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FOR IMMEDIATE RELEASE
ROLLINS, INC. REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS
Strong Revenue Growth Drives Healthy Improvements in Earnings and Cash Flow
ATLANTA, GEORGIA, July 23, 2025: Rollins, Inc. (NYSE:ROL) (“Rollins” or the “Company”), a premier global consumer and commercial services company, reported unaudited financial results for the second quarter of 2025.
Key Highlights

•Second quarter revenues were $1 billion, an increase of 12.1% over the second quarter of 2024 with organic revenues* increasing 7.3%.
•Quarterly operating income was $198 million, an increase of 8.7% over the second quarter of 2024. Quarterly operating margin was 19.8%, a decrease of 60 basis points versus the second quarter of 2024. Adjusted operating income* was $206 million, an increase of 10.3% over the prior year. Adjusted operating margin* was 20.6%, a decrease of 30 basis points compared to the prior year.
•Adjusted EBITDA* was $231 million, an increase of 10.0% over the prior year. Adjusted EBITDA margin* was 23.1%, a decrease of 50 basis points versus the second quarter of 2024.
•Quarterly net income was $141 million, an increase of 9.3% over the prior year. Adjusted net income* was $147 million, an increase of 11.1% over the prior year.
•Quarterly EPS was $0.29 per diluted share, a 7.4% increase over the prior year EPS of $0.27. Adjusted EPS* was $0.30 per diluted share, an increase of 11.1% over the prior year.
•Operating cash flow was $175 million for the quarter, an increase of 20.7% compared to the prior year. The Company invested $226 million in acquisitions, $7 million in capital expenditures, and paid dividends totaling $79 million.

*Amounts are non-GAAP financial measures. See the schedules below for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.
Management Commentary
"Our results for the second quarter reflect strong execution by our teammates throughout our business,” said Jerry Gahlhoff, Jr., President and CEO. “The demand environment is healthy, and we saw double-digit revenue growth across all major service lines. As we start the second half of the year, we are focused on driving growth while also improving profitability. We remain well-positioned to deliver strong results in 2025 and beyond,” Mr. Gahlhoff added.

"In addition to double-digit revenue and adjusted earnings growth, cash flow compounded at a healthy rate,” said Kenneth Krause, Executive Vice President and CFO. “While EBITDA margins were pressured from developments on legacy auto claims by 70 basis points in the quarter, our underlying operations yielded healthy margin performance. Additionally, we continue to execute a balanced capital allocation program enabled by compounding cash flow, a strong balance sheet, and access to investment grade credit markets,” Mr. Krause concluded.
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Three and Six Months Ended Financial Highlights

