UL Solutions Inc. (ULS)

CIK: 0001901440. SIC: 8734 Services-Testing Laboratories. Latest 10-K as of: 2026-02-19.

SIC breadcrumb: Services > SIC Major Group 87 > SIC 8734 Services-Testing Laboratories

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1901440. Latest filing source: 0001901440-26-000005.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001901440.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001901440.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001901440-26-000012.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-05. Report date: 2026-03-31.

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

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-19. Report date: 2025-12-31.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis includes a comparison of the Company’s results of operations, financial condition and liquidity and capital resources for the years ended December 31, 2025 and 2024 and should be read in conjunction with the Company’s consolidated financial statements and the related notes which are included in this Annual Report. For a comparison of our results of operations, financial condition and liquidity and capital resources for the years ended December 31, 2024 and 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 20, 2025, which discussion is incorporated herein by reference. 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 the Company describes under “Risk Factors” in Part I Item 1A of this Annual Report. See “Cautionary Note Regarding Forward-Looking Statements.” Additionally, the Company’s historical results are

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not necessarily indicative of the results that may be expected for any period in the future. The Company has reclassified certain amounts in prior period financial statements to conform to the current period’s presentation.

References to “UL Solutions” and the “Company” refer to UL Solutions Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires.

Business Overview

UL Solutions is a global safety science leader with a distinguished and trusted brand that dates back to its founding in 1894 as part of the nonprofit Underwriters Electrical Bureau, a predecessor to Underwriters Laboratories Inc. (“UL Research Institutes”), ULSE Inc. (“UL Standards & Engagement”) and UL Solutions. As of December 31, 2025, the Company provided independent third-party testing, inspection and certification (“TIC”) services and related software and advisory (“S&A”) offerings to more than 80,000 customers in over 110 countries. UL Solutions is the largest TIC services provider headquartered in North America (by revenue), and it maintains a leadership position across additional global markets, including Europe and Asia.

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 ongoing 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 (“SaaS”) and license-based software solutions, including implementation and training services related to software.

The Company’s primary addressable market is the highly fragmented outsourced product TIC market, where the Company provides (1) testing, inspection and certification services for a wide array of products, components, assets and supply chains in the consumer and industrial end markets, and (2) emerging product lifecycle services, asset and sustainability performance advisory and supply chain services. Demand for outsourced TIC services is increasing across the markets the Company serves as a result of new emerging technologies, evolving global safety regulations and standards, increases in global trade and shorter product lifecycles. With more than 650 technical accreditations and the ability to test and certify against more than 4,000 global standards, the Company believes it is positioned to benefit from ongoing demand growth within the Company’s addressable market. Additionally, as the global economy evolves and becomes more digital and inter-connected, the Company’s customers continue to seek ways to bridge their traditional TIC needs with next generation software and services. The Company believes that its complementary TIC and S&A offerings position it to capitalize on this market need and better serve its customers.

Since January 1, 2024, the Company has completed the following acquisitions and divestitures, including those that impact the comparability of results between periods:

•In July 2024, the Company acquired 100% of the outstanding stock of TesTneT Engineering GmbH (together with its subsidiaries, “TesTneT”) for approximately $19 million. TesTneT is a Germany-based company that provides testing services for various hydrogen storage systems, refueling stations and their components. The results of operations of TesTneT are included in the Industrial segment since the date of acquisition.

•In May 2024, the Company acquired 100% of the outstanding stock of Batterielngenieure GmbH (together with its subsidiaries, “Batterielngenieure”) for approximately $12 million. Batterielngenieure is a Germany-based battery testing company that was, at the time of acquisition, in the process of building a laboratory in Aachen, Germany to replace the leased facility it was using and to add testing and simulation capacity. The results of operations of Batterielngenieure are included in the Industrial segment since the date of acquisition.

•In May 2024, the Company completed the sale of its payments testing business to an affiliate of Gallant Capital Partners, for a base price of $29 million. The business performed Software and Non-certification Testing and Other Services and the results of operations were included in the Industrial segment until the date of divestiture. The divestiture resulted in a pre-tax gain on sale of $24 million, which was recorded within other (expense) income, net in the Company’s consolidated results of operations.

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, for a base

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purchase price of $210 million in cash, subject to customary post-closing adjustments. The transaction is expected to close in the second quarter of 2026, subject to the satisfaction of customary closing conditions.

Recently, 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 effect 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.

The Company’s Segments

UL Solutions reports its financial results through three segments: Industrial, Consumer and Software and Advisory. Effective beginning in the first quarter of 2026, the Company reorganized its segments to be consistent with how the Chief Executive Officer will evaluate business performance and allocate resources. The amounts and discussions included within this Form 10-K reflect the Company’s segment structure that existed through the end of 2025. Refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 22, “Subsequent Events” for further details.

Industrial

Industrial is a segment of the Company’s TIC business. This segment represented 44% of the Company’s consolidated revenue for both the years ended December 31, 2025 and 2024. The Company generates revenue in this segment primarily through three major service categories: Certification Testing; Ongoing Certification Services; and Non-certification Testing and Other Services. The Industrial segment provides TIC services to help ensure that the Company’s 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 Company believes the products it tests, certifies and inspects in this segment generally represent very high cost of failure components, which in turn drives customers in this segment to choose UL Solutions based on its deep technical expertise, consistency and quality of service.

Consumer

Consumer is a segment of the Company’s TIC business. This segment represented 43% of the Company’s consolidated revenue for both the years ended December 31, 2025 and 2024. The Company generates revenue in this reportable segment primarily through three major service categories: Certification Testing; Ongoing Certification Services; and Non-certification Testing and Other Services. 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, including new mobility, smart products and 5G. 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.

Software and Advisory

The Software and Advisory segment provides complementary software and advisory solutions that extend the value proposition of TIC services the Company offers. This segment represented 13% of the Company’s consolidated revenue for both the years ended December 31, 2025 and 2024. The Company generates revenue in this segment through two major service categories: Software and Non-certification Testing and Other Services. The software and technical advisory offerings enable the Company’s customers to manage complex regulatory requirements, deliver supply chain transparency and operationalize sustainability.

Components of the Company’s Results of Operations

Revenue

The Company generates revenue from the services it provides to customers through the following service categories.

