STERIS plc
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
STE$252.30-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-06.
0001628280-26-006055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001628280-26-054830
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 147 current paragraphs.
69 unchanged; 60 reworded; 16 added; 26 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 19 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Income from operations for the first three months of fiscal 2027 was $285.8 million, compared to income from operations of $246.0 million for the first three months of fiscal 2026. The increase in income from operations for the three month period is primarily due to increased pricing, volume, and productivity, which were partially offset by inflation and additional spending on operational investments and staffing.
Current report
Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year. The increase reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.
Current report
On August 5, 2026, the Company announced a targeted restructuring plan to consolidate manufacturing and distribution for formulated chemistries to a new Center of Excellence in North Carolina. The investment is expected to accelerate innovation, expand capacity and optimize our U.S. chemistries manufacturing and distribution network. The plan includes the anticipated closure of chemistry manufacturing and distribution facilities in St. Louis, Missouri and Plymouth, Minnesota. The Company currently expects to incur total pre-tax restructuring charges of approximately $55 million to $70 million, consisting of approximately $40 million to $50 million of cash expenditures and approximately $15 million to $20 million of non-cash charges. Cash expenditures are expected to primarily consist of Associate retention, severance and benefits, and also include transition, facility exit and other related costs. Non-cash charges are expected to primarily relate to accelerated depreciation. These charges are expected to be incurred over time, with completion anticipated to occur during fiscal 2030. No financial impact has been recognized to date with respect to these amounts. This investment strengthens our Healthcare and Life Sciences formulated chemistries businesses, which together generate more than $700 million in annual revenue.
Current report
The estimated costs and timing associated with the restructuring actions are based on the Company's current expectations and are subject to various assumptions. Actual results may differ materially from these estimates. Accordingly, the Company may revise its estimates in future periods as implementation activities progress.
Current report
Other income, net increased $0.3 million during the first three months of fiscal 2027, when compared to the same prior year period.
Current report
Healthcare revenues increased 7.6% to $1,048.3 million for the three months ended June 30, 2026, as compared to $974.7 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 9.6%, 9.2% and 1.4%, respectively. The constant currency organic growth of 6.4% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Current report
AST revenues increased 5.8% to $297.6 million for the three months ended June 30, 2026, as compared to $281.2 million for the same prior year period. The constant currency organic growth of 4.7% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, partially offset by a decline in volume.
Current report
(1) Corporate costs include corporate and administrative functions, public company costs, legacy post-retirement benefits, certain services and facilities related to distribution and research and development that are shared by multiple segments, and the benefit of refunds received on tariffs previously paid under the International Economic Emergency Powers Act ("IEEPA").
Current report
(2) For more information regarding our recent acquisitions, refer to Note 3 titled, "Business Acquisitions."
Current report
(3) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.
Current report
(4) Costs incurred in tax restructuring.
Current report
(5) For more information regarding our restructuring efforts, refer to Note 2 titled, "Restructuring."
Current report
The Healthcare segment’s operating income increased $24.7 million to $260.2 million for the three months ended June 30, 2026, as compared to $235.5 million in the same prior year period. The segment's operating margins were 24.8% and 24.2% for the first three months of fiscal 2027 and 2026, respectively. The increase in operating income and operating margin for the three month period ended June 30, 2026 is primarily due to the benefits of higher volume, productivity, pricing and mix, which were partially offset by unfavorable labor inflation, tariffs, and additional spending on operational improvements and staffing.
Current report
The AST segment's operating income increased $6.3 million to $142.9 million for the three months ended June 30, 2026, as compared to $136.7 million during the same prior year period. The increase in operating income for the three month period ended June 30, 2026 is primarily due to the benefits of higher pricing and favorable foreign currency impacts, which were partially offset by higher depreciation expense, lower productivity and unfavorable labor inflation. The segment's operating margins were 48.0% and 48.6% for the first three months of fiscal 2027 and 2026, respectively. Operating margin declined as higher depreciation expense, lower productivity and unfavorable labor inflation more than offset the benefit provided by higher pricing.
Current report
The Life Sciences segment’s operating income increased $3.0 million to $61.8 million for the three months ended June 30, 2026, as compared to $58.7 million for the same prior year period. Theincrease in segment operating incomefor the three month period ended June 30, 2026 is primarily due to favorable volume and pricing which were partially offset by lower productivity and higher materials cost. The segment's operating margins were 42.1% and 43.5% for the first three months of fiscal 2027 and 2026, respectively. Operating margin declined as lower productivity and higher materials cost more than offset the benefits of higher pricing and volume.
