STERIS plc Shatters Records in Q4 2025 Performance
STERIS plc, a leading medical and laboratory equipment company, has announced its fourth-quarter 2025 performance, showcasing impressive growth across various segments. In a recent conference call, the company highlighted key achievements that have set new records for the organization.
The total revenue from continuing operations grew 4% in the quarter, with constant currency organic revenue increasing by 6%. This significant growth was driven by both volume and price increases, demonstrating the company's ability to expand its market share. The gross margin also saw a substantial increase of 170 basis points compared to the prior year, reaching 44.3%. This improvement was attributed to positive price, favorable mix, and productivity gains that outpaced labor inflation.
The EBIT (Earnings Before Interest and Taxes) margin increased by 110 basis points to 24.8% of revenue, a significant improvement over last year. The adjusted effective tax rate for the quarter was 23.5%, with an increase driven by unfavorable discrete item adjustments. Net income from continuing operations in the quarter reached $270 million, while adjusted earnings per diluted share from continuing operations were $2.74, representing a 40% increase over the prior year.
STERIS' President and CEO, Dan Carestio, expressed satisfaction with the company's ability to grow earnings double digits all year, while also highlighting the benefits of the divestiture of the Dental segment in reducing interest expense. The capital expenditures for fiscal 2025 totaled $370 million, with depreciation and amortization amounting to $476 million. During the quarter, the company continued to pay down debt, ending with $2 billion in total debt and a gross debt-to-EBITDA ratio of approximately 1.4x.
The free cash flow for fiscal 2025 reached a record $787 million, surpassing full-year guidance due to significant working capital improvements, particularly in inventory management. The company's President and CEO, Dan Carestio, emphasized that the diversified nature of their business allowed them to deliver results in line with original outlooks despite challenges during the year.
STERIS' Healthcare segment saw a 6% growth in constant currency organic revenue for the full year, driven by strong recurring revenue streams. The company's outperformance in consumables and services continued, fueled by procedure volumes in the U.S., as well as price and market share gains. In contrast, capital equipment revenue declined by 5% for the year, although orders grew over 12% due to sustained underlying demand.
On the other hand, STERIS' AST segment experienced a 9% growth in constant currency organic revenue for the full year, with services growing at 7%. Med device customers remained stable, while bioprocessing was somewhat uneven throughout the year. The company has also begun to reap benefits from restructuring cost savings, capturing approximately $5 million in savings during the fourth quarter of fiscal 2025.
STERIS plc's remarkable performance in Q4 2025 underscores its ability to navigate market fluctuations and drive growth across various segments. As the company continues to evolve and adapt to changing industry dynamics, investors will be keenly watching their progress and outlook for future growth.
