Good morning. The Roper Technologies Conference Call will now begin. Today's call is being recorded. All participants will be in listen-only mode. [Operator Instructions] I would now like to turn the call over to Zack Moxcey, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you all for joining us, as we discuss the third quarter financial results for Roper Technologies. Joining me on the call this morning are Neil Hunn, President and Chief Executive Officer; Rob Crisci, Executive Vice President and Chief Financial Officer; Jason Conley, Vice President and Chief Accounting Officer; and Shannon O'Callaghan, Vice President of Finance. Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call. We've prepared slides to accompany today's call, which are available through the webcast and are also available on our website. Now, if you'll please turn to Slide 2. We begin with our Safe Harbor statement. During the course of today's call, we will make forward-looking statements, which are subject to risks and uncertainties as described on this page in our press release and in our SEC filings. You should listen to today's call in the context of that information. And now, please turn to Slide 3. Today, we will discuss our results for the quarter primarily on an adjusted non-GAAP basis. During and subsequent to the third quarter, Roper signed definitive agreement to divest TransCore, Zetec and CIVCO Radiotherapy businesses. Results for these businesses are reported as discontinued operations for all period presented. Unless otherwise noted, the number shown in this presentation is in continuing operation basis. For the third quarter, the difference between our GAAP results and adjusted results consist of the following item: amortization of acquisition-related intangible assets; purchase accounting adjustments to commission expense and lastly income tax restructuring associated with our pending divestures. Reconciliations can be found in our press release and in the appendix of this presentation on our website. And now, if you'll please turn to Slide 4, I'll hand the call over to Neil. After our prepared remarks, we will take questions from our telephone participants. Neil?

Thanks, Zack, and good morning, everyone. Thanks for joining us. We're looking forward to sharing with you the details of our solid quarter performance, as well as summarizing the acceleration of our portfolio transformation. As we look at the sequence of our call this morning, we'll start with our quarterly highlights and our recent divestiture activity. I'll then turn the call over to Rob who will share the details of our financial performance and our bridge to continued operations. I'll then walk everyone through our segment by segment performance and our outlook for the balance of the year. As usual, we'll leave plenty of time to talk to you all of your questions towards the end. Next slide, please. As we turn to Page 5, this was another quarter of solid operational and excellent financial performance. On a continuing ops basis, we grew revenue, EBITDA and DEPS north of 20% in the quarter. It is important to highlight and characterize the underlying strength of these results. Revenue on an organic basis grew 12% in the quarter. End market and customer demand was very strong across our portfolio within both our software and product businesses. Importantly, our software segments were strong operationally with 10% growth in one segment and 17% in the other. Our software businesses recurring revenue grew low double digits in the quarter, highlighting the underlying strength, stability and increasing quality of a revenue base. To remind everyone, about 80% of our software revenues are recurring in nature. It's also worth noting that our 2020 acquisition cohort, led by Vertafore, continues to perform very well. As it relates to our product businesses, like most other companies we, are experiencing supply chain and logistical challenges. But the businesses nevertheless performed very well during the third quarter. As mentioned, customer demand…

