Rollins Inc (ROL) 2023 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Rollins Inc. Fourth Quarter and Full Year 2023 Earnings Call. (Operator Instructions) This conference is being recorded today, Thursday, February 15, 2024. I'd now like to hand the call over to Lyndsey Burton, Vice President of Investor Relations. Please go ahead.

美好的一天，女士們先生們。謝謝你的支持。歡迎參加 Rollins Inc. 2023 年第四季和全年財報電話會議。 （操作員說明）本次會議將於今天（2024 年 2 月 15 日，星期四）進行錄製。我現在想將電話轉給投資者關係副總裁 Lindsey Burton。請繼續。

Thank you, 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.

謝謝大家，大家早安。除了我們昨天發布的收益報告外，該公司還準備了支援幻燈片簡報。收益發布和演示可在我們的網站 www.rollins.com 上取得。作為今天上午討論的一部分，我們納入了某些非公認會計準則財務指標。非公認會計原則調節表可在今天簡報的附錄以及我們的收益報告中找到。

The company's earnings release discusses the business outlook and contains certain forward-looking statements. 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 yesterday's press release and the company's SEC filings, including the Risk Factors section of our Form 10-K for the year ended December 31, 2023, which will be filed later today.

該公司的收益報告討論了業務前景並包含某些前瞻性陳述。這些特定的前瞻性陳述以及本次電話會議中所做的所有其他陳述（不包括歷史事實）都受到許多風險和不確定性的影響，實際結果可能與我們今天所做的任何陳述有重大差異。請參閱昨天的新聞稿和公司向 SEC 提交的文件，包括我們將於今天稍後提交的截至 2023 年 12 月 31 日的年度 10-K 表格的風險因素部分。

On the line with me today and speaking are Jerry Gahlhoff, President and Chief Executive Officer; and Ken Krause, Executive Vice President, Chief Financial Officer and Treasurer. Management will make some opening remarks, and then we'll open the line for your questions. Jerry, would you like to begin?

今天和我一起發言的是總裁兼執行長 Jerry Gahlhoff；執行副總裁、財務長兼財務主管 Ken Krause。管理層將發表一些開場白，然後我們將開通您的提問熱線。傑瑞，你想開始嗎？

Thank you, Lyndsey. Good morning, everyone. Fiscal 2023 was an outstanding year for Rollins as we achieved a milestone of $3.1 billion in revenue. Demand from our customers remained strong throughout the year across all major service offerings. While full year revenue increased 14% versus last year, we grew earnings per share by over 18% and adjusted earnings per share by 20%, reflecting consistent execution of our operating strategies and a commitment to continuous improvement in our business.

謝謝你，林賽。大家，早安。 2023 財年對 Rollins 來說是出色的一年，我們實現了 31 億美元收入的里程碑。全年客戶對所有主要服務產品的需求依然強勁。雖然全年收入比去年增長了14%，但我們的每股收益增長了18% 以上，調整後的每股收益增長了20%，這反映出我們對運營戰略的一貫執行以及對業務持續改進的承諾。

We finished the year with a strong fourth quarter and observed sustained strength in the pest control markets we serve. We also continue to drive share gains in our markets by leveraging a multi-brand, multichannel approach at scale to differentiate ourselves competitively. Digital marketing, cross-selling, service bundling in door-to-door sales methods help us reach new customers and enhance engagement with existing customers to support organic growth.

我們以強勁的第四季度結束了這一年，並觀察到我們所服務的害蟲防治市場持續強勁。我們也透過大規模利用多品牌、多通路的方法，持續提高市場份額，使自己在競爭中脫穎而出。數位行銷、交叉銷售、上門銷售方式中的服務捆綁幫助我們吸引新客戶並增強與現有客戶的互動，以支持有機成長。

We have also strategically allocated resources to the commercial side of our business to capitalize on opportunities within key verticals. Most notably, we have grown our sales force and invested in training and tools to enable their success. Our service quality is high, and our offerings are customized, which helps new sales professionals gain confidence and become successful quickly.

我們也策略性地將資源分配給我們業務的商業方面，以利用關鍵垂直領域的機會。最值得注意的是，我們擴大了銷售隊伍，並投資於培訓和工具，以幫助他們取得成功。我們的服務品質高，我們的產品是客製化的，這可以幫助新的銷售專業人員獲得信心並快速取得成功。

Additionally, we are leveraging the scale of our Orkin brand across North America to effectively serve commercial customers coast to coast in both the U.S. and Canada. While we're still early with respect to our efforts in this area, we see good results as demonstrated by approximately 11% commercial revenue growth for the year.

此外，我們也利用 Orkin 品牌在北美的規模，有效地為美國和加拿大的商業客戶提供服務。雖然我們在這一領域的努力還處於早期階段，但我們看到了良好的成果，今年商業收入成長了約 11%。

Investments to drive organic growth are complemented by strategic M&A and in 2023, we welcomed 24 new businesses into our company through acquisition. This includes the addition of Fox Pest Control, which was the second largest acquisition in our company's history. Our synergistic approach to integration has gone well with the Fox team exceeding the financial targets we outlined last April.

策略併購是推動有機成長的投資的補充，2023 年，我們透過收購迎來了 24 家新業務。其中包括增加 Fox Pest Control，這是我們公司史上第二大收購。我們的協同整合方法與 Fox 團隊合作進展順利，超越了我們去年 4 月制定的財務目標。

Additionally, during the fourth quarter, we divested certain noncore businesses, most notably our lawn care business, which includes insect, fertilization and weed control for turf grass. We recognized a pretax gain on sale of that transaction of approximately $15 million. The decision to divest this asset aligns with our strategy to focus on profitable growth in core pest control operations.

此外，在第四季度，我們剝離了某些非核心業務，最引人注目的是我們的草坪護理業務，其中包括草坪的昆蟲、施肥和雜草控制。我們確認出售該交易的稅前收益約為 1500 萬美元。剝離該資產的決定符合我們專注於核心害蟲防治業務獲利成長的策略。

Operationally, we remain committed to developing exceptional talent and investing in our teams. The hiring environment improved in 2023 as we put a lot of energy into onboarding the right people in both support functions as well as the customer-facing side of our business. Effective sales and service staffing levels help us capitalize on continued demand and deliver solid results for the year.

在營運方面，我們仍然致力於培養傑出人才並對我們的團隊進行投資。 2023 年，招募環境得到改善，我們投入了大量精力在支援職能部門以及面向客戶的業務部門招募合適的人才。有效的銷售和服務人員配置水準有助於我們利用持續的需求並在今年取得紮實的成果。

2023 was also an important year with respect to continuous improvement and safety was a key area of focus for us. During the year, we implemented an app that monitors driving behaviors once our vehicle is in motion. The app detects unsafe driving maneuvers associated with acceleration, braking and speed, then converts data collected into a driver safety score. I'm pleased to report that by year-end, our average driver safety score for drivers that we monitor increased over 30% from the beginning of the year, but we aren't stopping there.

2023 年也是持續改善的重要一年，安全是我們關注的重點領域。在這一年中，我們實施了一個應用程序，可以在車輛行駛時監控駕駛行為。該應用程式可偵測與加速、煞車和速度相關的不安全駕駛操作，然後將收集到的數據轉換為駕駛員安全評分。我很高興地向大家報告，到年底，我們監控的駕駛員的平均駕駛員安全得分比年初提高了 30% 以上，但我們並沒有就此止步。

Improving the safety culture isn't something that is done overnight. But we are proud of the progress we have made and have set ambitious goals for ourselves to encourage safe behaviors throughout our organization. We believe these efforts will improve our ability to serve customers, help mitigate potentially negative financial impacts on our business and most importantly, ensure our people return home safe every day.

改善安全文化不是一朝一夕就能完成的事。但我們對所取得的進步感到自豪，並為自己設定了雄心勃勃的目標，以鼓勵整個組織的安全行為。我們相信這些努力將提高我們為客戶服務的能力，有助於減輕對我們業務的潛在負面財務影響，最重要的是，確保我們的員工每天安全回家。

Our continuous improvement efforts also center on own initiatives to modernize our back office and support functions. This is a work in progress, but we took some important steps to upgrade talent and systems during the year. These efforts are aimed at further enabling our growth priorities and increasing productivity as we work to become a better, more effective provider of shared services for our brands.

