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Date

Thursday, Feb. 19, 2026 at 8:30 a.m. ET

Call participants

  • Chief Executive Officer — Jennifer F. Scanlon
  • Chief Financial Officer — Ryan D. Robinson

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Takeaways

  • Full-year revenue -- $3.1 billion, representing 6.4% total and 6.2% organic growth.
  • Q4 revenue -- $789 million, up 0.8%, with 5.7% organic growth.
  • Full-year adjusted EBITDA -- Grew 20.7%, with margin expanding by 300 basis points to 25.9%.
  • Q4 adjusted EBITDA -- $217 million, up 28.4%, with margin of 27.5%, an increase of 460 basis points.
  • Consumer segment Q4 organic revenue growth -- 7.1%.
  • Consumer segment Q4 adjusted EBITDA margin -- 19.7%, up 510 basis points.
  • Industrial segment Q4 organic revenue growth -- 6.1%.
  • Industrial segment Q4 adjusted EBITDA margin -- 36.4%, up 440 basis points.
  • Software and advisory segment Q4 revenue -- $102 million, flat year over year; Q4 adjusted EBITDA margin 22.5%, up 390 basis points.
  • Full-year free cash flow -- $403 million, up from $287 million in 2024, representing 13.2% of revenue.
  • 2025 capital expenditures -- $197 million, amounting to 6.5% of revenue.
  • Q4 adjusted diluted EPS -- $0.53, compared to $0.49 in 2024.
  • 2025 effective tax rate -- 26.6%, up from 16.9% in 2024 due to OECD Pillar Two implementation and absence of prior reserve release.
  • Restructuring charges -- $37 million pretax recorded in Q4 under previously announced plan.
  • Dividend actions -- Regular quarterly dividend raised by 11.5% for 2026; $104 million dividends paid in 2025.
  • Debt reduction -- $253 million of borrowings repaid in 2025.
  • Facility and infrastructure investments -- New labs launched in Germany, Italy, and Japan; expansions in Dongguan and Ningbo, China; fire science center underway in Northbrook, Illinois; automotive EMC labs underway in Japan and Germany.
  • Divestiture announced -- Sale of employee health and safety (EHS) software business, accounting for $56 million in 2025 revenue, for $210 million; expected to close in Q2 2026.
  • Segment realignment -- Advisory services (about 5% of consolidated 2025 revenue) moving from Software and Advisory to Industrial; Risk and Compliance Software is new segment name.
  • 2026 organic revenue growth guidance -- Targeting mid-single digits; includes anticipated headwinds from nonstrategic exits (about 1% of 2025 revenue).
  • 2026 adjusted EBITDA margin guidance -- 26.5%-27%.
  • 2026 capital expenditure guidance -- Approximately 7%-8% of revenue, focused on new lab investments.
  • 2026 effective tax rate guidance -- Approximately 26%.

Summary

UL Solutions (ULS 0.58%) reported record revenues and full-year profit margins, driven by growth in both the Consumer and Industrial segments, while maintaining disciplined cost and capital management. Management announced the divestiture of the employee health and safety software business to sharpen focus on higher-growth, core software offerings and introduced a major segment realignment for more strategic clarity. Large investments in new and expanded laboratories were completed or launched in key international markets, supporting demand across high-growth sectors such as energy, data centers, and automation. Guidance for 2026 indicates continued organic growth in the mid-single-digit percentage range, further margin expansion, and continued strong free cash flow, bolstered by recent restructuring actions and targeted use of capital. Announced increases in the regular dividend and ongoing debt reduction underscore the company's prioritization of shareholder returns and financial flexibility. The evolving global regulatory landscape and sector megatrends, including energy transition and digitalization, are identified as core drivers sustaining demand for UL Solutions' services.

  • Leadership stated, "Over 55% of our global and strategic accounts customers currently purchase at least one of our ULTRIS risk and compliance software offerings," highlighting software penetration in key customer groups.
  • The CFO confirmed, "Approximately 120 basis points of the adjusted EBITDA margin improvement was due to certain non-restructuring severance expenses recorded in 2024 that were absent in 2025 due to the implementation of the restructuring plan."
  • Management said that the EHS software divestiture will improve software growth rates, describing EHS as a "lower growth" portfolio.
  • UL Solutions leaders identified double-digit growth trends in services linked to energy transition, digitalization of data centers, and sustainability markets.
  • Ryan D. Robinson stated that, "We have been able to keep lab headcount flat, so our revenue per employee and our metrics of productivity per employee have been increasing," aligning with productivity and operating leverage initiatives.
  • The CFO described ongoing investment priorities as "organic initiatives, accretive acquisitions, and to pursue a number of value-enhancing activities."

Industry glossary

  • TIC: Testing, inspection, and certification — core technical services that assess safety, performance, and regulatory compliance of industrial and consumer products.
  • EMC: Electromagnetic compatibility — testing of electronic devices to ensure they do not emit or are unduly affected by electromagnetic interference, required for regulatory certification in multiple markets.
  • OECD Pillar Two: An international corporate tax framework requiring a minimum effective rate on multinational enterprises, impacting tax rates across jurisdictions.
  • ULTRIS: UL Solutions' digital risk and compliance software platform offering tools for regulatory management, supply chain transparency, and operational sustainability.
  • ECOLOGO: A UL Solutions environmental certification program verifying and distinguishing products or services as meeting specific sustainability standards.
  • COU: Customer operating unit — referenced internally by UL Solutions to designate organizational subdivisions aligned to specific customers or markets.

Full Conference Call Transcript

Jennifer F. Scanlon, our Chief Executive Officer, and Ryan D. Robinson, our Chief Financial Officer. During our discussion today, we will be referring to our earnings presentation, which is available on the Investor Relations section of our website at ul.com. Our earnings release is also available on the website. I would like to remind everyone that on today's call, we may discuss forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements may include, among other things, statements about UL Solutions Inc.’s results of operations, and estimates and prospects that involve substantial risks, uncertainties, and other factors that could cause actual results to differ in a material way from those expressed or implied in the forward-looking statements. Please see the disclosure statement on slide two of the earnings presentation, as well as the disclaimers in our earnings release concerning forward-looking statements and the risk factors that are described in our filings with the SEC, including our Annual Report on Form 10-K for the year ended 12/31/2025. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as required by law.

