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What changed in Rollins, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Rollins, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+202 added−269 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Rollins, Inc.'s 2025 10-K

202 paragraphs added · 269 removed · 140 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

52 edited+23 added−109 removed62 unchanged
Biggest changeWe currently conduct business in international markets, with approximately 7% of our 2024 revenues derived from our international operations. In addition, a key element of our business strategy includes further expansion in international markets.
Biggest changeSuch infestations could increase costs and decrease revenues which may have a material adverse effect on our business, results of operations and financial condition. We currently conduct business in international markets, which presents unique challenges. We currently conduct business in international markets, with approximately 7% of our 2025 revenues derived from our international operations.
Our inability to fully or substantially meet customer demand due to distributor or supply chain issues could result in, among other things, unmet consumer demand leading to reduced preference for our products or services in the future, customers' purchasing services from competitors, strained customer relationships, termination of customer contracts, additional competition and new entrants into the market, and loss of potential sales and revenue.
Our inability to fully or substantially meet customer demand due to distributor or supply chain issues could result in, among other things, unmet consumer demand leading to reduced preference for our products or services in the future, customer purchasing services from competitors, strained customer relationships, termination of customer contracts, additional competition and new entrants into the market, and loss of potential sales and revenue.
Also, the Company regularly tests the efficacy of its training efforts as well as its systems to assess vulnerabilities to cybersecurity risks, including tabletop incident response exercises. Annually the Company conducts an Enterprise Risk Assessment during which management identifies and quantifies risks, including cybersecurity risks, that could enhance or impede the Company’s ability to achieve current or future strategic objectives.
Also, the Company regularly tests the efficacy of its training efforts as well as its systems to assess vulnerabilities to cybersecurity risks, including tabletop incident response exercises. Annually the Company conducts an Enterprise Risk Assessment during which management identifies and quantifies risks, including cybersecurity risks, which could enhance or impede the Company’s ability to achieve current or future strategic objectives.
Our strong brands, such as Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, Fox Pest Control, Trutech, Western Pest Services, The Industrial Fumigant Company (IFC), Waltham Services, Okolona Pest Control (OPC), and Critter Control, have significantly contributed to the success of our business.
Our strong brands, such as Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, Fox Pest Control, Saela Pest Control, Trutech, Western Pest Services, The Industrial Fumigant Company (IFC), Waltham Services, Okolona Pest Control (OPC), and Critter Control, have significantly contributed to the success of our business.
Activities by bad actors, changes in computer and software capabilities and encryption technology, new tools and discoveries, cloud applications, changes in multi-jurisdictional regulations, and other events or developments may result in a compromise or breach of our systems.
Activities by bad actors, changes in computer and software capabilities and encryption technology, new tools and discoveries, AI, cloud applications, changes in multi-jurisdictional regulations, and other events or developments may result in a compromise or breach of our systems.
In the normal course of business, we have been and may in the future be involved in various claims, contractual disputes, investigations, arbitration and litigation, including (1) claims that our acts, omissions, services or vehicles caused damage or injury, (2) claims that our pest control, termite and/or ancillary services did not achieve the desired results, (3) claims related to acquisitions, (4) claims related to violations of antitrust laws or consumer protection laws, (4) claims related to allegations by federal, state or local authorities, including the Securities and Exchange Commission, the Federal Trade Commission and Department of Justice, of violations of regulations or statutes, (5) claims related to federal securities laws, (6) claims related to employment or wage and hour violations, including class actions under the California Private Attorney General Act ("PAGA"), (7) claims related to environmental matters, and (8) claims related to additional laws and regulations.
In the normal course of business, we have been and may in the future be involved in various claims, contractual disputes, inquiries, investigations, arbitration and litigation, including (1) claims that our acts, omissions, services or vehicles caused damage or injury, (2) claims that our pest control, termite and/or ancillary services did not achieve the desired results, (3) claims related to acquisitions, (4) claims related to violations of antitrust laws or consumer protection laws, (4) claims related to allegations by federal, state or local authorities, including the Securities and Exchange Commission, the Federal Trade Commission and Department of Justice, of violations of regulations or statutes, (5) claims related to federal securities laws, (6) claims related to employment or wage and hour violations, including class actions under the California Private Attorneys General Act ("PAGA"), (7) claims related to environmental matters, and (8) claims related to additional laws and regulations.
The Company has assigned responsibility for Board oversight of cybersecurity risk to the Audit Committee, which monitors the cybersecurity risk management and cyber control functions, including external security audits, and receives periodic updates from experienced senior management, outside legal counsel, and cybersecurity insurance carriers knowledgeable about assessing and managing cyber risks, including, as appropriate, updates on the prevention, detection, mitigation, and remediation of cyber incidents.
The Company has assigned responsibility for Board oversight of cybersecurity risk to the Audit Committee, which monitors the cybersecurity risk management and cyber control functions, including external security audits, and receives periodic updates from the CISO and other experienced senior management, outside legal counsel, and cybersecurity insurance carriers knowledgeable about assessing and managing cyber risks, including, as appropriate, updates on the prevention, detection, mitigation, and remediation of cyber incidents.
Rollins, Inc.’s certificate of incorporation, bylaws and other documents contain provisions including advance notice requirements for stockholder proposals and staggered terms for the Board of Directors. These provisions may make a tender offer, change in control or takeover attempt that is opposed by the Company’s Board of Directors more difficult or expensive. Item 1.B. Unresolved Staff Comments None.
Rollins, Inc.’s certificate of incorporation, bylaws and other documents contain provisions including advance notice requirements for stockholder proposals. These provisions may make a tender offer, change in control or takeover attempt that is opposed by the Company’s Board of Directors more difficult or expensive. Item 1.B. Unresolved Staff Comments None.
Our business is also affected by extreme weather such as hurricanes, wildfires, and other storms which can impact our ability to operate as well as drought which can greatly reduce the pest population for extended periods. Climate change continues to receive increasing global attention.
Our business is also affected by extreme weather such as hurricanes, wildfires, snow storms, and other storms which can impact our ability to operate as well as drought and cold weather which can greatly reduce the pest population for extended periods. Climate change continues to receive increasing global attention.
These could include unauthorized access to or unintentional distribution of personal, financial, proprietary, confidential, or other protected data or information the Company is entrusted to keep about its customers, employees, business practices, or third parties; significant operational disruptions that result from a cybersecurity incident; or vulnerabilities through the use of evolving tools such as Artificial Intelligence.
These could include unauthorized access to or unintentional distribution of personal, financial, proprietary, confidential, or other protected data or information the Company is entrusted to keep about its customers, employees, business practices, or third parties; significant operational disruptions that result from a cybersecurity incident; or vulnerabilities through the use of evolving tools such as AI.
The Company has assigned responsibility for Board oversight of cybersecurity risk to the Audit Committee, which monitors the cybersecurity risk management and cyber control functions, including external security audits, and receives periodic updates from experienced senior management, including the CISO, knowledgeable about assessing and managing cyber risks, including, as appropriate, updates on the prevention, detection, mitigation, and remediation of cyber incidents.
The Company has assigned responsibility for Board oversight of cybersecurity risk to the Audit Committee, which monitors the cybersecurity risk management and cyber control functions, including external security audits, and receives periodic updates from experienced senior management, including the CISO, who are knowledgeable about assessing and managing cyber risks, including, as appropriate, providing updates on the prevention, detection, mitigation, and remediation of cyber incidents.
Penalties for noncompliance with these laws may include criminal sanctions or civil remedies, including, but not limited to, cancellation of licenses, fines, and other corrective actions. Noncompliance with, changes in, expanded enforcement of, or adoption of new laws and regulations governing hazardous waste disposal and other environmental matters, could result in operational changes and increased costs.
Penalties for noncompliance with these laws may include criminal sanctions or civil remedies, including, but not limited to, cancellation of licenses, fines, and other corrective actions. Noncompliance with, changes in, expanded enforcement of, or 15 Table of Contents adoption of new laws and regulations governing hazardous waste disposal and other environmental matters, could result in operational changes and increased costs.
Any failure to comply with such applicable laws or regulations could result in fines or legal proceedings. New or proposed regulations regarding climate change could have uncertain impacts on our business. Climate change has been the subject of increased focus by various governmental authorities and regulators around the world.
Any failure to comply with such applicable laws or regulations could result in fines, enforcement actions, class actions or legal proceedings. New or proposed regulations regarding climate change could have uncertain impacts on our business. Climate change has been the subject of increased focus by various governmental authorities and regulators around the world.
We have also implemented policies and procedures for the assessment, identification, and management of material risks from cybersecurity threats, including internal training, system controls, and monitoring and audit processes to protect the Company from internal and external vulnerabilities and to comply with consumer privacy laws in the areas in which we operate.
We have also 19 Table of Contents implemented policies and procedures for the assessment, identification, and management of material risks from cybersecurity threats, including internal training, system controls, and monitoring and audit processes to protect the Company from internal and external vulnerabilities and to comply with consumer privacy laws in the areas in which we operate.
Our inability to achieve the anticipated financial benefits from any acquisition transactions may not be realized due to any number of factors, including, but not limited to, unsuccessful onboarding efforts, unexpected or underestimated liabilities or increased costs, fees, expenses and charges related to such transactions.
Our inability to achieve the anticipated financial benefits from any acquisition 11 Table of Contents transactions may not be realized due to any number of factors, including, but not limited to, unsuccessful onboarding efforts, unexpected or underestimated liabilities or increased costs, fees, expenses and charges related to such transactions.
If these labor organizing activities are successful, it could further increase labor costs, decrease operating efficiency and productivity in the future, or otherwise disrupt or negatively impact our operations which could have a material adverse effect on our reputation and business. 11 Table of Contents We may experience difficulties integrating, streamlining and optimizing our information technology (“IT”) systems and processes.
If these labor organizing activities are successful, it could further increase labor costs, decrease operating efficiency and productivity in the future, or otherwise disrupt or negatively impact our operations which could have a material adverse effect on our reputation and business. We may experience difficulties integrating, streamlining and optimizing our information technology (“IT”) systems and processes.
The Company also has a cross-functional group of representatives 17 Table of Contents from several departments that comprise the Cybersecurity and Privacy Committee, which meets and discusses information at least quarterly related to cybersecurity and privacy compliance at the Company, including training, policies, and trends.
The Company also has a cross-functional group of representatives from several departments that comprise the Privacy Committee, which meets and discusses information at least quarterly related to cybersecurity and privacy compliance at the Company, including training, policies, and trends.
The conclusions of the annual Enterprise Risk Assessment are shared with the Audit Committee. The CISO also reviews with the Audit Committee the strategy, priorities, and goals of the cybersecurity program.
The conclusions of the annual Enterprise Risk Assessment are shared with the Audit Committee and the full Board. The CISO also reviews with the Audit Committee the strategy, priorities, and goals of the cybersecurity program.
We have processes to address risks of a key 13 Table of Contents service provider experiencing a significant cybersecurity incident that renders their services unavailable, but those processes may not cover all business losses.
We have processes to address risks of a key service provider experiencing a significant cybersecurity incident that renders their services unavailable, but those processes may not cover all business losses.
In addition, our compliance with remedial or containment measures could impact our day-to-day operations and could disrupt our business and operations, as well as that of our customers and suppliers, for an indefinite period of time.
In addition, our compliance with remedial or containment measures could impact 17 Table of Contents our day-to-day operations and could disrupt our business and operations, as well as that of our customers and suppliers, for an indefinite period of time.
Although we have sought to register or protect many of our marks either in the United States or in the countries in which they are or may be used, we have not sought to protect our marks in every 15 Table of Contents country.
