Group 1 - The article expresses a positive outlook on Rollins (NYSE: ROL), highlighting improvements in pricing, execution, retention, and margin expansion as key factors for investment consideration [1] - The author emphasizes a comprehensive investment strategy that incorporates fundamental, technical, and momentum investing approaches, suggesting a well-rounded perspective on market analysis [1] - The intention behind writing on Seeking Alpha is to track investment ideas and connect with like-minded investors, indicating a focus on community engagement and performance monitoring [1] Group 2 - There are no disclosed positions in any of the companies mentioned, indicating an unbiased perspective in the analysis [2] - The article is presented as an individual opinion without compensation, reinforcing the authenticity of the insights shared [2] - Seeking Alpha clarifies that past performance does not guarantee future results, emphasizing the importance of independent research for investors [3]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents Rollins, Inc.'s unaudited condensed consolidated financial statements and management's analysis [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Rollins, Inc.'s unaudited condensed consolidated financial statements and accompanying notes [CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) This section presents Rollins, Inc.'s condensed consolidated statements of financial position **Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024):** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total Assets | $3,180,040 | $2,819,695 | $360,345 | 12.78% | | Total Liabilities | $1,736,169 | $1,489,102 | $247,067 | 16.59% | | Total Stockholders' Equity | $1,443,871 | $1,330,593 | $113,278 | 8.51% | | Cash and cash equivalents | $123,035 | $89,630 | $33,405 | 37.27% | | Goodwill | $1,337,903 | $1,161,085 | $176,818 | 15.23% | | Short-term debt | $59,989 | $— | $59,989 | N/A | | Long-term debt | $485,278 | $395,310 | $89,968 | 22.76% | - Significant increases in total assets and liabilities, primarily driven by acquisitions and debt issuance. Goodwill increased by over **15%**, reflecting acquisition activity. Cash and cash equivalents saw a substantial increase of over **37%**[10](index=10&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF INCOME](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This section provides Rollins, Inc.'s condensed consolidated statements of income for the reported periods **Income Statement Highlights (Three Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $999,527 | $891,920 | $107,607 | 12.06% | | Operating Income | $198,333 | $182,377 | $15,956 | 8.75% | | Net Income | $141,489 | $129,397 | $12,092 | 9.35% | | Net Income Per Share - Basic and Diluted | $0.29 | $0.27 | $0.02 | 7.41% | | Dividends Paid Per Share | $0.165 | $0.150 | $0.015 | 10.00% | **Income Statement Highlights (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $1,822,031 | $1,640,269 | $181,762 | 11.08% | | Operating Income | $340,981 | $314,801 | $26,180 | 8.32% | | Net Income | $246,737 | $223,791 | $22,946 | 10.25% | | Net Income Per Share - Basic and Diluted | $0.51 | $0.46 | $0.05 | 10.87% | | Dividends Paid Per Share | $0.330 | $0.300 | $0.030 | 10.00% | [CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section presents Rollins, Inc.'s condensed consolidated statements of comprehensive income **Comprehensive Income (Three Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net Income | $141,489 | $129,397 | $12,092 | 9.35% | | Other comprehensive income (loss), net of tax | $15,334 | $1,276 | $14,058 | 1101.72% | | Comprehensive income | $156,823 | $130,673 | $26,150 | 20.01% | **Comprehensive Income (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net Income | $246,737 | $223,791 | $22,946 | 10.25% | | Other comprehensive income (loss), net of tax | $21,027 | $(4,441) | $25,468 | N/A | | Comprehensive income | $267,764 | $219,350 | $48,414 | 22.07% | - Other comprehensive income saw a significant positive shift in 2025, primarily due to foreign currency translation adjustments, moving from a loss in 2024 to a substantial gain in 2025[14](index=14&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) This section details Rollins, Inc.'s condensed consolidated statements of stockholders' equity **Stockholders' Equity (June 30, 2025 vs. December 31, 2024):** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total Stockholders' Equity | $1,443,871 | $1,330,593 | $113,278 | 8.51% | | Common Stock (Shares) | 484,640 | 484,372 | 268 | 0.06% | | Retained Earnings | $822,014 | $734,650 | $87,364 | 11.90% | | Accumulated Other Comprehensive Loss | $(22,607) | $(43,634) | $21,027 | -48.19% | - The increase in total stockholders' equity was driven by net income and a significant reduction in accumulated other comprehensive loss, partially offset by cash dividends paid[18](index=18&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section outlines Rollins, Inc.'s condensed consolidated statements of cash flows **Cash Flow Summary (Six Months Ended June 30):** | Activity | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net cash provided by operating activities | $322,014 | $272,548 | $49,466 | 18.15% | | Net cash used in investing activities | $(263,091) | $(93,621) | $(169,470) | 181.02% | | Net cash used in financing activities | $(28,570) | $(173,886) | $145,316 | -83.57% | | Net increase in cash and cash equivalents | $33,405 | $2,872 | $30,533 | 1063.19% | - Operating cash flow increased significantly, while investing activities saw a substantial increase in cash usage, primarily due to acquisitions. Financing activities used considerably less cash in 2025 compared to 2024, mainly due to debt issuance offsetting repayments[21](index=21&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and disclosures for the condensed consolidated financial statements [NOTE 1. BASIS OF PREPARATION](index=10&type=section&id=NOTE%201.%20BASIS%20OF%20PREPARATION) This note describes the basis of preparation for the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, Form 10-Q instructions, and SEC regulation S-X, and should be read with the 2024 Annual Report on Form 10-K[22](index=22&type=chunk) - Management's estimates and assumptions reflect economic trends, but future results may vary due to continued uncertainty in economic conditions[23](index=23&type=chunk) [NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS](index=10&type=section&id=NOTE%202.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses recent accounting pronouncements and their potential impact on the Company's financial statements - ASU 2023-09 (Income Taxes): Issued December 2023, effective for annual periods after December 15, 2024, enhancing income tax disclosures. The Company is evaluating its potential impact[24](index=24&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses): Issued November 2024, effective for annual periods after December 15, 2026, requiring additional expense disclosures. The Company is evaluating its potential impact[25](index=25&type=chunk) [NOTE 3. ACQUISITIONS](index=10&type=section&id=NOTE%203.%20ACQUISITIONS) This note provides details on significant acquisitions made by Rollins, Inc. during the reported periods - **Saela Pest Control Acquisition (April 1, 2025):** * Acquired 100% of Saela Holdings, LLC for **$207.1 million**, funded by cash on hand and commercial paper borrowings[26](index=26&type=chunk) * Contributed **$18.9 million** in revenues and **$2.7 million** in net earnings during the three months ended June 30, 2025[28](index=28&type=chunk)[29](index=29&type=chunk) * Preliminary valuation includes **$132.96 million** in goodwill, **$52.2 million** in customer contracts (6.5-year useful life), and **$17.3 million** in indefinite-lived trademarks/tradenames[30](index=30&type=chunk)[31](index=31&type=chunk) - **Other 2025 Acquisitions:** * The Company made 12 other acquisitions during the six months ended June 30, 2025, with an aggregate preliminary value of **$67.1 million**[35](index=35&type=chunk) * Resulted in **$35.12 million** in goodwill and **$25.98 million** in customer contracts[37](index=37&type=chunk) **Pro Forma Financial Information (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------ | :------------------ | :------------------ | | Pro Forma Revenues | $1,850,939 | $1,667,502 | | Pro Forma Net Income | $253,371 | $226,433 | [NOTE 4. REVENUE](index=13&type=section&id=NOTE%204.