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Azenta, Inc. (AZTA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $144.0M, flat year over year and up slightly sequentially; non-GAAP diluted EPS from continuing operations was $0.19 and adjusted EBITDA margin expanded to 12.3%, driven by favorable mix and cost execution .
  • Versus Wall Street: Revenue missed consensus ($149.8M*) but non-GAAP EPS beat ($0.19 vs $0.137*); adjusted EBITDA was modestly above consensus ($18.0M vs $17.3M*) .
  • Guidance reiterated: FY25 organic revenue growth 3–5% and ~300 bps adjusted EBITDA margin expansion; segment outlook shifted to Multiomics mid-single-digit and SMS low-single-digit growth (from prior view) .
  • Catalysts flagged by management: execution of large orders/backlog into Q4 (implied ~$160M revenue), Investor Day later in CY2025, and progress on B Medical Systems divestiture (discontinued operations and non-cash impairment in Q3) .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion: GAAP gross margin rose to 47.1% (+170 bps YoY) and adjusted gross margin to 48.5% (+180 bps YoY), reflecting mix and operational efficiencies; adjusted EBITDA margin improved to 12.3% (+260 bps YoY) .
  • Multiomics growth: Revenue up 4% YoY (organic +3%); sustained double-digit NGS volume growth with stabilized pricing; China posted ~10% organic growth in the quarter .
  • Management execution and tone: “Operational turnaround is progressing as planned… meaningful margin expansion through disciplined cost management” — CEO John Marotta .

What Went Wrong

  • Revenue vs consensus: Q3 revenue of $143.9M missed the ~$149.8M* consensus; organic revenue declined 2% YoY, with weakness in core products (Automated Stores and Cryogenic Systems) .
  • SMS softness: Sample Management Solutions revenue fell 4% YoY (organic -6%), driven by softer bookings in Cryo and timing delays in Automated Stores; Sanger Sequencing and Gene Synthesis were also headwinds within Multiomics .
  • Discontinued operations impact: A non-cash impairment related to B Medical Systems drove total diluted EPS to ($1.15) (continuing ops diluted EPS $0.01) .

Financial Results

Consolidated P&L vs prior periods and Street

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$148.0 $143.4 $143.9
GAAP Gross Margin %46.6% 45.9% 47.1%
Adjusted Gross Margin %47.6% 47.5% 48.5%
GAAP Operating Margin %(7.7%) (11.3%) (0.5%)
Adjusted Operating Margin %(0.2%) (0.4%) 5.5%
Adjusted EBITDA ($USD Millions)$13.0 $14.0 $18.0
Adjusted EBITDA Margin %9.0% 10.0% 12.3%
Diluted EPS – Continuing Ops (GAAP)($0.21) ($0.40) $0.01
Non-GAAP Diluted EPS – Continuing Ops$0.08 $0.05 $0.19
Estimates vs ActualsQ3 2025Q4 2025 (consensus)
Revenue ($USD Millions)$143.9 actual vs $149.8 estimate* $156.4 estimate*
Non-GAAP Diluted EPS ($)$0.19 actual vs $0.137 estimate* $0.196 estimate*
EBITDA ($USD Millions)$18.0 adjusted actual vs $17.3 estimate* $19.1 estimate*

Values with asterisk (*) retrieved from S&P Global.

Segment Revenue

Segment Revenue ($USD Millions)Q1 2025Q2 2025Q3 2025
Sample Management Solutions (SMS)$81 $80 $78
Multiomics$66 $64 $66
Total$148 $143 $144