Today's presentation also includes references to non-GAAP financial measures. A reconciliation to the most comparable GAAP financial measures can be found in the appendix to the earnings presentation. With that, I will now turn the call over to Jennifer F. Scanlon.

Jennifer F. Scanlon: Thank you, and good morning, everyone, and thanks for joining us. I am delighted to report that UL Solutions Inc. concluded a record year with outstanding performance that exceeded our guidance. What makes our results particularly impressive is that we achieved them while navigating trade policy shifts and geopolitical uncertainties throughout 2025. Our resilience is evident. We have once again delivered robust organic growth, enhanced profitability, and strong cash flow generation, while maintaining our investment grade balance sheet. Our performance is a testament to the durability of our business model, the essential nature of our services, and the strength of our team.

I am particularly pleased that our global product TIC strategy continues to deliver balanced performance across segments, service offerings, and regions. Our strategic alignment with major industry megatrends is resonating with customers. This demonstrates the critical role we play in their success, helping them innovate with confidence while accelerating their path to global market entry. The sustained demand for our services underscores the fundamental value proposition we deliver to our customers worldwide. On the call today, I will cover three areas. First, highlights of our strong full year performance; second, some notable achievements and activities throughout 2025; and third, our financial position and capital allocation strategy for 2026.

With respect to our full year performance, our delivery of superior results reflects our team's consistent ability to execute. I want to express my deep appreciation to our employees, whose dedication to our mission of working for a safer world, scientific excellence, and customer centricity defines our culture and is fundamental to our long-term success. Ryan will dive into the fourth quarter numbers, but first, let me hit the high notes of our full year 2025 results. We continued to fuel the momentum that began when we became a public company almost two years ago, delivering revenues of nearly $3,100,000,000, up 6.4% versus 2024 and up 6.2% on an organic basis.

Our 6.9% full year growth including 7.1% on an organic basis. While our 6.5% including 6.1% on an organic basis. Our Software and Advisory segment completed the year with 4% top line growth including 3.7% on an organic basis.

Jennifer F. Scanlon: Our full year results once again reflected growth across all major geographic regions. Adjusted EBITDA for the full year grew 20.7% and adjusted EBITDA margin expanded by 300 basis points to 25.9%. We significantly exceeded our original long-term goal of 24% in our second year as a public company, and we expect this progression to continue. Next, let me highlight significant investments in our global testing infrastructure that we completed or announced in 2025. We opened new advanced facilities in Aachen, Germany for battery testing; Carugate, Italy for HVAC and heat pump testing; Ise, Japan for electric motor efficiency testing. We expanded laboratories in Dongguan and Ningbo, China for IoT, wireless, and retail product testing.

Additionally, we broke ground on our global fire science center of excellence in Northbrook, Illinois, one of our largest laboratory investments to date. We also broke ground on two advanced automotive EMC testing facilities, one in Toyota City, Japan, expected to open during 2026, another one in Neu-Isenburg, Germany, projected to be operational by mid-2027. In addition to our organic investments, we invest in the evolution of safety standards. That role enables us to proactively build the certification services necessary to advance emerging technologies. For example, in Q4, we announced the launch of new certification services for battery-powered vehicles and industrial equipment, supporting the UL 2850 and UL 2701 standards for battery management, thermal runaway risks, and functional safety.

This work helps manufacturers navigate the complexities of the global energy transition. We are excited to extend our ECOLOGO certification program to industrial products, helping manufacturers demonstrate sustainability commitments and meet growing market and regulatory demands. We issued Schneider Electric the first ECOLOGO certification for an industrial product, certifying their PowerPact circuit breakers portfolio. Our new ECOLOGO certification for energy and industrial automation equipment sets a new benchmark for sustainable product design, advancing transparency and sustainability. On the software side, we expanded our ULTRIS software with new AI-powered releases that support compliance and sustainability goals. These releases help customers manage regulatory requirements and operationalize sustainable practices while complementing our test, inspection, and certification services.

Our ongoing strategic investments significantly expand our capabilities across critical growth sectors, including data centers, energy storage, connected devices, fire safety, and digital services. Our new offerings address demand in markets projected to experience substantial growth for years to come. Finally, let me comment on our disciplined approach to capital allocation activities during the year. Our strong revenue growth and rigorous expense management allowed us to generate robust cash flow. Key actions in 2025 included investing $197,000,000 in capital expenditures to drive growth, paying down $253,000,000 in borrowing, and paying $104,000,000 in dividends. We are excited to enter 2026 building on this momentum. First, we are introducing our 2026 growth outlook reflecting continued strength in our underlying business model.

Second, we are increasing our regular quarterly dividend by 11.5%. And third, we have made some enhancements to the composition of our segments. At the beginning of this year, to better position the company for growth and enhance customer value and innovation, we realigned our Software and Advisory segment as a means to focus and grow our software business. This change creates a focused software segment which we have renamed Risk and Compliance Software. The segment will be positioned to deliver great value with ULTRIS, our digital platform that helps customers simplify product compliance, gain supply chain visibility, and access data to enable smarter decision making.

As part of that focus on high quality growth and strengthening our value proposition, today, we are announcing the divestiture of our employee health and safety software business. This divestiture is expected to close in the second quarter. We consider these EHS software offerings to be non-core and we believe this divestiture will allow us to concentrate resources on the core software offerings most relevant to our TIC customer audience and redeploy capital toward attractive opportunities. Over 55% of our global and strategic accounts customers currently purchase at least one of our ULTRIS risk and compliance software offerings. Those offerings will remain a core part of our value proposition.

