filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF JUNE 30, 2026 AND DECEMBER 31, 2025
(in thousands except share data)
(unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 109,085 | $ | 100,004 | |||||||
| Trade receivables, net of allowance for expected credit losses of $21,002 and $23,528, respectively | 238,989 | 202,518 | |||||||||
| Financed receivables, short-term, net of allowance for expected credit losses of $3,655 and $3,112, respectively | 49,261 | 44,723 | |||||||||
| Materials and supplies | 42,807 | 42,982 | |||||||||
| Other current assets | 150,259 | 82,455 | |||||||||
| Total current assets | 590,401 | 472,682 | |||||||||
| Equipment and property, net of accumulated depreciation of $251,921 and $237,815, respectively | 126,689 | 126,187 | |||||||||
| Goodwill | 1,449,382 | 1,374,664 | |||||||||
| Customer contracts, net | 421,384 | 407,516 | |||||||||
| Trademarks & tradenames, net | 173,247 | 166,779 | |||||||||
| Other intangible assets, net | 6,901 | 8,089 | |||||||||
| Operating lease right-of-use assets | 408,136 | 424,528 | |||||||||
| Financed receivables, long-term, net of allowance for expected credit losses of $9,321 and $7,922, respectively | 118,181 | 110,057 | |||||||||
| Other assets | 60,611 | 50,021 | |||||||||
| Total assets | $ | 3,354,932 | $ | 3,140,523 | |||||||
| LIABILITIES | |||||||||||
| Short-term debt | $ | 215,918 | $ | 123,683 | |||||||
| Accounts payable | 79,759 | 44,361 | |||||||||
| Accrued insurance - current | 48,706 | 44,123 | |||||||||
| Accrued compensation and related liabilities | 132,197 | 128,259 | |||||||||
| Unearned revenues | 196,468 | 187,670 | |||||||||
| Operating lease liabilities - current | 138,677 | 137,410 | |||||||||
| Other current liabilities | 126,376 | 120,019 | |||||||||
| Total current liabilities | 938,101 | 785,525 | |||||||||
| Accrued insurance, less current portion | 92,394 | 79,157 | |||||||||
| Operating lease liabilities, less current portion | 273,601 | 290,765 | |||||||||
| Long-term debt | 487,107 | 486,147 | |||||||||
| Other long-term accrued liabilities | 134,132 | 124,608 | |||||||||
| Total liabilities | 1,925,335 | 1,766,202 | |||||||||
| 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, 481,124,063 and 481,193,751 shares issued and outstanding, respectively | 481,124 | 481,194 | |||||||||
| Additional paid in capital | 180,952 | 179,406 | |||||||||
| Accumulated other comprehensive (loss) income | (27,442) | (25,194) | |||||||||
| Retained earnings | 794,963 | 738,915 | |||||||||
| Total stockholders’ equity | 1,429,597 | 1,374,321 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,354,932 | $ | 3,140,523 |
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, 2026 AND 2025
(in thousands except per share data)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Customer services | $ | 1,078,576 | $ | 999,527 | $ | 1,985,000 | $ | 1,822,031 | |||||||||||||||
| COSTS AND EXPENSES | |||||||||||||||||||||||
| Cost of services provided (exclusive of depreciation and amortization below) | 508,630 | 461,861 | 954,152 | 861,995 | |||||||||||||||||||
| Sales, general and administrative | 334,977 | 307,596 | 617,895 | 558,109 | |||||||||||||||||||
| Depreciation and amortization | 33,610 | 31,737 | 66,108 | 60,946 | |||||||||||||||||||
| Total operating expenses | 877,217 | 801,194 | 1,638,155 | 1,481,050 | |||||||||||||||||||
| OPERATING INCOME | 201,359 | 198,333 | 346,845 | 340,981 | |||||||||||||||||||
| Interest expense, net | 9,391 | 7,380 | 18,242 | 13,176 | |||||||||||||||||||
| Other expense (income), net | 2,214 | (292) | 1,751 | (984) | |||||||||||||||||||
| CONSOLIDATED INCOME BEFORE INCOME TAXES | 189,754 | 191,245 | 326,852 | 328,789 | |||||||||||||||||||
| PROVISION FOR INCOME TAXES | 45,844 | 49,756 | 75,104 | 82,052 | |||||||||||||||||||
| NET INCOME | $ | 143,910 | $ | 141,489 | $ | 251,748 | $ | 246,737 | |||||||||||||||
| NET INCOME PER SHARE - BASIC AND DILUTED | $ | 0.30 | $ | 0.29 | $ | 0.52 | $ | 0.51 | |||||||||||||||
| Weighted average shares outstanding – basic | 481,375 | 484,643 | 481,380 | 484,530 | |||||||||||||||||||
| Weighted average shares outstanding – diluted | 481,389 | 484,674 | 481,397 | 484,559 | |||||||||||||||||||
| DIVIDENDS PAID PER SHARE | $ | 0.1825 | $ | 0.1650 | $ | 0.3650 | $ | 0.3300 |
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, 2026 AND 2025
