Rollins, Inc.

Greetings. Welcome to the Rollins, Inc., third quarter 2026 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 turn the conference over to Lyndsey Burton. Thank you, Lyndsey. You may begin.

Thank you, Sam, 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 and presentation contain certain forward-looking statements and discuss the business outlook. 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 the cautionary statements in yesterday's press release, today's presentation, and the company's SEC filings, including the risk factor section of our Form 10-K for the year ended December 31st, 2025 and subsequent filings. 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. I want to begin with saying that our third quarter performance did not meet our expectations and we are not satisfied with these results. The primary challenge continues to be pressure on residential customer acquisition. We now have a clearer understanding of what is driving this pressure and are working with urgency to address it. The pattern has become clear. AI and LLM driven search are meaningfully changing the way customers discover service providers. With additional data through the third quarter, we clearly see the impact of the changing search landscape, which drove continued deceleration and digital lead flow. Ultimately, LOMs are recommending a wider range of pest control providers. Unlike with traditional search, these recommendations vary significantly across platforms, markets, and can even yield different results for the same search run on different days. The result is a more fragmented, variable, and dynamic customer discovery environment. Importantly, moderating organic growth trends have not been broad-based across our portfolio. Brands that utilize relationship-driven customer acquisition channels, including direct sales, door-to-door marketing, and home builder partnerships, delivered stronger organic growth. Home Team and Fox, for example, continue to perform well, leveraging their door-to-door sales forces to deliver growth well above the overall company. These results highlight the strength of our diversified, multi-brand approach and the benefits of having multiple channels to reach customers. Additionally, our recurring residential customer base is healthy, with customer count continuing to grow in the third quarter and retention remaining strong. The relationships our frontline teammates build with customers are an important source of resilience, creating loyalty, and increasing retention over time. This underscores our confidence that pest control continues to be a large, growing, and highly attractive market, and we believe that the current pressure is a customer acquisition and discovery challenge, not a deterioration in underlying demand for our services. While the slowdown was most pronounced in residential customer acquisition, we also experienced softer performance in portions of our termite ancillary and commercial businesses. The impact on our commercial businesses was fairly isolated to non-Orkin brands and timing of certain one-time business. That being said, Orkin's commercial business continued to grow high single digits, reflecting the investments we have made there in expanding our commercial capabilities. In our termite and ancillary business, growth was impacted to some degree by lower acquisition of new residential customers as these customers provide a source of future cross-sell opportunities within termite and ancillary categories. We also faced staffing and capacity constraints in certain markets that limited our ability to fully capitalize on available opportunities. We have a large and attractive base of existing customers that provides runway for continued cross-sell within these categories. We're also taking targeted steps to address staffing and capacity constraints in affected markets so that we can better capitalize on those opportunities over time. We remain confident in the underlying demand and growth potential of these services. We're focused on controlling what we can control. and are taking concrete steps to optimize our approach with respect to digital customer acquisition. Our plan is centered around three priorities. First, we're ensuring our brands show up where customers are looking. This starts with evaluating how our brands are surfaced across traditional and LLM-driven search and identifying opportunities to strengthen our presence by market and service category. We're strengthening our visibility across traditional search and AI-driven discovery by expanding locally relevant content, improving local business listings and customer reviews, and strengthening our presence in the sources LOM platforms use to generate recommendations. This targeted, data-driven approach enables us to translate the strength of our national brands into greater local visibility, more qualified leads, and ultimately new customers. We're making it easier for customers to understand what differentiates us and ultimately choose our brands. We're improving local content, increasing pricing transparency, and more clearly highlighting the service attributes that make Rollins brand stand out, including same day and next day availability and the quality of our customer service. We're also working to ensure customers receive accurate, relevant information about our services whenever and wherever they are searching. And third, we are continuously testing, learning, and reallocating resources accordingly. We are improving lead attribution, testing different approaches, and shifting investment toward the channel and tactics that generate qualified leads, convert them into new customers, and deliver the strongest returns. Importantly, this is not simply about spending more. but continuously evaluating where our marketing dollars generate the strongest returns and investing behind those opportunities. For example, we've begun taking advantage of new paid advertising opportunities on AI search platforms, including ChatGPT and Google Gemini to improve our visibility. In this highly dynamic environment, our ability to be nimble and shift resources to keep pace with change is an important source of strength. We believe the companies that will be most successful in this changing environment are those with the resources, expertise, and organizational agility to continuously test, learn, and adapt as these technologies evolve. This is not about finding a single solution and moving on. It requires ongoing optimization and our scale, diversified portfolio, and financial flexibility position us particularly well to navigate these changes over time. At the same time, we are always focused on providing exceptional service to our existing customers and maintaining the strong relationships that underpin our recurring business. We are seeing some early but encouraging signs of progress from our efforts as we close the quarter. That said, we have not reached stabilization, and there is more work ahead to translate improving search visibility into new customers and sustained growth. We recognize that the customer discovery landscape may be changing structurally, and we are not assuming a return to historical patterns. We're moving quickly to adapt, and our resources, scale, and flexibility will give us multiple ways to respond as the environment evolves. Our long-term confidence in Rollins has not changed. Our highly recurring business model, strong customer relationships, diversified portfolio, and experienced and committed team position us well to navigate evolving market conditions and drive long-term success. We've faced challenges before, and our team has consistently demonstrated the ability to adapt, execute, and emerge stronger. I have every confidence in our ability to rise to this challenge as well. I'd like to thank our 20,000 plus teammates around the world for their hard work and dedication to serving our customers every day. I'll now turn the call over to Will.