# ROLLINS INC (ROL)

Informational only - not investment advice.

CIK: 0000084839
SIC: 7340 Services-To Dwellings & Other Buildings
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7340 Services-To Dwellings & Other Buildings](/industry/7340/)
Latest 10-K filed: 2026-02-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=84839
Filing source: https://www.sec.gov/Archives/edgar/data/84839/000008483926000008/rol-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 3761050000 | USD | 2025 | 2026-02-12 |
| Net income | 526705000 | USD | 2025 | 2026-02-12 |
| Assets | 3140523000 | USD | 2025 | 2026-02-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000084839.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 1,573,477,000 | 1,673,957,000 | 1,821,565,000 | 2,015,477,000 | 2,161,220,000 | 2,424,300,000 | 2,695,823,000 | 3,073,278,000 | 3,388,708,000 | 3,761,050,000 |
| Net income |  |  |  | 203,347,000 | 266,756,000 | 356,565,000 | 368,599,000 | 434,957,000 | 466,379,000 | 526,705,000 |
| Operating income |  |  |  | 317,394,000 | 376,088,000 | 447,636,000 | 493,388,000 | 583,226,000 | 657,224,000 | 726,068,000 |
| Diluted EPS | 0.51 | 0.55 | 0.47 | 0.41 | 0.54 | 0.72 | 0.75 | 0.89 | 0.96 | 1.09 |
| Assets | 916,538,000 | 1,033,663,000 | 1,094,124,000 | 1,744,376,000 | 1,845,900,000 | 2,021,540,000 | 2,122,028,000 | 2,595,460,000 | 2,819,695,000 | 3,140,523,000 |
| Liabilities | 347,993,000 | 379,739,000 | 382,216,000 | 928,626,000 | 904,540,000 | 910,323,000 | 854,831,000 | 1,439,893,000 | 1,489,102,000 | 1,766,202,000 |
| Stockholders' equity | 568,545,000 | 653,924,000 | 711,908,000 | 833,109,000 | 964,651,000 | 1,111,217,000 | 1,267,197,000 | 1,155,567,000 | 1,330,593,000 | 1,374,321,000 |
| Cash and cash equivalents | 142,785,000 | 107,050,000 | 115,485,000 | 94,276,000 | 98,477,000 | 105,301,000 | 95,346,000 | 103,825,000 | 89,630,000 | 100,004,000 |
| Net margin |  |  |  | 10.09% | 12.34% | 14.71% | 13.67% | 14.15% | 13.76% | 14.00% |
| Operating margin |  |  |  | 15.75% | 17.40% | 18.46% | 18.30% | 18.98% | 19.39% | 19.30% |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Caution Regarding Forward-Looking Statements

This Annual Report on Form 10-K 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.

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Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements regarding:

•expectations with respect to our financial and business performance and strategy;

•expansion efforts and growth opportunities, including, but not limited, to anticipated organic and acquisition growth and recent and future acquisitions in the United States and in foreign markets where we have a presence and integration efforts with respect to recent acquisitions;

•our anticipation of another year of strong organic revenue growth;

•that maintaining and enhancing our brands increases our ability to enter new markets and launch new and innovative services that better serve the needs of our customers;

•the Saela acquisition expanding the Rollins family of brands and driving long-term value;

•the Company's credit risk, including that we do not believe that a one percent increase in interest rates would have a material effect on our results of operations or cash flows, and our belief that foreign exchange rate risk will not have a material impact upon the Company’s results of operations going forward;

•the impact of inflation, changing interest rates, tariffs, trade disputes, foreign exchange rate risk, business interruptions due to natural disasters and changes in the weather patterns, seasonality, employee shortages, and supply chain issues;

•our belief that we maintain a sufficient level of products, materials, and other supplies and have qualified comparable products and materials and our ability to foresee potential supply disruptions;

•our belief that the contracted and recurring nature of our services provide us with visibility into a significant portion of our future revenue;

•our belief that our key strategic objectives will help us to drive continued success for Rollins;

•our belief that our alignment around key strategic areas will enable us to grow faster than our market, position our business for the future, and deliver value for all stakeholders, including our customers, our teammates, our communities and our shareholders;

•our belief that our scale enables delivery of great service and provides us with a significant and reinforcing competitive advantage;

•that we have strategically invested in proprietary routing and scheduling technologies to increase our competitive advantage;

•our belief that geographic diversity allows us to increase brand recognition, meet demands of global customers, and draw on business and technical expertise from teams in several countries, and offers us an opportunity to access new markets;

•that our acquisition strategy targets businesses that have the potential to achieve organic growth and margin expansion;

