STERIS STE Form 10-Q filing Q1 FY2027

PART 1—FINANCIAL INFORMATION

As used in this Quarterly Report on Form 10-Q, STERIS plc and its consolidated subsidiaries together are called “STERIS,” the “Company,” “we,” “us,” or “our,” unless otherwise noted.

ITEM 1. FINANCIAL STATEMENTS

See notes to consolidated financial statements.

See notes to consolidated financial statements.

See notes to consolidated financial statements.

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in millions, except per share amounts)

(Unaudited)

• Three Months Ended June 30, 2026

• Three Months Ended June 30, 2025

See notes to consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the Three Months Ended June 30, 2026 and 2025

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services. These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors; and connectivity solutions such as operating room integration.

We operate and report our financial information in three reportable business segments: Healthcare, Applied Sterilization Technologies ("AST"), and Life Sciences. We describe our business segments in Note 10 titled "Business Segment Information."

Our fiscal year ends on March 31. References in this Quarterly Report to a particular "year," "fiscal," "fiscal year," or "year-end" mean our fiscal year. The significant accounting policies applied in preparing the accompanying consolidated financial statements of the Company are summarized below.

A detailed description of our significant and critical accounting policies, estimates, and assumptions is included in our consolidated financial statements included in 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. Our significant and critical accounting policies, estimates, and assumptions have not changed materially from March 31, 2026.

Interim Financial Statements

We prepared the accompanying unaudited consolidated financial statements of the Company according to accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. This means that they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our unaudited interim consolidated financial statements contain all material adjustments (including normal recurring accruals and adjustments) management believes are necessary to fairly state our financial condition, results of operations, and cash flows for the periods presented.

These interim consolidated financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026. The Consolidated Balance Sheet at March 31, 2026 was derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

Principles of Consolidation

We use the consolidation method to report our investment in our subsidiaries. Therefore, the accompanying consolidated financial statements include the financial statements of the Company and its wholly-owned and majority-owned subsidiaries. We eliminate intercompany accounts and transactions when we consolidate these financial statements. Investments in equity of unconsolidated affiliates, over which the Company has significant influence, but not control, over the financial and operating polices, are accounted for primarily using the equity method. These investments are immaterial to the Company's consolidated financial statements.

Our reporting currency is United States Dollars (USD). Columns and rows within tables may not add due to rounding. Percentages have been calculated using actual, non-rounded figures.

Use of Estimates

We make certain estimates and assumptions when preparing financial statements according to U.S. GAAP that affect the reported amounts of assets and liabilities at the financial statement dates and the reported amounts of revenues and expenses during the periods presented. These estimates and assumptions involve judgments with respect to many factors that are difficult to predict and are beyond our control. Actual results could be materially different from these estimates. We revise the estimates and assumptions as new information becomes available. This means that operating results for the three month period ended June 30, 2026 are not necessarily indicative of results that may be expected for future quarters or for the full fiscal year ending March 31, 2027.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

Contract Liabilities

Payments received from Customers are based on invoices or billing schedules as established in contracts with Customers. Deferred revenue is recorded when payment is received in advance of performance under the contract. Deferred revenue is recognized as revenue upon completion of the performance obligation, which generally occurs within one year. During the first three months of fiscal 2027, $33.4 million of the March 31, 2026 deferred revenue balance was recorded as revenue. During the first three months of fiscal 2026, $38.5 million of the March 31, 2025 deferred revenue balance was recorded as revenue.

Refer to Note 7 titled, "Additional Consolidated Balance Sheet Information" for deferred revenue balances.

Remaining Performance Obligations

Remaining performance obligations reflect only the performance obligations related to agreements for which we have a firm commitment from a Customer to purchase, and exclude variable consideration related to unsatisfied performance obligations. With regard to products, these remaining performance obligations include orders for capital equipment and consumables where control of the products has not passed to the Customer. With regard to service, these remaining performance obligations primarily include installation, certification, and outsourced reprocessing services. As of June 30, 2026, the transaction price allocated to remaining performance obligations was approximately $1,541.4 million. We expect to recognize approximately 58% of the transaction price within one year and approximately 32% beyond one year. The remainder has yet to be scheduled for delivery.

Recently Issued Accounting Standards Impacting the Company

Recently Issued Accounting Standards impacting the Company are presented in the following table:

• Standard Date of Issuance Description Date of Adoption Effect on the financial statements or other significant matters
• Standards that have been adopted in fiscal 2027
• ASU 2025-05 "Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets." July 2025 The standard introduces a practical expedient allowing entities to assume current economic conditions, as of the balance sheet date, remain unchanged when estimating expected credit losses for current trade receivables and contract assets. The guidance is effective for fiscal years beginning after December 15, 2025, including interim periods. First Quarter Fiscal 2027 We adopted this standard in fiscal 2027 with no material impact to the consolidated financial statements.
• Standards that have not yet been adopted
• ASU 2024-03"Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses." November 2024 The standard provides guidance to enhance disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. The standard also requires amounts that are already required to be disclosed under U.S. GAAP in the same disclosure as the other disaggregation requirements, disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. The amendments in this standard are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. NA We are currently assessing the impact of this standard update on our disclosures in the notes to the consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

• ASU 2025-06 "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software September 2025 The standard removes all references to prescriptive and sequential software development stages and requires entities to begin capitalizing software costs when management has both authorized and committed to funding the software project, and it is probable that the project will both be completed and the software will be used to perform the function intended. Capitalized internal-use software costs are now subject to the same disclosure requirements as property, plant, and equipment (PPE), even if they are presented as intangible assets or under a different line item. The amendments in this standard are effective for annual periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods, with early adoption permitted. NA We are in the process of evaluating the impact that the standard update will have on our consolidated financial statements.
• ASU 2025-10 "Government Grants (Topic 832) Accounting for Government Grants Received by Business Entities" December 2025 The standard provides authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants received by business entities. The standard defines a government grant as a transfer of a monetary or tangible nonmonetary asset from a government to a business entity in a nonexchange transaction and requires a grant to be recognized only when it is probable that the entity will comply with the grant’s conditions and that the grant will be received. The amendments introduce an accounting model largely based on International Accounting Standard (IAS) 20, under which grants related to assets or income are recognized over the periods in which the related costs or expenses are incurred. The standard also amends Topic 832, which previously included only disclosure requirements, and provides guidance on presentation and repayment of grants. The guidance excludes certain transactions such as income tax items, below-market interest rate loans, and government guarantees from its scope. The amendments are effective for annual periods beginning after December 15, 2028 (including interim periods within those annual periods) for public business entities and one year later for all other entities. Early adoption is permitted. NA We are in the process of evaluating the impact that the standard update will have on our consolidated financial statements.

