Q2 2025 Financial Highlights - Revenue grew by 6.3%, with organic revenue growth of 5.5%[9] - Adjusted Net Income increased by 17.0%[9] - Adjusted EBITDA increased by 13.9%, leading to a 170 bps increase in Adjusted EBITDA margin[9] - Free Cash Flow generated was $364 million for the last twelve months ended June 30, 2025[9] Q2 2025 Revenue Breakdown - Industrial revenue increased by 7.6% (7.0% organic), reaching $338 million[21, 22] - Consumer revenue increased by 5.6% (4.7% organic), reaching $340 million[24, 25] - Software and Advisory revenue increased by 4.3% (3.2% organic), reaching $98 million[27, 28] Q2 2025 Profitability - Industrial Adjusted EBITDA increased by $20 million, with Adjusted EBITDA margin increasing by 370 bps to 34.6%[22, 21] - Consumer Adjusted EBITDA increased by $4 million, with Adjusted EBITDA margin increasing by 20 bps to 19.1%[25, 24] - Software and Advisory Adjusted EBITDA remained flat, with Adjusted EBITDA margin decreasing by 70 bps to 15.3%[28, 27] Full-Year 2025 Outlook - The company affirms its 2025 outlook, expecting mid-single-digit constant currency organic revenue growth[34, 36] - Adjusted EBITDA margin organic improvement is expected to be approximately 24%[36] - Capital expenditures are expected to be 7% to 8% of revenue[36]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) UL Solutions reported strong Q2 2025 revenue and Adjusted EBITDA growth, with GAAP Net Income declining due to a prior-year divestiture gain [Overall Performance](index=1&type=section&id=Overall%20Performance) UL Solutions achieved strong Q2 2025 revenue and Adjusted EBITDA growth, with revenue up **6.3%** to **$776 million** and Adjusted EBITDA up **13.9%** to **$197 million**, despite an **8.5%** GAAP Net Income decrease Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $776M | $730M | +$46M | +6.3% | | Organic Revenue Growth | 5.5% | N/A | N/A | N/A | | **Net Income** | $97M | $106M | -$9M | -8.5% | | Net Income Margin | 12.5% | 14.5% | -200 bps | N/A | | **Adjusted Net Income** | $110M | $94M | +$16M | +17.0% | | **Adjusted EBITDA** | $197M | $173M | +$24M | +13.9% | | Adjusted EBITDA Margin | 25.4% | 23.7% | +170 bps | N/A | | **Diluted EPS** | $0.45 | $0.50 | -$0.05 | -10.0% | | **Adjusted Diluted EPS** | $0.52 | $0.44 | +$0.08 | +18.2% | - Management attributes the record second-quarter revenue to the company's resilient business model, strategic positioning in high-growth markets, and strong execution across all segments[2](index=2&type=chunk) - The decrease in GAAP Net Income was primarily caused by a **$25 million** non-operating gain on the divestiture of the payments testing business in May 2024, which was absent in Q2 2025[4](index=4&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) The Industrial segment led growth with a **7.6%** revenue increase, while Consumer and Software & Advisory segments also showed solid revenue gains [Industrial Segment](index=1&type=section&id=Industrial%20Segment) The Industrial segment drove growth with a **7.6% revenue increase** to **$338 million** and a **20.6% rise in Adjusted EBITDA** to **$117 million**, expanding its margin to **34.6%** Industrial Segment Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $338M | $314M | +7.6% | | Organic Revenue Growth | 7.0% | N/A | N/A | | **Operating Income** | $98M | $85M | +15.3% | | Operating Income Margin | 29.0% | 27.1% | +190 bps | | **Adjusted EBITDA** | $117M | $97M | +20.6% | | Adjusted EBITDA Margin | 34.6% | 30.9% | +370 bps | - Growth drivers included price increases, sustained demand for energy and automation testing, and expanded laboratory capacity[7](index=7&type=chunk)[9](index=9&type=chunk) [Consumer Segment](index=2&type=section&id=Consumer%20Segment) The Consumer segment achieved a **5.6% revenue increase** to **$340 million** and **6.6% Adjusted EBITDA growth** to **$65 million**, with a slight margin improvement to **19.1%** Consumer Segment Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $340M | $322M | +5.6% | | Organic Revenue Growth | 4.7% | N/A | N/A | | **Operating Income** | $40M | $38M | +5.3% | | Operating Income Margin | 11.8% | 11.8% | 0 bps | | **Adjusted EBITDA** | $65M | $61M | +6.6% | | Adjusted EBITDA Margin | 19.1% | 18.9% | +20 bps | - Revenue growth was primarily driven by the consumer technology and retail sectors[10](index=10&type=chunk) [Software and Advisory Segment](index=2&type=section&id=Software%20and%20Advisory%20Segment) The Software and Advisory segment saw **4.3% revenue growth** to **$98 million**, but Adjusted EBITDA remained flat at **$15 million**, with margin contracting to **15.3%** due to higher compensation expenses Software and Advisory Segment Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $98M | $94M | +4.3% | | Organic Revenue Growth | 