Rollins Inc (ROL) Q3 2026 Earnings Call Transcript

Greetings. Welcome to the Rollins, Inc. Third Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Lindsay Burton. Thank you, Lindsay. You may begin.

Thank you, Sam, and good morning, everyone. In addition to the earnings release that we issued yesterday, the company has also prepared a supporting slide presentation. The earnings release and presentation are available on our website at www.rollins.com. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation as well as in our earnings release. The company's earnings release and presentation contain certain forward-looking statements and discuss the business outlook. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially from any statement we make today. Please refer to the cautionary statements in yesterday's press release, today's presentation, and the company's SEC filings, including the risk factors section of our Form 10-K for the year ended December 31st, 2025, and subsequent filings. On the line with me today and speaking are Jerry Gayloff, President and Chief Executive Officer, and Will Harkins, Executive Vice President and Chief Financial Officer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin?

Thank you, Lindsay. Good morning, everyone. I want to begin with saying that our third quarter performance did not meet our expectations, And we are not that it continues to be pressure on we now have a clearer understanding of what is driving this pressure and are working with urgent AI and LLM driven search are meaningfully changing the way we clearly see the impact of the changing search landscape which drove continued deceleration and digital lead flow. Ultimately, LLMs are recommending a wider range of these recommendations very significantly across platforms, markets, and can even yield different results for the same search run on different days. The result is a more fragmented, variable, and dynamic customer discovery environment. Importantly, moderating organic growth trends have not been broad-based across brands that utilize relations and home builder partners. Home Team and Fox, for example, continue to perform well, leveraging their door-to-door sales well above the overall company. These results highlight a multi-brand approach and the benefits of having multiple channels to reduce. Additionally, our recurring residential customer base is healthy, with customer count continuing to grow in the third quarter and retention remaining strong. Our line teammates billed with customers are an important source of resilience, creating loyalty, and increasing retention over time. and highly attractive market, and we believe that the current pressure is not a deterioration in underlying demand. While the slowdown was most pronounced in residential customer acquisition, we also experienced softer performance in portions of our termite ancillary and commercial businesses. The impact on our commercial businesses was fairly isolated to non-Organ brands and timing of certain one-time business. That being said, Orkin's commercial business continued to grow high single digits, reflecting the investments we have made there and expanding our commercial capabilities. In our termite and ancillary business, growth was impacted to some degree by lower acquisition of new residential customers within termite. We also faced staffing and capacity constraints in certain markets that limited our ability to fully capitalize existing customers. continued crossing targeted steps to address staffing and capacity constraints in affected markets so that we can better capitalize on those opportunities over time in the underlying demand and growth potential of these services, what we can control, and are taking concrete steps and identifying opportunities to strengthen our presence by market and service category. We're strengthening our visibility across traditional search and AI-driven discovery by expanding locally relevant content, listings, and customer reviews, recommendations. Targeted, data-driven approach enables us to translate the strength of our national brands into greater local visibility, more qualified leads, and ultimately new customers. We're making it easier for customers to understand what differentiates us and ultimately choose our content, increasing pricing transparency, and more clearly highlighting the service attributes that make Rollins brand stand out. including same day and next day availability and the quality of our working to ensure customers receive accurate relevant information about our services whenever and wherever they're searching continuously testing learning and reallocating resources testing different approaches and shifting investment toward the channel and tactics that generate qualified leads convert them into new customers and deliver this importantly this is not simply about spending more but continuously evaluating where our marketing dollars generate the strongest returns and investing behind them we've begun taking advantage of new paid advertising opportunities on ai search platforms including chat gpt and google gemini to improve our visibility in this highly dynamic environment our ability to be nimble and shift resources to keep pace with change is an important source of strength. Things that will be most successful in this changing environment are those with the resources, expertise, and organizational agility to continuously test, learn, and adapt. This is not about finding a single solution. Our scale, diversified portfolio, and financial flexibility position us particularly well to navigate these changes. At the same time, we are always focused and maintaining the strong relationships that underpin. We are seeing some early but encouraging signs of progress from our efforts as we close the quarter. That said, we have not reached stabilization, and there is more work ahead to translate improving search visibility into new customers and sustained growth. That the customer discovery landscape may be changing structurally, and we are not assuming a return to historical patterns. We need to adapt, and our resources, scale, and flexibility will give us multiple ways to respond. And Rollins has its model, strong, diversified portfolio. An experienced and committed team positioned as well to navigate evolving market conditions and drive long-term success. We've faced challenges before, and our team has consistently demonstrated the ability to adapt, execute, and emerge stronger. We have every concept. I'd like to thank our 20,000 plus teammates around the world for their hard work and dedication to serving our customers.

