ServiceMaster Global Holdings (NYSE: SERV) reported Q2 EPS of $0.40, $0.05 better than the analyst estimate of $0.35. Revenue for the quarter came in at $534 million versus the consensus estimate of $516.23 million.

• Terminix residential organic revenue growth of three percent, including seven percent organic growth in termite
• ServiceMaster net income of $53 million and net income margin of 9.9%
• Terminix delivered 23.3% Adjusted EBITDA margins, year-over-year improvement of 190 basis points
• Strong free cash flow generation increased cash to $302 million with $677 million in total liquidity

“ServiceMaster’s strong performance this quarter despite the unprecedented challenges created by the COVID-19 pandemic is a testament to the dedication of our people and their commitment to serving our customers,” said ServiceMaster Chairman and interim CEO Naren Gursahaney. “Terminix saw strong organic growth in termite services leading to solid performance in its residential business. The Terminix commercial business saw improving trends as businesses reopened, underscoring the resilience and essential nature of our services. In addition, our actions to reduce costs resulted in improved Adjusted EBITDA margins and free cash flow conversion year-over-year. ServiceMaster Brands also performed well, with growth in national accounts and enhanced cleaning and disinfection services more than offset by the impact of COVID-19 on Merry Maids franchisees, as well as the impacts of a mild winter on ServiceMaster Restore.”

“Despite the difficult economic climate, we also made meaningful progress during the quarter on our key strategic priorities, which are continuing to contribute to greater focus and improved customer service levels across the organization. While pandemic related uncertainty remains, we are well-positioned to navigate these challenges and I am confident in the growth prospects of our business in both the short and long term.”

GUIDANCE:

ServiceMaster Global Holdings sees Q3 2020 revenue of $495-515 million, versus the consensus of $491.13 million.

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