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- **Revenue Growth**: 12% total, 7.2% organic, driven by double-digit service line growth and Saela outperformance. 
- **Profitability**: 25.2% EBITDA margin, 35.4% incremental margins, 21% net income growth. 
- **Cash Flow**: 31% FCF growth, 120% cash flow conversion, 11% dividend hike. 
- **Strategic Moves**: Saela acquisition 75% of target, commercial sales investments paying off, [Collab] leadership program scaling. 
- **Competitive Edge**: Diversified customer acquisition (door-to-door, cross-sell, digital), 7-8% organic growth target. 
- **Risk Management**: Vehicle gains headwind (~$5M), moderate inflation (~3-4% pricing).

**【CEO Summary Section】**
- Total revenue grew 12% year-over-year (YoY), with 7.2% organic growth, driven by double-digit increases across all service lines (residential, commercial, termite & ancillary). 
- Saela acquisition performed exceptionally, exceeding expectations with year-1 revenue ~75% of target vs. ~65% projected. 
- Commercial division delivered double-digit recurring growth, benefiting from ~$5M in favorable claims adjustments. 
- Launched [Collab] leadership development program, training 2,000+ managers to enhance cross-brand talent mobility and retention. 
- Emphasized balance between organic growth (7-8% target) and M&A (3-4% contribution) for 2025. 

**【CFO Financial Commentary】**
- Adjusted EBITDA margin expanded 120bps to 25.2%, with 35.4% incremental margins (31% ex-claims). 
- GAAP net income rose 21% to $0.34/share, vs. $0.28 prior year. 
- Free cash flow increased 31% to $183M, enabling 11% dividend hike and $35M in Q3 acquisitions. 
- Year-to-date cash flow conversion at 120%, with 44% of FCF allocated to dividends. 
- Tax rate improved 120bps to 24.8%, supporting long-term margin expansion. 
- Fleet-related vehicle gains created ~$5M headwind, expected to moderate in Q4. 

**【Q&A Highlights】**
- **Residential Momentum**: Q3 exit rate strong, with recurring revenue growth ~6%, sustained into early October. 
- **Saela Performance**: 75% of year-1 target vs. 65% projection, driven by balanced customer acquisition (1/3 door-to-door, 2/3 cross-sell/digital). 
- **Commercial Growth**: Double-digit recurring growth (8.3% organic), benefiting from 2024 investments in dedicated sales teams. 
- **Incremental Margins**: 35%+ achievable in Q3, targeting 25-30% for full year. 
- **Competitive Landscape**: Maintain 7-8% organic growth despite PE entrants, leveraging diversified customer acquisition channels. 
- **M&A Pipeline**: 7 deals closed in Q3, targeting 2-3% revenue from acquisitions. 
- **AI Impact**: SEO disruption offset by higher-quality leads, with cross-selling and commercial growth mitigating reliance on digital marketing. 
- **Cost Inflation**: 3-4% pricing strategy offsetting input costs, with stable labor and materials inflation.

Rollins, Inc. (ROL) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ROL

ROL fundamentals

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