•our belief that, through our wholly-owned subsidiaries, we compete effectively and favorably with our competitors as one of the world’s largest pest and termite control companies;

•that we remain committed to developing exceptional talent and investing in our teams;

•that we continue to execute various strategies previously implemented to help mitigate the impact of economic disruptors;

•our belief that interest expense will be approximately $30 million in 2026 associated with borrowings under our 2035 Senior Notes and commercial paper program;

•our belief that we expect to realize an effective tax rate of 24.5% to 25% in 2026;

•our belief that, as we look to 2026, demand for our services is solid and our pipeline for acquisitions is robust;

•as we start 2026, we remain focused on continuous improvement initiatives to enhance profitability across our business;

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Table of Contents

•that compounding operating cash flow and a strong balance sheet should continue to enable us to follow a balanced capital allocation strategy;

•our belief that we expect to report 7% to 8% organic revenue* growth in 2026;

•our belief that while we may see a slower start to the year in the first quarter, the strength of our recurring revenue and ancillary services gives us confidence in our ability to meet our financial outlook for 2026;

•that we intend to continue to grow the business in the international markets where we have a presence, and that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore;

•the economic impact of changes to global trade policies, including the imposition of tariffs;

•expectations with respect to new and innovative products and services;

•our approach to human capital management, including training, development, retention, inclusion, and engaging with our local communities;

•continuously improving our safety culture and monitoring safety goals, including, but not limited to, our proactive approach with respect to safety and risk management;

•our increasing reliance on AI technologies in services and operations as well as the related risks that could materially adversely affect our business;

•our policies and procedures that are designed to identify, assess, and manage material risks arising from cybersecurity incidents and AI technologies;

•new information systems and technology will lead to new or improving business capabilities and streamline business processes, financial reporting, and acquisition integration;

•expectations with respect to interest costs and effective tax rates;

•our focus on pricing, ongoing modernization efforts, and a culture of continuous improvement should support healthy incremental margins;

•our belief that our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program which is backstopped by our Revolving Credit Facility, as defined below, and available borrowings under our Revolving Credit Facility will be sufficient to finance our current operations and obligations and fund expansion of the business for the foreseeable future;

•our expectations to fund our contractual commitments including lease obligations and debt payments primarily through cash generated from our operations;

•that our focus on creating the best customer experience will enable a loyal customer base and in turn reduce the amount of churn across our customer base, and that, by focusing on this key objective, we expect it to enable growth that will outpace our market growth;

•our belief that the Company has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims;

•our approach to capital allocation inclusive of our intent to pay cash dividends to common shareholders and to invest in acquisitions;

•our belief that no pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, including, but not limited to, the inquiry by the FTC and claims filed under California's Private Attorneys General Act, will have a material adverse effect on our financial position, results of operations or liquidity;

•the suitability and adequacy of our facilities to meet our current and reasonably anticipated future needs; and

•estimates, assumptions, and projections related to our application of critical accounting policies, described in more detail under “Critical Accounting Estimates.”

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These forward-looking statements are based on information available as of the date of this report, 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 Item 1A “Risk Factors” of Part I, Item 7 “Management’s Discussion and Analysis of Financial condition and Results of Operations” of Part II, and elsewhere in this Annual Report on Form 10-K for our fiscal year ended December 31, 2025 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.

Presentation

This discussion should be read in conjunction with our audited financial statements and related notes included elsewhere in this document. Discussions of 2023 items and year-to-year comparisons of 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. The following discussion (as well as other discussions in this document) contains forward-looking statements. Please see “Cautionary Statement Regarding Forward-Looking Statements” and "Risk Factors" for a discussion of uncertainties, risks and assumptions associated with these statements.

The Company

Rollins, Inc. (“Rollins,” “we,” “us,” “our,” or the “Company”), is an international services company headquartered in Atlanta, Georgia that provides pest and termite control services to both residential and commercial customers through its wholly-owned subsidiaries and independent franchises in the United States, Canada, Australia, Europe, and Asia with international franchises in Canada, Central and South America, the Caribbean, Europe, the Middle East, Asia, Africa, and Australia. Our pest and termite control services are performed pursuant to terms of contracts that specify the pricing arrangement with the customer. The Company operates as one reportable segment and the results of operations and its financial condition are not reliant upon any single customer.

Strategic Update

We are focused on continuous improvement throughout the business. During 2025, we continued to make strides in all four pillars of our strategic objectives: 1) people first 2) customer loyalty 3) growth mindset and 4) operational efficiency.

People First

We continue to focus on the development of our people. We continued to make strategic improvements to both our support functions, as well as the customer-facing side of our business, by hiring and onboarding the right people into the right roles. We introduced The Co-Lab, where our people managers develop servant leadership skills to help them develop themselves, their people and ultimately our business. We remain committed to developing exceptional talent and investing in our teams.

