Rollins, Inc. (NYSE:ROL) Q1 2023 Earnings Call Transcript

Aadit Shrestha: All right. Thank you for that. And I have a follow-up regarding incremental margins, pretty healthy, 32%. How should we think about it for the remain of the year? Can you maybe exceed that 32% with sort of the pricing actions and the cost-cutting initiatives that you’ve put in? Plus like, what’s the impact of Fox Pest on that?

Ken Krause: Certainly. Thanks for the question. If you look at the last nine months, the last three quarters, if you will, going back to the second half of last year, we’ve consistently delivered an incremental margin that’s approaching 30%. So, we feel like we’re positioned very well to deliver that 30% sort of incremental margin as we move forward. There’s always challenges. There’s always puts, and there’s takes, and there might be one quarter where you might be below that, but you might have one quarter where you exceed that. As I said in my prepared comments, the second quarter, you’re going to see a little bit more investment in customer acquisition costs. We see an opportunity to go after and get customers that are going to create long-term value for our business.

And so, you’ll probably see a little bit more investment, a little heavier investment come through in that area as we think about the second quarter, but we feel very good about long-term value creation from those customers that will help us deliver that incremental margin profile of 30 plus percent.

Operator: Thank you very much. There are no further questions at this time. I’d like to turn the floor back to management for closing remarks. Thank you.

Jerry Gahlhoff: Well, thanks, everyone, for joining our call today. We look forward to giving you an update at the end of the second quarter on our next call. We’ll see you then. Thank you.

Operator: Thank you very much. Ladies and gentlemen, that does conclude today’s conference. You may disconnect your lines at this time, and thank you very much for your participation.