Good afternoon, everyone, and thank you for joining us today. Welcome to JP Morgan U.S. All Stars Conference in London. My name is Tomo Sano from JP Morgan. We are very pleased to host Rollins this afternoon. Joining us today, Jerry Gahlhoff, CEO and President as well, and Will Harkins, Chief Financial Officer. Will, before we get started, congratulations on the new CFO role.
Thank you.
I think this may be one of the first investor conference in London in the new positions. So, congratulations, and we are delighted to have you with us today. It has been an interesting year for the company. Investors have spent a lot of time trying to better understand the unusual demand volatilities experiences during the second quarter, while also evaluating the long-term opportunities around the commercial growth, technology investment, and M&A. Today, I would like to spend some time discussing what happened in second quarter. Also, what you are seeing as we move forward to the back half of the year, and then why you remain confidence in the long-term growth outlook for the business. With that, let us jump right in. Jerry, maybe we can start with the big topic on everyone's mind.
It's been roughly 60 days after second quarter results, which came with a lot of the demand volatilities. Could you take a step back and give us your key takeaways from second quarter, and also what you learned and where you think business stands today as we move forward to the back half of the year? Thank you.
Right. So thank you, Tomo. It has been quite a saga for us. I think to help give some context to this discussion, it may help to even go back further, briefly, into late last year and early this year, because there's been a lot of noise. There's been a lot of, I guess, speculation about what's going on. I hear things, but yet I'm also living it. So I live it each and every day. So when I hear things, I'm like, "Well, that's not at all what we're seeing or what we're experiencing." So, I thought I'd give you my perspective on how this has all played out. So if you go back to the fourth quarter last year, and actually most of last year. Go back to, say, March or April of 2025.
I had talked about softening lead generation coming through the business from about March on of 2025. We were seeing these single digit, mid-single digit, 5% lead declines throughout the performance marketing driven brands like in Orkin. That was fairly consistent through the year. We still grew really well, achieved great results, because the lead volume that we were getting was higher quality leads that were converting at a higher rate and also starting at a higher rate. So our volumes were good and we were dealing with that. Fast-forward through 2025 to about November. November, we actually, in much of the U.S., had kind of an early winter, and that seemed to have halted the pest pressure a little bit early. It was by weeks. Normally it's end of November, beginning of December. Instead, it was that first week of November that was really quite different.
So in some ways, winter just kind of started early, Tomo. So, we reported fourth quarter, and it was a lot of our one-time business that was impacted. People were wondering, "Well, is it really the weather or is somebody else taking share? What else is going on in the market?" There's a lot of speculation. We're like, "No," we knew exactly what that was. You go into January. January was really tough, and we had ice storms that affected much of the South. We had branch closures, branches that couldn't drive and operate safely. It really was a challenge operationally. As we moved through the quarter, we saw similar kind of lead changes like we saw in 2025. As we moved through the quarter, we exited March with an 8% organic growth rate.
Things were looking good and things looked healthy. April was fine. It wasn't a record-setting month, but it was solid. Then we move into May. As we moved over the course of May, especially as we moved towards the back half of May, things started to deteriorate. Those are times in our business when you get close to June, when the lead volume and the activity in this space is really typically quite high. That separation really started. You really started to feel it as we moved through the back half of May. June had some highs and lows. The end of June was decent and we started out July good. Then it seemed to drop again, and I talked about that on the earnings call. At times, there were glimmers of hope and some times when things isn't strong.
Then you move forward into, as we talk about current environment, this softness has really remained with us this entire time. This extra softness in the leads, where we're talking about double-digit lead declines instead of 4% or 5% lead decline. It made for a really challenging environment. Looking back on the Q2 earnings call, we talked about, is it the consumer? Is it the LLMs? Is it pest pressure? Or all these things. We really started doing a deep dive into what are the things that are driving some of this change. We were working on that as we ended the quarter and doing some of the look back on there.
