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    AZTA
    Earnings call· Jun 2026(Q3 FY26)

    Azenta Q3 FY26 earnings call AZTA

    Aug 5, 2026 Source

    Executive summary

    Azenta Q3 FY26 — Revenue Exceeds Outlook, Multiomics Turnaround Underway

    Azenta reported Q3 FY26 results exceeding revenue expectations, driven by strong organic growth in Multiomics and Sample Management Solutions, particularly recurring revenue businesses. While the Multiomics turnaround is in early stages and automated stores face uneven demand, the company is executing operational transformations and cost optimizations. Management maintains a disciplined outlook for Q4, acknowledging a challenging comparison and ongoing market uncertainties, but expresses confidence in long-term strategic priorities.

    Highlights

    5

    • Total revenue of $161 million grew 9% organically, exceeding expectations.

    • Multiomics revenue grew 8% organically, with modest improvement in North America and strong performance in China and Europe.

    • Biorepositories and C&I delivered strong organic growth of 9%, with recurring revenue now over half of total revenue.

    • Adjusted EBITDA margin improved sequentially by 610 basis points to 11.4%.

    • Completed remediation for 3 remaining automated stores quality issues, with new orders added to backlog for FY27.

    Concerns

    5

    • Adjusted EBITDA margin declined 60 basis points year-over-year due to lower volumes in automated stores and Sanger Sequencing, quality remediation, and UKBC dilution.

    • Free cash flow was negative $5 million, driven by working capital usage and lower deferred revenue.

    • Automated stores revenue remained below prior year levels due to slower bookings and macro-driven budget constraints.

    • Sanger Sequencing continued to face market and technology transitions, impacting gross margin.

    • North America research spending remains below prior year levels, with customer purchasing decisions and project timing difficult to predict.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year FY26 Total Reported Revenue
    $613 million to $618 million
    high materiality
    High
    Full-year FY26 Organic Revenue Growth
    flat to up 1%
    high materiality
    High
    Full-year FY26 Multiomics Organic Revenue Growth
    down 1% to flat
    medium materiality
    High
    Full-year FY26 Sample Management Solutions Organic Revenue Growth
    low single-digit growth
    medium materiality
    High
    Q4 FY26 Organic Revenue Growth
    decline low single digits
    medium materiality
    High
    Q4 FY26 Adjusted EBITDA
    $20 million to $23 million
    high materiality
    High
    Full-year FY26 Adjusted EBITDA
    $59 million to $62 million
    high materiality
    High
    Full-year FY26 Free Cash Flow
    improve approximately 10% to 15% year-over-year
    medium materiality
    High
    Full-year FY26 Quality-Related Remediation Costs
    $5 million and $6 million
    medium materiality
    High
    Full-year FY26 UKBC Margin Dilution
    approximately 30 basis points
    low materiality
    High
    Long-term Adjusted EBITDA Margin
    18% to 20%
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Sample Management Solutions
    Strong growth in recurring revenue businesses (biorepository and C&I) offset by softness in automated stores due to slower bookings. Margin impacted by lower volume, fixed cost absorption, and quality remediation in capital equipment.
    Biorepository and C&I organic growth: strongRecurring revenue: 70% to 80% of businessAutomated stores: below prior year levels
    		$88 million14% reported, 9% organically—45.9% gross margin (down 750 bps YoY)
    Multiomics
    Benefited from higher activity in North America, stronger commercial execution, and increased volumes in gene synthesis and next-generation sequencing. Strong performance in China and Europe contributed meaningfully. Margin improved due to higher volumes and operating leverage, partially offset by Sanger pressure and regional mix.
    North America trends: improved from mid-teens declineChina and Europe growth: strongSanger Sequencing: continued pressure
    		$73 million10% reported, 8% organically—46.5% gross margin (up 550 bps YoY)

    Operational metrics

    25
    Total Revenue
    $161 millionup 12% reported, up 9% organically
    Q3 FY26

    Exceeded expectations.

    Organic Revenue Growth
    9%YoY
    Q3 FY26

    Broad-based across the portfolio.

    Adjusted EBITDA Margin
    11.4%down 60 bps YoY, up 610 bps sequentially
    Q3 FY26

    Improved sequentially due to multiomics revenue, recurring revenue growth, and cost actions.