Thanks, Neil. Good morning, everyone. Turning to Page 7. On this page, we will review some Q3 financial metrics on a basis that includes the discontinued operations in order to compare our Q3 results to our previous guidance on an apples-to-apples basis, including the businesses now classified as discontinued operations, we generated $1.621 billion of revenue and $602 million of EBITDA. Total DEPS was $3.91, which exceeded our Q3 DEPS guidance of $3.80 to $3.84. Free cash flow for the quarter was $431 million, down 2% versus prior year; year-to-date free cash flow is now up 29% through three quarters. Now turning to Page 8. Here we'll review some of the key income statement metrics on a continuing operations basis. Revenue increased 22% to $1.463 billion. Q2 organic revenue increased 12% with strong growth across all four reporting segments led by 17% organic growth in our Network Software segment. EBITDA increased 21% to $558 million, net earnings grew 24% to $384 million, and DEPS also grew 24% to $3.60. Next slide. Turning to Page 9. This slide will update you on the latest installment in our successful deleveraging story. Year-to-date, we have reduced our net debt by nearly $1.3 billion and our total debt reduction is now $1.8 billion since completing the last of the 2020 acquisitions approximately one year ago. We continue to benefit from our excellent cash conversion as nearly $2.3 billion of total EBITDA we generated over the last four quarters has converted to $1.94 billion of free cash flow, representing EBITDA to free cash flow conversion of 85%. At the end of September, our net debt to EBITDA has decreased to 3.5. We are on track to be near 3x by the end of 2021 and therefore, well positioned to return to capital deployment even before accounting for the divestitures. The proceeds from the divestitures further amplify our capacity with $5 billion-plus available for deployment through 2022, as Neil highlighted earlier. Next slide. Moving now to Page 10. A quick look here at how the divestitures meaningfully improve our working capital position moving forward. This page repeat the working capital numbers we showed last October and adds a Q3 '21 column that shows the enterprise including the removal of the three businesses being divested, we are now at negative 12% net working capital to revenue compared to negative 6% in the same quarter last year, and negative 3% back in Q3 2019. Divesting TransCore reduces our net working capital by approximately $200 million with the majority coming out of our unbilled receivables balance. This structurally lower net working capital positions us very well for continued high cash conversion moving forward. So with that, I'll turn it back over to Neil to cover the segments.

Thanks Rob. Let's turn to Page 12 and walk through our application software segment. Revenues in this segment were $603 million, up 10% on organic basis. EBITDA margins were 44.4% in the quarter. Across this segment, we saw organic recurring revenue, which is a touch north of 75% of the revenue for this segment increased approximately 10%. This recurring revenue strength is based on strong customer retention, continued migration to our fast delivery models, cross-selling activity and new customer adds. Across this group of companies, the financial strength was broad. To highlight a few businesses, Deltek, our enterprise software business that serves the US federal contractor, architect, engineering, and other services end markets had another good quarter. During the quarter, demand was particularly strong in Enterprise GovCon and construction end markets. Importantly, during the quarter, Deltek also had success at the top end of market with their cloud or SaaS solutions. Vertafore, our agency management cloud software business focused on P&C insurance agencies also had a nice quarter with very strong new bookings and nice expansion activity in some of their largest customers. Aderant, our legal software business continues its momentum and market share gains, as we talked about last quarter; Aderant is gaining momentum for their SaaS solutions this quarter, setting a record for SaaS bookings activity. Consistent with the theme of this segment, PowerPlan was strong as well both in terms of new bookings and adds to their recurring revenue base. It's nice to see PowerPlan's refocus strategies start to pay dividends. As relates to our healthcare IT businesses, Strata, the data innovations and CliniSys were rock solid in the quarter. For Strata, their recurring subscription based software solutions continue to perform well and grow nicely. Strata's integration of EPSi is on track and nearly complete. The customer…

We will now go to our question-and-answer portion of the call. [Operator Instructions] Our first question is from Deane Dray from RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone.

Hey, good morning, Deane.

Good morning, Deane.

Hey, look, when I look at free cash flow, organic revenue growth, recurring revenue, everything checks the boxes, and there's a lot of moving parts this quarter and I really appreciate all the reconciliation of previous guidance versus revised with a divestiture. So just set that aside and the first question I want to ask is for Neil, to help put in context, these recent portfolio moves. And I don't want to parse your words, but the slide says accelerating a portfolio transformation. You're not saying optimize, you are not trimming at the edges, but you are making some sizable moves here in a cluster. And it just begs the question, what is the strategic transformation? Is it more just making Roper a better Roper? Or is there a more sizable change in portfolio composition coming in what the timing might be. Thanks. We'll start there.

