Latest news with #JohnMarotta
Yahoo
09-05-2025
- Business
- Yahoo
AZTA Q1 Earnings Call: Revenue Tops Expectations, Margin Progress Amid Macro Headwinds
Life sciences company Azenta (NASDAQ:AZTA) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 5.2% year on year to $143.4 million. Its non-GAAP profit of $0.05 per share was $0.03 below analysts' consensus estimates. Is now the time to buy AZTA? Find out in our full research report (it's free). Revenue: $143.4 million vs analyst estimates of $140.6 million (5.2% year-on-year growth, 2% beat) Adjusted EPS: $0.05 vs analyst estimates of $0.07 ($0.03 miss) Adjusted EBITDA: $14.29 million vs analyst estimates of $12.79 million (10% margin, 11.7% beat) Operating Margin: -11.3%, up from -17.8% in the same quarter last year Free Cash Flow Margin: 6.1%, up from 0.9% in the same quarter last year Market Capitalization: $1.27 billion Azenta's first-quarter results reflected continued operational improvements and strategic adjustments in response to a shifting macroeconomic landscape. CEO John Marotta emphasized that growth was led by both the Sample Management Solutions and Multiomics segments, with particular strength in next-generation sequencing and consumables. The company pointed to ongoing cost discipline and productivity initiatives, such as its restructuring efforts and rollout of the Azenta Business System, as contributing factors to year-over-year margin improvement. Management acknowledged that external pressures—such as reduced U.S. academic research funding, tariffs, and geopolitical tensions—required active risk mitigation, including weekly executive reviews and direct customer engagement to understand market dynamics. Looking forward, Azenta reaffirmed its full-year guidance for organic revenue growth and margin expansion, despite the evolving environment. Marotta noted, 'We remain committed to our full-year 2025 guidance of organic revenue growth between 3% and 5%, and adjusted EBITDA margin expansion of 300 basis points.' The company highlighted opportunities to benefit from increased outsourcing by customers facing cost constraints and indicated that its strong balance sheet positions it to pursue targeted acquisitions. Management also plans to update investors more fully at an upcoming Investor Day later this year. Azenta's management attributed the company's performance to a combination of operational restructuring, strategic investment, and proactive customer engagement. The following were the most meaningful drivers of financial results and forward-looking guidance: Operational Streamlining: The company completed a global organizational redesign, reducing workforce complexity by nearly 10% and shifting resources toward R&D, sales, and product management. These changes are intended to boost productivity and customer focus. Segment Growth Patterns: Sample Management Solutions saw robust growth in consumables, instruments, and storage, while Multiomics benefited from strong next-generation sequencing demand. However, there was softness in Sanger sequencing and gene synthesis, particularly in North America, due to delayed projects and shifting customer priorities. Macro and Regulatory Response: Management identified and addressed headwinds from reduced U.S. National Institutes of Health (NIH) funding and new tariffs. Countermeasures were implemented to limit the impact on both revenue and margins, including rapid customer outreach and organizational pivots toward higher-growth segments. Digital and Sales Investments: The company increased investment in digital platforms, data analytics, and expanded sales force coverage to capture new business, especially in pharma and biotech. Regional go-to-market models were adopted to better respond to local market conditions, particularly in China and Europe. Leadership and Transformation: John Marotta temporarily took direct oversight of Sample Management Solutions following a leadership transition. Additionally, the company appointed Will Simmons as Vice President of the Azenta Business System to drive lean initiatives and continuous improvement through Kaizen workshops and daily management boot camps. Management's outlook centers on leveraging operational gains and digital investments to drive revenue growth and margin expansion, while remaining vigilant to external risks and market shifts. Increased Outsourcing Demand: The company expects continued outsourcing by academic and biopharma customers, driven by cost pressures and funding reductions, to benefit Azenta's storage and services platforms. M&A Pipeline and Cash Position: Azenta's substantial cash reserves and absence of debt enable it to pursue tuck-in acquisitions that could accelerate growth and enhance margins, particularly as more targets become available in a challenging market. Macro and Regulatory Uncertainties: Management remains focused on mitigating risks from tariffs, NIH funding changes, and geopolitical factors. The company's weekly executive reviews and customer feedback loops are designed to adapt strategy quickly if market conditions worsen. David Saxon (Needham): Asked about the cadence of growth for the remainder of the year and what risks might affect maintaining the low end of guidance. Management stated growth patterns should be similar to prior years, with countermeasures offsetting NIH funding headwinds. David Saxon (Needham): Inquired about the Sample Management Solutions leadership transition and whether an internal or external replacement is being considered. CEO John Marotta confirmed he is currently overseeing the segment and emphasized hands-on involvement to drive performance. Vijay Kumar (Evercore): Questioned the sustainability of recent free cash flow performance and margin outlook, especially regarding the impact of tariffs. CFO Lawrence Lin explained that improvements stem from working capital execution and that guidance already reflects expected margin impacts from tariffs. Paul Knight (KeyBanc): Sought clarity on the salesforce structure and long-term growth expectations for Sample Management Solutions. Marotta discussed regional alignment, investment in sales headcount, and indicated that there is further growth potential beyond current rates. Matthew Stanton (Jefferies): Asked about capital deployment priorities, including share repurchases versus M&A. Marotta stated that M&A opportunities are actionable, but all capital allocation levers are on the table, with an emphasis on disciplined returns. Going forward, the StockStory team will be watching (1) the pace of margin expansion as operational efficiencies and cost discipline take hold, (2) the impact of recently implemented countermeasures on mitigating macroeconomic headwinds—especially those related to tariffs and research funding, and (3) the company's ability to execute on M&A opportunities and digital platform investments without disrupting core performance. Updates from the planned Investor Day and ongoing customer feedback initiatives will also be important for assessing strategic progress. Azenta currently trades at a forward P/E ratio of 37.6×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
07-05-2025
- Business
- Yahoo
Azenta (NASDAQ:AZTA) Beats Q1 Sales Targets
Life sciences company Azenta (NASDAQ:AZTA) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 5.2% year on year to $143.4 million. Its non-GAAP profit of $0.07 per share was in line with analysts' consensus estimates. Is now the time to buy Azenta? Find out in our full research report. Azenta (AZTA) Q1 CY2025 Highlights: Revenue: $143.4 million vs analyst estimates of $140.6 million (5.2% year-on-year growth, 2% beat) Adjusted EPS: $0.07 vs analyst estimates of $0.07 (in line) Adjusted EBITDA: $14 million vs analyst estimates of $12.79 million (9.8% margin, 9.4% beat) Operating Margin: -11.3%, up from -17.8% in the same quarter last year Free Cash Flow Margin: 5.1%, up from 3.3% in the same quarter last year Market Capitalization: $1.16 billion "We delivered another quarter of strong performance in an evolving and uncertain macroeconomic environment. Our performance in the second quarter and first half of our fiscal year demonstrates the resilience of our portfolio and the dedication of our teams that focus on our customers with our clearly differentiated products and services," said John Marotta, President and CEO. Company Overview Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ:AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials. Sales Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Azenta struggled to consistently generate demand over the last five years as its sales dropped at a 6.8% annual rate. This was below our standards and is a sign of poor business quality. Azenta Quarterly Revenue Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Azenta's revenue over the last two years was flat, sugggesting its demand was weak but stabilized after its initial drop in sales. Azenta Year-On-Year Revenue Growth We can better understand the company's revenue dynamics by analyzing its most important segment, Sample Management. Over the last two years, Azenta's Sample Management revenue averaged 5.3% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company's performance. This quarter, Azenta reported year-on-year revenue growth of 5.2%, and its $143.4 million of revenue exceeded Wall Street's estimates by 2%. Looking ahead, sell-side analysts expect revenue to grow 4% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.