(in thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| NET INCOME | $ | 143,910 | $ | 141,489 | $ | 251,748 | $ | 246,737 | |||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | (1,276) | 15,272 | (2,387) | 20,503 | |||||||||||||||||||
| Pension settlement | — | — | — | 493 | |||||||||||||||||||
| Unrealized gain (loss) on available for sale securities | 158 | 62 | 139 | 31 | |||||||||||||||||||
| Other comprehensive (loss) income, net of tax | (1,118) | 15,334 | (2,248) | 21,027 | |||||||||||||||||||
| Comprehensive income | $ | 142,792 | $ | 156,823 | $ | 249,500 | $ | 267,764 |
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, 2026 AND 2025
(in thousands)
(unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | 481,462 | $ | 481,462 | $ | 167,767 | $ | (26,324) | $ | 758,783 | $ | 1,381,688 | ||||||||||||||||||||||||
| Net income | — | — | — | — | 143,910 | 143,910 | |||||||||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | (1,276) | — | (1,276) | |||||||||||||||||||||||||||||
| Unrealized gain on available for sale securities | — | — | — | 158 | — | 158 | |||||||||||||||||||||||||||||
| Cash dividends | — | — | — | — | (88,091) | (88,091) | |||||||||||||||||||||||||||||
| Stock compensation | 53 | 53 | 13,631 | — | — | 13,684 | |||||||||||||||||||||||||||||
| Shares withheld for payment of employee taxes | (9) | (9) | (446) | — | — | (455) | |||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | (382) | (382) | — | (19,639) | (20,021) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | 481,124 | $ | 481,124 | $ | 180,952 | $ | (27,442) | $ | 794,963 | $ | 1,429,597 | ||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | 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 (loss) income, net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | 15,272 | — | 15,272 | |||||||||||||||||||||||||||||
| Unrealized gain 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 |
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, 2026 AND 2025
(in thousands)
(unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | 481,194 | $ | 481,194 | $ | 179,406 | $ | (25,194) | $ | 738,915 | $ | 1,374,321 | ||||||||||||||||||||||||
| Net income | — | — | — | — | 251,748 | 251,748 | |||||||||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | (2,387) | — | (2,387) | |||||||||||||||||||||||||||||
| Unrealized gain on available for sale securities | — | — | — | 139 | — | 139 | |||||||||||||||||||||||||||||
| Cash dividends | — | — | — | — | (176,061) | (176,061) | |||||||||||||||||||||||||||||
| Stock compensation | 679 | 679 | 23,984 | — | — | 24,663 | |||||||||||||||||||||||||||||
| Shares withheld for payment of employee taxes | (367) | (367) | (22,438) | — | — | (22,805) | |||||||||||||||||||||||||||||
| Repurchase and retirement of common stock, including excise tax | (382) | (382) | — | — | (19,639) | (20,021) | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | 481,124 | $ | 481,124 | $ | 180,952 | $ | (27,442) | $ | 794,963 | $ | 1,429,597 |
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | 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 (loss) income, net of tax: | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | 20,503 | — | 20,503 | |||||||||||||||||||||||||||||
| Pension settlement | — | — | — | 493 | — | 493 | |||||||||||||||||||||||||||||
| Unrealized gain 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 |
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, 2026 AND 2025
(in thousands)
(unaudited)
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 251,748 | $ | 246,737 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 66,108 | 60,946 | |||||||||
| Stock-based compensation expense | 21,495 | 19,809 | |||||||||
| Provision for expected credit losses | 17,359 | 16,461 | |||||||||
| Loss (gain) on sale of assets, net | 2,135 | (984) | |||||||||
| Provision for deferred income taxes | 2,053 | 12,470 | |||||||||
| Other operating activities, net | 1,778 | (1,223) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Trade accounts receivable | (52,765) | (44,654) | |||||||||
| Financing receivables | (12,412) | (12,927) | |||||||||
| Materials and supplies | (252) | (2,086) | |||||||||
| Other current assets | (67,288) | (18,062) | |||||||||
| Accounts payable and accrued expenses | 47,996 | 43,967 | |||||||||
| Unearned revenue | 8,454 | 17,893 | |||||||||
| Other long-term assets and liabilities | 4,464 | (16,333) | |||||||||
