UL Solutions (NYSE: ULS) grows Q1 revenue, boosts cash flow and reshapes portfolio
Filing Impact
Filing Sentiment
Form Type
10-Q
UL Solutions Inc. reported Q1 2026 revenue of $758 million, up from $705 million, driven by growth in Industrial and Consumer testing and ongoing certification services. Net income rose to $97 million from $71 million, with net margin improving to 12.8%.
Operating income increased to $138 million from $109 million as cost of revenue grew more slowly than sales and interest expense declined. Adjusted EBITDA reached $197 million and free cash flow was $150 million, supported by strong operating cash generation of $219 million.
The company is actively reshaping its portfolio. It closed the sale of its Employee Health and Safety software business for about $202 million in cash and expects a roughly $191 million pre-tax gain. It agreed to acquire Electrical and Electronics Testing LUX Holding SARL for enterprise value of €575 million plus daily ticking fees and to sell its ~28% stake in DQS Holding GmbH for about €105 million, both subject to customary conditions and approvals.
Positive
- Strong Q1 performance with margin expansion: Revenue rose to $758 million (7.5% growth), net income increased to $97 million, and Adjusted EBITDA margin improved to 26.0%, reflecting operating leverage and lower interest expense.
- Strategic portfolio repositioning at meaningful scale: A ~$202 million EHS software sale with an expected ~$191 million gain, a planned €575 million E&E testing acquisition, and a ~€105 million DQS stake sale together represent sizable, thesis-relevant reshaping of the business.
Negative
- None.
Insights
UL Solutions combines solid Q1 growth with major portfolio moves.
UL Solutions delivered Q1 2026 revenue of $758 million, up 7.5% year over year, with net income rising to $97 million. Margin expansion lifted Adjusted EBITDA to $197 million and Adjusted Net Income to $107 million, helped by lower interest expense and operating leverage.
The company generated strong operating cash flow of $219 million and Free Cash Flow of $150 million, even as capital expenditures increased to $69 million to support capacity and software investments. Long-term debt declined to $357 million from $491 million, improving the balance sheet while maintaining a revolving facility with $937 million of unused capacity as of March 31, 2026.
Strategically, UL Solutions is rotating its portfolio: it sold its Employee Health and Safety software business for about $202 million and expects a pre-tax gain of roughly $191 million. It agreed to acquire Electrical and Electronics Testing LUX Holding SARL for enterprise value of €575 million plus a daily amount from September 1, 2025, and to sell its ~28% stake in DQS for about €105 million. These transactions, expected to close in the second half and Q4 2026 subject to regulatory approvals, indicate a shift toward core testing assets funded by cash, divestiture proceeds and its credit facility.
Key Figures
Revenue: $758 million
Net income: $97 million
Adjusted EBITDA: $197 million
+5 more
8 metrics
Revenue
$758 million
Three months ended March 31, 2026
Net income
$97 million
Three months ended March 31, 2026
Adjusted EBITDA
$197 million
Three months ended March 31, 2026
Free Cash Flow
$150 million
Three months ended March 31, 2026
Total assets
$2,955 million
Balance sheet as of March 31, 2026
Long-term debt
$357 million
Balance sheet as of March 31, 2026
EHS software sale price
$202 million
Preliminary cash consideration for divestiture
E&E Testing acquisition EV
€575 million
Enterprise value under sale and purchase agreement
Key Terms
Adjusted EBITDA, Free Cash Flow, Restructuring Plan, locked box, +2 more
6 terms
Adjusted EBITDA financial
"The Company uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income..."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free Cash Flow financial
"The Company defines Free Cash Flow as cash from operating activities less cash outlays..."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Restructuring Plan financial
"On November 4, 2025, the Company announced an expense reduction initiative... (the “Restructuring Plan”)."
A restructuring plan is a company’s roadmap for reorganizing its operations, debts, or assets to improve financial health and efficiency; think of it as rewriting a household budget and chores when income changes. Investors care because the plan can affect a company’s ability to repay loans, generate profits, and sustain growth—successful restructuring can restore value, while a poorly executed one can signal continued trouble or reduced returns.
locked box financial
"The transaction includes a “locked box” structure, subject to customary leakage prohibitions..."
A locked box is a deal mechanism used in acquisitions where the buyer and seller agree a fixed purchase price based on a past balance sheet date, and the seller guarantees that no value has been removed from the business since then. Think of it as buying a sealed piggy bank whose contents are frozen — it gives buyers certainty about price and cash in the business and shifts the risk of any value taken out before closing onto the seller, which matters to investors because it reduces post‑deal surprises and simplifies valuation.
Pillar Two financial
"the OECD released administrative guidance on Pillar Two (a framework of rules which impose a 15% corporate minimum tax...)"
Pillar Two is an international tax framework that sets a global minimum tax rate for large multinational companies and requires extra payments when profits booked in low-tax locations fall below that floor. For investors, it matters because it raises the likely tax bill, reduces after-tax earnings and cash available for dividends or reinvestment, and can change company valuations—think of it as a tax “price floor” that limits how much a firm can lower its effective tax rate.
equity method financial
"The Company accounts for DQS using the equity method and DQS financial results are not consolidated..."
An equity method investment is an accounting approach used when a company owns enough of another business to influence its decisions but not control it (commonly around 20–50% ownership). Instead of counting only dividends, the investor records its share of the other company’s profits and losses on its own income statement and adjusts the investment’s value on the balance sheet—like tracking a friend’s joint project by noting your share of their gains or setbacks. For investors, this matters because it can significantly affect reported earnings, asset values, and the apparent strength of a company’s financial results.
Earnings Snapshot
Revenue: $758 million
Q1 2026
Revenue
$758 million
+7.5% YoY
Net income
$97 million
+26 million YoY
Adjusted EBITDA
$197 million
+$36 million YoY
Free Cash Flow
$150 million
+$47 million YoY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ________ to _________
Commission file number 001-42012
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(847 ) 272-8800
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
x | Accelerated filer | o | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The registrant had outstanding 77,808,115 shares of Class A common stock, par value $0.001 per share, and 123,755,000 shares of Class B common stock, par value $0.001 per share, as of April 24, 2026.
| UL Solutions Inc. | ||
| Table of Contents | ||
Page | |||||
PART I. FINANCIAL INFORMATION | 2 | ||||
ITEM 1. Condensed Consolidated Financial Statements (Unaudited) | 2 | ||||
Condensed Consolidated Statements of Operations | 2 | ||||
Condensed Consolidated Statements of Comprehensive Income | 3 | ||||
Condensed Consolidated Balance Sheets | 4 | ||||
Condensed Consolidated Statements of Stockholders’ Equity | 5 | ||||
Condensed Consolidated Statements of Cash Flows | 6 | ||||
Notes to the Condensed Consolidated Financial Statements | 7 | ||||
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 | ||||
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk | 31 | ||||
ITEM 4. Controls and Procedures | 32 | ||||
PART II. OTHER INFORMATION | 34 | ||||
ITEM 1. Legal Proceedings | 34 | ||||
ITEM 1A. Risk Factors | 34 | ||||
ITEM 5. Other Information | 34 | ||||
ITEM 6. Exhibits | 35 | ||||
SIGNATURE | 36 | ||||
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Operations
| UL Solutions Inc. | ||
| Condensed Consolidated Statements of Operations | ||
| (Unaudited) | ||
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Revenue | $ | $ | |||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Restructuring | ( | ||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Other expense, net | ( | ( | |||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: net income attributable to non-controlling interests | |||||||||||||||||||||||
| Net income attributable to stockholders of UL Solutions | $ | $ | |||||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | $ | |||||||||||||||||||||
| Diluted | $ | $ | |||||||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
2
| UL Solutions Inc. | ||
| Condensed Consolidated Statements of Comprehensive Income | ||
| (Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
| Pension and postretirement benefit plans, net of tax | |||||||||||||||||||||||
| Foreign currency translation (loss) gain | ( | ||||||||||||||||||||||
| Total other comprehensive (loss) income | ( | ||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Less: comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||
| Comprehensive income attributable to stockholders of UL Solutions | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
3
| UL Solutions Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited) | ||
Condensed Consolidated Balance Sheets
| (in millions, except share and per share data) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Contract assets, net of allowance of $ | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
| Goodwill | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Deferred income taxes | |||||||||||
Capitalized software, net of accumulated amortization of $ | |||||||||||
| Other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued compensation and benefits | |||||||||||
| Operating lease liabilities - current | |||||||||||
| Contract liabilities | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Pension and postretirement benefit plans | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total Liabilities | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||
| Stockholders’ equity: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity before non-controlling interests | |||||||||||
| Non-controlling interests | |||||||||||
| Total Stockholders’ Equity | |||||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | |||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
4
| UL Solutions Inc. | ||
| Condensed Consolidated Statements of Stockholders’ Equity | ||
| (Unaudited) | ||
Condensed Consolidated Statements of Stockholders’ Equity
| (in millions, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total | |||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividend to stockholders of UL Solutions ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend to non-controlling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividend to stockholders of UL Solutions ($ | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Dividend to non-controlling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
5
| UL Solutions Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows
| Three Months Ended March 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Losses on foreign exchange transactions | |||||||||||
| Deferred income taxes | |||||||||||
| Other, net | |||||||||||
| Changes in assets and liabilities, excluding the effects of acquisitions and divestitures: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Contract and other assets | ( | ( | |||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued expenses | ( | ( | |||||||||
| Pension and postretirement benefit plans | ( | ( | |||||||||
| Contract and other liabilities | |||||||||||
| Net cash flows provided by operating activities | |||||||||||
| Investing activities | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Sales of investments | |||||||||||
| Other investing activities, net | |||||||||||
| Net cash flows used in investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Proceeds from long-term debt | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Dividends to stockholders of UL Solutions | ( | ( | |||||||||
| Dividends to non-controlling interest | ( | ( | |||||||||
| Employee taxes paid on settlement of stock-based compensation | ( | ||||||||||
| Other financing activities, net | ( | ( | |||||||||
| Net cash flows used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Cash paid during the period for interest | $ | $ | |||||||||
| Cash paid during the period for income taxes | |||||||||||
| Noncash investing and financing activities | |||||||||||
| Capital expenditures funded by liabilities | $ | $ | |||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
6
| UL Solutions Inc. | ||
| NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (Unaudited) | ||
Notes to the Condensed Consolidated Financial Statements
1. Significant Accounting Policies
Description of Business
UL Solutions Inc. (together with its consolidated subsidiaries, “UL Solutions” and the “Company”, unless the context otherwise requires) is a global safety science leader that provides independent third-party testing, inspection and certification services, advisory offerings and software solutions. Underwriters Laboratories Inc. (“UL Research Institutes”) is the sole member of ULSE Inc. (“UL Standards & Engagement”), which controls the majority of the voting power of the Company’s common stock.
Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The changes primarily related to the Company’s Advisory business, which was previously included within the Software and Advisory segment and is now included within the Industrial segment. As a result of the reorganization, the Software and Advisory segment was renamed “Risk & Compliance Software” and costs related to the Company’s corporate functions were reallocated across its segments. The prior period amounts within Note 8, “Goodwill” and Note 18, “Segment Information”, have been recast to reflect the Company’s segment reorganization. This reorganization had no impact on the Company’s consolidated financial position, results of operations or cash flows.
Basis of Presentation
The condensed consolidated financial statements are unaudited and have been prepared in accordance with applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair statement of the Company’s results of operations, financial position and cash flows. Results of operations for any interim period are not necessarily indicative of future or annual results. The Company has reclassified certain amounts in prior period financial statements to conform to the current period’s presentation.
Recently Issued Accounting Standards – Not Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on either a prospective or retrospective basis, with early adoption permitted. The Company expects to adopt the new annual disclosures as required for the year ending December 31, 2027 and the interim disclosures as required beginning with the first quarter of 2028. The application of this new guidance is not expected to have a material impact on the Company’s consolidated financial condition, results of operations, or cash flows, as the guidance pertains to disclosure only.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to “development stages” and clarifying the threshold to begin capitalizing costs. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, on either a prospective, modified transition or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendments are intended to improve GAAP by establishing authoritative guidance on the accounting for government grants received by business entities. The amendments in ASU 2025-10 are effective for fiscal years beginning after December 15, 2028, and interim periods within those annual reporting periods, on either a modified prospective, modified retrospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.
7
2. Earnings Per Share
Basic and diluted earnings per share were calculated as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, except per share data) | 2026 | 2025 | |||||||||||||||||||||
| Net income attributable to stockholders of UL Solutions | $ | $ | |||||||||||||||||||||
| Basic weighted average common shares outstanding | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Diluted weighted average common shares outstanding | |||||||||||||||||||||||
| Basic earnings per share attributable to stockholders of UL Solutions | $ | $ | |||||||||||||||||||||
| Diluted earnings per share attributable to stockholders of UL Solutions | $ | $ | |||||||||||||||||||||
3. Revenue
The table below summarizes the major service categories from which the Company derives its revenues:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Certification Testing | $ | $ | |||||||||||||||||||||
| Ongoing Certification Services | |||||||||||||||||||||||
| Non-certification Testing and Other Services | |||||||||||||||||||||||
| Software | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
Contract Balances
The revenue recognized during the three months ended March 31, 2026, that was included in contract liabilities at December 31, 2025, amounted to $43 million. The revenue recognized during the three months ended March 31, 2025, that was included in contract liabilities at December 31, 2024, amounted to $36 million.
Remaining Performance Obligations
At March 31, 2026, the Company estimates that $186 million in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The Company expects to recognize approximately 67 % of its unsatisfied (or partially unsatisfied) performance obligations as revenue in the subsequent 12 months, with the remaining balance to be recognized thereafter.
Remaining consideration from contracts with customers is included in the amount presented above and includes contracts with multiple performance obligations and multi-year agreements, which are typically recognized as the performance obligation is satisfied.
4. Divestiture
In February 2026, the Company signed a definitive agreement to sell its Employee Health and Safety software business in the Company’s Risk & Compliance Software segment to an affiliate of Peak Rock Capital, a private investment firm. The preliminary purchase price is approximately $202 million in cash consideration, subject to customary post-closing adjustments. In connection with the board approval of the sale, the Company reclassified all assets and liabilities of the business as held for sale. The divestiture does not qualify as discontinued operations and therefore, its results are included within continuing operations for all periods presented. As of March 31, 2026, assets and liabilities classified as held for sale included $7 million recorded within other current assets, $16 million recorded within other assets, and $16 million recorded within other current liabilities.
8
The following table summarizes components of assets and liabilities held for sale:
| (in millions) | |||||
| Accounts receivable, net of allowance | $ | ||||
| Contract and other current assets | |||||
| Goodwill | |||||
| Capitalized software, net of accumulated amortization | |||||
| Total assets | |||||
| Contract and other current liabilities | |||||
| Net assets of disposal group | $ | ||||
The transaction closed on April 1, 2026, subsequent to the balance sheet date.
5. Other Expense, net
The components of other expense, net are as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Foreign exchange losses | $ | ( | $ | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Non-operating pension and postretirement benefit expense | ( | ( | |||||||||||||||||||||
| Total | $ | ( | $ | ( | |||||||||||||||||||
6. Fair Value of Financial Instruments
The carrying amount and fair value of the Company’s debt was as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
| Revolving credit facility | $ | $ | $ | $ | |||||||||||||||||||
| Senior notes | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The fair value of the Company’s revolving credit facility reflects current market conditions and is primarily determined using broker quotes, which are Level 2 inputs in the fair value hierarchy. The fair value of the Company’s senior notes is estimated based on prevailing interest rates and trading activity, which are Level 2 inputs in the fair value hierarchy.
7. Investments in Equity Securities
The Company holds investments in equity securities of various companies, certain of which comprise less than 10% of the applicable company’s outstanding equity securities and are included within other assets in the Company’s Condensed Consolidated Balance Sheets. The Company accounts for these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The carrying amount of these investments was $33
The Company owns 70 % of the issued and outstanding equity interests of UL-CCIC Company Limited (“UL-CCIC”), an entity formed under the laws of the People’s Republic of China. The Company determined that it is the primary beneficiary of UL-CCIC and assets of $160 million and $219 million and liabilities of $83 million and $94 million, inclusive of intercompany eliminations, were included in the Company’s Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025, respectively.
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8. Goodwill
Changes in the carrying amount of goodwill for the three months ended March 31, 2026 were as follows:
| (in millions) | Industrial | Consumer | Risk & Compliance Software | Total | |||||||||||||||||||
Balance at December 31, 2025(a)(b) | $ | $ | $ | $ | |||||||||||||||||||
| Reclassification to assets held for sale | ( | ( | |||||||||||||||||||||
| Effect of changes in foreign exchange rates | ( | ( | ( | ||||||||||||||||||||
Balance at March 31, 2026(a) | $ | $ | $ | $ | |||||||||||||||||||
(a)Net of accumulated impairment losses of $137
(b)Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The amounts presented for the year ended December 31, 2025 have been recast to reflect the Company’s segment reorganization. Refer to Note 1, “Significant Accounting Policies” for further information.
9. Intangible Assets
The following table summarizes intangible assets:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Intellectual property and patents | ( | ( | |||||||||||||||||||||||||||||||||
| Trademarks | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
10. Pension
The components of net periodic benefit cost for the Company’s U.S. defined benefit pension plan were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
| Interest cost | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of net actuarial loss | |||||||||||||||||||||||||||||||||||||||||||||||
| Settlement losses | |||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic benefit cost | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
11. Income Taxes
The effective tax rate for the three months ended March 31, 2026 was 24.8 %, which differed from the U.S. federal statutory tax rate of 21%, primarily due to foreign tax effects.
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The effective tax rate for the three months ended March 31, 2025 was 24.5 %, which differed from the U.S. federal statutory tax rate of 21%, primarily due to foreign tax effects, U.S. tax on Global Intangible Low Taxed Income net of related foreign tax credits, and Section 162(m) limitations on compensation deductions of certain executive officers.
12. Long-Term Debt
The Company’s outstanding debt consisted of the following:
| (in millions) | Currency | Maturity Date | March 31, 2026 | December 31, 2025 | |||||||||||||||||||
| Revolving credit facility | USD | October 2030 | $ | $ | |||||||||||||||||||
| Senior notes | USD | October 2028 | |||||||||||||||||||||
| Other | USD | August 2033 | |||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Less: unamortized debt issuance costs | ( | ( | |||||||||||||||||||||
| Long-term debt | $ | $ | |||||||||||||||||||||
2025 Credit Facility
In October 2025, the Company entered into a credit agreement, by and among UL Solutions Inc. and certain of its non-U.S. subsidiaries as co-borrowers (collectively, the “Borrowers”), Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for a $1.0 billion senior unsecured five-year multi-currency revolving facility (collectively, and as amended, the “2025 Credit Facility”). The Borrowers’ obligations (other than the Company’s) under the Credit Agreement are guaranteed by the Company. As of March 31, 2026, the Company was in compliance with all covenants under the 2025 Credit Facility. The interest rate on the revolving credit facility was 4.74 % as of March 31, 2026 and 4.78 % as of December 31, 2025.