The key drivers of performance, along with our 6.2%, including organic growth of 4.4%, which was below our expectations. Just continued pressure on residential customer acquisition was the primary challenge during the quarter. We also experienced softer performance in portions of our termite and ancillary. Performance was affected by fewer new residential customers entering the cross-sell price control increase. and termite and ancillary across the portfolio was 2.3%, continuing to remain dynamic. Maintaining an appropriateness, not only serving the flexibility of the margin, with negative 2.8% on insurance and claims in the third quarter of last year, and the unfavorable marginal margin would have exceeded 25%. It was 25.7% in the quarter. We continue to expect our full year ETR to come in under 25% for the year to continue investing in the business. The third quarter, we completed seven acquisitions totaling $27 million. dollars 120 million dollars of share flexibility and conviction in the intrinsic value of our business supported more meaningful share repurchase activity in the quarter and we will continue to evaluate futures remain below the lower volume period to changes in demand that uncertainty the range of potential outcomes and for two to three preparing any thinking on our longer term margin framework on margins in the 30 to 35 percent range so we recognize that our results have fallen short of expectations and we are taking steps to improve performance through disciplined execution in our control. Brands show up for us proving productivity and continuing to invest in our people and capabilities that support long-term growth. We remain confident in Rollins' long-term growth opportunity and position us while continuing to invest in the capabilities that we believe the actions we are taking, together with the growth and productivity initiatives, position us in the hallmark of our finance and the quarters ahead. I'll turn the call back over to Jerry. Thank you, Will.

We're happy to take any questions.

We will now be conducting a question and answer session. We ask that you please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our first question is from Tim Mulrooney with William Blair. Please proceed with your question.

Yeah, Jerry, Will, good morning. We've got a couple questions here. Good morning. So first, unsurprisingly, on lead flow, can you talk about how residential lead flow trended through the quarter? One of your competitors this morning said that resi lead flow actually improved in September. So I'm wondering how that compares to what you saw. Will, in your prepared remarks, I think you said lead flow deteriorated in the third quarter. So, but I'm wondering, you know, was September worse than August? Was August worse than July? Or was it more just a continuation of what you saw in the back half of last quarter? Just any comments on trends would be helpful. Thank you.

Yeah, so thanks, Tim, for your question. So coming out of Q2 and early Q3, you know, we saw some signs of improvement. They really weren't as consistent as that change from Q2, and the big difference was Q3 was consistently weak, steadily weak, even though once in a while life, so to speak, when you look in September, when we saw year-over-year decline in our organic website traffic had been a 13% decline in August that moved to only a 4% decline in September. And that, as you know, that organic website traffic is a great leader of leads that can come into the business. And also we saw in September our organic search leads in the organic channel improved. So we saw some of that in September as well. However, you know, I want to caution you. This is, we've said, this is dynamic. And, you know, in the second quarter, we saw positive signs of life. And so that's where, you know, our outlook reflects that we don't know if the things that we saw in September, improvements that we saw, is that going to sustain us through the rest of the year. So we're just really cautious in how we're speaking.

Understood, Jerry. Sounds like you're being appropriately conservative, given the uncertainty in the situation. And thanks for the detail on the lead flow. So it sounds like it did improve in September. Could you also comment on how lead flow trended across your specialty brands in residential? I know you have Orkin. You have your specialty brands. The specialty brands, given their lower dependence on the digital channel, I'm curious about the performance there. Thank you.

So, generally speaking, this is where, you know, that question, we talk about it going to a wide variety. I wouldn't necessarily, didn't appear to see, be some major benefactor, just as they weren't necessarily hurt by. They get different and they acquire. They don't spend as much of their time in it. So, I would say, if any.

Our next question is from Manav Patnik with Barclays. Please proceed with your question.

Hi, good morning. This is Ronan Kennedy on for Manav. Thank you for taking our questions. Good morning, Ronan. Good morning. Thank you. As you follow up to some of the points discussed on Tim, but also go back at a more high level, you repeatedly referenced early but encouraged signs of progress, but also said the business has not yet reached stabilization and continue to describe this as transitory disruption in a permanently changed environment. What specifically is improving today? How far are you from the level that can make you conclude that customer acquisition trends have truly stabilized? And what makes you confident that the adaptation and your priorities ultimately restore growth rather than simply make the disruption more manageable?