Three Months Ended June 30,Six Months Ended June 30,
VarianceVariance
(unaudited, in thousands, except per share data and margins)20252024$%20252024$%
GAAP Metrics
Revenues$999,527 $891,920 $107,607 12.1 %$1,822,031 $1,640,269 $181,762 11.1 %
Gross profit (1)
$537,666 $481,635 $56,031 11.6 %$960,036 $864,426 $95,610 11.1 %
Gross profit margin (1)
53.8 %54.0 %(20) bps52.7 %52.7 %— bps
Operating income$198,333 $182,377 $15,956 8.7 %$340,981 $314,801 $26,180 8.3 %
Operating margin19.8 %20.4 %(60) bps18.7 %19.2 %(50) bps
Net income$141,489 $129,397 $12,092 9.3 %$246,737 $223,791 $22,946 10.3 %
EPS$0.29 $0.27 $0.02 7.4 %$0.51 $0.46 $0.05 10.9 %
Net cash provided by operating activities$175,122 $145,115 $30,007 20.7 %$322,014 $272,548 $49,466 18.1 %
Non-GAAP Metrics
Adjusted operating income (2)
$205,900 $186,596 $19,304 10.3 %$352,769 $324,285 $28,484 8.8 %
Adjusted operating margin (2)
20.6 %20.9 %(30) bps19.4 %19.8 %(40) bps
Adjusted net income (2)
$146,902 $132,229 $14,673 11.1 %$254,775 $230,586 $24,189 10.5 %
Adjusted EPS (2)
$0.30 $0.27 $0.03 11.1 %$0.53 $0.48 $0.05 10.4 %
Adjusted EBITDA (2)
$231,152 $210,088 $21,064 10.0 %$403,009 $370,871 $32,138 8.7 %
Adjusted EBITDA margin (2)
23.1 %23.6 %(50) bps22.1 %22.6 %(50) bps
Free cash flow (2)
$168,046 $136,419 $31,627 23.2 %$308,157 $256,681 $51,476 20.1 %
(1) Exclusive of depreciation and amortization
(2) Amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics including a reconciliation of the most directly comparable GAAP measure.
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The following table presents financial information, including our significant expense categories, for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,Six Months Ended June 30,
(unaudited, in thousands)2025202420252024
$% of Revenue$% of Revenue$% of Revenue$% of Revenue
Revenue$999,527 100.0 %$891,920 100.0 %$1,822,031 100.0 %$1,640,269 100.0 %
Less:
Cost of services provided (exclusive of depreciation and amortization below):
Employee expenses298,354 29.8 %268,043 30.1 %560,077 30.7 %506,572 30.9 %
Materials and supplies59,500 6.0 %57,047 6.4 %107,991 5.9 %101,833 6.2 %
Insurance and claims20,734 2.1 %15,034 1.7 %37,258 2.0 %32,678 2.0 %
Fleet expenses41,834 4.2 %34,653 3.9 %78,691 4.3 %65,351 4.0 %
Other cost of services provided (1)
41,439 4.1 %35,508 4.0 %77,978 4.3 %69,409 4.2 %
Total cost of services provided (exclusive of depreciation and amortization below)461,861 46.2 %410,285 46.0 %861,995 47.3 %775,843 47.3 %
Sales, general and administrative:
Selling and marketing expenses140,177 14.0 %125,449 14.1 %238,428 13.1 %208,360 12.7 %
Administrative employee expenses89,303 8.9 %79,417 8.9 %170,783 9.4 %155,195 9.5 %
Insurance and claims12,939 1.3 %9,088 1.0 %22,943 1.3 %19,614 1.2 %
Fleet expenses10,443 1.0 %9,195 1.0 %19,846 1.1 %16,960 1.0 %
Other sales, general and administrative (2)
54,734 5.5 %48,398 5.4 %106,109 5.8 %94,475 5.8 %
Total sales, general and administrative307,596 30.8 %271,547 30.4 %558,109 30.6 %494,604 30.2 %
Depreciation and amortization31,737 3.2 %27,711 3.1 %60,946 3.3 %55,021 3.4 %
Interest expense, net7,380 0.7 %7,775 0.9 %13,176 0.7 %15,500 0.9 %
Other (income) expense, net(292)— %(412)— %(984)(0.1)%(351)— %
Income tax expense49,756 5.0 %45,617 5.1 %82,052 4.5 %75,861 4.6 %
Net income$141,489 14.2 %$129,397 14.5 %$246,737 13.5 %$223,791 13.6 %
1) Other cost of services provided includes facilities costs, professional services, maintenance & repairs, software license costs, and other expenses directly related to providing services.
2) Other sales, general and administrative includes facilities costs, professional services, maintenance & repairs, software license costs, bad debt expense, and other administrative expenses.


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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 Aardwolf Pestkare, Clark Pest Control, Crane Pest Control, Critter Control, Fox Pest Control, HomeTeam Pest Defense, Industrial Fumigant Company, McCall Service, MissQuito, Northwest Exterminating, OPC Pest Services, Orkin, Orkin Australia, Orkin Canada, PermaTreat, Safeguard, Saela Pest Control, Trutech, Waltham Services, Western Pest Services, and more. You can learn more about Rollins and its subsidiaries by visiting www.rollins.com.

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: expectations with respect to our financial and business performance; demand for our services; focus on driving growth while improving profitability; being well-positioned to continue delivering strong results in 2025 and beyond; and a balanced capital allocation program enabled by compounding cash flow, a strong balance sheet, and access to investment grade credit markets.

