Financial Performance Highlights - Q2 2024 revenue reached $892 million, a 9% increase year-over-year[28, 40] - The company achieved a gross margin of 54%[10, 29] - Q2 2024 adjusted EBITDA margin was 23.6%[41] - Q2 Free Cash Flow was $136 million, a decrease of 3%[27, 62] - Q2 Free Cash Flow Conversion was approximately 105%[32, 40] - EPS of $0.27, a 23% increase[12] Growth and Margins - Organic revenue growth was 7.7% in Q2 2024[27, 28] - Incremental EBITDA margins for the first six months of the year were 30%[46] - Adjusted SG&A saw an improvement of 60 basis points[13] Capital Allocation and Debt - The company closed 14 acquisitions in Q2 2024 and 26 year-to-date[44] - Net leverage is well below 1x of EBITDA[44] - Outstanding borrowings of $504 million under the Credit Facility as of June 30, 2024[6]

Rollins, Inc. (NYSE:ROL) Q2 2024 Earnings Conference Call July 25, 2024 8:30 AM ET Company Participants Lyndsey Burton - Vice President, Investor Relations Jerry Gahlhoff - Chief Executive Officer and President Kenneth Krause - Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants Tim Mulrooney - William Blair Ashish Sabadra - RBC Capital Markets George Tong - Goldman Sachs Hilary Lee - Morgan Stanley Heather Balsky - Bank of America Joshua Chan - UBS Aadit Shrestha - ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Rollins, Inc. achieved robust Q2 2024 financial results, marked by strong revenue growth, significant margin expansion, and improved profitability Q2 2024 Key Financial Metrics (vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $892 million | $821 million | +8.7% | | Organic Revenues | - | - | +7.7% | | Operating Income | $182 million | $155 million | +17.8% | | Net Income | $129 million | $110 million | +17.5% | | Adjusted EBITDA | $210 million | $182 million | +15.3% | | Diluted EPS | $0.27 | $0.22 | +22.7% | | Adjusted EPS | $0.27 | $0.23 | +17.4% | - The company maintained strong cash flow, deploying capital towards strategic initiatives. In Q2 2024, Rollins generated **$145 million** in operating cash flow, invested **$35 million** in acquisitions, spent **$9 million** on capital expenditures, and returned **$73 million** to shareholders through dividends[33](index=33&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed satisfaction with strong organic growth and margin improvements, emphasizing continued investment and a healthy market outlook - CEO Jerry Gahlhoff, Jr. credited the team for delivering **strong organic growth** and an improving margin profile, positioning the company for another year of healthy growth in 2024[10](index=10&type=chunk) - CFO Kenneth Krause highlighted the solid performance in revenue and profitability, specifically pointing to the **140 basis point improvement** in EBITDA margins and strong incremental EBITDA margin performance[13](index=13&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated financial statements reflect the company's strong financial health, consistent cash generation, and strategic capital deployment [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement for Q2 2024 shows significant revenue growth and improved profitability, leading to higher net income and diluted EPS Income Statement Highlights (in thousands) | Account | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $891,920 | $820,750 | $1,640,269 | $1,478,765 | | Operating Income | $182,377 | $154,789 | $314,801 | $267,029 | | Net Income | $129,397 | $110,143 | $223,791 | $198,377 | | Net Income Per Share - Diluted | $0.27 | $0.22 | $0.46 | $0.40 | [Condensed Consolidated Statements of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position) The balance sheet as of June 30, 2024, indicates a solid financial position with increased total assets and stockholders' equity, alongside managed liabilities Balance Sheet Summary (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $474,292 | $406,639 | | Total Assets | $2,766,502 | $2,595,460 | | Total Current Liabilities | $609,950 | $576,689 | | Long-term Debt | $502,043 | $490,776 | | Total Liabilities | $1,530,444 | $1,439,893 | | Total Stockholders' Equity | $1,236,058 | $1,155,567 | [Condensed Consolidated Cash Flow