Safety certification company UL Solutions (NYSE: ULS) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 5.2% year on year to $816 million. Its non-GAAP profit of $0.59 per share was 5.4% above analysts’ consensus estimates.
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UL Solutions (ULS) Q2 CY2026 Highlights:
- Revenue: $816 million vs analyst estimates of $814.3 million (5.2% year-on-year growth, in line)
- Adjusted EPS: $0.59 vs analyst estimates of $0.56 (5.4% beat)
- Adjusted EBITDA: $219 million vs analyst estimates of $214.3 million (26.8% margin, 2.2% beat)
- Operating Margin: 18.4%, in line with the same quarter last year
- Free Cash Flow Margin: 11.2%, down from 13.5% in the same quarter last year
- Market Capitalization: $18.35 billion
Company Overview
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE: ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $3.15 billion in revenue over the past 12 months, UL Solutions is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, UL Solutions’s 5.4% annualized revenue growth over the last four years was decent. This shows its offerings generated slightly more demand than the average business services company, a helpful starting point for our analysis.
Long-term growth is the most important, but within business services, a stretched historical view may miss new innovations or demand cycles. UL Solutions’s annualized revenue growth of 6.8% over the last two years is above its four-year trend, suggesting some bright spots. 
This quarter, UL Solutions grew its revenue by 5.2% year on year, and its $816 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 4.9% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Adjusted Operating Margin
Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.
UL Solutions has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 18.2%.
Analyzing the trend in its profitability, UL Solutions’s adjusted operating margin decreased by 2.2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q2, UL Solutions generated an adjusted operating margin profit margin of 21.2%, up 2 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Cash Is King
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
UL Solutions has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 10.9% over the last five years, quite impressive for a business services business.
Taking a step back, we can see that UL Solutions’s margin expanded by 6.1 percentage points during that time. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability fell.
UL Solutions’s free cash flow clocked in at $91 million in Q2, equivalent to a 11.2% margin. The company’s cash profitability regressed as it was 2.4 percentage points lower than in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends trump fluctuations.
Key Takeaways from UL Solutions’s Q2 Results
It was good to see UL Solutions beat analysts’ EPS expectations this quarter. Overall, this print had some key positives. The stock remained flat at $91.61 immediately following the results.
UL Solutions put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
