ROLLINS, INC. REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS
Rollins (NYSE:ROL) reported strong Q2 2025 financial results with revenues reaching $1 billion, marking a 12.1% increase year-over-year, while organic revenues grew 7.3%. The company achieved quarterly net income of $141 million, up 9.3%, and diluted EPS of $0.29, a 7.4% increase from Q2 2024.
Operating cash flow showed significant improvement, increasing 20.7% to $175 million. The company demonstrated active capital deployment, investing $226 million in acquisitions and paying $79 million in dividends. However, margins faced some pressure, with operating margin decreasing 60 basis points to 19.8% and adjusted EBITDA margin declining 50 basis points to 23.1%, partly due to legacy auto claims impact.
Rollins (NYSE:ROL) ha riportato solidi risultati finanziari nel secondo trimestre 2025 con ricavi pari a 1 miliardo di dollari, segnando un aumento del 12,1% rispetto all'anno precedente, mentre i ricavi organici sono cresciuti del 7,3%. L'azienda ha registrato un utile netto trimestrale di 141 milioni di dollari, in crescita del 9,3%, e un utile per azione diluito di 0,29 dollari, con un incremento del 7,4% rispetto al secondo trimestre 2024.
Il flusso di cassa operativo ha mostrato un miglioramento significativo, aumentando del 20,7% a 175 milioni di dollari. La societ脿 ha dimostrato un'attiva allocazione del capitale, investendo 226 milioni di dollari in acquisizioni e distribuendo 79 milioni di dollari in dividendi. Tuttavia, i margini hanno subito una certa pressione, con un margine operativo in calo di 60 punti base al 19,8% e un margine EBITDA rettificato che 猫 diminuito di 50 punti base al 23,1%, in parte a causa dell'impatto delle richieste assicurative legacy nel settore auto.
Rollins (NYSE:ROL) report贸 s贸lidos resultados financieros en el segundo trimestre de 2025 con ingresos que alcanzaron 1.000 millones de d贸lares, lo que representa un aumento interanual del 12,1%, mientras que los ingresos org谩nicos crecieron un 7,3%. La compa帽铆a logr贸 un ingreso neto trimestral de 141 millones de d贸lares, un aumento del 9,3%, y un BPA diluido de 0,29 d贸lares, un incremento del 7,4% respecto al segundo trimestre de 2024.
El flujo de efectivo operativo mostr贸 una mejora significativa, aumentando un 20,7% hasta 175 millones de d贸lares. La empresa demostr贸 un despliegue activo de capital, invirtiendo 226 millones de d贸lares en adquisiciones y pagando 79 millones de d贸lares en dividendos. Sin embargo, los m谩rgenes enfrentaron cierta presi贸n, con un margen operativo que disminuy贸 60 puntos b谩sicos hasta el 19,8% y un margen EBITDA ajustado que baj贸 50 puntos b谩sicos hasta el 23,1%, en parte debido al impacto de reclamaciones automotrices heredadas.
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鞓侅梾 順勱笀 頋愲鞚� 韥矊 臧滌劆霅橃柎 20.7% 歃濌皜頃� 1鞏� 7,500毵� 雼煬毳� 旮半頄堨姷雼堧嫟. 須岇偓電� 頇滊皽頃� 鞛愲掣 氚半秳鞚� 氤挫棳欤茧┌ 2鞏� 2,600毵� 雼煬毳� 鞚胳垬鞐� 韴瀽顷橁碃 7,900毵� 雼煬毳� 氚半嫻旮堨溂搿� 歆�旮�頄堨姷雼堧嫟. 雼る, 毵堨鞚� 鞚茧秬 鞎曤皶鞚� 氚涭晿鞙茧┌, 鞓侅梾 毵堨鞚� 60 氩犾澊鞁滌姢 韽澑韸� 頃橂澖頃� 19.8%, 臁办爼 EBITDA 毵堨鞚� 50 氩犾澊鞁滌姢 韽澑韸� 頃橂澖頃� 23.1%毳� 旮半頄堧姅雿�, 鞚措姅 鞚茧秬 甑槙 鞛愲彊彀� 氤错棙 觳惮 鞓來枼 霑岆鞛呺媹雼�.
