UL Solutions (ULS) Q2 2024 earnings summary

Executive summary

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

• Adjusted EBITDA increased 11.6% to $173 million, with margin expanding 120 basis points to 23.7%.

• Net income rose 7.1% to $106 million, or $0.50 per diluted share; Adjusted Net Income increased 5.6% to $94 million, or $0.44 per adjusted diluted share.

• Strong free cash flow for the first six months was $131 million, supporting a robust investment-grade balance sheet.

• Completed upsized IPO in April 2024; paid first regular quarterly dividend of $0.125 per share.

Financial highlights

• Q2 2024 revenue: $730 million (+6.0% year-over-year); organic growth was 8.4%.

• Adjusted EBITDA: $173 million (23.7% margin), up from $155 million (22.5%) in Q2 2023.

• Adjusted Net Income for Q2: $94 million, up from $89 million in Q2 2023; Adjusted Diluted EPS: $0.44.

• Free cash flow for the first half: $131 million, up from $107 million in the prior year.

• Cash and cash equivalents at quarter-end: $295 million; net leverage at 0.9x.

Outlook and guidance

• Reiterates mid-single digit constant currency, organic revenue growth for full year 2024, with similar expectations for the second half.

• Full-year Adjusted EBITDA margin improvement anticipated, driven by organic growth, productivity, and M&A; capital expenditures projected at 7.5–8.5% of revenue.

• Revenue impact from two recent German acquisitions expected to be less than $10 million in 2024.

• Continues to pursue acquisitions and portfolio refinements.