Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2025 AND DECEMBER 31, 2024

(in thousands except share data)

(unaudited)


	June 30, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	123,035	$	89,630
Trade receivables, net of allowance for expected credit losses of $22,882 and $19,770, respectively	229,735		196,081
Financed receivables, short-term, net of allowance for expected credit losses of $2,840 and $2,536, respectively	43,722		40,301
Materials and supplies	43,239		39,531
Other current assets	98,176		77,080
Total current assets	537,907		442,623
Equipment and property, net of accumulated depreciation of $354,876 and $382,266, respectively	129,713		124,839
Goodwill	1,337,903		1,161,085
Customer contracts, net	424,119		383,092
Trademarks & tradenames, net	167,972		149,895
Other intangible assets, net	8,879		8,602
Operating lease right-of-use assets	418,717		414,474
Financed receivables, long-term, net of allowance for expected credit losses of $6,923 and $6,150, respectively	102,625		89,932
Other assets	52,205		45,153
Total assets	$	3,180,040	$	2,819,695
LIABILITIES
Short-term debt	$	59,989	$	—
Accounts payable	73,798		49,625
Accrued insurance - current	64,483		54,840
Accrued compensation and related liabilities	120,826		122,869
Unearned revenues	200,110		180,851
Operating lease liabilities - current	130,822		121,319
Other current liabilities	138,052		115,658
Total current liabilities	788,080		645,162
Accrued insurance, less current portion	57,706		61,946
Operating lease liabilities, less current portion	291,093		295,899
Long-term debt	485,278		395,310
Other long-term accrued liabilities	114,012		90,785
Total liabilities	1,736,169		1,489,102
Commitments and contingencies (see Note 9)
STOCKHOLDERS’ EQUITY
Preferred stock, without par value; 500,000 shares authorized, zero shares issued	—		—
Common stock, par value $1 per share; 800,000,000 shares authorized, 484,640,136 and 484,372,303 shares issued and outstanding, respectively	484,640		484,372
Additional paid in capital	159,824		155,205
Accumulated other comprehensive loss	(22,607)		(43,634)
Retained earnings	822,014		734,650
Total stockholders’ equity	1,443,871		1,330,593
Total liabilities and stockholders’ equity	$	3,180,040	$	2,819,695

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(in thousands except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
REVENUES
Customer services	$	999,527	$	891,920	$	1,822,031	$	1,640,269
COSTS AND EXPENSES
Cost of services provided (exclusive of depreciation and amortization below)	461,861		410,285		861,995		775,843
Sales, general and administrative	307,596		271,547		558,109		494,604

Depreciation and amortization	31,737		27,711		60,946		55,021
Total operating expenses	801,194		709,543		1,481,050		1,325,468
OPERATING INCOME	198,333		182,377		340,981		314,801
Interest expense, net	7,380		7,775		13,176		15,500
Other (income) expense, net	(292)		(412)		(984)		(351)
CONSOLIDATED INCOME BEFORE INCOME TAXES	191,245		175,014		328,789		299,652
PROVISION FOR INCOME TAXES	49,756		45,617		82,052		75,861
NET INCOME	$	141,489	$	129,397	$	246,737	$	223,791
NET INCOME PER SHARE - BASIC AND DILUTED	$	0.29	$	0.27	$	0.51	$	0.46
Weighted average shares outstanding – basic	484,643		484,244		484,530		484,187
Weighted average shares outstanding – diluted	484,674		484,419		484,559		484,356
DIVIDENDS PAID PER SHARE	$	0.165	$	0.150	$	0.330	$	0.300

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(in thousands)

(unaudited)


	Three Months Ending June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
NET INCOME	$	141,489	$	129,397	$	246,737	$	223,791
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	15,272		1,306		20,503		(4,468)
Pension settlement	—		—		493		—
Unrealized gain (loss) on available for sale securities	62		(30)		31		27

Other comprehensive income (loss), net of tax	15,334		1,276		21,027		(4,441)
Comprehensive income	$	156,823	$	130,673	$	267,764	$	219,350

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2025 AND 2024

(in thousands)

(unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Retained Earnings		Total
	Shares	Amount
Balance at March 31, 2025	484,619	$	484,619	$	149,086	$	(37,941)	$	759,988	$	1,355,752
Net income	—	—		—		—		141,489		141,489
Other comprehensive income, net of tax:
Foreign currency translation adjustments	—	—		—		15,272		—		15,272