2. RESTRUCTURING

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. As of March 31, 2026, the execution of our Restructuring Plan was substantially complete.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

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:

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.

Liabilities related to restructuring activities are recorded as current liabilities in the accompanying Consolidated Balance Sheets within "Accrued payroll and other related liabilities" and "Accrued expenses and other." The following table summarizes our restructuring liability balances:

3. BUSINESS 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.

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.

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.

4. INVENTORIES, NET

Inventories are stated at the lower of their cost and net realizable value determined by the first-in, first-out (“FIFO”) cost method. Inventory costs include material, labor, and overhead. Inventories, net consisted of the following:

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

5. PROPERTY, PLANT, AND EQUIPMENT

Information related to the major categories of our depreciable assets is as follows:

(1) Land is not depreciated. Construction in progress is not depreciated until placed in service.

6. DEBT

Indebtedness was as follows:

On October 7, 2024, STERIS plc (“Parent”), STERIS Corporation ("Corporation"), STERIS Limited ("Limited"), and STERIS Irish FinCo Unlimited Company (“FinCo”), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,100.0 million revolving credit facility (the “Revolving Credit Facility”), which replaced a prior credit agreement, dated as of March 19, 2021.

The Revolving Credit Agreement provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit. The Revolving Credit Agreement may be increased in specified circumstances by up to $625.0 million in the discretion of the lenders. The Revolving Credit Agreement matures on the date that is five years after October 7, 2024, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date. The Revolving Credit Facility bears interest from time to time, at either the Base Rate or the Relevant Rate, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement. The Applicable Margin is determined based on the Debt Rating of Parent, as defined in the Revolving Credit Agreement. Base Rate Advances are payable quarterly in arrears and Term Benchmark Advances are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months. Swingline borrowings bear interest at a rate to be agreed by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S. Dollars equal to the Base Rate plus the Applicable Margin for Base Rate Advances plus the Facility Fee. There is no premium or penalty for prepayment of Base Rate Advances, but prepayments of Term Benchmark Advances are generally subject to a breakage fee. Advances may be extended

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

in U.S. Dollars or in specified alternative currencies (“Alternative Currency Advances”). Alternative Currency Advances are limited in the aggregate to the equivalent of $625.0 million.

Additional information regarding our indebtedness is included in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

At June 30, 2026, we were in compliance with all financial covenants associated with our indebtedness.

7. ADDITIONAL CONSOLIDATED BALANCE SHEET INFORMATION

Additional information related to our Consolidated Balance Sheets is as follows:

8. INCOME TAXES

The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025. Some limited guidance has been issued clarifying the application of some of the provisions in this legislation, and more guidance is expected to be issued in the near future with respect to a number of income tax provisions in the OBBBA. The law did not have a material impact on our consolidated financial statements for the three month period ended June 30, 2026, and we do not expect it to have a material

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

impact on our effective tax rate in future years. However, we are unable to fully predict the overall impact that the OBBBA and additional guidance may have on our business. Furthermore, some non-U.S. jurisdictions have raised tax rates, and it is reasonable to expect that other global taxing authorities will be reviewing current legislation for potential modifications.

Our effective tax rate is affected by (i) the tax rates in Ireland (our country of domicile), the United States, and other jurisdictions in which we operate, and (ii) the relative amount of income before income taxes by geography.

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.

Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. In determining the estimated annual effective income tax rate, we analyze various factors, 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 carry forwards, and available tax planning alternatives.

We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions. We are no longer subject to United States federal examinations for years before fiscal 2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2018. We remain subject to tax authority audits in various jurisdictions wherever we do business.

In November 2023, we received two Notices of Deficiency from the IRS regarding the previously disclosed deemed dividend inclusions and associated withholding tax matter. The notices relate to the fiscal and calendar year 2018. The IRS adjustments would result in a cumulative tax liability of approximately $50.0 million, excluding any interest and penalties, if ultimately assessed. We are contesting the IRS’s assertions and have filed petitions with the U.S. Tax Court. We have not established reserves related to these notices. An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but could be material to our consolidated results of operations and cash flows for any one period.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

9. COMMITMENTS AND CONTINGENCIES

We are, and will likely continue to be, involved in a number of legal proceedings, government investigations, and claims, which we believe generally arise in the course of our business, given our size, history, complexity, and the nature of our business, products, Customers, regulatory environment, and industries in which we participate. These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We record a liability for such contingencies to the extent we conclude that their occurrence is both probable and estimable and believe we have adequately reserved for our current litigation and claims that are probable and estimable. In the event that the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We consider many factors in making these assessments, including the professional judgment of experienced members of management and our legal counsel. We have made estimates as to the likelihood of unfavorable outcomes and the amounts of such potential losses. Further, we believe that the ultimate outcome of pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole. Due to their inherent uncertainty, however, there can be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings. For certain types of claims, we presently maintain insurance coverage for bodily injury and third party property damage and other liability coverages in amounts and with retentions and deductibles that we believe are prudent, and we may also have contractual indemnification rights against certain liabilities, but there can be no assurance that either will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us. We record expected recoveries under applicable contracts when we are assured of recovery.

Civil, criminal, regulatory or other proceedings involving our products or services, including the matters discussed herein, could possibly result in judgments, settlements or administrative or judicial decrees requiring us, among other actions, to pay damages or fines or effect recalls, or be subject to other governmental, Customer or other third party claims or remedies, which could materially affect our business, performance, prospects, value, financial condition, and results of operations. Further, the Company may incur material defense costs as a result of such proceedings, which may also divert management attention from other priorities.

From time to time, STERIS is also involved in legal proceedings as a plaintiff involving contract, patent protection, and other claims asserted by us. Gains, if any, from these proceedings are recognized when they are realized.