Senior Notes
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13. Accumulated Other Comprehensive Loss
The following tables summarize the changes in accumulated other comprehensive loss.
| (in millions) | Foreign Currency Translation | Pension and Postretirement Plans | Total | ||||||||||||||||||||
| Balance at December 31, 2025, net of tax | $ | ( | $ | ( | $ | ( | |||||||||||||||||
| Amounts before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified out | |||||||||||||||||||||||
| Total other comprehensive (loss) income, before tax | ( | ( | |||||||||||||||||||||
| Tax effect | ( | ( | |||||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
| Balance at March 31, 2026, net of tax | $ | ( | $ | ( | $ | ( | |||||||||||||||||
| (in millions) | Foreign Currency Translation | Pension and Postretirement Plans | Total | ||||||||||||||||||||
| Balance at December 31, 2024, net of tax | $ | ( | $ | ( | $ | ( | |||||||||||||||||
| Amounts before reclassifications | |||||||||||||||||||||||
| Total other comprehensive income, net of tax | |||||||||||||||||||||||
| Balance at March 31, 2025, net of tax | $ | ( | $ | ( | $ | ( | |||||||||||||||||
14. Stock-based Compensation
Stock-based compensation expense was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||
| Cost of revenue | $ | $ | |||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||
| Income tax benefit | ( | ( | |||||||||||||||||||||
| Stock-based compensation expense, net | $ | $ | |||||||||||||||||||||
| Stock-based compensation expense by type of award | |||||||||||||||||||||||
| Restricted stock units | $ | $ | |||||||||||||||||||||
| Performance share units | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Employee stock purchase plan | |||||||||||||||||||||||
Cash-settled awards | |||||||||||||||||||||||
| Stock-based compensation expense | $ | $ | |||||||||||||||||||||
15. Restructuring
On November 4, 2025, the Company announced an expense reduction initiative to further improve the operating model and exit certain lines of business that are no longer considered strategically important to the Company (the “Restructuring Plan”). Inclusive of the charges recorded through the first quarter of 2026, the Company expects to incur pre-tax charges associated with the Restructuring Plan of approximately $40 million in the aggregate, consisting of approximately $32 million in cash
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charges relating to employee separation expenses and approximately $8 million in other cash charges, primarily relating to facility exits.
The Company has incurred total costs to date of $31 million related to employee separation expenses, $5 million related to facility exits and $1 million related to professional services in connection with the Restructuring Plan. The Company has incurred total costs to date of $27 million in Consumer, $8 million in Industrial, and $2 million in Risk & Compliance Software related to the Restructuring Plan. The Company anticipates the Restructuring Plan will be substantially completed by the end of the first quarter of 2027, with the remaining charges expected to be incurred throughout the remainder of the plan.
Charges related to the Restructuring Plan, as well as other qualifying restructuring expenses, are as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | |||||||||||||||||||||||||||
| Employee separation expense adjustments | $ | ( | $ | ( | |||||||||||||||||||||||||
| Facility exits | |||||||||||||||||||||||||||||
| Professional services | |||||||||||||||||||||||||||||
| Total | $ | $ | ( | ||||||||||||||||||||||||||
The following table summarizes the changes in the Company’s accrued restructuring balance:
| (in millions) | Employee separation expenses | Professional services | Total | ||||||||||||||||||||
| Liability balance as of December 31, 2025 | $ | $ | $ | ||||||||||||||||||||
| Restructuring | ( | ( | |||||||||||||||||||||
| Cash payments | ( | ( | |||||||||||||||||||||
| Foreign exchange rate adjustment | ( | ( | |||||||||||||||||||||
| Liability balance as of March 31, 2026 | $ | $ | $ | ||||||||||||||||||||
The Company had a short-term liability for its restructuring activities of $19 million and $25 million as of March 31, 2026 and December 31, 2025, respectively, which is recorded within other current liabilities on the Condensed Consolidated Balance Sheets. The Company had a long-term liability for its restructuring activities of $2 million and $5 million as of March 31, 2026, and December 31, 2025, respectively, which is recorded within other liabilities on the Condensed Consolidated Balance Sheets.
16. Commitments and Contingencies
On February 11, 2026, a putative class action complaint was filed against UL LLC, UL Solutions Inc., UL Standards and Engagement and UL Research Institutes (collectively, the “Defendants”) in the United States District Court for the Northern District of Illinois captioned John Martucci, on behalf of himself and the Putative Class v. Underwriters Laboratories Inc., et al., Case No. 1:26-cv-01561. The complaint alleges, among other things, that certain combination-listed single databus burglar and fire alarm system control units (the “Alarm Systems”) tested by the Defendants have defects that the Defendants concealed from and/or failed to disclose to consumers and that the Defendants listed the Alarm Systems as compliant with UL and National Fire Protection Association 72 standards when they were not compliant with such standards. The complaint seeks an order certifying a nationwide class and a New Jersey subclass; compensatory, actual, treble, statutory, punitive, and/or other damages; equitable relief, including restitution and disgorgement of profits; injunctive relief; declaratory relief; and pre and post judgment interest, attorneys’ fees and costs. The Company currently believes the claims are without merit and intends to vigorously defend against this action. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time.
The Company is, in the ordinary course of business, party to certain claims, litigation, audits and investigations. The Company will record an accrual for a loss contingency when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable and that may be incurred in connection with any such currently pending or threatened matter, none
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of which are material. In the Company’s opinion, the settlement of any such currently pending or threatened matter is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.
17. Related Party Transactions
In each of the three month periods ended March 31, 2026 and March 31, 2025, the Company incurred expenses of $5
In each of the three month periods ended March 31, 2026 and March 31, 2025, the Company declared and paid regular cash dividends to stockholders of $18
18. Segment Information
The following table provides revenue, significant segment expenses and operating income, by segment for the three months ended March 31, 2026 and 2025:
| Industrial | Consumer | Risk & Compliance Software | Total | ||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025(a) | 2026 | 2025(a) | 2026 | 2025(a) | 2026 | 2025(a) | |||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Employee compensation | |||||||||||||||||||||||||||||||||||
| Services and materials | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Restructuring | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Operating income | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(a)Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The amounts presented for the three months ended March 31, 2025 have been recast to reflect the Company’s segment reorganization. Refer to Note 1, “Significant Accounting Policies” for further information.
Capital expenditures of the Company’s segments were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025(a) | |||||||||||||||||||||
| Industrial | $ | $ | |||||||||||||||||||||
| Consumer | |||||||||||||||||||||||
| Risk & Compliance Software | |||||||||||||||||||||||
| Total segments | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
(a)Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The amounts presented for the three months ended March 31, 2025 have been recast to reflect the Company’s segment reorganization. Refer to Note 1, “Significant Accounting Policies” for further information.
19. Subsequent Events
Acquisition of Electrical and Electronics Testing LUX Holding SARL
In April 2026, Underwriters Laboratories Holdings B.V. (“ULH”), a wholly owned subsidiary of the Company, and the Company as guarantor, entered into a sale and purchase agreement for the entire issued share capital of Electrical and Electronics Testing LUX Holding SARL, a private limited liability company, and certain of its subsidiaries and related companies. The transaction includes a “locked box” structure, subject to customary leakage prohibitions (with customary permitted leakage). The purchase price will be comprised of an enterprise value of €575 million, subject to certain customary
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adjustments, and additional consideration of €41 thousand per day from September 1, 2025, through the closing date of the transaction. The sale and purchase agreement provides that, in the event of termination as a result of ULH’s failure to submit certain required regulatory filings within the prescribed deadlines, or certain conditions not being satisfied by October 13, 2027, ULH will pay a break fee of €34.5 million. The break fee is not payable to the extent termination of the sale and purchase agreement results from certain specified breaches by the seller. The Company expects to fund the transaction with cash on hand, including proceeds from its portfolio management activities, and available capacity under its revolving credit facility. The transaction is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.
Sale of DQS Holding GmbH
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Company’s results of operations, financial condition and liquidity and capital resources should be read in conjunction with the Company’s condensed consolidated financial statements and the related notes as of March 31, 2026 and for the three month periods ended March 31, 2026 and 2025, which are included in this Quarterly Report, as well as the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risks and uncertainties about the Company’s business and operations. The Company’s actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described under “Risk Factors” in Part I Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. See “Cautionary Note Regarding Forward-Looking Statements.” Additionally, the Company’s historical results are not necessarily indicative of the results that may be expected for any period in the future.
References to “UL Solutions” and the “Company” refer to UL Solutions Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.
Overview
UL Solutions is a global safety science leader that provides independent third-party testing, inspection and certification (“TIC”) services, advisory offerings and software solutions.
UL Solutions reports its financial results through three segments: Industrial, Consumer and Risk & Compliance Software (“R&C Software”).
Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer currently evaluates business performance and allocates resources. The changes primarily relate to the Company’s Advisory business, which was previously included within the Software and Advisory segment and is now included within the Industrial segment. As a result of the reorganization, the Software and Advisory segment was renamed “Risk & Compliance Software” and costs related to the Company’s corporate functions were reallocated across its segments. This reorganization had no impact on the Company’s consolidated financial position, results of operations or cash flows. The amounts presented for the three months ended March 31, 2025 have been recast to reflect the Company’s segment reorganization.
The geopolitical environment and attendant increased levels of uncertainty have caused, and may continue to cause, the Company’s customers to modify, delay or cancel plans to purchase services. Accordingly, ongoing uncertainty related to the current geopolitical environment and the associated unpredictability of the macroeconomic environment could have an adverse impact on various aspects of the Company’s business in the future, including its results of operations and financial condition. The Company is unable at this time to reasonably determine any future negative impacts from reduced or delayed customer testing or product development as a result of uncertainty that may result from the current geopolitical environment.