Unrealized gains on available for sale securities	—	—		—		62		—		62
Cash dividends	—	—		—		—		(79,463)		(79,463)
Stock compensation	25	25		10,985		—		—		11,010
Shares withheld for payment of employee taxes	(4)	(4)		(247)		—		—		(251)
Balance at June 30, 2025	484,640	$	484,640	$	159,824	$	(22,607)	$	822,014	$	1,443,871


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Retained Earnings		Total
	Shares	Amount
Balance at March 31, 2024	484,230	$	484,230	$	127,531	$	(32,472)	$	588,207	$	1,167,496
Net income	—	—		—		—		129,397		129,397
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	—	—		—		1,306		—		1,306
Unrealized losses on available for sale securities	—	—		—		(30)		—		(30)
Cash dividends	—	—		—		—		(72,578)		(72,578)
Stock compensation	97	97		10,589		—		—		10,686
Shares withheld for payment of employee taxes	(13)	(13)		(206)		—		—		(219)

Balance at June 30, 2024	484,314	$	484,314	$	137,914	$	(31,196)	$	645,026	$	1,236,058

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(in thousands)

(unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Retained Earnings		Total
	Shares	Amount
Balance at December 31, 2024	484,372	$	484,372	$	155,205	$	(43,634)	$	734,650	$	1,330,593
Net income	—	—		—		—		246,737		246,737
Other comprehensive income, net of tax:
Foreign currency translation adjustments	—	—		—		20,503		—		20,503
Pension settlement	—	—		—		493		—		493
Unrealized gains on available for sale securities	—	—		—		31		—		31
Cash dividends	—	—		—		—		(159,373)		(159,373)
Stock compensation	566	566		19,243		—		—		19,809
Shares withheld for payment of employee taxes	(298)	(298)		(14,624)		—		—		(14,922)

Balance at June 30, 2025	484,640	$	484,640	$	159,824	$	(22,607)	$	822,014	$	1,443,871


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income / (Loss)		Retained Earnings		Total
	Shares	Amount
Balance at December 31, 2023	484,080	$	484,080	$	131,840	$	(26,755)	$	566,402	$	1,155,567
Net income	—	—		—		—		223,791		223,791
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	—	—		—		(4,468)		—		(4,468)
Unrealized gains on available for sale securities	—	—		—		27		—		27
Cash dividends	—	—		—		—		(145,167)		(145,167)
Stock compensation	511	511		17,356		—		—		17,867
Shares withheld for payment of employee taxes	(277)	(277)		(11,282)		—		—		(11,559)

Balance at June 30, 2024	484,314	$	484,314	$	137,914	$	(31,196)	$	645,026	$	1,236,058

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2025		2024
OPERATING ACTIVITIES
Net income	$	246,737	$	223,791
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	60,946		55,021
Stock-based compensation expense	19,809		15,560
Provision for expected credit losses	16,461		15,137
Gain on sale of assets, net	(984)		(781)
Provision for deferred income taxes	12,470		—
Other operating activities, net	(1,223)		—
Changes in operating assets and liabilities:
Trade accounts receivable	(44,654)		(39,904)
Financing receivables	(12,927)		(12,523)
Materials and supplies	(2,086)		(4,142)
Other current assets	(18,062)		(30,775)
Accounts payable and accrued expenses	43,967		15,289
Unearned revenue	17,893		24,304
Other long-term assets and liabilities	(16,333)		11,571
Net cash provided by operating activities	322,014		272,548
INVESTING ACTIVITIES
Acquisitions, net of cash acquired	(253,578)		(81,654)
Capital expenditures	(13,857)		(15,867)
Proceeds from sale of assets	3,470		2,313
Other investing activities, net	874		1,587
Net cash used in investing activities	(263,091)		(93,621)
FINANCING ACTIVITIES
Payment of contingent consideration	(3,447)		(30,289)
Issuance of senior notes	492,215		—

Borrowings under revolving commitment	11,000		271,000
Borrowings under commercial paper, net	59,989		—
Repayments of revolving commitment	(408,000)		(260,000)
Payment of debt issuance costs	(5,986)		—
Payment of dividends	(159,373)		(145,167)
Cash paid for common stock purchased	(14,922)		(11,559)
Other financing activities, net	(46)		2,129
Net cash used in financing activities	(28,570)		(173,886)
Effect of exchange rate changes on cash	3,052		(2,169)
Net increase in cash and cash equivalents	33,405		2,872
Cash and cash equivalents at beginning of period	89,630		103,825
Cash and cash equivalents at end of period	$	123,035	$	106,697
Supplemental disclosure of cash flow information:
Cash paid for interest	$	5,211	$	17,558
Cash paid for income taxes, net	$	85,017	$	93,272
Non-cash additions to operating lease right-of-use assets	$	70,534	$	103,235

