Financial Data and Key Metrics Changes - The company reported revenues of nearly $3.1 billion for the full year 2025, representing a 6.4% increase compared to 2024, and a 6.2% increase on an organic basis [8] - Adjusted EBITDA for the full year grew by 20.7%, with the adjusted EBITDA margin expanding by 300 basis points to 25.9% [9] - For Q4 2025, consolidated revenue was $789 million, up 6.8% year-over-year, with organic growth of 5.7% [16] Business Line Data and Key Metrics Changes - The industrial segment led growth with a 6.9% increase for the full year, including 7.1% on an organic basis, while the consumer segment grew by 6.5%, including 6.1% on an organic basis [8] - The software and advisory segment completed the year with 4% top-line growth, including 3.7% on an organic basis [8] - In Q4, revenues in the industrial segment rose 7.3% to $352 million, with adjusted EBITDA increasing by 21.9% to $128 million [20] - The consumer segment saw revenues of $335 million, up 8.4% from the previous year, with adjusted EBITDA increasing by 46.7% [21] - The software and advisory segment's revenues were $102 million, essentially flat year-over-year, with adjusted EBITDA for the quarter at $23 million, a 21.1% increase [22] Market Data and Key Metrics Changes - The company experienced growth across all major geographic regions, reflecting robust demand for its services [8] - The consumer technology market, particularly in EMC testing and HVAC, showed a surge in demand [21] Company Strategy and Development Direction - The company is focused on strategic investments in testing infrastructure, including new facilities for battery testing, HVAC, and electric motor efficiency [9][10] - A realignment of the software and advisory segment was announced to enhance customer value and innovation, with a focus on the newly named Risk and Compliance Software segment [12][13] - The company plans to divest its employee health and safety software business to concentrate on core software offerings [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid trade policy shifts and geopolitical uncertainties, highlighting strong cash flow generation and an investment-grade balance sheet [5][12] - The outlook for 2026 includes expectations for mid-single-digit organic revenue growth, with industrial growth anticipated to outpace consumer growth [25][26] - Management emphasized the importance of megatrends such as energy transition and sustainability in driving future demand [31] Other Important Information - The company generated $600 million from operating activities in 2025, an increase from $524 million in the prior year [23] - Capital expenditures for the year amounted to $197 million, or 6.5% of revenue, reflecting ongoing strategic investments [23] - The company repaid $253 million in borrowings and returned $104 million to shareholders through dividends [24] Q&A Session Summary Question: 2026 margin guidance drivers - Management indicated that the 2026 margin guidance reflects continuous improvement efforts and operational leverage, with restructuring initiatives contributing to cost efficiency [35][36] Question: Cash management and debt repayment - The initial use of proceeds from the asset sale will prioritize debt repayment, with a focus on reinvesting in the business and evaluating acquisition opportunities [39] Question: Performance in high-margin verticals - Management noted that growth is driven by a combination of megatrends, operational initiatives, and a favorable mix of services, particularly in high-margin sectors [45][46] Question: Advisory business performance - The advisory business has been softer, with management noting a closer tie to TIC services and a strategic shift to enhance integration with core offerings [83] Question: Lab utilization and productivity - Management emphasized that improvements in margin expansion are linked to both lab and expert utilization, with ongoing investments in technology to enhance productivity [87][88]

Financial Data and Key Metrics Changes - The company reported revenues of nearly $3.1 billion for the full year 2025, representing a 6.4% increase compared to 2024, and a 6.2% increase on an organic basis [6] - Adjusted EBITDA for the full year grew by 20.7%, with the adjusted EBITDA margin expanding by 300 basis points to 25.9% [7] - For Q4, consolidated revenue was $789 million, up 6.8% year-over-year, including organic growth of 5.7% [14] - Adjusted net income for Q4 was $114 million, an increase of 11.8% from $102 million in Q4 2024 [17] Business Line Data and Key Metrics Changes - The industrial segment led growth with a 6.9% increase for the full year, including 7.1% on an organic basis, while the consumer segment grew by 6.5%, including 6.1% on an organic basis [6] - The software and advisory segment completed the year with 4% top-line growth, including 3.7% on an organic basis [6] - In Q4, revenues in the industrial segment rose 7.3% to $352 million, or 6.1% on an organic basis, while consumer revenues were $335 million, up 8.4% or 7.1% on an organic basis [18][19] Market Data and Key Metrics Changes - The company experienced growth across all major geographic regions, indicating a robust demand for its services [6] - The demand for services in the consumer technology sector, including EMC testing and HVAC, surged, contributing to the growth in the consumer segment [19] Company Strategy and Development Direction - The company is focused on aligning with major industry megatrends, such as energy transition and sustainability, which are driving demand for its services [4][31] - Significant investments were made in global testing infrastructure, including new facilities for battery testing and HVAC testing, to enhance capabilities [7][8] - The company announced a strategic realignment of its software and advisory segment to focus on high-quality growth and divestiture of non-core businesses [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid trade policy shifts and geopolitical uncertainties, highlighting strong cash flow generation and an investment-grade balance sheet [4] - The outlook for 2026 includes expectations for mid-single-digit organic revenue growth, with industrial growth anticipated to outpace consumer growth [24] - Management emphasized the importance of continuous improvement and operational leverage as key drivers for future margin expansion [34][35] Other Important Information - The company generated $600 million from operating activities in 2025, an increase from $524 million in the prior year, with free cash flow totaling $403 million [22] - The divestiture of the employee health and safety software business is expected to close in Q2, with a sale price of approximately $210 million [23] Q&A Session Summary Question: 2026 margin guidance drivers - Management indicated that the 2026 margin guidance reflects continuous improvement efforts and operational leverage, with a focus on increasing lab capacity and staff utilization [34][35] Question: Cash management and debt repayment - The initial use of proceeds from the asset sale will prioritize debt repayment, with ongoing evaluations for reinvestment opportunities [38] Question: Performance in high-margin verticals - Management noted that growth is driven by multiple factors, including megatrends and operational initiatives, leading to high-quality growth across various sectors [43][44] Question: Advisory business performance - The advisory business has been softer, with management recognizing a need to align it more closely with TIC services to enhance synergies [81][83] Question: Lab utilization impact on margins - Management acknowledged that while lab utilization contributes to margin expansion, it is challenging to quantify its exact impact due to the diversity of labs and services [89]