Customer Loyalty

We remain committed to providing our customers with the best customer experience. Effective sales and service staffing levels helped us to capitalize on continued demand and deliver solid results for the year, with organic revenues* growing by 6.9% compared to 2024.

Growth Mindset

2025 marked another record year in terms of revenues, totaling approximately $3.8 billion, an increase of 11.0% over 2024, with acquisition revenues* contributing 4.1% growth in the year. We completed 26 transactions in 2025, including 22 acquisitions and 4 franchise buybacks, driving inorganic growth at our brands both domestically and internationally.

Operational Efficiency

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We saw healthy margins in 2025, with gross margin improving 10 basis points to 52.8% in 2025 compared to 52.7% in 2024. Operating margin was 19.3% of revenue, a decrease of 10 basis points as compared to 2024 and adjusted operating margin* was 20.0%, an increase of 10 basis points over the prior year. Our 2025 operating margin reflects weaker volumes in the fourth quarter, but our ongoing modernization efforts position us to deliver an improving margin profile as we look to 2026.

*Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.

Impact of Economic Trends

The continued disruption in economic markets due to inflation, changing interest rates, tariffs, trade disputes, business interruptions due to natural disasters and changes in weather patterns, employee shortages, and supply chain issues, all pose challenges which may adversely affect our future performance. The Company continues to execute various strategies previously implemented to help mitigate the impact of these economic disruptors. However, the Company cannot reasonably estimate whether these strategies will help mitigate the impact of these economic disruptors in the future.

The Company’s consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements. The Company considered the impact of economic trends on the assumptions and estimates used in preparing the consolidated financial statements. In the opinion of management, all material adjustments necessary for a fair presentation of the Company’s financial results for the year have been made. These adjustments are of a normal recurring nature but are complicated by the continued uncertainty surrounding these macro economic trends. The severity, magnitude and duration of certain economic trends continue to be uncertain and are difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to economic trends and may change materially in future periods.

The extent to which changing interest rates, inflation and other economic trends will continue to impact the Company’s business, financial condition and results of operations is uncertain. Therefore, we cannot reasonably estimate the full future impacts of these matters at this time.

Results of Operations—2025 Compared to 2024

Twelve Months Ended December 31,

Variance

(in thousands, except per share data and margins)

2025

2024

$

%

GAAP Metrics

Revenues

$

3,761,050 

$

3,388,708 

372,342 

11.0 

Gross profit (1)

$

1,984,044 

$

1,785,511 

198,533 

11.1 

Gross profit margin (1)

52.8 

%

52.7 

%

10 bps

Operating income

$

726,068 

$

657,224 

68,844 

10.5 

Operating margin

19.3 

%

19.4 

%

-10 bps

Net income

$

526,705 

$

466,379 

60,326 

12.9 

EPS

$

1.09 

$

0.96 

0.13 

13.5 

Net cash provided by operating activities

$

678,107 

$

607,653 

70,454 

11.6 

Non-GAAP Metrics

Adjusted operating income (2)

$

752,200 

$

675,126 

77,074 

11.4 

Adjusted operating margin (2)

20.0 

%

19.9 

%

10 bps

Adjusted net income (2)

$

544,412 

$

479,190 

65,222 

13.6 

Adjusted EPS (2)

$

1.12 

$

0.99 

0.13 

13.1 

Adjusted EBITDA (2)

$

855,144 

$

771,493 

83,651 

10.8 

Adjusted EBITDA margin (2)

22.7 

%

22.8 

%

-10 bps

Free cash flow (2)

$

650,021 

$

580,081 

69,940 

12.1 

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Table of Contents

(1) Exclusive of depreciation and amortization

(2) Amounts are non-GAAP financial measures. See "Non-GAAP Financial Measures" below for a discussion of non-GAAP financial metrics including a reconciliation to the most directly comparable GAAP measure.

The following table presents financial information, including our significant expense categories, for the twelve months ended December 31, 2025 and 2024

Twelve Months Ended December 31,

(in thousands)

2025

2024

$

% of Revenue

$

% of Revenue

Revenue

$

3,761,050 

100.0 

%

$

3,388,708 

100.0 

%

Less:

Cost of services provided (exclusive of depreciation and amortization below):

Employee expenses

1,166,044 

31.0 

%

1,048,992 

31.0 

%

Materials and supplies

225,462 

6.0 

%

212,296 

6.3 

%

Insurance and claims

66,897 

1.8 

%

68,326 

2.0 

%

Fleet expenses

157,461 

4.2 

%

131,898 

3.9 

%

Other cost of services provided (1)