The accompanying notes are an integral part of these condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

NOTE 1. BASIS OF PREPARATION

Basis of Preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, the instructions to Form 10-Q and applicable sections of Securities and Exchange Commission ("SEC") regulation S-X, and therefore do not include all information and footnotes required by U.S. GAAP for complete financial statements. There have been no material changes in the Company’s significant accounting policies or the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-K of Rollins, Inc. (including its subsidiaries unless the context otherwise requires, “Rollins,” “we,” “us,” “our,” or the “Company”) for the year ended December 31, 2024. Accordingly, the quarterly condensed consolidated financial statements and related disclosures herein should be read in conjunction with the 2024 Annual Report on Form 10-K.

The Company’s condensed 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 condensed consolidated financial statements. In the opinion of management, all material adjustments necessary for a fair presentation of the Company’s financial results for the quarter have been made. These adjustments are of a normal recurring nature but complicated by the continued uncertainty surrounding economic trends. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of results for the entire year. The severity, magnitude and duration of certain economic trends continue to be uncertain and are difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to economic trends and may change materially in future periods.

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

Accounting standards issued but not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, while retrospective application is permitted. The Company is currently evaluating the potential impact of adopting this new ASU on its disclosures.

In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses (DISE)", which requires additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance will be effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures.

NOTE 3. ACQUISITIONS

Saela Pest Control Acquisition

On April 1, 2025, the Company acquired 100% of Saela Holdings, LLC ("Saela") for $207.1 million. The Company funded this acquisition using cash on hand and borrowings under the commercial paper program.

The acquisition will expand the Rollins family of brands, and management believes the acquisition will drive long-term value given Saela's attractive financial profile and complementary end market exposure.

ROLLINS, INC. AND SUBSIDIARIES

The Saela acquisition has been accounted for as a business combination, and Saela's results of operations are included in the Company's operations from the acquisition date. Saela contributed revenues of $18.9 million and net earnings of $2.7 million during the three months ended June 30, 2025.

The valuation of the Saela acquisition is being performed by a third-party valuation specialist under management’s supervision. The preliminary values of identified assets acquired and liabilities assumed for Saela are summarized as follows (in thousands):


	April 1, 2025
Cash	$	1,506
Accounts receivable	832
Materials and supplies	573
Operating lease right-of-use assets	991
Other current assets	414
Equipment and property	4,648
Goodwill	132,959
Customer contracts	52,200
Trademarks & tradenames	17,300
Accounts payable	(1,961)
Accrued compensation and related liabilities	(949)
Other current liabilities	(389)

Operating lease liabilities	(991)
Assets acquired and liabilities assumed	$	207,133

Included in the total consideration above are cash payments of $193.7 million made upon closing, contingent consideration valued at $8.8 million that is based on Saela's expected financial performance in the two years following the acquisition, and holdback liabilities valued at $4.6 million to be held by the Company to settle indemnity claims and purchase price adjustments. The fair value of the contingent consideration was estimated using a Monte Carlo simulation. During the three months ended June 30, 2025, we recognized a charge of $1.1 million related to adjustments to the fair value of contingent consideration resulting from the acquisition of Saela. This charge is reported in sales, general and administrative expenses on our condensed consolidated statement of income.

The acquired Saela customer contracts are estimated to have a remaining useful life of 6.5 years. The acquired trademarks and tradenames are expected to have an indefinite useful life. See Note 6, Goodwill and Intangible Assets, for further details.

Goodwill from this acquisition represents the excess of the purchase price over the fair value of net assets of the business acquired. The factors contributing to the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized. The recognized goodwill is expected to be deductible for tax purposes. Valuations of certain assets and liabilities, including intangible assets and goodwill, as of the acquisition date have not been finalized at this time and are provisional.

ROLLINS, INC. AND SUBSIDIARIES

Pro Forma Financial Information

The following table presents unaudited consolidated pro forma information as if the acquisition of Saela had occurred on January 1, 2024. This information presented below is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisition had actually occurred as of the beginning of such years or results which may be achieved in the future.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Revenues	$	999,527	$	907,560	$	1,850,939	$	1,667,502
Net income	140,628		132,723		253,371		226,433

This information adjusts for the effects of material business combination items, including the alignment of accounting policies, the effect of fair value adjustments including the amortization of acquired intangible assets, and income tax effects.

