Good morning. The Roper Technologies Conference Call will now begin. Today’s call is being recorded. [Operator Instructions] I would now like to turn the call over to Zack Moxcey, Vice President, Investor Relations. Please go ahead, sir..

amortization of acquisition-related intangible assets; purchase accounting adjustments to commission expense, a Sunquest trade name and technology asset impairment related to the merger with CliniSys; and lastly, income tax restructuring associated with our pending divestiture of TransCore.

Reconciliations can be found in our press release and in the appendix of this presentation on our website. And now, if you please turn to Page 4, I will hand the call over to Neil. After our prepared remarks, we will take questions from our telephone participants.

Neil?.

first, our strong finish to ‘21; second, that we are setup very well for solid 2022 organic performance; and third, we have substantial M&A capacity given our rapid deleveraging last year. As it relates to the fourth quarter and closed the 2021, financial performance was excellent with double-digit growth in revenue, EBITDA, DEPS and cash flow.

Additionally, because of our strong cash performance last year, our balance sheet is in a great spot as we exceeded our deleveraging plans for the year. As we look towards our 2022 outlook, we have considerable tailwinds that help setup for a very strong year. Underpinning this outlook is our software recurring revenue growth momentum.

Given strong market demand, continued innovation in new products and increased shift towards our SaaS solutions, we exit 2021 with robust ARR growth that carries momentum into ‘22.

In addition, our product businesses are experiencing strong demand and record levels of backlog, which provide these businesses with an unprecedented level of in-hand orders and revenue visibility heading into the year. Factoring all this together, we expect 6% to 8% organic revenue growth in 2022.

In addition to this organic outlook, our balance sheet is well-positioned to allow us to be more meaningfully offensive with M&A in 2022. So, the table is set for us to have great 2022 and continue our long-term track record of double-digit cash flow compounding.

Now, let me turn things over to our CFO, Rob Crisci, to walk through our financial summary.

Rob?.

Thanks, Neil. Good morning, everyone and thanks again for joining us. Turning to Page 6, looking at our Q4 income statement performance, as Zack stated earlier, all the financials here are reported on a continuing operations basis unless otherwise noted. Both organic revenue and total revenue for the quarter increased 13% to a total of $1.51 billion.

EBITDA grew 12% to $576 million. EBITDA margin was down 10 basis points versus prior year at 38.1%. That all resulted in adjusted diluted earnings per share of $3.73, which was above our guidance range. Free cash flow grew 4% in the quarter on top of last year’s 23% fourth quarter growth.

Cash conversion was once again very strong at 35% of revenue and 92% of EBITDA. Q4 was a nice finish to a very strong year and positions us well for a great 2022. Next slide.

Turning to Page 7, reviewing the Q4 results by segment, Neil will discuss the full year segment performance in more detail a little later, but we wanted to just highlight the Q4 results by segment here. All four segments grew double-digit organically as our businesses executed very well and continued to win within their niche markets.

Application Software segment grew 10% organically with broad-based strength throughout the segment. EBITDA margin increased to 43.8%. For Network Software, excellent 14% organic growth with EBITDA margin increasing to 52.3%.

For Measurement & Analytical Solutions, 15% organic growth was broad-based with double-digit growth at Neptune, medical products and our industrial businesses. EBITDA margin was 31.3% as our businesses continue to navigate supply chain challenges.

Lastly, for Process Technologies, a nice rebound from last year’s decline, with 17% organic revenue growth and EBITDA margins of 31.2%. Next slide. Turning to Page 8, which is a summary of our full year 2021 financial highlights. For full year 2021, organic revenue growth was 9%.

We benefited from both our strong organic growth and meaningful contributions from our recent acquisitions to achieve 19% total revenue growth. EBITDA grew 22% for the year to exceed $2.2 billion. EBITDA margin increased 90 basis points to 38.2%. Full year DEPS increased 23% to $14.18, which was above the high-end of our guidance range.

