Rollins Inc (ROL) 2026 Q2 法說會逐字稿

Greetings, and welcome to Rollins, Inc second quarter 2026 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

各位好，歡迎參加 Rollins, Inc 2026 年第二季財報電話會議。（接線員指示）提醒您，本次會議將被錄音。

It is now my pleasure to introduce your host, Lyndsey Burton, Vice President of Investor Relations. Thank you. Please go ahead.

現在我很榮幸介紹本次會議主持人：投資人關係副總裁 Lyndsey Burton。謝謝。請開始。

Thank you, Donna, 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.

謝謝你，Donna，大家早安。除了我們昨天發布的財報新聞稿之外，公司也準備了一份配套的簡報投影片。財報新聞稿與簡報可於我們網站 www.rollins.com 取得。

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 discusses the business outlook and contains certain forward-looking statements.

今天早上的討論中，我們納入了若干非 GAAP 財務衡量指標。非 GAAP 的調節表可在今日簡報的附錄以及我們的財報新聞稿中查閱。公司的財報新聞稿討論了業務展望，並包含若干前瞻性陳述。

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, 2025.

這些特定的前瞻性陳述以及本次電話會議中所作的所有其他陳述（不含歷史事實）均受多項風險與不確定性影響，實際結果可能與我們今天所作的任何陳述存在重大差異。請參閱昨日的新聞稿以及公司向 SEC 提交的文件，包括截至 2025 年 12 月 31 日止年度 Form 10-K 中的「風險因素」章節。

On the line with me today speaking are Jerry Gahlhoff, 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?

今天與我同線並將發言的有：總裁兼執行長 Jerry Gahlhoff，以及執行副總裁兼財務長 Will Harkins。管理團隊將先做開場致詞，之後我們將開放提問。Jerry，您要先開始嗎？

Thank you, Lyndsey. Good morning, everyone. Our second quarter results did not meet our expectations, driven primarily by slower growth within certain portions of our residential pest control business. The pressure was concentrated in brands such as Orkin that rely more heavily on consumer-initiated demand through search, digital media and inbound calls. The lead environment got progressively worse as we moved through the quarter before showing signs of improvement at the very end of June.

謝謝你，Lyndsey。各位早安。我們第二季的結果未達預期，主要原因是我們住宅害蟲防治業務的部分領域成長放緩。壓力主要集中在如 Orkin 等品牌，這些品牌更仰賴消費者主動發起的需求來源，例如搜尋、數位媒體與來電。隨著季度推進，潛在客戶（leads）環境逐步惡化，直到 6 月底才在最後階段出現改善跡象。

Our experience with respect to a slowdown in underlying residential demand was not broad-based across the portfolio, brands that generate customers through relationship-based channels like direct sales, door-to-door models, and relationships with homebuilders delivered organic growth above our targeted 7% to 8% range for the quarter. For example, Home Team experienced double-digit residential growth as did Fox, who leverage their door-to-door sales force to grow in the high teens organically during the quarter. This is a testament to the importance of our diversified multi-brand approach.

就住宅端基礎需求放緩而言，我們的經驗並非在整個品牌組合中普遍發生；透過關係型通路（如直銷、到府拜訪模式，以及與建商的合作關係）獲取客戶的品牌，本季有機成長高於我們目標的 7% 至 8% 區間。例如，Home Team 的住宅業務呈現兩位數成長；Fox 亦然，其運用到府拜訪的銷售團隊，使本季有機成長達到十幾個百分點的高檔。這證明了我們多品牌、多元化策略的重要性。

And beyond residential, our termite and ancillary business delivered solid double-digit growth, while commercial grew high single digits demonstrating that strategic investments we have made in support of these service areas continue to pay off. We spent a great deal of time evaluating the drivers of the slowdown in parts of our residential business.

除住宅業務外，我們的白蟻與附加服務業務也交出穩健的兩位數成長；商業端則成長高個位數，顯示我們為支持這些服務領域所做的策略性投資持續帶來成效。我們投入大量時間評估住宅業務部分領域放緩的驅動因素。

And candidly, we don't believe there is a single explanation. It's important to note that the underlying health of our customer base remains strong, and there were no notable shifts or deterioration in customer retention trends. While precise drivers are difficult to isolate, what we do know is that customer demand patterns have been more variable to start peak season than we've experienced in the better part of a decade.

坦白說，我們不認為有單一原因可以解釋。需要強調的是，我們客戶基礎的整體健康狀況仍然強勁，客戶留存趨勢並未出現明顯變化或惡化。雖然很難精準拆解驅動因素，但我們確知的是：在旺季開始之初，客戶需求型態的波動性比我們過去近十年所經歷的更大。

Regardless of the underlying drivers, our focus is on the actions needed to drive improved performance. We have implemented organizational and operational changes designed to strengthen accountability, improve execution and better align our resources with current demand conditions.

無論背後驅動因素為何，我們的重點在於採取必要行動以帶動績效改善。我們已推動組織與營運調整，旨在強化責任歸屬、提升執行力，並使資源配置更貼近當前需求狀況。

At Orkin, for example, we recently promoted Scott Weaver, a Chief Operating Officer of Orkin North America. Scott most recently had responsibility for all Harkins commercial operations in the U.S. This newly expanded role expands his scope of responsibility to include both residential and commercial operations for the U.S. as well as Canada. This will provide a better span of control with all division presidents now reporting to Scott, who will continue to report to Patrick Chrzanowski.

以 Orkin 為例，我們近期晉升 Scott Weaver 擔任 Orkin 北美營運長。Scott 最近負責的是 Harkins 在美國的所有商業營運。此一擴大的新職務將其責任範圍延伸至美國與加拿大的住宅與商業營運。這將帶來更佳的管理幅度，所有事業部總裁將改為向 Scott 匯報，而 Scott 仍將向 Patrick Chrzanowski 匯報。

We are focused on improving customer acquisition results, sales productivity, local market execution and labor efficiency while maintaining the customer service standards that have differentiated us as the leader in the market. Although we're cautious with respect to near-term trends, we were encouraged that inbound lead flow and call center volumes improved towards the end of June and have continued a positive trajectory through the first few weeks of July.

我們聚焦於改善客戶獲取成效、提升銷售生產力、強化在地市場執行與勞動效率，同時維持使我們成為市場領導者的客戶服務標準。雖然我們對短期趨勢保持審慎，但我們受到鼓舞的是：6 月底來電與進線潛在客戶流量有所改善，且在 7 月前幾週持續呈現正向走勢。

Stepping back, our confidence in the long-term opportunity remains unchanged. We operate in a large and fragmented market with a diversified portfolio of leading brands, strong customer relationships, a significant recurring revenue base and a team that has the experience needed to successfully navigate near-term market conditions and improve performance.

從更宏觀的角度來看，我們對長期機會的信心不變。我們所處市場規模龐大且高度分散；我們擁有多元化的領先品牌組合、強健的客戶關係、可觀的經常性收入基礎，以及具備足夠經驗的團隊，能成功因應短期市場狀況並改善績效。

I'd like to thank our 20,000-plus teammates around the world for their hard work and dedication to serving our customers every day. I'm now pleased to turn the call over to Will. This marks his first earnings call as CFO. We're excited to have his leadership at Rollins, and I'm personally grateful for the partnership we're building. Will, take it away.

我要感謝全球超過 20,000 位同仁每天辛勤工作、全心投入服務客戶。接下來我很高興把電話會議交給 Will。這是他擔任財務長後的第一場財報電話會議。我們很高興他在 Rollins 的領導，也個人感謝我們正在建立的合作夥伴關係。Will，交給你了。

Thanks, Jerry, and good morning, everyone. I'm pleased to join you today for my first earnings call as CFO. I look forward to providing a clear view of our second quarter results, our updated outlook and the actions we are taking to improve performance. I will begin with our quarterly financial results, starting with revenue. Total revenue increased 7.9%, while organic growth was 5.7%, both below our expectations for the quarter.

謝謝你，Jerry，各位早安。我很高興今天以財務長身分參與我的第一場財報電話會議。我期待就我們第二季業績、更新後的展望，以及我們為改善績效所採取的行動，提供清晰的說明。我將先從本季財務結果開始，先談營收。總營收成長 7.9%，有機成長為 5.7%，兩者皆低於我們對本季的預期。

As Jerry mentioned, the primary driver was slower growth in portions of our residential business.

如 Jerry 所提到，主要原因是我們住宅業務部分領域成長放緩。

We delivered growth across each of our service offerings. In the second quarter, residential revenues increased 6.6%. Commercial pest control increased 8.6% and termite and ancillary increased 10.5%. Organic growth across the portfolio was 3.6% in residential, 7.2% in commercial and 8.9% in termite and ancillary.

我們在各項服務提供上皆實現成長。第二季住宅營收成長 6.6%。商業害蟲防治成長 8.6%，白蟻與附加服務成長 10.5%。整體組合的有機成長方面：住宅為 3.6%，商業為 7.2%，白蟻與附加服務為 8.9%。

Turning to profitability. As demand trends softened in certain areas of the business during the quarter, our cost structure remained aligned with the stronger growth outlook we anticipated entering peak season. Gross margin was 52.8% and a decrease of 100 basis points. Lower-than-expected volume in the quarter, coupled with higher medical-related costs and fuel headwinds pressured quarterly margins. The primary drivers were higher people-related costs, including medical plan expenses and service salary deleverage, which together represented 70 basis points of pressure.

接著談獲利能力。由於本季業務部分領域的需求趨勢轉弱，我們的成本結構仍維持與我們在進入旺季前所預期的較強成長展望相一致。毛利率為 52.8%，下降 100 個基點。本季量能低於預期，加上較高的醫療相關成本與燃油不利因素，對季度利潤率造成壓力。主要驅動因素為較高的人員相關成本，包括醫療計畫費用與服務薪資的規模不經濟（deleverage），兩者合計帶來 70 個基點的壓力。

Fleet represented an additional 20 basis points of headwind, driven primarily by fuel. Fuel costs represented approximately 1.8% of sales in the second quarter and are expected to remain below 2% of sales for 2026. Customer response to our recent price increase has been favorable, and we continue to expect to be positive on price/cost for the year. Quarterly SG&A cost as a percentage of revenue increased 30 basis points compared with the prior year. Incremental selling investments represented a 10 basis point headwind, while higher fleet costs contributed an additional 10 basis points of headwind.