Current report
•Purchases of investments – During the first three months of fiscal 2027, we used $5.0 million to purchase investments.
Removed paragraphs (26)
Previous report
•Days sales outstanding (“DSO”) – We define DSO as the average collection period for accounts receivable. It is calculated as net accounts receivable divided by the trailing four quarters’ revenues, multiplied by 365 days. We use this figure to help gauge the quality of accounts receivable and expected time to collect.
Previous report
On April 1, 2024, we completed the sale of the Controlled Environment Certification Services ("CECS") business. We recorded net proceeds of$41.9 million and recognized a pre-tax gain on the sale of$19.3 millionin the first nine months of fiscal 2025.
Previous report
Discontinued Operations. On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of$787.5 million, subject to customary adjustments, and up to an additional
Previous report
$12.5 million in contingent payment had the Dental business achieved certain revenue targets in fiscal 2025. No amounts have been recorded or are expected to be recorded with respect to this contingent consideration. The transaction was structured as an equity sale and closed on May 31, 2024. A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024. The Dental segment results of operations have been reclassified as income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented. Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024. A majority of the proceeds received from the sale were utilized to pay off existing debt.
Previous report
For more information, see Note 4 to our consolidated financial statements titled, "Discontinued Operations."
Previous report
U.S. Tax Reform. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA") which contains substantial changes to its tax policies. Business provisions in the OBBBA, some of which were extensions of those established in the Tax Cuts and Jobs Act, include favorable cost recovery allowances, changes to U.S. international tax rules, and changes to energy and environmental related incentives. The law has multiple effective dates, with certain provisions applicable to years beginning after fiscal 2026. The law did not have a material impact on our consolidated financial statements for the three and nine month periods ended December 31, 2025, and we do not expect it to have a material impact on our effective tax rate.
Previous report
Income from operations for the third quarter of fiscal 2026 was $273.2 million, compared to income from operations of $245.3 million for the third quarter of fiscal 2025. Income from operations for the first nine months of fiscal 2026 was $785.0 million, compared to income from operations of $650.5 million for the first nine months of fiscal 2025. The increase in income from operations for the three and nine month periods is primarily due to increased volume and pricing, which was partially offset by inflation and tariff costs. Additionally, income from operations during the first nine months of fiscal 2026 reflected the benefit of lower restructuring expenses.
Previous report
Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year. The increase reflects organic growth in all three segments due to the benefits of higher volume and pricing.
Previous report
Service revenues increased 10.0% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in Healthcare and AST. Consumable revenues increased by 8.4% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 8.5% for the three months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments.
Previous report
Revenues from other foreign locations increased 11.2% to $382.3 million for the three months ended December 31, 2025, as compared to $343.9 million for the same period in the prior year, reflecting growth in all regions.
Previous report
Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year. The increase reflects the benefits of higher volume and pricing, with all three segments contributing to growth.
Previous report
Ireland revenues increased 10.8% to $76.6 million for the nine months ended December 31, 2025, as compared to $69.1 million for the same period in the prior year, reflecting growth in service and capital revenues, which was partially offset by a decline in consumable revenues.
Previous report
United States revenues increased 8.8% to $3,188.0 million for the nine months ended December 31, 2025, as compared to $2,929.0 million for the same period in the prior year, reflecting growth in service, consumable, and capital equipment revenues.
Previous report
Gross profit percentage for thethird quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for thethird quarter of fiscal 2025 of 44.5%. Favorable impacts from pricing (110 basis points), productivity (40 basis points) and other cost reductions (30 basis points) were more than offset by unfavorable impacts from tariff costs (120 basis points), inflation (60 basis points), mix (60 basis points) and currency (10 basis points).
Previous report
Other expense (income), net increased $3.4 million and increased $16.2 million during the third quarter and first nine months of fiscal 2026, when compared to the same prior year periods. Other expense (income), net during the third quarter and first nine months of fiscal 2026 related to a loss on impairment of fixed assets which was partially offset by a gain recognized on the sale of a building, related to disposal activities. Other expense (income), net during the third quarter of fiscal 2025 related to a loss recorded on an equity investment. Other expense (income), net for the first nine months of fiscal 2025 primarily related to the sale of our CECS business, which was partially offset by a loss recorded on an equity investment. For more information on our divestiture activity, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."
