Q4 2025 Azenta Inc Earnings Call

November 21, 2025

Speaker #1: Greetings, and welcome to the Azenta Q4 2025 financial results. During the presentation, all participants will be in the listen-only mode. Afterwards, we will conduct a question-and-answer session.

Operator: Greetings and welcome to the Azenta Q4 2025 financial results. During the presentation, all participants will be in the listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press star followed by the one on your telephone. As a reminder, this conference is being recorded Friday, 21 November 2025. I will now turn the conference over to Yvonne Perron, Vice President, FP&A and Investor Relations.

Speaker #1: At that time, if you have a question, please press star followed by the one on your telephone. As a reminder, this conference is being recorded on Friday, November 21st, 2025.

Speaker #1: I will now turn the conference over to Yvonne Perron, Vice President, FP&A and Investor Relations.

Speaker #2: Thank you, Operator, and good morning to everyone on the line today. We would like to welcome you to our earnings conference call for the fourth quarter of fiscal year 2025.

Yvonne Perron: Thank you, Operator, and good morning to everyone on the line today. We would like to welcome you to our earnings conference call for the fourth quarter of fiscal year 2025. Our fourth quarter earnings press release was issued before the open of the market today and is available on our Investor Relations website located at investors.azenta.com, in addition to the supplementary PowerPoint slides that will be used during the prepared remarks today. Please note that effective the first fiscal quarter of 2025, the results of B Medical Systems are treated as discontinued operations. I would like to remind everyone that during the course of the call, we will be making a number of forward-looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements.

Speaker #2: Our fourth-quarter earnings press release was issued before the open of the market today and is available on our Investor Relations website, located at investors.azenta.com, in addition to the supplementary PowerPoint slides that will be used during the prepared remarks today.

Speaker #2: Please note that effective the first fiscal quarter of 2025, the results of B Medical Systems are treated as discontinued operations. I would like to remind everyone that during the course of the call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #2: There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements. I would refer you to the section of our earnings release titled "Safe Harbor Statement: The Safe Harbor Slide" on the aforementioned PowerPoint presentation on our website and our various filings with the SEC.

Yvonne Perron: I would refer you to the section of our earnings release titled Safe Harbor Statement, the Safe Harbor slide on the aforementioned PowerPoint presentation on our website, and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of the GAAP measures, they provide an even more complete understanding of the Azenta business.

I would refer you to the section of our earnings release titled Safe Harbor Statement, the Safe Harbor slide on the aforementioned PowerPoint presentation on our website, and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of the GAAP measures, they provide an even more complete understanding of the Azenta business.

Speaker #2: Including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today.

Speaker #2: We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP.

Speaker #2: We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance. When considered alongside GAAP financial results and the reconciliation of the GAAP measures, they provide an even more complete understanding of the Azenta business.

Speaker #2: Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Marotta, and our Executive Vice President and Chief Financial Officer, Lawrence Lin.

Yvonne Perron: Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Marotta, and our Executive Vice President and Chief Financial Officer, Lawrence Lin. We will open the call with remarks from John, then Lawrence will provide a detailed look into our financial results and our outlook for fiscal year 2026. We will then take your questions at the end of the prepared remarks. With that, I would like to turn the call over to our CEO, John Marotta.

Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Marotta, and our Executive Vice President and Chief Financial Officer, Lawrence Lin. We will open the call with remarks from John, then Lawrence will provide a detailed look into our financial results and our outlook for fiscal year 2026. We will then take your questions at the end of the prepared remarks. With that, I would like to turn the call over to our CEO, John Marotta.

Speaker #2: We will open the call with remarks from John. Then, Lawrence will provide a detailed look into our financial results and our outlook for fiscal year 2026.

Speaker #2: We will then take your questions at the end of the prepared remarks. With that, I would like to turn the call over to our CEO, John.

Speaker #2: We will then take your questions at the end of the prepared remarks. With that, I would like to turn the call over to our CEO, John Marotta.

Speaker #3: Thank you, Yvonne. Good morning, everyone, and thank you for joining us today. As we reflect on fiscal 2025, I want to begin by recognizing our Azenta employees around the world.

John Marotta: Thank you, Yvonne. Good morning, everyone, and thank you for joining us today. As we reflect on fiscal 2025, I want to begin by recognizing our Azenta employees around the world. Their dedication, resilience, and unwavering focus on our customers and our purpose, enabling breakthroughs faster, have been the driving force behind our successes to date. At the start of the year, we set out to refocus the organization, put the customer at the core of everything we do, to simplify how we operate, to improve execution, and to build a company positioned for durable, profitable growth and long-term value creation. We've made considerable progress, but we have also recognized we have more to do, which excites us about the road ahead. The opportunities in front of us are significant.

Speaker #3: Their dedication, resilience, and unwavering focus on our customers and our purpose of enabling breakthroughs faster have been the driving force behind our successes to date.

Speaker #3: At the start of the year, we set out to refocus the organization, putting the customer at the core of everything we do, and simplifying how we operate.

Speaker #3: To improve execution and to build a company position for durable, profitable growth and long-term value creation. We've made considerable progress, but we have also recognized that we have more to do.

Speaker #3: Which excites us about the road ahead. The opportunities in front of us are significant. We're energized by the potential to deepen our impact, sharpen our execution, and continue delivering for our customers, our employees, and our shareholders.

John Marotta: We're energized by the potential to deepen our impact, sharpen our execution, and continue delivering for our customers, our employees, and our shareholders. We've created a simpler, more accountable organization through the implementation of the Azenta Business System, ABS, which is the framework for how we operate. It brings together lean principles, daily management routines, and structured problem-solving. This year, we trained teams and conducted Kaizens in manufacturing, commercial, and support functions, and delivered measurable improvements in quality, on-time delivery, and overall productivity. These results are just the start. What's most meaningful is the cultural shift and momentum. Operational excellence is no longer just a goal. It's embedded in how our teams work every day. Employees are identifying inefficiencies and driving change from the ground up. We have simplified our structure.

We're energized by the potential to deepen our impact, sharpen our execution, and continue delivering for our customers, our employees, and our shareholders. We've created a simpler, more accountable organization through the implementation of the Azenta Business System, ABS, which is the framework for how we operate. It brings together lean principles, daily management routines, and structured problem-solving. This year, we trained teams and conducted Kaizens in manufacturing, commercial, and support functions, and delivered measurable improvements in quality, on-time delivery, and overall productivity. These results are just the start. What's most meaningful is the cultural shift and momentum. Operational excellence is no longer just a goal. It's embedded in how our teams work every day. Employees are identifying inefficiencies and driving change from the ground up. We have simplified our structure.

Speaker #3: We've created a simpler, more accountable organization through the implementation of the Azenta Business System (ABS), which is the framework for how we operate. It brings together lean principles, daily management routines, and structured problem-solving.

Speaker #3: This year, we trained teams and conducted Kaizens in manufacturing, commercial, and support functions, delivering measurable improvements in quality, on-time delivery, and overall productivity.

Speaker #3: These results are just the start. What's most meaningful is the cultural shift and momentum. Operational excellence is no longer just a goal; it's embedded in how our teams work every day.

Speaker #3: Employees are identifying efficiencies and driving change from the ground up. We have simplified our structure; we have moved from a complex centralized model to one that empowers our operating companies with clearer accountability and greater agility.

John Marotta: We have moved from a complex, centralized model to one that empowers our operating companies with clearer accountability and greater agility. Decision-making is now faster, closer to the customer, and grounded in data and outcomes. We've reinvested savings in line with our growth priorities: innovation, sales, marketing, and product management. These changes are making Azenta a more growth-focused and efficient company. The strength of our balance sheet with over half a billion dollars in cash, cash equivalents, and marketable securities gives us the financial flexibility to invest with discipline across four strategic levers: driving productivity, accelerating organic growth, returning capital to shareholders through share repurchases, and pursuing targeted tuck-in M&A. We will have clear accountability for outcomes, reinforcing our commitment to value creation and operational excellence. We remain well-positioned to invest for our future while delivering sustainable returns and creating long-term value.

We have moved from a complex, centralized model to one that empowers our operating companies with clearer accountability and greater agility. Decision-making is now faster, closer to the customer, and grounded in data and outcomes. We've reinvested savings in line with our growth priorities: innovation, sales, marketing, and product management. These changes are making Azenta a more growth-focused and efficient company. The strength of our balance sheet with over half a billion dollars in cash, cash equivalents, and marketable securities gives us the financial flexibility to invest with discipline across four strategic levers: driving productivity, accelerating organic growth, returning capital to shareholders through share repurchases, and pursuing targeted tuck-in M&A. We will have clear accountability for outcomes, reinforcing our commitment to value creation and operational excellence. We remain well-positioned to invest for our future while delivering sustainable returns and creating long-term value.

Speaker #3: Decision-making is now faster, closer to the customer, and grounded in data and outcomes. We've reinvested savings in line with our growth priorities: innovation, sales, marketing, and product management.

Speaker #3: These changes are making Azenta a more growth-focused and efficient company. The strength of our balance sheet, with over half a billion dollars in cash, cash equivalents, and marketable securities, gives us the financial flexibility to invest with discipline across four strategic levers: driving productivity, accelerating organic growth, returning capital to shareholders through share repurchases, and pursuing targeted tuck-in M&A.

Speaker #3: We will have clear accountability for outcomes, reinforcing our commitment to value creation and operational excellence. We remain well positioned to invest in our future while delivering sustainable returns and creating long-term value.

Speaker #3: In fiscal 2025, we achieved 3% core growth and delivered meaningful margin expansion of 310 basis points. Beyond our financial results, we took decisive steps to reshape our commercial organization, with the right leadership in place, an expanded field presence, and a sharpened go-to-market targeting.

John Marotta: In fiscal 2025, we achieved 3% core growth and delivered meaningful margin expansion of 310 basis points. Beyond our financial results, we took decisive steps to reshape our commercial organization. With the right leadership in place, an expanded field presence, and a sharpened go-to-market targeting, we're well-positioned to serve our customers and accelerate our growth trajectory. It's important to recognize that all of this took place amid a volatile and uncertain macro backdrop, characterized by softer academic and NIH funding, shifting biopharma priorities, and ongoing geopolitical uncertainty. Yet, through these challenges, Azenta demonstrated its resilience. Our differentiated portfolio delivers critical solutions that uniquely support our customers, ranging from sample management of irreplaceable assets to automated product workflows, warehouse and inventory optimization, and comprehensive testing of samples and data that underpin life sciences research and production. We're confident not only in our ability to navigate volatility, but to capitalize on it.

In fiscal 2025, we achieved 3% core growth and delivered meaningful margin expansion of 310 basis points. Beyond our financial results, we took decisive steps to reshape our commercial organization. With the right leadership in place, an expanded field presence, and a sharpened go-to-market targeting, we're well-positioned to serve our customers and accelerate our growth trajectory. It's important to recognize that all of this took place amid a volatile and uncertain macro backdrop, characterized by softer academic and NIH funding, shifting biopharma priorities, and ongoing geopolitical uncertainty. Yet, through these challenges, Azenta demonstrated its resilience. Our differentiated portfolio delivers critical solutions that uniquely support our customers, ranging from sample management of irreplaceable assets to automated product workflows, warehouse and inventory optimization, and comprehensive testing of samples and data that underpin life sciences research and production. We're confident not only in our ability to navigate volatility, but to capitalize on it.

