Latest news with #JerryGahlhoff
Yahoo
27-04-2025
- Business
- Yahoo
ROL Q1 Earnings Call: Organic Growth, Commercial Momentum, and Saela Acquisition Shape Outlook
Pest control company Rollins (NYSE:ROL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 9.9% year on year to $822.5 million. Its non-GAAP profit of $0.22 per share was in line with analysts' consensus estimates. Is now the time to buy ROL? Find out in our full research report (it's free). Revenue: $822.5 million vs analyst estimates of $820 million (9.9% year-on-year growth, in line) Adjusted EPS: $0.22 vs analyst estimates of $0.22 (in line) Adjusted EBITDA: $171.9 million vs analyst estimates of $173.6 million (20.9% margin, 1% miss) Operating Margin: 17.3%, in line with the same quarter last year Free Cash Flow Margin: 17%, similar to the same quarter last year Organic Revenue was up 7.4% year on year Market Capitalization: $26.81 billion Rollins reported first quarter results driven by broad-based growth across its service lines, with management highlighting double-digit gains in commercial pest control and the continued expansion of the termite and ancillary businesses. CEO Jerry Gahlhoff attributed the quarter's performance to increased investments in sales staffing, marketing, and operational execution, as well as early benefits from the company's multi-brand strategy. The recently closed acquisition of Saela Pest Control was also discussed as a contributor to growth and a strategic fit for Rollins' regional approach. Looking ahead, management maintained its outlook for organic growth in the 7% to 8% range and expects the addition of Saela to lift M&A-driven growth. The leadership team emphasized resilience in the face of macroeconomic uncertainty, with CFO Kenneth Krause stating, 'We remain confident in our ability to yield a strong return on these investments in the quarters and years ahead.' Rollins expects ongoing investments in technology, personnel, and customer service to support sustainable profitability throughout the year. Rollins' leadership focused on key contributors to first quarter performance, including M&A activity, investments in staffing and marketing, and the strength of its recurring service model. Management attributed results to operational execution and the company's ability to adapt under varying market conditions. Saela Acquisition Impact: The Saela Pest Control acquisition was highlighted as an important addition, expanding Rollins' presence in the Pacific Northwest, Mountain West, and Midwest. Management stressed that Saela's culture and operational scale align with Rollins' multi-brand strategy, providing new avenues for customer acquisition and geographic diversification. Commercial Division Growth: Significant resources have been dedicated to the Orkin commercial division. These investments supported double-digit recurring revenue growth in commercial pest control, though some softness was noted in one-time services like fumigation. Recurring Revenue Model: The company's recurring base, particularly in the residential and termite segments, remained resilient. Management credited strong customer relationships and effective cross-selling as drivers of sustained organic growth, especially in higher-ticket termite ancillary services. Operational Efficiency Initiatives: Rollins reported a 20-basis-point improvement in gross margin, citing pricing strategy, cost discipline in people and materials, and a focus on continuous improvement. These gains were partially offset by higher fleet expenses and increased spending on marketing and advertising. Balanced Capital Allocation: The quarter included an inaugural $500 million bond offering and the establishment of a $1 billion commercial paper program, providing flexibility for future acquisitions and organic investments. Free cash flow conversion remained high, supporting ongoing dividends and capital deployment. Management expects continued revenue and profit growth as a result of organic expansion, integration of recent acquisitions, and a focus on operational efficiency, while acknowledging potential macroeconomic headwinds. Integration of Saela and M&A Pipeline: The addition of Saela is expected to be accretive to earnings in its first year, with further growth possible from ongoing M&A activity. Management is focused on pragmatic integration, emphasizing both operational synergies and the adoption of best practices across acquired brands. Investment in Talent and Technology: Strategic hiring, training, and deployment of sales and technician teams remain priorities. Investments in technology, such as sales enablement tools, are designed to support productivity and enhance customer service, laying the groundwork for future margin improvement. Macro and Cost Environment: While leadership sees the business as recession-resilient, they are monitoring fleet costs and general inflation. The company's variable cost structure and ability to adjust pricing are viewed as levers to maintain profitability if demand softens. Tim Mulrooney (William Blair): Asked whether Rollins saw any signs of weakening demand in residential or termite services, given mixed industry feedback. Management