我們的持續改進工作也集中在我們的後台和支援職能現代化的主動行動上。這是一項正在進行的工作，但我們在這一年中採取了一些重要步驟來升級人才和系統。這些努力旨在進一步實現我們的成長重點並提高生產力，讓我們成為更好、更有效的品牌共享服務提供者。

In closing, our performance in 2023 demonstrates the strength of our business model and the engagement level of our team. Our family of pest control brands are driving profitable growth and we are focused on continuous improvement throughout the business. We remain committed to providing our customers with the best customer experience and investing meaningfully in our team to drive growth both organically, as well as through disciplined acquisitions.

最後，我們 2023 年的業績證明了我們業務模式的優勢和團隊的敬業度。我們的害蟲防治品牌系列正在推動獲利成長，我們專注於整個業務的持續改進。我們仍然致力於為客戶提供最佳的客戶體驗，並對我們的團隊進行有意義的投資，以推動有機成長以及透過嚴格的收購。

We're pleased with where our business stands today and the momentum we carry into 2024. And I want to thank each of our 19,000-plus associates around the world for their efforts and contribution to our success in 2023. I'll now turn the call over to Ken.

我們對我們今天的業務狀況以及我們在2024 年保持的勢頭感到滿意。我要感謝我們在世界各地的19,000 多名員工中的每一位，他們為我們2023 年的成功所做的努力和貢獻。我現在將打電話給肯。

Thank you, Jerry, and good morning, everyone. Our results for the quarter and the year reflect continued strong execution by the team. Let me begin with a few highlights for 2023. First, we delivered robust revenue growth of 14% for the year with double-digit growth across each of our service offerings. It was encouraging to see organic growth of 8% for the year while acquisitions continue to be a meaningful part of our growth profile, accounting for approximately 6% of our total revenue growth.

謝謝傑瑞，大家早安。我們本季和全年的業績反映了團隊持續強勁的執行力。讓我先介紹 2023 年的一些亮點。首先，我們全年營收實現了 14% 的強勁成長，每項服務產品均達到兩位數成長。令人鼓舞的是，今年有機成長 8%，而收購仍是我們成長概況的重要組成部分，約占我們總收入成長的 6%。

Second, we made good progress on profitability improvement in 2023. Full year gross margins were healthy as we were positive on the price-cost equation and saw improvement across several key cost categories. Adjusted operating margin finished the year at 19.7%, improving 140 basis points driven by leverage across the P&L. This translated into GAAP EPS of $0.89 per share, up over 18% for the year and adjusted earnings per share of $0.90, up 20% for the year.

其次，我們在 2023 年的獲利能力改善方面取得了良好進展。全年毛利率保持健康，因為我們對價格成本方程式持積極態度，並且幾個關鍵成本類別都有所改善。全年調整後營業利益率為 19.7%，在損益表槓桿的推動下提高了 140 個基點。這相當於 GAAP 每股收益 0.89 美元，全年增長超過 18%，調整後每股收益為 0.90 美元，全年增長 20%。

On an as-reported basis, we generated incremental margins of almost 30% for the year and on an adjusted basis, incremental margins were almost 28% for the year. And last but not least, we delivered operating cash flow of $528 million and free cash flow of $495 million, both up over 13% versus last year. Our strong cash flow performance enabled us to execute a balanced capital allocation strategy, deploying nearly $1 billion of capital in 2023 with a focus on investing for growth, while returning cash to shareholders through a growing dividend and share repurchases.

根據報告，我們今年的增量利潤率接近 30%，而根據調整後的數據，今年的增量利潤率接近 28%。最後但並非最不重要的一點是，我們實現了 5.28 億美元的營運現金流和 4.95 億美元的自由現金流，均比去年增長了 13% 以上。強勁的現金流表現使我們能夠執行平衡的資本配置策略，在 2023 年部署近 10 億美元的資本，重點投資於成長，同時透過增加股息和股票回購向股東返還現金。

Turning to our fourth quarter performance. The team delivered a strong quarter with revenue up 14% to $754 million. Currencies had a negligible impact on quarterly revenue growth. We saw a good balance of growth between organic and inorganic activities as organic revenue was up over 7% with acquisitions accounting for the other 7% of growth.

轉向我們第四季的業績。該團隊的季度業績表現強勁，營收成長 14% 至 7.54 億美元。貨幣對季度營收成長的影響可忽略不計。我們看到有機和無機活動之間的成長取得了良好的平衡，有機收入成長了 7% 以上，而收購則貢獻了另外 7% 的成長。

Jerry mentioned that we divested certain noncore businesses in the quarter, most notably our lawn care business. The purchase price for the transaction was $18 million. We received $15 million in proceeds during 2023 and recorded a pretax gain of $15 million on the sale. This business doesn't provide the growth or profitability profile of our core pest control business. Going forward, we don't anticipate any significant divestitures associated with portfolio rationalization in the foreseeable future.

傑瑞提到，我們在本季剝離了某些非核心業務，尤其是我們的草坪護理業務。此次交易的收購價格為1800萬美元。 2023 年，我們收到了 1500 萬美元的收益，並在出售中獲得了 1500 萬美元的稅前收益。該業務不提供我們核心害蟲防治業務的成長或獲利能力。展望未來，我們預計在可預見的將來不會出現任何與投資組合合理化相關的重大資產剝離。

In the fourth quarter, residential revenues increased approximately 18%, commercial pest control rose nearly 11% and termite and ancillary was up over 13%. Organic growth was healthy across the portfolio with growth of nearly 5% in residential, approximately 9% in commercial and over 11% in termite and ancillary. We normally see a step down in revenue as well as growth in Q4 along with Q1 due to seasonality. Comparing Q4 this year to last year, we saw an acceleration in organic growth across all service lines.

第四季度，住宅收入成長約 18%，商業害蟲防治成長近 11%，白蟻及輔助收入成長超過 13%。整個投資組合的有機成長都很健康，住宅成長近 5%，商業成長約 9%，白蟻及附屬成長超過 11%。由於季節性因素，我們通常會看到第四季的營收會隨著第一季的成長而下降。與去年第四季相比，我們看到所有服務線的有機成長都在加速。

Gross margin improved 40 basis points to 50.9% in the quarter. While Fox was accretive to gross margins for the quarter by about 30 basis points, we saw 10 basis points of improvement in organic margin as leverage from people costs and fleet offset pressure from materials and supplies and higher insurance-related costs. Gross profit also steps down in Q4 and Q1, primarily due to lower volume levels associated with the seasonality of our business I previously discussed. With that said, I'm pleased with the fourth quarter performance as we saw improvement year-over-year and recorded our highest Q4 gross margin level in the last several decades.

本季毛利率提高了 40 個基點，達到 50.9%。儘管福克斯本季的毛利率增加了約30 個基點，但我們看到有機利潤率提高了10 個基點，因為人員成本和機隊的槓桿作用抵消了材料和供應以及更高的保險相關成本的壓力。第四季和第一季的毛利也有所下降，這主要是由於我之前討論過的業務季節性相關的銷售水平較低。話雖如此，我對第四季度的業績感到滿意，因為我們看到同比有所改善，並創下了過去幾十年來最高的第四季度毛利率水平。

Quarterly SG&A costs as a percentage of revenue increased by 10 basis points versus last year. Excluding the earn-out adjustment for the Fox acquisition, SG&A costs as a percentage of revenue decreased by 10 basis points in the quarter. We saw nice leverage on people costs, which offset increased advertising and selling expense associated with the growth initiatives that Jerry discussed previously.

季度 SG&A 成本佔營收的百分比比去年增加了 10 個基點。不包括收購福克斯的盈餘調整，本季銷售、管理及行政費用佔收入的百分比下降了 10 個基點。我們看到了對人員成本的良好槓桿作用，這抵消了與傑瑞之前討論的成長計劃相關的廣告和銷售費用的增加。

Fourth quarter GAAP operating income was $139 million, up 16% year-over-year. Adjusted operating income was $144 million, up over 20% versus the prior year on 14% total revenue growth. Quarterly EBITDA was $181 million, up 24% versus last year, and EBITDA margin was a healthy 24%, up 190 basis points versus last year.

