• Revenue: $656 million for fiscal year 2024, down 2% year over year on an organic basis.
• Fourth Quarter Revenue: $170 million, down 1% year over year on a reported basis and down 2% on an organic basis.
• Adjusted EBITDA Margin: 10.2% in the fourth quarter and 7.5% for the full year, representing a margin expansion of approximately 300 basis points for the year.
• Non-GAAP EPS: $0.18 for the fourth quarter and $0.41 for the full year.
• SMS Revenue: $85 million for the fourth quarter, up 4% year over year reported and up 3% organic.
• Multiomics Revenue: $66 million for the fourth quarter, 8% growth on both a reported and organic basis.
• B Medical Revenue: $19 million in the fourth quarter, down 35% year over year.
• Cash and Equivalents: $522 million at the end of the quarter, with no outstanding debt.
• Capital Expenditures: Approximately $13 million for the fourth quarter and $38 million for the full year.

• Warning! GuruFocus has detected 2 Warning Sign with AZTA.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Azenta Inc (NASDAQ:AZTA) delivered strong results in the quarter and year, with full-year revenue of $656 million, in line with guidance.
• The Sample Management Solutions and Multiomics segments grew core revenue by 4% for the year, excluding B Medical.
• The company announced the sale of B Medical, allowing a refocus on high-quality core businesses with opportunities for growth and margin expansion.
• Azenta Inc (NASDAQ:AZTA) achieved an adjusted EBITDA margin of 10.2% in Q4, representing a significant margin expansion of over 550 basis points year-over-year.
• The company returned $249 million to shareholders through its share repurchase program, completing a $1.5 billion buyback over two years.

Negative Points

• Revenue was down 2% year-over-year on an organic basis, indicating challenges in the current market environment.
• B Medical revenue declined by 35% year-over-year, impacting overall financial performance.
• The company faces ongoing pricing pressure in the Multiomics segment, particularly in next-generation sequencing.
• Azenta Inc (NASDAQ:AZTA) has identified complexity within its operations, stemming from 15 legacy acquisitions, which it aims to address through simplification initiatives.
• The guidance for fiscal 2025 indicates only 3% to 5% organic revenue growth, reflecting macroeconomic uncertainties and market challenges.

Q & A Highlights

Q: Can you provide insights on the fiscal '26 targets and the lower fiscal '25 guidance relative to those targets? A: Herman Cueto, CFO, explained that the company has made significant progress against the long-range plan (LRP) announced at the 2024 Investor Day, achieving above-market growth and margin expansion in fiscal '24. The fiscal '25 guidance of 3% to 5% growth assumes the current market environment, with potential upside if the market recovers in the second half of 2025. John Marotta, CEO, added that demonstrating capability on the top line is crucial given the market uncertainty.

Q: Why does the fiscal '25 EBITDA margin guidance appear flat relative to the second half of fiscal '24? A: Herman Cueto noted that the company aims for 300 basis points of EBITDA margin expansion each year, targeting 15% to 17% by fiscal '26. The guidance reflects confidence in achieving this, despite needing to make some investments in fiscal '25. The quarterly cadence for sales and EBITDA is expected to be similar to fiscal '24.

Q: What are your thoughts on the freezer market and its outlook? A: John Marotta expressed confidence in Azenta's capabilities in the freezer market, highlighting the potential for market conversion to highly automated storage solutions. He believes the company's competitive advantages will support continued market penetration and growth.

Q: Can you discuss the pricing and volume trends in the NGS business? A: Herman Cueto reported price stabilization from Q3 to Q4, which contributed to growth. The company saw increased volume and benefited from larger deals like FinnGen. While pricing headwinds are expected to continue, the company is optimistic about volume growth.

Q: What is the timeline for the B Medical transaction, and how will it affect CapEx? A: Herman Cueto indicated that the B Medical transaction is expected to close in the first half of the year. While CapEx will decrease post-divestiture, it will remain within the 4% to 6% range relative to sales. John Marotta added that capital allocation will align with strategic initiatives, focusing on productivity improvements and growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.