Roper Technologies Inc. (NASDAQ:ROP)

The analysis of the financial data over the five-year period reveals several notable trends in the intangible asset components.

Goodwill

Goodwill has shown a consistent upward trend from 9,346,800 thousand USD in 2018 to 15,946,100 thousand USD in 2022, representing a growth of approximately 70.7%. The most significant increase occurred between 2019 and 2020.

Customer Related Intangibles

Customer related intangibles also experienced strong growth, rising from 3,926,800 thousand USD in 2018 to 9,300,700 thousand USD in 2022, more than doubling over the period. The steepest increase was evident between 2019 and 2020.

Unpatented Technology

This asset category increased steadily from 504,000 thousand USD in 2018 to 954,600 thousand USD in 2022, showing an overall growth of approximately 89.4%. There was a slight decrease in 2021 before it rebounded in 2022.

Software

Software assets remained relatively stable, with minor fluctuations around the 170,000 to 150,000 thousand USD range. A small decline is noted in the last two years, from 172,400 thousand USD in 2020 to 149,000 thousand USD in 2022.

Patents and Other Protective Rights

These assets exhibited a modest increase from 9,700 thousand USD in 2018 to 10,300 thousand USD in 2022, with a peak in 2020 followed by a slight decline and partial recovery.

Trade Names

Reported in two separate lines with different values and trends, trade names initially increased from 7,300 thousand USD in 2018 to 12,800 thousand USD in 2021, then decreased to 9,700 thousand USD in 2022. Another entry for trade names under "Assets not subject to amortization" shows growth from 608,900 thousand USD in 2018 to 689,300 thousand USD in 2022, with a dip occurring in 2021.

Assets Subject to Amortization, Cost

The cost of assets subject to amortization grew substantially from 4,619,800 thousand USD in 2018 to 10,424,300 thousand USD in 2022, more than doubling. The largest jump occurred between 2019 and 2020.

Accumulated Amortization

Accumulated amortization increased negatively from -1,386,600 thousand USD in 2018 to -3,082,900 thousand USD in 2022, reflecting ongoing amortization of intangible assets in line with the growth in asset costs.

Assets Subject to Amortization, Net Book Value

The net book value of assets subject to amortization showed an overall increasing pattern, rising from 3,233,200 thousand USD in 2018 to 7,341,400 thousand USD in 2022. There was a notable decline in 2021 before recovering in 2022.

Other Intangible Assets

Other intangible assets increased markedly from 3,842,100 thousand USD in 2018 to 8,030,700 thousand USD in 2022, with a peak in 2020 followed by a slight decline in 2021 and rebound in 2022.

Goodwill and Other Intangible Assets (Total)

The aggregate value of goodwill and other intangible assets exhibits a strong upward trajectory, growing from 13,188,900 thousand USD in 2018 to 23,976,800 thousand USD in 2022. Despite a minor decrease in 2021, the overall growth is significant, indicating substantial additions or revaluations of intangible assets during the period.

In summary, the data indicate robust growth in goodwill and customer related intangibles, which are the primary contributors to the increase in total intangible assets. The expansion in assets subject to amortization and their accumulated amortization aligns with the overall increase in intangible assets. Minor fluctuations in other asset categories suggest periodic reassessments or amortization impacts. Overall, the trend suggests ongoing acquisitions and investment in intangible asset categories, reflecting a strategic emphasis on intangible asset accumulation.

Reported Total Assets

There is a consistent upward trend in reported total assets over the five-year period. The value increased from approximately 15.2 billion US dollars at the end of 2018 to about 27.0 billion by the end of 2022. This represents significant growth, with a notable acceleration in asset accumulation between 2019 and 2020.

Adjusted Total Assets

The adjusted total assets, which exclude goodwill or other adjustments, also show steady growth but at a slower pace compared to reported total assets. Starting at approximately 5.9 billion US dollars in 2018, the adjusted total assets rose to about 11.0 billion in 2022. The most rapid increase occurred between 2019 and 2020, with growth plateauing slightly between 2020 and 2021 before continuing to increase in 2022.

Reported Stockholders’ Equity

Reported stockholders’ equity exhibited a clear upward trajectory over the period. Beginning at around 7.7 billion US dollars in 2018, it rose steadily each year to reach roughly 16.0 billion by 2022. This indicates sustained growth in the company’s net worth and suggests shareholder value appreciation over the period analyzed.

Adjusted Stockholders’ Equity

In contrast to reported equity, adjusted stockholders’ equity, which presumably adjusts for goodwill and related items, started from a negative position of approximately -1.6 billion US dollars in 2018 and remained negative throughout most of the period, hitting a low of around -3.9 billion in 2020. However, there is a notable improvement by 2022, where the adjusted equity approaches near neutrality at about 91.7 million US dollars. This trend suggests improved underlying equity value excluding intangible assets over time.

Overall Insights

The data indicate that reported figures show strong growth in assets and equity, largely driven by intangible assets such as goodwill, given the disparity between reported and adjusted values. Adjusted metrics provide a more conservative view of asset and equity growth but still reflect positive trends, especially in the latter years. The improving adjusted equity towards the end of the period may signal enhanced financial health excluding intangible assets or impairments becoming less significant.

