UL Solutions Inc. Reports Strong First Quarter 2025 Results
First Quarter 2025 (Comparisons to First Quarter 2024 unless otherwise noted)1
-
Strong revenue growth of
5.2% to , including$705 million 7.6% organic growth -
Net income of
increased$71 million 18.3% , Net income margin of10.1% , expanded 110 basis points -
Diluted earnings per share of
increased$0.33 17.9% , Adjusted Diluted Earnings Per Share of increased$0.37 32.1% -
Adjusted EBITDA of
increased$161 million 22.9% , Adjusted EBITDA margin of22.8% expanded 320 basis points
“As we completed our first full year as a public company, I’m encouraged by the strong execution and outstanding results our team continued to deliver, with momentum once again across all segments, service offerings and regions,” said President and CEO Jennifer Scanlon. “Strong organic growth, improved profitability and increased cash flow generation reflect our strategic focus on high-growth markets and ongoing operational excellence. Our global laboratory additions and expansions directly address evolving customer needs while strengthening our market leadership position across key industries.”
Scanlon continued, “In today’s environment of heightened global uncertainty, our work is never done. Customers continue to rely on UL Solutions as an essential strategic partner to navigate complex regulatory landscapes and bring products to market safely and efficiently. The investments we’re making help position us at the forefront of global megatrends shaping our industry’s future.”
“Our strong first quarter results included
First Quarter 2025 Financial Results
Revenue of
Net income of
Adjusted Net Income of
Diluted earnings per share of
Adjusted EBITDA of
1This press release includes references to non-GAAP financial measures. Please refer to “Non-GAAP Financial Measures” later in this release for the definitions of each non-GAAP financial measure presented, as well as reconciliations of these measures to their most directly comparable GAAP measures.
First Quarter 2025 Segment Performance
Industrial Segment Results
Industrial revenue of
Consumer Segment Results
Consumer revenue of
Software and Advisory Segment Results
Software and Advisory revenue of
Liquidity and Capital Resources
For the first three months of 2025, the Company generated
The Company continues to make strategic capital investments to meet increased demand and drive greater productivity. Capital expenditures were
The Company paid a dividend of
As of March 31, 2025, total debt was
The Company ended the quarter with cash and cash-equivalents of
Full-Year 2025 Outlook
The Company is affirming its 2025 outlook:
- Mid single digit constant currency organic revenue growth
-
Adjusted EBITDA margin organic improvement to approximately
24% -
Capital expenditures expected to be
7% to8% of revenue -
Effective tax rate estimated to be approximately
26% - Continuing to pursue acquisitions and portfolio refinements
The Company’s 2025 outlook is based on a number of assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve the results expressed by this outlook. In addition, the increasingly uncertain and complex near-term macroeconomic and geopolitical environment presents both potential risks and opportunities for the Company. Like many other global businesses, the Company is carefully monitoring the potential impacts.
The Company does not provide guidance for net income margin, the most directly comparable GAAP measure to Adjusted EBITDA margin, and similarly cannot provide a reconciliation between its forecasted Adjusted EBITDA margin and net income margin without unreasonable effort due to the unavailability of reliable estimates for certain components of net income and the respective reconciliations. These forecasted items are not within the Company’s control, may vary greatly between periods and could significantly impact future financial results.
Conference Call and Webcast
UL Solutions will host a conference call today at 8:30 am ET to discuss the Company’s financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through the UL Solutions Investor Relations website at ir.ul.com. For those unable to access the webcast, the conference call can be accessed by dialing 1-844-825-9789 (domestic) or 1-412-317-5180 (international). An archive of the webcast will be available on the Company’s website for 30 days.
About UL Solutions
A global leader in applied safety science, UL Solutions Inc. (NYSE: ULS) transforms safety, security and sustainability challenges into opportunities for customers in more than 110 countries. UL Solutions delivers testing, inspection and certification services, together with software products and advisory offerings, that support our customers’ product innovation and business growth. The UL Mark serves as a recognized symbol of trust in our customers’ products and reflects an unwavering commitment to advancing our safety mission. We help our customers innovate, launch new products and services, navigate global markets and complex supply chains, and grow sustainably and responsibly into the future. Our science is your advantage.
