Rollins (ROL) Q4 2024 earnings summary

Executive summary

• Achieved record revenue of $3.4 billion for 2024, up 10.3% year-over-year, with strong demand and robust organic growth of 7.9% across all service lines.

• Adjusted earnings per share rose 11.2% to $0.99, and adjusted net income for Q4 increased nearly 10% year-over-year.

• Closed 44 acquisitions in 2024, including franchise buybacks, maintaining a robust M&A pipeline.

• Operating income and cash flow saw significant year-over-year increases, with operating margin expansion and strong free cash flow.

• Ended 2024 with the highest quarterly organic growth rate of the year; residential business grew 6.5% organically in Q4.

Financial highlights

• Full-year revenue increased 10.3% to $3.4B; Q4 revenue up 10.4% to $832M.

• Operating cash flow was $608M (up 15%); free cash flow was $580M (up 17%); Q4 free cash flow was $184M (up 29.9%).

• Q4 GAAP operating income was $151M (up 8.3%), adjusted operating income $155M (up 7.3%).

• Adjusted EBITDA for FY 2024 was $771M (up 11.6%), with a margin of 22.5%; Q4 adjusted EBITDA margin was 21.8%.

• Leverage ratio at year-end was 0.8x, reflecting a strong balance sheet and conservative leverage.

Outlook and guidance

• Expecting 2025 organic growth of 7%-8%, with 2%-3% additional growth from M&A.

• Adjusted incremental EBITDA margin expected to approach 30–35% in the medium term.

• Free cash flow conversion expected to remain above 100% in 2025.

• Pricing expected to remain at or above CPI levels, targeting 3%-4% price increases.

• Compounding cash flow and a strong balance sheet to enable balanced capital allocation.