Speaker #3: We're well positioned to serve our customers and accelerate our growth trajectory. It's important to recognize that all of this took place amid a volatile and uncertain macro backdrop.

Speaker #3: Characterized by softer academic and NIH funding, shifting biopharma priorities, and ongoing geopolitical uncertainty. Yet, through these challenges, Azenta demonstrated its resilience. Our differentiated portfolio delivers critical solutions that uniquely support our customers, ranging from sample management of irreplaceable assets to automated product workflows, warehouse and inventory optimization, and comprehensive testing of samples and data that underpin life sciences research and production.

Speaker #3: We're confident not only in our ability to navigate volatility but also to capitalize on it. This environment has created opportunities as customers look to do more with less; they are consolidating partners, outsourcing non-core operations, and investing in automation and digital workflows.

John Marotta: This environment has also created opportunities. As customers look to do more with less, they are consolidating partners, outsourcing non-core operations, and investing in automation and digital workflows, all areas where Azenta is positioned to lead. We're seeing new partnership discussions emerge precisely because of our reputation for expertise, quality, reliability, and execution. Our customers are looking for partners they can trust, and Azenta is that partner. As we look ahead to fiscal 2026, we are entering the year from a position of strength. Although macroeconomic uncertainty continues to persist, we have reshaped the organization, instilled a culture of accountability and continuous improvement, and set a strong operational foundation. Our priorities are clear: continue to deliver core growth and margin expansion, embed the Azenta Business System deeper across the organization to further improve our operational discipline and productivity, and to deploy capital optimally in a disciplined approach.

This environment has also created opportunities. As customers look to do more with less, they are consolidating partners, outsourcing non-core operations, and investing in automation and digital workflows, all areas where Azenta is positioned to lead. We're seeing new partnership discussions emerge precisely because of our reputation for expertise, quality, reliability, and execution. Our customers are looking for partners they can trust, and Azenta is that partner. As we look ahead to fiscal 2026, we are entering the year from a position of strength. Although macroeconomic uncertainty continues to persist, we have reshaped the organization, instilled a culture of accountability and continuous improvement, and set a strong operational foundation. Our priorities are clear: continue to deliver core growth and margin expansion, embed the Azenta Business System deeper across the organization to further improve our operational discipline and productivity, and to deploy capital optimally in a disciplined approach.

Speaker #3: All areas where Azenta is positioned to lead. We're seeing new partnership discussions emerge precisely because of our reputation for expertise, quality, reliability, and execution.

Speaker #3: Our customers are looking for partners they can trust, and Azenta is that partner. As we look ahead to fiscal 2026, we're re-entering the year from a position of strength.

Speaker #3: Although macroeconomic uncertainty continues to persist, we have reshaped the organization, instilled a culture of accountability and continuous improvement, and set a strong operational foundation; our priorities are clear.

Speaker #3: Continue to deliver core growth and margin expansion; embed the Azenta business system deeper across the organization to further improve our operational discipline and productivity.

Speaker #3: And to deploy capital optimally, in a disciplined approach. We anticipate core revenue growth between 3% and 5%, and expected adjusted EBITDA margin expansion of 300 basis points.

John Marotta: We anticipate core revenue growth between 3% to 5% and expected adjusted EBITDA margin expansion of 300 basis points and higher free cash flow generation as we scale our operational improvements. With a leaner structure, growth initiatives, enhanced ABS discipline, and a strong balance sheet, we believe we're positioned to outperform the market. Next month, we will host our Investor Day, where we will outline the next phase of the Azenta journey, including our multi-year growth strategy, long-term financial framework, and capital deployment priorities. We look forward to sharing how our strategy positions us for profitable growth and value creation. We are a stronger company today, operationally, culturally, and strategically, and we are confident in the path ahead. With that, I'll turn the call over to Lawrence for a detailed review of our financial results.

We anticipate core revenue growth between 3% to 5% and expected adjusted EBITDA margin expansion of 300 basis points and higher free cash flow generation as we scale our operational improvements. With a leaner structure, growth initiatives, enhanced ABS discipline, and a strong balance sheet, we believe we're positioned to outperform the market. Next month, we will host our Investor Day, where we will outline the next phase of the Azenta journey, including our multi-year growth strategy, long-term financial framework, and capital deployment priorities. We look forward to sharing how our strategy positions us for profitable growth and value creation. We are a stronger company today, operationally, culturally, and strategically, and we are confident in the path ahead. With that, I'll turn the call over to Lawrence for a detailed review of our financial results.

Speaker #3: And higher free cash flow generation, as we scale our operational improvements. With a leaner structure, growth initiatives, enhanced ABS discipline, and a strong balance sheet, we believe we're positioned to outperform the market.

Speaker #3: Next month, we will host our Investor Day, where we will outline the next phase of the Azenta journey, including our multi-year growth strategy, long-term financial framework, and capital deployment priorities.

Speaker #3: We look forward to sharing how our strategy positions us for profitable growth and value creation. We are a stronger company today—operationally, culturally, and strategically—and we are confident in the path ahead.

Speaker #3: With that, I'll turn the call over to Lawrence for a detailed review of our financials.

Speaker #3: Results. Thank you, John, and good.

Lawrence Lin: Thank you, John, and good morning, everybody. I'll start by sharing with you our fourth quarter and full-year fiscal 2025 results, then discuss our segments, provide an update on our balance sheet, and close with guidance for fiscal 2026. First, I want to take a moment to echo John's comments. Fiscal 2025 was truly a pivotal year for Azenta. As we close the year, we're encouraged by the internal business momentum, and excited to carry that progress forward into fiscal 2026. The results we are discussing today exclude B Medical Systems, which is reported in discontinued operations unless otherwise noted. In the fourth quarter, we recorded an additional non-cash loss on assets held for sale of $4 million on B Medical. We believe the transaction remains on track to be announced in calendar 2025.

Speaker #2: Good morning, everybody. I'll start by sharing with you our fourth quarter and full year fiscal 2025 results, then discuss our segments, provide an update on our balance sheet, and then close with guidance for fiscal 2026.

Speaker #2: But first, I want to take a moment to echo John's comments. Fiscal 2025 was truly a pivotal year for Azenta. As we close the year, we're encouraged by the internal business momentum and excited to carry that progress forward into fiscal 2026.

Speaker #2: The results we are discussing today exclude B Medical Systems, which is reported in discontinued operations, unless otherwise noted. In the fourth quarter, we recorded an additional non-cash loss on assets held for sale of $4,000,000 related to B Medical.

Speaker #2: We believe the transaction remains on track to be announced in calendar 2025. To supplement my remarks today, I will refer to the slide deck available on our website.

Lawrence Lin: To supplement my remarks today, I will refer to the slide deck available on our website. We'll begin on slide four with a few highlights. Fourth quarter revenue was $159 million, up 6% year-over-year on a reported basis and up 4% organically, with Multiomics delivering a record quarter. Fiscal year 2025 revenue was $594 million, which was up 4% on a reported basis and up 3% organic, despite a macro environment that became more challenging as the year progressed. Strong performance in next-generation sequencing, clinical biosource, sample repository solutions, and consumables and instruments contributed meaningfully to these results. Non-GAAP EPS for the fourth quarter was $0.21 and was $0.51 for the full year. I'm pleased to report an adjusted EBITDA margin of 13% in the fourth quarter and 11.2% for the full year, representing expansion of approximately 230 basis points in Q4 and 310 basis points for the full year.

To supplement my remarks today, I will refer to the slide deck available on our website. We'll begin on slide four with a few highlights. Fourth quarter revenue was $159 million, up 6% year-over-year on a reported basis and up 4% organically, with Multiomics delivering a record quarter. Fiscal year 2025 revenue was $594 million, which was up 4% on a reported basis and up 3% organic, despite a macro environment that became more challenging as the year progressed. Strong performance in next-generation sequencing, clinical biosource, sample repository solutions, and consumables and instruments contributed meaningfully to these results. Non-GAAP EPS for the fourth quarter was $0.21 and was $0.51 for the full year. I'm pleased to report an adjusted EBITDA margin of 13% in the fourth quarter and 11.2% for the full year, representing expansion of approximately 230 basis points in Q4 and 310 basis points for the full year.

Speaker #2: We'll begin on slide four with a few highlights. Fourth quarter revenue was $159 million, up 6% year over year on a reported basis, and up 4% organically, with multi-omics delivering a record quarter.

Speaker #2: Fiscal Year 2025 revenue was $594 million, which was up 4% on a reported basis and up 3% organically, despite a macro environment that became more challenging as the year progressed.

Speaker #2: Strong performance in next-generation sequencing, clinical biosource, sample repository solutions, and consumables and instruments contributed meaningfully to these results. Non-GAAP EPS for the fourth quarter was $0.21 and was $0.51 for the full year.

Speaker #2: I'm pleased to report an adjusted EBITDA margin of 13% in the fourth quarter and 11.2% for the full year, representing expansion of approximately 230 basis points in Q4 and 310 basis points for the full year.

Speaker #2: These results reflect the continued benefits of our operational turnaround and disciplined cost execution, delivered in the face of a challenging macro environment. We believe we have meaningfully more margin expansion potential, and we are confident we can achieve it while also accelerating our top-line growth.

Lawrence Lin: These results reflect the continued benefits of our operational turnaround and disciplined cost execution delivered in the face of a challenging macro environment. We believe we have meaningfully more margin expansion potential and are confident we can achieve it while also accelerating our top-line growth. Free cash flow, including B Medical, was a usage of $6 million for the quarter, driven by the timing of revenue and project-related milestone billing. For the full year, free cash flow was $38 million, a notable improvement of $26 million year-over-year, driven by improvements in working capital. Excluding B Medical, we ended the year in a strong financial position with $546 million in cash, cash equivalents, and marketable securities, providing us with the flexibility to invest in growth initiatives and return value to shareholders over time.

These results reflect the continued benefits of our operational turnaround and disciplined cost execution delivered in the face of a challenging macro environment. We believe we have meaningfully more margin expansion potential and are confident we can achieve it while also accelerating our top-line growth. Free cash flow, including B Medical, was a usage of $6 million for the quarter, driven by the timing of revenue and project-related milestone billing. For the full year, free cash flow was $38 million, a notable improvement of $26 million year-over-year, driven by improvements in working capital. Excluding B Medical, we ended the year in a strong financial position with $546 million in cash, cash equivalents, and marketable securities, providing us with the flexibility to invest in growth initiatives and return value to shareholders over time.

Speaker #2: Free cash flow, including B Medical, was a usage of $6 million for the quarter, driven by the timing of revenue and project-related milestone billing.

Speaker #2: For the full year, free cash flow was $38 million, a notable improvement of $26 million year-over-year, driven by improvements in working capital.

Speaker #2: Excluding B Medical, we ended the year in a strong financial position with $546 million in cash, cash equivalents, and marketable securities, providing us with the flexibility to invest in growth initiatives and return value to shareholders over time.

Speaker #2: We closed fiscal 2025 with a healthier, more efficient business, sustained operational momentum, and the financial strength to invest in our growth priorities. Now, let's turn to slide five to take a deeper look at our results in the quarter.