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Certification Testing

The Company evaluates products, components and systems according to global or regional regulatory requirements and other design and performance specifications. Select certification testing services include testing to global or regional standards, engineering evaluation and project review and functional safety testing of embedded software. Certification testing services generally align with the new product development cycle and help customers mitigate risk, demonstrate compliance with regulatory requirements and deliver confidence to businesses and consumers, resulting in demand for ongoing certification services. As a result of the certification process, the Company may authorize its customers to use the Company’s certification marks, including the UL Mark, on their products, packaging and marketing collateral as part of their manufacturing, distribution and marketing processes to demonstrate to the marketplace that their product has met the applicable requirements. Certification testing services often lead to ongoing certification services to support the continued safety, compliance and performance objectives of the customer.

Ongoing Certification Services

To maintain the right to use the Company’s certification marks, including the UL Mark, and meet certain regulatory requirements, the Company’s customers must meet certain certification program requirements, including mandatory inspection and monitoring by the Company. These requirements, addressed through standard certification and inspection services, are designed to validate the continued compliance of the Company’s customers’ previously certified products, components and systems. Services are delivered through periodic inspections, initial and follow-up audits, sample testing and UL Solutions label usage. The frequency and combination of these services can vary based on product, component or system type, production volume and historical risk-based customer compliance. These ongoing certification services are designed and executed to help the Company’s customers confirm ongoing compliance and to help protect the integrity of the UL Mark. Select services include factory inspection and testing to confirm products that are being produced match the configuration of products that were tested and certified.

Non-certification Testing and Other Services

The Company offers testing services to address performance and other requirements that may not be required by any regulation and may not result in a certification, but are still desired by the Company’s customers to help ensure the safety, performance and reliability of their products. Select services include on-site and remote inspections, audits and field engineering specialty services, testing for energy efficiency, wireless and electromagnetic compatibility, quality, chemical and reliability for customers in medical devices, information technologies, appliances, HVAC and lighting. For retail and consumer customers, the Company offers testing such as color-matching, sensory, emissions and flame resistance. Lastly, the Company offers advisory and technical services to support the Company’s customers in managing their safety, compliance, regulatory risk and sustainability programs.

Software

The Company provides SaaS and license-based software solutions, including implementation and training services related to software, to enable the Company’s customers to manage complex regulatory requirements, deliver supply chain transparency and operationalize sustainability. The Company’s SaaS and licensed software solutions provide data-driven product stewardship, chemicals management, supply chain insights, environmental, social and governance (“ESG”) data and reporting, environmental, health and safety (“EHS”) training, management and compliance, and additional regulatory driven software solutions.

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

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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 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 includes services and materials expenses including 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.

Goodwill Impairment

During the third quarter of 2023, the Company identified a triggering event and performed a quantitative impairment assessment for a reporting unit in the Consumer segment, which resulted in a pre-tax goodwill impairment charge of $37 million. Refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 9, “Goodwill” for further details.

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 8, “Notes to the Consolidated Financial Statements”, Note 18, “Restructuring” for further details.

Operating Income

Operating income is calculated as revenue less cost of revenue, selling, general and administrative expenses, goodwill impairment 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, FX and Goodwill Impairment 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

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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) Income, net

Other (expense) income, 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, gains and losses on equity investments, non-operating pension and postretirement benefit expenses and gains on divestitures.

Income Before Income Taxes

Income before income taxes is calculated as revenue less cost of revenue, selling, general and administrative expenses, goodwill impairment, restructuring, interest expense and other (expense) income, 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, goodwill impairment, restructuring, interest expense, other (expense) income, 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.

Year Ended December 31,

Change

(in millions)

2025

% Revenue

2024

% Revenue

Revenue

$

3,053 

N/A

$

2,870 

N/A

$

183 

Cost of revenue

1,543 

50.5 

%

1,478 

51.5 

%

65 

Selling, general and administrative expenses

953 

31.2 

%

931 

32.4 

%

22 

Restructuring

35 

1.1 

%

(1)

— 

%

36 

Operating income

522 

17.1 

%

462 

16.1 

%

60 

Interest expense

(41)

(1.3)

%

(55)

(1.9)

%

14 

Other (expense) income, net

(11)

(0.4)

%

8 

0.3 

%

(19)

Income before income taxes

470 

15.4 

%

415 

14.5 

%

55 

Income tax expense

125 

4.1 

%

70 

2.4 

%

55 

Net income

$

345 

11.3 

%

$

345 

12.0 

%

— 

71

Revenue

Year Ended December 31,

(in millions)

2025

2024

Change

% Change

Industrial

$

1,341 

$

1,254 

$

87 

6.9 

%

Consumer

1,319 

1,238 

81 

6.5 

%

Software and Advisory

393 

378 

15 

4.0 

%

Total

$

3,053 

$

2,870 

$

183 

6.4 

%

Revenue increased by $183 million, or 6.4%, for the year ended December 31, 2025, as compared to the same period in 2024. Revenue increased on an organic basis by $179 million, or 6.2%, due to organic growth across all segments in 2025, driven by the Industrial and Consumer segments in Certification Testing, Non-certification Testing and Other Services and Ongoing Certification Services revenue. FX increased revenue by $12 million, or 0.4%, primarily due to the relative strength of the euro. Acquisitions / Divestitures decreased revenue by $8 million, or 0.3%, primarily due to the sale of the payments testing business in the Industrial segment in 2024.

Year Ended December 31, 2025

(in millions)

Organic

Acquisition / Divestiture

FX

Total

Organic % Change

Total % Change

Revenue change

Industrial

$

89 

$

(8)

$

6 

$

87 

7.1 

%

6.9 

%

Consumer

76 

— 

5 

81 

6.1 

%

6.5 

%

Software and Advisory

14 

— 

1 

15 

3.7 

%

4.0 

%

Total

$

179 

$

(8)

$

12 

$

183 

6.2 

%

6.4 

%

Cost of Revenue

Cost of revenue increased by $65 million, or 4.4%, for the year ended December 31, 2025, as compared to the same period in 2024. On an organic basis, employee compensation expenses increased $20 million, related to base salary and headcount increases. In addition, depreciation and amortization increased $16 million related to the completion of additional laboratory capacity and software placed in service. FX increased cost of revenue by $8 million, primarily due to the relative strength of the euro.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $22 million, or 2.4%, for the year ended December 31, 2025, as compared to the same period in 2024. On an organic basis, employee compensation expenses increased $24 million, primarily due to base salary increases and higher costs associated with performance-based incentives, including the Company’s long-term incentive awards and the Company’s annual cash bonus plan. In addition, technology costs increased $14 million on an organic basis, primarily associated with cloud computing service arrangements. The increase was partially offset by an $11 million organic decrease in professional fees, in part due to the Company’s public offerings and higher accounting and legal costs in the prior year. FX increased selling, general and administrative expenses by $5 million, primarily due to the relative strength of the euro.

