Healthcare services company Sotera Health (NASDAQ:) announced better-than-expected revenue in Q4 CY2025, with sales up 4.6% year on year to $303.4 million. The company’s full-year revenue guidance of $1.24 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $0.26 per share was 7% above analysts’ consensus estimates.

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“The Company delivered strong results in 2025, driven by solid execution, increased demand for our mission‑critical services, and disciplined financial management,” said Michael B. Petras, Jr., Chairman and Chief Executive Officer.

Company Overview

With a critical role in ensuring the safety of millions of patients worldwide, Sotera Health (NASDAQGS:SHC) provides sterilization services, lab testing, and advisory services to ensure medical devices, pharmaceuticals, and food products are safe for use.

Revenue Growth

Reviewing a company’s long-term sales 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 sales at a mediocre 7.3% compounded annual growth rate. This was below our standard for the healthcare sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Sotera Health Company’s recent performance shows its demand has slowed as its annualized revenue growth of 5.3% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips 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 5.7% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Sotera Health Company reported modest year-on-year revenue growth of 4.6% but beat Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, similar to its two-year rate. This projection is above average for the sector and suggests its newer products and services will help sustain its recent top-line performance.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Sotera Health Company’s operating margin has risen over the last 12 months and averaged 26.8% over the last five years. On top of that, its profitability was top-notch for a healthcare business, showing it’s an well-run company with an efficient cost structure.

Analyzing the trend in its profitability, Sotera Health Company’s operating margin of 28.1% for the trailing 12 months may be around the same as five years ago, but it has increased by 1.7 percentage points over the last two years.

This quarter, Sotera Health Company generated an operating margin profit margin of 23.2%, down 6.8 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sotera Health Company’s full-year EPS was flat over the last four years, worse than the broader healthcare sector.

In Q4, Sotera Health Company reported adjusted EPS of $0.26, up from $0.21 in the same quarter last year. This print beat analysts’ estimates by 7%. Over the next 12 months, Wall Street expects Sotera Health Company’s full-year EPS of $0.86 to grow 9.4%.

Key Takeaways from Sotera Health Company’s Q4 Results

We enjoyed seeing Sotera Health Company beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its organic revenue slightly missed. Overall, this print had some key positives. The stock traded up 1.5% to $17.75 immediately after reporting.

Indeed, Sotera Health Company had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).