Sotera Health Company

Good morning and welcome to Terra Health fourth quarter and full year 2025 conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star then 1-1 on your touchtone phone. To withdraw your question, please press star 1-1 again. Please note this event is being recorded. I would now like to turn the conference over to Vice President of Investor Relations, Jason Peterson. Jason, please go ahead.

Good morning and thank you. Welcome to Soterra Health's fourth quarter and four-year 2025 earnings call. Today's press release and supplemental slides are available on the investor section of our website at soterrahealth.com. This webcast is being recorded and a replay will also be available on the investor section of the Soterra Health website shortly after the call. Joining me today are Chairman and Chief Executive Officer Michael Petras and Chief Financial Officer John Lyons. During the call today, some of our comments may be considered forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to Sotero Health SEC filings in the forward-looking statement slide at the beginning of the presentation for a description of these risks and uncertainties. The company assumes no obligation to update any such forward-looking statements. Please note that during the discussion today, the company will present both GAAP and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, tax rate applicable to net income, adjusted net income, adjusted EPS, adjusted free cash flow, net debt and net leverage ratio, as well as constant currency comparisons. A reconciliation of GAAP to non-GAAP measures for all relevant periods may be found in the schedules attached to the company's press release and in the supplemental slides to this presentation. The operator will be assisting with the Q&A portion of the call today. Please limit yourself to one question and one follow-up. For further questions, feel free to reach out to the investment relations team. With that, I'll now turn the call over to Sotero Health Chairman and CEO, Michael Petras.

Good morning, and thank you for joining us. This morning, we announced another strong year of performance, extending our track record of year-over-year revenue growth to 20 consecutive years. In 2025, the total company revenue increased 5.7% to $1.164 billion or 5.2% growth on a constant currency basis versus 2024. Adjusted EBITDA increased 8.2% or 7.8% on a constant currency basis with margins expanding to 51%, an increase of nearly 120 basis points. We also delivered adjusted free cash flow of over $200 million in 2025. Our results demonstrate strong execution, growing demand for our mission critical services, and disciplined financial management. The team's performance in 2025 positions us well for sustained growth ahead. We also had several notable achievements during the year. Our customer satisfaction exceeded 80%, underscoring our commitment to delivering excellent service, We advanced our portfolio across several key areas, including our commercial initiatives continued to build momentum with revenue from XPU customers expanding 9% year over year. Sterigenics delivered approximately 8% constant currency revenue growth versus 2024, driven by improved volume and mix. Significant progress was also made on the EO Facility Enhancement Program, as well as the construction of the new X-ray facility, which is planned to open in 2026. Norion delivered a strong year, achieving approximately 9% constant currency revenue growth. Also, in the fourth quarter, the team signed a cobalt development agreement with Westinghouse and PSE&G, and they secured a 25-year Class 1B license renewal for our Ottawa facility, which is the longest ever issued by the Canadian Nuclear Safety Commission. Nelson Labs delivered core lab testing growth during the year. They expanded their margins by 312 basis points and made progress on its clean room investment. On the capital markets front, we reduced borrowing costs by 75 basis points on our $1.4 billion term loan and paid down $86 million of debt, resulting in $13 million of annual interest savings. We also upsized and extended our revolver, increasing liquidity by $175 million. Cetera Health's public float increased to 80% of outstanding shares during 2025. We continue to strengthen our corporate governance with the appointment of a lead independent director. Also, as you may have seen, we welcomed Richard Kyle to the board earlier this month. Richard's leadership experience as a public company CEO and his extensive experience in operations and governance along with a strong financial acumen, will serve as tremendous assets as we continue to grow. Finally, we remain actively engaged with our shareholders on many corporate responsibility initiatives. 2025 was a strong first step in executing the 2025 to 2027 long-range plan we presented on our November 2024 investor day, and we expect this year to represent another meaningful year of progress towards those goals. Earlier today, we issued our 2026 outlook. For the full year, we expect total revenue to increase to a range of $1.233 billion to $1.251 billion, representing constant currency growth of 5% to 6.5% versus 2025. Adjusted EBITDA to grow to a range of $632 to $641 million, or 5.5% to 7% constant currency growth. Before I hand it over to John, I'd like to highlight a management transition. As you may have seen in our press release this morning, effective April 1st of this year, Senior Vice President General Counsel Alex Dimitri was transitioned to an outside advisor to the company. I would like to thank Alex for his leadership and service the past three years, and we are grateful that he will continue to support the company going forward as an advisor. We are excited to announce that Erica Ostrowski, who has served for the last two years as the Vice President, Deputy General Counsel, and Corporate Secretary under Alex's leadership, will be promoted to the Senior Vice President and General Counsel for Cetera Health after demonstrating strong leadership, sound judgment, and a deep understanding of our business. Erica is well-positioned success in their new role. Now, John will take us through our fourth quarter and full year 2025 financials and our 2026 outlook and more depth. Thank you, Michael.