Other 2025 Acquisitions

The Company made 12 other acquisitions during the six months ended June 30, 2025. The aggregate preliminary values of major classes of assets acquired and liabilities assumed recorded at the dates of acquisition are summarized as follows (in thousands):


	June 30, 2025
Cash	$	263
Accounts receivable	1,348
Materials and supplies	856
Other current assets	231
Equipment and property	5,006
Goodwill	35,120
Customer contracts	25,982
Trademarks & tradenames	887
Other intangible assets	1,253
Current liabilities	(319)
Unearned revenue	(938)
Other assets and liabilities, net	(2,551)
Assets acquired and liabilities assumed	$	67,138

Included in the total consideration of $67.1 million are acquisition holdback liabilities of $8.3 million.

The Company also made payments of $2.8 million for prior year acquisitions during the six months ended June 30, 2025.

Goodwill from acquisitions represents the excess of the purchase price over the fair value of net assets of businesses acquired. The factors contributing to the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized. A majority of the recognized goodwill is expected to be deductible for tax purposes. Valuations of certain assets and liabilities, including intangible assets and goodwill, as of the acquisition date have not been finalized at this time and are provisional.

ROLLINS, INC. AND SUBSIDIARIES

NOTE 4. REVENUE

Revenue, classified by the major geographic areas in which our customers are located, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
United States	$	927,682	$	827,839	$	1,691,251	$	1,521,699
Other countries	71,845		64,081		130,780		118,570
Total revenues	$	999,527	$	891,920	$	1,822,031	$	1,640,269

Revenue from external customers, classified by significant product and service offerings, was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Residential revenues	$	455,665	$	408,414	$	811,978	$	737,752
Commercial revenues	320,490		287,770		604,847		545,884
Termite and ancillary revenues	211,855		186,024		383,985		338,084
Franchise revenues	3,908		4,445		7,678		8,406
Other revenues	7,609		5,267		13,543		10,143
Total revenues	$	999,527	$	891,920	$	1,822,031	$	1,640,269

The Company records unearned revenue when we have either received payment or contractually have the right to bill for services in advance of the services or performance obligations being performed. Unearned revenue recognized in the three months ended June 30, 2025 and 2024 was $68.9 million and $63.4 million, respectively. Unearned revenue recognized in the six months ended June 30, 2025 and 2024 was $135.9 million and $125.3 million, respectively. Changes in unearned revenue were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Beginning balance	$	233,365	$	222,967	$	223,872	$	210,059
Deferral of unearned revenue	78,975		74,369		155,481		149,165
Recognition of unearned revenue	(68,881)		(63,437)		(135,894)		(125,325)
Ending balance	$	243,459	$	233,899	$	243,459	$	233,899

As of June 30, 2025 and December 31, 2024, the Company had long-term unearned revenue of $43.3 million and $43.0 million, respectively, recorded in other long-term accrued liabilities on our condensed consolidated statements of financial position. Unearned short-term revenue is recognized over the next 12-month period. During the three and six months ended June 30, 2025, we recognized $45.2 million and $90.4 million of revenue that was included in the balance of unearned revenue at December 31, 2024. During the three and six months ended June 30, 2024, we recognized $43.1 million and $86.2 million of revenue that was included in the balance of unearned revenue at December 31, 2023. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2035.

Incremental Costs of Obtaining a Contract with a Customer

Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, primarily sales commissions. These costs are recorded as an asset and amortized to expense over the life of the contract to the extent such costs are expected to be recovered. As of June 30, 2025, we have $36.3 million of unamortized capitalized costs to obtain a contract, of which $23.9 million is recorded within other current assets and $12.4 million is recorded within other assets on our condensed consolidated statements of financial position. As of December 31, 2024, we had $23.4 million of unamortized capitalized costs to obtain a contract, of

ROLLINS, INC. AND SUBSIDIARIES

which $19.3 million was recorded within other current assets and $4.1 million was recorded within other assets on our condensed consolidated statements of financial position. During the three and six months ended June 30, 2025, we recorded approximately $7.9 million and $15.0 million, respectively, of amortization of capitalized costs, which is recorded within sales, general and administrative expense on our condensed consolidated statement of income. During the three and six months ended June 30, 2024, we recorded $4.2 million and $8.0 million of amortization of capitalized costs.

NOTE 5. ALLOWANCE FOR CREDIT LOSSES

The Company is exposed to credit losses primarily related to accounts receivables and financed receivables derived from customer services revenue. To reduce credit risk for residential pest control accounts receivable, we promote enrollment in our auto-pay programs. In general, we may suspend future services for customers with past due balances. The Company’s credit risk is generally low with a large number of individuals and entities comprising Rollins’ customer base and dispersion across many different geographical regions.

