ROLLINS INC
For the period ended Sep 30, 2026. Filed Oct 22, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 22, 2026
ROL$37.95-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0000084839-26-000040
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-22.
0000084839-26-000045
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 175 previous paragraphs and 179 current paragraphs.
119 unchanged; 46 reworded; 14 added; 9 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
We are disappointed with our third quarter performance, during which residential customer acquisition remained under pressure. We now have a clearer understanding of how the customer acquisition landscape is evolving and are taking concrete steps to optimize our 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. This remains a dynamic environment that requires us to continually assess and adapt how we reach and win new customers. At the same time, we continue to invest in our people and the service quality that builds customer loyalty.
Current report
Our record of 100 consecutive quarters of revenue growth reflects the durability of our business and our ability to successfully adapt through changing conditions. 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. 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.
Current report
Given our performance through the first nine months of the year and the visibility we have today, we are updating our full-year outlook. We now expect organic revenue* growth of 4% to 6% for the year and adjusted incremental EBITDA margin* ranging from slightly positive to 10% for the year. Our expectations for 2% to 3% of acquisition-related growth and free cash flow conversion* above 100% remain unchanged for the year. The revision to our expectations for the year reflects our assessment of near-term operating conditions rather than any change in our confidence in the long-term growth potential of the business.
Current report
*Amounts are non-GAAP financial measures. See "Non-GAAP Financial Measures" of this Form 10-Q for a discussion of these measures and a reconciliation of historical amounts to the most directly comparable GAAP measures. The Company has not provided a reconciliation of its forward-looking organic revenue growth, adjusted incremental EBITDA margin, and free cash flow conversion to the most directly comparable GAAP measures because it cannot predict, without unreasonable effort, the amount or timing of certain items, such as contingent consideration fair value adjustments, gains and losses on asset sales, related tax effects, and working capital changes. These items could have a material impact on the Company's GAAP results for the applicable period.
Current report
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Current report
•the evolving customer acquisition landscape, including pressure on residential customer acquisition, and the steps we are taking to address it;
Current report
•our efforts to optimize our marketing approach, including 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, and our ability to continually assess and adapt how we reach and win new customers;
Current report
•the durability of our business and our ability to adapt through changing conditions, the benefits of our recurring customer relationships and diversified portfolio, and the underlying resilience of the pest control market;
Current report
•our continued investment in our people and the service quality that builds customer loyalty;
Current report
•our updated full-year 2026 outlook, including expected organic revenue growth, adjusted incremental EBITDA margin, acquisition-related growth and free cash flow conversion, and our assessment of near-term operating conditions and the long-term growth potential of the business;
Current report
•the timing of tax payments and refunds associated with our tax credit planning strategy and their impact on our cash flows;
Current report
•our expectation that certain real estate assets classified as held for sale will be sold within 12 months, and our plan to lease those properties back following the sale;
Current report
•our capital allocation priorities, including investing in the business through accretive acquisitions, maintaining and growing a healthy and sustainable dividend, and deploying excess cash opportunistically for share repurchases, and our financial flexibility;
Current report
•our ability to execute our strategy and deliver sustainable, profitable growth over the long term.
Removed paragraphs (9)
Previous report
Our reported results for the second quarter fell short of our expectations. Organic revenue* growth in the quarter was negatively impacted by slower growth in parts of our residential service offering due to a decline in lead volume. Specifically, those of our brands that are more reliant on consumer-initiated demand through search, digital media and inbound calls experienced a more challenging demand environment. Encouragingly, other areas of our business that leverage relationship-based channels, such as home builders and door-to-door sales, delivered solid organic revenue* growth in the quarter, reinforcing the importance of our diversified, multi-brand approach. Although we remain cautious regarding near-term demand trends, lead volume improved toward the end of June and has maintained this momentum through the first few weeks of July.
Previous report
We are focused on execution, accountability, and consistent improvement. We have implemented organizational and operational changes to improve local execution, strengthen accountability, and better align resources with current demand conditions, while continuing to invest in areas that will drive long-term growth.
