Sotera Health raises full-year outlook as Nelson Labs recovers
Adjusted earnings per share rose 30% to $0.26 in the second quarter.
Sotera Health (SHC), the medical sterilization and testing provider, reported second-quarter net revenues that increased 9.2% compared to the same period last year.
The results marked a recovery in the company's testing segment and a strengthening of its balance sheet. The company raised its full-year growth projections following a quarter of expanded margins and the achievement of a long-term leverage target.
Net revenues grew 8.0% on a constant currency basis. Adjusted earnings per share rose 30% to $0.26. Adjusted EBITDA increased 10.0% compared to the prior year, or 8.7% on a constant currency basis.
Performance was driven by a turnaround at Nelson Labs, where constant currency revenue grew 5.4% year-over-year. This followed a 3.8% constant currency revenue decline in the first quarter. The segment also achieved a sequential income margin improvement of 438 basis points.
Nordion constant currency revenue grew 16.7% year-over-year, though this represented a deceleration from the 25.8% growth seen in the first quarter. The segment's income margin improved by 160 basis points. Sterigenics reported constant currency revenue growth of 7.0% and a segment income margin increase of 53 basis points.
Overall Adjusted EBITDA margin expanded to 51.6%, up from 51.2% in the first quarter.
Sotera Health raised its full-year 2026 constant currency net revenue growth outlook to a range of 5.25% to 6.75%, up from the previous guide of 5.0% to 6.5%. The company also raised its constant currency Adjusted EBITDA growth outlook to 5.75% to 7.25% from a prior range of 5.5% to 7.0%.
The company's net leverage ratio improved to 3.0x as of June 30, 2026, down from 3.2x at the end of March, placing the company within its long-term target range of 2.0x to 3.0x. Sotera Health also repriced its term loan to save approximately $3.5 million in annual interest expenses and completed a final private equity sponsor secondary offering, which eliminated all remaining sponsor ownership.