Free cash flow performance was outstanding for the year with 19% growth to $1.8 billion. Our free cash flow represented 31% of revenue and 82% of EBITDA. Excellent cash conversion, which is of course a key component of Roper’s business model and value creation flywheel.

We are well-positioned to continue our double-digit cash flow compounding moving forward. Next slide. Turning to Page 9, which is the latest installment in our successful deleveraging story. Including our discontinued operations, total operating cash flow for 2021 exceeded $2 billion.

After CapEx and servicing of our dividend, nearly all of our excess free cash flow went to debt reduction. In total, we were able to reduce our net debt by $1.7 billion in 2021, which exceeded the deleveraging outlook we shared with you last January by about $200 million. We ended the year with net debt to EBITDA of 3.1x.

Subsequent to year end, we closed the previously announced $350 million Zetec divestiture, which has further reduced our leverage. The closing of the TransCore divestiture expected for later this quarter will bring in over $2.1 billion of additional after-tax proceeds.

We are pleased with our performance here as we once again demonstrated our ability to quickly delever after large acquisitions, reinforcing our commitment to our solid investment grade ratings. So with that, I will turn it back over to Neil for the remainder of our prepared remarks.

Neil?.

We had a strong ‘21; we are set up very well for a solid 2022 organic performance; and we have substantial M&A capacity heading into the year. As it relates to 2021, our revenues grew 19% to $5.8 billion and 9% on an organic basis. EBITDA grew 22% to $2.2 billion, which was 38.2% of revenue.

Free cash flow grew 19% to $1.8 billion, 31% of revenue and 82% of EBITDA. Finally, we exceeded our deleveraging plan by reducing net debt by $1.7 billion and ending the year with 3.1x leverage. As we discussed throughout this call, we are set up to have a very strong 2022.

Our 2021 software recurring revenue growth provides significant momentum heading into the year. Additionally, our product businesses had and have broad-based demand and record levels of backlog. Taken together and further aided by favorable market tailwinds, we expect to see 6% to 8% organic revenue growth this year.

In addition, we have reloaded our balance sheet and continue to have a highly active and engaged pipeline of M&A opportunities. We anticipate having about $5 billion of available M&A firepower over the course of 2022. As a result, we have a high level of conviction that will continue our double-digit cash flow compounding in 2022.

And with that, let’s open it up to your questions..

Thank you. [Operator Instructions] And today’s first question comes from Deane Dray at RBC Capital Markets. Please go ahead..

Thank you. Good morning, everyone..

Good morning, Deane..

Maybe we can start with the impact of Omicron supply chain, etcetera. It did come up a couple of points, parts in your prepared remarks. But in the scheme of things, it did not sound as impactful as we’ve heard from other companies. So not surprising in measurement and process, it did have an impact.

So could you size there, what might have been either revenue pushouts, because I’ve seen record backlog, so that implies that you might not be able to get some of the product out the door. And then just confirm on the software side, what the impact is, if any. I mean it’s probably limited site access, maybe some landing new logos and so forth.

But just how did that play out? And what’s the expectations in the first quarter when, hopefully, we get to some sort of normal level of activity and access..

Yes. So Deane, I’ll start, maybe going in reverse order. And then there is a handful of [Technical Difficulty] there is no supply chain fortunately. So there wasn’t an impact in any meaningful – not meaningful way on our software businesses. The businesses have been working remote for the last 2 years.

And so that’s a complete – the Omicron spike, if you will, is a complete non-factor. Bookings activity, as we talked about, was super strong in Q4 there. So that’s our view there. On our product businesses, yes, it was – it was more about supply chain, less about Omicron and shutdown of facilities.

I mean it happened for a week here or there, not an impact really in the quarter and the issue on supply chain, as you hear it from some of the companies, it’s not one thing. It is really sort of a hornet’s nest of small things.

One of the nice things about our organization, as you know, is we’ve got 25 or so product businesses and 25 groups of people focused on their bespoke issues, and they did a very nice job in Q4 working through that.

