ROPRoper Technologies

We are increasingly incorporating artificial intelligence (“AI”) AI solutions into our platforms, offerings, services, and operations, and we expect that AI will continue to become a more important to integral part of our company business over time. Our competitors competitors, AI companies, or other third parties may incorporate AI into their products or operations more quickly or successfully than us, or develop superior products and services with the aid of AI, which could impair our ability to compete effectively and adversely affect our results of operations. The rapid pace of AI advancement may make it difficult to maintain competitive advantages, and AI capabilities could quickly become commoditized, reducing our ability to differentiate our offerings. Additionally, we may face challenges in protecting AI-generated innovations as intellectual property protections for AI-created materials remain uncertain in many jurisdictions. Competitors may be able to reverse-engineer or replicate our AI capabilities, and questions regarding ownership of AI-generated content or inventions could create legal uncertainties. Furthermore, if we use AI that is based on data, algorithms, or other inputs that are flawed, or if the AI assists in producing content, analyses, or recommendations that are or are alleged to be deficient, inaccurate, violative of third-party intellectual property, or biased, our business, financial condition, and results of operations may be adversely affected. The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation and results of operations. AI also presents emerging ethical issues, and if our use of AI becomes controversial we may experience brand, reputational, or competitive harm, or legal liability.

In our Application Software segment, net revenues grew 15.9% to $4,483.0 for the year ended December 31, 2024 were $3,868.3 2025 as compared to $3,186.9 $3,868.3 for the year ended December 31, 2023. 2024, led by acquisition contribution from Transact and CentralReach. The growth of 5.6% 5.4% in organic revenues was broad-based across the segment led by our businesses serving the project-based business/government contracting, acute healthcare, property and casualty insurance, and legal markets. markets, partially offset by a decrease in organic non-recurring revenue driven primarily by our business serving the government contracting market. Gross margin decreased increased slightly to 68.5% for the year ended December 31, 2025 as compared to 68.4% for the year ended December 31, 2024 as compared to 68.9% for the year ended December 31, 2023, 2024, due primarily to improved leverage on higher organic revenues, which was offset by a lower gross margin profile associated with the higher payments revenue mix at Procare and Transact, our 2024 acquisitions, whose results reduced gross margin by 180 basis points. This decrease was partially offset by improved leverage on higher organic revenues. Transact. Selling, general and administrative (“SG&A”) expenses as a percentage of net revenues decreased improved to 41.6% in the year ended December 31, 2025 as compared to 42.0% in the year ended December 31, 2024 as compared to 43.1% in the year ended December 31, 2023, 2024, due primarily to lower SG&A profiles at Procare and Transact, which collectively reduced SG&A as a percentage of net revenues by 70 basis points, operating leverage on higher organic revenues, revenues and cost synergies resulting from the integration of Syntellis. Transact with CBORD, partially offset by higher amortization of acquired intangibles from the acquisition of CentralReach. The resulting operating margin was 26.8% in the year ended December 31, 2025 as compared to 26.5% in the year ended December 31, 2024 as compared to 25.8% in the year ended December 31, 2023. 2024.