車隊（fleet）另帶來 20 個基點的不利因素，主要由燃油所致。第二季燃油成本約占銷售額的 1.8%，預期 2026 年全年將維持在銷售額 2% 以下。客戶對我們近期的漲價反應良好，我們仍預期全年在價格/成本（price/cost）方面將為正向。季度 SG&A 費用占營收比重較去年增加 30 個基點。額外的銷售投資帶來 10 個基點的不利因素，而較高的車隊成本另貢獻 10 個基點的不利因素。

The remaining pressure was attributable to other general and administrative expenses.

其餘的壓力主要歸因於其他一般及行政費用。

Second quarter GAAP operating income was $201 million, an increase of 1.5% year-over-year. Adjusted operating income was $210 million, an increase of 2% compared with the prior year and second quarter adjusted EBITDA was $236 million, an increase of 2.2% versus last year, which represented a 21.9% margin. The effective tax rate was 24.2% in the quarter compared with an even 26% last year, reflecting the work our tax team has done to improve our ETR. We expect our effective tax rate to come in under 25% for the year, down approximately 100 basis points from historical levels.

第二季 GAAP 營業利益為 2.01 億美元，年增 1.5%。調整後營業利益為 2.10 億美元，較去年同期成長 2%；第二季調整後 EBITDA 為 2.36 億美元，較去年成長 2.2%，對應 21.9% 的利潤率。本季有效稅率為 24.2%，相較去年持平的 26%，反映我們稅務團隊為改善有效稅率（ETR）所做的努力。我們預期全年有效稅率將低於 25%，較歷史水準約下降 100 個基點。

Quarterly GAAP net income was $144 million or $0.30 per share. For the second quarter, we had non-GAAP pretax adjustments associated with acquisition-related costs and other items totaling approximately $10.8 million in the quarter. Accounting for these expenses, adjusted net income for the quarter was $152 million or $0.32 per share, an increase of 6.7% from the same period a year ago.

單季 GAAP 淨利為 1.44 億美元，或每股 0.30 美元。第二季我們有與併購相關成本及其他項目相關的非 GAAP 稅前調整，合計約 1,080 萬美元。計入這些費用後，本季調整後淨利為 1.52 億美元，或每股 0.32 美元，較去年同期成長 6.7%。

Turning to cash flow and the balance sheet. We generated operating cash flow of $173 million and free cash flow of $166 million. Free cash flow conversion, which is measured as the percentage of income converted into cash flow, was above 115% for the quarter. Cash flow growth was negatively impacted by the timing of tax payments associated with our tax credit planning strategy. This strategy continues to deliver meaningful benefits and is contributing to significant improvements in our ETR.

接著談現金流與資產負債表。我們創造了 1.73 億美元的營運現金流，以及 1.66 億美元的自由現金流。自由現金流轉換率（以獲利轉換為現金流的百分比衡量）本季超過 115%。現金流成長受到與我們稅額抵減規劃策略相關的稅款支付時點影響而呈現負面影響。該策略持續帶來顯著效益，並正推動我們的有效稅率（ETR）大幅改善。

We expect the timing-related headwinds to cash flow growth that we have experienced year-to-date to reverse as we move through the remainder of the year, particularly in the fourth quarter, resulting in a neutral impact on full year cash flow growth.

我們預期今年迄今所經歷、因時點因素造成的現金流成長逆風，將在今年剩餘期間逐步反轉，尤其在第四季，從而使全年現金流成長的影響趨於中性。

During the second quarter, we completed acquisitions totaling $117 million and paid $88 million in dividends. We continue to expect M&A to contribute 2% to 3% of revenue growth for 2026. Our leverage ratio stands at 1 times, and our balance sheet remains strong and positions us well to continue executing against our growth priorities while returning capital to shareholders.

第二季期間，我們完成總額 1.17 億美元的併購，並支付 8,800 萬美元股利。我們仍預期 2026 年併購將貢獻營收成長 2% 至 3%。我們的槓桿比率為 1 倍，資產負債表依然穩健，使我們能在持續推動成長優先事項的同時，向股東回饋資本。

As we look to the remainder of 2026, we remain encouraged by the strength of our markets, our recession-resilient business model and the engagement and execution of our teams. At the same time, we recognize that our performance fell short of our targets and our immediate focus is on improving the trajectory of the business through disciplined execution and operational improvements. We are approaching the balance of the year with discipline, transparency and a clear focus on the controllable actions that will improve performance.

展望 2026 年剩餘期間，我們仍對市場的強勁表現、我們具抗衰退特性的商業模式，以及團隊的投入與執行力感到鼓舞。同時，我們也認知到表現未達目標，當前的首要重點是透過嚴謹執行與營運改善，提升業務走勢。我們將以紀律、透明度，以及清楚聚焦於可控行動來面對今年餘下時間，以改善績效。

Given our first half results and the visibility we have today, we are updating our full year outlook. We now expect organic growth of at least 6% for the year and incremental margins of at least 10% for 2026 with implied margin improvement in the back half of the year to be Q4 weighted. Our expectation for 2% to 3% of growth from acquisitions as well as our expectation that cash flow will continue to convert at a rate above 100% remain unchanged for the year. Importantly, the revision to our 2026 expectations reflects our current assessment of near-term operating conditions rather than any change to the medium-term algorithm we outlined at our Investor Day in May.

基於上半年結果以及目前可見度，我們更新全年展望。我們目前預期全年有機成長至少 6%，且 2026 年增量利潤率至少 10%，並隱含下半年利潤率改善將偏重於第四季。我們對併購帶來 2% 至 3% 成長的預期，以及現金流轉換率全年將持續高於 100% 的預期，維持不變。重要的是，對 2026 年預期的修正反映我們對短期營運環境的當前評估，而非對我們在 5 月投資人日所提出的中期演算法（成長/獲利框架）有任何改變。

We continue to believe this business is capable of generating organic growth of at least 7% while delivering meaningful margin expansion. The operational opportunities that underpin our longer-term margin framework remain ahead of us, and we maintain conviction in our ability to achieve incremental margins of at least 30% over time.

我們仍相信此業務有能力在實現至少 7% 有機成長的同時，帶來具意義的利潤率擴張。支撐我們長期利潤率架構的營運機會仍在前方，我們也持續堅信，隨時間推進可達成至少 30% 的增量利潤率。

Our priorities are clear: improved customer acquisition, increase productivity, align resources by demand and demonstrate consistent operational improvement quarter-by-quarter. We believe the actions we are taking together with the growth and productivity initiatives outlined at our recent Investor Day, position us to deliver profitable growth and attractive shareholder returns that have been the hallmark of our financial performance for decades. We are focused on execution, accountability and consistent improvement, and I look forward to updating you on our progress in the quarters ahead.

我們的優先事項很明確：改善客戶獲取、提升生產力、依需求配置資源，並逐季展現一致的營運改善。我們相信，我們正在採取的行動，加上近期投資人日所概述的成長與生產力計畫，使我們有能力實現獲利性成長與具吸引力的股東報酬，而這些一直是我們數十年來財務表現的標誌。我們專注於執行、問責與持續改善，並期待在未來幾季向各位更新我們的進展。

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

接下來，我把電話交回給 Jerry。

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

謝謝你，Will。我們很樂意現在開始回答任何問題。

(Operator Instructions)

（接線員指示）

Tim Mulrooney, William Blair.

Tim Mulrooney，William Blair。

Yeah, good morning. Just a couple of questions about top line growth here real quick. The first one is just on the components of organic growth. Have you seen any changes in retention or pricing? Or is this primarily just new sales that are pressured right now?

是的，早安。我想快速問幾個關於營收成長（top line growth）的小問題。第一個是關於有機成長的組成。你們是否看到留存率或定價有任何變化？還是主要只是新銷售目前承壓？

We've not seen any hesitancy from our customers on pricing. And as I mentioned in the remarks, our customer retention remains strong. We have also some parts of the business that have made improvement -- slight improvements in customer retention in the second quarter. So those 2 elements aren't drivers of anything that gives us any pause or any cause for concern.

我們沒有看到客戶在定價方面有任何猶豫。而且如我在發言中提到的，我們的客戶留存率仍然強勁。此外，業務的某些部分在第二季的客戶留存率也有一些改善——小幅改善。因此，這兩個因素都不是會讓我們有所遲疑或引發擔憂的驅動因素。

I thought that was the case, Jerry. I just wanted to make sure -- so I appreciate that. So it sounds like it is just the top of the funnel issue. So maybe we can dig into that a little bit. Curious why you think digital leads are slowing so much right now?

我想也是這樣，Jerry。我只是想確認一下——所以很感謝你的說明。所以聽起來就是漏斗頂端的問題。那也許我們可以再深入一點。我很好奇你為什麼認為數位線索（digital leads）現在放緩得這麼多？

I mean, I know they've been under pressure for a while. It sounds like though something really shifted in April and May. So I was just curious, have there been any -- any changes in SEO or from the LLM overviews that are impacting leads? Like do you think this is an AI thing or do you think it's a softer consumer? Just curious what you think is going on here?

我的意思是，我知道它們已經承壓一段時間了。但聽起來像是 4 月和 5 月真的出現了某種明顯轉變。所以我想問，有沒有——有沒有任何 SEO 的變化，或是來自 LLM 概覽（overviews）對線索造成影響？你覺得這是 AI 的因素，還是消費者變得更疲弱？只是想了解你認為這裡到底發生了什麼？

Tim, if you would -- could be in the room to hear the number of hours and the amount of time and the research and the amount of effort that's gone into trying to explain that. That's why I called out that I think it's truly a multitude of factors. April was okay. April wasn't -- April wasn't far off. It was really we were expecting by mid-May that it would have made a turn.

Tim，如果你能——如果你能在現場聽到我們花了多少小時、多少時間、做了多少研究、投入了多少努力來試著解釋這件事就好了。這也是為什麼我特別指出，我認為這確實是多重因素所致。4 月還可以。4 月並沒有——4 月並沒有差太多。真正的情況是，我們原本預期到 5 月中旬應該會出現轉折。

And May was not -- did not start out great. And we thought, well, it's coming, it's coming. It's coming. We looked at lots of factors. You think, okay, May is when gas prices spiked, and maybe consumers are sizing their belts.

但 5 月一開始並不——並沒有一個很好的開局。而我們想說，好吧，它會來的、會來的。會來的。我們檢視了很多因素。你會想，好吧，5 月是油價飆升的時候，也許消費者正在勒緊褲帶。

Maybe there's -- maybe there's a little lack of consumer confidence. But yet, at the same time, we were still able to drive termite and ancillary with our existing customer base and those close rates weren't impacted. So we felt like maybe the consumer is still healthy.

