Azenta Inc Q1 2022 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: David Joshua Saxon - Needham & Company, LLC, Research Division - Analyst : Yes. Steve, Lindon, congrats on the quarter. One on SRS and one on margins. First on SRS, can you give us a sense of how much progress you've made with bringing the samples from those 2 large pharma contracts? It sounds like you're still working on bringing them in. So is it fair to assume some sort of modest sequential growth in SRS over the next few quarters? And then any additional color you can give on traction you're getting with other potential customers? Stephen Schwartz Sure. I'll take that. This is Steve. So thanks, David. A couple of things. You should expect increases in SRS, and it's exactly, as you said. We have a number of contracts that we always bring in. But in particular, the 2 large contracts that we've been working on, these are tens of thousands of samples on a weekly basis typically. We've almost exhausted one of the North American sites, and now we've ramped up in Europe. And the other one is behind that by 6 months. And this is an onboarding, if you will, of millions of samples. And I'd say we're probably halfway through. But things are on schedule and on plan. On one of the contracts, it involves a pretty significant on-site presence for us to help them to get organized before they ultimately send the samples to us. Everything is on track. But yes, you should anticipate that we'll continue to see revenue expansion from those 2 contracts through the duration of the fiscal year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 08, 2022 / 9:30PM, AZTA.OQ - Q1 2022 Azenta Inc Earnings Call And the pipeline, we think, is pretty significant. As we prove capability for a large contract capability, it brings more interest from customers who can now consider somebody who could handle millions of samples as opposed to somebody who could handle maybe thousands or a few hundred thousand samples. So we're bullish about the business. We'll be cautious as we guided, but North American progress is good. Europe has now picked up on both contracts.

Question: Jacob K. Johnson - Stephens Inc., Research Division - Analyst : Congrats on becoming the pure-play life and tools company. Maybe first on the Product side and freezer specifically, I think you posted another record quarter here. I believe Lindon just called it a growth engine. Certainly, when we think about freezers, those are the large stores, but a lot of focus on the B3 cryo for cell and gene therapy. But I think you launched a new cryo freezer recently. Maybe just talk broadly about the potential for continued innovation, especially, I guess, as it relates to cryogenic freezers as we look out the next couple of years? Stephen Schwartz Sure, Jacob. We've got a pretty significant initiative around all manner of cryogenic automated stores. So it's a necessary tool we see for all cell and gene therapy applications. The ramp is pretty significant. As you mentioned, we just launched a modest-sized one that we think is comfortable for many lab configurations. So it will wheel through a door. It's a stand-up tool that somebody can put in like an appliance, but it's fully automated cryogenic system. And we think the promise for this tool -- the demand is very strong. The promise for the tool, we think, is great. We actually were showing it at the SLAS conference here in Boston this week, and it's been received particularly well. So we have a complete portfolio, a range of sizes. And the demand just -- demand continues to build. And we talked about doubling year-over-year volume. We anticipate that this will continue. We have customers now, some with more than 20 units. And we see nothing but continued acceptance of the technology because it's a necessity. We think to really -- the fidelity of the cells and samples, we think it's critical. And we think automation is the way that customers are going. And on the large automated stores -- just to comment on the large automated stores, we just see a general trend toward automation, both because of the complexity and the number of samples, but also, once again, the fidelity of samples as we go forward. And we can feel it building in the second half of calendar '22 in the pipeline. That's as strong as we can ever remember it for the large stores. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 08, 2022 / 9:30PM, AZTA.OQ - Q1 2022 Azenta Inc Earnings Call So these always take a little bit of time to build, to book and to close, but we're fully engaged with customers like we've never been before. And we have a complete offering from a portfolio standpoint across temperature ranges and across sizes. And we're really confident about what the back half of the year looks like across the portfolio of all automated stores.