Azenta, Inc. Q2 FY2026 earnings call

John Murata mentioned not being satisfied with Q2 results, organic revenue down 3% and adjusted EBITDA margin 5.4% below expectations. Addressed execution-related shortfalls and cautious demand environment. Highlighted growth in multiomics in Europe and Asia, and sustained growth in sample repository solutions, product services, consumables and instruments. Mentioned restructuring of automated stores quality issues, with remediation expected by end of Q3. Announced acquisition of UK BioCenter Limited, integration progressing. Pushed out long-range plan from 2028 to 2029. John Murata also talked about leadership changes, organizational redesign, and deployment of Azenta business system for operational rigor. Trey Martin joined as president of multi-omics business to lead transformation. Lawrence Lin discussed financial results, including revenue, non-GAAP EPS, adjusted EVA margin, free cash flow, and balance sheet.

Sample management solutions (SMS) revenue was $81 million in Q2 2026, up 2% reported but down 3% organically. Biorepository solutions (approx 40% of SMS) had high single-digit growth. Consumables and instruments had modest year-over-year growth. Multi-omics segment revenue was $64 million, flat reported but down 2% organically. Europe and Asia-Pacific performed well, while North America was impacted by softer demand and competitive pressure.

Revised full-year fiscal 2026 outlook: organic revenue range from down 2% to up 1% year-over-year. Adjusted EBITDA range from down approx 125 basis points to flat year-over-year. Total reported revenue range $603 million to $621 million including UKBC. Organic revenue range down 2% to up 1%. Adjusted EBITDA margin range down approx 125 basis points to flat. Free cash flow expected to improve 10%-15% year-over-year. Fiscal Q3 organic revenue expected to grow low single digits, Q4 expected to decline low single digits.

Execution-related shortfalls within control. Prolonged cautious demand environment, especially in North America. Customer spending and research funding constrained. Competitive pressure in multiomics, especially in North America. Delayed order conversions in capital-intensive products. Quality issues in automated and cryogenic store systems taking longer than anticipated. Uncertainty around B-Medical transaction financing. Variability in life sciences funding environment, including academic and government-related funding flows.

Q: David Saxon asked about Q2 cadence, order slips.

A: John Murata and Lawrence Lin discussed multiomics North America bookings slow, commercial execution gaps, and SMS capital-intensive product order push-outs.

Q: Matt Stanton asked about multi-omics reset, Be Medical update.

A: John Murata talked about multi-omics commercial engine reset, Be Medical financing update.

Q: Mac Itosh asked about margin pressure and LRP.

A: John Murata and Lawrence Lin discussed margin pressure from utilization and structural dynamics, LRP phase shift.

Q: Vijay Kumar asked about company specific vs market issues, forecast.

A: John Murata and Lawrence Lin discussed Zenta specific issues and forecast conservatism.

Q: Paul Knight asked about automated stores reorg, Sanger.

A: John Murata talked about automated stores reorg and Sanger technology shift.

Q: Brendan Smith asked about competitive opportunity in sequencing vs synthesis.

A: John Murata talked about gene synthesis strategy and AI-related opportunities.