NYSE$ROL

Rollins Inc. · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported an increase in revenue and earnings, driven by strong demand and strategic investments.

Rollins, Inc. reported strong second-quarter results with a 14.9% increase in revenue to $821 million and a 8.4% increase in net income to $110 million. The company's adjusted EBITDA increased by 15.1% to $183 million, reflecting healthy demand and effective cost management.

  • Second quarter revenues increased by 14.9% to $821 million, with organic revenues growing by 7.7%.
  • Operating income rose by 14.9% to $155 million, maintaining an operating margin of 18.9%.
  • Net income increased by 8.4% to $110 million, with EPS reaching $0.22 per diluted share.
  • Operating cash flow increased by 15.8% to $147 million, and free cash flow increased by 17.8% to $141 million.

Headline financials

Total Revenue

$821M

Previous: $714M+14.9%
EPS (adj)

$0.23

Previous: $0.20+15.0%
Operating Margin

18.9%

No prior period
Adjusted EBITDA

$183M

Previous: $159M+15.1%
Capital Expenditures

-$14.4M

Previous: -$15.9M+9.3%
Free Cash Flow

$95.7M

Previous: $84.4M+13.4%
Net Income

$110M

Previous: $100M+9.8%
Operating Income

$155M

Previous: $133M+16.4%
Gross Profit

-$411M

Previous: -$361M-13.7%
Cash & Equivalents

$155M

Previous: $221M-30.0%
Total Assets

$2.6B

Previous: $2.17B+19.9%
Stock-Based Comp

$6.38M

Previous: $4.82M+32.5%

Revenue & EPS history

Rollins · Revenue · Quarterly

$821M

Q2 2023+14.9%vs Q2 2022
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

Rollins · $677M total across 2 segments · Q3 2023

  • Residential Revenue
    $404M+19.7%
  • Commercial Revenue
    $272M+11.8%

Forward guidance

Rollins is focused on driving growth while evaluating initiatives aimed at improving productivity. The company is well-positioned to continue delivering strong results in 2023 and beyond, with a focus on executing additional programs to improve the efficiency of its business model.

Tailwinds

  • Demand environment is healthy.
  • Pipeline for acquisitions remains robust to start the third quarter.
  • Company is well positioned to continue to drive growth through acquisition.
  • Improvement in gross margin.
  • Current demand environment provides a sense of optimism to start the second half.

Headwinds

  • Operating margins were pressured on higher insurance.
  • Operating margins were pressured on legacy claims activity.
  • Potential increases in labor costs.
  • Labor shortages and/or our inability to attract and retain skilled workers.
  • The effects of a pandemic, such as the COVID-19 pandemic, or other major public health concern on the Company's business, results of operations, accounting assumptions and estimates and financial condition

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+0.3%

Avg return

Earnings day

+0.5%

Avg return

5 days after

+1.6%

Avg return

30 days after

60%

41 / 68 earnings

Positive

+14.1%

Q3 2022

Best reaction

-11.5%

Q3 2021

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.3%+0.8%-3.3%
Q4 2025-10.5%-8.4%-16.0%
Q3 2025+7.3%+10.7%+14.1%
Q1 2025+1.0%+2.6%+3.5%
Q4 2024+3.6%-0.2%+2.6%
Q3 2024-6.2%-4.6%+2.2%
Q2 2024-6.4%-4.7%+0.4%
Q1 2024+3.8%+5.0%+8.3%
Q4 2023-4.9%-6.4%+5.7%
Q3 2023+6.1%+9.5%+19.2%
Q2 2023-8.9%-8.9%-12.2%
Q1 2023+4.7%+3.9%-1.0%
Q4 2022+1.5%+1.9%+1.2%
Q3 2022+14.1%+17.1%+11.3%
Q2 2022+6.5%+8.0%-4.8%
Q1 2022+5.2%+1.5%+11.9%
Q4 2021-7.3%-1.3%+2.8%
Q3 2021-11.5%-13.0%-9.8%
Q2 2021+1.8%+3.7%+3.9%
Q1 2021+4.0%+5.1%-5.1%
Q4 2020-2.9%-2.2%-10.4%
Q3 2020-0.2%-1.9%-3.8%
Q2 2020+5.7%+8.4%+12.6%
Q1 2020-1.7%+0.0%+2.8%
Q4 2019+4.0%+4.8%+1.9%
Q3 2019+7.3%+5.6%-1.4%
Q2 2019-10.8%-11.2%-16.2%
Q1 2019-10.6%-11.1%-15.4%
Q4 2018-1.6%-2.7%+2.7%
Q3 2018+0.6%+1.7%+6.3%
Q2 2018+1.2%-1.6%+5.7%
Q1 2018-3.0%-4.3%-1.1%
Q4 2017+5.5%+4.9%+6.9%
Q3 2017-6.6%-8.3%-4.1%
Q2 2017+4.0%+4.3%+7.6%
Q1 2017+2.7%+2.8%+13.0%
Q4 2016+4.8%+3.8%+8.9%
Q3 2016+9.1%+9.5%+15.8%
Q2 2016-4.6%-3.3%-3.7%
Q1 2016+0.4%
Q4 2015-0.3%
Q3 2015-0.7%
Q2 2015+3.3%
Q1 2015-1.6%
Q4 2014+1.0%
Q3 2014+3.1%
Q2 2014+0.7%
Q1 2014+0.0%
Q4 2013+2.0%
Q3 2013+0.2%
Q2 2013-5.8%
Q1 2013+1.4%
Q4 2012+1.7%
Q3 2012+0.9%
Q2 2012+3.9%
Q1 2012+2.4%
Q4 2011-2.6%
Q3 2011-7.1%
Q2 2011-0.7%
Q1 2010-0.7%
Q1 2011+2.3%
Q4 2008+2.7%
Q4 2010+2.7%
Q3 2009-0.2%
Q3 2010-0.2%
Q2 2010+0.5%
Q2 2009+0.5%
Q4 2009+0.5%

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