replied demand was steady, noting improvements as the quarter progressed and no significant slowdowns observed. Ronan Kennedy (Barclays): Inquired about the drivers of top-line growth and the resilience of each business segment during downturns. Management cited pricing strength, volume growth, and the multi-brand strategy, emphasizing flexibility and the ability to adjust costs quickly if needed. George Tong (Goldman Sachs): Questioned the moderation in organic growth in residential and termite segments compared to the previous quarter. Management pointed to the impact of one less business day, minor currency headwinds, and the timing of one-time services as the main factors. Jason Haas (Wells Fargo): Asked about integration synergies from the Saela acquisition and whether incremental margins would improve as investments normalize. Management explained that synergies will focus on technology and best practice sharing, and margins should improve as temporary marketing and sales investments are absorbed. Stephanie Moore (Jefferies): Sought details on client retention strategies in a potential recession and whether Rollins could use flexible billing or service adjustments. Management highlighted the importance of customer relationships and the ability to adapt retention tactics market by market. In the coming quarters, our analysts will monitor (1) the pace and effectiveness of Saela's integration and its impact on earnings, (2) ongoing improvements in commercial division productivity and recurring revenue growth, and (3) the company's ability to maintain gross margin gains while balancing investments in marketing and technology. The progression of additional M&A opportunities and further enhancements in employee retention will also be key indicators of execution and long-term growth potential. Rollins currently trades at a forward P/E ratio of 48.1×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today.
Yahoo
26-04-2025
- Business
- Yahoo
ROL Q1 Earnings Call: Organic Growth, Commercial Momentum, and Saela Acquisition Shape Outlook
Pest control company Rollins (NYSE:ROL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 9.9% year on year to $822.5 million. Its non-GAAP profit of $0.22 per share was in line with analysts' consensus estimates. Is now the time to buy ROL? Find out in our full research report (it's free). Revenue: $822.5 million vs analyst estimates of $820 million (9.9% year-on-year growth, in line) Adjusted EPS: $0.22 vs analyst estimates of $0.22 (in line) Adjusted EBITDA: $171.9 million vs analyst estimates of $173.6 million (20.9% margin, 1% miss) Operating Margin: 17.3%, in line with the same quarter last year Free Cash Flow Margin: 17%, similar to the same quarter last year Organic Revenue was up 7.4% year on year Market Capitalization: $26.81 billion Rollins reported first quarter results driven by broad-based growth across its service lines, with management highlighting double-digit gains in commercial pest control and the continued expansion of the termite and ancillary businesses. CEO Jerry Gahlhoff attributed the quarter's performance to increased investments in sales staffing, marketing, and operational execution, as well as early benefits from the company's multi-brand strategy. The recently closed acquisition of Saela Pest Control was also discussed as a contributor to growth and a strategic fit for Rollins' regional approach. Looking ahead, management maintained its outlook for organic growth in the 7% to 8% range and expects the addition of Saela to lift M&A-driven growth. The leadership team emphasized resilience in the face of macroeconomic uncertainty, with CFO Kenneth Krause stating, 'We remain confident in our ability to yield a strong return on these investments in the quarters and years ahead.' Rollins expects ongoing investments in technology, personnel, and customer service to support sustainable profitability throughout the year. Rollins' leadership focused on key contributors to first quarter performance, including M&A activity, investments in staffing and marketing, and the strength of its recurring service model. Management attributed results to operational execution and the company's ability to adapt under varying market conditions. Saela Acquisition Impact: The Saela Pest Control acquisition was highlighted as an important addition, expanding Rollins' presence in the Pacific Northwest, Mountain West, and Midwest. Management stressed that Saela's culture and operational scale align with Rollins' multi-brand strategy, providing new avenues for customer acquisition and geographic diversification. Commercial Division Growth: Significant resources have been dedicated to the Orkin commercial division. These investments supported double-digit recurring revenue growth in commercial pest control, though some softness was noted in one-time services like fumigation. Recurring Revenue Model: The company's recurring base, particularly in the residential and termite segments, remained resilient. Management credited strong customer relationships and effective cross-selling as drivers of sustained organic growth, especially in higher-ticket termite ancillary