A little bit of margin pressure in those businesses at the gross margin line in Q4, just sort of expediting and sort of pulling things forward to be able to meet demand. A couple of other things I’d say, and I’ll turn it to Rob, is as we look to 2022, those issues haven’t abated.

We expect them to sort of lessen in the second half, but still persist to some degree. And the final thing is the companies, their teams have done a very nice job of sort of taking the price taking price and offsetting going forward in 2022, the impact of the inflationary environment associated with this. Rob, anything you want to....

Yes. That’s right. So yes, it clearly impacts the product margins a little bit. You saw that in the fourth quarter. We’re assuming Q1 is similar and then a little bit of gradual improvement throughout the year on margins for the product businesses..

And did you size or can you size any missed revenues or was it not meaningful?.

It was not meaningful..

Yes, I mean, we’re at record backlog levels as all other businesses are that sell products. And so we will benefit from that moving forward. But we wouldn’t say it was meaningful to sort of revenue in the quarter..

Thank you. Our next question today comes from Christopher Glynn at Oppenheimer. Please go ahead..

Yes, thanks. Good morning, everyone..

Good morning..

So congrats on rebooting the balance sheet there. Just wanted to ask about the pipeline, how are you seeing the toggle between what’s currently most actionable versus decision trees around holding fire? I think sometimes you’ve talked about don’t do the very good at the expense of great..

Well, I want to make sure we understand your question. I mean I think the – in terms of the opportunities that are out there for acquisitions, I mean, it is – there’s a lot of opportunities. There are always a lot of opportunities. The pipeline activity is full, there’s lots of discussions, diligence.

We’re always in some phase of diligence at some point, something. The thing that we said for a very long period of time, the 10 years I’ve been here, is that we continue to invest through cycle. We’re a permanent home. We’re trying to find the very best businesses we can find because we’re going to own them over a very long arc of time.

And that the compounding effect overwhelms any sort of short-term value. We’ve been here and there and compounding overwhelm that in sort of a cycle benefit. That feature is going to have perfect visibility on what the future holds, which we don’t claim to have..

That’s great, it’s helpful. Thanks. And then you’re pretty bullish kind of even multiyear comment on Neptune.

I’m just wondering if you could drill in there a little bit and what you’re seeing specifically for 2022 for Neptune and the particular compounders into 2023, ‘24?.

Yes. I think it’s – we’re not going to – we try not to give guidance on the forward year for a specific business. But you’re right, the commentary and our view of Neptune and what Don and the team’s doing there is quite bullish.

It’s rooted in three things, principally around the products, both the meter itself going more static from mechanical, the reading technology going from – going to more cellular.

And then once you have both of those elements in place, then Neptune becomes more of a data business, helping its customers sort of navigate the data and work with their customers in a more meaningful and impactful way.

Importantly, on the first two, especially the meter technology itself, we think we have some very real proprietary advantages in the static ultrasound technology that we’re using, both on the residential side and the commercial side that we are quite bullish about going forward..

Thank you. Our next question today comes from Allison Poliniak of Wells Fargo. Please go ahead..

Hi, good morning. Just want to talk, I know you mentioned strong freight matching. Obviously, I’m a little biased here in terms of what I cover. But when we think about that, obviously, the network challenges has put a huge spotlight on that market. And I know DAT certainly supports some of the new entrants.

But how are you managing a, I would say, that risk in terms of the viability of some of the new entrants that are coming on to your system or utilizing your system, as well as competitive dynamics? Any thought there?.

Yes, so DAT, as you know, is wonderfully positioned and spot freight market is one of two primary competitors or players that help match the shippers and the brokers and the carriers, I should say.

And as you think about the tech enabling of the brokerage model, DAT sits right in the center of that and as their business model in future is only aided by that. In terms of the tech-enabled brokers, they are just – all brokers are becoming tech-enabled.

