STERIS Announces Financial Results for Fiscal 2027 Second Quarter
STERIS plc (STE) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 STERIS Announces Financial Results for Fiscal 2027 Second Quarter • Fiscal 2027 second quarter revenue increased 9%; constant currency organic revenue growth was 8% • Fiscal 2027 second quarter as reported diluted EPS increased to $2.19; adjusted EPS per diluted shar
How this was made
The 30-second read
Why it matters
The earnings beat and revised EPS guidance provide a fresh catalyst for the stock, potentially driving short‑term price appreciation.
Market read
The report offers a primary earnings disclosure with upgraded guidance, making it a high‑value trading signal for STE.
What to watch
The announced restructuring plan could introduce near‑term execution risk despite the earnings beat.
Fiscal 2027 second quarter revenue increased 9%; constant currency organic revenue growth was 8%; as reported diluted EPS increased to $2.19; adjusted EPS per diluted share increased to $2.94.
Revenue, segment operating income and both GAAP and adjusted diluted EPS increased from the prior-year quarter, led by 18% Life Sciences revenue growth. The full-year adjusted EPS outlook increased, while consolidated revenue growth expectations were unchanged and first-half operating cash flow and free cash flow declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $1.59B | – | 8.8 % |
| Constant currency organic revenue growth, three months ended September 30, 2026non-GAAP | 8.1 % | – | 8.1 % |
| Gross profit, three months ended September 30, 2026GAAP | $710.8M | – | – |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $719.6M | – | – |
| Selling, general, and administrative expenses, three months ended September 30, 2026GAAP | $366M | – | – |
| Research and development expenses, three months ended September 30, 2026GAAP | $31.5M | – | – |
| Restructuring expenses, three months ended September 30, 2026GAAP | $19.1M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $416.6M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $294.3M | – | – |
| Adjusted income from operations, three months ended September 30, 2026non-GAAP | $390.5M | – | – |
| Net income, three months ended September 30, 2026GAAP | $214.1M | – | – |
| Net income attributable to shareholders, three months ended September 30, 2026GAAP | $213.7M | – | – |
| Adjusted net income attributable to shareholders, three months ended September 30, 2026non-GAAP | $286.8M | – | – |
| Diluted EPS, three months ended September 30, 2026GAAP | $2.19 | – | – |
| Adjusted diluted EPS, three months ended September 30, 2026non-GAAP | $2.94 | – | – |
| Income tax rate, three months ended September 30, 2026GAAP | 25.7 % | – | – |
| Adjusted income tax rate, three months ended September 30, 2026non-GAAP | 25.3 % | – | – |
| Revenue, six months ended September 30, 2026GAAP | $3.08B | – | 8.1 % |
| Constant currency organic revenue growth, six months ended September 30, 2026non-GAAP | 7.2 % | – | 7.2 % |
| Gross profit, six months ended September 30, 2026GAAP | $1.40B | – | – |
| Income from operations, six months ended September 30, 2026GAAP | $580.1M | – | – |
| Adjusted income from operations, six months ended September 30, 2026non-GAAP | $745.2M | – | – |
| Net income attributable to shareholders, six months ended September 30, 2026GAAP | $413.8M | – | – |
| Diluted EPS, six months ended September 30, 2026GAAP | $4.23 | – | – |
| Adjusted diluted EPS, six months ended September 30, 2026non-GAAP | $5.53 | – | – |
| Net cash provided by operating activities, six months ended September 30, 2026GAAP | $656.1M | – | – |
| Free cash flow, six months ended September 30, 2026non-GAAP | $492.5M | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $531.1M | – | – |
| Short-term indebtedness, September 30, 2026GAAP | $243.1M | – | – |
| Long-term indebtedness, September 30, 2026GAAP | $1.65B | – | – |
| Total backlog, second quarter fiscal 2027other | $548.9M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| HealthcareService revenue increased 10%, consumables revenue grew 10%, and capital equipment revenue increased 4%. Constant currency organic revenue growth was 7%. | $1.12B | – | 8.6 % |
| Applied Sterilization Technologies (AST)Service revenue grew 5% and capital equipment revenue declined 21%. Constant currency organic revenue growth was 5%. | $295.6M | – | 5.0 % |
| Life SciencesCapital equipment revenue grew 53%, consumables revenue improved 9%, and service revenue grew 5%. Constant currency organic revenue growth was 18%. | $170.6M | – | 17.7 % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
FY 2027, twelve months ended March 31, 2027 outlook
- RevenueAs reported revenue growth of 7-8% and constant currency organic revenue growth of 6-7%.
