STERIS Q3 2025: Contradictions in Bioprocessing Demand, Equipment Shipments, and Legal Expenses

These are the key contradictions discussed in STERIS's latest 2025 Q3 earnings call, specifically including: Bioprocessing Demand Expectations, Healthcare Capital Equipment Shipment Timings, and Legal Expense Outlooks:



Revenue and Revenue Growth:
- STERIS plc reported total as-reported revenue growth of 6% with constant currency organic revenue growth also at 6% for Q3 2025, driven by volume and 240 basis points of price increase.
- Growth was impacted by delays in Healthcare capital equipment shipments and higher labor and energy costs.

EBIT Margin and Expense Impact:
- The EBIT margin decreased by 10 basis points to 23.3%, with over $10 million of additional expense year-over-year due to litigation expenses and increased healthcare benefit costs.
- The adjusted effective tax rate increased due to unfavorable discrete items.

AST Segment Performance:
- AST's constant currency organic revenue grew by 10%, with services growing by 10% and a decline in capital equipment shipments, benefiting from global medtech customer stability and bioprocessing demand.
- The positive growth was offset by higher labor and energy costs.

Revised Revenue Outlook:
- STERIS revised its full-year revenue outlook to approximately 6% for both as-reported and constant currency organic revenue growth, reflecting the impact of currency rate changes and healthcare capital equipment shipment delays.
- Free cash flow expectations remain unchanged at approximately $700 million.

Ethylene Oxide Legal Proceedings:
- STERIS continues to defend its subsidiary Isomedix amid ongoing litigation related to ethylene oxide emissions, with the first case having ended in a mistrial.
- The company anticipates additional expenses but remains confident in its safety practices and awaits further trial outcomes.