ROLLINS INC

Previous wording

•Second quarter revenues were $999.5 million, an increase of 12.1% over the second quarter of 2024 with organic revenues* increasing 7.3%.

Current wording

•Third quarter revenues were $1.0 billion, an increase of 12.0% over the third quarter of 2024 with organic revenues* increasing 7.2%.

Previous wording

•Quarterly operating income was $198.3 million, an increase of 8.7% over the second quarter of 2024. Quarterly operating margin was 19.8%, a decrease of 60 basis points versus the second quarter of 2024. Adjusted operating income* was $205.9 million, an increase of 10.3% over the prior year. Adjusted operating margin* was 20.6%, a decrease of 30 basis points compared to the prior year.

Current wording

•Quarterly operating income was $225.0 million, an increase of 17.3% over the third quarter of 2024. Quarterly operating margin was 21.9%, an increase of 100 basis points versus the third quarter of 2024. Adjusted operating income* was $232.1 million, an increase of 18.4% over the prior year. Adjusted operating margin* was 22.6%, an increase of 120 basis points compared to the prior year.

Previous wording

•Adjusted EBITDA* was $231.2 million, an increase of 10.0% over the prior year. Adjusted EBITDA margin* was 23.1%, a decrease of 50 basis points versus the second quarter of 2024.

Current wording

•Adjusted EBITDA* was $258.3 million, an increase of 17.7% over the prior year. Adjusted EBITDA margin* was 25.2%, an increase of 120 basis points versus the third quarter of 2024.

Previous wording

•Quarterly net income was $141.5 million, an increase of 9.3% over the prior year. Adjusted net income* was $146.9 million, an increase of 11.1% over the prior year.

Current wording

•Quarterly net income was $163.5 million, an increase of 19.4% over the prior year. Adjusted net income* was $168.5 million, an increase of 20.7% over the prior year.

Previous wording

•Quarterly EPS was $0.29 per diluted share, a 7.4% increase over the prior year EPS of $0.27. Adjusted EPS* was $0.30 per diluted share, an increase of 11.1% over the prior year.

Current wording

•Quarterly EPS was $0.34 per diluted share, a 21.4% increase over the prior year EPS of $0.28. Adjusted EPS* was $0.35 per diluted share, an increase of 20.7% over the prior year.

Previous wording

•Operating cash flow was $175.1 million for the quarter, an increase of 20.7% compared to the prior year. The Company invested $226.4 million in acquisitions, $7.1 million in capital expenditures, and paid dividends totaling $79.5 million.

Current wording

•Operating cash flow was $191.3 million for the quarter, an increase of 30.2% compared to the prior year. The Company invested $34.7 million in acquisitions, $8.5 million in capital expenditures, and paid dividends totaling $80.1 million.

Previous wording

Demand remains favorable to start the third quarter and the pipeline of acquisition activity remains healthy. Although we continue to navigate a highly uncertain macroeconomic environment, we believe we are well positioned to continue to deliver strong results in 2025.

Current wording

Demand remains favorable to start the fourth quarter and the pipeline of acquisition activity remains healthy. Although we continue to navigate a highly uncertain macroeconomic environment, we believe we are well positioned to continue to deliver strong results in 2025.

Previous wording

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

Current wording

*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.

Previous wording

Revenues for the quarter ended June 30, 2025 were $999.5 million, an increase of $107.6 million, or 12.1%, from 2024 revenues of $891.9 million. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 7.3% with acquisitions adding 4.8% in the quarter. Residential pest control revenue increased 11.6%, commercial pest control revenue increased 11.4% and termite and ancillary services grew 13.9% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 4.9% in residential, 8.4% in commercial, and 10.3% in termite and ancillary activity.

Current wording

Revenues for the quarter ended September 30, 2025 were $1.0 billion, an increase of $109.8 million, or 12.0%, from 2024 revenues of $916.3 million. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 7.2% with acquisitions adding 4.8% in the quarter. Residential pest control revenue increased 11.2%, commercial pest control revenue increased 11.8% and termite and ancillary services grew 15.2% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.2% in residential, 8.3% in commercial, and 10.8% in termite and ancillary activity.

Previous wording

Gross profit for the quarter ended June 30, 2025 was $537.7 million, an increase of $56.0 million, or 11.6%, compared to $481.6 million for the quarter ended June 30, 2024.

Current wording

Gross profit for the quarter ended September 30, 2025 was $558.7 million, an increase of $64.3 million, or 13.0%, compared to $494.4 million for the quarter ended September 30, 2024.

