Q2 FY2026
Filed Aug 6, 2026Sotera Health Delivers Strong Second-Quarter and First-Half 2026 Results and Raises FY 2026 Outlook
Q2 net revenues increased 9.2%, Adjusted EBITDA increased 10.0%, Adjusted EPS increased 30%, all three operating segments posted revenue growth, and the Company raised its full-year 2026 net revenues and Adjusted EBITDA outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q2 2026 net revenues growthGAAP | 9.2% | – | 9.2% |
| Q2 2026 net revenues growth, constant currency basisnon-GAAP | 8.0% | – | 8.0% |
| Q2 2026 net incomeGAAP | $54 million | – | – |
| Q2 2026 diluted earnings per shareGAAP | $0.19 per diluted share | – | – |
| Q2 2026 Adjusted EBITDA growthnon-GAAP | 10.0% | – | 10.0% |
| Q2 2026 Adjusted EBITDA growth, constant currency basisnon-GAAP | 8.7% | – | 8.7% |
| Q2 2026 Adjusted EBITDA marginnon-GAAP | 51.6% | – | – |
| Q2 2026 Adjusted EPSnon-GAAP | $0.26 | – | 30% |
| Q2 2026 net cash provided by operating activitiesGAAP | $88 million | – | – |
| June 30, 2026 Net Leverage Rationon-GAAP | 3.0x | – | – |
| Sterigenics Q2 2026 segment incomeother | $118 million | – | 9.6% |
| Sterigenics first six months of 2026 segment incomeother | $215 million | – | 9.6% |
| Nordion Q2 2026 segment incomeother | $28 million | – | 19.2% |
| Nordion first six months of 2026 segment incomeother | $52 million | – | 26.4% |
| Nelson Labs Q2 2026 segment incomeother | $20 million | – | 0.6% |
| Nelson Labs first six months of 2026 segment incomeother | $34 million | – | -4.9% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| SterigenicsSecond-quarter net revenues growth was driven by favorable pricing, improved volume/mix and a foreign currency benefit. | $212 million | – | 8.6% |
| NordionSecond-quarter net revenues growth was driven by improved volume/mix, primarily due to the timing of Cobalt-60 harvests and favorable pricing, partially offset by foreign currency. | $49 million | – | 15.8% |
| Nelson LabsSecond-quarter net revenues and segment income growth were driven by favorable pricing, improved volume/mix and a foreign currency benefit. | $61 million | – | 6.3% |
| Sterigenics, first six months of 2026Constant currency net revenues increased 6.6%. | $398 million | – | 9.1% |
| Nordion, first six months of 2026Constant currency net revenues increased 20.8%. | $91 million | – | 21.6% |
| Nelson Labs, first six months of 2026Constant currency net revenues improved 0.9%. | $113 million | – | 2.9% |
FY 2026 outlook
- Revenue$1.236 billion to $1.254 billion, representing constant currency growth of 5.25% to 6.75% and an estimated 100 basis points of foreign currency benefit
- Tax rate27.0% to 28.0%
- NoteAdjusted EBITDA range raised to $634 million to $643 million, representing constant currency growth of 5.75% to 7.25% and an estimated 100 basis points of foreign currency benefit
- NoteInterest expense improved to a range of $135 million to $142 million
- NoteAdjusted EPS improved to a range of $0.95 to $1.01
- NoteA weighted-average fully diluted share count in the range of 289 million to 291 million shares
- NoteCapital expenditures in the range of $200 million to $225 million
What drove it
- Sterigenics revenue growth reflected favorable pricing, improved volume/mix and a foreign currency benefit.
- Nordion growth reflected improved volume/mix, primarily due to the timing of Cobalt-60 harvests, and favorable pricing, partially offset by foreign currency.
- Nelson Labs growth reflected favorable pricing, improved volume/mix and a foreign currency benefit.
- All three business units reported revenue growth in Q2 2026.
- The Company cited strong first-half performance and confidence in the remainder of the year in raising its full-year 2026 outlook.
Concerns
- Nelson Labs segment income margin was impacted by higher costs.
- Inflation partially offset segment income and segment income margin benefits at Sterigenics and Nordion.
- The outlook incorporates assumptions regarding supply chain continuity, particularly for the supply of ethylene oxide and Cobalt-60, and inflationary trends affecting energy prices and labor supply.
- The Company identified potential uncertainty from changes to the regulatory landscape, restructuring items and certain fair value measurements.
- The filing cites risks related to ethylene oxide litigation, environmental, health and safety regulations, supply availability, foreign currency exchange rates, inflation and tariffs.
