Start here if you're new
what it is
UL Solutions gets products tested, certified, and approved so your customers and regulators do not freak out.
how it gets paid
FY2025 revenue was $3,053M (+6.4%). The segment bridge uses Q4 2025 reportable segments ($789M total) from the Feb 19, 2026 release—Industrial $352M, Consumer $335M, Software & Advisory $102M.
why it's growing
FY2025 adjusted diluted EPS was $1.99 (+17.1% vs FY2024 adjusted $1.70 in the same release). Q4 adjusted diluted EPS was $0.53 vs $0.49 prior-year quarter.
what just happened
Q4 2025: GAAP diluted $0.32; adjusted diluted $0.53 (vs $0.49 prior-year quarter). Revenue $789M (+6.8%).
At a glance
B++ balance sheet — above average — nothing keeping you up at night
37.7x trailing p/e — you're paying up for this one
0.8% dividend yield — cash in your pocket every quarter
26.0% return on capital — every dollar works hard here
$2.30 fy2027 eps est
xvary composite: 60/100 — average
What they do
UL Solutions gets products tested, certified, and approved so your customers and regulators do not freak out.
UL has been doing this since 1894. That matters because if your product already carries a UL mark, switching labs means new tests, new paperwork, and more delay. The proof is in returns: 26.0% return on capital (money invested in the business → profit produced → this business earns a lot from each dollar it uses).
How they make money
$3.05B
FY2025 revenue (+6.4%) · segment rows = Q4 2025 only ($789M)
Industrial (Q4 2025)
$352M
Consumer (Q4 2025)
$335M
Software & Advisory (Q4 2025)
$102M
The products that matter
tests industrial systems
Industrial
$352M · Q4 2025
Q4 2025 Industrial revenue +7.3% vs the prior-year quarter; energy, automation, and fire safety were called out in the release.
largest segment
consumer product certification
Consumer
$335M · Q4 2025
Q4 Consumer revenue +8.4% vs the prior-year quarter; consumer technology / EMC testing cited. Operating income included restructuring charges—read the segment footnote in the release.
broad demand base
compliance software and services
Software & Advisory
$102M · Q4 2025
Software & Advisory revenue was flat vs the prior-year quarter; adjusted EBITDA improved on utilization. Smallest of the three reportable segments by Q4 revenue.
fastest growth
Key numbers
26.0%
return on capital
Return on capital → profit earned on the money used in the business → so what: this company turns a boring service into elite economics.
37.7x
trailing p/e
Price-to-earnings → how much investors pay for each $1 of profit → so what: you are paying a growth-stock multiple for a 6.4% revenue grower.
$494M
total debt
Dec 31, 2025 total debt $494M before unamortized issuance costs (Feb 19, 2026 release)—down vs prior year after net repayments.
17.1%
operating margin
Operating margin → profit after running the business → so what: each $100 of sales leaves about $17 before interest and taxes.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- long-term debt $494M total debt (Dec 31, 2025)
- net profit margin 14.0% — keeps 14 cents of every dollar in revenue
- return on equity 34% — $0.34 profit for every $1 investors have put in
UL Solutions Q4 & FY2025 results · Business Wire Feb 19, 2026
Total return vs. market
Return history isn't available for ULS right now.
source: institutional data · return history unavailable
What just happened
Q4 beat (adjusted)
Q4 2025: $0.53 adjusted diluted EPS (GAAP $0.32) on $789M revenue (+6.8%).
FY2025 revenue $3,053M (+6.4%); FY2025 diluted EPS $1.60 GAAP and $1.99 adjusted per the same release. Gross margin on $789M revenue: (~$789M − ~$395M cost of revenue) ⇒ ~50% for the quarter.
$789M
revenue
$0.53
adj. diluted EPS
~50%
gross margin (Q)
the number that mattered
Compare any “beat” to the same non-GAAP vs GAAP definition the release uses—Q4 adjusted EPS rose vs the prior-year quarter while GAAP EPS fell on tax rate and restructuring items.
-
first, ul solutions saw solid (mid-single-digit) organic revenue growth across all of its segments.looking closer, the industrial division benefited from strong demand for testing, inspection, and certification services, especially in energy and automation. furthermore, the consumer division benefited from strong demand for consumer technology testing and related services. also, revenues and margins improved in the software & advisory business, thanks to new business and solid client retention figures. we forecast healthy bottom-line growth for 2026, while our newly inked 2027 estimates suggest more of the same. our optimistic outlook is based on a healthy economic backdrop, which would likely support top-line growth. in addition to likely continued solid organic growth over the next 12 to 18 months, the company should benefit from operating leverage, as fixed expenses are better absorbed.
-
this factor, along with disciplined cost management, ought to lead to improved margins.the company should also benefit from tailwinds related to demand for safety, testing, and certification products in high-growth segments including data centers and energy transition (such as electric vehicle batteries).
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what about the stock?
-
though these shares have given up some ground in 2026, they are up more than 30% over the past year, exceeding the performance of the s&p 500 index by a good margin.earnings per share ought to be in the neighborhood of $3.70 by 2029-2031, assuming our forecast is close to the mark.
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the company’s diversification ought to be an added plus for long-term profit growth.
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What could go wrong
the risk here is specific: you are paying a premium multiple for a business that still gets most of its revenue from steady testing volume, not fast software expansion.
med
37.7x trailing earnings leaves little room for an ordinary quarter
The business grew revenue 6.4% last year. That is solid. It is not the kind of growth rate that usually gets endless patience from the market.
If margin expansion slows, investors may start valuing ULS more like a steady industrial service business than a premium compounder.
med
Software is the story, but it is still only 16% of revenue
Software & Advisory is the smallest Q4 segment ($102M of $789M); Industrial and Consumer still dominate near-term results.
If the higher-multiple software mix does not keep growing faster than the rest of the company, the rerating argument gets thinner.
med
Industrial demand still matters more than the market's favorite themes
Management highlighted data centers, energy transition, and EV batteries as growth supports. That still depends on customer launch activity, capital spending, and certification volume.
A slowdown likely shows up first in Industrial testing demand, then works its way into the growth story investors are paying for.
Industrial and Consumer make up about $2.6B of the $3.05B revenue base. If those segments cool while Software & Advisory stays a $0.5B sidecar, the premium multiple has less room to hide.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q1 2026 earnings report
Expected May 5, 2026. You want to see whether the margin story keeps moving after the 25.9% adjusted EBITDA print.
mix
Software & Advisory growth versus the core business
At 16% of revenue and 7.5% growth, this is the segment that helps justify the premium valuation. If it drifts back toward company-average growth, the narrative cools fast.
margin
Operating leverage after a 300-basis-point jump
Last year set a high bar. Another step up matters more than another quarter of ordinary mid-single-digit revenue growth.
demand
Certification volumes in data centers, energy, and EV batteries
Management called out these markets for a reason. If they stay strong, ULS keeps looking like a steady grower with optionality. If not, the stock starts looking expensive again.
Analyst rankings
forward setup
31x
Forward p/e based on the $2.30 FY2027 EPS estimate. In human-speak, analysts see earnings growth ahead, but not enough to make the stock cheap.
consensus anchor
$2.30
This is the current FY2027 EPS estimate the valuation is leaning on. If that number starts moving down, the market will notice quickly.
coverage tone
steady
The message from the estimates is not explosive growth. It is dependable growth with expanding margins. That usually supports premium pricing, until it doesn't.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 178 buyers vs. 105 sellers in 3q2025. total institutional holdings: 68.4M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$57
$126
$72
current price
$92
target midpoint · +28% from current · 3-5yr high: $135 (+90% · 18% ann'l return)
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