To further focus our Risk and Compliance Software segment, effective in Q1 this year, we moved advisory services, which accounted for approximately 5% of our consolidated 2025 revenue, into the Industrial segment from the Software and Advisory segment. We believe this move is a better strategic and operational fit with our core testing, inspection, and certification work. We expect this change will strengthen customer value by more tightly pairing technical advisory with standards-driven TIC services, and will better align advisory with the industrial demand drivers where we see attractive growth opportunities, such as broadening services into the wider energy ecosystem, expanding our focus on the built environment, and better tailoring our offerings to the medical device industry.

We believe we are well positioned in 2026 for continued high-quality growth and remain focused on maintaining our investment grade balance sheet to help our strategic priorities. I will now turn the call over to Ryan D. Robinson for a detailed review of our fourth quarter results and our initial 2026 outlook.

Ryan D. Robinson: Thank you, Jenny, and hello, everyone. I also want to thank all of our team members for delivering another strong quarter and full year 2025. Jenny did an excellent job summarizing our outstanding financial results for the year. I will focus my comments on our fourth quarter and segment results before closing with some comments on our initial 2026 full year outlook. We are proud to report a continuation of strong growth, adjusted EBITDA margin expansion, and solid cash generation in the fourth quarter. Now let me dive into the details of the quarter. Consolidated revenue of $789,000,000 was up 0.8% year over year, including organic growth of 5.7%.

The increase was particularly impressive given the difficult comps we had from the prior year period and reflected strength in both the Consumer segment, which delivered 7.1% organic growth, and the Industrial segment, which delivered 6.1% organic growth. Cost of revenue as a percentage of revenue improved 260 basis points, primarily by holding organic cost of revenue unchanged from last year's level while delivering strong revenue growth. SG&A as a percentage of revenue improved by 150 basis points compared to the prior year period. We recorded pretax restructuring charges of $37,000,000 associated with the previously announced restructuring plan. Adjusted EBITDA for the quarter was $217,000,000, an improvement of 28.4% year over year.

Adjusted EBITDA margin was 27.5%, up 460 basis points from the same period a year ago on particular strength in the Consumer and Industrial segments. The primary drivers of the margin expansion include operating leverage from revenue growth and supporting our team members with better technology and work environments. This allowed higher employee productivity and laboratory utilization, and as a result, we reduced our employee compensation expenses as a percentage of revenue. Our service and materials cost also improved as we decreased our use of third parties to fulfill portions of our work.

Approximately 120 basis points of the adjusted EBITDA margin improvement was due to certain non-restructuring severance expenses recorded in 2024 that were absent in 2025 due to the implementation of the restructuring plan. Adjusted net income for the fourth quarter was $114,000,000, up 11.8% from $102,000,000 in 2024. Adjusted diluted earnings per share was $0.53, up from $0.49 in 2024. Adjusted net income and adjusted diluted EPS improved alongside stronger core profitability, partially offset by a higher effective tax rate. For the full year, our effective tax rate was 26.6% in 2025. This compares to 16.9% in 2024. Our effective tax rate in 2025 was impacted by the additional implementation of the OECD's Pillar Two provisions for multinational corporations.

We also experienced a benefit in 2024 from a significant release of tax reserves that did not recur in 2025. Now let me turn to our performance by segment, starting with Industrial. Revenues in Industrial rose 7.3% to $352,000,000, or 6.1% on an organic basis as compared to 2024, with growth in all service lines. This was achieved despite outsized ongoing certification services growth in the year-ago period, which we believe were a result of increased activity ahead of potential tariffs. Certification testing growth was led by energy and automation, as well as fire safety testing. Adjusted EBITDA in the Industrial segment increased 21.9% to $128,000,000 in the quarter, while adjusted EBITDA margin improved 440 basis points to 36.4%.

As I mentioned earlier, we delivered revenue growth with expense efficiency across the business. Now turning to the Consumer segment. Revenues in Consumer were $335,000,000, up 8.4% from the 2024 quarter, or 7.1% on an organic basis. The improvement was driven by demand across all service categories, led by non-certification testing and other services. In terms of end markets, we saw a surge in demand across consumer technology, including EMC testing, as well as HVAC. Adjusted EBITDA for the quarter in Consumer was $66,000,000, an increase of 46.7% versus the fourth quarter of last year. Adjusted EBITDA margin for the quarter was 19.7%, an increase of 510 basis points year over year.

Margin growth was driven by higher revenue along with disciplined operational execution and employee utilization. In our Software and Advisory segment, revenues were $102,000,000 in the quarter, essentially flat year over year in both total and on an organic basis. The results reflect strong demand in software, including retail product compliance, offset by lower advisory-related activities. Adjusted EBITDA for the quarter in Software and Advisory was $23,000,000, a 21.1% increase as compared to the fourth quarter of last year. Adjusted EBITDA margin for the quarter was 22.5%, an increase of 390 basis points, primarily due to lower services and materials costs. Turning to cash flow.

For the full year 2025, we generated $600,000,000 from operating activities, an increase from $524,000,000 in the prior year. Capital expenditures for the year amounted to $197,000,000, or 6.5% of revenue, reflecting our continued commitment to investing strategically both for future growth opportunities and for current infrastructure needs. CapEx as a percentage of revenue moderated in 2025 as we finished a couple of key lab additions in 2024 and early 2025, and are ramping up the Global Fire Science Center of Excellence in Northbrook and the EMC labs that Jenny mentioned earlier. Free cash flow totaled $403,000,000 in 2025, up strongly as compared to $287,000,000 in 2024, and grew as a percentage of revenue from 10% to 13.2%.

We finished the year with $295,000,000 of cash and cash equivalents. The strength of our balance sheet is reflected in our investment grade ratings. A robust balance sheet and strong cash flow generation give us great flexibility to invest in organic initiatives, accretive acquisitions, and to pursue a number of value-enhancing activities as we strive to produce best-in-class shareholder returns. In addition, we repaid $253,000,000 of borrowings and returned $104,000,000 to our shareholders through quarterly dividends. Now let me expand a bit on the divestiture of our employee health and safety software business we announced today. This business accounted for approximately $56,000,000 of 2025 revenue, and the transaction is expected to close in Q2.