Information](index=5&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Information) Cash flow from operations significantly increased for the six months ended June 30, 2024, supporting strategic investments and shareholder returns Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $272,548 | $248,186 | | Net cash used in investing activities | ($93,621) | ($331,622) | | Net cash (used in) provided by financing activities | ($173,886) | $140,195 | [Appendix: Reconciliation of GAAP and Non-GAAP Financial Measures](index=6&type=section&id=Appendix%3A%20Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) This appendix provides detailed reconciliations of non-GAAP financial measures, offering a clearer view of the company's core operating performance - Management uses non-GAAP measures like organic revenues, adjusted operating income, adjusted EBITDA, and free cash flow to compare performance consistently over various periods, excluding impacts from acquisitions, divestitures, and other non-operational items[23](index=23&type=chunk)[43](index=43&type=chunk) - In Q1 2024, the company revised its non-GAAP metrics (adjusted net income, adjusted EPS, and adjusted EBITDA) to exclude gains and losses from non-operational asset sales to better reflect core operating performance[28](index=28&type=chunk) [Reconciliation of Operating Income, Net Income, and EPS](index=7&type=section&id=Reconciliation%20of%20Operating%20Income%2C%20Net%20Income%2C%20and%20EPS) Reconciliations show adjusted operating income and net income for Q2 2024, reflecting core performance after excluding specific non-operational items Q2 2024 Reconciliation of GAAP to Adjusted Operating and Net Income (in thousands) | Metric | GAAP | Adjustments | Non-GAAP (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Income | $182,377 | $4,219 | $186,596 | | Net Income | $129,397 | $2,832 | $132,229 | | Diluted EPS | $0.27 | $0.00 | $0.27 | [Reconciliation of EBITDA and Free Cash Flow](index=7&type=section&id=Reconciliation%20of%20EBITDA%20and%20Free%20Cash%20Flow) Adjusted EBITDA and free cash flow reconciliations for Q2 2024 demonstrate strong profitability and cash generation after specific adjustments Q2 2024 EBITDA and Free Cash Flow Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $129,397 | $110,143 | 17.5% | | EBITDA | $210,500 | $182,247 | 15.5% | | Adjusted EBITDA | $210,088 | $182,275 | 15.3% | | Free Cash Flow | $136,419 | $140,638 | (3.0)% | [Reconciliation of Revenues to Organic Revenues](index=9&type=section&id=Reconciliation%20of%20Revenues%20to%20Organic%20Revenues) This section details the reconciliation of reported revenues to organic revenues, highlighting growth drivers excluding acquisition impacts Q2 2024 Revenue to Organic Revenue Reconciliation (in thousands) | Description | Amount | % of Revenue | | :--- | :--- | :--- | | Reported Revenues | $891,920 | 100.0% | | Less: Revenues from acquisitions | ($14,153) | (1.7)% | | Impact of Divestitures | $5,924 (vs PY) | 0.7% | | Organic Revenues | $877,767 | 98.4% | Q2 2024 Organic Revenue Growth by Segment | Segment | Organic Growth % | | :--- | :--- | | Residential | 5.4% | | Commercial | 8.6% | [Reconciliation of SG&A and Net Debt](index=10&type=section&id=Reconciliation%20of%20SG%26A%20and%20Net%20Debt) Reconciliations show improved adjusted SG&A as a percentage of revenues and a lower net leverage ratio, indicating enhanced operational efficiency and balance sheet strength Net Debt and Leverage Ratio | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Long-term debt | $504,000 | $493,000 | | Less: cash | $106,697 | $103,825 | | Net debt | $397,303 | $389,175 | | Net leverage ratio | 0.5x | 0.6x |

Rollins, Inc. (ROL) is scheduled to report its second-quarter 2024 results on Jul 24, after market close. Our estimate for Residential revenues is pegged at $401.9 million, indicating 4.2% growth from the year-ago quarter's actual. Commercial revenues are anticipated to increase 9.1% year over year to $283.7 million. We expect revenues from Termite Completions, Bait Monitoring & Renewals to be pegged at $187.7 million, suggesting a 12.5% growth on a year-over-year basis. Franchise revenues are estimated at ...

