ROLLINS, INC. REPORTS FIRST QUARTER 2026 FINANCIAL RESULTS
Rhea-AI Summary
Rollins (NYSE: ROL) reported Q1 2026 revenue of $906.4M, up 10.2% year-over-year, with organic revenue +6.6%. GAAP net income was $107.8M and EPS was $0.22. Adjusted operating income was $152.8M and adjusted EBITDA was $179.5M. Operating cash flow was $118.4M and free cash flow was $111.2M, both down due in part to $40M tax-timing and $9M interest-payment timing; the company completed the Romex acquisition in April and reported strong March demand acceleration.
AI-generated analysis. Not financial advice.
Positive
- Revenue +10.2% YoY: Q1 2026 revenues reached $906.4M
- March acceleration: exited quarter with ~12% total growth and >8% organic growth in March
- Completed acquisition: Romex acquisition closed in April supporting strategic M&A activity
Negative
- Operating cash flow -19.4%: Q1 operating cash provided $118.4M versus $146.9M prior year
- Free cash flow -20.6%: Q1 free cash flow was $111.2M versus $140.1M prior year
- Cash timing headwinds: ~$40M tax payment timing and ~$9M interest-payment transition reduced Q1 cash flow
- Operating margin down 120 bps: Q1 operating margin was 16.1% versus 17.3% prior year
News Market Reaction – ROL
On the day this news was published, ROL gained 3.02%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
ROL’s modest 0.13% gain contrasts with mixed peers: HRB up 0.84%, while SCI, FTDR, BFAM, and VIK show declines, and only VIK appears in momentum scans, suggesting stock-specific focus around this earnings release.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 07 | Earnings call schedule | Neutral | +1.9% | Announcement of Q1 2026 results release date and conference call details. |
| Feb 11 | Earnings results | Positive | -10.5% | Reported Q4 and FY2025 with double-digit revenue, earnings, and cash flow growth. |
| Jan 13 | Earnings call schedule | Neutral | +0.8% | Set date and access details for Q4 and FY2025 results and conference call. |
| Oct 29 | Earnings results | Positive | +7.3% | Q3 2025 results showed broad strength in revenue, margins, earnings, and cash flow. |
| Oct 08 | Earnings call schedule | Neutral | -2.6% | Announced Q3 2025 earnings release date and investor conference call logistics. |
Earnings-related headlines have produced generally modest moves, averaging -0.64%, including one sharp selloff despite strong FY2025 results.
Recent earnings-related news for Rollins shows a steady cadence of result releases and call schedules. The company highlighted its 24th consecutive year of revenue growth and FY2025 revenue of $3.76B (+11.0%), with net income of $527M (+12.9%) and EPS of $1.09 (+13.5%). Q3 2025 delivered strong gains across revenue, earnings, and cash flow. Scheduling releases on earnings dates has typically led to smaller share price moves compared with full result announcements.
Historical Comparison
In the past year, five earnings-tagged headlines for ROL saw an average move of -0.64%, with mostly modest reactions and one notable selloff on strong FY2025 results.
Earnings updates have emphasized sustained double-digit 2025 revenue and earnings growth, with Q3 2025 showing broad strength and FY2025 marking the 24th consecutive year of revenue increases.
Market Pulse Summary
This announcement highlights continued revenue expansion, with Q1 2026 revenue up 10.2% and organic growth of 6.6%, alongside adjusted EPS of $0.24. At the same time, operating margin declined to 16.1% and free cash flow dropped 20.6%, partly due to tax and interest timing. Historically, earnings headlines have produced modest average moves of -0.64%. Investors may watch upcoming quarters for trends in margins, cash flow, and acquisition spending relative to this quarter’s profile.
Key Terms
non-gaap financial measures financial
adjusted ebitda financial
free cash flow financial
basis points financial
rule 10b5-1 trading plan regulatory
schedule 13g/a regulatory
def 14a regulatory
AI-generated analysis. Not financial advice.
