ROLLINS, INC. REPORTS THIRD QUARTER 2026 FINANCIAL RESULTS

A $63 million tax refund helped quarterly cash flow rise despite lower earnings and continued residential customer acquisition pressure.

Rhea-AI Summary

Rollins (NYSE: ROL) reported third-quarter 2026 revenue of $1.1 billion, up year over year, while earnings and operating margin declined. Revenue increased 6.2%, including 4.4% organic growth. Net income fell 3.4% to $158 million, diluted earnings per share fell 2.9% to $0.33, and operating margin declined 140 basis points to 20.5%.

Operating cash flow rose 26.4% to $242 million, helped by the timing of a $63 million tax refund. Rollins spent $120 million on share repurchases and $27 million on acquisitions. Management said residential customer acquisition remained under pressure and is reallocating marketing resources toward higher-return channels. For the first nine months, revenue rose 8.0% to $3.075 billion, while net income declined 0.1% to $409.675 million. Short-term debt reached $239.562 million at September 30, versus $123.683 million at year-end 2025.

19 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 24 points

How the balance works

Positive

• Moderate pointThird-quarter revenue rose 6.2% year over year to $1.1 billion.
• Moderate pointThird-quarter gross profit, excluding depreciation and amortization, rose 4.3% to $582.903 million year over year.
• Moderate pointThird-quarter operating cash flow increased 26.4% to $242 million, helped by $63 million tax-refund timing.
• Moderate pointShare repurchases totaled $120 million in the third quarter.
• Moderate pointNine-month operating income increased 0.7% to $569.704 million year over year.

14 minor points

• Minor pointThird-quarter organic revenue increased 4.4% year over year.
• Minor pointThird-quarter free cash flow, a non-GAAP measure, rose 28.8% to $235 million year over year.
• Minor pointThird-quarter dividends paid per share increased to $0.1825 from $0.1650 a year earlier.
• Minor pointAcquisition investment totaled $27 million in the third quarter.
• Minor pointRollins is reallocating marketing resources toward channels it identifies as generating higher returns, including AI-driven discovery.
• Minor pointNine-month revenue increased 8.0% to $3,074.670 million year over year.
• Minor pointNine-month gross profit, excluding depreciation and amortization, increased 6.3% to $1,613.751 million year over year.
• Minor pointNine-month adjusted operating income, a non-GAAP measure, rose 1.5% to $593.415 million year over year.
• Minor pointNine-month adjusted net income, a non-GAAP measure, rose 1.2% to $428.499 million year over year.
• Minor pointNine-month adjusted earnings per share increased 2.3% to $0.89 year over year.
• Minor pointNine-month adjusted EBITDA, an adjusted earnings measure, increased 1.7% to $672.332 million year over year.
• Minor pointNine-month operating cash flow rose 3.8% to $532.732 million year over year.
• Minor pointNine-month free cash flow increased 4.4% to $512.800 million year over year.
• Minor pointCash increased to $129.050 million at September 30, 2026, from $100.004 million at year-end 2025.

Negative

• Moderate pointThird-quarter net income declined 3.4% to $158 million year over year.
• Moderate pointThird-quarter operating income decreased 1.0% to $223 million year over year.
• Minor pointThird-quarter diluted earnings per share fell 2.9% to $0.33 year over year.
• Minor pointThird-quarter operating margin declined 140 basis points to 20.5% year over year.
• Minor pointThird-quarter gross margin, excluding depreciation and amortization, fell 90 basis points to 53.5% year over year.