What to watch
- Execution against the raised FY 2026 net revenues range of $1.236 billion to $1.254 billion.
- Execution against the raised FY 2026 Adjusted EBITDA range of $634 million to $643 million.
- Whether Nelson Labs can improve its segment income margin following the impact from higher costs.
- Availability and pricing of ethylene oxide and Cobalt-60.
- Progress in maintaining the long-term net leverage ratio target range of 2.0x to 3.0x.
- Capital expenditures in the range of $200 million to $225 million.
Balance sheet and cash flow
- Net cash provided by operating activities of $88 million
- As of June 30, 2026, Sotera Health had $2.2 billion of total debt, and $357 million in unrestricted cash and cash equivalents.
- As of December 31, 2025, Sotera Health had $2.2 billion in total debt and $345 million in unrestricted cash and cash equivalents.
- Available liquidity increased to approximately $950 million.
- The Company had no outstanding borrowings under its $600 million revolving credit facility.
- Repriced term loan, saving approximately $3.5 million of annual interest expense.
- Net Leverage Ratio improved to 3.0x, achieving the Company’s long-term net leverage ratio target range of 2.0x to 3.0x.
Analysis
Sotera Health reported broad Q2 growth, with net revenues increasing 9.2%, or 8.0% on a constant currency basis. Net income was $54 million, compared to $8 million in Q2 2025, while diluted earnings per share were $0.19 per diluted share, compared to $0.03 per diluted share. Adjusted EBITDA increased 10.0%, or 8.7% on a constant currency basis, and the Adjusted EBITDA margin expanded to 51.6%. Adjusted EPS was $0.26, up 30% per diluted share.
All three segments contributed to revenue growth. Sterigenics net revenues increased 8.6% to $212 million, supported by favorable pricing, improved volume/mix and foreign currency. Nordion was the fastest-growing segment, with net revenues up 15.8% to $49 million, driven by volume/mix associated primarily with the timing of Cobalt-60 harvests and favorable pricing. Nelson Labs net revenues grew 6.3% to $61 million, with pricing, volume/mix and foreign currency contributing.
Profitability improved most visibly at Sterigenics and Nordion. Sterigenics segment income increased 9.6% to $118 million and Nordion segment income increased 19.2% to $28 million. Nelson Labs segment income increased 0.6% to $20 million, but its segment income margin was impacted by higher costs. For the first six months of 2026, Nelson Labs segment income decreased 4.9% to $34 million despite net revenue growth of 2.9% to $113 million, making cost recovery and margin progression at that business a key operating focus.
Cash generation and leverage improved. Net cash provided by operating activities was $88 million. The Company ended June 30, 2026 with $2.2 billion of total debt and $357 million in unrestricted cash and cash equivalents, while available liquidity increased to approximately $950 million. The Net Leverage Ratio improved to 3.0x, reaching the stated long-term target range of 2.0x to 3.0x. Sotera Health also repriced its term loan, saving approximately $3.5 million of annual interest expense.
Management raised full-year 2026 net revenues guidance to $1.236 billion to $1.254 billion and Adjusted EBITDA guidance to $634 million to $643 million. The outlook calls for constant currency net revenue growth of 5.25% to 6.75% and Adjusted EBITDA growth of 5.75% to 7.25%, each with an estimated 100 basis points of foreign currency benefit. The guide also includes interest expense of $135 million to $142 million, a tax rate applicable to Adjusted Net Income of 27.0% to 28.0%, Adjusted EPS of $0.95 to $1.01, and capital expenditures of $200 million to $225 million.
Management, verbatim
We delivered another strong quarter, with high-single-digit growth, reflecting focused execution across all three of our business units.
Alton Shader, Chief Executive Officer
Based on our strong first-half performance and confidence in the remainder of the year, we are raising our full-year 2026 outlook.
Alton Shader, Chief Executive Officer
Not in the filing
stated, not guessed- Q2 2026 total net revenues dollar amount
- Q2 2026 total net revenues prior-year dollar amount
- Q2 2026 GAAP gross profit and gross margin
- Q2 2026 GAAP operating income and operating margin
- Q2 2026 Adjusted EBITDA dollar amount
- Q2 2026 Adjusted EBITDA prior-year dollar amount
- Q2 2026 Adjusted EPS prior-year value
- Q2 2026 free cash flow
- Quarterly capital expenditures
- Share repurchases and dividends
- Prior-quarter consolidated comparisons
- Previous-release outlook for comparison
- Forward gross margin guidance
- Forward operating expenses guidance
AlphaAI analysis generated 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 cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.