Where we land today is we tested a lot of things, we looked at the data, and there may be some degree of it that's tied back to the consumer and the consumer health. We don't think that's a lot because we tested, we looked at our income bands, we looked at lead volume by income band, and you would have suspected that the lower income bands may have seen steeper reduction in lead volume. That really wasn't the case. It was proportional across all of our income bands that we're aware of. That really didn't seem to be it. It just wasn't significant enough to represent the significant change. We looked at pest pressure. We did see some change in certain, what I call bellwether pests, like mosquitoes and things that were down single digits.
Looking at the re-service rate, that for us is an indication of pest pressure. Then you have the LLMs, which is the unknown, and we also learned that March 19th is when Google went to AI Overviews and all their default search, which- May 19th. What did I say? March. March 19th. But May 19th is when they went to the AI Overview as default search, and that's also when we started to see that gap really begin to widen as well. Certainly, if I had to name it, I would say certainly, at least 50%-60% of what we experience is probably related to this shift in the LLMs, and there's probably also a few other factors that are involved there, probably at a much less level. Since then, we've been focused rather aggressively for our marketing teams. We've navigated changes like this before.
We navigated when it went from Google to Google LSA and some other challenges over the years. We will navigate this one too. We have engaged some other outside help with our team. We have a great, fantastic team that I believe in, that I know can help us navigate this. Rather than playing one game like we used to play or just a couple of digital acquisition methods, now we have to play in how do we deal with Gemini, how do we deal with ChatGPT, how do I deal with Claude? There are all these things that all value certain things differently. We have to look at our content online, what we do on our websites, how we feel, making sure that our brands feel like we are local companies in the markets that we serve.
We have 400 branch web pages that all have to make sure we have the local feel. We have to do things like increasing our price transparency. We have to start talking about things like same-day service, next-day service as part of our value propositions. Maybe more pricing transparency in our business so that when we are searched, a consumer has a range to compare us to competitors in the market. These are things that we are out there doing right now and learning quickly. If you think about the shape, the steep S learning curve of this and the AI, how that is, and we are having to do much the same. I remain optimistic. What I cannot tell you is, are we going to have this kind of fixed in the next two or three months, or is it going on to next year?
I really do not know. That is what makes Rollins so great. We have lots of different brands, lots of different ways we acquire customers. For example, our Fox brand continues to be very healthy, driving through the door-to-door space, driving new growth, and they are growing great organically in the residential space, which also demonstrates that the market is still there and the appetite for our services is still there.
Our HomeTeam business, which is also mostly residential through the home building channel, is really strong. We also have opportunities to continue to focus on our commercial growth. That is a great opportunity for us to drive as well. We are excited about it. A lot has changed, but yet I feel like if there is any team that is going to survive this and drive this level of consistency, it is us. You think back 25 years of every quarter of organic growth.
Not one quarter have we not grown
That is amazing.
organically for 25 years, and we ought to be able to continue that. That is a winning streak. While it might soften or where it comes from might shift over time, we are going to still be that resilient company with a strong customer base that is always going to be there for us. That is how it is really shaped up over recent months.
That is helpful context, Jerry. Maybe building on that, if we look at the share price over the past three months, the stock is down 25%. As a CFO, how do you translate this to capital allocations, reinvestment, M&A, and then some share repurchase? What is the capital allocation here?
Thank you, Tomo. Every meeting we've had starts with what Jerry just said about, "Tell me a little bit about the industry, the market, what's going on with residential sales and organic growth." It always ends with capital allocation. I am really happy that you are hitting this second. Some of you in this room have heard us have this very same conversation. But the one thing that I can tell you is that we have an authorization with our board.
As we think about capital allocation, there are a couple of different components to it. First and foremost is always going to be M&A. We want to reinvest in the business through M&A. Second is we are going to continue to grow the dividend. Then third, which is what most people are asking about at this time, is what do you do with share repurchases? That is a component of the strategy as well. We have an authorization from our board, we have had it for years, that we can repurchase shares, up to 11 million of them. You have seen us play in our shares when we have gone to a secondary, the family has sold down. You have seen that over the last two times.
