ROL | Q1 2025

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Overview

• Non-GAAP EPS of $0.22 in-line.

• Revenue of $822.5M (+10.0% Y/Y) beats by $6.52M.

Takeaways

Rollins (ROL) kicked off 2025 with a strong first quarter, growing total revenue by nearly 10% and organic revenue by 7.4%—even with one fewer business day in the period.

The company’s gross margin came in at 51.4%—the highest first-quarter margin the company has posted in recent history.

With that, operating income grew 7.7% to $143 million, with adjusted operating income at $147 million.

Free cash flow was up a whopping 17% to $140 million, and net income rose to $105 million, or $0.22 per share.

On the call, CEO Jerry Gahlhoff said growth was solid across all major service lines. Residential, commercial, and termite services all posted healthy gains, with the termite and ancillary segment leading the way at over 13% growth.

The big news this quarter was the acquisition of Saela Pest Control. Rollins has known and respected Saela for years, and their president, Mitch Smith, is actually a former Orkin division leader—so the relationship goes way back.

According to Jerry, Saela stood out for three key reasons: their strong service-first culture, their operational excellence, and their presence in strategic regions like the Pacific Northwest, Mountain West, and Midwest.

Adding Saela strengthens Rollins’ multi-brand strategy, which the company sees as a competitive advantage. It allows them to reach potential customers through different brands while also diversifying how they acquire those customers.

On the commercial side, business is also looking very strong. Rollins saw solid double-digit growth, even with some temporary weakness in one-time services like fumigation. Overall, investments in Orkin’s commercial division over the past year have started to pay off, with recurring commercial revenue growing close to 10%.

In the quarters to come, management expects organic growth to remain in the 7% to 8% range, while M&A-related growth is now expected to land between 3% and 4%, thanks to the Saela acquisition.

The deal is expected to add $45–$50 million in revenue this year and be accretive to earnings right away. Saela’s margin profile is similar to Rollins’, so it should be a smooth integration.

All in all, it was another great quarter in the books. Growth is holding strong, margins are expanding, and I don’t know what more you could’ve asked for from this company (besides a lower share price, of course).

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