第四季 GAAP 營業收入為 1.39 億美元，較去年同期成長 16%。調整後營業收入為 1.44 億美元，比上年增長 20% 以上，總收入增長 14%。季度 EBITDA 為 1.81 億美元，比去年增長 24%，EBITDA 利潤率為 24%，比去年增長 190 個基點。

Fourth quarter adjusted EBITDA was $167 million, up 14% and representing a 22.1% margin, flat versus last year. While we saw nice leverage with respect to both gross profit and SG&A, adjusted EBITDA margins were negatively impacted by about 40 basis points in the quarter due to lower nonoperational gains on property and vehicle sales that were included in other income when compared to the fourth quarter of last year. This impacted incremental EBITDA margins in the quarter as well.

第四季調整後 EBITDA 為 1.67 億美元，成長 14%，利潤率為 22.1%，與去年持平。雖然我們在毛利和銷售管理費用方面都看到了良好的槓桿作用，但由於與第四季度相比，其他收入中包含的房地產和車輛銷售的非經營性收益較低，調整後的EBITDA 利潤率在本季受到了約40 個基點的負面影響去年的。這也影響了本季 EBITDA 利潤率的增量。

The effective tax rate was 25.8% for both the quarter and the full year period. And for 2024, we're expecting an effective rate -- tax rate of approximately 26%. Quarterly GAAP net income was approximately $109 million or $0.22 per share, an increase of nearly 30% from $0.17 per share in the same period a year ago. For the fourth quarter, we had non-GAAP pretax adjustments associated with the Fox acquisition-related items that I mentioned earlier, totaling approximately $5 million of pretax expense in the quarter. We also recognized the $15 million pretax benefit associated with a gain on the sale of our noncore business. Taking into account these adjustments, adjusted net income for the quarter was $101 million or $0.21 per share, increasing over 23% from the same period a year ago.

本季和全年的有效稅率均為 25.8%。到 2024 年，我們預計有效稅率約為 26%。季度 GAAP 淨利潤約為 1.09 億美元，即每股 0.22 美元，比去年同期的每股 0.17 美元增長近 30%。對於第四季度，我們進行了與我之前提到的福克斯收購相關項目相關的非公認會計原則稅前調整，該季度的稅前費用總計約為 500 萬美元。我們也確認了與出售非核心業務收益相關的 1500 萬美元稅前收益。考慮到這些調整，本季調整後淨利潤為 1.01 億美元，即每股 0.21 美元，比去年同期成長 23% 以上。

Turning to cash flow and the balance sheet. Operating cash flow increased 24% in the quarter to $153 million. We generated $142 million of free cash flow on $109 million of GAAP earnings, a 22% increase versus last year. Cash flow conversion, the percent of income that was converted into operating cash flow was well above 100% for the quarter. Debt remains low and debt-to-EBITDA is well below 1x on a gross and net level.

轉向現金流和資產負債表。本季營運現金流量成長 24%，達到 1.53 億美元。我們的 GAAP 收益為 1.09 億美元，產生了 1.42 億美元的自由現金流，比去年增加了 22%。現金流轉換，即收入轉換為營運現金流的百分比，本季遠高於 100%。債務仍然很低，債務與 EBITDA 的總額和淨額水準遠低於 1 倍。

We continued to fund our dividend in the quarter. Going back to the fourth quarter of 2022, we have increased our dividend 45% and we remain committed to funding a growing dividend as cash flow improves.

我們繼續為本季的股息提供資金。回到 2022 年第四季度，我們已將股息增加了 45%，並且我們仍然致力於隨著現金流的改善為不斷增長的股息提供資金。

As we look to 2024, we remain encouraged by the strength of our markets and the execution by our team. We are focused on delivering another year of robust growth and healthy incremental margins, further complemented by a strategic and disciplined approach to M&A. From a pricing perspective, we remain focused on effectively pricing the value of our services to remain positive on the price cost equation. And we have begun to raise prices for 2024 in the first quarter at a rate that is consistent with 2023 levels.

展望 2024 年，我們的市場實力和團隊的執行力仍然令我們感到鼓舞。我們致力於實現另一年的強勁成長和健康的利潤增量，並透過策略性和嚴格的併購方法進一步補充。從定價的角度來看，我們仍然專注於有效定價我們的服務價值，以保持價格成本方程式的動機。我們已經從第一季開始提高 2024 年的價格，漲幅與 2023 年的水準一致。

We also continue to be active in managing our rate cards. Our focus remains on driving consistent growth, delivering healthy incremental margins and compounding cash flow that will enable a balanced capital allocation strategy focused on investing in growth initiatives in our core market.

我們也繼續積極管理我們的價目表。我們的重點仍然是推動持續成長，提供健康的增量利潤和複合現金流，這將實現平衡的資本配置策略，重點是投資於我們核心市場的成長計畫。

Before I turn the call back to Jerry, I wanted to announce that we will be holding an Investor and Analyst Conference on the morning of May 17 in New York City, where we will share more about our strategic priorities and how we are positioning ourselves for continued success in the future. We're looking forward to sharing more details in the coming weeks and months. But for now, please hold the date.

在我回電給 Jerry 之前，我想宣布，我們將於 5 月 17 日上午在紐約舉行投資者和分析師會議，屆時我們將更多地分享我們的戰略重點以及我們如何定位自己未來繼續取得成功。我們期待在未來幾週和幾個月內分享更多細節。但現在，請保留日期。

With that, I'll turn the call back over to Jerry.

這樣，我會將電話轉回給傑瑞。

Thank you, Ken. We're happy to take any questions at this time.

謝謝你，肯。我們很樂意此時回答任何問題。

(Operator Instructions) Our first question is from Tim Mulrooney with William Blair.

（操作員說明）我們的第一個問題是 Tim Mulrooney 和 William Blair 提出的。

A couple of questions here. On the resi organic growth, Ken, as you highlighted, it decelerated from 7% to 5% from the third to the fourth quarter. But you're right. As I look at results historically, I do see a slight deceleration seasonally from the third quarter to the fourth quarter, typically. So could you just talk about what those seasonal factors are? Like onetime revenue or whatever else. And if that's the case, could you also talk about how your recurring -- your residential recurring revenue stream looked like in the fourth quarter?

這裡有幾個問題。關於樹脂有機成長，Ken，正如您所強調的，從第三季度到第四季度，有機成長從 7% 減速至 5%。但你是對的。當我回顧歷史業績時，我確實看到從第三季到第四季季節性略有放緩。那麼您能談談這些季節性因素是什麼嗎？例如一次性收入或其他什麼。如果是這樣的話，您能否也談談您的經常性 - 您的住宅經常性收入流在第四季度的情況如何？

Certainly, Tim, I'll start and then turn it over to Jerry for additional comments [here] as well. But when we look at the business, the business, as you so well indicate has a high degree of recurring revenue. And so as a result, there is a consistent base to the revenue that we enjoy and we benefit from. The one thing that does have an impact on our business from time to time is what we call onetime type of service. And when we look at the quarter -- in the fourth quarter, we did see a decel and the deceleration in the rate of growth in those areas of our business. That's probably the largest area of impact on the revenue growth in the quarter.

當然，蒂姆，我會開始，然後將其轉交給傑瑞（Jerry）以獲取更多評論[此處]。但當我們審視這項業務時，正如您所指出的那樣，該業務具有很高的經常性收入。因此，我們享有並從中受益的收入有一個穩定的基礎。時不時對我們的業務產生影響的一件事就是我們所說的一次性服務。當我們回顧第四季度時，我們確實看到了我們這些業務領域的成長速度和成長率的放緩。這可能是對本季營收成長影響最大的領域。

We were really encouraged, quite frankly, with the level of growth that we continue to see from the recurring business. It was a healthy level of growth for us despite being stacked up against last October, you may recall, was more beneficial because hurricane season was pretty tough in September. And so some of that business pushed into the fourth quarter of last year. There's always puts and takes, of course, in this business with weather. But we continue to be pretty encouraged with respect to our growth, especially in the resi sector.

坦白說，我們對經常性業務持續成長的水平感到非常鼓舞。您可能還記得，儘管與去年 10 月相比，這對我們來說是一個健康的增長水平，但由於 9 月的颶風季節非常艱難，因此更加有利。因此，部分業務延後到了去年第四季。當然，在涉及天氣的行業中，總是會有好壞之分。但我們的成長仍然令人鼓舞，尤其是在樹脂產業。

And I would add, Ken, as I think about residential pest control, your -- every other month in your quarterly service frequency offerings of your recurring base, that's your bread and butter. That is the healthiest indicator of what's going on in our business as we are growing our business, increasing our volumes and are we ending the year from a positive standpoint and customer -- in net customers -- net new customers to start the year, we certainly did that. And that quarterly and EOM pest control is your bread and butter and the onetime is that gravy on top. And sometimes you don't always get that gravy and that's what's really caused the slowdown in addition to the divestiture of the lawn care, that was about another $1 million on the residential side that also impacted that number in the quarter as well, Tim.