Rollins (NYSE:ROL) a publi茅 de solides r茅sultats financiers pour le deuxi猫me trimestre 2025, avec un chiffre d'affaires atteignant 1 milliard de dollars, soit une augmentation de 12,1 % par rapport 脿 l'ann茅e pr茅c茅dente, tandis que les revenus organiques ont progress茅 de 7,3 %. La soci茅t茅 a r茅alis茅 un r茅sultat net trimestriel de 141 millions de dollars, en hausse de 9,3 %, et un BPA dilu茅 de 0,29 $, soit une augmentation de 7,4 % par rapport au deuxi猫me trimestre 2024.
Le flux de tr茅sorerie op茅rationnel a connu une am茅lioration significative, augmentant de 20,7 % pour atteindre 175 millions de dollars. L'entreprise a d茅montr茅 un d茅ploiement actif du capital, investissant 226 millions de dollars dans des acquisitions et versant 79 millions de dollars en dividendes. Cependant, les marges ont subi une certaine pression, la marge op茅rationnelle diminuant de 60 points de base 脿 19,8 % et la marge EBITDA ajust茅e baissant de 50 points de base 脿 23,1 %, en partie en raison de l'impact des sinistres automobiles h茅rit茅s.
Rollins (NYSE:ROL) meldete starke Finanzergebnisse f眉r das zweite Quartal 2025 mit einem Umsatz von 1 Milliarde US-Dollar, was einem Anstieg von 12,1 % gegen眉ber dem Vorjahr entspricht, w盲hrend die organischen Ums盲tze um 7,3 % wuchsen. Das Unternehmen erzielte einen Quartalsnettogewinn von 141 Millionen US-Dollar, ein Plus von 9,3 %, und einen verw盲sserten Gewinn je Aktie (EPS) von 0,29 US-Dollar, eine Steigerung von 7,4 % gegen眉ber dem zweiten Quartal 2024.
Der operative Cashflow verbesserte sich deutlich und stieg um 20,7 % auf 175 Millionen US-Dollar. Das Unternehmen zeigte eine aktive Kapitalverwendung, indem es 226 Millionen US-Dollar in Akquisitionen investierte und 79 Millionen US-Dollar an Dividenden zahlte. Die Margen gerieten jedoch unter Druck, wobei die operative Marge um 60 Basispunkte auf 19,8 % sank und die bereinigte EBITDA-Marge um 50 Basispunkte auf 23,1 % zur眉ckging, was teilweise auf Auswirkungen von Altlasten aus Autoversicherungsanspr眉chen zur眉ckzuf眉hren ist.
- Revenue grew 12.1% to $1 billion with organic growth of 7.3%
- Net income increased 9.3% to $141 million
- Operating cash flow improved 20.7% to $175 million
- Double-digit revenue growth across all major service lines
- Strong acquisition activity with $226 million invested
- Operating margin decreased 60 basis points to 19.8%
- Adjusted EBITDA margin declined 50 basis points to 23.1%
- EBITDA margins pressured by legacy auto claims (70 basis points impact)
- Insurance and claims costs increased significantly as percentage of revenue
Insights
Rollins delivered strong Q2 results with 12.1% revenue growth, 11.1% earnings growth, despite slight margin pressure from legacy auto claims.
