Shares of UL Solutions Inc. (NYSE: ULS) experienced a significant premarket surge, climbing close to 16% to $82.64, driven by a combination of robust financial updates and strategic corporate actions. The safety science and testing leader delivered fourth-quarter results that surpassed guidance, announced a substantial dividend hike, and provided a clear profitability target for 2026, all while moving forward with a planned divestiture.
Financial Performance Exceeds Expectations
The company reported fourth-quarter revenue of $789 million, representing a 6.8% year-over-year increase. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $217 million, yielding a strong margin of 27.5% for the period. This performance allowed UL Solutions to achieve a significant corporate milestone, surpassing $3 billion in annual revenue. Chief Executive Jennifer Scanlon attributed the success to sustained demand driven by the global energy transition and the rapid digitalization of industries, particularly advancements in artificial intelligence.
However, net income for the quarter declined to $71 million, impacted by a pre-tax restructuring charge of $37 million. The company filed these results with the Securities and Exchange Commission in an 8-K form on Thursday, February 20, 2026.
Strategic Outlook and Shareholder Returns
Looking ahead, UL Solutions outlined a confident financial trajectory. The company is targeting mid-single-digit organic revenue growth on a constant-currency basis for 2026. More notably, it established an adjusted EBITDA margin goal of 26.5% to 27.0% for that year. Chief Financial Officer Ryan Robinson pointed to improved laboratory productivity and strategic adjustments to the company's operational footprint as key drivers behind the margin expansion.
In a direct move to return capital to shareholders, the board of directors approved an 11.5% increase in the quarterly dividend, raising it to $0.145 per share. The increased dividend is scheduled for distribution on March 12, with a record date of March 2.
Portfolio Simplification Through Divestiture
Concurrent with its earnings release, UL Solutions announced a definitive agreement, dated February 12, to sell its employee health and safety (EHS) software unit. The transaction is expected to close in the second quarter of 2026. According to a report from The Wall Street Journal, private equity firm Peak Rock Capital is the acquirer, with the deal valued at over $200 million. Following the sale's completion, the business unit will be rebranded as PureEHS.
This divestiture represents a strategic step to streamline the company's portfolio, allowing management to focus resources on its core testing, inspection, and certification operations. The move is being closely watched by investors, who are keen to understand the final sale terms and the capital allocation plan for the proceeds.
Analyst and Market Reaction
The market's enthusiastic response reflects optimism that UL Solutions' essential compliance and certification services will remain in high demand, even amid potential cyclical delays in product launches. The rally also prices in confidence that the benefits from recent restructuring efforts will be durable, despite ongoing investments in new laboratory capacity and capabilities.
Analyst commentary following the report was generally positive. Andrew Wittmann of Baird maintained an Outperform rating on the stock, though he slightly adjusted his price target to $96 from $97. His analysis highlighted the company's clear 2026 financial outlook as a foundational element for future valuation.
As a relatively new public entity, having debuted in 2024, UL Solutions is effectively articulating its investment case to the market. The latest announcements—combining solid current execution, a raised dividend, a forward margin target, and a strategic asset sale—work in concert to recalibrate near-term expectations and underscore the company's potential for consistent cash generation.
Investors are now monitoring the timeline for the software unit sale's closure and any further details on the use of proceeds. The company's ability to meet its stated 2026 margin target will be a critical benchmark for performance in the coming quarters.