[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Azenta, Inc.'s unaudited condensed consolidated financial statements, including detailed notes, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Azenta, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), cash flows, and changes in stockholders' equity, along with detailed notes explaining the company's nature of operations, significant accounting policies, discontinued operations, marketable securities, derivative instruments, goodwill and intangible assets, restructuring, supplementary balance sheet information, stockholders' equity, revenue recognition, stock-based compensation, fair value measurements, income taxes, net income (loss) per share, and segment/geographic information [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :------------ | :----------------- | | Total Assets | $2,019,135 | $2,100,041 | | Total Liabilities | $345,501 | $331,074 | | Total Stockholders' Equity | $1,673,634 | $1,768,967 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total Revenue | $143,942 | $144,292 | $434,870 | $422,372 | | Gross Profit | $67,760 | $65,478 | $202,317 | $187,885 | | Operating Loss | $(714) | $(7,106) | $(28,218) | $(47,564) | | Income (Loss) from Continuing Operations | $680 | $(158) | $(26,926) | $(23,552) | | Loss from Discontinued Operations, net of tax | $(53,486) | $(6,424) | $(79,676) | $(135,634) | | Net Loss | $(52,806) | $(6,582) | $(106,602) | $(159,186) | | Basic Net Loss Per Share | $(1.15) | $(0.12) | $(2.33) | $(2.90) | | Diluted Net Loss Per Share | $(1.15) | $(0.12) | $(2.33) | $(2.90) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net Loss | $(52,806) | $(6,582) | $(106,602) | $(159,186) | | Total Other Comprehensive Income (Loss), net of tax | $22,514 | $(3,167) | $(6,171) | $17,531 | | Comprehensive Loss | $(30,292) | $(9,749) | $(112,773) | $(141,655) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $70,011 | $32,151 | | Net cash (used in) provided by investing activities | $(91,287) | $26,732 | | Net cash used in financing activities | $(10,408) | $(411,661) | | Effects of exchange rate changes on cash, cash equivalents and restricted cash | $4,510 | $15,596 | | Net decrease in cash, cash equivalents and restricted cash | $(27,174) | $(337,182) | | Cash, cash equivalents and restricted cash, end of period | $293,816 | $346,863 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Changes in Stockholders' Equity (in thousands) | Metric | Balance September 30, 2024 | Net Loss | Stock-based Compensation | Net Investment Hedge Currency Translation Adjustment | Foreign Currency Translation Adjustments | Balance June 30, 2025 | | :------------------------------------ | :------------------------- | :--------- | :----------------------- | :-------------------------------------------- | :--------------------------------------- | :-------------------- | | Total Equity | $1,768,967 | $(106,602) | $15,887 | $(39,744) | $33,462 | $1,673,634 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Nature of Operations](index=12&type=section&id=1.%20Nature%20of%20Operations) - Azenta, Inc. is a global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry, offering sample management, automated storage, and genomic services[33](index=33&type=chunk) - The Company announced a plan to sell its B Medical Systems business in Q1 fiscal year 2025 to simplify its portfolio and focus on core businesses, classifying this business as 'held for sale' and 'discontinued operations'[34](index=34&type=chunk)[35](index=35&type=chunk) - Discontinued operations also include a loss contingency related to the sale of the semiconductor automation business in February 2022, with an accrued liability of **$2.1 million** as of June 30, 2025[36](index=36&type=chunk)[58](index=58&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The Company revised its Condensed Consolidated Statements of Cash Flows for prior periods (FY2023 and interim FY2024) to correct immaterial classification errors, primarily related to the effects of exchange rate changes on foreign denominated cash and cash equivalents[40](index=40&type=chunk)[41](index=41&type=chunk) - Net foreign currency transaction and remeasurement losses were **$0.2 million** and **$0.5 million** for the three months ended June 30, 2025 and 2024, respectively, and **$1.3 million** and **$1.5 million** for the nine months ended June 30, 2025 and 2024, respectively[44](index=44&type=chunk) - The Company does not expect the adoption of new accounting standards (ASU 2023-07 Segment Reporting, ASU 2023-09 Income Taxes, Pillar 2 global minimum tax) to have a material impact on its financial statements in the near term, with ASU 2024-03 (Expense Disaggregation) still under evaluation[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 3. Discontinued Operations](index=15&type=section&id=3.