161,142 

4.3 

%

141,685 

4.2 

%

Total cost of services provided (exclusive of depreciation and amortization below)

1,777,006 

47.2 

%

1,603,197 

47.3 

%

Sales, general and administrative:

Selling and marketing expenses

484,859 

12.9 

%

427,916 

12.6 

%

Administrative employee expenses

345,643 

9.2 

%

313,814 

9.3 

%

Insurance and claims

40,816 

1.1 

%

41,434 

1.2 

%

Fleet expenses

39,608 

1.1 

%

33,580 

1.0 

%

Other sales, general and administrative (2)

222,306 

5.9 

%

198,323 

5.9 

%

Total sales, general and administrative

1,133,232 

30.1 

%

1,015,067 

30.0 

%

Depreciation and amortization

124,744 

3.3 

%

113,220 

3.3 

%

Interest expense, net

28,558 

0.8 

%

27,677 

0.8 

%

Other (income) expense, net

(3,416)

(0.1)

%

(683)

— 

%

Income tax expense

174,221 

4.6 

%

163,851 

4.8 

%

Net income

$

526,705 

14.0 

%

$

466,379 

13.8 

%

1) Other cost of services provided includes facilities costs, professional services, maintenance and repairs, software license costs, and other expenses directly related to providing services.

2) Other sales, general and administrative includes facilities costs, professional services, maintenance and repairs, software license costs, bad debt expense, and other administrative expenses.

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Table of Contents

Revenues

The following presents a summary of revenues by service offering:

Revenues for the year ended December 31, 2025 were $3.8 billion, an increase of $372.3 million, or 11.0%, from 2024 revenues of $3.4 billion. The increase in revenues was largely driven by demand from our customers that remained strong throughout the year across all major service offerings. Comparing 2025 to 2024, organic revenue* growth was 6.9% with acquisitions adding 4.1% during the year. Residential pest control revenue increased approximately 10%, commercial pest control revenue increased approximately 11% and termite and ancillary services grew approximately 14% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing approximately 5% in residential, approximately 8% in commercial, and approximately 10% in termite and ancillary activity. The Company’s foreign operations accounted for approximately 7% of total revenues for the years ended December 31, 2025 and 2024.

Revenue growth was healthy throughout the year, but we did see weaker volumes in the fourth quarter due to weakness in one-time services associated with less favorable weather conditions.

*Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.

Gross Profit (exclusive of Depreciation and Amortization)

Gross profit for the twelve months ended December 31, 2025 was $2.0 billion, an increase of $198.5 million, or 11.1%, compared to $1.8 billion for the year ended December 31, 2024.

Gross margin improved 10 basis points to 52.8% in 2025 compared to 52.7% in 2024. We saw leverage across a number of cost categories including 30 basis points in materials and supplies and 20 basis points in insurance and claims, partially offset by 30 basis points of higher fleet costs, while employee expenses were flat as a percentage of revenue.

Sales, General and Administrative

For the twelve months ended December 31, 2025, sales, general and administrative ("SG&A") expenses increased $118.2 million, or 11.6%, compared to the twelve months ended December 31, 2024.

As a percentage of revenue, SG&A increased 10 basis points to 30.1% in 2025 compared to 30.0% in 2024. Lower volumes negatively impacted leverage across several categories, partially offset by lower insurance and claims costs.

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Depreciation and Amortization

For the twelve months ended December 31, 2025, depreciation and amortization increased $11.5 million, or 10.2%, compared to the twelve months ended December 31, 2024. The increase was primarily due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela.

Operating Income

For the twelve months ended December 31, 2025, operating income increased $68.8 million or 10.5% compared to the prior year.

As a percentage of revenue, operating income decreased to 19.3% from 19.4% in the prior year. Operating margin decreased mostly due to higher fleet costs and higher selling and marketing costs. This was partially offset by lower insurance and claims costs, lower materials and supplies costs, and lower administrative costs.

Interest Expense, Net

During the twelve months ended December 31, 2025, interest expense, net increased $0.9 million compared to the prior year, due to the increase in the average debt balance associated primarily with the issuance of our 2035 Senior Notes, as well as borrowings under our commercial paper program. This was partially offset by a lower average effective interest rate on our borrowings. We expect interest expense to be approximately $30 million in 2026 associated with borrowings under our 2035 Senior Notes and commercial paper program.

Other (Income) Expense, Net

During the twelve months ended December 31, 2025, other (income) expense, net increased $2.7 million primarily due to higher gains on sales of non-operational assets.

