A global pest and wildlife control company, Rollins serves residential and commercial customers under brands like Orkin, HomeTeam Pest Defense, and Critter Control. Its roots trace to 1901, when Latvian immigrant Otto Orkin began selling rat poison door-to-door as a teenager — earning the nickname "The Rat Man" — and built the Orkin brand. Rollins, founded in 1948 as a broadcasting company by brothers O. Wayne and John Rollins, bought Orkin in 1964 and later took its own name.
Q2 2026 revenue rose 10.2% to $999.5M but gross margin fell 0.5pt to 53.8% on cost inflation
Margins kept compressing even as grew. Revenue rose 10.2% to $999.5M and held at $0.29 while fell 0.5 points to 53.8% on higher employee, materials, and fleet costs that outpaced pricing. The company lowered its full-year outlook to at least 6%, leaving less room for cost inflation to be absorbed.
Key takeaways
rose 10.2% to $999.5M and fell 0.7% from Q1 2026's $1,026.1M, with the annual table showing the quarter as the first sequential decline after Q1's $1,026.1M.
fell 0.5 points to 53.8% and fell 1.3 points to 19.8% as employee, materials, and fleet costs rose faster than pricing, per the quarterly table.
rose 2.5% to $107.8M and was flat at $0.22 versus Q2 2025's $0.29, as absorbed most of the gain.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 7.9% to $1.1B, but margins contracted due to higher employee, materials, and fleet costs; full-year organic growth outlook lowered to at least 6%.
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Total grew 7.9% to $1,078.6M, with of 5.7% driven by commercial (7.2% organic) and termite/ancillary (8.9% organic), while residential organic growth slowed to 3.6% due to lower lead volume in consumer-initiated channels.
fell 19.4% to $118.4M and fell 20.6% to $111.2M , with the prior quarter at $175.1M and $168.0M respectively.
The company lowered its full-year 2026 outlook to at least 6% from the prior 7-8% guide, while Q2 MD&A cites 5.7% organic growth and a 7.9% total increase to $1,078.6M for the quarter.
Liquidity included $116.5M cash, $215.9M outstanding under a $1B program, and an undrawn $1B at a 1.0x .
What changed
Q2 2026 of 53.8% came in below the 54.4% Q3 2025 peak and the 53.8% Q2 2025 level, confirming the margin pressure flagged after Q1 2026's drop to 50.8% persisted rather than recovered.
Full-year guide was cut to at least 6% from 7-8%, below the 6.9% delivered in 2025 and the 6.6% Q1 2026 pace that earlier filings said to watch against the 7-8% range.
SG&A at 31.1% of in Q2 (per MD&A) stayed elevated versus the 29.4% Q3 2025 low, with the prior-quarter watch item on whether the 31.2% Q1 level normalized now answered as roughly flat.
outstanding rose to $215.9M from $114.4M at 2025 year-end, the exact borrowing trend the FY 2025 filing flagged to monitor through 2026.
The FTC inquiry into post-employment covenants resolved via consent order in Q1 2026 was not restated as a new risk in this 10-Q's legal section, removing a prior watch item.
What to watch
Q3 2026 against the 54.4% Q3 2025 level as fleet and employee costs continue to test pricing
Full-year 2026 against the revised at-least-6% outlook after Q2 delivered 5.7% organic
balance and as the $215.9M position rolls under the semi-annual 2035 note schedule
SG&A ratio next quarter to see if the 31.1% level from marketing and fleet costs reverts toward the 29.4% Q3 2025 figure
fell 100 to 52.8%, primarily from 70 bps of higher employee expenses (medical costs and service salaries), 20 bps of higher materials, and 20 bps of higher fleet fuel costs.
declined 110 to 18.7% as SG&A rose 30 bps to 31.1% of , reflecting higher selling and marketing costs and fleet expenses; adjusted operating margin also fell 110 bps to 19.5%.
decreased 1.5% to $172.5M and decreased 1.2% to $166.0M, impacted by timing of tax payments related to tax credit planning; the company invested $116.8M in acquisitions and paid $88.1M in dividends.
Full-year 2026 outlook updated to at least 6% growth, 2-3% inorganic growth, adjusted incremental margin of at least 10%, and above 100%.
Liquidity remains strong with $109.1M cash, a $1B program ($215.9M outstanding), and an undrawn $1B ; was 1.0x as of June 30, 2026.
Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7.A of our 2025 Form 10-K. There were no material changes to our market risk exposure during the six months ended June 30, 2026.
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For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7.A of our 2025 Form 10-K. There were no material changes to our market risk exposure during the six months ended June 30, 2026.
The Company states no pending or threatened matter is expected to have a material adverse effect on its financial position, results of operations, or liquidity.
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The Company is involved in routine claims, litigation, and regulatory matters including allegations of service or vehicle damage, acquisition disputes, and employment-related class actions.
Employment matters include wage and hour class actions, California Private Attorneys General Act claims, and investigations into post-employment restrictive covenants.
The Company retains risk for general liability, workers’ compensation, and auto liability, accruing estimated costs based on historical trends and actuarial studies.
Environmental proceedings are evaluated for disclosure using a $1.0 million monetary sanction threshold, and currently no such disclosure is required.
Management acknowledges that an unfavorable outcome in one or more matters could result in a charge material to a single quarter or year.
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2025. 45 Table of Contents ROLLINS, INC. AND SUBSIDIARIES
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There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2025.
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ROLLINS, INC. AND SUBSIDIARIES