UL Solutions (ULS) J.P. Morgan 2025 Ultimate Services Investor Conference summary

Business model and revenue streams

• Recurring revenue from inspection and certification services accounts for 33% of total revenue, providing a stable income base.

• Industrial tech is the primary focus, rooted in a long history of electrical safety and standards development.

• Consumer tech is more labor-intensive and less profitable due to the volume and manual nature of testing.

• Supply chain shifts and product redesigns by clients drive incremental testing and certification revenue.

• Cross-selling opportunities in software and advisory services are expanding, with new features and customer segments being targeted.

Growth drivers and industry trends

• Industrial segment has experienced double-digit revenue growth in 2023 and 2024, with high single-digit growth expected to continue.

• Mega trends such as energy transition, data center proliferation, and new energy storage technologies are fueling demand.

• Data center and renewable energy markets are significant but not easily quantifiable within the revenue mix.

• U.S. base and involvement in standards development provide a competitive edge in the domestic data center and renewable energy sectors.

• International expansion and new market entries contribute to overall growth.

Operational efficiency and margin expansion

• Margin improvements are driven by footprint optimization, lab consolidation, and relocating labs to lower-cost regions.

• Pricing initiatives and higher price realization are contributing to both revenue and margin growth.

• Lab utilization varies, with some facilities running 24/7 and others having additional capacity for growth.

• Consumer margins have surpassed 20% but remain structurally lower than industrial due to higher labor requirements.

• Ongoing investments in technology and lab infrastructure are expected, with 2026 likely to be a more capital-intensive year.