Lawrence Lin: We closed fiscal 2025 with a healthier, more efficient business, sustained operational momentum, and the financial strength to invest in our growth priorities. Now, let's turn to slide five to take a deeper look at our results in the quarter. Total revenue of $159 million represented 6% growth on a reported basis and 4% on an organic basis. As I already mentioned, Multiomics delivered a record quarter. Solid contributions from next-generation sequencing, automated stores, and sample storage were the primary driver of growth that helped offset softness in other areas of the portfolio. In the fourth quarter, non-GAAP gross margin was 46.7%, down 20 basis points year-over-year. The modest decline was driven by performance in Multiomics, partially offset by favorable product mix, gains from operational efficiencies, and improved cost execution, mainly in sample management solutions.

We closed fiscal 2025 with a healthier, more efficient business, sustained operational momentum, and the financial strength to invest in our growth priorities. Now, let's turn to slide five to take a deeper look at our results in the quarter. Total revenue of $159 million represented 6% growth on a reported basis and 4% on an organic basis. As I already mentioned, Multiomics delivered a record quarter. Solid contributions from next-generation sequencing, automated stores, and sample storage were the primary driver of growth that helped offset softness in other areas of the portfolio. In the fourth quarter, non-GAAP gross margin was 46.7%, down 20 basis points year-over-year. The modest decline was driven by performance in Multiomics, partially offset by favorable product mix, gains from operational efficiencies, and improved cost execution, mainly in sample management solutions.

Speaker #2: Total revenue of $159 million represented a 6% growth on a reported basis and 4% on an organic basis. As I already mentioned, multi-omics delivered a record quarter.

Speaker #2: Solid contributions from next-generation sequencing, automated storage, and sample storage were the primary drivers of growth that helped offset softness in other areas of the portfolio.

Speaker #2: In the fourth quarter, non-GAAP gross margin was 46.7%, down 20 basis points year over year. The modest decline was driven by performance in multi-omics, partially offset by favorable product mix, gains from operational efficiencies, and improved cost execution, mainly in sample management solutions.

Speaker #2: Overall, the net impact was limited, demonstrating the resilience of our business amid a challenging macro environment. Adjusted EBITDA was $21 million, representing a 13% margin, expanding both year over year and sequentially.

Lawrence Lin: Overall, the net impact was limited, demonstrating the resilience of our business amid a challenging macro environment. Adjusted EBITDA was $21 million, representing 13% margin, expanding both year-over-year and sequentially. This improvement reflects the leverage from our cost actions and our disciplined focus on operational performance. Again, non-GAAP EPS was $0.21 per share. Overall, these results underscore consistent progress towards our profitability objectives, driven by improved efficiency, disciplined cost management, and stronger execution. With that, let's turn to slide six for a review of our segment quarterly results, starting with Sample Management Solutions, or SMS. SMS revenue was $86 million for the quarter, up 2% reported and flat organically. The performance reflects softness in cryogenic stores, driven by slower bookings due to ongoing customer budget constraints and a tough compare to last year's record quarter. Consumables and instruments performed well both year-over-year and quarter to quarter.

Overall, the net impact was limited, demonstrating the resilience of our business amid a challenging macro environment. Adjusted EBITDA was $21 million, representing 13% margin, expanding both year-over-year and sequentially. This improvement reflects the leverage from our cost actions and our disciplined focus on operational performance. Again, non-GAAP EPS was $0.21 per share. Overall, these results underscore consistent progress towards our profitability objectives, driven by improved efficiency, disciplined cost management, and stronger execution. With that, let's turn to slide six for a review of our segment quarterly results, starting with Sample Management Solutions, or SMS. SMS revenue was $86 million for the quarter, up 2% reported and flat organically. The performance reflects softness in cryogenic stores, driven by slower bookings due to ongoing customer budget constraints and a tough compare to last year's record quarter. Consumables and instruments performed well both year-over-year and quarter to quarter.

Speaker #2: This improvement reflects the leverage from our cost actions and our disciplined focus on operational performance. Again, non-GAAP EPS was $0.21 per share. Overall, these results underscore consistent progress towards our profitability objectives, driven by improved efficiency, disciplined cost management, and stronger execution.

Speaker #2: With that, let's turn to slide six for a review of our segment quarterly results, starting with Sample Management Solutions (SMS). SMS revenue was $86 million for the quarter, up 2% reported and flat organically.

Speaker #2: The performance reflects softness in cryogenic stores, driven by slower bookings due to ongoing customer budget constraints and a tough comparison to last year's record quarter.

Speaker #2: Consumables and instruments performed well, both year over year and quarter to quarter. While both automated stores and sample storage grew, customers continued to delay CAPEX decisions due to macroeconomic uncertainty.

Lawrence Lin: While both automated stores and sample storage grew, customers continued to delay CapEx decisions due to macroeconomic uncertainty. SMS' fourth quarter non-GAAP gross margin was 49.3%, up 180 basis points year-over-year as a result of a favorable shift in product mix, improved operational execution, and cost management. Turning next to the Multi-Omics segment, Multi-Omics delivered record revenue of $73 million in the quarter, the highest ever for the segment, representing 11% growth on a reported basis and 10% organic growth. Continued strength in next-generation sequencing was the primary driver, with sequencing volume rising 50% year-over-year. We saw strong performance across all geographies, aided by large deals in Europe that contributed to the record quarterly revenue. Despite macro and geopolitical headwinds, our team continues to outperform in China, posting 17% organic growth for the quarter.

While both automated stores and sample storage grew, customers continued to delay CapEx decisions due to macroeconomic uncertainty. SMS' fourth quarter non-GAAP gross margin was 49.3%, up 180 basis points year-over-year as a result of a favorable shift in product mix, improved operational execution, and cost management. Turning next to the Multi-Omics segment, Multi-Omics delivered record revenue of $73 million in the quarter, the highest ever for the segment, representing 11% growth on a reported basis and 10% organic growth. Continued strength in next-generation sequencing was the primary driver, with sequencing volume rising 50% year-over-year. We saw strong performance across all geographies, aided by large deals in Europe that contributed to the record quarterly revenue. Despite macro and geopolitical headwinds, our team continues to outperform in China, posting 17% organic growth for the quarter.

Speaker #2: SMS fourth quarter non-GAAP gross margin was 49.3%, up 180 basis points year-over-year, as a result of a favorable shift in product mix, improved operational execution, and cost management.

Speaker #2: Turning next to the multi-omics segment, multi-omics delivered record revenue of $73 million in the quarter, the highest ever for the segment. This represents 11% growth on a reported basis and 10% organic growth.

Speaker #2: Continued strength in next-generation sequencing was the primary driver, with sequencing volume rising 50% year over year. We saw strong performance across all geographies, aided by large yields in Europe that contributed to the record quarterly revenue.

Speaker #2: Despite macro and geopolitical headwinds, our team continues to outperform in China, posting 17% organic growth for the quarter. In 2025, driven by strong demand in China and continued wins in oligo production, we achieved low single-digit growth year over year, resulting in the highest quarterly revenue.

Lawrence Lin: Encouragingly, gene synthesis revenue grew low single digits year-over-year, achieving the highest quarterly revenue in 2025, driven by strong demand in China and continued wins in oligo production. We continue to actively monitor the macro environment, where customers are reprioritizing projects and remapping pipelines. FENGR sequencing revenue declined low double digits year-over-year, consistent with trends we've discussed in prior quarters, though the pace of decline moderated in the quarter. Revenue growth in Plasmid EZ, our Oxford Nanopore-based solution, remains strong and continues to largely offset the decline in traditional FENGR revenue. Multi-Omics non-GAAP gross margin for the fourth quarter was 43.7%, down 260 basis points year-over-year. The decline was primarily driven by product mix and lower volume in FENGR sequencing and gene synthesis. Now, let's turn to slide seven for a review of the balance sheet.

Encouragingly, gene synthesis revenue grew low single digits year-over-year, achieving the highest quarterly revenue in 2025, driven by strong demand in China and continued wins in oligo production. We continue to actively monitor the macro environment, where customers are reprioritizing projects and remapping pipelines. FENGR sequencing revenue declined low double digits year-over-year, consistent with trends we've discussed in prior quarters, though the pace of decline moderated in the quarter. Revenue growth in Plasmid EZ, our Oxford Nanopore-based solution, remains strong and continues to largely offset the decline in traditional FENGR revenue. Multi-Omics non-GAAP gross margin for the fourth quarter was 43.7%, down 260 basis points year-over-year. The decline was primarily driven by product mix and lower volume in FENGR sequencing and gene synthesis. Now, let's turn to slide seven for a review of the balance sheet.

Speaker #2: We continue to actively monitor the macro environment where customers are reprioritizing projects and remapping pipelines. Thengar sequencing revenue declined low double digits year over year, consistent with trends we've discussed in prior quarters, though the pace of decline moderated in the quarter.

Speaker #2: Revenue growth in Plasmid EZ earned Oxford Nanopore-based solutions remains strong and continues to largely offset the decline in traditional Thengar revenue. Multi-omics non-GAAP gross margin for the fourth quarter was 43.7%, down 260 basis points year-over-year.

Speaker #2: The decline was primarily driven by product mix and lower volume in Thengar sequencing and gene synthesis. Now, let's turn to slide seven for a review of the balance sheet.

Speaker #2: We ended the year with $546 million in cash, cash equivalents, and marketable securities, excluding B Medical. We had no debt outstanding. The strong liquidity position provides us with the strategic flexibility to invest in growth initiatives, support operational needs, and maintain a disciplined capital allocation framework.

Lawrence Lin: We ended the year with $546 million in cash, cash equivalents, and marketable securities, excluding B Medical. We had no debt outstanding. This strong liquidity position provides us with the strategic flexibility to invest in growth initiatives, support operational needs, and maintain a disciplined capital allocation framework. Capital expenditures for the quarter were approximately $8 million, reflecting continued investment in automation, capacity expansion, and technology to support scalable growth. Turning to guidance on slide nine, for fiscal 2026, we anticipate organic revenue growth in the range of 3% to 5%. Multiomics is expected to deliver low single-digit growth, while Sample Management Solutions is expected to contribute mid-single-digit growth. Our guidance reflects continued uncertainty in the macro environment, particularly around capital spending, as well as moderated growth in next-generation sequencing as volumes normalize.

We ended the year with $546 million in cash, cash equivalents, and marketable securities, excluding B Medical. We had no debt outstanding. This strong liquidity position provides us with the strategic flexibility to invest in growth initiatives, support operational needs, and maintain a disciplined capital allocation framework. Capital expenditures for the quarter were approximately $8 million, reflecting continued investment in automation, capacity expansion, and technology to support scalable growth. Turning to guidance on slide nine, for fiscal 2026, we anticipate organic revenue growth in the range of 3% to 5%. Multiomics is expected to deliver low single-digit growth, while Sample Management Solutions is expected to contribute mid-single-digit growth. Our guidance reflects continued uncertainty in the macro environment, particularly around capital spending, as well as moderated growth in next-generation sequencing as volumes normalize.

Speaker #2: Capital expenditures for the quarter were approximately $8 million, reflecting continued investment in automation capacity expansion and technology to support scalable growth. Turning to guidance on slide nine, for fiscal 2026, we anticipate organic revenue growth in the range of 3% to 5%.

