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- **Revenue Growth**: Q3 up 7.1% YoY to $783M, driven by balanced segment growth.
- **Profitability Expansion**: EBITDA margin 27.7% (up 270bps YoY), with $217M EBITDA.
- **Restructuring Impact**: 3.5% workforce reduction targeting $25-30M annual savings, with 2026 organic growth headwind of ~1%.
- **AI Innovation**: Launched AI safety certification testing (UL-3115) and patented AI scoring system.
- **Cash Generation**: $317M free cash flow YTD (+47% YoY), with $26M dividends Q3.

**【CEO Opening Remarks】**
- **Revenue Growth**: Q3 revenue up 7.1% YoY ($783M), driven by balanced contributions across all segments (Industrial +7.3%, Consumer +5.3%, Software & Advisory +6.5%).
- **Profitability**: Adjusted EBITDA of $217M (+18.6% YoY), margin expanded 270bps to 27.7%, highest since IPO.
- **Restructuring Initiative**: Announced 3.5% workforce reduction and exit of 1% of 2025 revenue in nonstrategic services, targeting $25-30M annual savings by Q1 2027.
- **New Product Launch**: Introduced AI safety certification testing (UL-3115) and patented AI scoring system for responsible AI adoption.
- **Capital Allocation**: Generated $317M free cash flow YTD, up 47% YoY, with $26M dividends paid Q3.

**【CFO Financial Commentary】**
- **Segment Performance**: 
  - **Industrial**: Revenue $343M (+8.2% YoY), EBITDA $123M (+16%), margin 35.9%.
  - **Consumer**: Revenue $340M (+5.9% YoY), EBITDA $70M (+12.9%), margin 20.6%.
  - **Software & Advisory**: Revenue $100M (+7.5% YoY), EBITDA $24M (+60%), margin 24%.
- **Restructuring Costs**: $42-47M pretax charges Q4 2025, with 2026 organic growth headwind from exited services.
- **Updated Guidance**: 
  - Organic revenue growth 5.5-6.0% vs. prior 5-6%.
  - EBITDA margin 25% vs. prior 24%.
  - CapEx 6.5-7.0% of revenue (down from 7-8%).

**【Q&A Highlights】**
- **Tariffs Impact**: Customers adapting to tariffs through supply chain diversification, with growth in Vietnam/Thailand/India offsetting declines in Germany/Japan.
- **Restructuring Details**: 3.5% workforce reduction focused on nonstrategic services, with 2026 organic growth rate reduced by ~1% due to exited revenue.
- **Software Segment**: Advisory business benefited from project completions (8.8% organic growth), while recurring software revenue grew 5.8%.
- **AI Testing Lab**: Michigan battery lab utilization strong, with focus on energy storage systems for data centers and EVs.
- **M&A Strategy**: Disciplined approach to inorganic growth, with focus on strategic opportunities in core markets.

UL Solutions Inc. (ULS) Q3 2025 Earnings Call Transcript

Industrial

Consumer

Software and Advisory

ULS

ULS fundamentals

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