Mike Polark

Dan attributed higher endoscopy volumes to earlier detection age (below 50) and greater colon cancer awareness, noting peers see the same strength while cautioning the elevated level may not be sustainable.

Dan reaffirmed the 7%-8% AST organic model, identifying recovery from inventory destocking to normalized volumes as the biggest 2H driver; Karen noted incremental depreciation from capacity go-lives is evenly paced across the year.

Dan described the SPD compliance system including IFU access at the sink, process verification steps, and SPM (ERP for sterile processing) for track-and-trace compliance and inventory management.

Dan expressed optimism on Life Sciences with buying patterns back, reshoring creating opportunities, and consumables growing 8%. Noted weakness is concentrated in smaller companies, not STERIS's sweet spot.

Dan clarified MEDglas is a vertical integration of their wall glass supplier used in ORs and SPDs; not margin accretive but strategically important. GI products bring 20-25 sales reps and channel expansion.

Karen provided clear detail: $46M incremental tariffs in FY26, total $60-65M modeled flat for FY27, no refunds assumed. Bonus tailwind of $20M from overachievement in FY26 vs 100% target in FY27.

Dan disclosed unusual monthly cadence: October was really weak, November improved, December was strong. No geographic or customer subsegment explanation identified. Acknowledged some speculation of customers building ahead of tariffs causing slight inventory adjustment in the fall.

Karen confirmed $55M is the full FY26 annual figure with tariffs incurred every quarter. Q3 was $16M with Q4 expected to step up slightly. Polark was disconnected mid-question and returned later.

Dan reiterated single-use scopes are viable only for small-diameter (hysteroscopy, ureteroscopy, bronchoscopy) but not for large-diameter colonoscopy scopes where STERIS is concentrated. Noted several competitors have announced they are not targeting large-diameter colonoscopy.

Dan acknowledged some reshoring activity benefiting GMP capital but cautioned it is still mostly noise over substance. Easy comps from 18-month pharma trough also contributing to LS growth.

Mike clarified the cost increase is from higher employee utilization of benefits, not premium inflation, which was in line with typical low-single-digit increases.

Dan cited multiple data points, offsite center volumes, AST throughput, backlog growth, order intake, and could not confirm competitor's observations.

Dan declined subsegment guidance but noted the strong order year bodes well for capital backlog going into FY26.

Dan attributed broad-based share gains to a great portfolio and enterprise solution for large systems around sterile processing.

Dan clarified stable means low single-digit volume growth, not flat, indicating a return to normalized patterns.

Dan deflected the question about deliberately managing capital equipment revenue, deferring FY26 outlook to next earnings call.

Dan expressed cautious optimism but warned against declaring victory on one quarter of 10% growth, noting occasional customer pull effects.

Dan attributed broad-based share gains to strong capital placement, favorable GPO positioning in sterile processing, and U.S. procedure volume growth.

Dan declined M&A specifics but confirmed financial and management capacity. Mike noted deal pipeline is robust with focus on tuck-in acquisitions and $100M in buybacks in H1.

Dr. Stein tied the slowdown to OCEAN closure, confusion around CHAMPION and greater use of a wait-and-wait strategy, and pointed to SIMPLAAFY data and WATCHMAN Elite as the response.

CEO positioned Siemens 4D ICE as premium differentiated product for WATCHMAN and FARAFLEX, not yet commercially available. BSX 2D ICE as established market portfolio addition at different price point.

Dr. Stein noted de novo persistent already has high PFA uptake. ADVANTAGE trial showed best long-term outcomes ever in de novo persistent. Redo rates in single digits. FARAPOINT and FARAFLEX address more complex redo cases. Cortex AI for precision mapping of unexplained recurrences.

Dr. Stein questioned whether CMS appropriately values procedure complexity. Committed to supporting medical societies. Believes physicians will still provide clinically appropriate stroke prevention regardless.

CFO explained tax rate driven by manufacturing sourcing, geographic mix, IP location. Potential 200-300bps headwind in 2026 from TCJA sunset but optimistic about Washington developments.

CEO deflected on US TAVR regulatory path, stating continued internal discussions with no timeline. Acknowledged some EU structural heart impact from US trial concerns.

No scrap, warranty or return rates were disclosed. Management substituted NPS direction, lower complaint levels, and margin as an indirect proxy.

Jereme explained 2025 one-timer impact somewhat less than analyst's estimate. Gross margin likely exits above top of guide before Q4 Ireland facility turn-on creates temporary COGS spike. G6 phasing out toward mid-2026 with many G6 users upgrading directly to 15-day.

Jereme confirmed approximately 50-50 split between freight and scrap impact. Goal for 2026 is majority or all product moving via ocean freight from Malaysia. Sensor deployment scrap expected to dissipate as factory fixes take hold.

Jereme confirmed program is financially net neutral. Provides same-day pharmacy replacement option for customers on their last sensor. Differentiated versus competitors. Focused on making things easier for customers.

Kevin noted CMS submission pending. Administration comments supportive of CGM. Jake confirmed RCT enrollment completing H1 2025 with initial readout late 2025 or early 2026.

Jereme explained point estimate was chosen to set clear expectations after a unique 2024 but did not clarify if $4.6B is floor or midpoint.

Eric confirmed Omnipod 5 was compatible with 15-day G7 from day 1 of Dexcom launch. Libre 3 Plus integration in limited market release with full launch in H1 2026. Omnipod 6 designed as one Pod with over-the-air updates for faster future sensor integrations.

Flavia confirmed no stocking impact internationally in Q3 or recent quarters. Growth primarily volume-driven with some price/mix from DASH to Omnipod 5 conversion. Still have headroom on conversion. Ashley noted NGS markets seeing 68% growth.

Ashley noted Omnipod's near 100% pharmacy channel distribution through Medicare Part D shields it from Part B competitive bidding proposal. Engaging with CMS on benefits of differentiated technology.

Eric said Middle East markets are smaller than existing Omnipod 5 launches. Described three-stage international portfolio: mature (U.K., Germany), ramping (France, Netherlands), newly launched (9 countries in 2025). International TAM ~3.5M type 1 patients, only 20-25% penetrated.

Jim confirmed guide includes planned sales force expansion. Already hired 75% of new roles, training underway, expect majority in place by end of Q1. Same selling model into more call points.

Jamie declined to quantify the extended use impact until the next earnings call, framing it as balancing growth and profitability.

Patrick noted similar Japan and China pharmacopeia revisions already drove incremental growth and that new lab balances position MTD well for compliance demand.