Income Taxes

The Company’s effective tax rate was 24.9% in 2025 compared to 26.0% in 2024. The reduced rate is primarily due to the purchase of transferable federal income tax credits in 2025. We expect to realize an effective tax rate of 24.5% to 25% in 2026.

General Commentary

Our team delivered solid results in 2025, producing double-digit revenue, EPS, and operating cash flow growth for the full year. As we look to 2026, demand for our services is solid and our pipeline for acquisitions is robust. We continued to invest meaningfully in our business throughout 2025 and we are well-positioned as we begin 2026.

While we had solid full year results, our fourth quarter results were impacted by slower growth in certain parts of our business and a negative impact from weather. Our 2025 operating margin reflects weaker volumes in the fourth quarter, but our ongoing modernization efforts position us to deliver an improving margin profile as we look to 2026. We continue to execute a balanced capital allocation program enabled by compounding operating cash flow and a strong balance sheet.

2026 Outlook

For 2026, the Company anticipates:

•The underlying health of core pest control markets, as well as Rollins’ ongoing commitment to operational execution, should support another year of strong organic revenue growth*, further complemented by a strategic and disciplined approach to acquisitions.

•A focus on ongoing modernization efforts, a culture of continuous improvement and pricing should support an improving margin profile.

•Compounding operating cash flow and a strong balance sheet should continue to enable a balanced capital allocation strategy.

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The Company expects to report 7% to 8% organic revenue* growth in 2026. While we may see a slower start to the year in the first quarter, the strength of our recurring revenue and ancillary services gives us confidence in our ability to meet our financial outlook for 2026.

Our outlook reflects current expectations and is subject to significant uncertainty, including factors described under "Risk Factors," many of which are outside the Company's control.

*Amounts are non-GAAP financial measures. See the schedules below for definitions and a discussion of non-GAAP financial metrics, including a reconciliation to the most directly comparable GAAP measure.

Non-GAAP Financial Measures

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 consolidated statements of operations, financial position, or statements 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 Form 10-K:

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 operating income those expenses associated with 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 associated with 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

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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, free cash flow conversion, adjusted free cash flow, and adjusted 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. Adjusted free cash flow is calculated by adding back to cash provided by operating activities the impact of certain delayed income tax payments. Adjusted free cash flow conversion is calculated as adjusted free cash flow divided by net income.

Management uses free cash flow conversion and adjusted free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow and adjusted free cash flow are important financial measures for use in evaluating the Company’s liquidity. Free cash flow and adjusted 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 and adjusted 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 and adjusted free cash flow as measures that provide 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 report with their most directly comparable GAAP measures (unaudited, in thousands, except per share data and margins).

Twelve Months Ended December 31,

Variance

2025

2024

$

%

Reconciliation of Revenues to Organic Revenues

Revenues

$

3,761,050 

$

3,388,708 

372,342 

11.0

Revenues from acquisitions

(138,587)

— 

(138,587)

4.1

Organic revenues

$

3,622,463 

$

3,388,708 

233,755 

6.9

Reconciliation of Residential Revenues to Organic Residential Revenues

Residential revenues

$

1,693,244 

$

1,535,104 

158,140 

10.3

Residential revenues from acquisitions

(80,778)

— 

(80,778)

5.3

Residential organic revenues

$

1,612,466 

$

1,535,104 

77,362 

5.0

Reconciliation of Commercial Revenues to Organic Commercial Revenues

Commercial revenues

$

1,244,733 

$

1,125,964 

118,769 

10.5

Commercial revenues from acquisitions

(32,686)

— 

(32,686)

2.9

Commercial organic revenues

$

1,212,047 

$

1,125,964 

86,083 

7.6

Reconciliation of Termite and Ancillary Revenues to Organic Termite and Ancillary Revenues

Termite and ancillary revenues

$

781,542 

$

688,186 

93,356 

13.6

Termite and ancillary revenues from acquisitions

(25,123)

— 

(25,123)

3.7

Termite and ancillary organic revenues

$

756,419 

$

688,186 

68,233 

9.9

Reconciliation of Franchise and Other Revenues to Organic Franchise and Other Revenues

Franchise and other revenues

$

41,531 

$

39,454 

2,077 

5.3

Franchise and other revenues from acquisitions

— 

— 

— 

—

Franchise and other organic revenues

$

41,531 

$

39,454 

2,077 

5.3

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Twelve Months Ended December 31,

Variance

2025

2024

$

%

Reconciliation of Operating Income and Operating Margin to Adjusted Operating Income and Adjusted Operating Margin

Operating income

$

726,068 

$

657,224 

Acquisition-related expenses (1)