Recent Developments
Divestiture of Employee Health and Safety Software Business
In April 2026, the Company completed the divestiture of its Employee Health and Safety software business in the Company’s Risk & Compliance Software segment to an affiliate of Peak Rock Capital, a private investment firm. The preliminary purchase price is approximately $202 million in cash consideration, subject to customary post-closing adjustments. The Company expects the divestiture will result in a pre-tax gain on sale of approximately $191 million, which will be recorded as non-operating income in the second quarter of 2026.
Acquisition of Electrical and Electronics Testing LUX Holding SARL
In April 2026, Underwriters Laboratories Holdings B.V. (“ULH”), a wholly owned subsidiary of the Company, and the Company as guarantor, entered into a sale and purchase agreement for the entire issued share capital of Electrical and Electronics Testing LUX Holding SARL, a private limited liability company, and certain of its subsidiaries and related companies (the “E&E Transaction”). The E&E Transaction includes a “locked box” structure, subject to customary leakage prohibitions (with customary permitted leakage). The purchase price will be comprised of an enterprise value of €575 million, subject to certain customary adjustments, and additional consideration of €41 thousand per day from September 1,
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2025, through the closing date of the transaction. The sale and purchase agreement provides that, in the event of termination as a result of ULH’s failure to submit certain required regulatory filings within the prescribed deadlines, or certain conditions not being satisfied by October 13, 2027, ULH will pay a break fee of €34.5 million. The break fee is not payable to the extent termination of the sale and purchase agreement results from certain specified breaches by the seller. The Company expects to fund the transaction with cash on hand, including proceeds from its portfolio management activities, and available capacity under its revolving credit facility. The transaction is expected to close in the fourth quarter of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.
Sale of DQS Holding GmbH
In April 2026, the Company entered into a definitive agreement with Montagu, a private equity firm, and certain other parties to sell its approximately 28% shareholding of DQS Holding GmbH (“DQS”), a global management system assessment company headquartered in Germany. The Company expects to receive approximately €105 million in cash consideration, subject to customary post-closing adjustments, a portion of which will be held in escrow to cover certain indemnification obligations under the share purchase and transfer agreement. The Company accounts for DQS using the equity method and DQS financial results are not consolidated within the Company’s financial statements. The sale is expected to result in a pre-tax gain of approximately $100 million, which will be recorded as non-operating income upon closing of the transaction, which is expected to be completed in the second half of 2026, subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.
Components of the Company’s Results of Operations
Revenue
The Company conducts its operations across four major service categories: (1) Certification Testing of products, components and systems according to standards and regulatory requirements and other design and performance specifications; (2) Ongoing Certification Services to validate the continued compliance of previously certified products, components and systems; (3) Non-certification Testing and Other Services, which includes performance testing for customer or other requirements that may not be required by any regulation and may not result in a certification, as well as other services, including advisory and technical services; and (4) Software, comprising software as a service and license-based software solutions, including implementation and training services related to software.
Components of Revenue Change
The Company uses Organic, Acquisition / Divestiture and FX to explain the change in revenue from period to period. Revenue change is calculated as the percentage change in revenue in one period relative to the prior period’s revenue and is a key financial measure that the Company uses to manage its business. The Company defines these components of revenue as follows:
“Organic” reflects revenue change in a given period excluding Acquisition / Divestiture and FX in that same period, expressed in dollars or as a percentage of revenue in the prior period.
“Acquisition / Divestiture” is calculated as revenue change in a given period related to acquisitions or disposals of businesses using prior period exchange rates, expressed in dollars or as a percentage of revenue in the prior period. Revenues from an acquisition or disposal are measured as Acquisition / Divestiture for the initial twelve-month period following the acquisition or disposal date. Subsequently, the revenue impact from the acquired or disposed business is measured as Organic.
“FX” reflects the impact that foreign currency exchange rates have on revenue in a given period, expressed in dollars or as a percentage of revenue in the prior period. The Company uses constant currency to calculate the FX impact on revenue in a given period by translating current period revenues at prior period exchange rates, expressed as a percentage of revenue in the prior period.
Cost of Revenue
Cost of revenue includes employee compensation consisting of salaries, incentives, stock-based compensation and other benefits for employees directly attributable to revenue generation across each of the Company’s four major service categories. In addition, cost of revenue includes services and materials expenses including occupancy and facility-related costs for laboratories and other buildings where testing and inspection services are performed, customer-related travel costs, expenses related to third-party contractors or third-party facilities and consumable materials and supplies used in testing and
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inspection and other costs associated with generating revenue. Cost of revenue also includes depreciation on equipment used in testing and amortization of capitalized software sold to customers.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include employee compensation consisting of salaries, incentives, stock-based compensation and other benefits for sales and indirect administrative functions such as executive, finance, legal, human resources and information technology, not included within cost of revenue. In addition, selling, general and administrative expenses include services and materials expenses such as third-party consultancy costs, facility costs, internal research and development costs as well as legal and accounting fees, travel, marketing, bad debt and non-chargeable materials and supplies. Selling, general and administrative expenses also include depreciation and amortization.
Restructuring
On November 4, 2025, the Company announced an expense reduction initiative to further improve the operating model and exit certain lines of business that are no longer considered strategically important to the Company (the “Restructuring Plan”). Costs incurred in connection with the Company’s restructuring actions, including the Restructuring Plan, consist of employee-separation costs, facility exit costs, as well as professional services. Refer to Item 1, “Notes to the Condensed Consolidated Financial Statements”, Note 15, “Restructuring” for further details.
Operating Income
Operating income is calculated as revenue less cost of revenue, selling, general and administrative expenses and restructuring. Operating income margin is calculated as operating income as a percentage of revenue.
Components of Operating Income Change
The Company uses Organic, Acquisition / Divestiture and FX to explain the change in operating income from period to period. Operating income change is calculated as the percentage change in operating income in one period relative to the prior period’s operating income and is a key financial measure that the Company uses to manage its business. The Company defines these components of operating income as follows:
“Organic” reflects total operating income change in a given period excluding Acquisition / Divestiture and FX in that same period, expressed in dollars or as a percentage of operating income in the prior period.
“Acquisition / Divestiture” is calculated as operating income change in a given period related to acquisitions or disposals of businesses using prior period exchange rates, expressed in dollars or as a percentage of operating income in the prior period. Operating income change from an acquisition or disposal is measured as Acquisition / Divestiture for the initial twelve-month period following the acquisition or disposal date. Subsequently, operating income impact from the acquired or disposed business is measured as Organic. Acquisition / Divestiture also includes the change in due diligence-related costs for merger and acquisition and disposal activities.
“FX” reflects the impact that foreign currency exchange rates have on operating income in a given period expressed in dollars or as a percentage of operating income in the prior period. The Company uses constant currency to calculate the FX impact on operating income in a given period by translating current period operating income at prior period exchange rates, expressed as a percentage of operating income in the prior period.
Interest Expense
Interest expense consists primarily of interest expense on the Company’s debt obligations.
Other Expense, net
Other expense, net consists primarily of non-operating gains and losses, including gains and losses related to foreign exchange transactions and the revaluation performed on designated balance sheet accounts, interest income and non-operating pension and postretirement benefit expenses.
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Income Before Income Taxes
Income before income taxes is calculated as revenue less cost of revenue, selling, general and administrative expenses, restructuring, interest expense and other expense, net.
Income Tax Expense
Income tax expense consists of current and deferred federal and state taxes for the Company’s U.S. and foreign jurisdictions.
Net Income
Net income is calculated as revenue less cost of revenue, selling, general and administrative expenses, restructuring, interest expense, other expense, net and income tax expense. Net income margin is calculated as net income as a percentage of revenue.
Results of Operations
The following tables set forth the Company’s condensed consolidated results of operations for the periods presented.
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
| Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||
| (in millions) | 2026 | % Revenue | 2025 | % Revenue | |||||||||||||||||||||||||
| Revenue | $ | 758 | N/A | $ | 705 | N/A | $ | 53 | |||||||||||||||||||||
| Cost of revenue | 377 | 49.7 | % | 365 | 51.8 | % | 12 | ||||||||||||||||||||||
| Selling, general and administrative expenses | 243 | 32.1 | % | 232 | 32.9 | % | 11 | ||||||||||||||||||||||
| Restructuring | — | — | % | (1) | (0.1) | % | 1 | ||||||||||||||||||||||
| Operating income | 138 | 18.2 | % | 109 | 15.5 | % | 29 | ||||||||||||||||||||||
| Interest expense | (8) | (1.1) | % | (12) | (1.7) | % | 4 | ||||||||||||||||||||||
| Other expense, net | (1) | (0.1) | % | (3) | (0.4) | % | 2 | ||||||||||||||||||||||
| Income before income taxes | 129 | 17.0 | % | 94 | 13.3 | % | 35 | ||||||||||||||||||||||
| Income tax expense | 32 | 4.2 | % | 23 | 3.3 | % | 9 | ||||||||||||||||||||||
| Net income | $ | 97 | 12.8 | % | $ | 71 | 10.1 | % | 26 | ||||||||||||||||||||
Revenue
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Industrial | $ | 375 | $ | 340 | $ | 35 | 10.3 | % | |||||||||||||||
| Consumer | 318 | 304 | 14 | 4.6 | % | ||||||||||||||||||
| Risk & Compliance Software | 65 | 61 | 4 | 6.6 | % | ||||||||||||||||||
| Total | $ | 758 | $ | 705 | $ | 53 | 7.5 | % | |||||||||||||||
Revenue increased by $53 million, or 7.5%, for the three months ended March 31, 2026, as compared to the same period in 2025. Revenue increased on an organic basis by $40 million, or 5.7%, due to organic growth across all segments in the first quarter of 2026, driven by the Industrial and Consumer segments in Ongoing Certification Services and Certification Testing revenue. FX increased revenue by $13 million, or 1.8%, primarily due to the relative strength of the euro and Chinese renminbi.
