ROL

- Interested in Rollins, Inc.? Here are five stocks we like better. - Residential customer acquisition weakened: Rollins reported 6.2% third-quarter revenue growth, but organic growth was only 4.4% as changing online and AI-driven search behavior reduced residential lead flow. The company said retention and recurring customer demand remain healthy. - Margins and earnings declined: Gross margin fell 90 basis points due mainly to higher insurance, claims and fleet costs. Adjusted EBITDA declined 0.7% and adjusted net income fell 2.9% year over year. - Full-year outlook was reduced: Rollins now expects 2026 organic revenue growth of 4%–6%, below its prior outlook centered on 6%, while investing in traditional and AI-search visibility, pricing transparency and higher-return marketing channels. - Waste Management: Is it a good use of your time? Rollins (NYSE:ROL) reported third-quarter revenue growth that fell short of management's expectations as changes in online search behavior continued to pressure residential customer acquisition. The pest-control company lowered its full-year organic-growth outlook and said it is adapting its digital marketing strategy to a customer-discovery environment increasingly shaped by artificial intelligence and large language models. President and Chief Executive Officer Jerry Gahlhoff said AI-driven search is changing how consumers find pest-control providers. Rather than producing relatively consistent results through traditional search engines, LLM platforms can recommend different providers based on the platform, market and even the date of a search, he said. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Rollins Pest Control Needs to be in Your Watchlist "The result is a more fragmented, variable, and dynamic customer discovery environment," Gahlhoff said. He added that Rollins has not yet reached stabilization in customer acquisition, although the company saw some early signs of progress late in the quarter. Total third-quarter revenue increased 6.2%, including 4.4% organic growth, according to Executive Vice President and Chief Financial Officer Will Harkins. Residential revenue rose 4.9%, commercial pest-control revenue increased 7.7%, and termite and ancillary revenue grew 6.5%. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? Organic growth was 2.3% in residential, 6.6% in commercial and 5.3% in termite and ancillary services. Management attributed the weaker residential performance primarily to lower digital lead flow. Termite and ancillary results also were affected by fewer new residential customers entering the cross-selling pipeline, as well as staffing and capacity constraints in certain markets. Gahlhoff said the company's recurring residential customer base remained healthy, with customer counts continuing to grow and retention remaining strong. He characterized the issue as one of customer discovery and acquisition rather than weakening underlying demand for pest-control services. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Brands that rely more heavily on relationship-driven channels, including direct sales, door-to-door marketing and home-builder partnerships, outperformed the broader company, according to Gahlhoff. He cited HomeTeam and Fox as examples, saying their door-to-door sales forces helped produce growth well above the overall company level. Fox delivered double-digit growth, he said during the question-and-answer session. Commercial softness was concentrated in non-Orkin brands and reflected timing of certain one-time fumigation work, management said. Orkin's commercial business, meanwhile, grew more than 8%, according to Gahlhoff. Third-quarter gross margin was 53.5%, down 90 basis points from a year earlier. Higher insurance and claims costs accounted for 100 basis points of deleverage, while fleet costs contributed another 40 basis points of pressure, Harkins said. Fuel-related costs and lower gains on vehicle sales also affected results. Employee expenses improved by 30 basis points as Rollins aligned staffing with business volumes following lower second-quarter volumes. Materials and supplies provided an additional 10 basis points of leverage. GAAP operating income was $223 million, down 1% from the prior-year quarter. Adjusted operating income declined 0.6% to $231 million, while adjusted EBITDA decreased 0.7% to $257 million. Adjusted EBITDA margin was 23.5%. GAAP net income totaled $158 million, or $0.33 per share. Adjusted net income was $163 million, or $0.34 per share, down 2.9% year over year. The company recorded approximately $7.3 million in pre-tax acquisition-related and other non-GAAP adjustments during the quarter. Harkins said Rollins expects to remain positive on price versus cost for the year. The company continues to view itself as a CPI-plus pricing business, generally expecting pricing in the 2%-3% or 3%-4% range across its portfolio, though that pricing is weighted more toward commercial operations than residential services. Rollins now expects 2026 organic revenue growth of 4% to 6%, with incremental margins ranging from slightly positive to 10%. The company previously provided an outlook centered on 6% organic growth. Harkins said the midpoint of the revised range assumes lead volumes remain below prior-year levels but stabilize at third-quarter levels. The low end assumes additional deterioration in lead trends, while the high end assumes meaningful improvement. The company noted that November and December are seasonally lower-volume months for the short-cycle residential business and can be more sensitive to demand shifts and weather disruptions. The company maintained its expectation for 2% to 3% growth from acquisitions and free-cash-flow conversion above 100% for the year. Management said it would not provide 2027 commentary until releasing fourth-quarter and full-year results. Rollins generated $242 million in operating cash flow and $235 million in free cash flow during the quarter. Results included a $63 million tax refund related to the company's tax-credit planning strategy. Excluding that benefit, free-cash-flow conversion would have been 109%, Harkins said. During the quarter, the company completed seven acquisitions totaling $27 million, paid $87 million in dividends and repurchased $120 million of shares. Rollins also announced a 10% increase in its quarterly cash dividend, which Harkins said has doubled since the beginning of 2022. Its leverage ratio stood at 1x at quarter-end. Management outlined three priorities for improving residential customer acquisition: strengthening visibility in traditional and AI-driven search, making it easier for customers to understand service differences and choose Rollins brands, and continually testing marketing tactics while reallocating spending toward the highest-return channels. Gahlhoff said the company is expanding locally relevant content, enhancing local business listings and reviews, improving pricing transparency, and emphasizing attributes including same-day and next-day availability. Rollins has also begun using paid advertising opportunities on AI search platforms, including ChatGPT and Google Gemini. He said one quick adjustment involved adding greater pricing transparency to Orkin's digital content. Previously, potential customers were generally encouraged to engage through web leads or the call center for pricing discussions. Providing price ranges improved how the brand appeared in LLM-generated results, he said. Management emphasized that the strategy is not simply to spend more on marketing. Harkins said the company intends to direct investment toward channels and tactics that produce qualified leads and stronger returns. Gahlhoff added that Rollins is balancing marketing investment with efforts to align costs to current demand and protect profitability. Despite the near-term disruption, management reiterated its belief that the company can eventually return to the 7%-8% organic-growth framework and achieve 30%-35% incremental margins over time. Gahlhoff said reaching that growth profile will require healthy performance across residential, commercial, and termite and ancillary operations. Rollins, Inc is a provider of pest and termite control services for residential and commercial customers. The company offers protection against common pests such as ants, cockroaches, rodents, termites, mosquitoes and bedbugs, along with wildlife control and other specialty services. Rollins serves customers through a portfolio of regional and international brands, including Orkin, the company's best-known pest control business; HomeTeam Pest Defense; Western Pest Services; Critter Control; and other local and specialized operations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Rollins (ROL) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management attributed the third-quarter performance shortfall primarily to a structural shift in residential customer discovery driven by AI and Large Language Models (LLMs). - LLM-driven search is fragmenting the market by recommending a wider range of providers, leading to a meaningful deceleration in digital lead flow for national brands like Orkin. - Relationship-driven channels, including direct sales, door-to-door marketing, and homebuilder partnerships, outperformed digital channels, highlighting the resilience of a diversified multi-brand approach. - The underlying demand for pest control remains healthy, evidenced by a growing recurring residential customer base and strong retention rates despite acquisition headwinds. - Commercial growth was led by Orkin's high single-digit performance, though overall commercial results were tempered by timing-related softness in non-Orkin fumigation business. - Termite and ancillary growth was constrained by lower cross-sell opportunities from new residential leads and localized staffing and capacity bottlenecks. - Management emphasized that the current challenge is one of customer acquisition and discovery rather than a deterioration in the essential nature of the service. - The updated 2026 organic growth outlook of 4% to 6% reflects a range of scenarios based on whether lead volumes stabilize at Q3 levels, improve, or deteriorate further. - Management is prioritizing three strategic pillars: improving brand visibility on AI platforms, increasing pricing transparency, and continuously reallocating marketing spend based on real-time attribution. - The company is holding off on 2027 guidance until Q4 results to better assess the stabilization of the changing search landscape and the effectiveness of new digital tactics. - Long-term targets of 7% to 8% organic growth and 30% to 35% incremental margins remain intact, predicated on the belief that scale and agility will eventually offset discovery fragmentation. - Future marketing strategy focuses on 'test, learn, and adjust' cycles rather than simply increasing spend, ensuring resources follow the highest-return channels in a dynamic environment. - Gross margin decreased 90 basis points, primarily due to higher insurance and claims costs compared to a favorable prior-year period and fuel-related headwinds. - Staffing and capacity constraints in specific markets resulted in a record-high backlog for termite and ancillary services at the end of the quarter. - The company received a $63 million tax refund associated with its tax credit planning strategy, significantly boosting free cash flow conversion to 149% for the quarter. - Management addressed the FTC case regarding non-compete clauses, stating the impact on competition is negligible as these agreements were rarely enforced and have been rolled back. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management noted that while Q3 was consistently weak, September showed 'signs of life' with organic website traffic declines narrowing from 13% in August to 4% in September. - Organic search leads improved 5% from July to September, though management remains cautious about assuming these trends will sustain through year-end. - Rollins is implementing 'quick wins' like adding pricing transparency and highlighting service speed (same-day/next-day) to improve how LLMs scrape and recommend their brands. - The company is testing new paid advertising opportunities on platforms like ChatGPT and Google Gemini to maintain visibility as these platforms begin to monetize. - Management declined to significantly ramp up marketing spend, citing a lack of predictable returns in a volatile environment and a preference for protecting margins through cost alignment. - The focus remains on reallocating existing dollars to channels with proven returns rather than pursuing a 'sugar high' from irresponsible spending. - Direct sales and door-to-door channels, particularly at the Fox brand, delivered double-digit growth and showed no signs of the weakness seen in digital channels. - This divergence reinforces the company's strategy to maintain a balanced portfolio of acquisition methods to mitigate structural shifts in any single channel.