Although we have sought to register or protect many of our marks either in the United States or in the countries in which they are or may be used, we have not sought to protect our marks in every country.
The Company’s Incident Response and Breach Notification Policy outlines the procedures that the Company follows for evaluation and recovery from an incident, including containment of the affected systems, to restore our systems to normal operations.
The Company’s Incident Response and Breach Notification Policy outlines the procedures that the Company follows for evaluation and recovery from an incident, including containment of the affected systems, and restoring systems to normal operations.
Also, we may be adversely affected by local laws and customs and legal and regulatory constraints, including compliance with applicable export, anti-corruption and currency laws and regulations of the countries or regions in which we currently operate or intend to operate in the future.
Also, we may be adversely affected by local laws and customs and legal and regulatory constraints, including compliance with applicable export, anti-corruption and currency laws and regulations of the United States and other countries or regions in which we currently operate or may operate in the future.
To date, the Company has not had a cybersecurity event that materially impacted or is reasonably likely to materially affect its business strategy, results of operations, financial condition, or the security of its proprietary data.
To date, the Company has not had a cybersecurity event that materially impacted or affected its business strategy, results of operations, financial condition, or the security of its proprietary data.
The demand for employees is high, and the supply is limited. Ongoing labor shortages could negatively affect our ability to efficiently operate at full capacity or lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees.
Ongoing labor shortages could negatively affect our ability to efficiently operate at full capacity or lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Annual Report on Form 10-K.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Annual Report on Form 10-K. You are cautioned that the risk factors discussed below are not exhaustive.
Such adverse events could result in a decrease in the estimated fair value of goodwill or other intangible assets established as a result of such transactions, triggering an impairment.
Such adverse events could result in a decrease in the estimated fair value of goodwill or other intangible assets established as a result of such transactions, triggering an impairment as well as a negative impact on inorganic and/or organic growth.
Rollins, Board member, Pam Rollins, and certain persons acting as a group with them (the “Significant Shareholder”) which as of December 31, 2024, beneficially held (in the aggregate, including direct and indirect ownership) approximately 42 percent of our common stock.
Rollins; Board member, Pamela R. Rollins; director nominee, Timothy C. Rollins; and certain persons acting as a group with them (the “Significant Shareholder”) which as of December 31, 2025, beneficially held (in the aggregate, including direct and indirect ownership) approximately 38 percent of our common stock.
Our ability to operate successfully in international markets may be adversely affected by political, economic and social conditions beyond our control and geopolitical conflicts, such as the conflict between Russia and Ukraine and the conflict in Gaza.
Our ability to operate successfully in international markets may be adversely affected by political, economic and social conditions beyond our control and geopolitical conflicts.
Our ability to remain productive and profitable will depend substantially on our ability to compete with other pest control and service companies to attract, adequately train, and retain skilled workers and key employees (including executive officers), and create leadership opportunities. Our ability to expand our operations is in part impacted by our ability to increase our labor force.
Our ability to remain productive and profitable will depend substantially on our ability to compete with other pest control and service companies to attract, adequately train, and retain skilled workers. Our ability to expand our operations is in part impacted by our ability to increase our labor force. The demand for skilled employees is high, and the supply is limited.
Future sales or other transactions entered into by the Significant Shareholder with respect to all or a portion of their shares or otherwise could also negatively affect the trading price of, or cause volatility in the market for, our common stock. Certain provisions in Rollins, Inc.’s certificate of incorporation and bylaws may inhibit a takeover of the Company.
Future sales or other transactions entered into by the Significant Shareholder with respect to all or a portion of their shares or otherwise could also negatively affect the trading price of, or cause volatility in the market for, our common stock.
Item 1.C Cybersecurity The Company has security incident response policies and procedures for identifying, assessing, and managing material risks arising from cybersecurity incidents, including those arising from third-party service providers.
Item 1.C Cybersecurity The Company has security incident response policies and procedures for identifying, assessing, and managing material risks arising from cybersecurity incidents, including those arising from third-party service providers. The Company welcomed a new Chief Information Security Officer (“CISO”) on December 15, 2025.
The possible effects of climate change could include changes in rainfall patterns, water shortages, changing storm patterns and intensities, changing temperature levels, as well as changes in legislation, regulation, and international accords, all of which could adversely impact our costs and business operations. Our business is also affected by seasonality associated with our pest and termite control services.
The possible effects of climate change could include changes in rainfall patterns, water shortages, changing storm patterns and intensities, changing temperature levels, as well as changes in legislation, regulation, and international accords, all of 13 Table of Contents which could adversely impact our costs and business operations.
We cannot predict how the proposed rules, if finalized, or any future legislation or regulations pertaining to climate change, will ultimately affect our business. Termite claims and lawsuits related thereto could increase our legal expenses.
Compliance with any new or more stringent laws or requirements, or stricter interpretations of existing laws, could require additional expenditures by us or our suppliers. We cannot predict how the proposed rules, if finalized, or any future legislation or regulations pertaining to climate change, will ultimately affect our business. Termite claims and lawsuits related thereto could increase our legal expenses.
Our auto or other safety management system and performance measures are critical to our reputation and results of operation. We attempt to mitigate risks relating to employee work-related injuries, automobile collision, third-party liability, or property loss through the implementation of company-wide safety management programs designed to focus on prevention and decrease the occurrence of incidents or events that may occur.
We attempt to mitigate risks relating to employee work-related injuries, automobile collision, third-party liability, or property loss through the implementation of company-wide safety management programs designed to focus on prevention and decrease the occurrence of incidents or events that may occur. Such incidents could also have the effect of destabilizing or increasing our insurance costs and financial reserves.
However, such tools are subject to terms such as deductibles, retentions, limits and policy exclusions, commercial availability and supply of coverage as well as risk of denial of coverage, default or insolvency.
In addition, we also maintain other insurance and other traditional risk transfer tools to respond to certain types of liabilities and risks. However, such tools are subject to terms such as deductibles, retentions, limits and policy exclusions, commercial availability and supply of coverage as well as risk of denial of coverage, default or insolvency.
As these initiatives are implemented, we may not fully achieve the desired results, including but not limited to, expected cost savings or growth rates, and these initiatives may adversely impact customer retention or our operations.
As these initiatives are implemented, we may not fully achieve the desired results, including but not limited to, expected cost savings or growth rates, and these initiatives may adversely impact customer retention or our operations. Also, our business strategies may change in light of our ability to implement new business initiatives, competitive pressures, economic uncertainties or developments or other factors.
From time to time, we are subject to claims brought by our customers for termite protection services, generally based on alleged termite damage to the structure(s) covered by our contracts with those customers.
From time to time, we are subject to claims brought by our customers for termite protection services, generally based on alleged termite damage to the structure(s) covered by our contracts with those customers. In some instances of these claims, the customer may initiate litigation or arbitration proceedings against us or one of our brands.
Acquisitions have been and may continue to be an important element of our business strategy. We cannot assure investors that we will be able to identify and acquire acceptable acquisition targets on terms favorable to us in the future, that we will receive necessary regulatory approvals, or that any acquisitions will achieve the anticipated financial benefits.
Acquisitions have been and may continue to be an important element of our business strategy. We may not be able to identify and acquire acceptable acquisition targets on terms favorable to us in the future, as investors increase in our industry.
Risks Related to Cybersecurity, Privacy Compliance and Business Disruptions The Company, our brands, third-party business partners and service providers have been subject to cybersecurity incidents in the past and could be the targets of future attacks that could result in disruption to our business operations, economic and reputational damage, and possible fines, penalties and private litigation.
In addition, our relationship with our franchisees, subcontractors, and vendors could become strained (including resulting in litigation) as we impose new standards or assert more rigorous enforcement practices of the existing required standards. 14 Table of Contents Risks Related to Cybersecurity, Privacy Compliance and Business Disruptions The Company, our brands, third-party business partners and service providers have been subject to cybersecurity incidents in the past and could be the targets of future attacks that could result in disruption to our business operations, economic and reputational damage, and possible fines, penalties and private litigation.
Accordingly, if we fail to maintain adequate safety standards, we could experience reduced profitability or the loss of projects or clients. Our insurance coverage may be inadequate to cover all significant risk exposures and our accruals and reserves for uninsured claims are variable. We are exposed to liabilities that are unique to our business and the services we provide.
Our insurance coverage may be inadequate to cover all significant risk exposures and our accruals and reserves for uninsured claims are variable. 16 Table of Contents We are exposed to liabilities that are unique to our business and the services we provide. We maintain commercial liability insurance that extends to products liability.
We believe that the principal competitive factors in the market areas that we serve are quality and speed of service, customer proximity, customer satisfaction, brand awareness and reputation, terms of guarantees, technical proficiency and price.
We compete with other large pest control companies, as well as numerous smaller pest control companies and do-it-yourself options, for a finite number of customers. We believe that the principal competitive factors in the market areas that we serve are quality and speed of service, customer proximity, customer satisfaction, brand awareness and reputation, terms of guarantees, technical proficiency and price.
As a result, the Significant Shareholder has significant influence over our operations, including the election of directors, approval of substantial corporate transactions such as acquisitions, and approval of matters requiring stockholder approval.
As a result, the Significant Shareholder has significant influence over our operations, including the election of directors, approval of substantial corporate transactions such as acquisitions, and approval of matters requiring stockholder approval. This concentration of ownership could also have the effect of delaying or preventing a third party from acquiring control of the Company at a premium.
The accruals and reserves we hold are based on estimates that involve a degree of judgment and are inherently variable and could be overestimated or insufficient. If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited.
If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited.
You are cautioned that the risk factors discussed below are not exhaustive. 10 Table of Contents Risks Related to our Business, Brand, Industry and Operations We face risks regarding our ability to compete in the pest control industry in the future. We operate in a highly competitive industry with fragmented markets and low barriers to entry.
Risks Related to our Business, Brand, Industry and Operations We face risks regarding our ability to compete in the pest control industry in the future. We operate in a highly competitive industry with fragmented markets and low barriers to entry. Our revenues and earnings are affected by changes in competitors’ services, markets, and prices and general economic issues.
For example, the State of California has enacted legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures, and other states are also considering similar measures. Also, the SEC has issued final rules, which are currently stayed pending judicial review; however, if implemented as proposed, these rules would significantly increase our climate-related disclosure obligations.
For example, the State of California has enacted legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures. We are assessing our obligations under these proposed and enacted rules in the United States and around the world and expect that compliance could require substantial effort in the future.
This concentration of ownership could also have the effect of delaying or preventing a third party from acquiring control of the Company at a premium. 16 Table of Contents The Significant Shareholder has a substantial ownership interest, and the availability of the Company’s common stock to the investing public may be limited.
The Significant Shareholder has a substantial ownership interest, and the availability of the Company’s common stock to the investing public may be limited.
In some instances of these claims, the customer may initiate litigation or arbitration proceedings against us or one of our brands. 14 Table of Contents Our safety and risk management programs may not have the intended effect of reducing our liability for employee-work related injuries, third party-liability claims or property loss.
Our safety and risk management programs may not have the intended effect of reducing our liability for employee-work related injuries, third party-liability claims or property loss. Our auto or other safety management system and performance measures are critical to our reputation and results of operation.
Such incidents could also have the effect of destabilizing or increasing our insurance costs and financial reserves. Incidents involving injury or property loss may be caused by multiple potential factors, a significant number of which are beyond our control.
Incidents involving injury or property loss may be caused by multiple potential factors, a significant number of which are beyond our control. Therefore, there is no guarantee that our safety and risk management and safety programs will have the desired effect of avoiding or controlling all potential expenses and liability exposure.
The increase in pest presence and activity, as well as the metamorphosis of termites in the spring and summer (the occurrence of which is determined by the timing of the change in seasons), has historically resulted in an increase in the revenue and income of our pest and termite control operations during such periods.
