UL Solutions (ULS) risk factors, 2025 10-K

Risks Related to Our Industry and Business

1. 01Technological advances in AI may in the future disrupt the TIC industry, which could significantly reduce the demand for our services
2. 02Technological advances in AI may in the future disrupt the S&A portion of the industry, which could significantly reduce the demand for our services or otherwise adversely impact our business or reputation if we are unable to successfully keep pace and navigate this evolving environment
3. 03A failure to effectively leverage emerging AI technology in our internal operations and management of our business may adversely impact the efficiency of our operations and our ability to keep pace with our competitors and may expose us to regulatory and other risks
4. 04The success of our business depends, in part, on our ability to develop new proprietary technical solutions, increase the functionality of our current solutions and develop our reputation as a technology leader
5. 05Our business is highly competitive. If we fail to compete successfully, or if we fail to innovate in response to changing customer needs, new technologies or other market requirements, our business, financial condition and results of operations could be adversely affected
6. 06We are subject to a variety of risks associated with doing business outside the United States
7. 07We may be adversely affected by global and regional economic and political instability
8. 08Enhanced trade tariffs, import restrictions, export restrictions, regulations of mainland China or other trade barriers could materially adversely affect our business
9. 09We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls
10. 10The success of our operations in international markets is highly dependent on the expertise of local management and operating staff, as well as the political, social, legal and economic operating conditions of each country in which we operate
11. 11Our senior leadership team is critical to our continued success, and the loss of such personnel could have a material adverse effect on our business, financial condition and results of operations
12. 12Our success depends upon our ability to recruit, train and retain key employees—in particular, our technical personnel—including through the implementation of diversity and inclusivity initiatives
13. 13Additionally, changes in immigration laws and policies have, in certain circumstances, made it more difficult—and may continue to make it more difficult—for us to recruit or relocate highly skilled technical, professional and management personnel to meet our business needs
14. 14Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure
15. 15We work with dangerous materials and in dangerous environments that could injure our employees, contractors or visiting customers, damage our or our customers’ facilities and disrupt our or our customers’ operations
16. 16We are subject to risks related to sustainability and corporate social responsibility
17. 17insurance), changes in demand for certain products, enhanced compliance or disclosure obligations or other impacts to our business, financial condition or results of operations
18. 18Public perceptions that the products we use or the services we use and deliver are not environmentally friendly, environmentally safe or ethical could adversely impact the demand for our services and our results of operations
19. 19Through our advisory services, we provide sustainability, quality, risk management and other solutions for our customers’ products and their product development, supply chains and organizations, as well as regulatory market access services
20. 20If we are unable to increase capacity at our existing facilities or build new facilities in a timely and cost-effective manner, we may not achieve our expected revenue growth or profitability or such revenue growth and profitability, if any, could be delayed
21. 21Our failure to meet contractual schedule requirements, meet a required performance standard, meet our internal contractual performance projections or otherwise perform adequately on a project could adversely affect our business, financial condition and results of operations
22. 22For certain of our services, we face a long selling cycle to secure new agreements, and securing such agreements often requires significant resource commitments, which result in long lead times before we receive revenues from new relationships
23. 23The growth of our business may be adversely affected if we do not implement our growth strategies and initiatives successfully or if we are unable to manage our growth or operations effectively
24. 24Part of our growth strategy is to pursue strategic transactions, including acquisitions, and we may not be able to find suitable acquisition targets or achieve our desired acquisition objectives
25. 25We operate across a number of industries that have inherent safety risks
26. 26Our reports, certificates, certification marks and name are at risk of being falsified, counterfeited, forged, tampered with or otherwise misused, which could result in costly legal proceedings and damage to our brand and reputation and materially impact our business
27. 27Our earnings and profitability may vary based on the mix of our agreements and may be adversely affected by our failure to accurately estimate and manage costs, time and resources
28. 28Our focus on new growth areas for our business entails risks, including those associated with new relationships, customers, talent needs, capabilities and services