This article first appeared on GuruFocus. - Total Revenue: Increased 6.2% year-over-year in Q3 2026. - Organic Growth: 4.4% for the quarter, below expectations. - Residential Revenue: Up 4.9%; organic growth of 2.3%. - Commercial Pest Control Revenue: Up 7.7%; organic growth of 6.6%. - Termite and Ancillary Revenue: Up 6.5%; organic growth of 5.3%. - Gross Margin: 53.5%, down 90 basis points year-over-year on higher insurance/claims and fuel costs. - SG&A: 60 basis points higher as a percentage of revenue, driven by insurance and fuel costs. - GAAP Operating Income: $223 million, down 1% year-over-year. - Adjusted Operating Income: $231 million, down 0.6% year-over-year. - Adjusted EBITDA: $257 million, down 0.7%; margin of 23.5%. - Adjusted Incremental EBITDA Margin: Negative 2.8% (would have exceeded 25% normalizing for insurance/claims timing). - Effective Tax Rate: 25.7% vs. 24.8% prior year; full-year ETR expected under 25%. - GAAP Net Income: $158 million, or $0.33 per share. - Adjusted Net Income: $163 million, or $0.34 per share, down 2.9% year-over-year. - Operating Cash Flow: $242 million. - Free Cash Flow: $235 million; conversion of 149% (109% excluding $63 million tax refund). - Capital Returns: $87 million in dividends paid; $120 million in share repurchases; quarterly dividend raised 10%. - Acquisitions: Seven acquisitions completed totaling $27 million. - Leverage Ratio: 1.0x. - Full-Year 2026 Outlook: Organic growth of 4%6%; incremental margins from slightly positive to 10%; 2%3% growth from acquisitions; cash flow conversion above 100%. - Warning! GuruFocus has detected 8 Warning Sign with OSBC. - Is ROL fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Rollins Inc (NYSE:ROL) maintains a healthy and growing recurring residential customer base with strong retention. - The company's diversified multi-brand approach, including door-to-door and homebuilder partnerships, delivered strong organic growth, with brands like Home Team and Fox performing well above overall company growth. - Orkin's commercial business continued to grow high single-digits, reflecting investments in expanding commercial capabilities. - Rollins Inc (NYSE:ROL) generated strong operating cash flow of $242 million and free cash flow of $235 million, with a healthy balance sheet and leverage ratio of 1x. - The company remains confident in its long-term growth potential, expecting to return to 7%-8% organic growth and 30%-35% incremental margins over time. - Third quarter performance did not meet expectations, with organic growth of 4.4% falling short due to pressure on residential customer acquisition. - AI and LLM-driven search are disrupting digital lead flow, causing continued deceleration and a more fragmented customer discovery environment. - Gross margin decreased 90 basis points year-over-year, driven by higher insurance and claims costs and fuel-related headwinds. - Adjusted EBITDA decreased 0.7% year-over-year, with an adjusted incremental EBITDA margin of negative 2.8%. - Full-year organic growth guidance was lowered to 4%-6% from 6%, reflecting uncertainty in lead trends and a dynamic environment. Q: Can you discuss how residential lead flow trended through the third quarter, and whether September was worse than August or July?A: CEO Jerry Gahlhoff explained that Q3 was consistently and steadily weak, though there were occasional high spots. However, he noted some encouraging signs in September: year-over-year decline in organic website traffic improved from a 13% decline in August to only a 4% decline in September, and organic search leads improved 5% since July. He cautioned that similar positive signs appeared in Q2 but did not sustain, so the company remains cautious about whether September's improvement will persist. Q: What specifically is improving today, how far are you from concluding that customer acquisition has truly stabilized, and what makes you confident that your priorities will restore growth rather than simply make the disruption more manageable?A: CEO Jerry Gahlhoff stated the company monitors many lead indicators to determine where to invest, and actual lead volume increases will signal stabilization. He emphasized that the search landscape has "completely changed" and the company will need to constantly test, learn, and adjust going forward rather than expecting to fully solve the problem in a fixed timeframe. CFO Will Harkins added that the team with the most resources and agility is best positioned to win. Q: With the 4% to 6% organic growth range as a function of three scenarios, is there a way to think about probability weighting those scenarios, and how should we think about implications for the 2027 revenue base?A: CFO Will Harkins explained that the original 6% outlook assumed no further deterioration or improvement. If Q4 trends continue as they did in Q3, the company lands at the 5% midpoint; meaningful improvement gets to 6%, and further deterioration brings 4% to 5% into play. He said it is too early to discuss 2027 until Q4 results are known. CEO Jerry Gahlhoff added that the customer base is growing and healthy, and retention improvements are another lever. Q: How long does it take to drive change in how your brands show up in AI searchadding reviews, localizing sites nationallyand how nimble can you be?A: CEO Jerry Gahlhoff cited a quick win: Orkin added pricing transparency, which LLMs were not picking up a few months ago but are today, accomplished in weeks. He noted that when companies don't discuss price, LLMs assume the worst and may direct customers to inaccurate sources. He stressed that this environment is constantly evolving, making test-learn-reallocate-adjust the ongoing norm. Q: Given the changing customer acquisition landscape, how are you viewing marketing spend at a holistic level and into 2027?A: CFO Will Harkins said it is not about spending more but about reallocating dollars to where returns are greatest, and investors should not assume higher marketing spend in this environment. CEO Jerry Gahlhoff added that the multi-brand portfolio gives the company many choices across brands, which is a key advantage, especially in residential. Q: Can you decompose third-quarter organic growth into price versus volume, and has your view of CPI+ price realization changed as LLM-driven search increases pricing transparency?A: CFO Will Harkins said Rollins continues to see itself as a CPI+ business with 3% to 4% pricing across the full portfolio, weighted more heavily toward commercial than residential. He noted no meaningful change in customers rolling back prices or canceling, and the company regularly evaluates pricing, having discussed it just two weeks prior. Q: As AI/LLM search simplifies price comparisons with local providers, how do you assess the risk that your premium value messageservice quality, guarantees, reliabilitygets diluted?A: CEO Jerry Gahlhoff said the company cannot stop spending on brand messaging and reputation. The goal is for consumers to think of Orkin or its brands first and go directly to their websites. He emphasized continuing to communicate service value and quality so that content is available when customers search LLMs. Q: Regarding the FTC case over non-compete clauses, does this have any impact on competition or contribute to local competition weighing on lead flow and residential growth?A: CEO Jerry Gahlhoff called it "pretty much a non-issue," explaining the company simply rolled back non-competes in parts of the business that still had them. These agreements were rarely enforced, and with roughly 19,000 pest control companies whose family trees often trace back to Orkin or Terminix, people have freely moved between companies for years. He sees no change in the competitive environment. Q: At Investor Day you framed the pest control market as growing around 6% a year, and noted lead declines were proportional across income bands. Is consumer health still not the main driver, and has industry growth changed?A: CEO Jerry Gahlhoff said pest control is an essential serviceif you have a problem, you want it solved. He described a more discerning consumer who wants value and the right provider, making price, value, responsiveness, and reliability more important. He believes consumers remain willing to spend on pest control services. Q: Third-party data suggests organic traffic for Orkin was down materially year-over-year, with the top four players down double-digits. What are your early findings on adapting to LLMshas the biggest success been third-party content, business reviews, or something else?A: CEO Jerry Gahlhoff said easy steps like pricing transparency helped tremendously, as did communicating same-day/next-day service windows and value messaging that LLMs pick up quickly. Local content also mattersfor example, branch-level content about the Joro spider in Atlanta gets picked up. CFO Will Harkins added that ChatGPT and Google are piloting ad monetization on their platforms, and Rollins is beginning to play in that space. Q: ChatGPT uses Yelp for recommendations, and Rollins has about 13 reviews per store versus competitors' 25 to 30. What steps are you taking to improve Yelp recommendation rates?A: CEO Jerry Gahlhoff noted Yelp's review model differs significantly from Google reviews, where Rollins has a much stronger presence. He said the company is acutely aware of the gap but must weigh investments, since impacting Yelp will take more time, against faster-moving opportunities within ChatGPT and other channels that may deliver more visibility sooner. Q: Can you discuss the lead generation mix in your For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Rollins, Inc. ROL reported unimpressive third-quarter 2026 results, with both earnings and revenues missing the Zacks Consensus Estimate. ROL's adjusted earnings of 34 cents per share missed the consensus estimate by 2.9% and declined 2.9% year over year. Total revenues of $1.09 billion fell short of the consensus mark by 3.2% but increased 6.2% from the year-ago quarter. Organic revenues grew 4.4%, supported by commercial and termite operations, while residential customer acquisition challenges and higher costs weighed on profitability. Rollins, Inc. price-consensus-eps-surprise-chart | Rollins, Inc. Quote Residential revenues increased 4.9% year over year to $499.7 million. Organic residential revenues rose 2.3% to $487.4 million, reflecting continued pressure on customer acquisition despite overall revenue growth. Management noted that consumer-initiated demand remained weak during the quarter as traditional search, digital media and inbound channels faced challenges. The evolving customer acquisition landscape continued to affect residential performance, prompting the company to reassess its marketing approach and improve the effectiveness of customer acquisition spending. Commercial revenues climbed 7.7% year over year to $360.7 million. Organic commercial revenues increased 6.6% to $357.1 million, demonstrating resilience in this part of the business despite challenges affecting residential demand. Termite and