Speaker #2: Multi-omics is expected to deliver low single-digit growth, while sample management solutions are expected to contribute mid-single-digit growth. Our guidance reflects continued uncertainty in the macro environment, particularly around capital spending, as well as moderated growth in next-generation sequencing as volumes normalize.

Speaker #2: Based on these factors, we expect a slower start in the first half of the year and anticipate first-quarter revenue to decline approximately 1% to 2% year over year.

Lawrence Lin: Based on these factors, we expect a slower start in the first half of the year and anticipate first quarter revenue to decline approximately 1% to 2% year-over-year. We expect the second half of the year to accelerate as our commercial investments and growth initiatives gain traction, giving us confidence in our full-year guide. On the profitability front, we are targeting approximately 300 basis points of year-over-year adjusted EBITDA margin expansion, driven by continued operational efficiencies, disciplined cost management, and scalable operating leverage. We expect to improve free cash flow generation by over 30% year-over-year. We look forward to sharing more information about our growth priorities and longer-term financial and capital allocation framework in our Investor Day in December. We will outline how these strategic initiatives position Azenta for sustainable, profitable growth, and, most importantly, value creation. In closing, we are pleased with our performance in fiscal 2025.

Based on these factors, we expect a slower start in the first half of the year and anticipate first quarter revenue to decline approximately 1% to 2% year-over-year. We expect the second half of the year to accelerate as our commercial investments and growth initiatives gain traction, giving us confidence in our full-year guide. On the profitability front, we are targeting approximately 300 basis points of year-over-year adjusted EBITDA margin expansion, driven by continued operational efficiencies, disciplined cost management, and scalable operating leverage. We expect to improve free cash flow generation by over 30% year-over-year. We look forward to sharing more information about our growth priorities and longer-term financial and capital allocation framework in our Investor Day in December. We will outline how these strategic initiatives position Azenta for sustainable, profitable growth, and, most importantly, value creation. In closing, we are pleased with our performance in fiscal 2025.

Speaker #2: We expect the second half of the year to accelerate as our commercial investments and growth initiatives gain traction, giving us confidence in our full-year guide.

Speaker #2: On the profitability basis points of year-over-year front, we are targeting approximately $300 million in adjusted EBITDA margin expansion, driven by continued operational efficiencies, disciplined cost management, and scalable operating leverage.

Speaker #2: We expect to improve free cash flow generation by over 30% year over year. We look forward to sharing more information about our growth priorities and longer-term financial and capital allocation framework at our Investor Day in December.

Speaker #2: We will outline how these strategic initiatives position Azenta for sustainable, profitable growth and, most importantly, value creation. In closing, we are pleased with our performance in fiscal 2025.

Speaker #2: We reshaped the company structure, strengthened our operational foundation, and generated strong financial results despite a challenging macro environment. The progress we’ve made positions us well for fiscal 2026.

Lawrence Lin: We reshaped the company structure, strengthened our operational foundation, and generated strong financial results despite a challenging macro environment. The progress we've made positions us well for fiscal 2026. This concludes our prepared remarks, and I will now turn the call over to the operator for questions.

We reshaped the company structure, strengthened our operational foundation, and generated strong financial results despite a challenging macro environment. The progress we've made positions us well for fiscal 2026. This concludes our prepared remarks, and I will now turn the call over to the operator for questions.

Speaker #2: This concludes our prepared remarks, and I will now turn the call over to the operator for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from David Saxton with Needham. Your line is now open.

Speaker #2: Should you have a question, please press star, followed by the number on your touch-tone phone. You will hear a prompt once your hand has been raised.

Speaker #2: Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift the hands up before pressing any keys.

Speaker #2: One moment, please, for your first question. Your first question comes from David Saxon with Needham. Your line is now open.

Speaker #3: Great. Good morning, John and Lawrence. Thanks for taking my questions, and congrats on the quarter. So maybe I'll start with guidance. So, 3% to 5% growth, I guess, what do you think the market's going at this point?

David Saxton: Great. Good morning, John and Lawrence. Thanks for taking my questions, and congrats on the quarter. Maybe I'll start with guidance. Three to five growth. I guess, you know, what do you think the market's going at at this point? The decline in fiscal first quarter, down 1% to 2%, what's driving that, you know, across businesses or even, you know, product categories? I think you'll lap the NIH funding dynamics in the fiscal first half. Would love to hear, you know, what's baked into guidance in terms of that impact. I'll have a follow-up.

Speaker #3: And then the decline in fiscal Q1, down one to two, what's driving that across businesses or even product categories? And then I think you'll lap the NIH funding dynamics in the fiscal first half.

Speaker #3: So we'd love to hear what's baked into guidance in terms of that impact. And then I'll have a follow-up.

Speaker #4: Sure. You bet, David. Good to be with you, and thank you for the question. Let's talk about the macro, and then I'll hand it over to Lawrence to get into the numbers.

John Marotta: Sure. You bet, David. Good to be with you. Thank you for the question. Let's talk about the macro, then I'll hand it over to Lawrence to get into the numbers. A lot of what we're seeing is this slowdown on capital expenditures. That's continued to impact our stores in cryo. We're seeing some green shoots around that, particularly in Europe, and seeing less traction in the US right now. There's some booking softness, of course. The government shutdown from last month is really weighing on some of the guidance. The way to think about it is that mid-point's four. You know, that contemplates some deterioration in the macro on the low end. On the upper side, it's just a slow, gradual improvement over the year. Regarding what we think the market's doing, we think the market is, you know, 1% to 2%.

Speaker #4: But a lot of what we're seeing is this slowdown in capital expenditures. That's continued to impact our stores in cryo, and we're seeing some green shoots around that, particularly in the EU, while seeing less traction in the US right now.

Speaker #4: There's some booking softness, of course. The government shutdown from last month is really weighing on some of the guidance. The way to think about it is that the midpoint's four, and that contemplates some deterioration in the macro on the low end. On the upper side, it's just a slow gradual improvement over the year.

Speaker #4: Regarding what we think the market's doing, we think the market is 1 to 2%. We're still in outgrowth story and that's kind of how our view of this is shaping up for '26.

John Marotta: We're still an outgrowth story, and that's kind of how our view of this is shaping up for 2026. One thing to note is we're not, you know, we're not focused on the first quarter, the first half. We're focused on delivering the year like we were this year, and that's really what the teams are laser-focused on.

We're still an outgrowth story, and that's kind of how our view of this is shaping up for 2026. One thing to note is we're not, you know, we're not focused on the first quarter, the first half. We're focused on delivering the year like we were this year, and that's really what the teams are laser-focused on.

Speaker #4: One thing to note is we're not focused on the first quarter or the first half; we're focused on delivering the year like we were this year.

Speaker #4: And that's really what the teams are laser-focused on. Yeah, David, this is Lawrence. How are you doing? So let me give you a little color on Q1, and really John has touched on it a little bit, but a couple of things to inform our view.

Lawrence Lin: Yeah, David, this is Lawrence. How are you doing? Let me give you a little color on Q1. John's touched on it a little bit, but a couple of things inform our view, right? The macro slowdown, the CapEx, really will continue to impact our automated storage business in cryo, right? As John mentioned, we are seeing some green shoots in Europe, but right now, not seeing much traction in the US currently. The second is really the government shutdown, right? Overall, we were down about 45 days. John and I have heard from our customers that new grant reviews and approvals were paused during that time, and it's going to take a bit of time to work through that through the system.

Speaker #4: Right? So the macro slowdown on the CapEx really will continue to impact our automated storage business in cryo. Right? As John mentioned, we are seeing some green shoots in Europe, but right now, we are not seeing much traction in the U.S. currently.

Speaker #4: The second is really the government shutdown, right? Overall, we were down about 45 days. John and I have heard from our customers that new grant reviews and approvals were paused during that time.

Speaker #4: And so it's going to take a bit of time to work through that through the system. So we don't expect this to impact the full year, obviously, but some of these bookings will push out to future quarters.

Lawrence Lin: We don't expect this to impact the full year, obviously, but some of these bookings will push out to future quarters. As far as the proportion of the impact on the negative growth, you know, I would say the macro slowdown on CapEx was about two-thirds, and about 1/3 is related to government funding.

We don't expect this to impact the full year, obviously, but some of these bookings will push out to future quarters. As far as the proportion of the impact on the negative growth, you know, I would say the macro slowdown on CapEx was about two-thirds, and about 1/3 is related to government funding.

Speaker #4: As far as the proportion of the impact on the negative growth, I would say the macro slowdown on CapEx was about two-thirds, and about a third is related to government funding.

Speaker #3: Okay, that's super helpful. Thanks for that. And then the follow-up, I guess, is just on SMS growth for the year. So mid-single digits, you just talked about some weakness in stores in cryo.

David Saxton: Okay. That's super helpful. Thanks for that. The follow-up, I guess, is just on SMS growth for the year. Mid-single digits, you just talked about some weakness in stores in cryo. Last quarter you talked about the CNI backlog was like two and a half times annual sales. You know, maybe if you could, can we get an update there? How much of that is driving your confidence in the mid-single digit growth? You know, how are you thinking about SRS for the year? Thanks so much.

Speaker #3: So I guess last quarter you talked about the CNI backlog being like two and a half times annual sales. So maybe if you could, can we get an update there?

Speaker #3: How much of that is driving your confidence in the mid-single-digit growth? And then how are you thinking about SRS for the year? Thanks so much.

Speaker #4: Yeah. Look, I think for CNI, we feel really good about kind of where we are. Some of the things that you'll see that inform why our SMS is mid-single digit is, and John and I talked a bit about really reinvesting in commercial in fiscal 2025.

Lawrence Lin: Yeah, look, I think for CNI, we feel really good about kind of where we are. Some of the things that you'll see that inform why our SMS is mid-single digit is, and John and I talked a bit about really reinvesting in commercial. In fiscal 2025, we did that in GeneWiz. What you're seeing in fiscal 2026 is we've put in a commercial engine, new leadership, and right now they're putting investments to work on feet on the street. That's one. That's going to read through across all our SMS business lines. Now, to talk a little bit about SRS, you know, we expect robust growth in SRS really through two things, right? You'll see that our commercial engine really starts to move. We just put a new leader in place.

Speaker #4: We did that in GeneWiz. What you're seeing in fiscal 2026 is we've put in a commercial engine, new leadership, and right now they're putting investments to work on feed on the street.

Speaker #4: That's one. So that's going to read through across all our SMS business lines. Now, to talk a little bit about SRS, we expect robust growth in SRS.

Speaker #4: Really, through two things, right? You'll see that our commercial engine really starts to move. We just put a new leader in place. Additionally, as we talked a bit about this, we had an initiative in SRS particularly to optimize our price, and that's going to read through starting at the end of fiscal—sorry, at the end of the first quarter.

Lawrence Lin: Additionally, there is, and we talked a bit about this, we have an initiative in SRS, particularly to optimize our price, and that's going to read through starting at the end of the first quarter. Those are two major components. Why we feel really good about SRS is really we've seen actually recently our commercial leaders close two meaningful big deals in the areas of manufactured and bulk compounds.