19 minor points

• Minor pointThird-quarter adjusted operating income decreased 0.6% to $231 million year over year.
• Minor pointThird-quarter adjusted operating margin declined 140 basis points to 21.2% year over year.
• Minor pointThird-quarter adjusted net income decreased 3.1% to $163 million year over year.
• Minor pointThird-quarter adjusted earnings per share fell 2.9% to $0.34 year over year.
• Minor pointThird-quarter adjusted EBITDA decreased 0.7% to $257 million year over year.
• Minor pointThird-quarter adjusted EBITDA margin declined 170 basis points to 23.5% year over year.
• Minor pointResidential customer acquisition remained under pressure in the third quarter, management said.
• Minor pointService-related insurance and claims expenses rose to $23.048 million from $11.127 million in third-quarter 2025.
• Minor pointAdministrative insurance and claims expenses rose to $13.722 million from $6.929 million in third-quarter 2025.
• Minor pointService-related fleet expenses rose to $45.482 million from $38.997 million in third-quarter 2025.
• Minor pointAdministrative fleet expenses rose to $11.739 million from $9.502 million in third-quarter 2025.
• Minor pointThird-quarter net interest expense increased to $10.669 million from $7.942 million a year earlier.
• Minor pointNine-month net income declined 0.1% to $409.675 million; earnings per share remained $0.85 year over year.
• Minor pointNine-month operating margin declined 140 basis points to 18.5% year over year.
• Minor pointNine-month gross margin, excluding depreciation and amortization, declined 80 basis points to 52.5% year over year.
• Minor pointNine-month adjusted operating margin fell 120 basis points to 19.3% year over year.
• Minor pointNine-month adjusted EBITDA margin declined 130 basis points to 21.9% year over year.
• Minor pointShort-term debt rose to $239.562 million at September 30, 2026, from $123.683 million at year-end 2025.
• Minor pointLong-term debt rose to $487.587 million at September 30, 2026, from $486.147 million at year-end 2025.

Argus 15 min delay 5 alerts

-7.38% vs previous close $30.98 last price 1.0x rel. volume Open Argus

Details

Market move: ROL -7.38% vs previous close. Third-quarter earnings report

$30.20 – $34.36 Day Range

$14.91B Mkt Cap at Last Price

On Oct 21, the day this news came out, the latest delayed price for ROL is 7.38% below the previous close. Our momentum scanner has recorded 5 alerts for this stock so far that day. The latest delayed price is $30.98.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Key Figures

Revenue: $1.1 billion Organic revenue growth: 4.4% Operating income: $223 million +5 more

Revenue

$1.1 billion

Third quarter 2026; up 6.2% year over year

Organic revenue growth

4.4%

Third quarter 2026; compared with the prior year

Operating income

$223 million

Third quarter 2026; down 1.0% year over year

Operating margin

20.5%

Third quarter 2026; down 140 basis points year over year

Quarterly EPS

$0.33 per diluted share

Third quarter 2026; down 2.9% year over year

Operating cash flow

$242 million

Third quarter 2026; up 26.4% year over year

Free cash flow

$235 million

Third quarter 2026; up 28.8% year over year

Tax refund timing impact

$63 million

Cash flow was favorably impacted by timing of a tax refund

Previous Earnings Reports

2 past events · Latest: Jul 22

Same Type 2 events

1. Jul 22

   Earnings report

   24h Move

   -9.3%

   Q2 revenue rose 7.9% with organic growth of 5.7%, while operating margin fell 110 bps.

2. Apr 22

   Earnings report

   24h Move

   +3.0%

   Q1 revenue rose 10.2% and organic revenue rose 6.6%, compared with slower growth in Q3.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

non-gaap financial measures, ebitda, basis points

3 terms

non-gaap financial measures financial

"Amounts are non-GAAP financial measures."

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

ebitda financial

"Adjusted EBITDA* was $257 million, a decrease of 0.7% compared to the prior year."

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

View in glossary

basis points financial

"Quarterly operating margin was 20.5%, a decrease of 140 basis points"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

ATLANTA, Oct. 21, 2026 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL) ("Rollins" or the "Company"), a premier global consumer and commercial services company, reported unaudited financial results for the third quarter of 2026.

