AZTA

• Overall Strategic Position & Turnaround Progress: The company's broader turnaround remains underway, with operational transformation in Sample Management Solutions well progressed, and Multiomics transformation in early stages. The core strategic focus is building a more focused, efficient, scalable business aligned with long-term investor day priorities, with over half of total revenue now recurring, improving overall stability.

• Sample Management Solutions Updates:

  • Biorepositories completed the first customer deployment of an AI-enabled inventory solution with advanced imaging and data management, which delivered meaningful productivity improvements versus manual processes, with a long-term target of doubling productivity.
  • Quality remediation work for the three previously highlighted problematic automated store systems is complete, with final customer testing and validation ongoing; most remediation spending is now behind us. The company is shifting to a modular automated store model with greater standardization to reduce engineering complexity, improve quality, and lower execution risk. New automated store opportunities were added to the backlog during the quarter.
  • Biorepositories and CNI continue to be strong, recurring core growth drivers for the segment.

• Multiomics Transformation & Performance:

  • Multiomics delivered year-over-year growth, with solid strength in Europe and China, and modest sequential improvement in North America (still below prior year levels). Early commercial momentum was observed, but management views this as an initial indicator rather than proof of sustained recovery.
  • A new North American regional multiomics leader has been appointed to strengthen commercial execution and customer engagement, with footprint rationalization, organizational changes, and a focus on high-value workflows underway to improve long-term profitability.
  • End market conditions remain mixed: customer engagement is healthy, but North American research spending remains below prior year levels, with customers taking a cautious approach to large capital investments, making project timing hard to predict.

• Corporate & Capital Allocation Updates:

  • The divestiture of B Medical Systems completed on July 1, 2026 for $63 million total consideration, simplifying the portfolio and sharpening focus on core life sciences businesses.
  • Integration of UK Bio Center (UKBC) remains on track, and is enhancing European biorepository capabilities.
  • The company repurchased 2.3 million shares for $50 million during the quarter, with $200 million remaining in the current authorization through December 2028. The balance sheet remains strong with $529 million in cash/securities and no debt, supporting flexibility for acquisitions, internal investment, and shareholder returns.

Management updated full-year fiscal 2026 guidance following a stronger-than-expected Q3 performance:

• Total reported revenue is now expected in the range of $613 million to $618 million, from the prior range that included lower midpoint.
• Organic revenue guidance is revised to flat to up 1% year-over-year, up from the prior guidance of down 2% to up 1%.
  • At the segment level: Sample Management Solutions is still expected to deliver low single-digit year-over-year growth; Multiomics is now expected to be down 1% to flat, improved from prior guidance of down mid-single digits.
• Full-year adjusted EBITDA is expected in the range of $59 million to $62 million, with Q4 2026 adjusted EBITDA expected between $20 million and $23 million. Q4 organic revenue is expected to decline low single digits year-over-year, matching prior guidance, due to a very tough comparison against Q4 2025 (Multiomics' highest ever quarterly revenue).
• Full-year free cash flow is expected to improve 10% to 15% year-over-year, driven by continued focus on working capital management.
• No guidance for fiscal 2027 is provided at this time; fiscal 2027 guidance will be released in November 2026 after full fiscal 2026 results are finalized. Management reaffirmed commitment to the long-term 18-20% adjusted EBITDA margin target outlined in the long-range plan, with annual margin accretion expected to ramp in 2028 and 2029.

Total company revenue for Q3 2026 was $161 million, growing 12% year-over-year on a reported basis and 9% organically. There are two core operating segments following the divestiture of B Medical Systems, classified as discontinued operations:

1. Sample Management Solutions: Generated $88 million in revenue, up 14% reported and 9% organically year-over-year. This segment accounts for 54.7% of total company revenue. The recurring revenue sub-segments Biorepositories and CNI delivered strong, resilient growth, partially offset by expected softness in automated stores driven by macro budget constraints. Gross margin for the segment was 45.9%, down 750 basis points year-over-year, pressured by lower volumes, unfavorable fixed cost absorption, and $1 million in quality remediation costs for automated stores and cryogenic systems, partially offset by improved profitability in Biorepositories.
2. Multiomics: Generated $73 million in revenue, up 10% reported and 8% organically year-over-year. This segment accounts for 45.3% of total company revenue. Growth was driven by improved activity in North America (following mid-teens declines in H1 2026) and strong performance across China and Europe, partially offset by continued long-term decline in Sanger sequencing. Gross margin for the segment improved 550 basis points year-over-year to 46.5%, driven by higher volumes and improved operating leverage for next-generation sequencing and gene synthesis, offset by ongoing margin pressure in Sanger sequencing.

• Overall market demand remains uneven and unpredictable, particularly for large capital projects, where customer purchasing decisions are cautious and project timing is highly variable due to ongoing constraints on research and biotechnology spending, which remains below prior year levels in North America.
• Automated stores and cryogenic systems continue to face soft demand and conversion challenges, with lower volumes negatively impacting fixed cost absorption and profitability, even as the pipeline grows.
• Sanger sequencing continues to face long-term market and technology transitions that pressure margins and revenue, requiring ongoing structural cost adjustments.
• Final customer acceptance of the remediated automated store systems is still pending, and resolution will not be considered complete until all systems are fully approved and operating as intended.
• M&A valuations and seller expectations often do not align with the company's value creation requirements, limiting near-term transaction opportunities.

Q: What drove the improved Q3 performance of Multiomics in North America, and how confident is management in the sustainability of this improvement? / A: Improvement came from three key sources: catch-up of NIH and other projects delayed earlier in the year, accretion from recently hired sales team members who have now been in role 3-6 months, and a $3 million clinical services customer order that shifted from Q4 to Q3. While monthly quoting numbers for NGS are positive and Plasma Easy growth offsets Sanger declines, management emphasizes that one quarter of improvement does not confirm sustained broad market recovery; research spending remains below prior year levels, and the outlook remains cautious.

Q: What is the primary gating factor for converting customer interest in automated storage equipment to finalized orders, and how large of a role does equipment refresh play in current demand? / A: The main barrier to conversion is customer caution around large CapEx spending amid uneven end market funding, even with healthy on-shoring bioprocessing tailwinds. Most current demand is for new capacity expansion (particularly for therapeutic compound and API storage, where customers gain major productivity and throughput improvements) rather than refresh. Refresh cycles for installed systems run 10-20 years, so only a small share of current interest comes from replacement.

Q: How does the company's shift to modular automated stores change product design and risk? What is Azenta's competitive advantage in oligo synthesis? / A: The shift from fully custom one-off builds to configurable modular designs standardizes the five core features customers prioritize (storage density, throughput, footprint, labware compatibility, temperature options), eliminating the complexity that caused past quality issues. It also enables entry into the small store/kiosk market the company has not previously served, with clearer R&D team structuring to support ongoing quality. For oligo synthesis, Azenta's key advantages are fast, reliable high-quality product in Europe and China, driving 26% growth in Europe and 23% growth in China; adding an experienced industry regional leader has further strengthened commercial execution.

Q: What is the company's approach to M&A in the current environment, and are the long-range plan (LRP) targets from Investor Day still intact? / A: Management maintains a disciplined approach to M&A, will only pursue transactions that align with long-term value creation, and will not transact just to deploy capital, as seller valuation expectations often do not align with the company's requirements. The strong balance sheet supports both M&A and opportunistic share repurchases. The company remains focused on executing the original strategic priorities laid out in the LRP, with recurring revenue growth, biorepository AI investment, and Multiomics stabilization on track, and the original 18-20% long-term adjusted EBITDA margin target remains intact.