Previous wording

Gross margin was consistent at 52.7% in 2025 and 2024. We saw leverage across a number of cost categories, including 30 basis points in materials and supplies and 20 basis points in employee expenses. This was offset by 30 basis points of higher fleet expenses.

Current wording

Gross margin improved 40 basis points to 54.4% in 2025 compared to 54.0% in 2024. We saw leverage across a number of cost categories, including 70 basis points of lower insurance and claims costs due to a more favorable claims experience and 10 basis points in materials and supplies. This was partially offset by 10 basis points of higher fleet expenses associated with lower vehicle gains and less favorable medical claims impacting people costs.

Previous wording

For the quarter ended June 30, 2025, sales, general and administrative ("SG&A") expenses were $307.6 million, an increase of $36.0 million, or 13.3%, compared to the quarter ended June 30, 2024.

Current wording

For the quarter ended September 30, 2025, sales, general and administrative ("SG&A") expenses were $301.4 million, an increase of $26.5 million, or 9.6%, compared to the quarter ended September 30, 2024.

Previous wording

As a percentage of revenue, SG&A increased 40 basis points to 30.8% from 30.4% in the prior year, primarily due to 30 basis points of higher insurance and claims costs associated with legacy auto claims. This was partially offset by 10 basis points of lower selling and marketing costs, primarily due to timing of advertising spend offset by other continued investments in growth initiatives.

Current wording

As a percentage of revenue, SG&A decreased 60 basis points to 29.4% from 30.0% in the prior year, primarily due to 40 basis points of lower insurance and claims costs due to a more favorable claims experience, 10 basis points of lower selling and marketing costs, and 10 basis points of lower administrative costs.

Previous wording

For the quarter ended June 30, 2025, depreciation and amortization increased $4.0 million, or 14.5%, compared to the quarter ended June 30, 2024. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela Pest Control ("Saela").

Current wording

For the quarter ended September 30, 2025, depreciation and amortization increased $4.6 million, or 16.5%, compared to the quarter ended September 30, 2024. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela Pest Control ("Saela").

Previous wording

For the quarter ended June 30, 2025, operating income increased $16.0 million, or 8.7%, compared to the prior year.

Current wording

For the quarter ended September 30, 2025, operating income increased $33.2 million, or 17.3%, compared to the prior year.

Previous wording

As a percentage of revenue, operating income was 19.8%, a decrease of 60 basis points compared to the second quarter of 2024. Operating margin declined mostly due to higher insurance and claims costs and higher fleet costs, partially offset by leverage in materials and supplies, employee expenses, and selling and marketing costs.

Current wording

As a percentage of revenue, operating income was 21.9%, an increase of 100 basis points compared to the third quarter of 2024. Operating margin improved mostly due to lower insurance and claims costs and leverage in materials and supplies, administrative costs, and selling and marketing costs, partially offset by higher fleet costs.

Previous wording

During the quarter ended June 30, 2025, other income decreased $0.1 million primarily due to lower gains on non-operational asset sales.

Current wording

During the quarter ended September 30, 2025, other income decreased $0.2 million primarily due to lower gains on non-operational asset sales.

Previous wording

The Company’s effective tax rate was 26.0% in the second quarter of 2025 and 26.1% in the second quarter of 2024. The reduced rate was due to a decrease in state income tax expense in 2025.

Current wording

The Company’s effective tax rate was 24.8% in the third quarter of 2025 and 26.1% in the third quarter of 2024. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the three months ended September 30, 2025.

Previous wording

The following table presents financial information, including our significant expense categories, for the six months ended June 30, 2025 and 2024:

Current wording

The following table presents financial information, including our significant expense categories, for the nine months ended September 30, 2025 and 2024:

Previous wording

The following presents a a summary of revenues by service offering for the six months ended June 30, 2025 and June 30, 2024, respectively:

Current wording

The following presents a summary of revenues by service offering for the nine months ended September 30, 2025 and September 30, 2024, respectively:

Previous wording

Revenues for the six months ended June 30, 2025 were $1.8 billion, an increase of $181.8 million, or 11.1%, from 2024 revenues of $1.6 billion. The increase in revenues was driven by demand from our customers across all major service offerings, partially offset by foreign currency headwind of 20 basis points primarily related to the Canadian Dollar. Organic revenue* growth was 7.4% with acquisitions adding 3.7% in the six months ended June 30, 2025. Residential pest control revenue increased 10.1%, commercial pest control revenue increased 10.8% and termite and ancillary services grew 13.6%, including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.2% in residential, 7.9% in commercial, and 10.7% in termite and ancillary activity despite having one less business day in the six months ended June 30, 2025 compared to the same period in 2024.