- NoteAdjusted net income from continuing operations per diluted share $11.35 - $11.55
- NoteNet income from continuing operations per diluted share $8.92 - $9.12
- NoteCash flows from operating activities $1,250.0
- NotePurchases of property, plant, equipment, and intangibles (450.0)
- NoteFree Cash Flow $800.0
- NoteHealthcare constant currency organic revenue growth 6-7%
- NoteApplied Sterilization Technologies constant currency organic revenue growth 6-7%
- NoteLife Sciences constant currency organic revenue growth 9-10%
- NoteThe revised outlook includes the benefit of approximately $0.18 from tariff refunds received year-to-date.
Capital returns
- Repurchases of ordinary shares were $(215.9) million for the six months ended September 30, 2026, compared with $(111.1) million for the six months ended September 30, 2025.
- Cash dividends paid to ordinary shareholders were $(128.4) million for the six months ended September 30, 2026, compared with $(118.1) million for the six months ended September 30, 2025.
- Cash dividends declared per ordinary share outstanding were $0.69 for the three months ended September 30, 2026, compared with $0.63 for the three months ended September 30, 2025.
What drove it
- Second-quarter total revenue increased 9% to $1.6 billion, with constant currency organic revenue growth of 8%.
- Healthcare operating income was $269.2 million, with improved volume and price partially offset by inflation, lower productivity and investments.
- AST operating income was $132.1 million, as improved price was partially offset by inflation and increased depreciation.
- Life Sciences operating income increased to $75.8 million, reflecting improvement in price, productivity, volume and favorable mix.
- The pre-tax impact of tariff refunds on as reported second-quarter results was a benefit of approximately $20 million; gross tariff costs were flat with the prior year at $15 million for the quarter.
- Corporate operating loss was $(86.7) million in the second quarter of fiscal 2027, compared with $(109.9) million in the prior-year quarter.
Concerns
- First-half net cash provided by operating activities and free cash flow declined, driven primarily by a significantly lower contribution from working capital in fiscal 2027 compared with fiscal 2026.
- AST capital equipment revenue declined 21% in the second quarter.
- Second-quarter restructuring expenses were $19.1 million, compared with $2.2 million in the prior-year quarter.
- The additional restructuring plan is expected to result in total charges of approximately $45 million, including approximately $10 million in cash expenditures and $35 million in non-cash charges.
- The Company expects to discontinue disclosure of backlog beginning in fiscal 2028, as backlog has become a less meaningful indicator of future revenue trends across the business.
What to watch
- Delivery against FY 2027 adjusted net income from continuing operations per diluted share outlook of $11.35 - $11.55.
- Healthcare constant currency organic revenue growth outlook of 6-7%, AST outlook of 6-7%, and Life Sciences outlook of 9-10%.
- The tariff-refund benefit of approximately $0.18 included in the revised outlook.
- Execution of the additional targeted restructuring plan, which is expected to generate annualized savings of approximately $9 million, with a portion realized in fiscal 2028 and the full benefit realized in subsequent fiscal years.
- Revised fiscal 2027 outlook inclusive of the proposed Xodus Medical acquisition after closing.
- Cash flows from operating activities outlook of $1,250.0 and Free Cash Flow outlook of $800.0.
Balance sheet and cash flow
- Cash and cash equivalents were $531.1 million at September 30, 2026, compared with $439.6 million at March 31, 2026.
- Short-term indebtedness was $243.1 million and long-term indebtedness was $1,650.3 million at September 30, 2026.
- Net cash provided by operating activities was $656.1 million for the six months ended September 30, 2026, compared with $707.8 million in the prior-year period.
- Purchases of property, plant, equipment, and intangibles were $(163.6) million for the six months ended September 30, 2026, compared with $(180.1) million in the prior-year period.
- Free cash flow was $492.5 million for the six months ended September 30, 2026, compared with $527.7 million in the prior-year period.