| Net cash provided by operating activities | 290,873 | 322,014 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Acquisitions, net of cash acquired | (135,255) | (253,578) | |||||||||
| Capital expenditures | (13,568) | (13,857) | |||||||||
| Proceeds from sale of assets | 1,121 | 3,470 | |||||||||
| Other investing activities, net | 1,493 | 874 | |||||||||
| Net cash used in investing activities | (146,209) | (263,091) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Payment of contingent consideration | (9,495) | (3,447) | |||||||||
| Issuance of senior notes | — | 492,215 | |||||||||
| Borrowings under revolving commitment | — | 11,000 | |||||||||
| Borrowings under commercial paper, net | 101,488 | 59,989 | |||||||||
| Repayments of revolving commitment | — | (408,000) | |||||||||
| Payment of debt issuance costs | — | (5,986) | |||||||||
| Payment of dividends | (175,941) | (159,373) | |||||||||
| Cash paid for common stock purchased | (42,826) | (14,922) | |||||||||
| Other financing activities, net | (7,948) | (46) | |||||||||
| Net cash used in financing activities | (134,722) | (28,570) | |||||||||
| Effect of exchange rate changes on cash | (861) | 3,052 | |||||||||
| Net increase in cash and cash equivalents | 9,081 | 33,405 | |||||||||
| Cash and cash equivalents at beginning of period | 100,004 | 89,630 | |||||||||
| Cash and cash equivalents at end of period | $ | 109,085 | $ | 123,035 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | 17,729 | $ | 5,211 | |||||||
| Cash paid for income taxes, net | $ | 134,763 | $ | 85,017 | |||||||
| Non-cash additions to operating lease right-of-use assets | $ | 58,896 | $ | 70,534 |
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, 2025. Accordingly, the quarterly condensed consolidated financial statements and related disclosures herein should be read in conjunction with the 2025 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, 2026 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
Recently adopted accounting standards
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance provides an optional practical expedient when applying the guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets resulting from transactions arising from contracts with customers. The Company adopted the ASU effective January 1, 2026 on a prospective basis and elected the practical expedient for the calculation of current expected credit losses. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Accounting standards issued but not yet adopted
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” to amend certain disclosure and presentation requirements for a variety of topics within the Accounting Standards Codification ("ASC"). These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company does not expect that the application of this standard will have a material impact on its condensed consolidated financial statements or 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 disclosures.
ROLLINS, INC. AND SUBSIDIARIES
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance modernizes and clarifies the threshold for when an entity is required to start capitalizing software costs and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The requirements will be applied prospectively with the option for a modified or retrospective application. Early adoption is permitted as of the beginning of an annual reporting period. The Company does not expect that the application of this standard will have a material impact on its condensed consolidated financial statements or disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The update improves the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of this ASU will have on its condensed consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (Evergreen). This evergreen project facilitates Codification updates for a broad range of Topics arising from technical corrections, the unintended application of the Codification, clarifications, and other minor improvements. The Company is currently evaluating the impact that the adoption of this ASU will have on its condensed consolidated financial statements and related disclosures.
NOTE 3. ACQUISITIONS
Romex Pest Control Acquisition
On April 1, 2026, the Company acquired 100% of Romex Pest Control, LLC ("Romex") for $95.7 million. The Company funded this acquisition using cash on hand and borrowings under the commercial paper program.