Key Highlights

• Third quarter revenues were $1.1 billion, an increase of 6.2% over the third quarter of 2025 with organic revenues* increasing 4.4% compared to the prior year.
  
  
• Quarterly operating income was $223 million, a decrease of 1.0% compared to the third quarter of 2025. Quarterly operating margin was 20.5%, a decrease of 140 basis points compared to the third quarter of 2025. Adjusted operating income* was $231 million, a decrease of 0.6% versus the prior year. Adjusted operating margin* was 21.2%, a decrease of 140 basis points compared to the prior year.
  
  
• Quarterly net income was $158 million, a decrease of 3.4% compared to the prior year. Adjusted net income* was $163 million, a decrease of 3.1% versus the prior year.
  
  
• Adjusted EBITDA* was $257 million, a decrease of 0.7% compared to the prior year. Adjusted EBITDA margin* was 23.5%, a decrease of 170 basis points versus the third quarter of 2025.
  
  
• Quarterly EPS was $0.33 per diluted share, a 2.9% decrease compared to the prior year. Adjusted EPS* was $0.34 per diluted share, a decrease of 2.9% versus the prior year.
  
  
• Operating cash flow was $242 million for the quarter, an increase of 26.4% compared to the prior year. Free cash flow* was $235 million for the quarter, an increase of 28.8% compared to the prior year. Cash flow was favorably impacted by $63 million due to the timing of a tax refund associated with our tax credit planning strategy. The Company invested $27 million in acquisitions, $6 million in capital expenditures, $120 million in share repurchases, and paid dividends totaling $87 million.

*Amounts are non-GAAP financial measures. See the appendix to this release below for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure.

Management Commentary

"We are disappointed with our third quarter performance and are acting with urgency to address the challenges impacting our results. We now have a clearer understanding of how the customer acquisition landscape is evolving and are taking concrete steps to optimize our approach. This remains a dynamic environment that requires us to continually assess and adapt how we reach and win new customers. At the same time, our record of 100 consecutive quarters of revenue growth reflects the durability of our business and our ability to successfully adapt through changing conditions. With recurring customer relationships, a diversified portfolio and the underlying resilience of the pest control market, we remain confident in our ability to deliver sustainable, profitable growth over the long term," said Jerry Gahlhoff, Jr., President and Chief Executive Officer.

"Residential customer acquisition remained under pressure in the third quarter. We are responding with a more dynamic marketing approach—reallocating resources from the traditional digital playbook to the channels and capabilities generating the highest returns, including those that strengthen our visibility in AI- and LLM-driven discovery. Our capital allocation priorities remain unchanged: investing in the business through accretive M&A, maintaining and growing a healthy and sustainable dividend, and deploying excess cash opportunistically for share repurchases. Our financial flexibility and conviction in the intrinsic value of the business supported more meaningful share repurchase activity during the quarter. At the same time, we continue to invest in our people and the service quality that builds customer loyalty," said Will Harkins, Executive Vice President and Chief Financial Officer. 