Previous report
We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives.
Previous report
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences. Previously, we had four reportable business segments; however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations. Historical information has been retrospectively adjusted to reflect these changes for comparability, as required.
Previous report
For the three and nine months ended December 31, 2025 and 2024, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.
Previous report
Healthcare revenues increased 9.0% to $1,063.8 million for the three months ended December 31, 2025, as compared to $976.0 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 11.5%, 8.0% and 6.8%, respectively. The constant currency organic growth of 8.2% is primarily due to increased volume, impacting revenues by a high-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage. Healthcare revenues increased 8.9% to $3,072.3 million for the nine months ended December 31, 2025, as compared to $2,821.5 million for the same prior year period. This increase reflects growth in service, consumable, and capital equipment revenues of 12.7%, 7.4% and 5.5%, respectively. The constant currency organic growth of 8.3% is primarily due to increased volume, impacting revenues by a high-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Previous report
AST revenues increased 11.0% to $286.6 million for the three months ended December 31, 2025, as compared to $258.1 million for the same prior year period. The constant currency organic growth of 7.9% is primarily due to increased pricing, impacting revenue by a mid-single digit percentage, and volume, impacting revenues by a low-single digit percentage, with growth in service and capital equipment. AST revenues increased 11.1% to $849.3 million for the nine months ended December 31, 2025, as compared to $764.7 million for the same prior year period. The constant currency organic growth of 8.5% is primarily due to increased pricing and volume, with pricing impacting revenues by a mid-single digit percentage, and volume impacting revenues by a low-single digit percentage, with service growth partially offset by a decline in capital equipment.
Previous report
The Healthcare segment’s operating income increased 4.5% to $258.1 million for the three months ended December 31, 2025, as compared to $246.9 million in the same prior year period. The segment's operating margins were 24.3% and 25.3% for the third quarter of fiscal 2026 and 2025, respectively. The Healthcare segment’s operating income increased 8.9% to $753.1 million for the nine months ended December 31, 2025, as compared to $691.8 million in the same prior year period. The segment's operating margins were 24.5% in each of the first nine months of fiscal 2026 and 2025. The increase in operating income for the three and nine month periods ended December 31, 2025 is primarily due to the benefits of higher volume, pricing, productivity, and the benefit of prior restructuring efforts, which were partially offset by increased tariff costs and inflation. The decrease in operating margin for the three month period ended December 31, 2025 is primarily due to increased tariff costs and inflation, which were partially offset by the benefits of higher volume, pricing, productivity, and the benefit of prior restructuring efforts. Operating margin for the nine month period ended December 31, 2025 remained consistent with the same prior year period, as the benefits of increased volume, pricing, and productivity were offset by inflation and mix.
Previous report
The AST segment's operating income increased 11.6% to $129.2 million for the three months ended December 31, 2025, as compared to $115.8 million during the same prior year period. The segment's operating margins were 45.1% and 44.8% for the third quarter of fiscal 2026 and 2025, respectively. The AST segment's operating income increased 14.6% to $393.6 million for the nine months ended December 31, 2025, as compared to $343.4 million during the same prior year period. The segment's operating margins were 46.3% and 44.9% for the first nine months of fiscal 2026 and 2025, respectively. The increase in operating income and margin for the three and nine month periods ended December 31, 2025 is primarily due to increased pricing and volume which were partially offset by increased energy and labor inflation costs and unfavorable mix.
Previous report
The Life Sciences segment’s operating income increased 6.3% to $61.8 million for the three months ended December 31, 2025, as compared to $58.1 million for the same prior year period. The segment's operating margins were 42.4% and 42.6% for the third quarter of fiscal 2026 and 2025, respectively. The Life Sciences segment’s operating income increased 9.7% to $180.4 million for the nine months ended December 31, 2025, as compared to $164.4 million for the same prior year period. The segment's operating margins were 42.4% and 41.9% for the first nine months of fiscal 2026 and 2025, respectively. The changes in segment operating income and marginfor the three month period ended December 31, 2025 are primarily due to favorable volume and pricing which were offset by increased tariff costs and inflation. The increases in segment operating income and marginfor the nine month period ended December 31, 2025 is primarily due to favorable volume and pricing which were partially offset by increased tariff costs and inflation.