The acquisition expanded the Rollins family of brands, and management believes the acquisition will drive long-term value given Romex's attractive financial profile and complementary end market exposure.
The Romex acquisition has been accounted for as a business combination, and Romex's results of operations are included in the Company's operations from the acquisition date. During the three months ended June 30, 2026, Romex contributed revenues and net earnings of $10.2 million and $0.8 million, respectively.
The valuation of the Romex acquisition was performed by a third party valuation specialist under management’s supervision. The preliminary values of identified assets acquired and liabilities assumed as of June 30, 2026 are summarized as follows:
ROLLINS, INC. AND SUBSIDIARIES
| (in thousands) | April 1, 2026 | ||||
| Cash | $ | 1,412 | |||
| Accounts receivable | 806 | ||||
| Materials and supplies | 345 | ||||
| Other current assets | 276 | ||||
| Equipment and property | 3,131 | ||||
| Goodwill | 46,223 | ||||
| Customer contracts | 38,600 | ||||
| Trademarks & tradenames | 7,300 | ||||
| Operating lease right-of-use assets | 851 | ||||
| Accounts payable | (117) | ||||
| Accrued compensation and related liabilities | (608) | ||||
| Other current liabilities | (1,364) | ||||
| Operating lease liabilities | (851) | ||||
| Unearned revenue | (287) | ||||
| Assets acquired and liabilities assumed | $ | 95,717 | |||
Included in the total consideration above are cash payments of $85.5 million made upon closing, contingent consideration valued at $5.2 million that is based on Romex's expected financial performance in the two years following the acquisition, and holdback liabilities valued at $5.0 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, 2026, we recognized a charge of $0.9 million related to adjustments to the fair value of contingent consideration resulting from the acquisition of Romex. This charge is reported in sales, general and administrative expenses on our condensed consolidated statement of income.
The acquired Romex customer contracts are estimated to have a remaining useful life of 9.5 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.
Pro Forma Financial Information
The following table presents unaudited consolidated pro forma information as if the acquisition of Romex had occurred on January 1, 2025. 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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenues | $ | 1,078,576 | $ | 1,008,580 | $ | 1,993,521 | $ | 1,838,589 | |||||||||||||||
| Net income | 143,171 | 142,204 | 251,717 | 248,131 | |||||||||||||||||||
ROLLINS, INC. AND SUBSIDIARIES
The 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 2026 Acquisitions
The Company made eight other acquisitions during the six months ended June 30, 2026. 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) | 2026 | ||||
| Cash | $ | 7 | |||
| Accounts receivable | 1,497 | ||||
| Materials and supplies | 230 | ||||
| Equipment and property | 1,616 | ||||
| Goodwill | 28,599 | ||||
| Customer contracts | 21,582 | ||||
| Trademarks & tradenames | 1,016 | ||||
| Accrued compensation and related liabilities | (134) | ||||
| Unearned revenue | (154) | ||||
| Other assets and liabilities, net | 2,069 | ||||
| Assets acquired and liabilities assumed | $ | 56,328 |
Included in the total consideration of $56.3 million are acquisition holdback liabilities of $5.1 million.
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.
Saela Pest Control Acquisition
On April 1, 2025, the Company acquired 100% of Saela Holdings, LLC ("Saela") for $207.2 million. The Company funded this acquisition using cash on hand and borrowings under the commercial paper program.
The acquisition expanded 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.
The Saela acquisition was accounted for as a business combination, and Saela's results of operations are included in the Company's operations from the acquisition date.
The valuation of the Saela acquisition was performed by a third party valuation specialist under management’s supervision. The values of identified assets acquired and liabilities assumed were finalized as of March 31, 2026 and are summarized as follows:
ROLLINS, INC. AND SUBSIDIARIES
| (in thousands) | Final Fair Value | ||||
| Cash | $ | 1,522 | |||
| Accounts receivable | 805 | ||||
| Materials and supplies | 573 | ||||
| Other current assets | 414 | ||||
| Equipment and property | 4,657 | ||||
| Goodwill | 129,262 | ||||
| Customer contracts | 56,300 | ||||
| Trademarks & tradenames | 17,300 | ||||
| Operating lease right-of-use assets | 991 | ||||
| Accounts payable | (1,984) | ||||
| Accrued compensation and related liabilities | (1,064) | ||||
| Other current liabilities | (558) | ||||
| Operating lease liabilities | (991) | ||||
| Assets acquired and liabilities assumed | $ | 207,227 | |||
Included in the total consideration above were 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 $4.7 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 and six months ended June 30, 2026, we recognized a charge of $0.5 million and $1.5 million, respectively, 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 were estimated to have a remaining useful life of 7 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.
