Azenta, Inc. Q1 FY2025 earnings call

John Marotta's Remarks: Spent time getting to know the business on the ground, progress on strategic initiatives, portfolio optimization with B Medical Systems being discontinued operations, and updates on Sample Management Solutions and Multiomics businesses. Highlighted the U.K. Biocentre's selection of Azenta for BioArc Ultra. Discussed rolling out business system and operating model, key performance indicators (CVDs), technology initiatives like weekly automated sales report. Lawrence Lin's Remarks: Shared financial results, noting Q1 revenue of $148 million, up 4% year-over-year, adjusted EBITDA margin of 9% with 400 basis points expansion. Discussed balance sheet with $530 million in cash, cash equivalents, and marketable securities, and initial reflections on immersing in the business.

Sample Management Solutions (SMS): Revenue was $81 million for the quarter, up 3% year-over-year reported and 2% organic. Driven by growth in Consumables, Instruments, Clinical, Cryogenic Store Systems, and sample storage. Non-GAAP gross margin was 47.8%, up 460 basis points year-over-year. Multiomics: Delivered revenue of $66 million with a 6% growth on both reported and organic basis. Next Generation Sequencing grew 11%, Gene Synthesis grew 5%, while Sanger Sequencing was down 11% but Plasmid-EZ (ONT product) was strong. Non-GAAP gross margin was 47.4%, up 30 basis points year-over-year.

Reiterated guidance for 2025: organic revenue growth of 3% to 5% for the full year, with Multiomics expected to grow low single digits and Sample Management Solutions mid-single digits. Reaffirmed commitment to 300 basis points of adjusted EBITDA margin expansion year-over-year.

Potential impacts from China tariffs (materiality deemed immaterial but monitored), market uncertainties affecting project timelines, and perception of ULT glut (Azenta not party to ULT glut as it's growing in other applications).

Q: About the U.K. Biocentre's BioArc Ultra win, size, timing, and contemplation in guidance; and number of similar wins.

A: BioArc Ultra was contemplated in guidance, a POC business with multimillion dollars, implementation expected early 2026.

Q: Impact of Illumina being added to China's unreliable entity list on NGS business in China.

A: Azenta doesn't own Illumina products in China, partners with BGI using Illumina and MGI platforms, risk low.

Q: Margins and B Medical status.

A: EBITDA margin improved, restructuring of corporate function within guidance; B Medical sale still in initial stages with Value Creation Committee involved.

Q: Exposure to tariffs in China, Mexico, Canada.

A: Minimal risk in Mexico and Canada; China tariff impact deemed immaterial.

Q: SMS guidance, orders, backlog.

A: Timing issue with large stores in Q1, but robust pipeline and backlog with 75% of 2025 revenue secured.

Q: Gross margins, back half margin ramp.

A: Pleased with Q1 gross margin results, confident in gross margin trajectory and back half operating margin ramp.

Q: Share buyback program and M&A.

A: Share buybacks are last in capital allocation framework, focus on gross margin improvement, growth initiatives, and M&A; more work needed to determine steady-state for share buybacks.

Q: Multiomics margins and pricing.

A: NGS pricing stable, Sanger facing technology shift challenges but Plasmid-EZ strong.