Core Insights - STERIS is enhancing its product offerings through new acquisitions and partnerships, currently holding a Zacks Rank 2 (Buy) [1] Group 1: Growth Drivers - The Healthcare segment of STERIS is benefiting from the successful market adoption of its infection prevention consumables and capital equipment, with a reported revenue growth of 5% year over year for Q4 fiscal 2025 [2] - The Applied Sterilization Technologies (AST) division saw a 9% reported growth year over year in Q4 fiscal 2025, driven by a 6% increase in service revenues, with organic revenues in high single digits [3] - STERIS is experiencing increased bioprocessing demand, while global demand from MedTech customers remains stable [3] Group 2: Strategic Acquisitions - STERIS frequently engages in strategic acquisitions and joint ventures, including the recent purchase of surgical instrumentation and sterilization container assets from BD, which enhances its Healthcare product offerings [4] - The company anticipates a strong fiscal year ahead, with reported revenues from continuing operations expected to grow approximately 6-7% in fiscal 2026 [4] Group 3: Stock Performance - Over the past three months, STERIS shares have risen 13.6%, contrasting with an 11.8% dip in the industry, driven by sustained growth in bioprocessing demand and strategic acquisitions [5]

Core Insights - The U.S. Gynecological Chairs and Tables Market was valued at USD 194.8 Million in 2024 and is projected to reach USD 283.8 Million by 2030, with a CAGR of 6.50% [1][9]. Market Growth Drivers - The expansion of the U.S. gynecological chairs and tables industry is driven by the increasing adoption of minimally invasive surgical (MIS) techniques, which enhance procedural efficiency and patient comfort [2][4]. - The demand for laparoscopic procedures is significantly influenced by the prevalence of uterine fibroids, affecting approximately 26 million women in the U.S. aged 15 to 50 [3][4]. Market Segmentation - Gynecological chairs dominate the U.S. market share, while gynecological tables are expected to grow steadily, supported by high procedure volumes in OB/GYN facilities [8]. - The pelvic surgery segment holds a notable market share, while the urology surgery segment is projected to grow at the fastest CAGR of 8.1% due to rising urological procedures [8]. - The office-based surgery (OBS) segment significantly contributes to market revenue, with the Department of Veterans Affairs (VA) segment expected to experience the fastest growth rate [8]. Future Trends and Recommendations - Healthcare facilities are increasingly investing in advanced gynecological chairs and tables to improve procedural outcomes and patient safety as MIS becomes more prevalent [4]. - The report provides insights into market estimates and forecasts from 2018 to 2030, highlighting growth opportunities and trend analyses [5][9].

Core Insights - The performance of Steris' international operations is crucial for understanding its financial resilience and growth potential [1][2][3] - The company's total revenue for the quarter was $1.48 billion, reflecting a 4.3% increase year-over-year [4] International Revenue Analysis - Ireland contributed $38.21 million, or 2.58% of total revenue, exceeding the consensus estimate by 49.78% [5] - Other Foreign Revenues accounted for $363.71 million, or 24.57% of total revenue, falling short of expectations by 12.43% [6] Revenue Forecasts - Analysts project Steris will generate $1.36 billion in revenue for the ongoing fiscal quarter, a 6.1% increase year-over-year [7] - For the full year, total revenue is expected to reach $5.79 billion, a 6% rise from the previous year, with Ireland contributing 2.1% and Other Foreign Revenues 27.4% [8] Conclusion - The reliance on global markets presents both opportunities and challenges for Steris, making the analysis of international revenue trends essential for forecasting future performance [9][10]

Group 1 - The stock price of Steris plc (NYSE: STE) has increased by more than 11% since the upgrade to a Strong Buy rating in March 2025 [1] - The company is expected to benefit from potential market conditions influenced by political factors [1]

STERIS (STE) Q4 2025 Earnings Call May 15, 2025 09:00 AM ET Company Participants Julie Winter - Vice President of Investor Relations & Corporate CommunicationsMichael Tokich - Senior VP & CFODaniel Carestio - President, CEO & DirectorPatrick Wood - Managing DirectorMac Etoch - Senior Research Associate Conference Call Participants David Turkaly - Research AnalystMike Matson - Senior Equity Research AnalystMichael Polark - Senior Equity Research AnalystJason Bednar - Senior Research AnalystBrett Fishbin - Vi ...