3.2% | N/A | N/A | | **Operating Income** | $1M | $3M | -66.7% | | Operating Income Margin | 1.0% | 3.2% | -220 bps | | **Adjusted EBITDA** | $15M | $15M | 0.0% | | Adjusted EBITDA Margin | 15.3% | 16.0% | -70 bps | - Adjusted EBITDA was flat and margins decreased due to higher employee compensation expense relative to revenue growth[11](index=11&type=chunk) [Financial Position and Cash Flow](index=2&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company demonstrated strong liquidity with increased operating cash flow and free cash flow, while reducing total debt and maintaining a healthy cash balance [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) The company achieved strong H1 2025 liquidity, with net cash from operations increasing to **$301 million** and Free Cash Flow rising to **$208 million**, alongside debt reduction and dividend payments Cash Flow for Six Months Ended June 30 (in millions) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $301 | $244 | +$57 | | Capital Expenditures | ($93) | ($113) | +$20 | | **Free Cash Flow** | **$208** | **$131** | **+$77** | - The company paid a dividend of **$0.13 per share**, totaling **$26 million**, during the second quarter[14](index=14&type=chunk) - Total debt decreased to **$612 million** as of June 30, 2025, following **$135 million** of net repayments on its term loan and revolving credit facility[14](index=14&type=chunk) - The company ended the quarter with **$272 million** in cash and cash equivalents[15](index=15&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) UL Solutions affirmed its full-year 2025 guidance, projecting mid-single-digit organic revenue growth and an Adjusted EBITDA margin of approximately **24%** [Full-Year 2025 Outlook](index=2&type=section&id=Full-Year%202025%20Outlook) UL Solutions affirmed its full-year 2025 guidance, projecting mid-single-digit organic revenue growth and an Adjusted EBITDA margin of approximately **24%**, alongside planned capital expenditures and continued acquisitions - The company affirmed its full-year 2025 outlook, including: - Mid single digit constant currency organic revenue growth - Adjusted EBITDA margin organic improvement to approximately **24%** - Capital expenditures expected to be **7% to 8% of revenue** - Effective tax rate estimated to be approximately **26%** - Continuing to pursue acquisitions and portfolio refinements[16](index=16&type=chunk)[17](index=17&type=chunk) - The company does not provide guidance for net income margin, the most comparable GAAP measure to Adjusted EBITDA margin, due to the unavailability of reliable estimates for certain reconciling items[18](index=18&type=chunk) [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents detailed financial statements, including condensed consolidated statements of operations, balance sheets, cash flows, and supplemental reconciliations of GAAP to non-GAAP measures [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The income statement for Q2 2025 shows a **6.3% revenue increase**, but net income decreased from **$106 million** to **$97 million** year-over-year, impacted by 'Other (expense) income, net' Q2 Statement of Operations Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $776 | $730 | | Operating Income | $139 | $126 | | Other (expense) income, net | ($4) | $21 | | **Net Income** | **$97** | **$106** | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets of **$2.92 billion** and total liabilities of **$1.81 billion**, with a decrease in long-term debt from year-end 2024 Balance Sheet Highlights (in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $272 | $298 | | Total Assets | $2,922 | $2,800 | | Long-term debt | $608 | $692 | | Total Liabilities | $1,809 | $1,869 | | Total Stockholders' Equity | $1,113 | $931 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash from operating activities increased to **$301 million**, while cash used in financing activities rose due to higher net debt repayments Six-Month Cash Flow Highlights (in millions) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $301 | $244 | | Net cash used in investing activities | ($107) | ($93) | | Net cash used in financing activities | ($221) | ($159) | | Net decrease in cash | ($26) | ($20) | [Supplemental Financial Information and Reconciliations](index=9&type=section&id=Supplemental%20Financial%20Information%20and%20Reconciliations) This section details Q2 2025 revenue by service category, with Ongoing Certification Services as the largest, and provides reconciliations of GAAP to non-GAAP measures like Adjusted EBITDA and Adjusted Net Income Q2 2025 Revenue by Major Service Category (in millions) | Service Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Certification Testing | $215 | $203 | | Ongoing Certification Services | $250 | $234 | | Non-certification Testing and Other Services | $241 | $225 | | Software | $70 | $68 | | **Total** | **$776** | **$730** | Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net income** | **$97** | **$106** | | Depreciation and amortization | $46 | $41 | | Interest expense | $10 | $13 | | Other expense (income), net | $4 | ($21) | | Income tax expense | $28 | $28 | | Stock-based compensation | $13 | $6 | | **Adjusted EBITDA** | **$197** | **$173** | H1 2025 Reconciliation of Operating Cash Flow to Free Cash Flow (in millions) | Line Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $301 | $244 | | Capital expenditures | ($93) | ($113) | | **Free Cash Flow** | **$208** | **$131** |

