STERIS Reports 5.6% Revenue Growth to $1.37 Billion in Third Quarter of Fiscal 2025

STERIS plc reported a notable increase in financial performance for the third quarter and first nine months of fiscal 2025, with total revenues reaching $1.37 billion for the three months ended December 31, 2024, a 5.6% increase from $1.30 billion in the same period last year. For the nine months, revenues rose 7.0% to $3.98 billion compared to $3.72 billion in the prior year. The growth was driven by higher volumes and pricing across its product and service offerings, particularly in the Healthcare and Applied Sterilization Technologies (AST) segments.

The company's gross profit margin improved to 44.5% for the third quarter, up from 43.2% in the previous year, reflecting favorable pricing and productivity impacts, despite some increases in labor and overhead costs. Operating income also saw an increase, with $245.3 million reported for the third quarter, compared to $226.5 million in the same quarter of fiscal 2024. For the nine-month period, operating income rose to $650.5 million from $615.8 million, attributed to increased sales volume and pricing, although offset by rising labor costs and restructuring expenses.

Strategically, STERIS has been active in acquisitions and divestitures, completing several tuck-in acquisitions totaling approximately $53.7 million during the first nine months of fiscal 2025. Notably, the company acquired surgical instrumentation assets from Becton, Dickinson and Company for $539.8 million, which has been integrated into its Healthcare segment. Additionally, STERIS announced the sale of its Dental segment for $787.5 million, which closed on May 31, 2024, and generated significant cash flow used to reduce debt.

Operationally, STERIS reported a total employee headcount of 14,000 as of December 31, 2024, reflecting a strategic restructuring plan that aims to enhance profitability and efficiency, with fewer than 300 positions being eliminated. The company also noted a backlog of $434.9 million in its Healthcare segment, indicating strong future demand. The effective tax rate for the third quarter increased to 24.2%, up from 21.6% in the prior year, primarily due to unfavorable discrete items and changes in the geographic mix of profits.

Looking ahead, STERIS anticipates continued growth driven by increased demand for its products and services, particularly in the healthcare sector, as well as the successful integration of recent acquisitions. The company remains focused on improving operational efficiency and managing costs effectively while navigating market conditions and potential regulatory challenges.