Three and Nine Months Ended Financial Highlights

	Three Months Ended September 30,							Nine Months Ended September 30,
					Variance							Variance
(unaudited, in thousands, except per share data and margins)	2026		2025		$	%		2026		2025		$	%
GAAP Metrics
Revenues	$  1,089,670		$  1,026,106		$ 63,564	6.2 %		$  3,074,670		$  2,848,137		$  226,533	8.0 %
Gross profit (1)	$     582,903		$     558,656		$ 24,247	4.3 %		$  1,613,751		$  1,518,692		$    95,059	6.3 %
Gross profit margin (1)	53.5 %		54.4 %			(90) bps		52.5 %		53.3 %			(80) bps
Operating income	$     222,859		$     225,021		$  (2,162)	(1.0) %		$     569,704		$    566,002		$      3,702	0.7 %
Operating margin	20.5 %		21.9 %			(140) bps		18.5 %		19.9 %			(140) bps
Net income	$     157,927		$     163,527		$  (5,600)	(3.4) %		$     409,675		$    410,264		$        (589)	(0.1) %
EPS	$           0.33		$           0.34		$    (0.01)	(2.9) %		$           0.85		$          0.85		$           —	— %
Net cash provided by operating activities	$     241,859		$     191,349		$ 50,510	26.4 %		$     532,732		$    513,363		$    19,369	3.8 %
Non-GAAP Metrics
Adjusted operating income (2)	$     230,683		$     232,057		$  (1,374)	(0.6) %		$    593,415		$    584,826		$      8,589	1.5 %
Adjusted operating margin (2)	21.2 %		22.6 %			(140) bps		19.3 %		20.5 %			(120) bps
Adjusted net income (2)	$     163,343		$     168,501		$  (5,158)	(3.1) %		$    428,499		$    423,277		$     5,222	1.2 %
Adjusted EPS (2)	$           0.34		$           0.35		$    (0.01)	(2.9) %		$          0.89		$          0.87		$       0.02	2.3 %
Adjusted EBITDA (2)	$     256,571		$     258,334		$  (1,763)	(0.7) %		$    672,332		$    661,343		$   10,989	1.7 %
Adjusted EBITDA margin (2)	23.5 %		25.2 %			(170) bps		21.9 %		23.2 %			(130) bps
Free cash flow (2)	$     235,495		$     182,846		$ 52,649	28.8 %		$    512,800		$    491,003		$   21,797	4.4 %

(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 and nine months ended September 30, 2026 and 2025:

	Three Months Ended September 30,				Nine Months Ended September 30,
(unaudited, in thousands)	2026		2025		2026		2025
	$	% of Revenue	$	% of  Revenue	$	% of  Revenue	$	% of  Revenue
Revenue	$           1,089,670	100.0 %	$           1,026,106	100.0 %	$           3,074,670	100.0 %	$           2,848,137	100.0 %
Less:
Cost of services provided (exclusive of depreciation and amortization below):
Employee expenses	328,186	30.1 %	312,249	30.4 %	946,695	30.8 %	872,326	30.6 %
Materials and supplies	65,082	6.0 %	62,933	6.1 %	184,638	6.0 %	170,924	6.0 %
Insurance and claims	23,048	2.1 %	11,127	1.1 %	66,127	2.2 %	48,385	1.7 %
Fleet expenses	45,482	4.2 %	38,997	3.8 %	134,613	4.4 %	117,688	4.1 %
Other cost of services provided (1)	44,969	4.1 %	42,144	4.1 %	128,846	4.2 %	120,122	4.2 %
Total cost of services provided (exclusive of depreciation and amortization below)	506,767	46.5 %	467,450	45.6 %	1,460,919	47.5 %	1,329,445	46.7 %
Sales, general and administrative:
Selling and marketing expenses	146,339	13.4 %	138,881	13.5 %	410,305	13.3 %	377,309	13.2 %
Administrative employee expenses	92,358	8.5 %	88,601	8.6 %	277,840	9.0 %	259,384	9.1 %
Insurance and claims	13,722	1.3 %	6,929	0.7 %	39,544	1.3 %	29,872	1.0 %
Fleet expenses	11,739	1.1 %	9,502	0.9 %	33,776	1.1 %	29,348	1.0 %
Other sales, general and administrative (2)	62,613	5.7 %	57,491	5.6 %	183,201	6.0 %	163,600	5.7 %
Total sales, general and administrative	326,771	30.0 %	301,404	29.4 %	944,666	30.7 %	859,513	30.2 %
Depreciation and amortization	33,273	3.1 %	32,231	3.1 %	99,381	3.2 %	93,177	3.3 %
Interest expense, net	10,669	1.0 %	7,942	0.8 %	28,911	0.9 %	21,118	0.7 %
Other (income) expense, net	(400)	— %	(350)	— %	1,351	— %	(1,334)	— %
Income tax expense	54,663	5.0 %	53,902	5.3 %	129,767	4.2 %	135,954	4.8 %
Net income	$            157,927	14.5 %	$  163,527	15.9 %	$            409,675	13.3 %	$  410,264	14.4 %

