UL Solutions (ULS) 5 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the UL Solutions Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, [ Mr. Kevin Arns ], Associate General Counsel at UL Solutions. Thank you.

Mr. [ begin, may You Arns ].

leave. you. to earnings quarter, third family XXXX everyone, I Thank who am on this our call. Ji filling quarter Mitchell Welcome, in is for

Chief Joining Executive Chief me Officer. Jenny today Scanlon, Financial Officer; Ryan Robinson, are and our our

our website be to at presentation, we ul.com. our Investor Relations will on is available the today, section discussion earnings During referring which of our

uncertainties in would financial to appendix now financial I hereof, the A ended law. Today's measure date as references the circumstances presentation. quarterly XX-Q assume our the discuss found also the to disclaimers like non-GAAP described and forward-looking Jenny. release Securities Our XXXX. factors cause Solutions within earnings be over of call, available differ to concerning on after would a or remind update the include, may results also website. I in to presentation today's the could turn provisions to results earnings everyone release in X statements forward-looking report other other to no operations is on the to to With measures. March actual any These see by of quarter XX, as statements. Please to earnings we the Litigation meaning the risk UL in things, way disclosure XXXX. the except that or may and for events as statements implied call the comparable of obligation can statement harbor are earnings of expressed the risks, and required the Form Slide reconciliation statements from factors statements prospects forward-looking on reflect those material well like estimates that that on statements about among forward-looking Reform substantial includes safe the Act in Private our We and that forward-looking most involve that, of GAAP the presentation

results the These megatrends anticipate turning everyone, long-term will of that morning, extended cover industry-leading joining improved before including focus services. QX we our for Ryan. margins cash very into in strategic to first revenue, solid demand showcase and our half and I'm flow. pleased ongoing growth, say us. in X XXXX higher robust key EBITDA adjusted thanks Good performance main core strong that for and to drive our on it business our strength I'll over topics with

I'll First, highlight strong performance. QX our

achievements And position our and notable strategies. Second, activities. finally, customer financial growth capital allocation and

demand quarter crucial to been our success. I'm third services healthy results whose employees execution our our by to customer-centric growth and unwavering QX due overall $XXX of are our a for to reached overall safety, deeply not has focused Our dedication team. strong also appreciative only our Their growth scientific X.X%. revenue commitment approach, but business. culture, organic with propels and our X.X% reflecting million, of defines excellence entire

respectively, underperformed segment and Industrial Our Advisory our notable X.X%, our Consumer while expectations. & growing Software by an and on organic XX.X% segment strength, basis showed

grew quarter all EBITDA reflected Adjusted XX points. and XX.X% EBITDA margin basis third results for growth across by regions. the expanded Our geographic adjusted

work year-to-date. resulted flow hard cash And Our of million adjusted net free increase we generated X.X% income. $XXX in a in

quarter Auburn cutting-edge large-scale and me Hills, operations most of country. our testing performance let few and highlight strong opened and with is It end. we investment in our of achievements In facility, a Michigan. Next, drivers the laboratory to centers testing battery to This key began this backlog August, vehicle subsequent testing of battery its lab and largest comprehensive in projects. one a hybrid battery date industrial industrial electric the

anticipate and overwhelming generating North show and covers the and and and customers. The of advanced UL on call, We our a event to hybrid battery show, we the conference increase largest multitude continues energy lab to well energy continue a life. recently Consumer of with storage interest large-scale onwards. In Auburn industrial space, energy from array to storage goes on a to last our at battery from ways battery growth is the Solutions hosted Activity As contribute battery our covers vehicle heavy be state-of-the-art EV automotive hybrid systems transition that wide and Hills we presence trade earnings I our mission testing and comes beyond show it power used had mentioned customer consumers XXXX in for automotive a batteries. The technology from and equipment. small electric pleased needs focused batteries transfer will also industrial to large to American at the drivetrains.

