Azenta Inc Q2 2025 Earnings Call Transcript

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

Question: David Saxon - Needham - Analyst : Great, good morning, John, Lawrence thanks for taking my questions. I have a couple on the guidance. So you know, first-half organic growth is tracking close to the top end of the guidance comes get easier. As we move into the back half, you talked about this 1% impact from funding. But I wanted to just ask how we should think about the cadence of growth in the back half versus the first half, he's maintaining the bottom end of the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 12:30PM, AZTA.OQ - Q2 2025 Azenta Inc Earnings Call guide more reflective of just the uncertain macro, or there any specific dynamics you see playing out that kind of currently would be a risk to growth outside of the funding portion? And then lastly, can you talk about the currency assumptions in the back half, and then I'll just have one follow up thing.

Question: David Saxon - Needham - Analyst : Yeah, that is super helpful. Thanks for all that and really appreciate all the color on kind of the macro, and you know all those details. I'll probably leave some follow ups on that to the other folks, but I wanted to ask about the SMS leadership transition earlier in April. Any color around kind of that that departure, and whether you're looking internally or externally for a new leader. Thanks so much.

Question: David Saxon - Needham - Analyst : Great thank you.

Question: Vijay Kumar - Evercore - Analyst : Hey guys, congrats on nice execution here. Maybe John, first question for you on the NIH, 1% headwind, which -- I guess you've made, some comments in the past. Hey, this could be as high as 2% rated in during the conference season. So just walk us through the assumptions, behind the 1% headwind. Is it all coming in the back half, and where is the offset coming from?

Question: Vijay Kumar - Evercore - Analyst : That's helpful comments. Maybe one on free cash and margins; free cash, performance first half is quite impressive. Is that a sustainable number and sort of related on the margins here? First-half execution is coming well above your annual plan of 200 basis points. I think back half implied is maybe just 100 basis points of margin expansion hit the guidance. So is that a step down on margin expansion first half or second half contemplating tariff, and what is the total tariff impact, if so?

Question: Vijay Kumar - Evercore - Analyst : And so thanks guys.

Question: Paul Knight - KeyBanc - Analyst : Hi John, if you've gone through this event to business system roll out, are you set now with the sales for structure, right, that's kind of been fluctuating in the past. I'm sure you're fixing it. Where are you with that aspect of ABS?

Question: Paul Knight - KeyBanc - Analyst : And the -- you know you mentioned the crown jewels being SRS and SMS and a pretty impressive 8% organic growth rate. The biologic market probably grows around there. Do you think that's kind of the long term growth rate potential for those businesses? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 12:30PM, AZTA.OQ - Q2 2025 Azenta Inc Earnings Call

Question: Paul Knight - KeyBanc - Analyst : And then lastly, China. China is actually an innovator now in biotech. Is China in your view at risk due to the China-US dialogue or is it really legit discovery market for you at this juncture?

Question: Vijay Kumar - Evercore - Analyst : Okay, thank you.

Question: Paul Knight - KeyBanc - Analyst : No problem.

Question: Matt Stanton - Jefferies - Analyst : Thanks. Maybe just to pick up there on gene synthesis. You talked about it was down in the quarter, but tough double-digit comp there last year. Just give a little more color in terms of trends, either customers academic versus biopharma in the quarter or by geography. Sounds like America's was maybe a little bit softer. And then any change in your expectations here for the year? I know you left Multiomics overall unchanged at mid single. But any color in terms of how tariffs could impact the GENEWIZ business from a demand destruction side and then just another company in the space and out some targeted actions on the academic side a few months ago. Curious if you've seen any change in trends as a result of that for you where you know the industry more broadly? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 12:30PM, AZTA.OQ - Q2 2025 Azenta Inc Earnings Call

Question: Matt Stanton - Jefferies - Analyst : Good. Thanks, and then and then maybe one on capital deployment done your script. You noted kind of the balance sheet optionality over $500 million of cash on the balance sheet. I think you've been pretty clear since you joined in terms of your preferences for capital deployment, maybe the share repurchase towards the bottom end. But it sounds like maybe just given where shares are -- you're a little more open to that. So I guess talk about kind of framework of how you balance buy back versus other actions. And you know, obviously, others in the space are talking about dislocation and balance sheet fire power. So just talk about kind of where your funnel sits today, and I think one of the big focuses for you going back to when you started was just revamping and building the M&A muscle. So maybe just an update in terms of where you and the team sit from, the funnel, but also the muscle to be able to execute and integrate on some of these tucking deals you noted. Thanks.

Question: Matt Stanton - Jefferies - Analyst : Okay, appreciate it. Thank you.

Question: Brandon Smith - TD Cowen - Analyst : Great, thanks for taking the questions guys, and congrats on the quarter. Maybe just a couple quick ones from us. I know you've touched on this a little bit, but I wanted to ask if you have any sense or have had any conversations with customers over the last quarter, that might suggest any potential order pull forward to get ahead of or around tariffs this year, and if you're kind of seeing or you might expect certain segments within your revenue streams to feel that -- maybe more than others. And then really just -- I know you also touched on this a little bit within Multiomics, you spoke to some nice price stabilizations on NGS and in the market in China, but I guess just wondering if you can expand on a bit on some of the NGS ordering trends a little more broadly, just anything that you're seeing that you would call out, how you're thinking about that growth opportunity, maybe just over the medium term if you just notice any particular shifts in customer priorities where you think -- is especially primed to compete. Thanks.

Question: Brandon Smith - TD Cowen - Analyst : Got it, super helpful. Thanks, guys. You bet.