In addition, the Company may pursue opportunities to recover amounts previously paid in connection with certain legal or regulatory matters, tariffs or similar governmental charges. During the three months ended June 30, 2026, the Company received $3.9 million related to amounts previously paid pursuant to the International Economic Emergency Powers Act ("IEEPA"), consisting of $3.7 million of refunds recorded in Cost of product revenues and $0.2 million of interest recorded in Interest and miscellaneous income. As of June 30, 2026, approximately $23 million of IEEPA tariffs have not yet been refunded, and no financial statement impact has been recognized with respect to these amounts.

Illinois EO Litigation Settlement

A subsidiary of the Company was sued in Illinois state court by individual plaintiffs who worked or resided near a facility in Lake County, Illinois, where the subsidiary provided sterilization services using ethylene oxide (“EO”) from January 2005 to September 2008. The plaintiffs filed separate suits in which each alleged that they were diagnosed with one or more types of cancer, allegedly resulting from exposure to EO emissions from the facility into the ambient air.

On March 3, 2025, the Company entered into binding confidential term sheets ("Term Sheets") with plaintiffs’ counsel, as well as settlement agreements with several plaintiffs in cases which were at the time scheduled for trial in fiscal 2026. On October 29, 2025, the Company entered into binding confidential settlement agreements ("Settlement Agreements") with plaintiffs' counsel, containing terms and provisions consistent with the Term Sheets.

Pursuant to the Settlement Agreements, the Company agreed to pay up to $48.2 million to settle claims. We recorded a charge for this amount in fiscal 2025, and the remaining liability is included in the "Accrued expenses and other" line within our Consolidated Balance Sheets. None of the Settlement Agreements are an admission of liability or that emissions from the

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

Waukegan, Illinois facility ever posed a safety hazard to the people who live or work in the surrounding areas. The Settlement Agreements established a claims administration process that includes guidelines and procedures for administering individual settlements.

Subsequent to quarter-end, the Company made payments, consistent with amounts previously accrued, pursuant to the Settlement Agreements. As of July 31, 2026, substantially all payment obligations of the Company under the Settlement Agreements have been satisfied, and the claims administration process has been largely completed. Accordingly, substantially all of the personal injury claims subject to the Settlement Agreements have been dismissed with prejudice.

Additional Information

For additional information, see the following portions of our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026, Item 1 titled "Business - Information with respect to our Business in General - Government Regulation" and the "Risk Factors" in Item 1A titled "Product and service related regulations and claims."

We are subject to taxation from United States federal, state and local, and foreign jurisdictions. Tax positions are settled primarily through the completion of audits within each individual jurisdiction or the closing of statutes of limitation. Changes in applicable tax law or other events may also require us to revise past estimates. We describe income taxes further in Note 8 to our consolidated financial statements titled, “Income Taxes” in this Quarterly Report on Form 10-Q.

10. BUSINESS SEGMENT INFORMATION

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.

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.

Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems. Our technology-neutral offering supports Customers every step of the way, from testing through sterilization.

Our Life Sciences segment provides a comprehensive offering of products and services designed to support biopharmaceutical and medical device research and manufacturing facilities, in particular those focused on aseptic manufacturing. Our portfolio includes a full suite of capital equipment, consumable products, equipment maintenance and specialty services.

Our chief operating decision maker ("CODM") is our President and Chief Executive Officer ("CEO"). The CEO is responsible for performance assessment and resource allocation. The CEO regularly receives discrete financial information about each reportable segment and uses this information to assess performance and allocate resources. This information includes Revenues and Cost of revenues; Selling, general, and administrative expenses; and Research and development expenses for each reportable segment.

We disclose a measure of segment income that is consistent with the way management operates and views the business. The accounting policies for reportable segments are the same as those for the consolidated Company.

For the three months ended June 30, 2026 and 2025, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

Additional information regarding our segments is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

The following table compares business segment revenues and business segment and Corporate operating income for the three months ended June 30, 2026 and 2025:

(1) For more information regarding our recent acquisitions, refer to Note 3 titled, "Business Acquisitions."

(2) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.

(3) Costs incurred in tax restructuring.

(4) For more information regarding our restructuring efforts, refer to Note 2 titled, "Restructuring."

Assets include the current and long-lived assets directly attributable to the segment based on the management of the location or on utilization. Certain corporate assets were allocated to the reportable segments based on revenues. Assets attributed to sales and distribution locations are only allocated to the Healthcare and Life Sciences segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

Individual facilities, equipment, and intellectual properties are utilized by both the Healthcare and Life Sciences segments at varying levels over time. As a result, an allocation of total assets, capital expenditures, and depreciation and amortization is not meaningful to the individual performance of the Healthcare and Life Sciences segments. Therefore, their respective amounts are reported together.

Financial information for each of our United States and international geographic areas is presented in the following table. Revenues are attributed to the geographic areas based on the location of these operations and their Customers. Property, plant, and equipment, net are those assets that are identified within the operations in each geographic area.

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For the Three Months Ended June 30, 2026 and 2025

Additional information regarding our fiscal 2027 and fiscal 2026 revenue is disclosed in the following table:

11. SHARES AND PREFERRED SHARES

Ordinary shares

We calculate basic earnings per share based upon the weighted average number of shares outstanding. We calculate diluted earnings per share based upon the weighted average number of shares outstanding plus the dilutive effect of share equivalents calculated using the treasury stock method. The following is a summary of shares and share equivalents outstanding used in the calculations of basic and diluted earnings per share:

Options to purchase the following number of shares were outstanding but excluded from the computation of diluted earnings per share because the combined exercise prices, unamortized fair values, and assumed tax benefits upon exercise were greater than the average market price for the shares during the periods, so including these options would be anti-dilutive:

Additional Authorized Shares

The Company has an additional authorized share capital of 1,000,000 preferred shares of $0.001 par value each, plus 25,000 deferred ordinary shares of €1.00 par value each, in order to satisfy minimum statutory capital requirements for all Irish public limited companies.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

12. REPURCHASES OF ORDINARY SHARES

On May 3, 2023 our Board of Directors authorized a share repurchase program (the "Outgoing Repurchase Program") for the purchase of up to $500.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges), with no specified expiration date. Under the Outgoing Repurchase Program, the Company could repurchase its shares from time to time through open market purchases, including 10b5-1 plans. It also permitted share repurchases to be activated, suspended or discontinued at any time.