We've ion a in matters. demonstrated lithium of Our and progress. of the done work and couple past around safety battery lot years have mission

do. battery For indicate Recent City York example, that devices published been not a the New safety, e-mobility the about in has the ion significant injuries both fires and City banned we what period have reports to which, as deaths compared there of to due reduction is certified New sale of rental of course, York lithium in XXXX. has been for and same

towards city's said that while progress X deaths. fire commissioner lithium saw he the battery fighting threat in a that threat, fact, and fires In remain working

impact. and to proud Our are key this safety-based we work in our of solutions are effort,

comment allocation let me on Now activities. our capital

us model business an balance backed generate to and flow. investment-grade resilient allow sheet work cash hard robust Our by

$X.XXX hydrogen September. approach included anchor a acquisition an We paid continue quarter to regular to value completing our take allocation. of future share this to our shareholders dividend actions TesTneT, through and capital returning the of in Key strategy disciplined of per quarterly

Additionally, a on million engagement, our increasing ] UL of including significantly fully offering behalf we shares, public XX standards greenshoe a [ float. and of successfully exercised follow-on completed

investment-grade we a to over committed time. capital maintaining are excess We to to balance continue return to sheet leverage and conservative strong expect with ratings, and shareholders

Now will and provide greater to who results outlook. call turn the detail over let our me Ryan, on our

more all strong of team year our detail discuss our our for we'll with on to and outlook. delivering performance segment on comments some then another want financial results, provide thank Thank I'll you, hello, also before our closing Jenny, first everyone. members I full quarter.

a quarter adjusted EBITDA third a our continuation and in consolidated cash growth, basis, report to solid generation. on strong proud are margin expansion of We

As see geographies. across once our Jenny revenue mentioned, and segments occurred that all again of of growth all it's encouraging to our

a on into the essentially let of to as Now performance organic organic which in were headcount dive same XX.X% quarter including million share, and segments. reflected consumer strength up third compensation in both Industrial million $XXX the annual incentive company's and consumer revenues expenses, expense year, for SG&A delivered from $XX on a of specifically year the was advisory. third period compared revenue salary particular the expense of $XXX the of delivered which the the period. quarter to pre-IPO quarter, compared expenses from growth of across the quarter, long-term our Adjusted plan. Last in which Adjusted catch-up increases. earnings with stock-based X.X%. prior more related in organic of share decline XX in which strength basis quarter. Consolidated Adjusted our the over or $X.XX me XX.X% of up plan X.X% in Adjusted XX.X% modest prior a improvement future and growth income ago cash we segments, segment, stable stronger our the year resulted bonus per reduced the segment, was was Over in our performance margin quarter which was all year, growth. XX.X%, to recognition part details X.X% in particular quarter diluted benefit the of up Gross The some million, increased an higher the offset X.X% was per flat our increase while points of for increase $XXX including compensation, were to our this $X.XX of up year-over-year. offset half CSAR resulted industrial settled than year was EBITDA some year, cash appreciation XXXX. third third net software by EBITDA estimates increased the rights, prior the in from margin million, XXXX.

performance X in segment, million our certification These at margin to $XXX the X.X% the innovation also automation Revenues the rose compared as XXXX. had basis adjusted lab. Adjusted quarter opened Industrial mentioned, deliver to associated organic segments growth recent offset most revenue compensation, capacity expected. driving And battery an segment robust EBITDA the the improved to segment and strongest an on turn higher and for by robust, starting to was ongoing revenue XX.X%. Those by The demand and robust in Jenny industrial certification Industrial. The last the the me to EV of comparison and partially helped demand were to of Industrial as our quarter. organic are for are for recently Hills, we including industrial Auburn contributing customer energy for XX.X% quarter, driven contributions XX.X% services. $XXX of trends let exciting services year's remains across event performance-based as increases. Now industrial our with while increases the XX transition, gains industries Michigan price million third in or and recently impressive expense. demand CSAR the points increased by basis electrification everything factors of our mega tremendous EBITDA