26,132 

17,902 

Adjusted operating income

$

752,200 

$

675,126 

77,074 

11.4

Revenues

$

3,761,050 

$

3,388,708 

Operating margin

19.3 

%

19.4 

%

Adjusted operating margin

20.0 

%

19.9 

%

Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS

Net income

$

526,705 

$

466,379 

Acquisition-related expenses (1)

26,132 

17,902 

(Gain) loss on sale of assets, net (2)

(2,332)

(683)

Tax impact of adjustments (3)

(6,093)

(4,408)

Adjusted net income

$

544,412 

$

479,190 

65,222 

13.6

EPS - basic and diluted

$

1.09 

$

0.96 

Acquisition-related expenses (1)

0.05 

0.04 

(Gain) loss on sale of assets, net (2)

— 

— 

Tax impact of adjustments (3)

(0.01)

(0.01)

Adjusted EPS - basic and diluted (4)

$

1.12 

$

0.99 

0.13 

13.1

Weighted average shares outstanding - basic

484,105 

484,249 

Weighted average shares outstanding - diluted

484,147 

484,295 

Reconciliation of Net Income to EBITDA, Adjusted EBITDA, EBITDA Margin, Incremental EBITDA Margin, Adjusted EBITDA Margin, and Adjusted Incremental EBITDA Margin

Net income

$

526,705 

$

466,379 

Depreciation and amortization

124,744 

113,220 

Interest expense, net

28,558 

27,677 

Provision for income taxes

174,221 

163,851 

EBITDA

854,228 

771,127 

83,101 

10.8

Acquisition-related expenses (1)

$

3,248 

$

1,049 

(Gain) loss on sale of assets, net (2)

(2,332)

(683)

Adjusted EBITDA

$

855,144 

$

771,493 

83,651 

10.8

Revenues

$

3,761,050 

$

3,388,708 

EBITDA margin

22.7 

%

22.8 

%

Incremental EBITDA margin

22.3 

%

Adjusted EBITDA margin

22.7 

%

22.8 

%

Adjusted incremental EBITDA margin

22.5 

%

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow, Free Cash Flow Conversion, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Conversion

Net cash provided by operating activities

$

678,107 

607,653 

Capital expenditures

$

(28,086)

$

(27,572)

Free cash flow

$

650,021 

$

580,081 

69,940 

12.1

Delayed income tax payments (5)

21,710 

(21,710)

Adjusted free cash flow

$

671,731 

$

558,371 

113,360 

20.3

Free cash flow conversion

123.4 

%

124.4 

%

Adjusted free cash flow conversion

127.5 

%

119.7 

%

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Twelve Months Ended December 31,

2025

2024

Reconciliation of SG&A to Adjusted SG&A

SG&A

$

1,133,232 

$

1,015,067 

Acquisition-related expenses (1)

3,248 

1,049 

Adjusted SG&A

$

1,129,984 

$

1,014,018 

Revenues

$

3,761,050 

$

3,388,708 

Adjusted SG&A as a % of revenues

30.0 

%

29.9 

%

Twelve Months Ended December 31,

2025

2024

Reconciliation of Debt and Net Income to Leverage Ratio

Short-term debt (6)

$

123,683 

$

— 

Long-term debt (7)

500,000 

397,000 

Operating lease liabilities (8)

428,175 

417,218 

Cash adjustment (9)

(90,004)

(80,667)

Adjusted net debt

$

961,854 

$

733,551 

Net income

$

526,705 

$

466,379 

Depreciation and amortization

124,744 

113,220 

Interest expense, net

28,558 

27,677 

Provision for income taxes

174,221 

163,851 

Operating lease cost (10)

159,924 

133,420 

Stock-based compensation expense

39,707 

29,984 

Adjusted EBITDAR

$

1,053,859 

$

934,531 

Leverage ratio

0.9x

0.8x

(1) Consists of expenses associated with 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 company 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 non-GAAP EPS calculations due to rounding.

(5) The U.S. Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was made during the second quarter of 2025.

(6) As of December 31, 2025, the Company had outstanding borrowings of $114.4 million under our commercial paper program and $9.3 million in bank overdrafts. The Company's short-term borrowings are presented under the short-term debt caption of our consolidated statements of financial position, net of unamortized discounts.

(7) As of December 31, 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 consolidated statements of financial position, net of a $7.1 million unamortized discount and $6.7 million in unamortized debt issuance costs as of December 31, 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 consolidated statements of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.

(8) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our consolidated statements of financial position.

(9) Represents 90% of cash and cash equivalents per our consolidated statements of financial position as of both periods presented.

(10) Operating lease cost excludes short-term lease cost associated with leases that have a duration of 12 months or less.

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LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

The Company’s $100.0 million of total cash at December 31, 2025 is held at various banking institutions. Approximately $50.5 million is held in cash by foreign subsidiaries and the remaining $49.5 million is held at domestic banks and also includes cash-in-transit.