Restructuring

The Company incurred $35 million of restructuring charges, primarily related to employee separation expenses in connection with the previously announced 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 of $5-10 million primarily expected to be incurred in the first half of 2026.

Interest Expense

Interest expense decreased by $14 million for the year ended December 31, 2025, as compared to the same period in 2024. The decrease is primarily due to lower balances in the current period on the Company’s credit facilities. During the fourth quarter of 2025, the Company entered into a new revolving credit agreement and repaid in full all indebtedness and other

72

obligations outstanding under, and terminated, its previous credit facility. For additional information refer to “—Liquidity and Capital Resources.”

Other (Expense) Income, net

Other (expense) income, net decreased by $19 million for the year ended December 31, 2025, as compared to the same period in 2024, primarily due to a $24 million gain on divestiture of the Company’s payments testing business in May 2024.

Income Tax

The Company’s effective income tax rate was 26.6% for the year ended December 31, 2025, compared to 16.9% for the year ended December 31, 2024. For the year ended December 31, 2025, the effective tax rate differed from the U.S. federal statutory tax rate primarily due to foreign tax effects (including the impact of valuation allowances on foreign deferred tax assets), limitations on current year compensation deductions under U.S. Internal Revenue Code Section 162(m), state income tax, and U.S. tax on Global Intangible Low Taxed Income net of related foreign tax credits. For the year ended December 31, 2024, the effective rate differed from the U.S. federal statutory tax rate primarily due to earnings subject to lower tax rates in certain foreign jurisdictions and a reduction to uncertain tax positions as a result of expiration of the statute of limitations. This was partially offset by a reduction to previously established deferred tax assets due to the Company becoming subject to Section 162(m) of the U.S. Internal Revenue Code, which limits U.S. public company compensation expenses of certain executive officers that were previously deductible as a private company, as well as Section 162(m) limitations on current year compensation deductions.

Several countries in which the Company operates have enacted into their local legislation, effective either January 1, 2024, or January 1, 2025, aspects of the Organisation for Economic Co-operation and Development’s Pillar Two rules, which impose a 15% corporate minimum tax.

The effective tax rate for the year ended December 31, 2025 of 26.6% was higher than the effective tax rate for the year ended December 31, 2024 of 16.9% primarily due to the impact of the Qualified Domestic Minimum Top-up Tax, a subset of the Pillar Two rules that became effective on January 1, 2025, as well as a reduction to uncertain tax positions in the year ended December 31, 2024. Refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 12, “Income Taxes” for a full reconciliation of the effective tax rate to the U.S. federal statutory rate.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes several corporate tax provisions that apply to the Company, such as the permanent extension of certain expiring provisions of the U.S. Tax Cuts and Jobs Act and modifications to the international tax framework and business interest expense limitations. The Company has assessed the impact of the OBBBA and has determined that there is no material impact to its consolidated financial statements.

Industrial

The Industrial segment provides TIC 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.

73

The following tables summarize the change in Industrial’s revenue and operating income for the periods presented:

Year Ended December 31,

(in millions)

2025

2024

Change

% Change

Revenue

$

1,341 

$

1,254 

$

87 

6.9 

%

Employee compensation

609 

595 

14 

2.4 

%

Services and materials

283 

274 

9 

3.3 

%

Depreciation and amortization

56 

47 

9 

19.1 

%

Restructuring

7 

— 

7 

— 

%

Segment operating income

$

386 

$

338 

$

48 

14.2 

%

Segment operating income margin

28.8 

%

27.0 

%

Year Ended December 31, 2025

(in millions)

Organic

Acquisition / Divestiture

FX

Total

Revenue change

$

89 

$

(8)

$

6 

$

87 

Segment operating income change

$

48 

$

(1)

$

1 

$

48 

Revenue

Revenue increased by $87 million, or 6.9%, for the year ended December 31, 2025, as compared to the same period in 2024. On an organic basis, revenue increased $89 million or 7.1%, primarily due to growth in Certification Testing revenue of $48 million across most industries, driven by continued demand for energy and automation and fire safety, price increases, and new capacity provided by recent laboratory investments. Ongoing Certification Services revenue increased $34 million across most industries due in part to price increases and additional volume. Acquisitions / Divestitures decreased revenue by $8 million, or 0.6%, primarily due to the sale of the payments testing business in 2024. FX increased revenue by $6 million, or 0.5%, primarily due to the relative strength of the euro.

Segment Operating Income

Segment operating income increased by $48 million, or 14.2%, for the year ended December 31, 2025, as compared to the same period in 2024 primarily due to the $89 million increase in organic revenue noted above. This was partially offset by a $41 million organic increase in expenses, primarily due to higher employee compensation of $15 million related to base salary and headcount increases. Depreciation and amortization also increased $8 million on an organic basis primarily related to the completion of additional laboratory capacity. The Restructuring Plan charges also increased expenses by $7 million during the current period. In addition, technology costs increased $6 million on an organic basis, primarily associated with cloud computing service arrangements.

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, including new mobility, smart products and 5G. 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.

74

The following tables summarize the change in Consumer’s revenue and operating income for the periods presented:

Year Ended December 31,

(in millions)

2025

2024

Change

% Change

Revenue

$

1,319 

$

1,238 

$

81 

6.5 

%

Employee compensation

745 

715 

30 

4.2 

%

Services and materials

345 

331 

14 

4.2 

%

Depreciation and amortization

81 

79 

2 

2.5 

%

Restructuring

26 

(1)

27 

n/m(a)

Segment operating income

$

122 

$

114 

$

8 

7.0 

%

Segment operating income margin

9.2 

%

9.2 

%

________

(a)not meaningful

Year Ended December 31, 2025

(in millions)

Organic

Acquisition / Divestiture

FX

Total

Revenue change

$

76 

$

— 

$

5 

$

81 

Segment operating income change

$

13 

$

(3)

$

(2)

$

8 

Revenue

Revenue increased by $81 million, or 6.5%, for the year ended December 31, 2025, as compared to the same period in 2024. On an organic basis, revenue increased $76 million, or 6.1%, primarily due to Non-certification Testing and Other Services revenue growth of $43 million in consumer technology driven by increased demand for electromagnetic compatibility testing for consumer electronics and in retail. FX increased revenue by $5 million, or 0.4%, primarily due to the relative strength of the euro.