Current wording

Revenues for the nine months ended September 30, 2025 were $2.8 billion, an increase of $291.6 million, or 11.4%, from 2024 revenues of $2.6 billion. The increase in revenues was driven by demand from our customers across all major service offerings, partially offset by foreign currency headwind of 10 basis points primarily related to the Canadian Dollar. Organic revenue* growth was 7.3% with acquisitions adding 4.1% in the nine months ended September 30, 2025. Residential pest control revenue increased 10.5%, commercial pest control revenue increased 11.2% and termite and ancillary services grew 14.1%, including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.2% in residential, 8.0% in commercial, and 10.7% in termite and ancillary activity despite having one less business day in the nine months ended September 30, 2025 compared to the same period in 2024.

Previous wording

Gross profit for the six months ended June 30, 2025 was $960.0 million, an increase of $95.6 million, or 11.1%, compared to $864.4 million for the six months ended June 30, 2024.

Current wording

Gross profit for the nine months ended September 30, 2025 was $1.5 billion, an increase of $159.9 million, or 11.8%, compared to $1.4 billion for the nine months ended September 30, 2024.

Previous wording

Gross margin declined 20 basis points to 53.8% in 2025 compared to 54.0% in 2024. We saw leverage across a number of cost categories, including 30 basis points in employee expenses and 40 basis points in materials and supplies. This was fully offset by 40 basis points of higher insurance and claims costs associated with legacy auto claims and 30 basis points of higher fleet expenses.

Current wording

Gross margin increased to 53.3% in 2025 versus 53.2% 2024. We saw leverage across a number of cost categories, including 20 basis points in insurance and claims, 20 basis points in materials and supplies, and 10 basis points in employee expenses. This was partially offset by 20 basis points of higher fleet expenses associated with lower vehicle gains and higher other cost categories.

Previous wording

For the six months ended June 30, 2025, SG&A expenses increased $63.5 million, or 12.8%, compared to the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, SG&A expenses increased $90.0 million, or 11.7%, compared to the nine months ended September 30, 2024.

Previous wording

As a percentage of revenue, SG&A expenses increased 40 basis points to 30.6% from 30.2% in the prior year, primarily due to 40 basis points of higher selling and marketing costs associated with continued investments in growth initiatives, 10 basis points of higher insurance and claims costs associated with legacy auto claims, and 10 basis points of higher fleet expenses. This was partially offset by 10 basis points of lower employee expenses.

Current wording

As a percentage of revenue, SG&A expenses increased 10 basis points to 30.2% from 30.1% in the prior year. This is primarily due to 20 basis points of higher selling and marketing costs associated with continued investments in growth initiatives, partially offset by lower insurance and claims costs and lower administrative costs.

Previous wording

For the six months ended June 30, 2025, depreciation and amortization increased $5.9 million, or 10.8%, compared to the six months ended June 30, 2024. The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela.

Current wording

For the nine months ended September 30, 2025, depreciation and amortization increased $10.5 million, or 12.7%, compared to the nine months ended September 30, 2024. The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela.

Previous wording

For the six months ended June 30, 2025, operating income increased $26.2 million, or 8.3%, compared to the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, operating income increased $59.4 million, or 11.7%, compared to the nine months ended September 30, 2024.

Previous wording

As a percentage of revenue, operating income decreased 50 basis points to 18.7% from 19.2% in the prior year. Operating margin declined mostly due to higher selling and marketing costs, higher fleet costs, and higher insurance and claims costs. This was partially offset by leverage in materials and supplies and employee expenses.

Current wording

As a percentage of revenue, operating income increased 10 basis points to 19.9% from 19.8% in the prior year. Operating margin increased mostly due to lower insurance and claims costs, lower materials and supplies costs, and lower administrative costs and employee expenses. This was partially offset by higher fleet costs and higher selling and marketing costs.

Previous wording

For the six months ended June 30, 2025, interest expense, net decreased $2.3 million, compared to the six months ended June 30, 2024, primarily due to a lower average interest rate on our borrowings.

Current wording

For the nine months ended September 30, 2025, interest expense, net decreased $1.5 million, compared to the nine months ended September 30, 2024, primarily due to a lower average interest rate on our borrowings.

Previous wording

During the six months ended June 30, 2025, other income increased $0.6 million compared to the six months ended June 30, 2024, primarily due to higher gains on non-operational asset sales.

Current wording

During the nine months ended September 30, 2025, other income increased $0.4 million compared to the nine months ended September 30, 2024, primarily due to higher gains on non-operational asset sales.