Rollins' Q2 2025 results show impressive top-line momentum with revenue reaching
The company's cash flow generation improved significantly, with operating cash flow up
However, there are some margin pressures to note. Adjusted operating margin decreased 30 basis points to
Breaking down the cost structure, employee expenses (
The
Strong Revenue Growth Drives Healthy Improvements in Earnings and Cash Flow
Key Highlights
- Second quarter revenues were
$1 billion 12.1% over the second quarter of 2024 with organic revenues* increasing7.3% . - Quarterly operating income was
$198 million 8.7% over the second quarter of 2024. Quarterly operating margin was19.8% , a decrease of 60 basis points versus the second quarter of 2024. Adjusted operating income* was$206 million 10.3% over the prior year. Adjusted operating margin* was20.6% , a decrease of 30 basis points compared to the prior year. - Adjusted EBITDA* was
$231 million 10.0% over the prior year. Adjusted EBITDA margin* was23.1% , a decrease of 50 basis points versus the second quarter of 2024. - Quarterly net income was
$141 million 9.3% over the prior year. Adjusted net income* was$147 million 11.1% over the prior year. - Quarterly EPS was
$0.29 7.4% increase over the prior year EPS of$0.27 $0.30 11.1% over the prior year. - Operating cash flow was
$175 million 20.7% compared to the prior year. The Company invested$226 million $7 million $79 million
*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.
Management Commentary
"Our results for the second quarter reflect strong execution by our teammates throughout our business," said Jerry Gahlhoff, Jr., President and CEO. "The demand environment is healthy, and we saw double-digit revenue growth across all major service lines. As we start the second half of the year, we are focused on driving growth while also improving profitability. We remain well-positioned to deliver strong results in 2025 and beyond," Mr. Gahlhoff added.听
"In addition to double-digit revenue and adjusted earnings growth, cash flow compounded at a healthy rate," said Kenneth Krause, Executive Vice President and CFO. "While EBITDA margins were pressured from developments on legacy auto claims by 70 basis points in the quarter, our underlying operations yielded healthy margin performance. Additionally, we continue to execute a balanced capital allocation program enabled by compounding cash flow, a strong balance sheet, and access to investment grade credit markets," Mr. Krause concluded.
Three and Six Months Ended Financial Highlights
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
Variance | Variance | ||||||||||||
(unaudited, in thousands, except per share data and margins) | 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | |||||
GAAP Metrics | |||||||||||||
Revenues | 12.1听% | $听 1,822,031 | $听 1,640,269 | $听 181,762 | 11.1听% | ||||||||
Gross profit (1) | $听 56,031 | 11.6听% | $听听 960,036 | $听听 864,426 | $听听听 95,610 | 11.1听% | |||||||
Gross profit margin (1) | 53.8听% | 54.0听% | 听听 (20) bps | 52.7听% | 52.7听% | 听听听听听听听 鈥� bps | |||||||
Operating income | $听 15,956 | 8.7听% | $听听 340,981 | $听听 314,801 | $听听听 26,180 | 8.3听% | |||||||
Operating margin | 19.8听% | 20.4听% | 听听 (60) bps | 18.7听% | 19.2听% | 听听听听 (50) bps | |||||||
Net income | $听 12,092 | 9.3听% | $听听 246,737 | $听听 223,791 | $听听听 22,946 | 10.3听% | |||||||
EPS | $听听听听听 0.29 | $听听听听听 0.27 | $听听听听听 0.02 | 7.4听% | $听听听听听听听 0.51 | $听听听听听听听 0.46 | $听听听听听听听 0.05 | 10.9听% | |||||
Net cash provided by operating activities | $听 30,007 | 20.7听% | $听听 322,014 | $听听 272,548 | $听听听 49,466 | 18.1听% | |||||||
Non-GAAP Metrics | |||||||||||||
Adjusted operating income (2) | $听 19,304 | 10.3听% | $听听 352,769 | $听听 324,285 | $听听听 28,484 | 8.8听% | |||||||
