Sotera Health Company (SHC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 2.6% to $255M (4.4% constant currency), with Adjusted EBITDA up 8.8% to $122M (11.2% constant currency), and margin expansion across core segments.

• Net loss of $13M in Q1 2025, primarily due to a $31M EO litigation settlement; Adjusted EPS rose to $0.14.

• All business lines met or exceeded expectations, with Sterigenics, Nordion, and Nelson Labs contributing to performance.

• Over 70% of revenue is tied to multi-year contracts, with a diversified customer base and global presence.

• Reaffirmed full-year 2025 outlook for revenue and Adjusted EBITDA growth.

Financial highlights

• Q1 2025 revenue was $255M, up 2.6% year-over-year; Adjusted EBITDA rose 8.8% to $122M; Adjusted EBITDA margin expanded to 47.9%.

• Adjusted EPS increased by $0.01 to $0.14 year-over-year; GAAP net loss was $13M due to EO settlement.

• Gross profit for Q1 2025 was $135.4M, up from $127.1M in Q1 2024.

• Net leverage ratio improved to 3.6x as of March 31, 2025, from 3.7x at year-end 2024.

• Liquidity at quarter-end was $715M, including $300M+ cash and no outstanding borrowings on the revolver.

Outlook and guidance

• 2025 net revenue growth expected at 4.0%-6.0% and Adjusted EBITDA growth at 4.5%-6.5% (constant currency); FX headwinds of ~1.25% on revenue and ~1.5% on Adjusted EBITDA.

• Adjusted EPS guidance: $0.70-$0.76; effective tax rate of 33%-35%.

• Capital expenditures projected at $190M-$210M for 2025, decreasing to ~$110M by 2027.

• Net leverage ratio targeted to decline further by year-end 2025.

• Free cash flow target of $500M-$600M over the next three years.