Associated Press
07-05-2025
- Business
- Associated Press
Azenta Reports Second Quarter Results for Fiscal 2025, Ended March 31, 2025
BURLINGTON, Mass., May 7, 2025 /PRNewswire/ -- Azenta, Inc. (Nasdaq: AZTA) today reported financial results for the second quarter ended March 31, 2025. The results of B Medical Systems are treated as discontinued operations and reflected in total diluted EPS, following the Company's announcement in the first fiscal quarter of 2025 of its intention to pursue a sale. Quarter Ended Dollars in millions, except per share data March 31, December 31, March 31, Change 2025 2024 2024 Prior Qtr Prior Yr. Revenue from Continuing Operations $ 143 $ 148 $ 136 (3) % 5 % Organic growth 6 % Sample Management Solutions $ 80 $ 81 $ 74 (2) % 8 % Multiomics $ 64 $ 66 $ 62 (4) % 2 % Diluted EPS Continuing Operations $ (0.40) $ (0.21) $ (0.29) (93) % (36) % Diluted EPS Total $ (0.88) $ (0.29) $ (2.47) NM 64 % Non-GAAP Diluted EPS Continuing Operations $ 0.05 $ 0.08 $ 0.06 (43) % (23) % Adjusted EBITDA - Continuing Operations $ 14 $ 13 $ 8 7 % 75 % Adjusted EBITDA Margin - Continuing Operations 10.0 % 9.0 % 6.0 % Management Comments 'We delivered another quarter of strong performance in an evolving and uncertain macroeconomic environment. Our performance in the second quarter and first half of our fiscal year demonstrates the resilience of our portfolio and the dedication of our teams that focus on our customers with our clearly differentiated products and services,' said John Marotta, President and CEO. 'We have a healthy balance sheet, and strong cash position, which provides optionality to continue investing in our long-term growth plans while maintaining our continued disciplined in capital deployment. We remain confident in our positioning and disciplined in how we operate the business while navigating these uncertain times.' Second Quarter Fiscal 2025 Results - Continuing Operations Revenue was $143 million, up 5% year over year. Organic revenue, which excludes the impact from foreign exchange, was up 6% year over year. The year-over-year revenue increase was attributable to higher Sample Management Solutions and Multiomics revenues. Sample Management Solutions revenue was $80 million, up 8% year over year. Organic revenue grew 8%, mainly driven by higher revenues in Sample Repository Solutions and Core Products, particularly in Consumables and Instruments, Sample Storage, Clinical Stores and Product Services. Multiomics revenue was $64 million, up 2% year over year. Organic revenue grew 3% year over year, primarily driven by growth in Next Generation Sequencing, partially offset by a year-over-year decline in Sanger Sequencing and Gene Synthesis. Summary of GAAP Earnings Results - Continuing Operations Operating loss was $16 million. Operating margin was (11.3%), up 650 basis points year over year. Gross margin was 45.9%, up 140 basis points year over year, mainly driven by higher revenue, favorable sales mix and operational efficiencies. Operating expenses were $82 million, down 3% year over year, primarily due to lower research and development expense and the impact of non-recurring intangible asset impairment charges recorded in the same period last year. These were partially offset by higher selling, general and administrative expenses, as well as increased restructuring and transformation charges. Other income included $4 million of net interest income versus $9.5 million in the prior year period. Diluted EPS from continuing operations was ($0.40) compared to ($0.29) in the second quarter of fiscal year 2024. Diluted EPS from discontinued operations was ($0.49). Total diluted EPS was ($0.88), compared to ($2.47) a year ago. Summary of Non-GAAP Earnings Results - Continuing Operations Adjusted operating loss was $0.6 million. Adjusted operating margin was (0.4%), an improvement of 280 basis points year over year. Adjusted gross margin was 47.5%, up 130 basis points compared to the second quarter of fiscal 2024, primarily driven by higher revenue, favorable sales mix and operating efficiencies. Adjusted operating expense in the quarter was $69 million, up 2% year over year, primarily driven by higher selling, general and administrative expenses, partially offset by lower research and development costs. Adjusted EBITDA was $14 million, and Adjusted EBITDA margin was 10.0%, an improvement of 400 basis points year over year. Non-GAAP Diluted EPS was $0.05, compared to $0.06 one year ago. Cash and Liquidity as of March 31, 2025 The Company ended the quarter with a total balance of cash, cash equivalents, restricted cash and marketable securities of $540 million, which includes $27 million of cash held in discontinued operations. Operating cash flow was $14 million in the quarter. Capital expenditures were $7 million, and free cash flow (cash flow from operations less capital expenditures) was $7 million. Guidance for Continuing Operations for Full Year Fiscal 2025 The Company is reiterating its revenue guidance for fiscal year 2025: Total organic revenue is expected to grow in the range of 3% to 5% relative to fiscal 2024. Adjusted EBITDA margin expansion is expected to be approximately 300 basis points relative to fiscal 2024. Azenta does not provide forward-looking guidance on a GAAP basis for the measures on which it provides forward-looking non-GAAP guidance as the Company is unable to provide a quantitative reconciliation of forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because of the inherent difficulty in accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliations that have not yet occurred, are dependent on various factors, are out of the company's control, or cannot be reasonably predicted. Such adjustments include, but are not limited to, transformation costs, restructuring charges, costs related to acquisitions and divestitures costs, governance-related matters, goodwill and intangible impairments, and other gains and charges that are not representative of the normal operations of the business. Conference Call and Webcast Azenta management will webcast its second quarter fiscal 2025 earnings conference call today at 8:30 a.m. Eastern Time. During the call, Company management will respond to questions concerning, but not limited to, the Company's financial performance, business conditions and industry outlook. Management's responses could contain information that has not been previously disclosed. The call will be broadcast live over the Internet and, together with presentation materials referenced on the call, will be hosted at the Investor Relations section of Azenta's website at and will be archived online on this website for convenient on-demand replay. Regulation G – Use of Non-GAAP financial Measures The Company supplements its GAAP financial measures with certain non-GAAP financial measures to provide investors a better perspective on the results of business operations, which the Company believes is more comparable to the similar analyses provided by its peers. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. These measures should always be considered in conjunction with appropriate GAAP measures. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included at the end of this release following the consolidated balance sheets and statements of operations. Certain amounts in the tables that supplement the consolidated financial statements may not sum due to rounding. All percentages are calculated using unrounded amounts. 'Safe Harbor Statement' under Section 21E of the Securities Exchange Act of 1934 Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Azenta's financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. Forward-looking statements include but are not limited to statements about our revenue and earnings expectations, our ability to realize margin improvement from cost reductions, and our ability to deliver financial success in the future and otherwise related to future operating or financial performance and opportunities. Factors that could cause results to differ from our expectations include the following: uncertainties in global political and economic conditions, including the imposition of additional tariffs on goods imported into the US, our ability to reduce costs effectively; the volatility of the life sciences markets the Company serves; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; price competition; disputes concerning intellectual property; and other factors and other risks, including those that we have described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K, Current Reports on Form 8-K and our Quarterly Reports on Form 10-Q. As a result, we can provide no assurance that our future results will not be materially different from those projected. Azenta expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstance on which any such statement is based. Azenta undertakes no obligation to update the information contained in this press release. About Azenta Life Sciences Azenta, Inc. (Nasdaq: AZTA) is a leading provider of life sciences solutions worldwide, enabling impactful breakthroughs and therapies to market faster. Azenta provides a full suite of reliable cold-chain sample management solutions and multiomics services across areas such as drug development, clinical research and advanced cell therapies for the industry's top pharmaceutical, biotech, academic and healthcare institutions globally. Our global team delivers and supports these products and services through our industry-leading brands, including GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, and Barkey. Azenta is headquartered in Burlington, Massachusetts, with operations in North America, Europe, and Asia. For more information, please visit AZENTA INVESTOR CONTACTS: Yvonne Perron Vice President, Financial Planning & Analysis and Investor Relations [email protected] Sherry Dinsmore [email protected] AZENTA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data) Three Months Ended Six Months Ended March 31, March 31, 2025 2024 2025 2024 Revenue Products $ 41,955 $ 38,772 $ 85,782 $ 82,479 Services 101,463 97,583 205,146 195,601 Total revenue 143,418 136,355 290,928 278,080 Cost of revenue Products 23,159 24,015 48,493 50,798 Services 54,373 51,676 107,878 104,875 Total cost of revenue 77,532 75,691 156,371 155,673 Gross profit 65,886 60,664 134,557 122,407 Operating expenses Research and development 6,869 7,733 13,249 15,046 Selling, general and administrative 71,588 69,058 144,801 138,947 Impairment of intangible assets — 4,658 — 4,658 Restructuring charges 3,580 3,428 4,011 4,214 Total operating expenses 82,037 84,877 162,061 162,865 Operating loss (16,151) (24,213) (27,504) (40,458) Other income Interest income, net 4,489 9,479 8,787 19,434 Other income (expense), net 1,157 (268) 2,360 250 Loss before income taxes (10,505) (15,002) (16,357) (20,774) Income tax expense 7,680 1,200 11,249 2,620 Loss from continuing operations (18,185) (16,202) (27,606) (23,394) Loss from discontinued operations, net of tax (22,271) (120,678) (26,190) (129,210) Net loss $ (40,456) $ (136,880) $ (53,796) $ (152,604) Basic net loss per share: Loss from continuing operations $ (0.40) $ (0.29) $ (0.60) $ (0.42) Loss from