Sotera Health — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 net revenues increased 4.4% year-over-year to $324.9 million.
• Q3 2026 net income was $58.4 million, or $0.20 per diluted share, compared to $48.4 million ($0.17 per share) in Q3 2025.
• Q3 2026 Adjusted EBITDA increased 3.9% to $170.7 million, or 4.0% on a constant currency basis.
• Q3 2026 Adjusted EPS was $0.29, a 12% increase from $0.26 in Q3 2025.
• Q3 2026 Adjusted EBITDA margin improved nearly 100 basis points sequentially to 52.5%.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $228.5 million.
• Total debt stood at $2.24 billion as of September 30, 2026, compared to $2.24 billion as of December 31, 2025.
• Unrestricted cash and cash equivalents were $412 million as of September 30, 2026, up from $345 million as of December 31, 2025.
• Net Leverage Ratio improved to 2.9x as of September 30, 2026, from 3.2x as of December 31, 2025.
• Nine-month 2026 net revenues increased 7.7% to $926.3 million.
• Nine-month 2026 net income was $138.6 million, or $0.48 per diluted share, compared to $43.1 million ($0.15 per share) in the prior year period.

Guidance and Future Outlook:

• Reaffirmed full-year 2026 net revenues growth outlook of 5.25% to 6.75% on a constant currency basis.
• Reaffirmed full-year 2026 Adjusted EBITDA growth outlook of 5.75% to 7.25% on a constant currency basis.
• Full-year 2026 net revenues guidance range is $1.233 billion to $1.250 billion.
• Full-year 2026 Adjusted EBITDA guidance range is $632 million to $641 million.
• Full-year 2026 Adjusted EBITDA margins are expected to be approximately flat versus 2025.
• Foreign currency benefit to net revenues and Adjusted EBITDA revised to 70 basis points from 100 basis points.
• Full-year 2026 interest expense guidance narrowed to $137 million to $140 million.
• Full-year 2026 tax rate applicable to Adjusted Net Income remains in the range of 27.0% to 28.0%.
• Full-year 2026 Adjusted EPS guidance remains in the range of $0.95 to $1.01.
• Full-year 2026 weighted-average fully diluted share count remains in the range of 289 million to 291 million shares.
• Full-year 2026 capital expenditures remain in the range of $200 million to $225 million.

Business Segments and Product Lines:

• Sterigenics: Q3 2026 net revenues increased 8.5% to $209 million (8.2% constant currency); segment income increased 9.6% to $117 million; segment income margin improved 57 basis points. Revenue growth driven by pricing, volume, mix, and foreign currency benefit, partially offset by inflation.
• Nelson Labs: Q3 2026 net revenues increased 8.8% to $61 million (9.2% constant currency); segment income increased 2.5% to $19 million. Revenue growth driven by favorable volume, mix, and pricing, partially offset by foreign exchange.
• Nordion: Q3 2026 net revenues decreased 12.4% to $55 million (11.5% constant currency) due to expected Co-60 harvest timing; segment income decreased 11.4% to $34 million. Segment income margin improved 71 basis points.
• Completed a new Nelson Labs Annex-1 compliant cleanroom during the quarter.
• Nine-month 2026 Sterigenics net revenues increased 8.9% to $607 million; segment income increased 9.6% to $332 million.
• Nine-month 2026 Nordion net revenues increased 6.1% to $146 million; segment income increased 8.2% to $85 million.
• Nine-month 2026 Nelson Labs net revenues increased 4.9% to $173 million; segment income decreased 2.4% to $54 million.

Market and Competitive Landscape:

• Sotera Health is a leading global provider of mission-critical end-to-end sterilization solutions, lab testing, and advisory services for the healthcare industry.
• The company operates through three businesses: Sterigenics, Nordion, and Nelson Labs.
• Management highlighted the company's focus on being a trusted partner providing exceptional service, quality, reliability, and technical expertise.

Risks and Challenges:

• Risks include disruption in the availability or supply of, or price increases for, ethylene oxide (EO) and Co-60, including due to geopolitical instability, sanctions, or supply chain continuity issues.
• Risks include fluctuations in foreign currency exchange rates and evolving environmental, health, and safety regulations.
• Legal and liability risks include litigation related to EO emissions and releases, product liability claims, recalls, and penalties.
• Operational risks include compliance with extensive regulatory requirements, business continuity hazards (e.g., supply chain disruptions, government shutdowns), and cybersecurity incidents.
• Financial risks include the company's significant degree of leverage and its impact on capital raising and operational flexibility.
• Outlook assumptions include current expectations regarding supply chain continuity for EO and Co-60 and the impact of inflationary trends on energy prices and labor supply.

Management Commentary and Tone:

• CEO Alton Shader expressed pleasure with the third-quarter performance, citing solid top- and bottom-line constant currency growth and nearly 100 basis points of sequential Adjusted EBITDA margin expansion.
• Management noted that performance was supported by year-over-year constant currency revenue growth of 8.2% at Sterigenics and 9.2% at Nelson Labs.
• Management reaffirmed the 2026 constant currency revenue and Adjusted EBITDA outlook based on year-to-date performance and expectations for the remainder of the year.

Other Key Points:

• Achieved a credit rating upgrade from Moody's Ratings in early October 2026, reflecting progress in strengthening the balance sheet and reducing leverage.
• Net Leverage Ratio of 2.9x is within the Company's long-term goal of 2.0x to 3.0x.
• Illinois EO litigation settlements of $64.9 million were recorded in the first nine months of 2025 but were $0 in the first nine months of 2026.
• Professional services relating to EO sterilization facilities totaled $34.9 million for the nine months ended September 30, 2026.
• Depreciation and amortization totaled $96.5 million for the nine months ended September 30, 2026.
• Share-based compensation totaled $29.6 million for the nine months ended September 30, 2026.
• Management will host a conference call and live webcast at 9:00 a.m. Eastern Daylight Time on November 3, 2026.
• Upcoming events include the Jefferies London Healthcare Conference on November 18, 2026, and the Piper Sandler 36th Annual Healthcare Conference on December 2, 2026.