Investors and others should note that UL Solutions intends to routinely announce material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the UL Solutions Investor Relations website. We also intend to use certain social media channels as a means of disclosing information about us and our products to consumers, our customers, investors and the public on our X account (@UL_Solutions) and our LinkedIn account (@ULSolutions). The information posted on social media channels is not incorporated by reference in this press release or in any other report or document we file with the SEC. While not all of the information that the Company posts to the UL Solutions Investor Relations website or to social media accounts is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in UL Solutions to review the information shared on our Investor Relations website at ir.ul.com and to regularly follow our social media accounts. Users can automatically receive email alerts and information about the Company by subscribing to “Investor Email Alerts” at the bottom of the UL Solutions Investor Relations website at ir.ul.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. These include statements regarding management’s objectives for future operations and the Company’s plans, business strategy, outlook and future results of operations and financial position. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “likely,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “continue” and variations of these terms and similar expressions, or the negative of these terms or similar expressions (although not all forward-looking statements may contain such words). The Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important factors that could cause the Company’s actual results to differ materially from those expressed or implied by the forward-looking statements made in this press release, including, but not limited to, the following: any failure on the Company’s part to protect and maintain its brand and reputation, or the impact on its brand or reputation of third-party events or actions outside of its control; risks associated with the Company’s information technology and software, including those relating to any future data breach or other cybersecurity incident; the potential disruption of the TIC or S&A industries by technological advances in artificial intelligence; the Company’s ability to innovate, adapt to changing customer needs and successfully introduce new products and services in response to changes in the Company’s industries and technological advances; the Company’s ability to compete in its industries and the effects of increased competition from its competitors; risks associated with conducting business outside
If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company, or others acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements above.
Non-GAAP Financial Measures
In addition to financial measures determined in accordance with accounting principles generally accepted in
The Company uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and Adjusted Diluted Earnings Per Share to measure the operational strength and performance of its business and believes these measures provide additional information to investors about certain non-cash items and unusual items that the Company does not expect to continue at the same level in the future. Further, management believes these non-GAAP financial measures provide a meaningful measure of business performance. The Company uses Free Cash Flow and Free Cash Flow margin as additional liquidity measures and believes these measures provide useful information to investors about the cash generated from the Company’s core operations that may be available to repay debt, make other investments and return cash to stockholders.
There are material limitations to using these non-GAAP financial measures. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other expense, net, income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. Adjusted Net Income and Adjusted Diluted Earnings Per Share do not take into account certain significant items, including other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income and diluted earnings per share, as applicable. Free Cash Flow and Free Cash Flow margin adjust for cash items that are ultimately within management’s discretion to direct and therefore may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow and Free Cash Flow margin are not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering these non-GAAP financial measures in conjunction with net income, operating income, diluted earnings per share and net cash provided by operating activities as calculated in accordance with GAAP.