Our business is also affected by seasonality associated with our pest and termite control services. The decrease in pest presence and activity in the fall and winter has historically resulted in a decrease in the revenue and income of our pest and termite control operations during such periods.
The Company’s Chief Information Security Officer (“CISO”), who has over 30 years of experience in information technology and information security and has several industry certifications, including CISSP, CCSP, CISM, CRISC, and CIPP, is the executive primarily responsible for managing cybersecurity risks.
The new CISO has over 20 years of experience in information security and has previously served as CISO for a public company. He will be the executive primarily responsible for managing cybersecurity risks.
We may also experience difficulties, costs or delays in migrating acquired businesses to our systems, processes, and technologies. Distributor or supply chain issues may result in product shortages or disruptions to our business.
We may also experience difficulties, costs or delays in migrating acquired businesses to our systems, processes, and technologies. Our increasing reliance on cloud-based platforms, third-party software providers, managed service providers, and emerging technologies, increases the complexity of our IT environment and may expose us to additional risks.
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Item 1. Business General Overview Rollins, Inc. (“Rollins,” “we,” “us,” “our,” or the “Company”), is an international services company headquartered in Atlanta, Georgia.
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Also, we cannot assure investors that we will receive necessary regulatory approvals, or that any acquisitions will achieve the anticipated financial benefits.
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Through our family of leading brands, we provide essential pest and wildlife control services and protection against termite damage, rodents and insects to more than two million residential and commercial customers from more than 800 Company-owned and franchised locations in approximately 70 countries.
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In addition, acquired businesses may operate on legacy or incompatible information technology systems, maintain data security, privacy or compliance practices that differ from ours, or have undisclosed or underestimated cybersecurity, data protection, employment, regulatory or operational liabilities.
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Over the course of our lengthy operating history, we have garnered a reputation for providing great customer service. The contracted and recurring nature of our services provide us with visibility into a significant portion of our future revenue. In 1964, brothers O.
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Difficulties integrating acquired companies’ systems, processes, personnel, data or controls, including cybersecurity and privacy controls, could increase costs, disrupt operations, delay realization of anticipated synergies, or expose us to additional risks.
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Wayne and John Rollins acquired Orkin Exterminating Company and in 1965 we changed our name from Rollins Broadcasting, Inc to Rollins, Inc.
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Failures, interruptions, 12 Table of Contents security incidents, or performance issues involving third-party systems or technologies on which we rely could disrupt operations, impair customer service, delay billing or collections, or result in increased costs and reputational harm.
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In 1968, Rollins began trading on the New York Stock Exchange under the symbol “ROL.” Since then, we have grown into a premier consumer and commercial services business with numerous industry leading brands including the world renowned Orkin, as well as HomeTeam Pest Defense, Clark Pest Control, Western Pest Services, Critter Control Wildlife, Northwest Exterminating, and Fox Pest Control, among others.
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Our increasing reliance on artificial intelligence (“AI”) technologies in our services and operations, and corresponding reliance by our competitors, present several risks that could materially adversely impact our business, financial condition, and results of operations. We are increasingly incorporating AI capabilities into the development of technologies and our business operations, our services, and other operational and administrative processes.
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Pest control generally consists of assessing a customer's property for conditions that invite pests, tackling current infestations, and stopping the life cycle to prevent future invaders. Termite protection programs include liquid treatments, wet and dry foam applications, termite baiting and wood treatments.
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While we believe these technologies enhance efficiency and service quality, their use presents risks that could adversely affect our business, financial condition, and results of operations. AI technology is complex and rapidly evolving, and may subject us to significant competitive, legal, regulatory, operational and other risks.
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We operate under one reportable segment which contains our three service offerings: • Residential : Pest control services protecting residential properties from common pests, including rodents, insects and wildlife; • Commercial : Workplace pest control solutions for customers across diverse end markets such as healthcare, food service, logistics; and • Termite and Ancillary : Termite protection services and ancillary services (wildlife exclusion, crawlspace encapsulation and moisture remediation, insulation) for both residential and commercial customers.
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We are committed to developing and using AI responsibly and to maintain our competitive position, but there can be no guarantee that we will successfully mitigate all associated risks. Any failure in our AI initiatives could materially harm our business, financial condition, and results of operations.
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Risk factors associated with our business are discussed in Item 1.A. "Risk Factors." Our Strategic Objectives We regularly assess the business environment, as well as our own strengths and opportunities, and have aligned around key strategic objectives that will help us to drive continued success for Rollins.
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We are subject to evolving payment card network rules, including PCI DSS, and security risks associated with payment processing systems. We accept credit and debit card payments across multiple channels.
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People First We promote a people first mindset that prioritizes the well-being and development of the individual, as well as our collective team, in all aspects of our business. To provide our customers with the best customer experience, we must focus on cultivating our position as the employer of choice in our industry.
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As a result, we are subject to payment card network rules and operating regulations, including the Payment Card Industry Data Security Standard (“PCI DSS”), which is a set of comprehensive security requirements designed to protect payment card account data during the storage, processing, and transmission of such data.
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This means not only investing in competitive wages and benefits, but also providing tools, training and development opportunities that drive a high level of teammate engagement. Customer Loyalty We focus on creating the best customer experience that will enable a loyal customer base and in turn reduce the amount of churn across our customer base.
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We rely on third-party payment processors, cloud service providers, telecommunications carriers, and other vendors in connection with payment card processing and related systems.
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This starts with our people and the interactions they have with our customers. By focusing on this key objective, we expect it to enable growth that will outpace our market growth. Growth Mindset A growth mindset helps us consider ways to improve and best position our business.
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If we, or any of our third-party service providers, fail to maintain PCI DSS compliance, experience a security breach, or are otherwise found to have compromised payment card data, we could be subject to fines, penalties, higher transaction fees, remediation costs, litigation, reputational harm, and potential indemnification obligations.
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Our focus here is to identify changes that may present both risks and opportunities to our business.
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In extreme circumstances, we could lose our ability to accept credit or debit card payments, whether temporarily or permanently, which would adversely affect our operations and customer relationships. Distributor or supply chain issues may result in product shortages or disruptions to our business.
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We focus on evaluating changes in the markets we compete 3 Table of Contents in but also across other industries to continue to identify changing dynamics that may impact our people and our customers that may impact our position in the markets we compete.
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Invasive pests as well as pest population resistance could materially and adversely impact our business . If a species previously not encountered arrives and becomes invasive, our business would be negatively impacted until appropriate methods for control are developed or deployed.
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Operational Efficiency As a complement to our growth mindset, our dedication to continuous improvement and operational efficiency is another key tenet of our strategy and culture. We approach our operations from the perspective that everything we do can be improved upon. We are constantly striving to improve our service levels by optimizing our business model and modernizing our business.
Added
Additionally, pest populations can develop resistance to the pest management tools we use which may impact our ability to gain effective control and impact our business. Moreover, there can be no assurance that current or future technologies to control invasive or resistant pest infestations would be effective.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company owns or leases over 700 branch offices and operating facilities used in its business as well as the Rollins Training Center located in Atlanta, Georgia, and the Pacific Division Administration and Training Center in Riverside, California. None of the branch offices, individually considered, represents a materially important physical property of the Company.
Biggest changeThe Company owns or leases over 850 branch offices and operating facilities used in its business as well as the Rollins Training Center located in Atlanta, Georgia, and the Pacific Division Administration and Training Center in Riverside, California. None of the branch offices, individually considered, represents a materially important physical property of the Company.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIf actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited. Item 103 of SEC Regulation S-K requires disclosure of certain environmental legal proceedings if the proceeding reasonably involves potential monetary sanctions of $300,000 or more.
Biggest changeItem 103 of SEC Regulation S-K requires disclosure of certain environmental legal proceedings if the proceeding reasonably involves potential monetary sanctions of $300,000 or more.
Management does not believe that any pending claim, proceeding or litigation, regulatory action or investigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters could result in a charge that might be material to the results of an individual quarter or year.
Management does not believe that any pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters could result in a charge that might be material to the results of an individual quarter or year.
Item 3. Legal Proceedings. In the normal course of business, the Company and its subsidiaries are involved in, and will continue to be involved in, various claims, arbitrations, contractual disputes, investigations, litigation, environmental and tax and other regulatory matters relating to, and arising out of, our businesses and our operations.
Item 3. Legal Proceedings. In the normal course of business, the Company and its subsidiaries are involved in, and will continue to be involved in, various claims, arbitrations, contractual disputes, inquiries, investigations, litigation, and tax and other regulatory matters relating to, and arising out of, our businesses and our operations.
These matters may involve, but are not limited to, allegations that our services or vehicles caused damage or injury, claims that our services did not achieve the desired results (including claims that we are responsible for termite damage to a structure), claims related to acquisitions and allegations by federal, state or local authorities, including taxing authorities, of violations of regulations or statutes.
These matters may involve, but are not limited to, allegations that our services or vehicles caused damage or injury, claims that our services did not achieve the desired results, claims related to acquisitions and allegations by federal, state or local authorities, including taxing authorities, of violations of regulations or statutes.
Item 4. Mine Safety Disclosures. Not applicable. 19 Table of Contents PART II
Item 4. Mine Safety Disclosures. Not applicable. 21 Table of Contents PART II
We are also involved from time to time in certain environmental and tax matters primarily arising in the normal course of business. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable.
We are also involved from time to time in certain environmental matters primarily arising in the normal course of business. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable in accordance with Accounting Standards Codification ("ASC") 450.
The Company has received a notice of alleged violations and information requests from local governmental authorities in California for our Orkin and Clark Pest Control operations and is currently working with several local governments regarding compliance with environmental regulations 18 Table of Contents governing the management of hazardous waste and pesticide disposal.
In January 2023, the Company received a notice of alleged violations and information requests from local governmental authorities in California for our Orkin and Clark Pest Control operations, relating to compliance with environmental and other regulations governing the management of certain waste streams and pesticide disposal.
In addition, we are parties to employment-related cases and claims from time to time, which may include claims on a representative or class action basis alleging wage and hour law violations or claims related to the operation of our retirement benefit plans.
In addition, we are parties to employment-related investigations, cases, and claims from time to time, which may include claims on a representative or class action basis alleging wage and hour law violations, claims filed under California's Private Attorneys General Act and claims and investigations related to our enforcement of post-employment restrictive covenants.
Removed
The investigation appears to be part of a broader effort to investigate waste handling and disposal processes of a number of industries. While we are unable to predict the outcome of this investigation, we do not believe the outcome will have a material effect on our results of operations, financial condition, or cash flows.
Added
If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited. 20 Table of Contents The Federal Trade Commission ("FTC") has requested information regarding certain of the Company’s practices relating to post-employment restrictive covenants entered by the Company with certain of its employees.
Added
Rollins has fully cooperated with the FTC’s requests for information and responded to any concerns they have identified, and we believe that our employee agreements and practices are, and have been, fully consistent with federal antitrust laws as well as common industry practices and applicable state employment laws. Rollins, however, cannot predict the outcome of the FTC’s inquiry.
Added
Any voluntary agreement with the FTC to resolve the FTC inquiry is unlikely to have a material impact on Rollins. The FTC could also choose to proceed to litigation. In the event of litigation, the Company is prepared to vigorously defend its practices, but we are unable to predict the outcome.
Added
The investigation was part of a broader effort to investigate waste handling and disposal processes of a number of industries. The Company and district attorneys reached a settlement and a payment was made during 2025.