%20REVENUE) This note details Rollins, Inc.'s revenue breakdown by geographic area, service offering, and unearned revenue **Total Revenues by Geographic Area (Six Months Ended June 30):** | Geographic Area | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :---------------- | :------------------ | :------------------ | :--------- | :--------- | | United States | $1,691,251 | $1,521,699 | $169,552 | 11.14% | | Other countries | $130,780 | $118,570 | $12,210 | 10.30% | | **Total Revenues** | **$1,822,031** | **$1,640,269** | **$181,762** | **11.08%** | **Total Revenues by Service Offering (Six Months Ended June 30):** | Service Offering | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :--------------------- | :------------------ | :------------------ | :--------- | :--------- | | Residential revenues | $811,978 | $737,752 | $74,226 | 10.06% | | Commercial revenues | $604,847 | $545,884 | $58,963 | 10.80% | | Termite and ancillary revenues | $383,985 | $338,084 | $45,901 | 13.58% | | Franchise revenues | $7,678 | $8,406 | $(728) | -8.66% | | Other revenues | $13,543 | $10,143 | $3,400 | 33.52% | | **Total Revenues** | **$1,822,031** | **$1,640,269** | **$181,762** | **11.08%** | **Unearned Revenue (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------- | :------------------ | :------------------ | | Beginning balance | $223,872 | $210,059 | | Deferral of unearned revenue | $155,481 | $149,165 | | Recognition of unearned revenue | $(135,894) | $(125,325) | | Ending balance | $243,459 | $233,899 | [NOTE 5. ALLOWANCE FOR CREDIT LOSSES](index=14&type=section&id=NOTE%205.%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) This note provides information on Rollins, Inc.'s allowance for credit losses for trade and financed receivables **Allowance for Credit Losses (June 30, 2025):** | Metric | Trade Receivables (in thousands) | Financed Receivables (in thousands) | Total Receivables (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | :----------------------------- | | Balance at Dec 31, 2024 | $19,770 | $8,686 | $28,456 | | Provision for expected credit losses | $11,112 | $5,349 | $16,461 | | Write-offs charged against allowance | $(10,485) | $(4,799) | $(15,284) | | Recoveries collected | $2,485 | $527 | $3,012 | | Balance at June 30, 2025 | $22,882 | $9,763 | $32,645 | - Total allowance for credit losses increased by **$4.19 million** (**14.7%**) from December 31, 2024, to June 30, 2025, driven by higher provisions for expected credit losses[44](index=44&type=chunk)[46](index=46&type=chunk) [NOTE 6. GOODWILL AND INTANGIBLE ASSETS](index=15&type=section&id=NOTE%206.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details changes in Rollins, Inc.'s goodwill and intangible assets, including amortization expense **Goodwill Changes (Six Months Ended June 30, 2025):** | Metric | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Balance at December 31, 2024 | $1,161,085 | | Additions (from acquisitions) | $168,079 | | Adjustments due to currency translation and other | $9,883 | | Balance at June 30, 2025 | $1,337,903 | - Goodwill increased by **$176.8 million** (**15.2%**) primarily due to additions from acquisitions[47](index=47&type=chunk) **Intangible Assets (June 30, 2025 vs. December 31, 2024):** | Asset Type | June 30, 2025 Carrying Value (in thousands) | December 31, 2024 Carrying Value (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------- | :--------- | | Customer contracts, net | $424,119 | $383,092 | $41,027 | 10.71% | | Trademarks & tradenames, net | $10,941 | $12,079 | $(1,138) | -9.42% | | Other intangible assets, net | $8,879 | $8,602 | $277 | 3.22% | | Indefinite-lived intangible assets | $157,031 | $137,816 | $19,215 | 13.94% | | **Total intangible assets, excluding goodwill** | **$600,970** | **$541,589** | **$59,381** | **10.96%** | **Amortization Expense (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Amortization expense related to intangible assets | $43,700 | $38,000 | $5,700 | 15.00% | - Estimated amortization expense for existing amortizable intangible assets is projected to be **$45.6 million** for the remainder of 2025 and **$89.2 million** in 2026[48](index=48&type=chunk) [NOTE 7. DEBT](index=16&type=section&id=NOTE%207.%20DEBT) This note describes Rollins, Inc.'s debt structure, including senior notes, commercial paper, and credit facilities **Long-term Debt (June 30, 2025 vs. December 31, 2024):** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | 2035 Senior Notes | $500,000 | $— | $500,000 | N/A | | Revolving Credit Facility | $— | $397,000 | $(397,000) | -100.00% | | Total long-term debt, net | $485,278 | $395,310 | $89,968 | 22.76% | - The Company issued **$500 million** in 2035 Senior Notes in February 2025 at **5.25%** interest, using proceeds to repay the Revolving Credit Facility, which had **$397 million** outstanding at year-end 2024 and zero outstanding at June 30, 2025[50](index=50&type=chunk)[62](index=62&type=chunk) - **Commercial Paper Program:** * Established in March 2025, allowing issuance of up to **$1 billion** in unsecured commercial paper[63](index=63&type=chunk) * Outstanding borrowings of **$59.99 million** at June 30, 2025, with a weighted average annual interest rate of **4.57%** and average remaining term of **2.5 days**[65](index=65&type=chunk) - **Revolving Credit Facility:** * **$1.0 billion** facility maturing February 24, 2028[58](index=58&type=chunk) * Amendment No. 1 in March 2025 released subsidiary guarantors[59](index=59&type=chunk) * No outstanding borrowings as of June 30, 2025[62](index=62&type=chunk) [NOTE 8. FAIR VALUE MEASUREMENT](index=18&type=section&id=NOTE%208.%20FAIR%20VALUE%20MEASUREMENT) This note provides information on Rollins, Inc.'s fair value measurements, including contingent consideration and senior notes **Contingent Consideration (June 30, 2025 vs. December 31, 2024):** | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Acquisition holdback and earnout liabilities | $40,215 | $21,008 | $19,207 | 91.43% | - Contingent consideration liabilities significantly increased, primarily due to new acquisitions and measurement adjustments[71](index=71&type=chunk) **2035 Senior Notes Fair Value (June 30, 2025):** | Metric | Fair Value (in thousands) | Carrying Value (in thousands) | | :---------------- | :------------------------ | :-------------------------- | | 2035 Senior Notes | $502,150 | $485,278 | - The fair value of the 2035 Senior Notes was slightly above their carrying value, classified as Level 2 in the fair value hierarchy[73](index=73&type=chunk) [NOTE 9. CONTINGENCIES](index=19&type=section&id=NOTE%209.%20CONTINGENCIES) This note outlines Rollins, Inc.'s involvement in various legal and environmental contingencies - The Company is involved in various claims, arbitrations, disputes, investigations, and litigation, including allegations of service/vehicle damage, service efficacy, acquisition-related claims, and regulatory violations, and accrues loss contingency reserves based on probable and estimable outcomes[74](index=74&type=chunk) - Retains risks for general liability, workers' compensation, and auto liability, with estimated costs based on historical trends and actuarial studies[75](index=75&type=chunk) - An ongoing environmental investigation in California is not expected to have a material adverse effect on financial results[77](index=77&type=chunk)[78](index=78&type=chunk) [NOTE 10. STOCKHOLDERS' EQUITY](index=20&type=section&id=NOTE%2010.%20STOCKHOLDERS%27%20EQUITY) This note details changes in Rollins, Inc.'s stockholders' equity, including dividends and stock-based compensation **Cash Dividends Paid (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Total Cash Dividends | $159,373 | $145,167 | $14,206 | 9.79% | | Dividends Per Share | $0.330 | $0.300 | $0.030 | 10.00% | **Stock-based Compensation Expense (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Stock-based compensation expense | $19,809 | $15,560 | $4,249 | 27.31% | - The Company did not repurchase shares on the open market during the reported periods[81](index=81&type=chunk) [NOTE 11. EARNINGS PER SHARE](index=20&type=section&id=NOTE%2011.%20EARNINGS%20PER%20SHARE) This note provides calculations for Rollins, Inc.'s basic and diluted earnings per share **Weighted Average Shares Outstanding (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :----- | :--------- | | Total weighted-average shares outstanding – basic | 484,530 | 484,187 | 343 | 0.07% | | Weighted-average shares outstanding – diluted | 484,559 | 484,356 | 203 | 0.04% | [NOTE 12. INCOME TAXES](index=21&type=section&id=NOTE%2012.