Rollins, Inc.

Greetings and welcome to the Rollins, Inc. Second Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad, and we ask you please limit yourselves to one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Lyndy Burton, Vice President of Investor Relations. Lyndy, please go ahead.

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 .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 factors section of our form 10K for the year ended December 31st, 2024. On the line with me in speaking today are Jerry Gayloff, president and chief executive officer, and Ken Krauss, 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. I'm pleased to report Rollins delivered strong second quarter results. Overall, we continue to see solid growth across all major service lines, with total revenue growth of .1% and organic growth of 7.3%. Growth was healthy, but a little choppier moving through the quarter due to some seasonality, particularly in parts of the country where we saw a cold and wet start to peak season. Demand picked up in June, resulting in a strong backlog of work going into July, which has made for a busy start to Q3 for our team. I'm thrilled with the progress we're making this far with the SELA acquisition that we announced in April. The integration has gone smoothly and their performance is exceeding our expectations thanks to the efforts of our collective teams who have ensured that SELA can remain focused on their customers and teammates without disruption. I'd like to express my gratitude to the SELA team and to all of our Rollins teammates that have worked so hard to make this happen. As you know, we believe the combination of Orkin and our strong group of regional brands is a competitive differentiator for Rollins, giving us multiple bites at the apple with potential customers, while also providing some balance and diversification with respect to customer acquisition. The addition of SELA further strengthens these competitive advantages for us. Our investments in strategic M&A opportunities are also complemented by ongoing investments to drive organic growth. As expected, we continue our investments in incremental sales, staffing, and marketing activities ahead of peak season to ensure that we are positioned top of mind for the consumer as the season began. We are well-staffed on the sales, technician, and customer support front with our teammates onboarded, extensively trained, and ready to provide an exceptional level of service for our customers. On the commercial side of our business, we are encouraged by our momentum. Over the last year, we have strategically added resources to support our dedicated commercial division within Orkin. These resources are paying off as Orkin Commercial delivered double-digit recurring growth in the second quarter. As a reminder, while commercial takes a little more upfront investment to drive growth, it's also the highest retention business among our service lines, making the lifetime value of these customer relationships very attractive. And I'm excited to announce that we recently promoted Scott Weaver to Chief Operating Officer of Commercial Operations for Orkin. Scott has been instrumental in leading our commercial efforts over the past few years and will help to drive further alignment and focus in this elevated role. Beyond growth, our dedication to operational efficiency and continuous improvement is an important part of our strategy and culture. Kim will discuss in more detail, but we did see some headwinds to our margin performance in the quarter, most notably from insurance claims and less vehicle gains in our fleet versus last year. Encouragingly, we did leverage our people costs despite ramping up staffing to align with our peak season. Our team also made tremendous improvements in teammate retention, especially with new hires, which helped as well. We also leveraged sales and marketing expenses despite ongoing investments we continue to make in support of our long-term growth objectives. In closing, we're excited about where our business stands today, the year is off to a solid start and demand from our customers remains strong. Our teams in the field are ready to support our customers through the peak season, and I want to thank each of our teammates around the world for their ongoing commitment to our customers. I'll now turn the call over to Ken. Thanks,