ROL earnings analysis
What we found in ROL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Rollins delivered Q2 revenue growth of 7.9% to $1.079 billion, but both GAAP EPS of $0.30 and adjusted EPS of $0.32 reflected modest growth and margins deteriorated materially year over year. Gross margin declined 100 basis points to 52.8% and operating margin declined 110 basis points to 18.7%, as employee, materials and fleet costs increased and residential consumer lead volume slowed. Commercial and termite services outperformed, while management lowered its 2026 organic-growth expectation to at least 6%; liquidity remains adequate, though commercial-paper debt increased to $215.918 million.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth remained solid
- Q2 revenue rose $79.049 million, or 7.9% year over year, to $1.079 billion, following $906.424 million in Q1 2026. Organic revenue increased 5.7%, while acquisitions contributed 2.2%.
- Commercial and termite led growth
- Commercial revenue increased 8.6% to $347.913 million and termite and ancillary revenue increased 10.5% to $234.151 million; their organic growth rates were 7.2% and 8.9%, respectively.
- Cash conversion stayed above 100%
- Free cash flow was $166.077 million in Q2 and converted 115.4% of net income, despite a $49.7 million year-over-year increase in first-half tax payments. Q2 capex was only $6.429 million, or 0.6% of revenue.
- EPS increased year over year and sequentially
- GAAP diluted EPS increased from $0.29 to $0.30 year over year, while adjusted EPS increased 6.7% to $0.32. Sequentially, GAAP EPS improved from $0.22 in Q1 2026.
- Core service categories all expanded
- All major service offerings grew: residential revenue rose 6.6% to $485.845 million, commercial rose 8.6% to $347.913 million, and termite and ancillary rose 10.5% to $234.151 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Cost inflation compressed margins
- Operating margin fell 110 basis points year over year to 18.7%, and declined from 16.1% in Q1 only because of seasonal mix; gross margin was 52.8%, down 100 basis points year over year. Higher employee costs accounted for 70 basis points of gross-margin pressure, with materials and fleet costs adding 20 basis points each.
- Residential lead-volume slowdown
- Management said Q2 results fell short of expectations as slower consumer-initiated residential demand reduced lead volume. The revised outlook calls for at least 6% organic growth, versus the earlier 7%-8% organic-growth framing.
- Commercial-paper borrowing increased
- Short-term debt increased to $215.918 million at June 30, 2026 from $123.683 million at December 31, 2025, primarily commercial paper borrowings. Net interest expense rose $2.011 million year over year in Q2 to $9.391 million.
- First-half cash flow declined
- First-half operating cash flow declined 9.7% to $290.873 million and free cash flow fell 10.0% to $277.305 million. Management attributes much of the decline to approximately $49.7 million of incremental tax payments and expects the timing effect to moderate.
- No material risk-factor update reported
- Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. The filing nevertheless notes economic risks including inflation, tariffs, weather, labor shortages and supply-chain issues; environmental proceedings are assessed against a $1.0 million disclosure threshold.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.3
- Gross margin
- 52.8%
- Operating margin
- 18.7%
- Segment
- Residential pest control: $485.845 million, +6.6% year over year; organic growth +3.6%.
- Segment
- Commercial pest control: $347.913 million, +8.6% year over year; organic growth +7.2%.
- Segment
- Termite and ancillary: $234.151 million, +10.5% year over year; organic growth +8.9%.
- Segment
- Franchise and other: $10.667 million, -7.4% year over year.
What they said about what is next.
Management updated 2026 outlook to at least 6% organic revenue growth, 2%-3% inorganic growth, adjusted incremental EBITDA margin of at least 10%, and free-cash-flow conversion above 100%. This lowers the organic-growth framing from the previously cited 7%-8% range. Management also expects interest expense of approximately $40 million, an effective tax rate below 25%, and fuel costs below 2% of revenue in 2026.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 23, 2026
- Rollins reported Q1 2026 revenue of $906.4M, up 10.2% year-over-year, with organic revenue growth of 6.6% and acquisitions contributing 3.6%. GAAP EPS was $0.22 (unchanged YoY) while adjusted EPS rose 9.1% to $0.24;…
- 10-K · February 12, 2026
- Rollins reported a record 2025 with revenues of $3.761 billion (up 11.0% vs. 2024) driven by 6.9% organic growth and 4.1% from acquisitions, producing $526.7 million of net income (EPS $1.09) and free cash flow of…
- 10-Q · October 30, 2025
- Rollins reported a strong Q3: revenues rose to $1,026,106,000 (up $109,836,000 vs. Q3 2024) and operating income increased to $225,021,000, driving EPS to $0.34 (vs. $0.28). Operating cash flow remains robust at…
- 10-Q · April 24, 2025
- Rollins reported Q1 2025 revenue of $822,504,000 and diluted EPS of $0.22, roughly in line with consensus. Revenue was up materially year-over-year while operating margin and EPS were modestly above the comparable…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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