There's a lot of lead indicators that we can look at. There's many lead sources that we begin to see and things are stabilizing. But let me go back and say that the world has completely changed in this space. This is not to adjust. Every idea that back to normal, I don't want to give anybody a word that this will shape. It's just going to be a con, learn, adjust, going back and doing it as nimble as we can as we go.

And, Jerry, I think the team that's got, you know, the most resources, has the most agility, is able to really win at the end of the day.

Thank you. And then as a follow-up with the laid out four to six range as a function of three scenarios, there are ways to think of probability weighting those three scenarios based on the answer to the questions thus far and the data we're seeing so far. And then, you know, how should we think of potential implications for the revenue base for 27? Cognizant, you know, your comment that you're not specifically going to be guiding, but, you know, at a high level, how should we think of implications for revenue base for 27.

Thanks, Ronan. Let me reiterate a little bit about how we got to the four to six. And so essentially, remember that when we issued 6% back at the end of Q2, we said that we assumed that really we were not going to see further deterioration in the business or any improvement in the business. It was just going to stay steady. And so that's how we really got to the full year 6% number. And then as we've gone through the quarter, the third assumption is now what's underlying that, you know, if things continue in the fourth quarter, just as they did in the third quarter, we will be in the 5%, the midpoint of that range. If things meaningfully improve, we're going to, you know, we still 6% is on the table. And if things deteriorate even further, that's when the 4% to 5% range comes into the Q4 outlook. And I'll tell you that that's where we're putting the most focus. We just want to make sure we finish this year strong. But it's really too early for us to talk about anything in 2027 until we see how we finish G4.

And that's another lever.

Thank you both very much. Greatly appreciate it. Thanks, Ronan.

Our next question is from Greg Parrish with Morgan Stanley. Please proceed with your question.

Hey, everyone. So you talked about the need for being nimble. So I just wanted to ask, so how long does it take to really drive change in how your brands show up in AI search? Adding reviews on different sites, localizing all of your sites, Oregon sites nationally. It seems like it could take time. So maybe just help us understand the dynamic and your ability to be nimble here and how you show up.

I'll give you a great example of how nimble and in some ways how easy this can be. So, for example, at Orkin, Orkin typically wanted someone, we wanted you these days, was not being picked up a few months ago that is being picked up today. Easy types of adjustments that you could make where Orkin a few months ago wasn't even seen as being relevant. And then what we learned is that when you don't talk about price and give some price, people, the LLMs don't give you any credit, and they assume the worst, and they may go to other sources. Something as simple as changing, constantly evolving, and that's, again, where tests, learn, going to be.

Okay, great. That's a helpful caller. And then maybe just to touch on marketing, just given the changing customer acquisition landscape, you know, how are you viewing marketing spend sort of at a holistic level and, you know, maybe more granular? I mean, it seems like you might have more areas to attack here and spread your dollars out. So just how are you thinking about that into 2027?

Greg, from that perspective, you know, it's really not about us spending more in our mind. It is truly about, you know, Jerry's just talking about testing different things. We are going to follow, you know, put our money where we see the greatest returns. And so it really is about reallocating based on where we see, you know, our returns improving. And so there's a lot of tests that we're doing. We are certainly, you know, not being shy about putting money where we need to.

But importantly here, we have choices. We have a lot of choices we can make across. That's the advantage of our model. That's where our multi-brand approach, especially in residential.

Great. Thank you very much.

Our next question is from Curtis Nagel with Bank of America. Please proceed with your question.

Great. Thanks very much. I just wanted to maybe quickly go through just some of the puts and takes on the 5-4-Q or guide. Low-end, it seems to imply, I think, kind of zero growth. Is that wholly based in resi? Could that, I guess, potentially turn negative?

And I guess what are you assuming in terms of kind of the ranges for commercial and termite and ancillary follow-up Curtis I would say from from all of our everything that we've done as we evaluated and we you know based our assumptions for that guide it was that things continue exactly as you see them in Q3 to get to that 5% so I you know I would just say if we continue in the same trajectory you're at 5% if that goes down you're going to be a 4% and it's got a meaningfully improved to get to that five to six percent with how we built the guys and then that's really okay fair enough and then just maybe

focusing on termite and ancillary just in terms of like what specifically was driving those we hear customer acquisition trends is it you know I guess proliferation of LLM impact and then I guess on some of these I think labor shortages just sort of what's driving that when that could that be resolved yeah so the the certainly is that as we mentioned the slower residential customer volumes did reduce some of the opportunities to some degree, but some of the challenges there were really impacted more by staffing and capacity constraints in some markets where we had to get the work done. We exited the quarter with backlog that was at our high water mark for the year, which that's both good and bad. We just didn't get it all completed in the third. Classity could be related to adjustments that we made in the business. It can also be just labor environment or various things happen, and that comes back to leadership and strong operational execution that we tend to be pretty sure towards the end of the quarter and fog there in the need for these services.

