stockrowLatest quarter
For the quarter ended June 30, UL Solutions reported revenue of $816.0 million and adjusted EPS of $0.59, both above the consensus estimates of $811.9 million and $0.56, respectively.
For the latest quarter, Q3 FY2026, UL Solutions reported revenue of $823.0 million, up from $783.0 million a year earlier, and diluted EPS of $0.53, up from $0.49. The company’s filing attributed organic growth to all segments, led by industrial and consumer certification testing and ongoing certification services.
The filing said industrial revenue rose 8.2%, supported by demand for materials, energy and automation. Consumer revenue increased 5.9%, with demand for retail and consumer technology services. Risk and compliance software revenue fell 17.2% following the sale of the environmental, health and safety software business, although the remaining business grew organically.
UL Solutions reported an operating margin of 19.7%, compared with 19.9% a year earlier. Free cash flow rose to $154.0 million from $109.0 million.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $823.0 million | $783.0 million | 5.11% |
| Diluted EPS | $0.53 | $0.49 | 8.16% |
| Gross margin | 50.7% | 48.8% | 1.9 percentage points |
| Operating margin | 19.7% | 19.9% | −0.2 percentage points |
| Free cash flow | $154.0 million | $109.0 million | 41.3% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.59 | $0.56 | Beat by 5.36% |
| Revenue | $816.0 million | $811.9 million | Beat by 0.51% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Jenny Scanlon said demand remained healthy early in the fourth quarter and pointed to product complexity, changing safety requirements and customers’ need for independent testing. She said certification testing revenue increased nearly 11% in the third quarter, while ongoing certification services grew over 7%.
Asked about data-center demand, Scanlon said certification testing was the best place to see its effect on growth. She said customers’ innovation was driving testing work, and the company had launched certification programs covering power distribution, power conversion and liquid cooling. UL Solutions also expanded its cooling technology testing capabilities in Plano, Texas, she said.
On visibility, Scanlon said certification testing tends to last longer than non-certification work, allowing UL Solutions to see how revenue will arrive over time. CFO Ryan Robinson added that ongoing certification services provide a contractually recurring revenue stream.
Scanlon attributed the quarter’s adjusted EBITDA margin expansion to productivity improvements, pricing initiatives and business optimization. Asked about further expansion, she said the company was applying AI to processes, continuing pricing initiatives and refining its portfolio. Robinson said improvements to pricing systems and governance had contributed to revenue growth and margins, though work remained on value-based pricing in some businesses.
Scanlon said the October acquisition of Eurofins’ electrical and electronics business expanded UL Solutions’ consumer capabilities and laboratory network. She expects back-office integration to be substantially complete in 2027 and go-to-market and laboratory-utilization synergies to be largely realized by the end of 2028. Robinson said integration costs would continue in 2027.
Asked about restrictions affecting Chinese testing labs, Scanlon said she did not expect a material impact and would work with customers to adjust testing locations through the company’s global lab network. She also expects some fourth-quarter margin improvement in risk and compliance software after the earlier software divestiture.
Guidance
UL Solutions raised its FY2026 constant-currency organic revenue growth outlook to approximately 6.5%, from its prior mid-single-digit range. CFO Ryan Robinson said the revision followed performance through the first nine months. The company said the outlook includes a 70 basis point reduction from restructuring-related business exits.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EBITDA, Risk and Compliance Software Non Gaap Margin | Q4 FY2026 | UL Solutions expects margin improvement in its risk and compliance software business in Q4 FY2026. | — | — |
| EBITDA growth, Non Gaap Underlying Margin | FY2026 | 2.00% | — | New |
| Capex growth, Percent of Revenue | FY2026 | 8.50% | 8.50% | Held |
| Tax rate | FY2026 | 26.0% | 26.0% | Held |
| Operating expenses, Transaction and Integration Costs | FY2026 | $37.0 million–$40.0 million | — | New |
| Revenue, E and E | Q4 FY2026 | $50.0 million | — | New |
| EBITDA growth, Adjusted Ebitda Margin | FY2026 | 27.0% | 27.0% | Held |
| Revenue, Constant Currency Organic Growth | FY2026 | UL Solutions expects mid-single-digit constant-currency organic revenue growth in FY2026. | — | — |
| Operating expenses, Annual Employee Incentive | FY2027 | UL Solutions expects its annual employee incentive expense to be lower in FY2027 than in FY2026 if performance is on next year’s plan. | — | — |
| EBITDA, Risk Compliance Non Gaap Margin | FY2026 | UL Solutions expects its Risk & Compliance segment’s adjusted EBITDA margin to be fairly consistent with its prior-year full-year margin in FY2026. | — | — |
| EBITDA growth, Non Gaap Margin | FY2026 | 27.0% | — | New |
| Revenue, Organic | FY2026 | UL Solutions expects consolidated organic revenue growth in the mid-single-digit range for FY2026. | — | — |