Financial Data and Key Metrics Changes - Total reported revenue grew by 4%, while constant currency organic revenue increased by 6% driven by volume and a 20 basis points price increase [6][10] - Gross margin increased by 170 basis points to 44.3%, with positive pricing, favorable mix, and productivity outpacing labor inflation [6][7] - EBIT margin rose by 110 basis points to 24.8% of revenue compared to the previous year [7] - Net income from continuing operations was $270 million, and adjusted earnings per diluted share increased by 14% to $2.74 [7][10] - Free cash flow for fiscal 2025 reached a record $787 million, significantly above guidance due to working capital improvements [8] Business Line Data and Key Metrics Changes - Healthcare constant currency organic revenue grew by 6% for the year, driven by strong recurring revenue streams, while capital equipment revenue declined by 5% [10][11] - Capital equipment orders grew over 12% for the full year, indicating strong underlying demand [11] - AST constant currency organic revenue grew by 9% for the year, with services growing by 7% [12] - Life Sciences saw a 1% increase in constant currency organic revenue, with margins improving to 42.3% [13] Market Data and Key Metrics Changes - The diversified nature of the business allowed the company to deliver results in line with original outlook despite obstacles [10] - The company anticipates revenue growth of 6% to 7% for fiscal 2026 across all segments, with a minor note on AST reflecting high single-digit growth in services [14][15] Company Strategy and Development Direction - The company plans to leverage its strengths to mitigate tariff exposure, with an estimated $30 million impact from tariffs included in the fiscal 2026 outlook [17][18] - The company is well-positioned to deliver both top and bottom line growth in 2026, with no acquisition or divestiture impacts expected [14][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver growth, particularly in recurring revenues and capital equipment orders, despite previous uncertainties in the pharma sector [23][24] - The anticipated tariff impact is expected to be managed strategically, with a focus on mitigating exposure through supply chain adjustments [18][62] Other Important Information - Capital expenditures for fiscal 2025 totaled $370 million, while depreciation and amortization amounted to $476 million [8] - The effective tax rate is planned at approximately 23.5% for fiscal 2026 [18] Q&A Session Summary Question: Comfort in Life Sciences bouncing back to 6% to 7% range - Management noted strong performance in recurring revenues, particularly in consumables, and a rebound in capital equipment orders towards the end of the year [23] Question: Impact of tariffs on EPS - Management discussed various headwinds and tailwinds, including $20 million in restructuring cost savings and lower interest expenses offsetting higher tax rates and tariff impacts [25][26] Question: Cash flow guidance differences - The anticipated $40 million legal settlement for ETO negatively impacts cash flow, along with tariffs and reduced inventory improvements [30] Question: M&A opportunities - Management indicated capacity for M&A from both financial and intellectual perspectives, should the right opportunity arise [32] Question: Onshoring trends - Management suggested that while there are opportunities for onshoring, regulatory complexities may limit rapid shifts in production [36][37] Question: AST growth expectations - Management expressed confidence in accommodating industry growth without capacity constraints [73] Question: Tariff breakdown and mitigation - Management confirmed that the $30 million tariff impact is a net number, with half attributed to China and half to global tariffs, and emphasized ongoing mitigation efforts [58][62]

Core Viewpoint - STERIS plc reported mixed results for the fourth quarter of fiscal 2025, with adjusted earnings per share (EPS) exceeding estimates while revenues fell short of expectations [13]. Financial Performance - Adjusted EPS for Q4 fiscal 2025 was $2.74, a 13.7% increase year-over-year, surpassing the Zacks Consensus Estimate by 5.8% [1] - GAAP EPS was $1.48, down 3.9% from $1.54 in the previous year [1] - Full-year adjusted EPS was $9.22, up 12.4% year-over-year, also exceeding the Zacks Consensus Estimate by 1.4% [2] Revenue Analysis - Q4 revenues from continuing operations were $1.48 billion, a 4.2% increase year-over-year, but missed the Zacks Consensus Estimate by 0.1% [3] - Organic revenues at constant exchange rate (CER) rose 6% year-over-year [3] - Full-year revenues from continuing operations reached $5.46 billion, a 6.2% increase year-over-year, matching the Zacks Consensus Estimate [3] Segment Performance - Healthcare segment revenues increased 5% year-over-year to $1.10 billion, with consumable revenues up 6% and service revenues up 13%, partially offset by a 4% decline in capital equipment revenues [4] - Applied Sterilization Technologies (AST) revenues improved 9% to $273.9 million, driven by 6% growth in service revenues [5] - Life Sciences segment revenues decreased 7% to $149.5 million, attributed to the divestiture of the CECS business, with consumable revenues growing 8% but capital equipment and service revenues declining significantly [6] Margin and Expense Insights - Gross profit for the quarter was $641.2 million, a 10% increase year-over-year, with gross margin expanding 224 basis points to 43.3% [7] - Selling, general and administrative expenses rose 8% to $333.9 million, while research and development expenses increased 0.8% to $27.7 million [8] - Adjusted operating expenses totaled $361.6 million, up 7.4% year-over-year, with adjusted operating margin expanding 153 basis points to 18.9% [8] Cash Flow and Guidance - Cash and cash equivalents at the end of fiscal 2025 were $171.7 million, down from $207 million at the end of fiscal 2024 [10] - Cumulative net cash flow from operating activities was $1.15 billion, compared to $973.2 million in the previous year [11] - For fiscal 2026, the company expects revenues from continuing operations to increase approximately 6-7%, with adjusted EPS projected in the range of $9.90-$10.15 [12]