ancillary revenues rose 6.5% to $217.9 million, with organic growth of 5.3%. Franchise and other revenues increased 11.4% to $11.4 million. The stronger performance of commercial and termite operations helped support overall growth, while acquisitions contributed $18.3 million to quarterly revenues. Operating income declined 1% year over year to $222.9 million. The operating margin contracted 140 basis points to 20.5%, reflecting cost pressures despite higher revenues. Gross profit increased 4.3% to $582.9 million, while the gross margin declined 90 basis points to 53.5%. Adjusted operating income decreased 0.6% to $230.7 million, with the adjusted operating margin shrinking 140 basis points to 21.2%. Adjusted EBITDA declined 0.7% to $256.6 million, while the adjusted EBITDA margin contracted 170 basis points to 23.5%. Total cost of services provided increased to $506.8 million from $467.5 million a year ago. Insurance and claims expenses within service costs more than doubled to $23 million. Selling, general and administrative expenses also increased to $326.8 million from $301.4 million. Net income declined 3.4% to $157.9 million, while adjusted net income fell 3.1% to $163.3 million. The results underscore the impact of rising operating expenses on earnings growth. Management expressed disappointment with third-quarter performance and emphasized the need to address challenges affecting customer acquisition. The company is implementing changes to improve marketing efficiency and adapt to evolving consumer behavior. Rollins is shifting resources away from traditional digital marketing approaches toward channels offering stronger returns. These initiatives include strengthening visibility through artificial intelligence and large language model-driven discovery platforms. Management also highlighted the company's recurring customer relationships and diversified brand portfolio as important foundations for sustainable growth. Rollins completed its 100th consecutive quarter of revenue growth, reflecting the durability of its business amid changing market conditions. Rollins generated operating cash flow of $241.9 million during the quarter, increasing 26.4% year over year. Free cash flow totaled $235.5 million, reflecting a 28.8% improvement from the prior-year period. Cash generation benefited from a $63 million tax refund associated with the company's tax credit planning strategy. Free cash flow conversion improved to 149.1% from 111.8% a year earlier, indicating stronger cash generation relative to reported net income. During the quarter, Rollins invested $27.4 million in acquisitions and spent $6.4 million on capital expenditures. The company also repurchased approximately $120.1 million of shares and paid dividends totaling $87.2 million, maintaining its focus on business investments and shareholder returns. Rollins exited the quarter with $129.1 million of cash and cash equivalents, up from $100 million at year-end 2025. Long-term debt totaled $487.6 million compared with $486.1 million in the aforesaid period. Short-term debt increased to $239.6 million from $123.7 million at year-end 2025. The company's leverage ratio stood at 1.0 times compared with 0.9 times at the end of 2025. Management reiterated its capital allocation priorities, including pursuing accretive acquisitions, maintaining a sustainable dividend and opportunistically repurchasing shares. The company continues to emphasize financial flexibility while investing in employees, service quality and initiatives supporting long-term growth. Rollins currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Equifax EFX reported better-than-expected third-quarter 2026 results. EFX's adjusted earnings per share of $2.26 outpaced the Zacks Consensus Estimate by 3.2% and increased 10.8% from the year-ago quarter. EFX's revenues of $1.69 billion marginally surpassed the consensus estimate and improved 9.6% year over year. ManpowerGroup MAN posted mixed third-quarter 2026 results. MAN's adjusted earnings of $1.01 per share matched the consensus mark and rose 21.7% from the year-ago quarter. MAN's total revenues of $4.84 billion missed the consensus mark by 1.4% but increased 4.4% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rollins, Inc. (ROL) : Free Stock Analysis Report ManpowerGroup Inc. (MAN) : Free Stock Analysis Report Equifax, Inc. (EFX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Investor Relations - Lyndsey Burton - President and Chief Executive Officer - Jerry Gahlhoff - Executive Vice President and Chief Financial Officer - Will Harkins Operator: Greetings, and welcome to the Rollins, Inc. Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Lyndsey Burton. Thank you, Lyndsey. You may begin. Lyndsey Burton: Thank you, Sam, and good morning, everyone. In addition to the earnings release that we issued yesterday, the company has also prepared a supporting slide presentation. The earnings release and presentation are available on our website at www.rollins.com. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation as well as in our earnings release. The company's earnings release and presentation contains certain forward-looking statements and discuss the business outlook. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to the cautionary statements in yesterday's press release, today's presentation and the company's SEC filings, including the Risk Factors section of our Form 10-K for the year ended December 31, 2025, and subsequent filings. On the line with me today and speaking are Jerry Gahlhoff, President and Chief Executive Officer; and Will Harkins, Executive Vice President and Chief Financial Officer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin? Jerry Gahlhoff: Thank you, Lyndsey. Good morning, everyone. I want to begin with saying that our third quarter performance did not meet our expectations, and we are not satisfied with these results. The primary challenge continues to be pressure on residential customer acquisition. We now have a clearer understanding of what is driving this pressure and are working with urgency to address it. The pattern has become clear. AI and LLM-driven search are meaningfully changing the way customers discover service providers. With additional data through the third quarter, we clearly see the impact of the changing search landscape, which drove continued deceleration in digital lead flow. Ultimately, LLMs are recommending a wider range of pest control providers. Unlike with traditional search, these recommendations vary significantly across platforms, markets and can even yield different results for the same search run on different days. The result is a more fragmented, variable and dynamic customer discovery environment. Importantly, moderating organic growth trends have not been broad-based across our portfolio. Brands that utilize relationship-driven customer acquisition channels, including direct sales, door-to-door marketing and homebuilder partnerships, delivered stronger organic growth. HomeTeam and Fox, for example, continued to perform well, leveraging their door-to-door sales forces to deliver growth well above the overall company. These results highlight the strength of our diversified multi-brand approach and the benefits of having multiple channels to reach customers. Additionally, our recurring residential customer base is healthy, with customer count continuing to grow in the third quarter and retention remaining strong. The relationships our frontline teammates build with customers are an important source of resilience, creating loyalty and increasing retention over time. This underscores our confidence that pest control continues to be a large, growing and highly attractive market and we believe that the current pressure is a customer acquisition and discovery challenge, not a deterioration in underlying demand for our services. While the slowdown was most pronounced in residential customer acquisition, we also experienced softer performance in portions of our termite, ancillary and commercial businesses. The impact on our commercial businesses was fairly isolated to non-Orkin brands and timing in certain -- of certain onetime business. That being said, Orkin's commercial business continued to grow high single digits, reflecting the investments we have made there in expanding our commercial capabilities. In our termite and ancillary business, growth was impacted to some degree by lower acquisition of new residential customers as these customers provide a source of future cross-sell opportunities within termite and ancillary categories. We also faced staffing and capacity constraints in certain markets that limited our ability to fully capitalize on available opportunities. We have a large and attractive base of existing customers that provides runway for continued cross-sell within these categories. We're also taking targeted steps to address staffing and capacity constraints in affected markets so that we can better capitalize on those opportunities over time. We remain confident in the underlying demand and growth potential of these services. We're focused on controlling what we can control and are taking concrete steps to optimize our approach with respect to digital customer acquisition. Our plan is centered around 3 priorities. First, we're ensuring our brands show up where customers are looking. This starts with evaluating how our brands are surfaced across traditional and LLM-driven search and identifying opportunities to strengthen our presence by market and service category. We're strengthening our visibility across traditional search and AI-driven discovery by expanding locally relevant content, improving local business listings and customer reviews and strengthening our presence in the sources LLM platforms use to generate recommendations. This targeted data-driven approach enables us to translate the strength of our national brands into greater local visibility, more qualified leads and ultimately, new customers. Second, we are making it easier for customers to understand what differentiates us and ultimately choose our brands. We're improving local content, increasing pricing transparency and more clearly highlighting the service attributes that make Rollins' brands stand out, including same-day and next-day availability and the quality of our customer service. We're also working to ensure customers receive accurate, relevant information about our services whenever and wherever they are searching. And third, we are continuously testing, learning and reallocating resources accordingly. We are improving lead attribution, testing different approaches and shifting investment towards the channel and tactics that generate qualified leads, convert them into new customers and deliver the strongest returns. Importantly, this is not simply about spending more, but continuously evaluating where our marketing dollars generate the strongest returns and investing behind those opportunities. For example, we've begun taking advantage of new paid advertising opportunities on AI search platforms, including ChatGPT