Previous wording

During the six months ended June 30, 2025, the Company’s effective tax rate decreased to 25.0% compared to 25.3% in 2024. The reduced rate was due to a decrease in state income tax expense in 2025.

Current wording

During the nine months ended September 30, 2025, the Company’s effective tax rate decreased to 24.9% compared to 25.6% in 2024. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the three months ended September 30, 2025.

Previous wording

(5) As of June 30, 2025, the Company had outstanding borrowings of $60.0 million under our commercial paper program. The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statements of financial position, net of unamortized discounts.

Current wording

(5) As of September 30, 2025 and December 31, 2024, the Company had no outstanding borrowings under our commercial paper program. The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statements of financial position, net of unamortized discounts.

Previous wording

(6) As of June 30, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility. These borrowings are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of a $7.5 million unamortized discount and $7.2 million in unamortized debt issuance costs as of June 30, 2025. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.

Current wording

(6) As of September 30, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility. These borrowings are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of a $7.3 million unamortized discount and $7.0 million in unamortized debt issuance costs as of September 30, 2025. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.

Previous wording

The Company’s $123.0 million of total cash at June 30, 2025 is held at various banking institutions. As of June 30, 2025, approximately $60.0 million is held in cash by foreign subsidiaries and the remaining $63.0 million is held at domestic banks and also includes cash-in-transit.

Current wording

The Company’s $127.4 million of total cash at September 30, 2025 is held at various banking institutions. As of September 30, 2025, approximately $55.2 million is held in cash by foreign subsidiaries and the remaining $72.1 million is held at domestic banks and also includes cash-in-transit.

Previous wording

In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million, and paid approximately $6.0 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as well as for general corporate purposes.

Current wording

In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Section 4(a)(2) and Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million, and paid approximately $6.1 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as well as for general corporate purposes.

Previous wording

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. Borrowings under this program are generally outstanding for 16 days or less. The net proceeds from the issuance of commercial paper are used for various purposes, including general corporate purposes and funding for acquisitions. As of June 30, 2025, there were $60.0 million of outstanding borrowings under the commercial paper program.

Current wording

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. Borrowings under this program are generally outstanding for 30 days or less. The net proceeds from the issuance of commercial paper are used for various purposes, including general corporate purposes and funding for acquisitions. As of September 30, 2025, there were no outstanding borrowings under the commercial paper program.

Previous wording

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the six month periods presented:

Current wording

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the nine month periods presented:

Previous wording

Cash from operating activities is the principal source of cash generation for our businesses. The most significant source of cash in our cash flow from operations is customer-related activities, the largest of which is collecting cash resulting from services sold. The most significant operating use of cash is to pay our suppliers, employees, and tax authorities. The Company’s operating activities generated net cash of $322.0 million and $272.5 million for the six months ended June 30, 2025 and 2024, respectively. The $49.5 million increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.

Current wording

Cash from operating activities is the principal source of cash generation for our businesses. The most significant source of cash in our cash flow from operations is customer-related activities, the largest of which is collecting cash resulting from services sold. The most significant operating use of cash is to pay our suppliers, employees, and tax authorities. The Company’s operating activities generated net cash of $513.4 million and $419.5 million for the nine months ended September 30, 2025 and 2024, respectively. The $93.9 million increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.

Previous wording

The U.S. Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was made during the second quarter of 2025. We have implemented tax planning strategies that have deferred certain additional tax payments into the second half of 2025.

Current wording

The U.S. Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was made during the second quarter of 2025. We have implemented tax planning strategies that have deferred certain additional tax payments.

Previous wording

The Company’s investing activities used $263.1 million and $93.6 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid for acquisitions totaled $253.6 million for the six months ended June 30, 2025, compared to $81.7 million for the six months ended June 30, 2024, driven primarily by the Saela acquisition. The Company invested $13.9 million in capital expenditures during the year, offset by $3.5 million in cash proceeds from the sale of assets, compared with $15.9 million of capital expenditures and $2.3 million in cash proceeds from asset sales in 2024. The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program.

Current wording

The Company’s investing activities used $302.8 million and $123.6 million for the nine months ended September 30, 2025 and 2024, respectively. Cash paid for acquisitions totaled $288.3 million for the nine months ended September 30, 2025, compared to $105.5 million for the nine months ended September 30, 2024, driven primarily by the Saela acquisition. The Company invested $22.4 million in capital expenditures during the year, offset by $5.9 million in cash proceeds from the sale of assets, compared with $23.4 million of capital expenditures and $3.0 million in cash proceeds from asset sales in 2024. The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program.