STERIS (STE) Q3 2025 earnings summary

Executive summary

• Third quarter revenue grew 6% year-over-year to $1.4B, with constant currency organic revenue also up 6%, driven by volume and pricing gains, especially in Healthcare and AST segments.

• Gross margin improved to 44.6%, with operating income rising to $245.3M for the quarter, supported by favorable pricing, mix, and productivity.

• Net income from continuing operations was $173.6M, and adjusted EPS rose 11% to $2.32.

• Free cash flow for the first nine months reached $588.1M, on track for the $700M full-year target.

• Divestiture of the Dental segment and CECS business contributed to debt reduction and improved earnings.

Financial highlights

• Adjusted effective tax rate was 24.5% for the quarter, up year-over-year due to unfavorable discrete items.

• Capital expenditures for the first nine months totaled $299M, with depreciation and amortization at $354M.

• Debt-to-total capital ratio improved to 25.2%, with total debt at $2.2B and gross leverage at 1.5x EBITDA.

• Cash dividends paid totaled $1.66 per share for the nine months, with Q3 dividend at $0.57 per share.

• Net cash provided by operations for the first nine months was $887.3M.

Outlook and guidance

• Full-year as-reported and constant currency organic revenue growth expected at approximately 6%, revised from prior 6.5%-7.5% due to currency headwinds.

• Adjusted EPS guidance narrowed to $9.05–$9.15, reflecting a $0.10 negative currency impact.

• Free cash flow guidance remains at about $700M, with capital expenditures projected at ~$360M.

• Restructuring actions expected to be substantially complete by fiscal year-end, with anticipated annual operating income improvements of ~$25M.

• Additional restructuring costs of ~$20M are expected through the remainder of fiscal 2025.