Additionally, there is, and we talked a bit about this, we have an initiative in SRS, particularly to optimize our price, and that's going to read through starting at the end of the first quarter. Those are two major components. Why we feel really good about SRS is really we've seen actually recently our commercial leaders close two meaningful big deals in the areas of manufactured and bulk compounds.

Speaker #4: So those are two major components. And why we feel really good about SRS is

Speaker #1: In the areas of manufactured and bulk compounds.

Speaker #2: Okay , great . Thanks so much for that . You bet . .

Speaker #3: Your next question comes from Matt with Stephens. Your line is now open.

David Saxton: Okay. Great. Thanks so much for that.

John Marotta: You bet.

Operator: Your next question comes from Macy Toak with Stifel. Your line is now open.

Speaker #2: I'm .

Speaker #4: an issue with Mac Maybe having now . Let's go to the Mac . Are you . There we go . There we go .

John Marotta: Hi, Mac. We may be having an issue with Mac right now. Let's go to the new Mac. There we go. There we go. Hey, Mac.

Speaker #4: Hey , Mac

Speaker #5: Macroeconomic backdrop. Just to give a little bit of an update on the challenges now.

Macy Toak: Apologies. Sorry about that. You'd think I'd be able to find the mute button by now.

Mac Etoch: Apologies. Sorry about that. You'd think I'd be able to find the mute button by now.

John Marotta: No problem. That's all right.

Speaker #5: seeing across the

Macy Toak: As you highlighted, the macroeconomic backdrop is still a little bit challenged, specifically around capital equipment. I'd love to just get an update of what you're seeing across your various customer bases at this point.

Mac Etoch: As you highlighted, the macroeconomic backdrop is still a little bit challenged, specifically around capital equipment. I'd love to just get an update of what you're seeing across your various customer bases at this point.

Speaker #4: Sure . We're seeing we're seeing pharma . Of course . We're tapping into the profit pools of pharma and biotech . Right now .

John Marotta: Sure. We're seeing pharma. Of course, we're tapping into the profit pools of pharma and biotech right now. We're seeing strength in pharma, so there's spending going on there. There's some repositioning around projects in pharma right now with some of the restructuring that was going on. Some of the projects were put on hold. We're seeing some of that get unstuck at this point in time. There's clarity around that. That means there's clarity with our multi-omics business in terms of what we're supporting from a testing perspective, from a synthesis perspective. We are seeing some investments and some clarity around optimization in biotech. Biotech's holding tight right now in terms of CapEx, more so than pharma. We're seeing a little bit more clarity in the academic and the government side, but that really started to slow down with this government shutdown.

Speaker #4: We're seeing strength in pharma, so there's spending going on there. There's some repositioning around projects in pharma right now, with some of the restructuring that was going on. Some of the projects were put on hold.

Speaker #4: We're seeing some of that get unstuck at this point in time. So there's clarity around that, and that means there's clarity with our multi-omics business in terms of what we're supporting from a testing perspective and from a synthesis perspective.

Speaker #4: We are seeing some investments and some clarity around optimization in biotech. Biotechs are holding tight right now in terms of CapEx, more so than pharma.

Speaker #4: And then we're seeing we were seeing a little bit more clarity in the academic and the government side . But that really that really started to slow down with this government shutdown .

Speaker #4: But all in all, it's more of a pharma story at this point in time.

Speaker #5: I appreciate the color there . And then in terms of multi-omics , the low single digit guide , I think that's I think line with what people were roughly in expecting .

John Marotta: All in all, it's more of a pharma story at this point in time.

All in all, it's more of a pharma story at this point in time.

Macy Toak: I appreciate the elevator. In terms of multi-omics, the low single-digit guide, I think that's roughly in line with what people were expecting. Can you just parse out the various aspects that are contributing to that expectation for the year?

Mac Etoch: I appreciate the elevator. In terms of multi-omics, the low single-digit guide, I think that's roughly in line with what people were expecting. Can you just parse out the various aspects that are contributing to that expectation for the year?

Speaker #5: But can you just parse out various aspects that are contributing to that expectation for the year?

Speaker #4: Sure . You bet . More around on the macro side , and I'll hand it over to Lawrence on the numbers . But on the macro , it's really this normalization on on NGS .

John Marotta: Sure. You bet. More around the macro side, I'll hand it over to Lawrence on the numbers. On the macro, it's really this normalization on NGS. You know, past the technology curve, price normalization, volume normalization, those sorts of things. That's really what we're looking at from a multi-omics perspective. Why don't you give some of the color on the numbers?

Speaker #4: So , you know , past the technology curve , price normalization , volume normalization , those sorts of things . That's really what we're looking at from a from a multi-omics perspective .

Speaker #4: Why don't you give some of the color on the numbers?

Speaker #1: Yeah. Look, you know, first off, we were really pleased with our fourth quarter results. The Multi-omics team did a great job.

Speaker #1: You know , let's talk specifically a bit about Multi-omics a couple of things to note . And John alluded to this is , you know what you're going to see around Multi-omics in particular , NGS is a bit of this normalization .

Lawrence Lin: Yeah. Look, Mac, you know, first off, we were really pleased with our fourth quarter results for multi-omics. The team did a great job. You know, let's talk specifically a bit about multi-omics. A couple of things to note, and John alluded to this, is, you know, what you're going to see around multi-omics, in particular NGS, is a bit of this normalization. We expect NGS through the year to be roughly mid-single digits. As you may recall, we've kind of lapsed this price challenge in the prior year. We saw a lot of volume pickup. Seeing that double-digit number in fiscal 2025, you'll see that really kind of normalize back to mid-single digit growth. Again, we feel really good about what the team's been doing, particularly around the NGS space.

Speaker #1: So we expect NGS through the year to be roughly mid-single digits. As you may recall, we've kind of lapsed this price challenge in the prior year.

Speaker #1: We we saw a lot of volume pick up . So seeing that double digit number in fiscal 2025 , you'll see that really kind of normalize back to mid-single digit growth .

Speaker #1: Again, we feel really good about what the BEAN team's doing, particularly around the NGS space.

Speaker #5: I appreciate the I color. I'll leave it there.

Speaker #4: Thank you .

Speaker #3: Your next question comes from Andrew Cooper with Raymond James. Your line is now open.

Macy Toak: I appreciate the color. I'll leave it there.

Mac Etoch: I appreciate the color. I'll leave it there.

Speaker #6: Hey , everybody . Thanks for the questions . Maybe first a similar 1 to 1 that was just asked . But on the SMS side of the house , in terms of that 3 to 5% growth and maybe calling back or sorry , mid-single digit growth and then maybe calling back to the comment on optimizing price for fiscal 26 .

Lawrence Lin: Thank you.

Operator: Your next question comes from Andrew Cooper with Raymond James. Your line is now open.

Andrew Cooper: Hey, everybody. Thanks for the questions. Maybe first, a similar one to one that was just asked, but on the SMS side of the house in terms of that 3% to 5% growth and maybe calling back, or sorry, mid-single digit growth, and then maybe calling back to the comment on optimizing price for fiscal 2026. Can you give a little bit of framework for how you think about each of the segments, and then how much is price contributing when we think about that mid-single digit goal versus volume on an apples-to-apples basis?

Speaker #6: Can you give a little bit of framework for how you think about each of the segments, and then how much is price contributing?

Speaker #6: When we think about that mid-single-digit goal versus volume on an apples-to-apples basis.

Speaker #4: So just just in terms of the portfolio durability with SRS specifically , I mean , you're looking at contracts of 7 to 25 years , extremely stable , recurring revenue is is , you know , in the 90% range in that part of our portfolio .

Lawrence Lin: Just in terms of the portfolio durability with SRS specifically, I mean, you're looking at contracts of seven to 25 years, extremely stable, recurring revenue is, you know, in the 90% range in that part of our portfolio. We do have contractual obligations around price in particular, so a lot of strength in that. We really have not taken advantage of that in the past, and we're starting to do that now going forward in terms of sharing the value with our customers in terms of what we deliver. Lawrence, you want to talk about giving some of the color on this? Yeah, absolutely. You know, let's start with SMS. Look, we've talked a bit about this slower start for the first quarter and first half on capital expenditures on stores and cryo.

John Marotta: Just in terms of the portfolio durability with SRS specifically, I mean, you're looking at contracts of seven to 25 years, extremely stable, recurring revenue is, you know, in the 90% range in that part of our portfolio. We do have contractual obligations around price in particular, so a lot of strength in that. We really have not taken advantage of that in the past, and we're starting to do that now going forward in terms of sharing the value with our customers in terms of what we deliver. Lawrence, you want to talk about giving some of the color on this?

Speaker #4: And so, we do have contractual obligations around price in particular. So, a lot of strength in that; we really have not taken advantage of that in the past.

Speaker #4: And we're starting to do that now going forward. In terms of sharing the value with our customers, in terms of what we deliver.

Speaker #4: do you want to talk Lawrence , about ? Yeah , some of the color on this ?

Speaker #1: Yeah , absolutely . Let's start with SMS . Look , we've talked a bit about this slower start for the first quarter and first half on capital expenditures on stores and cryo .

Lawrence Lin: Yeah, absolutely. You know, let's start with SMS. Look, we've talked a bit about this slower start for the first quarter and first half on capital expenditures on stores and cryo.

Speaker #1: You know , we expect this to pick up in the second half of the year . When you look at CNI , you know , the team continues to do well as you probably know , we're specked into the workflows , right ?

Lawrence Lin: You know, we expect this to pick up in the second half of the year. When you look at CNI, you know, the team continues to do well. As you probably know, we're specced into the workflows, right? There's a bit of this speed bump around the government shutdown, but overall, we expect to see this continue to be a very good business for us. Around SRS, again, you know, John talked about a lot of the long-term contracts. We've got a new leader in place that's done a spectacular job. Like I mentioned earlier, we've won two pretty big deals in manufactured and compounds, and feel pretty good about kind of what we're seeing early on in fiscal 2026. Now, let's talk a little bit more on multi-omics. You know, we've touched on NGS. Gene synthesis, you know, we've seen some favorability coming out of the fourth quarter.

You know, we expect this to pick up in the second half of the year. When you look at CNI, you know, the team continues to do well. As you probably know, we're specced into the workflows, right? There's a bit of this speed bump around the government shutdown, but overall, we expect to see this continue to be a very good business for us. Around SRS, again, you know, John talked about a lot of the long-term contracts. We've got a new leader in place that's done a spectacular job. Like I mentioned earlier, we've won two pretty big deals in manufactured and compounds, and feel pretty good about kind of what we're seeing early on in fiscal 2026. Now, let's talk a little bit more on multi-omics. You know, we've touched on NGS. Gene synthesis, you know, we've seen some favorability coming out of the fourth quarter.

Speaker #1: There's a bit of this speed bump around the government shutdown , but overall we expect to see this continue to be a very good business for us around SRS .

Speaker #1: Again , you know , John talked about a lot of the long term contracts . We've got a new leader in place , has done a spectacular job .

Speaker #1: Like I mentioned earlier , we've won two pretty big deals in in in manufactured and compounds and feel pretty good about kind of what we're seeing early on in fiscal 26 .

Speaker #1: Now let's talk a little bit more on on Multiomics . You know , we've we've touched on NGS gene synthesis . You know , we had we've seen some favorability coming out of the fourth quarter .