Previous report
Given our first half results and visibility into near-term operating conditions, we are updating our full-year outlook. We expect to report at least 6% organic revenue* growth, 2% to 3% inorganic revenue* growth, adjusted incremental EBITDA margin* of at least 10%, and free cash flow conversion* of greater than 100% in 2026. We believe the medium-term financial outlook and opportunities outlined at our Investor & Analyst Conference in May remain ahead of us and we maintain conviction in our ability to achieve those financial targets over time.
Previous report
*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP fina ncial metrics including a reconciliation to the most directly comparable GAAP measure.
Previous report
Six months ended June 30, 2026 compared to six months ended June 30, 2025
Previous report
•our belief that the medium-term financial outlook and opportunities outlined at our Investor & Analyst Conference in May are intact;
Previous report
•our belief that the momentum established late in the second quarter provides a stronger foundation as we move through the second half of the year;
Previous report
•our expectation that the timing of tax payments will moderate and cash flow growth will improve in future quarters;
Previous report
•our approach to capital allocation inclusive of dividends, share repurchases, acquisitions and other investments;
Reworded paragraphs (46)
Previous wording
•Second quarter revenues were $1.1 billion, an increase of 7.9% over the second quarter of 2025 with organic revenues* increasing 5.7%. This represents our 99th consecutive quarter of revenue growth.
Current wording
•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.
Previous wording
•Quarterly operating income was $201.4 million, an increase of 1.5% over the second quarter of 2025. Quarterly operating margin was 18.7%, a decrease of 110 basis points versus the second quarter of 2025. Adjusted operating income* was $209.9 million, an increase of 2.0% over the prior year. Adjusted operating margin* was 19.5%, a decrease of 110 basis points compared to the prior year.
Current wording
•Quarterly operating income was $222.9 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 versus the third quarter of 2025. Adjusted operating income* was $230.7 million, a decrease of 0.6% compared to the prior year. Adjusted operating margin* was 21.2%, a decrease of 140 basis points compared to the prior year.
Previous wording
•Quarterly net income was $143.9 million, an increase of 1.7% over the prior year. Adjusted net income* was $151.9 million, an increase of 3.4% over the prior year.
Current wording
•Quarterly net income was $157.9 million, a decrease of 3.4% compared to the prior year. Adjusted net income* was $163.3 million, a decrease of 3.1% compared to the prior year.
Previous wording
•Adjusted EBITDA* was $236.3 million, an increase of 2.2% over the prior year. Adjusted EBITDA margin* was 21.9%, a decrease of 120 basis points versus the second quarter of 2025.
Current wording
•Adjusted EBITDA* was $256.6 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.
Previous wording
•Quarterly EPS was $0.30 per diluted share, a 3.4% increase over the prior year EPS of $0.29. Adjusted EPS* was $0.32 per diluted share, an increase of 6.7% over the prior year.
Current wording
•Quarterly EPS was $0.33 per diluted share, a decrease of 2.9% compared to the prior year. Adjusted EPS* was $0.34 per diluted share, a decrease of 2.9% compared to the prior year.
Previous wording
•Operating cash flow was $172.5 million for the quarter, a decrease of 1.5% compared to the prior year. Free cash flow* was $166 million for the quarter, a decrease of 1.2% compared to the prior year. Cash flow was negatively impacted due to the timing of tax payments associated with our tax credit planning strategy. The Company invested $116.8 million in acquisitions, $6.4 million in capital expenditures, and paid dividends totaling $88.1 million.
Current wording
•Operating cash flow was $241.9 million for the quarter, an increase of 26.4% compared to the prior year. Free cash flow* was $235.5 million for the quarter, an increase of 28.8% compared to the prior year. Cash flow was favorably impacted by $63.0 million due to the timing of a tax refund associated with our tax credit planning strategy. The Company invested $27.4 million in acquisitions, $6.4 million in capital expenditures, $120.1 million in share repurchases, and paid dividends totaling $87.2 million.