services. Operational Efficiency Initiatives: Rollins reported a 20-basis-point improvement in gross margin, citing pricing strategy, cost discipline in people and materials, and a focus on continuous improvement. These gains were partially offset by higher fleet expenses and increased spending on marketing and advertising. Balanced Capital Allocation: The quarter included an inaugural $500 million bond offering and the establishment of a $1 billion commercial paper program, providing flexibility for future acquisitions and organic investments. Free cash flow conversion remained high, supporting ongoing dividends and capital deployment. Management expects continued revenue and profit growth as a result of organic expansion, integration of recent acquisitions, and a focus on operational efficiency, while acknowledging potential macroeconomic headwinds. Integration of Saela and M&A Pipeline: The addition of Saela is expected to be accretive to earnings in its first year, with further growth possible from ongoing M&A activity. Management is focused on pragmatic integration, emphasizing both operational synergies and the adoption of best practices across acquired brands. Investment in Talent and Technology: Strategic hiring, training, and deployment of sales and technician teams remain priorities. Investments in technology, such as sales enablement tools, are designed to support productivity and enhance customer service, laying the groundwork for future margin improvement. Macro and Cost Environment: While leadership sees the business as recession-resilient, they are monitoring fleet costs and general inflation. The company's variable cost structure and ability to adjust pricing are viewed as levers to maintain profitability if demand softens. Tim Mulrooney (William Blair): Asked whether Rollins saw any signs of weakening demand in residential or termite services, given mixed industry feedback. Management replied demand was steady, noting improvements as the quarter progressed and no significant slowdowns observed. Ronan Kennedy (Barclays): Inquired about the drivers of top-line growth and the resilience of each business segment during downturns. Management cited pricing strength, volume growth, and the multi-brand strategy, emphasizing flexibility and the ability to adjust costs quickly if needed. George Tong (Goldman Sachs): Questioned the moderation in organic growth in residential and termite segments compared to the previous quarter. Management pointed to the impact of one less business day, minor currency headwinds, and the timing of one-time services as the main factors. Jason Haas (Wells Fargo): Asked about integration synergies from the Saela acquisition and whether incremental margins would improve as investments normalize. Management explained that synergies will focus on technology and best practice sharing, and margins should improve as temporary marketing and sales investments are absorbed. Stephanie Moore (Jefferies): Sought details on client retention strategies in a potential recession and whether Rollins could use flexible billing or service adjustments. Management highlighted the importance of customer relationships and the ability to adapt retention tactics market by market. In the coming quarters, our analysts will monitor (1) the pace and effectiveness of Saela's integration and its impact on earnings, (2) ongoing improvements in commercial division productivity and recurring revenue growth, and (3) the company's ability to maintain gross margin gains while balancing investments in marketing and technology. The progression of additional M&A opportunities and further enhancements in employee retention will also be key indicators of execution and long-term growth potential. Rollins currently trades at a forward P/E ratio of 48.1×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
26-04-2025
- Business
- Yahoo
ROL Q1 Earnings Call: Organic Growth, Commercial Momentum, and Saela Acquisition Shape Outlook
Pest control company Rollins (NYSE:ROL) met Wall Street's revenue expectations in Q1 CY2025, with sales up 9.9% year on year to $822.5 million. Its non-GAAP profit of $0.22 per share was in line with analysts' consensus estimates. Is now the time to buy ROL? Find out in our full research report (it's free). Revenue: $822.5 million vs analyst estimates of $820 million (9.9% year-on-year growth, in line) Adjusted EPS: $0.22 vs analyst estimates of $0.22 (in line) Adjusted EBITDA: $171.9 million vs analyst estimates of $173.6 million (20.9% margin, 1% miss) Operating Margin: 17.3%, in line with the same quarter last year Free Cash Flow Margin: 17%, similar to the same quarter last year Organic Revenue was up 7.4% year on year Market Capitalization: $26.81 billion Rollins reported first quarter results driven by broad-based growth across its service lines, with management highlighting double-digit gains in commercial pest control and the continued expansion of the termite and ancillary businesses. CEO Jerry Gahlhoff attributed the quarter's performance to increased investments in sales staffing, marketing, and operational execution, as well as early benefits from the company's multi-brand strategy. The recently