Rollins (ROL) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue grew 7.9% year-over-year to $1.1 billion, with organic growth of 5.7% and acquisition-driven growth of 2.2%.

• Adjusted EPS increased 6.7% to $0.32, and adjusted net income rose 3.4% to $151.9 million.

• Relationship-based channels (direct sales, door-to-door, commercial) outperformed, while consumer-initiated residential demand lagged but showed late-quarter improvement.

• Organizational and operational changes, including leadership shifts, were implemented to improve execution and resource alignment.

• Free cash flow was $166.1 million, down 1.2% due to tax timing, but conversion remained strong at 115%.

Financial highlights

• Total revenue increased 7.9% year-over-year to $1.1 billion; organic growth was 5.7%.

• Residential revenue grew 6.6%, commercial pest control 8.6%, and termite/ancillary 10.5% year-over-year.

• Gross margin was 52.8%, down 100 basis points due to higher employee, medical, and fuel costs.

• Adjusted EBITDA reached $236 million (21.9% margin), up 2.2% year-over-year.

• Free cash flow conversion was 115% for the quarter.

Outlook and guidance

• Full-year 2026 outlook: at least 6% organic growth, 2–3% inorganic growth, incremental margins of at least 10%, and free cash flow conversion above 100%.

• Medium-term targets: 7–8% organic growth, 2–3% M&A-driven growth, and adjusted incremental EBITDA margin of 30–35%.

• Effective tax rate expected to remain under 25% for 2026.