Segment Operating Income

Segment operating income increased by $8 million for the year ended December 31, 2025, as compared to the same period in 2024, primarily due to the $76 million increase in organic revenue noted above. This was partially offset by a $63 million organic increase in expenses, primarily due to charges of $28 million in the current period related to the Restructuring Plan. Employee compensation also increased $25 million on an organic basis, primarily related to base salary increases. In addition, technology costs increased $8 million on an organic basis, primarily associated with cloud computing service arrangements.

Software and Advisory

The Software and Advisory segment provides complementary software and advisory solutions that extend the value proposition of TIC services the Company offers. The software and technical advisory offerings enable the Company’s customers to manage complex regulatory requirements, deliver supply chain transparency and operationalize sustainability.

75

The following tables summarize the change in Software and Advisory’s revenue and operating income for the periods presented:

Year Ended December 31,

(in millions)

2025

2024

Change

% Change

Revenue

$

393 

$

378 

$

15 

4.0 

%

Employee compensation

261 

255 

6 

2.4 

%

Services and materials

65 

67 

(2)

(3.0)

%

Depreciation and amortization

51 

46 

5 

10.9 

%

Restructuring

2 

— 

2 

— 

%

Segment operating income

$

14 

$

10 

$

4 

40.0 

%

Segment operating income margin

3.6 

%

2.6 

%

Year Ended December 31, 2025

(in millions)

Organic

Acquisition / Divestiture

FX

Total

Revenue change

$

14 

$

— 

$

1 

$

15 

Segment operating income change

$

8 

$

(4)

$

— 

$

4 

Revenue

Revenue increased by $15 million, or 4.0%, for the year ended December 31, 2025, as compared to the same period in 2024. On an organic basis, revenue increased $14 million, or 3.7%, primarily driven by demand for software, including retail product compliance.

Segment Operating Income

Segment operating income increased by $4 million for the year ended December 31, 2025, as compared to the same period in 2024, primarily due to the $14 million increase in organic revenue noted above. This was partially offset by a $6 million organic increase in expenses, primarily driven by higher employee compensation of $5 million related to base salary increases. Depreciation and amortization also increased $5 million on an organic basis related to additional software placed in service.

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.

76

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 (income), 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 (income), 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.

The table below presents these non-GAAP measures with the most directly comparable GAAP measures.

Year Ended December 31,

(in millions, unless otherwise stated)

2025

2024

2023

Net income

$

345 

$

345 

$

276 

Net income margin

11.3 

%

12.0 

%

10.3 

%

Adjusted EBITDA

$

792 

$

656 

$

563 

Adjusted EBITDA margin

25.9 

%

22.9 

%

21.0 

%

Adjusted Net Income

$

423 

$

361 

$

304 

Adjusted Net Income margin

13.9 

%

12.6 

%

11.4 

%

Diluted Earnings per Share

$

1.60 

$

1.62 

$

1.30 

Adjusted Diluted Earnings Per Share

$

1.99 

$

1.70 

$

1.44 

Net Cash provided by Operating Activities

$

600 

$

524 

$

467 

Net cash provided by operating activities margin

19.7 

%

18.3 

%

17.4 

%

Free Cash Flow

$

403 

$

287 

$

252 

Free Cash Flow margin

13.2 

%

10.0 

%

9.4 

%

Adjusted EBITDA

The Company defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense, interest expense, other expense (income), 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.

77

The table below reconciles net income to Adjusted EBITDA.

Year Ended December 31,

(in millions, unless otherwise stated)

2025

2024

2023

Net income

$

345 

$

345 

$

276 

Depreciation and amortization expense

188 

172 

154 

Interest expense

41 

55 

35 

Other expense (income), net

11 

(8)

(13)

Income tax expense

125 

70 

70 

Stock-based compensation

47 

23 

— 

Goodwill impairment

— 

— 

37 

Restructuring

35 

(1)

4 

Adjusted EBITDA

$

792 

$

656 

$

563 

Revenue

$

3,053 

$

2,870 

$

2,678 

Net income margin

11.3 

%

12.0 

%

10.3 

%

Adjusted EBITDA margin

25.9 

%

22.9 

%

21.0 

%

78

The table below reconciles segment operating income to segment Adjusted EBITDA.

Year Ended December 31,

(in millions, unless otherwise stated)

2025

2024

2023

Industrial

Segment operating income

$

386 

$

338 

$

308 

Depreciation and amortization expense

56 

47 

38 

Stock-based compensation

19 

9 

— 

Restructuring

7 

— 

1 

Adjusted EBITDA

$

468 

$

394 

$

347 

Revenue

$

1,341 

$

1,254 

$

1,146 

Operating income margin

28.8 

%

27.0 

%

26.9 

%

Adjusted EBITDA margin

34.9 

%

31.4 

%

30.3 

%

Consumer

Segment operating income

$

122 

$

114 

$

45 

Depreciation and amortization expense

81 

79 

75 

Stock-based compensation

20 

11 

— 

Goodwill impairment

— 

— 

37 

Restructuring

26 

(1)

2 

Adjusted EBITDA

$

249 

$

203 

$

159 

Revenue

$

1,319 

$

1,238 

$

1,172 

Operating income margin

9.2 

%

9.2 

%

3.8 

%

Adjusted EBITDA margin

18.9 

%

16.4 

%

13.6 

%

Software and Advisory

Segment operating income

$

14 

$

10 

$

15 

Depreciation and amortization expense

51 

46 

41 

Stock-based compensation

8 

3 

— 

Restructuring

2 

— 

1 

Adjusted EBITDA

$

75 

$

59 

$

57 

Revenue

$

393 

$

378 

$

360 

Operating income margin

3.6 

%

2.6 

%

4.2 

%

Adjusted EBITDA margin

19.1 

%

15.6 

%

15.8 

%

Adjusted EBITDA

$

792 

$

656 

$

563 

Adjusted Net Income

The Company defines Adjusted Net Income as net income adjusted for other expense (income), 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.