Earlier this year, we started talking about the fact that we were going to repurchase $40 million worth of shares just to really offset the dilutive effect of our stock compensation program. But we see the same share price that everybody is seeing out there. We absolutely believe that the company is undervalued at the moment. One thing that we have done in the third quarter is we have repurchased $100 million worth of shares in the third quarter. That is something that will continue to be something that we discuss at the board level. That doesn't mean that it is 100 and done. Like I said, we have a much larger authorization that is out there, but we do want to deploy a very. We want to be very intentional about how we reinvest in the business.
While that is one leg of the stool, there are others as well. I think the second component that I would want to just share with you is that people often ask, "Well, if you do X, can you also do Y?" It is not an either/or story. It is, we can certainly continue to go after strategic M&A opportunities. We can continue to grow that dividend, and we can also repurchase our shares, because our balance sheet is incredibly healthy, as many as you know. We are only at one times leverage, so there is opportunity for us to do more. Thank you for that question, not waiting until the end and kind of bookending it.
Thank you. Going back to you, Jerry, maybe just to unpack that a bit, like what happened in the second quarter and what is happening. You described this situation as a multitude of factors. Which hypothesis did you explore that didn't fully explain the patterns, whether regional mix, competitive dynamics and pest pressures and micro, a lot of things going on, and how would you respond to that actual questions?
Yeah. Luckily, we have a pretty good data team, and we have good, rich data. We could pull data from looking at geographies, various, our Orkin divisions. We have played with weather data, and kind of backing our way into our history on weather. Look, analyzing our income band to see what is going on. Had something fundamentally changed in the market, which doesn't appear to be the case, that there is not something fundamentally different in the consumer. But one of the questions, and we still don't know this answer, it deserves some more research, is if our leads are down and demand is still there, where is it going? There is this debate about is it going to DIY? Is it going hyper local down to one or two person operators in the space?
We don't yet have a really good sense of where that lead volume is going or what consumers are choosing to do. But I think that will reveal itself over time as we do more research in that space. The pest pressure side of it is something we continue to monitor and see if there is something going on there. It is interesting too that, and this is where you lead more towards LLMs side, is when it dropped, it dropped those same kind of percentages everywhere.
It just suddenly, no matter if you were in California or in Virginia, those kinds of declines just were spread out equally. They weren't necessarily across certain geographics with certain weather or maybe certain types of consumer heavy. We investigate all those kinds of things, really were things we looked at, and we also began trying a lot of things. We tried it and this idea that you learn fast by failing fast, and we put a lot of things into place trying to make adjustments. Look, the reality is a lot of them didn't work. A lot of these adjustments that we attempted to make across June and July, they just flat didn't work. There were a couple that did, but that was rare. But we have to encourage our teams, you got to keep trying these things. You got to keep learning.
The faster we learn, the faster we adapt, the faster we'll get through this. Partnering with other people is going to continue to help us drive that. Partnering with people that are experts in this field will help us. But I think Sammy said it earlier, it's a brave new world out there. We're not the only ones experiencing it, but I know that we'll figure it out. We'll get past it.
Thank you. Investors are debating whether LLM and AI-driven search is changing the lead generations. How are you framing that risk opportunities today, and how are you measuring, monitoring it?
Yeah. We think there are a lot of opportunities, and basically, over the last several months, to put it in a nutshell, the customer journey is shifting a lot. How you discover us, how you discover our brands is shifting a lot. That means how we track lead generation and that customer journey, we have to adapt a lot of the tracking so that we know where things are going and how to allocate resources. So that's a really high priority is tracking that customer journey. How are they finding us and how are we then catering to them and meeting them where they are so that we're top of mind?
That's probably the biggest thing we're challenged with, is making sure we get that lead attribution part worked out, so that way we know exactly what's going on and then can continue to adapt as things change moving forward.
Mm-hmm. Jerry, if you could explain to us how are differences between Google search era versus where we are today, having four to five or six tools that the customers actually can explore to get to Rollins.
Yeah. Old school Google search of whether it was buying keywords or doing Google ads or pay per click and all those kinds of things that I think most of you know how all that worked has evolved. At that point in time, Google ratings or your Google reviews were the key driver of a lot of that search, and how you appeared in a lot of that search. Today you have ChatGPT that, of course, chat's not going to use Google's reviews. They're going to use someone else, and they've partnered with Yelp and so now you have to also have the Yelp reviews, or they're using the Better Business Bureau, or they're using Reddit to feed their content and their responses. Different ones are all doing different things.
