ULS Earnings Prediction
The chart below shows how ULS performed 10 days before and after its earnings report, based on data from the past quarters. Typically, ULS sees a -2.49% change in stock price 10 days leading up to the earnings, and a +0.09% change 10 days following the report. On the earnings day itself, the stock moves by +2.16%. This data can give you a slight idea of what to expect for the next quarter's release.
ULS Key Earning Data
2024/Q4
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ULS Earnings Analysis
UL Solutions Inc Corporation (ULS.N) Earnings Conference Call
Positive
Earnings Per Share Beat: UL Solutions Inc. reported an EPS of $0.401, exceeding expectations of $0.38.
Revenue Increase Overview: The company achieved revenues of $2.9 billion for the full year 2024, reflecting a 7.2% increase compared to 2023 and an 8.7% increase on an organic basis.
Segment Growth Performance: The Industrial segment led growth with a 9.4% increase for the year, including 11.9% organic growth, while the Consumer segment grew 5.6% and the Software & Advisory segment grew 5%.
EBITDA Growth and Margin Expansion: Adjusted EBITDA for the full year grew by 16.5%, with an adjusted EBITDA margin expansion of 190 basis points.
Strong Cash Generation: Free cash flow for the full year was $287 million, demonstrating strong cash generation capabilities.
Consolidated Revenue Increase: In Q4 2024, consolidated revenue was $739 million, up 8.0% year-over-year, with organic growth of 9.5%.
Industrial Segment Growth: The Industrial segment achieved 13.9% organic growth in Q4, marking seven consecutive quarters of double-digit organic revenue growth.
Q4 Adjusted EBITDA Growth: Adjusted EBITDA for Q4 was $169 million, an increase of 27.1% year-over-year, with an adjusted EBITDA margin of 22.9%, up 350 basis points from the previous year.
IPO and Follow-On Offering: The company successfully completed its IPO in April 2024 and a follow-on offering in September, enhancing its capital position.
Strategic Acquisitions for Energy Transition: UL Solutions made two strategic acquisitions in the Industrial segment to align with global energy transition trends.
Lab Expansion and Investment: The company opened a new battery testing lab in Michigan and expanded its lab capacity in Mexico, indicating investment in growth.
Cyber Trust Mark Leadership: The U.S. Federal Communications Commission appointed UL Solutions as the lead administrator of the new U.S. Cyber Trust Mark program, showcasing its leadership in safety science.
Negative
Revenue Growth Deceleration: Consolidated revenue growth is expected to slow down in 2025, with guidance for mid-single digits compared to 8.7% organic growth in 2024, indicating a potential deceleration in momentum.
Projected Tax Rate Increase: The effective tax rate is projected to increase significantly to approximately 26% in 2025 from 16.9% in 2024, primarily due to the implementation of OECD Pillar 2 provisions, which could impact net income.
Challenging Growth Comparisons: The company anticipates facing increasingly challenging comparisons in the second half of 2025, which may hinder growth and profitability as they will be compared against stronger prior year results.
Q1 Revenue Challenges: Despite strong performance in 2024, the company acknowledged that Q1 is typically their lowest revenue quarter, which could affect overall profitability and operating leverage early in the year.
Certification Services Demand Concerns: There are concerns regarding the normalization of demand in ongoing certification services in 2025, which could lead to reduced revenue growth in that segment.
ULS FAQs
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ULS Earning Call Sentiment
UL Solutions Inc. (NYSE:ULS) Q4 2024 Earnings Call Transcript
ULS.N
0.91%Positive
The earnings call presents a mixed outlook. While financial performance is strong with significant growth in revenue, EBITDA, and net income, the guidance for 2025 indicates slower revenue growth and increased tax rates due to OECD provisions. The Q&A reveals competitive pressures and economic headwinds, but management remains optimistic about segment opportunities. The shareholder return strategy is positive, but supply chain challenges and regulatory risks create uncertainties. Overall, the sentiment is balanced, leading to a neutral prediction for stock price movement.
