Roper Technologies Inc. (NASDAQ:ROP)

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Area Asset Turnover: United States

Roper Technologies Inc.; United States; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Net revenues	4,665,700)	4,753,500)	4,621,800)	4,467,500)	4,320,100)
Long-lived assets	196,500)	178,500)	191,000)	164,600)	145,200)
Area Activity Ratio
Area asset turnover¹	23.74	26.63	24.20	27.14	29.75

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ 2022 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= 4,665,700 ÷ 196,500 = 23.74

The financial performance within the United States region between 2018 and 2022 is characterized by a gradual decline in asset utilization efficiency, despite an overall increase in net revenues during the majority of the period. The primary driver of this trend is the growth of long-lived assets outpacing the growth of revenue generation.

Net Revenue Trends: Net revenues demonstrated steady growth from 2018 through 2021, increasing from US$ 4.32 billion to a peak of US$ 4.75 billion. This growth trend reversed in 2022, where revenues decreased to US$ 4.67 billion, reflecting a year-over-year decline of approximately 1.8%.
Long-lived Asset Accumulation: The base of long-lived assets experienced a significant net increase over the five-year period, rising from US$ 145.2 million in 2018 to US$ 196.5 million in 2022. While a temporary contraction occurred in 2021, the overall trajectory indicates a substantial expansion of the asset base, totaling an increase of approximately 35.3% by the end of 2022.
Area Asset Turnover Performance: The area asset turnover ratio exhibited a general downward trend, falling from 29.75 in 2018 to 23.74 in 2022. A brief recovery was noted in 2021, where the ratio rose to 26.63, corresponding with a reduction in long-lived assets during that fiscal year. The final ratio in 2022 represents the lowest point in the observed period, confirming that the investment in long-lived assets has not yielded a proportional increase in revenue.

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Area Asset Turnover: Non-U.S.

Roper Technologies Inc.; Non-U.S.; area asset turnover calculation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in thousands)
Net revenues	843,800)	1,273,400)	1,193,100)	1,163,500)	1,152,000)
Long-lived assets	17,100)	29,900)	33,000)	33,200)	30,000)
Area Activity Ratio
Area asset turnover¹	49.35	42.59	36.15	35.05	38.40

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ 2022 Calculation
Area asset turnover = Net revenues ÷ Long-lived assets
= 843,800 ÷ 17,100 = 49.35

The financial performance for non-U.S. geographic areas reflects a significant shift in asset utilization and revenue generation between 2018 and 2022. While the period began with a phase of steady revenue growth, the most recent fiscal year indicates a substantial contraction in both top-line revenue and the asset base.

Net Revenue Trends: Net revenues experienced consistent growth from 2018 through 2021, increasing from US$ 1,152,000 thousand to a peak of US$ 1,273,400 thousand. A sharp reversal occurred in 2022, with revenues falling to US$ 843,800 thousand, marking a significant decline from the preceding year's levels.
Long-lived Asset Management: Long-lived assets remained relatively stable from 2018 to 2021, fluctuating between US$ 29,900 thousand and US$ 33,200 thousand. A marked reduction is observed in 2022, where the asset base decreased to US$ 17,100 thousand, suggesting a strategic divestiture or significant reduction in the long-term asset footprint within non-U.S. markets.
Area Asset Turnover Interpretation: The area asset turnover ratio demonstrates a general upward trajectory, rising from 38.40 in 2018 to a peak of 49.35 in 2022. The increase in the ratio during 2022, despite the decline in total revenue, is attributed to the fact that the reduction in long-lived assets was proportionally greater than the decline in revenues. This indicates an increase in the efficiency of revenue generation relative to the remaining non-U.S. asset base.

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Roper Technologies Inc., net revenues by geographic area

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States	4,665,700)	4,753,500)	4,621,800)	4,467,500)	4,320,100)
Non-U.S.	843,800)	1,273,400)	1,193,100)	1,163,500)	1,152,000)
Eliminations	(137,700)	(249,100)	(287,800)	(264,200)	(280,900)
Total	5,371,800)	5,777,800)	5,527,100)	5,366,800)	5,191,200)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Total net revenues exhibited a consistent upward trajectory from 2018 to 2021, peaking at 5,777,800 thousand USD. However, a contraction occurred in 2022, with total revenues decreasing to 5,371,800 thousand USD, effectively reversing a significant portion of the gains achieved over the preceding three years.

United States Revenue Performance: Revenue within the United States grew steadily from 4,320,100 thousand USD in 2018 to a peak of 4,753,500 thousand USD in 2021. This period of growth was followed by a marginal decrease to 4,665,700 thousand USD in 2022, indicating that the domestic market serves as a relatively stable revenue base.
Non-U.S. Revenue Performance: International revenues showed modest growth between 2018 and 2021, rising from 1,152,000 thousand USD to 1,273,400 thousand USD. A sharp contraction was observed in 2022, where revenues fell to 843,800 thousand USD. This represents a significant decline in international market contribution compared to the peak observed in the prior year.
Intercompany Eliminations and Geographic Concentration: Intercompany eliminations fluctuated between 2018 and 2021 before decreasing to -137,700 thousand USD in 2022. The overall revenue composition remains heavily weighted toward the United States. The decline in total consolidated revenues in 2022 is primarily attributable to the volatility in the Non-U.S. segment rather than a substantial reduction in domestic performance.

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Roper Technologies Inc., long-lived assets by geographic area

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
United States	196,500)	178,500)	191,000)	164,600)	145,200)
Non-U.S.	17,100)	29,900)	33,000)	33,200)	30,000)
Total	213,600)	208,400)	224,000)	197,800)	175,200)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The distribution of long-lived assets exhibits a strategic shift toward domestic concentration over the five-year period analyzed. While total long-lived assets increased from 175.2 million US dollars in 2018 to 213.6 million US dollars in 2022, the growth was driven exclusively by assets within the United States, contrasting with a sharp decline in international holdings.

United States Asset Trends: Domestic long-lived assets demonstrated a general upward trajectory, rising from 145.2 million US dollars in 2018 to 196.5 million US dollars by the end of 2022. Despite a moderate contraction in 2021, where values dipped to 178.5 million US dollars, the recovery in 2022 indicates a sustained investment in US-based infrastructure and long-term resources.
Non-U.S. Asset Trends: International long-lived assets experienced a period of relative stability between 2018 and 2020, peaking at 33.2 million US dollars in 2019. However, a significant downward trend emerged thereafter, with a sharp acceleration in the decline during 2022, where assets fell to 17.1 million US dollars. This represents a decrease of approximately 48% from the 2019 peak.
Geographic Concentration and Composition: The proportion of total long-lived assets situated in the United States has increased substantially. In 2018, US assets comprised approximately 82.9% of the total. By 2022, this concentration rose to approximately 92% of the total asset base. This shift reflects a diminishing reliance on non-U.S. physical or long-term assets in favor of domestic holdings.
Total Asset Volatility: Total long-lived assets peaked in 2020 at 224.0 million US dollars before experiencing a correction in 2021. The subsequent stabilization at 213.6 million US dollars in 2022 was achieved through the offset of continued US asset growth against the accelerating reduction of non-U.S. assets.

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