UL Solutions Inc.

UL Solutions reported second-quarter revenue of $816 million, up 5.2% year over year, including 6.6% organic growth. Adjusted EBITDA was $219 million, up 11.2%, with margin at 26.8%, up 140 basis points. Adjusted diluted EPS was $0.59 versus $0.52 a year ago, and adjusted net income was $129 million versus $110 million. Operating income was $150 million, up 7.9%, with operating margin improving 50 basis points. By segment, Industrial revenue increased 7.8% to $402 million and Consumer revenue rose 6.5% to $362 million; Risk & Compliance revenue fell 17.5% to $52 million due to the EHS Software divestiture. For full-year 2026, the company expects consolidated organic revenue growth in the mid-single-digit range, about a 1% revenue reduction from restructuring-related exits, adjusted EBITDA margin of approximately 27%, an effective tax rate of approximately 26%, and capital expenditures of approximately 8.5% of revenue. Management said the restructuring plan should be complete by the end of Q1 2027, with about $3 million of remaining pretax charges.

Jenny Scanlon framed the quarter as evidence that UL Solutions is benefiting from durable secular trends such as the energy transition, electrification, automation, and more complex product ecosystems. She emphasized that the company is becoming more focused, scalable, and efficient through restructuring and productivity efforts, while continuing to invest in capabilities tied to customer demand. Her tone was confident and upbeat, and she repeatedly pointed to strong visibility, resilient demand, and confidence in the full-year outlook.

Ryan Robinson highlighted the core financial drivers: revenue of $816 million, operating income of $150 million, adjusted EBITDA of $219 million, and adjusted diluted EPS of $0.59. He noted margin improvement from favorable operating leverage, restructuring benefits, and productivity initiatives, while SG&A was pressured by performance-based compensation and professional fees. On cash flow, trailing 12-month operating cash flow was $678 million and free cash flow was $436 million, up 19.8% year over year, with free cash flow margin at 13.9%; the company ended the quarter with $434 million of cash and cash equivalents and $303 million of debt. He also said full-year capex is now expected to be approximately 8.5% of revenue and reiterated that the balance sheet remains investment-grade, supporting the pending Eurofins E&E acquisition and other capital priorities.

Analysts focused heavily on margin cadence, incentive compensation, capex intensity, and the durability of demand. Management said second-half EBITDA margin should be roughly similar between Q3 and Q4, while performance-based compensation and acquisition-related costs are among the main second-half puts and takes. On incentive compensation, Ryan Robinson explained that annual bonus accruals and performance stock units both rose with stronger performance, but said the second-quarter impact was bigger than the first and should be moderately lower going forward. On demand, management said Consumer is seeing support from AI data center-related testing and product redesign activity, while Industrial remains tied to energy, electrification, and automation, though advisory had some solar and wind-related headwinds.