Thank you.

Our next question is from Tomo Sano with J.P. Morgan. Please proceed with your question.

Good morning, M.O.1. Good morning, Tomo. Thank you. Could you decompose the quarter's organic growth into price versus volumes, if you could give us any color overall and then by segment? And then also, as LLM-driven search increases pricing transparency and simplifies comparisons, has your view of CPI plus price realization changed in any way?

Tomo, when we think about the price versus volume equation, what I would tell you is that we do continue to see ourselves as a CPI plus business. We're an essential business, and so that is going to be in the 2% to 3% range of – or 3% to 4% range for pricing. And that's the only thing I want to make sure that you have color there is that that is across the entire portfolio. We talk about that 3% to 4% of pricing that's across the full portfolio. That is more heavily weighted towards commercial than residential, so it doesn't apply evenly across everything. But we do still see that being, you know, kind of where we will play in this space. And so, and we don't see any indications that that is creating trouble. I mean, we are regularly evaluating our pricing. We meet, we just met two weeks ago, and so we don't see any meaningful change in the number of customers that are either trying to, you know, roll their prices back. that are canceling with us, so we feel like we still have room to go there. Second question, Tomo.

That's a good answer. Thank you, Will. And just one follow-up to Jaylee, if I may. On a customer acquisition landscape change, the AI LLM search simplified price comps with the local providers. How do you assess the risk that the YPAY premium value message, like such a service quality and guarantees and reliability gets diluted.

Yeah, and that's where I think you have to be careful in this space because you cannot stop spending on your brand and your brand messaging and who you are and what you're all about. This idea that we should just spending and building our brand, the main thing we want you to do, instead of going to an LLM, and asking about pest control, we want you to type in Orkin.com. Just think Orkin or one of our brands as the top of them. We have to continue to send the messaging on our website and all of our content about the value of our service and ensure that the value proposition and the things that our customers are asking about when they are in the LLMs, that content is there on our website that they can see the clear value in using us compared to anyone else.

Thank you, Jerry. Thanks, Jamal.

Our next question is from Seth Weber with BNP Paribus. Please proceed with your question.

Hi, good morning. This is Christina Batink on for Seth. Thanks for taking our questions. So I guess first up for me is over the summer, the FTC actually brought a large case against Rollins over the use of non-compete clauses across its workforce. and we were kind of wondering if this has any impact on competition and additionally if this could actually be contributing to the local competition that's kind of been weighing on lead flow and residential growth no um that is a um it's been pretty much a non-issue the details of that we had some pieces and parts that were extended into and all we did was our business

that still had those in there um at the end of the day these were these were agreements if you think about the fact that there are 19,000 estimated 19,000 pest control companies and the people I know in the industry had started back in the day because people have free between and amongst as any sort of.

Thank you so much. That's super helpful. And then I guess back at the investor day that you guys hosted in May, you guys framed that the pest control market was growing around 6% a year. And I know at a recent conference, you guys said that lead declines were fairly proportional across all income bands which kind of suggested that consumer health wasn't the main driver is this still the case and given what you've seen up until this point do you think that industry growth has changed at all or do you think it's more of a rolling specific shift in how customers find you thanks when we think about the consumer health i think what we're really saying is we're an essential service if you need if you have a problem you're going to want trying to make sure that if they are going to spend their money, they're getting the value and they're choosing the right provider.

And that goes back to value, responsiveness, and the data out there about we have a more discerning.

Thank you so much.

Our next question is from Connor Cerniglia with Bernstein. Please proceed with your question.

Great. Thank you for having me. Heading into this quarter, third-party data suggests organic traffic for Orkin was down pretty materially year on year. It paints a very similar picture for Macy, very similar picture for Active. Terminex seemed to be the outlier, which was actually up on the quarter, but for the top four players, organic traffic was down more than double digits, so corroborating your claim that LLMs seemed to be the issue. And I guess that one competitor was more of an outlier than the trend. Can you talk about the early findings in your process to adapting to LLMs? Has the biggest success so far been third-party content? Is it improving business reviews? Any caller on that would be really helpful.