driven on or market X.X% from basis. are demand strong by compatibility a an for Consumer million, across Demand or X Now our and consumer where segment. Revenues strong. was up to consumer testing, quarter electronics, the of in turning service EMC were remains electromagnetic improvement higher $XXX X.X% for XXXX leader lines. automotive organic we all The the

for increase growth made by last in capacity margin for basis product from quarter CSAR quarter in EBITDA prior HVAC quarter Consumer have XXX surge from the in benefited an quarter in of EBITDA points compensation driven year's the a $XX benefited also and was year-over-year, XX.X% revenues. also an million, in additions We Strong versus was consumer revenue performance-based of partially benefits. Revenue retail. was organic and year. the year technology the areas increase of some we higher testing. Adjusted third technology demand Adjusted last the the for by of offset the XX.X%,

demand. capacity various We our at consumer how footprint sustainability-related are we testing increasing connect order with improving facilities, our and in meet to increased adding customers

The Revenues sustainability and was churn Our in by by which is than million, a third both basis. solutions, increase improvement and software, particularly Advisory. $XX modest driven that and segment reduced for retail and of for total product for higher organic year-over-year more a was decline X.X% on Software compliance an offset segment demand were advisory.

As earlier, XX.X% expectations. higher below compared as a EBITDA the advisory in results quarter decrease these $X -- $XX our Software was in and for Jenny for Adjusted or million, were Advisory software mentioned and the as million revenues third a quarter more direct by decrease margin the both year. XXX EBITDA performance-based than points last offset to were XX.X%, in company-wide Adjusted was and quarter compensation. of year-over-year increases the basis for

million Turning the from X million of was cash X we $XXX cash generation. In Capital performance compared cash driven in of to the The the XXXX same $XXX first for the lower expenditures period were payments. activities $XXX operating months last improvement $XXX million business and to to in year. million year-ago by our XXXX, incentive months generated of first compared period.

in our $XXX the in strength of important transition investment-grade We of first of XXXX Solutions. growth area and total million cash months of the quarter was with ratings. the investments X a finished $XXX energy our XXXX. We million in debt continue $XXX The Free focused cash of UL million. compared credit for to balance same is sheet flow $XXX period to reflected million for opportunities, make

produce and a Our returns. pursue to robust shareholder great give generation best-in-class number initiatives, of in to cash flexibility acquisitions accretive balance value-enhancing sheet organic to us ways and flow invest Betterieingenieure. have examples as Center you Arkansas new TesTneT we year, and Hills and like have like opened Excellence this This acquisitions as seen of the labs, of Auburn in Retail well

full year outlook. the to turning Now

transition, robust high revenue Given year-to-date we range. end the particularly visibility business remains our key and and our to digitalization mid- into year results now constant the our from electrification Demand energy strong single-digit currency everything, sustainability. expect to full markets, of megatrends, growth and organic in be

to expect year for for beyond and XXXX through full adjusted We combination margin the key focus company. a drive the of EBITDA areas improvement

First top is line delivering organic growth.

industrial our our is both by fastest-growing our margin which segment. and Second the benefit is expected mix driven highest segment,

on for M&A. year setup finish our is some productivity; is I'll we're strategic for outlook, Third on a and to accretive quarter. Based year-end. fourth, fourth excited context full additional provide our a strong increasing the

in We constant expect our line growth QX revenue full outlook. the high to mid- currency range, with year single-digit organic in

factors. Importantly, attributable the growth pace this from moderates primarily to QX X

and basis in surge in Furthermore, growth quarter our that strongest deceleration demand of tougher earlier, saw in consumers in said year, QX First, I of as In this QX expand may even EBITDA a quarter the expanded expect by Year-to-date, XXXX, XXXX. we compared presents fourth see QX. points XXX was comparisons. a have quarter, at the to EBITDA fourth margins adjusted pace an we to margin of adjusted year-over-year. faster

margin improvement of services. Performance-based quarter growth, Consumer customer in and based quarter the and revenue and to also offset in delivered in expenses categories in outstanding expect results profit professional compensation expenditures investments of this to will outsourced new year-to-date summary, revenue be capital to XXXX. by X.X% be and now by to proud We seek third and multiple plans. match the costs our spending We affect we driven incremental in be elevated the strong approximately namely the in both flow-through on year-to-date our fulfillment support 'XX year degree and of largely annual revenue final segments. In of Industrial as and of expect of X% labs the we I'm in to demand higher on outlays to