%20INCOME%20TAXES) This note details Rollins, Inc.'s provision for income taxes and effective tax rate **Provision for Income Taxes (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Provision for income taxes | $82,052 | $75,861 | $6,191 | 8.16% | **Effective Tax Rate (Six Months Ended June 30):** | Metric | 2025 | 2024 | Change (bps) | | :---------------- | :--- | :--- | :----------- | | Effective tax rate | 25.0% | 25.3% | -30 bps | - The effective tax rate decreased due to a decrease in state income tax expense in 2025[86](index=86&type=chunk) [NOTE 13. SEGMENT AND GEOGRAPHIC INFORMATION](index=21&type=section&id=NOTE%2013.%20SEGMENT%20AND%20GEOGRAPHIC%20INFORMATION) This note provides information on Rollins, Inc.'s reportable segment and geographic distribution of assets - The Company operates under one reportable segment, encompassing residential, commercial, and termite and ancillary service offerings[87](index=87&type=chunk) - The CEO, as CODM, uses net income to assess financial performance and allocate resources[87](index=87&type=chunk) **Long-lived Tangible Assets by Location (June 30, 2025 vs. December 31, 2024):** | Location | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :--------------- | :------------------ | :------------------ | :--------- | :--------- | | United States | $506,544 | $503,767 | $2,777 | 0.55% | | International | $41,886 | $35,546 | $6,340 | 17.84% | [NOTE 14. SUBSEQUENT EVENTS](index=23&type=section&id=NOTE%2014.%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including dividends and tax legislation - **Quarterly Dividend:** On July 22, 2025, the Board declared a regular quarterly cash dividend of **$0.165** per share, payable on September 10, 2025[91](index=91&type=chunk) - **Tax Legislation (OBBBA):** President Trump signed the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which permanently extends certain 2017 Tax Cuts and Jobs Act provisions and modifies the international tax framework. The Company does not expect a material impact on its condensed consolidated financial statements[92](index=92&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Rollins, Inc.'s financial performance and condition [GENERAL OPERATING COMMENTS](index=24&type=section&id=GENERAL%20OPERATING%20COMMENTS) This section provides general comments on Rollins, Inc.'s operating environment and strategic objectives - Demand remains favorable to start the third quarter, and the pipeline of acquisition activity remains healthy[95](index=95&type=chunk) - The Company aims for **7% to 8%** organic revenue growth and **3% to 4%** inorganic revenue growth for 2025[96](index=96&type=chunk) - Focus on improving business model efficiency while investing in programs aimed at growing the business across service offerings[96](index=96&type=chunk) [RECENT DEVELOPMENTS AND ECONOMIC CONDITIONS](index=24&type=section&id=RECENT%20DEVELOPMENTS%20AND%20ECONOMIC%20CONDITIONS) This section discusses recent economic developments and their potential impact on Rollins, Inc.'s operations - The Company continues to navigate challenges from inflation, changing interest rates, natural disasters, employee shortages, and supply chain issues, implementing strategies to mitigate impacts, though future effectiveness is uncertain[97](index=97&type=chunk)[101](index=101&type=chunk) - Ongoing changes to global trade policies, including tariffs, are monitored, with no material impact expected on the Company's business, despite potential changes in fleet and materials expenses[98](index=98&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, is not expected to have a material impact on the Company's condensed consolidated financial statements[102](index=102&type=chunk) [RESULTS OF OPERATIONS](index=25&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed comparison of Rollins, Inc.'s financial performance for the reported periods [Quarter ended June 30, 2025 compared to quarter ended June 30, 2024](index=25&type=section&id=Quarter%20ended%20June%2030%2C%202025%20compared%20to%20quarter%20ended%20June%2030%2C%202024) This section compares Rollins, Inc.'s financial performance for the second quarter of 2025 against 2024 **Key Financial Performance (Q2 2025 vs. Q2 2024):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $999,527 | $891,920 | $107,607 | 12.1% | | Operating Income | $198,333 | $182,377 | $15,956 | 8.7% | | Net Income | $141,489 | $129,397 | $12,092 | 9.3% | | EPS (diluted) | $0.29 | $0.27 | $0.02 | 7.4% | | Operating Cash Flow | $175,122 | $145,115 | $30,007 | 20.7% | - **Revenue Growth Drivers (Q2 2025):** * Total revenue increased by **12.1%**, with organic revenue growth of **7.3%** and acquisitions contributing **4.8%**[108](index=108&type=chunk) * Residential pest control revenue increased **11.6%** (**4.9%** organic)[108](index=108&type=chunk) * Commercial pest control revenue increased **11.4%** (**8.4%** organic)[108](index=108&type=chunk) * Termite and ancillary services grew **13.9%** (**10.3%** organic)[108](index=108&type=chunk) - **Operating Margin Decline (Q2 2025):** * Operating margin decreased by **60 basis points** to **19.8%**, primarily due to higher insurance and claims costs (**40 bps**) and fleet costs (**30 bps**), partially offset by leverage in employee expenses (**30 bps**) and materials and supplies (**40 bps**)[112](index=112&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk) [Six months ended June 30, 2025 compared to six months ended June 30, 2024](index=29&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20six%20months%20ended%20June%2030%2C%202024) This section compares Rollins, Inc.'s financial performance for the first half of 2025 against 2024 **Key Financial Performance (H1 2025 vs. H1 2024):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Revenues | $1,822,031 | $1,640,269 | $181,762 | 11.1% | | Operating Income | $340,981 | $314,801 | $26,180 | 8.3% | | Net Income | $246,737 | $223,791 | $22,946 | 10.3% | | EPS (diluted) | $0.51 | $0.46 | $0.05 | 10.9% | | Operating Cash Flow | $322,014 | $272,548 | $49,466 | 18.1% | - **Revenue Growth Drivers (H1 2025):** * Total revenue increased by **11.1%**, with organic revenue growth of **7.4%** and acquisitions contributing **3.7%**[125](index=125&type=chunk) * Residential pest control revenue increased **10.1%** (**5.2%** organic)[125](index=125&type=chunk) * Commercial pest control revenue increased **10.8%** (**7.9%** organic)[125](index=125&type=chunk) * Termite and ancillary services grew **13.6%** (**10.7%** organic)[125](index=125&type=chunk) * Foreign currency headwinds impacted revenue by **20 basis points**[125](index=125&type=chunk) - **Operating Margin Decline (H1 2025):** * Operating margin decreased by **50 basis points** to **18.7%**, mainly due to higher selling and marketing costs, fleet costs, and insurance and claims costs, partially offset by leverage in materials and supplies and employee expenses[127](index=127&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles various non-GAAP financial measures used by Rollins, Inc. **Organic Revenues (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Total Revenues | $1,822,031 | $1,640,269 | $181,762 | 11.1% | | Revenues from acquisitions | $(61,152) | $— | $(61,152) | 3.7% | | **Organic revenues** | **$1,760,879** | **$1,640,269** | **$120,610** | **7.4%** | **Adjusted Operating Income (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Operating income (GAAP) | $340,981 | $314,801 | $26,180 | 8.3% | | Acquisition-related expenses | $11,788 | $9,484 | $2,304 | 24.3% | | **Adjusted operating income (Non-GAAP)** | **$352,769** | **$324,285** | **$28,484** | **8.8%** | **Adjusted EBITDA (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | EBITDA (Non-GAAP) | $402,911 | $370,173 | $32,738 | 8.8% | | Acquisition-related expenses | $1,082 | $1,049 | $33 | 3.1% | | Gain on sale of assets, net | $(984) | $(351) | $(633) | 180.3% | | **Adjusted EBITDA (Non-GAAP)** | **$403,009** | **$370,871** | **$32,138** | **8.7%** | **Free Cash Flow (Six Months Ended June 30):** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net cash provided by operating activities (GAAP) | $322,014 | $272,548 | $49,466 | 18.1% | | Capital expenditures | $(13,857) | $(15,867) | $2,010 | -12.7% | | **Free cash flow (Non-GAAP)** | **$308,157** | **$256,681** | **$51,476** | **20.1%** | [LIQUIDITY AND CAPITAL RESOURCES](index=37&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section details Rollins, Inc.'s financial liquidity and capital management strategies - **Cash and Cash Equivalents:** **$123.0 million** at June 30, 2025, with approximately **$60.0 million** held by foreign subsidiaries and **$63.0 million** held at domestic banks[157](index=157&type=chunk) - The