Rollins — Financial Results

Revenue Hit a Record $3.8 Billion, Driven by Both Organic Growth and Acquisitions

Rollins posted its strongest revenue year ever, with growth coming from two sources: customers spending more on existing services (organic growth) and newly acquired businesses adding to the top line. Termite and ancillary services were the fastest-growing category at 14%, while residential and commercial pest control each grew around 10-11%. The one soft spot was the fourth quarter, where bad weather reduced demand for one-time services.

Profitability Is Broadly Healthy, Though Operating Margin Slipped Slightly

Gross margin (revenue left after direct service costs) ticked up slightly, helped by lower materials and insurance costs. However, operating margin (profit after all running costs) dipped 10 basis points, largely due to higher fleet and selling costs, plus the weak Q4 volumes. The adjusted figure, which strips out acquisition-related accounting charges, actually improved slightly.

Free Cash Flow Remains Strong and Converts Well From Earnings

Free cash flow — the cash left after maintaining the business's physical assets — grew in line with earnings and converts at over 120% of net income, meaning the company is actually collecting more cash than its reported profit. This is a sign of a high-quality, asset-light business model.

Rollins Issued $500M in Long-Term Debt to Refinance and Fund Growth

In February 2025, Rollins issued $500 million in 10-year Senior Notes at a 5.25% interest rate, using the proceeds mainly to pay down its flexible revolving credit line. This swaps short-term, variable-rate borrowing for longer-term, fixed-rate debt — reducing refinancing risk. The company also set up a new $1 billion commercial paper program (short-term corporate IOUs) for day-to-day flexibility, with $114 million drawn at year-end.

Active Acquisition Program Including the Saela Deal Accelerated Spending

Rollins completed 26 transactions in 2025, spending $309.5 million on acquisitions compared to $157.5 million in 2024. The largest was Saela Pest Control, which notably expanded the brand portfolio. Acquisition activity contributed 4.1% of total revenue growth and is driving higher amortization charges (the gradual expensing of purchased intangible assets like customer lists and brand value).

Management Guides for 7%-8% Organic Revenue Growth in 2026

Looking ahead, management expects organic revenue growth of 7% to 8% in 2026, slightly above the 6.9% delivered in 2025. They anticipate a slow start to Q1 but express confidence based on the recurring, contracted nature of their revenue base. Ongoing modernization and pricing initiatives are expected to support margin improvement through the year.