We This in allows faster cash-generating strong already profile, the market all to as our be selective business enhancing foundation. improving profitability are investment-grade and capital. an us our gaining rating active our a than share, with yet deployment of growing

as most sustainability to is science-based and security partner to aspiration outsized our we shareholder trusted and Our value. customers' be look create deliver safety,

me for remarks. to the closing turn her Now back let call Jenny

Thanks, Ryan.

us delivering success. for QX Our results and year robust team's and April as a the in positions lays our margins. in performance the improved debut future full our This on outstanding momentum strong foundation public company growth for revenue built IPO, of

as As some I do highlight in expert mentioned for will work leading important last science. quarter, occasionally, we a you we safety and high-profile

the lithium-ion you part As a Solutions of batteries, that energy are has know, of UL transition. decades testing batteries experience including large

penetration local, work to and governments batteries storage. the accelerates, scientists with regularly large-scale energy from this them engineers of and and state increased As help transition UL federal to solutions market related issues understand lithium-ion

In to results on past with R&D the the and Philippines and presented Asia. demonstrations from and including increased tests include year, Singapore of Singapore. This Solutions Over National classroom and standards team with to Agency workshops, in first year, Air a failure has analysis has and studies, and several in of battery engagement responders in Taiwan R&D conduct the countries technology the battery this UL of training including worked Vietnam, UL USAID series government battery testing the and technical engagement, battery conducted research to variety organizations team partnership safety Solutions Taiwan, instruction Republic in safety case advances training, of Force Fire has UL of standards prominent organizations, different organizations and often a features. safety

unique that So leader, focus as our offerings. long-term markets by with with will are by we I underscoring trends on that, an conclude product industry aligned that driven mega

is sustainability well balance sectors. sheet and deliver execution compliance and cash the are we're lie to in Solutions safety, strategic value positioned our about and strong our stakeholders. on call gain Our long-term all let's the With please to to flow, the share poised exceptional ahead. Operator, targeted entry, strong questions. and market open helping opportunities for capitalize enthusiastic acquisitions we're growing market us that UL investment-grade

[Operator Blair. first from Andrew Nicholas question comes Instructions] William with Our

strong growth to digging in quarter. really business. really, a wanted I maybe by a more little consumer start bit to

So I guess a X-part question.

could into in could that way way a talking also, if you maybe it about you decelerate there's that kind potentially like of surge be in I understand. know helpful quarter. a fourth bit quantify but happened a general just was the there's quarter, third don't technology little product and what spend you're seeing time if customers of just bit velocity, terms it something that's to at both that least would to or the demand little for what sounds that if saw amongst the First, explain there, testing, product to dive exactly those sentiment in any more of more then in

Yes.

consumer you performance. Andrew. margin mentioning we thank in -- the and adjusted pleased EBITDA with revenue that, in So increases performance We're for both across

business testing. segment in that retail know, consumer has a and to HVAC appliances, and testing in you and we're technology product see growth pleased As few lines consumer

areas. third was an to in surge new a fourth quarter, go Often of as did help the in to We the we a offerings. related in mean different pickup increased activity mentioned are it in customers several see quarter, their So quarter. the product we make to as business related and you we work of with saw products to sure market, to ready level third

single basis, guidance consumer in mid- the a overall confident fourth having in high bit digits see potential our quarter. quarter, to and fourth consolidated that do the off on So while the to we're a taper we increased in

thing we one seeking see strength And continue a sustainability customers in to testing. is Andrew, would I add,