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.
Conference Call
Rollins will host a conference call on Thursday, July 24, 2025 at 8:30 a.m. Eastern Time to discuss the second quarter 2025 results. The conference call will also broadcast live over the internet via a link provided on the Rollins, Inc. website at www.rollins.com. Interested parties can also dial into the call at 1-877-869-3839 (domestic) or +1-201-689-8265 (internationally) with conference ID of 13754407. For interested individuals unable to join the call, a replay will be available on the website for 180 days.
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ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
June 30,
2025		December 31,
2024
ASSETS
Cash and cash equivalents$123,035 $89,630 
Trade receivables, net229,735 196,081 
Financed receivables, short-term, net43,722 40,301 
Materials and supplies43,239 39,531 
Other current assets98,176 77,080 
Total current assets537,907 442,623 
Equipment and property, net129,713 124,839 
Goodwill1,337,903 1,161,085 
Intangibles, net600,970 541,589 
Operating lease right-of-use assets418,717 414,474 
Financed receivables, long-term, net102,625 89,932 
Other assets52,205 45,153 
Total assets$3,180,040 $2,819,695 
LIABILITIES
Short-term debt$59,989 $— 
Accounts payable73,798 49,625 
Accrued insurance – current64,483 54,840 
Accrued compensation and related liabilities120,826 122,869 
Unearned revenues200,110 180,851 
Operating lease liabilities – current130,822 121,319 
Other current liabilities138,052 115,658 
Total current liabilities788,080 645,162 
Accrued insurance, less current portion57,706 61,946 
Operating lease liabilities, less current portion291,093 295,899 
Long-term debt485,278 395,310 
Other long-term accrued liabilities114,012 90,785 
Total liabilities1,736,169 1,489,102 
STOCKHOLDERS’ EQUITY
Common stock484,640 484,372 
Retained earnings and other equity959,231 846,221 
Total stockholders’ equity1,443,871 1,330,593 
Total liabilities and stockholders’ equity$3,180,040 $2,819,695 

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ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share data)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
REVENUES
Customer services$999,527 $891,920 $1,822,031 $1,640,269 
COSTS AND EXPENSES
Cost of services provided (exclusive of depreciation and amortization below)461,861 410,285 861,995 775,843 
Sales, general and administrative307,596 271,547 558,109 494,604 
Depreciation and amortization31,737 27,711 60,946 55,021 
Total operating expenses801,194 709,543 1,481,050 1,325,468 
OPERATING INCOME198,333 182,377 340,981 314,801 
Interest expense, net7,380 7,775 13,176 15,500 
Other (income) expense, net(292)(412)(984)(351)
CONSOLIDATED INCOME BEFORE INCOME TAXES191,245 175,014 328,789 299,652 
PROVISION FOR INCOME TAXES49,756 45,617 82,052 75,861 
NET INCOME$141,489 $129,397 $246,737 $223,791 
NET INCOME PER SHARE - BASIC AND DILUTED$0.29 $0.27 $0.51 $0.46 
Weighted average shares outstanding - basic484,643484,244484,530484,187
Weighted average shares outstanding - diluted484,674484,419484,559484,356
DIVIDENDS PAID PER SHARE$0.165 $0.150 $0.330 $0.300 

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ROLLINS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(in thousands)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
OPERATING ACTIVITIES
Net income$141,489 $129,397 $246,737 $223,791 
Depreciation and amortization31,737 27,711 60,946 55,021 
Change in working capital and other operating activities1,896 (11,993)14,331 (6,264)
Net cash provided by operating activities175,122 145,115 322,014 272,548 
INVESTING ACTIVITIES
Acquisitions, net of cash acquired(226,387)(34,522)(253,578)(81,654)
Capital expenditures(7,076)(8,696)(13,857)(15,867)
Other investing activities, net2,939 2,062 4,344 3,900 
Net cash used in investing activities(230,524)(41,156)(263,091)(93,621)
FINANCING ACTIVITIES
Net borrowings (repayments)59,989 (9,000)155,204 11,000 
Payment of dividends(79,463)(72,578)(159,373)(145,167)
Other financing activities, net(4,484)(28,054)(24,401)(39,719)
Net cash used in financing activities(23,958)(109,632)(28,570)(173,886)
Effect of exchange rate changes on cash and cash equivalents1,218 (601)3,052 (2,169)
Net (decrease) increase in cash and cash equivalents$(78,142)$(6,274)$33,405 $2,872 

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APPENDIX
Reconciliation of GAAP and non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, statement of financial position or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

These measures should not be considered in isolation or as a substitute for revenues, net income, earnings per share or other performance measures prepared in accordance with GAAP. Management believes all of these non-GAAP financial measures are useful to provide investors with information about current trends in, and period-over-period comparisons of, the Company's results of operations. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

