UL Solutions (ULS 3.44%), a major provider of testing, inspection, and certification services, reported results for Q2 2025 on August 5, 2025. The company delivered GAAP revenue of $776 million and adjusted diluted earnings per share of $0.52. Both figures outperformed analyst averages, which had forecast $771.56 million in GAAP revenue and $0.47 in non-GAAP adjusted EPS. Revenue (GAAP) grew 6.3% from the prior year period, while Adjusted profitability saw double-digit growth. However, headline net income (GAAP) declined compared to the prior year, due to the absence of a prior one-time gain and higher tax expense. Overall, the quarter demonstrated the company’s continued momentum in its core business segments and progress against strategic initiatives, with some pressure in the software and advisory areas.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Diluted EPS (Non-GAAP) | $0.52 | $0.47 | $0.44 | 18.2% |
| Revenue | $776 million | $771.56 million | $730 million | 6.3% |
| Adjusted EBITDA (Non-GAAP) | $197 million | $173 million | 13.9% | |
| Adjusted EBITDA Margin | 25.4% | 23.7% | 1.7 pp | |
| Adjusted Net Income (Non-GAAP) | $110 million | $94 million | 17.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About UL Solutions and its business model
UL Solutions delivers testing, inspection, and certification (TIC) services that help companies meet regulatory and safety requirements. The company operates laboratories and facilities around the world and is recognized for its UL Mark, which appears on billions of products globally. Its core business spans services like product testing, certification for regulatory standards, and ongoing compliance reviews for industries such as electronics, medical devices, and retail.
Recently, the company has focused on expanding its capabilities. It is investing in new laboratory capacity, adding new assessment services, and pursuing growth through acquisitions. Key success factors include maintaining market leadership, expanding service offerings to new and existing customers, and running operations efficiently to drive profitability. The company serves over 80,000 customers and holds hundreds of technical accreditations.
Quarterly performance: Key results and drivers
During Q2 2025, UL Solutions outpaced analyst expectations, with non-GAAP EPS of $0.52 and GAAP revenue of $776 million both exceeding consensus estimates, posting higher-than-expected GAAP revenue and non-GAAP earnings per share. The revenue result of $776 million (GAAP) reflected organic growth across all three main business segments. Adjusted diluted earnings per share grew to $0.52, 10% above the consensus projection. Profitability improvements came from higher sales volumes and operational efficiencies, most notable in the Industrial segment.
The company's headline measure of adjusted EBITDA (a non-GAAP metric) rose 13.9% from the prior year. Adjusted EBITDA margin, a measure of profitability relative to revenue, improved from 23.7% to 25.4% (non-GAAP). This was the highest Adjusted EBITDA margin (25.4%) achieved since the company went public. These results highlight effective cost control and improved operating leverage -- meaning the company made more profit from each additional dollar in revenue.
By business line, the Industrial segment saw the fastest growth, with revenue climbing 7.6%. Demand for energy and automation testing -- services that ensure the reliability and safety of industrial equipment -- was a key driver. The Industrial segment’s adjusted EBITDA margin expanded by 3.7 percentage points, reaching 34.6% compared to 30.9% in Q2 2024 (non-GAAP), supported by pricing gains and greater laboratory output. The Consumer segment grew revenue 5.6% (GAAP), benefitting from technology and retail testing. Here, adjusted EBITDA margin saw only a slight improvement of 0.2 percentage points (non-GAAP). The Software and Advisory segment increased revenue by 4.3%, but Adjusted EBITDA margin for the Software and Advisory segment decreased by 0.7 percentage points to 15.3% compared to 16.0% in Q2 2024, driven by higher employee compensation expense relative to revenue growth.
Looking at product families, Certification testing generated $215 million in GAAP revenue, up 5.9% compared to Q2 2024. Ongoing certification services revenue (GAAP) was $250 million, rising 6.8% compared to Q2 2024. Software solutions delivered $70 million in revenue. Non-certification testing and other services contributed $241 million, up 7.1%.
One notable event in the quarter was the absence of a repeat of Q2 2024’s $25 million one-time non-operating gain from a business sale. This, combined with a higher effective tax rate, led to a year-over-year decline of 8.5% in reported net income. Adjusted profit measures (non-GAAP), which exclude these one-off impacts, told a more favorable story. The company’s free cash flow (non-GAAP) reached $208 million for the first six months of 2025, up 59% from the same period in 2024. This enabled it to reduce debt by $135 million since the start of 2025, ending the quarter with $608 million in long-term debt and $272 million in cash.
The company maintained its quarterly dividend at $0.13 per share. This return to shareholders totaled $26 million.
Business focus, strategy, and competitive landscape
UL Solutions leads the North American TIC market, with a wide range of product safety, security, and sustainability services. Its reputation is built on technical expertise and global brand recognition. The company’s ability to address regulatory requirements in over 110 countries gives it an edge, along with its trusted UL Mark recognized by consumers, manufacturers, and regulators. It serves a broad base of customers and offers more than 400 independent third-party assessment services, able to test and certify against over 4,000 global standards.
The company’s recent growth priorities include expanding its service portfolio for both existing and new clients, supporting new trends around connected devices and sustainable practices. Acquisitions play a role in broadening its technical reach and market presence. Operational efficiency -- achieved through scaling laboratory capacity, managing costs, and driving productivity gains -- remains a core focus. The company faces strong competition from other global TIC providers, with success depending on service quality, breadth of offerings, and global compliance credentials.
Outlook and what to watch ahead
Management affirmed its full-year guidance, projecting mid-single-digit constant currency organic revenue growth and an adjusted EBITDA margin of approximately 24% for the year. The outlook assumes ongoing expansion of service lines and continued capital investments, with capital expenditures planned at 7–8% of revenue. The company expects an effective tax rate of approximately 26%. Capital expenditures will focus on meeting rising demand.
The leadership cited uncertainties in the global environment but reiterated confidence in its business model. Ongoing risks include continued margin pressure in the software and advisory segment and potential volatility from regulatory and geopolitical factors. The company’s ability to maintain margin gains, boost growth in its digital offerings, and further strengthen its balance sheet will remain focal points for the coming periods.
ULS currently pays a dividend, with $0.13 per share paid during the quarter. The quarterly dividend was maintained at $0.13 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