(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 North America, South America, Europe, Asia, Africa, and Australia, with approximately 22,000 employees from more than 850 locations. Rollins is parent to numerous brands, including Aardwolf Pestkare, Clark Pest Control, Crane Pest Control, Critter Control, Fox Pest Control, HomeTeam Pest Defense, Industrial Fumigant Company, MissQuito, Northwest Exterminating, OPC Pest Services, Orkin, Orkin Australia, Orkin Canada, Orkin UK, Safeguard, Romex Pest Control, Saela Pest Control, Trutech, Waltham Services, and Western Pest Services. You can learn more about Rollins and its subsidiaries by visiting www.rollins.com.

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: the Company's expectations with respect to financial and business performance; near-term demand trends; the evolving customer acquisition landscape and the Company's actions to address customer acquisition challenges; lead volumes and consumer-initiated demand through search, digital media, inbound calls, and other channels; the Company's marketing strategy, including the reallocation of marketing resources and the expected benefits of investments in channels and capabilities intended to improve the Company's visibility in artificial intelligence - and large language model - driven discovery; the benefits of the Company's recurring customer relationships and diversified, multi-brand approach; the resilience of the pest control market; margin performance, margin trends, and the alignment of the Company's cost structure with demand conditions; investments in the Company's people and service quality and other investments intended to support long-term growth; the strength of the Company's balance sheet; cash flow generation; financial flexibility; capital allocation, including reinvestment in the business, acquisitions, capital expenditures, dividends and the Company's dividend policy, and share repurchases; and the Company's ability to execute its strategy and deliver sustainable, profitable growth over the long term.

These forward-looking statements are based on information available as of the date of this press release and on current expectations, forecasts, and assumptions, and involve judgments, risks and uncertainties, many of which are beyond the Company's control. Important factors that could cause actual results to differ materially include, but are not limited to: the Company's ability to attract and retain customers as customer acquisition channels evolve, including digital and artificial intelligence driven channels; the effectiveness of the Company's marketing efforts; competition; the Company's ability to execute its business strategies and successfully onboard acquisitions; labor, insurance, and other operating costs; economic conditions; weather and seasonality; and the other risks described in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in the Company's subsequent filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov.

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, October 22, 2026 at 8:30 a.m. Eastern Time to discuss the third 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 13762677. 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)
	September 30, 2026		December 31, 2025
ASSETS
Cash and cash equivalents	$    129,050		$     100,004
Trade receivables, net	255,872		202,518
Financed receivables, short-term, net	48,824		44,723
Materials and supplies	42,215		42,982
Real estate assets held for sale	13,686		—
Other current assets	123,178		82,455
Total current assets	612,825		472,682
Equipment and property, net	111,031		126,187
Goodwill	1,466,429		1,374,664
Intangibles, net	589,832		582,384
Operating lease right-of-use assets	394,264		424,528
Financed receivables, long-term, net	119,701		110,057
Other assets	64,706		50,021
Total assets	$  3,358,788		$  3,140,523
LIABILITIES
Short-term debt	$    239,562		$     123,683
Accounts payable	74,249		44,361
Accrued insurance – current	51,588		44,123
Accrued compensation and related liabilities	126,097		128,259
Unearned revenues	192,825		187,670
Operating lease liabilities – current	137,157		137,410
Other current liabilities	165,165		120,019
Total current liabilities	986,643		785,525
Accrued insurance, less current portion	95,677		79,157
Operating lease liabilities, less current portion	261,402		290,765
Long-term debt	487,587		486,147
Other long-term accrued liabilities	137,021		124,608
Total liabilities	1,968,330		1,766,202
STOCKHOLDERS' EQUITY
Common stock	478,012		481,194
Retained earnings and other equity	912,446		893,127
Total stockholders' equity	1,390,458		1,374,321
Total liabilities and stockholders' equity	$  3,358,788		$  3,140,523