The sale price is approximately $210,000,000 and is subject to customary post-closing adjustments. This strategic exit allows us to focus resources on higher growth software offerings that are more closely aligned with our core testing, inspection, and certification services. The cash proceeds provide flexibility for value-accretive investments and capital allocation priorities. Now turning to our initial 2026 full year outlook. As a reminder, organic growth is constant currency, and excludes acquisitions and divestitures. We expect 2026 consolidated organic revenue growth to be in the mid-single-digit range as compared to our full year 2025 results. We expect Industrial to grow at a faster pace than Consumer.

At this time, the forward FX forecast imply an additional approximately 50 basis points tailwind on revenue growth year over year, and market forecasts have a large majority of that FX benefit in the first half of the year. We expect to improve adjusted EBITDA margin to a range of 26.5% to 27% in 2026, assuming current forward FX rates that I just mentioned. As a reminder, as part of our restructuring actions announced in the fourth quarter of last year, we expected to exit nonstrategic service lines totaling approximately 1% of 2025 revenue, which will reduce organic revenue growth, and it is factored into the organic revenue guide.

The revenue impact of the expected EHS divestiture, which is pretty similar each quarter, will be reflected in the acquisition and divestiture portion of the revenue change and will not affect our organic revenue growth rate. We will be sharing recast historical results for our new segment orientation when we report Q1 2026 results, which will include the movement of $139,000,000 of advisory revenue in 2025 from the Software and Advisory segment to the Industrial segment. We continue to expect the restructuring plan to be substantially completed by the end of the first quarter of 2027, with remaining changes expected to largely be incurred in 2026 in the Consumer segment.

Once completed, we expect to improve annual operating income by between $25,000,000 and $30,000,000 compared to the trailing twelve months ended Q3 2025 as a result of both the revenue and expense impacts of these actions. Our adjusted EBITDA margin guidance for 2026 contemplates the expected EHS divestiture, some benefit from the restructuring program, and our current estimates of the FX impact. We expect capital expenditures to be approximately 7% to 8% of revenue in 2026, with investments in new labs continuing as we seek to match continued strong customer demand. We estimate our effective tax rate in 2026 to be approximately 26%.

While our guidance is for the full year of 2026, let me provide you with some color with regard to seasonality. As a reminder, Q1 is typically our lowest revenue quarter in terms of dollars given the Lunar New Year holiday impact on customer operations in Asia and fewer workdays as compared to other quarters. This results in slightly less operating leverage and therefore profitability in Q1 compared to the other quarters. Our Consumer segment benefited from a surge in customer demand in Q4 and is facing particularly strong comparable results versus the first quarter of prior year. Therefore, we expect more modest growth in Q1.

Also, we expect more of our adjusted EBITDA margin improvement to occur in the second half of 2026. We are incredibly proud and thankful for the achievement of our global team and we believe they have positioned us well for 2026. We enter the year with strong momentum and expect to continue to steadily grow while improving profitability and delivering robust cash flow. We are working hard to deliver sustainable, long-term value for our stakeholders. I will now turn the call back to Jennifer F. Scanlon for her closing remarks.

Jennifer F. Scanlon: Thanks, Ryan. I mentioned earlier all of the various openings of facilities and investments we made throughout 2025. I would like to add that as part of the trips I often make to celebrate these achievements, I regularly meet with customers, employees, and local government leaders. The genuine enthusiasm I always encounter never ceases to energize me. It is inspiring to work for an organization like ours. Our mission of working for a safer world serves essential basic needs of humanity for safer, more secure, and more sustainable products. 2025 was another validating year. We exceeded guidance for both Q4 and the full year, demonstrating the strength of our business model and the value we deliver to customers worldwide.

As we enter our third year as a public company, our trajectory is clear. From our initial IPO targets, through our 2025 results, to our 2026 outlook, we expect to continue delivering consistent top-line growth and improving profitability. Looking ahead, we see tremendous opportunity. There are some fundamental shifts reshaping global commerce and many are very positive forces, such as the energy transition, the push for sustainability, and the evolution of connected technologies, all of which are creating unprecedented demand for the safety science expertise that we believe differentiates us. We continue to strategically invest to meet this moment, strengthening our capabilities and expanding our presence in high growth markets.

With our strong financial foundation, global reach, and unwavering commitment to our mission of working for a safer world, we believe UL Solutions Inc. is exceptionally well positioned to deliver sustained value for our customers, our people, and our shareholders in the years ahead. We will now open for questions.

Operator: Thank you very much. We will now begin with the question and answer session. To ask a question, if you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Curtis Nagle with Bank of America. Please go ahead.

Curtis Nagle: Great. Thanks so much for taking the question. Maybe just starting with the 2026 margin guide that definitely stands out. Looks pretty good. Just some of the biggest drivers, how much of that restructuring leverage, stuff like that. And then, you know, I do not think I saw it, but, you know, any updates in terms of a long-term margin framework, previously 24%? You guys are well above that. Or maybe asked another way, sort of 26%, what is a kind of reasonable cadence of margin performance if you are still hitting that on mid-single-digit growth. And then I have a follow-up.

Jennifer F. Scanlon: Thanks, Curtis, and welcome. And really what I want to start by saying is our 2026 margin guide is a continuation of our continuous improvement philosophy. And so if you look at what led to our restructuring plan that we announced last year, it really was a confluence of a number of ongoing activities that we packaged into one event. We will continue to pursue continuous improvement activities on an ongoing basis, and that is really what underpins our guidance. But I will let Ryan go into more of the details.