我想補充一點，肯，當我想到住宅害蟲防治時，您的定期服務頻率每隔一個月提供一次，這就是您的麵包和黃油。這是我們業務發展的最健康指標，因為我們正在發展我們的業務，增加我們的銷量，我們是否從積極的角度結束了這一年，而客戶——淨客戶——淨新客戶開始了新的一年，我們當然是這麼做的。每季和 EOM 害蟲防治就是您的麵包和黃油，而一次性則是上面的肉汁。有時你並不總是能得到那種肉汁，這就是除了草坪護理的剝離之外真正導致經濟放緩的原因，這在住宅方面又增加了約100 萬美元，這也影響了本季度的數字，提姆。

Got it. Okay. So there was a little less gravy in the fourth quarter, which -- it implies that your recurring revenue in that business is above your stated organic growth in the fourth quarter. Am I correct on that?

知道了。好的。因此，第四季度的利潤有所減少，這意味著您在該業務中的經常性收入高於您在第四季度聲稱的有機成長。我的說法正確嗎？

It -- yes, our recurring quarterly every other month service definitely outpaced our organic overall number.

是的，我們每隔一個月定期提供的季度服務絕對超過了我們的有機總數。

Got it. The other one for me, and thank you for that, is on digital leads. You mentioned last quarter that digital marketing leads were, I think the language is flat to down slightly. Correct me if I'm wrong about that. But I was just curious if that trend carried through the fourth quarter or if it moved up or down at all?

知道了。對我來說，另一個是數字線索，謝謝大家。您在上個季度提到數位行銷的領先地位是，我認為語言是持平甚至略有下降。如果我錯了，請糾正我。但我只是好奇這種趨勢是否會持續到第四季度，或者是否有所上升或下降？

Yes. So as we look at the digital queries we saw in the fourth quarter, the digital queries, we saw modest increases in the quarter versus the prior year. But we did -- so it did result in some healthy increases in lead starts and sales both from a digital as well as just overall in our business, we did see a lift there. It was certainly better than flat. It wasn't stellar performance, but it was an improvement year-over-year. So we believe we continue to benefit from a diversified approach that we're not overly reliant on all the digital space. And that's a key part of the formula in our organic growth.

是的。因此，當我們查看第四季度看到的數位查詢時，我們發現該季度與前一年相比略有增長。但我們做到了——所以它確實導致了數位業務和整體業務的領先啟動和銷售的健康成長，我們確實看到了那裡的提升。這肯定比平坦的要好。雖然表現不出色，但年比有所改善。因此，我們相信我們將繼續受益於多元化的方法，我們不會過度依賴所有數位空間。這是我們有機成長公式的關鍵部分。

Yes. It's interesting, Jerry, just adding on to that. When we look at the business in the fourth quarter as well as throughout the year, what really proves the point that we're continuing to see good cross-sell, and we always talk about additional ways we access the customer. And one area is the cross-sell and the termite and ancillary business is really representative of that. We continue to see really robust level of demand on the ancillary side of our business, which is driven a lot by that cross-sell activity that the team continues to execute upon.

是的。傑瑞，這很有趣，只是補充一下。當我們審視第四季度以及全年的業務時，真正證明了我們繼續看到良好的交叉銷售，並且我們總是談論我們接觸客戶的其他方式。其中一個領域是交叉銷售，白蟻和輔助業務確實是其中的代表。我們繼續看到我們業務輔助方面的需求非常強勁，這在很大程度上是由團隊繼續執行的交叉銷售活動所推動的。

Got it. When my kids turn 16, I might try to hit you up for one of those driver monitoring systems.

知道了。當我的孩子滿 16 歲時，我可能會嘗試向您尋求駕駛監控系統。

It's a good idea. You should probably get on it yourself, too.

是個好主意。你或許也應該自己去做。

Our next question is from Jason Haas with Bank of America.

我們的下一個問題來自美國銀行的 Jason Haas。

I'm curious if you could remind us what level of price increase you had put in last year. And I know it's early in the year, but I'm curious if you're seeing any more sensitivity from customers to the price increase you're putting in this year versus last?

我很好奇您能否提醒我們去年的價格上漲幅度是多少。我知道現在是今年年初，但我很好奇您是否發現客戶對今年的漲價比去年更加敏感？

So as we had talked about previously, Jason, we had passed along a 3% to 4% price increase in the prior year. We followed that on again this year with a similar price increase here in the first quarter, ahead of our heavier pest market season, which starts here later in the first quarter. So we're pretty -- in terms of what we're seeing on the customer side, we monitor that. We assess that, we look at churn, we look at cancellations, we look at rollbacks. We look at a number of different metrics. And we feel like the level that we're passing along is at a very healthy level and is representative of the value of our services.

Jason，正如我們之前談到的，去年我們將價格上漲了 3% 到 4%。今年我們再次遵循這一點，在第一季稍後開始的害蟲市場旺季之前，第一季價格出現了類似的上漲。所以我們很漂亮——就我們在客戶方面看到的情況而言，我們進行監控。我們對此進行評估，我們關注客戶流失，我們關注取消，我們關注回滾。我們研究了許多不同的指標。我們覺得我們正在傳遞的水平處於非常健康的水平，並且代表了我們服務的價值。

Got it. That's great to hear. And then as a follow-up question, I'm curious if you could just talk about competitive dynamics in the industry. I'm curious how your growth rates in 4Q compared to the industry? If you feel like you're still gaining share? And just if you see any opportunities for further share gains in the year ahead?

知道了。聽到這個消息我很高興。作為一個後續問題，我很好奇你是否可以談談該行業的競爭動態。我很好奇你們第四季的成長率與產業相比如何？如果您覺得自己仍在獲得份額？如果您認為未來一年有進一步提升股價的機會嗎？

I mean we continue to have a highly fragmented market in this industry. It remains very competitive. I wouldn't necessarily characterize any significant shifts or changes in that -- in that competitiveness, it's always been that way. And while there are some ebbs and flows in here and there, we just keep doing what we do, focusing on our business and trying to win at what we do. So...

我的意思是，我們這個行業的市場仍然高度分散。它仍然非常有競爭力。我不一定會描述這方面的任何重大轉變或變化——在競爭力方面，它一直都是這樣。雖然有時會出現一些起伏，但我們只是繼續做我們所做的事情，專注於我們的業務，並努力在我們所做的事情上獲勝。所以...

When we look at our growth, Jason, in the quarter -- the organic growth, which was north of 7%, and we think about how that fares relative to how we've discussed the business and also how we've performed, we're pretty happy with the level of growth that we're seeing come through the business. And we also continue to have a high degree of optimism and we're encouraged about the future growth that we continue to see in this business. So we really look at how we're performing relative to our expectations, and we continue to perform at a level that we're pretty pleased with.

傑森，當我們審視本季的成長時——有機成長超過 7%，我們會考慮相對於我們討論業務的方式以及我們的表現，我們的表現如何，我們對業務的成長水平感到非常滿意。我們也繼續保持高度樂觀，並對我們在該業務中繼續看到的未來​​成長感到鼓舞。因此，我們確實關注了我們的表現相對於我們的期望的情況，並且我們繼續以我們非常滿意的水平表現。

Our next question is from George Tong with Goldman Sachs.

我們的下一個問題來自高盛的 George Tong。

Following up on the residential business, can you talk about what recurring revenue growth trends were? How did it perform relative to your earlier quarters? And what you see as the key drivers of growth acceleration going forward?

跟進住宅業務，您能談談經常性收入成長趨勢嗎？與前幾季相比，它的表現如何？您認為未來成長加速的關鍵驅動因素是什麼？

Certainly, George. When we look at the growth rates and we look at the recurring revenue growth relative to prior quarters, the business continues to perform pretty well. It continues to hold in there. I mean Q4 always sees a step down and just generally the growth year-over-year. But it's above what we saw a year ago, and it continues to be at a healthy level. So there's nothing that's indicating that there's a significant decel in the growth rates or a different -- or a change in growth profile and the growth rates that we're seeing coming through our business.