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| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| (in millions) | Organic | FX | Total | Organic % Change | Total % Change | ||||||||||||||||||||||||||||||
| Revenue change | |||||||||||||||||||||||||||||||||||
| Industrial | $ | 28 | $ | 7 | $ | 35 | 8.2 | % | 10.3 | % | |||||||||||||||||||||||||
| Consumer | 9 | 5 | 14 | 3.0 | % | 4.6 | % | ||||||||||||||||||||||||||||
| Risk & Compliance Software | 3 | 1 | 4 | 4.9 | % | 6.6 | % | ||||||||||||||||||||||||||||
| Total | $ | 40 | $ | 13 | $ | 53 | 5.7 | % | 7.5 | % | |||||||||||||||||||||||||
Cost of Revenue
Cost of revenue increased by $12 million, or 3.3%, for the three months ended March 31, 2026, as compared to the same period in 2025. FX increased cost of revenue by $10 million, primarily due to the relative strength of the euro and Chinese renminbi. On an organic basis, the increase was partially offset by a $4 million decrease in employee compensation expenses, in part related to headcount reductions from the Restructuring Plan.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $11 million, or 4.7%, for the three months ended March 31, 2026, as compared to the same period in 2025. Acquisitions / Divestitures increased selling, general and administrative expenses by $7 million, primarily in connection with the contemplated E&E Transaction. FX increased selling, general and administrative expenses by $5 million, primarily due to the relative strength of the euro.
Restructuring
The Company did not incur material restructuring charges during either period presented. The Company anticipates the previously announced Restructuring Plan will be substantially completed by the end of the first quarter of 2027, with the remaining charges of approximately $3 million expected to be incurred throughout the remainder of the plan.
Interest Expense
Interest expense decreased by $4 million for the three months ended March 31, 2026, as compared to the same period in 2025. The decrease is primarily due to lower balances in the current period on the Company’s credit facilities. For additional information, refer to “—Liquidity and Capital Resources.”
Other Expense, net
Other expense, net decreased by $2 million due to lower net foreign exchange losses related to the strengthening of certain foreign currencies against the U.S. dollar.
Income Tax Expense
The effective tax rate for the three months ended March 31, 2026 was 24.8%, which differed from the U.S. federal statutory tax rate of 21%, primarily due to foreign tax effects.
The effective tax rate for the three months ended March 31, 2025 was 24.5%, which differed from the U.S. federal statutory tax rate of 21%, primarily due to foreign tax effects, U.S. tax on Global Intangible Low Taxed Income net of related foreign tax credits, and Section 162(m) limitations on compensation deductions of certain executive officers.
On January 5, 2026, the Organisation for Economic Co-operation and Development (“OECD”) released administrative guidance on Pillar Two (a framework of rules which impose a 15% corporate minimum tax and were enacted by several countries in which the Company operates prior to 2026). The administrative guidance mainly introduces a “side‑by‑side” arrangement that provides safe-harbors against certain aspects of the Pillar Two rules for multinational companies headquartered in countries having an eligible minimum tax system – most notably that of the U.S. Following formal global adoption by OECD member countries, the administrative guidance is effective for fiscal years beginning on or after January 1, 2026, and the Company does not currently expect it to have a material impact on its consolidated financial statements. The
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Company continues to monitor developments related to the OECD Pillar Two global minimum tax framework, including this new arrangement.
Industrial
The Industrial segment provides TIC and advisory services to help ensure customers’ industrial products meet or exceed international standards for product safety, performance and sustainability. The Industrial segment provides services that address needs across a number of end markets, including energy, industrial automation, engineered materials (plastics and wire and cable) and built environment, and across a variety of stakeholders, including manufacturers, building and asset owners, end users and regulators.
The following tables summarize the change in Industrial’s revenue and operating income for the periods presented:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 375 | $ | 340 | $ | 35 | 10.3 | % | |||||||||||||||||||||||||||||||||||||||
| Employee compensation | 176 | 165 | 11 | 6.7 | % | ||||||||||||||||||||||||||||||||||||||||||
| Services and materials | 81 | 76 | 5 | 6.6 | % | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 16 | 16 | — | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Restructuring | 1 | — | 1 | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Segment operating income | $ | 101 | $ | 83 | $ | 18 | 21.7 | % | |||||||||||||||||||||||||||||||||||||||
| Segment operating income margin | 26.9 | % | 24.4 | % | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Organic | FX | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue change | $ | 28 | $ | 7 | $ | 35 | |||||||||||||||||||||||||||||||||||||||||
| Segment operating income change | $ | 18 | $ | — | $ | 18 | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Revenue
Revenue increased by $35 million, or 10.3%, for the three months ended March 31, 2026, as compared to the same period in 2025. On an organic basis, revenue increased $28 million, or 8.2%, due to growth in Ongoing Certification Services revenue of $12 million across most industries, driven by continued demand for energy and automation and materials. Certification Testing revenue also increased $11 million across most industries due to continued demand. FX increased revenue by $7 million, or 2.1%, primarily due to the relative strength of the euro and Chinese renminbi.
Segment Operating Income
Segment operating income increased by $18 million, or 21.7%, for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the $28 million increase in organic revenue noted above. This was partially offset by a $10 million organic increase in expenses, primarily due to higher employee compensation of $6 million related to base salary increases.
Consumer
The Consumer segment provides a variety of global product market acceptance and risk mitigation services for customers in the consumer products end market, including consumer electronics, medical devices, information technologies, appliances, HVAC, lighting, retail (softlines and hardlines) and emerging consumer applications. The primary services offered by this segment include safety certification testing, ongoing certification, global market access, testing for connectivity, performance and quality and critical systems advisory and training.
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The following tables summarize the change in Consumer’s revenue and operating income for the periods presented:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 318 | $ | 304 | $ | 14 | 4.6 | % | |||||||||||||||||||||||||||||||||||||||
| Employee compensation | 178 | 181 | (3) | (1.7) | % | ||||||||||||||||||||||||||||||||||||||||||
| Services and materials | 90 | 83 | 7 | 8.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 21 | 19 | 2 | 10.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Restructuring | (1) | (1) | — | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Segment operating income | $ | 30 | $ | 22 | $ | 8 | 36.4 | % | |||||||||||||||||||||||||||||||||||||||
| Segment operating income margin | 9.4 | % | 7.2 | % | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Organic | Acquisition/ Divestiture | FX | Total | |||||||||||||||||||||||||||||||||||||||||||
| Revenue change | $ | 9 | $ | — | $ | 5 | $ | 14 | |||||||||||||||||||||||||||||||||||||||
| Segment operating income change | $ | 16 | $ | (6) | $ | (2) | $ | 8 | |||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Revenue
Revenue increased by $14 million, or 4.6%, for the three months ended March 31, 2026, as compared to the same period in 2025. On an organic basis, revenue increased $9 million, or 3.0%, primarily due to growth in Certification Testing revenue of $5 million across most industries, driven primarily by continued demand for consumer technology. Ongoing Certification Services revenue increased $4 million across most industries due to continued demand for appliances and HVAC.
Segment Operating Income
Segment operating income increased by $8 million for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the $9 million increase in organic revenue noted above. Additionally, organic expenses decreased $7 million, primarily due to lower employee compensation of $8 million, in part related to headcount reductions from the Restructuring Plan. This was partially offset by a $6 million increase in Acquisition / Divestiture expenses, primarily in connection with the contemplated E&E Transaction.
Risk & Compliance Software
The R&C Software segment provides complementary software solutions that extend the value proposition of TIC services the Company offers. The software, data, and insight offerings enable the Company’s customers to manage complex regulatory requirements, deliver supply chain transparency and operationalize sustainability.
The following tables summarize the change in R&C Software’s revenue and operating income for the periods presented:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Change | % Change | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 65 | $ | 61 | $ | 4 | 6.6 | % | |||||||||||||||||||||||||||||||||||||||
| Employee compensation | 41 | 42 | (1) | (2.4) | % | ||||||||||||||||||||||||||||||||||||||||||
| Services and materials | 7 | 5 | 2 | 40.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 10 | 10 | — | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Segment operating income | $ | 7 | $ | 4 | $ | 3 | 75.0 | % | |||||||||||||||||||||||||||||||||||||||
| Segment operating income margin | 10.8 | % | 6.6 | % | |||||||||||||||||||||||||||||||||||||||||||
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| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Organic | Acquisition/ Divestiture | FX | Total | |||||||||||||||||||||||||||||||||||||||||||
| Revenue change | $ | 3 | $ | — | $ | 1 | $ | 4 | |||||||||||||||||||||||||||||||||||||||
| Segment operating income change | $ | 4 | $ | (1) | $ | — | $ | 3 | |||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Revenue
Revenue increased by $4 million, or 6.6%, for the three months ended March 31, 2026, as compared to the same period in 2025. On an organic basis, revenue increased $3 million, or 4.9% driven by demand for software subscriptions, primarily for providing supply chain insights to the retail industry.
Segment Operating Income
Segment operating income increased by $3 million for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the $3 million increase in organic revenue noted above.
Non-GAAP Financial Measures
In addition to financial measures determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company considers a variety of supplemental non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin, Adjusted Diluted Earnings Per Share, Free Cash Flow and Free Cash Flow margin. Management uses non-GAAP financial measures in addition to GAAP measures to understand and compare operating results across periods and for forecasting and other purposes. Management believes these non-GAAP financial measures provide useful information to investors and reflect results in a manner that enables, in some instances, more meaningful analysis of trends and facilitates comparison of results across periods. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, operating income, diluted earnings per share, net cash provided by operating activities or any other measure calculated in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies due to potential differences between the companies in calculations.