There are some that are native tech-enabled and some that are sort of migrating their business models, all of which are customers and all of which were helping do their job to sort of do their business with less human interaction to more computer-driven connectivity..

Got it, that’s helpful. And I guess, leaning on that competitive dynamic, meters, obviously, the growth and opportunity certainly attracts new innovation there. Do you know any change in competitive dynamics or things that you’re concerned around? Obviously, Neptune seems like it’s growing quite nicely for you.

Any thoughts on that?.

Is your question, Allison, on the competitive dynamics on DAT and freight matching or on Neptune?.

Freight matching originally first. But this one will be....

Okay. Yes. So on – no, so hey, we – it’s something that we pay very close attention to. The team at DAT has a very open ecosystem. They partner with many folks, and so we pay attention to all of that. But this is a very vibrant two-sided scaled network. Scale matters a ton here. And I mean, when I say a ton, I mean it’s a huge rate limiter for competition.

You’ve got to have scale on both sides of the network to be effective, very hard, not impossible but super, super hard to create de novo. But we pay attention to that and any competitive activity, and we need to think about how to counteract that.

On the Neptune side, hey, I think this is over a very long arc of time when we think that the metering technology can render a market share advantage. I’ll remind you that Neptune seemingly every year for 20 years ekes out 50 to 100 basis points of market share.

I think we’re clearly the leader in the North American water utility metering space, and we’ll just – we expect that will just continue eking out a little bit of share gain each year..

Thank you. And our next question today comes from Julian Mitchell of Barclays. Please go ahead..

Hi, good morning. Maybe just wanted to dial into the EBITDA margin guidance a little bit, so I think you are guiding sort of EPS up around 9% for the year at the midpoint, sales up maybe 1 point or 2 lower than that right now.

So when we’re looking at EBITDA margins, are we expecting those to be up sort of 20, 30 bps or so at the midpoint? And any color around those product businesses, just to understand in measurement and analytics and in process.

Are we expecting margins up much for the full year as a whole in those two divisions?.

Yes, so we’re – we have EBITDA leverage, right, on organic growth around 40%, which is generally pretty normal. So that on a full year basis I think you’re right. We’ve got total EBITDA margins up a little bit sort of embedded in the guidance. Software businesses are, right, 44% EBITDA for application, 51% for network.

We’ve got that about the same year-over-year, very stable there. You’re growing, you’re investing, we have very nice organic growth in those businesses this year. So that will drive a lot of organic EBITDA growth at those margin levels.

And then – and as we mentioned on products, it’s a little bit lower margins in the first half of the year, similar to Q4. And then I think we’ll benefit from a lot of the price cost things that we’ve been doing as we get to the second half, margins get a little better.

So I think on a full year basis, again there, margins are pretty flat year-over-year, maybe a little bit of improvement as we get to the second half..

That’s helpful.

And just my follow-up question on the free cash flow outlook, very good performance last year with sort of 82% conversion out of EBITDA, anything you’d call out sort of one-timeish helping that and how should we think about cash flow conversion in 2022?.

Yes, so there were a couple of things that helped us this year for sure. I mean, we had great working capital performance, which we view we’ll always have, especially when you have highly negative net working capital of revenue minus 15%. That drives great conversion. In ‘20 in particular, there were some tax benefits that we benefited from.

And so the 80% to 83% conversion is great. We generally feel like if we’re plus or minus 80% conversion, and that’s kind of where we start and then we see sort of the one-off items that happened year-over-year. So that’s – we always sort of I think we’ll be around 80% and then sometimes it ends up a little bit better..

Thank you. Our next question today comes from Scott Davis of Melius Research. Please go ahead..

Good morning guys..

Hi. Good morning..

Neil, can you talk a little bit about what you are trying to accomplish with combining CliniSys and Sunquest? And is – and how do you really combine businesses like that? Do you – can you integrate that – can sales, for example, be combined? Certainly understand any other functions, but just trying to think about holistically how that helps you guys out..