Speaker #1: We think this area is stabilizing nicely . And then on Sanger , look , you know , this is still slow . We're you know , we are seeing that plasmids is .

Lawrence Lin: We think this area is stabilizing nicely. On Sanger, look, you know, this is still slow. You know, we are seeing that Plasmid EZ is offsetting that loss there. I think that's going to be a trend that continues. I think your ask, the other question was around price. You know, look, we've talked a little bit about this kind of price optimization. Where we're seeing our ability to optimize price is two areas: CNI, and then in SRS. Let me kind of double-click into SRS. You know, one of the examples we're seeing historically in this business is we were constrained by our systems to deploy contracted, meaning it's built into our customers' contracts. We were not able to really deploy this effectively annually. You know, the team has already done a good job, and through the business system, streamlined that process.

We think this area is stabilizing nicely. On Sanger, look, you know, this is still slow. You know, we are seeing that Plasmid EZ is offsetting that loss there. I think that's going to be a trend that continues. I think your ask, the other question was around price. You know, look, we've talked a little bit about this kind of price optimization. Where we're seeing our ability to optimize price is two areas: CNI, and then in SRS. Let me kind of double-click into SRS. You know, one of the examples we're seeing historically in this business is we were constrained by our systems to deploy contracted, meaning it's built into our customers' contracts. We were not able to really deploy this effectively annually. You know, the team has already done a good job, and through the business system, streamlined that process.

Speaker #1: Offsetting that loss there. And I think that's going to be a trend that continues. I think you'll ask the other question, which was around price.

Speaker #1: You know look we've talked a bit a little bit about this kind of price optimization where where we're seeing our ability optimize and price is two areas CNI and then in SRS .

Speaker #1: And let me kind of double click into SRS . You know , one of the examples we're seeing historically in this business is we were constrained by our systems to deploy contracted , meaning it's built into our customers contracts .

Speaker #1: We were not able to really deploy this effectively annually . You know , the team has already done a good job . And through the business system , streamline that process .

Speaker #1: Really , those are those are really the key areas , you know , that that I refer to around price optimization .

Speaker #6: Okay , helpful . And then maybe one , John , you mentioned , you know , some of these moves to . Enable some of the different components of the business to make decisions closer to the customer .

Lawrence Lin: Really, those are really the key areas, you know, that I refer to around price optimization.

Really, those are really the key areas, you know, that I refer to around price optimization.

Andrew Cooper: Okay. Helpful. Maybe one, John, you mentioned, you know, some of these moves to enable some of the different components of the business to make decisions closer to the customer. I guess maybe frame that relative to, you know, a history where I think there were some siloed aspects of operations that really needed to come together and get integrated a little bit more. How do we balance those two sort of ideas and comments? Would love the framing of how they fit together, you know, in context of that 300 basis points of margin that I think is encouraging in a 3% to 5% top-line environment.

Speaker #6: I guess maybe frame that relative to , you know , history where I think there was some siloed aspects of operations that really needed to come together and get integrated a little bit more .

Speaker #6: So how do we balance those two sort of ideas and comments and would love the framing of of how they fit together . You know , in context of that 300 basis points of margin that I think is , is encouraging in a , in a 3 to 5% top line environment .

Speaker #4: , of course . Sure , sure . Happy to . So I think this is really important in terms of our go to market and how we're aligning the organization from a product line .

Lawrence Lin: Of course. Sure. Sure. Happy to. I think this is really important in terms of our go-to-market and how we're aligning the organization from a product line P&L perspective, and really having general managers and product managers aligned around these specific segments. We optimize and get synergies where it makes sense. We're moving from this very functionally aligned, centrally aligned organization to a decentralized model. You have that specifically built around, as I stated, these product lines and these product managers. We've got general managers specifically in place now in all of the businesses. That's kind of the first step in this, and there's clarity around that in the organization. More importantly, it's putting R&D back into the businesses, product management into the businesses, sales, and marketing back into the businesses.

John Marotta: Of course. Sure. Sure. Happy to. I think this is really important in terms of our go-to-market and how we're aligning the organization from a product line P&L perspective, and really having general managers and product managers aligned around these specific segments. We optimize and get synergies where it makes sense. We're moving from this very functionally aligned, centrally aligned organization to a decentralized model. You have that specifically built around, as I stated, these product lines and these product managers. We've got general managers specifically in place now in all of the businesses. That's kind of the first step in this, and there's clarity around that in the organization. More importantly, it's putting R&D back into the businesses, product management into the businesses, sales, and marketing back into the businesses.

Speaker #4: PNL perspective . And really having general managers and product managers aligned around these specific segments . We we optimize and and get synergies where it makes sense .

Speaker #4: And so we're moving from this very functionally aligned central , centrally aligned organization to a decentralized model . And you have that . You have that specifically built around , as I stated around these product lines and these product managers .

Speaker #4: And so we've got general managers specifically in place now . And all of the businesses . So that's kind of the first step in this .

Speaker #4: And there's clarity around that . And the organization and more importantly it's putting R&D back into the businesses product management into the businesses , sales and marketing back into the businesses .

Speaker #4: And this then you have regional go to market model where SRS , we've got a leader in SRS , but we also have specific leaders around storage better management .

Lawrence Lin: You have this regional go-to-market model where SRS, we've got a leader in SRS, but we also have specific leaders around better storage management. We've got a clear expert that's leading that right now. We've got clarity around our go-to-market and who's leading that. All of those individuals are new in their roles. In CNI and in stores and cryo, very similar where we have a regional go-to-market model. The team is doing a great job by our European leader who's there now. We just hired a new US or North American leader as well, doing a great job, out with customers all the time. The decision-making is at the point of impact regionally now, and that's really given the organization a lot of clarity. Similar to GeneWiz and our multi-omics business, we moved to a regional go-to-market model.

You have this regional go-to-market model where SRS, we've got a leader in SRS, but we also have specific leaders around better storage management. We've got a clear expert that's leading that right now. We've got clarity around our go-to-market and who's leading that. All of those individuals are new in their roles. In CNI and in stores and cryo, very similar where we have a regional go-to-market model. The team is doing a great job by our European leader who's there now. We just hired a new US or North American leader as well, doing a great job, out with customers all the time. The decision-making is at the point of impact regionally now, and that's really given the organization a lot of clarity. Similar to GeneWiz and our multi-omics business, we moved to a regional go-to-market model.

Speaker #4: And we've got a clear expert that's leading that right now . We've got clarity around our go to market and and who's leading that .

Speaker #4: All of those individuals are new in their roles in CNI and in stores in cryo. Very similar where we have a regional go-to-market model.

Speaker #4: The team is doing a great job led by our European leader, who's there now. We also just hired a new US or North American leader, who is doing a great job.

Speaker #4: So out with customers all the time . The decision making is at the point of impact regionally . Now . And so that's really it's really given the organization a lot of clarity , similar to Genewiz in our Multi-omics business , we moved to a regional go to market model , and it's working and we're seeing we're seeing a lot of green shoots around that .

Speaker #4: Specifically . So the point is , is , is there's more credibility the closer you are to the customer . And we've we've really structured the organization around that .

Lawrence Lin: It's working, and we're seeing a lot of green shoots around that specifically. The point is, there's more credibility the closer you are to the customer, and we've really structured the organization around that. Synergies are around the systems, reporting systems, management information systems. We've really streamlined that. That makes a lot of sense to do that. From an operating structure, we always talk about people, structure, process. Our structure is extremely nimble right now because it's very aligned around these product categories where you've got clarity around your R&D roadmaps and those sorts of things, and then this regional go-to-market model. I appreciate the question. Thank you for that.

It's working, and we're seeing a lot of green shoots around that specifically. The point is, there's more credibility the closer you are to the customer, and we've really structured the organization around that. Synergies are around the systems, reporting systems, management information systems. We've really streamlined that. That makes a lot of sense to do that. From an operating structure, we always talk about people, structure, process. Our structure is extremely nimble right now because it's very aligned around these product categories where you've got clarity around your R&D roadmaps and those sorts of things, and then this regional go-to-market model. I appreciate the question. Thank you for that.

Speaker #4: Synergies are around the systems reporting, systems management, and information systems. We've really streamlined that. That makes a lot of sense to do that.

Speaker #4: But from an operating structure , we always talk about people structure , process , our structure is is extremely right nimble now because it's very aligned around these product categories , where you've got clarity around your R&D roadmaps and those sorts of things .

Speaker #4: And then there's the regional go-to-market model. So, I appreciate the question. Thank you for that.

Speaker #6: Awesome . Thank you .

Speaker #4: You bet . .

Speaker #3: Your next question comes from Vijay Kumar with Evercore ISI . Your line is now open .

Andrew Cooper: Awesome. Thank you.

Lawrence Lin: You bet.

John Marotta: You bet.

Speaker #7: Hi guys . Thank you for taking my question . And congrats on a nice finish here . Maybe John on this macro common that making on CapEx and the shutdown impact .

Operator: Your next question comes from Vijay Kumar with Evercore ISI. Your line is now open.

Vijay Kumar: Hi guys. Thank you for taking my question, and congrats on a nice spring share. Maybe John, on this macro comment that you're making on CapEx and the shutdown impact. We haven't heard that from some of your other life science tools peers. Curious on, you know, the trends that you're seeing. You know, maybe just elaborate on that. What are you assuming for the segments here in Q1 to get to the minus 1 to minus 2?

Speaker #7: We haven't heard that from some of your other life science tools peers . So curious on , you know , the trends that you're seeing .

Speaker #7: You know, maybe just elaborate on that. And what are you assuming for the segments here in Q1 to get to the minus 1 to minus 2?

Speaker #4: Sure . So we're seeing we're seeing strength in the outsourcing trends , of course , because they want to outsource . And partner with experts .

Lawrence Lin: Sure. We're seeing strength in the outsourcing trends, of course, because they want to outsource and partner with experts. That's continuing. Where the pause in the softness was, specifically around some projects with NIH and those sorts of entities that we do business with, you know, people were just hitting the pause button right now through the government shutdown. We're starting to see kind of that being lapped, but this was an impact in the last 45 days. Real impact to the organization. Mostly, you know, mostly weaker in multi-omics. Lawrence, you want to give some color on it? Yeah. Look, I think on the first quarter, kind of the CapEx and then around the government shutdown, you'll see on the CapEx, obviously, that's weaker from a negative growth perspective in SMS, right?

John Marotta: Sure. We're seeing strength in the outsourcing trends, of course, because they want to outsource and partner with experts. That's continuing. Where the pause in the softness was, specifically around some projects with NIH and those sorts of entities that we do business with, you know, people were just hitting the pause button right now through the government shutdown. We're starting to see kind of that being lapped, but this was an impact in the last 45 days. Real impact to the organization. Mostly, you know, mostly weaker in multi-omics. Lawrence, you want to give some color on it?

Speaker #4: And that's that's continuing . But we're the pause where the pause in the softness was was specifically around some projects with NIH and those sorts of entities that we do business with , you know , people were just hitting the pause button right now through the government shutdown .

Speaker #4: We're starting to see kind of that being lapped . But this was this was an impact in the last 45 days . So real impact to the organization mostly , you know , mostly weaker in Multi-omics Lawrence .

Speaker #4: Do you want to give some color around ?