Yes. Thanks, Dean. So hey, the - it's all about Roper being a better version of our self, our strategy, as you know and most people listening know, for the last 20 years has been fundamentally based on improving the quality of our enterprise, historically, that's been characterized as being more asset light or recently, it's not just that, but increasing mix towards recurring revenue, increasing mix towards higher and slightly higher organic growth businesses. So that strategy has been in place and will remain in place, nothing's changed there relative to these three transactions is really a result, these three are result of really two different decisions. Zetec was really an opportunistic situation with a strategic buyer, who offered a compelling price. And it was just made sense, in our view, for our shareholders to let that go to that buyer and reduce a little bit of cyclicality and exposure to the Zetec end markets. As it relates to CIVCO Radiotherapy and TransCore, those were -- while they're independent decisions, the result of a single process, which was our sort of our new and revised sort of deep strategic review of all the businesses, we do this with each business on a rolling sort of three-year basis. The CIVCO Radiotherapy and TransCore reviews were late last year, early this year, and we just felt, given their future growth prospects, which are interesting and likely robust, but also capital intensive. In both cases, we're going to just be a sub optimized with us as an owner, you overlay that where the valuations will get for the businesses, the three together roughly 20x this year just made sense from all vectors for us.

Is there just to circle back for the timing? And just like what's ahead, how far down the road are you on this optimization? Are there other bigger pieces coming? What kind of timing should we expect?

Yes, I think the, again, it's, I wouldn't -- I would call it the acceleration of the transformation. Transformation has been slow and evolutionary over 20 years, as we've gone from 40% cyclical to now, 10% or 15% cyclical, going from more asset intensive, less asset intensive gone from products to software. I mean, this has been an evolutionary approach, and we expect that to continue.

Good. Well, just, I really appreciate the specifics you provided each one of these divestitures makes sense. You're getting good valuation for them. So, kudos to you guys. And then the second question, and this feels more like some that would ask at an Analyst Day, but just it jumped off the page here on your board additions. Today, adding Tom Joyce from Danaher, Irene from CFO of Time Warner. I've presented to your board last November, I've got an appreciation for how high powered the group already is and how hands on they are. Talk about the partnership with the board, the dynamics, especially at this stage of the evolution of the portfolio. And what were the priorities for the board is in our at this time?

Yes, appreciate the opportunity, any opportunity to talk about our board because it is absolutely and undeniably a strategic asset for our business. The board, we highly engaged with five times a year, three days each time. So it's a board that works hard. They enjoy working hard, it's a board and that amount of time that we spend, it's not just a series of presentations where there is space to have conversation, deliberation, challenge one another, and then form a point of view on the forward direction of our enterprise, highly collaborative group, but one where people express their points of view open and freely. So it's a great environment. Also in governance, there's a refreshment process that goes with that, the Board Chair that became the Board Chair at Brian's passing, Will Prezzano just aged off the board. And we have a sort of that requirement to refresh the Board and we're super fortunate to have Irene and Tom join us. Irene will bring just a tremendous - she's most recently professionally as a executive at Time Warner, but a long track record in financial institutions just a very astute and financially savvy executive understands risk and risk management and also a very experienced Board member at this stage in her career. Tom, this will be his first public, outside public company board. Everybody here listening knows Tom very well, but just the combination of what he's done in his 30-year career at Danaher, combination of business building and capital deployment leader development is core to what we are all about. And I think both will just bring tremendous new thoughts to our boardroom as we continue to evolve and build our business.

Our next question comes from Allison Poliniak from Wells Fargo. Please go ahead.

Hi, good morning, guys.

Hey, Allison.

I just want to talk of the CRA metric. Obviously, core to your M&A strategy, and I suspect going forward, but with, some of that asset intensive business coming out, elevating Roper's on CRA. I guess one is that, is it more challenging in terms of pool of potential properties that you want to acquire? And, I just maybe any thoughts on does that CRA metric relative to Roper kind of shift going forward? Just any color there?