closed acquisition of Saela Pest Control was also discussed as a contributor to growth and a strategic fit for Rollins' regional approach. Looking ahead, management maintained its outlook for organic growth in the 7% to 8% range and expects the addition of Saela to lift M&A-driven growth. The leadership team emphasized resilience in the face of macroeconomic uncertainty, with CFO Kenneth Krause stating, 'We remain confident in our ability to yield a strong return on these investments in the quarters and years ahead.' Rollins expects ongoing investments in technology, personnel, and customer service to support sustainable profitability throughout the year. Rollins' leadership focused on key contributors to first quarter performance, including M&A activity, investments in staffing and marketing, and the strength of its recurring service model. Management attributed results to operational execution and the company's ability to adapt under varying market conditions. Saela Acquisition Impact: The Saela Pest Control acquisition was highlighted as an important addition, expanding Rollins' presence in the Pacific Northwest, Mountain West, and Midwest. Management stressed that Saela's culture and operational scale align with Rollins' multi-brand strategy, providing new avenues for customer acquisition and geographic diversification. Commercial Division Growth: Significant resources have been dedicated to the Orkin commercial division. These investments supported double-digit recurring revenue growth in commercial pest control, though some softness was noted in one-time services like fumigation. Recurring Revenue Model: The company's recurring base, particularly in the residential and termite segments, remained resilient. Management credited strong customer relationships and effective cross-selling as drivers of sustained organic growth, especially in higher-ticket termite ancillary services. Operational Efficiency Initiatives: Rollins reported a 20-basis-point improvement in gross margin, citing pricing strategy, cost discipline in people and materials, and a focus on continuous improvement. These gains were partially offset by higher fleet expenses and increased spending on marketing and advertising. Balanced Capital Allocation: The quarter included an inaugural $500 million bond offering and the establishment of a $1 billion commercial paper program, providing flexibility for future acquisitions and organic investments. Free cash flow conversion remained high, supporting ongoing dividends and capital deployment. Management expects continued revenue and profit growth as a result of organic expansion, integration of recent acquisitions, and a focus on operational efficiency, while acknowledging potential macroeconomic headwinds. Integration of Saela and M&A Pipeline: The addition of Saela is expected to be accretive to earnings in its first year, with further growth possible from ongoing M&A activity. Management is focused on pragmatic integration, emphasizing both operational synergies and the adoption of best practices across acquired brands. Investment in Talent and Technology: Strategic hiring, training, and deployment of sales and technician teams remain priorities. Investments in technology, such as sales enablement tools, are designed to support productivity and enhance customer service, laying the groundwork for future margin improvement. Macro and Cost Environment: While leadership sees the business as recession-resilient, they are monitoring fleet costs and general inflation. The company's variable cost structure and ability to adjust pricing are viewed as levers to maintain profitability if demand softens. Tim Mulrooney (William Blair): Asked whether Rollins saw any signs of weakening demand in residential or termite services, given mixed industry feedback. Management replied demand was steady, noting improvements as the quarter progressed and no significant slowdowns observed. Ronan Kennedy (Barclays): Inquired about the drivers of top-line growth and the resilience of each business segment during downturns. Management cited pricing strength, volume growth, and the multi-brand strategy, emphasizing flexibility and the ability to adjust costs quickly if needed. George Tong (Goldman Sachs): Questioned the moderation in organic growth in residential and termite segments compared to the previous quarter. Management pointed to the impact of one less business day, minor currency headwinds, and the timing of one-time services as the main factors. Jason Haas (Wells Fargo): Asked about integration synergies from the Saela acquisition and whether incremental margins would improve as investments normalize. Management explained that synergies will focus on technology and best practice sharing, and margins should improve as temporary marketing and sales investments are absorbed. Stephanie Moore (Jefferies): Sought details on client retention strategies in a potential recession and whether Rollins could use flexible billing or service adjustments. Management highlighted the importance of customer relationships and the ability to adapt retention tactics market by market. In the coming quarters, our analysts will monitor (1) the pace and effectiveness of Saela's integration and its impact on earnings, (2) ongoing improvements in commercial division productivity and recurring revenue growth, and (3) the company's ability to maintain gross margin gains while balancing investments in marketing and technology. The progression of additional M&A opportunities and further enhancements in employee retention will also be key indicators of execution and long-term growth potential. Rollins currently trades at a forward P/E ratio of 48.1×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Associated Press
