Rollins Q2: Residential Slows, Commercial Grows

Rollins, the parent company of Orkin and a long list of regional brands, reported second-quarter 2026 results on July 22. Revenue rose 7.9% from a year earlier to $1.1 billion, with organic growth of 5.7%. It was the company’s 99th consecutive quarter of revenue growth.

Under the headline, the mix told a more mixed story. Organic growth by service line was 3.6% in residential, 7.2% in commercial and 8.9% in termite and ancillary services. Residential pest control, the biggest consumer-facing piece of the business, was the laggard.

Chief executive Jerry Gahlhoff Jr. said results “fell short of expectations,” pointing to slower growth in parts of residential pest control. The softness was concentrated in brands that depend on customers finding them through search, digital media and inbound calls. Relationship-based channels, such as home builder work and door-to-door sales, delivered solid organic growth.

Rollins said lead volume improved toward the end of June and held that momentum through the first weeks of July. Coverage of the earnings call described the lead environment as getting worse through the quarter before that late recovery.

Profit grew more slowly than sales. Net income was $144 million, up 1.7%, and earnings per diluted share were $0.30, up 3.4%. Operating margin fell 110 basis points to 18.7%, and adjusted EBITDA margin fell 120 basis points to 21.9%.

The company kept buying. Rollins spent $117 million on acquisitions in the quarter, paid $88 million in dividends and spent $6 million on capital expenditures. Operating cash flow was $173 million.

About a week later, Rentokil Initial reported a similar late-quarter dip in residential lead flow at Terminix. With the two largest US operators both pointing to the same pattern, the slowdown looks more like a market-wide shift in how homeowners were shopping for service this spring than a problem at any one company.

For people in the field, the service-line numbers are worth a closer look. Commercial accounts and termite work grew roughly twice as fast as residential pest control at Rollins this quarter. That kind of work tends to come from contracts, builder relationships and inspections rather than a homeowner typing a search into a phone, and it has proven steadier when consumer demand cools. It is also the kind of work where documentation, inspection quality and repeat service carry the account.