See additional information below for definitions of these non-GAAP financial measures, and reconciliations to their most directly comparable GAAP measures.
Source Code: ULS-IR
UL Solutions Inc. Condensed Consolidated Statements of Operations (Unaudited) |
|||||||
|
Three Months Ended
|
||||||
(in millions, except per share data) |
|
2025 |
|
|
|
2024 |
|
Revenue |
$ |
705 |
|
|
$ |
670 |
|
Cost of revenue |
|
364 |
|
|
|
351 |
|
Selling, general and administrative expenses |
|
232 |
|
|
|
228 |
|
Operating income |
|
109 |
|
|
|
91 |
|
Interest expense |
|
(12 |
) |
|
|
(15 |
) |
Other expense, net |
|
(3 |
) |
|
|
(3 |
) |
Income before income taxes |
|
94 |
|
|
|
73 |
|
Income tax expense |
|
23 |
|
|
|
13 |
|
Net income |
|
71 |
|
|
|
60 |
|
Less: net income attributable to non-controlling interests |
|
4 |
|
|
|
4 |
|
Net income attributable to stockholders of UL Solutions |
$ |
67 |
|
|
$ |
56 |
|
|
|
|
|
||||
Earnings per common share: |
|
|
|
||||
Basic |
$ |
0.34 |
|
|
$ |
0.28 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.28 |
|
|
|
|
|
||||
Weighted average common shares outstanding: |
|
|
|
||||
Basic |
|
200 |
|
|
|
200 |
|
Diluted |
|
203 |
|
|
|
200 |
|
UL Solutions Inc. Condensed Consolidated Balance Sheets (Unaudited) |
|||||
(in millions) |
March 31,
|
|
December 31,
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
267 |
|
$ |
298 |
Accounts receivable, net |
|
463 |
|
|
380 |
Contract assets, net |
|
203 |
|
|
182 |
Other current assets |
|
65 |
|
|
61 |
Total current assets |
|
998 |
|
|
921 |
Property, plant and equipment, net |
|
631 |
|
|
631 |
Goodwill |
|
641 |
|
|
633 |
Intangible assets, net |
|
56 |
|
|
58 |
Operating lease right-of-use assets |
|
182 |
|
|
186 |
Deferred income taxes |
|
108 |
|
|
108 |
Capitalized software, net |
|
123 |
|
|
127 |
Other assets |
|
139 |
|
|
136 |
Total Assets |
$ |
2,878 |
|
$ |
2,800 |
Liabilities and Stockholders’ Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Current portion of long-term debt |
$ |
— |
|
$ |
50 |
Accounts payable |
|
143 |
|
|
182 |
Accrued compensation and benefits |
|
164 |
|
|
254 |
Operating lease liabilities - current |
|
40 |
|
|
38 |
Contract liabilities |
|
400 |
|
|
162 |
Other current liabilities |
|
57 |
|
|
54 |
Total current liabilities |
|
804 |
|
|
740 |
Long-term debt |
|
653 |
|
|
692 |
Pension and postretirement benefit plans |
|
195 |
|
|
196 |
Operating lease liabilities |
|
150 |
|
|
155 |
Other liabilities |
|
92 |
|
|
86 |
Total Liabilities |
|
1,894 |
|
|
1,869 |
Total Stockholders’ Equity |
|
984 |
|
|
931 |
Total Liabilities and Stockholders’ Equity |
$ |
2,878 |
|
$ |
2,800 |
UL Solutions Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
(in millions) |
|
2025 |
|
|
|
2024 |
|
Operating activities |
|
|
|
||||
Net cash flows provided by operating activities |
$ |
154 |
|
|
$ |
141 |
|
|
|
|
|
||||
Investing activities |
|
|
|
||||
Capital expenditures |
|
(51 |
) |
|
|
(57 |
) |
Other investing activities, net |
|
1 |
|
|
|
— |
|
Net cash flows used in investing activities |
|
(50 |
) |
|
|
(57 |
) |
|
|
|
|
||||
Financing activities |
|
|
|
||||
Repayments of long-term debt, net |
|
(90 |
) |
|
|
(25 |
) |
Dividends to stockholders of UL Solutions |
|
(26 |
) |
|
|
(25 |
) |
Dividends to non-controlling interest |
|
(17 |
) |
|
|
— |
|
Other financing activities, net |
|
(2 |
) |
|
|
1 |
|
Net cash flows used in financing activities |
|
(135 |
) |
|
|
(49 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
— |
|
|
|
(6 |
) |
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents |
|
(31 |
) |
|
|
29 |
|
|
|
|
|
||||
Cash and cash equivalents |
|
|
|
||||
Beginning of period |
|
298 |
|
|
|
315 |
|
End of period |
$ |
267 |
|
|
$ |
344 |
|
UL Solutions Inc.
|
|||||
Revenue by Major Service Category |
Three Months Ended March 31, |
||||
(in millions) |
2025 |
|
2024 |
||
Certification Testing |
$ |
189 |
|
$ |
176 |
Ongoing Certification Services |
|
245 |
|
|
233 |
Non-certification Testing and Other Services |
|
203 |
|
|
194 |
Software |
|
68 |
|
|
67 |
Total |
$ |
705 |
|
$ |
670 |
Revenue Change Components |
Three Months Ended March 31, 2025 |
|
|
|
|
||||||||||||||
(in millions) |
Organic1 |
|
Acquisition /
|
|
FX3 |
|
Total |
|
Organic %
|
|
Total %
|
||||||||
Revenue change |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Industrial |
$ |
24 |
|
$ |
(7 |
) |
|
$ |
(4 |
) |
|
$ |
13 |
|
8.1 |
% |
|
4.4 |
% |
Consumer |
|
22 |
|
|
— |
|
|
|
(4 |
) |
|
|
18 |
|
7.7 |
% |
|
6.3 |
% |
Software and Advisory |
|
5 |
|
|
— |
|
|
|
(1 |
) |
|
|
4 |
|
5.6 |
% |
|
4.5 |
% |
Total |
$ |
51 |
|
$ |
(7 |
) |
|
$ |
(9 |
) |
|
$ |
35 |
|
7.6 |
% |
|
5.2 |
% |
-
Organic reflects revenue change in a given period excluding Acquisition / Divestiture and FX in that same period, expressed in dollars or as a percentage of revenue in the prior period.
