STERIS Sets Sights on Strong Future with Record-Breaking Q4 Results
STERIS plc, a leading provider of medical and cleanroom solutions, has reported strong fourth-quarter (Q4) 2026 results, solidifying its position as a leader in the industry. The company's continued growth and impressive financial performance have set it up for even greater success in the coming year.
According to Karen Burton, Senior Vice President and CFO, total revenue grew 7% in Q4, with constant currency organic revenue increasing 5%. This growth was driven by both volume and pricing, demonstrating the company's ability to adapt to market conditions. Gross margin for the quarter came in at 44%, down slightly from the prior year but still a respectable figure.
The adjusted effective tax rate increased to 25.4% in Q4, up from 23.5% in the same period last year. This change was primarily due to shifts in geographic profit mix and discrete item adjustments, including withholding taxes. Adjusted net income from continuing operations reached $278.3 million, with earnings per diluted share increasing by 3% year-over-year.
STERIS's capital expenditures for FY 2026 totaled $369 million, while depreciation and amortization came in at $486.5 million. The company ended the year with a strong balance sheet, boasting $1.9 billion in total debt and gross debt to EBITDA of approximately 1.2x – well below its target range.
Free cash flow for FY 2026 was an impressive $982.9 million, representing a significant improvement over the previous year. This growth was driven primarily by increased earnings, which offset the lower contribution from working capital. As Karen Burton noted, "The increase in earnings more than offset the significantly lower contribution from working capital in FY 2026 compared with FY 2025."
The company's strong financial performance has set it up for continued success in the coming year. With plans to increase dividends, reinvest in its business, and return excess cash to shareholders through a share buyback program, STERIS is poised to drive growth and create value for its stakeholders.
