01—Abstract
Summary
Summary of the 10-Q filed February 6, 2026. Cited figures are marked; the original filing is the authoritative source.
STERIS plc's 10-Q for the quarter ended December 31, 2025 shows continued top-line growth.
Total revenues rose 9.2% to $1,496.2 milliona for the three months and 9.3% to $4,347.5 million for the nine months ended December 31, 2025, driven by higher volume and pricing, with Healthcare, AST and Life Sciences all contributing. Income from operations was $273.2 million for the quarter versus $245.3 million a year earlier, and $785.0 million for the nine months versus $650.5 million. Net income attributable to shareholders was $192.9 million for the quarter and $562.1 million for the nine months.
Gross profit percentage was 43.8% for the quarter, down from 44.5%, as tariffs, inflation and mix offset pricing and productivity gains, while the nine-month gross profit percentage was 44.4% versus 44.3%. Cash generation and balance sheet strengthened. Net cash from operating activities was $1,006.0 millionb for the nine months, and free cash flow was $737.6 million, versus $588.1 million a year earlier.
Total debt declined to $1,898.4 millionc from $2,043.7 million at March 31, 2025, after repayment of $125.0 million of Private Placement Senior Notes, and the debt-to-total capital ratio fell to 21.1% from 25.2% a year earlier. The company repurchased $150.0 million of shares in the nine months and paid $1.83 per share in dividends, with $150.0 million remaining under its repurchase authorization. The filing also flags ongoing items.
The company agreed to settle Illinois ethylene oxide (EO) claims for up to $48.2 milliond, with a claims administration process expected to continue into fiscal 2027. The IRS issued Notices of Deficiency tied to a cumulative potential liability of about $50.0 million, which the company is contesting in U.S. Tax Court without reserves. The Restructuring Plan's total pre-tax expense since inception is $109.8 million, and further costs are not expected to be significant in fiscal 2026.
02—Key points
Key Highlights
- Total revenues rose 9.2% to $1,496.2 million in the third quarter and 9.3% to $4,347.5 million for the nine months ended December 31, 2025, with all three segments contributing.
- Income from operations increased to $273.2 million for the quarter (from $245.3 million) and $785.0 million for the nine months (from $650.5 million).
- Gross profit percentage was 43.8% in the quarter, down from 44.5%, as tariffs, inflation and mix offset pricing and productivity; nine-month gross margin was 44.4% versus 44.3%.
- Free cash flow was $737.6 million for the nine months, up from $588.1 million, on operating cash flow of $1,006.0 million.
- Total debt fell to $1,898.4 million from $2,043.7 million at March 31, 2025, and the debt-to-total capital ratio declined to 21.1% from 25.2% a year earlier.
- The company repurchased $150.0 million of ordinary shares and paid $1.83 per share in dividends during the nine months, with $150.0 million remaining under its repurchase authorization.
- An Illinois ethylene oxide settlement of up to $48.2 million is expected to resolve substantially all pending personal injury claims, and a $50.0 million potential IRS deemed-dividend tax liability is being contested without reserves.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Steris kept $0.13.
- Revenue$1.50B100.0%
- Cost of revenue−$840.7M56.2%
- Gross profit$655.5M43.8%
- Operating costs−$382.3M25.6%
- Operating income$273.2M18.3%
- Interest, other & tax−$80.3M5.4%
- Net income$192.9M12.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed February 6, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.50B$1.37B | +9.2% |
| Cost of Revenue | $840.70M$760.20M | +10.6% |
| Gross Profit | $655.50M$610.30M | +7.4% |
| R&D Expenses | $29.50M$27.40M | +7.7% |
| SG&A Expenses | $352.30M$335.50M | +5.0% |
| Operating Expenses | $382.30M$365.00M | +4.7% |
| Operating Income | $273.20M$245.30M | +11.4% |
| Net Income | $192.90M$173.50M | +11.2% |
| EPS (Basic) | $1.96$1.76 | +11.4% |
| EPS (Diluted) | $1.96$1.75 | +12.0% |
| Shares Outstanding (Basic) | 98.20M98.50M | −0.3% |
| Shares Outstanding (Diluted) | 98.60M98.90M | −0.3% |
05—Questions
Frequently Asked Questions
How did STERIS perform in the third quarter of fiscal 2026?
Revenues increased 9.2% to $1,496.2 million, and income from operations rose to $273.2 million from $245.3 million. Net income attributable to shareholders was $192.9 million, compared with $173.5 million a year earlier. Growth reflected higher volume and pricing across Healthcare, AST and Life Sciences.
What pressured margins during the period?
The quarterly gross profit percentage fell to 43.8% from 44.5%, as favorable pricing, productivity and cost reductions were more than offset by tariff costs (120 basis points), inflation (60 basis points) and mix (60 basis points). The company's effective tax rate also rose to 24.0% for the nine months from 22.4%, mainly due to geographic mix and discrete items.
How strong is the company's cash flow and balance sheet?
Operating cash flow was $1,006.0 million for the nine months, and free cash flow was $737.6 million. Total debt was $1,898.4 million at December 31, 2025, down from $2,043.7 million at March 31, 2025, and the company had no outstanding revolving credit borrowings. Cash and cash equivalents rose to $423.7 million.
What legal and tax matters could affect investors?
The company agreed to settle Illinois ethylene oxide claims for up to $48.2 million, with a charge recorded in fiscal 2025 and claims administration expected into fiscal 2027. The IRS issued Notices of Deficiency with a cumulative potential tax liability of about $50.0 million, excluding interest and penalties, which the company is contesting in U.S. Tax Court without establishing reserves.
What is the company doing with capital returned to shareholders?
During the nine months, STERIS repurchased 0.6 million ordinary shares for $150.0 million and paid cash dividends totaling $180.0 million, or $1.83 per share. The Board's repurchase authorization had $150.0 million remaining as of December 31, 2025, and the program has no specified expiration date.
06—Continue