and Google Gemini, to improve our visibility. In this highly dynamic environment, our ability to be nimble and shift resources to keep pace with change is an important source of strength. We believe the companies that will be most successful in this changing environment are those with the resources, expertise and organizational agility to continuously test, learn and adapt as these technologies evolve. This is not about finding a single solution and moving on. It requires ongoing optimization and our scale, diversified portfolio and financial flexibility position us particularly well to navigate these changes over time. At the same time, we are always focused on providing exceptional service to our existing customers and maintaining the strong relationships that underpin our recurring business. We are seeing some early but encouraging signs of progress from our efforts as we close the quarter. That said, we have not reached stabilization, and there is more work ahead to translate improving search visibility into new customers and sustained growth. We recognize that the customer discovery landscape may be changing structurally, and we are not assuming a return to historical patterns. We're moving quickly to adapt and our resources, scale and flexibility will give us multiple ways to respond as the environment evolves. Our long-term confidence in Rollins has not changed. Our highly recurring business model, strong customer relationships, diversified portfolio and experienced and committed team position us well to navigate evolving market conditions and drive long-term success. We faced challenges before, and our team has consistently demonstrated the ability to adapt, execute and emerge stronger. I have every confidence in our ability to rise to this challenge as well. I'd like to thank our 20,000-plus teammates around the world for their hard work and dedication to serving our customers every day. I'll now turn the call over to Will. William Harkins: Thanks, Jerry, and good morning, everyone. I'll walk through our third quarter financial results and discuss the key drivers of performance, along with our priorities for improvement. Total revenue increased 6.2%, including organic growth of 4.4%, which was below our expectations for the quarter. As Jerry discussed, continued pressure on residential customer acquisition was the primary challenge during the quarter. We also experienced softer performance in portions of our termite and ancillary businesses as well as our commercial business. Performance was affected by fewer new residential customers entering the cross-sell pipeline, along with staffing and capacity constraints in certain markets that limited conversion of available demand. In the third quarter, residential revenues increased 4.9%. Commercial pest control increased 7.7%, and termite and ancillary increased 6.5%. Organic growth across the portfolio was 2.3% in residential, 6.6% in commercial and 5.3% in termite and ancillary. Turning to profitability. We continue to focus on managing factors within our control, taking steps to align our cost structure with current demand while continuing to invest in the people and capabilities that support service quality and long-term growth. In an environment where customer acquisition trends remain dynamic, maintaining an appropriately aligned cost structure is particularly important. We are focused not only on restoring stronger organic growth, but also on ensuring that our operating expenses reflect current business volumes, allowing us to protect profitability while preserving the flexibility to invest over the long term. Gross margin was 53.5%, a decrease of 90 basis points year-over-year, primarily reflecting higher insurance and claims costs as well as fuel-related headwinds. Following the lower volumes in the second quarter, we took proactive steps to better align staffing with demand, resulting in a 30 basis point year-over-year improvement in employee expenses. Materials and supplies contributed an additional 10 basis points of leverage. Insurance and claims costs drove 100 basis points of deleverage, primarily reflecting higher claims costs against a favorable prior year comparison. And fleet costs represented 40 basis points of headwind, driven primarily by fuel and lower gains on vehicles. Fuel costs represented approximately 1.9% of sales in the third quarter, and we continue to expect fuel costs to remain below 2% of sales for 2026. Customer response to our recent price increase has been favorable and we expect to be positive on price/cost for the year. Quarterly SG&A costs as a percentage of revenue increased 60 basis points compared with the prior year as higher insurance and fuel costs were partially offset by our continued focus on cost management and improvements in employee expenses. We saw 10 basis points of leverage in selling and marketing expenses and administrative employee expenses also improved by 10 basis points. Insurance and claim costs represented a 60 basis point headwind, primarily reflecting higher claims expenses against a favorable prior year comparison while higher fleet costs contributed an additional 20 basis points. Third quarter GAAP operating income was $223 million, a decrease of 1% year-over-year. Adjusted operating income was $231 million, a decrease of 0.6% compared with the prior year. Third quarter adjusted EBITDA was $257 million, a decrease of 0.7% versus last year, representing a margin of 23.5%. Our adjusted incremental EBITDA margin was negative 2.8%. Normalizing for the benefit we saw in insurance and claims in the third quarter of last year and the unfavorable impacts this quarter, the company's incremental margin would have exceeded 25%. The effective tax rate was 25.7% in the quarter compared with 24.8% last year. Despite the slight increase in the quarter, we continue to expect our full year ETR to come in under 25% for the year, down approximately 100 basis points from historical levels. Quarterly GAAP net income was $158 million or $0.33 per share. For the third quarter, we had non-GAAP pretax adjustments associated with acquisition-related costs and other items, totaling approximately $7.3 million of pretax expenses in the quarter. Accounting for these expenses, adjusted net income for the quarter was $163 million or $0.34 per share, a decrease of 2.9% from the same period a year ago. Turning to cash flow and the balance sheet. We generated operating cash flow of $242 million and free cash flow of $235 million. Cash flow performance during the quarter did benefit from the receipt of a $63 million tax refund that is associated with our tax credit planning strategy, which continues to provide meaningful cash flow and tax rate benefits. Free cash flow conversion, measured as a percentage of income converted into cash flow, was 149% for the quarter. Excluding the $63 million tax benefit during the quarter, free cash flow conversion would have been 109%. This reflects our strength in cash generation and gives us flexibility to continue investing in the business while returning capital to shareholders. During the third quarter, we completed 7 acquisitions totaling $27 million, paid $87 million in dividends and repurchased $120 million of shares. Our financial flexibility and conviction in the intrinsic value of our business supported more meaningful share repurchase activity in the quarter, and we will continue to evaluate future share repurchases given the health of our balance sheet. Our leverage ratio stands at 1x, and our balance sheet remains strong. Our capital allocation priorities are clear: investing in the business through accretive M&A, continuing to grow our dividend and opportunistically repurchasing shares. Earlier this week, we announced another 10% increase in our quarterly cash dividend. With this increase, we have doubled our regular dividend since the beginning of 2022. Our healthy balance sheet provides us the flexibility to pursue all these priorities when appropriate, while also investing in organic growth opportunities. We are approaching the balance of the year with discipline, transparency and a clear focus on the actions that will improve performance. Given our performance during the first 9 months of the year and the visibility we have today, we are updating our full year outlook. We now expect organic growth of 4% to 6% for the year and corresponding incremental margins ranging from slightly positive to 10% for 2026. This is a highly dynamic environment, and this updated organic growth range reflects that. We want to be as clear as possible with you while being mindful about how the environment could evolve. When we provided our 6% organic growth outlook in Q2, we assumed residential lead declines would remain broadly consistent with the levels we were experiencing at that time with neither meaningful improvement nor further deterioration. Instead, volatility persisted throughout Q3 and lead volumes weakened further from Q2 levels. As a result, our updated guidance reflects a range of outcomes based on how lead trends could evolve for the remainder of the year. The midpoint of approximately 5% growth assumes lead volumes remain below the prior year but stabilize at Q3 levels, while the low end of 4% assumes lead trends deteriorate further from Q3 levels, and the high end of 6% assumes lead volumes meaningfully improve from Q3 levels. We also recognize that we are entering a seasonally lower volume period, particularly in November and December, when our short-cycle residential business can be more sensitive to changes in demand and weather-related disruptions. Our updated range is intended to reflect that uncertainty and provide a transparent view of the range of potential outcomes based on the trends we are seeing today. Our expectation for 2% to 3% of growth from acquisitions as well as our expectation that cash flow will continue to convert at a rate above 100% remain unchanged for the year. Given the current landscape, we are going to hold off on sharing any thinking on 2027. We are currently focused on taking concrete steps to strengthen residential customer acquisition, and we will discuss 2027 when we release our Q4 and full year results. Importantly, the revision to our 2026 expectations reflects our current assessment of near-term operating conditions rather than any change in our confidence in the long-term growth potential of our business. Our immediate priority is taking the right steps to successfully navigate through this dynamic environment and establishing a more stable foundation for customer acquisition. As we make progress towards that, we continue to believe the business has the potential to return to the organic growth algorithm of 7% to 8%, as outlined at our Investor Day. In addition, we are confident in the operational opportunities that underpin our longer-term margin framework and we believe the business has potential to achieve incremental margins in the 30% to 35% range over time. We recognize that our results have fallen short of expectations, and we are taking steps to improve performance