Previous report
•Proceeds from the sale of businesses – During the first nine months of fiscal 2025, we received proceeds of $811.4 million primarily from the sale of our Dental segment and the sale of our CECS business. For more information, refer to Note 3 to our consolidated financial statements titled "Business Acquisitions and Divestitures" and Note 4 to our consolidated financial statements titled "Discontinued Operations."
Previous report
•Payments on term loans – During the first nine months of fiscal 2025, we repaid $638.1 million of our term loans. The fiscal 2025 payment was primarily due to the use of proceeds from the sale of the Dental segment to pay off our outstanding term loans. For more information on our term loans, refer toour Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the SEC on May 29, 2025. For more information regarding the sale of the Dental segment, refer to Note 4 to our consolidated financial statements titled "Discontinued Operations."
Previous report
•Transactions with noncontrolling interest holders – During the first nine months of fiscal 2025, we received contributions of $2.5 million from noncontrolling interest holders.
Reworded paragraphs (60)
Previous wording
As you read the MD&A, it may be helpful to refer to information in our consolidated financial statements contained herein, which present the results of our operations for the first nine months of fiscal 2026 and fiscal 2025. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2025, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2025, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and Part II, Item 1A, "Risk Factors" of this Quarterly Report, for a discussion of some of the matters that can adversely affect our business and results of operations.
Current wording
As you read the MD&A, it may be helpful to refer to information in our consolidated financial statements contained herein, which present the results of our operations for the first three months of fiscal 2027 and fiscal 2026. It may also be helpful to refer to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the Securities and Exchange Commission ("SEC") on May 29, 2026, including information in Item 1, "Business," Part I, Item 1A, "Risk Factors," and Note 12 to our consolidated financial statements titled, "Commitments and Contingencies," and Part II, Item 1A, "Risk Factors" of this Quarterly Report, for a discussion of some of the matters that can adversely affect our business and results of operations.
Previous wording
In the following sections of the MD&A, we may, at times, refer to financial measures that are not required to be presented in the consolidated financial statements under accounting principles generally accepted in the United States ("U.S. GAAP"). We sometimes use the following financial measures in the context of this report: backlog; debt-to-total capital; and days sales outstanding. We define these financial measures as follows:
Current wording
In the following sections of the MD&A, we may, at times, refer to financial measures that are not required to be presented in the consolidated financial statements under accounting principles generally accepted in the United States ("U.S. GAAP"). We sometimes use the following financial measures in the context of this report: backlog and debt-to-total capital. We define these financial measures as follows:
Previous wording
•Backlog – We define backlog as the amount of unfilled capital equipment purchase orders at a point in time. We use this figure as a measure to assist in the projection of short-term financial results and inventory requirements.
Current wording
•Backlog – We define backlog as the amount of unfilled capital equipment purchase orders (excluding freight) at a point in time. We use this figure as a measure to assist in the projection of short-term financial results and inventory requirements.
Previous wording
•Debt-to-total capital – We define debt-to-total capital as total debt divided by the sum of total debt and shareholders’ equity. We use this figure as a financial liquidity measure to gauge our ability to borrow and fund growth.
Current wording
•Debt-to-total capital ratio – We define debt-to-total capital ratio as total debt divided by the sum of total debt and shareholders’ equity. We use this figure as a financial liquidity measure to gauge our ability to borrow and fund growth.
Previous wording
•Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, automated endoscope reprocessors, pure steam/water systems, surgical lights and tables, and integrated operating rooms ("OR").
Current wording
•Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, automated endoscope reprocessors, pure steam/water systems, surgical lights and tables, and integrated operating rooms.
Previous wording
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences. Previously, we had four reportable business segments; however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations. Historical information has been retrospectively adjusted to exclude discontinued operations for comparability, as required. For more information, refer to Note 4 to our consolidated financial statements titled, "Discontinued Operations." Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income. We describe our business segments in Note 11 to our consolidated financial statements titled, "Business Segment Information."
Current wording
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences. Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income. We describe our business segments in Note 10 to our consolidated financial statements titled, "Business Segment Information."
Previous wording
Acquisitions and Divestitures. During the first nine months of fiscal 2026, we completed two tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration was approximately $23.4 million.
Current wording
Acquisitions. During the first three months of fiscal 2027, we completed three tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration was approximately $17.3 million, including deferred consideration and the fair value of potential contingent consideration.