The Company has used the following non-GAAP financial measures in this earnings release:

Organic revenues

Organic revenues are calculated as revenues less the revenues from acquisitions completed within the prior 12 months and excluding the revenues from divested businesses. Acquisition revenues are based on the trailing 12-month revenue of our acquired entities. Management uses organic revenues, and organic revenues by type to compare revenues over various periods excluding the impact of acquisitions and divestitures.
Adjusted operating income and adjusted operating margin
Adjusted operating income and adjusted operating margin are calculated by adding back to net income those expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Adjusted operating margin is calculated as adjusted operating income divided by revenues. Management uses adjusted operating income and adjusted operating margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
Adjusted net income and adjusted EPS
Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.
EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, incremental EBITDA margin and adjusted incremental EBITDA margin
EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes. EBITDA margin is calculated as EBITDA divided by revenues. Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses. Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods.
Free cash flow and free cash flow conversion
Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity. Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows.
Adjusted sales, general, and administrative ("SG&A")
Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Management uses adjusted SG&A to compare SG&A expenses consistently over various periods.
Leverage ratio
Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding short-term debt and operating lease liabilities to total long-term debt less a cash adjustment of 90% of total consolidated cash. Adjusted EBITDAR is calculated by adding back to net income depreciation and amortization, interest expense, net, provision for income taxes, operating lease cost, and stock-based compensation expense. Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage.
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Set forth below is a reconciliation of the non-GAAP financial measures contained in this release with their most directly comparable GAAP measures.

(unaudited, in thousands, except per share data and margins)

