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Get filing alertsRollins Q2 revenue up 7.9% but margin falls 110 bps on residential demand softness
Filed July 22, 2026 · Period ending July 22, 2026 · ~1 min read
Key Changes
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Operating margin compressed 110 basis points to 18.7% (adjusted 19.5%) as cost structure positioned for stronger peak-season demand met softer actual demand, particularly in digital-reliant residential brands.
Exhibit 99.1 view on EDGAR → -
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Q2 revenue reached $1.1 billion, up 7.9% year-over-year (organic growth 5.7%), marking the 99th consecutive quarter of revenue growth despite residential headwinds.
Exhibit 99.1 view on EDGAR → -
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Residential pest control brands relying on digital and inbound channels saw declining lead volumes during Q2; relationship-based channels (home builders, door-to-door) delivered solid growth. Lead volume improved in late June and early July.
Exhibit 99.1 view on EDGAR → -
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Adjusted EPS rose 6.7% to $0.32, while operating cash flow declined 1.5% to $173 million and free cash flow fell 1.2% to $166 million, reflecting margin pressure and working capital dynamics.
Exhibit 99.1 view on EDGAR → -
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Company deployed $117 million to acquisitions and paid $88 million in dividends; implemented organizational changes to improve execution and align costs with current demand while maintaining long-term growth investments.
Exhibit 99.1 view on EDGAR →
Summary
Rollins reported Q2 2026 results that extended its revenue growth streak to 99 consecutive quarters but revealed margin pressure from a demand-cost mismatch. Revenue climbed 7.9% to $1.1 billion (5.7% organic), yet operating margin fell 110 basis points to 18.7% as the company entered peak season with a cost structure calibrated for stronger demand than materialized.
The shortfall centered on residential pest control brands dependent on digital and inbound channels, where lead volumes declined during the quarter. Relationship-based channels—home builders and door-to-door sales—performed well, underscoring the value of Rollins' diversified brand portfolio. Management noted lead volume improvement in late June continuing into early July, but remains cautious on near-term trends.
The company responded with organizational and operational changes to tighten execution and align resources with current demand, while preserving investment in long-term growth drivers. Cash generation remained healthy—operating cash flow of $173 million supported $117 million in acquisitions and $88 million in dividends—and the balance sheet provides flexibility to sustain capital deployment. Investors should watch whether the late-quarter lead volume recovery translates into sustained demand and whether cost realignment restores margin trajectory in Q3.
Section-by-Section Diff
Event · Item 2.02 — Results of Operations and Financial Condition
Rollins announced Q2 2026 financial results via press release; detailed figures not disclosed in the 8-K body.
Added in current filing · verify on EDGAR →
On July 22, 2026, Rollins, Inc. (the “Company”) issued a press release announcing its unaudited financial results for the second quarter ended June 30, 2026.
Rollins disclosed Q2 2026 financial results through a press release attached as Exhibit 99.1. The 8-K body does not provide revenue, earnings, or other quantitative metrics; those details are in the exhibit. This is a routine quarterly earnings disclosure under Item 2.02.
Event · Exhibit 99.1
Rollins reported Q2 2026 revenue growth of 7.9% but operating margin declined 110 bps due to softer residential demand and cost-structure misalignment.
Added in current filing · view on EDGAR →
Our second quarter results fell short of our expectations due to slower growth in parts of our residential pest control business, specifically brands more reliant on consumer-initiated demand through search, digital media and inbound calls, as lead volume declined in the quarter. Meanwhile, areas of the business that leverage relationship-based channels, such as home builders and door-to-door sales, delivered solid organic growth in the quarter, reinforcing the importance of our diversified, multi-brand approach. Although we remain cautious regarding near-term demand trends, lead volume improved toward the end of June and has maintained this momentum through the first few weeks of July
Residential pest control brands relying on digital and inbound channels experienced declining lead volumes during Q2, causing results to fall short of expectations. Relationship-based channels (home builders, door-to-door) performed well. Management noted lead volume improvement in late June continuing into early July, but remains cautious on near-term demand.
Added in current filing · view on EDGAR →
Quarterly net income was $144 million, an increase of 1.7% over the prior year. Adjusted net income* was $152 million, an increase of 3.4% over the prior year. ... Quarterly EPS was $0.30 per diluted share, a 3.4% increase over the prior year EPS of $0.29. Adjusted EPS* was $0.32 per diluted share, an increase of 6.7% over the prior year. ... Operating cash flow was $173 million for the quarter, a decrease of 1.5% compared to the prior year. Free cash flow* was $166 million for the quarter, a decrease of 1.2% compared to the prior year.
Net income grew 1.7% to $144 million (adjusted $152 million, up 3.4%), with EPS of $0.30 (adjusted $0.32, up 6.7%). Operating cash flow declined 1.5% to $173 million, and free cash flow fell 1.2% to $166 million, reflecting the margin pressure and working capital dynamics.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 23, 2026 · How we verify