UL Solutions (ULS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 8.1% year-over-year to $731 million, with 9.3% organic growth, led by strong performance in Industrial and Consumer segments across all regions.

• Adjusted EBITDA increased 12.3% to $183 million, with margin expanding 90 basis points to 25.0%.

• Net income rose to $94 million (12.9% margin), and Adjusted Net Income was $104 million, up 6.1%.

• Free Cash Flow for the first nine months was $215 million, with LTM Free Cash Flow at $282 million, reflecting strong cash generation.

• Strategic investments included a major new EV battery testing facility in Michigan, acquisitions such as TesNet, and plans for new labs in Korea and Arkansas.

Financial highlights

• Q3 2024 revenue was $731 million, up from $676 million in Q3 2023, with organic growth across all segments.

• Adjusted EBITDA margin improved to 25.0% from 24.1% in Q3 2023.

• Adjusted Net Income margin was 14.2%, compared to 14.5% in Q3 2023.

• Diluted EPS for Q3 2024 was $0.44, up from $0.27 in Q3 2023; adjusted diluted EPS was $0.49 vs. $0.47.

• Free Cash Flow for the nine months ended September 30, 2024 was $215 million, up from $185 million in the prior year period.

Outlook and guidance

• Full-year 2024 organic revenue growth outlook raised to mid- to high single digits (constant currency), with Q4 organic revenue growth also expected in this range.

• Full-year Adjusted EBITDA margin improvement reiterated, with margin expansion expected to accelerate in Q4.

• Capital expenditures for Q4 and full year anticipated at 8.0–8.5% of revenue, reflecting ongoing investments in lab capacity.

• Ongoing focus on acquisitions and portfolio refinements to support long-term growth.