Risks Related to Conducting Business in China

1. 29Changes in U.S. and Chinese regulations could have a material adverse effect on our business, financial condition, results of operations, our ability to raise capital and the market price of our Class A common stock
2. 30If our relationship with CCIC were to be negatively impacted, if we are unable to renew our joint venture with CCIC in the future, or if the joint venture were to be terminated, our business, financial condition, results of operations and profitability would be materially adversely affected
3. 31Changes in the economic policies of the government of China could have a significant impact upon the business we may be able to conduct in China and our profitability
4. 32Compliance with China’s new laws, regulations and guidelines relating to data privacy and protection, and any other similar future laws and regulations, could materially affect our business
5. 33Foreign exchange restrictions may limit our ability to transfer cash between us and UL-CCIC or our other Chinese subsidiaries, across borders and to U.S. investors and affect the value of our stock
6. 34If we fail to comply with Chinese EHS laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business

Risks Related to Information Technology and Our Software

1. 35unauthorized access to or disclosure of such data, cyber-attacks, or other security incidents that impact the confidentiality, integrity or availability of such data, or our systems and operations
2. 36We may experience an incident leading to unauthorized access to, disclosure or loss of personal information, including customer data and confidential information, which may result in damage to our brand and reputation, lost sales, legal claims, contractual obligations, and increased insurance costs
3. 37We may experience a ransomware incident with a high ransom demand which could impact financial performance, in addition to other risks described above
4. 38We may experience a compromise of our systems or data, which could cause a compromise of the environments of our customers or other third parties with which we conduct business, and may result in damage to our brand and reputation, lost sales, legal claims, contractual obligations, and increased insurance costs
5. 39Partial or total destruction of our databases, technology support or technology solutions would have a material adverse effect on our business, financial condition and results of operations
6. 40If we use open source software inconsistent with our policies and procedures or the license terms applicable to such software, we could be subject to legal expenses, damages or costly remediation or disruption to our business
7. 41Sales and implementation of our software and related services, including our cloud services, are subject to a number of material risks, some of which are beyond our direct control
8. 42We use software vendors and network and cloud providers in our business, and if they cannot deliver or perform as expected or if our relationships with them are terminated or otherwise change, it could have an adverse effect on our business, financial condition and results of operations
9. 43We could lose our access to our data providers, which could negatively impact our software solutions and could have a material adverse effect on our business, financial condition and results of operations
10. 44A failure in the integrity of our data or the systems upon which we rely could harm our brand and result in a loss of sales and an increase in legal claims

Risks Related to Third Parties

1. 45Any unethical conduct by our employees, agents, customers, contractors or partners could result in financial penalties or affect our brand, reputation or image, any of which could have a material adverse impact on our business, financial condition and results of operations
2. 46Our subcontractors, outside laboratories and other third parties with which we do business could take actions that could harm our business
3. 47subcontractors, outside laboratories or other third parties do not fulfill their contractual obligations to deliver their products or services on time or on budget, our business, financial condition and results of operations could be adversely affected
4. 48We are subject to various restrictive covenants that could materially adversely impact our business, financial position, results of operations and cash flows

Risks Related to Litigation and Regulation

1. 49Allegations of our failure to properly perform our services may expose us to potential product and other liability claims, recalls, penalties and reputational harm or could otherwise cause a material adverse effect on our business
2. 50contractual requirements. A product liability judgment against us could also result in substantial and unexpected costs, affect customer confidence in our services, damage our reputation and divert management’s attention from other responsibilities
3. 51Changes to the relevant regulatory frameworks could result in a reduction in required inspections, tests or certifications, or harmonized international or cross-industry benchmarks and standards, any of which could lead to the reduction in demand for, or commoditization of, our services
4. 52Regulatory developments concerning the collection, use and storage of data could negatively impact our business
5. 53Our services sometimes involve handling or disposing of hazardous substances or dangerous materials, and we are subject to environmental requirements and risks which could result in significant costs, liabilities and obligations
6. 54Failure to comply with labor and employment laws and regulations to which we are subject could result in penalties or costs that could adversely affect our consolidated results of operations
7. 55Changes in, a significant delay in obtaining, failure to obtain or the withdrawal or revocation of our licenses, approvals, accreditations or other authorizations or delegations of authority would likely have a material adverse effect on our business, financial condition and results of operations
8. 56We are currently defending certain litigation, and we are likely to be subject to additional litigation in the future
9. 57including, among others, litigation regarding the services and solutions we provide, ordinary course employment litigation and intellectual property-related claims
10. 58Our engagements may result in professional or other liability