Company believes its current cash, future operating cash flows, access to debt financing, **$1 billion** commercial paper program, and Revolving Credit Facility will be sufficient to finance current operations, obligations, and future business expansion[159](index=159&type=chunk) - **2035 Senior Notes:** Issued **$500 million** in February 2025 at **5.25%** interest, with proceeds primarily used to repay outstanding borrowings under the Revolving Credit Facility[160](index=160&type=chunk) - **Commercial Paper Program:** Established in March 2025, allowing issuance of up to **$1 billion** in unsecured commercial paper; **$60.0 million** outstanding at June 30, 2025[162](index=162&type=chunk) - **Revolving Credit Facility:** **$1.0 billion** facility, with no outstanding borrowings as of June 30, 2025 (compared to **$397.0 million** at December 31, 2024)[165](index=165&type=chunk) **Cash Flow Summary (Six Months Ended June 30):** | Activity | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Net cash provided by operating activities | $322,014 | $272,548 | $49,466 | 18.1% | | Net cash used in investing activities | $(263,091) | $(93,621) | $(169,470) | 181.0% | | Net cash used in financing activities | $(28,570) | $(173,886) | $145,316 | -83.6% | - Operating cash flow increased due to strong operating results and timing of cash receipts/payments. Investing cash usage significantly increased due to **$253.6 million** in acquisitions. Financing cash usage decreased substantially due to debt issuance offsetting repayments and lower contingent consideration payments[168](index=168&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [CONTINGENCIES](index=40&type=section&id=CONTINGENCIES) This section outlines Rollins, Inc.'s involvement in various legal and environmental contingencies - The Company is involved in various claims and legal matters, including service-related damages, acquisition claims, and regulatory violations, and accrues loss contingency reserves based on probable and estimable outcomes[176](index=176&type=chunk) - Retains risks for general liability, workers' compensation, and auto liability, with estimated costs based on historical trends and actuarial studies[177](index=177&type=chunk) - An environmental investigation in California is ongoing, but management does not expect a material adverse effect on financial position, results of operations, or liquidity[178](index=178&type=chunk)[179](index=179&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=41&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section confirms no significant changes to Rollins, Inc.'s critical accounting estimates - There have been no significant changes in critical accounting estimates as disclosed in the 2024 Form 10-K[180](index=180&type=chunk) [CAUTION REGARDING FORWARD-LOOKING STATEMENTS](index=41&type=section&id=CAUTION%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides a cautionary statement regarding forward-looking information in the report - This report contains forward-looking statements based on current opinions, expectations, and projections, which involve risks and uncertainties[181](index=181&type=chunk) - Key forward-looking statements include expectations for financial and business performance, growth opportunities (organic and acquisitions), credit risk, impact of economic trends (inflation, interest rates, supply chain), tax legislation, liquidity, capital allocation, and the outcome of legal contingencies[181](index=181&type=chunk) - Forward-looking statements are not guarantees of future performance and should not be unduly relied upon, with no obligation to update them except as required by law[182](index=182&type=chunk)[183](index=183&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states no material changes to Rollins, Inc.'s market risk exposure - No material changes to market risk exposure during the six months ended June 30, 2025[184](index=184&type=chunk) - Refer to Part II, Item 7.A of the 2024 Form 10-K for detailed information on market risks[184](index=184&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=42&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section reports on the effectiveness of Rollins, Inc.'s disclosure controls and procedures - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[185](index=185&type=chunk) - The assessment of internal control over financial reporting excludes Saela Holdings, LLC, which was acquired during the quarter and is currently being integrated[186](index=186&type=chunk) - No other material changes in internal control over financial reporting during the quarter ended June 30, 2025[187](index=187&type=chunk) [PART II OTHER INFORMATION](index=42&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements or management's discussion and analysis [ITEM 1. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section reiterates Rollins, Inc.'s involvement in various legal and regulatory matters - The Company is involved in various claims, arbitrations, contractual disputes, investigations, litigation, and tax/regulatory matters[188](index=188&type=chunk) - Loss contingency reserves are established for probable and reasonably estimable outcomes[188](index=188&type=chunk)[189](index=189&type=chunk) - An environmental investigation in California is ongoing, but management does not believe it will have a material effect on financial results[190](index=190&type=chunk)[191](index=191&type=chunk) [ITEM 1A. RISK FACTORS](index=42&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states no material changes to the risk factors previously disclosed by Rollins, Inc. - No material changes from the risk factors disclosed in the 2024 Annual Report on Form 10-K[192](index=192&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=43&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details Rollins, Inc.'s share repurchase activity, primarily for employee tax obligations **Share Repurchase Activity (Q2 2025):** | Period | Total shares purchased | Weighted average price paid per share | Shares purchased as part of publicly announced repurchases | Maximum shares that may yet be purchased | | :------------------ | :--------------------- | :---------------------------------- | :------------------------------------------------------- | :--------------------------------------- | | April 1 to 30, 2025 | 4,275 | $55.51 | — | 11,415,625 | | May 1 to 31, 2025 | 246 | $56.25 | — | 11,415,625 | | June 1 to 30, 2025 | — | — | — | 11,415,625 | | **Total** | **4,521** | | **—** | | - Shares purchased represent shares withheld by the Company in connection with tax withholding obligations of its employees upon vesting of restricted stock awards, not open market repurchases[194](index=194&type=chunk) - As of June 30, 2025, **11.4 million** additional shares may be purchased under the existing share repurchase program, which has no expiration date[194](index=194&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=43&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section confirms Rollins, Inc. has not experienced any defaults upon senior securities - No defaults upon senior securities[195](index=195&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=43&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that Rollins, Inc. has no mine safety disclosures to report - No mine safety disclosures[196](index=196&type=chunk) [ITEM 5. OTHER INFORMATION](index=44&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section provides other information, specifically regarding Rule 10b5-1 Trading Plans [Rule 10b5-1 Trading Plans](index=45&type=section&id=Rule%2010b5-1%20Trading%20Plans) This section addresses Rule 10b5-1 trading plans for Rollins, Inc.'s directors and executive officers - None of the Company's directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[197](index=197&type=chunk) [ITEM 6. EXHIBITS](index=45&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including corporate and debt documents - Lists various exhibits, including Restated Certificate of Incorporation, By-Laws, Form of Common Stock Certificate, Description of Registrant's Securities, Indenture for 2035 Senior Notes, Registration Rights Agreement, Commercial Paper Dealer Agreement, Amendment No. 1 to Credit Agreement, and certifications (CEO, CFO)[198](index=198&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q, confirming authorization - The report is signed by Kenneth D. Krause, Principal Financial and Accounting Officer, on July 24, 2025[201](index=201&type=chunk)

