Executive Summary

Q4 revenue rose 8.0% to $739M with 9.5% organic growth; Adjusted EBITDA grew 27.1% to $169M with margin expanding 350 bps to 22.9% as Industrial led and Consumer improved efficiency .
Diluted EPS increased 37.9% to $0.40 and Adjusted Diluted EPS rose 69.0% to $0.49; net income margin expanded 240 bps to 11.5% on operating leverage and lower SG&A ratio .
2025 outlook: mid‑single‑digit organic revenue growth, Adjusted EBITDA margin to ~24% (up from 22.9% FY24), capex 7–8% of revenue, and ETR ~26% (vs. 16.9% in 2024) .
Call color: Q4 ongoing certification services (OCS) growth accelerated to ~12% (vs. ~8% in Q1–Q3), likely modest pull‑forward; expect normalization in 2025. Pricing/volume mix roughly even for certification testing and electrification testing; FX could be a ~<1% revenue headwind in 2025 if forwards hold .
Stock reaction catalysts: durable Industrial growth tied to energy transition and AI data center power needs, margin expansion trajectory toward 24%, and higher 2025 tax rate (OECD Pillar 2) partially tempering EPS leverage; watch normalization in OCS after Q4 pull‑forward .

What Went Well and What Went Wrong

What Went Well
- Industrial delivered 13.9% organic growth (11.6% total) and 510 bps adj. EBITDA margin expansion to 32.0%; strength in electrical, renewables, component certification, and added lab capacity .
- Consumer growth (6.5% organic) with 230 bps adj. EBITDA margin expansion to 14.6% on retail and consumer tech demand and operational efficiency; management: “we're adding capacity...to meet increasing testing demand” .
- Strong cash generation and balance sheet flexibility: FY24 CFO $524M; FCF $287M; investment‑grade ratings; deleveraging through $165M net debt repayment in 2024 .
- CEO: “Robust organic revenue growth, margin expansion and strong cash flow generation underscored the resilience and predictability of our business model” .
What Went Wrong
- Software & Advisory grew 5.2% but margins were flat; management cited higher services/materials costs and professional fees; S&A margins lagged expectations in prior quarter as well .
- Services and materials costs rose with volume and use of third‑party labs; some spend reflects bridging capacity until in‑house investments come online .
- 2025 ETR expected to rise to ~26% from 16.9% in 2024 due to OECD Pillar 2 and non‑recurring 2024 reserve releases, a headwind to after‑tax earnings growth .
- FX likely to be a ~<1% revenue headwind in 2025 (largely expense‑offset at EBITDA, but still a net drag) .

Financial Results

Quarterly financials (sequential; oldest → newest):

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$730	$731	$739
Net Income ($M)	$106	$94	$85
Diluted EPS ($)	$0.50	$0.44	$0.40
Adjusted Diluted EPS ($)	$0.44	$0.49	$0.49
Adjusted EBITDA ($M)	$173	$183	$169
Adjusted EBITDA Margin (%)	23.7%	25.0%	22.9%
Net Income Margin (%)	14.5%	12.9%	11.5%

Notes: Management stated on the call Consumer Q4 Adjusted EBITDA was $49M; the company’s 8‑K shows $45M (we use the 8‑K for tables) .

Q4 2024 segment performance:

Segment	Revenue ($M)	Operating Income Margin (%)	Adjusted EBITDA ($M)	Adjusted EBITDA Margin (%)
Industrial	$328	26.8	$105	32.0
Consumer	$309	7.1	$45	14.6
Software & Advisory	$102	4.9	$19	18.6

Q4 revenue mix by service category:

Category	Q4 2024 ($M)
Certification Testing	$199
Ongoing Certification Services	$248
Non‑certification Testing & Other Services	$221
Software	$71
Total	$739

FY24 cash and balance sheet KPIs:

KPI (FY24)	Value
Cash from Operations	$524M
Free Cash Flow	$287M
Capital Expenditures	$237M
Total Debt (12/31/24)	$747M (before issuance costs)
Cash & Cash Equivalents (12/31/24)	$298M
Dividend Paid in Q4	$25M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth (cc)	FY 2025	N/A (initial)	Mid‑single‑digit	New
Adjusted EBITDA Margin	FY 2025	Long‑term target >24% (IPO)	~24%	In line with LT target; +110 bps vs FY24 actual 22.9%
Capex (% of revenue)	FY 2025	FY24 outlook 8.0–8.5%	7–8%	Slightly lower vs 2024 outlook
Effective Tax Rate	FY 2025	N/A (initial)	~26% (vs. 16.9% FY24 actual)	Higher YoY
FX Impact (reported revenue)	FY 2025	N/A	~<1% headwind if forwards hold	New
Ongoing Certification Services	FY 2025	N/A	Expect normalization after Q4 pull‑forward	Normalizing
Portfolio/M&A	FY 2025	N/A	Continue acquisitions and portfolio refinements	Ongoing