當然，喬治。當我們查看成長率以及相對於前幾季的經常性收入成長時，我們的業務繼續表現良好。它繼續保持在那裡。我的意思是，第四季總是會出現下降，但總體上會出現年增長。但它高於我們一年前看到的水平，並且仍然處於健康水平。因此，沒有任何跡象表明成長率顯著下降或不同，或我們在業務中看到的成長狀況和成長率發生變化。

Got it. And you talked about earlier, making good progress with bundling, cross-selling in door-to-door sales. Can you talk a little bit about your priorities for 2024 with respect to these areas and how you expect that to drive volume performance?

知道了。您之前談到，在上門銷售中捆綁、交叉銷售方面取得了良好進展。您能否談談您 2024 年在這些領域的優先事項以及您期望這將如何推動銷售表現？

Certainly, when you step back and you look at the business, George, we look at it across a number of different priorities. We -- and when we think about our expectations going forward, we talked earlier about our pricing. We're focused certainly on getting the value of our services through strategic pricing management. And we again raised prices and we'll continue to raise prices and manage our rate cards effectively. So that's one side of the equation. And so that rate -- that growth rate associated with pricing is at this point expected to be in line with what we saw a year ago at 3% to 4%.

當然，喬治，當你退後一步審視業務時，我們會從許多不同的優先事項中看待它。當我們考慮未來的期望時，我們早些時候討論了我們的定價。我們當然專注於透過策略定價管理來實現我們服務的價值。我們再次提高了價格，並將繼續提高價格並有效管理我們的價目表。這是等式的一方面。因此，目前與定價相關的成長率預計將與我們一年前看到的 3% 至 4% 一致。

And then secondly, when we look at growth profile across the business, we remain encouraged by our position in our market. We continue to have confidence on our ability to deliver a healthy level of growth going forward that's in line with what we've seen here over the last couple of years. We've all enjoyed the benefit and you've seen the benefit of our growth rate accelerating post-COVID. We continue to operate at a pretty healthy level of growth in our business from an organic perspective. And then, of course, we saw a really robust uptick in growth associated with M&A in the last year.

其次，當我們審視整個業務的成長狀況時，我們仍然對我們在市場中的地位感到鼓舞。我們仍然對未來實現健康成長的能力充滿信心，這與我們過去幾年所看到的情況一致。我們都享受了這個好處，您也看到了疫情過後我們的成長率加快所帶來的好處。從有機角度來看，我們的業務繼續以相當健康的成長水準運作。當然，去年我們看到與併購相關的成長確實強勁。

When we look at the initiatives across the business, the cross-sell is certainly really important, going after those customers that may have 1 service but trying to add additional services like mosquito and ticks and other services like that. Continuing to focusing on the termite and ancillary business is very important.

當我們審視整個企業的舉措時，交叉銷售當然非常重要，針對那些可能擁有一項服務但試圖添加額外服務（如蚊子和蜱蟲以及其他類似服務）的客戶。繼續專注於白蟻及其輔助業務非常重要。

And then last but certainly not least, is the commercial side. Jerry spoke about the commercial business in detail, we talked about it in the third quarter as well. We continue to place this portion of focus on the commercial business and driving growth there. So all of those initiatives are coming together to give us optimism as we think about our growth rates going forward.

最後但同樣重要的是商業方面。 Jerry詳細講了商業業務，我們第三季也講過。我們繼續將這部分重點放在商業業務上並推動那裡的成長。因此，當我們考慮未來的成長率時，所有這些舉措都讓我們感到樂觀。

George, I'll add -- this is Jerry. When we think about one of the ways I just love our business model is the diversity that we get from our brand strategy. Each of our brands has various different ways to acquire customers, whether it be, say, Northwest and HomeTeam that rely heavily on the homebuilding market or Fox doing door-to-door. And now, for example, we have HomeTeam doing door-to-door and expanding that offering in their business by things they learn from the Fox team. These are all things that we can deploy across and due to the diversity of our brands and what each one brings to the table that we think continues to help us with this solid growth profile for the future.

喬治，我補充一下──這是傑瑞。當我們想到我喜歡我們的商業模式的原因之一就是我們從品牌策略中獲得的多樣性。我們的每個品牌都有各種不同的方式來獲取客戶，無論是嚴重依賴住宅建築市場的 Northwest 和 HomeTeam，還是進行上門服務的 Fox。例如，現在，我們讓 HomeTeam 進行挨家挨戶的服務，並透過從 Fox 團隊學到的東西來擴展他們的業務。這些都是我們可以部署的東西，因為我們品牌的多樣性以及每個品牌帶來的東西，我們認為將繼續幫助我們實現未來的穩健成長。

Our next question is from Michael Hoffman with Stifel.

我們的下一個問題來自 Michael Hoffman 和 Stifel。

So the challenge is to how creative can I be to ask 4 questions in 2. So things that would help the model, Ken, are specifics that I think you can share like the 3% to 4% in 1Q pricing, what is the dollar amount of the M&A rollover from '23, so everybody just gets that right? And how do you think about the cadence of it in the calendar year, so we just don't get that wrong.

因此，挑戰在於我如何有創意地在2 中提出4 個問題。所以，對模型有幫助的事情，Ken，是我認為你可以分享的具體細節，比如第一季定價中的3% 到4% ，美元是多少23 年以來的併購展期金額，所以大家都懂了嗎？您如何看待日曆年中的節奏，所以我們不會弄錯。

Certainly. When we look at M&A, we continue to be focused on M&A. We continue to focus on executing that disciplined strategy. We see roughly 2% carryover coming into 2024 from M&A. A large part of that, of course, is here in the first quarter with Fox, we acquired Fox last April. So we still have 1 quarter of benefit. When we look at the pipeline, we see a healthy pipeline. We were very active to close out the year and then also to start 2024. January activity in deals that we closed, are up. So we continue to chart towards that 2% plus level of growth -- 2% to 3% plus level of growth associated with M&A as we go forward. But the carryover is around 2%.

當然。當我們審視併購時，我們繼續關注併購。我們將繼續專注於執行這項嚴格的策略。我們預計 2024 年會有約 2% 的結轉來自併購。當然，其中很大一部分是在福斯的第一季度，我們去年四月收購了福斯。所以我們還有 1 個季度的收益。當我們查看管道時，我們會看到一條健康的管道。我們非常積極地結束了這一年，然後也開始了 2024 年。我們完成的 1 月份交易活動有所增加。因此，隨著我們的前進，我們將繼續朝著 2% 以上的成長水準繪製圖表——與併購相關的 2% 至 3% 以上的成長水準。但結轉率約2%。

Okay. And then you shared with us that incremental margins on an adjusted basis were 28%, 29% -- well, both on unadjusted and adjusted, 28%, 29%. What is the target for this year? And how does nonoperating gains influence that? And maybe can you isolate what those gains were in '22 and '23, so we can understand how to think about them in '24. There's my creative question with 4...

好的。然後您與我們分享，調整後的增量利潤率為 28%、29%——嗯，無論是未經調整還是調整後，均為 28%、29%。今年的目標是什麼？營業外收益對此有何影響？也許你可以將這些收益在 22 和 23 中分離出來，這樣我們就可以理解如何在 24 中思考它們。我的創意問題是 4...

Certainly. When we look at the incremental margin profile, there's no reason -- I mean, we continue to see and have a confidence level in delivering 30% incremental margins. If you look at the incremental margin the last several years, we've seen it step up. Our focus has been -- we've been laser-focused on incremental margins and driving improvements on the margin profile. And so when we think about that level, that's the range at 30%. We've seen quarters as high as 35% to 40%. So it will jump around from quarter-to-quarter. And you're going to see that. But generally, when we step back and we finish a year at 28% to 30%, we're pretty pleased. That means we're getting 70 basis points as we did of improvement in EBITDA margins.

