Pest control company Rollins (NYSE: ROL) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 10.2% year on year to $906.4 million. Its non-GAAP profit of $0.24 per share was in line with analysts’ consensus estimates.

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"Our results for the first quarter reflect our resilient business model and the ongoing focus of our teammates on operational excellence," said Jerry Gahlhoff, Jr., President and CEO.

Company Overview

Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE: ROL) provides pest and wildlife control services to residential and commercial customers.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Rollins grew its sales at an impressive 11.7% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Rollins’s annualized revenue growth of 10.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

Rollins also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Rollins’s organic revenue averaged 7.3% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Rollins reported year-on-year revenue growth of 10.2%, and its $906.4 million of revenue exceeded Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 8.9% over the next 12 months, similar to its two-year rate. Still, this projection is above average for the sector and suggests the market sees some success for its newer products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Rollins’s operating margin has generally stayed the same over the last 12 months, averaging 18.9% over the last five years. This profitability was elite for an industrials business thanks to its efficient cost structure and economies of scale. This is seen in its fast historical revenue growth and healthy gross margin, which is why we look at all three data points together.

Looking at the trend in its profitability, Rollins’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Rollins generated an operating margin profit margin of 16.1%, down 1.3 percentage points year on year. Since Rollins’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Rollins’s EPS grew at 13.8% compounded annual growth rate over the last five years, higher than its 11.7% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

We can take a deeper look into Rollins’s earnings quality to better understand the drivers of its performance. A five-year view shows that Rollins has repurchased its stock, shrinking its share count by 2.2%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Rollins, its two-year annual EPS growth of 11.3% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q1, Rollins reported adjusted EPS of $0.24, up from $0.22 in the same quarter last year. This print beat analysts’ estimates by 1.3%. Over the next 12 months, Wall Street expects Rollins’s full-year EPS of $1.14 to grow 12%.

Key Takeaways from Rollins’s Q1 Results

Organic revenue beat, leading to a total reported revenue beat. Operating margin was down year-on-year, however, leading to EPS that just met expectations. Overall, this quarter was without any major surprises, good or bad. The stock remained flat at $55.35 immediately after reporting.

So should you invest in Rollins right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).