Speaker #1: Yeah . Look , I think on on the first quarter , kind the of CapEx and then and then around the government shutdown , you'll see on the CapEx , obviously , that's weaker from a negative growth perspective in SMBs , right .

Lawrence Lin: Yeah. Look, I think on the first quarter, kind of the CapEx and then around the government shutdown, you'll see on the CapEx, obviously, that's weaker from a negative growth perspective in SMS, right?

Speaker #1: And then around the government shutdown , it's lean to to John's point , more on the Multi-omics segment . There's a little bit in our CNI .

Lawrence Lin: Around the government shutdown, it's leaned to John's point more on the multi-omics segment. There's a little bit in our CNI, but again, you know, really we still see that the full year, we are super bullish about kind of where we're going to land. Normally, Vijay, we really don't guide quarterly. Our teams, John and I, really focus on hitting the year, and then we still kind of commute to that. Vijay, one other comment I would note. We went out, recall when at the beginning of the year, there was a lot of headwinds around government funding, NIH in particular, some of the tariffs. We went out to over 100 customers and had a lot, over 100 data points directly from them on what they were seeing.

Around the government shutdown, it's leaned to John's point more on the multi-omics segment. There's a little bit in our CNI, but again, you know, really we still see that the full year, we are super bullish about kind of where we're going to land. Normally, Vijay, we really don't guide quarterly. Our teams, John and I, really focus on hitting the year, and then we still kind of commute to that.

Speaker #1: But again, you know, we still see that for the full year, we are super bullish about kind of where we're going to land normally.

Speaker #1: Vijay, we really don't guide quarterly for our teams. John and I are really focused on hitting the year, but we are still kind of committed to that.

Speaker #4: Vijay , one other comment I would I would note we went out recall when when the beginning of the year there was a lot of of of headwinds around government funding .

John Marotta: Vijay, one other comment I would note. We went out, recall when at the beginning of the year, there was a lot of headwinds around government funding, NIH in particular, some of the tariffs. We went out to over 100 customers and had a lot, over 100 data points directly from them on what they were seeing.

Speaker #4: NIH in particular, some of the tariffs. We went out to over 100 customers and had a lot over 100 data points directly from them on what they were seeing.

Speaker #4: that gave And us a lot of confidence around , you know , guiding in terms of this 1% headwind . We were seeing in our business and a lot of our peers at the time were calling , you know , 20% issues around these headwinds .

Lawrence Lin: That gave us a lot of confidence around, you know, guiding in terms of this 1% headwind we were seeing in our business. A lot of our peers at the time were calling, you know, 20% issues around these headwinds. We were calling 1%. There was a little bit of disbelief in that, but we felt confident because we had the data. We have the data right now around this in particular, around VOC. I mean, we are out with our customers. This regional go-to-market model allows us to get real-time data from our customers on what they're seeing in region around specific programs in which we were supporting and/or are supporting. That gives us the clarity there regarding our point of view on it.

That gave us a lot of confidence around, you know, guiding in terms of this 1% headwind we were seeing in our business. A lot of our peers at the time were calling, you know, 20% issues around these headwinds. We were calling 1%. There was a little bit of disbelief in that, but we felt confident because we had the data. We have the data right now around this in particular, around VOC. I mean, we are out with our customers. This regional go-to-market model allows us to get real-time data from our customers on what they're seeing in region around specific programs in which we were supporting and/or are supporting. That gives us the clarity there regarding our point of view on it.

Speaker #4: We were calling 1%. There was a little bit of disbelief in that, but we felt confident because we had the data.

Speaker #4: We have the data right now around this in particular around VOC . I mean , we are out with our customers , this regional go to market model allows us to get real time data from our customers on what they're seeing in region around specific programs in which we were supporting and or are supporting .

Speaker #4: So that that gives us the clarity there regarding our our point of view on it .

Speaker #7: That's helpful . John . Then maybe one of related on on . Yes , Larry , on the phasing . Looks like back half needs to be 6 or 6 plus .

Vijay Kumar: It's helpful, John. Maybe one of a later on, I guess, Larry, on the phasing, looks like back half needs to be six or six plus. I guess confidence in the back half acceleration. Larry, how are you thinking about EPS for the year? I know you gave them a margin expansion. How should we think about any below-the-line items, and what should EPS be? Thank you.

Speaker #7: I guess that confidence in the back half acceleration . Larry , how are you thinking about EPs for the year ? I know you gave the EBITDA margin expansion .

Speaker #7: How should we think about any below-the-line items, and what should EPs be? Thank you.

Speaker #1: Yeah . Look I think , you know , if you look at how we're less than 50% of our full year revenue falls in the first half of the year .

Lawrence Lin: Yeah. Look, I think, you know, if you look at how we're less than 50% of our full-year revenue falls in the first half of the year. Generally, you're right. We feel really good about the second half of the year, Vijay. Why is that, right? As we mentioned, we've really invested in feet on the street, particularly in SMS, starting this year. We put in almost 20 commercial heads in GeneWiz earlier in mid-fiscal 2025. On top of the price we talked about, that's all going to read through in the second half of the year. We've got pretty good line of sight around that. In terms of EPS, look, our EPS is going to be better, right? It's roughly about $0.50 and $16 to 18 of other income, similar to 2025.

Speaker #1: So generally , you're right . We feel really good about second half of the the year . Vijay . And why is that right ?

Speaker #1: We as we mentioned , we've really invested in feed on the street , particularly in SMS in starting this year , we put in almost 20 commercial heads and Jean was earlier in mid fiscal 2025 , on top of price .

Speaker #1: the We talked about . That's all going to read through in the second half of the year . So we've got pretty good line of sight around that in terms of in terms of EPs .

Speaker #1: Look , our EPs is going to be better , right . And so it's roughly . It's roughly about $0.50 . And , and 16 to 18 of , of , you know of other income similar to 2025 .

Speaker #7: I'm sorry if I may . One more Larry , if margins are up 300 basis points rate , is there some below the line impact , like why is EPs flattish year on year ?

Vijay Kumar: I'm sorry, if I may, one more, Larry. If margins are up 300 basis points, right, is there some below-the-line impact? Like, why is EPS flattish year on year?

Speaker #1: Yeah . So so EPs is going to be greater than $0.50 . So that , you know , we I guess maybe clarify that .

Lawrence Lin: Yeah. EPS is going to be greater than $0.50. You know, I guess maybe clarify that. Really sure of your question, Vijay. Vijay, the way to think about how we look at value here is if you pull back and take a look at the way we're looking at value right now, we're trading at, you know, 10x EBITDA, and we think we're undervalued right now. $12 of our stock is cash. We're focused around driving that margin expansion on the EBITDA line right now, and that's pretty important to us in terms of how we look at economic value. We do not typically guide on the EPS line right now. Yeah, and, I mean, you know, we expect it to be better than $0.50.

Speaker #1: Ratio . Your question BJ .

Speaker #4: The way to think about the way to think about how we look at value here is if you if you pull back and take a look at the way we're looking at value right now , we're trading at , you know , ten times EBITDA .

Speaker #4: And we think we're undervalued right now. $12 of our stock is cash, and so we're focused on driving that margin expansion on the EBITDA line right now.

Speaker #4: And that's pretty important to us in terms of how we look at economic value . We do not we do not typically guide on on the EPs line right now .

Speaker #1: And so, I mean, you know, we expect it to be better than $0.50.

Speaker #7: Okay . Thank you guys .

Speaker #4: Sure .

Speaker #3: Your next question comes from Brendan Smith with TD Cowan. Your line is now open.

Vijay Kumar: Okay. Thank you, guys.

Speaker #8: Hi, this is Jacqueline on for Brendan. Congrats on the quarter. Maybe just doubling down on some of your expectations on timing for the potential M&A deals.

Lawrence Lin: Sure.

Operator: Your next question comes from Jacqueline with TD Cowen. Your line is now open.

Operator: Hi, this is Jacqueline on for Brendan. Congrats on the quarter. Maybe just doubling down on some of your expectations on timing for the potential M&A deals or tuck-ins over the year. What areas are you kind of looking to pursue in the near term, and how has the macro environment shifted your expectations on both when and where to acquire?

Jacqueline Kisa: Hi, this is Jacqueline on for Brendan. Congrats on the quarter. Maybe just doubling down on some of your expectations on timing for the potential M&A deals or tuck-ins over the year. What areas are you kind of looking to pursue in the near term, and how has the macro environment shifted your expectations on both when and where to acquire?

Speaker #8: Or tuck-ins over the years. What areas are you kind of looking to pursue in the near term, and how has the macro environment shifted your expectations on both when and where to acquire?

Speaker #4: Sure , our our focus around M&A has been pretty consistent , and that is on in regards specifically to tuck ins and how we look at it .

Lawrence Lin: Sure. Our focus around M&A has been pretty consistent, and that is in regards specifically to tuck-ins and how we look at it. Just to reiterate on how we look at capital allocation, first is around growth opportunities and capital allocation. What are we doing to support our growth initiatives from an R&D perspective, sales and marketing perspective, gross margin, and productivity improvements. Third is around tuck-ins and M&A. Fourth is around specifically share buyback. Parking on the M&A side, it's really expanding our core business. The criteria around that's going to be specifically around SRS, expanding our scale in that space. We're really bullish about our targets there and what our M&A funnel looks like. Second is around our automated solutions and driving some M&A around CNI and stores specifically. The third around synthesis and how we're investing around synthesis.

John Marotta: Sure. Our focus around M&A has been pretty consistent, and that is in regards specifically to tuck-ins and how we look at it. Just to reiterate on how we look at capital allocation, first is around growth opportunities and capital allocation. What are we doing to support our growth initiatives from an R&D perspective, sales and marketing perspective, gross margin, and productivity improvements. Third is around tuck-ins and M&A. Fourth is around specifically share buyback. Parking on the M&A side, it's really expanding our core business. The criteria around that's going to be specifically around SRS, expanding our scale in that space. We're really bullish about our targets there and what our M&A funnel looks like. Second is around our automated solutions and driving some M&A around CNI and stores specifically. The third around synthesis and how we're investing around synthesis.

Speaker #4: So just to reiterate on how we look at capital allocation first is around growth opportunities and capital allocation . So what are we what are we doing to support our growth initiatives from an R&D perspective ?

Speaker #4: Sales and marketing perspective , gross margin and productivity improvements . Third is around tuck ins and M&A . And fourth is around specifically share buyback .

Speaker #4: So parking on the M&A side , it's it's really expanding our core business . So the criteria around that is going to be specifically around SRS expanding our scale in that space .

Speaker #4: We're really bullish about our targets there and what our M&A funnel looks like. Second is around our automated solutions and driving some M&A around CNI and store. Specifically in the third around synthesis and how we're investing around synthesis, I would think about those three areas in which we're looking at M&A.

Speaker #4: I would think about 26 as being our our year of of executing on that specifically , 25 was really this reset building a stable foundation to to be able to absorb those type of acquisitions right now .

Lawrence Lin: I would think about those three areas in which we're looking at M&A. I would think about 2026 as being our year of executing on that specifically. 2025 was really this reset, building a stable foundation to be able to absorb those types of acquisitions right now. That's the focus in those areas specifically.

