Allison Poliniak: Understood. Thank you.
Neil Hunn: Yeah. Thank you.
Operator: The next question comes from Deane Dray with RBC Capital Markets. Please go ahead.
Deane Dray: Thank you. Good morning, everyone.
Neil Hunn: Good morning.
Jason Conley: Good morning, Deane.
Deane Dray: Hey, first, congrats on hiring Janet. I’ve known her many years. I think she’ll be a great addition to the team. So congrats.
Neil Hunn: Thanks for saying that. We’re looking at her, she’s sort of an — she’s not on the back script, we’re looking at her, and she’s a blushing. So she’s got to be great as part of the team for sure.
Deane Dray: That’s fabulous. All right. So, first, I wanted to go back more of a macro question. Had there been any changes at the margin and customer decision-making? You know, the pace of new logos, you called out Deltek, which is understandable given their government service side, some of the uncertainties there, but just kind of broad-brush, are you seeing any changes in customer behavior?
Neil Hunn: So it’s played out as we anticipated over the course of the year. It’s really been a mixed bag. Just look at one company in Deltek, strong across SMB, both on the government contracting and private sector, professional services markets, strong at the enterprise level for PS, less strong on the government contracting side at the enterprise level. So it really is a mixed bag. In that case, it’s less macro related and more tied to the uncertainty around what’s happening to the federal government and budgets and what’s going on there. You see strength across iPipeline. You see strength at Aderant. Those are very healthy customer bases. So it really is a mixed bag. Obviously, the weakness at DAT given that we just talked about with just where freight markets are, so it’s really a collection of bespoke things than it is sort of a broad brush macro across the portfolio.
Deane Dray: All right. That’s good to hear. And then second question on maybe more of an update on Gen AI. It was interesting that you called out several initiatives at the companies are pursuing DAT and Aderant. Are these mostly bottom-up initiatives by the companies? Or is there anything from the headquarter side, maybe you’re getting some expertise to help identify opportunities? And you know maybe give us a sense of how penetrated it is today within Roper and what kind of adoption might you see a year from now just to kind of — it sounds like you’re playing more offense here in this and would love some insights. Thanks.
Neil Hunn: Sure. Yeah. So we’re definitely playing offense here. We think this is a transformational technology, right? It’s not a trendy paradigm or hyping a fab. We think this is a foundational technology that will change the way we all live our personal lives and this will be conducted over the course of the next five years to 10 years, right? So that’s our view on the technology of Gen AI and large language models, et cetera. So what we’re doing is really a combination of top-down bottoms-up, if you will. From a top-down perspective, Deane, we’ve organized — we deputized, I should say, a couple of our group executives, Satish Maripuri and Mike Corkery, to lead an education series across a variety of topics around Gen AI for our companies.
So we’ve done a series of Zoom meetings, you know, three or four. We’ve got five or six still to go. They’re spaced out every three weeks or four weeks around, that started with what is Gen AI, and it’s evolving more and more into how do you deploy methods of deployment, where and how in the organization you deploy it both in productivity and new product ideas. So the hope with that is that it’s — it spurns this creative thinking across the 18,000 people at Roper. Think about how to impact our customers positively, how to impact our operations positively. So ultimately, it will be a bottoms-up, groundswell of ideas, but we’re accelerating the learning, if you will. Ultimately, we might do a couple other things that center around, you know, contracts with some of the larger players or deployment models for cybersecurity, and safety and security purposes.
But as with Roper, all the good ideas will be generated bottoms-up from the field and the leadership team and the employee base.
Deane Dray: Great to hear. Thank you.
Neil Hunn: Welcome.
Operator: The next question comes from Joe Vruwink with Baird. Please go ahead.
Joe Vruwink: Great. Thank you. In the slides, you make the distinction that organic software growth, the recurring software growth that’s already in the high single-digits. And then, of course, your reported organic is 5%. I guess the question is that generally going to be the spread you would expect just given professional services and probably license attrition over time? And then is that spread expected to be consistent in the foreseeable future?
Jason Conley: Hey, Joe, it’s Jason. I would say that — there always will be a spread. It was probably a little bit more pronounced this quarter just because we had some deals in AS push out, and we have — you know, we talked about Foundry going from, you know, perpetual to subscription. So yeah, there always will be a spread. It’s — like I said, it’s probably a little bit more pronounced than the third quarter though.
Joe Vruwink: Okay, thanks for that. And then I wanted to go back a couple of quarters ago now you mentioned that AS had ramping services capacity that was to support strong bookings in your health care assets. I’m wondering if you can maybe just provide an update on maybe whether those awards have gone live. And then in the broader healthcare apparatus, you know, what are you seeing there? Obviously, you’re increasing exposure there now via M&A I guess, how does maybe organic growth as a profile stand relative to the AS broader segment?
Neil Hunn: Yeah. So relative to the professional services ramp build, that was principally at our laboratory — global laboratory business, Clinisys. They’ve done just a tremendous job competing and winning in the UK, in the French market, in the Benelux region, they tend to be larger installs, and they did a nice job there. It also is around power plan, were that — I think their second quarter services bookings was the largest services bookings quarter in the company’s history, if my memory serves me correctly. So the deals have sort of formed in the capacity is in the process being utilized. So good operational sort of foresight from those two businesses. And then relative to health care exposure, I mean, it’s with Syntellis.
