So fairly muted impact there. And then a lot of our alternate site health care businesses are more indexed to Medicare versus Medicaid. So, again, not a huge impact.

Got it. Fantastic. And then just a quick follow-up on the record, Adderant Quarter. Any unique legal tailwinds that are driving that, or is this more specific to idiosyncratic dynamics that you're seeing within your business? I think you guys called out maybe starting to see some AI flow through. We'd just love to hear what you guys are seeing drive that outsized performance.

Yeah, so just to frame Adderant, and so everybody understands, it doesn't paint too broad of a brush with legal tech. Adderant is in the business of law, not the practice of law. So think about, and their principal go-to-market AI-based products right now are on the concept of how you automate and streamline time entry to cash collection. And substantial gains, still gains to happen on the technology and product side. So we just, Adderant over eight or nine years has been the clear market share winner. I mean, going from 30% to 55% market share, plus or minus, in the largest law firms in the world. And there's a large move to cloud that is still happening there, which is driving the bookings. But let's make no mistake about it. Adderick has the technology halo in the market right now on the business of law, period, full stop. Final thing is the largest law firms are winning in the market, right? They're gaining share, and so we're riding along with that as well.

And your next question comes from the line of Terry Tillman with Truist Securities. Please go ahead.

Yeah, thanks. Hi, Neil, Jason, and Zach. A lot of my questions have been answered, but you have a bunch of platform businesses, so I still have a few. One thing I was going to ask about ProCare is it's starting to move into the organic calculation. I think you all have had some leadership changes, go-to-market investment, and also I think you were working on improving attach rate of payments. It's just how is ProCare performing, particularly as it's becoming more of an organic calculation and then I had a Neptune follow-up?

Yeah, sure. So ProCare, the first year was mixed. In the first year, it under-delivered on our expectation on growth. It was more like a 10-ish percent grower with our expectation of 15. The root causes of that are known and already countermeasured, and you alluded to some of them. So it's been a complete change of the leadership team to be more growth-oriented, to be more process-oriented. There's a new CEO, CFO, CRO, CTO, right? So those are the leadership changes. So what's happened as a result of leadership changes is the go-to-market is massively improved, where we are winning in the market and the principal competitor is not. So that's a great outcome. support. There's a great lean Kaizen event on how to solve customer support tickets more quickly about six or eight weeks ago, already having an impact. And so you're seeing rotation there. We expect that, by the way, that for the second half of the year to be back on slope of 15% mid-teens organic growth for the reasons that I've decided. So feel very good on a go-forward trajectory. ProCare was just a little worse than we thought early on. In terms of attach of payments, It's been solid, help me, keep me honest, Jason, and it's 75% plus or minus range, right? So that's been a consistent tax rate, and also I'd say payments. Another thing I'd say, the whole payments point of view.

Thanks, Neil. That's a lot of great colors. I'm glad I asked about ProCare. And I guess just a follow-up on Neptune, and it relates to kind of TEPs more broadly, but with this meter data management solutions, the billing acquisition, and then on top of just ultrasonic meter, reading like do these just create opportunities for solid for longer or potentially some re-accelerations of growth from some of these newer dynamics thank you yeah so there's a long answer which we can all spare everybody with the short answer is we think these are these are the connecting the meter to cash is a unique compelling and really oh Neptune's the only one

running that strategy, and we think it's highly, highly compelling, especially in the segment of the market where Neptune really competes in WIND, which is a long tail of smaller municipalities, where they want to have a single vendor that stitches all this together in that compelling way. And then when you put in, once you have that, then you can do leak detection, and you can help them engage with the municipalities, engage with their end customers with more automation and more perhaps AI-based communications. We'll see what that looks like. It's very early days. And so we're competing and winning today based on the strength of the go-to-market channel and the product that we have, which we would claim very aggressively that we have the best static meter from a readability point of view. And in the future, we expect that to pick up, the growth to pick up, but it's going to take some time for this to fully get into the market.

Thanks, Neil.

And your next question comes from the line of Joe Giordano with 2D Count. Please go ahead.

Hey, good morning, guys.