Adjusted operating margin (2) | 20.6听% | 20.9听% | 听听 (30) bps | 19.4听% | 19.8听% | 听听听听 (40) bps | |||||||
Adjusted net income (2) | $听 14,673 | 11.1听% | $听听 254,775 | $听听 230,586 | $听听听 24,189 | 10.5听% | |||||||
Adjusted EPS (2) | $听听听听听 0.30 | $听听听听听 0.27 | $听听听听听 0.03 | 11.1听% | $听听听听听听听 0.53 | $听听听听听听听 0.48 | $听听听听听听听 0.05 | 10.4听% | |||||
Adjusted EBITDA (2) | $听 21,064 | 10.0听% | $听听 403,009 | $听听 370,871 | $听听听 32,138 | 8.7听% | |||||||
Adjusted EBITDA margin (2) | 23.1听% | 23.6听% | 听听 (50) bps | 22.1听% | 22.6听% | 听听听听 (50) bps | |||||||
Free cash flow (2) | $听 31,627 | 23.2听% | $听听 308,157 | $听听 256,681 | $听听听 51,476 | 20.1听% | |||||||
(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 of the most directly comparable GAAP measure. |
The following table presents financial information, including our significant expense categories, for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
(unaudited, in thousands) | 2025 | 2024 | 2025 | 2024 | ||||
$ | % of | $ | % of | $ | % of | $ | % of | |
Revenue | $听听 999,527 | 100.0听% | $听听 891,920 | 100.0听% | $听 1,822,031 | 100.0听% | $听 1,640,269 | 100.0听% |
Less: | ||||||||
Cost of services provided (exclusive of depreciation and amortization below): | ||||||||
Employee expenses | 298,354 | 29.8听% | 268,043 | 30.1听% | 560,077 | 30.7听% | 506,572 | 30.9听% |
Materials and supplies | 59,500 | 6.0听% | 57,047 | 6.4听% | 107,991 | 5.9听% | 101,833 | 6.2听% |
Insurance and claims | 20,734 | 2.1听% | 15,034 | 1.7听% | 37,258 | 2.0听% | 32,678 | 2.0听% |
Fleet expenses | 41,834 | 4.2听% | 34,653 | 3.9听% | 78,691 | 4.3听% | 65,351 | 4.0听% |
Other cost of services provided (1) | 41,439 | 4.1听% | 35,508 | 4.0听% | 77,978 | 4.3听% | 69,409 | 4.2听% |
Total cost of services provided (exclusive of depreciation and amortization below) | 461,861 | 46.2听% | 410,285 | 46.0听% | 861,995 | 47.3听% | 775,843 | 47.3听% |
Sales, general and administrative: | ||||||||
Selling and marketing expenses | 140,177 | 14.0听% | 125,449 | 14.1听% | 238,428 | 13.1听% | 208,360 | 12.7听% |
Administrative employee expenses | 89,303 | 8.9听% | 79,417 | 8.9听% | 170,783 | 9.4听% | 155,195 | 9.5听% |
Insurance and claims | 12,939 | 1.3听% | 9,088 | 1.0听% | 22,943 | 1.3听% | 19,614 | 1.2听% |
Fleet expenses | 10,443 | 1.0听% | 9,195 | 1.0听% | 19,846 | 1.1听% | 16,960 | 1.0听% |
Other sales, general and administrative (2) | 54,734 | 5.5听% | 48,398 | 5.4听% | 106,109 | 5.8听% | 94,475 | 5.8听% |
Total sales, general and administrative | 307,596 | 30.8听% | 271,547 | 30.4听% | 558,109 | 30.6听% | 494,604 | 30.2听% |
Depreciation and amortization | 31,737 | 3.2听% | 27,711 | 3.1听% | 60,946 | 3.3听% | 55,021 | 3.4听% |
Interest expense, net | 7,380 | 0.7听% | 7,775 | 0.9听% | 13,176 | 0.7听% | 15,500 | 0.9听% |
Other (income) expense, net | (292) | 鈥斕�% | (412) | 鈥斕�% | (984) | (0.1)听% | (351) | 鈥斕�% |
Income tax expense | 49,756 | 5.0听% | 45,617 | 5.1听% | 82,052 | 4.5听% | 75,861 | 4.6听% |
Net income | $听听 141,489 | 14.2听% | $听听 129,397 | 14.5听% | $听听 246,737 | 13.5听% | $听听 223,791 | 13.6听% |
1)听Other cost of services provided includes facilities costs, professional services, maintenance & repairs, software license costs, and other expenses directly related to providing services. |
2)听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
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: expectations with respect to our financial and business performance; demand for our services; focus on driving growth while improving profitability; being well-positioned to continue delivering strong results in 2025 and beyond; and a balanced capital allocation program enabled by compounding cash flow, a strong balance sheet, and access to investment grade credit markets.