Initially, beginning to appear better was some easy steps, like the one, the example I gave you earlier on price tremendously. Talking about service offering, it's not been key in our messaging, but those types of things that talk about the value, that talk about fulfill customer needs seem to get picked up a lot. And then you think about local content. While we're in national locations, we have local people that understand local needs and taking that information in. I give you a great example. And if you're talking about the Joro spider and it's hot on people's minds here, those are the kind of, and if your branch is here, and say at work in the Atlanta area have local content about the Joro spider, that's going to get picked up. So those are the types of things that we're focused on that we find to be getting the bigger return on investment, and they're quick wins.

Jerry, one of the other things that we've actually seen here recently is you see ChatGPT, you see Google, they're starting to run pilots where they're allowing kind of the monetization of that platform where you can start to put some ads. And so we're starting to play in that space as well. We'll see what's going to happen as we go through the quarter, but at least we're starting to see that they're playing in that space.

A very helpful caller. As a follow-up, I know we've talked about LLMs. ChatGPT is about 70% of the shares, so I think that's probably the biggest, maybe, obviously, issue, but that's probably the most focused target should be. It seems like Yelp reviews are probably some clear low-hanging fruit here. ChatGPT uses Yelp as recommendation rates. You all have about 13 reviews per store, so about a baker's dozen. Your competitors have about 25, 30. And it seems just like companies have long ignored Yelp as a review platform. And part of the solution here is just refocusing efforts to improve Yelp recommendation rates. Can you talk about any examples of steps you're taking to improve? Are there QR codes you can add to the site of your trucks, incentive cops to kind of get those business reviews up? Can you just give us any examples on that for it will be helpful?

Yeah, the Yelp model for reviews is a very different model of what they allow and just say Google reviews. Can you drive meaningful impact on that? We're acutely aware of that, but that is also something that will take a lot more time, weigh those investments, and say, hey, within, yeah, Yelp is weighted, but so are these other things within ChatGBT. How do, on these other things that are going to, that are, so those are all the things that we're, we're. Great.

Very helpful. Pass it on. Thank you.

Our next question is from George Tong with Goldman Sachs. Please proceed with your question.

Hi, thanks. Good morning. The digital lead pressure is greatest in residential, but can you also talk about the, the lead gen mix in your other segments? So ballpark, the new customer acquisition makes my channel across termite and commercial as well.

So our termite ancillary business as well as our commercial business is not heavily lead-driven. In terms of they get calls because that's, again, where the brand, say the Orkin brand and commercial people are just going to call. And that is a very organic type of lead gen. And so we're not very reliant in that space.

And then as a follow-up, you still believe that the business can get back to 7% to 8% organic growth. Does getting back there require residential digital leads to return to prior levels, or can channel mix, conversion, and cross-selling offset a structurally more fragmented digital search environment?

George, that's a good question. We, you know, our view is that we can absolutely get back to 7% to 8%. We don't know when that's going to happen. We've got to see this through. But certainly we're able to get back there. And what we're focused on mostly now is how do you make sure that every one of those leads we do get, that we convert it, and that it turns into a sale. So there are a lot of things that we're able to do to affect that 7% to 8%. There are levers we can pull. And so there's no reason to think that the long-term guidance would, you know, that we need to come off of that.

Generally speaking, I think for us to get to the 7% to 8% range, we are going to need to have residential healthy, commercial healthy, and termite ancillary healthy. And I think there's some different algorithms within there how you get there. I think we have to do better on residential, obviously. But, again, that goes back to the multi-brand strategy, where we invest, the decisions that we have to make, moving resources around to get us back there. So certainly, as Will said, it's possible, but I believe we've really got to be executing.

Got it. Very helpful. Thank you.

Our next question is from Stephanie Moore with Jeffries.

Please proceed with your question. hi good morning thank you um first question here maybe just i'd love to get your opinion higher level higher level question here you talked about not necessarily ramping up marketing spend or changing that but i'd almost push back on that response why not just given the magnitude in which the industry and your go-to-market strategy has effectiveness has changed why not use this period of time to step up marketing, to really solidify your position across kind of all go-to-market strategies, LLMs, for example, making sure that you're in the top position there, doubling down on door-to-door. I mean, why not use this period of disruption to leverage your size, scale, and quite frankly, financial position to really tackle and take meaningful share? Just, again, high-level thought here.

