Rollins Inc. is the rare services company that looks more like a utility than a contractor. The Atlanta-based owner of Orkin and a stable of regional brands sells protection—against termites, roaches, rodents—and does it on schedules that repeat with the seasons. That cadence shows up in the numbers: more than four-fifths of revenue is contractual and recurring, a cushion that helps smooth cycles and underwrite steady expansion.

The formula isn’t complicated. Residential and commercial customers sign up for routine treatments, termite inspections, and add-ons, then stick around because the cost of lapses is high and the nuisance returns quickly. Rollins layers technology—routing, scheduling, customer apps—onto field execution and keeps the brand visible through Orkin’s century-old national footprint. The company’s leadership reflects continuity as well. Jerry Gahlhoff has been chief executive since 2023; John Wilson, a three-decade veteran of the business, became executive chairman this year, while longtime steward Gary Rollins moved to chairman emeritus. Institutional memory remains deep in a business where route density and technician retention matter as much as marketing.

The model has delivered. Rollins closed 2024 with double-digit growth in revenue and cash flow and a 40-basis-point improvement in operating margin, the kind of incremental gain that compounds when your revenue base is subscription-like. Momentum continued into 2025: first-quarter sales rose nearly 10% to $823 million, and second-quarter revenue reached roughly $1 billion, up 12% year over year, with organic growth north of 7%. Those results came with higher net income and earnings per share, underscoring a recurring theme for Rollins: not just growth, but growth that pays for itself.

Buying Growth, Carefully

Rollins augments its route-by-route expansion with steady, bolt-on acquisitions. The company’s approach tends to be pragmatic rather than splashy: buy local density, keep the brand equity if it helps retention, integrate back-office tools, and cross-sell termite or wildlife services. In 2023, Rollins acquired Fox Pest Control through its HomeTeam unit, bringing in more than a thousand employees and a strong presence in fast-growing Sun Belt markets. In April 2025, it closed the purchase of Saela Holdings, another targeted deal that adds volume and territory to a route system already measured in the hundreds of branches. The through-line is M&A that improves route density and technician utilization rather than trophy buying for scale.

Capital allocation mirrors that discipline. Management has been explicit about a balanced playbook—investing in growth while returning cash via a rising dividend—enabled by predictable cash generation. Fitch, in assigning Rollins a BBB+ rating this year, highlighted the company’s high proportion of recurring revenue and sticky customer base, factors that reduce downside volatility and make modest leverage tolerable in a service roll-up. The financials show the approach in action: in the first quarter Rollins invested in acquisitions and capital expenditures, funded the dividend, and still grew operating cash flow in the mid-teens.

The industry backdrop helps. Pest control’s addressable market is expanding in line with urban density, warmer winters, aging housing stock, and stricter standards in food, healthcare and hospitality. Most forecasters peg global services growth in the mid-single digits over the next decade—enough to reward operational execution without requiring heroics from the economy. That gives a company like Rollins room to keep consolidating a fragmented landscape while maintaining service quality.

The Competitive Swarm—and the Valuation Question

Competition is real and visible. Rentokil Initial, already the world’s largest player, absorbed Terminix in late 2022 and has been reworking its North American footprint. That integration has not been linear—Rentokil issued a profit warning last year tied to softer U.S. demand and termite weakness—but the combined rival has scale, brand power and an incentive to fix its biggest region. For Rollins, that means staying sharp on pricing, technician productivity and customer retention while continuing to add density through acquisitions.

There are also the mundane but material headwinds of a field service business. Fuel and fleet costs, insurance claims, and advertising outlays can nip at margins even when demand is healthy. Rollins itself reminded investors of that reality in late 2024 when higher costs and more aggressive marketing compressed profitability despite solid revenue growth. The company has since rebuilt momentum, but the episode is a reminder that route-based businesses seldom glide in a straight line.

All of which brings the discussion to valuation. A predictable, recurring-revenue services compounder tends to command a premium—and Rollins often has. Bulls argue the premium is deserved: recurring contracts, a vast service network, strong brands, and a long runway of small deals add up to years of mid-to-high single-digit organic growth plus acquisitions and operational leverage. Skeptics point out that paying up for steadiness leaves little margin for error if weather turns, wage inflation sticks, or competition forces more marketing spend to win and keep accounts. The company’s recent performance—organic growth above 7% in the second quarter and higher earnings—tilts the argument toward patience, but the premium multiple requires Rollins to keep stringing together precisely this kind of execution.

For now, the story remains intact. The leadership bench is seasoned, the balance sheet is built for steady bolt-ons, and the core customer proposition—prevention beats infestation—doesn’t change with interest rates. Rollins won’t reinvent the category, and it doesn’t need to. Keep routes tight, technicians happy, prices rational, and competitors on their heels, and the quiet growth machine will keep humming—one driveway, one loading dock, one crawlspace at a time.