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 | 2025 | |||||||||||||||||||||
| Revenues | $ | 999,527 | $ | 1,850,939 | |||||||||||||||||||
| Net income | 140,628 | 253,371 | |||||||||||||||||||||
The 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.
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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| United States | $ | 1,002,793 | $ | 927,682 | $ | 1,842,667 | $ | 1,691,251 | |||||||||||||||||||||||||||
| Other countries | 75,783 | 71,845 | 142,333 | 130,780 | |||||||||||||||||||||||||||||||
| Total revenues | $ | 1,078,576 | $ | 999,527 | $ | 1,985,000 | $ | 1,822,031 |
Revenue from external customers, classified by significant service offering, was as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Residential revenues | $ | 485,845 | $ | 455,665 | $ | 875,349 | $ | 811,978 | |||||||||||||||||||||||||||
| Commercial revenues | 347,913 | 320,490 | 659,639 | 604,847 | |||||||||||||||||||||||||||||||
| Termite and ancillary revenues | 234,151 | 211,855 | 429,574 | 383,985 | |||||||||||||||||||||||||||||||
| Franchise revenues | 4,528 | 3,908 | 8,181 | 7,678 | |||||||||||||||||||||||||||||||
| Other revenues | 6,139 | 7,609 | 12,257 | 13,543 | |||||||||||||||||||||||||||||||
| Total revenues | $ | 1,078,576 | $ | 999,527 | $ | 1,985,000 | $ | 1,822,031 |
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 as revenues in the three months ended June 30, 2026 and 2025 was $75.7 million and $68.9 million, respectively. Unearned revenue recognized in the six months ended June 30, 2026 and 2025 was $148.9 million and $135.9 million, respectively. Changes in unearned revenue were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Beginning balance | $ | 243,118 | $ | 233,365 | $ | 232,986 | $ | 223,872 | |||||||||||||||
| Deferral of unearned revenue | 81,842 | 78,975 | 165,108 | 155,481 | |||||||||||||||||||
| Recognition of unearned revenue | (75,717) | (68,881) | (148,851) | (135,894) | |||||||||||||||||||
| Ending balance | $ | 249,243 | $ | 243,459 | $ | 249,243 | $ | 243,459 |
As of June 30, 2026 and December 31, 2025, the Company had long-term unearned revenue of $52.8 million and $45.3 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, 2026, we recognized approximately $46.9 million and $93.8 million of revenue that was included in the balance of unearned revenue at December 31, 2025. During the three and six months ended June 30, 2025, we recognized approximately $45.2 million and $90.4 million of revenue that was included in the balance of unearned revenue at December 31, 2024. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2036.
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, 2026, we have $53.9 million of unamortized capitalized costs to obtain a contract, of which $39.2 million is recorded within other current assets and $14.7 million is recorded within other assets on our condensed consolidated statements of financial position. As of December 31, 2025, we had $39.1 million of unamortized capitalized costs to obtain a contract, of
ROLLINS, INC. AND SUBSIDIARIES
which $28.9 million was recorded within other current assets and $10.2 million was recorded within other assets on our condensed consolidated statements of financial position. Amortization of capitalized costs is recorded within sales, general and administrative expense on our condensed consolidated statements of income. During the three and six months ended June 30, 2026, we recorded approximately $10.5 million and $20.0 million in amortization of capitalized costs, respectively. During the three and six months ended June 30, 2025, we recorded approximately $7.9 million and $15.0 million in amortization of capitalized costs, respectively.