So in the extends that areas for into tailwinds as refrigerant demand Asia. as chemicals GWP North we're America air strength that quality safety the And products. also seeing and from other strong as well indoor such testing regulations, sustainability there. And

Very helpful. margins. gears switching bit And my then to follow-up, a maybe little for

sense that of margin attributable consequence improvement process or utilization internally? efficiencies is expansion for to much strong is trend this how that how trying Another top you to rank to picture, point -- kind or good but don't bigger kind in to to, you'd any that be way terms different of operating much order versus price? things it pieces expansion Is Just really a willing maybe metric doing of even a demand line growth of of and quantify you're there of the above-average margin could of that know internal I and margin versus year-over-year. get expansion, to

over we largely a those thematic talked items. time time, comments expansion Good comments and third over are made were about We've than in rather specific question. quarter more Yes. order. of I'll rank that margin couple make

So revenue, revenue about our we operating creating growth expenses. our in talk a at pace faster business. including growing some leverage and than organic improvements price our

expenses, we including headcount-related do well expect expenses, that. core Our we we've think and continue to managed to

we that's an from of structures in it's our company company managing up and managing mix a stock-based good of public IT finally, but transition margins impact then it's will industrial. And benefiting we public is company, growth EBITDA company and total very margin, be driver growth EBITDA income, have but initiatives margin, that have footprint including digitalization as fairly item, our the company our to cash-based third, consolidated Second number by horizontal back. across shows a the improving for standard more processes, and an a portfolio, as factor. we work for adjusted geographic compensation then It it's costs, a incentives add adjusted in private a operating

The next Tong Sachs. question comes with Goldman from George

consumer room low-hanging on this robust gains whether early And segment? expand? a you're is to left plus in efficiency you driving margin still in about whether XXX The year-over-year much EBITDA there continuing basis, Can innings think quarter. to expansion you or the fruit addressed consumer margins been EBITDA business has for bps this is very talk of how see the

Thanks, breadth pricing offering. services mentioned organic through operating our new some to as what of consumer would on Ryan we the like focus call feel results that George. we quarter, trending we on that a normal And I we're in towards in are addition is pleased margin the leverage both do our saw of with value and as the that and customers for proposition pieces this well their the just

roof back with that in we We've that Ryan I and some And or on our what some margin. under the roof. And think under refrigerant and important our made capacity of new our under to could some added of into as margins. side in on we this through again, earlier certainly some the year, existing lab consumer GWP capabilities. and in we be the capacity capacity wireless lab flowing to, capabilities. as there, investments of at then a an last also have year, Arkansas full single that footprint that look housing announced consolidated, other alluded helpful demand EMC we pleased continues optimization, continue and is pieces greater the been have we that customer greater been utilization that chambers extending extend is retail utilization to to the and that longer-term location Excellence Center investments had

feel we're we're and with So consumer a pleased like normal. at new

a to when the secondly, and elaborate Can expectations you you the in trends moderation would growth. of then contributed segment And growth the mentioned to reacceleration underperformed and in organic expect in on helpful. a business Software see Advisory could that Very bit. you the you're some seeing have

Yes.

to of different as our has the Software and the software to advisory overall advisory that and growth. tick. that value and from Advisory, is And each our said, elements of is and a the customers it we business, advisory of top both premise everybody customers. tech it can remind like combination software reinforcing contribute piece element and of its our software that proposition I X/X to offer and I purchase always

software to chain I'm revenue. is continues look a for churn software pipeline side sustainability. tech longer-term Net for we we see looking to our recurring existing shoots areas mentioned, the stronger that turns in and that terms revenue, And supply are advisory, leads that in as out I and we at business particular, contract do to which Ryan down, look in is pipeline as improve. the in in and ARR that and of we every and So duration had performance customers. of extending also that the the SaaS each specifically into for Score, Promoter of look green then look in we and and what

select and set before. the did there to we whole ability a as platform supply new in platform part of and customers that green us that the Smart, thing had chemical about that there's are shelves. cross-sell the aid Ultra is potentially haven't and some Software of properties evaluate And U.S.-based quarter on their this ULTRUS Advisory. that now our to beauty software ULTRUS that of their chain I to largest the is positions So Work address products to which their was And shoots retailer pleased great their introduces

shoots So we Advisory. of certainly, Software there are here, and performance but some out green expect better

