Rollins’ third quarter results drew a positive market response, reflecting the company’s ability to deliver both revenue growth and margin stability. Management attributed this performance to strong execution across all major service lines, with particular emphasis on the ongoing integration of Saela and focused investments in the commercial division. CEO Jerry Gahlhoff highlighted the contribution of Saela’s balanced customer acquisition strategies and smoother-than-expected integration, while CFO Kenneth Krause noted that operational efficiencies and improvements in claims and fleet costs supported profitability. Management emphasized that the company’s diversified brand portfolio and recent M&A activity helped drive double-digit growth in both earnings and cash flow.
Is now the time to buy ROL? Find out in our full research report (it’s free for active Edge members).
Rollins (ROL) Q3 CY2025 Highlights:
- Revenue: $1.03 billion vs analyst estimates of $1.02 billion (12% year-on-year growth, in line)
- Adjusted EPS: $0.35 vs analyst estimates of $0.33 (6.4% beat)
- Adjusted EBITDA: $258.3 million vs analyst estimates of $249.8 million (25.2% margin, 3.4% beat)
- Operating Margin: 21.9%, in line with the same quarter last year
- Organic Revenue rose 7.2% year on year vs analyst estimates of 7.4% growth (18 basis point miss)
- Market Capitalization: $28.89 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 From Rollins’s Q3 Earnings Call
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Timothy Mulrooney (William Blair): Asked whether residential growth momentum was sustained through the quarter and about specifics behind Saela’s outperformance; CFO Kenneth Krause cited recurring revenue approaching 6% and CEO Jerry Gahlhoff detailed Saela’s above-plan revenue and effective integration.
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Ronan Kennedy (Barclays): Inquired about commercial investments' impact and margin trajectory; Krause explained that commercial productivity ramped up, driving recurring growth, and incremental margins benefited from both pricing and efficiency.
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Yehuda Silverman (Morgan Stanley): Questioned pricing acceptance for next year; Krause said the company’s “CPI plus” pricing model remains effective and will guide future increases to support margins.
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Keen Fai Tong (Goldman Sachs): Sought clarity on segments with the most opportunity for organic growth in Q4; Krause indicated healthy backlog and strong recurring growth in both termite/ancillary and residential service lines.
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Stephanie Benjamin Moore (Jefferies): Asked about the competitiveness of the M&A environment; Gahlhoff mentioned a robust pipeline, more private equity interest, but confidence in Rollins’ ability to source and execute deals efficiently.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the ongoing integration and performance of recent acquisitions such as Saela, (2) sustained momentum in commercial recurring revenues as productivity investments mature, and (3) evidence of continued margin expansion from pricing and cost controls. Additionally, we will watch for signs of successful digital marketing initiatives in residential customer acquisition and the company’s ability to manage cost inflation effectively.
Rollins currently trades at $59.85, up from $53.87 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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