Core Insights - Steris reported revenue of $1.48 billion for the quarter ended March 2025, reflecting a year-over-year increase of 4.3% and an EPS of $2.74, up from $2.41 in the same quarter last year [1] - The reported revenue was in line with the Zacks Consensus Estimate, showing a slight surprise of -0.09%, while the EPS exceeded expectations by 5.79% [1] Financial Performance Metrics - Healthcare revenues reached $1.06 billion, surpassing the average estimate of $1.05 billion, marking a 4.9% increase year-over-year [4] - Healthcare Products - Consumables generated $352.74 million, slightly below the estimate of $355.87 million, but still showing a 6% increase from the previous year [4] - Healthcare Products - Capital equipment reported $318.03 million, which was below the average estimate of $329.58 million, representing a decline of 4.1% year-over-year [4] - Healthcare Products - Service revenues were $386.41 million, exceeding the estimate of $367.62 million, with a significant year-over-year increase of 12.5% [4] - Life Sciences revenues totaled $149.47 million, falling short of the $158.82 million estimate, reflecting a 7% decrease year-over-year [4] - Applied Sterilization Technologies (AST) revenues were $273.89 million, slightly above the estimate of $269.92 million, with a year-over-year increase of 9.2% [4] - Life Sciences - Service revenues were $36.45 million, below the estimate of $44.18 million, showing a decline of 20.7% year-over-year [4] - Life Sciences - Capital equipment revenues were $36.98 million, under the average estimate of $40.52 million, representing a decrease of 16.4% year-over-year [4] - Life Sciences - Consumables generated $76.04 million, slightly below the estimate of $77.15 million, with an 8% increase year-over-year [4] Operating Income - Operating income for Healthcare was reported at $279.71 million, exceeding the average estimate of $255.95 million [4] - Corporate and Other reported an operating loss of $99.31 million, worse than the estimated loss of $83.07 million [4] - Operating income for Applied Sterilization Technologies (AST) was $122.20 million, slightly above the average estimate of $118.69 million [4] Stock Performance - Steris shares have returned +4.6% over the past month, compared to the Zacks S&P 500 composite's +9.9% change, indicating potential for future outperformance [3]

分组1 - Steris reported quarterly earnings of $2.74 per share, exceeding the Zacks Consensus Estimate of $2.59 per share, and up from $2.41 per share a year ago, representing an earnings surprise of 5.79% [1][2] - The company posted revenues of $1.48 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.09%, and compared to $1.42 billion in the same quarter last year [2] - Over the last four quarters, Steris has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] 分组2 - Steris shares have increased approximately 12.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4][6] - The current consensus EPS estimate for the upcoming quarter is $2.32 on revenues of $1.36 billion, and for the current fiscal year, it is $9.94 on revenues of $5.78 billion [7] 分组3 - The Medical - Instruments industry, to which Steris belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

