Rollins, Inc. (ROL) recently reported first-quarter 2025 revenues that reached $823 million, representing a substantial +9.9% increase compared to the same period in the prior year. This performance builds on the momentum established in fiscal year 2024, where the company achieved significant growth across key financial metrics, demonstrating resilience and effective execution in a competitive market.
This latest quarterly report, coupled with the full-year 2024 results, underscores the company's strategic focus on both organic expansion and targeted acquisitions. The pest control industry leader, under the guidance of CEO Mr. Jerry E. Gahlhoff Jr., continues to navigate market dynamics, leveraging its operational strengths and capital structure to drive shareholder value through growth and consistent capital returns.
Financial Performance Analysis#
Rollins' financial results for fiscal year 2024 highlight a trajectory of solid growth. Total revenue for the year reached $3.39 billion, marking a +10.26% increase from the $3.07 billion reported in 2023 (Monexa AI). This growth was complemented by a healthy increase in net income, which rose to $466.38 million in 2024, up +7.22% from $434.96 million in the previous year (Monexa AI). Earnings per share (EPS) also saw a positive trajectory, climbing to $0.99 in 2024 from $0.92 in 2023, an increase of +7.87% (Monexa AI).
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Operating cash flow demonstrated even stronger growth, increasing by +15.01% to $607.65 million in 2024 from $528.37 million in 2023 (Monexa AI). This robust cash generation translated into free cash flow (FCF) of $580.08 million in 2024, a notable +16.98% jump from $495.9 million in 2023 (Monexa AI). The consistent and accelerating growth in cash flow provides Rollins with significant flexibility for reinvestment, debt management, and shareholder distributions.
Profitability margins have remained relatively stable, indicating effective cost management despite revenue expansion. The gross profit margin stood at 52.69% in 2024, a slight improvement from 52.17% in 2023 and 51.47% in 2022 (Monexa AI). Operating income margin was 19.39% in 2024, up from 18.98% in 2023 and 18.3% in 2022 (Monexa AI). The net income margin in 2024 was 13.76%, slightly lower than 14.15% in 2023, but higher than 13.67% in 2022 (Monexa AI). EBITDA margin was 22.76% in 2024, compared to 22.94% in 2023 and 21.69% in 2022 (Monexa AI). These figures collectively suggest that Rollins is effectively scaling its operations while maintaining healthy profitability levels.
Historical Financial Performance#
Examining the past few years provides context for Rollins' recent results. Over the three-year period ending 2024, the company has demonstrated consistent compound annual growth rates (CAGRs). Revenue grew at an 11.81% 3-year CAGR, net income at 9.36%, operating cash flow at 14.78%, and free cash flow at 15.69% (Monexa AI). This historical performance confirms that the Q1 2025 and FY 2024 results are not anomalies but rather a continuation of a sustained growth trend, particularly in cash generation.
Here is a summary of key financial performance metrics over the last four fiscal years:
| Metric (Millions USD) | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Revenue | 2,420 | 2,700 | 3,070 | 3,390 |
| Net Income | 356.56 | 368.60 | 434.96 | 466.38 |
| Operating Cash Flow | 401.81 | 465.93 | 528.37 | 607.65 |
| Free Cash Flow | 374.61 | 435.30 | 495.90 | 580.08 |
| EPS | 0.76 | 0.79 | 0.92 | 0.99 |
Source: Monexa AI
Strategic Initiatives and Capital Allocation#
Rollins' growth strategy involves a mix of organic expansion and strategic acquisitions. The company spent $153.4 million on acquisitions net of cash acquired in 2024 (Monexa AI). The recent acquisition of Saela, highlighted in press releases (Rollins Reports Q1 2025 Earnings, April 23, 2025), is a notable example of this strategy, aimed at enhancing its presence in the US market. While acquisitions contribute to revenue growth, they also impact the balance sheet, particularly goodwill and intangible assets, which increased from $1.62 billion in 2023 to $1.7 billion in 2024 (Monexa AI).
Capital allocation also includes significant returns to shareholders. Rollins paid out $297.99 million in dividends in 2024 (Monexa AI), an increase from $264.35 million in 2023 (Monexa AI). The company has a history of consistent dividend payments, with a declared dividend of $0.165 per share in May 2025, following $0.165 in February 2025 and November 2024, and $0.15 in August 2024 (Monexa AI). This reflects a dividend yield of 1.13% TTM and a payout ratio of 63.98% TTM (Monexa AI), indicating a commitment to returning value while retaining sufficient capital for growth.
Share repurchases in 2024 totaled $11.61 million, significantly lower than the $315.01 million spent in 2023 (Monexa AI). This shift suggests a potential change in capital allocation priorities, potentially favoring acquisitions and organic investments over buybacks in the most recent year.
