Azenta, Inc. Q4 FY2024 earnings call

• John Marotta welcomed everyone and discussed Azenta's strong results in Q4 and full year 2024 despite a challenging life sciences market. Announced the sale of B Medical to refocus on core businesses. - Highlighted Sample Management Solutions' competitive advantage in cold storage, automation, and plan to invest in automation technology like BioArc Ultra. - Multiomics business with research expertise, NGS growth, gene synthesis with mid-to-high single-digit full-year growth, and Sanger Sequencing trends. - 2025 focus areas include portfolio optimization (selling B Medical), operational excellence (simplifying compensation, rightsizing cost structure, enhancing information systems), and capital allocation (returns-based process for investments). - Herman Cueto highlighted progress under Ascend 2026, IT system optimization from 13 to 8 core systems, margin expansion, and completion of $1.5 billion share repurchase program.

SMS segment: In the fourth quarter, SMS revenue was $85 million, up 4% year-over-year reported and 3% organic. Despite a 27% decline in custom stores, Cryogenic Stores grew 67% and Consumables & Instruments grew 14% in Q4. For fiscal year 2024, SMS and Multiomics combined had 4% organic growth. Multiomics segment: Multiomics delivered revenue of $66 million in the quarter, the largest revenue quarter since Q2 fiscal year '22, with 8% growth on both reported and organic basis. Next Generation Sequencing grew 25% year-over-year. B Medical segment: B Medical had revenue of $19 million in the quarter, down 35% on both reported and organic basis. Fiscal year 2024 B Medical contributed $83 million to revenue and was down 27% on an organic basis.

• 2025 organic revenue growth is guided to be in the range of 3% to 5% excluding B Medical. - SMS is forecasted to grow mid-single digits and Multiomics to grow low-single digits. - Adjusted EBITDA margin is expected to expand by approximately 300 basis points. - Confidence in the full year profile due to attractive recurring revenues and secured backlog.

Q: David Saxon asked about the 2026 targets and the lower 2025 guidance. Herman Cueto responded that they've seen progress against the LRP, the 2025 guide assumes the current market environment, and John Marotta mentioned there's some uncertainty in the market and they're being prudent in guiding.

Q: David Saxon asked about the EBITDA margin dynamics. Herman Cueto said they expect 300 basis points of EBITDA margin expansion year-over-year, and the quarterly cadence is similar to what was seen in fiscal year 2024.

Q: Vijay Kumar asked about NGS growth, gene synthesis, and China impact. Herman Cueto said NGS grew 25% with volume increase and price abate, gene synthesis was low-single digits in the quarter but mid-to-high single digits full-year, and John Marotta mentioned regionality in manufacturing and no current tariff impact concern.

Q: Jacob Johnson asked about freezers and NGS pricing. Herman Cueto said stores had a tough compare but good backlog visibility, and NGS had price stabilization from Q3 to Q4 with volume increase. John Marotta added on the unique advantage of the LIMS system in NGS.

Q: Andrew Cooper asked about guidance prudence and margin uplift. Herman Cueto said the 300 basis points is on the remainco and they'll provide recasted financials, and John Marotta mentioned open territories and transformation distraction as factors in guidance.

Q: Matt Stanton asked about M&A funnel and criteria. John Marotta said it's early days, they'll build the funnel with rigor, and criteria include double-digit ROIC.

Q: Lucas Baranowski asked about B Medical transaction timeline and CapEx. Herman Cueto said expected to close in first half of the year, and CapEx will come down but relative to sales in 4%-6% range.