Rollins Growth Slows as Residential Demand Weakens

The Tip Desk · July 22, 2026 · 2 min read

Second-quarter revenue reached $1.079 billion as softer lead volume weighed on profitability.

Rollins Inc. (ROL), the pest-control-services company, reported slower second-quarter growth as weakening consumer-initiated residential demand squeezed margins.

Revenue rose 7.9% from a year earlier, easing from 10.2% growth in the first quarter, while adjusted earnings increased 6.7% to $0.32 a share. Organic growth slowed to 5.7% from 6.6%, and acquisitions contributed 2.2 percentage points to growth, down from 3.6 points.

The slowdown marked a reversal from March, when total growth was running at about 12% and organic growth exceeded 8%. Lead volume subsequently declined at residential brands that relied on search, digital media and inbound calls, causing results to fall short of the company’s expectations. Lead volume began improving late in June and continued to recover in early July.

Residential organic revenue grew 3.6%, trailing commercial growth of 7.2% and termite-and-ancillary growth of 8.9%. Relationship-based residential channels, including home builders and door-to-door sales, delivered solid organic growth despite the weakness in consumer-initiated channels.

Costs positioned for stronger demand pressured profitability when that growth failed to arrive. Operating income increased 1.5%, compared with the 7.9% revenue gain, and operating margin narrowed 1.1 percentage points to 18.7%. Employee, materials and fleet expenses all consumed a larger share of revenue.

Adjusted EBITDA rose 2.2%, while its margin contracted 1.2 percentage points to 21.9%. Operating cash flow declined 1.5% to $173 million, a smaller drop than the 19.4% decrease recorded in the first quarter.

Rollins made organizational and operational changes to align resources with current demand and remained cautious about near-term conditions. Acquisition spending climbed to $117 million from $18 million in the first quarter, while leverage increased to 1.0 times as adjusted net debt reached $1.030 billion.