也許是——也許消費者信心有點不足。但同時，我們仍然能夠透過既有客戶基礎帶動白蟻與附加服務的業務，而那些成交率並未受到影響。所以我們覺得，消費者可能仍然是健康的。

Then you look at regional weather or is it just pest pressures, and we started diving into what's going on, especially in the onetime space. We look at data that show certain -- there are certain categories of pests that we measure a lot of different pests and what the reasons we get calls for. And things like quite mosquito, mosquito calls were significantly down year-over-year and other kind of onetime services like residential rodent and residential carpenter ant were down fairly significantly, which leads you to believe -- well, maybe there's something going on with pest pressure in the month. And we look at the mosquito and that's kind of a bellwether as to say what's going on from a pest pressure standpoint. And it seemed like mosquito season started really late.

接著你會去看區域性的天氣，或只是害蟲壓力的問題；我們開始深入研究發生了什麼，特別是在一次性服務這一塊。我們查看數據，顯示某些——我們會衡量很多不同類別的害蟲，以及我們接到來電的原因。像是蚊子——蚊子相關來電年比大幅下降，其他一些一次性服務，例如住宅鼠害與住宅木匠蟻，也顯著下滑，這會讓你覺得——嗯，也許當月的害蟲壓力確實出了些狀況。而我們看蚊子，某種程度上它是個風向球，用來判斷害蟲壓力面到底發生了什麼。看起來蚊子季節開始得非常晚。

We also tested the search environment. We looked across the competitive space. We pulled a lot of different levers to see, hey can we juice this? Can we create more demand? Can we -- and we were doing that testing a variety of things and adjustments to how you play in the digital space.

我們也測試了搜尋環境。我們檢視了整個競爭版圖。我們拉動了很多不同的槓桿，想看看，嘿，我們能不能把它推上去？能不能創造更多需求？能不能——我們測試了各種做法，以及在數位領域操作方式的調整。

None of those things really moved the needle a lot and it led us to believe that quite heavily that we just had fewer people year-over-year, actively searching the digital channel for pest control needs. That's the conclusion that we came to that it just seemed fewer.

這些事情都沒有真正大幅帶動成效，這讓我們相當強烈地相信：年比之下，主動在數位渠道搜尋害蟲防治需求的人就是變少了。我們得到的結論是，確實看起來就是更少。

And I think if we thought it was the LLM or the AI, it doesn't explain, we didn't do something radically different at the end of June to change our approach and suddenly, it just picked back up again. And then through the first few weeks of July, we saw the -- it was saying the same thing again. So it's not like our strategy change is like pest pressure and consumer-driven demand was the part that was off there. And it was -- I know I'm going on along here, Tim. Like I said, we've spent a lot of time analyzing this.

而且我認為，如果我們以為是 LLM 或 AI 的影響，也說不通，因為我們在 6 月底並沒有做什麼激進的改變來調整做法，結果卻突然又回升了。然後在 7 月前幾週，我們看到——又呈現同樣的情況。所以不像是我們策略改變；比較像是害蟲壓力與消費者驅動的需求那一塊出了偏差。而且——我知道我講得有點長了，Tim。就像我說的，我們花了很多時間在分析這件事。

And all -- this whole scenario harkened back for me and second quarter of 2017 was the last time I remember seeing this kind of a start in the season, and I'll never forget it because it was my first time having to go represent our operations in front of Randall Rollins and Gary Rollins, and we had a rough Q2. And it looks like the season just never started. And that was a very difficult first time operating meeting with Randall Rollins and it was just like -- just didn't come too much later.

而這整個情境讓我想起來：2017 年第二季是我上一次記得看到這種季節開局的時候；我永遠忘不了，因為那是我第一次要在 Randall Rollins 和 Gary Rollins 面前代表我們的營運部門，而我們那一季 Q2 很艱難。看起來就像整個季節根本沒有開始。那是我第一次和 Randall Rollins 的營運會議，非常難熬，而且就像——之後也沒有很快好轉。

And trust me, I'd rather have conversations with you about this than I would have with Gary and Randall at that period of time. And so that's exactly what this felt like. It just felt like a really super late start. What we attribute it to, I think it's all kinds of things. I think in all these things, it's a confluence of all these things likely.

相信我，我寧可跟你談這件事，也不想在那段時間跟 Gary 和 Randall 談。所以這正是這次給我的感覺。就覺得是非常、非常晚才開始。至於我們把它歸因於什麼，我覺得是各種因素。我想在這些事情上，很可能是多種因素匯聚在一起的結果。

And we also look at brands like Orkin and you think, oh, it's the consumer, there's probably -- Orkin drives a lot more diversity in terms of income bands that they get customers from. And we've checked across those income bands, and there's likely some impact from lower income bands, but affordability maybe gets a little tougher.

我們也看像 Orkin 這樣的品牌，你會想，喔，是消費者的問題；而 Orkin 的客戶來源在收入區間上更為多元。我們也檢視了各個收入帶，較低收入帶可能確實有些影響，但可負擔性可能變得更吃緊。

So we're seeing those things, but it's really not 1 thing that we can put our finger on. It is -- there's a lot of factors. We're encouraged by what we're seeing now, and we're going to continue to make adjustments. We're also going to be disciplined about our spend and make sure we don't over spend, especially in the back half of the year on driving customer acquisition. So we're going to be focused on efficiency, focused on having -- making sure we're efficient through the right lead channels and making the best decisions we can to add customers to the customer base.

所以我們看到這些現象，但真的不是單一一件事能讓我們明確指出來。這——有很多因素。我們對目前看到的狀況感到鼓舞，也會持續做調整。我們也會在支出上保持紀律，確保不會超支，特別是在下半年用於推動客戶獲取的投入。所以我們會聚焦效率，確保透過正確的線索渠道達到高效率，並做出我們能做的最佳決策，把客戶加入客戶基礎。

Thank you, Okay. I appreciate all that extra color, and good luck in the back half of the year.

謝謝，好的。我很感謝你補充這些額外的說明，也祝你們下半年順利。

Manav Patnaik, Barclays.

Barclays 的 Manav Patnaik。

I was hoping you could just help us size Orkin and maybe all the other brands that collectively make up this -- what you said was brands more reliant on consumer initiated demand. And I guess even within that, how much is kind of self-help on your part versus you're just waiting for the consumer to reach out to?

我希望你能幫我們估算一下 Orkin 的規模，以及其他所有品牌合計起來、構成你所說的——那些更依賴消費者主動發起需求的品牌的規模。另外即便在這之中，你們有多少是靠自身努力（self-help），而不是只是等消費者主動聯繫你們？

Yeah, thanks for the question, Manav. I mean, obviously, Orkin has a large residential customer base. Other brands like a HomeTeam and a Fox or primarily residential. A lot of our other brands are not quite as focused at the larger ones are not quite as focused just on residential, they may do a lot of termite ancillary, they may also do a lot of commercial.

好的，謝謝你的問題，Manav。我的意思是，很明顯 Orkin 有很大的住宅客戶基礎。其他像 HomeTeam 和 Fox 這些品牌，主要也是住宅端。我們其他很多品牌——較大的那些——不完全只聚焦住宅端；他們可能做很多白蟻附加服務，也可能做很多商業端。

And so the vast majority of the residential sits in between Orkin, Fox, HomeTeam on the residential pest control space and to some degree also Northwest Exterminating. And the work and piece of that is very sizable in the whole. So. Whereas they are able to grow a little more rapidly right now than Orkin, but the headwinds and volume. And what Orkin is getting that effect volume-wise is dragging that number down that 3.6% range just because they are more sizable than those other brands.

因此，住宅端的大多數業務主要集中在 Orkin、Fox、HomeTeam 這幾個在住宅害蟲防治領域的品牌之間，某種程度上也包括 Northwest Exterminating。而其中的工作量／業務量在整體中占比非常可觀。所以。相較之下，他們目前的成長速度能比 Orkin 快一些，但逆風與量能——而 Orkin 在量的層面受到的影響，因為其規模比其他品牌更大，會把那個數字拉低到約 3.6% 的區間。

That helps add a little color because we don't.

這有助於補充一些背景，因為我們不——

Because and across the other -- the specialty brands, that business performed quite well, right, where there's proactive protection-focused sales relationships at the doorstep, for example, with the big Box Kids.

因為在其他——專業品牌方面，那塊業務表現相當好，對吧？例如在門口以主動式、以防護為重點的銷售關係，像是與大型 Box Kids。

Box with the customers. Totally different business model, yes, that's right, Lyndsey. And some of those brands are much less dependent and spend very little marketing dollars like a HomeTeam brand spends almost nothing in the digital channel. It's just not what they do. So they're much more insulated from those kinds of, what I would call, consumer-driven demand channels where they're going and creating through selling prevention to home buyers.

Box 與客戶。完全不同的商業模式，是的，沒錯，Lyndsey。而且其中一些品牌依賴程度低得多，行銷費用也花得很少；例如 HomeTeam 品牌在數位渠道幾乎不花錢。那根本不是他們的做法。所以他們在我所稱的這類消費者驅動需求渠道上更具隔離性；他們是透過向購屋者銷售預防性方案來創造需求。

Got it. And then the 2Q '17 analogy that you pointed out, maybe you could just help us with kind of were there some of the similar. What caused that, I guess, back then? And then kind of how long perhaps would take you guys to come out of that?

了解。然後你提到 2017 年第二季的類比，也許你可以再幫我們說明一下，當時是否有一些類似之處。我想問的是，當時到底是什麼造成的？以及你們大概需要多久才能走出那種狀況？

Yeah, so that was one of those -- I remember it because our Q2 close meeting was in early July, just like we had the same kind of meeting here. It's kind of like deja vu. What happened in that situation was that July came back and we ended up -- we ended up in pretty decent shape in Q3. It wasn't like a long recovery because once you got into the heat and the peak season again, it just sort of took back off.

是的，所以那是其中一次——我記得很清楚，因為我們的第二季結帳會議是在七月初，就像我們這次在這裡開的同類型會議一樣。有點像似曾相識。當時的情況是，七月回來了，而我們最後——我們在第三季的狀況其實相當不錯。並不是那種漫長的復甦，因為一旦進入炎熱與旺季高峰，它就又重新起飛了。

And it was a really awkward sort of pregnant pause of a waiting for that. As though we thought it was never going to come, but then it finally did, it happened around the fourth of July that year, it hit. And then all of a sudden, we were off and running again. But it was pretty painful. It was from -- I have scars.

