Rollins, Inc.

Strong start to 2026; demand improved meaningfully by March (good) - Revenue +10.2% YoY; organic growth +6.6% YoY despite weather drag early in Q1 (esp. January). - Sequential acceleration through the quarter; March ~12% total growth and >8% organic growth (notably better than Q1 average). - Service line growth (Q1): Residential +9.3%, Commercial +9.6%, Termite/ancillary +13.5% (organic: 4.2% residential, 7.7% commercial, ~10% termite/ancillary). - What investors should take away: management views March demand as evidence of underlying momentum supporting guidance.

Guidance/outlook reiterated: mid-to-high single-digit organic growth + M&A contribution (forecast) - Company expects organic growth 7%–8% for 2026 and M&A growth +2%–3% (with M&A expected to contribute overall ~2%–3% of revenue growth). - Confidence supported by the improving exit rate (organic growth ~8.4% “as we think about March”). - Management suggested April is early but still consistent with the 7%–8% organic growth view (no update to guidance on the call).

Profitability pressure in Q1, but believed to be partly transitory (bad + improvement path) - Gross margin 50.8% (-60 bps YoY) driven by: - Lower fleet “vehicle gains” (~50 bps headwind)—expected to improve in Q2. - Insurance/claims (~30 bps headwind). - Service payroll costs (~20 bps headwind) from carrying more technicians ahead of peak season. - SG&A as % of revenue +70 bps YoY (incremental selling investments +50 bps; insurance/claims +20 bps). - Despite margin headwinds, GAAP operating income $145m (+2% YoY) and adjusted operating income $153m (+4% YoY); adjusted EBITDA $179m (+4.4% YoY; 19.8% margin). - Management expects incremental margin flow-through to improve in Q2/Q3/Q4 as: - Lower volume effects normalize, - Fleet gain headwinds ease, - Seasonality supports operating leverage, - People costs leverage improves as utilization rises.