Core Insights - Rollins, Inc. (ROL) reported better-than-expected second-quarter 2025 results with adjusted earnings of 30 cents per share, beating consensus estimates by 3.5% and increasing 11% year over year [1] - Revenues reached $999.5 million, surpassing consensus by 2.1% and improving 12.1% year over year, with organic revenues of $956.9 million rising 7.3% year over year [1] Financial Performance - Residential revenues increased 4.9% year over year to $428.5 million, missing the estimate of $431.6 million [3] - Commercial revenues rose 11.4% year over year to $320.5 million, exceeding the estimate of $310.3 million [3] - Termite and ancillary revenues increased 13.9% year over year to $211.9 million, beating the estimate of $211.6 million [3] - Adjusted EBITDA was $231 million, a 10% increase year over year, compared to the expectation of $227.5 million [4] - The adjusted EBITDA margin was 23.1%, a decrease of 50 basis points year over year, compared to the expected margin of 23.6% [4] Cash Flow and Debt - Rollins ended the quarter with cash and cash equivalents of $123.04 million, up from $89.6 million in the previous quarter [5] - Long-term debt increased to $485.3 million from $395.3 million at the end of the previous quarter [5] - The company generated $175.22 million in cash from operating activities, with capital expenditures of $7.08 million, resulting in free cash flow of $168.01 million [5] - Rollins paid dividends totaling $79 million during the quarter [5] Stock Performance - Rollins shares have risen 23.5% over the past year, slightly underperforming the industry growth of 24.4% [2]

Financial Data and Key Metrics Changes - The company reported total revenue growth of 12.1% year-over-year and organic growth of 7.3% [5][12] - Gross margin was reported at 53.8%, slightly down by 20 basis points compared to the previous year [14] - GAAP earnings per share were $0.29, with adjusted earnings per share at $0.30, reflecting an 11.1% increase from the same period last year [13][18] - Operating cash flow increased by 21% to $175 million, while free cash flow rose over 23% to $168 million [18][19] Business Line Data and Key Metrics Changes - Residential revenues increased by 11.6%, commercial pest control rose by 11.4%, and termite and ancillary services grew by 13.9% [13] - Organic growth in residential was 4.9%, in commercial it was 8.4%, and in termite and ancillary it was 10.3% [14] Market Data and Key Metrics Changes - The company experienced a strong demand recovery in June, leading to a robust backlog entering July [5][6] - The impact of weather was noted, particularly in May, which affected productivity in various regions [10][97] Company Strategy and Development Direction - The company is focused on strategic M&A opportunities and organic growth investments, with the recent acquisition of Saila enhancing competitive advantages [8][20] - The company aims to maintain organic growth in the range of 7% to 8% for the year, with M&A contributing an additional 3% to 4% [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of markets and the company's recession-resilient business model, despite macroeconomic uncertainties [20] - The company anticipates improving margin profiles in the second half of the year, with a focus on maintaining double-digit earnings growth [21][88] Other Important Information - The company has a healthy leverage ratio of 0.9 times and continues to prioritize capital allocation while maintaining a disciplined approach to debt [20][75] - The company has seen improvements in employee retention, which positively impacts customer service and operational efficiency [113] Q&A Session Summary Question: Can you unpack the residential performance a little bit in the quarter? - Management noted that residential organic growth was 4.9%, with a strong backlog exiting June, indicating robust demand [26][28] Question: What are the impacts of generative AI on your business? - Management acknowledged adjustments in marketing strategies due to generative AI, leading to higher quality leads and improved closing rates [36][39] Question: Can you provide context on contributions from pricing and volume? - The pricing strategy targets a CPI plus level of 3% to 4%, with volume growth outpacing the underlying market [44][46] Question: What was the impact of legacy auto claims on margins? - Management indicated that legacy auto claims are difficult to predict and can impact margins, but they are actively working on improving safety to reduce claims [61][64] Question: How is the commercial segment performing? - The commercial segment continues to show strong growth, with ongoing investments in staffing and marketing to capture opportunities [70] Question: How are you balancing debt repayment and capital return? - The company maintains a disciplined approach to managing debt while investing in growth and returning capital to shareholders [75] Question: What are the trends in ancillary services? - The ancillary business has performed well, with strong organic growth and no signs of consumer slowdown [90][91]

Financial Data and Key Metrics Changes - The company reported total revenue growth of 12.1% and organic growth of 7.3% for the second quarter [4][11] - Gross margin was reported at 53.8%, slightly down by 20 basis points compared to the previous year [13] - GAAP earnings were $0.29 per share, while adjusted earnings were $0.30 per share, reflecting an 11.1% increase from the same period last year [15][16] - Operating cash flow increased by 21% to $175 million, and free cash flow rose over 23% to $168 million [16][17] Business Line Data and Key Metrics Changes - Residential revenues increased by 11.6%, commercial pest control rose by 11.4%, and termite and ancillary services increased by 13.9% [12] - Organic growth in residential was 4.9%, in commercial it was 8.4%, and in termite and ancillary it was 10.3% [13] Market Data and Key Metrics Changes - The company experienced a strong backlog of work entering July, indicating robust demand across all segments [5][49] - The company anticipates organic growth in the range of 7% to 8% for the year, with M&A contributing an additional 3% to 4% [19] Company Strategy and Development Direction - The company is focused on strategic M&A opportunities and organic growth, with the recent acquisition of Saila enhancing competitive advantages [5][18] - Investments in sales staffing and marketing activities are ongoing to ensure readiness for peak season [6][10] - The company aims to improve its incremental margin profile while continuing to invest in growth opportunities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of markets and the company's recession-resilient business model [18] - The company is positioned well to deliver on financial objectives despite macroeconomic uncertainties [18] - Management noted improvements in teammate retention and operational efficiency, which are expected to positively impact margins [9][106] Other Important Information - The company has a healthy leverage ratio of 0.9 times and plans to maintain a disciplined approach to capital allocation [17][68] - The company is actively addressing legacy auto claims, which have impacted margins, and is implementing safety measures to reduce future claims [56][57] Q&A Session Summary Question: Can you unpack the residential performance in the quarter? - Management noted that residential organic growth was 4.9%, with a strong backlog exiting June, indicating robust demand [22][24] Question: What are the contributions from pricing and volume in organic growth? - The pricing strategy targets a CPI plus level of 3% to 4%, with volume growth outpacing the underlying market [38][40] Question: Can you elaborate on the impact of legacy auto claims on margins? - Management indicated that these claims are difficult to predict and can mature over time, impacting financials [54][56] Question: How is the company addressing SG&A as a percentage of sales? - Management highlighted ongoing efforts to improve cost structures and reduce SG&A, which currently stands at around 30% of sales [98][99] Question: What is the outlook for M&A activity and valuations? - The company noted a competitive marketplace for acquisitions but remains optimistic about strategic opportunities [46][47] Question: How did the weather impact performance in the quarter? - Management acknowledged that weather conditions in May were challenging but noted a strong recovery in June [88][90]

Second Quarter 2025 Earnings Webcast Presentation Rollins, Inc. July 24, 2025 1 © 2024 Rollins, Inc. All rights reserved. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required by law. 2 © 2024 Rollins, Inc. All ...

