STERIS(STE) - 2026 Q2 - Quarterly Results

Financial Performance - Total revenue from continuing operations for Q2 fiscal 2026 increased 10% to $1.5 billion compared to $1.3 billion in Q2 fiscal 2025[2] - Net income from continuing operations for Q2 was $191.9 million or $1.94 per diluted share, up from $150.2 million or $1.51 per diluted share in the same period last year[3] - Adjusted net income for Q2 fiscal 2026 was $244.5 million or $2.47 per diluted share, compared to $212.2 million or $2.14 per diluted share in Q2 fiscal 2025[3] - Free cash flow for the first half of fiscal 2026 was $527.7 million, up from $344.5 million in the prior year period[8] - Free cash flow for the six months ended September 30, 2025, was $527.7 million, compared to $344.5 million in 2024, indicating a 53.2% increase[27] - The company reported a diluted EPS of $4.81 for the first six months of FY 2026, compared to $4.17 in FY 2025, representing a 15.4% increase[33] Revenue Growth - Healthcare revenue grew 9% to $1,033.8 million, with service revenue up 13%, consumable revenue up 10%, and capital equipment revenue up 4%[4] - Applied Sterilization Technologies (AST) revenue increased 10% to $281.5 million, with service revenue growing 13% and capital equipment revenue declining 76%[5] - Life Sciences revenue increased 13% to $145.0 million, driven by 39% growth in capital equipment revenue[6] - Fiscal 2026 revenue from continuing operations is expected to increase by 8-9%, with constant currency organic revenue growth anticipated at 7-8%[9] - Total revenue for the six months ended September 30 reached $2,851.4 million, with a 9.3% organic growth year-over-year[31] - Total revenues for the second quarter of FY 2026 reached $1,460.3 million, a 9.8% increase from $1,328.9 million in FY 2025[35] - The total backlog for continuing operations increased to $541.3 million in FY 2026 from $480.9 million in FY 2025[35] Cash Flow and Expenditures - Capital expenditures are anticipated to be approximately $375 million, unchanged from prior expectations[10] - Cash flows from operating activities for FY 2026 are projected to be $1,225.0 million[34] Segment Performance - The Healthcare segment generated revenues of $1,033.8 million for the three months ended September 30, 2025, up from $944.2 million in 2024, reflecting a 9.5% increase[25] - Healthcare segment revenue for the three months ended September 30 was $1,033.8 million, representing a 9.5% organic growth compared to the previous year[31] - Life Sciences segment revenue increased to $145.0 million for the three months ended September 30, showing a 13.3% organic growth[31] - The Life Sciences segment showed a revenue increase of 9.3% for the six months ended September 30, reflecting strong market demand[31] Adjusted Earnings and Projections - Adjusted earnings per diluted share for fiscal 2026 are now expected to be in the range of $10.15 to $10.30, up from prior expectations of $9.90 to $10.15[9] - Adjusted diluted EPS for the three months ended September 30 was $2.47, up from $2.14 in the same period last year[32] - The adjusted income tax rate for continuing operations was 24.5% in FY 2026, up from 22.7% in FY 2025[35] Asset and Equity Growth - Total current assets as of September 30, 2025, were $2,106.3 million, an increase from $2,000.8 million as of March 31, 2025[23] - Total assets increased to $10,410.7 million as of September 30, 2025, compared to $10,146.8 million as of March 31, 2025[23] - Total equity as of September 30, 2025, was $7,022.5 million, an increase from $6,615.8 million as of March 31, 2025[23] Operating Income - Operating income for the three months ended September 30, 2025, was $265.8 million, a 20.9% increase from $219.7 million in the same period of 2024[25] - Gross profit for the six months ended September 30, 2025, rose to $1,273.9 million, compared to $1,151.2 million in 2024, reflecting a 10.6% increase[22] - The company experienced a net income attributable to shareholders of $191.9 million for the three months ended September 30, compared to $150.0 million in the previous year[32] Foreign Currency Impact - The company noted a foreign currency impact of $12.7 million on total revenue for the three months ended September 30[31]