The analysis of the reported and goodwill adjusted financial data reveals distinct trends and significant variations across the periods under review.

Total Asset Turnover

The reported total asset turnover ratio exhibits a declining trend from 0.34 in 2018 to 0.20 in 2022, indicating a gradual decrease in efficiency in using assets to generate sales over the period. The adjusted total asset turnover follows a similar downward trajectory, declining more sharply from 0.88 in 2018 to 0.49 in 2022. This suggests that when adjusting for goodwill, asset utilization efficiency has dropped substantially.

Financial Leverage

Reported financial leverage shows minor fluctuations, starting at 1.97 in 2018, slightly declining to 1.91 in 2019, then peaking at 2.29 in 2020 before decreasing to 1.68 in 2022. This indicates a variability in the use of debt relative to equity, with a notable reduction in leverage by the final year. Adjusted financial leverage data is only available for 2022 and is exceptionally high at 120.33, which is an outlier compared to reported figures and suggests either a different calculation basis or an extraordinary event affecting leverage when goodwill adjustments are considered.

Return on Equity (ROE)

Reported ROE fluctuates throughout the period, showing an increase from 12.2% in 2018 to a peak of 18.63% in 2019, followed by a decline to 9.06% in 2020 and steady recovery to 28.34% in 2022. The adjusted ROE available only for 2022 is extremely high at 4956.05%, indicating a substantial impact of goodwill adjustments on net equity profitability for that year, possibly due to very low adjusted equity levels or exceptional income items.

Return on Assets (ROA)

Reported ROA displays volatility, increasing from 6.19% in 2018 to 9.76% in 2019, dropping sharply to 3.95% in 2020, then gradually improving to 16.84% in 2022. The adjusted ROA also shows variability but at higher levels, beginning at 16.00% in 2018, peaking at 24.24% in 2019, dipping to 9.86% in 2020, and rising significantly to 41.19% in 2022. The adjustments apparently enhance the asset profitability metrics markedly.

Overall, the analysis indicates a general decline in asset turnover ratios, both reported and adjusted, suggesting reductions in asset utilization efficiency. Meanwhile, profitability ratios such as ROE and ROA reveal volatility, with significant improvement in the latest period, particularly in adjusted measures, which may reflect the strong influence of goodwill adjustments on the financial performance indicators. The abnormally high adjusted financial leverage and ROE in 2022 warrant further investigation to understand the underlying causes, as they represent outliers relative to reported figures and prior periods.

The analysis of the financial data reveals several key trends in both reported and goodwill adjusted figures over the five-year period ending in 2022.

Total Assets

The reported total assets demonstrated a consistent upward trajectory, starting at approximately $15.25 billion at the end of 2018 and increasing steadily each year to reach around $26.98 billion by the end of 2022. This represents an overall growth of about 77%, indicating significant asset accumulation or acquisition activity.

Similarly, the goodwill adjusted total assets also grew consistently from $5.90 billion in 2018 to $11.03 billion in 2022. This growth of approximately 87% suggests a substantial increase in underlying assets excluding goodwill, which highlights an expansion in tangible or other non-goodwill components of the asset base.

Total Asset Turnover

The reported total asset turnover ratio exhibited a declining pattern, decreasing from 0.34 in 2018 to 0.20 in 2022. This decline suggests that revenue generation relative to total assets became less efficient over the period when considering reported assets including goodwill.

In the adjusted context, excluding goodwill, the total asset turnover ratio also showed a downward trend, though it started at a higher base of 0.88 in 2018 and declined to 0.49 in 2022. Despite the decrease, this ratio remains more than twice the reported turnover ratio throughout the period, indicating better operational efficiency when goodwill is excluded.

Insights

The consistent increase in both reported and adjusted total assets signals ongoing investment or growth initiatives. However, the declining total asset turnover ratios in both contexts imply that asset utilization efficiency has weakened over time. This could be due to slower revenue growth relative to asset growth or increased allocation in less revenue-generating assets.

The more pronounced decline in adjusted asset turnover ratio from 0.88 to 0.49 reflects a reduction of nearly 44%, highlighting potential challenges in converting asset base improvements into proportional revenue increases. The gap between reported and adjusted asset turnover ratios also emphasizes the impact goodwill has on reported asset levels, often inflating assets without contributing directly to revenue-generating capacity.

The financial data reveals several notable trends over the five-year period under review. Reported total assets exhibit a consistent upward trajectory, increasing from approximately $15.2 billion at the end of 2018 to nearly $27.0 billion by the close of 2022. This represents substantial growth in the scale of the asset base.

Adjusted total assets, which reflect values net of goodwill adjustments, also demonstrate steady growth, rising from about $5.9 billion in 2018 to approximately $11.0 billion in 2022. Despite the adjustment, the asset base roughly doubles, indicating underlying expansion independent of goodwill considerations.