Yes, I appreciate the question. Good morning. So first, I would say, as we have gone through just our portfolio work over my time as being CEO, there is – we have tried to see if there are a little – small pockets where it makes sense to put businesses together.

We did it a couple of years ago with Seaboard and Horizon that are both doing very similar things into the education market. And now with CliniSys and Sunquest, as you know, they are doing literally the same thing, just Sunquest historically in the U.S. and CliniSys across Europe.

So, in terms of this integration, there are still going to be three core technology platforms for the lab information, U.S., UK and global. But this integration is really all about then sharing the innovation from that going forward. The microservices or service-oriented architecture allows us to do that.

The first three in the Q are advanced analytics that helped the laboratorians do their job and make better decisions. The acceleration of anatomic pathology, which is the tissue side of the lab into the cloud and then increasingly, the adoption of molecular or genetics into the lab space.

So, this is more about the product integration, if you will, on a go-forward basis. Go-to-market teams remain very similar as they are selling bespoke into their very specific geographies. So, the go-to-market motion is the same. Final thing I would say here is the teams are totally geeked up about this internally.

There is a ton of enthusiasm and excitement as the team is now 1,300 people, 12 countries, 21 languages and is part of the largest lab diagnostics business in the planet now..

Okay. That makes a lot of sense.

Just a quick follow-up on that, are the customer needs essentially the same when you go around the world now, Neil, when you think about that product offering?.

The customer needs are remarkably similar in that you have the fluid side of a lab, the tissue side of the lab and increasingly, the genetics or molecular labs. And then the integration of the ologies, if you will, rarely now do you have a genetic test without some sort of tissue or blood or urine test.

So, how do you integrate the pathologies is a major theme. So, those things are very similar. And so if you are a lab in the UK, in NHS or your lab in the U.S. or a lab in France or Spain or wherever it is, the needs are very similar..

Okay. Good luck guys. Thank you..

Thank you..

And our next question today comes from Joe Giordano with Cowen and Company. Please go ahead..

Hey. Good morning. This is Rob on for Joe. I just had a couple of questions about like Foundry and iPipeline. You called out some of the secular tailwinds behind these businesses.

And I was just curious how much – you have good penetration there already, but how much is the growth and further gains that you are going to see in the future is from like new enhancements or upgrades to the existing platforms or products that you offer there.

And is there like an opportunity to maybe increase like spend per customer or deepen that wallet as you go forward?.

So, the answer is it’s I will try to generalize them because your question around Foundry and iPipeline, totally different markets, obviously, in media and entertainment and life insurance distribution sort of workflows or channel.

Both businesses have net retention well north of 100%, right, which tells you that you have an appreciating asset from your customer base. You are selling more into your customer base in any given year. That is largely a result of two things. One is your customers are growing with you. They are growing, so you are growing with them.

And then two, you are selling them more value, more things. So, you are correct in that. In Foundry’s case, a lot of their growth has been – they are going to sort of ride the tailwinds of the 8% to 12% of content spend that happens in media and entertainment between streaming animation and theatrical.

But then the workflows in post production are remarkably tedious and manual. And so as we automate those workflows, those are modules that we can sell to monetize the investment in innovation that we are doing there. Similarly, conceptually at least at iPipeline, this is a business that we bought it several years ago.

It was all about and the strategy continues to be what they call straight-through processing. How do you get a – from a quote of life insurance to underwriting life insurance, how does that happen with minimal to no human touch. And so being able to do that and automating those workflows is a huge task.

But as you do that, you are creating a ton of value for the distribution channel and you are able to monetize that through the product..

That’s great. Thank you very much. I will pass it on..

Thank you..

And our next question today comes from Rob Mason of Baird. Please go ahead..

Yes. Good morning. Thanks for taking the question. Neil, you have spoken in the past about a heavy focus on software in the M&A pipeline.

