Rollins(ROL) - 2024 Q4 - Annual Results

Revenue Performance - Revenues for Q4 2024 were $832 million, a 10.4% increase year-over-year, with organic revenues up 8.5% and acquisition-related revenues up 2.4%[3] - Full year revenues reached $3.4 billion, a 10.3% increase from the previous year, with organic revenues increasing by 7.9% and acquisition-related revenues increasing by 3.1%[3] - Rollins, Inc. reported Q4 2024 revenues of $832.2 million, a 10.3% increase from $754.1 million in Q4 2023[18] - For the full year 2024, total revenues reached $3.39 billion, up 10.3% from $3.07 billion in 2023[18] - Revenues for the three months ended December 31, 2024, were $832,169,000, representing a 10.4% increase from $754,086,000 in 2023[34] - Organic revenues for the same period were $813,946,000, an 8.5% increase from $750,026,000 in 2023[34] - Residential organic revenues increased by 6.5% to $360,334,000 compared to $338,224,000 in the previous year[34] - Commercial organic revenues grew by 7.2% to $273,442,000 from $254,889,000 in 2023[34] - Termite and ancillary organic revenues rose by 14.9% to $169,937,000 compared to $147,868,000 in the prior year[34] - Total revenues for the twelve months ended December 31, 2024, reached $3,388,708,000, a 10.3% increase from $3,073,278,000 in 2023[34] Income and Profitability - Operating income for Q4 2024 was $151 million, an 8.3% increase year-over-year, while full year operating income was $657 million, a 12.7% increase[3] - Adjusted EBITDA for Q4 2024 was $181 million, a 9.0% increase year-over-year, and for the full year, it was $771 million, an 11.6% increase[3] - Net income for Q4 2024 was $106 million, a decrease of 2.9% year-over-year, while full year net income was $466 million, a 7.2% increase[3] - Operating income for Q4 2024 was $150.6 million, compared to $139.1 million in Q4 2023, reflecting an increase of 10.3%[18] - Net income for Q4 2024 was $105.7 million, slightly down from $108.8 million in Q4 2023, resulting in a net income per share of $0.22[18] - Net income for the full year 2024 was $466.4 million, compared to $435.0 million in 2023, marking a 7.5% increase[37] - Adjusted net income for the full year 2024 was $479.2 million, up 10.4% from $434.1 million in 2023[36] Cash Flow and Financial Health - Operating cash flow for Q4 2024 was $188 million, a 23.1% increase year-over-year, and for the full year, it was $608 million, a 15.0% increase[3] - Rollins, Inc. reported a net cash provided by operating activities of $188.2 million for Q4 2024, compared to $152.8 million in Q4 2023[20] - Free cash flow for Q4 2024 was $184.0 million, a significant increase of 29.9% from $141.6 million in Q4 2023[36] - The leverage ratio improved to 0.8x in 2024 from 0.9x in 2023, indicating a stronger balance sheet[37] Expenses and Margins - Adjusted EPS for Q4 2024 was $0.23, a 9.5% increase year-over-year, while full year adjusted EPS was $0.99, an 11.2% increase[3] - SG&A expenses for Q4 2024 were $245.5 million, compared to $218.6 million in Q4 2023, reflecting an increase in operational costs[37] - Adjusted SG&A as a percentage of revenues was 29.5% in Q4 2024, slightly higher than 28.8% in Q4 2023[37] - Adjusted operating income increased to $154.8 million in Q4 2024 from $144.3 million in Q4 2023, reflecting an 11.7% growth[36] Strategic Focus and Future Outlook - The company plans to focus on pricing, modernization efforts, and continuous improvement to support healthy incremental margins in 2025[6] - Management expects solid demand for services and a robust acquisition pipeline for 2025, building on the momentum from 2024[4] - The company invested $52 million in acquisitions and $4 million in capital expenditures during Q4 2024, with total dividends paid amounting to $80 million[3] - Rollins, Inc. has a robust pipeline for acquisitions and continues to focus on operational execution and pricing strategies to support growth[11] - Adjusted EBITDA and adjusted EBITDA margin are key performance measures used by management to assess operating performance consistently over various periods[27] - Free cash flow is a critical financial measure for evaluating the company's liquidity, calculated by subtracting capital expenditures from cash provided by operating activities[28] - The leverage ratio, an assessment of overall liquidity and financial flexibility, is calculated by dividing adjusted net debt by adjusted EBITDAR[30] - Adjusted SG&A is utilized to compare SG&A expenses consistently over various periods, excluding adjustments related to the acquisition of Fox[29]