through disciplined execution and a focus on the factors within our control. As Jerry outlined, we have a clear path to strengthen residential customer acquisition centered on 3 priorities: one, making sure our brands show up where customers are looking; two, making it easier for customers to choose Rollins' brands; and three, determining what works and investing behind it. At the same time, we remain focused on improving productivity, aligning costs with current demand and continuing to invest in our people and capabilities that support long-term growth. We remain confident in Rollins' long-term growth opportunity. Our scale, financial flexibility and focus on disciplined execution position us well to adapt to changes in customer discovery while continuing to invest in the capabilities that support long-term growth. We believe the actions we are taking, together with the growth and productivity initiatives outlined at our May Investor Day, position us to deliver profitable growth and attractive shareholder returns that have been the hallmark of our financial performance for decades. I look forward to updating you on our progress in the quarters ahead. And with that, I'll turn the call back over to Jerry. Jerry Gahlhoff: Thank you, Will. We're happy to take any questions at this time. Operator: [Operator Instructions] Our first question is from Tim Mulrooney with William Blair. Timothy Mulrooney: Yes, Jerry, Will, I've got a couple of questions here. So first unsurprisingly on lead flow. Can you talk about how residential lead flow trended through the quarter? One of your competitors this morning said that resi lead flow actually improved in September. So I'm wondering how that compares to what you saw. Will, in your prepared remarks, I think you said lead flow deteriorated in the third quarter. So -- but I'm wondering, was September worse than August, was August worse than July? Or was it more just a continuation of what you saw in the back half of last quarter? Just any comments on trends would be helpful. Jerry Gahlhoff: Yes. So thanks, Tim, for your question. So coming out of Q2 and early Q3, we saw some signs of improvement. They really weren't as consistent as we would have liked. We had a lot of data in front of us in those early days and we just have a much clearer view now. So as we think about that change from Q2 and Q3, you have in April, that was a fairly normalized April in the quarter, basically 1/3 of the second quarter was fairly normal, then it started to began to deteriorate. The big difference was, for us, Q3 was consistently weak, steadily weak. Even though once in a while, we get some high spots, but the way you ended each month was pretty similar throughout the entire third quarter. However, that said, we did see some signs of life, so to speak, when you look in September when we saw year-over-year decline in our organic website traffic had been 13% decline in August that moved to only a 4% decline in September. And that, as you know, that organic website traffic is a great predictor or indicator of leads that could come into the business. And also, we saw in September, our organic search leads in the organic channel improved 5% since July. So we saw some of that in September as well. However, I want to caution you, this is -- we've said this is dynamic. And in the second quarter, we saw positive signs of life. And so that's where our outlook reflects that we don't know if the things that we saw in September, improvements that we saw is that going to sustain us through the rest of the year. So we're just really cautious in how we're speaking about this at this time. Timothy Mulrooney: Understood, Jerry. It sounds like you're being appropriately conservative given the uncertainty in the situation. And thanks for the detail on the lead flow, so it sounds like it did improve in September. Could you also comment on how lead flow trended across your specialty brands in residential? I know you have Orkin, you have your specialty brands, the specialty brands, given their lower dependence on the digital channel. I'm curious about the performance there. Jerry Gahlhoff: So generally speaking, and I think this is where that question when we talk about it going to a wide variety of pest control companies, I wouldn't necessarily -- our kind of -- our smaller, more localized brands didn't appear to be see -- be some major benefactor just as they weren't necessarily hurt by these shifts as much as, say, an Orkin was because they go to market different and they acquire -- they don't spend as much of their time and attention in the digital channel. So I would say, if anything, it was probably more of a neutral type of impact on our non-Orkin brands compared to anything else. Operator: Our next question is from Manav Patnaik with Barclays. Ronan Kennedy: This is Ronan Kennedy on for Manav. Kind of as a follow-up to some of the points discussed on Tim, but also go back at a more high level, you repeatedly referenced early but encouraging signs of progress, but also that the business has not yet reached stabilization and continue to describe this as transitory disruption in a permanently changed environment. What specifically is improving today? How far are you from the level that can make you conclude that customer acquisition trends have truly stabilized? And what makes you confident that the adaptation and your priorities ultimately restore growth rather than simply make the disruption more manageable? Jerry Gahlhoff: Well, look, there's a lot of lead indicators that we can look at when we -- there's many lead sources and many sources of driving the residential business. We'll continue to monitor those lead indicators to tell us where we should invest, where we should put our dollars. And as we begin to see the lag indicator, which would be actual lead volumes increasing as a result of those, that's when we'll know that things are -- things have adjusted and things are stabilizing. But let me go back and say that the world has completely changed in this space. This is going to be -- to say somehow that 3 months from now, we think we've arrived. We have to adjust every single day going forward. So some idea that we've somehow solved this problem 6 months from now and everything is back to normal. I don't want to give anybody the impression that, that's exactly how this will shape out. It's just going to be a constant test, learn, adjust, going back and doing that over and over and over again and trying to be as nimble as we can as we go. William Harkins: And Jerry, I think the team that's got the most resources has the most agility, is able to really win at the end of the day and we're best prepared for that. Jerry Gahlhoff: We've done this before. Ronan Kennedy: Yes. And then as a follow-up, with the laid out 4% to 6% range, that's a function of 3 scenarios. Is there a way to think of probability weighting those 3 scenarios based on the answer to the question thus far and the data you're seeing so far? And then how should we think of potential implications for the revenue base for '27, cognizant your comments that you're not really going to be guiding, but at a high level, how should we think of implications for revenue base for '27? William Harkins: Thanks, Ronan. I'll just -- let me reiterate a little bit about how we got to the 4% to 6% outlook range. And so essentially, remember that when we issued 6% back at the end of Q2, we said that we assumed that really we were not going to see further deterioration in the business or any improvement in the business that was just going to stay steady. And so, that's how we really got to the full year 6% number. And then as we've gone through the quarter, the third quarter, we did see that continue to deteriorate. So our assumptions now, what's underlying that range is that if things continue in the fourth quarter, just as they did in the third quarter, we will be in the 5% at the midpoint of that range. If things meaningfully improve, we're going to -- we still -- 6% is on the table. And if things deteriorate even further, that's when the 4% to 5% range comes into the mix. So that's how the Q4 outlook is. And I'll tell you that, that's where we're putting the most focus. We just want to make sure we finish this year strong, but it's really too early for us to talk about anything in 2027 until we see how we finish Q4. Jerry Gahlhoff: And Ronan, coming back to your questions related to the customer base 2027, how we start. As I mentioned, our customer base is growing. So across our organization in total, our customer base is growing. It's healthy. And so -- and at the same time, we're working hard. While all this is going on, we're also working hard at improving our customer retention. And we've made that -- we're beginning to make those improvements. We're seeing positivity there. I expect that to continue with the intense focus that we're putting on that, and that's another lever that we have to pull on that as well. Operator: Our next question is from Greg Parrish with Morgan Stanley. Gregory Parrish: So you talked about the need for being nimble. I just wanted to ask, so how long does it take to really drive change in how your brands show up in AI search, adding reviews on different sites, localizing all of your sites, Orkin sites nationally. It seems like it could take time. So maybe just help us understand the dynamic and your ability to be nimble here and how you show up. Jerry Gahlhoff: I'll give you a great example of how nimble -- in some ways, how easy this can be. So for example, at Orkin, Orkin typically wanted someone -- we wanted you to engage with us through a web lead or somehow engage with us on the phone through our call center. And that's where we typically would talk about price these days. And very quickly, we were able to add pricing transparency that was not being picked up on the LLMs a few months ago that is being picked up today. So really quick, easy types of adjustments that you could make where Orkin a few months ago wasn't even seen as being relevant if someone -- especially if someone was curious about price and then when you -- what we learned is that when you don't talk about price, it gives some price ranges. People -- the LLMs don't give you any credit and they assume the worst and they may go to other sources that aren't accurate about your price. So doing something as simple as that has made a big impact in it. We were able to do that literally in weeks. So that's an example of what we can do. So -- but that's also constantly changing, constantly evolving and that's again where test, learn, reallocate resources, adjust, test, learn, reallocate resources, adjust. That's just going to be the norm going forward. Gregory Parrish: Okay. Great. That's helpful color. And then maybe just to touch on marketing. Just given the changing customer acquisition landscape, how are you viewing marketing spend sort of at a holistic level? And maybe more granular, I mean it seems like you might have to -- you might have more areas to attack here and spread your dollars out. So just how