Three Months Ended June 30,Six Months Ended June 30,
VarianceVariance
20252024$%20252024$%
Reconciliation of Revenues to Organic Revenues
Revenues$999,527 $891,920 107,607 12.1 $1,822,031 $1,640,269 181,762 11.1 
Revenues from acquisitions(42,602)— (42,602)4.8 (61,152)— (61,152)3.7 
Organic revenues$956,925 $891,920 65,005 7.3 $1,760,879 $1,640,269 120,610 7.4 
Reconciliation of Residential Revenues to Organic Residential Revenues
Residential revenues$455,665 $408,414 47,251 11.6 $811,978 $737,752 74,226 10.1 
Residential revenues from acquisitions(27,208)— (27,208)6.7 (35,574)— (35,574)4.9 
Residential organic revenues$428,457 $408,414 20,043 4.9 $776,404 $737,752 38,652 5.2 
Reconciliation of Commercial Revenues to Organic Commercial Revenues
Commercial revenues$320,490 $287,770 32,720 11.4 $604,847 $545,884 58,963 10.8 
Commercial revenues from acquisitions(8,689)— (8,689)3.0 (15,721)— (15,721)2.9 
Commercial organic revenues$311,801 $287,770 24,031 8.4 $589,126 $545,884 43,242 7.9 
Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues
Termite and ancillary revenues$211,855 $186,024 25,831 13.9 $383,985 $338,084 45,901 13.6 
Termite and ancillary revenues from acquisitions(6,705)— (6,705)3.6 (9,857)— (9,857)2.9 
Termite and ancillary organic revenues$205,150 $186,024 19,126 10.3 $374,128 $338,084 36,044 10.7 
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Three Months Ended June 30,Six Months Ended June 30,
VarianceVariance
20252024$%20252024$%
Reconciliation of Operating Income and Operating Income Margin to Adjusted Operating Income and Adjusted Operating Margin
Operating income$198,333 $182,377 $340,981 $314,801 
Acquisition-related expenses (1)
7,567 4,219 11,788 9,484 
Adjusted operating income$205,900 $186,596 19,304 10.3 $352,769 $324,285 28,484 8.8 
Revenues$999,527 $891,920 $1,822,031 $1,640,269 
Operating margin19.8 %20.4 %18.7 %19.2 %
Adjusted operating margin20.6 %20.9 %19.4 %19.8 %
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS
Net income$141,489 $129,397 $246,737 $223,791 
Acquisition-related expenses (1)
7,567 4,219 11,788 9,484 
Gain on sale of assets, net (2)
(292)(412)(984)(351)
Tax impact of adjustments (3)
(1,862)(975)(2,766)(2,338)
Adjusted net income$146,902 $132,229 14,673 11.1 $254,775 $230,586 24,189 10.5 
EPS - basic and diluted$0.29 $0.27 $0.51 $0.46 
Acquisition-related expenses (1)
0.02 0.01 0.02 0.02 
Gain on sale of assets, net (2)
— — — — 
Tax impact of adjustments (3)
— — (0.01)— 
Adjusted EPS - basic and diluted (4)
$0.30 $0.27 0.03 11.1 $0.53 $0.48 0.05 10.4 
Weighted average shares outstanding – basic484,643 484,244 484,530 484,187 
Weighted average shares outstanding – diluted484,674 484,419 484,559 484,356 
Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin
Net income$141,489 $129,397 $246,737 $223,791 
Depreciation and amortization31,737 27,711 60,946 55,021 
Interest expense, net7,380 7,775 13,176 15,500 
Provision for income taxes49,756 45,617 82,052 75,861 
EBITDA$230,362 $210,500 19,862 9.4 $402,911 $370,173 32,738 8.8 
Acquisition-related expenses (1)
1,082 — 1,082 1,049 
Gain on sale of assets, net (2)
(292)(412)(984)(351)
Adjusted EBITDA$231,152 $210,088 21,064 10.0 $403,009 $370,871 32,138 8.7 
Revenues$999,527 $891,920 107,607 $1,822,031 $1,640,269 181,762 
EBITDA margin23.0 %23.6 %22.1 %22.6 %
Incremental EBITDA margin18.5 %18.0 %
Adjusted EBITDA margin23.1 %23.6 %22.1 %22.6 %
Adjusted incremental EBITDA margin19.6 %17.7 %
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Free Cash Flow Conversion
Net cash provided by operating activities$175,122 $145,115 $322,014 $272,548 
Capital expenditures(7,076)(8,696)(13,857)(15,867)
Free cash flow$168,046 $136,419 31,627 23.2 $308,157 $256,681 51,476 20.1 
Free cash flow conversion118.8 %105.4 %124.9 %114.7 %
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Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Reconciliation of SG&A to Adjusted SG&A
SG&A$307,596 $271,547 $558,109 $494,604 
Acquisition-related expenses (1)
1,082 — 1,082 1,049 
Adjusted SG&A$306,514 $271,547 $557,027 $493,555 
Revenues$999,527 $891,920 $1,822,031 $1,640,269 
Adjusted SG&A as a % of revenues30.7 %30.4 %30.6 %30.1 %
Period Ended June 30, 2025
Period Ended December 31, 2024
Reconciliation of Debt and Net Income to Leverage Ratio
Short-term debt (5)
$60,000 $— 
Long-term debt (6)
500,000 397,000 
Operating lease liabilities (7)
421,915 417,218 
Cash adjustment (8)
(110,732)(80,667)
Adjusted net debt$871,183 $733,551 
Net income$489,325 $466,379 
Depreciation and amortization119,145 113,220 
Interest expense, net25,353 27,677 
Provision for income taxes170,042 163,851 
Operating lease cost (9)
148,241 133,420 
Stock-based compensation expense34,233 29,984 
Adjusted EBITDAR$986,339 $934,531 
Leverage ratio0.9x0.8x
(1) Consists of expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. While we exclude such expenses in this non-GAAP measure, the revenue from the acquired companies is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation.
(2) Consists of the gain or loss on the sale of non-operational assets.
(3) The tax effect of the adjustments is calculated using the applicable statutory tax rates for the respective periods.
(4) In some cases, the sum of the individual EPS amounts may not equal total adjusted EPS calculations due to rounding.
(5) As of June 30, 2025, the Company had outstanding borrowings of $60.0 million under our commercial paper program. The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statement of financial position, net of unamortized discounts. There were no outstanding borrowings under the commercial paper program as of December 31, 2024.
(6) As of June 30, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility. These borrowings are presented under the long-term debt caption of our condensed consolidated statement of financial position, net of a $7.5 million unamortized discount and $7.2 million in unamortized debt issuance costs as of June 30, 2025. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are presented under the long-term debt caption of our condensed consolidated statement of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.
(7) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our condensed consolidated statement of financial position.
(8) Represents 90% of cash and cash equivalents per our condensed consolidated statement of financial position as of both periods presented.
(9) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less.
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