Yes, cash return for us is our North Star, right? It is how we not just -- it just not only guides our capital deployment strategy, it guides every operational decision in the business. It defines for us, for instance, what good organic growth is versus just growth at any cost, right? It's how you do - in CRA for those that aren't intimate with it is really just a measure of business quality. Do you have a cash flow relationship with your customer, if you will, we're able to provide value, capture value for that and have an underlying business model that doesn't require a lot of assets to deliver that value. That's what cash return is, it is our North Star, will continue to be our North Star. It's just -- it's core to our culture here. Allison, in terms of your question about the number of targets, it mathematically yes, it's the number of targets are fewer as we're looking to buy companies that are have CRA that are higher than our existing, but it's not a limiter to our strategy, right? There's a vast ocean of software, informatics data-enabled business models that are out there that we've been fishing in for the last 10 years. And it's not a practical constraint for our capital deployment strategy.

Got it. That's helpful. And then just a quick question on measurement and analytical solutions at core without Verathon, obviously, up 20%-plus. But then you talked about EBITDA, some headwinds there, one being Verathon, but the other being supply chains. Is that just a headwind in terms of growth? Is it cost you can pass through, just any incremental color there to help me reconcile that?

Hey, I'll start and I'll pass over to Rob. And so first, I would say, our businesses more broadly, like most businesses, maybe around the world, certainly as country over the last 20 years have built their supply chain for optimize on the lowest cost and less so on resiliency, a nice thing that our businesses did, starting a couple years ago, is build some resiliency with the China sort of tariff situation. So that was a precursor that helped us a bit for us relative to the headwinds, yes, it was growth was limited a bit, certainly across all of our product businesses. And then also the choice that our businesses made when there's an opportunity to either expedite apart or go into a spot market or an alternative source for a part and pay incrementally bit more, they did that. And so there's a little bit of gross margin headwind, hard to notice, in a macro sense, but a little bit of headwind on GP percentage, and then certainly some impact on the revenue side. Rob, if you want to add something?

Yes, I just, about 25% of that MAS segment are the industrial businesses. And so that's where you see some of this and, I think we mentioned earlier that backlog is up 50% so that, we're -- we have great orders, and that bodes well for the future. But yes, I think what Neil said they're spot on.

The next question is from Julian Mitchell from Barclays.

Hey, good morning. This is Trish Gorman on for Julian, just maybe following up on that last question regarding the supply chain constraints. Can you just talk more about what your assumptions are kind of embedded in for guidance for when those might be.

Yes, so we're not expecting that they're going to ease really anytime soon. So we're expecting what we saw in the third quarter similar to what we'll see in the fourth quarter and then as we get in next year, we'll update that next quarter, but we're continuing to build backlog, the customer relationships are great as Neil said we're expediting wherever we can to get products to customers. And so I think long term it's a great story; short term, it's hard to say what's going to happen.

Got it. Thank you. That's helpful. And then just maybe a follow up kind of broader. We've been seeing industrial companies paying anywhere from 30x to 100x EBITDA for software assets now. And so does Roper think you'll have to pay this kind of price too or can it still buy software assets for 20x EBITDA or less as it did with Vertafore. Thanks.

Yes, appreciate the question. Certainly valuations for higher quality software businesses are high. They've been high for a while they remain high. It's, I think I said a couple quarters ago it feels like this. They may be stabilizing at a level I think that still may be the case. But that level is very high. That said Roper buys businesses that are tried and true. The competitive forces and market are observable, the market growth is concerned -- is observable, the forward growth outlook is diligence able and understandable and the growth drivers can be clearly modeled. When you get those businesses that are in small markets that are leaders that have mid to high single digit organic growth and are 30% to 40% plus EBITDA margin businesses, those trade in that we call it circa 20x maybe 18x, maybe 22x. But they're sort of in that zone. And that's where we think that will continue to play and focus.

Next question comes from Christopher Glynn from Oppenheimer.

Oh, yes. Thanks. Good morning. So given the comment that the number of targets is not a practical constraint, and I appreciate repeating that, which we've heard previously. I'm wondering if the expectation is actually to, at least replace the divestiture earnings and EBITDA in fairly short order? And can you under head of receiving those proceeds in terms of your negotiations with agencies and such?

