UL Solutions (ULS) Q4 2024 earnings summary

Executive summary

• Achieved strong organic growth, enhanced profitability, and robust cash flows in 2024, surpassing expectations in the first year as a public company.

• Completed IPO in April 2024, followed by a secondary offering in September, and ended the year with strong liquidity and an investment grade balance sheet.

• Executed multiple portfolio enhancements and two strategic acquisitions in the industrial segment.

• Mega trends such as global energy transition, electrification, and digitalization continue to drive demand.

• Initial 2025 outlook projects continued Adjusted EBITDA growth and improved profitability.

Financial highlights

• Full-year 2024 revenue reached $2.9 billion, up 7.2% year-over-year, with 8.7% organic growth.

• Adjusted EBITDA grew 16.5% for the year to $656M, with margin expanding by 190 basis points to 22.9%.

• Adjusted net income increased 18.8% year-over-year; free cash flow was $287 million, up 13.9%.

• Q4 2024 revenue was $739 million, up 8.0% year-over-year, with 9.5% organic growth.

• Q4 adjusted EBITDA was $169 million (+27.1% YoY), margin at 22.9% (+350 bps YoY); Q4 adjusted net income was $102 million (+64.5% YoY); adjusted EPS $0.49.

Outlook and guidance

• 2025 organic revenue growth expected in the mid-single digits, following 8.7% organic growth in 2024.

• Adjusted EBITDA margin targeted at approximately 24% for 2025.

• Capital expenditures projected at 7%-8% of revenue in 2025, focused on labs and software.

• Effective tax rate expected to rise to 26% in 2025 due to OECD Pillar Two implementation.

• Continuing to pursue acquisitions and portfolio refinements for future growth.