Risks Related to Our Intellectual Property

1. 59Any failure to obtain, maintain, adequately protect or enforce our intellectual property and proprietary rights could impair our ability to protect our proprietary technology, the UL Mark and our brand
2. 60The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate
3. 61Our intellectual property is at risk of being copied, imitated, counterfeited or forged, which could result in costly legal proceedings and damage to our brand, reputation and business
4. 62Unintended or unauthorized disclosure of trade secrets, source code or other proprietary information could have a material adverse effect on our business
5. 63We may be subject to intellectual property infringement claims or other allegations, which could result in substantial damages and diversion of our efforts and attention

Risks Related to Our Indebtedness

1. 64We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
2. 65Our indebtedness may limit our cash flow available to invest in the ongoing needs of our business
3. 66An increase in interest rates would increase interest costs on our Credit Facility and any variable rate debt we incur, which could adversely impact our ability to refinance existing debt or acquire assets
4. 67The terms of our Credit Facility and the indenture governing the notes contain restrictions and limitations on us and UL LLC that could impact our ability to operate our business
5. 68We and our subsidiaries may incur substantially more indebtedness, which could further exacerbate the risks associated with our indebtedness
6. 69Rating agency downgrades may increase our cost of capital

Risks Related to Ownership of Our Class A Common Stock

1. 70Our Class A common stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors
2. 71The dual class structure of our common stock may have adversely affected the trading market for our Class A common stock
3. 72We are a “controlled company” within the meaning of the rules of the New York Stock Exchange (“NYSE”) and, as a result, qualify for exemptions from certain corporate governance requirements. Investors do not have the same protections afforded to stockholders of companies that are subject to such requirements
4. 73If UL Standards & Engagement sells a controlling interest in our company to a third party in a private transaction, investors may not realize any change-of-control premium on shares of our Class A common stock and we may become subject to the control of a presently unknown third party
5. 74Conflicts of interest may arise because certain of our directors hold, or may in the future hold, a management or board position with UL Standards & Engagement or UL Research Institutes
6. 75Our inability to resolve in a manner favorable to us any potential conflicts or disputes that arise between us and UL Standards & Engagement or UL Research Institutes with respect to our past and ongoing relationships could materially adversely affect our business and prospects
7. 76There can be no assurance that we will continue to declare cash dividends or repurchase our shares at all or in any particular amounts
8. 77declaring any dividend or other distribution that is inconsistent with our current dividend policy, or modifying or amending our dividend policy, without the prior written consent of UL Standards & Engagement
9. 78We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock
10. 79B common stock would result in such shares becoming freely tradable without compliance with Rule 144 of the Securities Act upon effectiveness of the registration statement
11. 80We have incurred, and will continue to incur, significant costs as a result of being a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
12. 81Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and depress the market price of our Class A common stock
13. 82These provisions, as well as anti-takeover provisions in our other governing documents, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
14. 83If securities analysts do not continue to publish research or reports about our company, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline
15. 84If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline

Financial, Tax and General Risks

1. 85results of operations. Our effective tax rate could also change materially as a result of various evolving factors, including changes in income tax law or changes in the scope of our operations
2. 86Our insurance may not provide adequate levels of coverage against claims or we may be unable to find insurance with sufficient coverage at a reasonable cost
3. 87Our enterprise risk management program may not sufficiently identify, anticipate and mitigate risks
4. 88We may incur impairment charges on our goodwill and other intangible assets, which could negatively impact our business, financial condition and results of operations
5. 89We may incur changes in estimates to our reported revenue, contract assets and contract liabilities related to our contracts with customers. Changes in our estimates could adversely affect our future reported financial condition or results of operations in the relevant period of change
6. 90Changes with respect to funded status of our pension and postretirement benefit plans could materially increase liabilities with respect thereto
7. 91Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our flexibility
8. 92We lease many of our facilities, and we may be unable to renew our leases at the end of their terms
9. 93Our business is exposed to fluctuations in foreign currency exchange rates, which could adversely impact our results
10. 94Climate change could adversely affect our business, financial condition and results of operation