AI Takeaway
Rollins (ROL) delivered solid Q1 FY2026 revenue growth of 10.2% to $906.4M, but operating margin compressed 130 bps to 16.1% as SG&A expenses surged 12.9%, while cash and operating cash flow declined meaningfully year-over-year.
Revenue
$906.42M
++10.20% YoY
EPS (Basic)
$0.22
0.00% YoY
Operating Income
$145.49M
++1.99% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 10.2% year-over-year to $906.4M in Q1 FY2026 from $822.5M in the prior-year period, reflecting continued demand for pest control services and likely contributions from acquisitions.
Source: Source: 10-Q Income Statement
SG&A expenses rose 12.9% YoY to $282.9M, outpacing revenue growth of 10.2%, which contributed to operating margin compression of approximately 130 basis points from 17.3% to 16.1%.
Source: Source: 10-Q Income Statement
Operating income grew only 2.0% YoY to $145.5M despite a 10.2% revenue increase, indicating that cost inflation — particularly in SG&A — is absorbing a significant portion of incremental revenue.
Source: Source: 10-Q Income Statement
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Upgrade to unlockSG&A expenses grew 12.9% YoY, significantly outpacing revenue growth of 10.2%, compressing operating margin by ~130 bps to 16.1%. If this cost trend persists, profitability improvement could stall even as the top line grows.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $0.24 versus the $0.24 analyst consensus — a +0.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $906.42M | $822.5M | +10.20% |
Operating Income | $145.49M | $142.65M | +1.99% |
Net Income | $107.84M | $105.25M | +2.46% |
EPS (Basic) | $0.22 | $0.22 | 0.00% |
EPS (Diluted) | $0.22 | $0.22 | 0.00% |
SG&A Expense | $282.92M | $250.51M | +12.94% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $3.16B | $2.95B | +7.18% |
Current Assets | $513.68M | $555.97M | -7.61% |
Total Liabilities | $1.78B | $1.59B | +11.66% |
Current Liabilities | $794.66M | $636.82M | +24.79% |
Stockholders' Equity | $1.38B | $1.36B | +1.91% |
Cash & Equivalents | $116.54M | $201.18M | -42.07% |
Long-Term Debt | $486.63M | $485.45M | +0.24% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $118.37M | $146.89M | -19.42% |
Investing Cash Flow | $-24.57M | $-32.57M | +24.56% |
Financing Cash Flow | $-76.19M | $-4.61M | -1552.04% |
Share Buybacks | $22.35M | $14.67M | +52.34% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 16.1% | 17.3% | -1.29% |
Net Margin | 11.9% | — | — |
ROE | 7.8% | — | — |
ROA | 3.4% | — | — |
Current Ratio | $0.646 | — | — |
Debt to Equity | $1.287 | — | — |
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Rollins reported Q1 FY2026 revenue of $906.4M, up 10.2% year-over-year, with net income of $107.8M, up 2.5%. However, operating margin compressed to 16.1% from 17.3% due to SG&A expenses rising 12.9%, and EPS remained flat at $0.22.
ROL's operating margin fell approximately 130 basis points to 16.1% in Q1 FY2026 because SG&A expenses grew 12.9% to $282.9M, outpacing revenue growth of 10.2%. This cost inflation absorbed a significant portion of the incremental revenue, limiting operating income growth to just 2.0%.
ROL's financial health shows some areas of concern: cash dropped 42.1% YoY to $116.5M, the current ratio is a low 0.65, and operating cash flow fell 19.4% to $118.4M. On the positive side, the company continues to grow revenue and maintains a stable equity base of $1.38B.
Yes, Rollins increased share buybacks by 52.3% YoY to $22.4M in Q1 FY2026, reflecting a more aggressive capital return posture. Total financing cash outflows surged to -$76.2M from just -$4.6M in the prior-year period, suggesting additional capital return or debt-related activity.
The most significant near-term risks for Rollins include continued SG&A cost inflation compressing margins, a deteriorating liquidity position with a current ratio of 0.65 and cash down 42%, and declining operating cash flow of $118.4M versus $146.9M in the prior year. These factors could limit the company's financial flexibility if revenue growth slows.