Strong Acceleration of Demand During March Drives Improvement in Organic Growth Profile
Key Highlights
- First quarter revenues were
$906 million 10.2% over the first quarter of 2025 with organic revenues* increasing6.6% . - Quarterly operating income was
$145 million 2.0% over the first quarter of 2025. Quarterly operating margin was16.1% , a decrease of 120 basis points compared to the first quarter of 2025. Adjusted operating income* was$153 million 4.0% over the prior year. Adjusted operating margin* was16.9% , a decrease of 100 basis points compared to the prior year. - Adjusted EBITDA* was
$179 million 4.4% over the prior year. Adjusted EBITDA margin* was19.8% , a decrease of 110 basis points versus the first quarter of 2025. - Quarterly net income was
$108 million 2.5% over the prior year. Adjusted net income* was$113 million 5.0% over the prior year. - Quarterly EPS was
$0.22 $0.24 9.1% over the prior year. - Operating cash flow was
$118 million 19.4% compared to the prior year. Free cash flow* was$111 million 20.6% compared to the prior year. Cash flow was negatively impacted by$40 million $9 million $18 million $7 million $88 million
*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure.
Management Commentary
"Our results for the first quarter reflect our resilient business model and the ongoing focus of our teammates on operational excellence," said Jerry Gahlhoff, Jr., President and CEO. "We continue to invest in our business by focusing on organic demand generation activities, while also strengthening our Rollins family of brands through strategic M&A like the Romex acquisition we made in April. Our peak season is off to a strong start, and we are well-positioned from a staffing and service perspective to deliver for our customers," Mr. Gahlhoff added.
"We are encouraged by the sequential improvement in growth as we moved through the quarter, particularly as we exited the quarter with approximately 12 percent total growth and over 8 percent organic growth in March," said Kenneth Krause, Executive Vice President and CFO. "While margin performance was muted by pressures from insurance and claims, as well as deleverage from people costs and selling investments on lower volume early in the quarter, we anticipate improving profitability in our underlying operations as we enter peak season. We continue to execute a balanced capital allocation program enabled by compounding cash flow and a strong balance sheet," Mr. Krause concluded.
Three Months Ended Financial Highlights
Three Months Ended March 31, | ||||||
Variance | ||||||
(unaudited, in thousands, except per share data and margins) | 2026 | 2025 | $ | % | ||
GAAP Metrics | ||||||
Revenues | $ 906,424 | $ 822,504 | $ 83,920 | 10.2 % | ||
Gross profit (1) | $ 460,902 | $ 422,370 | $ 38,532 | 9.1 % | ||
Gross profit margin (1) | 50.8 % | 51.4 % | -60 bps | |||
Operating income | $ 145,486 | $ 142,648 | $ 2,838 | 2.0 % | ||
Operating margin | 16.1 % | 17.3 % | -120 bps | |||
Net income | $ 107,838 | $ 105,248 | $ 2,590 | 2.5 % | ||
EPS | $ 0.22 | $ 0.22 | $ — | — % | ||
Net cash provided by operating activities | $ 118,367 | $ 146,892 | (19.4) % | |||
Non-GAAP Metrics | ||||||
Adjusted operating income (2) | $ 152,793 | $ 146,861 | $ 5,932 | 4.0 % | ||
Adjusted operating margin (2) | 16.9 % | 17.9 % | -100 bps | |||
Adjusted net income (2) | $ 113,229 | $ 107,868 | $ 5,361 | 5.0 % | ||
Adjusted EPS (2) | $ 0.24 | $ 0.22 | $ 0.02 | 9.1 % | ||
Adjusted EBITDA (2) | $ 179,469 | $ 171,857 | $ 7,612 | 4.4 % | ||
Adjusted EBITDA margin (2) | 19.8 % | 20.9 % | -110 bps | |||
Free cash flow (2) | $ 111,228 | $ 140,111 | (20.6) % | |||
(1) Exclusive of depreciation and amortization |
(2) Amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure. |
The following table presents financial information, including our significant expense categories, for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31, | ||||
(unaudited, in thousands) | 2026 | 2025 | ||
$ | % of | $ | % of | |
Revenue | $ 906,424 | 100.0 % | $ 822,504 | 100.0 % |
Less: | ||||
Cost of services provided (exclusive of depreciation and amortization below): | ||||
