Margin Outlook
Q: Will margins improve in Q4 despite higher costs?
A: Management expects adjusted EBITDA margin to expand more than the 130 basis point increase year-to-date in Q4, even with higher fulfillment and compensation costs due to increased demand and final expenses for incentive programs. However, margin improvement may be tempered by these factors.

Industrial Segment Growth
Q: Is double-digit Industrial growth sustainable into 2025?
A: Management is proud of the double-digit growth in the Industrial segment, driven by long-duration projects and megatrends like the electrification of everything and sustainability. They've added capacity in battery labs globally, reflecting strong and durable demand. Specific guidance for 2025 will be provided after year-end.

Revenue Growth Drivers
Q: Is revenue growth driven by volume or price increases?
A: Revenue growth is driven by both volume and price, with volume contributing slightly more in Q3. Certification and non-certification testing services grew 9.5%, with both factors playing a role. Overall, volume is accelerating.

Software and Advisory Underperformance
Q: Why did Software and Advisory underperform, and when will growth reaccelerate?
A: The segment underperformed due to various factors, but there are positive signs like reduced churn, longer contract terms, and improved Net Promoter Scores. Management expects better performance as the sales transformation progresses in 2025.

Consumer Segment Demand
Q: Explain the surge and potential deceleration in Consumer demand.
A: The Consumer segment experienced strong growth due to increased activity from new product offerings. This surge may taper in Q4, but they continue to see strength in sustainability testing and expect mid- to high single-digit growth.

Consumer Margin Expansion
Q: Is there room for further Consumer margin expansion?
A: Consumer margins are trending toward a new normal, supported by operating leverage, pricing, and investments in new lab capabilities. Footprint optimization and capacity additions contribute to margin improvements. Management feels they have reached a new normal.

CapEx Expectations
Q: What are CapEx expectations going forward?
A: CapEx is expected to be approximately 8% to 8.5% of revenue in 2024 due to investments in new labs to meet customer demand, particularly around energy transition. Future investments will be based on the performance of recent projects.

Impact of Tariffs
Q: How would tariffs impact your business, especially with China?
A: Demand for product safety is consistent regardless of administrative policies. The majority of business from China is for export markets. As customers change manufacturing locations, ULS supports them through testing and certification services in new regions.

Value-Based Pricing Strategy
Q: Are you becoming more strategic in value-based pricing?
A: Management has implemented tools like Oracle Configure Price Quote and is training their sales team to leverage analytics for pricing. Their goal is to ensure they are paid for the value provided to customers.

AI Opportunities
Q: What is your exposure to the AI value chain?
A: ULS is incorporating AI into software products like ULTRUS and sees opportunities in testing components for AI data centers. They have introduced a benchmark program for AI in PCs and are developing offerings to meet customers' AI-related needs.

Acquisitions
Q: What is your M&A strategy after acquiring TesTneT?
A: ULS seeks acquisitions that provide unique capabilities, such as TesTneT's expertise in hydrogen. They consider M&A across all segments to grow the business when opportunities align with their strategic goals.