而且那段時間真的很尷尬，就像是在等待中的一段很長、很彆扭的空檔。彷彿我們以為它永遠不會來，但最後還是來了；那一年大約在七月四日左右，它就打中了。然後突然之間，我們又重新全速前進。但那段過程相當痛苦。那是從——我身上都留下疤了。

It was a pretty painful Q2, but we came right out of it in Q3.

第二季非常痛苦，但我們在第三季就立刻走出來了。

Greg Parrish, Morgan Stanley.

Greg Parrish，摩根士丹利。

So you talked about the improvement in late June and that persisting into July here. Maybe can you give us a sense of kind of what that exit rate was and where you're at here in July to start?

所以你提到六月下旬的改善，而且在這裡延續到七月。也許你能否讓我們大概了解一下那個期末（exit）水準大概是多少，以及七月一開始你們目前處於什麼狀態？

We basically saw the gap narrow back to being very -- rather than being down the prior year to being very similar to the prior year. That's the narrowing of that we saw.

我們基本上看到差距縮小，回到非常——與其說比去年同期下滑，不如說已經非常接近去年同期。這就是我們看到的差距縮小。

We're talking about lead flow there, right? In terms of the volume of inbound leads was more in far from where we were year ago.

我們在談的是潛在客戶（lead）流量，對吧？就進線潛在客戶的量而言，已經更接近我們一年前的水準了。

That's right. Very much in comparison. And look, we still are getting better quality leads. I think the team is driving better quality leads. So we're making some of it up in closure and start rate and still managing to get price in that.

沒錯。非常明顯是相較之下。而且你看，我們仍然拿到更高品質的潛在客戶。我認為團隊正在帶來更高品質的潛在客戶。所以我們在成交率與啟動率上補回了一部分，同時也仍然能在其中維持價格。

So that seems very healthy. So we can deal with it regionally, if there are some pockets where the lead volumes down, we usually still make that up by lead closure. But in months like May and parts of June, where there was just a massive gap, we can't make that up through pricing and closing efficiency.

所以那看起來非常健康。因此我們可以在區域層面去應對；如果某些區域的潛在客戶量下降，我們通常仍能透過潛在客戶成交來補回。但像五月以及六月的部分期間，差距實在太大，我們無法靠定價與成交效率把它補回來。

Okay. That's helpful. And then maybe just to turn to margin. Your updated incremental margin guide is plus 10%, you did 8% in the first half.

了解。這很有幫助。接著也許談一下毛利率。你們更新後的增量毛利率指引是正10%，而上半年你們做到8%。

So it doesn't imply a whole ton of improvement in second half. You talked a lot about margin, focused on margin efficiency efforts. So just trying to reconcile those two kind of what's in your control, what could lead to upside in the second half?

所以這並不意味著下半年會有非常大的改善。你們談了很多關於毛利率、也聚焦在毛利率效率的努力。所以我想把這兩者對起來：哪些在你們可控範圍內？下半年有哪些因素可能帶來上行空間？

Yeah, Greg, we -- as we look through the back half of this year, so through the first half, we're sitting at just below 8% of incremental margins. And so all those things that we outlined at Investor Day talking through improvements with our fleet, talking about how we can better utilize our procurement function from an M&S perspective, talking about our employee retention, all those things still remain fully intact, but we're also really cautious because we realized Q3 of last year had a lot of favorability in the numbers. And so we've got a pretty difficult number to hurdle as we go into Q3 of this year.

是的，Greg，我們——當我們看今年下半年，也就是上半年結束時，我們的增量毛利率略低於8%。因此我們在投資人日所概述的那些事項——談到車隊改善、談到從 M&S 角度如何更好地運用採購職能、談到員工留任——這些都仍然完全有效；但我們也非常謹慎，因為我們意識到去年第三季的數字有很多有利因素。所以今年進入第三季時，我們要跨越的是一個相當困難的比較基期。

We think we've got some good benefits that we may be able to pull through in the fourth quarter, but we're just trying to be cautious with what we know today, what we're seeing today, we didn't expect to be posting an incremental margin of 6.5% in the second quarter. So that certainly changes our outlook for the full year. But we still think all the things that we talked about there's plenty of opportunity sitting here.

我們認為第四季可能有一些不錯的效益可以帶出來，但我們只是想就目前所知、目前所見保持謹慎；我們原本沒預期第二季會繳出6.5%的增量毛利率。所以這當然改變了我們對全年展望的看法。但我們仍然認為，我們談到的那些事情，眼前仍有很多機會。

Yeah, there's opportunity that we have in the back half to greatly improve sales efficiency. We have no intention of staffing up the way we staffed up last year. So there's some opportunity there in the SG&A side. We just entered into a great new agreement with our fleet supplier Wheels, that will help us continue to manage our fleet costs considerably better as we move forward. We have opportunities in the procurement side.

是的，下半年我們有機會大幅提升銷售效率。我們完全不打算像去年那樣擴編。所以在 SG&A 端有一些機會。我們剛與車隊供應商 Wheels 簽訂了一份很棒的新協議，這將幫助我們在未來持續更有效地管理車隊成本。我們在採購端也有機會。

Phil or Will pointed out in his remarks about some of the headwinds that we're having in medical. We're going to be -- are doing our best to push our people to use lower-cost options like our telehealth option and our on-site clinics that we have available for people to use because they can -- we can drive cost savings through -- just through education and a more convenient way for our people to get medical care.

Phil 或 Will 在他的發言中提到我們在醫療方面面臨的一些逆風。我們將——也正在盡最大努力推動同仁使用成本較低的選項，例如我們的遠距醫療（telehealth）方案，以及我們提供可使用的駐點診所，因為透過教育以及讓同仁以更便利的方式取得醫療照護，我們——就能推動成本節省。

There's been a lot of challenges in the medical cost side. And so we've got some efforts that we need to make towards continue to drive those costs down. We've identified those, and we're going to be working on those.

醫療成本端一直有很多挑戰。因此我們需要持續投入一些努力來把這些成本降下來。我們已經辨識出這些項目，並且會著手推進。

Okay. Great.

好的。很好。

Curtis Nagle, Bank of America.

Curtis Nagle，美國銀行。

Great. Thanks so much for taking the question. One, and apologies if I just missed this. Any commentary on recurring sales within residential? What did that look like?

很好。非常感謝讓我提問。第一個問題，如果我剛剛漏聽了也先致歉。住宅端的經常性銷售有沒有什麼評論？那看起來如何？

Could you restate that question, Curtis?

Curtis，你可以重述一下問題嗎？

Yes. Of course, Jerry, just recurring revenue versus onetime within residential. What did that look like in the quarter? And how is that trending so far to start 3Q?

可以。當然，Jerry，我是指住宅端經常性營收相對於一次性（one-time）營收。這一季看起來如何？而到第三季開始為止，趨勢如何？

Yes, the recurring has been healthier. We've been able to sell and convert and retain better on the recurring side. The one-time when we start looking at the one-time categories, that has been the brunt of it, of the myth. So there were some parts of the second quarter where, for example, residential rodent.

是的，經常性（recurring）表現比較健康。我們在經常性這一塊的銷售、轉換與留存都做得更好。而一次性方面，當我們開始看一次性類別時，那一直是影響最大的部分。所以第二季有些時段，例如住宅鼠害（rodent）。

Could be down with that kind of demand, which is often one time, see a rat, catch a rat, kill a rat, is down could be 30% to 50% and it's just like some of that kind of call volume and for what we would call occasional invaders and one-time type of pets like stinging insects, just down.

在那種需求下可能會下滑；那通常是一次性——看到一隻老鼠、抓到一隻老鼠、殺掉一隻老鼠——這類需求的下滑可能達30%到50%，就像是某些這類來電量；以及我們所稱的偶發入侵者（occasional invaders）與一次性類型的害蟲，例如螫刺昆蟲（stinging insects），都在下滑。

So whereas we did see much better growth on the residential recurring and the interest from the consumer was still there, the one-time actually went negative throughout a large part of the quarter and that's a significant drag to organic growth because especially brands like Orkin that are more pest pressure driven versus prevention driven.

所以，雖然我們確實看到住宅經常性業務有更好的成長、消費者的興趣仍在，但一次性業務在本季很大一段時間其實轉為負成長；而這對內生成長（organic growth）是很大的拖累，特別是像 Orkin 這種品牌，比起「預防驅動」更偏向「蟲害壓力驅動」。

They're the ones that are going to have a larger impact from that, and that also affects things in the digital space as well.

這類品牌受到的影響會更大，而這也會影響到數位端的表現。

And maybe just to put a kind of follow-up point and then a follow-up. Just if you could quantify that, I think recurring in resi was somewhere around 7% 1Q. What did that look like in 2Q? And then just it sounds like for the remainder of the year, I think fuel costs is supposed to be around, I think, under 2%.

也許我再補充一個追問，然後再接一個追問。如果你能量化一下，我記得住宅（resi）的經常性（recurring）在第一季大約是 7%。那第二季看起來如何？另外，聽起來今年剩餘期間，我想燃料成本應該大約在、我想是低於 2%。

But I guess with cost rising even today, right? I guess how is that contemplated? And anything you're seeing on chem costs? Is that -- are we seeing any pressure there? Is that in the guide?

但我想即使到今天成本仍在上升，對吧？那這是如何納入考量的？另外你們在化學品成本方面看到什麼情況？那邊是否看到任何壓力？這有包含在指引（guide）裡嗎？

Yes. On the onetime volume, it went negative like mid-single digits. It wasn't steep in total, but it was -- but it's still also an Orkin brand, a pretty sizable piece of their business. It went negative low to mid-single digits. When we think about fuel, I think the guide there is still towards under 2%. Under 2%. We experienced in the second quarter.

是的。就一次性（onetime）量而言，它轉為負成長，大概是中個位數的負值。整體來看跌幅不算陡，但它仍然也是 Orkin 品牌、在他們業務中相當可觀的一塊。它是低到中個位數的負成長。至於燃料，我認為那邊的指引仍是朝著低於 2%。低於 2%。我們在第二季確實經歷了。

Fuel costs were up 30% in total. And I think we managed that pretty well. One of the metrics I look at is -- fuel was up 30%, but our miles driven per vehicle per month improved 8%. So we're helping to stop -- we're helping to mitigate some of that through our routing efficiencies and efficiencies in the fleet. We're helping to mitigate that.