These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and may also be described from time to time in our future reports filed with the SEC.听
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, July听24, 2025 at 8:30 a.m. Eastern Time to discuss the second quarter 2025 results. The conference call will also broadcast live over the internet via a link provided on the Rollins, Inc. website at . Interested parties can also dial into the call at 1-877-869-3839 (domestic) or +1-201-689-8265 (internationally) with conference ID of 13754407. For interested individuals unable to join the call, a replay will be available on the website for 180 days.
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) (unaudited) | |||
June 30, | December 31, | ||
ASSETS | |||
Cash and cash equivalents | $听听听听听 123,035 | $听听听听听听听 89,630 | |
Trade receivables, net | 229,735 | 196,081 | |
Financed receivables, short-term, net | 43,722 | 40,301 | |
Materials and supplies | 43,239 | 39,531 | |
Other current assets | 98,176 | 77,080 | |
Total current assets | 537,907 | 442,623 | |
Equipment and property, net | 129,713 | 124,839 | |
Goodwill | 1,337,903 | 1,161,085 | |
Intangibles, net | 600,970 | 541,589 | |
Operating lease right-of-use assets | 418,717 | 414,474 | |
Financed receivables, long-term, net | 102,625 | 89,932 | |
Other assets | 52,205 | 45,153 | |
Total assets | $听听 3,180,040 | $听听 2,819,695 | |
LIABILITIES | |||
Short-term debt | $听听听听听听听 59,989 | $听听听听听听听听听听听听听听 鈥� | |
Accounts payable | 73,798 | 49,625 | |
Accrued insurance 鈥� current | 64,483 | 54,840 | |
Accrued compensation and related liabilities | 120,826 | 122,869 | |
Unearned revenues | 200,110 | 180,851 | |
Operating lease liabilities 鈥� current | 130,822 | 121,319 | |
Other current liabilities | 138,052 | 115,658 | |
Total current liabilities | 788,080 | 645,162 | |
Accrued insurance, less current portion | 57,706 | 61,946 | |
Operating lease liabilities, less current portion | 291,093 | 295,899 | |
Long-term debt | 485,278 | 395,310 | |
Other long-term accrued liabilities | 114,012 | 90,785 | |
Total liabilities | 1,736,169 | 1,489,102 | |
STOCKHOLDERS' EQUITY | |||
Common stock | 484,640 | 484,372 | |
Retained earnings and other equity | 959,231 | 846,221 | |
Total stockholders' equity | 1,443,871 | 1,330,593 | |
Total liabilities and stockholders' equity | $听听 3,180,040 | $听听 2,819,695 | |
听
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data) (unaudited) 听 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
REVENUES | |||||||
Customer services | $听听听听听 999,527 | $听听听听听 891,920 | $听听 1,822,031 | $听听 1,640,269 | |||
COSTS AND EXPENSES | |||||||
Cost of services provided (exclusive of depreciation and amortization below) | 461,861 | 410,285 | 861,995 | 775,843 | |||
Sales, general and administrative | 307,596 | 271,547 | 558,109 | 494,604 | |||
Depreciation and amortization | 31,737 | 27,711 | 60,946 | 55,021 | |||
Total operating expenses | 801,194 | 709,543 | 1,481,050 | 1,325,468 | |||
OPERATING INCOME | 198,333 | 182,377 | 340,981 | 314,801 | |||
Interest expense, net | 7,380 | 7,775 | 13,176 | 15,500 | |||
Other (income) expense, net | (292) | (412) | (984) | (351) | |||
CONSOLIDATED INCOME BEFORE INCOME TAXES | 191,245 | 175,014 | 328,789 | 299,652 | |||
PROVISION FOR INCOME TAXES | 49,756 | 45,617 | 82,052 | 75,861 | |||