Financial Performance - UL Solutions' 2024 revenue reached $2.9 billion[14] - The company achieved 8.7% organic revenue growth in 2024[14] - Adjusted EBITDA for 2024 was $656 million, representing a 22.9% margin[14, 42] - The average Free Cash Flow from 2022 to 2024 was $249 million, with a 9.2% margin[42] - Q1 2025 saw a 7.6% organic revenue increase and a 22.9% rise in Adjusted EBITDA[60] Business Segments - The Industrial segment generated $1.254 billion in revenue in 2024, with a 31.4% Adjusted EBITDA margin[25, 30] - The Consumer segment's 2024 revenue was $1.238 billion, with a 16.4% Adjusted EBITDA margin[25, 32] - Software and Advisory segment revenue reached $378 million in 2024, with a 15.6% Adjusted EBITDA margin[25, 34] Market Position and Growth - UL Solutions holds the 1 product TIC market share by revenue[21] - The outsourced product TIC market is projected to grow at a 5-6% CAGR from 2022-2026[26]

Summary of UL Solutions (ULS) FY Conference Call Company Overview - **Company**: UL Solutions (ULS) - **Industry**: Testing, Inspection, and Certification (TIC) - **Revenue**: $2.9 billion in the last fiscal year - **Customer Base**: Over 80,000 customers across more than 35 industries - **Global Presence**: 41% of revenue from the USA, 25% from Greater China, and the remainder from Europe, the Middle East, and the rest of Asia [12][18][22] Key Themes and Core Messages 1. **Mission-Driven Growth**: ULS emphasizes its mission of creating a safer world, which resonates with customers and their end-users [6][61] 2. **Safety Science Commitment**: The company focuses on applying safety science to help customers navigate challenges in innovation, security, and sustainability [7][62] 3. **Long-Term Customer Relationships**: ULS has a history of long-lived customer relationships, with many clients being with the company for over a century [8][62] 4. **Global Scale and Operating Leverage**: The company leverages its global scale to drive margin expansion and growth, having invested over $1.3 billion in acquisitions since 2010 [9][17] 5. **Financial Strength**: ULS maintains a healthy balance sheet and disciplined capital allocation, allowing for flexibility in growth strategies and shareholder returns [9][10] Market Dynamics - **Industry Size**: The TIC industry is valued at over $240 billion, with a significant portion being outsourced [17] - **Growth Drivers**: Key megatrends driving growth include energy transition, new mobility solutions, sustainability, digitalization, and regulatory compliance [20][22] - **Recurring Revenue**: 33% of ULS's revenue is recurring, stemming from ongoing certification services [15] Financial Performance and Projections - **EBITDA Margin**: The adjusted EBITDA margin was 22.9% last year, with a target of 24% for the current year [38][39] - **Growth Resilience**: ULS has demonstrated resilient growth, averaging nearly 7% compound annual growth over the past decade, even during economic shocks [33] Strategic Initiatives 1. **Capital Allocation**: ULS reinvests approximately 18% of revenue back into the business, focusing on organic growth and capacity expansion [46][48] 2. **M&A Strategy**: The company seeks acquisitions that enhance its capabilities in product testing, inspection, and certification, focusing on technical expertise and service extension [49][50] 3. **Software and Advisory Services**: ULS is optimistic about growth in its software segment, which supports product compliance and supply chain transparency [52][53] Additional Insights - **Impact of Tariffs**: ULS views tariffs as short-term challenges that can lead to increased demand for retesting and recertification services as manufacturers adapt [29][30] - **Energy Transition**: The electrification of various sectors is expected to significantly increase demand for ULS's services, particularly in testing and certification for new energy technologies [24][26] This summary encapsulates the key points discussed during the UL Solutions FY Conference Call, highlighting the company's strategic focus, market dynamics, and financial performance.

