Rollins, Inc.

Greetings and welcome to Rollins, Inc.'s second quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, 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, Lyndsey Burton, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, Donna, 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 Reform 10-K for the year ended December 31st, 2025. On the line with me today and speaking are Jerry Gahlhoff, President and Chief Executive Officer, and Will Harkins, 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, Lyndsey. Good morning, everyone. Our second quarter results did not meet our expectations, driven primarily by slower growth within certain portions of our residential pest control business. The pressure was concentrated in brands such as Orkin that rely more heavily on consumer-initiated demand through search, digital media, and inbound calls. The lead environment got progressively worse as we moved through the quarter, before showing signs of improvement at the very end of June. Our experience with respect to a slowdown in underlying residential demand was not broad-based across the portfolio. Brands that generate customers through relationship-based channels like direct sales, door-to-door models, and relationships with home builders delivered organic growth above our targeted 7% to 8% range for the quarter. For example, Home Team experienced double-digit residential growth, as did Fox, who leveraged their door-to-door sales force to grow in the high teens organically during the quarter. This is a testament to the importance of our diversified, multi-brand approach. and beyond residential, our termite and ancillary business delivered solid double-digit growth, while commercial grew high single digits, demonstrating that strategic investments we have made in support of these service areas continue to pay off. We spent a great deal of time evaluating the drivers of the slowdowns in parts of our residential business, and candidly, we don't believe there is a single explanation. It's important to note that the underlying health of our customer base remains strong and there were no notable shifts or deterioration in customer retention trends. While precise drivers are difficult to isolate, what we do know is that customer demand patterns have been more variable to start peak season than we've experienced in the better part of a decade. Regardless of the underlying drivers, our focus is on the actions needed to drive improved performance. We have implemented organizational and operational changes designed to strengthen accountability, improve execution, and better align our resources with current demand conditions. At Orkin, for example, we recently promoted Scott Weaver to Chief Operating Officer of Orkin North America. Scott most recently had responsibility for all Orkin's commercial operations in the US. His newly expanded role expands his scope of responsibility to include both residential and commercial operations for the U.S. as well as Canada. This will provide a better span of control, with all division presidents now reporting to Scott, who will continue to report to Pat Chernowski. We are focused on improving customer acquisition results, sales productivity, local market execution, and labor efficiency while maintaining the customer service standards that have differentiated us as the leader in the market. Although we're cautious with respect to near-term trends, we were encouraged that inbound lead flow and call center volumes improved towards the end of June and have continued a positive trajectory through the first few weeks of July. Stepping back, our confidence in the long-term opportunity remains unchanged. We operate in a large and fragmented market with a diversified portfolio of leading brands, strong customer relationships, a significant recurring revenue base, and a team that has the experience needed to successfully navigate near-term market conditions and improve performance. I'd like to thank our 20,000 plus teammates around the world for the hard work and dedication to serving our customers every day. I'm now pleased to turn the call over to Will. This marks his first earnings call as CFO. We're excited to have his leadership at Rollins, and I'm personally grateful for the partnership we're building. Will, take it away.