STERIS plc Q2 2026 results

What Management Said

In addition, on today's call, non-GAAP financial measures, including adjusted earnings per diluted share, adjusted operating income, constant currency organic revenue growth, and free cash flow, will be used. Constant currency organic revenue grew 9% in the quarter, driven by volume, as well as 210 basis points of price. Gross margin for the quarter increased 60 basis points compared with the prior year to 44.3%. EBIT margin increased 90 basis points to 23.1% of revenue compared with the second quarter last year, mainly driven by operating expense leverage.

The year-over-year increase was driven primarily by changes in discrete item adjustments and geographic mix. Adjusted earnings per diluted share from continuing operations were $2.47, a 15% increase over the prior year. Capital expenditures for the first half of fiscal 2026 totaled $180.1 million, and depreciation and amortization totaled $241.1 million. Free cash flow for the first half of fiscal 2026 was $527.7 million, a very strong start to the year driven by the increase in earnings and improvements in working capital.

Starting with healthcare, constant currency organic revenue grew 9% in the second quarter, with growth across all categories. Healthcare capital equipment revenue increased 4% in the quarter, with backlog of over $400 million. Orders were up 3% year-to-date, and down slightly in the second quarter. EBIT margins for healthcare in the quarter increased 100 basis points to 25.1%, with volume, pricing, positive productivity, and restructuring program benefits offsetting tariffs and inflation.

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