stockrowWhat it does
STERIS provides products and services used to prevent infections and support patient care. Founded in 1985 and headquartered in Ireland, it serves healthcare providers and manufacturers of medical devices and pharmaceuticals. Daniel A. Carestio is its president and chief executive officer.
For hospitals and other healthcare providers, STERIS supplies products used to clean, disinfect and sterilize reusable instruments, as well as equipment used in operating rooms and endoscopy suites. Its products range from detergents and sterility assurance supplies to sterilizers, surgical tables and systems that reprocess endoscopes. It also repairs instruments and scopes, maintains equipment and runs outsourced instrument-processing services.
For medical device and pharmaceutical manufacturers, the company operates contract sterilization and laboratory testing facilities. These facilities support customers making single-use sterile products, while STERIS also sells sterilization equipment and control systems.
Its Life Sciences business supplies products and services for manufacturing facilities, particularly those making products under aseptic conditions. These include cleanroom disinfectants, pharmaceutical sterilizers and washers, and equipment maintenance.
STERIS organizes its operations into Healthcare, Applied Sterilization Technologies, known as AST, and Life Sciences. It also sells connectivity solutions, including systems that integrate operating-room equipment.
How it makes money
STERIS earns revenue by selling consumable supplies and capital equipment and by providing services. Product revenue includes both consumables and equipment; service revenue includes equipment installation, maintenance and repair, outsourced instrument reprocessing, contract sterilization and laboratory services.
Revenue was $5,935.9 million in fiscal 2026 and $1.6 billion in the second quarter of fiscal 2027.
Healthcare sells to providers that need sterile processing and procedural equipment. A customer can buy a sterilizer or an automated endoscope reprocessor, purchase supplies used with equipment, and use STERIS for maintenance or instrument repair. Healthcare also provides outsourced sterile processing at hospitals and off-site centers. In fiscal 2026, the segment generated $4.2 billion in revenue.
AST charges manufacturers for sterilization and testing services and sells equipment and process controls. Its facilities use a range of sterilization methods and support customers with materials testing and process validation. Life Sciences sells cleaning and disinfection supplies, sterilizers and other equipment to manufacturing facilities, alongside maintenance and specialty services.
STERIS defines recurring revenue as sales of consumables plus service revenue. In fiscal 2026, product revenue was $3.1 billion and service revenue was $2.9 billion; the product figure includes both consumables and capital equipment.
Revenue growth in fiscal 2026 reflected higher volume and pricing, along with favorable foreign currency movements. In the second quarter of fiscal 2027, STERIS reported that Healthcare consumables grew 10%, benefiting from customer consumption, share gains and endoscopy procedure growth.
| Product or service | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Product | $3.1 billion | 51.6% | 6.56% |
| Service | $2.9 billion | 48.4% | 11.1% |
Customers and how it sells
Most STERIS revenue comes from healthcare providers, medical device manufacturers and pharmaceutical customers. Healthcare customers include hospitals, ambulatory surgery centers and endoscopy suites. AST serves manufacturers of medical devices and pharmaceuticals, while Life Sciences supplies facilities involved in biopharmaceutical and medical device manufacturing.
In fiscal 2026, no customer accounted for more than 10% of revenue in any of the three segments. STERIS sells consumables, services and capital equipment to Healthcare and Life Sciences customers in many countries; AST offers its services worldwide.
The United States generated $4.3 billion of revenue in fiscal 2026, or 73.0% of the total. Ireland generated $108.5 million, while other foreign locations generated $1.5 billion.
STERIS supports sales and service through regional clinical specialists, system planners, account managers and customer service and field-support staff. It also contracts with distributors and dealers. Customer training is provided at customer sites, at STERIS training centers and online.
AST facilities are located in regions with medical device and pharmaceutical manufacturing across the Americas, Europe and Asia. Healthcare service employees install, maintain and repair equipment around the world.
| Region | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| UNITED STATES | $4.3 billion | 73.0% | 8.14% |
| Other foreign locations | $1.5 billion | 25.2% | 11.1% |
| IRELAND | $108.5 million | 1.83% | 1.12% |
Suppliers and costs
STERIS purchases raw materials, subassemblies, components and other supplies from numerous suppliers in the United States and internationally. Most are generally available from several sources. For certain materials with few suppliers, or that are single-sourced in some regions, it uses long-term supply contracts. These include ethylene oxide and cobalt-60, which are necessary for AST operations. STERIS is expanding irradiation capacity using accelerator-based technologies to help mitigate cobalt-60 supply risk.
The company manufactures, assembles and packages products in several countries, with facilities dedicated to particular processes and products. Its costs also include employees, service operations, facilities, research and development, and regulatory compliance.
In fiscal 2026, pricing, operational improvements, productivity and lower restructuring costs helped gross profit percentage, while tariffs and inflation partly offset those benefits. Capital expenditures were $369.0 million in fiscal 2026.
