ULS earnings analysis
What we found in ULS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
UL Solutions delivered Q2 revenue of $816 million, up 5.2% year over year and 7.7% sequentially, with organic growth of 6.6% led by Industrial and Consumer. Gross margin rose to 51.1% and operating margin improved to 18.4%, while adjusted EPS increased to $0.59 from $0.52; GAAP EPS of $1.21 was materially boosted by a $191 million divestiture gain. First-half operating cash flow rose to $379 million and free cash flow to $241 million, but reported R&C Software revenue declined 17.5% following the divestiture and the pending €575 million E&E acquisition adds execution risk.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Organic growth lifted Q2 revenue to $816M
- Q2 revenue rose $40 million, or 5.2% year over year, to $816 million; this was also $58 million, or 7.7%, above Q1 2026 revenue of $758 million. Organic revenue grew $51 million, or 6.6%, while the divestiture reduced reported revenue by $14 million.
- Gross and operating margins expanded
- Gross margin expanded to 51.1% from 49.2% a year ago, as cost of revenue increased only $5 million versus a $40 million revenue increase. Operating income increased $11 million to $150 million, lifting operating margin 50 bps to 18.4%.
- EPS growth includes a large divestiture gain
- GAAP diluted EPS increased to $1.21 from $0.45, while adjusted diluted EPS increased to $0.59 from $0.52. The $0.69 GAAP EPS increase includes a $191 million pre-tax gain on the Employee Health and Safety software divestiture, equal to $0.94 per diluted share.
- Industrial and Consumer drove growth
- Industrial revenue grew $29 million, or 7.8%, to $402 million, led by $16 million of Ongoing Certification Services growth and $10 million of Certification Testing growth. Consumer revenue grew $22 million, or 6.5%, to $362 million, and its segment operating margin improved 210 bps to 13.0%.
- Cash generation rose despite higher capex
- Six-month operating cash flow rose $78 million to $379 million and free cash flow increased $33 million to $241 million. Free-cash-flow margin rose 130 bps to 15.3%, despite capital expenditures increasing $45 million to $138 million, or 8.8% of revenue.
- Liquidity supports investment and acquisitions
- Liquidity included $434 million of cash and cash equivalents and $995 million of unused revolver availability at June 30, 2026. The company also had $300 million of 6.500% senior notes due 2028 and repaid more borrowings than it raised, contributing to $308 million of financing cash outflow in the first half.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Software reported revenue and profit declined
- Risk & Compliance Software revenue fell $11 million, or 17.5%, to $52 million in Q2 because the Employee Health and Safety software divestiture reduced revenue by $14 million. Segment operating income fell $2 million, from $2 million to breakeven.
- E&E transaction has execution and break-fee exposure
- The planned E&E acquisition carries a €575 million enterprise value plus €41 thousand per day from September 1, 2025 through closing. If specified filing deadlines or conditions are not met, ULH could owe a €34.5 million break fee; closing is expected in Q4 2026.
- Customer-demand uncertainty and residual restructuring
- Management says geopolitical uncertainty may cause customers to modify, delay, or cancel service purchases. Separately, the company expects approximately $3 million of remaining restructuring charges through completion targeted by the end of Q1 2027.
- No material risk-factor update disclosed
- The filing states there were no material changes to risk factors from the 2025 10-K. Existing financing exposure includes $300 million of 6.500% notes due 2028, although management says a hypothetical 100-basis-point change on the revolver would not be material at June 30, 2026.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.21
- Gross margin
- 51.1%
- Operating margin
- 18.4%
- Segment
- Industrial revenue: $402 million, up $29 million (7.8%) year over year
- Segment
- Consumer revenue: $362 million, up $22 million (6.5%) year over year
- Segment
- Risk & Compliance Software revenue: $52 million, down $11 million (17.5%) year over year
What they said about what is next.
The 10-Q contains no explicit numeric FY2026 revenue or EPS guidance. Management states that the Restructuring Plan is expected to be substantially completed by the end of Q1 2027, with approximately $3 million of remaining charges, and expects the E&E acquisition to close in Q4 2026, subject to approvals.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 5, 2026
- UL Solutions Inc. delivered robust Q1 2026 results, reporting a revenue of $758 million, a 7.5% increase year-over-year (up $53 million), and an EPS of $0.50, surpassing estimates. The Industrial segment led in growth…
- 10-K · February 19, 2026
- UL Solutions presents a strategy focused on expanding its core TIC business, cross-selling Software & Advisory (S&A) offerings and pursuing targeted M&A while pursuing operational margin expansion. The 10‑K highlights…
- 10-Q · November 4, 2025
- UL Solutions beat revenue and improved margins in Q3: revenue rose to $783 million (up $52M or +7.1% YoY from $731M) and operating income increased to $156 million (19.9% margin). Diluted EPS was $0.49 vs $0.44 a year…
- 10-Q · May 6, 2025
- UL Solutions reported revenue of $705.0M for the quarter ended March 31, 2025, up $35.0M (+5.2%) versus the prior-year period but down $34.0M (-4.6%) versus the prior quarter. Operating income rose to $109M (15.5%…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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