are you thinking about that into 2027? William Harkins: Greg, from that perspective, it's really not about us spending more in our mind. It is truly about -- Jerry was just talking about testing different things. We are going to follow -- put our money where we see the greatest returns. And so it really is about reallocating based on where we see our returns improving. And so there's a lot of tests that we're doing. We are certainly not being shy about putting money where we need to, but I would not assume that we are going to spend more in this environment. It is truly just making sure that we're seeing where we're getting the greatest benefit. Jerry Gahlhoff: Greg, importantly here, we have choices. We have a lot of choices we can make across our portfolio of brands. That's the advantage of our model. That's where our multi-brand approach, especially in residential, which is where a lot of the -- a lot of our other brands are heavily engaged in the residential space is really such an advantage for us. That's just a strong suit of ours. Operator: Our next question is from Curtis Nagle with Bank of America. Curtis Nagle: I just wanted to maybe quickly go through just some of the puts and takes on the implied 4Q guide. Low end, it seems to imply, I think, kind of 0 growth. Is that wholly based in resi? Could that, I guess, potentially turn negative? And I guess what are you assuming in terms of kind of the ranges for commercial and termite and ancillary? And then I have a follow-up. William Harkins: Curtis, I would say, from all of our -- everything that we've done as we evaluated and we based our assumptions for that guide, it was that things continue exactly as you see them in Q3 to get to that 5% growth rate. So I would just say, if we continue in the same trajectory, you're at 5%. If that goes down, you're going to be at 4%, and it's got to meaningfully improve to get to that 5% to 6% range. So that is how we built the guide, and that's really all we're -- all I can tell you now. Curtis Nagle: Okay. Fair enough. And then just maybe focusing on termite and ancillary. Just in terms of like what specifically was driving those weaker customer acquisition trends? Is it, I guess, proliferation of LLM impact? And then I guess on some of these, I think, labor shortages, just sort of what's driving that, when that could be resolved? Jerry Gahlhoff: Yes. So the -- certainly, as we mentioned, the slower residential customer volumes did reduce some of the opportunities to some degree. But some of the challenges there were really impacted more by staffing and capacity constraints in some markets where we had to get the work done. We exited the quarter with backlog that was at our high watermark for the year, which -- that's both good and bad. So that tells us there's plenty of work to be done, but we just didn't get it all completed in the third quarter. And some of that staffing and capacity could be related to adjustments that we made in the business. Could also be just -- some markets are more challenged from a labor environment or various things happen, and that comes back to leadership and strong operational execution that we tend to be pretty strong in. But our struggle was really towards the end of the quarter. We had -- termite and ancillary was really strong in the first part of Q3 and it was September that was really disappointing. Again, we got -- we have strong backlog there, and there's plenty of work for us to get done in the fourth quarter. So I'm not overly concerned about that. We really remain quite confident in the underlying demand and the need for these services. Our customers see a great deal of value in it. We still see that there's meaningful opportunities to drive growth through that large customer base that we have. Operator: Our next question is from Tomo Sano with JPMorgan. Tomohiko Sano: Could you decompose the quarter's organic growth into price versus volumes? If you could give us any color overall and then by segment? And then also as LLM-driven search increases pricing transparency and simplifies comparisons, has your view of CPI plus price realization changed in any way? William Harkins: Tomo, I would -- when we think about the price versus volume equation, what I would tell you is that we do continue to see ourselves as a CPI-plus business. We're an essential business, and so that is going to be in the 2% to 3% range of -- or 3% to 4% range for pricing. And that's -- the only thing I want to make sure that you have color there is that, that is across the entire portfolio. When we talk about that 3% to 4% of pricing that's across the full portfolio, that is more heavily weighted towards commercial than residential. So it doesn't apply evenly across everything. But we do still see that being kind of where we will play in this space. And so -- and we don't see any indications that, that is creating trouble. I mean we are regularly evaluating our pricing. We meet -- we just met 2 weeks ago actually about this topic. And so we don't see any meaningful change in the number of customers that are either trying to roll their prices back that are canceling with us. So we feel like we still have room to go there. And then your second question, I feel like there was -- was there another part to your question, Tomo? Tomohiko Sano: Yes, that's a good answer. And just one follow-up to Jerry, if I may. On the customer acquisition landscape change, the AI-LLM search simplified price with the local providers. How do you assess the risk that why pay a premium value message, like such as service quality and guarantees and reliabilities like gets diluted? Jerry Gahlhoff: Yes. And that's where I think you have to be careful in this space because you cannot stop spending on your brand and your brand messaging and who you are and what you're all about. So this idea that we should just stop spending and building our brand and the reputation in the mind of the consumer is really the best thing that we -- the main thing we want you to do instead of going to an LLM and asking about pest control, we want you to type in orkin.com and we want you to just think Orkin or one of our brands as a top-of-mind investment. And so we have to continue to send the messaging on our website and all of our content about the value of our service and ensure that our service quality is strong, and the value proposition and the things that our customers are asking about when they are in the LLMs, that content is there on our website that they can see the clear value in using us compared to anyone else. Operator: Our next question is from Seth Weber with BNP Paribas. Christina Johanna Bettink: This is Christina Bettink on for Seth. So I guess first up for me is over the summer, the FTC actually brought a large case against Rollins over the use of noncompete clauses across its workforce. And we were kind of wondering if this has any impact on competition? And additionally, if this could actually be contributing to the local competition that's kind of been weighing on lead flow and residential growth. Jerry Gahlhoff: No. That is a -- I think we've talked about this in the past to some degree, that has been pretty much a nonissue across our industry. In fact, if you look back at the details of that, we had some pieces and parts of our business that -- where our nonsolicit agreements that are designed to stop -- to discourage people from taking customers or recruiting our people were extended into noncompete. And all we did was roll those noncompetes back in the parts of our business that still have those in there. At the end of the day, these were agreements that were never enforced or very rarely enforced to begin with. So it was really a nonevent in our business. So we have had -- if you think about the fact that there are 19,000 -- estimated 19,000 pest control companies, and the people I know in the industry had started it. Usually, the family tree goes somewhere back to Orkin or Terminix or somewhere back in the day. There's a reason for that is because people have freely moved for many, many years between and amongst companies. So we don't really see that as any sort of a change in the environment at all. Christina Johanna Bettink: Okay. That's super helpful. And then I guess, back at the Investor Day that you guys hosted in May, you guys framed that the pest control market was growing around 6% a year. And I know at a recent conference, you guys said that lead declines were fairly proportional across all income bands, which kind of suggested that consumer health wasn't the main driver. Is this still the case? And given what you've seen up until this point, do you think that industry growth has changed at all? Or do you think it's more of a Rollins-specific shift in how customers find you? Jerry Gahlhoff: When we think about the consumer health, I think what we're really saying is we're an essential service. If you need -- if you have a problem, you're going to want to solve it. I think from a consumer standpoint, the consumer is trying to make sure that if they are going to spend their money, they're getting the value and they're choosing the right provider. And that goes back to, I think, to Tomo's question about ensuring that price and value, responsiveness and reliability, all those factors that drive value are more important. So there's lots of data out there about the consumer, and it certainly is something that we've dug into. I just think at this point in time, we have a more discerning consumer, but we certainly have a consumer that is willing to spend the money on pest control services. Operator: Our next question is from Connor Cerniglia with Bernstein. Connor Cerniglia: Heading into this quarter, third-party data suggests organic traffic for Orkin was down pretty materially year-on-year. You paint a very similar picture for Massey, very similar picture for Aptive. Terminix seemed to be the outlier, which was actually up in the quarter, but for the top 4 players, organic traffic was down more than double digits. So corroborating your claim that LLMs seem to be the issue. And that -- I guess that one competitor was more of an outlier than the trend. Can you talk about the early findings in your process to adapting the LLMs? Has the biggest success so far has been third-party content? Is it improving business reviews? Any color on that would be really helpful. Jerry Gahlhoff: Initially beginning to appear better was some easy steps like the one -- the example I gave you earlier on pricing and transparency helped tremendously. When we start talking about service offerings and our ability to respond and offering same-day, next-day service windows and how we communicate that, things that we've always done, we've just never put it in words and it's not been key in our messaging. But those types of things that talk about the value, that talk about how we can quickly fulfill customer needs seem to get picked up a lot faster and a lot easier. And then when you think about local content, where we have -- while we're a national company, we have national locations, we have