And I am just curious, given what we have seen around public market valuations there over the last couple of months, how private market valuations have responded? And is it requiring more patients on your part if a reset of some sort needs to happen there? Just what you are seeing in private markets?.

Well, we are always patient. So, we should start with that. And so it’s we are patient and disciplined relative to the asset selection, the value that we ultimately try to transact at.

I will tell you my experience here at Roper for a decade and the experience that predate Roper by 15 years sort of being in tech M&A for 20 years or 25 years now is the private markets always lag by some quarter or two quarters or three quarters, the public markets relative to valuation swings to the extent they are meaningful.

And so that’s what our – my personal expectation would be to the extent that we have structurally lower public valuations for software businesses, then it might take a couple of three quarters for those to filter into the private markets. Unclear if that’s the case, right. And so we will be patient.

I also said earlier that our analytics, we always are reviewing the analytics, and our analytics suggest that it’s better to buy a great business at the market clearing price at the time and let the compounding sort of begin rather than it is to try to see if you can wait for that asset and save 0.5 of a turn of EBITDA….

Or by a lower quality business..

Or by a lower quality business, that’s right. But we will be, and we always are patient..

Understand. And just as a follow-up, you had commented on Vertafore’s EBITDA coming in above plan for the year. I am curious, two questions, I guess. What drove that? And then when you purchased Vertafore, you talked about a mid-single digit growth revenue expectation there, but believe that could be conservative over time.

And I am just – as you have owned the business a year, what needs to happen to move that mid-single digit growth perspective higher?.

Yes, so the overdrive on the earnings was they just – they did a better job of managing our costs and the way mix came in on a revenue line. So, it was – and also a little bit is that first part of the year, they are still having a hard time of spending money sort of with COVID. So, it’s a little bit of that.

But more importantly, the momentum that the business left, I mean record bookings in Q4, and just the feedback that we are getting from the customers at the enterprise level did a nice little tuck-in that helps them get some customer acquisition on the lower side of the P&C agency space. That’s doing well in the first few weeks.

In terms of – you are right, we did – the expectation when we bought the business is the mid-single digit growth business, it still very much is that. Is there an upside to high-single digits over a long market time, we would like to hope so.

Amy and her team have a very well-articulated data-driven, market-driven outside-in strategy and there is some execution associated to sort of inflect the growth rate a bit higher, but right now, we will hold at mid-singles and want to see Amy and the team put post a few years of better performance where we call it high singles..

Thank you. And our next question today comes from Steve Tusa of JPMorgan. Please go ahead..

Hi. Good morning..

Hi. Good morning Steve. Good to hear you..

Can you give us some color on first quarter organic trends just what the guidance for first quarter organic growth? And then, sorry, I just wanted to clarify on EBITDA margins.

What do you guys expect for the first quarter kind of on a year-over-year basis?.

Yes. So, we have the 6 to 8 organic revenue guide for the year. It’s really pretty consistent throughout the year. For the first quarter, the software businesses are a little bit stronger, given all the ARR momentum we have coming out of Q4.

And then the product businesses are a little bit lower, given some of the supply chain challenges we have spoken about. And then I think, as I mentioned, the EBITDA margins we have for Q1 are flat sequentially to what we had in Q4 for the company..

Okay, great.

And then just on that kind of comment about double-digit free cash flow growth in compounding continuing is that kind of a high level of guide for the year? And could you – will you be growing free cash flow double digit without another acquisition, or would that take another acquisition to grow?.

Yes. So, I mean it’s not a guide. It’s what we do here at Roper. So, I think if you take our organic and you take capital deployment and you look at us over any given year or certainly over a couple of years, we are double-digit compounder. So, I think that will continue to be the case.

And we have got a lot of firepower for M&A that will certainly help that number here in the next couple of years..

Thank you. Our next question today comes from Brian Lau of Wolfe Research. Please go ahead..