Rollins (ROL) came out with quarterly earnings of $0.3 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +3.45%. A quarter ago, it was expected that this operator of Orkin and other pest and termine control services would post earnings of $0.22 per share when it actually produced earnings of $0.22, delivering no surprise.Over t ...

[Executive Summary & Company Overview](index=1&type=section&id=FOR%20IMMEDIATE%20RELEASE) Rollins, Inc. achieved strong Q2 2025 financial results with double-digit revenue growth and improved earnings, while detailing its global pest control services [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Key%20Highlights) Rollins, Inc. reported strong second-quarter 2025 financial results, driven by double-digit revenue growth across all major service lines, leading to healthy improvements in earnings and cash flow - Rollins, Inc. reported strong second quarter 2025 financial results with **double-digit revenue growth** across all major service lines[1](index=1&type=chunk)[5](index=5&type=chunk) - Management is focused on driving growth while also improving profitability and expects **strong results in 2025 and beyond**[5](index=5&type=chunk) - EBITDA margins were pressured by **70 basis points** due to developments on legacy auto claims, but underlying operations showed **healthy margin performance**[6](index=6&type=chunk) - The Company invested **$226 million** in acquisitions, **$7 million** in capital expenditures, and paid **$79 million** in dividends during the quarter[7](index=7&type=chunk) Q2 2025 Key Financial Metrics (YoY Growth) | Metric | Q2 2025 Value | YoY Growth | | :-------------------------------- | :------------ | :--------- | | Revenues | $1 billion | 12.1% | | Organic Revenues* | N/A | 7.3% | | Operating Income | $198 million | 8.7% | | Operating Margin | 19.8% | (60) bps | | Adjusted Operating Income* | $206 million | 10.3% | | Adjusted Operating Margin* | 20.6% | (30) bps | | Adjusted EBITDA* | $231 million | 10.0% | | Adjusted EBITDA Margin* | 23.1% | (50) bps | | Net Income | $141 million | 9.3% | | Adjusted Net Income* | $147 million | 11.1% | | EPS (diluted) | $0.29 | 7.4% | | Adjusted EPS* (diluted) | $0.30 | 11.1% | | Operating Cash Flow | $175 million | 20.7% | [Consolidated Financial Performance](index=2&type=section&id=Three%20and%20Six%20Months%20Ended%20Financial%20Highlights) Rollins reported strong GAAP and non-GAAP financial results for Q2 and YTD June 2025, with double-digit revenue growth and improved profitability across key metrics [GAAP Financial Metrics](index=2&type=section&id=GAAP%20Metrics) Rollins reported strong GAAP financial results for Q2 and YTD June 2025, with double-digit revenue growth and healthy increases in gross profit, operating income, net income, and EPS GAAP Financial Performance (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Revenues | $999,527 | $891,920 | 12.1% | $1,822,031 | $1,640,269 | 11.1% | | Gross profit | $537,666 | $481,635 | 11.6% | $960,036 | $864,426 | 11.1% | | Gross profit margin | 53.8% | 54.0% | (20) bps | 52.7% | 52.7% | — bps | | Operating income | $198,333 | $182,377 | 8.7% | $340,981 | $314,801 | 8.3% | | Operating margin | 19.8% | 20.4% | (60) bps | 18.7% | 19.2% | (50) bps | | Net income | $141,489 | $129,397 | 9.3% | $246,737 | $223,791 | 10.3% | | EPS | $0.29 | $0.27 | 7.4% | $0.51 | $0.46 | 10.9% | | Net cash provided by operating activities | $175,122 | $145,115 | 20.7% | $322,014 | $272,548 | 18.1% | [Non-GAAP Financial Metrics](index=2&type=section&id=Non-GAAP%20Metrics) Rollins' non-GAAP metrics for Q2 and YTD June 2025 also showed strong growth, with adjusted operating income, adjusted net income, adjusted EPS, and adjusted EBITDA all increasing double-digits year-over-year Non-GAAP Financial Performance (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Adjusted operating income | $205,900 | $186,596 | 10.3% | $352,769 | $324,285 | 8.8% | | Adjusted operating margin | 20.6% | 20.9% | (30) bps | 19.4% | 19.8% | (40) bps | | Adjusted net income | $146,902 | $132,229 | 11.1% | $254,775 | $230,586 | 10.5% | | Adjusted EPS | $0.30 | $0.27 | 11.1% | $0.53 | $0.48 | 10.4% | | Adjusted EBITDA | $231,152 | $210,088 | 10.0% | $403,009 | $370,871 | 8.7% | | Adjusted EBITDA margin | 23.1% | 23.6% | (50) bps | 22.1% | 22.6% | (50) bps | | Free cash flow | $168,046 | $136,419 | 23.2% | $308,157 | $256,681 | 20.1% | [Significant Expense Categories](index=3&type=section&id=Significant%20Expense%20Categories) An analysis of expense categories for Q2 and YTD 2025 shows that employee expenses remain the largest cost component, with insurance and claims costs increasing as a percentage of revenue in Q2 2025 - Insurance and claims expenses, both within cost of services and SG&A, **increased as a percentage of revenue** in Q2 2025 compared to Q2 2024[10](index=10&type=chunk) Key Expense Categories as % of Revenue (Q2 2025 vs. Q2 2024) | Expense Category | Q2 2025 (% of Revenue) | Q2 2024 (% of Revenue) | | :-------------------------------- | :----------------------- | :----------------------- | | Employee expenses (Cost of services) | 29.8% | 30.1% | | Materials and supplies | 6.0% | 6.4% | | Insurance and claims (Cost of services) | 2.1% | 1.7% | | Fleet expenses (Cost of services) | 4.2% | 3.9% | | Total cost of services provided | 46.2% | 46.0% | | Selling and marketing expenses | 14.0% | 14.1% | | Administrative employee expenses | 8.9% | 8.9% | | Insurance and claims (SG&A) | 1.3% | 1.0% | | Total sales, general and administrative | 30.8% | 30.4% | | Depreciation and amortization | 3.2% | 3.1% | [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Rollins' condensed consolidated financial statements for Q2 and YTD June 2025 reflect increased assets, liabilities, revenues, and net income, with strong operating cash flow and significant acquisition spending [Condensed Consolidated Statements of Financial Position](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, Rollins' total assets increased to $3.18 billion from $2.82 billion at December 31, 2024, primarily driven by increases in goodwill, intangibles, and current assets Key Balance Sheet Items (June 30, 2025 vs. December 31, 2024, in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total assets | $3,180,040 | $2,819,695 | +$360,345 | | Cash and cash equivalents | $123,035 | $89,630 | +$33,405 | | Trade receivables, net | $229,735 | $196,081 | +$33,654 | | Goodwill | $1,337,903 | $1,161,085 | +$176,818 | | Intangibles, net | $600,970 | $541,589 | +$59,381 | | Total current assets | $537,907 | $442,623 | +$95,284 | | Total liabilities | $1,736,169 | $1,489,102 | +$247,067 | | Short-term debt | $59,989 | $0 | +$59,989 | | Long-term debt | $485,278 | $395,310 | +$89,968 | | Unearned revenues | $200,110 | $180,851 | +$19,259 | | Total stockholders' equity | $1,443,871 | $1,330,593 | +$113,278 | [Condensed Consolidated Statements of Income](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the three months ended June 30, 2025, Rollins reported revenues of $999.5 million, an increase from $891.9 million in the prior year, with net income growing to $141.5 million Key Income Statement Items (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | | Revenues | $999,527 | $891,920 | $1,822,031 | $1,640,269 | | Total operating expenses | $801,194 | $709,543 | $1,481,050 | $1,325,468 | | Operating