Sotera Health Reaffirms 2026 Outlook After Nordion Reversal

The Tip Desk · November 10, 2026 · 3 min read

Third-quarter net revenues were $324.9 million, up 4.4% year over year, as Adjusted EBITDA margin reached 52.5%.

Sotera Health Company (SHC), a global provider of sterilization, lab testing and advisory services for healthcare, reported third-quarter 2026 net revenues of $324.9 million, up 4.4% from a year earlier on both an as-reported and constant currency basis, a slower pace than the 9.2% as-reported increase in the second quarter.

Net income was $58 million, or $0.20 a share. Adjusted EBITDA rose 3.9%, or 4.0% in constant currency, after 10.0% growth in the prior quarter. Adjusted EPS was $0.29, up 12% a share.

Sequential Adjusted EBITDA margin expanded nearly 100 basis points to 52.5%, after reaching 51.6% in the second quarter. Chief Executive Officer Alton Shader said the company was pleased with solid top- and bottom-line constant currency growth and that performance was supported by 8.2% constant currency revenue growth at Sterigenics and 9.2% growth at Nelson Labs.

Sterigenics, the largest of the three reportable businesses, posted net revenues of $209 million, up 8.5%, or 8.2% in constant currency. Segment income was $117 million, up 9.6%, with segment income margin improving 57 basis points. The company said third-quarter revenue growth was driven by pricing, improved volume and mix, and a foreign currency benefit; segment income and margin also benefited from those factors, partially offset by inflation.

Nordion reversed a second-quarter increase. Net revenues were $55 million, down 12.4%, or 11.5% in constant currency, which the company attributed to the expected year-over-year impact of Cobalt-60 harvest schedules. Segment income fell 11.4% to $34 million. Segment income margin improved 71 basis points, which the company said was driven by operational productivity and favorable pricing, partially offset by inflation.

Nelson Labs net revenues were $61 million, up 8.8%, or 9.2% in constant currency, versus 5.4% constant currency growth in the second quarter. Segment income was $19 million, up 2.5%. The company said third-quarter revenue growth was driven by favorable volume and mix as well as pricing, partially offset by foreign exchange, and that segment income margin was impacted primarily by business mix. A new Annex-1 compliant cleanroom was completed during the quarter.

Net cash provided by operating activities was $111 million. As of September 30, 2026, the company had $2.2 billion of total debt and $412 million in unrestricted cash and cash equivalents. The Net Leverage Ratio improved to 2.9x from 3.0x as of June 30, remaining within the company’s long-term goal of 2.0x to 3.0x. Sotera Health said it achieved a credit rating upgrade from Moody’s Ratings in early October, reflecting continued progress in strengthening the balance sheet and reducing leverage.

The company is reaffirming its full-year 2026 outlook of 5.25% to 6.75% constant currency net revenues growth and 5.75% to 7.25% Adjusted EBITDA growth, the ranges it raised after the second quarter. Full-year net revenues are expected in a range of $1.233 billion to $1.250 billion, and Adjusted EBITDA in a range of $632 million to $641 million, with full-year Adjusted EBITDA margins approximately flat versus 2025. The foreign currency benefit to net revenues and Adjusted EBITDA has been revised to 70 basis points from 100 basis points in the previous outlook. Interest expense is expected in a range of $137 million to $140 million. Adjusted EPS remains in a range of $0.95 to $1.01, with a weighted-average fully diluted share count of 289 million to 291 million shares and capital expenditures of $200 million to $225 million.

Shader said that, based on year-to-date performance and expectations for the remainder of the year, the company is reaffirming its 2026 constant currency revenue and Adjusted EBITDA outlook.