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Azenta, Inc. (AZTA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 FY2024 revenue was $170M (down 1% YoY) and non-GAAP EPS was $0.18, with adjusted EBITDA margin 10.2%; core segments (Sample Management Solutions and Multiomics) grew organically 5% while B Medical fell 35% .
  • FY2025 guidance (ex-B Medical): organic revenue growth of 3–5% and ~300 bps adjusted EBITDA margin expansion; company is pursuing sale of B Medical to simplify portfolio and improve growth/profitability .
  • Margin narrative improved materially in 2H: Q3 adjusted EBITDA margin 10.3% and Q4 10.2% vs 5.9% in Q2; management reiterated path to 15–17% EBITDA by FY2026 on transformation initiatives (Ascend 2026) .
  • Strategic/catalyst updates: CFO transition to Lawrence Lin, continued strong NGS momentum (volume growth, price stabilization) and cryogenic stores growth; robust share buybacks ($249M in Q4) and cash of $522M provide capital allocation flexibility .

What Went Well and What Went Wrong

  • What Went Well

    • “We ended fiscal 2024 strong, delivering core revenue growth in our Sample Management Solutions and Multiomics businesses, and upholding our commitment to meaningfully expand margins.” – John Marotta, CEO .
    • Multiomics: NGS grew 25% in Q4 with price stabilization and larger strategic deals (e.g., FinnGen); multiomics GAAP gross margin improved to 47.1% .
    • SMS: Cryogenic stores +67% YoY in Q4; consumables & instruments +14% YoY; strong stores backlog visibility (~75%) supporting FY2025 .

  • What Went Wrong

    • B Medical revenue down 35% YoY in Q4 due to order timing; FY2024 B Medical down 27% YoY; company now pursuing a sale to refocus on core businesses .
    • GAAP profitability impacted by non-cash impairment ($116M) and transformation/restructuring costs; FY2024 diluted EPS (continuing ops) was $(3.09) vs $(0.19) in FY2023 .
    • Cash flow statement classification review led to omission of cash flow statements from Q4 release; fixes to be reflected in FY2024 10-K (no balance sheet or P&L impact) .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)$159 $173 $170
GAAP Diluted EPS – Continuing Ops$(2.47) $(0.12) $(0.10)
Non-GAAP Diluted EPS – Continuing Ops$0.05 $0.16 $0.18
Adjusted EBITDA ($M)$9 $18 $17
Adjusted EBITDA Margin (%)5.9% 10.3% 10.2%
GAAP Gross Margin (%)39.8% 40.0% 40.8%
Non-GAAP Gross Margin (%)44.3% 45.2% 45.0%

Segment Revenue ($M)

SegmentQ2 2024Q3 2024Q4 2024
Sample Management Solutions$74 $81 $85
Multiomics$62 $64 $66
B Medical Systems$23 $29 $19

KPIs and Capital Allocation

KPIQ2 2024Q3 2024Q4 2024
Cash, Cash Equivalents & Marketable Securities ($M)$975 $754 $522
Capital Expenditures ($M)$7 $7 $13
Share Repurchases ($M)$74 $225.9 $249
Adjusted Operating Margin (%)(3.6%) 2.6% 4.1%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)FY2024$652–$658 (down 2% to down 1% organic) Actual $656; organic down 2% Delivered near midpoint; organic at low end
Non-GAAP EPSFY2024$0.30–$0.36 Actual $0.41 Beat guidance
Adjusted EBITDA MarginFY2024~+300 bps expansion +~300 bps to 7.5% Achieved
Net Interest Income ($M)FY2024~$32 $33 Slightly above
Organic Revenue Growth (ex-B Medical)FY2025N/A+3% to +5% New guidance
Adjusted EBITDA Margin Expansion (ex-B Medical)FY2025N/A~+300 bps New guidance
B Medical TreatmentFY2025N/AReported in discontinued ops; sale pursued Portfolio simplification