NOTE 5. ALLOWANCE FOR EXPECTED CREDIT LOSSES
The Company is exposed to credit losses primarily related to accounts receivable and financed receivables derived from customer services revenue. To reduce credit risk for residential 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, as Rollins’ customer base is comprised of a large number of individual customers and dispersed 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 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. Delinquent 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 on 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, 2026 and 2025.
| Allowance for Credit Losses | |||||||||||||||||
| (in thousands) | Trade Receivables | Financed Receivables | Total Receivables | ||||||||||||||
| Balance at December 31, 2025 | $ | 23,528 | $ | 11,034 | $ | 34,562 | |||||||||||
| Provision for expected credit losses | 5,071 | 2,751 | 7,822 | ||||||||||||||
| Write-offs charged against the allowance | (8,127) | (2,321) | (10,448) | ||||||||||||||
| Recoveries collected | 1,536 | 184 | 1,720 | ||||||||||||||
| Balance at March 31, 2026 | $ | 22,008 | $ | 11,648 | $ | 33,656 | |||||||||||
| Provision for expected credit losses | 6,621 | 2,916 | 9,537 | ||||||||||||||
| Write-offs charged against the allowance | (9,206) | (1,714) | (10,920) | ||||||||||||||
| Recoveries collected | 1,579 | 126 | 1,705 | ||||||||||||||
| Balance at June 30, 2026 | $ | 21,002 | $ | 12,976 | $ | 33,978 | |||||||||||
ROLLINS, INC. AND SUBSIDIARIES
| 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 | |||||||||||
NOTE 6. GOODWILL AND INTANGIBLE ASSETS
The following table summarizes changes in goodwill during the six months ended June 30, 2026:
| (in thousands) | |||||
| Balance at December 31, 2025 | $ | 1,374,664 | |||
| Additions | 74,822 | ||||
| Measurement period adjustments | 807 | ||||
| Adjustments due to currency translation and other | (911) | ||||
| Balance at June 30, 2026 | $ | 1,449,382 |
The following table sets forth the components of indefinite-lived and amortizable intangible assets as of June 30, 2026 and December 31, 2025.
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Gross | Accumulated Amortization | Carrying Value | Gross | Accumulated Amortization | Carrying Value | Useful Life in Years | ||||||||||||||||||||||||||||||||||
| Amortizable intangible assets: | |||||||||||||||||||||||||||||||||||||||||
| Customer contracts | $ | 780,500 | $ | (359,116) | $ | 421,384 | $ | 741,568 | $ | (334,052) | $ | 407,516 | 3-20 | ||||||||||||||||||||||||||||
| Trademarks and tradenames | 27,083 | (18,163) | 8,920 | 26,136 | (16,388) | 9,748 | 7-20 | ||||||||||||||||||||||||||||||||||
| Other intangible assets | 28,165 | (21,264) | 6,901 | 28,240 | (20,151) | 8,089 | 3-20 | ||||||||||||||||||||||||||||||||||
| Total amortizable intangible assets | $ | 835,748 | $ | (398,543) | $ | 437,205 | $ | 795,944 | $ | (370,591) | $ | 425,353 | |||||||||||||||||||||||||||||
| Indefinite-lived intangible assets | 164,327 | 157,031 | |||||||||||||||||||||||||||||||||||||||
| Total intangible assets, excluding goodwill | $ | 601,532 | $ | 582,384 |
Amortization expense related to intangible assets was $24.9 million and $22.9 million for the three months ended June 30, 2026 and 2025, respectively. Amortization expense related to intangible assets was $48.7 million and $43.7 million for the six months ended June 30, 2026 and 2025, 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, 2026 are as follows:
| (in thousands) | |||||
| 2026 (excluding the six months ended June 30, 2026) | $ | 48,737 | |||
| 2027 | 93,660 | ||||
| 2028 | 85,191 | ||||
| 2029 | 70,715 | ||||
| 2030 | 49,263 |
NOTE 7. DEBT
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:
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| Outstanding borrowings (1) | $ | 215,918 | $ | 114,430 | |||||||
| Weighted average annual interest rate | 3.97 | % | 3.94 | % | |||||||
| Weighted average remaining term | 4.4 days | 6.3 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.
Bank Overdrafts
As of June 30, 2026, we had no bank overdrafts. As of December 31, 2025, we had $9.3 million of bank overdrafts.
