STERIS Announces Financial Results for Fiscal 2026 Second Quarter

Core Insights - STERIS plc reported a 10% increase in total revenue from continuing operations for Q2 fiscal 2026, reaching $1.5 billion compared to $1.3 billion in Q2 fiscal 2025, with a constant currency organic revenue growth of 9% [1][8] - The company experienced improved net income, with reported net income from continuing operations at $191.9 million or $1.94 per diluted share, up from $150.2 million or $1.51 per diluted share in the same quarter last year [2][8] - STERIS has raised its fiscal 2026 outlook, expecting revenue growth of 8-9% and adjusted earnings per diluted share to be in the range of $10.15 to $10.30 [7][9] Financial Performance - Total revenue from continuing operations increased by 10% to $1.5 billion, with healthcare revenue growing by 9% to $1,033.8 million, driven by a 13% rise in service revenue [1][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 [2][8] - Free cash flow for the first half of fiscal 2026 was $527.7 million, an increase from $344.5 million in the prior year period, attributed to earnings growth and working capital improvements [6][8] Segment Performance - Healthcare segment revenue grew by 9% to $1,033.8 million, with operating income increasing to $259.5 million, reflecting improved volume and productivity [3][8] - Applied Sterilization Technologies (AST) revenue increased by 10% to $281.5 million, with a notable 76% decline in capital equipment revenue [4][8] - Life Sciences segment revenue rose by 13% to $145.0 million, with a 39% increase in capital equipment revenue contributing to the growth [5][8] Outlook - The company anticipates a constant currency organic revenue growth of 7-8% for fiscal 2026, an increase from previous expectations of 6-7% [7][9] - The adjusted earnings per diluted share outlook has been raised to $10.15 to $10.30, reflecting a positive adjustment from prior expectations [7][9] - Capital expenditures are expected to remain at approximately $375 million, with free cash flow now projected at around $850 million, up from previous expectations of $820 million [9]