We sales transformation expect they're XXXX. in better going the to legs through. get that

next Andy with Wittman question The comes Baird. Robert from W.

of could follow to offering a a future? are offering had just I'll of kind then your I value to comment with maybe curious here. exposure today. with first, just and up the you I are things Ryan. trends Great. questions as But of AI I'm types the couple on couple the business picture a of of what you're what things types -- bigger And guess, clarify what in to if question, you chain, be that things could in in seeing you particular? And Jenny,

is key and Consumer business there Industrial offering great our Thanks, a that fun to topic in products ways Yes. positively, the in both particularly that this are think and term, of and is the products. some ULTRUS both AI near really a about. through question some also our In affecting and Andy, we're

products. the So that ULTRUS, help our incorporated in content. into process retailer. wind forecasts key help and modeling we X The ways customers incorporating talked ways with with that in of business it chemical beauty ways large we're that AI. generate their within classify that we've analysis customers areas. The customers we our that our our We're the about already we're helping the the renewables just which advisory ways for I different

in product software positive offerings our way. is AR affecting a So just

services AI side, in those those need ways contain business amount we UL those cables the of centers, pretty to in is typically in tech centers early of extension the And then electrification, our see that which we're in stages certification labels like the the go centers needed components is ways data into certified. representing been labels be they've the our where seeing which data significant. because ongoing also in that data for electricity On an replaced,

So for considering next AI customers great trends embedded benchmark some see year, continue help revenue sway we're the products. We benchmark but to trajectory ways benchmarking that's that announce did safety our offering which as significantly to there. We a It's AI certainly their don't in expect they're PCs. it stages. in our that seeing a way we we early address program in

incubate continue offerings the to in intend needs to to they which AI. in respond going we're ways that So our use to customers'

just the Got then wanted make it. you're trying what fourth That's And correctly I Ryan. on understood quarter that helpful. margin to to sure I say performance,

you obviously basis the up -- mentioned third margins quarter were XXX points. You said

You that, were said you then were stronger. going things be they a negatives compensation couple costs. after But of to mentioned like that

think about fulfillment costs. said you I something

that So quarter than or -- will higher ex are sequentially you will fourth that saying the underlying, you items the be that the I as important sequentially all margins rate the that's in be in XXX. XXX think growth know but those be the I we might nuance called but out, get not as one they a strong it's point, on page. same margins

good no, Andy, question. Yes,

been fourth that to up the increase points. an And quarter, a margins we being XXX So the in expect fourth of adjusted higher year-to-date, report in EBITDA basis acceleration than that. our quarter

higher full that programs those the costs and fourth some be final and we'll incentive additional fulfillment that period it's the hot tempered final the how some services in be the year some year of lab fulfillment, outsourced demand by However, quarter. comes expenses mentioned, -- with quarter, need professional to multiple recorded I in

So of will revenue by the on be factors. incremental it's degree those flow tempered through just

JPMorgan. comes Stephanie Yee question next from with The

any margin could quarter I in growing say incremental if you the think in the particular provide thumb up fourth about last for a weren't mid- single quarter? flow-through typically digits we just Can if you the let's follow to how -- we all on was and could Ryan, rule high of question. to

-- in The period of we're a Yes. performance. increased

second the increasing pace in a our So at is revenue half.

compensation period fulfillment And so we associated time to with costs that. just shorter and have any of recognize a

temporary into the growth. And go this flow-through customers revenue and the components is the it's items. point, not But more that. skewed out our to by of of in from So increased detail outcome primary a at break accelerating position demand and consequence those is we're a

the for just you've it's several multiyear revenue at And in talking revenue about. the last Industrial of as look level starting of as Okay. segment, that we view looking into growth tailwinds XXXX. growth, been XXXX, posted kind you Do sustainable the currency double-digit constant when organic that quarters given

