Healthcare services company Sotera Health (NASDAQ: SHC) beat Wall Street’s revenue expectations in Q3 2026, with revenue rising 4.4% year on year to $324.9 million. The company expects the full year’s revenue to be around $1.24 billion, close to analysts’ consensus estimates. Its non-GAAP profit of $0.29 per share was 8% above analysts’ consensus estimates.
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Sotera Health Company (SHC) Q3 2026 highlights:
- Revenue $324.9 million vs S&P analysts’ consensus estimates of $319.7 million (4.4% year-on-year growth, 1.6% beat)
- Adjusted EPS $0.29 vs S&P analysts’ consensus estimates of $0.27 (8% beat)
- Adjusted EBITDA $170.7 million vs analysts’ consensus estimates of $167.8 million (52.5% margin, 1.7% beat)
- Revenue guidance The company reconfirmed its revenue guidance for the full year of $1.24 billion at the midpoint
- Adjusted EPS guidance Management reiterated its full-year adjusted EPS guidance of $0.98 at the midpoint
- Operating margin 35.9%, in line with the same quarter last year
- Free cash flow margin 17.8%, up from 11.2% in the same quarter last year
- Organic revenue rose 4.4% year on year (beat)
- Market capitalization $5.06 billion
Revenue growth
Reviewing a company’s long-term revenue performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Sotera Health Company grew its revenue at a mediocre 6.3% compounded annual growth rate, falling short of the healthcare sector benchmark.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Sotera Health Company’s recent performance shows its demand has slowed as its annualized revenue growth of 4.8% over the last two years was below its five-year trend. Decelerating revenue growth in the sector is a concern, as it could signal changing consumer tastes aided by low switching costs. 
Organic revenue offers a closer look at the company’s revenue dynamics by stripping out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Sotera Health Company’s organic revenue averaged 4.3% year-on-year growth. This was in line with its two-year revenue growth, indicating that core operations, rather than acquisitions and divestitures, drove most of its results. 
This quarter, Sotera Health Company reported modest year-on-year revenue growth of 4.4% but beat Wall Street’s consensus estimates by 1.6%.
Looking ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, according to S&P, similar to its two-year rate. This projection is above average for the sector and indicates its newer products and services will drive better revenue performance.
Adjusted operating margin
Sotera Health Company has operated efficiently over the last five years. It demonstrated high profitability for a healthcare business, with an average adjusted operating margin of 42.8%.
Sotera Health Company’s adjusted operating margin decreased by 4.6 percentage points over the last five years. The company’s two-year trajectory also shows it failed to restore profitability to its peak, as its margin fell by 3.1 percentage points. This poor performance shows its expenses were rising and it couldn’t pass those costs on to its customers.
This quarter, Sotera Health Company generated an adjusted operating margin of 35.9%, down 9.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings per share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share, or EPS, points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.
Sotera Health Company’s decent 6% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q3, Sotera Health Company reported adjusted EPS of $0.29, up from $0.26 in the same quarter last year. This result beat analysts’ consensus estimates by 8%. Over the next 12 months, Wall Street expects Sotera Health Company’s full-year EPS to grow 5.7% from $0.99 to $1.05, according to S&P.
Key takeaways from Sotera Health Company’s Q3 results
Revenue was a bright spot in Sotera Health Company’s mixed Q3 report: both total revenue and organic revenue beat analysts’ consensus estimates. Those were key positives, but full-year EPS and revenue guidance were in line with Wall Street’s consensus. Shares soared 12.9% to $20.03 immediately after the results.
When assessing Sotera Health Company at its current price, the latest quarter is only one part of its longer-term business quality. Quality, combined with valuation, can help determine whether the stock is a buy. For more on these factors, read our full research report here (it’s free).