On May 5, 2026, our Board of Directors terminated the Outgoing Repurchase Program and authorized a new share repurchase program (the "New Repurchase Program") for the purchase of up to $1,000.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges).

Under the New Repurchase Program, we may repurchase our shares from time to time through open market purchases, including 10b5-1 plans. Any share repurchases may be activated, suspended or discontinued at any time. There is no limitation to the number of shares that can be repurchased in a year and there is no expiration date for the New Repurchase Program.

During the first three months of fiscal 2027, we repurchased 0.5 million of our ordinary shares for the aggregate purchase amount of $100.0 million (exclusive of fees, commissions, and other charges) pursuant to authorizations, under the New Repurchase Program. During the first three months of fiscal 2026, we had no share repurchase activity under the Outgoing Repurchase Program.

During the first three months of fiscal 2027, we obtained 0.1 million of our ordinary shares in the aggregate purchase amount of $15.5 million in connection with share-based compensation award programs. During the first three months of fiscal 2026, we obtained 0.1 million of our ordinary shares in the aggregate amount of $10.6 million in connection with share-based compensation award programs.

As of June 30, 2026, there was $900.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges) of remaining availability under the New Repurchase Program.

13. SHARE-BASED COMPENSATION

We maintain a long-term incentive plan that makes available shares for grants, at the discretion of the Board of Directors or Compensation and Organizational Development Committee of the Board of Directors, to officers, directors, and key employees in the form of stock options, restricted shares, restricted share units, stock appreciation rights and share grants. We satisfy share award incentives through the issuance of new ordinary shares. In recent years, grants have been limited to stock options, restricted shares, and restricted share units.

Stock option awards to employees generally vest and become nonforfeitable in increments of 25% per year over a four-year period, with full vesting four years after the date of grant. Historically, restricted stock awards to employee recipients generally cliff vested on the fourth anniversary of the grant date if the recipient remained in continuous employment through that date. Beginning with fiscal 2024 grants, Company restricted stock (and restricted stock units) generally cliff vest over a three year period after the grant date. However, employees who are grantees of restricted stock and have attained age 55 and been employed for at least five years at the time of the grant or meet these criteria during the term of the grant and are employed in the U.S. or in a few other foreign jurisdictions, or employees who have 25 years of service at the time of grant or meet that criterion during the term of the grant, will be subject to installment vesting rules over the applicable vesting period. Awards to certain employees in the U.S. or a few other jurisdictions may provide for continued vesting after “retirement,” if certain conditions are met. As of June 30, 2026, 1.3 million ordinary shares remained available for grant under the long-term incentive plan.

The fair value of share-based stock option compensation awards was estimated at their grant date using the Black-Scholes-Merton option pricing model. This model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics that are not present in our option grants. If the model permitted consideration of the unique characteristics of employee stock options, the resulting estimate of the fair value of the stock options could be different. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Income. The expense is classified as Cost of revenues or Selling, general, and administrative expenses in a manner consistent with the employee’s compensation and benefits.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

The following weighted average assumptions were used for options granted during the first three months of fiscal 2027 and 2026:

The risk-free interest rate is based upon the U.S. Treasury yield curve. The expected life of options is reflective of historical experience, vesting schedules and contractual terms. The expected dividend yield of stock represents our best estimate of the expected future dividend yield. The expected volatility of stock is derived by referring to our historical stock prices over a time frame similar to that of the expected life of the grant. An estimated forfeiture rate of 1.92% and 2.21% was applied in fiscal 2027 and 2026, respectively. This rate is calculated based upon historical activity and represents an estimate of the granted options not expected to vest. If actual forfeitures differ from this calculated rate, we may be required to make additional adjustments to compensation expense in future periods. The assumptions used above are reviewed at the time of each significant option grant, or at least annually.

A summary of share option activity is as follows:

We estimate that 0.5 million of the non-vested stock options outstanding at June 30, 2026 will ultimately vest.

The aggregate intrinsic value in the table above represents the total pre-tax difference between the $210.57 closing price of our ordinary shares on June 30, 2026 over the exercise prices of the stock options, multiplied by the number of options outstanding or outstanding and exercisable, as applicable. The aggregate intrinsic value is not recorded for financial accounting purposes and the value changes daily based on the daily changes in the fair market value of our ordinary shares.

The total intrinsic value of stock options exercised during the first three months of fiscal 2027 and fiscal 2026 was $2.6 million and $9.4 million, respectively. Net cash proceeds from the exercise of stock options were $1.3 million and $9.3 million for the first three months of fiscal 2027 and fiscal 2026, respectively.

The weighted average grant date fair value of stock option grants was $60.17 and $68.44 for the first three months of fiscal 2027 and fiscal 2026, respectively.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

A summary of the non-vested restricted share and share unit activity is presented below:

Restricted shares and restricted share unit grants are valued based on the closing stock price at the grant date. The value of restricted shares and units that vested during the first three months of fiscal 2027 at the time of grant was $46.1 million.

As of June 30, 2026, there was a total of $85.9 million in unrecognized compensation cost related to non-vested share-based compensation granted under our share-based compensation plans. We expect to recognize the cost over a weighted average period of 1.6 years.

14. FINANCIAL AND OTHER GUARANTEES

We generally offer a limited parts and labor warranty on capital equipment. The specific terms and conditions of those warranties vary depending on the product sold and the countries where we conduct business. We record a liability for the estimated cost of product warranties at the time Product revenues are recognized. The amounts we expect to incur on behalf of our Customers for the future estimated cost of these warranties are recorded as a current liability on the accompanying Consolidated Balance Sheets. Factors that affect the amount of our warranty liability include the number and type of installed units, historical and anticipated rates of product failures, and material and service costs per claim. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

Changes in our warranty liability during the first three months of fiscal 2027 were as follows:

15. DERIVATIVES AND HEDGING

We utilize foreign currency forward contracts to hedge a portion of our monetary assets and liabilities denominated in

foreign currencies, including intercompany transactions. Within each fiscal year, we also utilize foreign currency forward

contracts to hedge a portion of our expected non-U.S. dollar-denominated earnings against our reporting currency, the U.S.

dollar. Further, we utilize commodity swap contracts to hedge price changes in nickel that impact raw materials included in our

Cost of revenues.

