Rollins' Q1 2024 revenue growth was significantly influenced by acquisitions, which contributed 7.0% to the overall 13.7% revenue increase. The company made 12 acquisitions during the quarter, demonstrating a continued focus on inorganic growth.

Management reiterated its focus on achieving 7-8% organic growth while adding 2-3% of inorganic growth for 2024. This indicates a strategic emphasis on both internal improvements and external expansion.

The recent acquisition of FPC Holdings, LLC (“Fox Pest Control", or "Fox") was accretive to gross margin by 40 basis points. Excluding Fox, the company saw 50 basis points of improvement in underlying margins, as pricing more than offset inflationary pressures.

Excluding the Fox acquisition, Rollins saw a 50 basis point improvement in underlying gross margins, as pricing more than offset inflationary pressures. This demonstrates effective management in navigating cost pressures.

SG&A expenses decreased to 29.8% from 29.9% in the prior year, as the company continues to manage its cost structure while investing in growth initiatives. Adjusted SG&A was 29.7%.

The Company is currently in the process of integrating Fox into its assessment of its internal control over financial reporting. In accordance with the SEC's published guidance, management's assessment and conclusions on the effectiveness of our disclosure controls and procedures as of March 31, 2024 excludes an assessment of the internal control over financial reporting of Fox.

The continued disruption in economic markets due to high inflation, increases in interest rates, business interruptions due to natural disasters, 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.

There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2023.

Rollins' 7.5% organic revenue growth is a testament to its competitive strength in the pest control market. This growth is driven by demand from customers across all major service offerings, indicating a broad-based competitive advantage.

Residential pest control revenue increased approximately 16%, commercial pest control revenue increased approximately 11% and termite and ancillary services grew approximately 12% including both organic and acquisition-related growth in each area.

Organic revenue growth was strong across our service offerings, growing over 4% in residential, 10% in commercial, and over 9% in termite and ancillary activity. This indicates a strong competitive position across all segments.

Gross margin improved 90 basis points to 51.2% in 2024 compared to 50.3% in 2023. The company saw leverage on people costs, fleet, and materials and supplies, the major areas that comprise cost of services provided.

Looking more closely at SG&A, we saw improvement of approximately 70 basis points associated with lower administrative costs. A majority of these savings, approximately 50 basis points, were reinvested back into growth initiatives aimed at driving improved revenue growth.

We continue to focus on improving the efficiency of our business model while investing in programs aimed at growing our business across our service offerings.

The 10Q filing does not provide specific details on R&D investments or advancements in technological capabilities. This makes it difficult to assess the company's commitment to innovation and its ability to leverage technology for competitive advantage.

The 10Q filing does not provide specific details on digital transformation efforts. This makes it difficult to assess the company's commitment to digital transformation and its ability to leverage technology for competitive advantage.

The 10Q filing does not provide specific details on intellectual property position. This makes it difficult to assess the company's commitment to intellectual property and its ability to leverage technology for competitive advantage.

The Company invested $47.1 million in acquisitions, $7.2 million in capital expenditures, and paid dividends totaling $72.6 million, indicating a balanced approach to capital allocation.

The Company did not repurchase shares on the open market during the three months ended March 31, 2024 and March 31, 2023. However, 11.4 million additional shares may be purchased under the share repurchase program.

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 Credit Agreement also contains provisions permitting a future environmental, social and governance amendment, subject to certain terms and conditions contained therein, by which pricing may be adjusted pursuant to the Company's performance measured against certain sustainability-linked metrics.

The Company has received a notice of alleged violations and information requests from local governmental authorities in California for our Orkin and Clark Pest Control operations and is currently working with several local governments regarding compliance with environmental regulations governing the management of hazardous waste and pesticide disposal.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports.

Demand remains favorable to start the second quarter and the pipeline of acquisition activity remains healthy. Although we continue to navigate a highly uncertain macro-environment, we believe we are well positioned to deliver strong results in 2024.

The extent to which increasing 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.

The Company considered the impact of economic trends on the assumptions and estimates used in preparing the condensed consolidated financial statements. In the opinion of management, all material adjustments necessary for a fair presentation of the Company's financial results for the quarter have been made.