Long-term Debt
Components of long-term debt were as follows:
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| 2035 Senior Notes | $ | 500,000 | $ | 500,000 | |||||||
| Revolving Credit Facility | — | — | |||||||||
| Total long-term debt | $ | 500,000 | $ | 500,000 | |||||||
| Less: unamortized debt discount | (6,736) | (7,125) | |||||||||
| Less: unamortized debt issuance costs | (6,157) | (6,728) | |||||||||
| Total long-term debt, net | $ | 487,107 | $ | 486,147 |
ROLLINS, INC. AND SUBSIDIARIES
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 Section 4(a)(2) and 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 $6.1 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, 2026.
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 99.7% 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 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 have no transfer restrictions or registration rights.
The effective interest rate of our 2035 Senior Notes was 5.6% as of June 30, 2026.
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.
ROLLINS, INC. AND SUBSIDIARIES
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, 2026.
As of June 30, 2026 and December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.
Letters of Credit
The Company maintained $84.6 million in letters of credit as of June 30, 2026 and $82.4 million as of December 31, 2025. 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.
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, 2026 and December 31, 2025, we had investments in international bonds of $4.7 million and $6.2 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, 2026 and 2025 was not significant.
ROLLINS, INC. AND SUBSIDIARIES
Contingent Consideration
As of June 30, 2026 and December 31, 2025, the Company had $44.9 million and $37.1 million of acquisition holdback and earnout liabilities payable to former owners of acquired companies, respectively. Holdback and earnout liabilities are considered Level 3 liabilities under the fair value hierarchy. 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 condensed consolidated statements of financial position. 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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Beginning balance | $ | 34,018 | $ | 25,005 | $ | 37,077 | $ | 21,008 | |||||||||||||||
| New acquisitions and measurement adjustments | 13,306 | 16,977 | 15,853 | 21,707 | |||||||||||||||||||
| Payouts | (3,391) | (2,254) | (9,495) | (3,447) | |||||||||||||||||||
| Interest and fair value adjustments | 1,431 | 1,177 | 1,714 | 1,197 | |||||||||||||||||||
| Charge offset, forfeit and other | (443) | (690) | (228) | (250) | |||||||||||||||||||
| Ending balance | $ | 44,921 | $ | 40,215 | $ | 44,921 | $ | 40,215 |
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, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in thousands) | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||||||||
| 2035 Senior Notes | $ | 497,050 | $ | 487,107 | $ | 512,160 | $ | 486,147 |
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, 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, claims related to acquisitions and allegations by federal, state or local authorities, including taxing and pest control regulatory 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 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
ROLLINS, INC. AND SUBSIDIARIES
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 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.
SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental regulations if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, the Company uses 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 purposes of determining whether disclosure of any such proceedings is required. Also, we will continue to disclose any environmental proceedings that we determine are otherwise material, regardless of the amount of potential monetary sanctions. Currently, there is no required disclosure.
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, 2026, the Company paid $88.1 million, or $0.1825 per share, in cash and stock dividends compared to $79.5 million, or $0.165 per share, during the same period in 2025. During the six months ended June 30, 2026, the Company paid $176.1 million, or $0.3650 per share, in cash and stock dividends compared to $159.4 million, or $0.330 per share, during the same period in 2025.
The Company withholds shares from employees for the payment of their taxes on equity awards that have vested. The Company withheld $0.5 million and $0.3 million in connection with employee tax obligations during the three month periods ended June 30, 2026 and 2025, respectively. The Company withheld $22.8 million and $14.9 million in connection with employee tax obligations during the six month periods ended June 30, 2026 and 2025, respectively.
Share Repurchases
During the three months ended June 30, 2026, the Company paid $20.0 million in open market share repurchases. The Company did not repurchase shares on the open market in 2025.
As we repurchase our common stock, we reduce common stock for par value of the shares repurchased, with the excess of the purchase price over par value recorded as a reduction to additional paid-in capital and retained earnings.