These contracts are not designated as hedging instruments and do not receive hedge accounting treatment; therefore, changes in their fair value are not deferred but are recognized immediately in the Consolidated Statements of Income. We do not use derivative financial instruments for speculative purposes.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

At June 30, 2026, we held net foreign currency forward contracts to sell 48.0 million euros, 7.0 million Australian dollars, and 7.0 million New Zealand dollars, and to buy 175.0 million Mexican pesos. At June 30, 2026, we held commodity swap contracts to buy 0.5 million pounds of nickel.

The following table presents the impact of derivative instruments and their location within the Consolidated Statements of Income:

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

16. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of financial assets and liabilities using available market information and generally accepted valuation methodologies. The inputs used to measure fair value are classified into three tiers. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the entity to develop its own assumptions. The following table shows the fair value of our financial assets and liabilities at June 30, 2026 and March 31, 2026:

(1) The fair values of forward and swap contracts are based on period-end forward rates and reflect the value of the amount that we would pay or receive for the contracts involving the same notional amounts and maturity dates.

(2) We maintain a frozen domestic non-qualified deferred compensation plan covering certain employees, which allowed for the deferral of payment of previously earned compensation for an employee-specified term or until retirement or termination. Amounts deferred can be allocated to various hypothetical investment options (compensation deferrals have been frozen under the plan). We hold investments to satisfy the future obligations of the plan. Employees who made deferrals are entitled to receive distributions of their hypothetical account balances (amounts deferred, together with earnings (losses)). Changes in the fair value of these investments are recorded in the Interest income and miscellaneous (income) expense line of the Consolidated Statements of Income. During the first three months of fiscal 2027 and 2026, we recorded gains of $0.2 million and $0.1 million, respectively, related to these investments.

(3) We estimate the fair value of our debt using discounted cash flow analyses, based on estimated current incremental borrowing rates for similar types of borrowing arrangements.

(4) Contingent consideration obligations arise from prior business acquisitions. The fair values are based on discounted cash flow analyses reflecting the possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money. Contingent consideration obligations are classified in the consolidated balance sheets as accrued expense (short-term) and other liabilities (long-term), as appropriate based on the contractual payment dates.

As of June 30, 2026 and March 31, 2026, we also held $50.5 million and $45.5 million, respectively, of other investments without readily determinable fair values measured at cost less impairment, if any, adjusted to fair value for any observable price changes in orderly transactions for identical or similar investments of the same issuer. These investments are included in the "Other assets" line of our Consolidated Balance Sheets.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

17. RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Amounts in Accumulated Other Comprehensive Loss are presented net of the related tax. Foreign Currency Translation is not adjusted for income taxes. Accumulated other comprehensive loss shown in our Consolidated Statements of Shareholders' Equity and changes in our balances, net of tax, for the three months ended June 30, 2026 and 2025 were as follows:

(1) The amortization (gain) of defined benefit pension items is reported in the Other expense line of our Consolidated Statements of Income.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)—(Continued)

For the Three Months Ended June 30, 2026 and 2025

18. SUBSEQUENT EVENTS

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.

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.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we explain the general financial condition and the results of operations for STERIS and its subsidiaries including:

• what factors affect our business;
• what our earnings and costs were in each period presented;
• why those earnings and costs were different from prior periods;
• where our earnings came from;
• how this affects our overall financial condition;
• what our expenditures for capital projects were; and
• where cash is expected to come from to fund future debt principal repayments, growth outside of core operations, repurchases of shares, cash dividends and future working capital needs.

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.

In the MD&A, we analyze and explain the period-over-period changes in the specific line items in the Consolidated Statements of Income. This information, discussion, and analysis may be important to you in making decisions about your investments in STERIS.

Financial Measures

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:

• 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.
• 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.

We, at times, may also refer to financial measures which are considered to be “non-GAAP financial measures” under SEC rules. We have presented these financial measures because we believe that meaningful analysis of our financial performance is enhanced by an understanding of certain additional factors underlying that performance. These financial measures should not be considered an alternative to measures required by accounting principles generally accepted in the United States. Our calculations of these measures may differ from calculations of similar measures used by other companies, and you should be careful when comparing these financial measures to those of other companies. Additional information regarding these financial measures, including reconciliations of each non-GAAP financial measure, is available in the subsection of MD&A titled, "Non-GAAP Financial Measures."

Revenues – Defined

As required by Regulation S-X, we separately present revenues generated as either Product revenues or Service revenues on our Consolidated Statements of Income for each period presented. When we discuss revenues, we may, at times, refer to revenues summarized differently than the Regulation S-X requirements. The terminology, definitions, and applications of terms that we use to describe revenues may be different from terms used by other companies. We use the following terms to describe revenues:

• Revenues – Our revenues are presented net of sales returns and allowances.
• Product Revenues – We define Product revenues as revenues generated from sales of consumable and capital equipment products.
• Service Revenues – We define Service revenues as revenues generated from parts and labor associated with the maintenance, repair, and installation of our capital equipment. Service revenues also include outsourced reprocessing

services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our Applied Sterilization Technologies ("AST") segment.

• 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.
• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables used in our capital equipment, gastrointestinal endoscopy accessories, instruments and tools, sterility assurance products, barrier protection solutions, and cleaning consumables.
• Recurring Revenues – We define recurring revenues as revenues generated from sales of consumable products and Service revenues.

GENERAL COMPANY OVERVIEW AND EXECUTIVE SUMMARY

STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention. WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe. We offer our Customers a unique mix of innovative products and services. These include: consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools; services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, and outsourced reprocessing; capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors; and connectivity solutions such as OR integration.

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."

The bulk of our revenues are derived from healthcare, medical device and pharmaceutical Customers. Much of the growth in these industries is driven by the aging of the population throughout the world, as an increasing number of individuals are entering their prime healthcare consumption years, and is dependent upon advancement in healthcare delivery, acceptance of new technologies, government policies, and general economic conditions.

In addition, there is increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies; and a desire by our Customers to operate more efficiently, all of which are driving increased demand for many of our products and services.

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.

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.

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.