The Company uses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income margin and Adjusted Diluted Earnings Per Share to measure the operational strength and performance of its business and believes these measures provide additional information to investors about certain non-cash items and unusual items that the Company does not expect to continue at the same level in the future. Further, management believes these non-GAAP financial measures provide a meaningful measure of business performance. The Company uses Free Cash Flow and Free Cash Flow margin as additional liquidity measures and believes they provide useful information to investors about the cash generated from the Company’s core operations that may be available to repay debt, make other investments and return cash to stockholders.
There are material limitations to using these non-GAAP financial measures. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest expense, other expense, net, income tax expense, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income, as applicable. Adjusted Net Income and Adjusted Diluted Earnings Per Share do not take into account certain significant items, including other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses which directly affect the Company’s net income and diluted earnings per share, as applicable. Free Cash Flow adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than the most comparable GAAP measure. Free Cash Flow is not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted. These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering these non-GAAP financial measures in conjunction with net income, operating income, diluted earnings per share and net cash provided by operating activities as calculated in accordance with GAAP.
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The table below presents these non-GAAP measures with the most directly comparable GAAP measures.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, unless otherwise stated) | 2026 | 2025 | |||||||||||||||||||||
| Net income | $ | 97 | $ | 71 | |||||||||||||||||||
| Net income margin | 12.8 | % | 10.1 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 197 | $ | 161 | |||||||||||||||||||
| Adjusted EBITDA margin | 26.0 | % | 22.8 | % | |||||||||||||||||||
| Adjusted Net Income | $ | 107 | $ | 80 | |||||||||||||||||||
| Adjusted Net Income margin | 14.1 | % | 11.3 | % | |||||||||||||||||||
| Diluted Earnings per Share | $ | 0.45 | $ | 0.33 | |||||||||||||||||||
| Adjusted Diluted Earnings Per Share | $ | 0.50 | $ | 0.37 | |||||||||||||||||||
| Net Cash provided by Operating Activities | $ | 219 | $ | 154 | |||||||||||||||||||
| Net cash provided by operating activities margin | 28.9 | % | 21.8 | % | |||||||||||||||||||
| Free Cash Flow | $ | 150 | $ | 103 | |||||||||||||||||||
| Free Cash Flow margin | 19.8 | % | 14.6 | % | |||||||||||||||||||
Adjusted EBITDA
The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other expense, net, income tax expense, as well as stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable. Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue.
The table below reconciles net income to Adjusted EBITDA.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, unless otherwise stated) | 2026 | 2025 | |||||||||||||||||||||
| Net income | $ | 97 | $ | 71 | |||||||||||||||||||
| Depreciation and amortization expense | 47 | 45 | |||||||||||||||||||||
| Interest expense | 8 | 12 | |||||||||||||||||||||
| Other expense, net | 1 | 3 | |||||||||||||||||||||
| Income tax expense | 32 | 23 | |||||||||||||||||||||
| Stock-based compensation | 12 | 8 | |||||||||||||||||||||
| Restructuring | — | (1) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 197 | $ | 161 | |||||||||||||||||||
| Revenue | $ | 758 | $ | 705 | |||||||||||||||||||
| Net income margin | 12.8 | % | 10.1 | % | |||||||||||||||||||
| Adjusted EBITDA margin | 26.0 | % | 22.8 | % | |||||||||||||||||||
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The table below reconciles segment operating income to segment Adjusted EBITDA.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, unless otherwise stated) | 2026 | 2025 | |||||||||||||||||||||
| Industrial | |||||||||||||||||||||||
| Segment operating income | $ | 101 | $ | 83 | |||||||||||||||||||
| Depreciation and amortization expense | 16 | 16 | |||||||||||||||||||||
| Stock-based compensation | 5 | 3 | |||||||||||||||||||||
| Restructuring | 1 | — | |||||||||||||||||||||
| Adjusted EBITDA | $ | 123 | $ | 102 | |||||||||||||||||||
| Revenue | $ | 375 | $ | 340 | |||||||||||||||||||
| Operating income margin | 26.9 | % | 24.4 | % | |||||||||||||||||||
| Adjusted EBITDA margin | 32.8 | % | 30.0 | % | |||||||||||||||||||
| Consumer | |||||||||||||||||||||||
| Segment operating income | $ | 30 | $ | 22 | |||||||||||||||||||
| Depreciation and amortization expense | 21 | 19 | |||||||||||||||||||||
| Stock-based compensation | 5 | 4 | |||||||||||||||||||||
| Restructuring | (1) | (1) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 55 | $ | 44 | |||||||||||||||||||
| Revenue | $ | 318 | $ | 304 | |||||||||||||||||||
| Operating income margin | 9.4 | % | 7.2 | % | |||||||||||||||||||
| Adjusted EBITDA margin | 17.3 | % | 14.5 | % | |||||||||||||||||||
| Risk & Compliance Software | |||||||||||||||||||||||
| Segment operating income | $ | 7 | $ | 4 | |||||||||||||||||||
| Depreciation and amortization expense | 10 | 10 | |||||||||||||||||||||
| Stock-based compensation | 2 | 1 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 19 | $ | 15 | |||||||||||||||||||
| Revenue | $ | 65 | $ | 61 | |||||||||||||||||||
| Operating income margin | 10.8 | % | 6.6 | % | |||||||||||||||||||
| Adjusted EBITDA margin | 29.2 | % | 24.6 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 197 | $ | 161 | |||||||||||||||||||
Adjusted Net Income
The Company defines Adjusted Net Income as net income adjusted for other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, adjusted to give effect to the income tax impact of such adjustments. Adjusted Net Income margin is calculated as Adjusted Net Income as a percentage of revenue.
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The table below reconciles net income to Adjusted Net Income.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions, unless otherwise stated) | 2026 | 2025 | |||||||||||||||||||||
| Net income | $ | 97 | $ | 71 | |||||||||||||||||||
| Other expense, net | 1 | 3 | |||||||||||||||||||||
| Stock-based compensation | 12 | 8 | |||||||||||||||||||||
| Restructuring | — | (1) | |||||||||||||||||||||
Tax effect of adjustments(a) | (3) | (1) | |||||||||||||||||||||
| Adjusted Net Income | $ | 107 | $ | 80 | |||||||||||||||||||
| Revenue | $ | 758 | $ | 705 | |||||||||||||||||||
| Net income margin | 12.8 | % | 10.1 | % | |||||||||||||||||||
| Adjusted Net Income margin | 14.1 | % | 11.3 | % | |||||||||||||||||||
(a)The Company computed the tax effect of adjustments to net earnings by applying the statutory tax rate in the relevant jurisdictions to the taxable income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero.
Adjusted Diluted Earnings Per Share
The Company defines Adjusted Diluted Earnings Per Share as diluted earnings per share attributable to stockholders of UL Solutions adjusted for other expense, net, stock-based compensation expense for equity-settled awards, material asset impairment charges and restructuring expenses, as applicable, adjusted to give effect to the income tax impact of such adjustments.
The table below reconciles diluted earnings per share to Adjusted Diluted Earnings Per Share.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Diluted earnings per share | $ | 0.45 | $ | 0.33 | |||||||||||||||||||
| Other expense, net | 0.01 | 0.02 | |||||||||||||||||||||
| Stock-based compensation | 0.06 | 0.04 | |||||||||||||||||||||
| Restructuring | — | (0.01) | |||||||||||||||||||||
Tax effect of adjustments(a) | (0.02) | (0.01) | |||||||||||||||||||||
| Adjusted Diluted Earnings Per Share | $ | 0.50 | $ | 0.37 | |||||||||||||||||||
(a)The Company computed the tax effect of adjustments to net earnings by applying the statutory tax rate in the relevant jurisdictions to the taxable income or expense items that are adjusted in the period presented. If a valuation allowance exists, the rate applied is zero.
Free Cash Flow
The Company defines Free Cash Flow as cash from operating activities less cash outlays related to capital expenditures. The Company defines capital expenditures to include purchases of property, plant and equipment and capitalized software. These items are subtracted from cash from operating activities because they represent long-term investments that are required for normal business activities. Free Cash Flow margin is calculated as Free Cash Flow as a percentage of revenue.
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The table below reconciles net cash provided by operating activities to Free Cash Flow.
| Three Months Ended March 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 219 | $ | 154 | |||||||
| Capital expenditures | (69) | (51) | |||||||||
| Free Cash Flow | $ | 150 | $ | 103 | |||||||
| Revenue | $ | 758 | $ | 705 | |||||||
| Net cash provided by operating activities margin | 28.9 | % | 21.8 | % | |||||||
| Free Cash Flow margin | 19.8 | % | 14.6 | % | |||||||
Liquidity and Capital Resources
Overview
The Company’s primary sources of liquidity are cash and cash equivalents on hand and short-term investments, cash flows from operating activities and cash borrowed under the 2025 Credit Facility (as defined below). The Company believes the combination of cash and cash equivalents on hand and short-term investments, the generation of cash from operating activities, funds available under the 2025 Credit Facility, and the Company’s ability to access the capital markets provide sufficient liquidity to meet the Company’s cash requirements for working capital, capital expenditures, service of indebtedness and to address other needs for the next twelve months and the foreseeable future thereafter, as well as to finance acquisitions, make contributions to the Company’s pension and postretirement plans and pay dividends to stockholders, as the Company’s board of directors deems appropriate.
The Company’s cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those referenced in the section titled “Risk Factors” in Part I Item 1A of the Company’s Annual Report on Form 10-K. In addition, the Company cannot predict whether or when it may enter into acquisitions, joint ventures or dispositions, make contributions to the Company’s pension and postretirement plans, pay dividends, or what impact any such transactions could have on the Company’s financial condition, results of operations or cash flows.