79

The table below reconciles net income to Adjusted Net Income.

Year Ended December 31,

(in millions, unless otherwise stated)

2025

2024

2023

Net income

$

345 

$

345 

$

276 

Other expense (income), net

11 

(8)

(13)

Stock-based compensation

47 

23 

— 

Goodwill impairment

— 

— 

37 

Restructuring

35 

(1)

4 

Tax effect of adjustments(a)

(15)

2 

— 

Adjusted Net Income

$

423 

$

361 

$

304 

Revenue

$

3,053 

$

2,870 

$

2,678 

Net income margin

11.3 

%

12.0 

%

10.3 

%

Adjusted Net Income margin

13.9 

%

12.6 

%

11.4 

%

__________________

(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 (income), 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.

Year Ended December 31,

2025

2024

2023

Diluted earnings per share

$

1.60 

$

1.62 

$

1.30 

Other expense (income), net

0.06 

(0.04)

(0.07)

Stock-based compensation

0.23 

0.12 

— 

Goodwill impairment

— 

— 

0.19 

Restructuring

0.17 

(0.01)

0.02 

Tax effect of adjustments(a)

(0.07)

0.01 

— 

Adjusted Diluted Earnings Per Share

$

1.99 

$

1.70 

$

1.44 

__________

(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.

80

The table below reconciles net cash provided by operating activities to Free Cash Flow.

Year Ended December 31,

(in millions)

2025

2024

2023

Net cash provided by operating activities

$

600 

$

524 

$

467 

Capital expenditures

(197)

(237)

(215)

Free Cash Flow

$

403 

$

287 

$

252 

Revenue

$

3,053 

$

2,870 

$

2,678 

Net cash provided by operating activities margin

19.7 

%

18.3 

%

17.4 

%

Free Cash Flow margin

13.2 

%

10.0 

%

9.4 

%

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. 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 December 31, 2025, the Company had $295 million in cash and cash equivalents, $8 million in short-term investments, and $803 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:

Year Ended December 31,

(in millions)

2025

2024

2023

Net cash provided by operating activities

$

600 

$

524 

$

467 

Net cash used in investing activities

$

(204)

$

(234)

$

(175)

Net cash used in financing activities

$

(396)

$

(284)

$

(294)

Cash flows from operating activities

Net cash provided by operating activities was $600 million for the year ended December 31, 2025, an increase of $76 million compared to net cash provided by operating activities of $524 million for the same period in 2024. The increase was primarily driven by higher net income after non-cash adjustments due to business performance.

Cash flows from investing activities

Net cash used in investing activities was $204 million for the year ended December 31, 2025, a decrease of $30 million compared to net cash used in investing activities of $234 million for the same period in 2024. The decrease in cash used in

81

investing activities was primarily driven by a $40 million decrease in capital expenditures and a $25 million decrease in cash paid for acquisitions compared to the same period in 2024. The decrease was partially offset by proceeds from the divestiture of the Company’s payments testing business of $29 million during the year ended December 31, 2024.

Cash flows from financing activities

Net cash used in financing activities was $396 million for the year ended December 31, 2025, an increase of $112 million compared to net cash used in financing activities of $284 million for the same period in 2024. The change was primarily driven by an $88 million increase in repayments net of proceeds on the Company’s credit facilities compared to the same period in 2024 and $15 million in employee taxes paid on settlement of stock-based compensation for the year ended December 31, 2025 which did not occur for the same period in 2024.

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 decreased $40 million, to $197 million for the year ended December 31, 2025, compared to $237 million for the same period in 2024.

Long-Term Debt

2022 Credit Facility

In January 2022, the Company entered into a credit agreement with Bank of America, N.A. and certain other lenders, which provided for senior unsecured credit facilities in an aggregate principal amount of $1.25 billion (collectively, and as amended, the “2022 Credit Facility”), consisting of term loans in an initial aggregate principal amount of $500 million and revolving loan commitments in an initial aggregate commitment amount of $750 million (including a $25 million sub-facility for letters of credit). The 2022 Credit Facility included an accordion feature permitting an increase in the 2022 Credit Facility by an aggregate amount of up to $625 million (of which up to $400 million may consist of term loans), 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. The Company’s wholly owned subsidiary, UL LLC, a Delaware limited liability company, provided a guaranty of its obligations thereunder. The 2022 Credit Facility was set to mature in January 2027 and could be prepaid without fees or penalties. The Company had $6 million outstanding in letters of credit, surety bonds, and performance and other guarantees with financial institutions as of December 31, 2024 under the 2022 Credit Facility.

In June 2024, the Company entered into an amendment (the “First Credit Facility Amendment”) to the 2022 Credit Facility with Bank of America, N.A. and certain other lenders. The First Credit Facility Amendment provided, among other things, for (i) the replacement of the Bloomberg Short-term Bank Yield (“BSBY”) with Term SOFR plus a SOFR adjustment as a benchmark rate for interest periods commencing subsequent to June 28, 2024; (ii) UL Solutions Inc., which was previously the guarantor of the facility, became the named borrower, and UL LLC, which was previously the named borrower, became the guarantor.

Effective from the date of the First Credit Facility Amendment, borrowings under the 2022 Credit Facility bore interest at a rate per annum equal to, at the Company’s option, (a) in the case of U.S. dollar loans, the Term SOFR plus a SOFR adjustment of 0.1% plus a margin, and for all other currencies, a specified benchmark rate for the applicable currency plus, in certain instances, a specified spread adjustment plus a margin (loans with a rate based on this clause (a), “benchmark rate loans”) or (b) for U.S. dollar loans only, the base rate plus a margin (loans with a rate based on this clause (b), “base rate loans”). Prior to the First Credit Facility Amendment, borrowings bore interest on the same terms with the exception that the BSBY Index rate plus a margin was used as the base rate in place of Term SOFR. As of December 31, 2024, the margin was 1.125% for benchmark rate loans and 0.125% for base rate loans but could be adjusted based on the Company’s most recently tested consolidated net leverage ratio and could vary from 1.0% to 1.5% for benchmark rate loans and 0% to 0.5% for base rate loans. The unused commitment fee could vary from 0.1% to 0.2% based on the Company’s most recently tested consolidated net leverage ratio.