The Company manages its financed receivables on an aggregate basis when assessing and monitoring credit risks. The Company’s established credit evaluation and monitoring procedures seek to minimize the amount of business we conduct with higher risk customers. The credit quality of a potential obligor is evaluated at the loan origination based on an assessment of the individual’s credit bureau score. Rollins requires a potential obligor to have good credit worthiness with low risk before entering into a contract. Depending upon the individual’s credit score, the Company may accept with 100% financing, require a significant down payment or turn down the contract. Delinquencies of accounts are monitored each month. Financed receivables include installment receivable amounts, some of which are due subsequent to one year from the balance sheet dates.

The Company’s allowances for credit losses for trade accounts receivable and financed receivables are developed using historical collection experience, current economic and market conditions, reasonable and supportable forecasts, and a review of the current status of customers’ receivables. The Company’s receivable pools are classified between residential customers, commercial customers, large commercial customers, and financed receivables. Accounts are written off against the allowance for credit losses when the Company determines that amounts are uncollectible, and recoveries of amounts previously written off are recorded when collected. The Company stops accruing interest to these receivables when they are deemed uncollectible. Below is a roll forward of the Company’s allowance for credit losses for the three and six months ended June 30, 2025 and 2024.


	Allowance for Credit Losses
(in thousands)	Trade Receivables		Financed Receivables		Total Receivables
Balance at December 31, 2024	$	19,770	$	8,686	$	28,456
Provision for expected credit losses	8,081		2,649		10,730
Write-offs charged against the allowance	(5,428)		(2,460)		(7,888)
Recoveries collected	1,276		241		1,517
Balance at March 31, 2025	$	23,699	$	9,116	$	32,815
Provision for expected credit losses	3,031		2,700		5,731
Write-offs charged against the allowance	(5,057)		(2,339)		(7,396)
Recoveries collected	1,209		286		1,495
Balance at June 30, 2025	$	22,882	$	9,763	$	32,645

ROLLINS, INC. AND SUBSIDIARIES


	Allowance for Credit Losses
(in thousands)	Trade Receivables		Financed Receivables		Total Receivables
Balance at December 31, 2023	$	15,797	$	5,602	$	21,399
Provision for expected credit losses	4,823		2,870		7,693
Write-offs charged against the allowance	(7,184)		(2,362)		(9,546)
Recoveries collected	1,428		146		1,574
Balance at March 31, 2024	$	14,864	$	6,256	$	21,120
Provision for expected credit losses	4,503		2,941		7,444
Write-offs charged against the allowance	(4,690)		(2,985)		(7,675)
Recoveries collected	1,423		195		1,618
Balance at June 30, 2024	$	16,100	$	6,407	$	22,507

NOTE 6. GOODWILL AND INTANGIBLE ASSETS

The following table summarizes changes in goodwill during the six months ended June 30, 2025 (in thousands):


Balance at December 31, 2024	$	1,161,085
Additions	168,079

Measurement adjustments	(1,144)
Adjustments due to currency translation and other	9,883
Balance at June 30, 2025	$	1,337,903

The following table sets forth the components of indefinite-lived and amortizable intangible assets as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30, 2025						December 31, 2024
	Gross		Accumulated Amortization		Carrying Value		Gross		Accumulated Amortization		Carrying Value		Useful Life in Years
Amortizable intangible assets:
Customer contracts	$	722,944	$	(298,825)	$	424,119	$	671,242	$	(288,150)	$	383,092	3-20
Trademarks and tradenames	25,220		(14,279)		10,941		24,559		(12,480)		12,079		7-20
Other intangible assets	28,041		(19,162)		8,879		26,507		(17,905)		8,602		3-20
Total amortizable intangible assets	$	776,205	$	(332,266)	$	443,939	$	722,308	$	(318,535)	$	403,773

Indefinite-lived intangible assets					157,031						137,816
Total intangible assets, excluding goodwill					$	600,970					$	541,589

Amortization expense related to intangible assets was $22.9 million and $19.3 million for the three months ended June 30, 2025 and 2024, respectively. Amortization expense related to intangible assets was $43.7 million and $38.0 million for the six months ended June 30, 2025 and 2024, respectively. Amortizable intangible assets are amortized on a straight-line basis over their economic useful lives.

