Rollins third-quarter revenue rises 6.2% to $1.09 billion as operating income falls 1.0%

Rollins, Inc. (ROL) said Wednesday its third-quarter revenue rose 6.2% from a year earlier to $1.09 billion, while operating income fell 1.0% to $223 million.

The company said in a filing that the unaudited figures cover the quarter ended Sept. 30, 2026.

Here's how the company did:

• Revenue: $1.09 billion vs. $1.03 billion a year earlier
• Operating income: $223 million vs. $225 million a year earlier
• Net income: $158 million vs. $164 million a year earlier
• Diluted EPS: $0.33 vs. $0.34 a year earlier
• Adjusted EPS: $0.34 vs. $0.35 a year earlier
• Adjusted EBITDA: $257 million vs. $258 million a year earlier
• Operating cash flow: $242 million vs. $191 million a year earlier

Organic revenue, which excludes acquisitions completed within the prior 12 months, rose 4.4% to $1.07 billion.

For the first nine months, revenue was $3.07 billion, up 8.0% from $2.85 billion a year earlier.

Nine-month net income was $410 million, down 0.1% from a year earlier, and nine-month EPS was $0.85, unchanged.

Operating margin was 20.5%, a decrease of 140 basis points from a year earlier. Basis points are hundredths of a percentage point.

Adjusted operating margin was 21.2%, also down 140 basis points, and adjusted operating income was $231 million, down 0.6%.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, adjusted for certain items, was $257 million, down 0.7%. Its margin was 23.5%, down 170 basis points.

Adjusted net income was $163 million, down 3.1% from a year earlier.

Operating cash flow was $242 million, up 26.4% from a year earlier. The company said cash flow was favorably impacted by $63 million due to the timing of a tax refund associated with its tax credit planning strategy.

Free cash flow was $235 million, up 28.8%. Free cash flow conversion, which measures how much net income turns into cash, was 149.1%.

The company invested $27 million in acquisitions and $6 million in capital expenditures. It also spent $120 million on share repurchases and paid $87 million in dividends.

Dividends paid per share were 18.25 cents, up from 16.5 cents a year earlier.

Employee expenses were $328 million, or 30.1% of revenue, compared with $312 million, or 30.4%, a year earlier.

Insurance and claims within cost of services rose to $23 million from $11 million a year earlier.

Selling and marketing expenses were $146 million, or 13.4% of revenue, compared with $139 million a year earlier.

Acquisition-related expenses were $8 million, compared with $7 million a year earlier.

“We are disappointed with our third quarter performance and are acting with urgency to address the challenges impacting our results,” said President and Chief Executive Officer Jerry Gahlhoff, Jr.

Gahlhoff also said the company’s “record of 100 consecutive quarters of revenue growth reflects the durability of our business.”

“Residential customer acquisition remained under pressure in the third quarter,” said Executive Vice President and Chief Financial Officer Will Harkins.

Harkins also said: “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.”

The company said its financial flexibility supported more meaningful share repurchase activity during the quarter.

The company said its capital allocation priorities remain unchanged, covering accretive acquisitions, a healthy and sustainable dividend, and opportunistic share repurchases.

The release did not include a financial outlook for the fourth quarter or the full year.

The company plans a conference call Thursday to discuss the results.

Rollins said it serves more than 2.8 million customers and has approximately 22,000 employees from more than 850 locations.