Rollins (ROL) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 6.2% YoY to $1,089.7M, with 4.4% organic growth; operating income, net income and adjusted EBITDA declined YoY.

• Residential customer acquisition remained pressured as digital and AI/LLM-driven search changed how customers discover providers; recurring relationships and underlying demand remained healthy.

• Revenue growth reached a 100-quarter consecutive streak; marketing resources are shifting toward higher-return channels and stronger local visibility.

Financial highlights

• Revenue was $1,089.7M versus $1,026.1M, up 6.2%; growth comprised 4.4% organic and 1.8% acquisition growth.

• GAAP operating income was $222.9M, down 1.0%; adjusted operating income was $230.7M, down 0.6%.

• Net income was $157.9M, down 3.4%; adjusted net income was $163.3M, down 3.1%. Diluted EPS was $0.33 and adjusted EPS was $0.34, each down 2.9%.

• Q3 gross profit increased 4.3% to $582.9M, while gross margin declined 90 bps to 53.5%.

• 9M revenue rose 8.0% to $3,074.7M; net income was $409.7M, while adjusted net income increased 1.2% to $428.5M.

Outlook and guidance

• FY2026 organic revenue growth guidance is 4%–6%; adjusted incremental EBITDA margin is expected to range from slightly positive to 10%, depending on organic growth.

• Acquisition-related growth guidance remains 2%–3%, and free cash flow conversion is expected to exceed 100%.

• The 4% growth case assumes further lead deterioration, while 6% assumes meaningful improvement; Q4 seasonality and weather add uncertainty.

• 2027 guidance was deferred until Q4 and full-year results; medium-term targets remain 7%–8% organic growth and 30%–35% adjusted incremental EBITDA margin.

• FY2026 effective tax rate is expected below 25%, and fuel costs below 2% of revenue; interest expense is expected to be ~$40M.