    Non-GAAP EPS
    $0.16
    Q3 FY26

    Reported for the quarter.

    Cash, Cash Equivalents and Marketable Securities
    $529 million
    Q3 FY26

    Balance at quarter end.

    Capital Expenditure
    approximately $7 million
    Q3 FY26

    Reflecting continued investment in automation and technology.

    B Medical Systems Divestiture Proceeds
    $63 million
    July 1, 2026

    Sale completed on July 1, 2026.

    Held-for-Sale Valuation Allowance Reversal
    $6.5 million
    Q3 FY26

    Partial reversal associated with the B Medical Systems transaction.

    Shares Repurchased
    approximately 2.3 million shares
    Q3 FY26

    Opportunistically repurchased under existing authorization.

    Share Repurchase Amount
    $50 million
    Q3 FY26

    Amount spent on share repurchases.

    Remaining Share Repurchase Authorization
    $200 million
    through December 2028

    Remaining under the current program.

    Multiomics North America Trend
    modest sequential improvementbelow prior year levels
    Q3 FY26

    Viewed as initial indicators rather than sustained recovery.

    Recurring Revenue Percentage
    more than half
    Q3 FY26

    Providing greater stability and resilience.

    Automated Stores Quality Remediation Costs
    approximately $1 million
    Q3 FY26

    Incurred during the quarter.

    Multiomics China Growth
    23%
    Q3 FY26

    Strong performance, contributing meaningfully to growth.

    Multiomics Europe Growth
    26%
    Q3 FY26

    Strong performance, contributing meaningfully to growth.

    Multiomics Preclinical Order Shift
    $3 million
    Q3 FY26

    Timing of one customer's clinical services business.

    Non-Recurring Items for FY27 EBITDA
    $5 million (quality issues), $5 million (strategic investments)
    FY27

    These items are not expected to reoccur, providing a better 'resting heart rate' for EBITDA.

    Sanger Sequencing Margin Pressure
    continued
    Q3 FY26

    Due to longer-term market and technology transitions.

    UKBC Margin Dilution
    30 basis points
    FY26

    Anticipated impact on full-year adjusted EBITDA.

    Biorepository and C&I Recurring Revenue
    70% to 80%
    Q3 FY26

    Provides long-term visibility and stability.

    Automated Stores Refresh Cycle
    10 to 20 years
    Long-term

    Some refresh cycles are coming online, but new investments are primarily for capacity extension and new applications.

    Restructuring Savings
    $3 million
    annualized

    Executed in March for Multiomics.

    Q4 FY26 Sequential Revenue (Low End)
    $158 millionsequential view from Q3
    Q4 FY26

    Low end of the sequential view from Q3 to Q4.

    Q4 FY26 Sequential Revenue (High End)
    $163 millionsequential view from Q3
    Q4 FY26

    High end of the sequential view from Q3 to Q4, contingent on additional opportunities and deals closing.

    Industry KPIs

    5
    MetricValueDetails
    FCF conversion ROICNegative $5 millionUSD
    Revenue EPS guidanceFY26 organic growth flat to up 1%
    China revenue exposureStrong performance, double-digit growth%
    M a contribution synergiesUKBC contribution of $4 millionUSD
    Segment organic revenue growthSMS 9%; Multiomics 8%%

    Product announcements

    1
    ProductTypeDetails
    AI-enabled Bio-repository Inventory Solutionlaunch

    Deals & partnerships

    2
    B Medical SystemsSimplifying the portfolio and sharpening focus on core license businesses.$63 million

    Consisted of $28 million cash proceeds and a $35 million short-term secured vendor loan. A partial reversal of a previously recorded held-for-sale valuation allowance of $6.5 million was recorded in Q3.

    UK BiocenterEnhancing biorepository capabilities across Europe.

    Integration remains on track and continues to enhance biorepository capabilities across Europe.

    Risks & headwinds

    4
    Uneven and challenging market conditionsOngoing

    North America research spending below prior year levels; customer purchasing decisions and project timing difficult to predict.

    Mitigation: Maintaining disciplined outlook, cost optimization, focusing on high-value workflows, and advancing strategic priorities.

    Automated stores quality issuesFY26

    $1 million in Q3 FY26, total impact between $5 million and $6 million for FY26.