The 2022 Credit Facility also included a financial covenant tested quarterly which required the Company to maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0, calculated on a consolidated basis for each consecutive four

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fiscal quarter period, with an increase in the maintenance level to 4.0 to 1.0 for each of the four test periods immediately following any permitted acquisition that involves the payment of aggregate consideration in excess of $100 million, subject to a two fiscal quarter rest period between increases for separate acquisitions. The calculation of the consolidated net leverage ratio permitted the netting of up to $250 million of unrestricted cash from funded debt.

The 2022 Credit Facility included customary representations and warranties, covenants and events of default, subject to certain customary exceptions, materiality thresholds and grace periods. The covenants included, among other things, financial reporting, maintenance of line of business, notices of default and other material changes, as well as limitations on investments and acquisitions, mergers and transfers of all or substantially all assets, dividends and distributions, burdensome contracts with affiliates, liens and indebtedness. Future borrowings under the 2022 Credit Facility were subject to the satisfaction of customary conditions, including the absence of any default or event of default and the accuracy of representations and warranties.

As described below, in connection with the entry into the 2025 Credit Facility, the Company repaid in full all indebtedness and other obligations outstanding under, and terminated, the 2022 Credit Facility.

2025 Credit Facility

In October 2025, the Company entered into a credit agreement, by and among the Company 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”), with a $25 million sub-limit for the issuance of letters of credit. The Credit Agreement includes 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. The Borrowers’ obligations (other than the Company’s) under the Credit Agreement are guaranteed by the Company. Initial proceeds were used to refinance the outstanding amounts under the 2022 Credit Facility. The 2025 Credit Facility matures on October 28, 2030 and may be prepaid without fees or penalties, subject to reimbursement of the lenders’ customary breakage and redeployment costs in applicable cases. The Company had $6 million outstanding letters of credit under the 2025 Credit Facility as of December 31, 2025.

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%) plus a margin that ranges from 0.0% to 0.375% per annum. The unused commitment fee varies from 0.090% to 0.175% based on the Company’s current debt rating and its most recently tested consolidated net leverage ratio.

The 2025 Credit Facility also includes a financial covenant, tested quarterly, which requires the Company to maintain a consolidated net leverage ratio of not greater than 3.5 to 1.0, calculated on a consolidated basis for each consecutive four fiscal quarter period, with an increase in the maintenance level to 4.0 to 1.0 for each of the four test periods immediately following any permitted acquisition that involves the payment of aggregate consideration in excess of $100 million, commencing with the fiscal quarter in which such permitted acquisition occurred, subject to a two fiscal quarter rest period between increases for separate acquisitions. The calculation of the consolidated net leverage ratio permits the netting of up to $250 million of unrestricted cash from funded debt. As of December 31, 2025, the Company was in compliance with all covenants under this facility.

The 2025 Credit Facility includes customary representations and warranties, covenants and events of default, subject to certain customary exceptions, materiality thresholds and grace periods. The covenants include, among other things, financial reporting, maintenance of line of business, notices of default and other material changes, as well as limitations on investments and acquisitions, mergers and transfers of all or substantially all assets, dividends and distributions, burdensome contracts with affiliates, liens and indebtedness. Future borrowings under the 2025 Credit Facility are subject to the satisfaction of customary conditions, including the absence of any default or event of default and the accuracy of representations and warranties.

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Senior Notes

In October 2023, the Company issued $300 million in aggregate principal amount of 6.500% senior notes due 2028 (the “notes”). The notes were sold to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The notes are senior unsecured obligations of UL Solutions Inc. and were unconditionally guaranteed by UL LLC, the Company’s wholly owned subsidiary, until October 2025. In connection with termination of the 2022 Credit Facility, the guaranty by UL LLC of the Company’s obligations under the notes was released. The Company used the net proceeds from the offering of the notes, together with borrowings under the 2022 Credit Facility and cash on hand, to fund a $600 million special cash dividend, which was paid to UL Standards & Engagement in December 2023.

In connection with the issuance of the notes, the Company entered into a registration rights agreement on the same date. In September 2025, pursuant to the registration rights agreement, the Company completed an exchange offer, pursuant to which the Company exchanged all of the outstanding notes for new 6.500% senior notes due 2028 registered under the Securities Act (the “exchange notes”). The terms of the exchange notes are substantially the same as the notes.

UL Solutions pays interest on the notes semi-annually in arrears on April 20 and October 20 of each year, which began on April 20, 2024.

Pursuant to the indenture that governs the notes (the “indenture”), there are certain limitations on the ability of the Company and its restricted subsidiaries to create or incur liens and to enter into sale and leaseback transactions. The indenture also imposes certain limitations on the ability of the Company to merge, consolidate or amalgamate with or into any other person (other than a merger of a wholly owned subsidiary into the Company) or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of the property of the Company in any one transaction or series of related transactions. These limitations are subject to significant exceptions.

If a change of control triggering event occurs, as defined in the indenture, UL Solutions will be required to offer to purchase the notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any. The Company may also redeem some or all of the notes at any time prior to their maturity pursuant to the indenture’s provisions and limitations.

Dividends

On February 10, 2026, the Company declared a regular cash dividend of 14.5 cents per share. The Company paid regular quarterly cash dividends on its common stock of 13 cents per share in 2025, 12.5 cents per share in 2024 and 10 cents per share in 2023. The Company will periodically assess the size of the regular quarterly dividend based on its dividend policy and certain factors described in this Annual Report. The Company cannot give any assurance that it will continue to declare dividends in any particular amounts, or at all, in the future.

For the years ended December 31, 2025 and 2024, the Company paid dividends to stockholders of $104 million and $100 million, respectively. For the year ended December 31, 2023, the Company paid dividends of $680 million to its then sole stockholder, UL Standards & Engagement, which comprised quarterly dividends of $20 million and a $600 million special cash dividend in December 2023.

Under the Company’s dividend policy, the determination as to the declaration and payment of dividends, if any, is at the discretion of the Company’s board of directors, subject to capital availability, applicable laws and compliance with contractual restrictions and covenants in the agreements governing the Company’s current and future indebtedness. Any such determination will also depend upon periodic determinations by the Company’s board of directors that cash dividends are in the best interest of the Company’s stockholders, and will be based upon its earnings, cash flow, business outlook and prospects, results of operations, financial condition, liquidity, future cash requirements and availability and other factors that the Company’s board of directors may deem relevant.