Ryan D. Robinson: Thank you for the question, Curtis. And we are pleased with the 300 basis points adjusted EBITDA margin improvement in 2025, on top of the 190 basis points we delivered in 2024. And as Jenny said, we are focused on continuous improvement. The themes of improvement in 2026 are anticipated to be similar to the year we just completed: driving operational leverage through both price and volume, intending to continue to increase the utilization of our lab capacity and our staff. The restructuring initiative will help on the cost side, but we also do have revenue reductions that we noted as well as a divested business, and so our expense and efficiency initiatives need to overcome those revenue changes.

And as I mentioned on the call, approximately 120 basis points of the adjusted EBITDA margin shift in the fourth quarter was related to that restructuring issue. All those things and FX go together to giving us comfort to guide to 26.5% to 27% for adjusted EBITDA margin.

Curtis Nagle: Okay. Thank you. Appreciate it. Then maybe just a quick one on cash. Kind of think about the pacing of debt paydown and, you know, potentially use of proceeds. I think you said $200,000,000 from the asset sale?

Ryan D. Robinson: Yes. The initial use of proceeds, general corporate purposes. Initially we will repay debt. Our priority is to continue to reinvest back into the business, organic CapEx, to grow and drive additional shareholder returns. It is a large, distributed, and consolidated industry, so we continue to evaluate acquisition opportunities. So in the short term, we will pay down debt, but we will evaluate investment opportunities.

Jennifer F. Scanlon: Thank you.

Curtis Nagle: Okay. Thank you very much.

Operator: Thank you. Your next question comes from the line of Stephanie Benjamin Moore with Jefferies. Please go ahead.

Stephanie Benjamin Moore: Great. Thank you for the question. I guess as I think about the underlying performance of the business, could you talk a bit about maybe where you are seeing some of your strong outperformance? You know, for example, you called out introducing your first ECOLOGO for industrial products and the like. Could you talk and see if the organic growth that you have seen in at least the fourth quarter are these higher margin verticals or end markets?

I guess, just trying to think about the substantial operating leverage that we are seeing and if this is just a function of, quite frankly, your initiatives around productivity and your investments, or are you seeing any kind of, you know, maybe mix or end market benefit that would be different from just a steady course? And I have a follow-up. Thank you.

Jennifer F. Scanlon: Thanks, Stephanie. I appreciate the question. And I would say it is all of the above. First of all, our focus on the megatrends is so important. As we are out there looking at things like the energy transition, or digitalization that is really pushing AI data centers, and even the needs in the sustainability space. You know, those are three of our biggest megatrends. All of those are yielding, as we look at it, double-digit growth. And, you know, while we transcend 35 industries and have a number of different services, that push for megatrends is important to our largest customers, and then it becomes important to their supply chains.

So we do believe that the megatrends lead to that high-quality growth. At the same time, a number of initiatives that you have mentioned are giving operating leverage between pricing as well as utilization of our teams, as well as introduction of new technologies and new tools to our business. All of those pieces fit together. And then finally, on mix, Ryan mentioned that we expect that Industrial will continue to have higher growth than Consumer.

Stephanie Benjamin Moore: Thank you. No. That is very clear. And then I wanted to circle back on maybe the first question on capital allocation, ask it in potentially a different way. You know, if I am looking at this correctly, a net cash position is probably on the table here sooner than later. So, you know, as you continue to obviously generate significant cash, I fully understand your commitment to continuing to invest back in the business. But, you know, as we think about the runway for the stepped-up CapEx, obviously, 2025, you announced a lot of major investment projects. So how should we think about the magnitude of investment from a capacity or physical standpoint in 2026 compared to 2025?

What is the runway on that magnitude of investments? And then given the, you know, debt position here coming to twelve months, what is the overall appetite for buybacks? Thanks.

Jennifer F. Scanlon: Yes. Let me start. On the CapEx, we always, in addition to many of the large labs that we have publicly announced, you know, we have ongoing critical facility upgrades that give more capacity, lease renewals to extend our positions in markets, as well as just individual services for many of our COUs. So our commitment to CapEx to, you know, deliver market-leading growth is an essential part of our strategy and an essential use of our capital allocation. Given high-quality growth as a strategy, you know, of course, we are also focused on M&A. We continue to see plenty of opportunities out there in the market. But we are very disciplined in our approach to that.

We are renewing our focus, for the year, on finding the right opportunities and successfully achieving that discipline and those results. So it is a balance. And then I will let Ryan talk about other distributions of capital.

Ryan D. Robinson: In addition to that, we have mentioned that over time, we would consider share repurchases, particularly to offset dilution. We feel that we have been prudent stewards of our shareholder capital, reinvesting back in the business and creating value. Our focus is organic growth and complementing that with accretive acquisitions. But we appreciate over time we need to evaluate all pieces of cash.

Stephanie Benjamin Moore: Thank you, guys, both.

Operator: Thank you, Stephanie.

Jennifer F. Scanlon: Thanks, Stephanie.

Operator: Your next question comes from Andy Wittmann with Baird. Please go ahead.

Andy Wittmann: Yes, great. Thanks for taking my question, and good morning, everyone. All your comments so far have been very helpful and very clear. Just thought maybe I would ask specifically on pricing. Ryan, in the past, you have talked about, like, kind of half of your growth-ish has been attributable to price. And I think historically, that has been a comment that you have been able to say kind of more confidently around your ongoing certification. Just wondering kind of how it evolved in the quarter.

And I know it is harder to pin down on the non-cert and the cert testing portion, but do you feel like you can comment on the order of magnitude that you think you are seeing in pricing in those businesses as well?

Ryan D. Robinson: Thanks for the question. We typically focus on our certification testing business and non-certification testing business, which have clear deliverables, and it is easier to measure the impact on price and volume. And I would say in the fourth quarter and the full year, there were similar contributions from price and volume in the revenue growth of both. We were pleased with the overall growth, particularly certification testing in the fourth quarter. And our plan for 2026 would be to generally continue to grow with that mix.