discontinued operations, net of tax (0.49) (2.18) (0.57) (2.30) Basic net loss per share $ (0.88) $ (2.47) $ (1.18) $ (2.72) Diluted net loss per share: Loss from continuing operations $ (0.40) $ (0.29) $ (0.60) $ (0.42) Loss from discontinued operations, net of tax (0.49) (2.18) (0.57) (2.30) Diluted net loss per share $ (0.88) $ (2.47) $ (1.18) $ (2.72) Weighted average shares used in computing net loss per share: Basic 45,732 55,440 45,658 56,078 Diluted 45,732 55,440 45,658 56,078 AZENTA, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except share and per share data) March 31, September 30, 2025 2024 Assets Current assets Cash and cash equivalents $ 253,642 $ 280,030 Short-term marketable securities 74,697 151,162 Accounts receivable, net of allowance for expected credit losses ($5,624 and $5,349, respectively) 149,490 156,273 Inventories 83,321 78,923 Short-term restricted cash 2,102 2,069 Prepaid expenses and other current assets 67,590 75,456 Current assets held for sale 79,754 88,894 Total current assets 710,596 832,807 Property, plant and equipment, net 151,716 155,622 Long-term marketable securities 176,781 49,454 Long-term deferred tax assets 731 837 Operating lease right-of-use assets 59,856 60,406 Goodwill 682,955 691,409 Intangible assets, net 111,202 125,042 Other assets 7,125 10,670 Noncurrent assets held for sale 140,963 173,794 Total assets $ 2,041,925 $ 2,100,041 Liabilities and stockholders' equity Current liabilities Accounts payable $ 39,155 $ 33,344 Deferred revenue 41,608 30,493 Accrued warranty and retrofit costs 5,237 5,213 Accrued compensation and benefits 26,039 27,785 Accrued customer deposits 26,318 22,324 Accrued income taxes payable 10,321 9,266 Accrued expenses and other current liabilities 43,102 46,364 Current liabilities held for sale 28,933 30,050 Total current liabilities 220,713 204,839 Long-term tax reserves 417 398 Long-term deferred tax liabilities 22,458 18,084 Long-term operating lease liabilities 53,696 56,683 Other long-term liabilities 10,062 8,874 Noncurrent liabilities held for sale 33,087 42,196 Total liabilities 340,433 331,074 Stockholders' equity Preferred stock, $0.01 par value - 1,000,000 shares authorized, no shares issued or outstanding — — Common stock, $0.01 par value - 125,000,000 shares authorized, 59,237,887 shares issued and 45,776,018 shares outstanding at March 31, 2025; 59,031,953 shares issued and 45,570,084 shares outstanding at September 30, 2024 593 590 Additional paid-in capital 520,961 505,958 Accumulated other comprehensive loss (42,149) (13,464) Treasury stock, at cost - 13,461,869 shares at March 31, 2025 and September 30, 2024 (200,956) (200,956) Retained earnings 1,423,043 1,476,839 Total stockholders' equity 1,701,492 1,768,967 Total liabilities and stockholders' equity $ 2,041,925 $ 2,100,041 AZENTA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands) Six Months Ended March 31, 2025 2024 Cash flows from operating activities Net loss $ (53,796) $ (152,604) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 32,053 44,214 Impairment of goodwill and intangible assets — 115,975 Loss on assets held for sale 24,187 — Inventory write-downs and other asset write-offs 4,326 7,499 Stock-based compensation 13,453 8,804 Amortization and accretion on marketable securities (983) (2,084) Deferred income taxes (1,885) (9,456) (Gain) loss on disposals of property, plant and equipment (7) 260 Changes in operating assets and liabilities: Accounts receivable 6,713 2,922 Inventories (6,030) 8,238 Accounts payable 1,864 936 Deferred revenue 12,042 3,379 Accrued warranty and retrofit costs 343 (714) Accrued compensation and tax withholdings (2,379) (7,831) Accrued restructuring costs 1,548 1,454 Other assets and liabilities 12,752 1,379 Net cash provided by operating activities 44,201 22,371 Cash flows from investing activities Purchases of property, plant and equipment (15,158) (19,542) Purchases of marketable securities (236,237) (345,447) Sales and maturities of marketable securities 184,636 190,504 Proceeds from other investment 2,130 — Net investment hedge settlement 3,043 1,476 Net cash used in investing activities (61,586) (173,009) Cash flows from financing activities Proceeds from issuance of common stock 1,553 1,678 Payments of finance leases (457) (386) Share repurchases — (186,834) Excise tax payment for settled share repurchases (11,376) — Net cash used in financing activities (10,280) (185,542) Effects of exchange rate changes on cash, cash equivalents and restricted cash (4,459) 16,255 Net decrease in cash, cash equivalents and restricted cash (32,124) (319,925) Cash, cash equivalents and restricted cash, beginning of period 320,990 684,045 Cash, cash equivalents and restricted cash, end of period $ 288,866 $ 364,120 Supplemental disclosures: Cash (received) / paid for income taxes, net (4,594) 5,008 Purchases of property, plant and equipment included in accounts payable and accrued expenses 5,773 2,270 Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets March 31, September 30, 2025 2024 Cash and cash equivalents of continuing operations $ 253,642 $ 280,030 Cash included in current assets held for sale 27,025 30,899 Short-term restricted cash 2,102 2,069 Long-term restricted cash included in other assets 6,097 7,992 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 288,866 $ 320,990 Notes on Non-GAAP Financial Measures - Continuing Operations Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A, non-recurring costs related to the Company's business transformation initiatives and share repurchases to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as impairment losses, gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure. Quarter Ended March 31, 2025 December 31, 2024 March 31, 2024 per diluted per diluted per diluted Amounts in thousands, except per share data $ share $ share $ share Net loss from continuing operations $ (18,185) $ (0.40) $ (9,421) $ (0.21) $ (16,202) $ (0.29) Adjustments: Amortization of completed technology 2,308 0.05 1,500 0.03 2,067 0.04 Amortization of other intangible assets 3,803 0.08 4,573 0.10 5,152 0.09 Transformation costs(1) 5,183 0.11 3,046 0.07 4,095 0.07 Restructuring charges 3,580 0.08 431 0.01 3,428 0.06 Impairment of intangible assets — — — — 4,658 0.08 Merger and acquisition costs and costs related to share repurchase(2) 688 0.02 1,570 0.03 426 0.01 Investment income(3) (2,130) (0.05) — — — — Tax adjustments(4) 6,900 0.15 408 0.01 1,645 0.03 Tax effect of adjustments (40) (0.00) 1,530 0.03 (1,959) (0.04) Non-GAAP adjusted net income from continuing operations $ 2,107 $ 0.05 $ 3,637 $ 0.08 $ 3,310 $ 0.06 Stock-based compensation, pre-tax 8,031 0.18 4,872 0.11 5,410 0.10 Tax rate 17 % — 15 % — 12 % — Stock-based compensation, net of tax 6,690 0.15 4,141 0.09 4,761 0.09 Non-GAAP adjusted net income excluding stock-based compensation - continuing operations $ 8,797 $ 0.19 $ 7,778 $ 0.17 $ 8,071 $ 0.15 Shares used in computing non-GAAP diluted net income per share — 45,732 — 45,626 — 55,440 Six Months Ended March 31, 2025 March 31, 2024 per diluted per diluted Amounts in thousands, except per share data $ share $ share Net loss from continuing operations $ (27,606) $ (0.60) $ (23,394) $ (0.42) Adjustments: Amortization of completed technology 3,808 0.08 3,923 0.07 Amortization of other intangible assets 8,376 0.18 10,523 0.19 Transformation costs(1) 8,229 0.18 4,136 0.07 Restructuring charges 4,011 0.09 4,214 0.08 Impairment of intangible assets — — 4,658 0.08 Merger and acquisition costs and costs related to share repurchase(2) 2,258 0.05 4,747 0.08 Investment income(3) (2,130) (0.05) — — Tax adjustments(4) 7,308 0.16 3,338 0.06 Tax effect of adjustments 1,490 0.03 (4,288) (0.08) Non-GAAP adjusted net income from continuing operations $ 5,744 $ 0.13 $ 7,857 $ 0.14 Stock-based compensation, pre-tax 12,904 0.28 8,411 0.15 Tax rate 17 % — 12 % — Stock-based compensation, net of tax 10,749 0.24 7,402 0.13 Non-GAAP adjusted net income excluding stock-based compensation - continuing operations $ 16,493 $ 0.36 $ 15,259 $ 0.27 Shares used in computing non-GAAP diluted net income per share — 45,658 — 56,078 (1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. (2) Includes expenses related to governance-related matters. (3) The Company received $2.1 million of cash proceeds from a cost method investment which had no cost basis during the three months ended March 31, 2025. The gain is non-recurring and non-operational in nature. (4) Tax adjustments during all periods include adjustments to tax benefits related to stock compensation. These adjustments are recognized in the period of vesting for US GAAP but included in the annual effective tax rate for Non-GAAP reporting. Tax adjustments for the three and six months ended March 31, 2025 include $6.6 million of tax expenses related to a one-time repatriation of historical earnings from China. Quarter Ended Six Months Ended March 31, December 31, March 31, March 31, March 31, Dollars in thousands 2025 2024 2024 2025 2024 GAAP net loss $ (40,456) $ (13,340) $ (136,880) $ (53,796) $ (152,604) Less: Loss from discontinued operations (22,271) (3,919) (120,678) (26,190) (129,210) GAAP net loss from continuing operations (18,185) (9,421) (16,202) (27,606) (23,394) Adjustments: Interest income, net (4,489) (4,298) (9,479) (8,787) (19,434) Income tax expense 7,680 3,569 1,200 11,249 2,620 Depreciation 7,818 7,474 7,395 15,292 14,815 Amortization of completed technology 2,308 1,500 2,067 3,808 3,923 Amortization of other intangible assets 3,803 4,573 5,152 8,376 10,523 Earnings before interest, taxes, depreciation and amortization - Continuing operations $ (1,065) $ 3,397 $ (9,867) $ 2,332 $ (10,947) Quarter Ended Six Months Ended March 31, December 31, March 31, March 31, March 31, Dollars in thousands 2025 2024 2024 2025 2024 Earnings before interest, taxes, depreciation and amortization - Continuing operations $ (1,065) $ 3,397 $ (9,867) $ 2,332 $ (10,947) Adjustments: Stock-based compensation 8,031 4,872 5,410 12,904 8,411 Restructuring charges 3,580 431 3,428 4,011 4,214 Impairment of intangible assets — — 4,658 — 4,658 Merger and acquisition costs and costs related to share repurchase(1) 688 1,570 426 2,258 4,747 Transformation costs(2) 5,183 3,046 4,095 8,229 4,136 Investment income(3) (2,130) — — (2,130) — Adjusted earnings before interest, taxes, depreciation and amortization - Continuing operations $ 14,287 $ 13,316 $ 8,150 $ 27,604 $ 15,219 (1) Includes expenses related to governance-related matters. (2) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. (3) The Company received $2.1 million of cash proceeds from a cost method investment which had no cost basis during the three months ended March 31, 2025. The gain is non-recurring and non-operational in nature. Quarter Ended Dollars in thousands March 31, 2025 December 31, 2024 March 31, 2024 GAAP gross profit $ 65,886 45.9 % $ 68,671 46.6 % $ 60,664 44.5 % Adjustments: Amortization of completed technology 2,308 1.6 % 1,500 1.0 % 2,067 1.5 % Transformation costs(1) — — % 52 0.0 % 359 0.3 % Other adjustments (9) (0.0) % 6 0.0 % — — % Non-GAAP adjusted gross profit $ 68,185 47.5 % $ 70,229 47.6 % $ 63,091 46.3 % Six Months Ended Dollars in