Sotera Health (SHC)·Q4 2025 Earnings Summary
Sotera Health Delivers 20th Straight Year of Revenue Growth, Stock Rises 1.5%
February 24, 2026 · by Fintool AI Agent
Sotera Health (NASDAQ: SHC) reported Q4 2025 results that extended its remarkable growth streak to 20 consecutive years of revenue gains. Full-year 2025 revenue reached $1.164B (+5.7% YoY), with Adjusted EPS of $0.86 beating consensus by 2.4%. The stock rose 1.5% in after-hours trading to $17.75.
Did Sotera Health Beat Earnings?
Sotera Health delivered solid results that modestly exceeded analyst expectations:
*Values retrieved from S&P Global
Quarterly Results (Q4 2025):
The 20-year revenue growth streak underscores what CEO Michael Petras called "the strength and resiliency of our business model."
Ask Fintool AI AgentHow Did Each Segment Perform?
Segment performance diverged sharply in Q4, with Sterigenics leading and Nordion dragging on timing-related headwinds:
Sterigenics (Sterilization Services) — Strong Execution
Sterigenics growth was driven by favorable pricing, volume/mix improvements, and favorable FX. This segment represents ~65% of total revenue and remains the primary growth engine.
Nordion (Cobalt-60 Supply) — Timing Impact
The Q4 decline was "expected" and driven by timing of Cobalt-60 harvest schedules — not a fundamental issue. Full-year growth of 8.2% demonstrates underlying demand strength.
Nelson Labs (Lab Testing & Advisory) — Margin Improvement Story
Despite full-year revenue decline, segment income grew 6% on "disciplined operational execution" and margin improvement. Core lab testing growth offset declines in Expert Advisory Services.
What Did Management Guide for 2026?
Management issued FY 2026 guidance above current consensus, signaling confidence in continued growth:
Key Assumptions:
- Constant currency revenue growth of 5.0%-6.5% plus ~100bps FX benefit
- Tax rate of 27%-29% on Adjusted Net Income
- Diluted shares of 289M-291M
- Total company pricing expected at mid-point of 3%-4% long-term range
- FX benefit weighted toward 1H'26, with largest impact in Q1'26
Segment Cadence for 2026:
Nelson Labs' Q1 decline is notable — expect sequential improvement through the year. Nordion's Q2-heavy 1H reflects harvest timing.
CEO Petras noted the company remains "on track to meet the financial goals presented at our November 2024 investor day."
Ask Fintool AI AgentHow Did the Stock React?
SHC shares rose +1.5% in after-hours trading following the earnings release, moving from $17.49 to $17.75.
Recent Earnings Reaction History:
*After-hours reaction
The muted positive reaction likely reflects:
- Results in-line to slightly above expectations
- Clean guidance with continued growth trajectory
- Improved balance sheet with net leverage at 3.2x
Valuation Context:
- 52-week range: $9.53 - $19.85
- Current price: $17.75 (after-hours)
- YTD 2026 performance: -1.2%
What Changed This Quarter?
Balance Sheet Strengthening:
The deleveraging progress is notable — net leverage improved by 0.5 turns YoY, with no outstanding borrowings on the revolver.
Illinois EO Litigation Settlements: The company recorded $64.9M in Illinois EO litigation settlements during 2025 , settling 226 pending and threatened claims across two term sheets (April and July 2025). This removes a key litigation overhang that had pressured shares throughout 2024-2025.
Public Float Expansion: Warburg Pincus and GTCR completed three secondary share sales in 2025, increasing public float to 80% of outstanding shares. This improves liquidity without impacting the company's balance sheet.
Management Transition
Effective April 1, 2026, General Counsel Alex Dimitrief will retire after three years, transitioning to an advisory role focused on EO litigation matters at $22,500/month.
Erika Ostrowski, current VP, Deputy General Counsel and Corporate Secretary (2 years under Dimitrief), will be promoted to SVP and General Counsel. CEO Petras highlighted her "strong leadership, sound judgment and deep understanding of our business."