For more information regarding our recent acquisitions, see Note 3 to our consolidated financial statements titled, "Business Acquisitions."

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.

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.

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.

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.

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.

Additional information regarding our financial performance during the first quarter of fiscal 2027 is included in the subsection below titled “Results of Operations.”

NON-GAAP FINANCIAL MEASURES

We, at times, refer to financial measures which are considered to be “non-GAAP financial measures” under the Securities and Exchange Commission rules. We, at times, also refer to our results of operations excluding certain transactions or amounts that are non-recurring or are not indicative of future results, in order to provide meaningful comparisons between the periods presented.

These non-GAAP financial measures are not intended to be, and should not be, considered separately from or as an alternative to the most directly comparable U.S. GAAP financial measures.

These non-GAAP financial measures are presented with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making. These amounts are disclosed so that the reader has the same financial data that management uses with the belief that it will assist investors and other readers in making comparisons to our historical operating results and analyzing the underlying performance of our operations for the periods presented.

We believe that the presentation of these non-GAAP financial measures, when considered along with our U.S. GAAP financial measures and the reconciliation to the corresponding U.S. GAAP financial measures, provides the reader with a more complete understanding of the factors and trends affecting our business than could be obtained absent this disclosure. It is important for the reader to note that the non-GAAP financial measures used may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

We define free cash flow as net cash provided by operating activities as presented in the Consolidated Statements of Cash Flows less purchases of property, plant, equipment, and intangibles (capital expenditures) plus proceeds from the sale of property, plant, equipment, and intangibles, which are also presented within investing activities in the Consolidated Statements of Cash Flows. We use this as a measure to gauge our ability to pay cash dividends, fund growth outside of core operations, fund future debt principal repayments, and repurchase shares.

The following table summarizes the calculation of our free cash flow for the three months ended June 30, 2026 and 2025:

RESULTS OF OPERATIONS

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.

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:

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.

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.

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.

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.

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.

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:

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).

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:

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.

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.

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.

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:

(1) Recorded in Cost of revenues on the Consolidated Statements of Income.

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.

Liabilities related to restructuring activities are recorded as current liabilities in the accompanying Consolidated Balance Sheets within "Accrued payroll and other related liabilities" and "Accrued expenses and other." The following table summarizes our restructuring liability balances:

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.

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.

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:

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."

Interest and miscellaneous income increased $1.4 million during the first three months of fiscal 2027, when compared to the same prior year period.

Other income, net increased $0.3 million during the first three months of fiscal 2027, when compared to the same prior year period.

Income Taxes. The following tables compare our tax expense and effective income tax rates for the three months ended June 30, 2026 and 2025:

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.

Business Segment Results of Operations.

We operate and report our financial information in three reportable business segments: Healthcare, AST, and Life Sciences.

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.

Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems. Our technology-neutral offering supports Customers every step of the way, from testing through sterilization.

Our Life Sciences segment provides a comprehensive offering of products and services designed to support biopharmaceutical and medical device research and manufacturing facilities, in particular those focused on aseptic manufacturing. Our portfolio includes a full suite of capital equipment, consumable products, equipment maintenance and specialty services.

We disclose a measure of segment income that is consistent with the way management operates and views the business. The accounting policies for reportable segments are the same as those for the consolidated Company.

Additional information regarding our segments is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

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.

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.

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.

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.

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.

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.

The Life Sciences backlog at June 30, 2026 was $109.9 million. The Life Sciences backlog at June 30, 2025 was $111.0 million. The decrease is primarily due to the timing of orders and shipments.

The following table compares business segment and Corporate operating income for the three months ended June 30, 2026 and 2025.

(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").

(2) For more information regarding our recent acquisitions, refer to Note 3 titled, "Business Acquisitions."

(3) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.

(4) Costs incurred in tax restructuring.

(5) For more information regarding our restructuring efforts, refer to Note 2 titled, "Restructuring."

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.

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.

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. The increase in segment operating income for 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.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes significant components of our cash flows for the three months ended June 30, 2026 and 2025:

Net Cash Provided by Operating Activities – The net cash provided by our operating activities was $367.1 million for the first three months of fiscal 2027 and $420.0 million for the first three months of fiscal 2026. The fiscal 2027 decrease in cash flows from operations resulted from a significantly lower contribution from working capital partially offset by an increase in earnings when compared to the prior year.

Net Cash Used In Investing Activities – The net cash used in investing activities totaled $108.5 million for the first three months of fiscal 2027 and net cash used in investing activities totaled $108.5 million for the first three months of fiscal 2026. The following discussion summarizes the significant changes in our investing cash flows for the first three months of fiscal 2027 and fiscal 2026:

• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $87.5 million for the first three months of fiscal 2027 and $93.6 million during the same prior year period. The fiscal 2027 decrease is due to the timing of capital spending.
• Purchases of investments – During the first three months of fiscal 2027, we used $5.0 million to purchase investments.
• Acquisition of businesses, net of cash acquired – During the first three months of fiscal 2027 and 2026, we used $16.0 million and $15.0 million, respectively, to acquire businesses. For more information, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions."

Net Cash Used In Financing Activities – The net cash used in financing activities amounted to $213.5 million for the first three months of fiscal 2027 compared to net cash used in financing activities of $213.1 million for the first three months of fiscal 2026. The following discussion summarizes the significant changes in our financing cash flows for the first three months of fiscal 2027 and fiscal 2026:

• Payments on Private Placement Senior Notes – During the first three months of fiscal 2026, we repaid $125.0 million, of Private Placement Senior Notes upon maturity. For more information on our Private Placement Senior Notes, refer to Note 6 to our consolidated financial statements titled, "Debt" and to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.
• Payments under credit facilities, net – Net payments under credit facilities totaled $37.8 million and $30.5 million for the first three months of fiscal 2027 and 2026, respectively.
• Repurchases of ordinary shares – During each of the first three month periods of fiscal 2027 and 2026, we obtained 0.1 million of our ordinary shares in connection with share-based compensation award programs in the aggregate amounts of $15.5 million and $10.6 million, respectively. During the first three month period of fiscal 2027, we purchased 0.5 million of our ordinary shares for the aggregate purchase amount of $100.0 million (exclusive of fees, commissions, and other charges) pursuant to authorizations under our new share repurchase program, which was adopted by the Board of Directors on May 5, 2026. During the first three months of fiscal 2026, we had no share repurchase activity under our previous share repurchase program. For more information on our share repurchases, refer to Note 12 to our consolidated financial statements titled, "Repurchases of Ordinary Shares" and to our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.
• Cash dividends paid to ordinary shareholders – During the first three months of fiscal 2027, we paid total cash dividends of $61.4 million, or $0.63 per outstanding share. During the first three months of fiscal 2026, we paid total cash dividends of $56.2 million, or $0.57 per outstanding share.
• Stock option and other equity transactions, net – We generally receive cash for issuing shares under our stock option programs. During the first three months of fiscal 2027 and fiscal 2026, we received cash proceeds totaling $1.3 million and $9.3 million, respectively, under these programs.

