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]

Financial Data and Key Metrics Changes - Consolidated revenues increased by 5.2% year-over-year, with organic growth of 7.6% [7][16] - Adjusted EBITDA grew by 22.9% year-over-year, with an adjusted EBITDA margin of 22.8%, up 320 basis points [8][17] - Adjusted net income for Q1 was $80 million, a 31.1% increase from $61 million in the same quarter last year [17] Business Line Data and Key Metrics Changes - Industrial segment revenues rose by 4.4% to $308 million, or 8.1% on an organic basis, driven by ongoing certification services and certification testing [18] - Consumer segment revenues were $304 million, up 6.3% year-over-year, or 7.7% on an organic basis, with strong demand across all service offerings [19] - Software and Advisory segment revenues increased by 4.5% year-over-year to $93 million, with organic growth of 5.6% [21] 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 [61] - The automotive electromagnetic compatibility laboratory in Japan is expected to address a growing market projected to reach $2.7 billion by 2030 [11] Company Strategy and Development Direction - The company is focusing on capacity expansions in HVAC testing facilities and developing a global fire science center of excellence [9][10] - Strategic investments are being made to align with megatrends such as global energy transition and digitalization [6][30] - The company aims to pursue strategic M&A opportunities to enhance margins and earnings [27] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed the full-year 2025 outlook despite increased macroeconomic uncertainties, expecting mid-single-digit organic revenue growth [25][26] - The company is monitoring key performance indicators closely to navigate potential risks and opportunities [14] Other Important Information - The effective tax rate for 2025 is expected to be approximately 26%, up from 16.9% in 2024 due to new tax regulations [27] - Free cash flow for Q1 was $103 million, up from $84 million in the prior year [24] Q&A Session Summary Question: Impact of tariffs on product redesign and manufacturing - Management noted that customers have been making decisions regarding tariffs for several years, with some already shifting manufacturing locations [34] Question: M&A strategy in uncertain macro backdrop - The company continues to engage in conversations about various acquisition opportunities globally, emphasizing the importance of CapEx as a growth accelerator [36] Question: Anticipated impact of tariffs on guidance - Management affirmed guidance, indicating confidence based on current business visibility and order book [41] Question: Moderation in new product launches - There has been no meaningful impact on innovation, with management maintaining close relationships with customers regarding their product development plans [42] Question: Margin expansion context - Strong operational execution across segments contributed to significant margin improvement, particularly in the Industrial segment [46] Question: Growth by geography - North America, especially in industrial sectors, continues to show strong demand, with notable growth also in Asia [61]

Q1 2025 Financial Highlights - Revenue grew by 5.2%, with organic revenue growth of 7.6%[8] - Adjusted Net Income increased by 31.1%[8] - Adjusted EBITDA increased by 22.9%, with Adjusted EBITDA margin up by 320 bps[8] - Free Cash Flow generated was $306 million for the last twelve months ended March 31, 2025[8] Q1 2025 Revenue Breakdown - Industrial segment revenue increased by 4.4% (8.1% organic) to $308 million[20, 40] - Consumer segment revenue increased by 6.3% (7.7% organic) to $304 million[24, 40] - Software and Advisory segment revenue increased by 4.5% (5.6% organic) to $93 million[27, 40] Q1 2025 Adjusted EBITDA - Adjusted EBITDA increased by 22.9% to $161 million, with a margin of 22.8%[13] Q1 2025 Adjusted Net Income - Adjusted Net Income increased by 31.1% to $80 million, with a margin of 11.3%[16] Full-Year 2025 Outlook - The company is affirming its 2025 outlook, which includes mid-single-digit constant currency organic revenue growth[34, 36] - Adjusted EBITDA margin organic improvement to approximately 24%[36] - Capital expenditures are expected to be 7% to 8% of revenue[36]

