UL Solutions 2025 Q1 Earnings Strong Performance as Net Income Rises 18.3%
Wednesday, May 7, 2025 5:10 am ET
26min read UL Solutions (ULS) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The total revenue of UL Solutions increased by 5.2% to $705 million in 2025 Q1, up from $670 million in 2024 Q1. UL Solutions's EPS rose 21.4% to $0.34 in 2025 Q1 from $0.28 in 2024 Q1. The stock price of UL Solutions jumped 11.96% during the latest trading day. UL Solutions reaffirmed its 2025 outlook, expecting consolidated organic revenue growth in the mid-single-digit range compared to 2024 results.
The company's revenue reached $705 million in Q1 2025, reflecting a 5.2% increase from the previous year. This growth was driven by significant performances across its segments. The Industrial segment contributed $308 million, showcasing robust demand for electrical products and component certification testing. Meanwhile, the Consumer segment generated $304 million, bolstered by consumer technology and retail. The Software and Advisory segment added $93 million, driven by heightened demand for software solutions, bringing the total revenue to the reported figure.
UL Solutions's EPS rose 21.4% to $0.34 in 2025 Q1 from $0.28 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $71 million in 2025 Q1, marking 18.3% growth from $60 million in 2024 Q1. The Company has sustained profitability for 3 years over the corresponding fiscal quarter, reflecting stable business performance. The strong EPS growth indicates positive financial health and effective strategic execution.
The strategy of buying ULS shares after a revenue drop quarter over quarter and holding for 30 days delivered impressive results over the past five years. It achieved an overall return of 21.55%, surpassing the benchmark return by 16.26%. With a compound annual growth rate of 21.09% and a maximum drawdown of only -4.25%, the strategy demonstrated robust performance and risk management skills. Furthermore, a Sharpe ratio of 2.15 and volatility of 9.80% confirmed its ability to generate returns with acceptable risk levels, making it a reliable investment approach.
CEO Commentary
Jennifer Scanlon, Chief Executive Officer, highlighted that UL Solutions experienced strong performance in Q1 2025, attributed to healthy market demand and execution across segments. She noted, "Our strong performance in 2024 extended into the first quarter of 2025 with balanced strength across all segments." Scanlon emphasized strategic investments in capacity expansions, particularly in HVAC and fire safety, as key growth drivers aligned with global trends. She acknowledged potential risks from geopolitical uncertainties but reaffirmed confidence in their resilient business model, stating, "We believe we continue to be well positioned to support customers in navigating times of uncertainty."
Guidance
UL Solutions reaffirmed its 2025 outlook, expecting consolidated organic revenue growth in the mid-single-digit range compared to 2024 results. The company anticipates adjusted EBITDA margin improvement to approximately 24% for the year and capital expenditures to be about 7% to 8% of revenue. The effective tax rate is projected at approximately 26%, with a focus on maintaining robust cash generation and strategic capital deployment.
Additional News
In recent weeks, UL Solutions made headlines for the opening of its expanded Songshan Lake IoT Laboratory in Dongguan, China, on March 27th, 2025. This state-of-the-art facility enhances the company's testing capabilities for electromagnetic compatibility, wireless, telecommunications, automotive, and Internet of Things products. The expansion underscores UL Solutions' commitment to supporting manufacturers in navigating the complexities of connected product and wireless device testing and market access. Additionally, UL Solutions announced a dividend payment of $0.13 per share, totaling $26 million, during the first quarter. These developments reflect UL Solutions' strategic focus on growth and maintaining shareholder value.
The company's revenue reached $705 million in Q1 2025, reflecting a 5.2% increase from the previous year. This growth was driven by significant performances across its segments. The Industrial segment contributed $308 million, showcasing robust demand for electrical products and component certification testing. Meanwhile, the Consumer segment generated $304 million, bolstered by consumer technology and retail. The Software and Advisory segment added $93 million, driven by heightened demand for software solutions, bringing the total revenue to the reported figure.
UL Solutions's EPS rose 21.4% to $0.34 in 2025 Q1 from $0.28 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $71 million in 2025 Q1, marking 18.3% growth from $60 million in 2024 Q1. The Company has sustained profitability for 3 years over the corresponding fiscal quarter, reflecting stable business performance. The strong EPS growth indicates positive financial health and effective strategic execution.
The strategy of buying ULS shares after a revenue drop quarter over quarter and holding for 30 days delivered impressive results over the past five years. It achieved an overall return of 21.55%, surpassing the benchmark return by 16.26%. With a compound annual growth rate of 21.09% and a maximum drawdown of only -4.25%, the strategy demonstrated robust performance and risk management skills. Furthermore, a Sharpe ratio of 2.15 and volatility of 9.80% confirmed its ability to generate returns with acceptable risk levels, making it a reliable investment approach.
CEO Commentary
Jennifer Scanlon, Chief Executive Officer, highlighted that UL Solutions experienced strong performance in Q1 2025, attributed to healthy market demand and execution across segments. She noted, "Our strong performance in 2024 extended into the first quarter of 2025 with balanced strength across all segments." Scanlon emphasized strategic investments in capacity expansions, particularly in HVAC and fire safety, as key growth drivers aligned with global trends. She acknowledged potential risks from geopolitical uncertainties but reaffirmed confidence in their resilient business model, stating, "We believe we continue to be well positioned to support customers in navigating times of uncertainty."
Guidance
UL Solutions reaffirmed its 2025 outlook, expecting consolidated organic revenue growth in the mid-single-digit range compared to 2024 results. The company anticipates adjusted EBITDA margin improvement to approximately 24% for the year and capital expenditures to be about 7% to 8% of revenue. The effective tax rate is projected at approximately 26%, with a focus on maintaining robust cash generation and strategic capital deployment.
Additional News
In recent weeks, UL Solutions made headlines for the opening of its expanded Songshan Lake IoT Laboratory in Dongguan, China, on March 27th, 2025. This state-of-the-art facility enhances the company's testing capabilities for electromagnetic compatibility, wireless, telecommunications, automotive, and Internet of Things products. The expansion underscores UL Solutions' commitment to supporting manufacturers in navigating the complexities of connected product and wireless device testing and market access. Additionally, UL Solutions announced a dividend payment of $0.13 per share, totaling $26 million, during the first quarter. These developments reflect UL Solutions' strategic focus on growth and maintaining shareholder value.
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