As of March 31, 2026, the Company had $258 million in cash and cash equivalents and $937 million of unused availability under the 2025 Credit Facility and access to an accordion feature permitting an increase in the 2025 Credit Facility by an aggregate amount of up to $500 million, subject to the consent of any lenders providing such increase, the absence of any default or event of default and entry into customary documentation with respect to such increase.
Cash Flows
The following table is a summary of the Company’s cash flow activity:
| Three Months Ended March 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 219 | $ | 154 | |||||||
| Net cash used in investing activities | $ | (61) | $ | (50) | |||||||
| Net cash used in financing activities | $ | (194) | $ | (135) | |||||||
Cash flows from operating activities
Net cash provided by operating activities was $219 million for the three months ended March 31, 2026, an increase of $65 million compared to net cash provided by operating activities of $154 million for the same period in 2025. The increase was primarily driven by higher net income after non-cash adjustments due to business performance, timing of payments made to suppliers and higher contract liabilities as a result of increased payments from customers.
Cash flows from investing activities
Net cash used in investing activities was $61 million for the three months ended March 31, 2026, an increase of $11 million compared to net cash used in investing activities of $50 million for the same period in 2025. The increase in cash used in
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investing activities was primarily driven by an $18 million increase in capital expenditures, partially offset by $8 million in sales of investments compared to the same period in 2025.
Cash flows from financing activities
Net cash used in financing activities was $194 million for the three months ended March 31, 2026, an increase of $59 million compared to net cash used in financing activities of $135 million for the same period in 2025. The increase in cash used in financing activities was primarily driven by a $44 million increase in repayments net of proceeds on the Company’s credit facilities and a $9 million increase in employee taxes paid on settlement of stock-based compensation compared to the same period in 2025.
Capital Expenditures
The Company makes strategic investments in capital expenditures to enable growth by expanding testing capacity to meet increased demand, to enable new capabilities and product offerings and to increase the efficiency of the Company’s processes. Capital expenditures include the building and refurbishment of laboratories and office space, the replacement and upgrade of existing laboratory equipment at the end of its useful life, and investments in technology for internal-use and sale to customers through product development of new software and enhancements of existing software. Cash paid for capital expenditures increased $18 million, to $69 million for the three months ended March 31, 2026, compared to $51 million for the same period in 2025.
Long-Term Debt
2025 Credit Facility
In October 2025, the Company entered into a credit agreement, by and among UL Solutions Inc. and certain of its non-U.S. subsidiaries as co-borrowers (collectively, the “Borrowers”), Bank of America, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement provides for a $1.0 billion senior unsecured five-year multi-currency revolving facility (collectively, and as amended, the “2025 Credit Facility”). The Borrowers’ obligations (other than the Company’s) under the Credit Agreement are guaranteed by the Company. As of March 31, 2026, the Company was in compliance with all covenants under the 2025 Credit Facility.
Senior Notes
The Company has outstanding $300 million in aggregate principal amount of 6.500% senior notes due 2028 (the “notes”). The notes are senior unsecured obligations of UL Solutions Inc. Borrowings under the notes bear a fixed interest rate of 6.500% per annum.
Dividends
The Company increased the regular quarterly dividend to 14.5 cents per share beginning in the first quarter of 2026, an increase from the previous 13 cents per share. The Company will periodically assess the size of the regular quarterly dividend based on the Company’s dividend policy and certain factors described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Dividends” in Part II Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company cannot give any assurance that the Company will continue to declare dividends in any particular amounts, or at all, in the future.
In the three months ended March 31, 2026 and 2025, the Company paid dividends to stockholders of $29 million and $26 million, respectively.
Contractual Obligations
The Company has purchase obligations related to agreements to purchase goods and services that are enforceable and legally binding, and that specify all significant terms, including the goods to be purchased or services to be rendered, the price at which the goods or services are to be rendered, and the timing of the transactions. Purchase obligations exclude liabilities that are included on the Company’s Condensed Consolidated Balance Sheets and include commitments for outsourced services, facilities, capital expenditures, cloud service arrangements and various other types of noncancelable contracts.
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Refer to the Company’s consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K for information about the Company’s noncancelable purchase obligations.
Recent Accounting Pronouncements
For a discussion of new accounting pronouncements recently adopted and not yet adopted, see Note 1 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.
Critical Accounting Policies and Estimates
The Company prepares its condensed consolidated financial statements in accordance with GAAP. While the majority of the Company’s revenue, expenses, assets and liabilities are not based on estimates, there are certain accounting principles that require management to make judgments and estimates regarding matters that are uncertain and susceptible to change. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which could potentially result in materially different results under different assumptions and conditions. Management regularly reviews the estimates and assumptions used in the preparation of the financial statements for reasonableness and adequacy. The Company’s estimates are based on historical experience, current conditions and various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions. To the extent that there are differences between estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows may be affected.
There have been no material changes to the Company’s critical accounting policies and estimates as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. Statements regarding the Company’s future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding the Company’s expected growth, future capital expenditures and the Restructuring Plan, including the Company’s estimates of the charges and expenditures in connection therewith and the timing thereof and the Company’s estimates of the benefits of such Restructuring Plan, and statements regarding the Company’s acquisitions, divestitures and other strategic transactions, including expected timing, closing, proceeds, financing, synergies and financial impact, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “likely,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “continues” and variations of these terms and similar expressions, or the negative of these terms or similar expressions (although not all forward-looking statements may contain such words). The Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important factors that could cause the Company’s actual results to differ materially from those expressed or implied in these forward-looking statements, including, but not limited to, the following:
•any failure on the Company’s part to protect and maintain its brand and reputation, or the impact on its brand or reputation of third-party events or actions outside of its control;
•risks associated with the Company’s information technology and software, including those relating to any future data breach or other cybersecurity incident;
•the potential disruption of the industries in which the Company operates by technological advances in artificial intelligence;
•the Company’s ability to innovate, adapt to changing customer needs and successfully introduce new products and services in response to changes in the Company’s industries and technological advances;
•the Company’s ability to compete in its industries and the effects of increased competition from its competitors;
•risks associated with conducting business outside the United States, including those relating to fluctuations in foreign currency exchange rates; the imposition of tariffs and enhanced trade, import or export restrictions or changes in U.S. trade policy or similar government actions; and global, regional or political instability and geopolitical tensions;
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•risks related to sustainability;
•risks associated with the Company’s operations in China, which subject the Company and UL-CCIC Company Limited, the Company’s joint venture with the China Certification & Inspection (Group) Co., Ltd. (“CCIC”), to China’s complex and rapidly evolving laws, which may be interpreted, applied or enforced inconsistently or in ways inconsistent with its current operations, as well as risks associated with the fact that the Chinese government has the power to exercise significant oversight and discretion over, and intervene in and influence, its business operations in China;
•the relationship between the United States and China and between the Company and CCIC, as well as changes in U.S. and Chinese regulations affecting the Company’s business operations in China;
•any failure on the Company’s part to attract, hire or retain its key employees, including its senior leadership and its skilled and trained engineering, technical and professional personnel;
•the level of the Company’s customers’ satisfaction and any failure on its part to properly and timely perform its services, meet its contractual obligations or fulfil its customers’ needs;
•changes to the relevant regulatory frameworks or private sector requirements, including any requirement that the Company accept third-party test results or certifications of components, end products, processes or systems or any changes that result in a reduction in required inspections, tests or certifications or harmonized international or cross-industry benchmarks and standards;
•the Company’s ability to adequately maintain, protect and enhance its intellectual property, including its registered UL-in-a-circle certification mark and other certification marks;
•the Company’s ability to implement its growth strategies and initiatives successfully;
•the Company’s reliance on third parties, including subcontractors and outside laboratories;
•the Company’s ability to obtain and maintain the requisite licenses, approvals, accreditations and delegations of authority necessary to conduct its business;
•the outcomes of current and future legal proceedings;
•the Company’s level of indebtedness and future cash needs;
•failure to generate sufficient cash to service the Company’s indebtedness;
•a change in the assumptions the Company uses to value its goodwill or intangible assets, or the impairment of its goodwill or intangible assets;
•the Company’s ability to generate sufficient cash to service its indebtedness and invest in the ongoing needs of its business;
•the increased expenses and responsibilities associated with being a public company;
•the significant influence that UL Standards & Engagement has over the Company, including pursuant to its rights under the Company’s amended and restated certificate of incorporation and the Stockholder Agreement, dated as of April 2, 2024, by and between the Company and UL Standards & Engagement;
•natural disasters and other catastrophic events, including pandemics and the rapid spread of contagious illnesses;
•changes in tax laws in jurisdictions in which the Company operates or adverse outcomes resulting from examination of the Company’s or its affiliates’ tax returns;
•risks that the Company may be unable to implement the Restructuring Plan on the anticipated timing, that local law and consultation requirements, including for potential position eliminations, extends the restructuring process further in certain countries or causes the actual charges and expenditures that the Company incurs in connection with the Restructuring Plan, and the timing thereof, to differ materially from estimates, that the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Restructuring Plan and that the Company may not be able to realize the anticipated benefits of the Restructuring Plan;
•the occurrence of any event, change, or other circumstance that could give rise to the termination of the E&E Transaction and the payment of a break fee; the possibility that one or more closing conditions to the E&E Transaction, including the receipt of certain regulatory approvals, may not be satisfied or waived, in a timely manner or at all, including the risk that a governmental entity may prohibit, delay, or refuse to grant approval for the consummation of the E&E Transaction, or may require conditions, limitations, or restrictions in connection with such approvals; the risk that the E&E Transaction may not be completed within the expected timeframe, or at all; unexpected costs, charges or expenses resulting from the E&E Transaction; uncertainty regarding the expected financial performance following completion of the E&E Transaction; the Company’s ability to achieve its short-term and long-term operating targets following completion of the E&E Transaction; the effects that the announcement or pendency of the E&E Transaction may have on the Company; the acquired business’ and the Company’s respective businesses and ability to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom the acquired business or the Company do business; the effects that termination of the E&E Transaction may have on the Company or its business; failure to successfully complete the E&E Transaction; legal proceedings that may be instituted related to the E&E Transaction; the Company’s ability or failure to successfully
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integrate the acquired business with existing operations; and the Company’s ability to realize anticipated synergies or obtain the results anticipated;
•the other factors discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in the “Risk Factors” in Part I Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the section titled “Risk Factors” in Part I Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the Company’s subsequent filings with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company, or others acting on the Company’s behalf, are expressly qualified in their entirety by the cautionary statements above.