Reported stockholders’ equity shows a positive and continuous increase from $7.7 billion in 2018 to $16.0 billion in 2022. This suggests strengthening equity financing and accumulated comprehensive income over the period. However, the adjusted stockholders’ equity figures remain negative from 2018 through 2021, indicating that when excluding goodwill, liabilities exceed assets, except for 2022, where adjusted equity turns slightly positive at around $92 million. This shift could imply improvements in underlying net asset value exclusive of goodwill.

Reported financial leverage, measured as the ratio of total assets to equity, fluctuates but follows a general declining trend from 1.97 in 2018 to 1.68 in 2022. A lower ratio may reflect a relatively stronger equity position compared to debt or liabilities. The peak at 2.29 in 2020 suggests higher leverage during that year, possibly related to acquisition financing or other capital structure changes.

Regarding adjusted financial leverage, data is missing for most periods except for 2022, where a notable figure of 120.33 is recorded. This unusually high ratio may result from the adjusted stockholders’ equity figure being close to zero while adjusted assets remain significant, magnifying the leverage ratio. The lack of data for earlier years limits comprehensive trend analysis for adjusted leverage.

Overall, the data indicates a firm with growing total assets and equity on a reported basis, with increasing asset base even after goodwill adjustments. The transition of adjusted stockholders’ equity from negative to slightly positive in the latest year could signify improving asset quality or successful deleveraging efforts excluding intangible assets. The decline in reported financial leverage further supports a strengthening financial position over the period analyzed.

Stockholders’ Equity (Reported)

There is a clear upward trend in reported stockholders’ equity over the five-year period. Starting at approximately US$7.74 billion in 2018, the equity increased steadily each year, reaching about US$16.04 billion by the end of 2022. The most notable increase occurred between 2021 and 2022, where the equity jumped by nearly 38.7%, indicating significant capital growth or retained earnings during that interval.

Stockholders’ Equity (Adjusted)

The adjusted stockholders’ equity values are negative from 2018 to 2021, beginning at -US$1.61 billion and fluctuating with a marked decline in 2020, reaching -US$3.92 billion. In 2022, a substantial positive reversal occurred, with equity becoming slightly positive at US$91.7 thousand. This shift suggests significant adjustments made for goodwill or intangible asset considerations impacting the equity base until 2021 and a potential impairment reversal or revaluation in 2022.

Return on Equity (ROE) - Reported

The reported ROE demonstrates variability across the periods. It was 12.2% in 2018, rose sharply to 18.63% in 2019, then experienced a decline through 2020 and 2021, falling to approximately 9%. However, in 2022, the ROE surged remarkably to 28.34%, the highest in the observed period. This pattern suggests fluctuations in profitability or net income relative to equity, with a strong recovery and enhanced efficiency or profitability in 2022.

Return on Equity (ROE) - Adjusted

Adjusted ROE figures are not available from 2018 through 2021 but show an extremely high value in 2022 at 4956.05%. This outlier likely results from the previously noted minimal positive adjusted equity in 2022, indicating that even a modest net income relative to a very small equity base caused an inflated ROE metric. This figure should be interpreted cautiously, as it may not reflect operational performance but rather accounting adjustments impacting equity.

The analysis of the financial data reveals several notable trends over the observed period.

Total Assets

Reported total assets have shown a consistent upward trajectory, rising from approximately 15.25 billion US dollars in 2018 to about 26.98 billion US dollars by the end of 2022. This represents significant growth, especially between 2019 and 2020, where assets increased sharply.

Adjusted total assets, which exclude goodwill or other adjustments, also increased steadily but at a lower scale, from around 5.90 billion US dollars in 2018 to approximately 11.03 billion US dollars in 2022. The rate of increase in adjusted assets has been relatively more stable compared to the reported figures, indicating that a portion of the growth in reported assets may be attributable to goodwill or similar intangible assets.

Return on Assets (ROA)

Reported ROA exhibits variability throughout the period, beginning at 6.19% in 2018 and rising to 9.76% in 2019. It then declined significantly in 2020 to 3.95% before recovering moderately in 2021 to 4.86%, and ultimately rising sharply to 16.84% by 2022. This fluctuation indicates phases of varying profitability relative to the asset base.

Adjusted ROA, based on adjusted total assets, consistently presents higher values compared to reported ROA. It started at 16.00% in 2018, peaked at 24.24% in 2019, declined to 9.86% in 2020, then improved to 11.98% in 2021, and surged to 41.19% by 2022. The pronounced increase in adjusted ROA in the final year suggests a substantially improved efficiency in generating returns from the asset base when considering adjustments for intangible assets.

Insights

The disparity between reported and adjusted figures highlights the impact of goodwill and similar intangibles on the company's financial position and profitability metrics. The growth in reported assets is considerably influenced by these factors, whereas adjusted assets provide a more conservative view of the company's tangible asset base.

The marked improvement in both reported and adjusted ROA in 2022 suggests enhanced operational performance or improved asset utilization. The sharp divergence in adjusted ROA relative to reported ROA also implies that, excluding goodwill effects, the company achieved significantly higher returns on its tangible assets in 2022.