燃料成本總體上升了 30%。我認為我們把它管理得相當好。我會看的其中一個指標是——燃料上升 30%，但我們每車每月的行駛里程提升了 8%。所以我們透過路線規劃效率與車隊效率，正在幫助——正在幫助緩解其中一部分影響。我們正在幫助緩解。

And our procurement team, it's great. I get a monthly report from our procurement team about how they're looking through our materials and supply spend and continue to try to drive savings every single month. And I think we have continued upside there to leverage our size, leverage our brand, make Rollins wide decisions about some of the products that we use that we -- that continue to be a potential help to us down the road.

而且我們的採購團隊很棒。我每月都會收到採購團隊的報告，說明他們如何檢視我們的材料與供應支出，並持續嘗試每個月都推動節省。我認為我們在那方面仍有持續向上的空間，可以運用我們的規模、運用我們的品牌，針對我們使用的一些產品做出 Rollins 全公司層級的決策——這些在未來仍可能對我們有所幫助。

And Curtis, I would just say that we continue to anticipate those pressures from the ones that we're seeing today from fuel and from medical. And then we don't really know where insurance and claims will go as well. I mean we continue to see that as we are talking through some of the claim activity that we've had from years ago where we're encouraged by the benefits that we're receiving from our safety programs and thinking about what's going to come in the future. But today, what we see in our entrance and claims and certainly what we may see in the future months. We still have that headwinds, but they're all contemplated in that 10% incremental story or outlook that we provided.

Curtis，我想補充的是，我們仍持續預期會面臨目前看到的壓力，來自燃料與醫療。此外，我們也不太確定保險與理賠（claims）會走向何方。我的意思是，當我們回顧並討論一些多年以前的理賠活動時，我們對於從安全計畫中獲得的效益感到鼓舞，也在思考未來會如何發展。但就今天而言，從我們在保險與理賠上看到的情況，以及未來幾個月可能看到的情況。我們仍有這些逆風，但都已納入我們所提供的 10% 增量（incremental）敘事或展望之中。

Maybe one thing to also add just from a residential recurring perspective, we see it as relatively consistent with our overall recurring growth. And so what we didn't do is we didn't add value because of the lead environment that Jerry talked about in his prepared remarks, so we just didn't have them at the same pace as we have been. And the onetime was just volatile. I mean back to the comment around we have seen negative onetime performance and a few of the months that we've had so far this year. So -- and certainly within the quarter.

另外補充一點，從住宅經常性（residential recurring）的角度來看，我們認為它與我們整體的經常性成長相對一致。因此我們沒有做的是：因為 Jerry 在事先準備的發言中提到的線索（lead）環境，我們沒有增加價值（add value），所以我們取得線索的速度就沒有像過去那樣。而一次性（onetime）則是波動很大。我的意思是，回到剛才的評論，我們今年到目前為止有幾個月份看到一次性表現為負。所以——當然也包含在本季之內。

But hopefully, that provides enough color or a little bit of color around that.

但希望這能提供足夠的說明，或至少提供一些脈絡。

Right. So recurring somewhat -- it sounds a little bit lower, but I guess, somewhere around 7%. Is that fair?

了解。所以經常性（recurring）有點——聽起來略低一些，但我想大概在 7% 左右。這樣說合理嗎？

But relatively consistent with our overall organic growth rate.

但與我們整體的有機成長率（overall organic growth rate）相對一致。

Organic growth. Okay.

有機成長。好的。

George Tong, Goldman Sachs

George Tong，高盛（Goldman Sachs）

In terms of the reasons behind the slowdown in areas of resi relying on search, digital media and inbounds, you mentioned looking at competitive trends. To what extent did your competitors also face this issue? In other words, what market share changes did you observe?

關於住宅（resi）中依賴搜尋、數位媒體與來電/主動詢問（inbounds）的領域放緩背後原因，你提到在觀察競爭趨勢。你們的競爭對手在多大程度上也面臨這個問題？換句話說，你們觀察到哪些市占率變化？

Yes. We do our best to monitor what's going on in the space as a whole. We try to monitor everything from our competitors that are direct and national competitors, regional competitors, mom and pops and activities that they're driving. And then we also try to monitor what's going on in the DIY space as well to see if there's factors there that could drive people -- drive people towards that side of things. But we did not notice anything competitively that stuck out to us that somehow we're getting beat or somebody is taking more share.

是的。我們會盡力監控整個產業的動態。我們嘗試監控從直接且全國性的競爭對手、區域性競爭對手、夫妻店/小型業者（mom and pops），以及他們所推動的活動等各個面向。同時我們也會監控 DIY（自己動手做）市場的情況，看看是否有因素會把人們——把人們推向那一端。但我們沒有注意到任何特別突出的競爭因素，讓我們覺得好像我們被打敗了或有人正在拿走更多市占。

Again, we just went right back to it feels like the consumer for the better part of six, maybe eight weeks was just not seeing a problem and needing to solve the problem. It was just a little different there. We had -- we have heard it from others of friends of mine in the industry that it's felt softer. I don't want to speak for all of them and just say that, that's the truth. But that's been the pulse that I've gotten is that it's softer cost, which also validates the some of our research that it seems like the -- it was a different consumer for a period of time.

再說一次，我們回到原點：感覺在大約六週、也許八週的大部分時間裡，消費者就是沒有看到問題、也不覺得需要解決問題。那段時間確實有點不一樣。我也從產業裡一些朋友那裡聽到，感覺比較疲弱。我不想代表所有人發言就說那就是事實。但我得到的脈動是需求較軟，這也驗證了我們部分研究：看起來——那段期間的消費者行為確實不同。

Got it. That's helpful. And then you mentioned testing and experimenting with various strategies to try to counter the slowdown in the quarter. How much did your actions move the needle? Or is this purely exogenous and not responsive to changes that you've tried?

了解。這很有幫助。另外你提到在本季測試並嘗試各種策略來對抗放緩。你們的行動在多大程度上帶來實質影響？還是說這完全是外生因素（exogenous），對你們嘗試的改變並不敏感？

Yeah, so that's, again, what points us back to the consumer, because we tried a lot of things, and it points to not being able to move the needle very much. So you could take off limits. You could move dollars into other channels.

是的，所以這也是——再次——讓我們回到消費者端的原因，因為我們嘗試了很多事情，但顯示我們無法把指標推動太多。你可以取消限制。你可以把預算挪到其他渠道。

We experimented with a lot of things, and it did not make much move to volume, even if you wanted to increase your spend. Didn't move volume, right? So again, it came back to it it would move it incrementally because maybe I'm taking a little bit from a competitor, but it perhaps wouldn't have been worth the investment that we made in it.

我們嘗試了很多事情，但對量（volume）的帶動不大，即使你想增加投放。量沒有起來，對吧？所以再一次，結果是它只能帶來些微增量，因為也許我從競爭對手那裡搶到一點，但可能不值得我們為此投入的成本。

Now, this is also the reason why when we think about our multi-brand strategy, what we do, that's where we want to put dollars into door-to-door, door-to-door can build more efficient routes, more they are in the way we're running door-to-door, we get nice sticky customers and. We can reallocate some resources and do a better job in door-to-door because that's where the better opportunity was. We're not hoping the consumer is going to call us because they see a pest problem. We're out there knocking on doors and selling prevention.

而這也是為什麼當我們思考多品牌策略（multi-brand strategy）時，我們所做的事情是：我們希望把資金投向逐戶拜訪（door-to-door）；逐戶拜訪可以建立更有效率的路線，而且在我們運作逐戶拜訪的方式下，我們能獲得黏著度很高的客戶，並且。我們可以重新配置一些資源，在逐戶拜訪上做得更好，因為那裡的機會更佳。我們不是寄望消費者因為看到害蟲問題才打電話給我們。我們會出去敲門，銷售預防方案。

Got it. Very helpful. Thank you.

了解了。非常有幫助。謝謝。

Josh Chan, UBS.

Josh Chan，瑞銀（UBS）。

Hi, good morning. Jerry and Will, thanks for taking my question. I guess on the channels, does it make sense to you that the consumer would slow down only on the digital side, but not the other side? Is it because the digital side kind of overwhelmingly skews onetime as well? Like is that the alignment for why that channel particularly is softer?

嗨，早安。Jerry 和 Will，謝謝你們回答我的問題。我想問關於通路，你們覺得消費者只在數位端放緩、但在其他端沒有放緩，這樣合理嗎？是不是因為數位端在某種程度上更偏向一次性需求？也就是說，這是否就是為什麼那個通路特別疲弱的原因？

So I look at it like a lot of digital is, we see a problem, we solve a problem. And you have something that you need to get taken care of. I've got ants in my pantry and I've tried to do it myself. It didn't work. Now I'm going to call a pro.

我的看法是，很多數位需求是：我們看到一個問題，就去解決一個問題。你有一件需要處理的事。我食品櫃裡有螞蟻，我試著自己處理。但沒用。那我現在就會打電話找專業人士。

I'm going to call the Orkin Pro. And that is -- and that's why we do -- a lot of the brand, Orkin to invest in name recognition, the power of that brand, that's very responsive. When you're out selling door-to-door or we're selling through the homebuilder channel, those other things, that is 100% a protect your asset, protect your home type of a sale. You may not see any bugs. Well, we want to stop you from ever seeing any bugs.

我會打電話給 Orkin 的專業人員。而這也就是——也是我們為什麼——在品牌上投入很多，讓 Orkin 提升知名度、強化品牌力，因為這種需求反應非常快。當你在做挨家挨戶銷售，或我們透過建商通路銷售時，那些則是 100% 屬於「保護你的資產、保護你的房子」這類型的銷售。你可能根本看不到任何蟲。但我們希望讓你永遠都不要看到任何蟲。

We want to be the people that protect your home from all the residential pest as well as termites and whatever and mosquitoes, whatever else, and we sell that as a prevention. If you're a new homeowner or -- and we also index in door-to-door indexes a little more on the higher-end side of household income bands in terms of where they want to sell to. So it's -- you're talking about it consumer -- the same consumer, but both are being met at a different place in time, fulfilling a different need. Does that make sense?

我們希望成為保護你家免受各種住家害蟲、以及白蟻等（還有蚊子或其他）侵擾的人，我們把它當作「預防」來銷售。如果你是新屋主——而且我們在挨家挨戶的客群上，也會更偏向家庭收入帶中較高端的族群，作為他們想要銷售的對象。所以你談的是消費者——同一個消費者，但在不同時間點被觸及、滿足的是不同需求。這樣說有道理嗎？

Yeah, absolutely. That makes a lot of sense.

有，完全有。這非常有道理。

And it's not that digital is necessarily more than one time, but it is more see something, deal with something.