Employee expenses | 289,722 | 32.0 % | 261,724 | 31.8 % |
Materials and supplies | 53,217 | 5.9 % | 48,491 | 5.9 % |
Insurance and claims | 21,147 | 2.3 % | 16,524 | 2.0 % |
Fleet expenses | 42,172 | 4.7 % | 36,857 | 4.5 % |
Other cost of services provided (1) | 39,264 | 4.3 % | 36,538 | 4.4 % |
Total cost of services provided (exclusive of depreciation and amortization below) | 445,522 | 49.2 % | 400,134 | 48.6 % |
Sales, general and administrative: | ||||
Selling and marketing expenses | 111,999 | 12.4 % | 98,250 | 11.9 % |
Administrative employee expenses | 89,749 | 9.9 % | 81,481 | 9.9 % |
Insurance and claims | 12,583 | 1.4 % | 10,004 | 1.2 % |
Fleet expenses | 10,262 | 1.1 % | 9,403 | 1.1 % |
Other sales, general and administrative (2) | 58,325 | 6.4 % | 51,375 | 6.2 % |
Total sales, general and administrative | 282,918 | 31.2 % | 250,513 | 30.5 % |
Depreciation and amortization | 32,498 | 3.6 % | 29,209 | 3.6 % |
Interest expense, net | 8,851 | 1.0 % | 5,796 | 0.7 % |
Other (income) expense, net | (463) | (0.1) % | (692) | (0.1) % |
Income tax expense | 29,260 | 3.2 % | 32,296 | 3.9 % |
Net income | $ 107,838 | 11.9 % | $ 105,248 | 12.8 % |
1) Other cost of services provided includes facilities costs, professional services, maintenance & repairs, software license costs, and other expenses directly related to providing services. |
2) Other sales, general and administrative includes facilities costs, professional services, maintenance & repairs, software license costs, bad debt expense, and other administrative expenses. |
About Rollins, Inc.:
Rollins, Inc. (ROL) is a premier global consumer and commercial services company. Through its family of leading brands, the Company and its franchises provide essential pest control services and protection against termite damage, rodents, and insects to more than 2.8 million customers in
Cautionary Statement Regarding Forward-Looking Statements
This press release as well as other written or oral statements by the Company may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current opinions, expectations, intentions, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Although we believe that these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Generally, statements that do not relate to historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "should," "will," "would," and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding: expectations with respect to our financial and business performance, including expectations regarding seasonal profitability improvement and margin trends; Rollins' ongoing commitment to operational excellence; our resilient business model; a strategic approach to acquisitions, including statements regarding the anticipated benefits of the recent acquisitions such as Romex; compounding cash flow and strong balance sheet continuing to enable a balanced capital allocation strategy; a focus on pricing; a culture of continuous improvement supporting an improving margin profile; the stability of growth in our recurring and ancillary businesses; investing meaningfully in our business, including investments in organic demand generation and selling activities; intra-quarter trends in revenue growth, including monthly organic and total revenue growth rates; our staffing levels and readiness for peak season; and remaining well-positioned for continued growth.
These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and may also be described from time to time in our future reports filed with the SEC.
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.
Conference Call
Rollins will host a conference call on Thursday, April 23, 2026 at 8:30 a.m. Eastern Time to discuss the first quarter 2026 results. The conference call will also broadcast live over the internet via a link provided on the Rollins, Inc. website at www.rollins.com. Interested parties can also dial into the call at 1-877-869-3839 (domestic) or +1-201-689-8265 (internationally) with conference ID of 13759502. For interested individuals unable to join the call, a replay will be available on the website for 180 days.