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1][2]. Company Overview: UL Solutions Inc. (ULS) - ULS currently holds a Momentum Style Score of B, indicating a favorable momentum outlook [3]. - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a strong historical performance [4]. Performance Metrics - ULS shares have increased by 17.24% over the past week, significantly outperforming the Zacks Business - Services industry, which rose by only 0.14% [6]. - Over the past month, ULS's price change is 26.6%, compared to the industry's 7.82% [6]. - In the last three months, ULS shares have risen by 25.69%, and over the past year, they have surged by 87.95%, while the S&P 500 has seen declines of -3.37% and gains of only 13.7% respectively [7]. Trading Volume - ULS has an average 20-day trading volume of 1,212,324 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the past two months, five earnings estimates for ULS have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.70 to $1.77 [10]. - For the next fiscal year, four estimates have also moved higher, with no downward revisions noted [10]. Conclusion - Given the strong performance metrics and positive earnings outlook, ULS is positioned as a promising momentum pick for investors [12].

Company Performance - UL Solutions Inc. shares have increased by 22.4% over the past month and reached a new 52-week high of $71.95, with a year-to-date gain of 41% compared to 3.5% for the Zacks Business Services sector and 13.4% for the Zacks Business - Services industry [1] - The company has consistently exceeded earnings expectations, reporting EPS of $0.37 against a consensus estimate of $0.32 in its last earnings report [2] - For the current fiscal year, UL Solutions Inc. is projected to achieve earnings of $1.77 per share on revenues of $3.02 billion, reflecting a 4.12% increase in EPS and a 5.38% increase in revenues [3] Valuation Metrics - The stock trades at a valuation of 39.8X current fiscal year EPS estimates, significantly higher than the peer industry average of 18.1X, and at 26.4X on a trailing cash flow basis compared to an average of 9.5X for its peers [7] - UL Solutions Inc. has a Value Score of D, a Growth Score of A, and a Momentum Score of D, resulting in a VGM Score of B [6] Zacks Rank - The company holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, indicating potential for further stock price appreciation [8] Industry Comparison - Bright Horizons Family Solutions Inc. is a notable peer with a Zacks Rank of 2 (Buy), a Value Score of C, and both Growth and Momentum Scores of A, indicating a strong competitive position [9] - The Business - Services industry is performing well, ranking in the top 20% of all industries, suggesting favorable conditions for both UL Solutions Inc. and its peers [11]

Commission file number 001-42012 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ UL Solutions Inc. (Exact name of registrant as specified in its charter) Delaware 27-0913800 (State or ...