Cash Flow Measures. The net cash provided by our operating activities was $367.1 million for the first three months of fiscal 2027 and $420.0 million for the first three months of fiscal 2026. Free cash flow was $279.6 million in the first three months of fiscal 2027 compared to $326.5 million in the first three months of fiscal 2026 (see the subsection above 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.

Our debt-to-total capital ratio was 20.9% at June 30, 2026 and 21.5% at June 30, 2025.

MATERIAL FUTURE CASH OBLIGATIONS AND COMMERCIAL COMMITMENTS

Information related to our material future cash obligations and commercial commitments is included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026. Our commercial commitments were approximately $165.7 million at June 30, 2026, reflecting a net increase of $4.4 million in surety bonds and other commercial commitments from March 31, 2026. We had no outstanding borrowings under our Revolving Credit Facility as of June 30, 2026. We had $9.6 million of letters of credit outstanding under the Revolving Credit Facility at June 30, 2026.

Cash Requirements. We intend to use our existing cash and cash equivalent balances and cash generated from operations for short-term and long-term capital expenditures and our other liquidity needs. Our capital requirements depend on many uncertain factors, including our rate of sales growth, our Customers’ acceptance of our products and services, the costs of obtaining adequate manufacturing capacities, the timing and extent of our research and development projects, changes in our expenses and other factors. To the extent that existing and anticipated sources of cash are not sufficient to fund our future activities, we may need to raise additional funds through additional borrowings or the sale of equity securities. There can be no assurance that our existing financing arrangements will provide us with sufficient funds or that we will be able to obtain any additional funds on terms favorable to us or at all.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

Parent and its wholly-owned subsidiaries, Limited and Corporation (collectively with Limited "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of FinCo ("FinCo") a wholly-owned subsidiary issuer, under senior public notes issued by FinCo on April 1, 2021 (the "Senior Public Notes") and of certain other obligations relating to the Senior Public Notes. The Senior Public Notes are guaranteed, jointly and severally, on a senior unsecured basis. The Senior Public Notes and the related guarantees are senior unsecured obligations of FinCo and the Guarantors, respectively, and are equal in priority with all other unsecured and unsubordinated indebtedness of FinCo and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes and borrowings under the Revolving Credit Facility.

All of the liabilities of non-guarantor direct and indirect subsidiaries of Parent, other than FinCo, Limited and Corporation, including any claims of trade creditors, are effectively senior to the Senior Public Notes.

FinCo’s main objective and source of revenues and cash flows is the provision of short- and long-term financing for the activities of Parent and its subsidiaries.

The ability of our subsidiaries to pay dividends, interest and other fees to FinCo and ability of FinCo and Guarantors to service the Senior Public Notes may be restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries are or may become a party.

The following is a summary of these guarantees:

Guarantees of Senior Notes

• Parent Company Guarantor – STERIS plc
• Subsidiary Issuer – STERIS Irish FinCo Unlimited Company
• Subsidiary Guarantor – STERIS Limited
• Subsidiary Guarantor – STERIS Corporation

The guarantee of a Guarantor will be automatically and unconditionally released and discharged:

• in the case of a subsidiary Guarantor, upon the sale, transfer or other disposition (including by way of consolidation or merger) of such subsidiary Guarantor, other than to the Parent or a subsidiary of the Parent and as permitted by the Indenture;
• in the case of a subsidiary Guarantor, upon the sale, transfer or other disposition of all or substantially all the assets of such subsidiary Guarantor, other than to the Parent or a subsidiary of the Parent and as permitted by the Indenture;
• in the case of a subsidiary Guarantor, at such time as such subsidiary Guarantor is no longer a borrower under or no longer guarantees any material credit facility (subject to reinstatement in specified circumstances);
• upon the legal defeasance or covenant defeasance of the Senior Public Notes or the discharge of FinCo’s obligations under the Indenture in accordance with the terms of the Indenture;
• as described in accordance with the terms of the Indenture; or
• in the case of Parent, if FinCo ceases for any reason to be a subsidiary of Parent; provided that all guarantees and other obligations of Parent in respect of all other indebtedness under any material credit facility of FinCo terminate upon FinCo ceasing to be a subsidiary of Parent; and
• upon such Guarantor delivering to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction or release have been complied with.

The obligations of each Guarantor under its guarantee are expressly limited to the maximum amount that such Guarantor could guarantee without such guarantee constituting a fraudulent conveyance. Each Guarantor that makes a payment under its guarantee will be entitled upon payment in full of all guaranteed obligations under the indenture to a contribution from each Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with U.S. GAAP.

The following tables present summarized results of operations for the three months ended June 30, 2026 and summarized balance sheet information at June 30, 2026 and March 31, 2026 for the obligor group of the Senior Public Notes. The obligor group consists of Parent, FinCo, and the other Guarantors. The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuer and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer. Transactions with non-issuer and non-guarantor subsidiaries have been presented separately.

Intercompany balances and transactions between the obligor group have been eliminated, and amounts due from, amounts due to, and transactions with non-issuer and non-guarantor subsidiaries have been presented separately. Intercompany transactions arise from internal financing and trade activities.

Critical Accounting Estimates and Assumptions

Information related to our critical accounting estimates and assumptions is included in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026. Our critical accounting policies, estimates, and assumptions have not changed materially from March 31, 2026.