Previous wording
During the first nine months of fiscal 2025, we completed several tuck-in acquisitions, recorded at fair value, which continued to expand our product and service offerings in the Healthcare and AST segments. Total aggregate consideration was approximately$53.7 million.
Current wording
During the first three months of fiscal 2026, we completed a tuck-in acquisition which continued to expand our product and service offerings in the Healthcare segment. Total aggregate consideration was approximately$15.0 million.
Previous wording
Acquisition and integration expenses totaled$3.3 million and$5.1 million for the three and nine months ended December 31, 2025, respectively. Acquisition and integration expenses totaled$3.8 million and$9.2 million for the three and nine months ended December 31, 2024, respectively. Acquisition and integration expenses are reported in the Selling, general and administrative expenses line of our Consolidated Statements of Income and include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.
Current wording
Acquisition and integration expenses totaled$1.5 million for the three months ended June 30, 2026. Acquisition and integration expenses totaled$0.5 million for the three months ended June 30, 2025. Acquisition and integration expenses reported in the Selling, general and administrative expenses and Cost of revenues lines of our Consolidated Statements of Income include, but are not limited to, investment banker, advisory, legal and other professional fees, and certain employee-related expenses.
Previous wording
For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."
Current wording
For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, "Business Acquisitions."
Previous wording
Highlights. Revenues increased 9.2% to $1,496.2 million for the three months ended December 31, 2025, as compared to $1,370.6 million for the same period in the prior year. Revenues increased 9.3% to $4,347.5 million for the nine months ended December 31, 2025, as compared to $3,979.0 million for the same period in the prior year. The increase during the three and nine month periods reflects the benefits of higher volume and pricing, with all three segments contributing to growth.
Current wording
Highlights. Revenues increased 7.3% to $1,492.7 million for the three months ended June 30, 2026, as compared to $1,391.1 million for the same period in the prior year. The increase during the three month period reflects the benefits of higher volume in the Healthcare and Life Sciences segments, and pricing across all three segments.
Previous wording
Gross profit percentage for the third quarter of fiscal 2026 was 43.8% compared to the gross profit percentage for the third quarter of fiscal 2025 of 44.5%. Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to the gross profit percentage for the first nine months of fiscal 2025 of 44.3%. The decrease in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and other cost reductions that were more than offset by unfavorable impacts from tariffs, inflation and mix. The increase in gross profit percentage for the nine month period reflects favorable impacts from pricing, productivity and other cost reductions that were partially offset by unfavorable impacts from tariff and inflation costs.
Current wording
Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to the gross profit percentage for the first three months of fiscal 2026 of 45.1%. The increase in gross profit percentage for the three month period reflects favorable impacts from pricing, productivity and mix that were partially offset by unfavorable impacts from inflation.
Previous wording
Cash flows from operations were $1,006.0 million and free cash flow was $737.6 million for the first nine months of fiscal 2026 compared to cash flows from operations of $887.3 million and free cash flow of $588.1 million for the first nine months of fiscal 2025 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow). The fiscal 2026 increase in cash flows from operations and free cash flow resulted from an increase in earnings when compared to the prior year. Free cash flow was also favorably impacted by a decrease in capital expenditures when compared to the same prior year period.
Current wording
Cash flows from operations were $367.1 million and free cash flow was $279.6 million for the first three months of fiscal 2027, compared to cash flows from operations of $420.0 million and free cash flow of $326.5 million for the first three months of fiscal 2026 (see the subsection below titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow). The fiscal 2027 decrease in cash flows from operations and free cash flow resulted from a significantly lower contribution from working capital partially offset by higher net income compared with fiscal 2026.
Previous wording
Our debt-to-total capital ratio was 21.1% at December 31, 2025 and 23.6% at March 31, 2025. During the first nine months of fiscal 2026, we declared and paid cash dividends totaling $1.83 per ordinary share.
Current wording
Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.3% at March 31, 2026. During the first three months of fiscal 2027, we declared and paid cash dividends totaling $0.63 per ordinary share.
Previous wording
Additional information regarding our financial performance during the third quarter of fiscal 2026 is included in the subsection below titled “Results of Operations.”
Current wording
Additional information regarding our financial performance during the first quarter of fiscal 2027 is included in the subsection below titled “Results of Operations.”