Yes, so appreciate the question. So first, we said it in the prepared remarks, it's on the slides is worth mentioning, we take the proceeds from these through transactions added to our cash flow we're generating in our current balance sheet leverage, there's about $5 billion of M&A firepower between now and the end of next year. So that's all good, the balance sheets in good shape, or as we mentioned we are super active in the M&A markets. But we always have been and always will be patient and disciplines, right? I mean, this is every deal matters; we're buying these businesses with the very long term in mind to never sell them. So you have to buy the very best asset you can find. And sometimes that takes time. So I'm not, we're sort of putting out this mathematical marker of $5 billion, but I would not associate any specific timeframe with that. It's just, we're patient, discipline focused, but active in the M&A markets.

And I would say we do have flexibility in terms of the timing on when that capital is deployed. I think you have to wait, for the proceeds to come in the door. But as Neil said, we're going to be very, very disciplined and we don't feel like we're rushing anyway.

Okay, and just wanted to dive into the backlog of 50% plus that the MAS segment, curious the play of medical versus industrial and how Verathon factors into it.

So it was the backlog was up over 50% in both MAS and Patterson. I'll certainly turn over to Rob here in second but the backlog was strong at medical products, Verathon Northern MMI. It was strong at Neptune and it was strong at industrial so --

Yes, it's very broad based. It really is across all the businesses, and again, that's getting a lot of orders in and then being able to get the products out the door.

Okay, last one for me any estimate on the after tax and impact of the $3.15 billion?

Yes, I think we want to wait until we get the deals closed to comment on that. I mean, there certainly will be some tax leakage. But we'd rather wait till next year, we get the deals closed and then we can give you a good number.

Next question comes from Joe Giordano from Cowen.

Hey, good morning, guys. So does this mean that I, we're not going to be able to ask you guys about New York City deal and the --.

You can ask.

We're under contract to not disclose a lot of details about that going forward.

It will be sadly missed. Yes, I just wanted to ask on Neptune. A lot of like kind of different things being said out there in that market. Can you talk about where that business is this year? Like is that business growing this year? Or is it still down? How much did it decline last year? Just kind of curious to see what's really going on in that metering market right now.

Yes, so I'll give you a little bit of color and turn over to Rob. So it's for Neptune this year will be like really close to '19. Just from a size perspective that absolutely is growing this year, in the very short term, we're actually we believe it's hard to measure in the very short term but the reports from the company Neptune as we picked up a little bit of market share this quarter because we are able to deliver product on a much shorter lead time than some of the people we compete with. The thing that's about the market itself, the markets are opening, but nowhere close to fully recovered, especially in Canada and less so but certainly not open in the Northeast United States in the US Northeast. Final thing I'd say about Neptune is the strategy here is, I mean, it's very clear, and it appears to be working, if you will, having traction around the strategy on the product with the static meter product that were introduced to the market, the way we read the data off the meter. And importantly, now the software and analytics that play that Neptune is developing, right? What do you do with all that data once you capture it off the meter in a more frequent basis? So it's the strategy is certainly got traction in the marketplace, and the business is growing, and they have record levels of backlog as we sit here at the end of the quarter.

Can you just remind me how much of the product at Neptune are you guys manufacturing, like in house and how much is contract?

It's virtually all in house. I mean, certainly there's -- it's a supply chain, and there are certain pieces that come but between the two facilities at Neptune it's a vertically integrated business.

Okay. And then my last question and I promise next quarter I'll ask software questions. So this is like the first one. But the process got, is that I mean, it's slightly less growth expectation than previous, is that just supply chain limiting your ability to deliver or does the market change at all?

No, 100% supply chain related across all the businesses and incrementally the markets more favorable. We talked about the backlogs but the obviously you know that the US rack markets more favorable energy prices more favorable the project work at CCC is going well. So yes, it's all supply chain related.

Next question comes from Jeff Sprague from Vertical Research.