-
Acquisition / Divestiture is calculated as revenue change in a given period related to acquisitions or disposals of businesses using prior period exchange rates, expressed in dollars or as a percentage of revenue in the prior period. Revenues from an acquisition or disposal are measured as Acquisition / Divestiture for the initial twelve month period following the acquisition or disposal date. Subsequently, the revenue impact from the acquired or disposed business is measured as Organic.
- FX reflects the impact that foreign currency exchange rates have on revenue in a given period, expressed in dollars or as a percentage of revenue in the prior period. The Company uses constant currency to calculate the FX impact on revenue in a given period by translating current period revenues at prior period exchange rates, expressed as a percentage of revenue in the prior period.
UL Solutions Inc. |
Supplemental Financial Information |
Non-GAAP Measures |
(Unaudited) |
The table below reconciles net income to Adjusted EBITDA.
|
Three Months Ended March 31, |
||||||
(in millions, unless otherwise stated) |
|
2025 |
|
|
|
2024 |
|
Net income |
$ |
71 |
|
|
$ |
60 |
|
Depreciation and amortization expense |
|
45 |
|
|
|
41 |
|
Interest expense |
|
12 |
|
|
|
15 |
|
Other expense, net |
|
3 |
|
|
|
3 |
|
Income tax expense |
|
23 |
|
|
|
13 |
|
Stock-based compensation |
|
8 |
|
|
|
— |
|
Restructuring |
|
(1 |
) |
|
|
(1 |
) |
Adjusted EBITDA1 |
$ |
161 |
|
|
$ |
131 |
|
Revenue |
$ |
705 |
|
|
$ |
670 |
|
Net income margin |
|
10.1 |
% |
|
|
9.0 |
% |
Adjusted EBITDA margin2 |
|
22.8 |
% |
|
|
19.6 |
% |
-
The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other expense, net, income tax expense, as well as stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. The Company believes that the presentation of Adjusted EBITDA provides additional information to investors about certain non-cash items and unusual items that are not expected to continue at the same level in the future. Further, the Company believes Adjusted EBITDA provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other expense, net, income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted EBITDA in conjunction with net income as calculated in accordance with GAAP.
- Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue.
The table below reconciles segment operating income to segment Adjusted EBITDA.
|
Three Months Ended March 31, |
||||||
(in millions, unless otherwise stated) |
|
2025 |
|
|
|
2024 |
|
Industrial |
|
|
|
||||
Segment operating income |
$ |
83 |
|
|
$ |
75 |
|
Depreciation and amortization expense |
|
14 |
|
|
|
11 |
|
Stock-based compensation |
|
3 |
|
|
|
— |
|
Adjusted EBITDA1 |
$ |
100 |
|
|
$ |
86 |
|
Revenue |
$ |
308 |
|
|
$ |
295 |
|
Operating income margin |
|
26.9 |
% |
|
|
25.4 |
% |
Adjusted EBITDA margin2 |
|
32.5 |
% |
|
|
29.2 |
% |
|
|
|
|
||||
Consumer |
|
|
|
||||
Segment operating income |
$ |
26 |
|
|
$ |
17 |
|
Depreciation and amortization expense |
|
19 |
|
|
|
19 |
|
Stock-based compensation |
|
4 |
|
|
|
— |
|
Restructuring |
|
(1 |
) |
|
|
(1 |
) |
Adjusted EBITDA1 |
$ |
48 |
|
|
$ |
35 |
|
Revenue |
$ |
304 |
|
|
$ |
286 |
|
Operating income margin |
|
8.6 |
% |
|
|
5.9 |
% |
Adjusted EBITDA margin2 |
|
15.8 |
% |
|
|
12.2 |
% |
|
|
|
|
||||
Software and Advisory |
|
|
|
||||
Segment operating loss |
$ |
— |
|
|
$ |
(1 |
) |
Depreciation and amortization expense |
|
12 |
|
|
|
11 |
|
Stock-based compensation |
|
1 |
|
|
|
— |
|
Adjusted EBITDA1 |
$ |
13 |
|
|
$ |
10 |
|
Revenue |
$ |
93 |
|
|
$ |
89 |
|
Operating loss margin |
|
— |
% |
|
|
(1.1 |
)% |
Adjusted EBITDA margin2 |
|
14.0 |
% |
|
|
11.2 |
% |
|
|
|
|
||||
Adjusted EBITDA1 |
$ |
161 |
|
|
$ |
131 |
|
-
See definition on previous page.
- See definition on previous page.
