Sotera Health's 2025Q2 Earnings Call: Unraveling Key Contradictions in Volume Growth, Tariffs, and Margin Improvements

Sterigenics volume growth and recovery, tariff impact on business, Nelson Labs margin improvement, volume recovery in Sterigenics, margin improvement at Nelson Labs are the key contradictions discussed in Sotera Health Company's latest 2025Q2 earnings call.



Revenue and Earnings Growth:
- Sotera Health reported revenue growth of 6.4% for Q2 2025, with an adjusted EBITDA increase of 9.8%.
- The growth was driven by strong performance in Sterigenics and Nordion, along with improved margins at Nelson Labs.

Sterigenics Segment Performance:
- Sterigenics delivered 10.5% year-over-year revenue growth in Q2 2025, driven by increased customer demand and volume mix, particularly in bioprocessing.
- The growth was attributed to strong performance in core medical device customers and capacity expansions in bioprocessing.

Nelson Labs Margin Improvement:
- Nelson Labs saw a segment income margin expansion of more than 500 basis points, marking the fourth consecutive quarter of year-over-year margin improvement.
- The improvement was driven by increased core lab testing volume, favorable mix shifts, and optimization actions, despite anticipated volume impacts from expert advisory services.

Revenue Guidance and Outlook:
- Sotera Health raised its full-year 2025 revenue and adjusted EBITDA growth outlook, expecting 4.5% to 6% revenue growth and 6% to 7.5% adjusted EBITDA growth.
- The revision reflects improved performance expectations and assumes no foreign currency impact for the full year.