The balance sheet shows an increase in total debt from $336.33 million in 2022 to $812.53 million in 2024 (Monexa AI), likely funding the increased acquisition activity. However, the net debt to EBITDA ratio remains manageable at 0.91x TTM (Monexa AI), reflecting the strong EBITDA generation offsetting the debt increase. The current ratio stands at 0.87x TTM (Monexa AI), indicating that current assets are slightly less than current liabilities, which is not uncommon for companies with stable cash flows and efficient working capital management, but warrants monitoring.
Profitability and Efficiency Metrics#
Rollins' operational efficiency is reflected in its return metrics. The company achieved a Return on Invested Capital (ROIC) of 20.3% TTM and a Return on Equity (ROE) of 36.43% TTM (Monexa AI). These figures are indicative of the company's ability to generate strong returns from the capital it employs, suggesting effective management and a competitive advantage in its market.
The consistency of gross and operating margins over the past four years, despite fluctuations in the broader economic environment, points to the stability of the pest control service business model and Rollins' ability to manage its cost of revenue and operating expenses effectively. Selling, general, and administrative expenses were $1.02 billion in 2024, up from $915.23 million in 2023, reflecting the costs associated with supporting revenue growth and integrating acquisitions (Monexa AI).
Competitive Landscape and Market Dynamics#
The pest control industry is influenced by factors such as urbanization, climate change, and public health concerns, all of which drive demand for professional services (Zacks.com, May 23, 2025). Rollins operates in a competitive environment alongside major players like Terminix (now part of Rentokil Initial Plc) and other regional providers. Industry trends favor integrated pest management solutions and technologically advanced service delivery, areas where companies are investing to gain an edge (MarketWatch.com, May 23, 2025).
Rollins' strategy of combining organic growth with targeted acquisitions allows it to consolidate market share and expand its geographic footprint. The substantial goodwill and intangible assets on its balance sheet are a direct result of this acquisition strategy, reflecting the value placed on acquired customer relationships, brand names, and non-compete agreements.
Valuation and Analyst Estimates#
Rollins' stock trades at a premium valuation, reflecting its consistent growth and market leadership. The trailing twelve months (TTM) Price-to-Earnings (PE) ratio stands at 57.44, and the Enterprise Value to EBITDA (EV/EBITDA) is 36.08x (Monexa AI). These multiples are significantly higher than many industrial or service sector peers, suggesting that investors are pricing in expectations of continued strong growth.
Analyst estimates for future performance project sustained growth. For fiscal year 2025, analysts estimate average revenue of $3.75 billion and average EPS of $1.10 (Monexa AI). Looking further out, revenue is estimated to reach $4.07 billion in 2026 and $4.41 billion in 2027 (Monexa AI). EPS is projected to grow to $1.25 in 2026 and $1.39 in 2027 (Monexa AI). This translates to a projected revenue CAGR of +7.47% and EPS CAGR of +10.11% through 2029 (Monexa AI).
These future estimates imply a gradual moderation from the double-digit growth rates seen in 2024, but still represent a healthy pace of expansion for a company of Rollins' size. The forward PE ratio based on 2025 estimates is 51.64x, declining to 46.17x for 2026 and 41.32x for 2027 (Monexa AI), indicating that the valuation premium is expected to persist, albeit at a slightly lower multiple relative to earnings over time, assuming estimates are met.
Here is a summary of analyst estimates for key future periods:
| Fiscal Year | Estimated Revenue (Billions USD) | Estimated EPS |
|---|---|---|
| 2025 | 3.75 | 1.10 |
| 2026 | 4.07 | 1.25 |
| 2027 | 4.41 | 1.39 |
| 2028 | 4.76 | 1.55 |
Source: Monexa AI (based on analyst consensus data)
Key Takeaways for Investors#
Rollins' recent financial performance, including strong Q1 2025 results and robust FY 2024 figures, underscores its leading position in the pest control industry. The company has demonstrated an ability to drive significant revenue and earnings growth, supported by accelerating cash flow generation. Strategic acquisitions remain a key component of its expansion strategy, contributing to both top-line growth and increased asset base, though also impacting debt levels.
While the company's valuation metrics are elevated, reflecting market confidence in its growth prospects, the projected future growth rates, particularly in EPS, suggest a path towards gradually more reasonable forward multiples. The consistent return of capital through dividends, supported by strong free cash flow, adds another layer of appeal for income-focused investors, although the yield is relatively modest given the high share price.
The competitive landscape remains dynamic, with ongoing consolidation and technological advancements. Rollins' ability to maintain healthy margins and strong returns on capital indicates effective operational execution in this environment. Investors should continue to monitor the pace and integration of acquisitions, the management of debt, and the company's ability to sustain its growth trajectory in line with or above analyst expectations.