The table below reconciles net income to Adjusted Net Income.
|
Three Months Ended March 31, |
||||||
(in millions, unless otherwise stated) |
|
2025 |
|
|
|
2024 |
|
Net income |
$ |
71 |
|
|
$ |
60 |
|
Other expense, net |
|
3 |
|
|
|
3 |
|
Stock-based compensation |
|
8 |
|
|
|
— |
|
Restructuring |
|
(1 |
) |
|
|
(1 |
) |
Tax effect of adjustments3 |
|
(1 |
) |
|
|
(1 |
) |
Adjusted Net Income1 |
$ |
80 |
|
|
$ |
61 |
|
Revenue |
$ |
705 |
|
|
$ |
670 |
|
Net income margin |
|
10.1 |
% |
|
|
9.0 |
% |
Adjusted Net Income margin2 |
|
11.3 |
% |
|
|
9.1 |
% |
-
The Company defines Adjusted Net Income as net income adjusted for other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, each net of tax. The Company believes that the presentation of Adjusted Net Income provides additional information to investors about certain non-cash items and unusual items that are expected to continue at the same level in the future. Further, the Company believes Adjusted Net Income provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted Net Income. Adjusted Net Income does not take into account certain significant items, including other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted Net Income in conjunction with net income as calculated in accordance with GAAP.
-
Adjusted Net Income margin is calculated as Adjusted Net Income as a percentage of revenue.
- The Company computed the tax effect of adjustments to net earnings by applying the statutory tax rate in the relevant jurisdictions to the taxable income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero.
The table below reconciles diluted earnings per share to Adjusted Diluted Earnings Per Share.
|
Three Months Ended March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Diluted earnings per share |
$ |
0.33 |
|
|
$ |
0.28 |
|
Other expense, net |
|
0.02 |
|
|
|
0.02 |
|
Stock-based compensation |
|
0.04 |
|
|
|
— |
|
Restructuring |
|
(0.01 |
) |
|
|
(0.01 |
) |
Tax effect of adjustments2 |
|
(0.01 |
) |
|
|
(0.01 |
) |
Adjusted Diluted Earnings Per Share1 |
$ |
0.37 |
|
|
$ |
0.28 |
-
The Company defines Adjusted Diluted Earnings Per Share as diluted earnings per share attributable to stockholders of UL Solutions adjusted for other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. The Company believes that the presentation of Adjusted Diluted Earnings Per Share provides additional information to investors about certain non-cash items and unusual items that are expected to continue at the same level in the future. Further, the Company believes Adjusted Diluted Earnings Per Share provides a meaningful measure of business performance and provides a basis for comparing its performance to that of other peer companies using similar measures. There are material limitations to using Adjusted Diluted Earnings Per Share. Adjusted Diluted Earnings Per Share does not take into account certain significant items, including other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s diluted earnings per share, as applicable. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Adjusted Diluted Earnings Per Share in conjunction with diluted earnings per share as calculated in accordance with GAAP.
- See definition on previous page.
The table below reconciles net cash provided by operating activities to Free Cash Flow.
|
Three Months Ended March 31, |
||||||
(in millions) |
|
2025 |
|
|
|
2024 |
|
Net cash provided by operating activities |
$ |
154 |
|
|
$ |
141 |
|
Capital expenditures |
|
(51 |
) |
|
|
(57 |
) |
Free Cash Flow1 |
$ |
103 |
|
|
$ |
84 |
|
Revenue |
$ |
705 |
|
|
$ |
670 |
|
Net cash provided by operating activities margin |
|
21.8 |
% |
|
|
21.0 |
% |
Free Cash Flow margin2 |
|
14.6 |
% |
|
|
12.5 |
% |
-
The Company defines Free Cash Flow as cash from operating activities less cash outlays related to capital expenditures. The Company defines capital expenditures to include purchases of property, plant and equipment and capitalized software. These items are subtracted from cash from operating activities because they represent long-term investments that are required for normal business activities. The Company uses Free Cash Flow as an additional liquidity measure and believes it provides useful information to investors about the cash generated from its core operations that may be available to repay debt, make other investments and return cash to stockholders. There are material limitations to using Free Cash Flow. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering Free Cash Flow in conjunction with net cash provided by operating activities as calculated in accordance with GAAP.
- Free Cash Flow margin is calculated as Free Cash Flow as a percentage of revenue.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250506922517/en/
Media:
Kathy Fieweger
Senior Vice President - Communications
Kathy.Fieweger@ul.com
+1 312-852-5156
Investors:
Dan Scott / Rodny Nacier, ICR Inc.
IR@ul.com
Source: UL Solutions Inc