ROL | Q4 2024

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Overview

• Non-GAAP EPS of $0.23 in-line.

• Revenue of $832.17M (+10.4% Y/Y) beats by $14.67M.

Takeaways

Rollins (ROL) closed out 2024 with another strong year, delivering $3.4 billion in revenue—a 10.3% increase over the prior year. Earnings grew 7.9%, while adjusted earnings per share rose 11.2%.

Organic growth remained healthy at 7.9%, with acquisitions adding further momentum.

Free cash flow increased 17% to $580 million, and operating cash flow climbed 15% to $608 million. This strong cash generation allowed the company to deploy nearly $500 million in capital, balancing investments for growth with continued shareholder returns through their rapidly growing dividend.

The fourth quarter was particularly strong for Rollins, with revenue rising 10.4% and organic growth climbing to 8.5%—the highest rate of the year. Residential revenue increased 8.4%, commercial pest control grew 9.2%, and termite and ancillary services saw a notable 16.6% jump.

Gross margin expanded by 40 basis points to 51.3%, benefiting from cost efficiencies in labor and materials, though insurance and claims expenses remained a headwind.

Adjusted operating income increased 7.3% to $155 million, while adjusted EBITDA reached $181 million with a 21.8% margin.

Net income for the quarter was $106 million, or $0.22 per share, with adjusted net income at $109 million, or $0.23 per share—reflecting a near 10% year-over-year increase.

On the call, CEO Jerry Gahlhoff noted that demand remains strong across all service lines, reinforcing Rollins’ position in a multibillion-dollar B2B market.

The company also remained active on the acquisition front, closing 44 tuck-in deals throughout the year and maintaining a strong pipeline heading into 2025.

On pricing, CFO Kenneth Krause addressed questions about potential normalization. He emphasized that Rollins has historically priced its services slightly above CPI and intends to maintain this approach moving forward.

With inflation still somewhat elevated, the company expects to implement price increases in the 3% to 4% range in 2025, which is consistent with prior years. Krause emphasized that pest control remains an essential service, and customers continue to recognize its value, supporting their disciplined pricing strategies.

For the current year, Rollins expects organic growth of 7% to 8% in 2025, with acquisitions contributing an additional 2% to 3%. With healthy demand trends and a disciplined approach to capital allocation, 2025 should be another year of solid growth for the company.

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