Andy Wittmann: Okay. That is helpful. And then, Jenny, I just thought I would ask for kind of an update on what you are seeing from new product releases from your customers? Anything around the data center ecosystem? If you could maybe talk about some of the specific categories of testing or product types that you are seeing from that area. Obviously, it feels like it should be a driver.

I just feel like a little bit more on the specifics of what you are actually seeing, kind of where you think you are in these product rollouts and the testing that you can do to help with this, I think would just be helpful for us to all understand as it contributes to your revenue growth. And if it is a material contributor to revenue growth, any quantification for how much it is adding to your revenue growth, I think, would also be helpful for people to understand as well.

Jennifer F. Scanlon: I think on the last point, just want to highlight again. We have got 35 industries and a number of different segments that we target. So, data center is extremely important, and we are seeing that digitalization trend really lead to double-digit growth rates in those types of services. And here is why we are seeing that. Today, we test to 70 standards, but what we are hearing from our customers is that the existing set of standards for the new complexities in data centers, it is just not enough.

And so they are coming to us for leadership and expertise in how they handle just the new realities of the changing of the thermal dynamics, of a shift to DC current, 800 volts, on the ways in which, you know, cooling, rack cooling, immersion cooling, all sorts of cooling needs are happening. So the data center work that we are doing, it is across all of our industrial product categories. So power and automation, renewables has a play as these data centers are trying to get enough power to power them. Wire and cable, the shifts to that DC is a different type of wire and cable. The built environment around the fire suppression.

And then on the consumer side, again, those chillers, those HVAC systems, as well as then just the underlying consumer technology, server technology, everything else going into those actual racks and pieces of equipment. So it is across the board. And it is an exciting area. Our customers, I mentioned in the fall we were having a data center power summit. It was so important and so well received, we are having another one coming soon. And, you know, it is the attendees of that. It is the hyperscalers. It is the equipment and component and wire and cable manufacturers. And there is also the focus on the owners of the colos. So it is complex.

It is growing, and we feel like we are right in the center of it all.

Andy Wittmann: Alright. That is super helpful. Just one kind of, I guess, technical question here. The restructuring plan that you guys announced last quarter, I think at the time, you were saying it was going to cost $42 to $47. Just want to make sure that there was no change there, because I guess you are $37 versus kind of that target range that you set out. Seems like most of the actions have really been taken here. Is that right, Ryan, or have there been any changes in plan scope reduction increases?

Ryan D. Robinson: Yes. The range has not changed. We recorded the majority of that in the fourth quarter. We anticipate completing the rest of that substantially in the first half of this year. But the total range of both the cost to achieve, as well as the benefits and timing, have not changed materially since we communicated it last quarter.

Andy Wittmann: Okay. Thank you.

Jennifer F. Scanlon: Thanks, Andy.

Operator: Thank you. The next question comes from Arthur Truslove with Citi. Please go ahead.

Arthur David Truslove: Hi there. Good morning, everyone, and congratulations on excellent results. First question from me, just within the divisional growth. So if you look at the Consumer business, you talked about consumer technology, including electromagnetic compatibility testing. Just wondered what end market that relates to. And similarly, in terms of the energy and automation within Industrial. And then second question, just to confirm, you obviously talked about mid-single-digit organic growth on a full-year basis. Obviously, of the 1% from the businesses that you have abandoned. Just to be clear, does mid-single-digit mean sort of anywhere between 4% to 7%, or do you have a different definition? And I suppose within that, you know, where does software fit in?

I do not think you mentioned that when you talked about Industrial and Consumer. So thank you.

Jennifer F. Scanlon: I will start with some of the diversified growth. So EMC testing is electromagnetic compatibility. And what this is, is the FCC in the U.S. and similar regulatory agencies all over the world set tolerance levels for essentially how much RF, radio frequency, devices emit. So anything with a transmitter or receiver has to go through EMC. So, for example, one of our capital announcements is an EMC lab in Toyota City, Japan, targeting the auto industry, because automobiles, as I like to say, have become driving data centers and driving nodes on the grid. So that is why we continue, as the world continues to connect, we continue to see demand for EMC growing.

You also asked about energy and industrial automation end markets. You know, that is really everything around power and controls, electrical distribution, circuit protection, wiring devices, anything that really powers large industrial equipment. And, again, a lot of that then becomes the types of products that get replicated into innovation and into consumer products.

Ryan D. Robinson: And then on the revenue guidance, Arthur, I would describe it in four parts, some of which are organic and some clarify the total growth. So first, in each of the past two years, we focused on high-quality growth, and we delivered on the mid-single-digit organic revenue guidance that we set at the beginning of the year. Second, if we start with the growth rate that we delivered in 2025, and back out what we announced in 2023, the exit of some businesses that accounted for approximately 1% of 2025 revenue, that puts us squarely in the middle of a mid-single-digit guidance for organic revenue growth year over year.

And then third, in addition to the organic change, we announced the planned divestiture of the EHS software business, which accounted for $56,000,000 of Software and Advisory revenue in 2025, and that was 1.8% of 2025 consolidated revenue. So we believe the sale will close in Q2, and therefore, the total reduction will be for a portion of the year. And then finally, a fourth consideration is FX. And this is based on market forecasts, but based on the current market forward rates, that would indicate about a 0.5% tailwind to revenue.

So if you account for a 100 basis points headwind from the divestiture of the EHS business on a total basis, and 50 basis points FX tailwind, we have a net 50 basis points headwind for year-over-year total growth rate. So that is squarely in the mid-single-digit range. You know, this is a year of a lot of small puts and takes, so I appreciate the question and I hope that is helpful, Arthur.

Jennifer F. Scanlon: And then, Arthur, let me add. I do not want to forget your question about software. And if you look at our revenue by major service categories in Q4, you will see that software revenue in the fourth quarter grew at a rate higher than it did for the full year. And, you know, I would say that bodes well for what we are looking at in 2026. Additionally, the announced divestiture will allow us to focus on the higher growth categories of our ULTRIS platform, categories like our supply chain insights or our benchmarks, which all really fulfill risk and compliance needs that our core TIC customers have.