當然。當我們查看增量利潤概況時，沒有理由——我的意思是，我們繼續看到並有信心實現 30% 的增量利潤。如果你看看過去幾年的增量利潤，我們會看到它在上升。我們的重點是——我們一直專注於增量利潤並推動利潤狀況的改善。所以當我們考慮這個水平時，範圍是 30%。我們看到幾季高達 35% 到 40%。因此，它會逐季度跳躍。你將會看到這一點。但總的來說，當我們退一步並​​以 28% 到 30% 完成一年時，我們感到非常高興。這意味著我們的 EBITDA 利潤率提高了 70 個基點。

The gains on asset sales will come through. They came through in Q3 -- or I'm sorry, Q4 here. And we saw roughly $3 million lower asset sales that came through other income, it was about 40 basis points on the margin line and the EBITDA margin line. And that will come through from time to time. And we'll try to isolate that as we go forward for you.

資產出售的收益將會實現。他們在第三季晉級——或者對不起，是第四季。我們發現其他收入帶來的資產銷售減少了約 300 萬美元，利潤率和 EBITDA 利潤率下降了約 40 個基點。這會時不時地發生。當我們為您前進時，我們將盡力隔離該問題。

Our next question is from Ashish Sabadra with RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場的阿什什·薩巴德拉 (Ashish Sabadra)。

Maybe if I can ask a clarifying question on resi. Obviously, good to hear the recurring revenues within resi continue to do really well and the digital inquiries are also pretty stable. Just a question there is, have you seen any change, particularly from competitor pushing harder on the marketing spend, is that changing anything? Did that change anything in the fourth quarter?

也許我可以問一個關於 resi 的澄清問題。顯然，很高興聽到 Resi 的經常性收入持續表現良好，而且數位查詢也相當穩定。只是一個問題，您是否看到任何變化，特別是競爭對手加大行銷支出，這會改變什麼嗎？這對第四季有什麼改變嗎？

But maybe importantly, going into 2024, how should we think about the demand environment? You talked about a pretty solid demand environment. I was wondering if you could provide any color on cicadas and the 2 groups of cicadas coming -- or emerging in '24, what do -- would that mean for the demand environment?

但也許重要的是，進入 2024 年，我們該如何考慮需求環境？您談到了相當穩固的需求環境。我想知道您是否可以提供有關蟬的任何顏色以及即將到來的 2 組蟬的顏色 - 或在 24 年出現的蟬，這對需求環境意味著什麼？

Ashish, I'll -- this is Jerry. I'll kind of try to take the first part of that statement. I asked our marketing team what was going on in the fourth quarter from a digital spend standpoint. It was a time when we'd like to invest a little earlier in the year in some of the marketing. And it did appear anecdotally that there was a pretty significant uptick in competitive spend in the fourth quarter at a time when we were backing winding down some of our marketing spend that there was some pretty significant investment in the market there in the fourth quarter. So we certainly saw the competitive environment pick up in that regard where there was more spend into there. Now how that equated to sales and starts to new customers or onetime work on the residential side, we don't really know. But -- so that's on your first question, that's...

阿希什，我－－這是傑瑞。我會嘗試理解該聲明的第一部分。我詢問我們的行銷團隊從數位支出的角度來看第四季度發生了什麼。那是我們希望在今年早些時候投資一些行銷的時候。確實有傳聞稱，當我們支持削減一些行銷支出時，第四季度的競爭性支出出現了相當顯著的上升，第四季度市場上有一些相當大的投資。因此，我們當然看到這方面的競爭環境加劇，那裡的支出增加。現在，這如何等同於銷售並開始新客戶或在住宅方面的一次性工作，我們真的不知道。但是──這是你的第一個問題，那就是…

Yes. And the second part of your question, I think, was around cicadas and new pests. And we continue to monitor new pest activity. Cicadas are one of the many pests that we continue to monitor. Jerry, I don't know if you want to add. I'm certainly not the expert when it comes to cicadas. You're probably much better positioned to answer that.

是的。我認為你問題的第二部分是關於蟬和新害蟲的。我們將繼續監測新的害蟲活動。蟬是我們持續監測的眾多害蟲之一。傑瑞，我不知道你是否要補充。我當然不是蟬方面的專家。你可能更適合回答這個問題。

Yes. Well, cicadas typically are not a household pest control problem. They are a nuisance because when they come out in the volumes as they did a couple of years ago, they wreaked havoc. From a noise standpoint, I know -- I have a house in the mountains that you couldn't sleep at night, and it was very annoying. But they tend to just go away over time, but it probably will create some awareness about pests in general and things that bother humans but it's not as though our pest control companies are going to be out there attempting to eradicate cicadas. So that's seemingly an impossible feat. We're really just out there waiting for them to die off and go away and start the whole process over again. So it will probably create some buzz in the marketplace, and that's always good for business.

是的。嗯，蟬通常不是家庭害蟲防治問題。它們很令人討厭，因為當它們像幾年前那樣成捲出版時，造成了嚴重破壞。從噪音的角度來看，我知道──我在山上有一棟房子，晚上睡不著，非常煩人。但隨著時間的推移，它們往往會消失，但這可能會提高人們對一般害蟲和困擾人類的事物的認識，但這並不是說我們的害蟲防治公司會試圖消滅蟬。所以這看起來是個不可能的壯舉。我們真的只是在那裡等待它們死去並消失並重新開始整個過程。因此，它可能會在市場上引起一些轟動，這對商業來說總是有好處的。

That's very helpful color. And maybe if I can ask a question on the back-office modernization. Ken, if you can just help us understand where you are on that process? And how should we think about that contribution to incremental EBITDA margins in '24, but also midterm.

這是非常有用的顏色。也許我可以問一個有關後台現代化的問題。 Ken，您能否協助我們了解您目前的進展？我們應該如何看待 24 年以及中期 EBITDA 利潤率增量的貢獻。

Yes. We continue to be very early on in our journey with respect to modernization, making good progress. We've added a number of new team members across our back office, we've made some significant changes. But we're pretty excited about what's to come. With that said, when we look at the SG&A performance over time, we've continued to see that improve. Going back a couple of years, it was almost 31%. It's come down under 29% here in the quarter. So we continue to leverage that and despite having investments in growth initiatives associated with the commercial business as well as other parts of our business. And so we're early on in the journey. We feel like there's some opportunities as we go forward to continue to improve the business.

是的。我們在現代化進程中仍然處於早期階段，並且取得了良好進展。我們在後台增加了一些新的團隊成員，並做出了一些重大改變。但我們對即將發生的事情感到非常興奮。話雖如此，當我們觀察一段時間內的銷售、一般行政費用（SG&A）表現時，我們不斷看到這種情況的改善。回想幾年前，這一比例幾乎是 31%。本季下降至 29% 以下。因此，儘管我們對與商業業務以及我們業務的其他部分相關的成長計劃進行了投資，但我們仍繼續利用這一點。所以我們還處於旅程的早期階段。我們覺得在我們繼續改進業務的過程中存在一些機會。

Our next question is from Josh Chan with UBS.

我們的下一個問題來自瑞銀集團的 Josh Chan。

Maybe bridging from the prior question on SG&A. I guess, you've done a really good job improving gross margin over the last several years. I guess from an SG&A perspective, is there an expectation that the leverage there can increase a little bit over time as some of your initiatives get more traction?

也許是為了彌補之前關於 SG&A 的問題。我想，過去幾年你們在提高毛利率方面做得非常好。我想從SG&A的角度來看，隨著時間的推移，隨著你們的一些舉措獲得更多關注，那裡的槓桿作用是否會增加？

Yes. I think there's an opportunity to improve upon the SG&A performance. And we've said that for some time, and we continue to see improvement in SG&A. With that said, we do have a disproportionate investment in securing customers through advertising and door-to-door and other activities. But with that said, our focus is to continue to improve upon the administrative side of the back office and without sacrificing the investments for growth. And so we're hopeful to see improvement as we go forward, just like we've seen in the last couple of years here -- in the last year or so, we continue to see improvement despite the investments we're making. But we feel like we're well positioned on that front.

是的。我認為有機會改善 SG&A 績效。我們已經這麼說了有一段時間了，而且我們繼續看到銷售、管理和管理方面的改善。話雖如此，我們確實在透過廣告、上門推銷和其他活動來確保客戶方面投入了不成比例的投資。但話雖如此，我們的重點是繼續改進後台的管理方面，而不犧牲成長投資。因此，我們希望在前進的過程中看到進步，就像我們在過去幾年中看到的那樣——在過去一年左右的時間裡，儘管我們正在進行投資，但我們仍繼續看到進步。但我們覺得我們在這方面處於有利地位。

Okay. That makes a lot of sense. And on the residential side, you mentioned that the onetime service slowed down a little in Q4 and maybe a little slower in Q1 as well. Is there anything to interpret from that from perhaps a macro perspective or any other reasons that would drive that to be a little slower for the upcoming quarter as well?