 

ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
REVENUES
Customer services	$  1,089,670		$  1,026,106		$  3,074,670		$  2,848,137
COSTS AND EXPENSES
Cost of services provided (exclusive of depreciation and amortization below)	506,767		467,450		1,460,919		1,329,445
Sales, general and administrative	326,771		301,404		944,666		859,513
Depreciation and amortization	33,273		32,231		99,381		93,177
Total operating expenses	866,811		801,085		2,504,966		2,282,135
OPERATING INCOME	222,859		225,021		569,704		566,002
Interest expense, net	10,669		7,942		28,911		21,118
Other (income) expense, net	(400)		(350)		1,351		(1,334)
CONSOLIDATED INCOME BEFORE INCOME TAXES	212,590		217,429		539,442		546,218
PROVISION FOR INCOME TAXES	54,663		53,902		129,767		135,954
NET INCOME	$    157,927		$     163,527		$    409,675		$     410,264
NET INCOME PER SHARE - BASIC AND DILUTED	$          0.33		$           0.34		$          0.85		$           0.85
Weighted average shares outstanding - basic	478,970		484,635		480,567		484,565
Weighted average shares outstanding - diluted	478,978		484,670		480,586		484,598
DIVIDENDS PAID PER SHARE	$      0.1825		$      0.1650		$      0.5475		$      0.4950

 

ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW INFORMATION (in thousands) (unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
OPERATING ACTIVITIES
Net income	$    157,927		$     163,527		$    409,675		$     410,264
Depreciation and amortization	33,273		32,231		99,381		93,177
Change in working capital and other operating activities	50,659		(4,409)		23,676		9,922
Net cash provided by operating activities	241,859		191,349		532,732		513,363
INVESTING ACTIVITIES
Acquisitions, net of cash acquired	(27,391)		(34,730)		(162,646)		(288,308)
Capital expenditures	(6,364)		(8,503)		(19,932)		(22,360)
Other investing activities, net	2,364		3,509		4,978		7,853
Net cash used in investing activities	(31,391)		(39,724)		(177,600)		(302,815)
FINANCING ACTIVITIES
Net borrowings (repayments)	23,644		(59,989)		125,132		95,215
Payment of dividends	(87,205)		(80,077)		(263,146)		(239,450)
Cash paid for common stock purchased	(120,065)		(3,651)		(162,891)		(18,573)
Other financing activities, net	(6,785)		(2,858)		(24,228)		(12,337)
Net cash used in financing activities	(190,411)		(146,575)		(325,133)		(175,145)
Effect of exchange rate changes on cash and cash equivalents	(92)		(728)		(953)		2,324
Net increase (decrease) in cash and cash equivalents	$      19,965		$        4,322		$      29,046		$      37,727

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, including the appendix:

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, Saela Pest Control and Romex 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, Saela Pest Control and Romex Pest Control, excluding gains and losses on the sale of non-operational assets and gains and losses 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, Saela Pest Control and Romex Pest Control, and excluding gains and losses on the sale of non-operational assets and gains and losses 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, Saela Pest Control and Romex 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 90% of total consolidated cash. Adjusted EBITDAR is calculated by adding back to net income depreciation and amortization, interest expense, net, provision for income taxes, operating lease cost, and stock-based compensation expense. Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage.