thousands March 31, 2025 March 31, 2024 GAAP gross profit $ 134,557 46.3 % $ 122,407 44.0 % Adjustments: Amortization of completed technology 3,808 1.3 % 3,923 1.4 % Transformation costs(1) 52 0.0 % 359 0.1 % Non-GAAP adjusted gross profit $ 138,417 47.6 % $ 126,689 45.6 % (1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. Sample Management Solutions Multiomics Quarter Ended Quarter Ended March 31, December 31, March 31, March 31, December 31, March 31, Dollars in thousands 2025 2024 2024 2025 2024 2024 GAAP gross profit $ 38,251 47.9 % $ 38,114 46.9 % $ 32,943 44.4 % $ 27,635 43.5 % $ 30,557 46.1 % $ 27,721 44.6 % Adjustments: Amortization of completed technology 1,449 1.8 % 639 0.8 % 1,028 1.4 % 859 1.4 % 861 1.3 % 1,040 1.7 % Transformation costs(1) — — % 52 0.1 % 359 0.5 % — — % — — % — — % Other adjustment (9) (0.0) % 5 0.0 % — — % — — % 1 — % — — % Non-GAAP adjusted gross profit $ 39,691 49.7 % $ 38,810 47.8 % $ 34,330 46.3 % $ 28,494 44.9 % $ 31,419 47.4 % $ 28,761 46.2 % Segment Total Quarter Ended March 31, December 31, March 31, Dollars in thousands 2025 2024 2024 GAAP gross profit $ 65,886 45.9 % $ 68,671 46.6 % $ 60,664 44.5 % Adjustments: Amortization of completed technology 2,308 1.6 % 1,500 1.0 % 2,068 1.5 % Transformation costs(1) — — % 52 0.0 % 359 0.3 % Other adjustment (9) (0.0) % 6 0.0 % — — % Non-GAAP adjusted gross profit $ 68,185 47.5 % $ 70,229 47.6 % $ 63,091 46.3 % Sample Management Solutions Multiomics Six Months Ended Six Months Ended Dollars in thousands March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024 GAAP gross profit $ 76,366 47.4 % $ 66,215 43.2 % $ 58,191 44.8 % $ 56,192 45.0 % Adjustments: Amortization of completed technology 2,088 1.3 % 1,843 1.4 % 1,720 1.3 % 2,080 1.7 % Transformation costs(1) 52 0.0 % 359 0.3 % — — % — — % Non-GAAP adjusted gross profit $ 78,506 48.7 % $ 68,417 44.7 % $ 59,911 46.2 % $ 58,272 46.6 % Segment Total Six Months Ended Dollars in thousands March 31, 2025 March 31, 2024 GAAP gross profit $ 134,557 46.3 % $ 122,407 44.0 % Adjustments: Amortization of completed technology 3,808 1.3 % 3,923 1.4 % Transformation costs(1) 52 0.0 % 359 0.1 % Non-GAAP adjusted gross profit $ 138,417 47.6 % $ 126,689 45.6 % (1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. Sample Management Solutions Multiomics Quarter Ended Quarter Ended March 31, December 31, March 31, March 31, December 31, March 31, Dollars in thousands 2025 2024 2024 2025 2024 2024 GAAP operating income (loss) $ 567 $ 1,562 $ (2,894) $ (6,132) $ (3,387) $ (3,920) Adjustments: Amortization of completed technology 1,449 639 1,028 859 861 1,040 Amortization of other intangible assets — 13 52 — — — Transformation costs(1) 2,606 103 359 — — — Restructuring charges — — — (23) 23 — Other adjustments (9) — (2) — — — Non-GAAP adjusted operating income (loss) $ 4,613 $ 2,317 $ (1,457) $ (5,296) $ (2,503) $ (2,880) Total Segments Corporate Total Quarter Ended Quarter Ended Quarter Ended March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, Dollars in thousands 2025 2024 2024 2025 2024 2024 2025 2024 2024 GAAP operating income (loss) $ (5,565) $ (1,825) $ (6,814) $ (10,586) $ (9,528) $ (17,399) $ (16,151) $ (11,353) $ (24,213) Adjustments: Amortization of completed technology 2,308 1,500 2,068 — — (1) 2,308 1,500 2,067 Amortization of other intangible assets — 13 52 3,803 4,560 5,100 3,803 4,573 5,152 Transformation costs(1) 2,606 103 359 2,577 2,943 3,736 5,183 3,046 4,095 Restructuring charges (23) 23 — 3,603 408 3,428 3,580 431 3,428 Impairment of intangible assets — — — — — 4,658 — — 4,658 Merger and acquisition costs and costs related to share repurchase(2) — — — 688 1,570 426 688 1,570 426 Other adjustments (9) — (2) — 9 2 (9) 9 — Non-GAAP adjusted operating income (loss) $ (683) $ (186) $ (4,337) $ 85 $ (38) $ (50) $ (598) $ (224) $ (4,387) Sample Management Solutions Multiomics Six Months Ended Six Months Ended Dollars in thousands March 31, March 31, March 31, March 31, 2025 2024 2025 2024 GAAP operating income (loss) $ 2,129 $ (4,380) $ (9,519) $ (8,223) Adjustments: Amortization of completed technology 2,088 1,843 1,720 2,080 Amortization of other intangible assets — 103 — — Transformation costs(1) 2,709 359 — — Other adjustments 4 2 3 (1) Non-GAAP adjusted operating income (loss) $ 6,930 $ (2,073) $ (7,796) $ (6,144) Total Segments Corporate Total Six Months Ended Six Months Ended Six Months Ended Dollars in thousands March 31, March 31, March 31, March 31, March 31, March 31, 2024 2024 2025 2024 2025 2024 GAAP operating loss $ (7,390) $ (12,603) $ (20,114) $ (27,855) $ (27,504) $ (40,458) Adjustments: Amortization of completed technology 3,808 3,923 — — 3,808 3,923 Amortization of other intangible assets — 103 8,376 10,420 8,376 10,523 Transformation costs(1) 2,709 359 5,520 3,777 8,229 4,136 Restructuring charges — — 4,011 4,214 4,011 4,214 Impairment of intangible assets — — — 4,658 — 4,658 Merger and acquisition costs and costs related to share repurchase(2) — — 2,258 4,747 2,258 4,747 Other adjustments 7 1 (7) (2) — (1) Non-GAAP adjusted operating income (loss) $ (866) $ (8,217) $ 44 $ (41) $ (822) $ (8,258) (1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 transformation plan and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. (2) Includes expenses related to governance-related matters. Sample Management Solutions Multiomics Azenta Total Quarter Ended Quarter Ended Quarter Ended March 31, March 31, March 31, March 31, March 31, March 31, Dollars in millions 2025 2024 Change 2025 2024 Change 2025 2024 Change Revenue $ 80 $ 74 8 % $ 64 $ 62 2 % $ 143 $ 136 5 % Currency exchange rates 0 — 1 % 1 — 1 % 1 — 1 % Organic revenue $ 80 $ 74 8 % $ 64 $ 62 3 % $ 144 $ 136 6 % Sample Management Solutions Multiomics Azenta Total Six Months Ended Six Months Ended Six Months Ended March 31, March 31, March 31, March 31, March 31, March 31, Dollars in millions 2025 2024 Change 2025 2024 Change 2025 2024 Change Revenue $ 161 $ 153 5 % $ 130 $ 125 4 % $291 $ 278 5 % Currency exchange rates 0 — 0 % 1 — 0 % 1 — 0 % Organic revenue $ 161 $ 153 5 % $ 130 $ 125 4 % $ 292 $278 5 % View original content to download multimedia: SOURCE Azenta
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06-02-2025
- Business
- Yahoo
Q1 2025 Azenta Inc Earnings Call
Yvonne Perron; Vice President, Financial Planning & Analysis, and Investor Relations; Azenta Inc John Marotta; President and Chief Executive Officer; Azenta Inc Lawrence Lin; Executive Vice President and Chief Financial Officer; Azenta Inc Jacob Johnson; Analyst; Stephens Inc. David Saxon; Analyst; Needham & Company Vijay Kumar; Analyst; Evercore ISI Matt Stanton; Analyst; Jefferies LLC Paul Knight; Analyst; KeyBanc Capital Markets Inc. Andrew Cooper; Analyst; Raymond James Yvonne Perron Thank you, operator, and good afternoon to everyone on the line today. We would like to welcome you to our earnings conference call for the first quarter of fiscal year 2025. Our first quarter earnings press release was issued before the open of the market today and is available on our Investor Relations website located at in addition to the supplementary PowerPoint slides that will be used today during the prepared remarks. Effective this quarter, the first fiscal quarter of 2025, the results of the medical systems are treated as discontinued operations. I would like to remind everyone that during the course of the call, we will be making a number of forward-looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements. I would refer you to the section of our earnings release titled Safe Harbor Statement, the safe harbor slide on the aforementioned PowerPoint presentation on our website, and on our various filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the Azenta business. Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Marotta, and our Chief Financial Officer, Lawrence Lin. We will open the call with remarks from John, and then Lawrence will provide a detailed look into our financial results and our outlook for fiscal year 2025. We will then take your questions at the end of the prepared remarks. And with that, I would like to turn the call over to our CEO, John Marotta. John Marotta Thank you, Yvonne. Good morning, everyone, and thank you for joining us today. We're happy to be with you in the morning rather than later in the day. And going forward, we will follow the same timing with the earnings release in the call before the market opens. This gives us more time for same-day interactions with our analysts, investors, and other interested stakeholders. Before getting into the numbers, I want to give you an update on how I've spent my time the first few months at Azenta. Since September, I've spent most of my time getting to know our business in the best way I know how. On the ground with our customers and our associates at our manufacturing sites and our lab facilities around the globe, including the UK, China and the US. These meetings with our teams have been invaluable. They have given me a chance to see firsthand the incredible work being done and hear from those who drive our success every day. These visits have deepened my understanding of our operations, our opportunities, and most importantly, our people. I'm even more excited about what lies ahead. Alongside our highly talented teams, we've been making progress towards our accelerated goal of delivering profitable growth and long-term shareholder value. Our work is well underway to further enhance our competitively advantaged portfolio, differentiated products and services, and strong market positioning. The Board aided capabilities of the newly created value creation committee have been working alongside me and my team to focus on and oversee our strategic initiatives. Portfolio optimization, operational excellence, and value-enhancing capital allocation. Our sample management solutions business is unique. I've had the opportunity to observe firsthand the highly differentiated products and services we deliver to our customers. To that end, we are excited that the UK bio center selected Azenta to expand its sample storage capabilities with the BioArc Ultra. The BioArc Ultra will deliver significant operational efficiency and reduce footprint through high-density automated storage. The 16 million sample storage system includes our sample intelligence software solution with digitized library and warehouse workflows and the picking capability of up to 9 million picks per year. This is a clear testament to our market leadership position and reflects the trust and confidence that customers place in our capabilities and track record of delivering exceptional value. In our Multi-Omics GENEWIZ business, I have clearly seen how much our customers consistently prioritize our high-quality offerings and trust the research expertise and consultative approach that our scientists provide to genomics analysis and scientific research. Across Azenta, we have a talented team that is focused on enabling breakthroughs faster for our customers. Now I'll shift my focus to the first quarter 2025 results, our full year outlook, and then dive into key updates on the focus areas that I shared with you during the last earnings call. As a