Rollins

Rollins is one of the largest pest control companies in the world, based in Atlanta. It owns Orkin and many other brands, such as HomeTeam Pest Defense, Clark Pest Control, Western Pest Services, Fox Pest Control, Saela and Romex. Its companies and franchises protect more than 2.8 million homes and businesses against pests, termites and rodents in North and South America, Europe, Asia, Africa and Australia. Most revenue is recurring: customers pay for regular service under contracts, and Rollins adds termite and other one-time services.

It makes money from these service fees, with low capital needs, and it uses the cash to buy smaller pest control companies and to pay dividends. The Rollins family controls about a third of the shares through LOR, Inc. and related entities. Jerry Gahlhoff is the CEO.

The market fears that AI search breaks the way Rollins finds new residential customers. Many of its brands get leads from people who search online or call in. Management said that leads fell by double digits from late May 2026 through the end of Q2, and it thinks 50% to 60% of the change comes from the move to AI answers in search, such as Google's AI Overviews. Growth then slowed further.

Organic growth was 5.7% in Q2 2026 and 4.4% in Q3 2026, and the Q3 operating margin fell to 20.5% from 21.9%. In October 2026, management said that residential customer acquisition was still under pressure. Piper Sandler cut its rating to Neutral on September 24, 2026, and a new CFO since June 2026 adds some doubt. For the gap to close, Rollins must show that its growth model still works when search changes.

The checks are clear. Organic growth must return to about 6% or more. Residential lead volume must stop falling, and relationship channels such as home builders and door-to-door sales must keep growing. Margins must recover after the staff cuts of May and June 2026.

Free cash flow must stay strong enough to pay for buybacks, such as the $120 million in Q3 2026, and for acquisitions. The next evidence comes with the full-year report and the 2027 framework in early 2027. If leads stabilize, the gap can close over the next three to five quarters. If AI search keeps cutting leads, Rollins will need new ways to find customers, and the gap can last into 2028.

1. Oct 21, 2026Failed

   Q3 2026 results: organic growth, leads and marginOrganic growth near 6%, residential leads that stop falling, and a margin near the Q3 2025 level pass; organic growth well below 6% or a lower 2026 framework fails.Outcome: Organic growth slowed to 4.4%, well below 6%, and the operating margin fell to 20.5% from 21.9%.
2. Jan 21, 2027 · est.Pending

   Full-year 2026 results and 2027 frameworkAbout 6% organic growth for 2026, incremental margins near 10%, and a 2027 framework back toward 7% to 8% organic growth pass; a lower 2027 framework fails.

Every passed and failed checkpoint across all picks

• October 21, 2026Rollins reported Q3 2026 results. Revenue grew 6.2% to $1.09 billion, but organic growth slowed to 4.4%. The operating margin fell to 20.5% from 21.9%, and adjusted EPS fell to $0.34 from $0.35. Free cash flow grew 28.8% to $235 million, helped by a $63 million tax refund. Rollins bought back $120 million of stock and paid $87 million of dividends in the quarter. The CEO said that the company is disappointed with the quarter and that residential customer acquisition was still under pressure. Rollins said it moves marketing money from its old digital methods to the channels that give the best return, which include visibility in AI search. The release gave no new outlook.
• October 7, 2026Rollins said that it will report Q3 2026 results after the market closes on October 21, 2026, with a call on October 22.
• September 24, 2026Piper Sandler cut its rating on Rollins to Neutral, with a $33 price target. The stock fell 6.8% that day.

• AI answers in search can send fewer people to Rollins' websites and phone lines. Management said that residential leads fell by double digits from late May 2026 through the end of Q2, and that many of its fixes in June and July 2026 did not give results yet. Organic growth slowed to 4.4% in Q3 2026. If this continues, residential organic growth stays below the 7% to 8% medium-term target.
• Rollins set its costs for 7% to 8% growth, so slower growth cuts margins. The operating margin fell to 18.7% in Q2 2026 from 19.8%, and to 20.5% in Q3 2026 from 21.9%. Insurance and claims costs about doubled in Q3 2026. Medical costs, wages and fuel also rise.
• Growth depends partly on acquisitions of smaller pest control companies. Higher prices for these companies, or poor integration, would lower returns.
• The Rollins family controls about a third of the shares, so other shareholders have little say. The CFO changed in June 2026.

Rollins funds itself with $500 million of senior notes due February 2035 and with short-term debt. Short-term debt was $240 million at September 30, 2026; at June 30, 2026, it was commercial paper with a term of a few days. Read more