而且也不是說數位一定就比較偏一次性，但它確實更像是「看到某個狀況，就處理某個狀況」。

Yes, that makes a lot of sense. And then I guess my other question is, I know a lot of attention is being paid today on residential, but it looks like the commercial and maybe Hermite ancillary growth were both a little slower than Q1. Is that just normal fluctuations or do you make anything out of those movements and those businesses?

是的，這很有道理。那我另一個問題是，我知道今天大家很關注住家端，但看起來商用端以及可能白蟻附加（termite ancillary）的成長都比第一季慢了一點。這只是正常波動，還是你們會從這些變化與這些業務看出什麼？

Yeah, so the termite ancillary was a little slower as well in -- primarily in May. It was strong in April, strong in June. May was just miserable. And it was even a little bit -- a tad bit softer in the commercial side.

是的，所以白蟻附加業務也稍微慢了一點——主要是在 5 月。4 月很強、6 月也很強。5 月就是很慘。而商用端也稍微——略微偏弱一點。

But commercial, everything we see in commercial all the lead indicators when we're looking at sales efficiencies, we're looking at new accounts we're landing, things -- nothing but positive there. And that's one of the reasons we're so positive on our outlook in the second half is I know the commercial and the investments we make there are going to pay off. And I think we have opportunity to execute better and leverage returns on those commercial investments even better as we move into the back half and into next year.

但商用端方面，我們看到的所有商用端領先指標——不管是看銷售效率、看我們拿下的新客戶帳戶等等——都是正面的。這也是我們對下半年展望很正向的原因之一：我知道商用端以及我們在那裡的投資會帶來回報。而且我認為，隨著我們進入下半年並延伸到明年，我們有機會把執行做得更好，並把這些商用投資的報酬槓桿化得更好。

Okay, great. I appreciate that.

好的，很好。謝謝你的說明。

Thanks, Josh.

謝謝你，Josh。

Jason Haas, Wells Fargo.

Jason Haas，富國銀行（Wells Fargo）。

Hey, good morning and thanks for taking my questions. Are you able to give us any sense of like what the exit rate was in June or what you're seeing in July? I'm just trying to reconcile the comments that it sounds like things got better, but then the guidance is going to 6% organic revenue growth. So like are you running the 6% range? Or yes, what to make of that? Thank you.

嗨，早安，謝謝你們回答我的問題。你們能否給我們一些概念，例如 6 月的期末退出率（exit rate）是多少，或你們在 7 月看到什麼？我只是想把你們的評論對起來：聽起來情況變好了，但指引卻是 6% 的有機營收成長。所以你們目前是跑在 6% 左右的區間嗎？或是該怎麼解讀？謝謝。

But Jason, we were pleased with what the end of June showed us in our results, and we're pleased with what we're seeing so far in July, but we're trying to be cautious because I would say that we've got -- we've seen now, a couple of quarters of this -- and we've had a quick shift. We've seen quick ships. That's right. But certainly, we're pleased with what we're seeing so far, but we are only two weeks into the quarter. And so it's just we've tried to make sure that we are going to with the visibility we have today.

Jason，我們對 6 月底的結果所呈現的狀況感到滿意，也對目前 7 月看到的情況感到滿意，但我們想保持謹慎，因為我會說我們已經——現在看到幾季都是這樣——而且我們出現了快速轉變。我們看到快速的變化。沒錯。但當然，我們對目前看到的狀況感到滿意，只是本季才過了兩週。所以我們只是想確保，在今天我們所掌握的能見度之下，我們的判斷是合理的。

We tried to factor all of that in and given that six-plus organic growth expectation for the full year. To remind you that it's for the full year, yes.

我們試著把這些因素都納入考量，並據此給出全年 6% 以上的有機成長預期。提醒你一下，這是針對全年，是的。

Okay. Great. That makes sense. And then sticking with the idea that maybe customers are, I guess, using an LLM first to try to solve their problem. If that is like weighing on the business, do you think that's because they're able to resolve it with like a DIY method by getting like advice from an LLM on how to resolve it.

好的。很好。這樣就說得通了。那接著延伸剛才的想法：也許客戶會先用 LLM 來嘗試解決他們的問題。如果這確實對業務造成壓力，你覺得是不是因為他們能透過 DIY 的方式解決——例如從 LLM 取得建議，知道該怎麼處理？

And therefore, there's less like pick up the phone and call and get a professional in there to help diagnose the problem. But do you think the issue would be more of that like you're using an LLM and that LM is routing them to like a local provider rather than like an Orkin professional.

因此就比較不會「拿起電話打來」，找專業人士到現場協助診斷問題。但你覺得問題會不會更像是：他們用了 LLM，而那個 LLM 把他們導向某個在地業者，而不是像 Orkin 這樣的專業人員？

And I guess, like what's the -- like how do you resolve that problem, like what can you do to change your, like, I guess, SEO to like show up better in those LLM results, if that is the case, curious like how you're thinking that through. I know it's pretty early, but I want to your thoughts on that. Thanks.

我想問的是——你們要怎麼解決這個問題？你們能做什麼來改變你們的——我想是 SEO——讓你們在那些 LLM 的結果裡更容易被看到？如果真是這樣的話，我很好奇你們怎麼思考。我知道現在還很早，但我想聽聽你們的看法。謝謝。

Yeah, so when we -- I have seen for myself and the LLM about how they kind of help you direct you to do it yourself. And is that having an impact and especially in a tighter economy, if somebody is figuring out kind of do this myself. Look, as an expert myself in that space, I know firsthand that you -- there are a lot of problems that you may think you can control yourself, but you can't. So I look at that as a, I have ants in my pantry and yes, I can find something and kill them there today, but it doesn't mean that they're not going to be back because we didn't -- you didn't find the source or you're not doing it quite the right way.

是的，所以我自己也看過 LLM——它們如何在某種程度上幫你引導你自己動手做。這是否造成影響？尤其在景氣較緊的情況下，如果有人想著「我自己來處理」。你看，作為這個領域的專家，我第一手知道：有很多問題你可能以為自己能控制，但其實不行。所以我會把它看成：我食品櫃裡有螞蟻，是的，我今天可以找個東西把眼前的螞蟻殺掉，但不代表牠們不會再回來，因為我們——你沒有找到源頭，或你處理的方法不太對。

That in three weeks, they're not just going to be back and you're going to be calling us at some point because you can't do it yourself.

也就是說，三週後他們不會只是回來，然後你會在某個時候打電話給我們，因為你自己做不到。

And so -- and we -- the data also shows that a lot of people don't want to do it themselves. But you're right, the LLM can lead them that way. I don't know if that's a significant impact. We haven't seen that, but we are working, and we have some metrics that tell us how we show up in the LLM space and the things that we're working on there, and we're continuing to put effort and energy behind how we show up in those spaces. There's also coming a time here, I think, really soon as Google is going to start and all of them are going to start monetizing that.

所以——而且我們——數據也顯示，很多人不想自己做。但你說得對，LLM 可能會引導他們走向那條路。我不知道那是否會造成顯著影響。我們尚未看到那種情況，但我們正在努力，而且我們有一些指標能告訴我們在 LLM 領域的曝光表現，以及我們在那裡正在推進的事項；我們也持續投入心力與資源，來提升我們在那些場域中的呈現方式。我也認為，很快就會到一個時間點，Google 會開始、而且他們所有人都會開始把那個變現。

And so that will be a whole different shift probably within a matter of months or weeks that we'll be faced with as well to see on those changes. And we continue to monitor it. I have a great deal of confidence in our team that we're doing everything that we can in that regard.

因此，這可能會在幾個月或幾週內帶來完全不同的轉變，我們也將面臨並觀察這些變化。我們會持續監控。我對我們團隊在這方面已盡其所能非常有信心。

But is it possible, and that is amongst all the variables. And when Tim asked his question of all those things. That's another one of those things that could possibly be coming together in a confluence on the residential space. I can't quantify it. I can't say it's this percent or is it possible?

但這是否有可能——這是在所有變數之中。而當 Tim 問到他那個問題、涉及所有那些事情時。這也是可能在住宅端形成匯聚效應的其中一項因素。我無法量化。我無法說是這個百分比；但是否有可能？

Yes, but I don't know exactly.

是的，但我不確定具體情況。

That's very fair. Thank you.

這很公平。謝謝。

Peter Keith, Piper Sandler.

Peter Keith，Piper Sandler。

Thanks. Good morning, everyone. So you're not the only company to talk about weakness in May. We have like Tractor supply out today. They had a tough May as well in lawn and garden.

謝謝。各位早安。所以談到 5 月疲弱的不只你們一家。我們今天也看到 Tractor Supply 的消息。他們在草坪與園藝方面的 5 月也很艱難。

One thing we've been looking at is a significant uptick in drought conditions throughout much of the East Coast. We think drier conditions would prevent the spread of mosquitoes.

我們一直在關注的一點是，美國東岸大部分地區的乾旱狀況顯著增加。我們認為較乾燥的環境會抑制蚊子的擴散。

I guess you did talk a bit about weather, but how do you feel about the drier ground conditions this year as a potential headwind on the business?

我想你們確實談到了一些天氣因素，但你們如何看待今年較乾燥的地表條件，是否可能成為業務的逆風？

Peter, it's a great question. And I promise you, we have dug into that one. We went really deep, both regionally. We looked at top 50 markets and weather conditions. And we try to do a lot of attribution to what was going on.

Peter，這是個很好的問題。我向你保證，我們已經深入研究過這點。我們做了非常深入的分析，包括按區域來看。我們檢視了前 50 大市場與天氣狀況。並且嘗試做大量歸因分析，看看當時到底發生了什麼。

Saying, "I had a lot of hypotheses, most of which -- it couldn't be proven as real. And so what we do know is that -- and I believe the pest pressure wasn't there. Now is that weather driven? Is it somehow weather-driven from something that got experienced four or five months ago, that harsh winter knockdown some populations that didn't over winter. All these kinds of variables that are out there, it does have me more interested these days than predictive weather models, especially with AI.

我可以說，「我有很多假設，但其中大多數——都無法被證明是真實的。」所以我們確實知道的是——而且我相信害蟲壓力並不存在。那是天氣驅動的嗎？是否可能是四、五個月前經歷的某些天氣所驅動——例如嚴冬打擊了部分族群，導致它們無法越冬。這些各式各樣的變數都存在；也讓我最近對預測型天氣模型更感興趣，尤其是結合 AI。

This is something we tried years ago trying to forecast demand in the future. But it does make me wonder if we have an opportunity for better models given the processing power and the data that we have today. Those are things that we're looking at. But the month of May completely baffled me. And I had the same hypothesis and that you did about -- I said weather and it may not -- it may just be pest pressure, and we don't know what pest pressure was driven by.