ROLLINS, INC. AND SUBSIDIARIES

Estimated amortization expense for the existing carrying amount of amortizable intangible assets for each of the five succeeding fiscal years as of June 30, 2025 are as follows:


(in thousands)
2025 (excluding the six months ended June 30, 2025)	$	45,593
2026	89,189
2027	85,073
2028	73,915
2029	59,965

NOTE 7. DEBT

Long-term Debt

Components of long-term debt were as follows:


(in thousands)	June 30, 2025		December 31, 2024
2035 Senior Notes	$	500,000	$	—
Revolving Credit Facility	—		397,000
Total long-term debt	$	500,000	$	397,000

Less: unamortized debt discount	(7,515)		—
Less: unamortized debt issuance costs	(7,207)		(1,690)

Total long-term debt, net	$	485,278	$	395,310

2035 Senior Notes and Exchange Offer

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 Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million and paid approximately $6.0 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as defined below, as well as for general corporate purposes.

The 2035 Senior Notes are senior unsecured obligations of the Company and, at the time of issuance, were guaranteed by the Company’s subsidiaries that were guarantors under its Revolving Credit Facility, provided for by the Credit Agreement defined below. Subsequent to the issuance of the 2035 Senior Notes, and described further below, we amended our Credit Agreement to release the Company's subsidiaries as guarantors, which also released them as guarantors on the 2035 Senior Notes.

The indenture governing the 2035 Senior Notes contains customary covenants that limit the Company and its subsidiaries’ ability to, among other things, incur liens and certain types of indebtedness. The indenture also provides for customary events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding 2035 Senior Notes to be due and payable immediately. We were in compliance with all covenants as of June 30, 2025.

On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.6% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes

ROLLINS, INC. AND SUBSIDIARIES

as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes will have no transfer restrictions or registration rights.

The effective interest rate of our 2035 Senior Notes was 5.6% as of June 30, 2025.

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”).

In March 2025, the Company entered into Amendment No. 1 to the Credit Agreement (the “Amendment No 1”), among the Company, JPMorgan Chase, and the lenders party thereto, which amended the Credit Agreement with, among others, the Company and the Administrative Agent. The Amendment No. 1, among other things, released each of Orkin, LLC, Northwest Exterminating Co., LLC, Clark Pest Control of Stockton, Inc. and Hometeam Pest Defense, Inc. (collectively, the “Existing Guarantors”) as guarantors under the Credit Agreement. Following the release of the Existing Guarantors from their guarantees of the obligations under the Credit Agreement, no subsidiary of the Company guarantees the obligations under the Credit Agreement.

The Credit Agreement provides for a $1.0 billion revolving credit facility ("Revolving Credit Facility"), which may be denominated in U.S. 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. The maturity date of the loans under the Credit Agreement is February 24, 2028.

Loans under the Credit Agreement bear interest, at Rollins’ election, at (i) for loans denominated in U.S. Dollars, (A) an alternate base rate (subject to a floor of 0.00%), which is the greatest of (x) the prime rate publicly announced from time to time by JPMorgan Chase, (y) the greater of the federal funds effective rate and the Federal Reserve Bank of New York overnight bank funding rate, plus 50 basis points, and (z) Adjusted Term SOFR for a one month interest period, plus a margin ranging from 0.00% to 0.50% per annum based on Rollins’ consolidated total net leverage ratio; or (B) the greater of term SOFR for the applicable interest period plus 10 basis points (“Adjusted Term SOFR”) and zero, plus a margin ranging from 1.00% to 1.50% per annum based on Rollins’ consolidated total net leverage ratio; and (ii) for loans denominated in other currencies, such interest rates as set forth in the Credit Agreement.

The Credit Agreement contains customary terms and conditions, including, without limitation, certain financial covenants including covenants restricting Rollins’ ability to incur certain indebtedness or liens, or to merge or consolidate with or sell substantially all of its assets to another entity. Further, the Credit Agreement contains a financial covenant restricting Rollins’ ability to permit the ratio of Rollins’ consolidated total net debt to EBITDA to exceed 3.50 to 1.00. Following certain acquisitions, Rollins may elect to increase the financial covenant level to 4.00 to 1.00 temporarily. The Company is in compliance with applicable debt covenants as of June 30, 2025.

As of June 30, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility.

Short-term Debt

Commercial Paper Program

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. Borrowings under this program are generally outstanding for 30 days or less. The net proceeds from the issuance of commercial paper are used for various purposes, including general corporate purposes and funding for acquisitions. Information with respect to our outstanding commercial paper borrowings is as follows:

ROLLINS, INC. AND SUBSIDIARIES


(in thousands)	June 30, 2025			December 31, 2024
Outstanding borrowings (1)	$	59,989		$	—
Weighted average annual interest rate	4.57		%	—
Weighted average remaining term	2.5 days			—

(1) Outstanding commercial paper borrowings are net of unamortized discount and are presented under the short-term debt caption of our condensed consolidated statements of financial position.