[Fiscal 2025 Financial Performance Overview](index=1&type=section&id=Fiscal%202025%20Financial%20Performance%20Overview) STERIS achieved a record fiscal year 2025, marked by significant revenue growth and increased adjusted diluted EPS, with strong performance continuing into the fourth quarter [Fourth Quarter & Full Year Highlights](index=1&type=section&id=Fourth%20Quarter%20%26%20Full%20Year%20Highlights) STERIS reported a record fiscal year 2025, with full-year revenue from continuing operations increasing 6% to $5.5 billion, driven by 6% constant currency organic growth Fiscal 2025 Full Year Financial Highlights (vs. FY 2024) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | $5.5 billion | $5.1 billion | +6% | | Constant Currency Organic Revenue Growth | 6% | N/A | N/A | | As Reported Diluted EPS | $6.16 | $5.55 | +11.0% | | Adjusted Diluted EPS | $9.22 | $8.20 | +12.4% | Q4 Fiscal 2025 Financial Highlights (vs. Q4 FY 2024) | Metric | Q4 FY 2025 | Q4 FY 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | $1.5 billion | $1.4 billion | +4% | | Constant Currency Organic Revenue Growth | 6% | N/A | N/A | | As Reported Diluted EPS | $1.48 | $1.54 | -3.9% | | Adjusted Diluted EPS | $2.74 | $2.41 | +13.7% | - The President and CEO, Dan Carestio, stated that fiscal 2025 was a record year, benefiting from a diversified customer base and growth in global procedure volumes[4](index=4&type=chunk) [Fourth Quarter Segment Performance](index=1&type=section&id=Fourth%20Quarter%20Segment%20Performance) In Q4 FY2025, the Healthcare and AST segments drove growth, with revenues increasing 5% and 9% respectively, while Life Sciences experienced a 7% revenue decline due to a divestiture [Healthcare](index=1&type=section&id=Healthcare) The Healthcare segment's Q4 revenue grew 5% to $1.1 billion, with a 6% constant currency organic growth, driven by service and consumable revenue increases Healthcare Segment Q4 Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1.1 billion | $1.0 billion | +5% | | Constant Currency Organic Revenue Growth | 6% | N/A | N/A | | Operating Income | $279.7 million | $245.2 million | +14.1% | - Revenue growth drivers included a **13% improvement in service revenue** and **6% growth in consumable revenue**, while capital equipment revenue declined by **4%**[6](index=6&type=chunk) [Applied Sterilization Technologies (AST)](index=1&type=section&id=Applied%20Sterilization%20Technologies%20(AST)) The AST segment's Q4 revenue increased 9% to $273.9 million, with strong constant currency organic growth of 10%, supported by service revenue and capital equipment sales AST Segment Q4 Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $273.9 million | $250.9 million | +9% | | Constant Currency Organic Revenue Growth | 10% | N/A | N/A | | Operating Income | $122.2 million | $114.2 million | +7.0% | [Life Sciences](index=1&type=section&id=Life%20Sciences) Life Sciences Q4 revenue decreased 7% to $149.5 million, largely due to a divestiture and a 16% decline in capital equipment revenue, though operating income remained stable Life Sciences Segment Q4 Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $149.5 million | $160.6 million | -7% | | Constant Currency Organic Revenue Growth | 0% | N/A | N/A | | Operating Income | $65.0 million | $64.5 million | +0.8% | - The revenue decline was primarily caused by the divestiture of the CECS business and significant declines in capital equipment (**-16%**) and service (**-21%**) revenue, which was partially offset by **8% growth in consumable revenue**[8](index=8&type=chunk) [Cash Flow](index=2&type=section&id=Cash%20Flow) For fiscal 2025, net cash provided by operations increased to $1.15 billion, and free cash flow rose to $787.2 million, primarily driven by improvements in working capital Fiscal 2025 Cash Flow Summary (vs. FY 2024) | Metric | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operations | $1.15 billion | $973.3 million | +18.2% | | Free Cash Flow | $787.2 million | $620.3 million | +26.9% | [Fiscal 2026 Outlook](index=2&type=section&id=Fiscal%202026%20Outlook) STERIS anticipates continued growth in fiscal 2026, projecting a 6-7% increase in revenue and a 7-10% increase in adjusted EPS, despite an estimated $30 million negative impact from tariffs [Key Projections](index=2&type=section&id=Key%20Projections) STERIS anticipates continued growth in fiscal 2026, projecting a 6-7% increase in both reported and constant currency organic revenue, with adjusted EPS expected between $9.90 and $10.15 Fiscal 2026 Guidance | Metric | FY 2026 Projection | | :--- | :--- | | As Reported Revenue Growth | 6% - 7% | | Constant Currency Organic Revenue Growth | 6% - 7% | | Adjusted EPS from Continuing Operations | $9.90 - $10.15 | | Capital