Previous wording
The following table summarizes the calculation of our free cash flow for the nine months ended December 31, 2025 and 2024:
Current wording
The following table summarizes the calculation of our free cash flow for the three months ended June 30, 2026 and 2025:
Previous wording
In the following subsections, we discuss our earnings and the factors affecting earnings for the first nine months of fiscal 2026 compared to the same fiscal 2025 periods. We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.
Current wording
In the following subsections, we discuss our earnings and the factors affecting earnings for the first three months of fiscal 2027 compared to the same fiscal 2026 period. We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.
Previous wording
Revenues. The following tables compare our revenues for the three and nine months ended December 31, 2025 to the revenues for the three and nine months ended December 31, 2024:
Current wording
Revenues. The following tables compare our revenues for the three months ended June 30, 2026 to the revenues for the three months ended June 30, 2025:
Previous wording
Service revenues increased 11.8% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 7.5% for the nine months ended December 31, 2025, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 6.1% for the nine months ended December 31, 2025, as compared to the same period in the prior year, driven by growth in the Healthcare and Life Sciences segments.
Current wording
Service revenues increased 7.8% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in all three segments. Consumable revenues increased by 9.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, reflecting growth in the Healthcare and Life Sciences segments. Capital equipment revenues increased 3.0% for the three months ended June 30, 2026, as compared to the same period in the prior year, driven by growth in the Life Sciences and Healthcare segments.
Previous wording
Ireland revenues increased 10.9% to $26.7 million for the three months ended December 31, 2025, as compared to $24.1 million for the same period in the prior year, reflecting growth in service and consumable revenues, partially offset by a decline in capital revenues.
Current wording
Ireland revenues increased 28.7% to $29.0 million for the three months ended June 30, 2026, as compared to $22.5 million for the same period in the prior year, reflecting growth in service, capital equipment, and consumable revenues.
Previous wording
United States revenues increased 8.4% to $1,087.1 million for the three months ended December 31, 2025, as compared to $1,002.6 million for the same period in the prior year, reflecting growth in service, consumable, and capital revenues.
Current wording
United States revenues increased 6.3% to $1,090.6 million for the three months ended June 30, 2026, as compared to $1,025.6 million for the same period in the prior year, reflecting growth in service, consumable and capital equipment revenues.
Previous wording
Revenues from other foreign locations increased 10.4% to $1,083.0 million for the nine months ended December 31, 2025, as compared to $980.9 million for the same period in the prior year. The increase reflects growth in all regions.
Current wording
Revenues from other foreign locations increased 8.8% to $373.2 million for the three months ended June 30, 2026, as compared to $342.9 million for the same period in the prior year. The increase reflects growth across all geographic regions.
Previous wording
Gross Profit. Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold. The following tables compare our gross profit for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:
Current wording
Gross Profit. The following tables compare our gross profit for the three months ended June 30, 2026 to the three months ended June 30, 2025:
Previous wording
Gross profit percentage for the first nine months of fiscal 2026 was 44.4% compared to gross profit percentage for the first nine months of fiscal of 2025 of 44.3%. Favorable impacts from pricing (120 basis points), productivity (60 basis points) and other cost reductions (40 basis points) were partially offset by unfavorable impacts from tariff costs (90 basis points), inflation (80 basis points), material costs (20 basis points), mix (10 basis points) and currency (10 basis points).
Current wording
Our gross profit is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs associated with the products and services that are sold. Gross profit percentage for the first three months of fiscal 2027 was 45.8% compared to gross profit percentage for the first three months of fiscal of 2026 of 45.1%. Favorable impacts from pricing (100 basis points), productivity (40 basis points), mix (40 basis points), and lower net tariffs (20 basis points) were partially offset by unfavorable impacts from inflation (60 basis points), adjustments and other charges (50 basis points), acquisitions (10 basis points), materials cost (10 basis points).
Previous wording
Operating Expenses. The following table compares our operating expenses for the three and nine months ended December 31, 2025 to the three and nine months ended December 31, 2024:
Current wording
Operating Expenses. The following table compares our operating expenses for the three months ended June 30, 2026 to the three months ended June 30, 2025:
Previous wording
Selling, General, and Administrative Expenses. Significant components of total selling, general, and administrative expenses (“SG&A”) are compensation and benefit costs, fees for professional services, travel and entertainment expenses, facility costs, and other general and administrative expenses. SG&A increased 5.0% and 5.5% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods. The increase in SG&A during the three months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs. The increase in SG&A during the nine months ended December 31, 2025, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs, unfavorable foreign currency movements, and increased bad debt expense, which were partially offset by lower fees for professional services.