Company Overview - Rollins is headquartered in Atlanta, GA, and provides pest and termite control services to both residential and commercial customers, including food manufacturers, hotels, and retailers [4]. Investment Insights - Rollins has a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating it is a strong candidate for investors [19]. - The company has a Growth Style Score of A, forecasting a year-over-year earnings growth of 12.2% for the current fiscal year [9]. - In the last 60 days, one analyst revised their earnings estimate higher for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.01 to $1.01 per share [24]. - Rollins boasts an average earnings surprise of 4.2%, suggesting a positive trend in earnings performance [24]. Style Scores - The Zacks Style Scores include Value, Growth, Momentum, and VGM Scores, which help investors identify stocks with the best chances of outperforming the market [1][17]. - The Value Style Score focuses on identifying attractive and discounted stocks using various financial ratios [20]. - The Growth Style Score evaluates projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [12]. - The Momentum Style Score assesses price trends and earnings outlook to identify favorable buying opportunities [6].

Company Overview - Rollins, Inc. is a premier global consumer and commercial services company providing essential pest control services to over 2.8 million customers across multiple continents [4] - The company operates through a family of leading brands, including Orkin, HomeTeam Pest Defense, and Clark Pest Control, among others, with more than 20,000 employees and over 800 locations worldwide [4] Financial Announcement - Rollins, Inc. will release its second quarter results for the period ended June 30, 2024, after the market closes on July 24, 2024 [5] - A conference call to review the financial and operating results will take place on July 25, 2024, at 8:30 a.m. Eastern Time [5]

Core Insights - The Zacks Focus List is a curated portfolio of stocks that aims to outperform the market over the next 12 months, serving as a starting point for long-term investors [10][9] - The methodology relies heavily on earnings estimate revisions, which are seen as a strong indicator of future stock performance [4][12] Company Overview - Rollins, headquartered in Atlanta, GA, provides pest and termite control services to both residential and commercial customers, including food manufacturers and hotels [7] - Rollins' earnings are projected to grow by 12.2% for the current fiscal year [8] Performance Metrics - The Zacks Focus List has shown strong historical performance, gaining 13.85% annually in 2020 compared to the S&P 500's 9.38% return, and has cumulatively returned 2,519.23% since February 1, 1996 [18] - Rollins' stock has increased by 35.21% since being added to the Focus List on January 7, 2019, rising from $36.50 to $49.35 per share [22] Earnings Estimates - Analysts have revised Rollins' earnings estimate upwards for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.01 to $1.01, and the company boasts an average earnings surprise of 4.2% [15]

Rollins, Inc. (ROL) stock has performed well over the past year, appreciating 16.5%, and has the potential to sustain momentum in the near term. Consequently, if you haven't taken advantage of the share price appreciation yet, you should add the stock to your portfolio. What Makes ROL an Attractive Pick? Positive Earnings Surprise History: Rollins has an impressive earnings surprise history. The company outpaced the consensus mark in one of the trailing four quarters and matched thrice, delivering an averag ...

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. Therefore, the Zacks rating upgrade for Rollins basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price. The change in a company's future earnings potential, as reflected in earnings e ...

Group 1 - The company's earnings for 2024 and 2025 are expected to increase by 12.2% and 10% year over year, respectively, with a long-term expected earnings growth rate of 13% over three to five years [1] - Rollins, Inc. (ROL) has developed an operating platform that enhances cross-selling opportunities and cost efficiency, while also facilitating swift customer service delivery [13] - The demand environment for Rollins, a leading pest and termite control services provider, is strong, with revenues increasing by 13.7% year over year in Q1 2024, driven by growth in residential (16.5%), commercial (11.4%), and termite (11.7%) business lines [5] Group 2 - Rollins has a current ratio of 0.72 at the end of Q1, indicating potential challenges in meeting short-term obligations, compared to 0.79 in the same quarter last year [14] - The company has consistently paid dividends, totaling $264.3 million in 2023, $211.6 million in 2022, and $208.7 million in 2021, reflecting its commitment to shareholders [9] - Rollins currently holds a Zacks Rank of 3 (Hold), while Booz Allen Hamilton (BAH) has a long-term earnings growth expectation of 14% and a Zacks Rank of 2 (Buy) [10][4][15]