Rollins, Inc.

Greetings and welcome to the Rollins Inc. Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lindsay Burton, Vice President of Investing Relations. Thank you. You may begin.

Thank you and good morning, everyone. In addition to the earnings release that we issued yesterday, the company has also prepared a supporting slide presentation. The earnings release and presentation are available on our website at www.rollins.com. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation as well as in our earnings release. The company's earnings release discusses the business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to yesterday's press release and the company's SEC filings, including the risk factor section of our Form 10-K for the year ended December 31, 2023. On the line with me today and speaking are Jerry Galoff, President and Chief Executive Officer, and Ken Krause, Executive Vice President and Chief Financial Officer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin?

Thank you, Lindsay. Good morning, everyone. We would like to begin our discussion today by offering our support and encouragement to all of those who have been impacted by the recent hurricanes. I am proud of the way our team has worked together to support our teammates, and the communities we serve in the aftermath of these disasters. The Rollins Relief Fund has processed over 250 emergency grants for teammates in need, and we continue to direct truckloads of food, water, and other necessities to impacted areas. Our efforts will continue in the days, weeks, and months ahead as these communities begin to recover. Turning to our financial results. Our team delivered another solid quarter, reflecting consistent execution of our operating strategies and continuous improvement in our business. Our team delivered these results despite some operational disruption caused by Hurricane Helene, which occurred during the last week of the quarter. Our financial performance for the third quarter was highlighted by an increase in revenue of 9% to $916 million, and we delivered healthy organic growth of 7.7% in the quarter. Overall, we continue to see solid revenue growth across all major service lines. We continue to invest in growing our business and adding to our customer base, as the markets we serve remain strong. We invested significantly in incremental sales staffing and marketing activities in Q3, and we're well staffed to convert quality leads and sales efforts into new customer growth, which our results in the quarter reflect. On the commercial side of the business, we continue to make long-term investments to capitalize on the growth opportunities in a multi-billion dollar B2B market. Our commercial division continues to strategically add feet on the street to our sales force and we are leveraging data analytics and training to better enable their success. Investments to drive organic growth are complemented by strategic M&A. We closed 32 tuck-in deals in the first nine months of the year and the M&A pipeline remains healthy. We're actively evaluating acquisition opportunities, both domestically and internationally, and remain on track to deliver at least 2% of growth from M&A activity in 2024. Beyond growth, our dedication to operational efficiency and continuous improvement is an important part of our strategy and culture. Tim will discuss in more detail, but investments we made to support long-term growth objectives did temper margins a bit in the quarter, but we remain on track to deliver healthy margin improvement and profitability for the year. In yesterday's release, we also announced a planned leadership transition at our Board of Directors. In accordance with the company's long-term leadership succession plan, Gary Rollins will transition from Executive Chairman to Executive Chairman Emeritus, and John Wilson will succeed him as executive chairman of the board. Gary was elected to a three-year term during our 2024 annual meeting and will continue to be an active and engaged member of our board. John has been with our company since 1996 in various positions of increasing responsibility. I've known John for 20 years and his experience and guidance have been invaluable to me as I have transitioned to the role of CEO over the last two years. I look forward to continuing to work with John, Gary, and the rest of our board as we position our company for continued success in the future. In closing, we're excited about where our business stands today. Our markets are solid, staffing levels are healthy, and our team is focused on driving continuous improvement and profitable growth. I want to thank each of our 20,000 plus teammates around the world for their ongoing commitment to our customers.