Azenta Inc Q4 2024 Earnings Call Transcript

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

Question: David Saxon - Needham - Analyst : So I have two, one on guidance and then one on the margins. So for, I guess, the first question, guiding to 3% to 5% organic growth, that's ex B Medical. If I look at the fiscal '26 target, I think SMS was expected to grow high singles, Multiomics, so this might be a multi-part question. But first, I understand you're hosting an Analyst Day next year, but would love John, to hear your thoughts on the fiscal '26 targets, whether you think they're achievable excluding B Medical obviously? Or will the next long-term model be started from a new page. And then number 2 is the lower fiscal '25 guidance relative to the assumptions baked into the '26 targets. Is that a function of the macro and market or -- are you still is in execution at this point?

Question: David Saxon - Needham - Analyst : Okay. Great. That's super helpful. And then my second question, probably for Herman. So the EBITDA margin, obviously, really good performance this quarter and last. So the guidance for fiscal '25 is implying flattish relative to the second half of fiscal '24. So I just want to understand the dynamics there. Is that just B Medical coming out of the model? Or are there any other dynamics that play -- any color on the quarterly cadence for EBITDA margin?

Question: Vijay Kumar - Evercore - Analyst : John, welcome to Azenta. I guess, Azenta's earnings call and (inaudible). I had a few questions if you don't mind now (inaudible) that's a pretty strong number. And I think I heard you say you've completed the transition on the (inaudible) expected strong double-digit growth? And would it (inaudible) do in the quarter?

Question: Vijay Kumar - Evercore - Analyst : Sorry, Gene Synthesis in the quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 9:30PM, AZTA.OQ - Q4 2024 Azenta Inc Earnings Call

Question: Vijay Kumar - Evercore - Analyst : Understood. John, one for you on China. What did China do in Fiscal '24? And what is the guide (inaudible) five. I guess a lot of questions here on potentia China tariff impacts. And maybe if you could just comment on ways Azenta importing from China in any hypothetical scenario analysis on where the tariff (inaudible) would look like? .

Question: Vijay Kumar - Evercore - Analyst : Understood. And maybe one last one for you, John, and (inaudible) I know it's still early days, but high level, learning for you and your strategic vision for the business would be helpful?

Question: Jacob Johnson - Stephens - Analyst : John, welcome. I'm off to a great start with you. Herman has been great working with you and educate us to all of the progress you made. Maybe (inaudible) just maybe first on freezers maybe for both of you. I think stores were down in the quarter. I'm just curious what you saw there was the timing? Or are you seeing some headwinds from the capital equipment environment? And then, John, just given your background in the freezers market is a four-letter word for investors right now. Can you just talk about your thoughts on differentiation of the (inaudible) portfolio. And then obviously, it's been difficult broadly for the freezer market for the last couple of years, your view for the outlook for that market longer term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 9:30PM, AZTA.OQ - Q4 2024 Azenta Inc Earnings Call

Question: Jacob Johnson - Stephens - Analyst : Got it. That's helpful. And then just maybe one on NGS. Just can you talk about what you're seeing there in terms of pricing versus volume? I think I heard you talk about maybe some continued price stabilization in the first half of the year. Can you just talk about the trends on that piece of business?

Question: Jacob Johnson - Stephens - Analyst : Got it. Thank you, Herman (inaudible)

Question: Andrew Cooper - Raymond James - Analyst : John, great to connect the first time publicly here. Maybe just a quick one to guide though. I just want to maybe ask it a little bit of a different way. I know you mentioned macro, we talked a little bit about some of the pricing in Multiomics. But you do have some periods in this fiscal year, you just closed where comps should be not overly difficult when we think about the ['25] growth. So maybe just can you lay out some of the items that we should keep in mind to keep us from being a little more bullish than that 3% to 5% in terms of what you might be able to deliver, given what you've seen in the fourth quarter with the core business was right in line with that already?

Question: Andrew Cooper - Raymond James - Analyst : No, that's helpful. And then just one more again sticking with guidance. I wonder sure the margin uplift, the 300 basis points, is that off a base of what you just reported? Or do we need to think about the EBITDA margins from continuing ops being a little bit different just given B Medical was probably somewhere, I don't know, near breakeven and probably dilutive to the overall base when we think about EBITDA margins in terms of the reported number for fiscal '24?

Question: Andrew Cooper - Raymond James - Analyst :

Question: Andrew Cooper - Raymond James - Analyst : So you can't give us a sense for what the actual number you're pointing towards is fiscal '25, given we don't have that fiscal '24 (inaudible) yet? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 9:30PM, AZTA.OQ - Q4 2024 Azenta Inc Earnings Call

Question: Matt Stanton - Jefferies - Analyst : (inaudible) I wonder what your comments were helpful on vision for the business where you're focused. If you go to M&A, you talked about strategic tuck-ins and the need to earn your way back there. Can you maybe just talk a little into how the funnel you inherited looks today? Does that need to be rebuilt or changed at all? And should there be any evolution in terms of key criteria as you think about those strategic tuck-ins, maybe leaning on some of the financial metrics and lend to do deals from your experience prior such as (inaudible)?

Question: Matt Stanton - Jefferies - Analyst : That's helpful. And then maybe one for you, Herman. Just talk about the pricing baked into the 3% to 5% guide next year. It sounds like NGS headwinds there (inaudible) market growth mix dynamics, what's baked in from a pricing standpoint for 2025?

Question: Paul Knight - KeyBanc Capital Markets - Analyst : This is Lucas signing in for Paul Knight at KeyBanc. One quick question on the B Medical transaction. Is there any color you can provide on the time line for closing that transaction and whether it's more likely to be the first half or second half type of event?

Question: Paul Knight - KeyBanc Capital Markets - Analyst : Great. And then switching over to CapEx, I believe you said the CapEx number for the quarter was $13 million. Would you expect that to trend lower after the B Medical divestiture closing?