Added
For future periods, pursuant to Item 103 of Regulation S‑K, we have elected to use a threshold of $1.0 million (which does not exceed the lesser of $1.0 million or 1% of our current assets as of December 31, 2025) for disclosing environmental proceedings to which a governmental authority is a party and that involve potential monetary sanctions.
Added
We will apply this threshold consistently in our annual and quarterly reports. We will continue to disclose any environmental proceedings that we determine are otherwise material, regardless of the amount of potential monetary sanctions.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 19 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 20 Item 6 [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 21 Item 7.A. Quantitative and Qualitative Disclosures about Market Risk. 36 Item 8.
Biggest changeItem 4. Mine Safety Disclosures. 21 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 22 Item 6 [Reserved] 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 23 Item 7.A. Quantitative and Qualitative Disclosures about Market Risk. 39 Item 8.
Financial Statements and Supplementary Data. 37 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures. 74 Item 9.A. Controls and Procedures. 74 Item 9.B. Other Information. 74
Financial Statements and Supplementary Data. 40 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures. 82 Item 9.A. Controls and Procedures. 82 Item 9.B. Other Information. 83

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) The Company has a share repurchase plan, adopted in 2012, to repurchase up to 16.9 million shares of the Company’s common stock. As of December 31, 2024, the Company has a remaining authorization to repurchase 11.4 million shares of the Company's common stock under this program.
Biggest changeThis repurchase was made in connection with a separate authorization approved by the Company's Board of Directors and did not reduce the remaining authorization of the share repurchase plan adopted in 2012. (3) The Company has a share repurchase plan, adopted in 2012, to repurchase up to 16.9 million shares of the Company’s common stock.
The Company expects to continue to pay cash dividends to the common stockholders, subject to the earnings and financial condition of the Company and other relevant factors. Issuer Purchases of Equity Securities The Company did not repurchase shares on the open market during the quarter ended December 31, 2024.
The Company expects to continue to pay cash dividends to the common stockholders, subject to the earnings and financial condition of the Company and other relevant factors. Issuer Purchases of Equity Securities The Company did not repurchase shares on the open market during the quarter ended December 31, 2025.
The indices included in the following graph are the S&P 500 Index and the S&P 500 Commercial Services & Supplies Index. *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2024 Standard & Poor's, a division of S&P Global.
The indices included in the following graph are the S&P 500 Index and the S&P 500 Commercial Services & Supplies Index. *$100 invested on 12/31/20 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2025 Standard & Poor's, a division of S&P Global.
The following table presents the Company's share repurchase activity for the period from October 1, 2024 to December 31, 2024.
The following table presents the Company's share repurchase activity for the period from October 1, 2025 to December 31, 2025.
Period Total number of shares purchased (1) Weighted- average price paid per share Total number of shares purchased as part of publicly announced repurchases (2) Maximum number of shares that may yet be purchased under the repurchase plan (2) October 1 to 31, 2024 — $ — — 11,415,625 November 1 to 30, 2024 — — — 11,415,625 December 1 to 31, 2024 817 49.86 — 11,415,625 Total 817 $ — — 11,415,625 (1) Represents shares withheld by the Company in connection with tax withholding obligations of its employees upon vesting of such employees' restricted stock awards.
Period Total number of shares purchased (1) Weighted- average price paid per share Total number of shares purchased as part of publicly announced repurchases (2) Maximum number of shares that may yet be purchased under the repurchase plan (3) October 1 to 31, 2025 93 $ 58.13 — 11,415,625 November 1 to 30, 2025 3,478,260 56.93 3,478,260 11,415,625 December 1 to 31, 2025 4,040 60.40 — 11,415,625 Total 3,482,393 3,478,260 (1) Includes 4,133 shares withheld by the Company in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.
As of January 31, 2025, there were 8,135 holders of record of the Company’s common stock. However, a large number of our shareholders hold their shares in “street name” in brokerage accounts and, therefore, do not appear on the shareholder list maintained by our transfer agent.
However, a large number of our shareholders hold their shares in “street name” in brokerage accounts and, therefore, do not appear on the shareholder list maintained by our transfer agent.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information, Holders, and Dividends The common stock of the Company is listed on the New York Stock Exchange and is traded on the Philadelphia, Chicago and Boston Exchanges under the symbol ROL.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information, Holders, and Dividends The common stock of the Company is listed on the New York Stock Exchange under the symbol ROL. As of January 31, 2026, there were 7,410 holders of record of the Company’s common stock.
The repurchase plan has no expiration date. 20 Table of Contents Performance Graph The following graph sets forth a five-year comparison of the cumulative total stockholder return based on the performance of the stock of the Company as compared with both a broad equity market index and an industry index.
As of December 31, 2025, the Company had a remaining authorization to repurchase 11.4 million shares of the Company's common stock under this program. 22 Table of Contents Performance Graph The following graph sets forth a five-year comparison of the cumulative total stockholder return based on the performance of the stock of the Company as compared with both a broad equity market index and an industry index.
Removed
All rights reserved. 2019 2020 2021 2022 2023 2024 Rollins Inc. $ 100.00 $ 178.51 $ 158.09 $ 170.87 $ 207.05 $ 222.65 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Commercial Services & Supplies 100.00 120.98 159.25 150.76 193.54 229.12
Added
(2) As further described in Note 13, Stockholders' Equity, and Note 16, Related Party Transactions, and announced on November 10, 2025, the Company entered into an underwriting agreement with certain selling shareholders and an underwriter relating to the sale by certain selling shareholders of a number of shares of the Company's common stock at a public offering price of $57.50 per share (the "2025 Offering").
Added
The Company repurchased 3,478,260 shares of its common stock concurrently with the 2025 Offering for approximately $200.0 million at the same per share price paid by the underwriter, or $56.93 per share.
Added
All rights reserved. 2020 2021 2022 2023 2024 2025 Rollins Inc. $ 100.00 $ 88.56 $ 95.72 $ 115.98 $ 124.72 $ 163.45 S&P 500 100.00 128.71 105.40 133.10 166.40 196.16 S&P 500 Commercial Services & Supplies 100.00 131.64 124.61 159.98 189.38 189.63

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

66 edited+29 added−18 removed32 unchanged
Biggest changeThe words “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “should,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. 21 Table of Contents Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements regarding: • expectations with respect to our financial and business performance and strategy; • expansion efforts and growth opportunities, including, but not limited to, organic growth and recent and future acquisitions in the United States and in foreign markets where we have a presence and integration efforts with respect to recent acquisitions; • our belief that we are starting 2025 with favorable demand and demand will continue to be solid; • our belief that we compete effectively and favorably with our competitors; • our alignment around the key strategic areas that will enable us to grow faster than our market, position our business for the future, and deliver value for all stakeholders and our ability to execute on our strategic plan; • the impact of inflation, changing interest rates, tariffs, trade disputes, foreign exchange rate risk, business interruptions due to natural disasters and changes in the weather patterns, seasonality, employee shortages, and supply chain issues; • our belief that we maintain a sufficient level of products, materials, and other supplies and have qualified comparable products and materials and our ability to foresee potential supply disruptions; • expectations with respect to new and innovative products and services; • our approach to human capital management, including training, development, retention, inclusion, and engaging with our local communities; • continuously improving our safety culture and monitoring safety goals, including, but not limited to, our proactive approach with respect to safety and risk management; • our policies and procedures that are designed to identify, assess, and manage material risks arising from cybersecurity incidents; • new information technology systems and technology will lead to new or improving business capabilities and streamline business processes, financial reporting, and acquisition integration; • expectations with respect to interest costs and effective tax rates; • our robust pipeline for acquisitions; • our focus on continuous improvement initiatives to enhance profitability across our business; • the underlying health of core pest control markets; • our focus on pricing, ongoing modernization efforts, and a culture of continuous improvement should support healthy incremental margins; • sufficiency of current cash and cash equivalents balances, future cash flows, and available borrowings under our Credit Facility to finance our current and future operations; • our belief that the Company has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims; • our approach to capital allocation inclusive of our intent to pay cash dividends to common shareholders and to invest in acquisitions; • our belief that no pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, including, but not limited to, the investigation by certain California governmental authorities regarding compliance with environmental regulations and claims filed under California's Private Attorneys General Act, will have a material adverse effect on our financial position, results of operations or liquidity; • the suitability and adequacy of our facilities to meet our current and reasonably anticipated future needs; and 22 Table of Contents • estimates, assumptions, and projections related to our application of critical accounting policies, described in more detail under “Critical Accounting Estimates.” These forward-looking statements are based on information available as of the date of this report, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties.
Biggest changeThe words “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “should,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. 23 Table of Contents Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements regarding: • expectations with respect to our financial and business performance and strategy; • expansion efforts and growth opportunities, including, but not limited, to anticipated organic and acquisition growth and recent and future acquisitions in the United States and in foreign markets where we have a presence and integration efforts with respect to recent acquisitions; • our anticipation of another year of strong organic revenue growth; • that maintaining and enhancing our brands increases our ability to enter new markets and launch new and innovative services that better serve the needs of our customers; • the Saela acquisition expanding the Rollins family of brands and driving long-term value; • the Company's credit risk, including that we do not believe that a one percent increase in interest rates would have a material effect on our results of operations or cash flows, and our belief that foreign exchange rate risk will not have a material impact upon the Company’s results of operations going forward; • the impact of inflation, changing interest rates, tariffs, trade disputes, foreign exchange rate risk, business interruptions due to natural disasters and changes in the weather patterns, seasonality, employee shortages, and supply chain issues; • our belief that we maintain a sufficient level of products, materials, and other supplies and have qualified comparable products and materials and our ability to foresee potential supply disruptions; • our belief that the contracted and recurring nature of our services provide us with visibility into a significant portion of our future revenue; • our belief that our key strategic objectives will help us to drive continued success for Rollins; • our belief that our alignment around key strategic areas will enable us to grow faster than our market, position our business for the future, and deliver value for all stakeholders, including our customers, our teammates, our communities and our shareholders; • our belief that our scale enables delivery of great service and provides us with a significant and reinforcing competitive advantage; • that we have strategically invested in proprietary routing and scheduling technologies to increase our competitive advantage; • our belief that geographic diversity allows us to increase brand recognition, meet demands of global customers, and draw on business and technical expertise from teams in several countries, and offers us an opportunity to access new markets; • that our acquisition strategy targets businesses that have the potential to achieve organic growth and margin expansion; • our belief that, through our wholly-owned subsidiaries, we compete effectively and favorably with our competitors as one of the world’s largest pest and termite control companies; • that we remain committed to developing exceptional talent and investing in our teams; • that we continue to execute various strategies previously implemented to help mitigate the impact of economic disruptors; • our belief that interest expense will be approximately $30 million in 2026 associated with borrowings under our 2035 Senior Notes and commercial paper program; • our belief that we expect to realize an effective tax rate of 24.5% to 25% in 2026; • our belief that, as we look to 2026, demand for our services is solid and our pipeline for acquisitions is robust; • as we start 2026, we remain focused on continuous improvement initiatives to enhance profitability across our business; 24 Table of Contents • that compounding operating cash flow and a strong balance sheet should continue to enable us to follow a balanced capital allocation strategy; • our belief that we expect to report 7% to 8% organic revenue* growth in 2026; • our belief that while we may see a slower start to the year in the first quarter, the strength of our recurring revenue and ancillary services gives us confidence in our ability to meet our financial outlook for 2026; • that we intend to continue to grow the business in the international markets where we have a presence, and that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore; • the economic impact of changes to global trade policies, including the imposition of tariffs; • expectations with respect to new and innovative products and services; • our approach to human capital management, including training, development, retention, inclusion, and engaging with our local communities; • continuously improving our safety culture and monitoring safety goals, including, but not limited to, our proactive approach with respect to safety and risk management; • our increasing reliance on AI technologies in services and operations as well as the related risks that could materially adversely affect our business; • our policies and procedures that are designed to identify, assess, and manage material risks arising from cybersecurity incidents and AI technologies; • new information systems and technology will lead to new or improving business capabilities and streamline business processes, financial reporting, and acquisition integration; • expectations with respect to interest costs and effective tax rates; • our focus on pricing, ongoing modernization efforts, and a culture of continuous improvement should support healthy incremental margins; • our belief that our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program which is backstopped by our Revolving Credit Facility, as defined below, and available borrowings under our Revolving Credit Facility will be sufficient to finance our current operations and obligations and fund expansion of the business for the foreseeable future; • our expectations to fund our contractual commitments including lease obligations and debt payments primarily through cash generated from our operations; • that our focus on creating the best customer experience will enable a loyal customer base and in turn reduce the amount of churn across our customer base, and that, by focusing on this key objective, we expect it to enable growth that will outpace our market growth; • our belief that the Company has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims; • our approach to capital allocation inclusive of our intent to pay cash dividends to common shareholders and to invest in acquisitions; • our belief that no pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, including, but not limited to, the inquiry by the FTC and claims filed under California's Private Attorneys General Act, will have a material adverse effect on our financial position, results of operations or liquidity; • the suitability and adequacy of our facilities to meet our current and reasonably anticipated future needs; and • estimates, assumptions, and projections related to our application of critical accounting policies, described in more detail under “Critical Accounting Estimates.” 25 Table of Contents These forward-looking statements are based on information available as of the date of this report, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties.
Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Free cash flow and free cash flow conversion Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities.
Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Free cash flow, free cash flow conversion, adjusted free cash flow, and adjusted free cash flow conversion Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities.
Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions.
Additionally, the Company’s definition of free cash flow and adjusted free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions.
The Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the condensed consolidated financial statements. The Company considered the impact of economic trends on the assumptions and estimates used in preparing the consolidated financial statements.
The Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements. The Company considered the impact of economic trends on the assumptions and estimates used in preparing the consolidated financial statements.
Discussions of 2022 items and year-to-year comparisons of 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons of 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.
Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those described in Item 1A “Risk Factors” of Part I, Item 7 “Management’s Discussion and Analysis of Financial condition and Results of Operations” of Part II, and elsewhere in this Annual Report on Form 10-K for our fiscal year ended December 31, 2024 and may also be described from time to time in our future reports filed with the SEC.
Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in Item 1A “Risk Factors” of Part I, Item 7 “Management’s Discussion and Analysis of Financial condition and Results of Operations” of Part II, and elsewhere in this Annual Report on Form 10-K for our fiscal year ended December 31, 2025 and may also be described from time to time in our future reports filed with the SEC.
Litigation For discussion on the Company’s legal contingencies, see Note 12, Commitments and Contingencies to the accompanying financial statements, and Part I, Item 3, Legal Proceedings. 35 Table of Contents Contractual Commitments We have material cash requirements for known contractual obligations and commitments in the form of operating leases and debt obligations.
Litigation For discussion on the Company’s legal contingencies, see Note 12, Commitments and Contingencies to the accompanying financial statements, and Part I, Item 3, Legal Proceedings. Contractual Commitments We have material cash requirements for known contractual obligations and commitments in the form of operating leases and debt obligations.
We remain committed to developing exceptional talent and investing in our teams. Customer Loyalty We remain committed to providing our customers with the best customer experience. Effective sales and service staffing levels helped us to capitalize on continued demand and deliver solid results for the year, with organic revenues* growing by 7.9% compared to 2023.
We remain committed to developing exceptional talent and investing in our teams. Customer Loyalty We remain committed to providing our customers with the best customer experience. Effective sales and service staffing levels helped us to capitalize on continued demand and deliver solid results for the year, with organic revenues* growing by 6.9% compared to 2024.
Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue.
Management uses incremental EBITDA margin as a measure of 31 Table of Contents operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue.
Non-GAAP Financial Measures Reconciliation of GAAP and non-GAAP Financial Measures A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
Non-GAAP Financial Measures Reconciliation of GAAP and non-GAAP Financial Measures A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, financial position, or statements of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
Residential pest control revenue increased approximately 9%, commercial pest control revenue increased approximately 10% and termite and ancillary services grew approximately 14% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing over 5% in residential, over 8% in commercial, and over 12% in termite and ancillary activity.
Residential pest control revenue increased approximately 10%, commercial pest control revenue increased approximately 11% and termite and ancillary services grew approximately 14% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing approximately 5% in residential, approximately 8% in commercial, and approximately 10% in termite and ancillary activity.
Rollins has the ability to expand its borrowing availability under the Credit Agreement in the form of increased revolving commitments or one or more tranches of term loans by up to an additional $750 million, subject to the agreement of the participating lenders and certain other customary conditions.
Dollars and other currencies, subject to a $400 million foreign currency sublimit. Rollins has the ability to expand its borrowing availability under the Credit Agreement in the form of increased revolving commitments or one or more tranches of term loans by up to an additional $750 million, subject to the agreement of the participating lenders and certain other customary conditions.
Risks are managed through either high deductible insurance or, for Clark Pest Control only, a non-affiliated group captive insurance member arrangement.
Risks are managed through either high deductible insurance or, for Clark Pest Control 38 Table of Contents only, a non-affiliated group captive insurance member arrangement.
During 2024, we made significant strides in all four pillars of our strategic objectives: 1) people first 2) customer loyalty 3) growth mindset and 4) operational efficiency. People First We continue to focus on the development of our people.
During 2025, we continued to make strides in all four pillars of our strategic objectives: 1) people first 2) customer loyalty 3) growth mindset and 4) operational efficiency. People First We continue to focus on the development of our people.
In addition, the Form S-3 shelf registration statement on file with the SEC registered $1.5 billion of the Company’s common stock, preferred stock, debt securities, depository shares, warrants, rights, purchase contracts and units for future issuance.
Active Shelf Registration The Form S-3 shelf registration statement on file with the SEC registered $1.5 billion of the Company’s common stock, preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts and units for future issuance by the Company.
See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.
See "Non-GAAP Financial Measures" below for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure.
Adjusted net income and adjusted EPS Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control, and restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses.
Adjusted net income and adjusted EPS Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses.
Approximately $48.5 million is held in cash by foreign subsidiaries and the remaining $41.1 million is held at domestic banks. We intend to continue to grow the business in the international markets where we have a presence.
Approximately $50.5 million is held in cash by foreign subsidiaries and the remaining $49.5 million is held at domestic banks and also includes cash-in-transit. We intend to continue to grow the business in the international markets where we have a presence.
(9) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our consolidated balance sheet. (10) Represents 90% of cash and cash equivalents per our consolidated balance sheet as of both periods presented.
(8) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our consolidated statements of financial position. (9) Represents 90% of cash and cash equivalents per our consolidated statements of financial position as of both periods presented.
The Company has not sold any such securities as of the date of this Form 10-K. Management is continually evaluating the Company's financial structure and the potential need or desirability of raising additional liquidity through the sale of debt or equity securities.
The Company has not sold any such securities in a primary offering as of the date of this Form 10-K. Management is continually evaluating the Company's financial structure and the potential need or desirability of raising additional liquidity through the sale of debt or equity securities. The Form S-3 will expire in June 2026.
The US Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for US federal income tax purposes in the fourth quarter of 2024. That estimated tax payment of approximately $32.0 million is now due in the second quarter of 2025.
Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was made during the second quarter of 2025.
The increase in revenues was driven by demand from our customers that remained strong throughout the year across all major service offerings. Comparing 2024 to 2023, organic revenue* growth was 7.9% with acquisitions adding 3.1% during the year, offset by divestitures of 0.7%.
The increase in revenues was largely driven by demand from our customers that remained strong throughout the year across all major service offerings. Comparing 2025 to 2024, organic revenue* growth was 6.9% with acquisitions adding 4.1% during the year.
During 2024, the Company invested $27.6 million in capital expenditures, offset by $4.1 million in cash proceeds from the sale of assets, compared with $32.5 million of capital expenditures, $12.5 million in cash proceeds from asset sales, and $15.9 million in cash proceeds from the sale of businesses during 2023.
The Company invested $28.1 million in capital expenditures during the year, offset by $7.5 million in cash proceeds from the sale of assets, compared with $27.6 million of capital expenditures and $4.1 million in cash proceeds from asset sales in 2024.
A total of $298.0 million was paid in cash dividends ($0.62 per share) during the twelve months ended December 31, 2024, compared to $264.3 million in cash dividends paid ($0.54 per share) during the twelve months ended December 31, 2023.
A total of $327.9 million was paid in cash dividends ($0.68 per share) during the twelve months ended December 31, 2025, compared to $298.0 million in cash dividends paid ($0.62 per share) during the twelve months ended December 31, 2024.
(11) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less. 33 Table of Contents Liquidity and Capital Resources Cash and Cash Flow The Company’s $89.6 million of total cash at December 31, 2024 is held at various banking institutions.
(10) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less. 35 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash The Company’s $100.0 million of total cash at December 31, 2025 is held at various banking institutions.
Cash Used in Investing Activities The Company’s investing activities used $176.2 million and $372.9 million for the twelve months ended December 31, 2024 and 2023, respectively.
Cash Used in Investing Activities The Company’s investing activities used cash of $326.7 million and $176.2 million for the twelve months ended December 31, 2025 and 2024, respectively.
Borrowings under the Credit Facility are presented under the long-term debt caption of our consolidated balance sheet, net of $1.7 million and $2.2 million in unamortized debt issuance costs as of December 31, 2024 and December 31, 2023, respectively.
Borrowings under the Revolving Credit Facility are presented under the long-term debt caption of our consolidated statements of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.
Management uses adjusted SG&A to compare SG&A expenses consistently over various periods. Leverage ratio Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding operating lease liabilities to total long-term debt less a cash adjustment of 90% of total consolidated cash.
Leverage ratio Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding short-term debt and operating lease liabilities to total long-term debt less a cash adjustment of 90% of total consolidated cash.
Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses.
Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses associated with the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses.
The Company’s operating activities generated net cash of $607.7 million and $528.4 million for the twelve months ended December 31, 2024 and 2023, respectively. The $79.3 million increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to vendors, employees, and tax and regulatory authorities.
The Company’s operating activities generated net cash of $678.1 million and $607.7 million for the twelve months ended December 31, 2025 and 2024, respectively. The $70.5 million, or 11.6%, increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.
In 2012, the Company’s Board of Directors authorized the purchase of up to 5 million shares of the Company’s common stock. After adjustments for stock splits, the total authorized shares under the share repurchase program is 16.9 million shares. As of December 31, 2024, we have a remaining authorization of 11.4 million shares under the share repurchase program.
Share Repurchase Program In 2012, the Company’s Board of Directors authorized the purchase of up to 5 million shares of the Company’s common stock. After adjustments for stock splits, the total authorized shares under the share repurchase plan is 16.9 million shares.
Cash paid for acquisitions totaled $157.5 million for the twelve months ended December 31, 2024, as compared to $366.9 million for the twelve months ended December 31, 2023, driven primarily by the acquisition of Fox in 2023.
Cash paid for acquisitions totaled $309.5 million for the twelve months ended December 31, 2025, compared to $157.5 million for the twelve months ended December 31, 2024, primarily driven by the acquisition of Saela Pest Control in 2025.
The Company did not repurchase shares of its common stock on the open market during 2024 or 2023. The Company also withheld $11.6 million and $10.8 million of common stock for the twelve months ended December 31, 2024 and 2023, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.