local people that understand local needs and taking that information in. I'll give you a great example is here in Atlanta, there's this spider called the Joro spider. And if you're talking about the Joro spider and the local content, and it's hot on people's minds here, those are the -- and if your branches here, I'd say, at Orkin in the Atlanta area have local content about the Joro spider, that's going to get picked up. So those are the types of things that we're focused on that we find to be getting the bigger return on investment, and they're quick wins. William Harkins: Jerry, one of the other things that we've actually seen here recently, as you see ChatGPT, you see Google, they're starting to run pilots where they're allowing kind of the monetization of that platform where you can start to put some ads. And so we're starting to play in that space as well. It's early. We'll see what's going to happen as we go through the quarter, but at least we're starting to see what they're playing in that space. Connor Cerniglia: Very helpful color. As a follow-up, I know we've talked about LLMs. ChatGPT is about 70% of the shares. So I think that's probably the biggest -- maybe I won't say issue, but that's probably the most focused target should be. It seems like Yelp reviews are probably some clear low-hanging fruit here. ChatGPT uses Yelp as recommendation rates. You all have about 13 reviews per store, so about a baker's dozen. Your competitors have about 25, 30. And it seems just like companies have long ignored Yelp as a review platform. And part of the solution here is just refocusing efforts to improve Yelp recommendation rates. Can you talk about any examples of steps you're taking to improve? Are there QR codes you're going to have in the side of your trucks, incentive comps to kind of get those business reviews up? Do you -- can you just give us any examples on that front would be helpful. Jerry Gahlhoff: Yes. The Yelp model for reviews is a very different model of what they allow and how that works compared to, say, Google reviews where we have a very strong -- a much stronger presence. So yes, that's one of the areas that you have to, again, test, learn, decide whether or not and how much to reallocate resources to try to drive meaningful -- can you drive meaningful impact on that. We're very -- we're acutely aware of that. And that -- but that is also something that will take a lot more time to be able to effectively impact. So you have to weigh those investments and say, hey, within -- yes, Yelp is weighted, but so are these other things within ChatGPT, how do I position us better on these other things that are going to -- that are also going to get us more visibility there that I might be able to move faster. And so those are all the things that we're weighing and trying to make better decisions on. Operator: Our next question is from George Tong with Goldman Sachs. Keen Fai Tong: The digital lead pressure is greatest in residential, but can you also talk about the lead gen mix in your other segments? So ballpark, the new customer acquisition mix by channel across termite and commercial as well and resi? Jerry Gahlhoff: So our termite and ancillary business as well as our commercial business is not heavily lead driven in terms of digital lead driven. They are -- they get called because that's again where the brand comes into top of mind and say the Orkin brand in commercial, people are just going to call Orkin. And that is a very organic type of lead gen. And so we're not very reliant on digital customer acquisition, digital marketing spend type of efforts in that space at all. Keen Fai Tong: Got it. And then as a follow-up, you still believe that the business can get back to 7% to 8% organic growth. Does getting back there require residential digital leads to return to prior levels? Or can channel mix, conversion and cross-selling offset a structurally more fragmented digital search environment? William Harkins: George, that's a good question. We -- our view is that we can absolutely get back to 7% to 8%. We don't know when that's going to happen. We've got to see this through. But certainly, we're able to get back there. And what we're focused on mostly now is how do you make sure that every one of those leads we do get that we convert it and that it turns into a sale. So there are a lot of things that we're able to do to affect that 7% to 8%. There are levers we can pull. And so there's no reason to think that the long-term guidance would -- that we need to come off of that. Jerry Gahlhoff: Generally speaking, I think for us to get to the 7% to 8% range, we are going to need to have residential healthy, commercial healthy and termite and ancillary healthy. And I think there's some different algorithms within there, how you get there. I think we have to do better on residential, obviously. But again, that goes back to the multi-brand strategy, where we invest, the decisions that we have to make that moving resources around to get us back there. So certainly, as Will said, it's possible, but I believe we've really got to be executing on all those cylinders. Operator: Our next question is from Stephanie Moore with Jefferies. Stephanie Benjamin Moore: First question here, maybe just I'd love to get your opinion, a higher level question here. You talked about not necessarily ramping up marketing spend or changing that. But I'd almost push back on that response. Why not just given the magnitude in which the industry and your go-to-market strategy has -- effectiveness has changed? Why not use this period of time to step up marketing to really solidify your position across kind of all go-to-market strategies, LLMs, for example, making sure that you're in the top position there, doubling down on door-to-door? I mean why not use this period of disruption to leverage your size, scale and, quite frankly, financial position to really tackle and take meaningful share? Just again, high-level thought here. Jerry Gahlhoff: Yes, I understand where you're coming from. Our -- we are perhaps more disciplined than that. If I knew that I could invest rapidly in the marketing, and I could accurately predict what return I would get on that in this dynamic environment where I don't know that -- what a $1 spend would necessarily yield. I could do that, but I would also probably be spending a lot of money irresponsibly. And so our -- we have leaned towards let's protect our margin, let's rightsize our business, let's do the right things and let's learn, test, be responsible about our decisions and adjust as we go. But because we got some sort of a sugar high off of just going in and spending marketing dollars, you can do that. But that doesn't necessarily -- it's not necessarily sustainable, and it could potentially change your business model and your discipline that you bring to the business. It's just fundamentally not how we approach the business. William Harkins: But it's hard to underestimate how dynamic this environment is right now. And so it keeps changing. I mean we've talked about the fact that we've gone to external parties to help us through this from a marketing perspective. And they don't even necessarily always agree. Nobody has a silver bullet. So it's how much would you spend on -- in this current environment? Jerry Gahlhoff: We don't know if that's some infinite number. And the other side of it is just spending marketing dollars doesn't necessarily create demand where demand isn't there. So you have to know the limit to what you'd be willing to go. So our focus has been on making sure we rightsize our business. In my mind, those are actually tougher decisions than just going and spending more in marketing. We have hard choices that we have to make about how we structure our business, and I'm really proud of our team for what they've done in that regard. Stephanie Benjamin Moore: Understood. One quick follow-up kind of along the same ones here. Does this dynamic change your M&A strategy? I mean is there a greater focus that you'll place on door-to-door just given that part of the business continues to hold well, holding strong? William Harkins: Stephanie, there's -- we've got a great pipeline of M&A opportunities that are still out there. It does not change what we see in value as a good business that we want to go and purchase. We're going to continue to look for opportunities where it's accretive. Businesses are, quite frankly, better than ours and that's what helps us continue to grow organically longer term. And so this does not -- we've been in the door-to-door space. We've been in the traditional space. It doesn't change our philosophy. Jerry Gahlhoff: We're interested in lots of businesses that help our -- that can help and be accretive to our growth, and we'll continue to take a balanced approach there. I still think this is a -- this right now is hopefully a short-term dislocation, and we'll see how this pans out over time. But we'll continue to be disciplined in our acquisition and look for businesses that are a good fit for us and bring the right balance to us. Operator: Our next question is from Peter Keith with Piper Sandler. Peter Keith: On the follow-up on the door knocking question. Within residential, you did cite that those areas of door knocking, direct sales, home (sic) [ HomeTeam ], continue to outperform. I guess I'm curious, are those areas running in line with historical averages? Or are those also outperforming, but maybe seeing a little bit of weakness? Jerry Gahlhoff: We've not seen any sign of weakness in those spaces. They have just gone gangbusters. So double-digit growth at Fox. And so that continues to be a great business growing. It's very helpful to our overall growth profile in the residential space. So we've not seen any real softness there at all. Peter Keith: Okay. Good. And then I just want to pivot over to commercial. I think you had cited some weakness in onetime business. Maybe could you unpack that for me a little bit more on where the slowdown in commercial occurred? Jerry Gahlhoff: Yes. So the softness in the commercial side was really driven by some timing related to fumigation services at non-Orkin brands. So as we go through -- as you go through the quarter, we -- there's -- in the commercial space, there's a lot of -- there's a decent amount of commodity fumigation that goes on that can be cyclical timing around holidays, things along those lines that just gets kind of dislocated from time to time. The good news in that is Orkin's commercial business, their core grew -- still grew over 8%, reflecting -- or very reflective of the investments that we've made there in expanding on the commercial side, not something I'm very concerned about. Operator: Our last question will be from Josh Chan with UBS. Joshua Chan: Maybe on the residential side, on the organic growth of 2.3%. I know that within residential, there's recurring and there's onetime business in there. So I guess, could you give some color in terms of whether the recurring business trended above or below the total? Jerry Gahlhoff: Josh, this