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- **Record Q3 Financials**: 9.1% revenue growth, 12.2% EBITDA expansion, and 147bps margin improvement highlight strong execution.
- **Debt Reduction & Savings**: $75M debt repayment cuts annual interest by $13M, lowering net leverage to 3.3x.
- **Nordion License Renewal**: 25-year Cobalt-60 supply secured, reinforcing global healthcare sterilization.
- **Litigation Defense Strength**: Georgia court rulings support scientific refutation of EO causation claims.
- **2025 Guidance Upped**: EBITDA growth raised to 6.75-7.75%, EPS to $0.81-0.86, reflecting operational and financial discipline.

**【CEO Summary Section】**
- **Q3 2025 Performance Highlights**: Total revenue grew 9.1% YoY to $311 million, with adjusted EBITDA up 12.2% to $164 million. Margins expanded 147 basis points to 52.7%, driven by Sterigenics (55.6%) and Nelson Labs (34.1%).
- **Balance Sheet Strength**: Reduced debt by $75 million, lowering annual interest expense by $13 million. Net leverage improved to 3.3x from 3.7x YoY.
- **Strategic Milestone**: Nordion secured a 25-year renewal of its Class 1B license, ensuring long-term Cobalt-60 supply for healthcare sterilization.

**【CFO Financial Commentary】**
- **Segment Breakdown**:
  - **Sterigenics**: 9.8% revenue growth ($193M) from volume/mix (+4.6%), pricing (+3.8%), and FX (+1.4%). Segment income rose 11.6% to $107M.
  - **Nordion**: 22.4% revenue growth ($63M) due to volume/mix (+18.9%) and pricing (+4.7%). Segment income increased 19.9% to $38M, though margins dipped 130bps to 60.6% due to product mix.
  - **Nelson Labs**: 5% revenue decline ($56M) from Expert Advisory Services decline, offset by core lab testing growth. Segment income grew 1.9% to $19M with 290bps margin expansion.
- **Updated Guidance**: Full-year constant currency revenue growth maintained at 4.5-6%, with EBITDA raised to 6.75-7.75% (vs. 6-7.5% prior). Adjusted EPS now $0.81-0.86 (vs. $0.75-0.82 prior) due to EBITDA growth and tax rate improvement.

**【Q&A Key Highlights】**
- **Litigation Update**: Georgia court ruled against plaintiffs' causation experts, dismissing three bellwether cases. Company expects science-based defense to prevail in remaining cases.
- **Budget Flush Impact**: No material impact from government shutdown; minimal delays in Expert Advisory Services.
- **4Q Margin Outlook**: Nelson Labs may see slight margin step-down due to lower Q3 expenses, but Sterigenics remains stable.
- **2026 Growth**: CEO confident in mid-single to high-single digit growth for Sterigenics, with potential pricing upside from NESHAP compliance investments.
- **Nelson Labs Recovery**: Core lab testing growth expected to offset Expert Advisory Services decline, with 2026 return to growth possible.

Sotera Health Company (SHC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

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Cost of Financing Services

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Operating Expenses

Selling, General and Administrative Expenses

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SHC

SHC fundamentals

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