Yeah, I understand where you're coming from. We are perhaps more disciplined than that. If I knew I could invest in marketing and what return I would get on that in this dynamic environment, I could do that spending a lot of money. And so that's our business, let's do the right things, and let's learn, test, be responsible about our decisions, and adjust marketing dollars. You can do that, but that doesn't necessarily be sustainable, and it could potentially change your business model and your disciplines that you bring to the business. It's just fundamentally not how we approach the business.

But it's hard to underestimate how dynamic this environment is right now. And so it keeps changing. I mean, we've talked about the fact that we've gone to external parties to help us through this from the marketing perspective. And they don't even necessarily always agree. Nobody has a silver bullet. So it's, you know, how much would you spend on, you know, in this current environment?

We don't know if that's some infinite number. And the other side of it is just spending marketing dollars doesn't necessarily create demand. where demand isn't there. So you have to know the limit to which you'd be working on, making sure we right-size our business. In my mind, those are actually tougher decisions than just going and spending more in marketing. We have hard choices that we have to make about how we structure our business, and I'm really proud of our team for what they've done in that regard.

Understood. Thank you. One quick follow-up kind of along the same lens here. Does this dynamic change your M&A strategy? I mean, is there a greater focus that you'll place on door-to-door, just given that part of the business continues to hold well, hold them strong?

Stephanie, we've got a great pipeline of M&A opportunities that are still out there. It does not change what we see and value as a good business that we want to go and purchase. We're going to continue to look for opportunities where it's accretive. Businesses are, quite frankly, better than ours, and that's what helps us continue to grow organically longer term. And so this is not, you know, we've been in the door-to-door space. We've been in the traditional space. It doesn't change our philosophy.

We're interested in lots of businesses that can help and be accretive to our growth, and we'll continue to take a balanced approach there. I still think this is a dislocation, and we'll see how this pans out over time. We'll continue to be disciplinary and bring a right balance.

Thank you, guys. I really appreciate it.

Thanks, Stephanie.

Our next question is from Peter Keith with Piper Sandler. Please proceed with your question.

Great. Good morning, everyone. On the follow-up on the door knocking question, within Residential, you did cite that those areas of door knocking, direct sales home, they continue to outperform. I guess I'm curious, are those areas running in line with historical averages, or are those also outperforming but maybe seeing a little bit of weakness?

We've not seen any sign of weakness in those spaces. They have just gone gangbusters. So double-digit growth, you know, so continues to be a great business growing. It's very helpful to our overall. We've not seen any real softness there.

Okay, good. And then I did want to pivot over to commercial. I think you cited some weakness in one-time business. Maybe could you unpack that for me a little bit more on where the slowdown in commercial occurred?

Yeah, so the softness in the commercial side was really driven by some timing related to fumigation services at non-Organ brands. There's a decent amount of commodity fumigation that goes on that can be cyclical, timing around holidays, things along those lines that just gets kind of dislocated from time to time. The good news in that is Orkin's commercial business, their core, grew still very reflective of the investments that we've made there, and it's not something I'm very concerned about.

Okay, very good. Thank you very much.

Our last question will be from Josh Chan with UBS. Please proceed with your question.

Hi, good morning, Jerry and Will. Thanks for taking my question. Maybe on the residential side, on the organic growth of 2.3, I know that within residential there's recurring and there's one-time business in there. So I guess could you give some color in terms of whether the recurring business trended above or below the total?

Josh, this is Jerry. And I hope you're having – I heard you're at Pets World, and I hope you're having a meeting. You're meeting some great people while you're there, aren't you?

I am, yes, yes.

So when we look at the organic growth, very, very similar.

But the recurring portion was actually better. So the organic – we are still in line with what we have seen historically from a recurring perspective. But both have been in.

That makes sense. All right, and then I guess on the customer acquisition side, do you feel like you have a handle on what tactics work and don't work and that you're just kind of focusing on executing to those tactics now, or do you feel like you still need a better handle on exactly what tactics to use?

I think we have a strong handle on some of the basics and interesting in this space. And so that's, again, what gives us that lack of clarity. Say, where do you invest? Which is different for helping us navigate that? Again, that's why we just end. And we don't know that the things we fixed the right things that are most important three months ago has changed. Continue to test, learn.

That makes a lot of sense, and thank you for the time, Jerry. Well, I appreciate it.

We have reached the end of the question and answer session. I would like to turn the floor back over to Jerry for closing comments.

Thank you, everyone, for joining us today. We look forward to speaking with you again in our Q4 earnings call in February.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.