So just based on your comments on ProCare that you just gave, like when you reflect on that, like how do you kind of prevent similar things from happening? I know they're totally different markets, but like when you look at central reach subsplash now that you're going to bring on board, like how do you kind of prevent those things before they start?

Yeah, so I'd like to ask Jason to add some comments to this when I'm done. So we've learned a lot in the pro-care maturing leader. I think at the end of the day, this is, we had Jason, we had Janet, who leads our capital deployment. We had Shannon, who is here with us on FP&A, and our group executive sort of in weekly and every other weekly meetings. And we saw some of these challenges occurring, and some of which we moved very quickly, and some of which we waited. And I think the number one learning is you just don't wait. is the number one learning. It's simple, and it's so fundamental to learning as that is. It is true, and we've observed it, and so in Transact or Subsplash or SensorReach, to the extent we see something, we're just not going to wait in the early ones. But I'll let you take it from there.

Anything you want to add, Jason? Yeah, no, I think it starts in diligence, and we have now, I think, staffed up appropriately in certain areas where if we don't see the proper telemetry on a business or just some of the infrastructure, we can help the business sort of illuminate that so that we can have conversations that will drive actions quicker. And so that was another key learning at ProCare. And so we've got a pretty rigorous schedule and execution plan on every deal. We thought we had one with ProCare, but now, as you learn, you fine-tune that a little bit more. And, you know, since then, be it Transact or Central Reach, you know, we've had a much smoother integration. Both of those are tracking really well on our value creation plan. And so, good lesson learned for us.

Final thing I'd say on that is when we did our post-mortem with ProCara, the board, the last board meeting, we summarized it in that we got the slope right. So the market, the market growth, the competitive intensity, the competitive positioning, the number of jump balls, the right to win in payments, all of that, the slope of the forward growth rate, we got exactly right, if you will, slope. The intercept, we got wrong, right? And so the good news is the intercept is things are 99% in our control about the way you operate the business. And so I just wanted to give you the context. We went straight into what we did, but it would be harder and be a bigger issue if the slope was wrong. We've got something wrong about the market growth rate or the competitive intensity, but that is all fully intact.

On sub-splash specifically, can you talk about the market landscape there a little bit and the competitive landscape? I mean, I guess it doesn't feel like a structural growing market in terms of, like, the total TAM, I guess. But it's interesting to hear, like, only 50% serve. So I'm just curious to hear, like, what the competitive landscape is.

Yeah, so just to give you some sense of the market size or the market, it's about a $2.5 billion market for software, like I said, about half served. In terms of church attendance, call it flattish over a 20-year period of time. The last two or three years, it's up, you know, low single digits, but we've sort of assumed just flattish church attendance. And this is all U.S., I should say. the number of faith-based organizations the number of buildings is actually up a couple percent and then giving is actually up about 4 or 5 percent over the last 10 or 20 years and then on top of that then you have the digitization going from essentially no technology to manage, operate, engage with the congregants to now starting to do that And so that's why you have a sort of call it 9-ish percent growth rate in the market and then the ability for this company to compete and win on top of that, which they've done for the last five, six, seven years. So there's a lot of penetration to still happen there. The import also relative to the competitive intensity, their engagement technology, which SubSplash really created, invented, is a clear market leader. When you engage, when you use modern-day engagement technologies, and this is more than just websites and live streaming for churches, then you find there's a 15% increase in donations when you engage the congregate that way, which then loops in the ability to drag along the church management software and other elements into this single stack. So lots of good flywheel effects here that the company has demonstrated in their most recent history, and we've underwritten two going forward. Final thing is, something like 50% of donations in churches are still cash and checks, so there's still a large digitization of payments as well.

Thank you, guys.

Thank you. And your next question comes from the line of Dean Dray with RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone. Good morning, Dean. Hey, just want to circle back on the DAT and load link combination. And it makes intuitive sense here, but can you flesh out like what the synergies are expected to be, both on kind of go-to-market, but might there be any cost synergies?