Letters of Credit

The Company maintained $82.4 million in letters of credit as of June 30, 2025 and $72.0 million as of December 31, 2024. These letters of credit are required by the Company’s insurance companies, 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.

NOTE 8. FAIR VALUE MEASUREMENT

Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and
Level 3: unobservable inputs for which little or no market data exists.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Debt Securities

As of June 30, 2025 and December 31, 2024, we had investments in international bonds of $7.9 million and $8.2 million, respectively. These bonds are accounted for as available for sale securities and are Level 2 assets under the fair value hierarchy. The bonds are recorded at their fair market values and reported within other current assets and other assets on our condensed consolidated statements of financial position. The unrealized gain or loss activity during the three and six months ended June 30, 2025 and 2024 was not significant.

ROLLINS, INC. AND SUBSIDIARIES

Contingent Consideration

As of June 30, 2025 and December 31, 2024, the Company had $40.2 million and $21.0 million of acquisition holdback and earnout liabilities payable to former owners of acquired companies, respectively. The earnout liabilities were adjusted to reflect the expected probability of payout, and both earnout and holdback liabilities were discounted to their net present value on the Company’s books and are considered Level 3 liabilities. The table below presents a summary of the changes in fair value for these liabilities.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Beginning balance	$	25,005	$	51,858	$	21,008	$	46,104
New acquisitions and measurement adjustments	16,977		3,785		21,707		10,449
Payouts	(2,254)		(33,012)		(3,447)		(34,486)
Interest and fair value adjustments	1,177		9		1,197		543
Charge offset, forfeit and other	(690)		(3)		(250)		27
Ending balance	$	40,215	$	22,637	$	40,215	$	22,637

Other Fair Value Disclosures

The carrying amount of cash and cash equivalents, trade and financed receivables, accounts payable, and short-term liabilities, including short-term borrowings under our commercial paper program, approximate fair value due to their short-term nature. The carrying amounts of borrowings outstanding under our Revolving Credit Facility approximate fair value, as interest rates are variable and reflective of market rates.

The following table presents the aggregate fair value and carrying value of our 2035 Senior Notes, which are classified as Level 2 within the fair value hierarchy:


	June 30, 2025				December 31, 2024
(in thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
2035 Senior Notes	$	502,150	$	485,278	$	—	$	—

NOTE 9. CONTINGENCIES

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, and regulatory and litigation 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, claims related to acquisitions and allegations by federal, state or local authorities, including taxing authorities, of violations of regulations or statutes. 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. 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 ASC 450.

The Company retains, up to specified limits, certain risks related to general liability, workers’ compensation and auto liability. The estimated costs of existing and future claims under the retained loss program are accrued based upon historical trends as incidents occur, whether reported or unreported (although actual settlement of the claims may not be made until future periods) and may be subsequently revised based on developments relating to such claims. The Company contracts with an independent third-party actuary to provide the Company an estimated liability based upon historical claims information. The actuarial study is a major consideration in establishing the reserve, along with management’s knowledge of changes in business practice and existing claims compared to current balances. Management’s judgment is inherently subjective as a number of factors are outside management’s knowledge and control. Additionally, historical information is not always an accurate indication of future events. 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

ROLLINS, INC. AND SUBSIDIARIES

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. 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 governing the management of hazardous waste and pesticide disposal. 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.

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.

NOTE 10. STOCKHOLDERS' EQUITY

During the three months ended June 30, 2025, the Company paid $79.5 million, or $0.165 per share, in cash dividends compared to $72.6 million, or $0.150 per share, during the same period in 2024. During the six months ended June 30, 2025, the Company paid $159.4 million, or $0.330 per share, in cash dividends compared to $145.2 million or $0.300 per share, during the same period in 2024.

The Company withholds shares from employees for the payment of their taxes on equity awards that have vested. The Company withheld $0.3 million and $0.2 million in connection with employee tax obligations during the three month periods ended June 30, 2025 and 2024, respectively. The Company withheld $14.9 million and $11.6 million in connection with employee tax obligations during the six month periods ended June 30, 2025 and 2024, respectively.

The Company did not repurchase shares on the open market during the three and six months ended June 30, 2025 and June 30, 2024.

The following table summarizes the components of the Company’s stock-based compensation programs, including time-lapsed restricted share awards, performance share unit awards, and employee stock purchase plan, recorded as expense:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Stock-based compensation expense	$	11,010	$	8,379	$	19,809	$	15,560

NOTE 11. EARNINGS PER SHARE

The Company reports both basic and diluted earnings per share. Basic earnings per share is computed by dividing net income available to participating common stockholders by the weighted average number of participating common shares outstanding for the period. Diluted earnings per share is calculated by dividing the net income available to participating common shareholders by the diluted weighted average number of shares outstanding for the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive equity.