02-04-2025
- Business
- Associated Press
ROLLINS, INC. COMPLETES ACQUISTION OF SAELA HOLDINGS, LLC, A LEADING PEST MANAGEMENT COMPANY
Highly complementary end market exposure that provides strategic growth opportunities Transaction financed through cash on hand and commercial paper Pro forma leverage ratio not expected to exceed 1.0x ATLANTA, April 2, 2025 /PRNewswire/ -- Rollins, Inc. (NYSE:ROL) ('Rollins'), a premier global consumer and commercial services company, today announced that it has acquired Saela Holdings, LLC ('Saela' or the 'Company'). Saela employs more than 250 teammates and is headquartered in Orem, Utah. The Company ranks as the 23rd largest pest management company according to PCT 100 rankings with over $65 million in annual revenue. Additional transaction details will be disclosed during Rollins' first quarter 2025 earnings conference call. Founded in 2008, Saela provides services for both residential and commercial customers across nine states. The Company has a diversified approach to customer acquisition, deploying traditional inside sales teams, technician sales efforts, as well as door-to-door marketing services. Saela has been recognized on the Inc. 5000 list as one of the fastest growing private companies in America. 'The acquisition of Saela will accelerate our long-term growth strategy and expand our presence in key geographies, including the Pacific Northwest, Mountain West, and Midwestern United States. While Saela will operate as a standalone brand, its service areas are highly complementary to our current portfolio. Saela has established itself as a high-quality, customer focused business anchored by a strong culture,' said Jerry Gahlhoff, President and CEO of Rollins. 'We're thrilled to partner with Rollins, a world-class organization, to create long-lasting opportunity for our team members. Rollins and Saela are closely aligned in the way we value people, leadership, and customer service, which is why there was no question that Rollins is the right partner for us as we begin the next chapter for Saela,' said Andrew Richardson, Chairman and CEO of Saela. The Potomac Company acted as exclusive financial advisor to Saela on the transaction. About Rollins, Inc. Rollins, Inc. (ROL) is a premier global consumer and commercial services company. Through its family of leading brands, the Company and its franchises provide essential pest control services and protection against termite damage, rodents, and insects to more than 2.8 million customers in North America, South America, Europe, Asia, Africa, and Australia, with more than 20,000 employees from more than 800 locations. Rollins is parent to Orkin, HomeTeam Pest Defense, Clark Pest Control, Northwest Exterminating, McCall Service, Trutech, Critter Control, Western Pest Services, Waltham Services, OPC Pest Services, The Industrial Fumigant Company, PermaTreat, Crane Pest Control, MissQuito, Fox Pest Control, Orkin Canada, Orkin Australia, Safeguard (United Kingdom), Aardwolf Pestkare (Singapore), and more. You can learn more about Rollins and its subsidiaries by visiting Cautionary Statement Regarding Forward-Looking Statements This press release as well as other written or oral statements by the Company may contain 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current opinions, expectations, intentions, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Although we believe that these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Generally, statements that do not relate to historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'intend,' 'may,' 'might,' 'plan,' 'possible,' 'potential,' 'predict,' 'should,' 'will,' 'would,' and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include, but are not limited to, statements regarding: the belief that Saela's highly complementary end market exposure provides strategic growth opportunities; the expectations that the pro forma leverage ratio will not exceed 1.0x; the expectations that the acquisition of Saela will (i) accelerate Rollins' long-term growth strategy and expand its presence in key geographies and (ii) create long-lasting opportunity for team members; and the belief that Saela will operate as a standalone brand. These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements including, but not limited to, those set forth in the sections entitled 'Risk Factors' in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and may also be described from time to time in our future reports filed with the SEC. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required by law. (404) 888-2000
