Rollins (ROL) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $823 million, up 9.9% year-over-year, with organic growth of 7.4% and the remainder from acquisitions, despite one less business day and FX headwinds.

• Net income rose 11.5% to $105 million, and EPS increased 15.8% to $0.22 per diluted share.

• Operating cash flow grew 15.3% to $147 million, with free cash flow at $140 million and conversion over 130%.

• Four acquisitions completed in Q1, including Saela Pest Control in April, expanding presence in key U.S. geographies and reinforcing the multi-brand strategy.

• Continued investments in sales staffing, marketing, and commercial division resources supported double-digit commercial growth.

Financial highlights

• Gross margin improved to 51.4%, up 20 basis points year-over-year, driven by pricing strategy and operational efficiencies.

• Adjusted EBITDA reached $172 million (6.9% YoY growth), with a margin of 20.9%, down 60 bps due to higher selling and marketing expenses.

• GAAP operating income was $143 million (+7.7% YoY); adjusted operating income was $147 million (+6.7% YoY).

• Free cash flow was $140 million, with a conversion rate of 133%.

• Dividend payout for the quarter was $80 million, up 10% year-over-year.

Outlook and guidance

• Management targets 7–8% organic revenue growth and 3–4% M&A contribution for 2025.

• Margin profile expected to improve in the second half of 2025 as investments normalize.

• Cash flow conversion expected to remain above 100% for 2025.

• Interest expense for Q2 2025 projected between $8 million and $10 million.

• Effective tax rate expected to approximate 26% for the full year.