NET INCOME | $听听听听听 141,489 | $听听听听听 129,397 | $听听听听听 246,737 | $听听听听听 223,791 | |||
NET INCOME PER SHARE - BASIC AND DILUTED | $听听听听听听听听听听 0.29 | $听听听听听听听听听听 0.27 | $听听听听听听听听听听 0.51 | $听听听听听听听听听听 0.46 | |||
Weighted average shares outstanding - basic | 484,643 | 484,244 | 484,530 | 484,187 | |||
Weighted average shares outstanding - diluted | 484,674 | 484,419 | 484,559 | 484,356 | |||
DIVIDENDS PAID PER SHARE | $听听听听听听听听听 0.165 | $听听听听听听听听听 0.150 | $听听听听听听听听听 0.330 | $听听听听听听听听听 0.300 | |||
听
ROLLINS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW INFORMATION (in thousands) (unaudited) 听 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
OPERATING ACTIVITIES | |||||||
Net income | $听听听听听 141,489 | $听听听听听 129,397 | $听听听听听 246,737 | $听听听听听 223,791 | |||
Depreciation and amortization | 31,737 | 27,711 | 60,946 | 55,021 | |||
Change in working capital and other operating activities | 1,896 | (11,993) | 14,331 | (6,264) | |||
Net cash provided by operating activities | 175,122 | 145,115 | 322,014 | 272,548 | |||
INVESTING ACTIVITIES | |||||||
Acquisitions, net of cash acquired | (226,387) | (34,522) | (253,578) | (81,654) | |||
Capital expenditures | (7,076) | (8,696) | (13,857) | (15,867) | |||
Other investing activities, net | 2,939 | 2,062 | 4,344 | 3,900 | |||
Net cash used in investing activities | (230,524) | (41,156) | (263,091) | (93,621) | |||
FINANCING ACTIVITIES | |||||||
Net borrowings (repayments) | 59,989 | (9,000) | 155,204 | 11,000 | |||
Payment of dividends | (79,463) | (72,578) | (159,373) | (145,167) | |||
Other financing activities, net | (4,484) | (28,054) | (24,401) | (39,719) | |||
Net cash used in financing activities | (23,958) | (109,632) | (28,570) | (173,886) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,218 | (601) | 3,052 | (2,169) | |||
Net (decrease) increase in cash and cash equivalents | $听听听听听 (78,142) | $听听听听听听听 (6,274) | $听听听听听听听 33,405 | $听听听听听听听听听 2,872 | |||
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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 income, statement of financial position 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:
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 net income those expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control.听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 and Saela Pest Control, excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
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 resulting from the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, and excluding gains and losses on the sale of non-operational assets and gains 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 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 and Saela 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
Set forth below is a reconciliation of the non-GAAP financial measures contained in this release with their most directly comparable GAAP measures.
(unaudited, in thousands, except per share data and margins) 听 | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Variance | Variance | ||||||||||||||
2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||
Reconciliation of Revenues to Organic Revenues | |||||||||||||||
Revenues | 107,607 | 12.1 | $听 1,822,031 | $听 1,640,269 | 181,762 | 11.1 | |||||||||
Revenues from acquisitions | (42,602) | 鈥� | (42,602) | 4.8 | (61,152) | 鈥� | (61,152) | 3.7 | |||||||
