UL Solutions (ULS) Q2 2024 earnings summary

Executive summary

• Achieved 8.4% organic revenue growth in Q2 2024, with revenue rising 6% year-over-year to $730 million and all segments and geographies contributing.

• Adjusted EBITDA increased 11.6% to $173 million, with margin expanding 120 basis points to 23.7%; adjusted net income rose 5.6% to $94 million.

• Net income grew 7.1% to $106 million, with a stable net income margin of 14.5%.

• Robust free cash flow generation and an investment-grade balance sheet support ongoing capital allocation, including dividends and M&A.

• Expanded capabilities through targeted acquisitions in battery and hydrogen testing, and completed an upsized IPO in April 2024.

Financial highlights

• Q2 2024 revenue reached $730 million, up from $689 million in Q2 2023; organic revenue growth was 8.4%.

• Adjusted EBITDA was $173 million (23.7% margin), up from $155 million (22.5%) year-over-year.

• Adjusted net income was $94 million ($0.44 per adjusted diluted share), up from $89 million ($0.42) in Q2 2023.

• Free cash flow for the first six months was $131 million, up from $107 million in the prior year period.

• Cash and cash equivalents at quarter-end were $295 million; net leverage at 0.9x trailing 12-month adjusted EBITDA.

Outlook and guidance

• Full-year and second-half organic growth expected in the mid-single-digit range, with margin improvement anticipated.

• Capital expenditures projected at 7.5% to 8.5% of revenue for 2024, reflecting growth investments and recent acquisitions.

• Ongoing focus on acquisitions, portfolio refinements, and laboratory capacity expansion.

• Pillar Two global minimum tax rules had immaterial impact in 2024; further evaluation ongoing for 2025.