STERIS reported a solid start to fiscal 2025 (QQ1) with revenue of approximately $1.28 billion, delivering modest currency-adjusted topline growth and a robust margin profile. Management highlighted a blend of volume-driven growth and price Realization, noting constant currency organic revenue growth of 6% and 270 basis points of price, contributing to a gross margin of about 45% and an EBIT margin near 22% on continuing operations. Reported GAAP net income totaled roughly $145 million, with adjusted EPS of $2.03 and a quarterly GAAP EPS of $1.47, underscoring a favorable mix of higher-margin services and consumables versus capital equipment sensitivity.
Key operational themes center on a normalization of capital equipment orders after an extended backlog, a continued lift in consumables and services (driven by procedure volumes), and ongoing deleveraging following the dental divestiture completed late in the period. Free cash flow was strong at about $196 million, supporting a 19th consecutive year of dividend increases (quarterly dividend up to $0.57 from $0.52). Management reaffirmed full-year guidance, targeting 6%–7% constant currency organic revenue growth and adjusted diluted EPS of $9.05–$9.25, with roughly $700 million of free cash flow and around $360 million in capital expenditures.
Overall, the QQ1 print reinforces STERIS’s diversified mix—Healthcare, Applied Sterilization Technologies (AST), Life Sciences, and Dental—while signaling a cycle of backlog normalization and continued levered cash generation. Investors should monitor cadence of capital equipment orders, the trajectory of consumables/services growth (especially in the US), and the pace of deleveraging as the company integrates its divestitures and expands its service-based revenue.