Steris Stock Earnings Reports

STERIS reported a strong start to FY2026: reported revenue grew 9% and constant-currency organic revenue grew 8% (driven by volume and ~230 bps of price). Gross margin improved modestly to 45.3% and adjusted EBIT margin rose to 22.8%. Adjusted EPS from continuing operations was $2.34, up 15% YoY. Free cash flow was strong at $327M in Q1, and management raised FY26 free cash flow guidance by $50M to $820M while keeping earnings guidance unchanged at $9.90–$10.15. The company reiterated constant-currency organic revenue guidance of 6%–7% (each segment expected to be in that range) and updated reported revenue to ~8%–9% growth to reflect a favorable ~200 bps currency movement. Management increased the FY tariff charge to $45M (up $15M QoQ) due to subsequent tariff actions on metals, but said favorable FX largely offsets the incremental tariff headwind. Segment highlights: Healthcare organic revenue +8% (capital +6% with order growth +14% and backlog >$400M; service +13%); AST organic +10% (service +12%), with AST EBIT margin of 48.6%; Life Sciences organic +4% (consumables +8%), backlog up >50% to $111M and margins up materially. Balance sheet and capital allocation: ended the quarter with $1.9B total debt (gross debt/EBITDA 1.2x); continued modest buybacks to offset dilution; nearly all prepayable debt is gone so cash may build in the near term absent M&A. The board increased the quarterly dividend by 10% (20th consecutive year of increases). CFO transition: Mike Tokich announced his planned CFO transition to Karen (longtime deputy); he will remain as special financial adviser during the handover.