Analysis
STERIS reported second-quarter revenue of $1,588.6 million, compared with $1,460.3 million in the prior-year quarter. The company reported 8.8 % U.S. GAAP revenue growth and 8.1 % constant currency organic revenue growth. Recurring revenue was $1,268.0 million and capital equipment revenue was $320.6 million. GAAP income from operations rose to $294.3 million from $265.8 million, while adjusted income from operations increased to $390.5 million from $337.1 million. GAAP diluted EPS was $2.19 and adjusted diluted EPS was $2.94, compared with $1.94 and $2.47, respectively.
All three operating segments increased revenue. Healthcare generated $1,122.4 million of revenue and $269.2 million of segment operating income, with service and consumables each growing 10%. AST revenue was $295.6 million and segment operating income was $132.1 million. Its service revenue grew 5%, but capital equipment revenue declined 21%. Life Sciences was the principal growth contributor, with revenue of $170.6 million, 17.7 % U.S. GAAP growth, 18.1 % constant currency organic growth, and segment operating income of $75.8 million. Its capital equipment revenue grew 53%.
The company cited improved volume and price in Healthcare, price improvement in AST, and price, productivity, volume and favorable mix in Life Sciences as operating-income drivers. Second-quarter GAAP results also received a pre-tax benefit of approximately $20 million from tariff refunds, while gross tariff costs were flat with the prior year at $15 million. Restructuring expenses were $19.1 million in the quarter. A separate targeted plan approved during the quarter is expected to generate annualized savings of approximately $9 million, but carries anticipated charges of approximately $45 million.
Cash conversion was weaker through the first half. Net cash provided by operating activities was $656.1 million and free cash flow was $492.5 million, compared with $707.8 million and $527.7 million in the prior-year period. The company attributed the declines primarily to a significantly lower working-capital contribution, partially offset by higher net income. It repurchased $(215.9) million of ordinary shares and paid $(128.4) million of cash dividends during the six-month period. Cash and cash equivalents were $531.1 million at September 30, 2026.
The FY 2027 consolidated revenue-growth outlook was unchanged at 7-8% as reported and 6-7% constant currency organic. Adjusted net income from continuing operations per diluted share guidance increased to $11.35 - $11.55 from prior expectations of $11.10 to $11.30, including approximately $0.18 from tariff refunds received year-to-date. Segment outlook changed materially beneath the unchanged consolidated revenue framework: AST constant currency organic growth is now 6-7% versus prior outlook of 7-8%, while Life Sciences is now 9-10% versus 6-7%; Healthcare remains 6-7%.
Management, verbatim
We are pleased with our second quarter performance.
Dan Carestio, President and CEO of STERIS
Life Sciences delivered particularly strong performance in the quarter, giving us confidence to raise our expectations for the segment for the full year.
Dan Carestio, President and CEO of STERIS
Fiscal 2027 is shaping up to be another record year for STERIS, supported by solid underlying demand and excellent execution from our commercial teams.
Dan Carestio, President and CEO of STERIS
Not in the filing
stated, not guessed- No gross margin percentage was reported for the second quarter or six-month period.
- No prior-quarter figures were reported for the income statement, segment revenue, segment operating income, EPS, operating cash flow, or free cash flow metrics.
- No forward gross margin, operating expenses, or tax rate guidance was reported.
- No separately provided previous outlook section was supplied for formal actual-versus-prior-guidance comparisons.
- No total debt line item was reported; short-term indebtedness and long-term indebtedness were reported separately.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
STERIS plc (NYSE: STE) released its FY2027 Q2 8‑K filing, detailing financial performance and an updated outlook.
Ticker impact
STERIS plc reported Q2 FY2027 results with 9% revenue growth and updated FY2027 adjusted EPS guidance to $11.35‑$11.55.
likely upward pressure as investors price in higher earnings guidance
Revenue beat and an upgraded EPS range suggest stronger profitability, prompting buying interest.
Market effects
Healthcare equipment and life‑sciences suppliers may see modest upside from STERIS's strong segment performance.
European and Irish markets could benefit from the positive earnings of a Dublin‑based multinational.
Limited; impact confined to STERIS and its immediate supply chain.
Counterpoint
If tariff refunds are temporary, the raised guidance may be overstated, leading to a pull‑back.
Key entities
- ExecutiveDan Carestio
President and CEO of STERIS who commented on the results.