The Company also withheld $16.2 million and $11.6 million of common stock for the twelve months ended December 31, 2025 and 2024, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.
Gross Profit (exclusive of Depreciation and Amortization) Gross profit for the twelve months ended December 31, 2024 was $1.8 billion, an increase of $182.1 million, or 11.4%, compared to $1.6 billion for the year ended December 31, 2023. Gross margin improved 50 basis points to 52.7% in 2024 compared to 52.2% in 2023, as pricing more than offset inflationary pressures.
Gross Profit (exclusive of Depreciation and Amortization) Gross profit for the twelve months ended December 31, 2025 was $2.0 billion, an increase of $198.5 million, or 11.1%, compared to $1.8 billion for the year ended December 31, 2024. Gross margin improved 10 basis points to 52.8% in 2025 compared to 52.7% in 2024.
We saw 20 basis points of leverage in fleet and 10 basis points of leverage in materials and supplies, while employee expenses and insurance and claims were flat as a percentage of revenue.
We saw leverage across a number of cost categories including 30 basis points in materials and supplies and 20 basis points in insurance and claims, partially offset by 30 basis points of higher fleet costs, while employee expenses were flat as a percentage of revenue.
Management believes that free cash flow is an important financial measure for use in evaluating the Company’s liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity.
Free cash flow and adjusted free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity.
Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income. Management uses free cash flow conversion to demonstrate how much net income is converted into cash.
Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income. Adjusted free cash flow is calculated by adding back to cash provided by operating activities the impact of certain delayed income tax payments.
Adjusted operating income and adjusted operating margin Adjusted operating income and adjusted operating margin are calculated by adding back to net income those expenses resulting from the amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox, and restructuring costs related to restructuring and workforce reduction plans.
Adjusted operating income and adjusted operating margin Adjusted operating income and adjusted operating margin are calculated by adding back to operating income those expenses associated with the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control.
The Company’s investing activities were funded through existing cash balances, operating cash flows, and borrowings under the Credit Facility. Cash Used in Financing Activities Cash used in financing activities was $440.7 million and $149.4 million during the twelve months ended December 31, 2024 and 2023, respectively.
The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program. Cash Used in Financing Activities Cash used in financing activities was $343.6 million and $440.7 million during the twelve months ended December 31, 2025 and 2024, respectively.
Growth Mindset 2024 marked a record year in terms of revenues, totaling $3.4 billion, an increase of 10.3% over 2023, with acquisition revenues* growing by 3.1% compared to 2023. We completed 44 acquisitions in 2024, including 32 acquisitions and 12 franchise buybacks, driving inorganic growth at our brands both domestically and internationally.
Growth Mindset 2025 marked another record year in terms of revenues, totaling approximately $3.8 billion, an increase of 11.0% over 2024, with acquisition revenues* contributing 4.1% growth in the year. We completed 26 transactions in 2025, including 22 acquisitions and 4 franchise buybacks, driving inorganic growth at our brands both domestically and internationally.
As it relates to our unremitted earnings in foreign jurisdictions, we assert that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore. On February 24, 2023, the Company entered into a revolving credit agreement with, among others, JPMorgan Chase Bank, N.A.
As it relates to our unremitted earnings in foreign jurisdictions, we assert that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore.
See "Non-GAAP Financial Measures" below for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure. 25 Table of Contents The following table presents financial information, including our significant expense categories, for the twelve months ended December 31, 2024 and 2023: Twelve Months Ended December 31, (in thousands) 2024 2023 $ % of Revenue $ % of Revenue Revenue $ 3,388,708 100.0 % $ 3,073,278 100.0 % Less: Cost of services provided (exclusive of depreciation and amortization below): Employee expenses 1,048,992 31.0 % 953,600 31.0 % Materials and supplies 212,296 6.3 % 197,825 6.4 % Insurance and claims 68,326 2.0 % 60,390 2.0 % Fleet expenses 131,898 3.9 % 127,390 4.1 % Other cost of services provided (1) 141,685 4.2 % 130,666 4.3 % Total cost of services provided (exclusive of depreciation and amortization below) 1,603,197 47.3 % 1,469,871 47.8 % Sales, general and administrative: Selling and marketing expenses 427,916 12.6 % 375,805 12.2 % Administrative employee expenses 313,814 9.3 % 291,772 9.5 % Insurance and claims 41,434 1.2 % 37,946 1.2 % Fleet expenses 33,580 1.0 % 31,415 1.0 % Other sales, general and administrative (2) 198,323 5.9 % 178,295 5.8 % Total sales, general and administrative 1,015,067 30.0 % 915,233 29.8 % Restructuring costs — — % 5,196 0.2 % Depreciation and amortization 113,220 3.3 % 99,752 3.2 % Interest expense, net 27,677 0.8 % 19,055 0.6 % Other income, net (683) — % (22,086) (0.7) % Income tax expense 163,851 4.8 % 151,300 4.9 % Net income $ 466,379 13.8 % $ 434,957 14.2 % 1) Other cost of services provided includes facilities costs, professional services, maintenance and repairs, software license costs, and other expenses directly related to providing services. 2) Other sales, general and administrative includes facilities costs, professional services, maintenance and repairs, software license costs, bad debt expense, and other administrative expenses. 26 Table of Contents Revenues The following presents a summary of revenues by service offering: Revenues for the year ended December 31, 2024 were $3.4 billion, an increase of $315.4 million, or 10.3%, from 2023 revenues of $3.1 billion.
The following table presents financial information, including our significant expense categories, for the twelve months ended December 31, 2025 and 2024 Twelve Months Ended December 31, (in thousands) 2025 2024 $ % of Revenue $ % of Revenue Revenue $ 3,761,050 100.0 % $ 3,388,708 100.0 % Less: Cost of services provided (exclusive of depreciation and amortization below): Employee expenses 1,166,044 31.0 % 1,048,992 31.0 % Materials and supplies 225,462 6.0 % 212,296 6.3 % Insurance and claims 66,897 1.8 % 68,326 2.0 % Fleet expenses 157,461 4.2 % 131,898 3.9 % Other cost of services provided (1) 161,142 4.3 % 141,685 4.2 % Total cost of services provided (exclusive of depreciation and amortization below) 1,777,006 47.2 % 1,603,197 47.3 % Sales, general and administrative: Selling and marketing expenses 484,859 12.9 % 427,916 12.6 % Administrative employee expenses 345,643 9.2 % 313,814 9.3 % Insurance and claims 40,816 1.1 % 41,434 1.2 % Fleet expenses 39,608 1.1 % 33,580 1.0 % Other sales, general and administrative (2) 222,306 5.9 % 198,323 5.9 % Total sales, general and administrative 1,133,232 30.1 % 1,015,067 30.0 % Depreciation and amortization 124,744 3.3 % 113,220 3.3 % Interest expense, net 28,558 0.8 % 27,677 0.8 % Other (income) expense, net (3,416) (0.1) % (683) — % Income tax expense 174,221 4.6 % 163,851 4.8 % Net income $ 526,705 14.0 % $ 466,379 13.8 % 1) Other cost of services provided includes facilities costs, professional services, maintenance and repairs, software license costs, and other expenses directly related to providing services. 2) Other sales, general and administrative includes facilities costs, professional services, maintenance and repairs, software license costs, bad debt expense, and other administrative expenses. 28 Table of Contents Revenues The following presents a summary of revenues by service offering: Revenues for the year ended December 31, 2025 were $3.8 billion, an increase of $372.3 million, or 11.0%, from 2024 revenues of $3.4 billion.
Operational Efficiency We saw healthy margins in 2024, with gross margin improving 50 basis points to 52.7% in 2024 compared to 52.2% in 2023. Operating margin was 19.4% of revenue, an increase of 40 basis points over 2023 and adjusted operating income margin* was 19.9%, an increase of 20 basis points over the prior year. *Amounts are non-GAAP financial measures.
Operational Efficiency 26 Table of Contents We saw healthy margins in 2025, with gross margin improving 10 basis points to 52.8% in 2025 compared to 52.7% in 2024. Operating margin was 19.3% of revenue, a decrease of 10 basis points as compared to 2024 and adjusted operating margin* was 20.0%, an increase of 10 basis points over the prior year.
Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. 29 Table of Contents EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin and adjusted incremental EBITDA margin EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes.
Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
The following table sets forth a summary of our cash flows from operating, investing and financing activities for the year ended December 31, 2024 and 2023: Year Ended December 31, Variance (in thousands) 2024 2023 $ % Net cash provided by operating activities 607,653 528,366 79,287 15.0 Net cash used in investing activities (176,232) (372,895) (196,663) (52.7) Net cash used in financing activities (440,708) (149,420) 291,288 194.9 Effect of exchange rate on cash (4,908) 2,428 (7,336) N/M Net (decrease) increase in cash and cash equivalents $ (14,195) $ 8,479 (22,674) N/M N/M - calculation not meaningful 34 Table of Contents Cash Provided by Operating Activities Cash from operating activities is the principal source of cash generation for our businesses.
The following table sets forth a summary of our cash flows from operating, investing and financing activities for the years ended December 31, 2025 and 2024: Year Ended December 31, (in thousands) 2025 2024 Net cash provided by operating activities 678,107 607,653 Net cash used in investing activities (326,699) (176,232) Net cash used in financing activities (343,579) (440,708) Effect of exchange rate on cash 2,545 (4,908) Net increase (decrease) in cash and cash equivalents $ 10,374 $ (14,195) Cash Provided by Operating Activities Cash from operating activities is the principal source of cash generation for our businesses.
The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from a full year of acquisition costs of FPC Holdings, LLC ("Fox Pest Control", or "Fox"). Operating Income For the twelve months ended December 31, 2024, operating income increased $74.0 million or 12.7% compared to the prior year.
The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela. Operating Income For the twelve months ended December 31, 2025, operating income increased $68.8 million or 10.5% compared to the prior year. As a percentage of revenue, operating income decreased to 19.3% from 19.4% in the prior year.
While we exclude such expenses in this non-GAAP measure, such expenses are expected to recur, the revenue from the acquired company is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation. (2) Restructuring costs consist of costs primarily related to severance and benefits paid to employees pursuant to restructuring and workforce reduction plans.
While we exclude such expenses in this non-GAAP measure, the revenue from the acquired company is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation. (2) Consists of the gain or loss on the sale of non-operational assets.
During 2024, we continued to make strategic improvements to both our support functions, as well as the customer-facing side of our business, by hiring and onboarding the right people 23 Table of Contents into the right roles. Additionally, we upgraded our training and onboarding programs to help improve our overall teammate retention.
We continued to make strategic improvements to both our support functions, as well as the customer-facing side of our business, by hiring and onboarding the right people into the right roles. We introduced The Co-Lab, where our people managers develop servant leadership skills to help them develop themselves, their people and ultimately our business.
The Company believes its current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, available borrowings under its Credit Facility, access to debt financing based on our creditworthiness, and our newly announced $1 billion commercial paper program authorization, which is backstopped by our Credit Facility, will be sufficient to finance its current operations and obligations, and fund expansion of the business for the foreseeable future.
We believe our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program which is backstopped by our Revolving Credit Facility, as defined below, and available borrowings under our Revolving Credit Facility will be sufficient to finance our current operations and obligations and fund expansion of the business for the foreseeable future. 2035 Senior Notes In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Section 4(a)(2) and Rule 144A under the Securities Act.
Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows. Adjusted sales, general and administrative ("SG&A") Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox.
Therefore, management believes it is important to view free cash flow and adjusted free cash flow as measures that provide supplemental information to our consolidated statements of cash flows.
The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims.
These letters of credit are required by the Company’s insurance carriers, due to the Company’s high deductible insurance program, to secure various workers’ compensation and casualty insurance contracts coverage. The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims.