Hey, good morning, guys. It's Andrew Shlosh on for Jeff. How are you? Sorry about that. I was on mute. So just Firstly, you said Vertafore was strong in the quarter and really good bookings there. Are you able to quantify the growth on a sales basis?

Yes, it's right on track with the numbers that we laid out last year, when we acquired the business; they're doing very, very well.

Yes. And it's, at the time of the acquisition, we said it was a mid single digit organic grower. And it's, that's where it is.

Awesome. No, that's great color. And the other thing I was kind of thinking about, so measurement and analytical solutions was up 9%, organic, 20%, organic, excluding Verathon, we talked a little bit about the growth there and I know revenues significantly above 2019 levels, how do we think about the growth going into 2022?

Yes, we will guide 2022 in beginning January, February, when we announced earnings, so I think the trends are very, very good. And all those businesses, we talked about the movement at Verathon to these, to the equipment that has been critical to the COVID fight, and now it's become more common. And so that leads to consumables. And so I think it's a great long-term growth story at Verathon, all those businesses. But we'll wait till next year to give you the numbers on that.

The one thing I'd add that is we're going to carry a very high backlog going into next year, there's momentum and demand, we'll see to the extent that it's going to be, we expected to carry through for the full year, but it'll certainly start strong.

Our next question comes from Alexander Blanton from Clear Harbor Asset Management.

Hi, good morning. Yes, very interesting quarter. I wanted to ask about the organic growth, it was 12% average and 10% for application, 17% for network, 13% -- 9% for measurement. 16% for process, these are numbers that are way above historical rates of organic growth for this company. And it's really stunning. And one comment that I had from our group this morning was, well, last year was depressed. So that really won't continue. Could you comment on that how much of that growth is just due to a depressed base, if any, and do you expect these kinds of things to continue this organic growth rates.

Yes, so these businesses when we acquire them, I think we're pretty consistent. They're mid single digit organic growth businesses, sometimes they're high; we work hard to get them from mid to high. I think if you look at the double digit, certainly last year was down low single digits, and now we're up double digits. And so if you take the sort of the two year run rate, you're in that mid to high single digit organic, which I think is the natural run rate for those businesses, which we're always looking to accelerate.

Yes, well, mid to high single digit is somewhat above what Roper did for many, many years, which was more like the mid single digits, not the high. So there is a -- there was a pickup.

Yes, Alex, it's the, yes, it's Neil. I mean, I would say a couple things there. I mean, we certainly, we're going to carry momentum from this year into next year, so if you just look across the portfolio, I think next year, we haven't done the guidance yet, it'll probably be a little bit better than trend, trend sort of mid single digits over a long arc of time, next year might be a touch better than that. We'll see we do our guidance next year. But what we're trying to do from our -- for three years now, as CEO, we've been trying to increase the organic growth rate of this business of the portfolio, through a very structured, process oriented way that focus on strategy, the execution of strategy and really building world class teams and team effectiveness. And we're starting to see that sort of work in pockets of organization that's a bit more mature. So the final story chapter hasn't been written on that story for us yet. It's got another several years to play out, but certainly encouraged by the early signs.

Yes. Second question is on the outlook for acquisitions. You mentioned a very robust pipeline in the new release and your earnings release, which was unusual, you don't usually comment on the pipeline and that location. But could give us a little more color on that, what kind of timing can we look forward to be super acquisitions right away in the next year, or it's going to be later on and so forth.

So I'll give you a very generic answer on the timing, which is, it's the pipeline always has a lot of deals in it, the pipe, we are able to because of our approach, filter that pipeline, where it's high quality, and we are spending our time on sort of high impact things. But the deal business, you can have a deal where you think you're the winner until you're not at the finish line. And so, the timing is always a little bit subject to a handshake, if you will, between the buyer and the seller. It's not just a one way thing. And so we're going to be very patient and very disciplined. And we don't feel any sense of urgency to get this $5 billion deploy just for the sake of getting it deployed, we're going to do it in the way we've done for the last 20 years. And so it's hard to handicap the specific timing of when anything would happen, but we're going to be busy at work trying to get it done.