我們多年前曾嘗試用這類方法來預測未來需求。但這也讓我在想，考量到今天的運算能力與我們擁有的數據，我們是否有機會建立更好的模型。這些都是我們正在研究的事情。但 5 月真的讓我完全摸不著頭緒。而且我也有跟你一樣的假設——我說是天氣，但也可能不是——也可能只是害蟲壓力，而我們不知道害蟲壓力是由什麼驅動的。

It may have been weather or it could have been weather months ago that affected it, that came to fruition in May. And just some year-over-year change there. It's hot. That's the best I can do for you, Peter.

可能是天氣，也可能是幾個月前的天氣影響了它，然後在 5 月才顯現出來。以及一些年對年的變化。天氣很熱。Peter，我能給你的就只有這些了。

Okay. That's fair. And I guess I think what we're saying, too, is there wasn't really much regional variability in the business where weather could have had an impact for instance.

好的。這很公平。而且我想我們要說的另一點是，從業務來看，並沒有太多區域性的差異，讓天氣可能對其造成影響。

That was the other part of it is the volume -- the volume challenges we saw were across the entire United States. There wasn't one place that just stood out as exceptionally well, and that's not normal. But the entire -- the entire U.S., and that's why -- and it's again, I think why our weather hypothesis did not hold up.

另一個部分是，我們看到的量——量的挑戰遍及全美。沒有任何一個地方表現特別突出地好，而那並不正常。但整個——整個美國都是如此；所以——而且這也是我認為我們的天氣假設站不住腳的原因。

Thank you very much. I appreciate the insights.

非常感謝。我很感謝這些見解。

Tomo Sano, JPMorgan.

Tomo Sano，JPMorgan。

Thank you. So given the recent headwinds and analysis you've conducted around the slowdown in residential, just curious, how are you thinking about strength of the organizations going forward, particularly with respect to demand forecasting and the design of your cost structure, please?

謝謝。鑑於近期的逆風，以及你們針對住宅端放緩所做的分析，我想請教，往前看你們如何思考組織的韌性，特別是在需求預測以及成本結構設計方面？

Yeah, so one thing I want to make crystal clear is that we are a very people-oriented organization, and we want to continue to invest in our people. We'll continue to invest in training, continue to invest in doing all the right things. And the reality is we need to execute better. At the end of the day, we need to be very internally focused to execute and execute better as we move through the rest of this year and into next.

是的，我想先把一件事講得非常清楚：我們是一個非常以人為本的組織，我們希望持續投資在我們的人才上。我們會持續投資訓練，持續投資做所有正確的事情。而現實是，我們需要把執行做得更好。歸根結底，隨著今年剩餘時間以及進入明年，我們需要更專注於內部，把執行做好、並且做得更好。

And I think we're not going to approach this in a shortsighted way and make irrational adjustments that are going to affect our business for the long term, and that is rooted in our people-focused culture, and we continue to invest in our programs like Ecolab.

而且我認為我們不會用短視的方式來處理，也不會做出不理性的調整，去影響我們長期的業務；這根植於我們以人為本的文化，我們也會持續投資在我們的計畫上，例如 Ecolab。

I mean, we -- you could have a debate that some of the training that is costing us a lot of money and the investments we're making in the business could be halted in the meantime, but we're not willing to discontinue those investments in our future and investments in our people. So if you have any concerns about that, please don't. We're going to continue to do the right thing to have the right culture and invest in our people.

我的意思是——你可以辯論說，有些訓練讓我們花了很多錢，以及我們在業務上的投資，短期內或許可以先暫停；但我們不願意中止對未來的投資、以及對我們員工的投資。所以如果你對這點有任何疑慮，請不要擔心。我們會持續做正確的事，維持正確的文化並投資我們的人才。

And Tomo, maybe just to mention one thing. You talked about the slowdown in residential, but we just want to remind you that it's not uniform across our business. So we saw a slowdown in certain parts of residential in the business, but not across all of our brands, which is why we feel confident in our multibrand, multi go-to-market approach, so thats right.

Tomo，我再補充一點。你提到住宅端放緩，但我們想提醒你，這並非在我們業務中全面一致發生。我們在住宅業務的某些部分看到放緩，但並非所有品牌都如此；這也是為什麼我們對多品牌、以及多元 go-to-market（市場進入）策略有信心，所以是的。

And in some situations, for example, if the business isn't as great in 1 market and it's better than another and they have more demand. For example, we moved some folks from Orkin into the Fox brand, where they needed more help, and we had capacity in Orkin to move people around. We can do those kinds of things. When we invest in our people, invest in their training, we do our best to try to make sure they can remain part of Rollins.

而且在某些情況下，例如某個市場的業務沒那麼好、但另一個市場更好且需求更高。舉例來說，我們把一些人員從 Orkin 調到 Fox 品牌，因為那邊需要更多支援，而 Orkin 這邊有產能可以調度人力。我們可以做這類事情。當我們投資我們的人、投資他們的訓練時，我們也會盡最大努力確保他們能繼續成為 Rollins 的一份子。

Thank you, Jerry. Well, just one follow-up. We understand they appreciate the company's long-term operating philosophy, which has been a key driver of its success over time. If you could give us like 10% updated incremental EBITDA margins, is something like we should think about floor like when we think about the scenarios of more downside of the demand in some of the areas in residentials or anything like you're thinking about stop low, continue to protect near-term margins on this level?

謝謝你，Jerry。嗯，我只有一個追問。我們理解他們欣賞公司長期的營運理念，而這一直是公司長期成功的關鍵驅動因素。如果你能給我們大概 10% 的最新增量 EBITDA 利潤率更新，我們在思考某些住宅等領域需求進一步下滑的情境時，是否應該把它視為一個底線？或是你們在這個水準上，如何看待守住低點、持續保護短期利潤率？

So Tomo, when we thought about that 10% incremental margin piece, that is really related to the fact that we've got to -- we've got to get our cost structure corrected for the demand that we're seeing right now. And so we are -- and again, outlining all the things that we've already put out there at Investor Day, there are a number of actions we are going to take over the course of the back half of this year and that we've been taking, but that will drive even further.

所以 Tomo，當我們談到那個 10% 的增量利潤率時，這其實是因為我們必須——我們必須把成本結構調整到符合我們目前看到的需求水準。因此我們——而且再次重申，我們在投資人日已經對外說明過的那些事項，我們在今年下半年會採取多項行動，而且我們也一直在做，這些都會帶來更進一步的推動。

10% -- The reason we said greater than 10%, we believe that's going to be the floor. So you just should make sure if you're trying to model this out, I hope you caught the part in my comments around the fact that it will be weighted into the fourth quarter. we are expecting to have a difficult cycle for Q3 or a number that we need to cycle.

10%——我們之所以說大於 10%，是因為我們相信那會是底線。所以如果你要把它建模推算，請務必留意我在評論中提到的一點：它會更偏重在第四季。我們預期第三季會面臨一個艱難的比較基期（cycle），或是有一個我們需要去跨越的基期數字。

But we had a perfect Q3.

但我們去年第三季是完美的一季。

We had a great Q3 last year.

我們去年第三季表現非常好。

So it's going to be challenging to lap, but we're going to work on it. We're absolutely going to try our darndest to get there. That's right. It's a more difficult quarter to lap, but Q4 certainly prevents or presents some upside.

所以要超越那個基期會很有挑戰，但我們會努力。我們絕對會竭盡全力達成。沒錯。這是一個更難超越的季度，但第四季確實能避免或帶來一些上行空間。

That's right. But for the full year, 10% is the number we felt confident in or comfortable being able to as a guide for the floor. That's right.

沒錯。但就全年而言，10% 是我們有信心、也覺得可以作為底線指引的數字。沒錯。

Thank you. I appreciate it.

謝謝。我很感謝。

Thank you.

謝謝。

Ashish Sabadra, RBC Capital Markets.

Ashish Sabadra，RBC Capital Markets。

Thanks for taking my question. Just given the recent choppiness in revenue and margin, my question is more around the medium-term outlook philosophy. Why maintain that current guidance rather than lowering the bar and embedding some conservatism to making it easier to meet those in a tough environment, but also beating those expectations in a good market. So just a question on the philosophy there?

謝謝讓我提問。鑑於近期營收與利潤率的波動，我的問題比較聚焦在中期展望的理念。為什麼要維持目前的指引，而不是把門檻下調、加入一些保守假設，讓在艱難環境下更容易達標，同時在市場好的時候也更容易超越預期？所以想請教你們在這方面的理念是什麼？

Ashish, thanks for the question. As we look at it, we didn't feel like we needed to come off of it from a medium-term perspective because we still feel really confident in our ability to drive revenue growth. And so what we haven't seen in the last couple of quarters is the revenue to come through. And if you don't get that 7% to 8% revenue, it's going to be much more difficult to be able to see the flow through down through the P&L from a margin perspective.

Ashish，謝謝你的問題。我們的看法是，從中期角度來看，我們不覺得需要下修，因為我們仍然對推動營收成長的能力非常有信心。而我們在過去幾個季度沒有看到的是營收的實際落地。如果沒有那 7% 到 8% 的營收成長，從利潤率角度來看，要在損益表上看到傳導效應就會困難得多。

And so we, again, feel comfortable with the 10% for the year. I think we tried to model in the headwinds that we're already expecting but also some offsets. We expect offsets in our fleet just with -- as we start to cycle the gains that we had in the prior couple of years with the used [ car ] market. But from a medium-term perspective, when we think about that 30% plus, it really does feel like something that we have seen in the past and something that we will get back to because we've got so many things that are in the pipeline right now from a procurement perspective, I mean, Jerry outlined a couple of these...

因此，我們再次強調，我們對全年 10% 仍感到有把握。我認為我們試著把已經預期到的逆風納入模型，同時也納入一些抵銷因素。我們預期在車隊方面會有抵銷，因為——當我們開始進入前幾年二手[ 汽車 ]市場帶來的收益的比較基期（cycle）時。但從中期角度來看，當我們思考 30% 以上時，這確實是我們過去曾經看到過、也會回到的水準，因為我們目前在採購面有很多正在推進的事項在管線中；Jerry 也概述了其中幾項……

And Ashish, I just know from an operational standpoint, I don't think we were at our best. We have opportunity in the back half of the year and leading into early next year to operate more efficiently and do better on a day-to-day basis in our operations. There are some things we left on the table in the second quarter that I just know that there's opportunity to do better. We've identified those things, and we're taking some actions.