In addition, statements that “the Company believes” and similar statements reflect the Company’s beliefs and opinions on the relevant subject. These statements are based upon information available to the Company as of the date of this Quarterly Report, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and the Company’s statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report and the documents that the Company references in this Quarterly Report with the understanding that the Company’s actual future results, levels of activity, performance and achievements may be materially different from what the Company expects.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact the Company’s financial position due to adverse changes in financial market prices and rates, such as interest and foreign currency exchange rates and equity prices. The Company’s market risk exposure is primarily a result of exposure to potential changes in interest rates or inflation and the resulting impact on investment income and interest expense. The Company does not hold financial instruments for trading purposes.
Interest Rate Risk
The Company’s operating results are subject to risk from interest rate fluctuations on its credit facility, which carries variable interest rates. Borrowings under the 2025 Credit Facility bear interest at a rate per annum equal to, at the applicable Borrower’s option, (a) a specified benchmark rate for the applicable currency (which, in the case of U.S. Dollar loans, shall be the Term SOFR (as defined in the Credit Agreement)), plus a margin that ranges from 0.875% to 1.375% per annum or (b) for U.S. Dollar loans made to the Company only, a base rate (which is equal to the highest of (i) the Bank of America prime rate, (ii) the U.S. federal funds rate plus 0.5% per annum, or (iii) the Term SOFR rate plus 1.0%) plus a margin that ranges from 0.0% to 0.375% per annum.
Because the Company’s borrowings bear interest at a variable rate, the Company is exposed to market risks relating to changes in interest rates. The Company is also exposed to interest rate risk associated with its cash and cash equivalents balances. The Company does not currently use derivative financial instruments in its investment portfolio.
The Company also has outstanding $300 million in aggregate principal amount of 6.500% senior notes due 2028. The notes carry a fixed interest rate (coupon rate) and as such, are not exposed to interest rate fluctuations risk until their expected maturity in 2028.
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During the first three months of 2026, the variable interest rates applicable to both benchmark rate loans and base rate loans under the 2025 Credit Facility generally fluctuated in line with interest rate changes in the marketplace and are expected to continue fluctuating with any future Federal Reserve Board interest rate changes and future changes to the SOFR Index. In addition, increases in interest expense are considered with other expense increases that may be passed, in whole or in part, along to the Company’s customers; however, the Company does not expect increases in interest expenses to materially impact pricing strategy in the near term. The fluctuations in interest payments on the Company’s variable-rate debt are not material to the Company’s overall liquidity position and have not impacted, and are not expected to have an impact on, the Company’s ability to make timely payments under the 2025 Credit Facility or its other obligations. Furthermore, while interest rates impact management’s evaluation of capital expenditure projects, the overall cash flows required to support the Company’s planned investments have not been materially impacted. Thus, fluctuations in interest rates have not had a material impact on the Company’s financial condition.
The interest rate for the 2025 Credit Facility as of March 31, 2026 was 4.74%, which was a floating rate based on the Term SOFR plus a margin. A hypothetical 100 basis point change in interest rates affecting the 2025 Credit Facility would not result in a material change to interest expense, based on outstanding borrowings at March 31, 2026. A hypothetical 100 basis point change in interest rates affecting the Company’s cash and cash equivalents would not have a material impact on the Company’s financial statements. Notwithstanding the Company’s efforts to manage interest rate risk, there can be no assurances that the Company will be adequately protected against the risks associated with interest rate fluctuations.
Foreign Currency Risk
With global operations, the Company has foreign currency risk related to its revenues and expenses denominated in currencies other than the U.S. dollar, primarily the euro, the Japanese yen, the Chinese renminbi, the New Taiwan dollar, the Korean won and the British pound sterling. Foreign currency gains (losses) are recorded in net income as transactions occur. Changes in exchange rates may substantially affect, either positively or negatively, the revenues and expenses, as expressed in U.S. dollars, of the Company’s foreign subsidiaries with functional currencies other than the U.S. dollar. Assuming a hypothetical change of 10% in the average foreign currency exchange rate for the three months ended March 31, 2026, the effect on operating income would not be material. The Company is also subject to foreign currency exchange rate risk associated with the translation of local currencies of its foreign subsidiaries into U.S. dollars.
The Company’s results of operations are exposed to foreign currency exchange rate risk related to intercompany loan and operating balances between subsidiaries that are denominated in currencies other than the U.S. dollar, primarily the euro and the Korean won. A transaction made in a currency that differs from the local entity’s functional currency is first remeasured at the entity’s functional currency. Subsequent foreign currency exchange rate changes result in foreign currency gains (losses) that are recognized in net income. If the transaction is already denominated in the entity’s functional currency, only the translation to U.S. dollar reporting is necessary. The remeasurement process required by GAAP for such intercompany loan and operating balances will give rise to foreign exchange gains (losses), which could materially impact the Company’s results of operations.
ITEM 4. Controls and Procedures
Evaluation of disclosure controls and procedures
The Company has conducted an evaluation, under the supervision and with the participation of management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of March 31, 2026, the Company’s disclosure controls and procedures were effective to provide reasonable assurance such that the information required to be disclosed in the Company’s reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
No changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) occurred during the quarter ended March 31, 2026, that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Limitations on Controls
The Company’s disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that the Company’s disclosure controls and procedures or its internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is, in the ordinary course of business, party to certain claims, litigation, audits and investigations. Discussion of these and other legal matters is incorporated by reference from Part I, Item 1, Note 16, “Commitments and Contingencies,” of this Quarterly Report and should be considered an integral part of Part II, Item 1, “Legal Proceedings.”
ITEM 1A. Risk Factors
See the section titled “Risk Factors” in Part I Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the Company’s risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 5. Other Information
On March 6, 2026 , Karen K. Pepping , Senior Vice President and Chief Accounting Officer of the Company, entered into a Rule 10b5-1 trading arrangement (the “Pepping 10b5-1 Plan”) for the potential sale of up to 5,529 shares of UL Solutions Inc. Class A common stock, including shares resulting from the vesting and settlement of certain restricted stock units and performance share units. The Pepping 10b5-1 Plan is scheduled to commence on June 9, 2026 and to terminate on the earlier of (i) the date all the shares under the Pepping 10b5-1 Plan are sold and (ii) March 18, 2027 , in each case, subject to the terms and conditions contained therein. The Pepping 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s insider trading policies and procedures and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.
On March 3, 2026 , Gitte Schjøtz , Executive Vice President and Chief Business Operations and Innovation Officer of the Company, entered into a Rule 10b5-1 trading arrangement (the “Schjøtz 10b5-1 Plan”) for the potential sale of up to 21,880 shares of UL Solutions Inc. Class A common stock, including shares resulting from the exercise of certain stock-settled stock appreciation rights. The Schjøtz 10b5-1 Plan is scheduled to commence on June 2, 2026 and to terminate on the earlier of (i) the date all the shares under the Schjøtz 10b5-1 Plan are sold and (ii) February 26, 2027 , in each case, subject to the terms and conditions contained therein. The Schjøtz 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s insider trading policies and procedures and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.
On February 26, 2026 , Alberto Uggetti , Executive Vice President and Chief Commercial Officer of the Company, entered into a Rule 10b5-1 trading arrangement (the “Uggetti 10b5-1 Plan”) for the potential sale of up to 3,844 shares of UL Solutions Inc. Class A common stock, including shares resulting from the vesting and settlement of certain restricted stock units. The Uggetti 10b5-1 Plan is scheduled to commence on May 28, 2026 and to terminate on the earlier of (i) the date all the shares under the Uggetti 10b5-1 Plan are sold and (ii) February 26, 2027 , in each case, subject to the terms and conditions contained therein. The Uggetti 10b5-1 Plan was entered into during an open trading window in accordance with the Company’s insider trading policies and procedures and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.
During the quarter ended March 31, 2026, no other directors or officers of the Company informed the Company of the adoption , modification or termination
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ITEM 6. Exhibits
| Exhibit No. | Description | |||||||
3.1 | Amended and Restated Certificate of Incorporation of UL Solutions Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on April 17, 2024). | |||||||
3.2 | Amended and Restated Bylaws of UL Solutions Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on April 17, 2024). | |||||||
10.1† | UL Solutions U.S. Executive Deferred Compensation Plan, effective January 1, 2026 (incorporated by reference to Exhibit 10.29 of the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026). | |||||||
31.1* | Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
31.2* | Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
32.1** | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
32.2** | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101* | The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline Extensible Business Reporting Language (iXBRL) includes (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Balance Sheets; (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to the Condensed Consolidated Financial Statements. | |||||||
| 104* | Cover Page Interactive Data File (embedded within the iXBRL document). | |||||||
* Filed herewith.
**Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 to this Quarterly Report are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.
† Indicates a management contract or compensatory plan or arrangement.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UL Solutions Inc. | ||||||||
Date: May 5, 2026 | ||||||||
By | /s/ Ryan D. Robinson | |||||||
Ryan D. Robinson | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Duly authorized officer and principal financial officer of the Registrant) | ||||||||
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