好的。這很有意義。在住宅方面，您提到一次性服務在第四季度放緩了一點，第一季可能也慢了一點。從宏觀角度或任何其他原因來看，是否有什麼可以解釋的，這會導致下一個季度的成長速度稍微慢一些？

Yes. Really, what we saw was a slowdown in some of the residential bed bug, onetime work and also on the wildlife side, which often involves some rat type of -- rat and rodent type of work, a slowdown there. Those are the main drivers of that, whether that's seasonal, whether it's something that's change in the weather or change in demand. We're not completely certain of any of that. But bed bugs, for example, being down has always been something that has fluctuated from quarter-to-quarter and year-to-year on some of the ups and downs. And it was just more significantly down for us in recent months.

是的。事實上，我們看到的是一些住宅臭蟲、一次性工作以及野生動物方面的放緩，這通常涉及一些老鼠類型的工作——老鼠和囓齒動物類型的工作，那裡的放緩。這些是主要的驅動因素，無論是季節性的，無論是天氣變化還是需求變化。我們對此並不完全確定。但以臭蟲為例，它的數量一直是隨著季度和年度的起伏而波動的。近幾個月來，我們的下降幅度更大。

When we look at that question, Josh, because we've looked at that as well because we deal with consumers, homeowners. And when we look at the business and we assess more of a macro level, we look across our business. We look not only in the residential pest control that Jerry just spoke about, well we also look at the termite and ancillary. And that ancillary business is normally some high-ticket items. And if that continues to grow the pace it's growing, it's indicative that the consumer is pretty healthy.

喬什，當我們考慮這個問題時，因為我們也考慮過這個問題，因為我們與消費者、房主打交道。當我們審視業務並從宏觀層面進行評估時，我們會審視整個業務。我們不僅關注傑瑞剛才談到的住宅害蟲防治，我們也關注白蟻和輔助設施。而輔助業務通常是一些高價項目。如果這種成長速度持續加快，則表示消費者相當健康。

With that said, we were proactive in the end of last year at tightening credit down in a number of different areas just to ensure that we don't run into any issues from a credit perspective. And so in our acceptance score, we raised the minimum level per credit, just trying to be proactive in today's market. But from a demand perspective, we're certainly not seeing any major deterioration in growth profile with our customers.

話雖如此，我們在去年年底在許多不同領域積極收緊信貸，只是為了確保我們不會從信貸角度遇到任何問題。因此，在我們的接受分數中，我們提高了每個學分的最低水平，只是為了在當今的市場中保持積極主動。但從需求角度來看，我們肯定不會看到客戶的成長狀況有任何重大惡化。

Our next question is from Toni Kaplan with Morgan Stanley.

我們的下一個問題來自摩根士丹利的東尼卡普蘭。

I was hoping you could give us an update on labor, namely your salespeople. Are you seeing higher employee retention right now versus normal? And I know you mentioned deploying some sales tools and wondering if you could talk about other initiatives as well.

我希望您能為我們提供有關勞動力（即您的銷售人員）的最新資訊。您現在是否發現員工留任率比正常情況下更高？我知道您提到部署一些銷售工具，並想知道您是否也可以談談其他舉措。

Yes. So the labor side of it is we have been very good at hiring, onboard and training our sales teams, especially on the -- well, really on the commercial and residential side, we're talking specifically a little bit more about the commercial side. But one of the things that you learn with -- on the commercial side, where you typically have a longer sales cycle, it takes longer from the time -- so you have a lead or create a creative lead to get a deal closed, you really have to get those salespeople productive in selling and finding success early on. And that's what helps you with keeping people in the long term. The more they're successful, the more they're winning, the longer they stay and the more money they earn, they go to our President's Club events, those types of things.

是的。因此，在勞動力方面，我們一直非常擅長招募、入職和培訓我們的銷售團隊，特別是在商業和住宅方面，我們具體談論了更多關於商業方面的內容。但你學到的一件事——在商業方面，你通常有更長的銷售週期，需要更長的時間——所以你有一個潛在客戶或創造一個有創意的潛在客戶來完成交易，你確實必須讓這些銷售人員儘早提高銷售效率並取得成功。從長遠來看，這可以幫助您留住人才。他們越成功，贏的錢就越多，停留的時間越長，賺的錢就越多，他們會參加我們的總統俱樂部活動，諸如此類的活動。

And I'm really proud of our -- of the sales team that we've built both on the commercial and residential side. It's a team of very high-performing people that we've enabled that through how we hire and how we train, how we invest in them, how we give them those tools to be successful. And that's ultimately what drives retention. That's what makes them want to stay. So we have a lot of momentum in that space that I -- that I just feel really good about as we head into 2024.

我真的為我們在商業和住宅方面建立的銷售團隊感到自豪。這是一支由表現非常出色的人員組成的團隊，我們透過如何招募、如何培訓、如何投資他們以及如何為他們提供成功的工具來實現這一目標。這才是最終推動保留的因素。這就是他們想留下來的原因。因此，當我們進入 2024 年時，我們在這個領域擁有很大的動力，我對此感覺非常好。

Terrific. I wanted to ask a big picture around footprint. Are you happy with the current coverage and portfolio of geographies that you're in? Or are there other geographies that you'd like to gain further density in?

了不起。我想了解一下關於足跡的大局。您對目前所在地區的覆蓋範圍和組合感到滿意嗎？或者您希望在其他地區獲得更高的密度？

I would say we are pretty happy. We have very broad geographic coverage under the Orkin brand in North America. And when you look in the U.S., mainly the area that we don't have the second bite at the apple brand strategy is fully built, is really probably in the Midwest where we have some opportunity where we would like to continue to add and invest in M&A.

我想說我們很幸福。我們的 Orkin 品牌在北美擁有非常廣泛的地理覆蓋範圍。當你看看美國時，主要是我們在蘋果品牌策略上還沒有完全建立的地區，很可能是在中西部，我們有一些機會，我們希望繼續增加和投資在併購中。

And then when you think about international, we're very happy with our Australian operations growing and healthy, and we're going to continue to build out Australia, the United Kingdom and Singapore where we currently operate, but we really haven't put a lot of effort or energy behind expanding outside of those areas. We like where we are, and we're going to continue to build and focus on those countries where we've expanded internationally.

然後，當你想到國際業務時，我們對澳洲業務的成長和健康感到非常滿意，我們將繼續在我們目前經營的澳洲、英國和新加坡開展業務，但我們確實還沒有在這些領域之外擴張需要付出大量的努力或精力。我們喜歡我們現在的處境，我們將繼續發展並專注於那些我們已經進行國際擴張的國家。

(Operator Instructions) Our next question is from Stephanie Moore with Jefferies.

（操作員說明）我們的下一個問題來自 Jefferies 的 Stephanie Moore。

I was hoping you could touch a little bit on maybe what you're seeing on the unit cost inflation side, some key areas. You talked a little bit about labor, but maybe just across the board, labor, materials, equipment, the likes and kind of expectations for 2024 versus what you saw and experienced in 2023.

我希望您能談談您在單位成本通膨方面所看到的一些關鍵領域。您談到了一些關於勞動力的問題，但也許只是全面討論，勞動力、材料、設備、對 2024 年的喜好和期望與您在 2023 年所看到和經歷的情況相比。

When we look across the cost structure, we look at our people costs, we look at our material supplies, we look at our fleet. Those are the 3 major drivers of cost in addition to insurance and claims, which sometimes can be less controllable -- not completely controllable as much as some of the other areas. But we're pretty pleased with the leverage we saw on the organic side of our business across those 3 cost categories.

當我們審視成本結構時，我們會關注我們的人員成本，我們會關注我們的材料供應，我們會關注我們的機隊。除了保險和索賠之外，這些是成本的三個主要驅動因素，有時這些因素的可控性較差——不像其他一些領域那樣完全可控。但我們對在這 3 個成本類別的業務有機方面所看到的槓桿作用感到非常滿意。

We continue to benefit from lower gas prices -- slightly lower gas prices, lower oil prices. That's definitely beneficial on the fleet side of our business. The interest rate environment certainly is less favorable from a leasing perspective. But we continue to focus on pricing the value of our services so that our gross margins will continue to improve and step higher. We were pleased with the 50 basis points we saw this past year on the gross margin side of our -- organic side of gross margin, and we're continuing to focus on leveraging our cost structure in a similar fashion going forward.