Now, that shift from us understanding and knowing Google and maybe a couple others on a smaller scale has really shifted into, now I've got to run five or six of these things, understand what makes them all tick, and then how do we adjust to them over time. That's really what the marketing team is focused on is first learning, understanding, and then you have to stay involved with how they evolve and how things change over time because you can get different result today typing in the same query that next week you might get a different result, right? So we're going to have to stay top of mind, really managing that on a day-to-day basis moving forward.
Mm-hmm. Thank you. Let's talk about the second half outlook and updated 2026 frameworks. You updated 2026 expectations to 6% organic growth and 10% incremental margins with improvement more weighted to fourth quarter. What gives you confidence in a back half set up, and why the Q4 weighting this year?
When we came up with that guidance and we're looking at the models that we had at the end of the second quarter, as we were preparing for our earnings call, it was looking at the company's forecast of revenue growth and then trying to look at what we were going to be hurdling in the third quarter and the fourth quarter. Certainly part of the revenue story that we were thinking is through the first half of the year, we had 6.1% of organic revenue growth. We said we don't expect it to meaningfully decline from there. We expect it to be more the same as we go through the end of the year.
We also didn't expect it to meaningfully improve in the back half of the year with everything that we had seen as we were looking at the different hypotheses that we had about what was going on in the business and in the market. That's how we arrived at our 6% organic growth for the year. The one thing that you just mentioned and that we wanted to make sure people walked away with, and I'm grateful to be able to reiterate that here on a public webcast, is the fact that it is weighted towards the fourth quarter. We certainly have seen just more turbulence as we've gone through the third quarter even, and gratefully that's what we were also forecasting in the sense that we knew it was going to be a choppier third quarter as well, we assumed.
We believe when we get to the fourth quarter, we've got a slightly better hurdle that we're going to be overcoming.
Last year in the third quarter was all the stars aligned. It was an amazing quarter, and we're lapping that.
That's right.
Tough comparison.
Certainly when you get down to the operating margin. When you get down to the margin side of it, that was where we came up with our 10% incremental margin story because the third quarter really was one where every metric down the P&L, you would just check all the boxes in third quarter of 2025. We still continue to have the medical headwinds that we've experienced so far this year. That will continue to be seen in the third quarter and also in the fourth quarter. We've got gains from a fleet perspective that we're lapping in the third quarter. We had a lot of, you've heard us talk about our auto liability claims, and so in the third quarter of 2025, almost everything went in our favor. We had some favorable settlements that we went through.
There were just some positive results that were coming through on that line item. We are not expecting that to happen in the third quarter of 2026. So, definitely something, even though we say 6% organic revenue growth, 10% incremental margins, I would not evenly weight those between the third and the fourth quarter. I would put the weighting more heavily on the fourth quarter, to get to that full year number.
Thank you. If you could talk about how should investors reconcile the improvement, like trends you referenced in late June and early July, with a cautious full year guidance.
Yeah.
If you could talk about that point, please.
That's a good question as well. You would've heard us on that second quarter call talk about the fact that we did, towards the end of July, in the very end of July, or sorry, the end of June, see some positive results, especially when we were looking at leads and things that at the end of June, the very beginning of July, we felt like things were starting to trend more favorably.
We also tried to make sure that we were being very cautious, and we shared with everybody, we've seen this before. Just because the end of June, the beginning of July, we're showing some positivity and some green shoots, we didn't want to forecast that and extrapolate it into the third quarter and the fourth quarter. Because like Jerry mentioned earlier, we finished Q1 with the best month that we've had so far this year in March. We finished Q2 not with the best month we've had, but it was certainly more favorable than the trough that we experienced in May.
We just knew that there were a number of head fakes that we've experienced throughout the year, and we wanted to tame that a bit and make sure that we were being very prudent with our guidance. I think that that's exactly what we've experienced. We saw some positive green shoots at the end of June, beginning of July. That doesn't mean, I don't want anybody to take away from this conversation that July and August have continued that trend. We have continued to see that volatility. There are days that look better than others, weeks that look better than others, but still a continuation of what we've
Still tough
in the first half of the year.