Arthur David Truslove: Great. Thank you very much.

Operator: Thank you. Your next question comes from Jason Haas with Wells Fargo. Please go ahead.

Jason Haas: Hey. Good morning, and thanks for taking my questions. You mentioned that you saw a surge of demand in Consumer in 4Q, and it sounds like that may have potentially pulled forward some business from 1Q. So do I have that right? Can you just explain what caused that dynamic?

Jennifer F. Scanlon: The biggest cause of that dynamic is Consumer, our customers really move quickly. And when they have innovation opportunities that they are trying to get to market quickly, we need to respond. And our emphasis on customer centricity, as well as just our ability to have the right capacity, allows us to do that. So we saw some particular strength in some of the most innovative customers in the world in both the consumer technology space, as well as some of the really great small appliances that are going to market globally.

Jason Haas: Got it. That makes sense. Very helpful. And then I wanted to follow up on, I know it has been a trend for a while, but the advisory business has been softer and weighed on your overall growth rates. Can you just talk about what is driving that? I recognize it is shifting segments, but how integrated and synergistic is it to have that advisory business? Thank you.

Jennifer F. Scanlon: It is a great question. And it is something that we spent a lot of time evaluating in 2025. And what we realized was that our original hypothesis was that those advisory businesses were contributing to our software businesses. But as we really decomposed it, what we realized is that those advisory businesses are much more tightly tied to our TIC business. And so, you know, areas like the energy ecosystem, we saw some good strength in renewables advisory last year. A little softening in the fourth quarter in that. But with the shift, particularly with data centers and needing new sources of energy, we see a greater tie to our Industrial businesses.

Similarly, the softness in commercial real estate has affected our Healthy Buildings advisory. And, again, we believe that opportunities to couple that with some of our built environment services will help contribute to strengthening that. And then certainly areas where we do advisory services into getting medical devices to market. We also see that tying more closely to the TIC services that we offer.

And so that was really the fundamental premise of changing our focus, so that we are letting our newly named Risk and Compliance Software segment focus solely on software, the purchases of that software, and those product road maps, and tying our advisory teams more closely to the TIC services that are really compatible with those advisory offerings.

Jason Haas: Got it. That makes sense. Very helpful. Thank you.

Operator: Thank you. Your next question comes from Andrew Charles Steinerman with JPMorgan. Please go ahead.

Andrew Charles Steinerman: Hi. I would like to focus a little bit more on lab utilization. You know, how much of your 260 basis points expansion is coming from higher lab utilization? And then also you mentioned technology investments, expanded productivity. Would that additional productivity, how do I think of the calculation of lab capacity and lab utilization and, you know, how much higher could lab utilization go from here?

Jennifer F. Scanlon: Thanks, Andrew. And a great question, something we spend a lot of time evaluating. Because I want to emphasize it is not just lab utilization, it is expert utilization. So we have got our engineering team, our technicians who also are part of the overall process. You have got the physical labs, and then within those labs, you have got specific pieces of equipment. So anything that we can do to help improve the capacity of any of those three functions—our people, our equipment, and then our overall facilities—is where we are focused. And so certainly, the technology initiatives that we are rolling out is expanding the capacity of our people.

Better use of AI in our processes frees up our people to have more capacity. At the actual equipment level, better really monitoring what is the right lab for specific services to be delivered and ensuring that we are directing those customer projects to the labs with the greatest capacity. It is one of the reasons why we believe running global P&Ls is essential. And then as I mentioned, as part of our capital planning, we are always looking at what are ways that we should be extending the actual capacity of an overall facility, and we will continue to do that on an ongoing basis. So that productivity comes from all three areas.

Andrew Charles Steinerman: And are you able to—I—my first question was, you know, could you tell us how much of the 260 basis points margin expansion is coming from higher utilization of labs?

Ryan D. Robinson: Andrew, we have such a diversity of labs, and we even measure utilization in different ways for different types of services. It is hard to directly correlate those. We do see the improvement in trend, and it is driving our results, but it is difficult to precisely correlate it.

Andrew Charles Steinerman: Okay. Thanks, Jenny and Ryan.

Operator: Thank you.

Jennifer F. Scanlon: Thanks, Andrew.

Operator: Thank you. The next question comes from George Tong with Goldman Sachs. Please go ahead.

George Tong: Hi. Thanks. Good morning. In the Industrial segment, we have seen organic revenue growth normalize from double digits in 2024 to mid-single digits exiting 2025. To what extent do you think Industrial organic growth will reaccelerate? And what are the key drivers? Or conversely, do you view current mid-single-digit growth as the new steady state for Industrial growth?

Jennifer F. Scanlon: Industrial, we want to just remind everybody that we believe that there was pull-forward in 2024 due to anticipation of tariffs. So I would say that normalized level is more along the line of our annual levels, which is on the higher end of single digits. But that said, as we look forward, the demand that we are seeing for Industrial, both in certification testing and non-certification testing, is strong. These areas of the built environment, the energy and industrial automation, wire and cable, power and controls—these are all pieces that are being fueled by the megatrends. And we are seeing particular strength. The U.S. strong across the board, by the way, both Industrial and Consumer.

And particular strength also coming out of China and more broadly across Asia for that energy and industrial automation within Industrial.

George Tong: Got it. That is helpful. You noted that the Industrial business should grow faster than Consumer this year. Can you talk about how much of a spread you expect in growth between these two segments?

Ryan D. Robinson: We have not provided specific guidance for the growth for each of the segments. We added that comment because of the particularly strong performance of Consumer in Q4, and we just wanted to clarify that was in part due to a surge of activity in Q4 and not a fundamental change in the relative growth rates of the quarter.

George Tong: Got it. That is helpful. Thank you.

Operator: Thank you. The next question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Adam (for Shlomo Rosenbaum): Hi. This is Adam on for Shlomo. Can you talk about the shift of manufacturing activity from China and other parts of world and how that trend looks in 2025 as it relates to UL? Put in Q4 2025. Excuse me.

