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Pest control company Rollins (NYSE:ROL) in Q2 CY2026, but sales rose 7.9% year on year to $1.08 billion. Its non-GAAP profit of $0.32 per share was 5.8% below analysts’ consensus estimates.
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Rollins (ROL) Q2 CY2026 Highlights:
・Revenue: $1.08 billion vs analyst estimates of $1.09 billion (7.9% year-on-year growth, 1.3% miss)
・Adjusted EPS: $0.32 vs analyst expectations of $0.34 (5.8% miss)
・Adjusted EBITDA: $236.3 million vs analyst estimates of $255.5 million (21.9% margin, 7.5% miss)
・Operating Margin: 18.7%, down from 19.8% in the same quarter last year
・Free Cash Flow Margin: 15.4%, down from 16.8% in the same quarter last year
・Organic Revenue rose 5.7% year on year (miss)
・Market Capitalization: $21.12 billion
Company Overview
Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE:ROL) provides pest and wildlife control services to residential and commercial customers.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Rollins’s sales grew at an impressive 11.3% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Rollins’s annualized revenue growth of 10.1% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.
We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Rollins’s organic revenue averaged 7% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.
This quarter, Rollins’s revenue grew by 7.9% year on year to $1.08 billion, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 9.6% over the next 12 months, similar to its two-year rate. This projection is healthy and implies the market sees success for its products and services.
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Operating Margin
Rollins’s operating margin has generally stayed the same over the last 12 months, averaging 18.8% over the last five years. This profitability was elite for an industrials business thanks to its efficient cost structure and economies of scale. This is seen in its fast historical revenue growth and healthy gross margin, which is why we look at all three data points together.
Looking at the trend in its profitability, Rollins’s operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, Rollins generated an operating margin profit margin of 18.7%, down 1.2 percentage points year on year. Since Rollins’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Rollins’s remarkable 12.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Rollins, its two-year annual EPS growth of 9.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q2, Rollins reported adjusted EPS of $0.32, up from $0.30 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Rollins’s full-year EPS to grow 12.5% from $1.16 to $1.31.
Key Takeaways from Rollins’s Q2 Results
We struggled to find many positives in these results. Its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 8.5% to $39.77 immediately after reporting.
Rollins’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