ROLLINS, INC. AND SUBSIDIARIES

A reconciliation of weighted average shares outstanding is as follows (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Weighted-average outstanding common shares	482,868	482,147	482,725	482,012
Add participating securities:
Weighted-average time-lapse restricted awards	1,775	2,097	1,805	2,175
Total weighted-average shares outstanding – basic	484,643	484,244	484,530	484,187
Dilutive effect of restricted stock units and PSUs	31	175	29	169
Weighted-average shares outstanding – diluted	484,674	484,419	484,559	484,356

NOTE 12. INCOME TAXES

The Company’s provision for income taxes is recorded on an interim basis based upon the Company’s estimate of the annual effective income tax rate for the full year applied to “ordinary” income or loss, adjusted each quarter for discrete items. The Company recorded a provision for income taxes of $49.8 million and $45.6 million for the three months ended June 30, 2025 and 2024, and $82.1 million and $75.9 million for the six months ended June 30, 2025 and 2024, respectively.

The Company’s effective tax rate decreased to 26.0% in the second quarter of 2025 compared with 26.1% in the second quarter of 2024. During the six months ended June 30, 2025, the Company's effective tax rate decreased to 25.0% compared to 25.3% in 2024. The reduced rate was due to a decrease in state income tax expense in 2025.

NOTE 13. SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates under one reportable segment which contains our residential, commercial, and termite and ancillary service offerings. The Company's chief operating decision maker ("CODM") is the chief executive officer. The CODM uses net income to assess financial performance and allocate resources. This financial metric is used by the CODM to make key operating decisions, such as the determination of the rate of growth investments and the allocation of budget between cost categories. The measure of segment assets is reported on the condensed consolidated statements of financial position as total consolidated assets.

ROLLINS, INC. AND SUBSIDIARIES

The following table presents selected financial information with respect to the Company’s single reportable segment:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Revenue	$	999,527	$	891,920	$	1,822,031	$	1,640,269

Less:
Cost of services provided (exclusive of depreciation and amortization below):
Employee expenses	298,354		268,043		560,077		506,572
Materials and supplies	59,500		57,047		107,991		101,833
Insurance and claims	20,734		15,034		37,258		32,678
Fleet expenses	41,834		34,653		78,691		65,351
Other cost of services provided (1)	41,439		35,508		77,978		69,409
Total cost of services provided (exclusive of depreciation and amortization below)	$	461,861	$	410,285	$	861,995	$	775,843

Sales, general and administrative:
Selling and marketing expenses	140,177		125,449		238,428		208,360
Administrative employee expenses	89,303		79,417		170,783		155,195
Insurance and claims	12,939		9,088		22,943		19,614
Fleet expenses	10,443		9,195		19,846		16,960
Other sales, general and administrative (2)	54,734		48,398		106,109		94,475
Total sales, general and administrative	$	307,596	$	271,547	$	558,109	$	494,604


Depreciation and amortization	31,737		27,711		60,946		55,021
Interest expense, net	7,380		7,775		13,176		15,500
Other (income) expense, net	(292)		(412)		(984)		(351)
Income tax expense	49,756		45,617		82,052		75,861
Net income	$	141,489	$	129,397	$	246,737	$	223,791

Other cost of services provided includes facilities costs, professional services, maintenance and repairs, software license costs, and other expenses directly related to providing services.
Other sales, general and administrative includes facilities costs, professional services, maintenance and repairs, software license costs, bad debt expense, and other administrative expenses.

See the consolidated financial statements for other financial information regarding the Company’s reportable segment. See Note 4, Revenue for further information on revenue.

The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized in the condensed consolidated statements of financial position were located as follows:


	June 30, 2025		December 31, 2024
(in thousands)
United States	$	506,544	$	503,767
International	41,886		35,546

ROLLINS, INC. AND SUBSIDIARIES

NOTE 14. SUBSEQUENT EVENTS

Quarterly Dividend

On July 22, 2025, the Company’s Board of Directors declared a regular quarterly cash dividend on its common stock of $0.165 per share payable on September 10, 2025 to shareholders of record at the close of business on August 11, 2025.

Tax Legislation

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). Significant provisions of the OBBBA include the permanent extension of certain provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The Company is currently evaluating the OBBBA and does not expect it will have a material impact on our condensed consolidated financial statements.

ROLLINS, INC. AND SUBSIDIARIES

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