Q3 2018 Financial Results October 26, 2018 Safe Harbor Statement - PowerPoint PPT Presentation

A Diversified Technology Company Q3 2018 Financial Results October 26, 2018

Safe Harbor Statement The information provided in this presentation contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements may include, among others, statements regarding operating results, the success of our internal operating plans, and the prospects for newly acquired businesses to be integrated and contribute to future growth, profit and cash flow expectations. Forward-looking statements A Diversified Growth Company 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 contained in any forward-looking statement. Such risks and uncertainties include our ability to identify and complete acquisitions consistent with our business strategies, Click to edit Master title style integrate acquisitions that have been completed, realize expected benefits and synergies from, and manage other risks associated with, the newly acquired businesses. We also face general risks, including our ability to realize cost savings from our operating initiatives, general economic conditions and the conditions of the specific markets in which we operate, changes in foreign exchange rates, difficulties associated with exports, risks associated with our international operations, increased product liability and insurance costs, increased warranty exposure, future competition, changes in the supply of, or price for, parts and components, environmental compliance costs and liabilities, risks and cost associated with asbestos related litigation and potential write-offs of our substantial intangible assets, and risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products. Important risks may be discussed in current and subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. We refer to certain non-GAAP financial measures in this presentation. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found within this presentation. 2

Reg. G Disclosure Today’s Conference Call Will Discuss Results Primarily on an Adjusted (Non-GAAP) Basis. The Q3 2018 Results are Adjusted for the Following Items: A Diversified Growth Company (1) Acquisition-Related Intangible Amortization Expense (2) Purchase Accounting Adjustment to Acquired Deferred Revenue Click to edit Master title style (3) Debt Extinguishment Charge (4) Measurement Period Adjustment to 2017 Provisional Income Tax Amounts Resulting from the Tax Cuts and Jobs Act See Appendix and Press Release for Reconciliations from GAAP to Adjusted Results 3

Roper Conference Call » Q3 2018 Enterprise Financial Results A Diversified Growth Company » Segment Detail & Outlook » Q4 and FY 2018 Guidance Click to edit Master title style » Q&A 4

Q3 2018 Enterprise Highlights » Record Results: Revenue, EBITDA, Net Earnings, Cash Flow » Revenue +13% to $1.32B; Organic +9% – Double-Digit Revenue Growth in All Four Segments » Gross Profit +14%; Margin +80 Bps to 63.8% » EBITDA +16% to $473M; EBITDA Margin +100 Bps to 35.8% – Double-Digit EBITDA Growth with Margin Expansion in All Four Segments » Earnings Before Taxes +18% to $411M » DEPS +31% to $3.09 » Free Cash Flow +34% to $404M, 31% of Revenue Tremendous Performance Across the Board 5 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.

Q3 Income Statement Metrics Q3’17 Q3’18 (in $ millions, except DEPS) Revenue $1,171 $1,321 +13%; Organic +9% A Diversified Growth Company Gross Profit $738 $842 Gross Margin 63.0% 63.8% +80 bps Click to edit Master title style EBITDA $407 $473 +16% EBITDA Margin 34.8% 35.8% +100 bps Interest Expense $46 $48 Earnings Before Taxes $348 $411 +18% Tax Rate 29.7% 21.5% Net Earnings $245 $323 DEPS $2.36 $3.09 +31% 6 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.

Compounding Cash Flow Q3 Operating Cash Flow » Q3 Operating Cash Flow: $418M (in $ millions) – +32% vs Prior Year – 32% of Revenue +32% $418 » Q3 Free Cash Flow: $404M – +34% vs Prior Year $316 – 31% of Revenue » YTD Operating Cash Flow: $966M – +12% vs Prior Year 2017 2018 Free Cash Flow = Operating Cash Flow less Capital Expenditures and Capitalized Software Cash Remains the Best Measure of Performance 7 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.

Asset-Light Business Model (1)(2) as % of Q3 Net Working Capital Annualized Revenue Q3 Deferred Revenue (2)(3) (in $ millions) 9/30/16 9/30/17 9/30/18 $620 (I) Inventory 5.2% 4.5% 4.4% $535 (R) Receivables 16.3% 16.4% 16.6% $290 (P) Payables & 11.1% 12.0% 11.5% Accruals (D) Deferred 7.7% 11.5% 11.7% Revenue 2016 2017 2018 Total (I+R-P-D) 2.7% (2.5)% (2.2)% 1) Defined as Inventory + A/R + Unbilled Receivables – A/P – Accrued Liabilities – Deferred Revenue; Excludes Acquisitions Completed in Each Quarter and Dividend Accrual. 2) Includes Gatan’s assets and liabilities that have been classified as held-for-sale on Roper's balance sheet. 3) Ending balance as of September 30 th . Negative Net Working Capital Accelerates Cash Flow Compounding 8 Note: Percentages may not sum correctly due to rounding.

Strong Financial Position » Successful $1.5B Bond Offering in August – $700M of 3.65% Senior Notes due 2023 – $800M of 4.20% Senior Notes due 2028 » Redeemed $500M of 6.25% Senior Notes due 2019 – $16M One-Time Debt Extinguishment Charge in Q3 » Well Positioned for Rising Interest Rate Environment – $4.1B of Fixed Rate Debt at 3.5% (weighted) (1) » Gross Debt-to-EBITDA: 2.8x (2) – Before Gatan Divestiture Proceeds 1) As of 10/1/18. 2) Per Credit Facility Definition. Strategically Positioned for Continued Capital Deployment 9 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.

Segment Detail & Outlook 10

RF Technology & Software (43% of Roper Revenue) Q3 Highlights » Organic +4% Q3’18 V to PY (in $ millions) Revenue $563 +14% A Diversified Growth Company » Software Businesses +6% Organic; Toll and Op Profit $168 +16% Traffic In-Line with Expectations Core: +100 bps » OP Margin 29.8% Continued Strong Deltek Performance; Acq.: (60) bps Click to edit Master title style Software Growth Balanced Across GovCon EBITDA $226 +17% and Professional Services End Markets » Outstanding Freight Match Growth; Network Expansion and Favorable Market Conditions Q4 2018 » » Double-Digit Aderant Growth Aided by Share 6 - 8% Organic Growth for the Segment Gains » Software Businesses Continue Strong Growth » PowerPlan Performing Well; SaaS Wins in and Cash Performance Adjacent End Markets » Toll and Traffic Improves on Timing of Tag » Favorable Pipeline of Toll and Traffic Shipments and Easier Project Comps Opportunities for 2019 11 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.

Medical & Scientific Imaging (29% of Roper Revenue) Q3 Highlights » Organic +11% Q3’18 V to PY (in $ millions) A Diversified Growth Company Revenue $380 +11% » Medical Businesses +7% Organic; Strong Op Profit $133 +15% Scientific Imaging Shipments as Expected OP Margin 35.0% +140 bps » Growth Across Niche Application Software Click to edit Master title style EBITDA $161 +11% Businesses Serving Healthcare Markets » Double-Digit Verathon Growth Q4 2018 – Demand for New BladderScan » 5 – 6% Organic Growth for the Segment – North American Sales Execution » MSD Growth from Medical Businesses – GlideScope Recurring Revenue Strength » Gatan Divestiture Expected to Close by the End of 2018 » Northern Digital Growth on Continued Adoption of Proprietary Electromagnetic Measurement Technology 12 Results are presented on an Adjusted (Non-GAAP) basis. See Appendix of this presentation and press release for reconciliations from GAAP to Adjusted results.