Here are 1-3 brief analogies to describe Sotera Health (SHC) succinctly:

• The UL (Underwriters Laboratories) for medical device sterilization and testing, providing the critical services that ensure products are safe and compliant.
• The ADP for critical sterilization and safety testing services in the healthcare industry, handling an essential, outsourced regulatory-mandated process for manufacturers.
• The Amazon Web Services (AWS) for medical product safety infrastructure, providing essential sterilization and testing services that healthcare companies rely on to bring safe products to market.

• Sterilization Services: Provides contract sterilization for medical devices, pharmaceuticals, and other products utilizing gamma, E-beam, and ethylene oxide technologies.
• Laboratory Testing & Advisory Services: Offers microbiology and analytical chemistry testing, along with expert advisory services, primarily for the medical device and pharmaceutical industries.
• Cobalt-60: Supplies Cobalt-60 radioisotopes, which are essential for gamma sterilization processes and various medical applications.

Intensifying regulatory scrutiny and proposed restrictions on Ethylene Oxide (ETO) sterilization, a critical service for Sotera Health's Sterigenics segment. Ongoing actions by the U.S. Environmental Protection Agency (EPA) and state regulators to tighten emissions standards and potentially limit the use of ETO pose a significant and evolving threat. This could lead to increased operational costs, potential facility disruptions, and necessitate a shift by medical device manufacturers towards alternative, potentially less efficient or more expensive, sterilization methods, impacting Sotera's market share and profitability within its largest business segment.

Sotera Health (SHC) operates in two primary addressable markets through its three business segments: sterilization services and lab testing and advisory services.

Sterilization Services

Sotera Health, through its Sterigenics and Nordion businesses, is a leading provider of sterilization services, including Ethylene Oxide (EtO), Gamma, and E-beam sterilization. Nordion specifically supplies Cobalt-60, a key component for gamma sterilization.

• The global sterilization services market was valued at approximately USD 3.52 billion in 2024 and is projected to reach USD 5.49 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 7.9%.
• Another estimate places the global sterilization services market at USD 3.93 billion in 2024, expecting it to increase to USD 7.93 billion by 2034 with a CAGR of 7.3%.
• In 2024, the global sterilization services market was also estimated at USD 5.60 billion, with projections to reach around USD 10.64 billion by 2034, demonstrating a CAGR of 6.63%.
• North America held the largest share of the global sterilization services market in 2024. The U.S. sterilization services market alone was valued at USD 1.75 billion in 2024 and is anticipated to reach approximately USD 3.38 billion by 2034, with a CAGR of 6.68%.
• The Ethylene Oxide (EtO) sterilization segment accounted for the largest share of the sterilization services market in 2024.
• The global gamma irradiation sterilization services market was estimated at USD 2.5 billion in 2025, with a projected CAGR of 7% from 2025 to 2033.
• The global medical device sterilization market was valued at USD 15.65 billion in 2025 and is projected to reach USD 28.93 billion by 2033, growing at a CAGR of 8.02%. The U.S. medical device sterilization market was valued at USD 5.09 billion in 2025 and is projected to reach USD 9.09 billion by 2033.

Lab Testing and Advisory Services

Through Nelson Labs, Sotera Health provides microbiological and analytical chemistry testing and advisory services primarily for the medical device and pharmaceutical industries.

• The global medical device testing market was valued at USD 5.20 billion in 2024 and is expected to reach USD 11.82 billion by 2032, at a CAGR of 10.80%.
• Another report indicates the global medical device testing services market was valued at USD 8.6 billion in 2024 and is expected to grow at a CAGR of 8.8% from 2025 to 2034.
• The global medical device testing services market size was estimated at USD 9.76 billion in 2024 and is projected to reach USD 16.77 billion by 2030, with a CAGR of 9.49%.
• North America dominates the global medical device testing market, accounting for approximately 40.2% of the market share in 2024, with the U.S. holding about 35%. However, Asia-Pacific dominated the medical device testing services market with a 41.18% share in 2024.
• The preclinical medical device testing services market is projected to expand from USD 1.7 billion in 2025 to USD 2.8 billion by 2035, at a CAGR of 5.3%. Medical device manufacturers are expected to account for 47% of this market in 2025.

Expected Drivers of Future Revenue Growth for Sotera Health (SHC)

• Favorable Pricing and Volume/Mix Expansion: Sotera Health consistently demonstrates pricing power across its segments, contributing to revenue growth. This is further bolstered by improvements in volume and mix across its Sterigenics and Nordion businesses, indicating increased demand and optimal utilization of services. For instance, Sterigenics' Q3 2024 revenue growth included favorable pricing of 4.4% and a 50 basis point increase from volume and mix. Similarly, Q1 2025 revenue growth for Sterigenics was driven by favorable pricing, while Nordion's growth was mainly attributable to volume and mix from the timing of reactor harvest schedules.
• Expansion within a Large Serviceable Addressable Market and Strategic Capital Investments: Sotera Health has identified a substantial serviceable addressable market of $18 billion, presenting significant opportunities for expansion. The company plans to leverage customer feedback to guide capital investment decisions and its growth outlook, aiming for an organic compound annual revenue growth rate of 5% to 7% for 2025-2027. This indicates a strategy of investing in capacity and capabilities to capture a larger share of its extensive market.
• Growth in Core Lab Testing Services and Stable Cobalt-60 Supply: Nelson Labs continues to see growth in its core lab testing services, which is a key driver for that segment. Furthermore, the Nordion segment benefits from the stability and strategic importance of its Cobalt-60 supply. The renewal of Nordion's Class 1B license for 25 years secures the global Cobalt-60 supply for sterilization and radiotherapeutic treatments, eliminating revenue risk associated with Cobalt-60 for 2025 and supporting mid- to high single-digit growth for the segment.

Share Issuance

• Sotera Health completed its initial public offering (IPO) in November 2020, generating approximately $1.1 billion in gross proceeds.
• The company executed a follow-on equity offering, issuing 20,000,000 shares of common stock at $15.35 per share, raising $307 million.
• An additional follow-on equity offering involved filing for 20,000,000 shares at $16.16 per share, valued at $323.2 million.

Inbound Investments

• The company raised approximately $1.1 billion in gross proceeds through its initial public offering in November 2020.

Capital Expenditures

• Capital expenditures were $54 million in 2020, $102 million in 2021, $182 million in 2022, $215 million in 2023, and $179.1 million in 2024.
• The capital expenditure guidance for 2025 has been revised downward multiple times, most recently to a range of $125 million to $135 million, citing project timing and cost savings.
• Expected capital expenditures for 2026 are approximately $110 million. These expenditures primarily focus on emissions controls, facility enhancements, regulatory compliance, and capacity expansion.