Key Risks and Concerns
EO Regulatory/Litigation Risk:
- Professional services costs for EO sterilization facilities totaled $46.2M in 2025
- Ongoing litigation and regulatory uncertainty around EO emissions remains a key risk
Supply Chain Concentration:
- Dependence on ethylene oxide (EO) and Cobalt-60 supply creates operational risk
- Geopolitical factors including Russia sanctions affect Co-60 supply dynamics
Leverage:
- While improving, 3.2x net leverage remains elevated
- 2026 guidance assumes $135M-$145M in interest expense
Ask Fintool AI AgentForward Catalysts
Near-term events to watch:
- Barclays Global Healthcare Conference (March 11, 2026)
- KeyBanc Healthcare Forum (March 17, 2026)
- Q1 2026 earnings (expected early May)
Progress Against Investor Day 2025-2027 Targets:
All five Investor Day commitments tracking "on track" heading into year two. The 118bps margin expansion in FY 2025 positions the company well within the 50-150bps cumulative target range, while $210M of free cash flow represents strong progress toward the $500M-$600M three-year cumulative goal.
Bottom Line
Sotera Health delivered a clean quarter that extended its impressive 20-year revenue growth streak. Sterigenics continues to execute at a high level (+10% growth), while Nordion's Q4 weakness was purely timing-related. The balance sheet is clearly improving, EO litigation settlements are progressing, and 2026 guidance implies continued mid-single-digit growth with margin expansion.
The +1.5% after-hours move suggests the market sees this as a "steady as she goes" quarter — no fireworks, but no concerns either. For a stock that's been volatile around litigation headlines, consistent operational execution is exactly what shareholders needed.
Q&A Highlights
NESHAP Regulatory Update: CEO Petras noted that "NESHAP has got a two-year extension period, so we're seeing discussions about insourcing and outsourcing, slowing down." One customer transitioning sterilization to SHC will start bringing volume in late 2026, rolling into 2027-2028. No "ice breaking" or significant shifts in the insourcing/outsourcing arena yet.
Q1 2026 Soft Start: Management flagged a softer-than-normal Q1 due to scheduled shutdowns and weather impacts. Sterigenics guiding to mid-single digits constant currency growth for Q1 — the lightest quarter expected for the year.
X-ray Facility Progress: The new X-ray facility is on track to open in 2H 2026 and begin customer qualifications. Utilization is "a little bit lighter" than the typical 40% target before breaking ground, and IRR will be below the 20% target as a greenfield investment. Management expects minimal 2026 impact, with ramp accelerating in 2027-2028.
Commercial Segment Challenges: The commercial segment (electronics, food, spices — less than 16% of Sterigenics) has been "choppy" since COVID, with some volumes "more probably shrinking than growing" due to customer product redesigns. Med tech volumes remain the core foundation and are "in a pretty good spot."
Bioprocessing Momentum: Despite a "very small base," bioprocessing volumes saw "significant growth" in 2025 and management expects that to continue into 2026. Sales team believes they've picked up some share.
Tariffs and Onshoring: Management sees no material tariff impact — the cobalt product is USMCA-certified. If onshoring were to accelerate, SHC is "very well situated" with significant US manufacturing presence. No major customer commitments to onshoring observed yet.
Cross-Business Unit (XBU) Growth: Revenue from XBU customers (using both Sterigenics and Nelson Labs) expanded 9% YoY, with several hundred customers now doing business across both platforms. Customer satisfaction scores exceeded 80% overall, with Sterigenics "even significantly higher."
Litigation Update: No trial set for 2026 other than the public nuisance case in New Mexico scheduled for July. No material change in litigation timelines.
Strategic Developments
Board Addition: Richard Kyle joined the board in February 2026, bringing "leadership experience as a public company CEO and extensive experience in operations and governance."
Nordion Milestones:
- Signed a cobalt development agreement with Westinghouse and PSEG
- Secured a 25-year Class 1B license renewal for the Ottawa facility — the longest ever issued by the Canadian Nuclear Safety Commission
This analysis was generated by Fintool AI Agent based on Sotera Health's Q4 2025 earnings release filed February 24, 2026.
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