reminder, during the fourth quarter of 2024 earnings call, we announced our decision to sell B Medical Systems. Effective this quarter, B Medical is reported and discontinues operations, and I will not be discussing the business performance in my remarks. I'm pleased to share that fiscal 2025 was off to a good start with positive momentum under our unique and differentiated offerings. On a year-over-year basis, organic revenue grew 4% and EBITDA margin expanded by 400 basis points. In Multiomics next-gen sequencing, gene synthesis and clinical services were strong. In sample management solutions, we saw growth in our consumables and instruments, clinical bio stores, cryogenics as well as sample storage. We remain cautiously optimistic about the gradual market recovery. We are confident in our outlook and are reiterating our full year 2025 guidance of organic revenue growth between 3% to 5% and adjusted EBITDA margin expansion of 300 basis points. Lawrence will go into more detail in our quarterly financial performance. At the last earnings call, I shared with you that we're focusing on several key areas. The first is portfolio optimization, the second is operational excellence; and the third is value-enhancing capital allocation. Each quarter, I will update you on the progress we are making in each area. In portfolio optimization, the medical sale process is underway, which will help simplify our portfolio and will allow us to focus on driving revenue growth and profitability in our remaining businesses. We've engaged external advisers but are still in the initial stages. We will update shareholders as this process develops, but won't be commenting further at this time. More broadly, our priority will always be to strategically review the portfolio on an ongoing basis and to ensure we are maximizing our full potential in creating value. We have made some early and positive strides in operational excellence. The efforts we are making will build the foundation for long-term value creation, reducing complexity, and simplifying what we do and how we work each day. I am confident that by focusing on operational excellence and transformation, we will deliver best-in-class growth. Specifically, we're starting on our business system and operating model. We brought together our top leaders for a two-day training on the business system and the implementation plan. The level of engagement, enthusiasm for the teams to learn a new way of doing business was encouraging. They understand the need for change, they demonstrated interesting curiosity and lean tools. We are being our leaders with the skills and the knowledge through participation in [Kaizen] events to become experts in the field, empowering them not to only excel individually but also to lead and mentor others and amplify their impact deep into the organization. We're working on continuous improvement and simplification is the way we work. A change in mindset will be modeled at the top and methodically cascaded throughout the organization. It will be challenging and sometimes bumpy. The business system model will help drive our performance and further unify our culture. I'm excited about the road ahead. To measure our performance, we have carefully selected our key performance indicator, which we call core value drivers or CVDs. These align our daily management and operating decisions with our strategy. These CVDs are broadly focused on revenue growth, profitability, customer-facing metrics for quality and on-time delivery, employee metrics on internal advancement and voluntary turnover, as well as working capital and cash management. We are starting to better utilize our information systems to provide more timely, visibility, and insights across the organization. Recently, our team quickly developed and rolled out a weekly automated sales report, which provides a visual dashboard to help focus deeply on running the business, to see where we're on track in red and where we are on track in green. This new tool will allow us to prioritize and focus on addressing issues, identify countermeasures where necessary, and save valuable time and resources and enable better, more consistent performance. This example illustrates the low-hanging fruit available to us. We have many opportunities like this that are highly achievable and can have rapid and meaningful impact on our performance. As an organization, we will be programmatic in how we spend our time. We are prioritizing customer on-time delivery and products and services quality, which will lead to gross margin improvements, indirect savings, inventory reduction, and importantly, improved customer experience and satisfaction. This will have immediate positive impacts on our profitability and how our customers see us, and organic growth acceleration will follow with a lag. In line with our priorities, we have scheduled three kaizens for the fiscal second quarter, two are in sample repository solutions, one focus on sample management workflow automation that will efficiency and scalability, and the other on simplification of order-to-cash process to shorten cycle time and improve process quality. The third Multiomics for improved payment capabilities to shorten the cycle from study inquiry to scientific results. These Kaizens will identify areas that will identify the need for more Kaizen starting the flywheel of continuous improvement. In January, we executed a separate restructuring plan to rightsize our G&A cost structure and reposition our resources. Simplification of corporate and operating company functions is critical to provide clarity and accountability while empowering our employees who are closest to the customer to make the right conversations. We have restructured head count and pushed R&D, quality, sales operations, finance, human resource and other functions into the two operating companies. Each operating company will undergo an organizational transformation in the coming weeks to ensure an optimal go-to-market and commercial structure. We are freeing up capital that will be redirected to the highest impact growth investments in sales, marketing, and R&D. There is a sense of excitement and optimism in the organization towards the changes and increased clarity around decision-making. To help implement standard procurement processes, we are in the process of standing up in new global procurement organization. This group will drive direct material and indirect cost savings, optimize inventory levels, streamline our supply chain, and optimize our preferred supplier list. More to come on this. Finally, on the capital allocation, the Value Creation Committee of the Board was created in November. I'm working closely with the committee to establish the monthly framework, where we will review progress on our financial performance, working capital initiatives, margin improvement as well as evaluate potential investments. We will prioritize investment opportunities across the four levers, which are gross margin productivity, organic growth offerings, inorganic growth through strategic tuck-in and M&A, and repurchasing our stock. We will make our capital allocation decisions through a standard and robust returns-based process. As I mentioned before, we will compete for resources internally to unlock long-term shareholder value. I'm excited about Azenta's potential and confident in our ability to drive long-term sustainable value to our customers, our employees, and our shareholders. I will keep you updated on our progress. With that, I'm pleased to turn the call over to Lawrence. Thank you. Lawrence Lin Thank you, John. Good morning, everyone. Thank you for joining us today. I'm honored to be here with you for my first earnings call as the Chief Financial Officer of Azenta. Before we discuss our financial performance first quarter of fiscal 2025, we want to take a moment to acknowledge the trust that you placed in me to help lead this great company. Additionally, I would like to recognize the dedication of our entire Azenta team who demonstrate every day their commitment to delivering value for our customers, fellow employees, and shareholders. I want to share my initial reflections following my 90 days on the job. These past three months have been insightful and energizing as I work to immerse myself in learning the business, understanding the dynamics of our operations, and engaging with the talented individuals across the organization. I couldn't be more excited to be here. Azenta has a history of delivering value and innovation, and it's clear that the team is deeply committed to our purpose of enabling breakthroughs faster. I've been impressed by the resilience and adaptability demonstrated across the organization particularly in navigating challenging market conditions. At the same time, after spending time with the team, it's clear to me there are numerous opportunities to enhance our financial performance. Streamlining our operations to work simpler and are deploying technology more fully to automate and build robust capabilities will enable improved cash flow generation and accelerate profitability. These initiatives will not only help us address immediate priorities and challenges, but also sets the scalable foundation for sustainable, long-term value creation. As a reminder, the results we are referring to today, unless otherwise noted, excludes B Medical Systems, which is now reported under discontinued operations. I am pleased to report all continued organic growth in our combined sample management solutions and multiomic businesses. The strength of our portfolio and our ability to better address the needs of our customers in an ever-evolving and uncertain and still difficult market environment. In addition, our continued focus on cost optimization and driving profitable growth is positioning us to improve margins to deliver strong and consistent results for our shareholders. To supplement my remarks today, I will refer to the slide deck available on our website. turning to slide 3 for some highlights. First quarter revenue was $148 million, up 4% year-over-year on an as reported and on an organic basis. Both the SMS and multiomic segments performed well in the quarter, given the continued challenging market environment. With growth in next-generation sequencing, gene synthesis, consumables and instruments, store systems as well as sample store. Non-GAAP EPS for the quarter was $0.08. Adjusted EBITDA margin was 9% in the quarter. This represents a margin expansion of about 400 basis points versus last year demonstrating the impact of our transformation initiatives as well as our strong focus on improved operational efficiencies. Our results were impacted by certain onetime costs, including those related to executive compensation in connection with the recent restructuring of our management team. Free cash flow $2 million for the quarter, driven primarily by lower accounts receivables and increased billings related to our source projects. We ended the quarter in a strong position with $530 million in cash, cash equivalents and marketable securities which includes $27 million of cash held in discontinued operations. Now let's turn to Slide 4 to take a deeper look