Revenue Performance - Revenue for Q1 2025 was $705 million, a 5.2% increase from $670 million in Q1 2024, with organic growth of 7.6% across all segments[3] - Revenue for the three months ended March 31, 2025, was $705 million, an increase of 5.2% compared to $670 million in 2024[48] - Certification Testing revenue was $189 million in Q1 2025, up from $176 million in Q1 2024, reflecting a growth of 7.4%[35] - Ongoing Certification Services revenue increased to $245 million in Q1 2025 from $233 million in Q1 2024, a rise of 5.2%[35] - The Industrial segment reported revenue of $308 million, a 4.4% increase, with organic growth of 8.1%[7] - The Consumer segment achieved revenue of $304 million, a 6.3% increase, with adjusted EBITDA rising 37.1% to $48 million[9] - The Software and Advisory segment's revenue was $93 million, a 4.5% increase, with adjusted EBITDA growing 30.0% to $13 million[10] Profitability Metrics - Net income rose to $71 million, an 18.3% increase from $60 million in Q1 2024, resulting in a net income margin of 10.1%, up 110 basis points[4] - Net income attributable to stockholders of UL Solutions for Q1 2025 was $67 million, up from $56 million in Q1 2024, representing a 19.6% increase[32] - Adjusted Net Income for Q1 2025 was $80 million, up 31.1% from $61 million in Q1 2024[48] - The company reported a basic earnings per share of $0.34 for Q1 2025, compared to $0.28 for Q1 2024, marking a 21.4% increase[32] - Adjusted Diluted Earnings Per Share increased to $0.37 in Q1 2025, compared to $0.28 in Q1 2024, representing a growth of 32.1%[52] - The company reported a net income margin of 10.1% for Q1 2025, up from 9.0% in Q1 2024[48] Cash Flow and Capital Expenditures - Free cash flow for Q1 2025 was $103 million, compared to $84 million in Q1 2024[12] - Free Cash Flow for the three months ended March 31, 2025, was $103 million, a 22.6% increase from $84 million in 2024[55] - The company generated $154 million in net cash flows from operating activities in Q1 2025, compared to $141 million in Q1 2024, an increase of 9.2%[34] - Net cash provided by operating activities was $154 million in Q1 2025, compared to $141 million in Q1 2024, reflecting a margin of 21.8%[55] - Capital expenditures are projected to be 7% to 8% of revenue for 2025[16] Debt and Liabilities - Total debt as of March 31, 2025, was $657 million, a decrease from the previous quarter due to $90 million in net repayments[13] - The company reported a total liabilities of $1,894 million as of March 31, 2025, compared to $1,869 million at the end of 2024, an increase of 1.3%[33] Future Outlook - The company expects mid-single digit constant currency organic revenue growth and an adjusted EBITDA margin improvement to approximately 24% for the full year 2025[16] Segment Performance - Adjusted EBITDA increased by 22.9% to $161 million, with an adjusted EBITDA margin of 22.8%, expanding 320 basis points[6] - Adjusted EBITDA for Q1 2025 was $161 million, compared to $131 million in Q1 2024, reflecting a 22.8% margin versus 19.6% margin in the prior year[41] - Operating income margin for the Industrial segment improved to 26.9% in Q1 2025 from 25.4% in Q1 2024[45] - Adjusted EBITDA margin for the Consumer segment increased to 15.8% in Q1 2025, up from 12.2% in Q1 2024[45] - Segment operating income for the Consumer segment rose to $26 million in Q1 2025, compared to $17 million in Q1 2024[45] - The Software and Advisory segment reported revenue of $93 million in Q1 2025, a slight increase from $89 million in Q1 2024[45]

Company Overview - UL Solutions Inc. (ULS) is expected to report a year-over-year increase in earnings, with a projected EPS of $0.32, reflecting a +14.3% change, and revenues of $703.87 million, up 5.1% from the previous year [3][12] Earnings Expectations - The upcoming earnings report is anticipated to be released on May 6, and the stock may rise if the actual results exceed expectations, while a miss could lead to a decline [2][12] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4][10] Earnings Surprise Prediction - The Zacks Earnings ESP model shows that the Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent changes in analyst views [10][11] - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [8][9] Historical Performance - In the last reported quarter, UL Solutions Inc. exceeded the expected EPS of $0.38 by delivering $0.49, resulting in a surprise of +28.95% [12] - Over the past four quarters, the company has beaten consensus EPS estimates three times [13] Industry Comparison - Thomson Reuters (TRI), a peer in the Zacks Business - Services industry, is expected to report an EPS of $1.06, reflecting a year-over-year decline of -4.5%, with revenues projected at $1.92 billion, up 1.8% [17] - Despite a recent downward revision of 2.6% in EPS estimates for Thomson Reuters, it has an Earnings ESP of 0.47%, indicating a likelihood of beating the consensus EPS estimate [18]