Azenta Inc Q1 2025 Earnings Call Summary

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

Question: Jacob Johnson - Stephens Inc. - Analyst : Hey, good morning, John and Lawrence. Thanks for the time. Maybe a couple of questions on recent headlines. First, John, you mentioned the UK bio center, BioArc win. Is there any way to frame up the size of that opportunity, maybe the timing of the revenues and whether this is something that was contemplated in guidance? And then I guess along the same lines, I'm just kind of curious, how many other these kind of BioArc Ultra wins could be out there?

Question: Jacob Johnson - Stephens Inc. - Analyst : Got it. And then yesterday, there was a headline about Illumina being added to the unreliable entity list in China. I know it's probably early, but we're getting questions on it. So can you talk about any impacts that you could see from that headline to your NGS business in China or maybe another is there any way to frame up how large the NGS business in China is for you all?

Question: Jacob Johnson - Stephens Inc. - Analyst : Got it, that's super helpful I'll leave it there. Thanks for taking the questions.

Question: David Saxon - Needham & Company - Analyst : Great, good morning. John and Lawrence, congrats on the quarter. So just a few for me on Multiomics, maybe I'll start. So the guide stayed at low single digits. You did send organic this quarter. It sounds like there were some orders that came in, in this quarter. But just given that guidance implies the deceleration in the back half of the year or the balance, I should say, what's driving that? I think NGS comps get tougher, but like anything you're seeing in Sanger or Synthesis that would drive that deceleration.

Question: David Saxon - Needham & Company - Analyst : Okay, great, Lawrence, maybe we'll stay with you on margins, just really strong improvement. It does seem like the guide implies EBITDA kind of margins kind of plateau in the back half. I don't know if it's just how you're thinking about the year versus the quarter early, but any comments around like how much of that is conservatism versus any timing from the Ascend '26 initiatives? And then just on B Medical, I don't know if this would be for John or Lawrence. I think last quarter, you talked about potentially closing that in the fiscal first half. It sounds like this morning, you're talking about still in the initial stages. So is the message essentially that it's going to probably take longer than that? Thanks so much. 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 05, 2025 / 1:30PM, AZTA.OQ - Q1 2025 Azenta Inc Earnings Call

Question: David Saxon - Needham & Company - Analyst : Okay, super helpful. Thanks, guys.

Question: Vijay Kumar - Evercore ISI - Analyst : Hey, guys, good morning. Thank you for taking my question. A couple of maybe macro-related questions on recent noise around tariffs. Can you talk about your exposure to China, Mexico, Canada, and any risk related to tariffs? 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 05, 2025 / 1:30PM, AZTA.OQ - Q1 2025 Azenta Inc Earnings Call

Question: Vijay Kumar - Evercore ISI - Analyst : Understood. And then maybe one on the guidance. In SMS, it looks like it was off a slow start. I know the guidance mid-singles for sample management solutions. I think stores, you said low singles. So maybe talk about your orders, backlog. Was this just a timing element or some cautiousness from customers, perhaps which we're seeing here in the numbers?

Question: Vijay Kumar - Evercore ISI - Analyst : Understood. And maybe if I could squeeze one more in. Gross margins, nice share. It looks like there was some timing moment in stock comp here in Q1 that's depressed operating margins. When you think about the back half margin ramp, should gross margin sustain at these levels and visibility into the back half operating margin ramp?

Question: Matt Stanton - Jefferies LLC - Analyst : Good, how are you doing? Thanks for taking the question. Maybe sticking with the theme kind of recent noisy headlines. Could you just remind us what the pro forma mixes within your academic and government exposure and then within what's directly tied to NIH? And any kind of impact you've seen, I know it's early days in the last few weeks, but then kind of a choppy backdrop from a headline perspective within the administration, anything you're seeing kind of in terms of activity levels at customers or things being pushed out? And then I assume that's kind of contemplated within the hour bar or the 3 to 5 guide. But if you just confirm that as well, thanks.

Question: Matt Stanton - Jefferies LLC - Analyst : Okay, thanks, that's helpful. And then maybe shifting gears a little bit. Can you just talk about what you saw in the cell and gene therapy side in the first quarter? I think the last few quarters have started to see, some improvement, funding, still maybe a bit 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 05, 2025 / 1:30PM, AZTA.OQ - Q1 2025 Azenta Inc Earnings Call challenged, but there's some later stage programs ramping up. So just love to see kind of what you're hearing and seeing from your customers on the selling gene therapy side of things? Thanks.

Question: Matt Stanton - Jefferies LLC - Analyst : Super, thank you.

Question: Paul Knight - KeyBanc Capital Markets Inc. - Analyst : Thank you, appreciate it. First question I have would be the company has been even before your tenure buying stock, we really didn't know what the margin target was. And I don't understand why there was such an aggressive share repurchase program when there was no clear metrics out there on what business performance should be. So the question really is, as you are now on Board, is there still a share buyback program or will we wait to see what the business can return first? And then is there a likelihood that we could go back to what I think was a consolidator of the industry or are you still out on that? So two questions there.

Question: Paul Knight - KeyBanc Capital Markets Inc. - Analyst : Great and then last question, I guess it's been asked about, but you know it seems like this post COVID era of overcapacity and ultra cold temperature, and even cold storage in general it seems like you know we're starting to get past that glut of material and capacity that did emerge during COVID. So are we kind of in one step past it now or what do you -- what's your feeling on you know where we are with this post COVID?

Question: Paul Knight - KeyBanc Capital Markets Inc. - Analyst : Side. Super helpful.

Question: Andrew Cooper - Raymond James - Analyst : Hi everybody, thanks for the questions. Maybe just one into a little bit of a nitty-gritty on Multiomics. I just want to make sure. You made a couple of comments about stability on NGS pricing, but there was one in there about price headwinds as a drag on margins. So maybe just help adjudicate or confirm, was that just, hey, you're a handful of quarters through stability and the comp is a little 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 05, 2025 / 1:30PM, AZTA.OQ - Q1 2025 Azenta Inc Earnings Call bit difficult? Or is there somewhere else in that segment where there's a little bit of pricing pressure we need to make sure we're thinking about?

Question: Andrew Cooper - Raymond James - Analyst : Great. That's helpful. Maybe just one more on that side of the business and I will sneak a third in at the same time as well. But just in terms of gene synthesis, one area that you guys have talked about has to be and needing to add some in India, I think, and more kind of coming out of China there relative to other parts of the business. So just to be clear, is the takeaway on the China tariff response that even that business you feel relatively comfortable with kind of the moving parts there? And where are we in that capacity expansion you've talked about before? And then lastly, just, John, what you made on getting in that right spot where it's time to execute on M&A and tuck-ins again. What do you need to see in the core business to feel like you're at that point where it is time to get a little bit more kind of forward-looking and aggressive on the M&A front? I appreciate it.