Sotera Health Company

Second-quarter 2026 revenue increased 9.2% to $321 million, or 8% constant currency, versus Q2 2025. GAAP net income was $54 million, or $0.19 per diluted share; adjusted EPS was $0.26, up 30% year over year. Adjusted EBITDA rose 10% to $166 million, or 8.7% constant currency, and adjusted EBITDA margin expanded 36 basis points to 51.6%. By segment, Sterigenics revenue was $212 million, up 8.6% reported and 7% constant currency, with segment income margin up 53 basis points; Nordion revenue was $49 million, up 15.8% reported and 16.7% constant currency, with segment income margin up 160 basis points to 56.9%; Nelson Labs revenue was $61 million, up 6.3% reported and 5.4% constant currency, with segment income margin of 32.4%. For 2026, management raised revenue guidance to $1.236 billion-$1.254 billion and adjusted EBITDA guidance to $634 million-$643 million, including about a 100 basis point foreign currency benefit in each case. They also improved adjusted EPS guidance to $0.95-$1.01, lowered interest expense guidance to $135 million-$142 million, raised the effective tax rate outlook to 27%-28%, and increased capex guidance to $200 million-$225 million. Management continued to expect Sterigenics to deliver mid- to high single-digit constant currency revenue growth, Nordion low- to mid-single-digit growth, and Nelson Labs low-single-digit growth, with segment income margin in the low- to mid-30% range overall.

Alton Shader struck an optimistic but measured tone, emphasizing that he is still in the early stages of learning the business and focusing first on talent, customers, and operating discipline. He highlighted a bigger opportunity around cross-business-unit or 'One Sotera' solutions, saying the businesses are complementary and work best together. He also said the company’s strong customer relationships, essential role in healthcare, and financial strength support consistent growth.

John Lyons focused on the quarter’s financial improvement and the balance sheet. He cited $88 million of operating cash flow, $46 million of capex, $34 million of interest expense, and $1.4 billion of term loan debt that has seen borrowing costs reduced by 100 basis points in less than a year. He said net leverage improved to 3x, reaching the long-term target range of 2 to 3x, and noted that liquidity remains strong. On guidance, he pointed to lower interest expense, a 27%-28% tax rate, and higher adjusted EPS guidance of $0.95-$1.01.

Analysts pressed on Nelson Labs’ stronger-than-expected growth, asking whether it reflected temporary project timing or more durable demand. Management said some of the Q2 upside came from customers bringing work to Nelson and that some of it will continue through the year, while also saying the validation pipeline looks healthy. Questions also focused on Sterigenics volumes, pricing, and the new X-ray capacity; management said demand looks stable, competition has not materially changed, pricing is still being achieved at value-based levels, and the X-ray facility is on track with revenue starting in Q3. On capital allocation, management said the main priority is using free cash flow to accelerate growth through internal investment and M&A, especially around sterilization and Nelson Labs.