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) (unaudited) | |||
March 31, | December 31, | ||
ASSETS | |||
Cash and cash equivalents | $ 116,543 | $ 100,004 | |
Trade receivables, net | 210,721 | 202,518 | |
Financed receivables, short-term, net | 44,243 | 44,723 | |
Materials and supplies | 44,128 | 42,982 | |
Other current assets | 98,043 | 82,455 | |
Total current assets | 513,678 | 472,682 | |
Equipment and property, net | 124,910 | 126,187 | |
Goodwill | 1,384,591 | 1,374,664 | |
Intangibles, net | 565,723 | 582,384 | |
Operating lease right-of-use assets | 412,690 | 424,528 | |
Financed receivables, long-term, net | 110,879 | 110,057 | |
Other assets | 47,763 | 50,021 | |
Total assets | $ 3,160,234 | $ 3,140,523 | |
LIABILITIES | |||
Short-term debt | $ 163,926 | $ 123,683 | |
Accounts payable | 61,188 | 44,361 | |
Accrued insurance – current | 45,204 | 44,123 | |
Accrued compensation and related liabilities | 102,461 | 128,259 | |
Unearned revenues | 194,273 | 187,670 | |
Operating lease liabilities – current | 136,714 | 137,410 | |
Other current liabilities | 90,897 | 120,019 | |
Total current liabilities | 794,663 | 785,525 | |
Accrued insurance, less current portion | 88,274 | 79,157 | |
Operating lease liabilities, less current portion | 279,873 | 290,765 | |
Long-term debt | 486,627 | 486,147 | |
Other long-term accrued liabilities | 129,109 | 124,608 | |
Total liabilities | 1,778,546 | 1,766,202 | |
STOCKHOLDERS' EQUITY | |||
Common stock | 481,462 | 481,194 | |
Retained earnings and other equity | 900,226 | 893,127 | |
Total stockholders' equity | 1,381,688 | 1,374,321 | |
Total liabilities and stockholders' equity | $ 3,160,234 | $ 3,140,523 | |
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
REVENUES | |||
Customer services | $ 906,424 | $ 822,504 | |
COSTS AND EXPENSES | |||
Cost of services provided (exclusive of depreciation and amortization below) | 445,522 | 400,134 | |
Sales, general and administrative | 282,918 | 250,513 | |
Depreciation and amortization | 32,498 | 29,209 | |
Total operating expenses | 760,938 | 679,856 | |
OPERATING INCOME | 145,486 | 142,648 | |
Interest expense, net | 8,851 | 5,796 | |
Other (income) expense, net | (463) | (692) | |
CONSOLIDATED INCOME BEFORE INCOME TAXES | 137,098 | 137,544 | |
PROVISION FOR INCOME TAXES | 29,260 | 32,296 | |
NET INCOME | $ 107,838 | $ 105,248 | |
NET INCOME PER SHARE - BASIC AND DILUTED | $ 0.22 | $ 0.22 | |
Weighted average shares outstanding - basic | 481,385 | 484,414 | |
Weighted average shares outstanding - diluted | 481,398 | 484,434 | |
DIVIDENDS PAID PER SHARE | $ 0.1825 | $ 0.1650 | |
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW INFORMATION (in thousands) (unaudited) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
OPERATING ACTIVITIES | |||
Net income | $ 107,838 | $ 105,248 | |
Depreciation and amortization | 32,498 | 29,209 | |
Change in working capital and other operating activities | (21,969) | 12,435 | |
Net cash provided by operating activities | 118,367 | 146,892 | |
INVESTING ACTIVITIES | |||
Acquisitions, net of cash acquired | (18,488) | (27,191) | |
Capital expenditures | (7,139) | (6,781) | |
Other investing activities, net | 1,060 | 1,405 | |
Net cash used in investing activities | (24,567) | (32,567) | |
FINANCING ACTIVITIES | |||
Net borrowings (repayments) | 49,496 | 95,215 | |
Payment of dividends | (87,849) | (79,910) | |
Cash paid for common stock purchased | (22,350) | (14,671) | |
Other financing activities, net | (15,489) | (5,246) | |
Net cash used in financing activities | (76,192) | (4,612) | |
Effect of exchange rate changes on cash and cash equivalents | (1,069) | 1,834 | |
Net increase (decrease) in cash and cash equivalents | $ 16,539 | $ 111,547 | |
APPENDIX
Reconciliation of GAAP and non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.
