Kenneth Krause
Executive Vice President, Chief Financial Officer & Treasurer at Rollins
Thank you, Jerry, and good morning, everyone. The team delivered a strong start to the year. Let me begin with a few financial highlights for the first quarter of 2023.
First, we delivered over 11% revenue growth in the first quarter with robust growth across all our service offerings. Acquisitions drove approximately 2% of the total revenue growth in the quarter. We expect to see meaningful improvement in growth from acquisitions for the remainder of the year, stemming from the acquisition of Fox we announced earlier this month.
Second, our continued emphasis on margin improvements drove 130 basis point improvement in EBITDA margins in the quarter. I will speak about incremental margins shortly, but as Jerry indicated, they were a bright spot. GAAP earnings per share increased 20% to $0.18 per share. And last but not least, we delivered a 15% improvement in operating cash flow and a 17% improvement in free cash flow. Let's look at the quarterly results in more detail, starting off with revenue.
It was up -- it was $658 million, up just over 11% on a reported basis. Currencies reduced quarterly revenue growth by 60 basis points on the stronger dollar, notably versus the Canadian dollar, the British pound and the Australian dollar.
Turning to profitability. We realized 30 basis points improvement in gross profit margin. Gross profit margins were 50.3% of revenue in the quarter. We saw good performance on gross profit as pricing more than offset inflationary pressures. We were more consistent in raising prices across all of our brands this year. We discussed our intent to do this on our year-end call, and it was good to see the impact of the steps we took on revenue and profitability.
Looking at 4 major buckets of costs: people, fleet, materials and supplies, and insurance and claims. These comprise approximately 90% of cost of services in the quarter. We saw improvements in margins associated with people costs as well as fleet cost. Material and supplies were neutral to margins, while insurance and claims were a headwind to margins.
We delivered improvements in SG&A expense as well. SG&A improved 40 basis points when stated as a percentage of revenue during the most recent quarter. Let's dive into the major categories of SG&A bit more.
People costs, advertising and selling costs and insurance and claims make up a majority of our spend in SG&A. Margins benefited in the people cost area. Advertising and selling related costs were relatively neutral to margins, while insurance and claims was a headwind to margins. As the case in the prior year, we expect to see SG&A tick up slightly in Q2 as we invest more heavily in customer acquisition-related costs across the business during the start of our more busy season in the second quarter.
We do not have any non-GAAP adjustments to operating income or EBITDA this year. GAAP operating income was $112 million or 17.1% of revenue, increasing 130 basis points from the same quarter a year ago. EBITDA margin was 21.2%, up a strong 130 basis points over the prior year EBITDA margin.
As I have consistently indicated, I like to look at the business using incremental margins or meaning what percent of every additional dollar of revenue growth is converted to EBITDA. On an as-reported basis, we generated incremental margins of approximately 32% in the most recent period. Quarterly GAAP net income was $88 million or $0.18 in an earnings per share, increasing from $0.15 per share in the same period a year ago.
Turning to cash flow and the balance sheet. Quarterly free cash flow was very strong in the quarter. We generated $93 million of free cash flow on $88 million of earnings. Free cash flow increased by over 17% in the most recent period. Cash flow conversion, the percent of income that was turned into cash was also a bright spot coming in at above 100% for the quarter. We made acquisitions totaling $15 million, and we paid $64 million in dividends. That remains negligible, and debt-to-EBITDA is well below 1x on a gross level.
We closed and announced the Fox acquisition earlier in April. We are excited about the strategic growth opportunities this acquisition will provide us. A few financial details. We expect this acquisition to add between $90 million and $100 million of revenue in 2023. The acquisition should add $18 million to $20 million -- $22 million of EBITDA for the remainder of the year.
We used a combination of existing cash balances and borrowings to pay for this strategic acquisition. We continue to be very active in pursuing additional acquisition opportunities. We expect the Fox acquisition to be accretive to earnings in the first full year with more meaningful contributions to EPS during the latter part of this year and into the first quarter of next year.
We are in the process of finalizing our purchase accounting, and we'll provide an update on this on our Q2 call in July after we complete that process. During the quarter, we refinanced our credit facilities that were set to expire in April of 2024. We closed on our new facility before the banking crisis in March, and we were able to successfully secure a more modernized facility that in addition to other benefits, provides us with the opportunity to incorporate sustainability metrics into the revolver in the future.
Additionally, we conducted an RFP for our external audit service provider and engaged Deloitte as our new auditor in place of Grant Thornton, who had been our auditor for the previous 19 years. We are making good progress on a number of general financial housekeeping issues that will help position us best as we continue to grow our business. We remain very well positioned to continue to fund our dividend and grow through acquisitions.
In summary, our quarter performance continues to demonstrate the strength of our business model and the engagement level of our team. We remain focused on providing our customers with the best customer experience and driving growth through acquisition. Organic demand remains robust, and we are very well positioned to continue to use our strong balance sheet to grow our business. The acquisition pipeline is healthy, and our strong cash flow and balance sheet positions us well to invest in our business. We continue to focus on execution and driving long-term profitable growth for our shareholders.
With that, I'll turn the call back over to Jerry.