income | $198,333 | $182,377 | $340,981 | $314,801 | | Consolidated income before income taxes | $191,245 | $175,014 | $328,789 | $299,652 | | Net income | $141,489 | $129,397 | $246,737 | $223,791 | | Net income per share - diluted | $0.29 | $0.27 | $0.51 | $0.46 | | Dividends paid per share | $0.165 | $0.150 | $0.330 | $0.300 | [Condensed Consolidated Cash Flow Information](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20CASH%20FLOW%20INFORMATION) Rollins generated $175.1 million in net cash from operating activities in Q2 2025, a 20.7% increase year-over-year, with significant acquisition spending impacting investing activities - Acquisition spending significantly increased in Q2 2025 to **$226.4 million**, compared to **$34.5 million** in Q2 2024[21](index=21&type=chunk) Key Cash Flow Items (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $175,122 | $145,115 | $322,014 | $272,548 | | Net cash used in investing activities | $(230,524) | $(41,156) | $(263,091) | $(93,621) | | Acquisitions, net of cash acquired | $(226,387) | $(34,522) | $(253,578) | $(81,654) | | Capital expenditures | $(7,076) | $(8,696) | $(13,857) | $(15,867) | | Net cash used in financing activities | $(23,958) | $(109,632) | $(28,570) | $(173,886) | | Payment of dividends | $(79,463) | $(72,578) | $(159,373) | $(145,167) | | Net (decrease) increase in cash and cash equivalents | $(78,142) | $(6,274) | $33,405 | $2,872 | [Company Information & Forward-Looking Statements](index=4&type=section&id=About%20Rollins%2C%20Inc.) Rollins, Inc. outlines its global operations, provides a cautionary statement on forward-looking information, and details the upcoming conference call for Q2 2025 results [About Rollins, Inc.](index=4&type=section&id=About%20Rollins%2C%20Inc.) Rollins, Inc. is a premier global consumer and commercial services company, offering essential pest control services and protection against various pests to over 2.8 million customers across multiple continents - Rollins, Inc. provides **essential pest control services** and protection against termite damage, rodents, and insects[11](index=11&type=chunk) - The company serves over **2.8 million customers** in North America, South America, Europe, Asia, Africa, and Australia, with more than **20,000 employees** from over **800 locations**[11](index=11&type=chunk) - Rollins operates through a family of leading brands including Orkin, HomeTeam Pest Defense, Clark Pest Control, and many others[11](index=11&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises readers that the press release may contain forward-looking statements based on current expectations and assumptions, which involve risks and uncertainties, and actual results could differ materially - Forward-looking statements are based on current opinions, expectations, intentions, beliefs, plans, objectives, assumptions, and projections about future events and financial trends[12](index=12&type=chunk) - Important factors could cause **actual results to differ materially** from forward-looking statements, as detailed in the 'Risk Factors' section of the Annual Report on Form 10-K[13](index=13&type=chunk) - The company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law[14](index=14&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call) Rollins will host a conference call on July 24, 2025, at 8:30 a.m. Eastern Time to discuss the second quarter 2025 results, with a live broadcast and replay available - Rollins will host a conference call on **Thursday, July 24, 2025, at 8:30 a.m. Eastern Time** to discuss Q2 2025 results[15](index=15&type=chunk) - The conference call will be broadcast live on www.rollins.com, and a replay will be available for **180 days**[15](index=15&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=APPENDIX) Rollins defines its non-GAAP financial measures and provides detailed reconciliations for key metrics such as organic revenue, adjusted operating income, net income, EPS, EBITDA, free cash flow, SG&A, and leverage ratio [Non-GAAP Financial Measures Definitions](index=8&type=section&id=Reconciliation%20of%20GAAP%20and%20non-GAAP%20Financial%20Measures) This section defines Rollins' non-GAAP financial measures, explaining their calculation and management's rationale for their use in evaluating performance and liquidity - Non-GAAP measures are used to provide investors with information about current trends and period-over-period comparisons, excluding certain items like acquisition impacts or amortization of intangibles[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Organic revenues exclude revenues from acquisitions completed within the prior 12 months and divested businesses[26](index=26&type=chunk) - Adjusted operating income, net income, and EPS add back amortization of intangible assets and adjustments to contingent consideration from Fox Pest Control and Saela Pest Control acquisitions[27](index=27&type=chunk)[28](index=28&type=chunk) - Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities, used to demonstrate the Company's ability to maintain its asset base and generate future cash flows[30](index=30&type=chunk) [Organic Revenue Reconciliations](index=9&type=section&id=Reconciliation%20of%20Revenues%20to%20Organic%20Revenues) Rollins' total revenues increased by 12.1% in Q2 2025, with organic revenue growth of 7.3% after excluding $42.6 million from acquisitions, demonstrating strong organic growth across all service lines Organic Revenue Growth (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 Revenues | Q2 2024 Revenues | Q2 Acq. Revenues | Q2 Organic Revenues | Q2 Organic % Change | YTD 2025 Revenues | YTD 2024 Revenues | YTD Acq. Revenues | YTD Organic Revenues | YTD Organic % Change | | :-------------------------------- | :--------------- | :--------------- | :--------------- | :------------------ | :------------------ | :---------------- | :---------------- | :---------------- | :------------------- | :------------------- | | Total Revenues | $999,527 | $891,920 | $42,602 | $956,925 | 7.3% | $1,822,031 | $1,640,269 | $61,152 | $1,760,879 | 7.4% | | Residential Revenues | $455,665 | $408,414 | $27,208 | $428,457 | 4.9% | $811,978 | $737,752 | $35,574 | $776,404 | 5.2% | | Commercial Revenues | $320,490 | $287,770 | $8,689 | $311,801 | 8.4% | $604,847 | $545,884 | $15,721 | $589,126 | 7.9% | | Termite and Ancillary Revenues | $211,855 | $186,024 | $6,705 | $205,150 | 10.3% | $383,985 | $338,084 | $9,857 | $374,128 | 10.7% | [Adjusted Operating Income & Margin Reconciliations](index=10&type=section&id=Reconciliation%20of%20Operating%20Income%20and%20Operating%20Income%20Margin%20to%20Adjusted%20Operating%20Income%20and%20Adjusted%20Operating%20Margin) Adjusted operating income for Q2 2025 was $205.9 million, an increase of 10.3% year-over-year, after adding back $7.6 million in acquisition-related expenses, with a slight decrease in adjusted operating margin Adjusted Operating Income & Margin (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Operating income | $198,333 | $182,377 | N/A | $340,981 | $314,801 | N/A | | Acquisition-related expenses | $7,567 | $4,219 | N/A | $11,788 | $9,484 | N/A | | Adjusted operating income | $205,900 | $186,596 | 10.3% | $352,769 | $324,285 | 8.8% | | Operating margin | 19.8% | 20.4% | N/A | 18.7% | 19.2% | N/A | | Adjusted operating margin | 20.6% | 20.9% | (30) bps | 19.4% | 19.8% | (40) bps | [Adjusted Net Income & EPS Reconciliations](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20and%20EPS%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20EPS) Adjusted net income for Q2 2025 increased by 11.1% to $146.9 million, and adjusted EPS rose by 11.1% to $0.30 per diluted share, after accounting for acquisition-related expenses and their tax impact Adjusted Net Income & EPS (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Net income | $141,489 | $129,397 | N/A | $246,737 | $223,791 | N/A | | Acquisition-related expenses | $7,567 | $4,219 | N/A | $11,788 | $9,484 | N/A | | Gain on sale of assets, net | $(292) | $(412) | N/A | $(984) | $(351) | N/A | | Tax impact of adjustments | $(1,862) | $(975) | N/A | $(2,766) | $(2,338) | N/A | | Adjusted net income | $146,902 | $132,229 | 11.1% | $254,775 | $230,586 | 10.5% | | EPS - diluted | $0.29 | $0.27 | N/A | $0.51 | $0.46 | N/A | | Adjusted EPS - diluted | $0.30 | $0.27 | 11.1% | $0.53 | $0.48 | 10.4% | [EBITDA & Adjusted EBITDA Reconciliations](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%2C%20Adjusted%20EBITDA%2C%20EBITDA%20Margin%2C%20Incremental%20EBITDA%20Margin%2C%20Adjusted%20EBITDA%20Margin%2C%20and%20Adjusted%20Incremental%20EBITDA%20Margin) Rollins reported Q2 2025 EBITDA of $230.4 million, a 9.4% increase, and Adjusted EBITDA of $231.2 million, a 10.0% increase, after adjustments, though both EBITDA and Adjusted EBITDA margins saw slight declines EBITDA & Adjusted EBITDA (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Net income | $141,489 | $129,397 | N/A | $246,737 | $223,791 | N/A | | Depreciation and amortization | $31,737 | $27,711 | N/A | $60,946 | $55,021 | N/A | | Interest expense, net | $7,380 | $7,775 | N/A | $13,176 | $15,500 | N/A | | Provision for income taxes | $49,756 | $45,617 | N/A | $82,052 | $75,861 | N/A | | EBITDA | $230,362 | $210,500 | 9.4% | $402,911 | $370,173 | 8.8% | | Acquisition-related expenses | $1,082 | $0 | N/A | $1,082 | $1,049 | N/A | | Gain on sale of assets, net | $(292) | $(412) | N/A | $(984) | $(351) | N/A | | Adjusted EBITDA | $231,152 | $210,088 | 10.0% | $403,009 | $370,871 | 8.7% | | EBITDA margin | 23.0% | 23.6% | N/A | 22.1% | 22.6% | N/A | | Adjusted EBITDA margin | 23.1% | 23.6% | N/A | 22.1% | 22.6% | N/A | | Incremental EBITDA margin | N/A | N/A | 18.5% | N/A | N/A | 18.0% | | Adjusted incremental EBITDA margin | N/A | N/A | 19.6% | N/A | N/A | 17.7% | [Free Cash Flow Reconciliations](index=10&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow%20and%20Free%20Cash%20Flow%20Conversion) Free cash flow for Q2 2025 increased by 23.2% to $168.0 million, driven by strong operating cash flow and a decrease in capital expenditures, leading to improved free cash flow conversion Free Cash Flow & Conversion (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Q2 % Change | YTD 2025 | YTD 2024 | YTD % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $175,122 | $145,115 | N/A | $322,014 | $272,548 | N/A | | Capital expenditures | $(7,076) | $(8,696) | N/A | $(13,857) | $(15,867) | N/A | | Free cash flow | $168,046 | $136,419 | 23.2% | $308,157 | $256,681 | 20.1% | | Free cash flow conversion | 118.8% | 105.4% | N/A | 124.9% | 114.7% | N/A | [Adjusted SG&A Reconciliations](index=11&type=section&id=Reconciliation%20of%20SG%26A%20to%20Adjusted%20SG%26A) Adjusted SG&A for Q2 2025 was $306.5 million, slightly lower than reported SG&A after removing $1.1 million in acquisition-related expenses, with adjusted SG&A as a percentage of revenues increasing slightly Adjusted SG&A (Q2 and YTD June 30, 2025 vs. 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :---------- | :---------- | :---------- | :---------- | | SG&A | $307,596 | $271,547 | $558,109 | $494,604 | | Acquisition-related expenses | $1,082 | $0 | $1,082 | $1,049 | | Adjusted SG&A | $306,514 | $271,547 | $557,027 | $493,555 | | Adjusted SG&A as a % of revenues | 30.7% | 30.4% | 30.6% | 30.1% | [Leverage Ratio Reconciliations](index=11&type=section&id=Reconciliation%20of%20Debt%20and%20Net%20Income%20to%20Leverage%20Ratio) As of June 30, 2025, Rollins' leverage ratio increased to 0.9x from 0.8x at December 31, 2024, reflecting an increase in adjusted net debt primarily due to new short-term and long-term borrowings - Short-term debt increased to **$60.0 million** as of June 30, 2025, from no outstanding borrowings at December 31, 2024, under the commercial paper program[39](index=39&type=chunk)[41](index=41&type=chunk) - Long-term debt increased to **$500.0 million** from **$397.0 million**, primarily due to the issuance of 2035 Senior Notes[39](index=39&type=chunk)[42](index=42&type=chunk) Leverage Ratio (June 30, 2025 vs. December 31, 2024, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Adjusted net debt | $871,183 | $733,551 | | Adjusted EBITDAR | $986,339 | $934,531 | | Leverage ratio | 0.9x | 0.8x |

Core Insights - Rollins, Inc. reported strong financial results for Q2 2025, with double-digit revenue growth across all major service lines, indicating a healthy demand environment [4][8] - The company achieved a revenue of $999.5 million, a 12.1% increase from Q2 2024, with organic revenues rising by 7.3% [8][31] - Adjusted net income for the quarter was $146.9 million, reflecting an 11.1% increase year-over-year, while adjusted EPS rose to $0.30, a 11.1% increase [8][32] Financial Performance - Revenues for the first six months of 2025 reached $1.82 billion, up 11.1% from $1.64 billion in the same period of 2024 [6][8] - Operating income for Q2 2025 was $198.3 million, an 8.7% increase from the previous year, with an operating margin of 19.8%, down 60 basis points [8][32] - Net cash provided by operating activities was $175.1 million for the quarter, a 20.7% increase compared to the prior year [8][19] Cost and Expenses - Total cost of services provided for Q2 2025 was $461.9 million, representing 46.2% of revenues, compared to 46.0% in Q2 2024 [7][18] - Sales, general, and administrative expenses were $307.6 million, accounting for 30.8% of revenues, slightly up from 30.4% in the previous year [9][18] Cash Flow and Investments - The company invested $226 million in acquisitions during the quarter, alongside $7 million in capital expenditures [8][19] - Free cash flow for Q2 2025 was $168 million, a 23.2% increase from the previous year [8][27] Market Position and Outlook - Management expressed confidence in the company's ability to drive growth and improve profitability in the second half of 2025 and beyond [4][5] - Rollins, Inc. continues to maintain a strong balance sheet and access to investment-grade credit markets, supporting its balanced capital allocation strategy [5][8]

Core Points - Rollins, Inc. declared a regular quarterly cash dividend of $0.165 per share, payable on September 10, 2025, to shareholders of record as of August 11, 2025 [1] Company Overview - Rollins, Inc. is a premier global consumer and commercial services company providing essential pest control services and protection against termite damage, rodents, and insects to over 2.8 million customers across multiple continents [2] - The company employs more than 20,000 individuals and operates from over 800 locations worldwide [2] - Rollins is the parent company of several leading brands in the pest control industry, including Orkin, Aardwolf Pestkare, and Clark Pest Control, among others [2]