Yeah, I think it's first the first big opportunity for us is there's a managerial synergy, if you will. We've got an amazing leadership team at DAT, and the businesses are essentially the same, one in the Canadian market, one in the U.S. market. So we just get a network-oriented leadership team thinking about the network is one. Two, there is a cross-border U.S. to Canada and maybe in the future U.S. to Mexico subtlety in the freight matching business, which we'll be able to better manage when we sort of have the businesses together. In terms of the actual network, the underlying technology itself, we're sort of taking a wait-and-see approach on that. I mean, the two markets, the two networks fundamentally operate very, very well today. DAT in the U.S. is extraordinarily busy in an exciting way integrating the trucker tools transaction, the outgo transaction, and executing the monetization strategy. So, as you know, essentially every broker and every carrier in the U.S., North America, is on the DAT network, and we monetize both sides through a subscription. And now we're going down looking at the value stack of a carrier, in this case factoring. We have that captive now to DAT, and we have partnerships, for instance, with legal services and fuel cards. And on the broker side, you look at what we can do to help them. It starts with tracking with trucker tools, and there's other things that DAT is working on. And so you have that sort of U.S.-centric oriented, that port into the Canadian market over time as well. So it's really playing the medium to long game here, Dean, versus some short-term synergy play.

Great. That was really helpful. And just to follow up, and Neil, I'm not sure how much you can comment, but has there been any change in the board's thinking about potentially exiting some of the non-software businesses? There was a media article suggesting Neptune might be exited. Can you comment on this, anything about potential timing? Thanks.

Yeah, Dean, I'll say what we've said publicly for the better part of two and a half years, which is it was really just November of 2022 when the current portfolio came into existence. And as you know, the driving force behind divesting Transcor and ZTech and the industrial businesses to CD&R and various in Singapore telecom engineering, et cetera, was to beat the cyclicality out of our business. And so that was the decision that we made, and we liked that decision. The product businesses we have today are great businesses. They meet all of our criteria, leaders in its markets, that compete on intimacy, that have great economics and margin profile. They're consistent or slightly better than organic growth aspirations. And so they're doing particularly well in the portfolio and proving to be non-cyclical. So that's our strategy, and we're going to play this one through. Thank you.

Your next question comes from the line of Scott Davis at Milius Research. Please go ahead.

Hey, good morning, guys.

Good morning, Scott. Thanks for joining.

Thanks for having me. Hey, I just want to follow on on kind of Dean's question, but in a different way. When you think about the structural change that has occurred at Roper, which has been pretty meaningful the last few years, what do you, what would, and now you include Subsplash, which seems like it's a pretty interesting deal, but what do you think your core growth rate or kind of entitlement growth rate has changed, kind of, I don't know, just say 2022 to 2026?

Yeah, so in the Thanksgiving of 2022 time, we snapped the chalk line with the investors, we talked about the historical growth rate of that portfolio was somewhere in the six, six and a half percent range. We believe that we have improved the sort of through cycle, if you will, sort of the minimal cycle that we have, you know, puts or takes in a given year to be in the seven, seven and a half range. We've said that for the last couple of years. This isn't any guidance to this year, next year. This is sort of through year over year, so people aren't confused. And the art of the possible is in the mid-eighths with this portfolio. Then, as we buy businesses that are growth accretive, subsplash is something like 15 basis points growth accretive organic, I think. Accenture each was 30 or 40 basis points, something like that. Then it either A, provides a hedge to what I just said, or B, provides an opportunity to stack on top of that. So I hope that answers your question, but happy to clarify anything I just said.

No, that does answer it. And then, look, there's been a lot of questions on subsplash, but just to be clear, I'm not asking for an exact number, but within your deal model, are you assuming that subsplash will be somewhere around segment average EBITDA margin year five-ish? Does that sound about right?

It's going to be a little bit below, Sky, because network's in sort of the mid to high 50s EBITDA, and so we'd say it'd be in the low 40s.

Thank you, guys.

And this concludes our question and answer session. I would like to turn it back to Zach Moxie for any closing remarks.

Thank you, everyone, for joining us today. We look forward to speaking with you during our next earnings call.

And the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.