That's right.
Sure. Thank you. Shifting here to cost management, in terms of protecting margins while staying true to people first cultures and initiatives. in 2Q, what was the biggest cost headwinds? Investors actually asking medical, service, labor, deleverage, and fleet and fuel oil we talk about.
Yeah.
We also talk about the importance of spending more cost to analyzing what's happening in the market and the marketing, operating expenses, and so on. Could you talk about how you manage the cost versus protecting margins and more people first, the culture?
That's right. Maybe I'll start with just some of the things we've done to protect the margins and then let Jerry talk a little more about people first and culture. The biggest things are what you just mentioned, medical claims. Fleet, we have seen fuel prices increase. The good part for us is that we've always said that they are less than 2% of sales, fuel at least, and it continues to be less than 2% of sales. It's more than last year. We're seeing 30 basis points of, it's getting worse. But at a pretty small level. We still have not gotten to the 2% of sales level. We're still below that. Some of the things that we're doing there is that we've got more hybrid vehicles in our fleet, so we're trying to protect ourselves from fuel there.
We went out to RFP with our vendor for fleet, so we're seeing some favorability just in our fleet costs overall as a result of that RFP. So we're trying to protect where we can. What you would've seen in the second quarter from a people related cost, not just medical expenses, but we were staffed for 7%- 8% growth. If you're staffed at the north end of that, because we kept thinking the season was coming, we were going to eventually get the demand that we had planned for. That has been pulled back. So we are no longer staffed at that level. We've right-sized the business. We started doing that at the end of May, going into June. Third quarter won't have that necessarily against it.
But those were things that were within our control that we were able to take action on pretty quickly. As far as marketing spend, we're reallocating those dollars. We've had a couple of questions in the meetings we've had today just around how do you shift that? Will you increase your marketing spend? That is not what we're planning to do. We're just reallocating what we're investing in and where we're deploying those dollars, to the channels that are more advantageous to us. Also continuing to do the research to figure out how do we better play in a brave new world. Maybe I'll let you, Jerry, if you want to talk through just some of kind of the culture.
Yeah. I think from a people first standpoint, maybe you've heard me talk about the Rollins Way, which is all about people. We're in the service business. This entire business is about relationships. If we have healthy relationships with our teammates, is what drives healthy relationships with our customers. Because they are front and center and key to everything. So, we have certain brands where they really don't sense a lot of this and haven't had those like a Fox and a HomeTeam brand where they're growing and going gangbusters. But then we have other brands, say like Orkin, that have had a tougher time navigating this. That's tough on people. Let me also add this, a lot of our teammates at Rollins are also shareholders in our company, so they all personally feel it as well.
And that's for me, sometimes where some of the illogical or irrational impact on our stock price kind of bothers me, because I know what goes on inside, and I see how hard our people are working and what they're doing. And then they look at that stock price because they're shareholders, too, and they go, they don't understand it either. They're like, "Well, what's this reaction about?" Because they know fundamentally, how good this business is and how good their service is that they provide each and every day. So as a leader of our organization, it's really important that is how we show up. We have to show up with a positive attitude. We have to encourage people. We can't lose sight of our values, our core values, and who we are and what we're all about. We talk to our people about, this is cyclical.
This is short-term in nature. Don't worry. Don't panic. We don't need knee-jerk reactions. We have to tell our leaders, "Look- We don't need to be making what appear to be really good short-term decisions that are at the sacrifice of the long-term of our business. In my job, I want Rollins to be around 120 Orkin's been around 125 years.
I want to make sure that Rollins is around another 125 years, not just my tenure here. So my commitment is also to the long-term, and I think theirs is too. So how I show up every day determines how my leaders on my leadership team show up every day, and it's just really important that we remain positive, and we talk to our people, and we have to communicate with them about what's going on, and what they're experiencing, what they're feeling. Because most of them are out there doing their job every single day and don't notice anything significantly different in the day-to-day. But where they see it is when they open up their phone and see a stock price-
Right
or they look at those kinds of things and they're like, "Gosh, what happened?" And that's the kind of this illogical part of this that doesn't make a lot of sense to me.
