Rollins began the year with steady first-quarter results, meeting Wall Street’s expectations for both revenue and adjusted earnings. Management cited broad-based growth across residential, commercial, and termite services, with particular strength in recurring commercial revenue. CEO Jerry Gahlhoff emphasized that investments in sales staffing and targeted marketing, made ahead of peak pest season, positioned the company for continued momentum. While there was one fewer business day in the quarter and some modest headwinds from foreign currency, the company reported that demand conditions remained generally stable and that recurring customer relationships continued to support retention and growth.
Is now the time to buy ROL? Find out in our full research report (it’s free).
Rollins (ROL) Q1 CY2025 Highlights:
- Revenue: $822.5 million vs analyst estimates of $820 million (9.9% year-on-year growth, in line)
- Adjusted EPS: $0.22 vs analyst estimates of $0.22 (in line)
- Adjusted EBITDA: $171.9 million vs analyst estimates of $173.6 million (20.9% margin, 1% miss)
- Operating Margin: 17.3%, in line with the same quarter last year
- Organic Revenue was up 7.4% year on year
- Market Capitalization: $27.34 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Rollins’s Q1 Earnings Call
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Tim Mulrooney (William Blair) asked about residential and termite demand trends amid broader industry commentary of softening leads. CEO Jerry Gahlhoff said demand was stable, noting improvements through the quarter and no negative signals in the data.
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Ronan Kennedy (Barclays) questioned the drivers of top-line growth and the company’s resilience in a downturn. CFO Kenneth Krause highlighted pricing power, volume growth, and M&A as key contributors, while Gahlhoff emphasized the value of Rollins’ multi-brand approach.
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George Tong (Goldman Sachs) inquired about the moderation in residential and termite organic growth. Krause attributed it to one fewer workday and foreign currency headwinds, but said underlying demand remained intact.
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Jason Haas (Wells Fargo) asked about incremental margins excluding one-time impacts and future margin trajectory. Krause said that margins would have been higher absent pulled-forward marketing investments and expects improvement as the year progresses.
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Toni Kaplan (Morgan Stanley) explored the impact of marketing strategy adjustments and long-term growth drivers in termite. Gahlhoff pointed to strong customer relationships and cross-selling as key to sustaining elevated growth in the segment.
Catalysts in Upcoming Quarters
In future quarters, our analysts will track (1) the pace and effectiveness of Saela Pest Control’s integration and its impact on geographic and customer expansion, (2) improvements in incremental margins as early-year marketing and staffing investments are lapped, and (3) the ability of Rollins’ multi-brand strategy to sustain organic growth across residential, commercial, and termite segments. Continued capital deployment for strategic M&A and operational efficiency initiatives will also be important markers.
Rollins currently trades at $56.41, up from $54.88 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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