I would think about those three areas in which we're looking at M&A. I would think about 2026 as being our year of executing on that specifically. 2025 was really this reset, building a stable foundation to be able to absorb those types of acquisitions right now. That's the focus in those areas specifically.

Speaker #4: So that's the focus in those areas specifically.

Speaker #8: That's very helpful . And then maybe just one more double clicking on the automated seems to be stores , which on the upswing .

Speaker #8: How should we think about the near and long term expectations for both the performance and customer spend of that line , and how contributive do you expect it to be in the future ?

Operator: That's very helpful. Maybe just one more, double-clicking on, you know, the automated stores, which seems to be on the upswing. How should we think about the near and long-term expectations for both the performance and customer spend of that line? How contributed do you expect it to be in the future for rev growth in that SMS segment?

Jacqueline Kisa: That's very helpful. Maybe just one more, double-clicking on, you know, the automated stores, which seems to be on the upswing. How should we think about the near and long-term expectations for both the performance and customer spend of that line? How contributed do you expect it to be in the future for rev growth in that SMS segment?

Speaker #8: For revenue growth in that SMB segment?

Speaker #4: Sure . I'm consistent with the past . I mean , you know , when the macro starts to to come back , I think you're going to see more strength in that segment .

Lawrence Lin: Sure. Consistent with the past, I mean, you know, when the macro starts to come back, I think you're going to see more strength in that segment. We're also investing a lot in R&D in that segment in particular, and we won't see that read through until, you know, 2027, 2028. We'll talk more about this in our long-term, in our long-range plan in Indianapolis in December on our investor day. We'll get into the particulars of this, and we'll give you some more detail on it. Listen, we're investing behind this. We are not in the freezer business. We're an automated solutions business. What that means is you have highly, highly complex electronics in a cold environment in some applications for our customers. That's cryogenic.

John Marotta: Sure. Consistent with the past, I mean, you know, when the macro starts to come back, I think you're going to see more strength in that segment. We're also investing a lot in R&D in that segment in particular, and we won't see that read through until, you know, 2027, 2028. We'll talk more about this in our long-term, in our long-range plan in Indianapolis in December on our investor day. We'll get into the particulars of this, and we'll give you some more detail on it. Listen, we're investing behind this. We are not in the freezer business. We're an automated solutions business. What that means is you have highly, highly complex electronics in a cold environment in some applications for our customers. That's cryogenic.

Speaker #4: But we're also investing a lot in R&D in that segment . In particular . And so that we won't see that read through through until , you know , 27 , 28 , we'll talk more about this in our long term and our long range plan in Indianapolis in December .

Speaker #4: On our Investor Day , we'll get into the particulars of this , and we'll give you some more detail on it . But listen , we're investing behind this .

Speaker #4: We are not in the freezer business. We're an automated solutions business. And what that means is you have highly, highly complex electronics in a cold environment.

Speaker #4: In some applications for our customers, it's cryogenic. There's a lot of tailwinds around cryogenic cold storage because of cell and gene therapy.

Speaker #4: And the moves being made there. I mean, 50% of the therapeutics coming out that are going through the FDA right now need ultra-cold or cold storage.

Lawrence Lin: There's a lot of tailwinds around cryogenic cold storage because of cell and gene therapy and the moves being made there. I mean, 50% of the therapeutics coming out that are coming through FDA right now need ultra cold or cold, and we feel like we're well positioned, and we're going to continue to position our product portfolio to enjoy those tailwinds. We'll get into that, of course, in Indianapolis.

There's a lot of tailwinds around cryogenic cold storage because of cell and gene therapy and the moves being made there. I mean, 50% of the therapeutics coming out that are coming through FDA right now need ultra cold or cold, and we feel like we're well positioned, and we're going to continue to position our product portfolio to enjoy those tailwinds. We'll get into that, of course, in Indianapolis.

Speaker #4: And so we we feel like we're well positioned and we're going to continue to position our product portfolio to enjoy those tailwinds . We'll get into that , of course , in Indianapolis .

Speaker #8: Great . Thank you .

Speaker #4: You bet . .

Speaker #3: Your next question comes from Paul Knight with KeyBanc. Your line is now open.

Operator: Great. Thank you.

Jacqueline Kisa: Great. Thank you.

Speaker #9: Yeah . Congratulations on the quarter . I kind of And hopping on to that same topic of stores . What do you think that market growth rate is ?

Lawrence Lin: You bet.

John Marotta: You bet.

Operator: Your next question comes from Paul Knight with KeyBanc. Your line is now open.

Yvonne Perron: Yeah. Congratulations on the quarter. Kind of hopping onto that same topic of stores, what do you think that market growth rate is? I guess you're saying too that that's your probably biggest area for, you know, rolling up that part of the marketplace. You know, what do you think market growth is, you know, and relative to, you know, what, our 10% biologic sales? Is that any kind of a proxy? Again, you know, is this the key M&A spot? Thanks.

Paul Knight: Yeah. Congratulations on the quarter. Kind of hopping onto that same topic of stores, what do you think that market growth rate is? I guess you're saying too that that's your probably biggest area for, you know, rolling up that part of the marketplace. You know, what do you think market growth is, you know, and relative to, you know, what, our 10% biologic sales? Is that any kind of a proxy? Again, you know, is this the key M&A spot? Thanks.

Speaker #9: And I guess you're saying to that, that's your probably biggest area for, you know, rolling up that part of the marketplace.

Speaker #9: So , you know , what do you think market growth is ? You know , and relative to , you know , what are 10% biologic sales ?

Speaker #9: Is that any kind of a proxy ? And then again , you know , you know , is this the key M&A spot ?

Speaker #9: Thanks .

Speaker #4: Insightful. Always a question. So you basically kind of linked the two, which is what we like to think about from an automated solutions perspective. Stores and cryo we think are in the low single digits.

Lawrence Lin: Always an insightful question. You basically kind of link the two, which is the way we like to think about it from an automated solutions perspective. Stores and cryo, we think, are low single digit right now. We're not in some of the veterinarian space that some of our peers are in cryogenic. We don't enjoy some of the vaccine tailwinds that are going on right now. What matters is when you've got an install base that we have right now of hundreds of the biological stores, plus the attachment rate of our consumables, which is increasing. I mean, that business is really performing for us very nicely. You've got this attachment rate that's driving this data. The data output right now in the tools revolution is driving data. In our space, in our business, that is physical specimens, okay?

John Marotta: Always an insightful question. You basically kind of link the two, which is the way we like to think about it from an automated solutions perspective. Stores and cryo, we think, are low single digit right now. We're not in some of the veterinarian space that some of our peers are in cryogenic. We don't enjoy some of the vaccine tailwinds that are going on right now. What matters is when you've got an install base that we have right now of hundreds of the biological stores, plus the attachment rate of our consumables, which is increasing. I mean, that business is really performing for us very nicely. You've got this attachment rate that's driving this data. The data output right now in the tools revolution is driving data. In our space, in our business, that is physical specimens, okay?

Speaker #4: Right now we're not we're not in some of the veterinarian space that some of our peers are in cryogenic . So we don't enjoy some of the vaccine tailwinds that are going on right now .

Speaker #4: What what what matters is , is when you've got an installed base that we have right now of hundreds of of the of the biological stores , plus the attachment rate of our consumables , which is increasing that business is really performing for us very nicely .

Speaker #4: And so you've got this attachment rate that's driving this data. The data output right now in the tools revolution is driving data.

Speaker #4: In our space , in our business . That is physical specimens . Okay . And so we see that read through with the attachment rate of our consumables .

Speaker #4: of our And sample tubes . And that's pretty important here . Got a 100% attachment rate on the service side . And you've got we're driving more attachment rate on on the CNI side .

Lawrence Lin: We see that read through with the attachment rate of our consumables and sample tubes. That's pretty important here. Got 100% attachment rate on the service side, and we're driving more attachment rate on the CNI side. To summarize, stores and cryo, low single in our segment of the market, and we're still an outgrowth story based on us capturing market share. Then you've got these attachment rates on CNI. I will tell you, I mean, I'm so proud of our team and what they were able to deliver last year in a really tough macro. We saw that across all of the segments of our business. In some of the areas that were challenged, the team needed to pull back and work on some things operationally. We were able to do that.

We see that read through with the attachment rate of our consumables and sample tubes. That's pretty important here. Got 100% attachment rate on the service side, and we're driving more attachment rate on the CNI side. To summarize, stores and cryo, low single in our segment of the market, and we're still an outgrowth story based on us capturing market share. Then you've got these attachment rates on CNI. I will tell you, I mean, I'm so proud of our team and what they were able to deliver last year in a really tough macro. We saw that across all of the segments of our business. In some of the areas that were challenged, the team needed to pull back and work on some things operationally. We were able to do that.

Speaker #4: So, to summarize, stores and cryo low single in our segment of the market. And we're still an outgrowth story based upon us capturing market share.

Speaker #4: And then you've got these attachment rates on CNI . I will tell you , I mean I'm so proud of our team and what they were able to deliver last year in a really tough macro .

Speaker #4: And we saw that . We saw that across all of the segments of our business and in some of the areas that that were were challenged , the team needed to pull back and work on some things operationally , and we were able to do that .

Speaker #4: But we were also executing nicely on a lot of our attachment rates and install base CNI. Specifically, we have tens of thousands of instruments out there, and so our attachment rates were working on that specifically.

Lawrence Lin: We were also executing nicely on a lot of our attachment rates and install base. CNI specifically, we have tens of thousands of instruments out there. Our attachment rates, we're working on that specifically, and you're seeing that read through as well. It's a mixed story in terms of how we look at it. Hope that helps, Paul.

We were also executing nicely on a lot of our attachment rates and install base. CNI specifically, we have tens of thousands of instruments out there. Our attachment rates, we're working on that specifically, and you're seeing that read through as well. It's a mixed story in terms of how we look at it. Hope that helps, Paul.

Speaker #4: And you're seeing that that through as read well . But it's a it's a it's a mixed story in terms of how we look at it .

Speaker #4: Hope that Paul.

Speaker #9: Very much . Thanks .

Speaker #4: You bet .

Speaker #3: There are no further questions at this time. I will now turn the call over to John for closing remarks.

Yvonne Perron: Very much. Thanks.

Paul Knight: Very much. Thanks.

Lawrence Lin: You bet.

John Marotta: You bet.

Speaker #4: Excellent . Well , in summary , we entered 26 as a stronger company operationally , commercially and culturally . I want to thank again our employees and our customers and our shareholders .

Operator: There are no further questions at this time. I will now turn the call over to John for closing remarks.

Lawrence Lin: Excellent. Well, in summary, we entered 2026 as a stronger company operationally, commercially, and culturally. I want to thank again our employees, our customers, and our shareholders. We're excited about the road ahead, and we will certainly see you at Investor Day in December. Thank you again.

John Marotta: Excellent. Well, in summary, we entered 2026 as a stronger company operationally, commercially, and culturally. I want to thank again our employees, our customers, and our shareholders. We're excited about the road ahead, and we will certainly see you at Investor Day in December. Thank you again.

Speaker #4: We're excited about the road ahead, and we will certainly see you at Investor Day in December. Thank you again.

Speaker #3: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and ask that you please disconnect your lines.

Q4 2025 Azenta Inc Earnings Call

Request a DemoDemo

AZTA

Azenta

Earnings