Mm-hmm. Thank you. After my next set of questions, I am going to see whether people on the floor have a question, so let us know. On the pricing strategies, CPI Plus, investors are debating when it comes to LLM, AI, the consumer business residentials. I think it is commercial side, I will ask later, is more different dynamics compared to the parts of the residential business. Are you worried about pricing negotiations from consumer, the spending, then especially low-income households or even in generally new generations talking about the pest control with some discount, like for Rollins. What do you think?
I would turn that question back around and tell you what I am actually worried about, and what is on my mind and what I think we have to action behind. That is exactly why we have to be the best service company in the world. Because if you have relationships with your customers, if you are serving customers the right way, and you build loyalty with your clients, these discussions about price over a few dollars on a service never come into play if those relationships are there.
The best way we can, as a company, prevent ourselves from becoming commoditized and this being about price is exactly what we were just talking about. It is about our people. It is about the work that we do and the relationships that they build. It is really hard for a customer to fire Will if Will is their technician or their Orkin Pro. It is really hard for them to do that over $3 or $4.
That is often what we are talking about here. I do not have a lot of worry about that. What I think about is how do we constantly drive better levels of service in our organization, so that that never even factors into someone's mind. That they would, when they're thinking about, "I got to choose between this or that," they're never going to choose us because they recognize the high value that we create and the relationship that we have in their lives.
Thank you.
Yeah.
Yep. That's clear. Any questions from audience? Yes, please.
Hi. Thanks very much. Could I ask two quick ones, please? Is there any element of change in the competitive environment in the recent period, either the bigger players or the independent sector? Secondly, perhaps a little bit aligned with that, is there a braver, newer world even coming with what's rushing through the stock market at the moment in the form of consumer personal agents? Do you have a concern about that arbitraging or lead creating in a different way, even to the one you're currently adjusting to? Thanks.
Sorry, I couldn't quite catch the first part of your-
Competition.
About-
Has competition changed, either the independents or the-
Right
bigger chains?
Right. No, I don't think there's been any significant shifts in competition. This is a very fragmented market, a lot of competitors. Those competitors vary greatly city to city, state to state. A lot of really good companies. There's a lot of good service providers. That only serves, I believe, to make us better each and every day. That means that we can't rest on our laurels. We always have to strive for continuous improvement and to try to be better. On your point about the personal assistance side, like take Meta's Muse and things like that. As these things evolve and I know a little bit about them, not enough, I'm not a user. I still come back to those relationships that you have.
If Will is your technician and you're seeing him all the time, and Muse comes back and tells you, "Hmm, do you really think you need this service with so and so?" If I have that relationship and I know I get good service and my home is protected and I have that peace of mind, is that really worth that little bit of out-of-pocket every three months? We have to work hard to make them not even question that, not even think that. If they want to do that with something else, if there's no personal relationship with, I think that's a much stronger argument when those relationships aren't there than when those. These are people that you're letting into the most intimate parts of your house, that you need to have those relationships with.
It's different than, say, the people that are maybe your cell phone provider, where somebody's telling you can save $20 a month if you call and do this. I do think we need to be aware. I'm not trying to come across too confident on this. I think we need to monitor, and we need to prepare, and also empower our frontline people that when they get objections or they get people talking about price or can you save me money, that they're empowered to do that. They need to be empowered to listen to their customers with empathy, hear their concerns, and make adjustments, because it's much easier for us to deal with that on a personal level than it is to get a new customer and start from scratch.
I do think that's an opportunity for us to really double down on moving forward, is how we make sure that our people are empowered to make those decisions.
Thank you. Yes, please.
Just maybe a follow-on question there. You touched on the shift in models, and you said Google shifted its model in the past, and you said you're just trying to understand how it will work with Gemini and Claude and maybe the personal assistants. Do you see that as a one-off cost, understanding these different models, done, move on, or is there potential that this is an ongoing? Because it looks like, I don't think we're forecasting much change in margins, a bit of a dip down this year and bouncing back next year. I'm just trying to understand whether this is an ongoing change in how much you need to spend, or is it just a one-off, understand them and move on. Thanks.