Stock Compensation
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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Stock-based compensation expense | $ | 10,673 | $ | 11,010 | $ | 21,495 | $ | 19,809 |
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:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Weighted-average outstanding common shares | 479,998 | 482,868 | 479,932 | 482,725 | |||||||||||||||||||
| Add participating securities: | |||||||||||||||||||||||
| Weighted-average time-lapse restricted awards | 1,377 | 1,775 | 1,448 | 1,805 | |||||||||||||||||||
| Total weighted-average shares outstanding – basic | 481,375 | 484,643 | 481,380 | 484,530 | |||||||||||||||||||
| Dilutive effect of restricted stock units and PSUs | 14 | 31 | 17 | 29 | |||||||||||||||||||
| Weighted-average shares outstanding – diluted | 481,389 | 484,674 | 481,397 | 484,559 |
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 $45.8 million and $49.8 million for the three months ended June 30, 2026 and 2025, and $75.1 million and $82.1 million for the six months ended June 30, 2026 and 2025, respectively.
The Company’s effective tax rate decreased to 24.2% in the second quarter of 2026 compared with 26.0% in the second quarter of 2025. During the six months ended June 30, 2026, the Company's effective tax rate decreased to 23.0% compared to 25.0% in the six months ended June 30, 2025. The reduced rate for both periods was primarily due to the purchase of transferable federal income tax credits during the three and six months ended June 30, 2026.
Cash paid for taxes, net of refunds, during the six months ended June 30, 2026 was $134.8 million, inclusive of cash paid to taxing authorities and third parties for purchases of investment tax credits.
NOTE 13. SEGMENT AND GEOGRAPHIC INFORMATION
Segment 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) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | 1,078,576 | $ | 999,527 | $ | 1,985,000 | $ | 1,822,031 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Cost of services provided (exclusive of depreciation and amortization below): | |||||||||||||||||||||||
| Employee expenses | 328,787 | 298,354 | 618,509 | 560,077 | |||||||||||||||||||
| Materials and supplies | 66,339 | 59,500 | 119,556 | 107,991 | |||||||||||||||||||
| Insurance and claims | 21,932 | 20,734 | 43,079 | 37,258 | |||||||||||||||||||
| Fleet expenses | 46,959 | 41,834 | 89,131 | 78,691 | |||||||||||||||||||
| Other cost of services provided (1) | 44,613 | 41,439 | 83,877 | 77,978 | |||||||||||||||||||
| Total cost of services provided (exclusive of depreciation and amortization below) | $ | 508,630 | $ | 461,861 | $ | 954,152 | $ | 861,995 | |||||||||||||||
| Sales, general and administrative: | |||||||||||||||||||||||
| Selling and marketing expenses | 151,967 | 140,177 | 263,966 | 238,428 | |||||||||||||||||||
| Administrative employee expenses | 95,733 | 89,303 | 185,482 | 170,783 | |||||||||||||||||||
| Insurance and claims | 13,239 | 12,939 | 25,822 | 22,943 | |||||||||||||||||||
| Fleet expenses | 11,775 | 10,443 | 22,037 | 19,846 | |||||||||||||||||||
| Other sales, general and administrative (2) | 62,263 | 54,734 | 120,588 | 106,109 | |||||||||||||||||||
| Total sales, general and administrative | $ | 334,977 | $ | 307,596 | $ | 617,895 | $ | 558,109 | |||||||||||||||
| Depreciation and amortization | 33,610 | 31,737 | 66,108 | 60,946 | |||||||||||||||||||
| Interest expense, net | 9,391 | 7,380 | 18,242 | 13,176 | |||||||||||||||||||
| Other expense (income), net | 2,214 | (292) | 1,751 | (984) | |||||||||||||||||||
| Income tax expense | 45,844 | 49,756 | 75,104 | 82,052 | |||||||||||||||||||
| Net income | $ | 143,910 | $ | 141,489 | $ | 251,748 | $ | 246,737 |
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Other cost of services provided includes facilities costs, professional services, maintenance and repairs, software license costs, and other expenses directly related to providing services.
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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 condensed consolidated financial statements for other financial information regarding the Company’s reportable segment. See Note 4, Revenue for further information on revenue.
Geographic Information
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:
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| United States | $ | 487,117 | $ | 504,593 | |||||||
| International | 47,708 | 46,122 |
ROLLINS, INC. AND SUBSIDIARIES
NOTE 14. SUBSEQUENT EVENTS
Quarterly Dividend
On July 21, 2026, the Company’s Board of Directors declared a regular quarterly cash dividend on its common stock of $0.1825 per share payable on September 10, 2026 to shareholders of record at the close of business on August 10, 2026.
ROLLINS, INC. AND SUBSIDIARIES
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