We intend to continue to grow the business in the international markets where we have a presence. As it relates to our unremitted earnings in foreign jurisdictions, we assert that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore.

We believe our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program which is backstopped by our Revolving Credit Facility, as defined below, and available borrowings under our Revolving Credit Facility will be sufficient to finance our current operations and obligations and fund expansion of the business for the foreseeable future.

2035 Senior Notes

In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Section 4(a)(2) and Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million, and paid approximately $6.1 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as well as for general corporate purposes.

On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.6% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes will have no transfer restrictions or registration rights.

Commercial Paper Program

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. Borrowings under this program are generally outstanding for 30 days or less. The net proceeds from the issuance of commercial paper are used for various purposes, including general corporate purposes and funding for acquisitions. As of December 31, 2025, there were $114.4 million outstanding borrowings under the commercial paper program.

Revolving Credit Facility

In February 2023, the Company entered into a credit agreement (the "Credit Agreement") with, among others, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”).

The Credit Agreement provides for a $1.0 billion revolving credit facility ("Revolving Credit Facility"), which may be denominated in U.S. Dollars and other currencies, subject to a $400 million foreign currency sublimit. Rollins has the ability to expand its borrowing availability under the Credit Agreement in the form of increased revolving commitments or one or more tranches of term loans by up to an additional $750 million, subject to the agreement of the participating lenders and certain other customary conditions. The maturity date of the loans under the Credit Agreement is February 24, 2028.

As of December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility, which were repaid with the proceeds from the 2035 Senior Notes.

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Letters of Credit

The Company maintained $82.4 million in letters of credit as of December 31, 2025 and $72.0 million as of December 31, 2024. These letters of credit are required by the Company’s insurance carriers, due to the Company’s high deductible insurance program, to secure various workers’ compensation and casualty insurance contracts coverage. The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims.

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the years ended December 31, 2025 and 2024:

Year Ended December 31,

(in thousands)

2025

2024

Net cash provided by operating activities

678,107 

607,653 

Net cash used in investing activities

(326,699)

(176,232)

Net cash used in financing activities

(343,579)

(440,708)

Effect of exchange rate on cash

2,545 

(4,908)

Net increase (decrease) in cash and cash equivalents

$

10,374 

$

(14,195)

Cash Provided by Operating Activities

Cash from operating activities is the principal source of cash generation for our businesses. The most significant source of cash in our cash flow from operations is customer-related activities, the largest of which is collecting cash resulting from services sold. The most significant operating use of cash is to pay our suppliers, employees, and tax authorities. The Company’s operating activities generated net cash of $678.1 million and $607.7 million for the twelve months ended December 31, 2025 and 2024, respectively. The $70.5 million, or 11.6%, increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.

The Company deferred its fourth quarter 2024 estimated federal income tax payment to the second quarter of 2025 under the federal Hurricane Helene disaster relief. In 2025 we also purchased federal income tax credits for use on our 2024 and 2025 federal income tax returns.

Cash Used in Investing Activities

The Company’s investing activities used cash of $326.7 million and $176.2 million for the twelve months ended December 31, 2025 and 2024, respectively. Cash paid for acquisitions totaled $309.5 million for the twelve months ended December 31, 2025, compared to $157.5 million for the twelve months ended December 31, 2024, primarily driven by the acquisition of Saela Pest Control in 2025. The Company invested $28.1 million in capital expenditures during the year, offset by $7.5 million in cash proceeds from the sale of assets, compared with $27.6 million of capital expenditures and $4.1 million in cash proceeds from asset sales in 2024. The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program.

Cash Used in Financing Activities

Cash used in financing activities was $343.6 million and $440.7 million during the twelve months ended December 31, 2025 and 2024, respectively. A total of $327.9 million was paid in cash dividends ($0.68 per share) during the twelve months ended December 31, 2025, compared to $298.0 million in cash dividends paid ($0.62 per share) during the twelve months ended December 31, 2024.

During the twelve months ended December 31, 2025, the Company received proceeds of $492.2 million and paid $6.1 million of debt issuance costs related to the issuance of the 2035 Senior Notes. Those proceeds were used primarily to repay borrowings under the credit agreement. Net proceeds from borrowings during the twelve months ended December 31, 2025 were $209.6 million, compared to net repayments of $96.0 million during 2024.

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During the twelve months ended December 31, 2025, the Company paid $14.2 million of contingent consideration, compared to $39.8 million during the twelve months ended December 31, 2024. In addition, during the twelve months ended December 31, 2025, the Company completed the repurchase of 3,478,260 of the shares of common stock for approximately $200.0 million in conjunction with the transaction described below.