Core Insights - UL Solutions Inc. reported $705 million in revenue for Q1 2025, a year-over-year increase of 5.2% and an EPS of $0.37 compared to $0.28 a year ago, exceeding the Zacks Consensus Estimate of $703.87 million by +0.16% and delivering an EPS surprise of +15.63% [1] Revenue Breakdown - Revenue from Industrial segment was $308 million, slightly below the average estimate of $313.20 million [4] - Revenue from Software and Advisory segment was $93 million, slightly above the average estimate of $92.52 million [4] - Revenue from Consumer segment was $304 million, exceeding the average estimate of $299.77 million [4] Adjusted EBITDA Performance - Adjusted EBITDA for Industrial segment was $100 million, surpassing the average estimate of $97.17 million [4] - Adjusted EBITDA for Software and Advisory segment was $13 million, above the average estimate of $12.48 million [4] - Adjusted EBITDA for Consumer segment was $48 million, exceeding the average estimate of $44.63 million [4] Stock Performance - Shares of UL Solutions Inc. returned +11.7% over the past month, compared to the Zacks S&P 500 composite's +11.5% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Core Insights - UL Solutions Inc. reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, and showing an increase from $0.28 per share a year ago, resulting in an earnings surprise of 15.63% [1] - The company achieved revenues of $705 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.16% and up from $670 million year-over-year [2] - UL Solutions Inc. shares have increased approximately 20.2% since the beginning of the year, contrasting with a decline of 3.9% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.47, with projected revenues of $769.66 million, and for the current fiscal year, the EPS estimate is $1.70 on revenues of $3.02 billion [7] - The estimate revisions trend for UL Solutions Inc. is mixed, leading to a Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Business - Services industry, to which UL Solutions Inc. belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, ABM Industries, is expected to report quarterly earnings of $0.88 per share, reflecting a year-over-year change of +1.2%, with revenues anticipated to be $2.08 billion, up 2.8% from the previous year [9]

Financial Data and Key Metrics Changes - Consolidated revenues increased by 5.2% year-over-year, with organic growth of 7.6% [6][15] - Adjusted EBITDA grew by 22.9% year-over-year, with an adjusted EBITDA margin of 22.8%, up 320 basis points [7][16] - Adjusted net income for Q1 was $80 million, a 31.1% increase from $61 million in the same quarter last year [16] Business Line Data and Key Metrics Changes - Industrial segment revenues rose by 8.1% organically, driven by ongoing certification services and certification testing [7][17] - Consumer segment revenues increased by 7.7% organically, with strong demand across consumer technology and retail products [7][19] - Software and Advisory segment revenues grew by 5.6% organically, with a 9.3% increase in the software service line [20] Market Data and Key Metrics Changes - Growth was observed across all geographic regions, with North America showing particular strength in both industrial and consumer segments [6][62] - The automotive electromagnetic compatibility laboratory in Japan is expected to address a growing market projected to reach $2.7 billion by 2030 [10] Company Strategy and Development Direction - The company is focusing on capacity expansions in HVAC testing facilities and developing a global fire science center to enhance market position [8][9] - Strategic M&A opportunities are being pursued to strengthen market position and drive margin and earnings improvement [26] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment presents both risks and opportunities, but they reaffirmed their full-year 2025 outlook [13][25] - The company is monitoring key performance indicators closely to understand potential impacts from tariffs and macroeconomic conditions [12][13] Other Important Information - The effective tax rate for 2025 is expected to be approximately 26%, up from 16.9% in 2024 due to the implementation of OECD's Pillar Two [26] - The company generated over $100 million in free cash flow and paid down $90 million of debt [7][22] Q&A Session Summary Question: Impact of tariffs on product redesign and manufacturing locations - Management indicated that customers have been making decisions regarding tariffs for several years, and while some adjustments are expected, no material impact has been observed currently [34] Question: M&A strategy in the current macro backdrop - The company continues to engage in conversations about various acquisition opportunities and remains active in pursuing growth through M&A [36] Question: Anticipated impact of tariffs on guidance - Management affirmed their guidance, indicating that they have accounted for increased uncertainty while maintaining confidence in their core business [41] Question: Moderation in new product launches - There has been no meaningful impact on innovation, and management remains close to customers regarding their new product development plans [42] Question: Context on margin expansion in Q1 - Strong operational execution and revenue growth contributed to significant margin improvement, particularly in the Industrial segment [46][48] Question: Growth by geography - North America, especially in industrial sectors, continues to show strong demand, with notable growth also in Asia [62]