%20Discontinued%20Operations) - The Company recorded an additional **$68.8 million** loss on assets held for sale for the B Medical Systems business during the three months ended June 30, 2025, bringing the total loss to **$93.0 million** for the nine months ended June 30, 2025[53](index=53&type=chunk)[55](index=55&type=chunk) Financial Results of B Medical Systems Business (Discontinued Operations, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Total Revenue | $16,302 | $28,517 | $51,099 | $63,888 | | Gross Profit | $4,909 | $3,578 | $13,445 | $6,068 | | Operating Loss | $(72,774) | $(7,647) | $(105,855) | $(140,821) | | Loss from Discontinued Operations, net of tax | $(53,187) | $(6,424) | $(78,997) | $(135,634) | Carrying Value of B Medical Systems Assets and Liabilities Held for Sale (in thousands) | Category | June 30, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Current Assets Held for Sale | $77,025 | $88,894 | | Noncurrent Assets Held for Sale | $85,479 | $173,794 | | Current Liabilities Held for Sale | $31,715 | $30,050 | | Noncurrent Liabilities Held for Sale | $17,091 | $42,196 | - The Company accrued an additional **$0.4 million** liability for the 2020 Claim related to the semiconductor cryogenics business sale, resulting in a total accrual of **$2.1 million** as of June 30, 2025[58](index=58&type=chunk) [Note 4. Marketable Securities](index=19&type=section&id=4.%20Marketable%20Securities) Sales and Maturities of Marketable Securities (in thousands) | Period | Sales and Maturities | | :------------------------------------ | :------------------- | | Three Months Ended June 30, 2025 | $57,900 | | Three Months Ended June 30, 2024 | $241,000 | | Nine Months Ended June 30, 2025 | $242,500 | | Nine Months Ended June 30, 2024 | $431,500 | Marketable Securities Amortized Cost and Fair Value (in thousands) | Category | June 30, 2025 Amortized Cost | June 30, 2025 Fair Value | September 30, 2024 Amortized Cost | September 30, 2024 Fair Value | | :------------------------------------ | :--------------------------- | :----------------------- | :-------------------------------- | :------------------------------ | | U.S. Treasury securities and obligations of U.S. government agencies | $255,091 | $254,993 | $118,159 | $118,091 | | Bank certificates of deposit | $1,234 | $1,234 | $5,212 | $5,200 | | Corporate securities | $3,782 | $3,782 | $77,580 | $77,325 | | Municipal securities | $10,932 | $10,976 | - | - | | Total | $271,039 | $270,985 | $200,951 | $200,616 | - Unrealized losses on fixed-income securities are primarily due to changes in interest rates, but the Company does not believe they represent impairments[65](index=65&type=chunk) [Note 5. Derivative Instruments](index=20&type=section&id=5.%20Derivative%20Instruments) Realized Losses on Undesignated Derivatives (in thousands) | Period | Realized Losses | | :------------------------------------ | :------------------- | | Three Months Ended June 30, 2025 | $(4,242) | | Three Months Ended June 30, 2024 | $(415) | | Nine Months Ended June 30, 2025 | $(4,246) | | Nine Months Ended June 30, 2024 | $(2,202) | Notional Amounts of Derivative Instruments (in thousands) | Instrument | June 30, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Cross-currency swap (Net Investment Hedge) | $260,025 | $75,978 | | Foreign exchange contracts (Undesignated) | $46,975 | $60,101 | - The Company entered into a new cross-currency swap agreement on February 3, 2025, notionally exchanging **$260.0 million** for **€250.0 million** to hedge net investments against a Euro-denominated subsidiary, maturing on February 2, 2026[69](index=69&type=chunk) - Interest income from cross-currency swaps was **$1.2 million** and **$0.3 million** for the three months ended June 30, 2025 and 2024, respectively, and **$2.2 million** and **$3.4 million** for the nine months ended June 30, 2025 and 2024, respectively[72](index=72&type=chunk) [Note 6. Goodwill and Intangible Assets](index=21&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) - The Company performed an interim quantitative goodwill impairment test as of June 30, 2025, and concluded there was no impairment to goodwill for its Sample Management Solutions (SMS) and Multiomics reporting units[73](index=73&type=chunk)[74](index=74&type=chunk) Changes in Carrying Amount of Goodwill by Segment (in thousands) | Segment | Balance - October 1, 2024 | Currency Translation Adjustments | Balance - June 30, 2025 | | :------------------------------------ | :-------------------------- | :------------------------------- | :-------------------- | | Sample Management Solutions | $494,649 | $12,205 | $506,854 | | Multiomics | $196,760 | — | $196,760 | | Total | $691,409 | $12,205 | $703,614 | Identifiable Intangible Assets (Net Book Value, in thousands) | Category | June 30, 2025 Net Book Value | September 30, 2024 Net Book Value | | :------------------------------------ | :----------------------------- | :-------------------------------- | | Completed technology | $50,270 | $54,758 | | Trademarks and trade names | $463 | $531 | | Customer relationships | $57,403 | $69,753 | | Total | $108,136 | $125,042 | - Amortization expenses for intangible assets were **$6.2 million** and **$7.2 million** for the three months ended June 30, 2025 and 2024, respectively, and **$18.4 million** and **$21.6 million** for the nine months ended June 30, 2025 and 2024, respectively[77](index=77&type=chunk) [Note 7. Restructuring](index=22&type=section&id=7.