Interest Expense, Net During the twelve months ended December 31, 2024, interest expense, net increased $8.6 million compared to the prior year, due to the increase in the average debt balance associated primarily with the share repurchase completed in the third quarter of 2023 and the acquisition of Fox in the second quarter of 2023.
Interest Expense, Net During the twelve months ended December 31, 2025, interest expense, net increased $0.9 million compared to the prior year, due to the increase in the average debt balance associated primarily with the issuance of our 2035 Senior Notes, as well as borrowings under our commercial paper program.
(8) As of December 31, 2024 and December 31, 2023, the Company had outstanding borrowings of $397.0 million and $493.0 million, respectively, under the Credit Facility.
(7) As of December 31, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility.
Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage. 30 Table of Contents Twelve Months Ended December 31, Variance 2024 2023 $ % Reconciliation of Revenues to Organic Revenues Revenues $ 3,388,708 $ 3,073,278 315,430 10.3 Revenues from acquisitions (95,517) — (95,517) 3.1 Revenues of divestitures — (20,559) 20,559 (0.7) Organic revenues $ 3,293,191 $ 3,052,719 240,472 7.9 Reconciliation of Residential Revenues to Organic Residential Revenues Residential revenues $ 1,535,104 $ 1,409,872 125,232 8.9 Residential revenues from acquisitions (62,799) — (62,799) 4.5 Residential revenues of divestitures — (11,913) 11,913 (0.8) Residential organic revenues $ 1,472,305 $ 1,397,959 74,346 5.2 Reconciliation of Commercial Revenues to Organic Commercial Revenues Commercial revenues $ 1,125,964 $ 1,024,176 101,788 9.9 Commercial revenues from acquisitions (24,460) — (24,460) 2.4 Commercial revenues of divestitures — (8,646) 8,646 (0.8) Commercial organic revenues $ 1,101,504 $ 1,015,530 85,974 8.3 Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues Termite and ancillary revenues $ 688,186 $ 605,533 82,653 13.6 Termite and ancillary revenues from acquisitions (8,258) — (8,258) 1.4 Termite and ancillary organic revenues $ 679,928 $ 605,533 74,395 12.2 31 Table of Contents Twelve Months Ended December 31, Variance 2024 2023 $ % Reconciliation of Operating Income and Operating Income Margin to Adjusted Operating Income and Adjusted Operating Margin Operating income $ 657,224 $ 583,226 Fox acquisition-related expenses (1) 17,902 15,795 Restructuring costs (2) — 5,196 Adjusted operating income $ 675,126 $ 604,217 70,909 11.7 Revenues $ 3,388,708 $ 3,073,278 Operating income margin 19.4 % 19.0 % Adjusted operating margin 19.9 % 19.7 % Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS (7) Net income $ 466,379 $ 434,957 Fox acquisition-related expenses (1) 17,902 15,795 Restructuring costs (2) — 5,196 Loss (gain) on sale of assets, net (3) (683) (6,636) Gain on sale of businesses (4) — (15,450) Tax impact of adjustments (5) (4,408) 280 Adjusted net income $ 479,190 $ 434,142 45,048 10.4 EPS - basic and diluted $ 0.96 $ 0.89 Fox acquisition-related expenses (1) 0.04 0.03 Restructuring costs (2) — 0.01 Loss (gain) on sale of assets, net (3) — (0.01) Gain on sale of businesses (4) — (0.03) Tax impact of adjustments (5) (0.01) — Adjusted EPS - basic and diluted (6) $ 0.99 $ 0.89 0.10 11.2 Weighted average shares outstanding - basic 484,249 489,949 Weighted average shares outstanding - diluted 484,295 490,130 Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin (7) Net income $ 466,379 $ 434,957 Depreciation and amortization 113,220 99,752 Interest expense, net 27,677 19,055 Provision for income taxes 163,851 151,300 EBITDA 771,127 705,064 66,063 9.4 Fox acquisition-related expenses (1) $ 1,049 $ 3,148 Restructuring costs (2) — 5,196 Loss (gain) on sale of assets, net (3) (683) (6,636) Gain on sale of businesses (4) — (15,450) Adjusted EBITDA $ 771,493 $ 691,322 80,171 11.6 Revenues $ 3,388,708 $ 3,073,278 EBITDA margin 22.8 % 22.9 % Incremental EBITDA margin 20.9 % Adjusted EBITDA margin 22.8 % 22.5 % Adjusted incremental EBITDA margin 25.4 % Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion Net cash provided by operating activities $ 607,653 528,366 Capital expenditures $ (27,572) $ (32,465) Free cash flow $ 580,081 $ 495,901 84,180 17.0 Free cash flow conversion 124.4 % 114.0 % 32 Table of Contents Twelve Months Ended December 31, 2024 2023 Reconciliation of SG&A to Adjusted SG&A SG&A $ 1,015,067 $ 915,233 Fox acquisition-related expenses (1) 1,049 3,148 Adjusted SG&A $ 1,014,018 $ 912,085 Revenues $ 3,388,708 $ 3,073,278 Adjusted SG&A as a % of revenues 29.9 % 29.7 % Twelve Months Ended December 31, 2024 2023 Reconciliation of Long-term Debt and Net Income to Leverage Ratio Long-term debt (8) $ 397,000 $ 493,000 Operating lease liabilities (9) 417,218 325,572 Cash adjustment (10) (80,667) (93,443) Adjusted net debt $ 733,551 $ 725,129 Net income $ 466,379 $ 434,957 Depreciation and amortization 113,220 99,752 Interest expense, net 27,677 19,055 Provision for income taxes 163,851 151,300 Operating lease cost (11) 133,420 110,627 Stock-based compensation expense 29,984 24,605 Adjusted EBITDAR $ 934,531 $ 840,296 Leverage ratio 0.8x 0.9x (1) Consists of expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control.
Twelve Months Ended December 31, Variance 2025 2024 $ % Reconciliation of Revenues to Organic Revenues Revenues $ 3,761,050 $ 3,388,708 372,342 11.0 Revenues from acquisitions (138,587) — (138,587) 4.1 Organic revenues $ 3,622,463 $ 3,388,708 233,755 6.9 Reconciliation of Residential Revenues to Organic Residential Revenues Residential revenues $ 1,693,244 $ 1,535,104 158,140 10.3 Residential revenues from acquisitions (80,778) — (80,778) 5.3 Residential organic revenues $ 1,612,466 $ 1,535,104 77,362 5.0 Reconciliation of Commercial Revenues to Organic Commercial Revenues Commercial revenues $ 1,244,733 $ 1,125,964 118,769 10.5 Commercial revenues from acquisitions (32,686) — (32,686) 2.9 Commercial organic revenues $ 1,212,047 $ 1,125,964 86,083 7.6 Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues Termite and ancillary revenues $ 781,542 $ 688,186 93,356 13.6 Termite and ancillary revenues from acquisitions (25,123) — (25,123) 3.7 Termite and ancillary organic revenues $ 756,419 $ 688,186 68,233 9.9 Reconciliation of Franchise and Other Revenues to Organic Franchise and Other Revenues Franchise and other revenues $ 41,531 $ 39,454 2,077 5.3 Franchise and other revenues from acquisitions — — — — Franchise and other organic revenues $ 41,531 $ 39,454 2,077 5.3 33 Table of Contents Twelve Months Ended December 31, Variance 2025 2024 $ % Reconciliation of Operating Income and Operating Margin to Adjusted Operating Income and Adjusted Operating Margin Operating income $ 726,068 $ 657,224 Acquisition-related expenses (1) 26,132 17,902 Adjusted operating income $ 752,200 $ 675,126 77,074 11.4 Revenues $ 3,761,050 $ 3,388,708 Operating margin 19.3 % 19.4 % Adjusted operating margin 20.0 % 19.9 % Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS Net income $ 526,705 $ 466,379 Acquisition-related expenses (1) 26,132 17,902 (Gain) loss on sale of assets, net (2) (2,332) (683) Tax impact of adjustments (3) (6,093) (4,408) Adjusted net income $ 544,412 $ 479,190 65,222 13.6 EPS - basic and diluted $ 1.09 $ 0.96 Acquisition-related expenses (1) 0.05 0.04 (Gain) loss on sale of assets, net (2) — — Tax impact of adjustments (3) (0.01) (0.01) Adjusted EPS - basic and diluted (4) $ 1.12 $ 0.99 0.13 13.1 Weighted average shares outstanding - basic 484,105 484,249 Weighted average shares outstanding - diluted 484,147 484,295 Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin Net income $ 526,705 $ 466,379 Depreciation and amortization 124,744 113,220 Interest expense, net 28,558 27,677 Provision for income taxes 174,221 163,851 EBITDA 854,228 771,127 83,101 10.8 Acquisition-related expenses (1) $ 3,248 $ 1,049 (Gain) loss on sale of assets, net (2) (2,332) (683) Adjusted EBITDA $ 855,144 $ 771,493 83,651 10.8 Revenues $ 3,761,050 $ 3,388,708 EBITDA margin 22.7 % 22.8 % Incremental EBITDA margin 22.3 % Adjusted EBITDA margin 22.7 % 22.8 % Adjusted incremental EBITDA margin 22.5 % Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow, Free Cash Flow Conversion, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Conversion Net cash provided by operating activities $ 678,107 607,653 Capital expenditures $ (28,086) $ (27,572) Free cash flow $ 650,021 $ 580,081 69,940 12.1 Delayed income tax payments (5) 21,710 (21,710) Adjusted free cash flow $ 671,731 $ 558,371 113,360 20.3 Free cash flow conversion 123.4 % 124.4 % Adjusted free cash flow conversion 127.5 % 119.7 % 34 Table of Contents Twelve Months Ended December 31, 2025 2024 Reconciliation of SG&A to Adjusted SG&A SG&A $ 1,133,232 $ 1,015,067 Acquisition-related expenses (1) 3,248 1,049 Adjusted SG&A $ 1,129,984 $ 1,014,018 Revenues $ 3,761,050 $ 3,388,708 Adjusted SG&A as a % of revenues 30.0 % 29.9 % Twelve Months Ended December 31, 2025 2024 Reconciliation of Debt and Net Income to Leverage Ratio Short-term debt (6) $ 123,683 $ — Long-term debt (7) 500,000 397,000 Operating lease liabilities (8) 428,175 417,218 Cash adjustment (9) (90,004) (80,667) Adjusted net debt $ 961,854 $ 733,551 Net income $ 526,705 $ 466,379 Depreciation and amortization 124,744 113,220 Interest expense, net 28,558 27,677 Provision for income taxes 174,221 163,851 Operating lease cost (10) 159,924 133,420 Stock-based compensation expense 39,707 29,984 Adjusted EBITDAR $ 1,053,859 $ 934,531 Leverage ratio 0.9x 0.8x (1) Consists of expenses associated with the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control.
The Company’s foreign operations accounted for approximately 7% of total revenues for the years ended December 31, 2024 and 2023. *Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.
Our outlook reflects current expectations and is subject to significant uncertainty, including factors described under "Risk Factors," many of which are outside the Company's control. *Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.