KPIs and Cash

KPIQ1 2025Q2 2025Q3 2025
Operating Cash Flow ($USD Millions)$30 $14 $26
Capex ($USD Millions)$8 $7 $11
Free Cash Flow ($USD Millions)$22 $7 $15
Total Cash, Cash Equivalents, Restricted Cash & Marketable Securities ($USD Millions)$530 (incl. $27 discontinued ops) $540 (incl. $27 discontinued ops) $565 (incl. $15 discontinued ops)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic Revenue GrowthFY 20253%–5% 3%–5% Maintained
Adjusted EBITDA Margin ExpansionFY 2025~300 bps ~300 bps Maintained
Multiomics Segment GrowthFY 2025Low single-digit Mid single-digit Raised
Sample Management Solutions GrowthFY 2025Mid single-digit Low single-digit Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Operational Excellence / ABSLaunch of Azenta Business System; kaizens; structural realignment; G&A rightsizing ABS driving productivity and gross margin; continued cost discipline Improving
NGS PerformancePrice stabilization; double-digit volume growth; +11% YoY Q1; +20% YoY Q2 Sustained double-digit volumes; large customer deals; stable pricing Improving
Sanger SequencingDeclines with tech transition; -11% YoY Q1; -18% YoY Q2 Mid-teens decline; offset by Plasmid-EZ momentum Structural decline (offset by ONT)
Gene SynthesisUp 5% Q1; tough comps & delays Q2 High single-digit decline among key pharma; timing issues Soft near-term
China7% organic growth Q1; 5% Q2 ~10% organic growth Q3 Improving
Tariffs / Supply ChainExposure assessed; countermeasures; immaterial China tariff impact ($1–2M) Nominal EBITDA impact; active mitigation; “war room” ongoing Managed
NIH Funding~1% revenue headwind; offsets planned Senate appropriations +1% step-up seen; tone more constructive for 2026 Easing risk
Outsourcing TailwindsCore labs and pharma consolidating partners; outsourcing opportunities rising New MSAs; visible outsourcing demand Building
Partnerships / AI/MLNone notableGenomics program with Frenova/Nephronomics leveraging AI/ML Strategic

Management Commentary

  • “Operational turnaround is progressing as planned… meaningful margin expansion through disciplined cost management and focused execution.” — John Marotta, CEO .
  • “Adjusted EBITDA margin was 12.3%… expansion of ~260 bps YoY… highlights continued progress of our operational turnaround and increased efficiency.” — Lawrence Lin, CFO .
  • On Q4 step-up: “To hit the 4% midpoint, there’s a step up… north of $15M… we’ll need ~ $160M in revenue… sufficient stores backlog; large C&I order shifted to Q4.” — CFO .
  • On segment mix: “We now expect Multiomics to grow mid-single digits and SMS low-single digits” — CFO .
  • On tariffs/NIH: “We believe the tariffs have a nominal impact on adjusted EBITDA… estimate NIH reductions ~1% headwind to FY25 revenue; countermeasures in place.” — CEO .

Q&A Highlights

  • Q4 trajectory: Management detailed backlog visibility and a large C&I order shipping in July, implying ~$160M Q4 revenue to reach guidance midpoint; seasonality supports step-up .
  • Demand timing vs cancellations: No cancellations; order timing delays in capital equipment (automated stores/cryo) amidst budget constraints .
  • SMS margins: Strength driven by mix (consumables/services) and improved stores execution; ABS contributing to productivity .
  • M&A funnel: Focused on core biorepositories/automation and near-line extensions; disciplined, accretive targets .
  • NIH outlook: Senate appropriations signaled +1% step-up; management constructive on FY26 with potential outsourcing tailwinds .

Estimates Context

  • Q3 2025: Revenue missed consensus ($143.9M actual vs $149.8M*); non-GAAP EPS beat ($0.19 actual vs $0.137*); adjusted EBITDA modestly above ($18.0 actual vs $17.3M*) .
  • Q4 2025: Consensus implies revenue ~$156.4M* and EPS ~$0.196*, consistent with management’s backlog-driven step-up commentary.
  • FY25/26: Street models ~$592M* revenue and ~$64M* EBITDA for FY25, rising to ~$618M* and ~$88M* in FY26; EPS ~$0.51* in FY25 and ~$0.79* in FY26.
    Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Execution improving: Broad-based margin expansion and higher adjusted EBITDA despite flat revenue indicates successful cost actions and mix optimization; ABS is starting to show tangible benefits .
  • Near-term setup hinges on Q4 delivery: Backlog conversion and timing of pushed C&I/stores orders are the swing factors to meet FY25 revenue midpoint (~$160M Q4) .
  • Segment mix shift: Multiomics momentum (NGS strength) now expected to outpace SMS; SMS growth reduced to low-single-digit given capital equipment timing .
  • Outsourcing tailwinds: Rising core lab outsourcing and pharma partner consolidation favor Azenta’s quality/on-time delivery positioning; recent MSAs evidence traction .
  • Risk management intact: Tariff and NIH headwinds are quantified and seen as manageable with countermeasures; China demand trends supportive .
  • Corporate actions: Continued progress on B Medical sale (discontinued ops), Investor Day slated for later CY2025, and disciplined M&A funnel in core areas could reshape growth/profit trajectory .
  • Trading lens: Post-earnings, focus on backlog conversion updates, SMS capital equipment bookings cadence, and Multiomics NGS volume/pricing durability as drivers of estimate revisions and stock narrative .