Rollins, Inc.

Greetings. Welcome to Rollins Inc. Fourth Quarter 2025 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 during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now like to turn the conference over to Lindsay Burton, Vice President of Investor Relations. Thank you. You may begin.

Thank you. 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 will be 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, 2025, which will be filed later today. 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. Fiscal 2025 was another solid year for Rollins as we achieved a milestone of $3.8 billion in revenue. As Ken will detail, We delivered double-digit revenue, earnings, and cash flow growth. But we did have a tougher finish to the year in the fourth quarter. Early winter weather caused demand to soften, especially in the Midwest and Northeast, which impacted one time in certain seasonal projects across all three business lines. Revenue from one-time business in the quarter declined by almost 3% compared to year-to-date growth through the first nine months of the year of 4%. Erratic weather patterns hindered demand for one-time projects and, at times, made it difficult for us to service the demand that did come through. Organic growth in the recurring portion of our business and ancillary services, which represent over 80% of total revenue, was above 7% for both the quarter and the year. Our underlying markets remain healthy, customer retention rates are strong, and we are confident that nothing has fundamentally changed with respect to our end consumer. Lower volumes in the quarter did hamper profitability, which can happen in shoulder seasons, particularly when weather gets choppy. It's important that we maintain healthy staffing levels ahead of peak season so that we aren't hiring, training, and onboarding a large number of new teammates at the same time seasonal demand ramps up. We've learned that extreme ramp-ups in hiring drives teammate turnover rates higher, and that will not yield the optimal experience for our customers. This can impact productivity in the short term as it did in the fourth quarter, but it's the right decision for the business long term as it sets us up to capitalize on peak season demand that's right around the corner. Moving on to some highlights, this year we prioritized getting better as we become bigger and made a number of investments throughout our business to support our teammates and enhance our customer experience. In support of our efforts around the Rollins Way, we are making significant investments to support the future growth of our company and establish consistent leadership behaviors across the enterprise. Our talent and development team has designed a program called the CoLab for all people managers. Servant leadership is the foundation of these sessions, which are designed to help leaders enhance skills for personal development, team development, and business growth. Our efforts here are intended to create a culture of cross-brand collaboration and cross-functional talent where teammates can seamlessly transfer between brands, divisions, our home office, and field operations. This will further enhance career opportunities for our teammates and create a robust pipeline of future leaders who can not only sustain our growth, but also help us reach our full potential. Operationally, we remain committed to hiring and developing top talent, The hiring environment was healthy in 2025 as we put significant energy into onboarding the right people in both support functions and the customer-facing side of our business. We're proud of the tenure and experience of our team, as well as their engagement level and commitment to both our company and our customers. While overall teammate retention has been consistently healthy, we have made encouraging progress in improving retention of our newer teammates. specifically those who are with us for one year or less. While there's still work to be done here, we saw teammate retention in this category improved by approximately 8% in 2025 and has improved nearly 18% since 2023, thanks to our ongoing efforts. In 2025, we closed the acquisition of CELA and completed 26 additional tuck-in deals. The performance of CELA has continued to exceed our expectations and integration has progressed very smoothly thanks to the efforts of our collective teams. We have a robust M&A pipeline with a number of opportunities that we are actively evaluating to drive additional growth. As we look ahead to 2026, we are encouraged by the opportunities that are in front of us across all aspects of our business. We remain committed to providing our customers with the best customer experience, and investing meaningfully in our team to drive growth both organically as well as through disciplined acquisitions. We are pleased with where our business stands today and what lies ahead of us in 2026. And I want to thank each of our 22,000-plus teammates around the world for their efforts and contribution to our success in 2025. I'll now turn the call over to Ken.