is Jerry. I hope you're having -- I heard you're at PestWorld, and I hope you're having a good time there with all of our friends, meeting some great people while you're there, aren't you? Joshua Chan: I am. Yes, yes. Jerry Gahlhoff: Yes. So when we look at the organic growth and onetime, I would categorize those as being down very equal proportions, very, very similar. But the recurring portion was actually better. So the -- we are still in line with what we have seen historically from a recurring perspective. Joshua Chan: Both of them? Jerry Gahlhoff: Yes, yes. Joshua Chan: That makes sense. Okay. All right. And then, I guess, on the customer acquisition side, do you feel like you have a handle on what tactics work and don't work and that you're just kind of focusing on executing to those tactics now? Or do you feel like you still need a better handle on exactly what tactics to use? Jerry Gahlhoff: I think we have a strong handle on some of the basics and some of the most fundamentals that we've been able to execute on. What's interesting in this space is you can ask 5 different experts and get different answers. And so that's, again, what gives us that lack of clarity, say, where do you invest? Which is why, again, I sound like a broken record when I say test, learn, reallocate resources, adjust. That is what we're going to have to do. And so we're doing a lot of that with different agencies and specialists that are helping us navigate that. So again, that's why we described this as this dynamic environment. And it's -- and the things -- we don't know that the things we fix today are also going to be the right things that are most important 3 months from now, right? So that's where -- that's when I say this world has changed probably forever in this space is so important. And we're just going to have to continue to test, learn, reallocate resources, but I don't think we'll ever be able to say we're done and we've arrived. Operator: We have reached the end of the question-and-answer session. I would like to turn the floor back over to Jerry for closing comments. Jerry Gahlhoff: Thank you, everyone, for joining us today. We look forward to speaking with you again in our Q4 earnings call in February. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Rollins, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rollins wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $350,756!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,363,905!* Now, it's worth noting Stock Advisor's total average return is 922% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 22, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Rollins. The Motley Fool has a disclosure policy. Rollins (ROL) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Rollins (ROL) came out with quarterly earnings of $0.34 per share, missing the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -2.86%. A quarter ago, it was expected that this operator of Orkin and other pest and termine control services would post earnings of $0.34 per share when it actually produced earnings of $0.32, delivering a surprise of -5.88%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Rollins, which belongs to the Zacks Building Products - Maintenance Service industry, posted revenues of $1.09 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate by 3.15%. This compares to year-ago revenues of $1.03 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Rollins shares have lost about 44.5% since the beginning of the year versus the S&P 500's gain of 12.7%. While Rollins has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Rollins was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.28 on $993.6 million in revenues for the coming quarter and $1.16 on $4.11 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Maintenance Service is currently in the bottom 4% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Full Truck Alliance Co. Ltd. Sponsored ADR (YMM), another stock in the broader Zacks Business Services sector, has yet to report results for the quarter ended September 2026. This company is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +53.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Full Truck Alliance Co. Ltd. Sponsored ADR's revenues are expected to be $496.44 million, up 5.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rollins, Inc. (ROL) : Free Stock Analysis Report Full Truck Alliance Co. Ltd. Sponsored ADR (YMM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

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 SUBSIDIARIESCONDENSED 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 SUBSIDIARIESCONDENSED 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 SUBSIDIARIESCONDENSED 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

Rollins (ROL) is on the radar this week as investors brace for Q3 results on Wednesday after the close and digest a higher quarterly dividend that signals a stronger cash return profile. At around $33.34 per share, Rollins has seen a sharp shift in sentiment, with the 90 day share price return down about 23% and the year to date share price return lower by roughly 44%, even though the 3 year total shareholder return is still slightly positive. Recent gains, such as the 7 day share price return of about 4% and the 1 day move of just over 2%, hint that traders are warming up again ahead of Wednesday's Q3 update and the richer dividend payout, as investors reassess both Rollins' growth profile and its cash return appeal. Spot opportunities beyond Rollins by scanning a curated 34 high quality undervalued stocks that could be setting up for the next rebound in quality cash generating businesses. The question now is simple. After a near 40% share price reset and a richer dividend, does it make more sense to step into Rollins at this point, or wait for an even cheaper entry as the valuation math gets unpacked next? Compared with Rollins' last close at $33.34, the most followed narrative pegs fair value closer to $16.20 per share, which points to a very different risk reward profile than the current market price suggests. Rollins is the dominant pure-play compounder in global pest control, a structurally necessary, recession-resistant service business that has grown revenue for 24 consecutive years and delivered ROIC of 23 to 31% for 12 consecutive years, without a single year of ROIC below 21% even through COVID-19. The investment thesis rests on three mutually reinforcing pillars: (1) a Wide Moat rooted in switching costs, where commercial customers cannot switch providers without triggering compliance risk, and residential customers renew habitually at annual price increases of 3 to 4% above CPI without meaningful churn; (2) a proven M&A flywheel that converts a fragmented industry of 34,000+ U.S. operators into compounding route density and FCF, completing 30 to 45 bolt-on acquisitions annually at disciplined multiples with zero reported impairments; and (3) a capital-light business model with minimal reinvestment needs, generating FCF of $678M in FY2025 on $3.76B of revenue. See why 10 investors see Rollins as 106% overvalued. Result: Fair Value of $16.20 (OVERVALUED) Still, the Rollins narrative can crack if acquisition returns fade, or if regulators and customers push back on pricing power that underpins those cash flow assumptions. Find out about the key risks to this Rollins narrative. A second lens on Rollins tells a very different story. The SWS DCF model values the shares at about $47.38, compared with the current price of $33.34. That implies Rollins trades below the modelled future cash flow value. So which framework should carry more weight in your process? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Rollins for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 34 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Sentiment around Rollins has clearly split, with some investors focused on the valuation reset and others on the long term compounding story. If you want to move quickly and ground your own view in the underlying numbers, start by weighing the 3 key rewards and 2 important warning signs. If Rollins has you thinking harder about price, cash flow and risk, use that momentum to line up a broader watchlist of potential opportunities. - Target resilient cash generators and track a curated 34 high quality undervalued stocks that may line up stronger fundamentals with more modest pricing. - Prioritise stability first by scanning a 31 resilient stocks with low risk scores that focuses on businesses with sturdier risk profiles. - Get ahead of the crowd by running through a 21 high quality undiscovered gems that could reveal quality stories before they hit the mainstream radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ROL. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Investing.com -- Rollins Inc (NYSE:ROL) reported third quarter results that fell short of Wall Street expectations, with both earnings and revenue missing analyst estimates as the pest control company faced continued pressure in residential customer acquisition. Still guessing which stocks will beat the market? Our AI portfolio updates monthly and is outperforming the S&P 500 by 118%. See this month's list » The company reported adjusted earnings per share of $0.34, missing the analyst consensus of $0.35 by $0.01. Revenue reached $1.09 billion, below the $1.11 billion estimate, though up 6.2% YoY from $1.03 billion in the prior year period. Organic revenue increased 4.4% compared to the third quarter of 2025. Shares fell 7.4% in after-hours trading Wednesday. Adjusted operating income declined 0.6% to $231 million, while adjusted operating margin contracted 140 basis points to 21.2%. Adjusted net income decreased 3.1% to $163 million. The company's adjusted EBITDA fell 0.7% to $257 million, with adjusted EBITDA margin declining 170 basis points to 23.5%. Unsure what to buy ahead of earnings? Our AI's recent pre-earnings calls delivered gains of +77% to +118% after results dropped. See this month's earnings picks » "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," said Jerry Gahlhoff, Jr., President and Chief Executive Officer. The company noted that residential customer acquisition remained under pressure during the quarter. Management said it is responding with a more dynamic marketing approach, reallocating resources from traditional digital channels to those generating higher returns, including capabilities that strengthen visibility in AI- and LLM-driven discovery. Operating cash flow increased 26.4% to $242 million, while free cash flow rose 28.8% to $235 million. Cash flow benefited from $63 million due to the timing of a tax refund associated with the company's tax credit planning strategy. During the quarter, Rollins invested $27 million in acquisitions, deployed $120 million for share repurchases, and paid $87 million in dividends. Original Article Rollins falls 7% on third quarter earnings and revenue miss Medpace beats Q3 estimates but guides below on revenue Graco falls 7% as third quarter results miss estimates