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 September 30,								Nine Months Ended September 30,
					Variance								Variance
	2026		2025		$		%		2026		2025		$		%
Reconciliation of Revenues to Organic Revenues
Revenues	$  1,089,670		$ 1,026,106		63,564		6.2		$  3,074,670		$ 2,848,137		226,533		8.0
Revenues from acquisitions	(18,348)		—		(18,348)		1.8		(70,023)		—		(70,023)		2.5
Organic revenues	$  1,071,322		$ 1,026,106		45,216		4.4		$  3,004,647		$ 2,848,137		156,510		5.5
Reconciliation of Residential Revenues to Organic Residential Revenues
Residential revenues	$    499,682		$    476,271		23,411		4.9		$  1,375,031		$ 1,288,249		86,782		6.7
Residential revenues from acquisitions	(12,310)		—		(12,310)		2.6		(44,405)		—		(44,405)		3.4
Residential organic revenues	$    487,372		$    476,271		11,101		2.3		$  1,330,626		$ 1,288,249		42,377		3.3
Reconciliation of Commercial Revenues to Organic Commercial Revenues
Commercial revenues	$    360,685		$   334,956		25,729		7.7		$  1,020,324		$    939,803		80,521		8.6
Commercial revenues from acquisitions	(3,538)		—		(3,538)		1.1		(13,376)		—		(13,376)		1.5
Commercial organic revenues	$    357,147		$   334,956		22,191		6.6		$  1,006,948		$    939,803		67,145		7.1
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues
Termite and ancillary revenues	$   217,930		$   204,670		13,260		6.5		$    647,504		$   588,655		58,849		10.0
Termite and ancillary revenues from acquisitions	(2,500)		—		(2,500)		1.2		(12,242)		—		(12,242)		2.1
Termite and ancillary organic revenues	$   215,430		$   204,670		10,760		5.3		$    635,262		$  588,655		46,607		7.9
Reconciliation of Franchise and Other Revenues to Organic Franchise and Other Revenues
Franchise and other revenues	$     11,373		$    10,209		1,164		11.4		$     31,811		$   31,430		381		1.2
Franchise and other revenues from acquisitions	—		—		—		—		—		—		—		—
Franchise and other organic revenues	$     11,373		$    10,209		1,164		11.4		$     31,811		$   31,430		381		1.2

	Three Months Ended September 30,								Nine Months Ended September 30,
					Variance								Variance
	2026		2025		$		%		2026		2025		$		%
Reconciliation of Operating Income and Operating Income Margin to Adjusted Operating Income and Adjusted Operating Margin
Operating income	$     222,859		$     225,021						$     569,704		$     566,002
Acquisition-related expenses (1)	7,824		7,036						23,711		18,824
Adjusted operating income	$     230,683		$     232,057		(1,374)		(0.6)		$     593,415		$     584,826		8,589		1.5
Revenues	$  1,089,670		$  1,026,106						$  3,074,670		$  2,848,137
Operating margin	20.5 %		21.9 %						18.5 %		19.9 %
Adjusted operating margin	21.2 %		22.6 %						19.3 %		20.5 %
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS
Net income	$     157,927		$    163,527						$     409,675		$    410,264
Acquisition-related expenses (1)	7,824		7,036						23,711		18,824
Loss (gain) on sale of assets, net (2)	(545)		(350)						1,590		(1,334)
Tax impact of adjustments (3)	(1,863)		(1,712)						(6,477)		(4,477)
Adjusted net income	$    163,343		$    168,501		(5,158)		(3.1)		$     428,499		$    423,277		5,222		1.2
EPS - basic and diluted	$          0.33		$          0.34						$           0.85		$          0.85
Acquisition-related expenses (1)	0.02		0.01						0.05		0.04
Loss (gain) on sale of assets, net (2)	—		—						—		—
Tax impact of adjustments (3)	—		—						(0.01)		(0.01)
Adjusted EPS - basic and diluted (4)	$          0.34		$         0.35		(0.01)		(2.9)		$           0.89		$         0.87		0.02		2.3
Weighted average shares outstanding – basic	478,970		484,635						480,567		484,565
Weighted average shares outstanding – diluted	478,978		484,670						480,586		484,598
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin
Net income	$     157,927		$     163,527						$     409,675		$     410,264
Depreciation and amortization	33,273		32,231						99,381		93,177
Interest expense, net	10,669		7,942						28,911		21,118
Provision for income taxes	54,663		53,902						129,767		135,954
EBITDA	$    256,532		$     257,602		(1,070)		(0.4)		$     667,734		$     660,513		7,221		1.1
Acquisition-related expenses (1)	584		1,082						3,008		2,164
Loss (gain) on sale of assets, net (2)	(545)		(350)						1,590		(1,334)
Adjusted EBITDA	$     256,571		$     258,334		(1,763)		(0.7)		$     672,332		$     661,343		10,989		1.7
Revenues	$  1,089,670		$  1,026,106		63,564				$  3,074,670		$  2,848,137		226,533
EBITDA margin	23.5 %		25.1 %						21.7 %		23.2 %
Incremental EBITDA margin					(1.7) %								3.2 %
Adjusted EBITDA margin	23.5 %		25.2 %						21.9 %		23.2 %
Adjusted incremental EBITDA margin					(2.8) %								4.9 %
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion
Net cash provided by operating activities	$     241,859		$    191,349						$ 532,732		$ 513,363
Capital expenditures	(6,364)		(8,503)						(19,932)		(22,360)
Free cash flow	$     235,495		$    182,846		52,649		28.8		$ 512,800		$ 491,003		21,797		4.4
Free cash flow conversion	149.1 %		111.8 %						125.2 %		119.7 %