Current wording
Selling, General, and Administrative Expenses. Significant components of total selling, general, and administrative expenses (“SG&A”) are compensation and benefit costs, fees for professional services, travel and entertainment expenses, facility costs, and other general and administrative expenses. SG&A increased 4.5% in the three month period ended June 30, 2026, compared to the same prior year period. The increase in SG&A during the three months ended June 30, 2026, compared to the same prior year period, is primarily attributable to increased compensation and benefit costs and marketing and sales costs, which were partially offset by favorable foreign currency impacts and lower bad debt expense.
Previous wording
Research and Development. Research and development expenses increased 7.7% and 5.2% in the three and nine month periods ended December 31, 2025, respectively, compared to the same prior year periods. Research and development expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations. During fiscal 2026, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.
Current wording
Research and Development. Research and development expenses increased 8.5% in the three month period ended June 30, 2026, compared to the same prior year period. Research and development expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize improving innovation governance processes and leveraging technology to accelerate development initiatives to launch critical capital and consumable products. During fiscal 2027, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.
Previous wording
Restructuring Expenses. In May 2024, we adopted and announced a targeted restructuring plan (the "Restructuring Plan"). This plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations. Approximately 300 positions have been eliminated. These restructuring actions were designed to enhance profitability and improve efficiency, and are expected to improve income from operations by approximately $25.0 million per year in fiscal 2026 and beyond.
Current wording
Restructuring Expenses. In May 2024, we adopted and announced a targeted restructuring plan (the "Restructuring Plan"). The Restructuring Plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations. Approximately 300 positions have been eliminated. These restructuring actions were designed to enhance profitability and improve efficiency, which we realized beginning in fiscal 2025 and 2026. As of March 31, 2026, the execution of our Restructuring Plan was substantially complete.
Previous wording
The following table summarizes our total pre-tax restructuring expenses recorded during the three and nine months ended December 31, 2025 and 2024 related to the Restructuring Plan:
Current wording
During the three months ended June 30, 2026, we did not incur any expenses related to the Restructuring Plan. The following table summarizes our total pre-tax restructuring expenses recorded during the three months ended June 30, 2025 related to the Restructuring Plan:
Previous wording
The Restructuring Plan expenses incurred during the three and nine months ended December 31, 2025 and 2024 primarily related to actions taken within our Healthcare segment. Total pre-tax restructuring expense of $109.8 million has been recorded relating to the Restructuring Plan since inception, of which $33.3 million has been recorded in Cost of revenues. Additional costs with respect to our Restructuring Plan are not expected to be significant during fiscal 2026.
Current wording
The Restructuring Plan expenses incurred during the three months ended June 30, 2025 primarily related to actions taken within our Healthcare and AST segments. Total pre-tax restructuring expense of $110.1 million has been recorded relating to the Restructuring Plan since inception, of which $33.9 million has been recorded in Cost of revenues.
Previous wording
Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, and other miscellaneous (income) expense.
Current wording
Non-Operating Expenses, Net. Non-operating expenses, net consists of interest expense on debt, offset by interest earned on cash, cash equivalents, short-term investment balances, losses (gains) related to disposal activities, and other expense (income) related to our equity investments, including our equity earnings and amortization of basis differences arising from our investments. The following tables compare our net non-operating expenses, net for the three months ended June 30, 2026 and 2025:
Previous wording
Interest expense decreased $4.2 million and $23.5 million during the third quarter and first nine months of fiscal 2026, respectively, as compared to the same prior year periods, primarily due to the lower principal amount of debt outstanding. For more information, refer to Note 7 to our consolidated financial statements titled, "Debt."
Current wording
Interest expense decreased $0.1 million during the first quarter of fiscal 2027, as compared to the same prior year period, primarily due to the lower principal amount of debt outstanding. For more information, refer to Note 6 to our consolidated financial statements titled, "Debt."
Previous wording
Interest and miscellaneous income increased $0.4 million and $2.1 million during the third quarter and first nine months of fiscal 2026, respectively, when compared to the same prior year periods.
Current wording
Interest and miscellaneous income increased $1.4 million during the first three months of fiscal 2027, when compared to the same prior year period.
