UL SOLUTIONS INC - CLASS A (NYSE:ULS) Reports Strong Q3 2025 Earnings, Beating Estimates

Quarterly Performance Overview

UL SOLUTIONS INC - CLASS A (NYSE:ULS) delivered a robust third quarter for 2025, posting results that exceeded analyst expectations on both the top and bottom lines. The global safety science leader reported revenue of $783 million, surpassing the analyst consensus estimate of approximately $778.6 million. This represents a 7.1% increase compared to the third quarter of 2024, with organic growth accounting for 6.3% of that gain.

The company's profitability metrics showed even stronger performance. Adjusted earnings per share (EPS) came in at $0.56, significantly higher than the $0.47 analysts had projected. This marks a $0.07 improvement from the $0.49 reported in the same period last year. Net income saw a 12.8% year-over-year increase to $106 million, while adjusted net income grew 14.4% to $119 million.

Key Financial Highlights

The company's strong operational execution was evident across several key performance indicators:

• Revenue: $783 million (Actual) vs. $778.6 million (Estimate)
• Adjusted EPS: $0.56 (Actual) vs. $0.47 (Estimate)
• Adjusted EBITDA: $217 million, an 18.6% year-over-year increase
• Adjusted EBITDA Margin: 27.7%, expanding 270 basis points to its highest level as a public company
• Organic Growth: 6.3% across all business segments

Market Reaction and Price Action

Following the earnings release, the market responded positively. In pre-market trading, the stock was up approximately 0.52%, indicating investor approval of the earnings beat and strengthened outlook. This positive movement contrasts with the stock's performance over the last week, which saw a slight decline of about 2.15%. However, the shares have gained 6.5% over the past month, suggesting building momentum leading into the earnings announcement.

Segment Performance and Strategic Initiatives

The company's growth was broad-based, with all three segments contributing to the strong results. The Industrial segment led with 8.2% revenue growth, driven primarily by energy and automation. The Consumer segment grew 5.9%, fueled by consumer technology, while the Software and Advisory segment expanded 7.5%, benefiting from demand for both software offerings and advisory services.

Concurrent with the earnings report, UL Solutions announced a restructuring plan aimed at improving its operating model and exiting certain non-strategic business lines. The company expects to incur pre-tax expenses of $42-$47 million, primarily related to employee separation costs for approximately 3.5% of its workforce. Once completed by the end of the first quarter of 2027, the restructuring is anticipated to improve annual operating income by $25-$30 million.

Updated Financial Outlook and Comparison to Estimates

Bolstered by its year-to-date performance, UL Solutions strengthened its full-year 2025 outlook. The company now expects constant currency, organic revenue growth between 5.5% and 6%, which appears consistent with the analyst sales estimate of $3.065 billion for the full year. The company also anticipates an adjusted EBITDA margin organic improvement to approximately 25% and capital expenditures between 6.5% and 7% of revenue.

For the upcoming fourth quarter, analysts are projecting revenue of approximately $789.7 million and are likely to adjust their EPS expectations upward following the company's strong Q3 beat and improved guidance.

Liquidity and Capital Resources

The company demonstrated strong cash generation, with net cash provided by operating activities increasing to $456 million for the first nine months of 2025, up from $394 million during the same period in 2024. Free cash flow for the first nine months was $317 million, a significant increase from $215 million in the prior year period. UL Solutions also reduced its total debt by $200 million through net repayments on its term loan and revolving credit facility.

Conclusion

UL Solutions' third-quarter results reflect a company executing effectively on its growth strategy, with particular strength in its Industrial segment and software offerings. The significant beat on EPS estimates, coupled with solid revenue performance and margin expansion, underscores the company's ability to translate top-line growth into bottom-line results. The market's positive reaction suggests investors are rewarding this performance and the company's decision to strengthen its full-year outlook.

For a more detailed analysis of future earnings estimates and historical performance, you can review the earnings and estimates data for UL Solutions.

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