at our results in the quarter. Total revenue was $148 million, representing a growth of 4% within organic. In the first quarter, non-GAAP gross margin was 47.6%, up 270 basis points year-over-year. The improvement is largely a result of higher revenue, favorable sales mix, operational efficiencies, and certain nonrecurring items already in the same period last year. Adjusted EBITDA margin in the quarter was 9%, up 400 basis points year-over-year. Again, non-GAAP EPS was $0.08 per share. With that, let's turn to slide 5 for a review of our segment results, starting with sample management solutions, or SMS. SMS revenue was $81 million, up 3% year-over-year reported and up 2% organic, driven by growth in sample repository solutions and core products. Consumables and instruments clinical and cryogenic store systems and sample storage were the drivers of growth which was partially offset by year-over-year decline in large automated stores due to timing. SMS first quarter non-GAAP gross margin was 47.8%, up 460 basis points year-over-year mostly driven by operational efficiencies, sales mix, and the impact of certain non-recurring items recorded in the same period last year. Turning next to the multiomic segment. Multiomics delivered revenue of $66 million with a growth of 6% on both and as reported and organic basis, demonstrating our strong execution in the face of several market headwinds. Next-generation sequencing grew 11% year-over-year. This was the third quarter of price stabilization and double-digit volume growth. Key large deals also contributed to the significant year-over-year gains, specifically in the North America and Europe regions. China delivered organic growth of 7%, once again outperforming a market with macro challenges. Gene synthesis grew 5% compared to last year with great execution by our teams in China in what continues to be a tough market environment. [Sanger] sequencing revenue was down 11% year-over-year as we continue to see the impacts of the shift of sequencing technology. This pressure was offset by growth in Plasmid-EZ, our ONT product, which continues to be strong and gaining ground. Multiomics first quarter non-GAAP gross margin was 47.4%, up 30 basis year-over-year, driven largely by the growth in NGS volume as well as labor and material productivity gains that helped to offset price headwinds. Let's turn to slide 6 for a review of the balance sheet. We ended the quarter with $530 million in cash, cash equivalents, and marketable securities. Excluding discontinued operations, the balance was $503 million. We had no debt outstanding. Capital expenditures for the quarter were $8 million, of which $7 million was investment for growth and scale in our sample management solution and Multiomic businesses. Turning to guidance on slide 8. As you saw in our press release, we are reiterating our guidance for 2025 as we expect organic revenue growth of 3% to 5% for the full year, with multiomics to grow low single digit and sample management solutions to grow mid-single digits. We are reaffirming our commitment to 300 basis points of adjusted EBITDA margin expansion year-over-year. In closing, my priority as CFO is to ensure that we deliver value to our customers, employees, and shareholders. This includes maintaining transparency, enhancing shareholder returns, and aligning our financial strategies with our long-term vision. I look forward to engaging with you regularly and sharing updates on our progress. This concludes our prepared remarks. Now I'll turn the call over to the operator for questions. Operator (Operator Instructions) Jacob Johnson, Stephens. Jacob Johnson Hey, good morning, John and Lawrence. Thanks for the time. Maybe a couple of questions on recent headlines. First, John, you mentioned the UK bio center, BioArc win. Is there any way to frame up the size of that opportunity, maybe the timing of the revenues and whether this is something that was contemplated in guidance? And then I guess along the same lines, I'm just kind of curious, how many other these kind of BioArc Ultra wins could be out there? John Marotta Good question. Jacob, thanks for your continued support here. Couple things on our BioArc Ultra, as you know, that's our ultra-low high-throughput warehouse management system, sample management system, and biological management system. So it's got a lot of versatility on these end markets. From our perspective, that was in our guidance, and so that was contemplated there. We're really excited about the implementation of that. As you know, it's a POC business. Highly customized and multimillions of dollars. We have -- just for some context here, I mean, we have seven quad banks in this facility already. So it's a continuation of our partnership with bio center, an important customer for us going forward. Lawrence, do you want to talk about phasing of this? Lawrence Lin Yeah, I think, as John said, the accounting process a percentage of completion, Jacob, I'm sure you're aware, we expect the UK bio center to be operational early in 2026. Jacob Johnson Got it. And then yesterday, there was a headline about Illumina being added to the unreliable entity list in China. I know it's probably early, but we're getting questions on it. So can you talk about any impacts that you could see from that headline to your NGS business in China or maybe another is there any way to frame up how large the NGS business in China is for you all? John Marotta So the team has done a nice job of anticipating this for quite some time in China. We do not own any Illumina products in [NovaSeq] specifically in China. We do have a few Illumina products internally. Most of our NGS business, we actually partner with BGI in China specifically. We run two platforms in particular on NGS. And that is the Illumina platform and the MGI platform from BGI. As you know, BGI was put on the list in biosecure and a Pentagon -- a list at the Pentagon as well. Those -- our partnership is only in China with that. And so we have the ability to move customers over to the MGI platform, if needed. But again, we've been -- the team in China has been anticipating this for quite some time. The risk is low. I'll let Lawrence quantify that in general, but we've been anticipating this for quite some time. Lawrence Lin Yeah, Jacob, as you mentioned, really, when we look at the revenue for NGS particularly in the region of China, it's roughly about 7%-ish to 10% of Multiomics. So again, what John mentioned is we see no material risk due to the Illumina issue. Jacob Johnson Got it, that's super helpful I'll leave it there. Thanks for taking the questions. John Marotta Thank you, Jacob. Appreciate it. Operator David Saxon, Needham. David Saxon Great, good morning. John and Lawrence, congrats on the quarter. So just a few for me on Multiomics, maybe I'll start. So the guide stayed at low single digits. You did send organic this quarter. It sounds like there were some orders that came in, in this quarter. But just given that guidance implies the deceleration in the back half of the year or the balance, I should say, what's driving that? I think NGS comps get tougher, but like anything you're seeing in Sanger or Synthesis that would drive that deceleration. John Marotta Thanks, David, appreciate your comments here on the morning as well. It's good to be speaking with you in the morning. Let's talk about, first, the way we're thinking about this. I mean we're looking at the full year. We're not looking at the quarters right now. Second thing is we are in the middle of a transformation. So we're holding that guide right now. We are going to be coming back to you in the summer with an Investor Day and kind of view of our LRP in general. I want to hand this over to Lawrence to talk to you about phasing and what this looks like quarter-on-quarter. Lawrence Lin Yeah, David, nice to speak with you. Look, as John alluded to, it's mainly a timing issue here. We had a really solid quarter to your point, right? NGS was up 11%. So we're really pleased about that. As John noted, I think as we get closer to Investor Day, more to come here now. But right now, we're just kind of -- we've got a lot of change that's happening, and we're looking at the phrasing as well. David Saxon Okay, great, Lawrence, maybe we'll stay with you on margins, just really strong improvement. It does seem like the guide implies EBITDA kind of margins kind of plateau in the back half. I don't know if it's just how you're thinking about the year versus the quarter early, but any comments around like how much of that is conservatism versus any timing from the Ascend '26 initiatives? And then just on B Medical, I don't know if this would be for John or Lawrence. I think last quarter, you talked about potentially closing that in the fiscal first half. It sounds like this morning, you're talking about still in the initial stages. So is the message essentially that it's going to probably take longer than that? Thanks so much. Lawrence Lin Yeah, David, I'll take the margin one, and maybe I'll pass it to John on as on the B Medical. First and foremost, just kind of ground ourselves a bit. EBITDA for the first quarter was 9%. I did mention during kind of the prepared remarks, that we had some onetime events. Excluding some of those onetime events, we're north of 10% EBITDA. So it gives us a bit of a pathway towards kind of what we're looking at 300 basis points. As we step through the balance of the year, John noted that we did it of the corporate function. That will also -- is within our guidance and it is a couple of million dollars on the balance of the year. We've got some more to come, but we feel pretty confident right now in our guide based on some of the actions we're taking this quarter. But more importantly, what we've got in queue for the second and third. John Marotta David, a few other comments here. So on restructuring, about 17% of corporate, we restructured. We're going to continue that transformation in the operating companies and making sure we've got the right structure to go forward. So the way we're framing this is it's around structure, process and then our people is the framing of how we're setting the company up. In regards to Ascend 2026, that put us on the right path. This is just going to be a way of life in how we run our business going forward. So we're going to -- I mean we want to keep G&A at a very modest level in this company and then accelerate around sales and marketing and R&D in these growth investments. Right now, we're trying to -- we're getting our resting heart rate in the organization to figure out what steady state looks like. We're really pleased with the teams have been making. Restructuring at corporate was very well done. Hands off to our HR team and the rest of the leaders that executed that. And our operating companies are entering their transformational phase as well. As it pertains to the one-timers that Lawrence discussed, I mean we're pleased about our trajectory financially on the bottom line right now. I mean those one-timers, if you back those out, we're pretty confident in where we're moving the bottom line right now and more in control there. In regards to B Medical, what