Previous wording
Income Taxes. The following tables compare our tax expense and effective income tax rates for the three and nine months ended December 31, 2025 and 2024:
Current wording
Income Taxes. The following tables compare our tax expense and effective income tax rates for the three months ended June 30, 2026 and 2025:
Previous wording
The effective income tax rates from continuing operations for the three month periods ended December 31, 2025 and 2024 were 24.6% and 24.2%, respectively. The effective income tax rates from continuing operations for the nine month periods ended December 31, 2025 and 2024 were 24.0% and 22.4%, respectively. The fiscal 2026 effective tax rates increased when compared to fiscal 2025, primarily due to changes in geographic mix of projected profits and unfavorable changes in discrete items.
Current wording
The effective income tax rates for the three month periods ended June 30, 2026 and 2025 were 26.5% and 23.3%, respectively. The fiscal 2027 effective tax rates increased when compared to fiscal 2026, primarily due to unfavorable changes in discrete items.
Previous wording
Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as OR and endoscopy suites. Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment; to the repair of re-usable procedural instruments; to outsourced instrument reprocessing services. In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in ORs, ambulatory surgery centers, endoscopy suites, and other procedural areas.
Current wording
Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as operating rooms and endoscopy suites. Our products and services range from infection prevention consumables and capital equipment, as well as services to maintain that equipment; to the repair of re-usable procedural instruments; to outsourced instrument reprocessing services. In addition, our procedural products also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.
Previous wording
The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three and nine months ended December 31, 2025 and 2024.
Current wording
The following tables compare business segment revenues as well as impacts from acquisitions, divestitures, and foreign currency movements for the three months ended June 30, 2026 and 2025.
Previous wording
Organic revenue growth and constant currency organic revenue growth are non-GAAP financial measures of revenue performance. Organic revenue growth is calculated by removing the impact of acquisitions and divestitures for one year following the respective transaction from the GAAP revenue growth. Constant currency organic revenue growth is subject to a further adjustment to eliminate the impact of foreign currency movements. See the section below "Business Segment Results of Operations" for a reconciliation of organic revenue growth and constant currency organic revenue growth to U.S. GAAP revenue.
Current wording
Organic revenue growth and constant currency organic revenue growth are non-GAAP financial measures of revenue performance. Organic revenue growth is calculated by removing the impact of acquisitions and divestitures for one year following the respective transaction from the GAAP revenue growth. Constant currency organic revenue growth is subject to a further adjustment to eliminate the impact of foreign currency movements.
Previous wording
The Healthcare segment's backlog at December 31, 2025 was $429.0 million. The Healthcare segment's backlog at December 31, 2024 was $434.9 million. The decrease is primarily due to the timing of shipments.
Current wording
The Healthcare segment's backlog at June 30, 2026 was $444.0 million. The Healthcare segment's backlog at June 30, 2025 was $403.5 million. The increase is primarily due to the timing of orders and shipments, as well as the impact of an acquisition.
Previous wording
Life Sciences revenues increased 6.9% to $145.8 million for the three months ended December 31, 2025, as compared to $136.4 million for the same prior year period. This increase reflects growth in consumable and capital equipment revenues of 10.6% and 7.2%, respectively, partially offset by a decline in service revenue of 0.4%. The constant currency organic growth of 5.0% is primarily due to increased volume and pricing, both impacting revenues by a low-single digit percentage. Life Sciences revenues increased 8.4% to $425.9 million for the nine months ended December 31, 2025, as compared to $392.8 million for the same prior year period. This increase reflects growth in capital equipment, consumable and service revenues of 14.0%, 8.5% and 3.9%, respectively. The constant currency organic growth of 6.9% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
Current wording
Life Sciences revenues increased 8.6% to $146.7 million for the three months ended June 30, 2026, as compared to $135.2 million for the same prior year period. This increase reflects growth in capital equipment, consumable and service revenues of 17.4%, 8.2% and 2.4%, respectively. The constant currency organic growth of 7.9% is primarily due to increased volume, impacting revenues by a mid-single digit percentage, as well as increased pricing, impacting revenues by a low-single digit percentage.
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Current report — wording carried from elsewhere
We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences.
Current report — wording carried from elsewhere
MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS
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Previous report — wording carried elsewhere
Non-Operating Expenses, Net. The following tables compare our net non-operating expenses for the three and nine months ended December 31, 2025 and 2024:
Previous report — wording carried elsewhere
Organic revenue growth and constant currency organic revenue growth are non-GAAP financial measures of revenue performance. See "Non-GAAP Financial Measures" for more information.