Contingencies

We are, and will likely continue to be, involved in a number of legal proceedings, government investigations, and claims, which we believe generally arise in the course of our business, given our size, history, complexity, and the nature of our business, products, Customers, regulatory environment, and industries in which we participate. These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We record a liability for such contingencies to the extent we conclude that their occurrence is both probable and estimable and believe we have adequately reserved for our current litigation and claims that are probable and estimable. In the event that the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range. We consider many factors in making these assessments, including the professional judgment of experienced members of management and our legal counsel. We have made estimates as to the likelihood of unfavorable outcomes and the amounts of such potential losses. Further, we believe that the ultimate outcome of pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole. Due to their inherent uncertainty, however, there can be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings. For certain types of claims, we presently maintain insurance coverage for personal injury and property damage and other liability coverages in amounts and with deductibles that we believe are prudent, and we may also have contractual indemnification rights against certain liabilities, but there can be no assurance that either will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us. We record expected recoveries under applicable contracts when we are assured of recovery. Refer to Note 9 of our consolidated financial statements titled, "Commitments and Contingencies" for additional information.

We are subject to taxation from United States federal, state and local, and foreign jurisdictions. Tax positions are settled primarily through the completion of audits within each individual jurisdiction or the closing of statutes of limitation. Changes in applicable tax law or other events may also require us to revise past estimates. We describe income taxes further in Note 8 of our consolidated financial statements titled, "Income Taxes" for more information.

Availability of Securities and Exchange Commission Filings

We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports as soon as reasonably practicable after we file such material with, or furnish such material to, the SEC. You may access these documents on the Investor Relations page of our website at http://www.steris-ir.com. The information on our website and the SEC's website is not incorporated by reference into this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, we are subject to interest rate, currency, and commodity risks. Information related to these risks and our management of these exposures is included in Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026. Our exposures to market risks have not changed materially since March 31, 2026.

Fluctuations in currency rates could affect our revenues, Cost of revenues and income from operations and could result in currency exchange gains and losses. During the first quarter of fiscal 2027, we held forward foreign currency contracts to hedge a portion of our expected non-U.S. dollar-denominated earnings against our reporting currency, the U.S. dollar. We did not elect hedge accounting for these forward currency contracts; however, we may seek to apply hedge accounting in future scenarios. As a result, we may experience volatility due to (i) the timing mismatch of unrealized hedge gains or losses versus recognition of the underlying hedged earnings, and (ii) the impact of unrealized and realized hedge gains or losses being reported in selling, general and administrative expenses, whereas the offsetting economic gains and losses of the underlying hedged earnings are reported in the various line items of our Consolidated Statements of Income.

We also enter into foreign currency forward contracts to hedge monetary assets and liabilities denominated in foreign currencies, including inter-company transactions. We do not use derivative financial instruments for speculative purposes. At June 30, 2026, we held net foreign currency forward contracts to sell 48.0 million euros, 7.0 million Australian dollars, and 7.0 million New Zealand dollars, and to buy 175.0 million Mexican pesos.

We are dependent on basic raw materials, sub-assemblies, components, and other supplies used in our operations. Our financial results could be affected by the availability and changes in prices of these materials. The costs of these materials can rise suddenly and result in significantly higher costs of production. Where appropriate, we enter into long-term supply contracts as a basis to guarantee a reliable supply. We may also enter into commodity swap contracts to hedge price changes in a certain commodity that impacts raw materials included in our Cost of revenues. At June 30, 2026, we held commodity swap contracts to buy 0.5 million pounds of nickel.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision of and with the participation of our management, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Quarterly Report. Based on that evaluation, including the assessment and input of our management, the PEO and PFO concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding our legal proceedings is included in this Form 10-Q in Note 9 to our consolidated financial statements titled, "Commitments and Contingencies" and in Item 7 of Part II, titled “Management's Discussion and Analysis of Financial Conditions and Results of Operations," of our Annual Report on Form 10-K for the year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

ITEM 1A. RISK FACTORS

For a complete discussion of the Company's risk factors, you should carefully review the risk factors included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, which was filed with the SEC on May 29, 2026.

Item 2. Unregistered Sales of Equity Securities, Use or Proceeds, and Issuer Purchases of Equity Securities

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

On May 3, 2023 our Board of Directors authorized a share repurchase program (the "Outgoing Repurchase Program") for the purchase of up to $500.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges), with no specified expiration date. Under the Outgoing Repurchase Program, the Company could repurchase its shares from time to time through open market purchases, including 10b5-1 plans. It also permitted share repurchases to be activated, suspended or discontinued at any time.

On May 5, 2026, our Board of Directors terminated the Outgoing Repurchase Program and authorized a new share repurchase program (the "New Repurchase Program") for the purchase of up to $1,000.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges).

Under the New Repurchase Program, we may repurchase our shares from time to time through open market purchases, including 10b5-1 plans. Any share repurchases may be activated, suspended or discontinued at any time. There is no limitation to the number of shares that can be repurchased in a year and there is no expiration date for the New Repurchase Program.

During the first three months of fiscal 2027, we repurchased 0.5 million of our ordinary shares for the aggregate purchase amount of $100.0 million (exclusive of fees, commissions, and other charges) pursuant to authorizations, under the New Repurchase Program. During the first three months of fiscal 2026, we had no share repurchase activity under the Outgoing Repurchase Program.

During the first three months of fiscal 2027, we obtained 0.1 million of our ordinary shares in the aggregate purchase amount of $15.5 million in connection with share-based compensation award programs. During the first three months of fiscal 2026, we obtained 0.1 million of our ordinary shares in the aggregate amount of $10.6 million in connection with share-based compensation award programs.

As of June 30, 2026, there was $900.0 million aggregate purchase amount (exclusive of fees, commissions, and other charges) of remaining availability under the New Repurchase Program.

The following table summarizes the ordinary shares repurchase activity during the first quarter of fiscal 2027 under our ordinary share repurchase program:

(1) Does not include four shares purchased during the quarter at an average price of $213.96 per share by the STERIS Corporation 401(k) Plan on behalf of an executive officer of the Company who may be deemed to be an affiliated purchaser.

ITEM 5. OTHER INFORMATION

During the three months ended June 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as such terms are defined under Item 408 of Regulation S-K.

ITEM 6. EXHIBITS

Exhibits required by Item 601 of Regulation S-K