Previous wording
Revenues for the quarter ended June 30, 2026 were $1.1 billion, an increase of $79.0 million, or 7.9%, from 2025 revenues of $999.5 million. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 5.7% with acquisitions adding 2.2% in the quarter. Residential pest control revenue increased 6.6%, commercial pest control revenue increased 8.6% and termite and ancillary services grew 10.5% including both organic and acquisition-related growth in each area. Organic revenue* growth was 3.6% in residential, 7.2% in commercial, and 8.9% in termite and ancillary activity. The Company’s foreign operations accounted for approximately 7% of total revenues for the quarters ended June 30, 2026 and June 30, 2025.
Current wording
Revenues for the quarter ended September 30, 2026 were $1.1 billion, an increase of $63.6 million, or 6.2%, from 2025 revenues of $1.0 billion. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 4.4% with acquisitions adding 1.8% in the quarter. Residential pest control revenue increased 4.9%, commercial pest control revenue increased 7.7% and termite and ancillary services grew 6.5% including both organic and acquisition-related growth in each area. Organic revenue* growth was 2.3% in residential, 6.6% in commercial, and 5.3% in termite and ancillary activity. The Company’s foreign operations accounted for approximately 7% of total revenues for the quarters ended September 30, 2026 and September 30, 2025.
Previous wording
Gross profit for the quarter ended June 30, 2026 was $569.9 million, an increase of $32.3 million, or 6.0%, compared to $537.7 million for the quarter ended June 30, 2025.
Current wording
Gross profit for the quarter ended September 30, 2026 was $582.9 million, an increase of $24.2 million, or 4.3%, compared to $558.7 million for the quarter ended September 30, 2025.
Previous wording
Gross margin decreased 100 basis points to 52.8% in 2026 compared to 53.8% in 2025. The decrease is primarily due to 70 basis points of higher employee expenses, including higher employee medical costs and service salaries, 20 basis points of higher materials and supplies, and 20 basis points of higher fleet expenses associated with higher fuel costs. This was partially offset by 10 basis points of leverage in insurance and claims costs.
Current wording
Gross margin decreased 90 basis points to 53.5% in 2026 compared to 54.4% in 2025. The decrease is primarily due to 100 basis points of higher insurance and claims costs due to a less favorable claims experience and 40 basis points of higher fleet expenses associated with higher fuel costs. This was partially offset by 30 basis points of lower employee expenses and 10 basis points of lower materials and supplies.
Previous wording
For the quarter ended June 30, 2026, sales, general and administrative ("SG&A") expenses were $335.0 million, an increase of $27.4 million, or 8.9%, compared to the quarter ended June 30, 2025.
Current wording
For the quarter ended September 30, 2026, sales, general and administrative ("SG&A") expenses were $326.8 million, an increase of $25.4 million, or 8.4%, compared to the quarter ended September 30, 2025.
Previous wording
As a percentage of revenue, SG&A increased 30 basis points to 31.1% from 30.8% in the prior year, primarily due to 10 basis points of higher selling and marketing costs and 10 basis points of higher fleet expenses associated with higher fuel costs. The remaining increase was driven by other SG&A costs.
Current wording
As a percentage of revenue, SG&A increased 60 basis points to 30.0% from 29.4% in the prior year, primarily due to 60 basis points of higher insurance and claims costs due to a less favorable claims experience and 20 basis points of higher fleet expenses associated with higher fuel costs. This was partially offset by 10 basis points of lower selling and marketing costs and 10 basis points of lower administrative employee costs.
Previous wording
For the quarter ended June 30, 2026, depreciation and amortization increased $1.9 million, or 5.9%, compared to the quarter ended June 30, 2025. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Romex.
Current wording
For the quarter ended September 30, 2026, depreciation and amortization increased $1.0 million, or 3.2%, compared to the quarter ended September 30, 2025. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Romex.
Previous wording
For the quarter ended June 30, 2026, operating income increased $3.0 million, or 1.5%, compared to the prior year.
Current wording
For the quarter ended September 30, 2026, operating income decreased $2.2 million, or 1.0%, compared to the prior year.
