Ken Krause
Executive Vice President, Chief Financial Officer, and Treasurer at Rollins
Thanks, Jerry, and good morning, everyone. The first quarter reflects continued strong execution by the Rollins team. A few highlights at the start, growth was robust to start the year. We delivered revenue growth of 13.7% year over year. Organic growth was 7.5% and we saw significant improvement moving throughout the quarter as organic revenue growth accelerated to over 10% for February and March. Adjusted operating margins were 18.4% up a healthy 130 basis points with strong gross profit performance and solid expense leverage, despite incremental investments aimed at growing our business.
Cash flow continues to be very strong with free cash flow increasing 29%, enabling a balanced capital allocation strategy. Diving farther into the quarter, we saw good growth across each of our service offerings. In the first quarter, residential revenues increased 16.5%, commercial pest control rose 11.4% and termite and ancillary increased by 11.7%. Organic growth was also healthy across the portfolio with growth of 4.3% in residential, 10.1% in commercial and 9.3% in termite and ancillary.
As Jerry mentioned, our residential organic growth was impacted by a slower start in January. To provide context, February and March total organic growth was a very strong 10.8% versus 7.5% for the quarter. And looking at residential revenue specifically, February and March organic growth was a healthy 8% versus 4.3% for the quarter. We are pleased with the consistent growth we continue to see across the business.
Turning to profitability. Our gross margins were healthy at 51.2%, up 90 basis points versus last year. We continue to be positive on the price cost equation and saw good performance across several key cost categories. While Fox was accretive to gross margins for the quarter by about 40 basis points, organic margin improved 50 basis points, as we saw nice leverage from people cost, fleet and materials and supplies.
Quarterly SG&A cost as a percentage of revenue decreased by 10 basis points versus last year. Excluding the earnout adjustment for the Fox acquisition, SG&A cost as a percentage of revenue decreased by 20 basis points in the quarter. We saw healthy leverage from administrative related costs which enabled reinvestment and incremental advertising and selling expenses associated with growth initiatives that Jerry discussed.
First quarter GAAP operating income was $132 million, up 18% year over year. Adjusted operating income was $138 million, up nearly 23% versus prior year on approximately 14% total revenue growth. Adjusted operating margins were 18.4%, up 130 basis points year over year, on strong gross margins coupled with solid expense leverage.
First quarter EBITDA was $160 million, up over 14% and representing a 21.3% margin, up 10 basis points versus last year. You'll recall that last quarter we called out a negative impact to adjusted EBITDA due to lower nonoperational gains versus the comparable period in the prior year. We saw a similar dynamic in the first quarter as well. Given that we do from time to time divest nonoperational assets, we have made the decision to exclude gains and losses on these types of sales. Adjusted EBITDA, adjusted net income and adjusted EPS are measures of operating performance, and this change will allow us to better compare our underlying performance more consistently over time. A table showing the revised metrics for fiscal 2023 is included in our earnings release.
First quarter adjusted EBITDA was $161 million, up 19% versus last year. Adjusted EBITDA margin of 21.5% was strong, improving 100 basis points driven by leverage across the P&L. Incremental adjusted EBITDA margin was 29%, a healthy result considering that Q1 is a slower period, and can have a lower profitability profile as we invest ahead of our busier seasons.
The effective tax rate was approximately 24% in the quarter in line with the prior year. Quarterly GAAP net income was $94 million, or $0.19 per share, increasing from $0.18 per share in the same period a year ago. For the first quarter, we had non-GAAP pretax adjustments associated with the Fox acquisition related items totaling approximately $5 million of pretax expense in the quarter. Accounting for these expenses, adjusted net income for the quarter was $98 million, or $0.20 per share, increasing over 17% from the same period a year ago, despite the higher level of interest costs on the higher debt balances versus the comparable period.
Turning to cash flow and the balance sheet, operating cash flow increased 27% in the quarter to $127 million. We generated $120 million of free cash flow, a 29% increase versus last year. Cash flow conversion, the percent of income that was converted into operating cash flow was well above 100% for the -- 120% for the quarter. We made acquisitions totaling $47 million, and we paid $73 million in dividends, both up versus the same period a year ago.
Debt-to-EBITDA leverage is well below one time on a gross and net level, and our balance sheet is very healthy and positions us well to continue to execute on our capital allocation priorities.
In closing, our performance this quarter continues to demonstrate the strength of our business model and the engagement level of our teams. Demand is healthy, and our acquisition pipeline provides us a sense of optimism. We remain focused on providing our customers with the best customer experience and driving growth both organically and through disciplined acquisitions. With that, I'll turn the call back over to Jerry.