另外 Ashish，從營運角度來看，我也知道我們並沒有做到最好。我們在今年下半年以及明年初，有機會以更高效率運作，並在日常營運上做得更好。第二季有些事情我們沒有做到位，我很清楚還有改善空間。我們已經找出這些項目，並正在採取一些行動。

Very helpful color. And maybe just a quick follow-up on -- with the stock dislocation here, are there things from a capital allocation perspective that you can do like take advantage of this market dislocation?

這些補充非常有幫助。再追問一個——在股價出現這種脫節的情況下，從資本配置角度，你們是否有什麼可以做的事情，例如利用這種市場錯位？

Ashish, we -- I mean our capital allocation strategy is still very much the same as it has been for the past several years. And so we're reinvesting in the business. We will continue to think about M&A opportunities. That's where we see great use of our capital. Certainly, there is this dislocation that's going on right now.

Ashish，我們——我的意思是，我們的資本配置策略仍然和過去幾年基本一致。因此我們會再投資於業務。我們也會持續思考併購（M&A）機會。那是我們認為資本運用很好的方向。當然，目前確實存在這種錯位情況。

You'll see in our Q that we file later today that we have done some pretty nominal repurchases related to -- we're trying to offset the dilution that comes from a stock comp -- the burn rate for our stock expense.

你會在我們今天稍晚提交的 Q（季度文件）中看到，我們做了一些相當小額的回購，主要是——我們試圖抵銷因股票薪酬——我們股票費用的消耗率所造成的稀釋。

As far as we played meaningfully when we had the secondary last November. So we certainly have gone into the market. But as of now, I would not expect to see us deviate from the allocation strategy that we've had over the past several years.

就我們在去年 11 月的次級發行時有較明顯的操作而言。所以我們確實有進入市場。但截至目前，我不預期我們會偏離過去幾年一直採行的資本配置策略。

And cash flow generation is really strong.

而且現金流的產生能力非常強。

Absolutely, yes. Still above 100%, 115% in the quarter. But we do -- we always are -- we talk with our board, we'll have our Board meeting next week. So we talk to the Board regularly about this very topic. So I think -- but we feel comfortable with where we are, where we have been and-

完全正確。本季仍高於 100%，達到 115%。不過我們確實——我們一直都會——我們會和董事會討論，我們下週會開董事會會議。所以我們會定期和董事會就這個主題進行討論。所以我想——但我們對目前的位置、以及一路走來的狀況感到安心，而且—

Continue that way.

就照這樣持續下去。

Continue to keep going.

繼續往前推進。

Stephanie Moore, Jefferies.

Stephanie Moore，Jefferies。

Good morning. This is Harold Antor on for Stephanie Moore. So I guess you, on the margin front, you discussed people cost in a part of the headwind. So I guess just on the -- I guess, on the hiring side, which in are we in the hiring side? Could you talk about retention in the hiring that you've seen, do you associate a $50 million opportunity to improve margins? And then just, I guess, anything on the salaries to were a headwind.

早安。我是代替 Stephanie Moore 的 Harold Antor。我想你們在利潤率方面提到人員成本是逆風的一部分。所以我想問——在招募方面，我們目前處於招募的哪個階段？你能談談你們看到的留任與招募情況嗎？你們是否把改善利潤率的 5,000 萬美元機會與此相關聯？另外，我想問薪資方面是否也是逆風。

Anything that would be helpful.Thank you.

任何有幫助的資訊都可以。謝謝。

Yes, thank you for the question. Maybe to just point out one thing. So we definitely see opportunities still for our retention, our employee retention and the fewer people we have to hire because we keep the employees that we currently have, that's going to be a great opportunity for us in the future. We're not -- we do not think that, that has gone anywhere. This quarter, in particular, and what we're even forecasting in our 10% incrementals for the remainder of the year.

好的，謝謝你的問題。也許先指出一點。我們確實仍看到在留任方面的機會，也就是員工留任；我們需要招募的人越少，因為我們能留住目前的員工，這對我們未來會是很好的機會。我們不——我們不認為這個機會已經消失。就本季而言，尤其是我們在全年剩餘期間 10% 增量假設中所做的預測。

It really was more around medical expense. So not so much just our core salaries, but around the additional expense we're seeing from a medical perspective. We've heard that in our industry and other industries, I mean, medical is certainly up significant headwind for a lot of companies. And so that's where you heard us speak about the margin degradation related to medical, not so much employee retention.

其實主要更多是與醫療費用相關。所以不太是我們的核心薪資，而是我們從醫療角度看到的額外支出。我們也聽說在我們的產業以及其他產業，醫療成本確實大幅上升，對許多公司而言是顯著的逆風。因此你們聽到我們談到與醫療相關的毛利率下滑，而不是員工留任。

We still have upside. Our seasonal hiring amounts as slow as Q2 was on the residential side, resulted in some slightly less hiring volumes, some lower hiring volumes across Rollins. And certainly, within Orkin, there were a lot fewer hires. But we continue to focus on our short-term retention and making sure that it's those teammates in the first year on the job that are trying to say that continues to be an opportunity for improvement that -- we know that there's a cost to that, what we call churn in those people, and so we're mindful of that. I also would say that continues to be an opportunity for us.

我們仍然有上行空間。由於住宅端第二季表現偏慢，我們的季節性招募量因此略少，Rollins 整體的招募量也偏低一些。而且在 Orkin 內部，招募人數明顯更少。但我們仍持續聚焦短期留任，並確保特別是那些入職第一年的夥伴——我們認為這仍是可改善的機會；我們知道這會有成本，也就是我們所說的這些人員的流失（churn），因此我們會謹慎看待。我也會說，這對我們而言仍然是一個機會。

And we -- our team is continuing to focus and do a good job on that.

而且我們——我們的團隊仍持續聚焦在這件事上，也做得很好。

Thank you. That's all for me today.

謝謝。我今天就到這裡。

Connor Cerniglia, Bernstein.

Connor Cerniglia，Bernstein。

Great. Thank you for having me. Could you speak a little bit about some of the difficult comparables you're lapping next quarter from last year? I know you commented that Q4 is where you'll really see the improvement. But just looking at insurance and claims last year, it was a pretty big tailwind, like it was 1.8% of sales. More recently, it's been the 3% to 3.5% range. Am I right in thinking that there's a pretty stark difference in margins between Q3 and Q4?

很好。謝謝讓我提問。你們能否談談下一季相較去年所面臨的一些較困難的比較基期？我知道你們提到第四季才會真正看到改善。但就去年保險與理賠來看，那是一個相當大的順風，約占銷售額的 1.8%。而最近則是在 3% 到 3.5% 的區間。我這樣理解對嗎：第三季與第四季之間的利潤率差異會相當明顯？

Or is my math wrong on that front?

還是我在這方面算錯了？

You have not done your math wrong. That is exactly right, Connor. I would just say that, yes, we hope that we're going to have a more favorable Q4. And so -- but we know in Q3 that we definitely -- everything went in our favor in Q3. I mean our -- our [indiscernible].

你沒有算錯。Connor，你說得完全正確。我只想說，是的，我們希望第四季會更有利。因此——但我們也知道第三季確實——第三季一切都對我們有利。我的意思是，我們——我們的[聽不清]。

I mean it was a really wonderful Q3 last year. So we just -- we -- our crystal ball is a little bit fuzzy, but we certainly hope that the -- the rest of the year, we will kind of be at the numbers that we've told you, and we'll be continuing to progress, but Q3 is going to be the more difficult comp by far.

我的意思是，去年第三季真的非常出色。所以我們只是——我們——我們的水晶球有點模糊，但我們當然希望——今年剩下的時間，我們大致能落在先前告訴你們的數字上，並持續推進；但到目前為止，第三季將是最困難的比較基期。

Okay. Great. I just want to make sure expectations are correct there. That's it for me.

好的。很好。我只是想確認大家的預期在這裡是正確的。我就到這裡。

Thank you, Connor.

謝謝你，Connor。

Anthony Chukumba, Loop Capital Markets.

Anthony Chukumba，Loop Capital Markets。

Good morning. Thank you so much for taking my question. So actually, I had a question on M&A, specifically, if you could just provide some color on the acquisitions that you did in the second quarter. Thank you.

早安。非常感謝讓我提問。我其實想問的是併購（M&A），特別是你們能否就第二季所做的收購提供一些補充說明。謝謝。

So Anthony, thanks for the question. We acquired Romex in the quarter. That was the largest of the acquisitions that we had -- and I would tell you that we find our pipeline to still be very healthy as we look towards the future. I mean, Romex is doing well in the quarter, already providing good results for us. But we remain disciplined in how we evaluate our M&A targets.

Anthony，謝謝你的問題。我們在本季收購了 Romex。那是我們這一季所做收購中最大的一筆——我也想告訴你，展望未來，我們的案源（pipeline）仍然非常健康。Romex 在本季表現良好，已經為我們帶來不錯的成果。但我們在評估併購標的時仍保持紀律。

And so we have a really healthy pipeline for the future.

因此我們未來的案源非常健康。

Yes, we closed several other tuck-in M&A deals in the quarter. All nice deals, really good companies. We have a -- as Will said, we have a good pipeline, and there's still plenty of companies out there that -- our good culture fits and that we would like to add to our family of brands here at Rollins. So nothing fundamentally has changed or shifted both between the fee space or anything else there that gives us any pause that we can't continue to drive 2% to 3% of revenue from the M&A side.

是的，我們本季也完成了幾筆其他的補強型（tuck-in）併購交易。都是不錯的交易、很好的公司。我們有——如 Will 所說，我們有良好的案源，而且市場上仍有很多公司——其文化與我們契合，我們也希望把它們加入 Rollins 旗下的品牌大家庭。因此無論是在估值環境或其他方面，都沒有任何根本性的改變或轉向會讓我們有所顧慮，以致無法持續透過併購端帶動營收的 2% 到 3%。

That's helpful.

這很有幫助。

Thank you so much.

非常感謝。

Thank you. At this time, I would like to turn the floor back over to Mr. Gahlhoff for closing comments.

謝謝。此時，我想把會議交回給 Gahlhoff 先生作結語。

Thank you, everyone, for joining us today. We look forward to speaking with you again on our Q3 call later this fall. See you.

感謝各位今天加入我們。我們期待在今年秋季稍晚的第三季電話會議上再次與各位交流。再會。

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

各位女士、先生，感謝各位的參與。今天的電話會議到此結束。您現在可以掛斷電話或登出網路直播，祝您今天剩下的時間愉快。