Yes. Stephanie, industrial, thanks question. The thing about for the

We in the proud be look the business, the power projects These of that transition to reflects and which that at really when do And sustainability. we're and automation seeing. you side are duration. really growth tend longer of energy double-digit

ago we've we the large-scale this battery the of reflective Korea the in at industrials more both certainly August, everything the macro look But that earlier about that business. and specific fact that, continue and added level, year. we we all there. of this durability the China, Hills a guidance we're to completed more year not to forward that And for world XXXX end trend It's at this commenting complete electrification a and newly an strength fact the point, of then we on You couple after beyond the capacity year. labs see years mega in over announced to extension Changzhou, more give going of next look of in Auburn the

Shlomo from Rosenbaum Stifel. comes question with next The

the us is time, that down, in form? so price. about quantify it coming And of volume Ryan, you the some as growth competitors European X about volume time. down. have or fair it's are picking could organic you're same in able revenue inflation follow-up. And talked have come I inflationary you but impact at pricing the maybe at seeing bit Is overcoming to for then comment way, drivers has that assume your growth the accelerate and shape coming a little between to that up same

And revenue a to certification very volume. service X more and of We those as testing know, themselves much service services primary for report X you and other Thank a testing a Yes. price you we testing categories, and and certification. product or non-certification Shlomo. report lend question, in the defined provide a issuing

quarter, well. quarter X.X% that. for pleased overall, to volume X increases the volume categories with But was are more third and we slightly price growth. than the pleased So those, both Those price third price. we In progress with in revenue in contribute as were it in grew the

Okay.

one? that the bottom accelerating. So on That's volume is line

correct. That's correct. That's

revenue and growth driven is is both our by But Yes. overall volume. Our growing. volume price actually,

this one for is Got you, it. Jenny. And

maybe of -- of one hand end the the we'd going And sourcing administration. up about through some how other the And U.S.? focused on your side, your China products And headwinds business. we're on then various about Just this? have from business And walk software the if to us with that, in you a maybe Is some and much of just about because think the could we helpful how specifically to business of of tariff China on more administrations that should on and advisory? is the thinking think side. terms the impact we to

Yes.

you of United only to products all, and successful is of the is or First need innovation and States universal safety Europe coming into product have kind and safety. safety enduring have and

a administration Republican look So administrative seen to today from at Democratic look administration. been at when you you through through in our rate pretty back through who's policies, in if -- we've XXXX It's administration Democratic matter consistent. office, from a growth a no demand, consistency

specifically, the So see continued question XXXX, saw about react. answer we've customers in to think this and ways tariffs, you to about we in which your an as our

majority And So continue the is export markets, to making launch to what from see China, to those they North we their or Europe. decisions into business about majority. America want house products where customers significant a manufacturing of is our

see continue visit to low the digits in single growth, teams that we field sites in China. our So

invested as manufacturing growth about and labs, our teams their make as by We distribution Mexico. sites in And we've customer Vietnam, decisions be to that continue and continue they locations. visit want to in size we'll house our where such to see higher where they field areas the new in India

terms was ULTRUS in help That's node. Will the about. chain of supply I what part of thinking business that

The really ULTRUS business is on materials supply chain traceability of products. within on focused the

or of chain software so to facilities they And as a can see manufacturing side I recertified in if that supply affect those in raw are the is or We it more on customers products suppliers recertify they licenses. decide move increase, going But locations. products. into the to think change it components our impact those bigger tick the other to certainly, their customer materials numbers that need or helping