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Reconciliation of SG&A to Adjusted SG&A
SG&A	$            326,771		$             301,404		$            944,666		$             859,513
Acquisition-related expenses (1)	584		1,082		3,008		2,164
Adjusted SG&A	$            326,187		$             300,322		$            941,658		$             857,349
Revenues	$         1,089,670		$          1,026,106		$         3,074,670		$          2,848,137
Adjusted SG&A as a % of revenues	29.9 %		29.3 %		30.6 %		30.1 %

	Period Ended September 30, 2026		Period Ended December 31, 2025
Reconciliation of Debt and Net Income to Leverage Ratio
Short-term debt (5)	$            239,562		$            123,683
Long-term debt (6)	500,000		500,000
Operating lease liabilities (7)	398,559		428,175
Cash adjustment (8)	(116,145)		(90,004)
Adjusted net debt	$         1,021,976		$            961,854
Net income	$            526,116		$            526,705
Depreciation and amortization	130,948		124,744
Interest expense, net	36,351		28,558
Provision for income taxes	168,034		174,221
Operating lease cost (9)	170,431		159,924
Stock-based compensation expense	41,629		39,707
Adjusted EBITDAR	$         1,073,509		$          1,053,859
Leverage ratio	1.0x		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, Saela Pest Control and Romex 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 September 30, 2026 and December 31, 2025, the Company had outstanding borrowings of $500 million from the issuance of our 2035 Senior Notes. These borrowings are presented under the long-term debt caption of our condensed consolidated statement of financial position, net of unamortized discount and unamortized debt issuance costs. As of September 30, 2026 and December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.

(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 90% of cash and cash equivalents per our condensed consolidated statement of financial position as of both periods presented.

(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

View original content:https://www.prnewswire.com/news-releases/rollins-inc-reports-third-quarter-2026-financial-results-302915958.html

SOURCE Rollins, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Rollins ROL's third-quarter 2026 revenue and earnings?

Rollins reported $1.1 billion in revenue and diluted earnings per share of $0.33 for third-quarter 2026. Revenue increased 6.2% year over year, while earnings per share declined 2.9%. Net income decreased 3.4% to $158 million.

Why did Rollins ROL's operating cash flow increase in third-quarter 2026?

The timing of a $63 million tax refund associated with Rollins' tax credit planning strategy favorably affected quarterly cash flow. Operating cash flow increased 26.4% year over year to $242 million, while free cash flow increased 28.8% to $235 million.