Rollins(ROL) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter revenues reached $1 billion, a 12.0% increase compared to Q3 2024, with organic revenues up 7.2%[7] - Quarterly operating income was $225 million, reflecting a 17.3% increase year-over-year, with an operating margin of 21.9%, up 100 basis points[7] - Adjusted EBITDA was $258 million, a 17.7% increase from the prior year, with an adjusted EBITDA margin of 25.2%, up 120 basis points[7] - Net income for the quarter was $164 million, a 19.4% increase year-over-year, with adjusted net income at $169 million, up 20.7%[7] - Quarterly EPS was $0.34 per diluted share, a 21.4% increase from the prior year, while adjusted EPS was $0.35, up 20.7%[7] - Adjusted operating income was $232 million, an 18.4% increase year-over-year, with an adjusted operating margin of 22.6%, up 120 basis points[8] - Adjusted net income for the nine months ended September 30, 2025, was $423 million, a 14.3% increase compared to the same period in 2024[8] - Net income for Q3 2025 was $163,527, representing a 19.5% increase from $136,913 in Q3 2024[19] - Operating income for the nine months ended September 30, 2025, was $566,002, up 11.7% from $506,597 in the same period of 2024[19] - Adjusted net income for the nine months ended September 30, 2025, was $410,264, up from $360,704 in the same period of 2024[19] - Net income for the nine months ended September 30, 2025, was $515.9 million, compared to $466.4 million for the same period in 2024, reflecting a 10.6% increase[41] Cash Flow and Investments - Operating cash flow increased by 30.2% to $191 million, with $35 million invested in acquisitions and $9 million in capital expenditures[7] - Free cash flow for the quarter was $182.8 million, a 31.1% increase year-over-year, contributing to a strong balance sheet and access to investment-grade credit markets[8] - Free cash flow for Q3 2025 was $182,846, reflecting a 31.1% increase from $139,425 in Q3 2024[40] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $513,363, compared to $419,495 in the same period of 2024, marking a 22.4% increase[22] - The company reported a free cash flow conversion rate of 111.8% for Q3 2025, up from 101.8% in Q3 2024[40] Assets and Liabilities - Total assets increased to $3,219,660 as of September 30, 2025, compared to $2,819,695 at the end of 2024, reflecting a growth of 14.2%[17] - Total liabilities increased to $1,687,612 as of September 30, 2025, from $1,489,102 at the end of 2024, reflecting a growth of 13.3%[17] - Cash and cash equivalents rose to $127,357, up 42.0% from $89,630 at the end of 2024[17] - Adjusted net debt as of September 30, 2025, was $811.8 million, up from $733.6 million as of December 31, 2024[41] - Long-term debt increased to $500.0 million as of September 30, 2025, from $397.0 million as of December 31, 2024[44] - Operating lease liabilities were $426.4 million as of September 30, 2025, compared to $417.2 million as of December 31, 2024[45] Operational Efficiency - The company is focused on continuous improvement initiatives to enhance profitability and is well-positioned for continued growth through organic means and acquisitions[5] - Adjusted SG&A as a percentage of revenues decreased to 29.3% in Q3 2025 from 30.0% in Q3 2024[41] - The leverage ratio remained stable at 0.8x for both September 30, 2025, and December 31, 2024[41] Acquisitions and Expenses - The company reported acquisitions net of cash acquired totaling $34,730 in Q3 2025, compared to $23,875 in Q3 2024[22] - The company incurred acquisition-related expenses of $1.1 million in Q3 2025, compared to no such expenses in Q3 2024[41] - Stock-based compensation expense increased to $37.1 million in Q3 2025 from $30.0 million in Q3 2024[41] Revenue Breakdown - Revenues for Q3 2025 reached $1,026,106, representing a 12.0% increase from $916,270 in Q3 2024[36] - Organic revenues increased by 7.2% to $982,120 in Q3 2025, compared to $916,270 in Q3 2024[36] - Residential organic revenues increased by 5.2% to $450,651 in Q3 2025, compared to $428,290 in Q3 2024[36] - EBITDA for Q3 2025 was $257,602, a 17.1% increase from $220,042 in Q3 2024[39] - The EBITDA margin improved to 25.1% in Q3 2025, compared to 24.0% in Q3 2024[39] - The company reported adjusted EBITDAR of $1,032.7 million for the three months ended September 30, 2025, compared to $934.5 million in the same period of 2024[41]