The jurisdictions in which the Company’s subsidiaries are incorporated generally have corporate law restrictions on the ability to pay dividends, which the Company is required to observe when effecting intra-group dividends. There are, however, generally no regulatory restrictions on the ability of most of the Company’s subsidiaries to pay dividends or make other distributions; however, UL-CCIC Company Limited (“UL-CCIC”) and the Company’s other Chinese subsidiaries are subject to certain regulatory controls on foreign exchange in China. The State Administration for Foreign Exchange (“SAFE”), under the authority of the People’s Bank of China, is in charge of the conversion of renminbi into other currencies

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and the remittance thereof abroad and, under Chinese foreign exchange regulations, cash generated from UL-CCIC may not be used to pay dividends without SAFE approval. The Company must also obtain SAFE approval to use cash generated from its China-based operations, including UL-CCIC, to pay debts in a currency other than renminbi owed to entities outside China, or to make capital expenditure payments outside China in a currency other than renminbi. In addition, the payment of dividends by UL-CCIC requires the approval of both of its shareholders.

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 Consolidated Balance Sheet and include commitments for outsourced services, facilities, capital expenditures, cloud service arrangements and various other types of noncancelable contracts.

Refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 19, “Commitments and Contingencies” 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, refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 1, “Significant Accounting Policies”.

Critical Accounting Policies and Estimates

The Company prepares its 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.

The Company’s significant accounting policies are discussed in Item 8, “Notes to the Consolidated Financial Statements”, Note 1, “Significant Accounting Policies”; however, the following discussion pertains to accounting policies the Company believes are most critical to the portrayal of the Company’s financial condition and results of operations and that require significant, difficult, subjective or complex judgments or estimates. Other companies in similar businesses may use different estimation policies and methodologies, which may affect the comparability of the Company’s financial statements, financial condition, results of operations and cash flows to those of other companies.

Revenue Recognition

The majority of the Company’s revenue from contracts with customers represents revenue from services recognized over time as performance obligations are satisfied. Revenue from over-time arrangements is recognized either on a straight line basis as the service is provided to the customer, or using an input method, which requires the Company to make estimates, in particular in relation to measuring progress towards completion. For arrangements recognized over time using an input method, progress towards completion is based on the relationship between the time elapsed of each project phase relative to the expected duration of that phase. The portion of a project’s revenue to be recognized is determined based on the time elapsed between the start-date of each project phase relative to its estimated duration. The start-date of each phase is based on the date that work begins on the phase and the estimated duration is determined using an analysis of historical data from similar projects. Management applies judgment in determining the expected duration of each phase. The portion of a project’s revenue estimated as earned, but not yet completed, and recognized as revenue, is included in contract assets or as a reduction to contract liabilities.

A 10% increase or decrease to estimated duration of all revenue phases would result in a $3 million decrease or a $3 million increase in revenue, respectively, for the year ended December 31, 2025 based on contracts in-process at the balance sheet date.

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Goodwill

Goodwill is tested for impairment annually in the fourth quarter, or more frequently if an event occurs or conditions change that would indicate it is more likely than not that the fair value of a reporting unit is below its carrying amount. The Company’s reporting units have been identified as one level below its operating segments. The goodwill impairment testing is performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

To evaluate the recoverability of a reporting unit’s goodwill the Company has the option to first perform a qualitative analysis. If the qualitative analysis indicates it is more likely than not that the fair value of a reporting unit is below its carrying amount, the Company performs a quantitative impairment assessment for that reporting unit.

The Company’s quantitative assessment consists of a fair value calculation for each reporting unit that combines an income approach and a market approach, using an equal weighting. The quantitative assessment requires the application of a number of significant assumptions which are further described below, including estimated future cash flows of the reporting unit, discount rates, and market multiples.

The fair value using the income approach is determined based on the present value of estimated future cash flows of the reporting unit, discounted at an appropriate risk‑adjusted rate. The Company uses its internally developed long-range plans to estimate future cash flows, which include an estimate of long‑term future growth rates based on its most recent views of the long‑term outlook for each reporting unit. Development of the Company’s long-range plans includes consideration of current and projected levels of income for the reporting unit based on management’s plans for that business, business trends, market and economic conditions, as well as other relevant factors. The discount rate is based on the weighted average cost of capital for the reporting unit. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in the Company’s long-range plans.

The fair value using the market approach is derived from market multiples using comparable publicly traded companies for a group of benchmark companies. The selection of comparable businesses is based on the markets in which the reporting units operate given consideration to risk profiles, size, geography and diversity of products and services.

During the third quarter of 2023, the Company identified a triggering event and performed a quantitative impairment assessment for a reporting unit in the Consumer segment, which resulted in a pre-tax impairment charge of $37 million. This partial impairment charge was the result of lower than expected demand for Non-certification Testing and Other Services in the mobility industry, which was impacted by auto industry conditions in 2023, including slowing of the pace of electric vehicle transition, labor uncertainties, and the impact of more moderate growth expectations for the business. At December 31, 2025, the remaining goodwill related to this reporting unit was no longer considered at risk of further impairment.

The impairment assessment for this reporting unit consisted of a fair value calculation that combined an income approach and a market approach, using an equal weighting, and a number of significant assumptions including estimated future revenue growth rates, EBITDA margins, discount rates and market multiples. The fair value using the income approach was determined based on the present value of the estimated future cash flows of the reporting unit, discounted using the weighted average cost of capital. The Company used its internally developed long-range plans to estimate future cash flows for the business, which included estimated future revenue growth rates and EBITDA margins. Development of the long-range plans includes consideration of current and projected levels of income for the reporting unit based on management’s plans for the business, business trends, market and economic conditions, as well as other relevant factors. The fair value using the market approach was derived from market multiples using comparable publicly traded companies for a group of benchmark companies. The selection of comparable businesses was based on the markets in which the reporting unit operates giving consideration to risk profiles, size, geography and diversity of products and services. These estimates and assumptions were considered Level 3 inputs under the fair value hierarchy. The Company believes the assumptions used in the impairment assessment are reasonable and consistent with assumptions that would be used by other market participants. However, such assumptions are inherently uncertain, and a change in assumptions could change the estimated fair value of the reporting unit. Therefore, future impairment charges could be required, which could have an adverse effect on the Company’s financial condition and results of operations.