[indiscernible] impact a on it's the side. So bigger

Haas comes Wells with question Fargo. next from Our Jason

a a quarters been of tailwind. couple value-based as It's least now where pricing out you've at called

if pricing? the a part curious was to get And you're I that's more So of if strategy. surgical doing anything little on bit

we curious going and are Just more process forward. where the there's in opportunities

focused We appreciate global asking one over has of to single instance That's it. force Jason. the really Thanks, sales our That have sales so few that on they that topics, members fingertips. I their years. completed on implemented my quote are power have all in teams of you the or really we training addition favorite configure the price the so implemented Oracle unleash analysis to now last a having been team X,XXX at how and of

pretty paid training the customers. our And value that sure to powerful we extend provide cases is make get goal And we for use engines. those so the that our ultimate and around to we continue the

you I'm could expectations That's as make curious your if recognizing for decision to about forward, in more they talk then made great. business, the CapEx follow-up, well. you And to that going seem off a be investments this paying conscious

you at that X% go the sort X.X% is as as we framework to the forward? So to right expectation, ] [ think about of look

we CapEx that than invest respond Historically, been around that. have seek has the see revenue as of prudent lab led Yes. and to support lower investments. high energy particularly bit of -- those to approach our those a understanding the to opportunities our underwriting needs transition themes have customer customers each opportunities. demand a of We to a percentage take revenue pretty us But visibility underlying to number in and investment, around against a to

new batteries and elevated some in like technologies on good investing a been large we've that in. CapEx, of returns are are There we're that period We CapEx. achieving

early always So But investments we are how what elevated basis continue also And whether of against our XXX-year large I themes in more energy to invest -- monitor transition. long that maintenance we're recent see of is a continue low. point our to fairly use relatively level is CapEx of we out will we're these we'll as innings the that in history those this to judge opportunities. UL think is and performing to important

And is on ahead us. see put of what we opportunities amount pretty we based CapEx toward the that so discretionary

The Jefferies. next ] Ante with from question comes [ Harold

Moore. I you know acquisition Harold [ is completed called of out recently This that TesTneT. ] Ante you for on Stephanie

acquisitions could you the acquiring? right [indiscernible] you acquisitions to think going think you As and about I the think multiple forward, give guess other business about now. just now market framework would us And of about a what use segments you sense of the if

question. you where investments market and the battery extend our And large-scale that's our why the Excellence, for impact. intellectual CapEx different have opportunity to opportunities Thanks leader, philosophically, Center we're And invest can of we position places these new see always new the But to the property that's retail have up Yes. deepen we to or strengthen priority. in and type research of footprint or we where our labs our the attractive of a or the where leading didn't like #X saw how net That's absolutely thought by really have. a into interesting now so. can leadership types we some had couldn't own we us where about into we do in where example applying in an if gives M&A. capabilities think on choose get to we our area perfect otherwise we easily test and of accretive. It strong they CapEx grow that hydrogen technologies us It's we something space those that in launches pick

X about opportunities the that got at our continue profile to M&A all timing fit the and business. think we over to need all we our how of it. look of relationships And what segments. the seek that's world. We've We So we across grow

on guess I on then brought Korea the Hills. in -- a And Auburn facility you just brought on being

these running So of expectations? Are came some backlog investments so a they you of how these on these there could some us just was Are line on if you you ahead for expectations. us been online. Can far? just that give give -- sense have going had color before

base. Yes, we existing got demand from until investing CapEx market clear we've have an underlying understanding commitments philosophy customer and of potential our not of

set Auburn And are utilization that and space So to Similarly, or with and lab. in that in the of ramping the Hills, is a had the growth Korea EV because fulfilling came lab we're with industrial commitments actually customer its fulfilling it innovation. case. their expectations looking that pleased the our customers, understandings battery up what help capacity that them that, to the space. backlog to a the capacity with And is in seeing invest forward pace is we're and battery we both came and of business asked online us

perform until you, to don't on your we that expectations. to backlog and thank that appreciate Well, look for capital matches exists. everyone, we All the our it support our us to we tend joining you philosophy next invest updating quarter. our So We believe And progress forward right. today.

Thank you. This conclude does today's teleconference.

time. You your may and day. lines for Thank your this participation, a disconnect you at have great