I can tell you is our value creation committee, Board members are involved in that process. We're going to help accelerate that. We're very pleased about maximizing -- well, let me say it differently. We're focused heavily on maximizing the value of that sale, and we're pleased that the committee members are involved in that specifically. I think that's going to really help us partner with our outside advisers to maximize value. Listen, the funnel in regards to inbound and in our outreach, I'm pleasantly surprised at how many party involved and interested in this business. So that's the update on that one, David. David Saxon Okay, super helpful. Thanks, guys. Operator Vijay Kumar, Evercore ISI. Vijay Kumar Hey, guys, good morning. Thank you for taking my question. A couple of maybe macro-related questions on recent noise around tariffs. Can you talk about your exposure to China, Mexico, Canada, and any risk related to tariffs? John Marotta Sure. Let me talk about -- just give you the high-level context and then Lawrence will jump into the they'll dive into the details of our -- if there's a materiality there or not. As it pertains to Mexico and Canada, we have minimal risk. Again, our businesses in multiomics specifically are set up regionally. It's a local-for-local model. We do have some global overlap around our synthesis business. In regards to SMS in that business unaffected. In China specifically, as you know, there's a 6.5% tariff and what is contemplated right now at 10%. I'll let Lawrence get into particulars of that in terms of materiality or not. Lawrence Lin Yeah, Vijay, good to speak with you. In terms of China tariff, looking at kind of the step up to 10%, we believe the impact of Azenta is really immaterial. Potential incremental, probably $1 million maybe $2 million at most that will be at the upper end. Really, as you think about this is -- we kind of known this was going to be happening. So we've really factored a lot of this into our guide. As you know, this is a pretty fluid situation. So we're kind of monitoring the developments here. And if the situation evolves adversely and the underlying understanding changes, we will communicate that to you. But right now, we feel pretty good that it's a very immaterial amount for us. Vijay Kumar Understood. And then maybe one on the guidance. In SMS, it looks like it was off a slow start. I know the guidance mid-singles for sample management solutions. I think stores, you said low singles. So maybe talk about your orders, backlog. Was this just a timing element or some cautiousness from customers, perhaps which we're seeing here in the numbers? Lawrence Lin Yeah, Vijay, you're absolutely right. It's really around timing. Our large stores in the first quarter was down 13%. However, we have a pretty robust pipeline and backlog and continues to build for '25, '26. Just to provide a little bit of context around that, we've got a good line of sight for the next 12 months here. And we've got 75% of the 2025 revenue secured. So feel pretty good. Sometimes these capital projects do kind of move on us quarter-to-quarter, as you saw similarly to what the UK came up, but we feel good. And on top of that, as you look at C&I, we continue to see strong demand up in the quarter about 9%, particularly, in instruments. So again, mainly timing here, Vijay. John Marotta Vijay, similar color here. So we were at [SOAS] last week. As you know, that's the biggest trade show in that segment of the market. We had a lot of inbound, over 300-some leads. We're pleased with the activity during that trade show. I think the other thing that we've learned, and we spoke with a lot of customers last week, I mean, personally, we spoke a lot of customers in. There's some uncertainty in these end markets right now illustration. But we think that it's more of a wait-and-see instead of canceling projects. Our sales leaders and our sales reps feel pretty confident with the -- with where we are in these programs, they're not seeing cancellations at all or delays. It's more of a wait-and-see approach we're seeing right now in these just first couple of months, but we feel pretty confident in our back half in general. Vijay Kumar Understood. And maybe if I could squeeze one more in. Gross margins, nice share. It looks like there was some timing moment in stock comp here in Q1 that's depressed operating margins. When you think about the back half margin ramp, should gross margin sustain at these levels and visibility into the back half operating margin ramp? Lawrence Lin Yes, Vijay, honestly, in terms of gross margin, really pleased with the results in Q1. We saw a similar profile last quarter, but a couple positive things, right? We saw better margins within stores and the SMS business. multiomics, we saw stabilization and NGS price, coupled with favorable sales mix and really operational efficiencies, right. And in general, we feel good about the gross margin trajectory here and the investment opportunity. Operator Matt Stanton, Jefferies. John Marotta Matt, how are you? Matt Stanton Good, how are you doing? Thanks for taking the question. Maybe sticking with the theme kind of recent noisy headlines. Could you just remind us what the pro forma mixes within your academic and government exposure and then within what's directly tied to NIH? And any kind of impact you've seen, I know it's early days in the last few weeks, but then kind of a choppy backdrop from a headline perspective within the administration, anything you're seeing kind of in terms of activity levels at customers or things being pushed out? And then I assume that's kind of contemplated within the hour bar or the 3 to 5 guide. But if you just confirm that as well, thanks. John Marotta It is contemplated in the guide. From an end market perspective, in general, so about 45% pharma biotech, about 16% academic, about 15% medical government, and we've got about 15% in emerging markets. The way I would look at this, Matt is, we've seen some pausing or delays in some projects that are government funded. We believe those are going to come back online. Once some decisions are made either on the NIH front or outside of funding government funding of some of these projects. So again, we're able to respond to whichever way the markets are going based on the fact that there are always projects and programs going on. We toggle our call points based on that. I mean the teams can move over, and move over to more pharma and biotech in the event there is a pullback, slight pullback, on research in other areas. So we're comfortable. But we're also monitoring the uncertainty out there in general in these markets. So that's kind of our view of it right now. Matt Stanton Okay, thanks, that's helpful. And then maybe shifting gears a little bit. Can you just talk about what you saw in the cell and gene therapy side in the first quarter? I think the last few quarters have started to see, some improvement, funding, still maybe a bit challenged, but there's some later stage programs ramping up. So just love to see kind of what you're hearing and seeing from your customers on the selling gene therapy side of things? Thanks. John Marotta Yeah, you bet. Last year, we saw our auto cryo business increase about 67%. We have delivered about 11 units this quarter against that, so we're seeing good progress in selling gene therapy. I mean that that product is specifically sits under that value stream and selling gene therapy as well as our barky products. We're pretty bullish on that end market, and we're seeing good traction there as well in it this year. And that trend is continuing. Matt Stanton Super, thank you. Operator Paul Knight, Keybank. Paul Knight Thank you, appreciate it. First question I have would be the company has been even before your tenure buying stock, we really didn't know what the margin target was. And I don't understand why there was such an aggressive share repurchase program when there was no clear metrics out there on what business performance should be. So the question really is, as you are now on Board, is there still a share buyback program or will we wait to see what the business can return first? And then is there a likelihood that we could go back to what I think was a consolidator of the industry or are you still out on that? So two questions there. John Marotta Two good questions, Paul. We were at -- last year, we were with investing in our Q1, and this topic came up quite frequently. And our capital allocation framework is alive and well in the organization right now. And first, it's around gross margin improvement. And we're really focused around that specifically. The second is around growth initiatives in R&D and expanding our business lines and geographies. Third is around M&A tuck-in, and last is share buyback. And I wanted to share that framework again really focused around that. We're focused around that in the value creation committee. And so when I say share buybacks are last, everything competes against that fourth lever specifically. Right now, as we sit here today, we think there's much more opportunity in levers one through three. We see those opportunities. We're investing in those now. There are strict ROIC metrics around that, and we're head down and focused on that specifically. I think we're excited to get us into the steady-state model where we can come back with a clear eye view on what is the algorithm of this business, what does it look like from a returns perspective. There's still work to be done there, Paul. But in general, that's the way we're thinking about it. And once we have that, then we can come back with a better answer around that. I don't view -- I've been pretty candid around this. I don't think that those shareholders hire us to do share buybacks. And I think the opportunity we have in front of us, specifically around SMS and SRS and some other business lines in Multiomics really excites us around our investment opportunities. But also at a certain point around M&A and when we get us into a good place to start to do that type of work. Paul Knight Great and then last question, I guess it's been asked about, but you know it seems like this post COVID era of overcapacity and ultra cold temperature, and even cold storage in general it seems like you know we're starting to get past that glut of material and capacity that did emerge during COVID. So are we kind of in one step past it now or what do you -- what's your feeling on you know where we are with this post COVID? John Marotta Yeah, we have some experience in the ULT market from my prior life. But thankfully, we've ever -- I understand how the investment community lumps us into that. And I don't think that's the case. The more I get into the business, the more I'm kind of scratching my head wondering why we we're being kind of lumped into that end market. And here's -- and let me be more helpful here, Paul. So if we think about our stores specifically, those units are basically asset management units or warehouse management units for a pharma and biotech, specifically around compound management, specifically around sample management is around antibodies and using these as warehouse management