Shares of Roper Technologies (ROP 5.68%) were up by 7% as of 12:30 p.m. ET Thursday, according to data provided by S&P Global Market Intelligence.

Roper Technologies is a portfolio of 28 businesses offering software, services, and technology solutions to defensible niche verticals. This morning, the company reported earnings and guidance that blew past analysts' expectations, signaling that its acquisitive growth strategy continues to pay off.

Leading its niche markets and expanding into new ones

Roper is a decentralized technology enterprise that holds 28 separate business segments under one umbrella but lets each unit operate independently. Under this unique operating model, the company uses mergers and acquisitions (M&A) to grow and has a strong track record of doing so, beating the S&P 500's total returns roughly sixfold since 2000.

Fast-forward to Roper's fourth-quarter results this morning, and it seems as if history is repeating itself. For 2024, the company grew sales by 14% (8% through M&A, 6% organically) and free cash flow (FCF) by 16%.

These double-digit growth rates are promising enough on their own. They are even more impressive when considering Roper's ongoing integration of two acquisitions that were made last year, worth a combined $3.6 billion. With these transactions, Roper expanded its campus commerce solutions business and entered a new niche with cloud-based software in early childhood education centers -- all while reaching record FCF.

Looking ahead to 2025, management guided for revenue growth of at least 10% (6% organically) and noted that its M&A pipeline has many attractive opportunities. With roughly $5 billion available to deploy on new acquisitions, Roper is well positioned to build on its success in Q4 and 2024.