It's a great question. I don't think we know just yet. I think that'll take a little. I think I'll have better feel for that three to six months from now. I think what we're doing right now is changed permanently. There's no doubt about that, and I don't think it's going to go back to being maybe as easy as it was. I also believe that's our strength, because we have the size, scale, and resource to be able to do it. I'm always going to challenge my team to try to work within the budget that we provide and allocate those dollars, and not have to spend any more. That's a Rollins discipline about margin management and ensuring that we're monitoring costs and not letting those kinds of pressures get out of hand. It changes our operating model.
We're acutely aware of trying not to let the business model have some radical shift in it, especially on the residential side. So we're going to fight against that. For additional investments to make sense, it needs to make a great deal of financial sense for us to do that. Because I can also make the choice that it's better for me to grow in some other section of our business and fund that compared to that, if that cost of customer acquisition and that lifetime value to customer equation isn't quite working out. So those are kind of real-time, game-time decisions that we'll sort out over time.
Thank you. As we have three minutes left, Jerry, I would like to ask you about the culture questions. In moments like this, when demand shifts quickly, what is Rollins' advantages here? How do people first training and operating philosophy translate into revisions and the execution?
Well, in the very beginning, I said we're a service company, that's a relationship and people company. So the investments that we make in training to make sure our people come out equipped with the tools that they need to be successful, the training and the investment that we make in our leaders. Because the experience that our frontline people get that are serving our customers, their experience at work is greatly impacted by the leaders that they work with. That's why we've invested so much in our Co-lab training, that is where probably about 80%, we've started at the top down and trained every one of our leaders from the top down on the concepts of servant leadership and what we expect of people that lead at HomeTeam or Fox or Orkin. We have the same core values and the same way we lead people across Rollins.
That's what it means to work at Rollins and be part of Rollins. It's how we lead. Trying to drive consistency in that across our business. We're about to put all, it's like 2,200 leaders going through that program. I think we'll have that finished as we get into the fourth quarter, then it's on to phase II. It's not a one and done. It's an ongoing learning, and we'll go to Co-lab 2.0 and drive that to the next. That's a big part of creating culture across our organization. Also, when we bring in Co-lab, the big part of Co is that we bring leaders from different brands in, and they're all going through this leadership experience together. They're getting to know each other. They're working across brands.
They get to learn that they're actually more alike than they are different, and they start helping each other. That, over time, becomes a superpower at Rollins. When our brands are collaborating and truly working together, maybe passing business to one another, that one does this, but another doesn't, and we put them in the environment where they can, that just benefits everybody. That's a big part of how we're driving culture at Rollins. We encapsulate that when we talk to our leaders and we talk to our frontline people, we talk about this concept of the Rollins Way. The Rollins Way starts with heroic impact. We have the opportunity to make a difference. Every one of us, whether you're a leader or frontline person, you can have a heroic impact each and every time you interact with a customer. You also have the opportunity to be remarkable.
That means going above and beyond and doing something that is the unexpected. If I'm there to do my pest control service, but I also brought up the trash cans and the newspaper and, "Hey, I noticed you have this plumbing problem in your house, so you need to get that fixed." These are all the things that we do to build relationship and be remarkable. Then the last one is essential together, recognizing that it takes a team. It takes all of us working together. Not one of us can do it in a silo. If we lead that way, and if our people serve that way, and we do that across all of our brands, at the end of the day, that's how Rollins wins. You take business models and the rest of it.
The end of the day, you can throw a lot of that out. It's about how we serve, what our customer relationships are like. That determines the longevity of Rollins, and that's why we're so focused on it.
Thank you very much. Okay, since our time is up, I'd like to wrap it up with the many thanks to Jerry and Will and everyone to join today. Thank you very much.
Thank you.
Thank you. Nice job. Thank you very much.
That brings our agenda to a close. Thank you for joining us at this year's U.S. All Stars Conference.