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Margin expansion (Ascend 2026)Adjusted EBITDA 5.9%; transformation actions (site exits, ERP) Adjusted EBITDA 10.3%; profitability in Q3; continued cost actions Adjusted EBITDA 10.2%; FY2025 +300 bps target; path to 15–17% by FY2026 reaffirmed Accelerating, credible execution
NGS pricing/volumeEarly NovaSeq X Plus adoption; volumes up; margins held despite pricing Pricing moderated; volume up; 700+ new NGS customers; record quotes 25% NGS growth; price stabilization; strategic deals (FinnGen) Stabilizing pricing with robust volume
SMS product performanceLarge automated stores +16%; SRS +5% Cryogenic stores +~40%; large stores +10%; C&I bookings strongest since pandemic Cryogenic stores +67%; C&I +14%; stores backlog ~75% visibility Strong demand and backlog
B Medical visibilityGuidance reset; focus on vaccine cold chain; DRC timing uncertain Q3 revenue $29M; pipeline robust; accretive margin; continued unpredictability Q4 revenue $19M; sale process initiated; guided ex-B Medical Portfolio exit to reduce volatility
China/regional trendsChina multiomics +15% growth; NA softness; EU strength China +4% multiomics growth China +6% multiomics growth in Q4; tariff exposure minimal due to regionalized manufacturing Consistent outperformance in China
Capital allocation$74M buybacks; ~$500M cash post-program $225.9M buybacks; $754M cash & securities $249M buybacks; $522M cash & securities; disciplined ROI focus; potential tuck-ins Shareholder returns, targeted reinvestment
Governance/leadershipCEO succession plan announced —CFO transition to Lawrence Lin; Value Creation Committee formed; Board refresh Strengthened leadership and oversight

Management Commentary

  • “Our competitively advantaged portfolio of businesses, coupled with the capabilities of the Value Creation Committee, supported by the full Board, will accelerate our goal of delivering profitable growth and long-term shareholder value creation.” – John Marotta, CEO .
  • “Adjusted EBITDA margin of 10.2% in the fourth quarter and 7.5% for the full year… two consecutive quarters above 10%, demonstrating the impact of transformation initiatives.” – Herman Cueto, CFO .
  • “We are guiding 2025 excluding B Medical… organic revenue to grow 3% to 5%… committing to ~300 bps of adjusted EBITDA margin expansion.” – Herman Cueto .
  • “We established a new Value Creation Committee… driving long-term value creation including through growth, cost and capital allocation initiatives.” – John Marotta .

Q&A Highlights

  • Guidance/trajectory: FY2025 3–5% organic growth reflects cautious macro; EBITDA margin expansion ~300 bps expected; apples-to-apples RemainCo margin uplift to >11% implied .
  • NGS dynamics: Q4 NGS +25% YoY with price stabilization; do not extrapolate one quarter, but volume momentum and strategic wins support outlook .
  • China tariffs: Limited impact expected due to regionalized manufacturing (China-for-China; US-for-US) .
  • B Medical timeline: Sale targeted within first half of FY2025; business to be reported in discontinued ops; recast historicals before Q1 10-Q .
  • CapEx: ~4–6% of sales post-sale; focus on productivity/gross margin improvements and selective capacity investments with double-digit ROIC .

Estimates Context

  • Wall Street consensus (S&P Global) for AZTA Q4 2024 EPS and revenue was not available at time of analysis due to S&P Global API request limits; as a result, explicit beat/miss vs consensus cannot be shown. Values would normally be sourced from S&P Global.

Key Takeaways for Investors

  • Core execution improved: two consecutive quarters >10% adjusted EBITDA margin and FY2024 non-GAAP EPS of $0.41 vs $0.30–$0.36 guidance demonstrate transformation progress and operating leverage .
  • Portfolio simplification: exiting B Medical (sale process underway) should reduce volatility, sharpen focus on higher-margin recurring SMS and multiomics revenue streams, and support margin expansion targets .
  • NGS turning point: price stabilization and volume growth (FinnGen and other strategic deals) position Multiomics for continued recovery and share gains into FY2025 .
  • SMS secular strength: robust stores backlog and strong cryogenic demand underpin mid-single-digit growth in FY2025; consumables momentum improving off constrained capital cycle .
  • Capital deployment: $522M liquidity and ongoing ROI discipline (including tuck-ins with double-digit ROIC) plus substantial buybacks ($249M Q4) are supportive of per-share value creation .
  • Watch items: cash flow statement reclassification to be addressed in 10-K; leadership transition (new CFO) and continued operational simplification are key to sustaining margin trajectory .
  • Near-term trading: potential catalysts include B Medical sale announcement/timing, FY2025 margin delivery cadence, and evidence of continued NGS price stability and stores backlog conversion .