Jennifer F. Scanlon: We are not seeing a significant shift out of China. We are seeing significant—I would call it China-plus-one continuation. So, you know, our China sites and the China sites of our customers that we inspect in our ongoing certification services continue to grow, albeit at a pretty low slope. But those sites that we visit—India is growing significantly; Malaysia, Thailand. So absolutely we continue to see, I would say, dispersion and de-risking of supply chains and our customers adding locations. Our China business continues to be strong. And we are continuing to be very pleased with our customer relationships. I am going over there next month. Looking forward to being back.

Adam (for Shlomo Rosenbaum): Okay. Thanks. And what is the demand like for the artificial intelligence safety certification services that the company announced last quarter?

Jennifer F. Scanlon: It is still in early days, but it is an important topic. What we are hearing is just how important trust is in AI. And we are working with different customers to understand how we adapt that standard for them to provide evidence that their customers can trust their use of AI. So it is still early days.

Adam (for Shlomo Rosenbaum): Thank you.

Operator: Thank you. Your next question comes from Andrew Nicholas with William Blair. Please go ahead.

Andrew Nicholas: Good morning. Thanks for taking my questions. First one I wanted to ask was just on kind of the advisory restructuring and the employee health and safety software sale. I mean, can you give us a little bit more color on the growth rates of those businesses over the last couple of years? I know you have called out advisory softness a couple times over the past several quarters. Just trying to figure out what kind of the restructuring there will do to the reported growth rates? And then any color on the margin profiles of those businesses would be helpful too.

Jennifer F. Scanlon: It is a great question. And let me just start. Advisory in general tends to be somewhat cyclical and can be directly affected by very specific market conditions, such as slowdown in commercial real estate affecting our Healthy Buildings portfolio. I always say it is like a sine wave on an upward trajectory, but any given quarter it can be lumpy. And so our rationale as we were assessing that for moving it under Industrial with TIC is that there are just better opportunities for synergies both in the opportunity identification with our TIC services, as well as just the way in which we utilize our teams for some of those services.

So, you know, we expect that to continue to be on an upward trajectory, but they will continue to be like a sine wave. The EHS piece of software, our rationale for divesting that is when we look at our TIC customers and the ultimate end personas of the users of our ULTRIS platform, EHS is an important service for many manufacturers, but that target audience is not consistent with our target audience for our other ULTRIS offerings. So we felt it would be better off in stronger hands. And we are excited that it found a good home. It was lower growth in our software portfolio.

So for us, we expect our software growth rate to improve as a result of that divestiture.

Andrew Nicholas: And anything you could say on the margin profile there just to take that off the list?

Ryan D. Robinson: I would say, Andrew, with the first quarter we will provide pretty fulsome information on the realignment of the segments, including the newly named Risk and Compliance Software segment. And so you will be able to infer how that affects the change in revenue, how that affects the change in profitability. We wanted to be clear that our consolidated adjusted EBITDA guidance for the year includes that divestiture. So more detail to come, but the guidance includes the change.

Jennifer F. Scanlon: And last thing on that, our Software and Advisory team has worked really hard to improve their EBITDA, and we expect that improvement to be durable with these changes, and we will report more in Q1 when we break them all out.

Andrew Nicholas: Thank you. And then if I could just ask a follow-up question on 2025 results. So obviously, adjusted EBITDA margin was, I think, almost 200 basis points better than what you had originally guided. I am curious, taking a step back, where you felt like you kind of got the most surprise relative to your initial expectations? How much of it was just taking a conservative approach a year ago versus demand or pricing or some other factor beating your expectations? Thank you.

Jennifer F. Scanlon: I am just going to give a general philosophy in continuous improvement: when you express to a team specific metrics or specific areas of process that you are focusing on, you typically get results. And so within our processes, there were certain areas that we asked our team to focus on that really would lead to greater customer satisfaction and centricity. And those were areas that also dropped right down to our bottom line. So things like turnaround time, billable utilization, time to quote, or use of the new pricing tool. Those are all examples of when you shine a light on them and apply metrics, people respond really favorably.

And we have got a great team who did a great job in all of these areas.

Operator: Thank you. The next question comes from Joshua K. Chan with UBS. Please go ahead.

Joshua K. Chan: Hi, good morning, Jenny and Ryan. One question on laboratory productivity as it relates to people. Have you been able to keep your lab headcount relatively flat despite growing the top line? And if so, do you expect that to continue into the future?

Ryan D. Robinson: Yes. We have been able to keep lab headcount flat, so our revenue per employee and our metrics of productivity per employee have been increasing. It is from a number of different initiatives. As Jenny mentioned, we are focused on continuous improvement. It is also an outcome of our laboratory optimization, increasingly using centers of excellence that have higher capabilities, higher throughput, higher opportunities for our employees that work in those areas. So that has been a key contributor. As we file the 10-K, you will get some additional information on our employee compensation as a percentage of revenue by segment and consolidated, and I think you will be able to see that even more precisely.

Joshua K. Chan: Great. Thank you for that. And then just a quick question on the margin guidance. So how much of the restructuring benefit is included in the 2026 guide? And also, why does the margin expansion become stronger in the second half than the first half? Thank you.

Ryan D. Robinson: Some of the improvements in the restructuring initiative are wind-downs of existing services that are not instantaneous. They take a couple quarters to achieve. Also, part of it is a transition of activities to different locations that take a while to consummate. So for 2026, there is a portion of the benefits, but from the time that we announced it, we thought it prudent to focus on by the end of the first quarter 2027 we will have all of these steps behind us.

Joshua K. Chan: Thanks for the color, and congrats on a good quarter.

Jennifer F. Scanlon: Thank you very much. Thank you, everyone, for joining us today. We appreciate your support, and we look forward to updating you on our progress again next quarter.

Operator: Thank you. This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.