Hi. Good morning everybody. I just wanted to talk about the network software and systems guide. So, high-single digits in ‘22 after a couple of strong mid to high teens quarters in 3Q, 4Q, kind of meaningfully ahead of the historic trends of like mid-single digits.

Is this the new medium-term kind of algorithm for the segment? And is this where you think application software can get as you kind of continue the SaaS transition there as well?.

Yes. Well, just historically, TransCore was in that segment, right. So, the software business have a little bit higher organic growth profile than the old segment did with TransCore was a little bit of more up and down given on various projects. And I will turn it over to Neil..

Yes. I mean I think it’s – that work has been strong. It’s been strong across the board as we highlighted this quarter, much of 2021. There was like super strength at our Freight Match businesses, both in North America and Canada.

So, that super strength to moderate a little bit, while the rest of the portfolio improves a little bit, but it’s – this has been a great couple of years last year, this year for network. Application software, the businesses are great. I think that all of them sort of are very steady eddy mid-single digit growers.

As we transition more of a revenue stream away from perpetual into recurring over a long arc of time, is there a chance that, that can inflect a little bit higher, I believe so, but it’s going to take a few years to do that..

Okay. Great. And then just on measurement, could you just clarify what the growth would look like in ‘22 without supply chain constraints versus that kind of high-single digit outlook? Thanks..

Hard to quantify..

It’s very hard to say. I mean I think probably in the same ballpark..

Thank you. Ladies and gentlemen, our next question today comes from Brendan Luke with AllianceBernstein. Please go ahead..

Good morning. Thanks for taking my question.

As I look at application software and network software and systems, just speaking to the recurring revenue growth, would you say that sort of active SaaS transitions are a drag on the top line here, or we sort of entered the phase where they are driving top line growth disproportionately?.

So, I appreciate the question. I love talking about this one. So, we believe in the application software business that the transition to SaaS is a net growth driver. You have two opposing factors going on. You have – as you transition new clients to the SaaS recurring models. Obviously, that’s the classic J-curve as it relates to perpetual.

We are in the year, and that’s a bad guy. Over the long-term, that’s a great guy because you have a higher level of recurring revenue.

Offsetting that is, as we have these businesses that have very large installed bases of customers that are paying maintenance, and in fact, it’s about $900 million a year, plus or minus, is what our maintenance stream is across our businesses. That maintenance gets transitioned to SaaS at a, I don’t know, call it, 1.7 to 2.5 uplift.

And so it becomes a net growth. That growth driver in year tends to offset the negative J-curve if that makes sense. So, we believe it’s a net growth driver over a long arc of time. We also just – and as a postscript on that, we don’t force the migration on our customers. The customers are pacing the migration to the cloud.

So, that’s why this is going to take 5 years plus to maybe 10 years to sort of fully migrate to the cloud because we are going at the pace of our customers. But it is – that’s our view on the net growth driver as we migrate to the cloud..

Excellent. Thank you..

Thank you..

And our next question today comes from Alex Blanton of Clear Harbor Asset Management. Please go ahead..

Hi. Good morning..

Good morning Alex..

I didn’t see in the slides your working capital to sales ratio.

What is that doing…?.

We just have a slide. It’s very consistent mid-teens negative, right. It’s – it is just part of the model now, especially post TransCore when the working capital went away. So, we are not updating it each quarter, but it’s the same as it was last quarter, minus 13% is where we sit today..

Minus 13%?.

Yes, sir..

Yes. Okay. Thank you.

On TransCore, when do you expect to complete that?.

We expect to complete it in this quarter..

This quarter.

So, are you – and you probably can’t answer this, but are you waiting to get that money to make an acquisition?.

No..

No..

No, we have the ability to make acquisitions before the cash comes in..

Ladies and gentlemen, this concludes our question-and-answer session. We will now return back to Zack Moxcey for any closing remarks..

Thank you, everyone, for joining us today, and we look forward to speaking with you during our next earnings call..

Thank you. The conference has now concluded, and we thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day..