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Energy transition & battery labs	Korea lab expansion; Batterieingenieure and TesTneT acquisitions; strong HVAC/next‑gen refrigerants; Auburn Hills battery lab opened	Continued demand; global coverage; battery labs seeing strong multi‑vertical needs (EV, ESS); new Global Fire Science Center underpinning safety testing	Strengthening investment and demand
AI/data centers	AI influencing consumer tech and ULTRUS; early stage AI PC/server benchmarks	Data centers need ~2x power vs normal; cabling, HVAC, storage upgrades; labels/OCS tied to AI infra	Expanding opportunity set
Tariffs/macro	Limited explicit Q2/Q3 impact	Q4 OCS growth pickup (~12%) likely influenced by tariff positioning; historically tariffs not a material headwind; retesting from supply chain shifts can boost demand	Watch normalization in 2025
Pricing vs. volume	Value‑based pricing noted in Industrial (Q2)	For certification/electrification testing (~57% of revenue), ~even price/volume mix in Q4	Healthy pricing power sustained
Software & Advisory	Balanced growth; ULTRUS enhancements (Q2)	Q4 software demand strong (retail compliance, sustainability), but S&A margin flat due to services/materials	Mixed: revenue improving, margin constrained
Capex & ROI	Elevated 8–8.5% outlook; disciplined underwriting (Q3)	7–8% in 2025; bridging third‑party services until capacity online	Elevated but moderating %
FX	Noted FX headwinds in 2024	2025 ~<1% revenue headwind if forwards hold; mostly EBITDA‑offset; Consumer more exposed	Modest headwind

Management Commentary

CEO: “Robust organic revenue growth, margin expansion and strong cash flow generation underscored the resilience and predictability of our business model” .
CEO on AI/data centers: data centers serving AI “need about twice as much power as a normal data center,” driving upgrades across power, cooling, storage and grid (benefiting Industrial and Consumer) .
CFO: “Adjusted EBITDA margin was 22.9%, up 350 basis points...on particular strength in both the Industrial and Consumer segments” .
CEO on FCC Cyber Trust Mark: UL Solutions named lead administrator to help launch U.S. cybersecurity labeling for smart products .
CFO on OCS pull‑forward: OCS grew ~8% in Q1–Q3, ~12% in Q4, contributing ~1% to consolidated Q4 growth; expect normalization in 2025 .

Q&A Highlights

Sustainability of Industrial growth: tailwinds (energy transition, electrification, digitalization) intact; comps get steeper but investment continues .
Tariffs: historically not a material negative; supply chain shifts and product re‑engineering often require retesting, supporting demand .
Margin drivers: primary lever is operating leverage from ~9.5% organic growth; CSAR accounting noise less relevant; ~300 bps OpInc margin expansion YoY .
Pricing/volume: certification/electrification testing (~57% of revenue) grew ~8% on ~even price/volume mix .
FX: current forwards imply just under 1% revenue headwind in 2025; largely offset in EBITDA by expense translation .
M&A appetite: active across segments globally; focus areas aligned to product safety and mega trends .
Battery labs & capacity: strong demand; interim outsourcing raises services/materials while in‑house capacity ramps .

Estimates Context

S&P Global Wall Street consensus for Q4 2024 EPS and revenue was unavailable due to a temporary API limit. As a result, we cannot quantify beats/misses versus consensus at this time; we will update when access is restored [GetEstimates errors].
Management did not explicitly frame results as beats/misses on the call or in the release; narrative emphasized broad-based organic growth and margin expansion .

Key Takeaways for Investors

Industrial strength remains the core engine: 13.9% organic growth and 32.0% adj. EBITDA margin in Q4, supported by energy transition, electrification, and AI‑driven data center power needs .
Consumer improving: 6.5% organic growth with 230 bps adj. EBITDA margin expansion; continued capacity additions to meet testing demand .
2025 setup: mid‑single‑digit organic growth with margin progression to ~24%; capex 7–8% supports durable demand, but higher ETR (~26%) tempers EPS leverage .
Near‑term watch items: normalization of OCS after Q4 pull‑forward, services/materials (outsourcing) costs until capacity catches up, and modest FX headwind .
Balance sheet optionality: FY24 FCF $287M and investment‑grade ratings enable continued capex, tuck‑ins, and shareholder returns .
Cross‑document check: the 8‑K reports Consumer Q4 Adjusted EBITDA at $45M; the call transcript cites $49M—use 8‑K figures as authoritative for modeling .
Multi‑year thesis: diversified TIC platform with pricing power and operating leverage, positioned to compound through mega trends (energy transition, digitalization/AI, sustainability) while expanding margin toward and above 24% over time .

Appendix: Source Documents

Q4 2024 8‑K earnings press release (EX‑99.1): –.
Q4 2024 earnings call transcript: –.
Q3 2024 8‑K and transcript excerpts: –, .
Q2 2024 8‑K and presentation: –; Q2 transcript excerpts: .

UL Solutions Inc. (ULS)·Q4 2024 Earnings Summary