In the second quarter of fiscal 2027, adjusted gross margin was 45.3%. Approximately 20 million in tariff refunds contributed to the increase from the prior year, while underlying margins declined slightly as inflation more than offset favorable pricing.
- Revenue$5.9B
- Cost of revenue−$3.3B
- Research and development−$112.9M
- Selling, general and administrative−$1.4B
- Operating income$1.1B
Competitive position
STERIS competes with large companies with broad portfolios and international operations, as well as smaller businesses with narrower offerings. Healthcare product competitors include 3M, Baxter, Boston Scientific, Belimed, Ecolab, Getinge, Olympus and Stryker. Healthcare service competitors include Crothall, Olympus and Pentax. AST competes with Sterigenics, smaller contract sterilizers, equipment makers and manufacturers that sterilize their own products. Life Sciences competitors include Belimed, Contec, Ecolab, Fedegari, Getinge and Stilmas.
STERIS identifies quality, safety, price, product features, delivery, service and technical support among the factors customers consider. Its competitive position also depends on developing and marketing products and services. The company protects technology through patents and relies on trade secrets and technical know-how, although patent protection varies and may be inadequate.
Our reading: Equipment maintenance, consumable supplies and instrument-processing services give STERIS several ways to serve an existing Healthcare customer, but the evidence does not establish how difficult it is for customers to switch.
Our reading: AST’s facility network and experience in regulated sterilization support its position, although customers can also use competitors or sterilize products in-house.
Our reading: Patents and know-how provide some protection, but their strength varies by product and jurisdiction, and competitors can develop alternative technologies.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| 3M | Healthcare products | Medium |
| Baxter | Healthcare products | Medium |
| Boston Scientific | Healthcare products | Medium |
| Belimed | Healthcare products and Life Sciences | Medium |
| Ecolab | Healthcare products and Life Sciences | Medium |
| Getinge | Healthcare products and Life Sciences | Medium |
| Olympus | Healthcare products and services | Medium |
| Stryker | Healthcare products | Medium |
Growth opportunities
STERIS identifies aging populations, demand for medical procedures and customers’ efforts to operate more efficiently as drivers of demand for its products and services. It also expects to develop products and services internally, invest in capacity and efficiency, and consider acquisitions. In fiscal 2026, it completed two acquisitions that expanded Healthcare offerings.
In the second quarter of fiscal 2027, STERIS reported 9% revenue growth as reported and 8% constant currency organic growth. Healthcare consumables grew 10%, which the company attributed in part to share gains and endoscopy procedure growth. Life Sciences capital equipment grew 53% in the quarter. STERIS said reshoring and localization of manufacturing benefited Life Sciences, and that one customer order in excess of $10 million made a difference to the quarter’s performance.
STERIS agreed to acquire Exodus Medical, a surgical specialties products business. The company expects the proposed acquisition to expand its direct commercial presence in operating rooms and add single-use products. Its fiscal 2027 outlook does not include the acquisition; STERIS expects to update that outlook after closing.
For fiscal 2027, STERIS expects as-reported revenue growth of seven to eight percent and constant currency organic growth of six to seven percent. It increased its Life Sciences constant currency organic growth outlook to 9-10% and revised its AST growth outlook to six to seven percent.
- $4.2BFY2022
- $4.5BFY2023
- $5.1BFY2024
- $5.5BFY2025
- $5.9BFY2026
Structural risks
- Regulation and approvals. STERIS must receive and maintain regulatory clearance or approval for many products and operations. Delays or failures to obtain or maintain approvals may hurt revenue and profitability; noncompliance can bring penalties.
- Sterilization inputs. Ethylene oxide and cobalt-60 are necessary for AST, and some regions have few suppliers or a single source. STERIS uses long-term contracts and is expanding accelerator-based irradiation capacity to help address cobalt-60 supply risk.
- Competition and innovation. Competitors may have greater resources or develop and commercialize products more quickly. STERIS cannot be certain its new products and services will be commercially successful.
- Acquisition integration. Acquisitions can bring unexpected costs, unknown liabilities, disruption and difficulty integrating personnel, systems and customer relationships. Anticipated revenue benefits or cost savings may not be achieved.
- Healthcare spending and costs. Changes in healthcare policy or reimbursement can affect providers and STERIS’s business. Inflation and tariffs also affect costs; in the second quarter of fiscal 2027, inflation more than offset favorable pricing in underlying gross margin.
Bottom line
Our reading
Our reading: STERIS combines equipment sales with consumables and services used in healthcare and manufacturing workflows, including contract sterilization. [item1] Its business benefits from several ways to serve customers, but it also faces competition, regulatory requirements and reliance on certain sterilization inputs. [item1] Recent growth has included a large Life Sciences order and tariff refunds, so those contributions should be considered alongside the underlying business. [call_prepared] [call_qa]