Organic revenues | 65,005 | 7.3 | $听 1,760,879 | $听 1,640,269 | 120,610 | 7.4 | |||||||||
Reconciliation of Residential Revenues to Organic Residential Revenues | |||||||||||||||
Residential revenues | 47,251 | 11.6 | $听听 811,978 | $听听 737,752 | 74,226 | 10.1 | |||||||||
Residential revenues from acquisitions | (27,208) | 鈥� | (27,208) | 6.7 | (35,574) | 鈥� | (35,574) | 4.9 | |||||||
Residential organic revenues | 20,043 | 4.9 | $听听 776,404 | $听听 737,752 | 38,652 | 5.2 | |||||||||
Reconciliation of Commercial Revenues to Organic Commercial Revenues | |||||||||||||||
Commercial revenues | 32,720 | 11.4 | $听听 604,847 | $听听 545,884 | 58,963 | 10.8 | |||||||||
Commercial revenues from acquisitions | (8,689) | 鈥� | (8,689) | 3.0 | (15,721) | 鈥� | (15,721) | 2.9 | |||||||
Commercial organic revenues | 24,031 | 8.4 | $听听 589,126 | $听听 545,884 | 43,242 | 7.9 | |||||||||
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues | |||||||||||||||
Termite and ancillary revenues | 25,831 | 13.9 | $听听 383,985 | $听听 338,084 | 45,901 | 13.6 | |||||||||
Termite and ancillary revenues from acquisitions | (6,705) | 鈥� | (6,705) | 3.6 | (9,857) | 鈥� | (9,857) | 2.9 | |||||||
Termite and ancillary organic revenues | 19,126 | 10.3 | $听听 374,128 | $听听 338,084 | 36,044 | 10.7 | |||||||||
鈥� | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Variance | Variance | ||||||||||||||
2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||
Reconciliation of Operating Income and Operating Income Margin to Adjusted Operating Income and Adjusted Operating Margin | |||||||||||||||
Operating income | $听听 198,333 | $听听 182,377 | $听听 340,981 | $听 314,801 | |||||||||||
Acquisition-related expenses (1) | 7,567 | 4,219 | 11,788 | 9,484 | |||||||||||
Adjusted operating income | $听听 205,900 | $听听 186,596 | 19,304 | 10.3 | $听听 352,769 | $听 324,285 | 28,484 | 8.8 | |||||||
Revenues | $听听 999,527 | $听听 891,920 | $听 1,822,031 | $听 1,640,269 | |||||||||||
Operating margin | 19.8听% | 20.4听% | 18.7听% | 19.2听% | |||||||||||
Adjusted operating margin | 20.6听% | 20.9听% | 19.4听% | 19.8听% | |||||||||||
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS | |||||||||||||||
Net income | $听听 141,489 | $听听 129,397 | $听听 246,737 | $听 223,791 | |||||||||||
Acquisition-related expenses (1) | 7,567 | 4,219 | 11,788 | 9,484 | |||||||||||
Gain on sale of assets, net (2) | (292) | (412) | (984) | (351) | |||||||||||
Tax impact of adjustments (3) | (1,862) | (975) | (2,766) | (2,338) | |||||||||||
Adjusted net income | $听听 146,902 | $听听 132,229 | 14,673 | 11.1 | $听听 254,775 | $听 230,586 | 24,189 | 10.5 | |||||||
EPS - basic and diluted | $听听听听听听听 0.29 | $听听听听听听听 0.27 | $听听听听听听听 0.51 | $听听听听听听听 0.46 | |||||||||||
Acquisition-related expenses (1) | 0.02 | 0.01 | 0.02 | 0.02 | |||||||||||
Gain on sale of assets, net (2) | 鈥� | 鈥� | 鈥� | 鈥� | |||||||||||
Tax impact of adjustments (3) | 鈥� | 鈥� | (0.01) | 鈥� | |||||||||||
Adjusted EPS - basic and diluted (4) | $听听听听听听听 0.30 | $听听听听听听听 0.27 | 0.03 | 11.1 | $听听听听听听听 0.53 | $听听听听听听听 0.48 | 0.05 | 10.4 | |||||||
Weighted average shares outstanding 鈥� basic | 484,643 | 484,244 | 484,530 | 484,187 | |||||||||||
Weighted average shares outstanding 鈥� diluted | 484,674 | 484,419 | 484,559 | 484,356 | |||||||||||
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin | |||||||||||||||
Net income | $听听 141,489 | $听听 129,397 | $听听 246,737 | $听 223,791 | |||||||||||