Previous wording
As a percentage of revenue, operating income was 18.7%, a decrease of 110 basis points compared to the second quarter of 2025. Operating margin decreased mostly due to higher employee expenses, higher materials and supplies, higher fleet expenses, and other SG&A expenses.
Current wording
As a percentage of revenue, operating income was 20.5%, a decrease of 140 basis points compared to the third quarter of 2025. Operating margin decreased mostly due to higher insurance and claims costs.
Previous wording
During the quarter ended June 30, 2026, interest expense, net increased $2.0 million compared to the prior year primarily due to a higher average debt balance associated with higher borrowings under our commercial paper program.
Current wording
During the quarter ended September 30, 2026, interest expense, net increased $2.7 million compared to the prior year primarily due to a higher average debt balance associated with higher borrowings under our commercial paper program.
Previous wording
During the quarter ended June 30, 2026, other (income) expense, net decreased $2.5 million primarily due to higher losses on non-operational asset sales and disposals.
Current wording
During the quarter ended September 30, 2026, other (income) expense, net increased $0.1 million primarily due to higher gains on non-operational asset sales and disposals.
Previous wording
The Company’s effective tax rate was 24.2% in the second quarter of 2026 and 26.0% in the second quarter of 2025. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the three months ended June 30, 2026.
Current wording
The Company’s effective tax rate was 25.7% in the third quarter of 2026 and 24.8% in the third quarter of 2025. The increased rate was primarily attributable to limitations on the deductibility of certain executive compensation during the three months ended September 30, 2026.
Previous wording
The following table presents financial information, including our significant expense categories, for the six months ended June 30, 2026 and 2025:
Current wording
The following table presents financial information, including our significant expense categories, for the nine months ended September 30, 2026 and 2025:
Previous wording
The following presents a summary of revenues by service offering for the six months ended June 30, 2026 and June 30, 2025, respectively:
Current wording
The following presents a summary of revenues by service offering for the nine months ended September 30, 2026 and September 30, 2025, respectively:
Previous wording
Revenues for the six months ended June 30, 2026 were $2.0 billion, an increase of $163.0 million, or 8.9%, from 2025 revenues of $1.8 billion. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 6.1% with acquisitions adding 2.8% in the six months ended June 30, 2026. Residential pest control revenue increased 7.8%, commercial pest control revenue increased 9.1% and termite and ancillary services grew 11.9%, including both organic and acquisition-related growth in each area. Organic revenue* growth was 3.9% in residential, 7.4% in commercial, and 9.3% in termite and ancillary. The Company’s foreign operations accounted for approximately 7% of total revenues for the six months ended June 30, 2026 and June 30, 2025.
Current wording
Revenues for the nine months ended September 30, 2026 were $3.1 billion, an increase of $226.5 million, or 8.0%, from 2025 revenues of $2.8 billion. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 5.5% with acquisitions adding 2.5% in the nine months ended September 30, 2026. Residential pest control revenue increased 6.7%, commercial pest control revenue increased 8.6% and termite and ancillary services grew 10.0%, including both organic and acquisition-related growth in each area. Organic revenue* growth was 3.3% in residential, 7.1% in commercial, and 7.9% in termite and ancillary. The Company’s foreign operations accounted for approximately 7% of total revenues for the nine months ended September 30, 2026 and September 30, 2025.
Previous wording
Gross profit for the six months ended June 30, 2026 was $1.0 billion, an increase of $70.8 million, or 7.4%, compared to $960.0 million for the six months ended June 30, 2025.
Current wording
Gross profit for the nine months ended September 30, 2026 was $1.6 billion, an increase of $95.1 million, or 6.3%, compared to $1.5 billion for the nine months ended September 30, 2025.
Previous wording
Gross margin decreased to 51.9% in 2026 versus 52.7% in 2025. The decrease is primarily due to 50 basis points of higher employee expenses, including medical costs and service salaries, 20 basis points of higher insurance and claims costs, 20 basis points of higher fleet expenses primarily associated with higher fuel costs, and 10 basis points of higher materials and supplies costs. This was partially offset by lower other expenses.