我們繼續受益於較低的天然氣價格——天然氣價格略有下降，油價較低。這對我們業務的機隊方面絕對有利。從租賃的角度來看，利率環境肯定不太有利。但我們繼續專注於為我們的服務價值定價，以便我們的毛利率將繼續改善並更高。我們對去年毛利率有機部分的毛利率提高了 50 個基點感到滿意，我們將繼續專注於以類似的方式利用我們的成本結構。

And Stephanie, I would add, we do have some concerns about truck prices rising. Some of these fleet vehicles -- or our costs are going up. As Ken mentioned, there's always the wild card as fuel prices and fluctuations we have there. On the M&S side, we just completed an RFP on our insecticides and termiticides, trying to ensure our pricing is in line on that and trying to generate some savings or at least offset the -- as much as we can, some of the price increases that are being passed along to us from some of our suppliers. So those are all things that are top of mind for us that we'll keep focused on through the year.

我想補充一點，史蒂芬妮，我們確實對卡車價格上漲感到擔憂。其中一些車隊車輛——或者我們的成本正在上升。正如肯所提到的，燃料價格和波動始終存在不確定性。在瑪莎百貨方面，我們剛剛完成了殺蟲劑和殺白蟻劑的徵求建議書，試圖確保我們的定價與此一致，並試圖節省一些費用，或者至少抵消——盡可能多的部分價格上漲這些訊息是從我們的一些供應商傳遞給我們的。因此，這些都是我們最關心的事情，我們將在這一年中繼續關注。

Great. No, that's helpful. And then, I mean, I guess just as a follow-up, I'm just trying to piece together the idea of similar price increases in 2024 versus 2023 but it sounds like the (inaudible) inflation is supposedly coming down here in 2024. So I guess what you're saying is it's probably still a little too early to tell if the inflationary side will have that material -- will step down in 2024. Is that kind of the right way to interpret that?

偉大的。不，這很有幫助。然後，我的意思是，我想作為後續行動，我只是試圖拼湊出 2024 年與 2023 年類似價格上漲的想法，但聽起來（聽不清楚）通貨膨脹應該會在 2024 年下降。所以我想你的意思是，現在判斷通貨膨脹方面是否會擁有這種材料——是否會在2024 年退出可能還為時過早。這是解釋這一點的正確方式嗎？

That's -- yes, that's what I'm hitting at is there's still -- there's some unknowns, there may be still some costs that we don't know. And you look at the inflation data that demonstrated that it's not necessarily slowing as fast as we all would probably like it to. So we're still -- we're cautiously optimistic there.

那是——是的，這就是我要說的——仍然存在一些未知因素，可能仍然存在一些我們不知道的成本。你看一下通膨數據，發現通膨放緩的速度並不一定像我們大家希望的那麼快。所以我們仍然對此持謹慎樂觀態度。

Great. And then just lastly, on M&A and kind of M&A activity, any changes in terms of pipeline or willingness of sellers that you've seen as of late?

偉大的。最後，關於併購和併購活動的類型，您最近看到的管道或賣家意願方面有什麼變化嗎？

I don't think there's any significant change. There's still good deal flow out there. We -- there's good businesses that are out there for sale. And while -- from a quarter-to-quarter basis, there's some ebbs and flows to that kind of volume that we get to see or look at. But there's still plenty of good business out there that are potentially worth acquiring. So we've gotten off to a good start already in January. We feel good about our pipeline. We're actually a little ahead of where we were last year in that regard. But last year, keep in mind, in January, February, we announced the Fox deal in April, we were heads down working on the Fox deal. So we put a lot of stuff aside to focus on that. So now we're back to kind of business as usual and looking at normal deal flow.

我認為沒有任何重大變化。那裡仍然有大量交易。我們—有一些好的企業正在出售。雖然從季度到季度來看，我們看到或看到的交易量存在一些起伏。但仍有許多值得收購的優質業務。因此，我們在一月就已經有了一個好的開始。我們對我們的管道感覺良好。在這方面，我們實際上比去年領先了一些。但請記住，去年一月、二月，我們在四月宣布了與福克斯的交易，我們正在埋頭致力於福克斯的交易。所以我們擱置了很多東西來專注於此。所以現在我們回到了正常的業務並專注於正常的交易流程。

Our next question is from John Mazzoni with Wells Fargo.

我們的下一個問題來自富國銀行的約翰‧馬佐尼 (John Mazzoni)。

Quickly -- yes. So maybe quickly, just to touch on the price cost spread. Looking at the kind of improvements in the driver safety score in that KPI, could you just help us understand how that can flow through to kind of lower insurance-related costs going forward? And what's the typical timing or delay? I mean, this is probably not going to be a kind of near-term item, but could we expect it in the back half of the year? Or would it be something that has a longer variable lag?

快點——是的。也許很快，我們就來談談價格成本價差。看看該 KPI 中駕駛員安全評分的改進情況，您能否幫助我們了解這將如何降低未來與保險相關的成本？典型的時間或延遲是多少？我的意思是，這可能不會是短期項目，但我們可以期待在今年下半年嗎？或者它會具有更長的變數滯後嗎？

It's a hard thing to predict, John, when you look at that trend line because it does take quite a while to work its way through. The last 12 months or so year-over-year, insurance and claims costs were negative for us despite not having large payouts, large claims that we settled like we did a year or so ago. But with that said, we're hopeful that it will improve.

約翰，當你觀察這條趨勢線時，這是一件很難預測的事情，因為它確實需要相當長的時間才能穿過。與去年同期相比，在過去 12 個月左右的時間裡，保險和索賠成本對我們來說是負數，儘管我們沒有像大約一年前那樣獲得大額賠付和大額索賠解決。但話雖如此，我們希望它會有所改善。

When we look at safety, it's not just about the financials either, it's about our people. And so when we think about our people-first culture, we want people to be safe. We want them to return home each and every night and that's really the focus here. It's how do we make sure our drivers are safe and the communities that they continue to work in remain very safe, and they can get home each and every day. So we're focused on the people side. By doing the right thing, ultimately, the financials will improve. And that's the focus here. As we think about the future in the next several years, that we'll continue to see improvements on safety. People will be safe, and we'll see the benefits of that coming through our financial statement.

當我們考慮安全時，它不僅涉及財務，還涉及我們的員工。因此，當我們思考以人為本的文化時，我們希望人們安全。我們希望他們每晚都能回家，這才是真正的焦點。這就是我們如何確保我們的司機安全以及他們繼續工作的社區保持非常安全，並且他們每天都可以回家。所以我們關注的是人的一面。透過做正確的事情，最終財務狀況將會改善。這就是這裡的重點。當我們思考未來幾年的未來時，我們將繼續看到安全的改善。人們將是安全的，我們將透過我們的財務報表看到由此帶來的好處。

Great color. And then maybe just the last one is around kind of a preview of the Investor Day. Anything that we could kind of look forward to, maybe around technology or capital allocation? Or should we just stay tuned?

顏色很棒。也許最後一個是關於投資者日的預覽。我們可以期待什麼，也許是技術或資本配置的事？或者我們應該繼續關注？

Yes. I would say, stay tuned, but we're really excited to get back to New York and to spend time with our investment community, talking about our growth prospects, our strategic priorities for the future, talking about how we will continue to expect the investments and growth initiatives. We're just really excited to spend the day talking about the future of this great company.

是的。我想說，請繼續關注，但我們真的很高興回到紐約，與我們的投資界共度時光，談論我們的成長前景、我們未來的戰略重點，談論我們將如何繼續期望投資和成長舉措。我們非常高興能花一天時間討論這家偉大公司的未來。

Thank you. This concludes the Q&A portion of the call. I will now hand the call back to management for any closing comments.

謝謝。電話問答部分到此結束。我現在將把電話轉回管理層以徵求結案意見。

Thank you, everyone, for joining us today. We appreciate your interest in our company, and we look forward to speaking with you on first quarter earnings call in a few months. Thank you.

謝謝大家今天加入我們。我們感謝您對我們公司的興趣，我們期待在幾個月後的第一季財報電話會議上與您交談。謝謝。

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

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。