systems and pick systems for shipping of these products. Those are three different applications that a ULT just -- I mean you may get some support there, but it's very manual process. I mean we're not seeing that overlap in particular. So we're pretty excited about these other applications and how they sit in other end markets that maybe you wouldn't see it on a broad macro chart, but we are able to meet the needs of these customers very uniquely because of our inventory management at the facilities, providing that service to our customers. Really excited about that. I mean these are highly sophisticated 12 access automated robots that are inside negative 80 degrees Celsius that what sits on top of that is a highly sophisticated software program that you can access your inventory very quickly, whether that's in compounds, monoclonal antibodies, antibodies and/or samples. So pretty excited about that end market. But this ULT glut, I don't think we've been parted to that because we've been growing well over the glut on the ULT side. Paul Knight Side. Super helpful. John Marotta Thank you. You bet thank you for that question. Operator (Operator Instructions) Andrew Cooper, Raymond James. Andrew Cooper Hi everybody, thanks for the questions. Maybe just one into a little bit of a nitty-gritty on Multiomics. I just want to make sure. You made a couple of comments about stability on NGS pricing, but there was one in there about price headwinds as a drag on margins. So maybe just help adjudicate or confirm, was that just, hey, you're a handful of quarters through stability and the comp is a little bit difficult? Or is there somewhere else in that segment where there's a little bit of pricing pressure we need to make sure we're thinking about? Lawrence Lin Andrew, just to clarify, we are seeing price stability in NGS. Just to reiterate, we had a great quarter there, 11% growth. So overall, that's kind of where the NGS businesses. When you look at at Sanger, you're going to -- we have challenges in Sanger. But that's kind of a shift in technology, right? We're down about 11% there. The big thing is, though, it's a shift in technology. We are seeing a significant kind of upside technology called Plasmid-EZ and that is up significantly. I believe almost [300%] year-on-year in the quarter. So well, that's helpful. John Marotta Yeah, Andrew, some color here. So our Sanger business is seeing some headwinds. But I'll tell you, with in the United states -- I am not even going to speak to you about the Europe and our infrastructure there. In the United States, we have got 2,500 drop boxes. Sanger's being disintermediated by the ONT Plasmid-EZ product, we're going to double that business this year because of our infrastructure. We're very excited about the growth of this in general. And I think the team has done a really good job of responding to that, we have great mediation, we're investing in it. Andrew Cooper Great. That's helpful. Maybe just one more on that side of the business and I will sneak a third in at the same time as well. But just in terms of gene synthesis, one area that you guys have talked about has to be and needing to add some in India, I think, and more kind of coming out of China there relative to other parts of the business. So just to be clear, is the takeaway on the China tariff response that even that business you feel relatively comfortable with kind of the moving parts there? And where are we in that capacity expansion you've talked about before? And then lastly, just, John, what you made on getting in that right spot where it's time to execute on M&A and tuck-ins again. What do you need to see in the core business to feel like you're at that point where it is time to get a little bit more kind of forward-looking and aggressive on the M&A front? I appreciate it. John Marotta Yeah, you bet. So let's talk about gene synthesis, then we'll go to capacity in an M&A piece. So the gene synthesis business has been a mid-single-digit grower for us, very steady because our customer base is biotech and pharma specifically. I mean that's the lion's share of our customers, less academics. And I want to share that overly because I think there's a lot of noise and there's a lot of misrepresentation out there in the market, specifically around synthesis. We compete in a very niche part of this market that no one else does and the needs of those customers are very unique, because they're looking at very complex long reads. And that takes a bit of automation, which we have. We're about 40% automated on that and the rest we have got 300 -- I'm sorry, almost 400 PhDs that support that business, both in the US and in China. And so we've got great capabilities there, and we meet those customers' needs very uniquely. There's a competitor out there that operates highly automated on a chip and so it's high volume, lower quality, but it's a different segment of the market. Again, we're positioned very nicely in that market from a high quality, high complexity, very high margin. It's a very high-margin business for us. So that's not a gene synthesis in general. As it pertains to capacity, Andrew, we're very early innings there. I mean we're trying to figure out, in general, we go back to Paul's question around discipline around capital allocation. We're not going to rush into decisions around areas of the business quite yet until we've got absolute clarity there. The easy wins for us around growth in R&D and some commercial investments we're making those today. And as it pertains to capacity, we're increasing capacity, and we're -- the team is doing a nice job. We'll come back to you when we've got a clear line of sight into that specifically. Regarding M&A, I mean, I think this is a case where we have to demonstrate credibility and capabilities. And in all candor, we haven't done a good job of that in the past. And so we're trying to change that specifically about doing what we say we're going to do and showing those results and doing that. At the end of the day, we own these results. And when we show a track record on quarter-on-quarter what those results are, we've got stability in the bottom line, very tight controls in the bottom line, and we're chasing the upside, meaning we've made those appropriate investments in strategic areas, then I can come to you and say, I think we're ready for some M&A. As I sit here today, we're not sure when that is. We may see some tuck-ins that are -- we're opportunistic around strategic parts of our business. We're not going to let those go. We have capacity to bring on some tuck-ins, but more to come on that, Andrew, as we go forward here. Operator All right. Thank you. I'm showing no further questions at this time. I would like to turn it back to John Marotta for closing remarks. John Marotta Very good, thank you so much and thank you again for all your support. I want to thank our 3,000 employees that make us special every day and appreciate your time this morning here. Operator Thank you, presenters, and this concludes today's conference call. Thank you all for participating. You may now disconnect.
Yahoo
06-02-2025
- Business
- Yahoo
Azenta Inc (AZTA) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Strategic Challenges
Revenue: $148 million, up 4% year-over-year on an organic basis. Non-GAAP EPS: $0.08 per share. Adjusted EBITDA Margin: 9%, representing a 400 basis point expansion year-over-year. Free Cash Flow: $2 million for the quarter. Cash Position: $530 million in cash, cash equivalents, and marketable securities. Sample Management Solutions Revenue: $81 million, up 3% year-over-year. Multiomics Revenue: $66 million, up 6% year-over-year. Non-GAAP Gross Margin: 47.6%, up 270 basis points year-over-year. Capital Expenditures: $8 million for the quarter. Guidance for 2025: Organic revenue growth of 3% to 5% and 300 basis points of adjusted EBITDA margin expansion. Warning! GuruFocus has detected 5 Warning Signs with DAY. Release Date: February 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Azenta Inc (NASDAQ:AZTA) reported a 4% year-over-year organic revenue growth in the first quarter of fiscal 2025. The company achieved a 400 basis point expansion in EBITDA margin, indicating improved operational efficiency. Azenta's Multiomics segment showed strong performance with next-generation sequencing growing by 11% year-over-year. The company has a strong cash position with $530 million in cash, cash equivalents, and marketable securities. Azenta is making strategic investments in R&D and sales to drive future growth, with a focus on operational excellence and portfolio optimization. The company is facing challenges in its Sanger sequencing business, which saw an 11% decline year-over-year due to a shift in sequencing technology. Azenta's large automated stores segment experienced a year-over-year decline due to timing issues. There are uncertainties in the market, particularly in government-funded projects, which could impact future revenue. The restructuring process, including the sale of B Medical Systems, is still in the initial stages, which may delay expected outcomes. Azenta is experiencing some pricing headwinds in certain segments, which could affect margins if not managed effectively. Q: Can you provide details on the UK BioArc Ultra win and its impact on guidance? A: John Marotta, CEO: The BioArc Ultra win was included in our guidance. It's a significant project involving a high-throughput warehouse management system. The UK bio center is expected to be operational by early 2026. This project is part of our ongoing partnership with the bio center, and we anticipate more opportunities like this in the future. Q: How does the addition of Illumina to the unreliable entity list in China affect your NGS business? A: John Marotta, CEO: We anticipated this situation and have minimal exposure to Illumina products in China. Most of our NGS business in China is conducted with BGI, and we have the flexibility to switch platforms if necessary. Lawrence Lin, CFO, added that NGS revenue in China is about 7%-10% of Multiomics, and the risk is low. Q: Why does the guidance for Multiomics imply a deceleration despite strong performance this quarter? A: Lawrence Lin, CFO: The guidance reflects timing issues and a cautious approach due to ongoing transformation. We had a strong quarter with 11% growth in NGS, but we're maintaining our full-year guidance as we navigate changes and prepare for an Investor Day update. Q: Can you discuss the impact of tariffs on your business, particularly in China? A: Lawrence Lin, CFO: The impact of increased tariffs in China is expected to be immaterial, potentially adding $1-2 million in costs. We've factored this into our guidance and are monitoring the situation closely. Q: What is the status of the B Medical Systems sale, and how does it affect your financial outlook? A: John Marotta, CEO: The sale process is ongoing, with a focus on maximizing value. The Value Creation Committee is involved, and we're seeing strong interest from potential buyers. The timeline may extend beyond the initial expectation, but we're committed to achieving the best outcome. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