Current wording
Gross margin decreased to 52.5% in 2026 versus 53.3% in 2025. The decrease is primarily due to 50 basis points of higher insurance and claims costs, 30 basis points of higher fleet expenses primarily associated with higher fuel costs, and 20 basis points of higher employee expenses.
Previous wording
For the six months ended June 30, 2026, SG&A expenses increased $59.8 million, or 10.7%, compared to the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2026, SG&A expenses increased $85.2 million, or 9.9%, compared to the nine months ended September 30, 2025.
Previous wording
As a percentage of revenue, SG&A expenses increased 50 basis points to 31.1% from 30.6% 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 and higher other SG&A expenses, partially offset by lower administrative employee costs.
Current wording
As a percentage of revenue, SG&A expenses increased 50 basis points to 30.7% from 30.2% in the prior year. This is primarily due to 30 basis points of higher insurance and claims costs, 10 basis points of higher selling and marketing costs associated with continued investments in growth initiatives, 10 basis points of higher fleet expenses primarily associated with higher fuel costs, partially offset by lower administrative employee costs.
Previous wording
For the six months ended June 30, 2026, depreciation and amortization increased $5.2 million, or 8.5%, compared to the six months ended June 30, 2025. The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisitions of Saela and Romex.
Current wording
For the nine months ended September 30, 2026, depreciation and amortization increased $6.2 million, or 6.7%, compared to the nine months ended September 30, 2025. The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisitions of Saela and Romex.
Previous wording
For the six months ended June 30, 2026, operating income increased $5.9 million, or 1.7%, compared to the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2026, operating income increased $3.7 million, or 0.7%, compared to the nine months ended September 30, 2025.
Previous wording
As a percentage of revenue, operating income decreased 120 basis points to 17.5% from 18.7% in the prior year. Operating margin decreased mostly due to higher employee expenses, higher insurance and claims costs, higher fleet expenses, and higher other operating expenses.
Current wording
As a percentage of revenue, operating income decreased 140 basis points to 18.5% from 19.9% in the prior year. Operating margin decreased mostly due to higher insurance and claims costs, higher fleet expenses, higher employee expenses, and higher selling and marketing costs.
Previous wording
For the six months ended June 30, 2026, interest expense, net increased $5.1 million, compared to the six months ended June 30, 2025, primarily due to a higher average debt balance associated with higher borrowings under our commercial paper program.
Current wording
For the nine months ended September 30, 2026, interest expense, net increased $7.8 million, compared to the nine months ended September 30, 2025, primarily due to a higher average debt balance associated with higher borrowings under our commercial paper program.
Previous wording
During the six months ended June 30, 2026, other income decreased $2.7 million compared to the six months ended June 30, 2025, primarily due to higher losses on non-operational asset sales and disposals.
Current wording
During the nine months ended September 30, 2026, other income decreased $2.7 million compared to the nine months ended September 30, 2025, primarily due to higher losses on non-operational asset sales and disposals.
Previous wording
During the six months ended June 30, 2026, the Company’s effective tax rate decreased to 23.0% compared to 25.0% in 2025. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the six months ended June 30, 2026.
Current wording
During the nine months ended September 30, 2026, the Company’s effective tax rate decreased to 24.1% compared to 24.9% in 2025. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the nine months ended September 30, 2026.
Previous wording
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 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.
Current wording
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.
Previous wording
The Company’s $109.1 million of total cash at June 30, 2026 is held at various banking institutions. As of June 30, 2026, approximately $46.2 million is held in cash by foreign subsidiaries and the remaining $62.9 million is held at domestic banks and also includes cash-in-transit.
Current wording
The Company’s $129.1 million of total cash at September 30, 2026 is held at various banking institutions. As of September 30, 2026, approximately $54.1 million is held in cash by foreign subsidiaries and the remaining $75.0 million is held at domestic banks and also includes cash-in-transit.
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 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 June 30, 2026 and December 31, 2025, there were $215.9 million and $114.4 million of outstanding borrowings under the commercial paper program, respectively.