Depreciation and amortization | 31,737 | 27,711 | 60,946 | 55,021 | |||||||||||
Interest expense, net | 7,380 | 7,775 | 13,176 | 15,500 | |||||||||||
Provision for income taxes | 49,756 | 45,617 | 82,052 | 75,861 | |||||||||||
EBITDA | $听听 230,362 | $听听 210,500 | 19,862 | 9.4 | $听听 402,911 | $听 370,173 | 32,738 | 8.8 | |||||||
Acquisition-related expenses (1) | 1,082 | 鈥� | 1,082 | 1,049 | |||||||||||
Gain on sale of assets, net (2) | (292) | (412) | (984) | (351) | |||||||||||
Adjusted EBITDA | $听听 231,152 | $听听 210,088 | 21,064 | 10.0 | $听听 403,009 | $听 370,871 | 32,138 | 8.7 | |||||||
Revenues | $听听 999,527 | $听听 891,920 | 107,607 | $听 1,822,031 | $听 1,640,269 | 181,762 | |||||||||
EBITDA margin | 23.0听% | 23.6听% | 22.1听% | 22.6听% | |||||||||||
Incremental EBITDA margin | 18.5听% | 18.0听% | |||||||||||||
Adjusted EBITDA margin | 23.1听% | 23.6听% | 22.1听% | 22.6听% | |||||||||||
Adjusted incremental EBITDA margin | 19.6听% | 17.7听% | |||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion | |||||||||||||||
Net cash provided by operating activities | $听听 175,122 | $听听 145,115 | $听听 322,014 | $听 272,548 | |||||||||||
Capital expenditures | (7,076) | (8,696) | (13,857) | (15,867) | |||||||||||
Free cash flow | $听听 168,046 | $听听 136,419 | 31,627 | 23.2 | $听听 308,157 | $听 256,681 | 51,476 | 20.1 | |||||||
Free cash flow conversion | 118.8听% | 105.4听% | 124.9听% | 114.7听% | |||||||||||
听
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Reconciliation of SG&A to Adjusted SG&A | |||||||
SG&A | $听听听听听听听听听听听听听听听听听 307,596 | $听听听听听听听听听听听听听听听听听 271,547 | $听听听听听听听听听听听听听听听听听 558,109 | $听听听听听听听听听听听听听听听听听 494,604 | |||
Acquisition-related expenses (1) | 1,082 | 鈥� | 1,082 | 1,049 | |||
Adjusted SG&A | $听听听听听听听听听听听听听听听听听 306,514 | $听听听听听听听听听听听听听听听听听 271,547 | $听听听听听听听听听听听听听听听听听 557,027 | $听听听听听听听听听听听听听听听听听 493,555 | |||
Revenues | $听听听听听听听听听听听听听听听听听 999,527 | $听听听听听听听听听听听听听听听听听 891,920 | $听听听听听听听听听听听听听听 1,822,031 | $听听听听听听听听听听听听听听 1,640,269 | |||
Adjusted SG&A as a % of revenues | 30.7听% | 30.4听% | 30.6听% | 30.1听% | |||
听
Period Ended | Period Ended | ||
Reconciliation of Debt and Net Income to Leverage Ratio | |||
Short-term debt (5) | $听听听听听听听听听听听听听听听听听听听 60,000 | $听听听听听听听听听听听听听听听听听听听听听听听听听听 鈥� | |
Long-term debt (6) | 500,000 | 397,000 | |
Operating lease liabilities (7) | 421,915 | 417,218 | |
Cash adjustment (8) | (110,732) | (80,667) | |
Adjusted net debt | $听听听听听听听听听听听听听听听听听 871,183 | $听听听听听听听听听听听听听听听听听 733,551 | |
Net income | $听听听听听听听听听听听听听听听听听 489,325 | $听听听听听听听听听听听听听听听听听 466,379 | |
Depreciation and amortization | 119,145 | 113,220 | |
Interest expense, net | 25,353 | 27,677 | |
Provision for income taxes | 170,042 | 163,851 | |
Operating lease cost (9) | 148,241 | 133,420 | |
Stock-based compensation expense | 34,233 | 29,984 | |
Adjusted EBITDAR | $听听听听听听听听听听听听听听听听听 986,339 | $听听听听听听听听听听听听听听听听听 934,531 | |
Leverage ratio | 0.9x | 0.8x | |
(1) Consists of expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela 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) As of June听30, 2025, the Company had outstanding borrowings of |
(6) As of June听30, 2025, the Company had outstanding borrowings of |
(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 |
(9) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less. |
听
For Further Information Contact
Lyndsey Burton (404) 888-2348
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