UL Solutions Inc.

UL Solutions (NYSE: ULS) provides testing, inspection, certification, advisory services and software. Customers use its services to test products against safety and performance requirements, maintain certifications and navigate compliance requirements. The business combines initial testing with ongoing certification work.

Its three reporting segments are Industrial, Consumer, and Risk & Compliance Software. In the third quarter of 2026, Industrial supplied $410 million of revenue, Consumer $360 million and Risk & Compliance Software $53 million. The acquired Eurofins electrical and electronics business joins Consumer beginning in the fourth quarter.

Growth and profit before the large acquisition

The third quarter ended September 30, one day before the Eurofins acquisition closed. Organic revenue growth was 7%, excluding acquisitions, disposals and currency effects. Industrial's organic growth was 8.4%, and Consumer's was 5.9%. Risk & Compliance Software's reported revenue fell 17.2%, largely because of a software disposal; its organic revenue grew 4.7%.

GAAP net income attributable to UL Solutions stockholders was $108 million, compared with $100 million. The larger consolidated totals above include noncontrolling interests. GAAP earnings per share use the stockholder-attributable amounts.

Adjusted EBITDA removes interest, taxes, depreciation, amortization and selected other items, including equity-settled stock compensation, restructuring and divestiture gains. Transaction and integration costs remain included: $6 million in the third quarter, following $8 million in the first and $5 million in the second.

What changed in the outlook

November's annual organic revenue growth forecast strengthened to about 6.5%, from August's mid-single-digit outlook. The adjusted EBITDA margin target remained about 27%. Management expects about two percentage points of underlying margin improvement, partly offset by 0.9 percentage point of incremental transaction costs versus 2025.

Full-year transaction and integration costs are forecast at $37 million to $40 million, compared with $10 million incurred in 2025. The fourth-quarter estimate is $18 million to $21 million, versus $2 million in the prior-year quarter. These are forecasts against historical costs, and cover acquisition and disposal activities across the company.

Portfolio changes and their funding

UL Solutions announced the Eurofins agreement April 13 and completed the $686 million cash acquisition October 1. The business adds electrical safety, wireless and electromagnetic-compatibility testing capabilities. Its estimated annualized 2026 revenue is about $200 million; it has 44 laboratories and roughly 1,400 employees.

Back-office integration is expected to be substantially complete by year-end 2027. Sales and laboratory-utilization benefits are expected to be largely realized by year-end 2028. April's original valuation assumed cost synergies within three years after closing. The original first-full-year adjusted EPS accretion forecast excluded intangible amortization and integration costs.

On October 30, UL Solutions sold its approximately 28% DQS stake for about $117 million, with part withheld for adjustments and indemnification obligations. DQS was accounted for using the equity method, so its revenue was not consolidated. The roughly $93 million pretax sale gain will enter fourth-quarter nonoperating income.

Earlier portfolio changes included the April 1 sale of the non-core Employee Health and Safety software business for $201 million in cash. In July, UL Solutions acquired Evnia Consulting for about $6 million in cash, adding environmental-compliance services.

Cash and debt across the closing dates

Nine-month operating cash flow was $594 million, up from $456 million. Subtracting $199 million of capital spending gives $395 million of free cash flow, versus $317 million a year earlier. That measure excludes the October acquisition payment.

September 30 cash of $1.016 billion and gross debt of $766 million preceded the $686 million purchase the following day. Cash had been built up for the closing, including through revolver borrowings. DQS sale proceeds subsequently repaid revolving debt; actual gross debt was $689 million on October 30. No cash balance was reported for that later date.