On November 10, 2025, the Company entered into an underwriting agreement (the “2025 Underwriting Agreement”) with LOR, Inc. and Rollins Holding Company, Inc. (together, the “Selling Stockholders”), and Morgan Stanley & Co. LLC, as sole underwriter (the “Underwriter”), relating to the sale by the Selling Stockholders of 17,391,305 shares of the Company’s common stock, par value $1.00 per share (the “Common Stock”), at a public offering price of $57.50 per share (the “2025 Offering”). In connection with the 2025 Offering, the Selling Stockholders granted the Underwriter an option to purchase up to an additional 2,608,695 shares of Common Stock (the “2025 Optional Shares”). The 2025 Offering, including the sale of the 2025 Optional Shares, closed on November 12, 2025. The Company did not sell any shares in the 2025 Offering and did not receive any proceeds from the 2025 Offering. In addition, the Company completed the repurchase of 3,478,260 of the shares of Common Stock offered in the 2025 Offering for approximately $200 million at the same per share price paid by the Underwriter to the Selling Stockholders in the 2025 Offering.

The Company also withheld $16.2 million and $11.6 million of common stock for the twelve months ended December 31, 2025 and 2024, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.

Share Repurchase Program

In 2012, the Company’s Board of Directors authorized the purchase of up to 5 million shares of the Company’s common stock. After adjustments for stock splits, the total authorized shares under the share repurchase plan is 16.9 million shares. As of December 31, 2025, we have a remaining authorization of 11.4 million shares under the share repurchase program. The Company did not repurchase shares of its common stock on the open market during 2025 or 2024.

Active Shelf Registration

The Form S-3 shelf registration statement on file with the SEC registered $1.5 billion of the Company’s common stock, preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts and units for future issuance by the Company. The Company may offer and sell some or all of such securities from time to time or through underwriters, brokers or dealers, directly to one or more other purchasers, through a block trade, through agents on a best-efforts basis, through a combination of any of the above methods of sale or through other types of transactions described in the Form S-3. The Company has not sold any such securities in a primary offering as of the date of this Form 10-K. Management is continually evaluating the Company's financial structure and the potential need or desirability of raising additional liquidity through the sale of debt or equity securities. The Form S-3 will expire in June 2026.

Litigation

For discussion on the Company’s legal contingencies, see Note 12, Commitments and Contingencies to the accompanying financial statements, and Part I, Item 3, Legal Proceedings.

Contractual Commitments

We have material cash requirements for known contractual obligations and commitments in the form of operating leases and debt obligations. We expect to fund these obligations primarily through cash generated from our operations. Refer to Note 6, Leases and Note 10, Debt to the accompanying financial statements for further details.

Critical Accounting Estimates

The Company views critical accounting estimates to be those that are very important to the portrayal of our financial condition and results of operations, and that require management’s most difficult, complex or subjective judgments. The circumstances that make these judgments difficult or complex relate to the need for management to make estimates about the effect of matters that are inherently uncertain. We believe our critical accounting estimate to be as follows:

Accrued Insurance—The Company retains, up to specified limits, certain risks related to U.S. general liability, workers’ compensation and auto liability. Risks are managed through either high deductible insurance or, for Clark Pest Control

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only, a non-affiliated group captive insurance member arrangement. The estimated costs of existing and future claims under the retained loss program are accrued based upon historical trends as incidents occur, whether reported or unreported (although actual settlement of the claims may not be made until future periods) and may be subsequently revised based on developments relating to such claims. The group captive is subject to a third-party actuarial study retained by the captive manager, independent from the Company. For the high deductible insurance program, the Company contracts with an independent third-party actuary to provide the Company an estimated liability based upon historical claims information. The actuarial study is a major consideration in establishing the reserve, along with management’s knowledge of changes in business practice and existing claims compared to current balances. Management’s judgment is inherently subjective as a number of factors are outside management’s knowledge and control. Additionally, historical information is not always an accurate indication of future events. The accruals and reserves we hold are based on estimates that involve a degree of judgment and are inherently variable and could be overestimated or insufficient. If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited.

The Company continues to be proactive in safety and risk management to develop and maintain ongoing programs to reduce and prevent incidents and claims. Initiatives that have been implemented include required pre-employment screening and ongoing motor vehicle record review for all drivers, post-offer physicals for new employees, pre-hire, random and post incident drug testing, driver training and post-injury nurse triage for work-related injuries.

Recent Accounting Guidance and Other Policies and Estimates

See Note 1, Summary of Significant Accounting Policies to the accompanying financial statements (Part II, Item 8 of this Form 10-K) for further discussion.