The Company engaged a third-party valuation specialist to assist in the analysis of the fair value of this reporting unit. All judgments, significant assumptions and estimates, and forecasts were either provided by or reviewed by management. While a third-party valuation specialist was used for assistance, the fair value analysis reflects the conclusions of management and not those of any third party.

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The following table illustrates the impact of changes in the significant assumptions used in the income and market approaches on the fair value of the reporting unit, holding all other assumptions constant:

Change

Decrease to fair value determined by respective approach

 (in millions)

Income approach

Revenue growth rate in each year of the forecast period

 -100bps

$

4 

EBITDA margin in each year of the forecast period

 -100bps

$

6 

Discount rate

 +100bps

$

6 

Market approach

Market multiples

-10 

%

$

6 

The Company did not recognize any impairments of goodwill for the years ended December 31, 2025 or 2024.

Pension

The Company provides a range of benefits to its employees and retired employees, as well as employees and retired employees of UL Research Institutes and UL Standards & Engagement, including a pension plan. Most of the Company’s pension plans are closed to new entrants. The Company records amounts relating to these plans based on various actuarial assumptions. Significant assumptions used in estimating the projected benefit obligation of the Company’s plans include the discount rate and the expected return on plan assets. Other assumptions include demographic factors such as retirement patterns, mortality, turnover and rate of compensation increases. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when appropriate. The Company believes the assumptions utilized in recording the obligations under its plans are reasonable based on the Company’s experience and on advice from the Company’s independent actuaries; however, differences in actual experience or changes in the assumptions may materially affect the funded status of the plans and the net periodic benefit cost. It is reasonably likely that changes in external factors will result in changes to the assumptions used to measure the Company’s pension plans.

For a description of the Company’s pension plans and the related accounting estimates, refer to Item 8, “Notes to the Consolidated Financial Statements”, Note 11 “Pension and Postretirement Benefit Plans”.

Discount rate

The projected benefit obligation represents the present value of the benefits that employees are entitled to in the future for services already rendered as of the measurement date. The Company measures the present value of these future benefits on a plan-by-plan basis by matching projected benefit payment cash flows for each future period with the yields of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. The Company uses the full yield curve rather than a single discount rate. Service cost and interest cost are measured separately using the spot rate approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot rate approach does not affect the measurement of the total projected benefit obligation as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income.

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Using this methodology, the Company determined discount rates used in the measurement of the benefit obligation and the net periodic benefit costs for its plans were as follows:

U.S.

Non U.S.

Benefit obligation

December 31, 2025

5.5 

%

1.2 - 4.9%

December 31, 2024

5.7 

%

0.9 - 4.6%

Net periodic benefit cost

December 31, 2025

5.7 

%

0.9 - 4.6%

December 31, 2024

5.0 

%

1.3 - 4.7%

December 31, 2023

5.2 

%

1.6 - 5.2%

The impact on 2025 net periodic benefit costs of a 100 basis point change in the discount rate used to measure net periodic benefit costs, holding all other assumptions constant, would not be material.

Expected Annual Rate of Return on Plan Assets

Another significant element in determining the Company’s pension expense is the expected return on plan assets. The expected return on plan assets is based on the strategic asset allocation of the plan, long-term capital market return expectations, and expected performance from active investment management.

The Company follows ASC Topic 820, Fair Value Measurement in determining the fair value of plan assets within its pension plans. While the Company believes the valuation methods used to determine the fair value of plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Under this methodology, the expected and actual return on plan assets were as follows:

U.S.

Non U.S.

2025

2024

2023

2025

2024

2023

Expected rate of return on plan assets

6.9 

%

6.9 

%

7.8 

%

2.4 - 4.9%

2.4 - 5.6%

1.6 - 5.6%

Actual rate of return on plan assets

14.5 

%

10.2 

%

16.7 

%

(13.2) - 8.3%

2.9 - 9.9%

1.0 - 18.1%

The impact on 2025 net periodic benefit costs of a 100 basis point change in the expected return on plan assets used to measure net periodic benefit costs, holding all other assumptions constant, would not be material.

Income Taxes

The Company recognizes deferred tax assets and liabilities based on the temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using current enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to reverse. The Company evaluates the likelihood of realizing the benefit of its deferred tax assets and may record a valuation allowance if, based on all available evidence, the Company determines that some portion of the tax benefit will not be realized. When assessing the need for a valuation allowance, the Company considers a number of factors, including three years of cumulative operating income/(loss), expected future taxable income and ongoing prudent and feasible tax planning strategies.

The Company evaluates its exposures associated with various tax filing positions and recognizes a tax benefit only if it is more-likely-than-not that the tax position will be sustained upon examination by the relevant taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that is more-likely-than-not to be realized upon settlement. The Company adjusts its liability for unrecognized tax benefits in the period they are settled, the statute of limitations expires, or when new information becomes available.

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The Company has generated income in certain foreign jurisdictions that may be subject to additional foreign withholding taxes and U.S. state income taxes, if repatriated. The Company regularly reviews its plans for reinvestment or repatriation of unremitted foreign earnings and has recorded deferred tax liabilities on certain foreign subsidiaries’ unremitted earnings that are not considered permanently reinvested. The Company’s assertion on indefinite reinvestment of foreign earnings is based upon assumptions of future liquidity needs of the business and cash flow projections of the affiliates. Should these assumptions change, certain foreign earnings may no longer be considered indefinitely reinvested. If these amounts were distributed, in the form of dividends or otherwise, the Company may be subject to additional foreign withholding taxes, which could be material.

The Company’s income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. Deferred tax asset valuation allowances and liabilities for unrecognized tax benefits require significant management judgment regarding applicable statutes and their related interpretation, the status of various income tax audits and particular facts and circumstances. Although the Company believes that the judgments and estimates made by management are reasonable, actual results, including forecasted business performance could differ, and the Company may be exposed to losses or gains that could be material. To the extent the Company prevails in matters for which a liability has been established or are required to pay amounts in excess of the established liability, the effective income tax rate in a given financial statement period could be materially affected.