High-quality earnings are supported by robust cash generation, evidenced by an OCF/NI ratio that frequently exceeds 2.0, providing consistent capital for dividends.
| Cash from Operations | 446M | 600M | 524M | 467M | 372M | 421M | 487M |
| Operating CF Margin % | - | 19.65% | 18.26% | 17.44% | 14.76% | 16.73% | 21.16% |
| Operating CF Growth % | -43.18% | 14.5% | 12.21% | 25.54% | -11.64% | -13.55% | - |
| Net Income | 349M | 325M | 326M | 260M | 293M | 224M | 231M |
| Depreciation & Amortization | 143M | 188M | 172M | 154M | 135M | 142M | 147M |
| Stock-Based Compensation | 28M | 0 | 54M | 0 | -1M | 135M | 12M |
| Deferred Taxes | 1M | 2M | 0 | 11M | 10M | -70M | 0 |
| Other Non-Cash Items | 15M | 96M | -11M | 60M | 43M | -111M | 31M |
| Working Capital Changes | -10M | -11M | -17M | -18M | -108M | 101M | 66M |
| Change in Receivables | 74M | -32M | -28M | 6M | -15M | -1M | -10M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 10M | -13M | 13M | 1M | -18M | 30M | 8M |
| Cash from Investing | -154M | -204M | -234M | -175M | -238M | 178M | -344M |
| Capital Expenditures | -146M | -197M | -237M | -215M | -164M | -107M | -119M |
| CapEx % of Revenue | 4.7% | 6.45% | 8.26% | 8.03% | 6.51% | 4.25% | 5.17% |
| Acquisitions | -1M | -1M | -26M | -18M | -65M | -39M | 0 |
| Investments | - | - | - | - | - | - | - |
| Other Investing | 0 | 1M | 29M | 9M | 0 | 0 | 0 |
| Cash from Financing | -261M | -396M | -284M | -294M | -1.12B | -228M | -20M |
| Debt Issued (Net) | -297M | -253M | -165M | 410M | 500M | 0 | 0 |
| Equity Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | -107M | -104M | -100M | -680M | -1.6B | -200M | -9M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 143M | -39M | -19M | -24M | -16M | -28M | -11M |
| Net Change in Cash | -9M | -3M | -17M | -7M | -1.01B | 357M | 127M |
| Free Cash Flow | 300M | 403M | 287M | 252M | 208M | 314M | 368M |
| FCF Margin % | 9.66% | 13.2% | 10% | 9.41% | 8.25% | 12.48% | 15.99% |
| FCF Growth % | -1.96% | 40.42% | 13.89% | 21.15% | -33.76% | -14.67% | - |
| FCF per Share | 1.47 | 1.99 | 1.43 | 1.26 | 1.04 | 1.57 | 1.84 |
| FCF Conversion (FCF/Net Income) | 0.86x | 1.85x | 1.61x | 1.80x | 1.27x | 1.88x | 2.11x |
| Interest Paid | 19M | 0 | 57M | 32M | 17M | 1M | 0 |
| Taxes Paid | 53M | 0 | 66M | 57M | 68M | 132M | 0 |
High labor cost sensitivity
Based on reported financial statements, ULS consistently generates operating cash flow significantly in excess of net income, with an OCF/NI ratio frequently exceeding 2.0, suggesting that the company's reported earnings are of high quality and supported by strong underlying cash generation from its core testing services.
The persistent gap between net income and operating cash flow indicates that non-cash charges and working capital dynamics are consistently favorable to cash generation. Investors should interpret this as a sign that the company's accounting practices are conservative and that the business model is highly effective at converting service delivery into liquid assets.
As reported in recent filings, ULS maintains a stable free cash flow trajectory, with FCF margins peaking at 14.6% in 2025Q1, demonstrating the company's ability to fund its operations and capital requirements while consistently generating surplus cash for shareholders despite ongoing investments in laboratory infrastructure.
The ability to maintain double-digit FCF margins suggests that the company's capital-intensive laboratory model is well-managed and not overly burdensome on cash flow. This trajectory implies that ULS possesses the financial flexibility to pursue strategic initiatives without relying on external financing, which is a key differentiator in the TIC sector.
According to quarterly data, ULS maintains a disciplined approach to capital expenditure, with CapEx as a percentage of revenue averaging between 5% and 9%, indicating that the company is effectively balancing the maintenance of its specialized laboratory assets with necessary growth-oriented investments in new testing capabilities.
The moderate capital intensity suggests that ULS is not trapped in a cycle of excessive reinvestment, allowing for a higher portion of operating cash flow to be returned to shareholders or deployed for M&A. Analysts should monitor whether future technological shifts in testing requirements necessitate a structural increase in these capital outlays.
Based on historical cash flow data, ULS utilizes its robust cash generation primarily to fund consistent dividend payments, which totaled $26M per quarter throughout 2025, while maintaining a conservative balance sheet that provides significant dry powder for potential future acquisitions or strategic investments in software platforms.
The company's capital allocation appears focused on returning value to shareholders while preserving a strong liquidity position. This conservative stance may be interpreted as a prudent approach given the company's recent transition to a public entity, though investors should watch for potential shifts toward more aggressive M&A activity.
Quick answers to the most common questions about buying ULS stock.
UL Solutions Inc. (ULS) generated $600.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
UL Solutions Inc. (ULS) generated $403.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
UL Solutions Inc. (ULS) spent $197.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, UL Solutions Inc. (ULS) returned $104.0M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.