The Company has used the following non-GAAP financial measures in this earnings release:
Organic revenues
Organic revenues are calculated as revenues less the revenues from acquisitions completed within the prior 12 months and excluding the revenues from divested businesses. Acquisition revenues are based on the trailing 12-month revenue of our acquired entities. Management uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures.
Adjusted operating income and adjusted operating margin
Adjusted operating income and adjusted operating margin are calculated by adding back to operating income those expenses associated with the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Adjusted operating margin is calculated as adjusted operating income divided by revenues. Management uses adjusted operating income and adjusted operating margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
Adjusted net income and adjusted EPS
Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin and adjusted incremental EBITDA margin
EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes. EBITDA margin is calculated as EBITDA divided by revenues. Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses associated with the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses. Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods.
Free cash flow and free cash flow conversion
Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Management uses free cash flow to demonstrate the Company's ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income.
Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow is an important financial measure for use in evaluating the Company's liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity. Additionally, the Company's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash flows.
Adjusted sales, general and administrative ("SG&A")
Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Management uses adjusted SG&A to compare SG&A expenses consistently over various periods.
Leverage ratio
Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding short-term debt and operating lease liabilities to total long-term debt less a cash adjustment of
Set forth below is a reconciliation of the non-GAAP financial measures contained in this release to their most directly comparable GAAP measures.
(unaudited, in thousands, except per share data and margins) | |||||||
Three Months Ended March 31, | |||||||
Variance | |||||||
2026 | 2025 | $ | % | ||||
Reconciliation of Revenues to Organic Revenues | |||||||
Revenues | $ 906,424 | $ 822,504 | 83,920 | 10.2 | |||
Revenues from acquisitions | (29,858) | — | (29,858) | 3.6 | |||
Organic revenues | $ 876,566 | $ 822,504 | 54,062 | 6.6 | |||
Reconciliation of Residential Revenues to Organic Residential Revenues | |||||||
Residential revenues | $ 389,504 | $ 356,313 | 33,191 | 9.3 | |||
Residential revenues from acquisitions | (18,145) | — | (18,145) | 5.1 | |||
Residential organic revenues | $ 371,359 | $ 356,313 | 15,046 | 4.2 | |||
Reconciliation of Commercial Revenues to Organic Commercial Revenues | |||||||
Commercial revenues | $ 311,726 | $ 284,357 | 27,369 | 9.6 | |||
Commercial revenues from acquisitions | (5,371) | — | (5,371) | 1.9 | |||
Commercial organic revenues | $ 306,355 | $ 284,357 | 21,998 | 7.7 | |||
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues | |||||||
Termite and ancillary revenues | $ 195,423 | $ 172,130 | 23,293 | 13.5 | |||
Termite and ancillary revenues from acquisitions | (6,342) | — | (6,342) | 3.7 | |||
Termite and ancillary organic revenues | $ 189,081 | $ 172,130 | 16,951 | 9.8 | |||
Reconciliation of Franchise and Other Revenues to Organic Franchise and Other Revenues | |||||||
Franchise and other revenues | $ 9,771 | $ 9,704 | 67 | 0.7 | |||
Franchise and other revenues from acquisitions | — | — | — | — | |||
Franchise and other organic revenues | $ 9,771 | $ 9,704 | 67 | 0.7 | |||
Three Months Ended March 31, | |||||||
Variance | |||||||
2026 | 2025 | $ | % | ||||
Reconciliation of Operating Income and Operating Income Margin to Adjusted Operating Income and Adjusted Operating Margin | |||||||
Operating income | $ 145,486 | $ 142,648 | |||||