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, 2026 and December 31, 2025, there were $239.6 million and $114.4 million of outstanding borrowings under the commercial paper program, respectively.
Previous wording
On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.7% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes will have no transfer restrictions or registration rights.
Current wording
On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.7% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes have no transfer restrictions or registration rights.
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 $290.9 million and $322.0 million for the six months ended June 30, 2026 and 2025, respectively. The $31.1 million, or 9.7%, decrease was driven primarily by an increase of approximately $49.7 million in net income tax payments associated with our tax credit planning strategy as well as the timing of cash receipts and cash payments to and from customers, vendors, and employees. Aside from the timing impact of our federal income tax payments, we continued to generate strong operating cash flows. We expect these timing differences to moderate as we go through the year, resulting in a neutral impact on our full-year operating cash flow growth.
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 $532.7 million and $513.4 million for the nine months ended September 30, 2026 and 2025, respectively. The $19.4 million, or 3.8%, increase was driven primarily by operating results and the timing of cash receipts and cash payments to and from customers, vendors, and employees.
Previous wording
The Company’s investing activities used $146.2 million and $263.1 million for the six months ended June 30, 2026 and 2025, respectively. Cash paid for acquisitions totaled $135.3 million for the six months ended June 30, 2026, compared to $253.6 million for the six months ended June 30, 2025. The Company invested $13.6 million in capital expenditures during the six months ended June 30, 2026, offset by $1.1 million in cash proceeds from the sale of assets, compared with $13.9 million of capital expenditures and $3.5 million in cash proceeds from asset sales in 2025. 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 $177.6 million and $302.8 million for the nine months ended September 30, 2026 and 2025, respectively. Cash paid for acquisitions totaled $162.6 million for the nine months ended September 30, 2026, compared to $288.3 million for the nine months ended September 30, 2025. The Company invested $19.9 million in capital expenditures during the nine months ended September 30, 2026, offset by $2.0 million in cash proceeds from the sale of assets, compared with $22.4 million of capital expenditures and $5.9 million in cash proceeds from asset sales in 2025. The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program.
Previous wording
Cash of $134.7 million was used in financing activities during the six months ended June 30, 2026, compared with $28.6 million during the six months ended June 30, 2025. A total of $175.9 million was paid in cash dividends ($0.3650 per share) during the six months ended June 30, 2026, compared to $159.4 million in cash dividends paid ($0.330 per share) during the six months ended June 30, 2025.
Current wording
Cash of $325.1 million was used in financing activities during the nine months ended September 30, 2026, compared with $175.1 million during the nine months ended September 30, 2025. A total of $263.1 million was paid in cash dividends ($0.5475 per share) during the nine months ended September 30, 2026, compared to $239.5 million in cash dividends paid ($0.495 per share) during the nine months ended September 30, 2025.
Previous wording
During the six months ended June 30, 2026, the Company received net borrowings of $101.5 million under its commercial paper program compared to net borrowings under its 2035 Senior Notes and Revolving Credit Facility and commercial paper program of $155.2 million during 2025.
Current wording
During the nine months ended September 30, 2026, the Company received net borrowings of $125.1 million under its commercial paper program compared to net borrowings under its 2035 Senior Notes and Revolving Credit Facility and commercial paper program of $95.2 million during the same period in 2025.
Previous wording
During the six months ended June 30, 2026, the Company paid $9.5 million of contingent consideration, compared to $3.4 million during the six months ended June 30, 2025. The Company withheld $22.8 million and $14.9 million of common stock for the six months ended June 30, 2026 and 2025, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.
Current wording
During the nine months ended September 30, 2026, the Company paid $17.9 million of contingent consideration, compared to $7.8 million during the nine months ended September 30, 2025. The Company withheld $22.9 million and $15.9 million of common stock for the nine months ended September 30, 2026 and 2025, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.
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Previous report — wording carried elsewhere
During the six months ended June 30, 2026, we repurchased 382,089 shares of our $1 par value common stock at a weighted average price of $52.38 per share. As of June 30, 2026, 11.0 million additional shares may be purchased under our share repurchase program.