- 20-Year Revenue Growth: 2025 revenue rose 5.7% to $1.164 billion, with adjusted EBITDA up 8.2% to $593.8 million (51% margin, +118 bps).<br>
- Strong Free Cash Flow: Adjusted free cash flow exceeded $200 million in 2025, driven by operational efficiency and margin expansion.<br>
- Segment Growth: XBU customer revenue surged 9% YoY, Sterigenics delivered 8% constant currency growth, and Nordion achieved 9% growth.<br>
- 2026 Guidance: Revenue projected to reach $1.233–$1.251 billion (5–6.5% growth), adjusted EBITDA of $632–$641 million (5.5–7% growth).<br>
- Strategic Investments: X-ray facility set to open in 2026, with $135–$145 million interest expense expected and $0.93–$1.01 adjusted EPS guidance.<br>
Segment Performance
The Sterigenics segment delivered approximately 8% constant currency revenue growth, driven by improved volume and mix. Nordion achieved around 9% constant currency revenue growth, while the XBU customer base expanded 9% year-over-year. The company's commercial initiatives continue to build momentum, with a strong value proposition across Sotera Health.
Guidance and Outlook
For 2026, Sotera Health expects total company revenue to grow between 5% to 6.5% on a constant currency basis, with adjusted EBITDA improving to a range of $632 million to $641 million. The company anticipates mid- to high single-digit constant currency revenue growth for Sterigenics and low to mid-single digit growth for Nordion. The X-ray facility is expected to open in the second half of 2026, bringing a new modality to the market.
Valuation and Metrics
With a P/E Ratio of 60.91 and an EV/EBITDA of 17.0, Sotera Health's valuation appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 5.9%, which is within the company's guidance range. The company's ROIC is 6.83%, and ROE is 14.98%, indicating a relatively healthy return profile. The Net Debt / EBITDA ratio is 4.91, suggesting a significant debt burden. The Free Cash Flow Yield is 2.0%, which is relatively modest.
Management Insights
As Michael Petras noted, "We should improve from here, and this should be the last quarter where we faced that kind of headwind." The company is focused on organic investments and debt reduction, with a commitment to a free cash flow target for the 2025 to 2027 period. Sotera Health is well-positioned in the competitive landscape, with a strong business model and global platform.