Sotera Health Q4 Earnings Call Highlights

Core Insights - Sotera Health reported a total revenue increase of 5.7% in 2025 to $1.164 billion, with a 5.2% increase on a constant-currency basis [5] - The company expects continued revenue and EBITDA growth in 2026, projecting total revenue between $1.233 billion and $1.251 billion, representing 5% to 6.5% constant-currency growth [15] Financial Performance - Nelson Labs' Q4 revenue increased by 2.3% to $55 million, with segment income rising 1.9% to $18 million [1] - Nordion's Q4 revenue declined by 12.3% to $50 million, with segment income falling 18.9% to $29 million [1] - Sterigenics experienced a Q4 revenue growth of 10.6% to $198 million, with segment income rising 10.4% to $110 million [2] - Sotera Health's Q4 revenue was $303 million, up 4.6% year over year, with adjusted EBITDA increasing 2.7% to $157 million [4] Operational Highlights - Customer satisfaction exceeded 80%, and cross-business-unit customer revenue growth was 9% year over year [7] - Sterigenics delivered approximately 8% constant-currency revenue growth for 2025, while Nordion achieved about 9% constant-currency revenue growth [7] Strategic Initiatives - The company is investing in an X-ray facility project as part of a long-term strategy to enhance sterilization services [8] - Management noted that the Sterigenics commercial segment has been "choppy" since 2020-2021, indicating challenges in that area [9] Balance Sheet and Governance - The company reduced borrowing costs by 75 basis points on its $1.4 billion term loan and paid down $86 million of debt, resulting in $13 million of annual interest savings [12] - Liquidity at year-end included about $345 million of unrestricted cash and nearly $600 million of revolver capacity, totaling approximately $940 million [13] - Governance changes included the appointment of a lead independent director and a legal leadership transition [14] 2026 Guidance - Interest expense is expected to be between $135 million and $145 million, with adjusted EPS projected at $0.93 to $1.01 [17] - Capital expenditures are anticipated to be between $175 million and $225 million, with no M&A assumed in the guidance [17]