Expenditures | ~$375 million | | Free Cash Flow | ~$770 million | - The outlook includes an estimated negative pre-tax profit impact of approximately **$30 million** due to tariffs[11](index=11&type=chunk) [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section provides an unaudited overview of STERIS's consolidated financial statements, including statements of operations, balance sheets, and cash flows [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) For the twelve months ended March 31, 2025, STERIS reported revenues of $5.46 billion, a 6.2% increase, with gross profit growing to $2.40 billion and income from continuing operations rising to $611.6 million FY 2025 Income Statement Highlights (in thousands) | Line Item | Twelve Months Ended Mar 31, 2025 | Twelve Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenues | $5,459,515 | $5,138,701 | | Gross Profit | $2,402,764 | $2,218,160 | | Income from Operations | $866,641 | $836,118 | | Income from Continuing Operations, Net of Tax | $611,557 | $553,280 | | Diluted EPS - Continuing Operations | $6.16 | $5.55 | [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of March 31, 2025, STERIS's total assets were $10.15 billion, with total equity increasing to $6.62 billion and long-term indebtedness significantly reduced to $1.92 billion Balance Sheet Summary (in thousands) | Line Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,000,765 | $2,869,123 | | Total Assets | $10,146,811 | $11,063,697 | | Long-term Indebtedness | $1,918,701 | $3,120,162 | | Total Equity | $6,615,757 | $6,315,346 | | Total Liabilities and Equity | $10,146,811 | $11,063,697 | [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) For fiscal 2025, net cash from operating activities was $1.15 billion, with investing activities providing $388.8 million, and financing activities using $1.57 billion FY 2025 Cash Flow Summary (in thousands) | Activity | Twelve Months Ended Mar 31, 2025 | | :--- | :--- | | Net cash provided by operating activities | $1,148,087 | | Net cash provided by (used in) investing activities | $388,773 | | Net cash used in financing activities | ($1,572,364) | | Decrease in cash and cash equivalents | ($35,319) | | Cash and cash equivalents at end of period | $171,701 | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section provides reconciliations of non-GAAP financial measures, including organic revenue growth and adjusted net income and EPS, to their most directly comparable GAAP measures [Organic Revenue Growth Reconciliation](index=8&type=section&id=Organic%20Revenue%20Growth%20Reconciliation) For fiscal year 2025, STERIS's reported revenue growth of 6.2% was reconciled to a constant currency organic growth rate of 6.2% after adjusting for acquisitions, divestitures, and foreign currency movements FY 2025 Revenue Growth Reconciliation | Growth Metric | Percentage | | :--- | :--- | | As Reported U.S. GAAP Growth | 6.2% | | Organic Growth | 5.9% | | Constant Currency Organic Growth | 6.2% | [GAAP to Adjusted Net Income & EPS Reconciliation](index=9&type=section&id=GAAP%20to%20Adjusted%20Net%20Income%20%26%20EPS%20Reconciliation) For fiscal year 2025, STERIS adjusted its U.S. GAAP net income from continuing operations of $611.6 million to an adjusted figure of $914.7 million, resulting in an adjusted diluted EPS of $9.22 FY 2025 GAAP to Adjusted EPS Reconciliation (Continuing Operations) | Line Item | Per Diluted Share | | :--- | :--- | | As reported, U.S. GAAP | $6.16 | | Net impact of adjustments | $3.06 | | **Adjusted** | **$9.22** | - Major adjustments for the full year included amortization of acquired intangible assets, acquisition and integration charges, restructuring charges, and a **$48.15 million** Illinois EO litigation settlement[34](index=34&type=chunk) [Supplemental Information](index=12&type=section&id=Supplemental%20Information) This section provides additional financial data, including recurring revenue composition, geographic revenue distribution, and total backlog for continuing operations [Supplemental Financial Data](index=12&type=section&id=Supplemental%20Financial%20Data) For fiscal year 2025, recurring revenue constituted approximately 78% of total revenues, with the United States accounting for 73% of total revenue, and the total backlog increasing to $452.9 million - For the full fiscal year 2025, recurring revenues (Consumables and Service) totaled **$4.27 billion**, representing **78.3% of total revenues**[36](index=36&type=chunk) - The United States remains the primary market, accounting for **73% of total revenues** in fiscal 2025[36](index=36&type=chunk) Total Backlog - Continuing Operations | Period | Backlog Amount | | :--- | :--- | | End of Q4 FY2025 | $452.9 million | | End of Q4 FY2024 | $425.2 million |