    Mitigation: Remediation work completed for 3 remaining systems, moving to modular stores for standardization to improve quality and reduce execution risk.

    Sanger Sequencing market and technology transitionsLonger-term

    Continued margin pressure.

    Mitigation: Optimizing and consolidating footprint, improving network efficiency, and aligning capacity with current market conditions.

    Challenging Q4 comparisonQ4 FY26

    Q4 organic revenue expected to decline low single digits; Multiomics had highest quarterly revenue in Q4 FY25.

    Mitigation: Prudent outlook, cost optimization, and continued focus on execution.

    What to watch in Q4 FY26

    5

    Multiomics North America recovery

    next quarter
    CurrentModest sequential improvement, still below prior year levels
    TargetSustained recovery and growth

    Why it matters

    Indicates whether commercial initiatives and new leadership are driving consistent improvement in a key region.

    Multiomics delivered year-over-year growth during the quarter, supported by continued strength in Europe and in China and modest improvement in North America, which year-to-date remains below prior year levels. While we are seeing some improvement in customer activity including our fast RNA sequencing that I mentioned last quarter and early signs of commercial momentum. We view these developments as initial indicators rather than evidence of a sustained recovery.

    Q&A highlights

    7

    Inquired about the drivers of Multiomics North America improvement (demand vs. execution) and confidence in sustained recovery given initiatives.

    John Marotta attributed improvement to catch-up of delayed projects (NIH-funded), accretive sales investments, new commercial leadership, and timing of a $3M clinical services order. Lawrence Lin added that while encouraging, it's not yet evidence of broad-based sustained market recovery.

    “Q3 was certainly an encouraging quarter, and we're really pleased with the execution across the businesses. Revenue grew 9% organically. And our adjusted EBITDA exceeded consensus.”

    asked by David Saxon · answered by John P. Marotta

    2 min read6 chapters

    Detailed Narrative

    01

    Multiomics Turnaround and Performance

    The company is executing targeted commercial and operational initiatives to improve Multiomics performance, increase scalability, and achieve a market-leading position. This includes footprint rationalization, organizational changes, and a sharper focus on high-value workflows. Multiomics delivered 8% organic growth in Q3, with modest sequential improvement in North America and strong double-digit growth in China (23%) and Europe (26%), showing early signs of commercial momentum.

    02

    Sample Management Solutions Strength

    Biorepositories and C&I delivered strong organic growth of 9%, driven by strategic investments in these recurring revenue businesses, which now constitute over half of Azenta's total revenue and 70-80% of the segment's revenue. An AI-enabled biorepository inventory solution was deployed, significantly improving inventory capture productivity and data management, with expectations to double productivity over time⏳.

    03

    Automated Stores Remediation and Strategic Shift

    Remediation work for the 3 remaining automated stores quality issues has been completed and is in final testing and validation. The company is strategically moving towards modular stores to reduce engineering complexity through greater standardization, aiming for improved quality and reduced execution risk. New orders were added to the backlog for FY27, indicating progress in building the pipeline despite current market challenges🌐.

    04

    Market Conditions and Disciplined Outlook

    Despite stronger-than-expected Q3 revenue, the broader market environment remains uneven. North America research spending is below prior year levels, and customer purchasing decisions, particularly for large capital investments, remain cautious and difficult to predict📌. The company maintains a prudent outlook for Q4, anticipating a low single-digit organic revenue decline due to a challenging comparison, especially in Multiomics.

    05

    Capital Allocation and Strategic Investments

    Azenta completed the divestiture of B Medical Systems for $63 million, further simplifying its portfolio. The company repurchased $50 million of shares in Q3, with $200 million remaining under authorization through December 2028. Capital allocation priorities remain focused on driving productivity, accelerating organic growth, pursuing disciplined strategic M&A, and returning capital to shareholders, leveraging a strong balance sheet.

    06

    UK Biocenter Integration and Cost Optimization

    The integration of the UK Biocenter remains on track, enhancing biorepository capabilities across Europe, and is expected to become accretive in FY27 after an anticipated 30 basis points of margin dilution in FY26. The company is also evaluating options to optimize cost structures in automated stores, cryo systems, and Sanger Sequencing to improve profitability and network efficiency.

    AI-generated summary of the company’s earnings call. Not investment advice.