The Company will continue to monitor the potential impact of Pillar Two proposals and developments on our consolidated financial statements and related disclosures as various tax jurisdictions begin enacting such legislation. 24 Table of Contents Results of Operations—2024 Compared to 2023 Twelve Months Ended December 31, Variance (in thousands, except per share data and margins) 2024 2023 $ % GAAP Metrics Revenues $ 3,388,708 $ 3,073,278 315,430 10.3 Gross profit (1) $ 1,785,511 $ 1,603,407 182,104 11.4 Gross profit margin (1) 52.7 % 52.2 % 50 bps Operating income $ 657,224 $ 583,226 73,998 12.7 Operating income margin 19.4 % 19.0 % 40 bps Net income $ 466,379 $ 434,957 31,422 7.2 EPS $ 0.96 $ 0.89 0.07 7.9 Net cash provided by operating activities $ 607,653 $ 528,366 79,287 15.0 Non-GAAP Metrics Adjusted operating income (2) $ 675,126 $ 604,217 70,909 11.7 Adjusted operating margin (2) 19.9 % 19.7 % 20 bps Adjusted net income (2) $ 479,190 $ 434,142 45,048 10.4 Adjusted EPS (2) $ 0.99 $ 0.89 0.10 11.2 Adjusted EBITDA (2) $ 771,493 $ 691,322 80,171 11.6 Adjusted EBITDA margin (2) 22.8 % 22.5 % 30 bps Free cash flow (2) $ 580,081 $ 495,901 84,180 17.0 (1) Exclusive of depreciation and amortization (2) Amounts are non-GAAP financial measures.
Results of Operations—2025 Compared to 2024 Twelve Months Ended December 31, Variance (in thousands, except per share data and margins) 2025 2024 $ % GAAP Metrics Revenues $ 3,761,050 $ 3,388,708 372,342 11.0 Gross profit (1) $ 1,984,044 $ 1,785,511 198,533 11.1 Gross profit margin (1) 52.8 % 52.7 % 10 bps Operating income $ 726,068 $ 657,224 68,844 10.5 Operating margin 19.3 % 19.4 % -10 bps Net income $ 526,705 $ 466,379 60,326 12.9 EPS $ 1.09 $ 0.96 0.13 13.5 Net cash provided by operating activities $ 678,107 $ 607,653 70,454 11.6 Non-GAAP Metrics Adjusted operating income (2) $ 752,200 $ 675,126 77,074 11.4 Adjusted operating margin (2) 20.0 % 19.9 % 10 bps Adjusted net income (2) $ 544,412 $ 479,190 65,222 13.6 Adjusted EPS (2) $ 1.12 $ 0.99 0.13 13.1 Adjusted EBITDA (2) $ 855,144 $ 771,493 83,651 10.8 Adjusted EBITDA margin (2) 22.7 % 22.8 % -10 bps Free cash flow (2) $ 650,021 $ 580,081 69,940 12.1 27 Table of Contents (1) Exclusive of depreciation and amortization (2) Amounts are non-GAAP financial measures.
The maturity date of the loans under the Credit Agreement is February 24, 2028. Refer to Note 10, Debt to the accompanying financial statements for further details. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Credit Facility. The aggregate effective interest rate on the debt outstanding as of December 31, 2024 was 5.5%.
The maturity date of the loans under the Credit Agreement is February 24, 2028. As of December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.
The Company made net repayments under its credit facility of $96.0 million during the twelve months ended December 31, 2024, compared to net borrowings of $438.0 million during 2023.
Net proceeds from borrowings during the twelve months ended December 31, 2025 were $209.6 million, compared to net repayments of $96.0 million during 2024. 37 Table of Contents During the twelve months ended December 31, 2025, the Company paid $14.2 million of contingent consideration, compared to $39.8 million during the twelve months ended December 31, 2024.
See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure. 28 Table of Contents 2025 Outlook For 2025, the Company anticipates: • The underlying health of core pest control markets, as well as Rollins’ ongoing commitment to operational execution, should support another year of strong organic revenue growth*, further complemented by a strategic and disciplined approach to acquisitions.
We continue to execute a balanced capital allocation program enabled by compounding operating cash flow and a strong balance sheet. 2026 Outlook For 2026, the Company anticipates: • The underlying health of core pest control markets, as well as Rollins’ ongoing commitment to operational execution, should support another year of strong organic revenue growth*, further complemented by a strategic and disciplined approach to acquisitions. • A focus on ongoing modernization efforts, a culture of continuous improvement and pricing should support an improving margin profile. • Compounding operating cash flow and a strong balance sheet should continue to enable a balanced capital allocation strategy. 30 Table of Contents The Company expects to report 7% to 8% organic revenue* growth in 2026.
(“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”), which refinanced its previous credit facility. The Credit Agreement provides for a $1.0 billion revolving Credit Facility, which may be denominated in U.S. Dollars and other currencies, including Euros, Australian Dollars, Canadian Dollars, New Zealand Dollars, Pounds Sterling and Japanese Yen, subject to a $400 million foreign currency sublimit.
Revolving Credit Facility In February 2023, the Company entered into a credit agreement (the "Credit Agreement") with, among others, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”). The Credit Agreement provides for a $1.0 billion revolving credit facility ("Revolving Credit Facility"), which may be denominated in U.S.
In addition, during the twelve months ended December 31, 2023, the Company completed the repurchase of 8,724,100 of the shares of common stock from LOR, Inc ("LOR") for $300.0 million in conjunction with the Offering, as defined in our 2023 Annual Report on Form 10-K.
In addition, during the twelve months ended December 31, 2025, the Company completed the repurchase of 3,478,260 of the shares of common stock for approximately $200.0 million in conjunction with the transaction described below. On November 10, 2025, the Company entered into an underwriting agreement (the “2025 Underwriting Agreement”) with LOR, Inc. and Rollins Holding Company, Inc.
Sales, General and Administrative For the twelve months ended December 31, 2024, sales, general and administrative (SG&A) expenses increased $99.8 million, or 10.9%, compared to the twelve months ended December 31, 2023. The increase is driven by expenses associated with growth initiatives aimed at capitalizing on the health of our underlying markets.
Sales, General and Administrative For the twelve months ended December 31, 2025, sales, general and administrative ("SG&A") expenses increased $118.2 million, or 11.6%, compared to the twelve months ended December 31, 2024. As a percentage of revenue, SG&A increased 10 basis points to 30.1% in 2025 compared to 30.0% in 2024.
No such costs were incurred during the twelve months ended December 31, 2024. Depreciation and Amortization For the twelve months ended December 31, 2024, depreciation and amortization increased $13.5 million, or 13.5%, compared to the twelve months ended December 31, 2023.
Lower volumes negatively impacted leverage across several categories, partially offset by lower insurance and claims costs. 29 Table of Contents Depreciation and Amortization For the twelve months ended December 31, 2025, depreciation and amortization increased $11.5 million, or 10.2%, compared to the twelve months ended December 31, 2024.
Other Income, Net During the twelve months ended December 31, 2024, other income, net decreased $21.4 million primarily due to the Company recognizing a $15.5 million gain on the sale of certain businesses during 2023, with no such gain on sale during 2024, and lower gains on sales of non-operational assets.
Other (Income) Expense, Net During the twelve months ended December 31, 2025, other (income) expense, net increased $2.7 million primarily due to higher gains on sales of non-operational assets. Income Taxes The Company’s effective tax rate was 24.9% in 2025 compared to 26.0% in 2024.
(3) Consists of the gain or loss on the sale of non-operational assets. (4) Represents the gain on the sale of certain non-core businesses. (5) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods.
(3) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods. (4) In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding. (5) The U.S.
This was partially offset by a lower average effective interest rate in 2024 compared to 2023.
This was partially offset by a lower average effective interest rate on our borrowings. We expect interest expense to be approximately $30 million in 2026 associated with borrowings under our 2035 Senior Notes and commercial paper program.
Removed
Tax Legislation Developments The Organization for Economic Co-operation and Development ("OECD") has proposed a global minimum tax of 15% of reported profits ("Pillar Two") for multinational enterprises with annual global revenues exceeding €750 million. Pillar Two has been agreed upon in principle by over 140 countries and is intended to apply for tax years beginning in 2024.
Added
Our 2025 operating margin reflects weaker volumes in the fourth quarter, but our ongoing modernization efforts position us to deliver an improving margin profile as we look to 2026. *Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.
Removed
The OECD has issued administrative guidance (including transitional safe harbor rules) in conjunction with the implementation of the Pillar Two global minimum tax. These rules did not have a material impact on financial results in 2024 due to certain transitional safe harbors.
Added
The Company’s foreign operations accounted for approximately 7% of total revenues for the years ended December 31, 2025 and 2024. Revenue growth was healthy throughout the year, but we did see weaker volumes in the fourth quarter due to weakness in one-time services associated with less favorable weather conditions. *Amounts are non-GAAP financial measures.
Removed
As a percentage of revenue, SG&A increased 20 basis points to 30.0% in 2024 versus 29.8% in 2023. Selling and marketing costs have increased 40 basis points as we continue to invest in growth initiatives.
Added
Operating margin decreased mostly due to higher fleet costs and higher selling and marketing costs. This was partially offset by lower insurance and claims costs, lower materials and supplies costs, and lower administrative costs.
Removed
This was partially offset by 20 basis points of leverage associated with lower administrative costs. 27 Table of Contents Restructuring Costs For the twelve months ended December 31, 2024, restructuring costs decreased by $5.2 million. During the twelve months ended December 31, 2023, we executed a restructuring program to modernize our workforce.
Added
The reduced rate is primarily due to the purchase of transferable federal income tax credits in 2025. We expect to realize an effective tax rate of 24.5% to 25% in 2026. General Commentary Our team delivered solid results in 2025, producing double-digit revenue, EPS, and operating cash flow growth for the full year.
Removed
As a percentage of revenue, operating income increased to 19.4% from 19.0% in the prior year. The improvement in operating income as a percentage of revenue is primarily driven by the improvement in gross profit discussed previously.
Added
As we look to 2026, demand for our services is solid and our pipeline for acquisitions is robust. We continued to invest meaningfully in our business throughout 2025 and we are well-positioned as we begin 2026.
Removed
Income Taxes The Company’s effective tax rate was 26.0% in 2024 compared to 25.8% in 2023. The 2024 rate was negatively impacted by higher state income taxes and foreign income taxes compared to 2023.
Added
While we had solid full year results, our fourth quarter results were impacted by slower growth in certain parts of our business and a negative impact from weather. Our 2025 operating margin reflects weaker volumes in the fourth quarter, but our ongoing modernization efforts position us to deliver an improving margin profile as we look to 2026.
Removed
General Commentary Our team delivered a strong finish to the 2024 fiscal year, exceeding our own revenue expectations and delivering healthy earnings growth for the full year. As we look to 2025, demand for our services is solid and our pipeline for acquisitions is robust.
Added
While we may see a slower start to the year in the first quarter, the strength of our recurring revenue and ancillary services gives us confidence in our ability to meet our financial outlook for 2026.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−0 removed0 unchanged
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Market Risk The Company is subject to interest rate risk exposure through borrowings on its $1.0 billion revolving credit facility (the "Credit Facility"). As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Credit Facility.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Market Risk The Company is subject to interest rate risk exposure through borrowings on its $1.0 billion revolving credit facility (the "Revolving Credit Facility") and on its commercial paper program.
The Company believes that this foreign exchange rate risk will not have a material impact upon the Company’s results of operations going forward. 36 Table of Contents
The Company believes that this foreign exchange rate risk will not have a material impact upon the Company’s results of operations going forward. 39 Table of Contents
See Note 10, Debt to the accompanying financial statements for further details regarding debt. We do not believe that a one percent increase in interest rates, for example, would have a material effect on our results of operations or cash flows. The Company is also exposed to market risks arising from changes in foreign exchange rates.
We do not believe that a one percent increase in interest rates, for example, would have a material effect on our results of operations or cash flows. The Company is also exposed to market risks arising from changes in foreign exchange rates.
Added
As of December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility and $114.4 million of outstanding commercial paper borrowings. See Note 10, Debt to the accompanying financial statements for further details regarding debt.

Other ROL 10-K year-over-year comparisons