Sotera Health Company Q4 FY2025 earnings call

• 2025 was a strong year with total company revenue up 5.7% to $1.164 billion, adjusted EBITDA up 8.2% with margins at 51%, and adjusted free cash flow over $200 million. • Customer satisfaction exceeded 80%. • Advancement of portfolio in key areas like commercial initiatives with XBU customers revenue up 9%, Sterigenics revenue up 8% constant currency, Nordion revenue up 9% constant currency, Nelson Labs core lab testing growth. • Reduced borrowing costs and paid down debt, upsized and extended revolver, public float increased to 80% of outstanding shares. • Appointed lead independent director and welcomed new board member. • 2025 was a strong first step in executing the 2025 - 2027 long - range plan.

For the fourth quarter: Sterigenics revenue improved 10.6% to $198 million or 8% on constant currency basis; Nordion's revenue decreased 12.3% to $50 million; Nelson Labs revenue increased 2.3% to $55 million. For full year 2025: Total company revenue increased 5.7% to $1.164 billion, adjusted EBITDA improved 8.2% with margins at 51%, Sterigenics revenue had 5.7% constant currency growth, Nordion revenue decreased due to Cobalt - 60 harvest timing, Nelson Labs revenue had 2.3% constant currency growth

• 2026 total company revenue expected to be in range of $1.233 billion to $1.251 billion, 5% to 6.5% constant currency growth. • Adjusted EBITDA expected to be in range of $632 million to $641 million, 5.5% to 7% constant currency growth. • Sterigenics expected mid - to high single - digit constant currency revenue growth in 2026, first quarter mid - single digits. • Nordion expected low to mid - single digit constant currency revenue growth in 2026, first half 40% - 45% of full year revenue. • Nelson Labs expected low single digit constant currency revenue growth in 2026, Q1 growth low to mid - single digits. • Interest expense expected $135 million - $145 million, effective tax rate 27% - 29%, adjusted EPS $0.93 - $1.01. • Capital expenditures expected $175 million - $225 million in 2026.

Q: About guidance and EBITDA margins, is it all operating leverage?

A: Jonathan Lyons said it's normal operating leverage and running the business.

Q: On Sterigenics client in - sourcing to outsourcing, what's the background?

A: Michael Petras said compliance period out for 2 more years, one client will start to bring volume late 2026 rolling in through '27 and '28, new regulations a factor but respect client confidentiality.

Q: On Nelson Labs EAS headwinds, progression and margins?

A: Jonathan Lyons said expert advisory comp has trailing Q1 comp challenge, will improve from there, last quarter with headwind; Jonathan Lyons said Nelson will stay in low to mid - 30s in 2026, first quarter lower margin.

Q: On Sterigenics 1Q guide and dynamics, A: Michael Petras said first quarter typically soft, Sterigenics has slow start with shutdown and weather impact but guiding mid - single digits.

Q: On X - ray facility, opening and strategy?

A: Michael Petras said expected to open in second half of 2026, in qualification with customers, long - term strategic investment for full service offering.

Q: On XBU customer base revenue growth, size and drivers?

A: Michael Petras said several hundreds of customers, strategic pilots, customer satisfaction scores above average, commercial work ongoing.

Q: On capital allocation and acquisition potential?

A: Michael Petras said priorities are funding organic investments, committed to free cash flow target, guide for CapEx fits framework.

Q: On Sterigenics growth projects, X - ray facility utilization and other facility?

A: Michael Petras said X - ray facility utilization below 40% target, other facility details not public yet.

Q: On Sterigenics competitive positioning and Nelson competitive landscape?

A: Michael Petras said NESHAP extension has slowed down urgency of in - sourcing/out - sourcing discussions for Sterigenics, Sterigenics well positioned with good customer satisfaction; Nelson Labs in fragmented market, core lab testing improved, advisory business choppy but good customer sat and NPS.

Q: On Sterigenics first quarter slower start and weather headwinds?

A: Michael Petras said shutdowns and weather impact, guide mid - single digits consistent with delivery.

Q: On Nordion segment headwinds and onshoring impact?

A: Michael Petras said Nordion headwinds due to Cobalt - 60 harvest schedule, not demand problem; onshoring not seen significant impact yet but well situated if it occurs.

Q: On guidance higher end drivers?

A: Michael Petras said volume and mix in Sterigenics and Nelson Labs could drive to higher end.

Q: On Sterigenics commercial segment volumes, what are commercial categories and challenges?

A: Michael Petras said commercial includes food, consumer products, electronics etc., challenged with churn in customer base, more shrinking than growing since 2020 - 2021.

Q: On Sterigenics volume growth and tariff landscape impact?

A: Michael Petras said not seen material impact from tariff side detected.