Our next question comes from Rob Mason from Baird.

Yes, good morning. Thanks for the question. I just wanted to speak on the software businesses a minute; the growth was very good to see across both application software networks. And Neil sprinkled throughout your commentary was frequently the strength around SaaS bookings. And I know you have several businesses where you have SaaS conversions underway. So just given the overall strength that typically you start to, there's a little bit of headwind, as you're converting some of those on-prem businesses over to subscription. I'm just curious what that -- what is that headwind and buried in the growth that you're putting up?

Appreciate, Rob, the opportunity to talk about this, just to level set, everybody that the vast majority of the revenue on the network side of our business is already in the cloud and/or recurring, it's 90 plus percent. So the vast, vast majority of the cloud conversions, Rob, what you're talking about, shows up in our application software segment, and is centered at Deltek, Aderant, PowerPlan, little bit at Seaport. As you mentioned, when you convert, the punch line of all this is that we convert we believe it's a modest net growth driver not a headwind. The reason it's a growth driver is you have two competing factors. One is the bad guy, you referring to the J curve. When you instead of selling a perpetual deal, you sell a recurring revenue deal in the year of that deal. That's a bad guy, right? Because instead of getting 100% of revenue, when you ship the perpetual license, you get some small percentage of that depending on what month the subscriptions booked. However, what counters that are when you have these large installed base of customers that are paying annual maintenance on their historical perpetual, we're actively lifting and shifting those customers to the cloud. And when you do that, because what you're doing for them carries more value, right? You're on the current release, you're managing the infrastructure, managing cyber security, you're managing your -- there's a greater value proposition, you're able to charge a higher recurring revenue base. And so the uplift on the recurring overwhelms the negative headwind on that upfront sale, and that becomes a modest net growth driver for us. Happy to talk about that offline in more detail, if you'd like.

And is there a timeframe that you're thinking about where these conversions, largely complete themselves for the existing businesses.

It's going to be -- it's elongated. In our case companies are, can make a decision, they can either, like some companies do just force it, like we're taking you to the cloud this year. And it becomes the company's perspective. In our case, we're allowing our customers to pace that. So our customers are the ones who are saying I'm ready to go to cloud and when we're going to meet them where they are. So in that case, it's going to be an elongated period of time, certainly five plus years, it might be as long as 10. So it's going to be a slow throttle to get fully cloud enabled.

How do you think about balancing, I guess, internal investment into support both sides of that?

Yes. So it's the way that the architecture of as our companies have become more cloud enabled the architecture allows them with a service orientation, to make investment, one investment and deploy it to both platforms. So it's not really an either or it's an and.

The next question comes from Steve Tusa from JPMorgan.

Hey, guys, good morning. Yes. On the organic, you guys didn't provide an update to the 7% plus, I know like there's some noise around disc ops and continued ops what is that number now for the year, I mean, I can kind of add up all the segments, but again, there's a lot of noise in the numbers, just, moving stuff around. So just an update to that 7% plus now on the continuing ops, for the year, total count?

Yes. I think on a continuing ops basis for the year is the eighth on an apples-to-apples basis, the seven is unchanged.

Okay, got it. So then why next year, if you kind of have some supply constraints and stuff, kind of pushing revenue in the next year, and this ridiculously strong backlog? Why would that slow next year? I mean is there any particular reason why that would slow?

I mean I think we'll guide next year in January and after we do all of our business reviews, but I don't see a reason why there should be a challenge.

Okay and then just one last one just on margins. What do you expect kind of this year for these continuing ops, kind of roughly EBITDA margin range and then in particular for MAS total company and then MAS EBITDA margins just for baseline for next year?

So I think the total company margins are we sort of just gave you Q3, Q4, similar and like I said, we'll guide next year, after we do all of our reviews.

Okay, and then MAS, any comments there?

You mean application software?

Yes. The MAS margin just where you're going to end up for the year in the fourth quarter?

Yes, I mean, I think generally similar to the third quarter.

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.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.