Acquisition-related expenses (1) | 7,307 | 4,213 | |||||
Adjusted operating income | $ 152,793 | $ 146,861 | 5,932 | 4.0 | |||
Revenues | $ 906,424 | $ 822,504 | |||||
Operating margin | 16.1 % | 17.3 % | |||||
Adjusted operating margin | 16.9 % | 17.9 % | |||||
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS | |||||||
Net income | $ 107,838 | $ 105,248 | |||||
Acquisition-related expenses (1) | 7,307 | 4,213 | |||||
Gain on sale of assets, net (2) | (61) | (692) | |||||
Tax impact of adjustments (3) | (1,855) | (901) | |||||
Adjusted net income | $ 113,229 | $ 107,868 | 5,361 | 5.0 | |||
EPS - basic and diluted | $ 0.22 | $ 0.22 | |||||
Acquisition-related expenses (1) | 0.02 | 0.01 | |||||
Gain on sale of assets, net (2) | — | — | |||||
Tax impact of adjustments (3) | — | — | |||||
Adjusted EPS - basic and diluted (4) | $ 0.24 | $ 0.22 | 0.02 | 9.1 | |||
Weighted average shares outstanding – basic | 481,385 | 484,414 | |||||
Weighted average shares outstanding – diluted | 481,398 | 484,434 | |||||
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin | |||||||
Net income | $ 107,838 | $ 105,248 | |||||
Depreciation and amortization | 32,498 | 29,209 | |||||
Interest expense, net | 8,851 | 5,796 | |||||
Provision for income taxes | 29,260 | 32,296 | |||||
EBITDA | $ 178,447 | $ 172,549 | 5,898 | 3.4 | |||
Acquisition-related expenses (1) | 1,083 | — | |||||
Gain on sale of assets, net (2) | (61) | (692) | |||||
Adjusted EBITDA | $ 179,469 | $ 171,857 | 7,612 | 4.4 | |||
Revenues | $ 906,424 | $ 822,504 | 83,920 | ||||
EBITDA margin | 19.7 % | 21.0 % | |||||
Incremental EBITDA margin | 7.0 % | ||||||
Adjusted EBITDA margin | 19.8 % | 20.9 % | |||||
Adjusted incremental EBITDA margin | 9.1 % | ||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion | |||||||
Net cash provided by operating activities | $ 118,367 | $ 146,892 | |||||
Capital expenditures | (7,139) | (6,781) | |||||
Free cash flow | $ 111,228 | $ 140,111 | (28,883) | (20.6) | |||
Free cash flow conversion | 103.1 % | 133.1 % | |||||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Reconciliation of SG&A to Adjusted SG&A | |||
SG&A | $ 282,918 | $ 250,513 | |
Acquisition-related expenses (1) | 1,083 | — | |
Adjusted SG&A | $ 281,835 | $ 250,513 | |
Revenues | $ 906,424 | $ 822,504 | |
Adjusted SG&A as a % of revenues | 31.1 % | 30.5 % | |
Period Ended | Period Ended | ||
Reconciliation of Debt and Net Income to Leverage Ratio | |||
Short-term debt (5) | $ 163,926 | $ 123,683 | |
Long-term debt (6) | 500,000 | 500,000 | |
Operating lease liabilities (7) | 416,587 | 428,175 | |
Cash adjustment (8) | (104,889) | (90,004) | |
Adjusted net debt | $ 975,624 | $ 961,854 | |
Net income | $ 529,295 | $ 526,705 | |
Depreciation and amortization | 128,033 | 124,744 | |
Interest expense, net | 31,613 | 28,558 | |
Provision for income taxes | 171,185 | 174,221 | |
Operating lease cost (9) | 163,890 | 159,924 | |
Stock-based compensation expense | 41,730 | 39,707 | |
Adjusted EBITDAR | $ 1,065,746 | $ 1,053,859 | |
Leverage ratio | 0.9x | 0.9x | |
(1) Consists of expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration associated with the acquisitions of Fox Pest Control and Saela Pest Control. While we exclude such expenses in this non-GAAP measure, the revenue from the acquired companies is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation. |
(2) Consists of the gain or loss on the sale of non-operational assets. |
(3) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods. |
(4) In some cases, the sum of the individual EPS amounts may not equal total adjusted EPS calculations due to rounding. |
(5) The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statement of financial position, net of unamortized discounts. |
(6) As of March 31, 2026 and December 31, 2025, the Company had outstanding borrowings of |
(7) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our condensed consolidated statement of financial position. |
(8) Represents |
(9) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less. |
For Further Information Contact
Lyndsey Burton (404) 888-2348
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SOURCE Rollins, Inc.