Roper Technologies shares surged more than 10% Thursday after the software company reported stronger-than-expected quarterly earnings and raised its full-year outlook, offering investors some reassurance about its business in the age of artificial intelligence.
The stock closed regular trading up 9.7%, bucking the trend of tech stocks falling. The Nasdaq closed down 2.6%.
Roper isn't a household name. The company owns dozens of specialized software and technology businesses serving industries including healthcare, insurance, construction, education, and transportation.
Its products help customers manage everything from insurance policies and legal operations to freight shipments and healthcare workflows. Unlike consumer-facing technology companies, Roper focuses on niche markets where its software is embedded in customers' daily operations.
That business model appears to be holding up.
Third-quarter revenue increased 8% from a year earlier to $2.17 billion, roughly matching analysts' expectations. Adjusted earnings rose 15% to $5.89 a share, beating the consensus estimate of $5.79.
To be sure, share repurchases helped boost per-share earnings growth. The company reported repurchasing 3.6 million shares for $1.2 billion in the second quarter alone. Adjusted net income increased only 5%.
More importantly, organic revenue growth accelerated to 7% from 5% in the previous quarter, suggesting stronger underlying demand besides the acquisitions the company made in the previous quarters.
Roper also raised its full-year adjusted earnings forecast to the range of $22.35 to $22.40 a share, from $22.15 to $22.30 previously.
The results provide encouraging evidence for investors concerned that artificial intelligence could disrupt traditional software providers. Roper is betting that AI can eventually accelerate growth across its specialized software businesses.
CEO Neil Hunn said Roper is incorporating AI-powered tools into its existing products to help customers automate complex tasks. He said in September that AI could potentially add hundreds of basis points to the company's organic revenue growth rate, although the timing and magnitude remain uncertain.
The company has already seen encouraging demand at its CentralReach unit, where AI and AI-influenced products accounted for 75% of new-business bookings in the first quarter, the company said during an April earnings call.
Investors aren't entirely convinced yet. Despite Thursday's jump, Roper shares remain roughly 26% below their record high in March 2025. Investors will continue to watch whether AI innovation can accelerate demand for Roper's products -- or threaten the competitive advantages of its software businesses.
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