%20Restructuring) - The Company continued its 2024 Restructuring Plan, focusing on facilities consolidation, portfolio optimization, and organization structure simplification, with completion expected by the end of fiscal year 2025[79](index=79&type=chunk) Restructuring Charges (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Severance and related costs | $971 | $852 | $4,740 | $3,625 | | ROU asset abandonment | — | — | — | $901 | | Other | $(217) | $849 | $25 | $1,389 | | Total Restructuring Charges | $754 | $1,701 | $4,765 | $5,915 | - The majority of 2025 restructuring expenses are severance and related costs, with **$0.3 million** for SMS and **$0.4 million** for Multiomics in the three months ended June 30, 2025[80](index=80&type=chunk) [Note 8. Supplementary Balance Sheet Information](index=23&type=section&id=8.%20Supplementary%20Balance%20Sheet%20Information) Inventories (in thousands) | Category | June 30, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Raw materials and purchased parts | $35,796 | $34,134 | | Work-in-process | $6,056 | $8,402 | | Finished goods | $38,654 | $36,387 | | Total Inventories | $80,506 | $78,923 | | Inventory reserves | $8,500 | $6,100 | Product and Warranty Retrofit Activity (in thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Balance at beginning of period | $5,213 | $3,974 | | Accruals for warranties during the period | $587 | $1,939 | | Costs incurred during the period | $(427) | $(1,184) | | Balance at end of period | $5,373 | $4,729 | [Note 9. Stockholders' Equity](index=24&type=section&id=9.%20Stockholders'%20Equity) - The Company completed its **$1.5 billion** 2022 Repurchase Authorization by September 30, 2024, repurchasing **30.0 million** shares, and made an **$11.4 million** excise tax payment related to these repurchases during the nine months ended June 30, 2025[86](index=86&type=chunk)[87](index=87&type=chunk) Components of Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Balance at September 30, 2024 | Other comprehensive income (loss) before reclassifications (9M 2025) | Amounts reclassified (9M 2025) | Balance at June 30, 2025 | | :------------------------------------ | :---------------------------- | :----------------------------------------------------------------- | :----------------------------- | :----------------------- | | Currency Translation Adjustments | $(34,170) | $33,462 | — | $(708) | | Unrealized Gains (Losses) on Available-for-Sale Securities | $(263) | $262 | — | $(1) | | Gains (Losses) on Derivative Net of tax | $21,468 | $(39,744) | — | $(18,276) | | Pension Liability Adjustments Net of tax | $(499) | $(205) | $54 | $(650) | | Total | $(13,464) | $(6,225) | $54 | $(19,635) | [Note 10. Revenue from Contracts with Customers](index=25&type=section&id=10.%20Revenue%20from%20Contracts%20with%20Customers) Revenue by Significant Business Line (in thousands) | Business Line | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Multiomics | $66,235 | $63,619 | $196,054 | $188,556 | | Core Products | $45,750 | $49,440 | $143,418 | $143,170 | | Sample Repository Services | $31,957 | $31,233 | $95,398 | $90,646 | | Total Revenue | $143,942 | $144,292 | $434,870 | $422,372 | - Accounts receivable, net, decreased from **$156.3 million** at September 30, 2024, to **$124.5 million** at June 30, 2025[91](index=91&type=chunk) - Contract assets increased from **$28.9 million** at September 30, 2024, to **$40.1 million** at June 30, 2025, while contract liabilities increased from **$30.5 million** to **$40.0 million** over the same period[92](index=92&type=chunk)[93](index=93&type=chunk) - Remaining performance obligations totaled **$76.2 million** as of June 30, 2025, with **$55.2 million** expected to be recognized within one year and **$21.0 million** after one year[94](index=94&type=chunk) [Note 11. Stock-Based Compensation](index=26&type=section&id=11.%20Stock-Based%20Compensation) Total Stock-Based Compensation Expense for Continuing Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Restricted stock units | $1,973 | $3,381 | $14,408 | $11,122 | | Employee stock purchase plan | $242 | $310 | $711 | $980 | | Total | $2,215 | $3,691 | $15,119 | $12,102 | - As of June 30, 2025, the future unrecognized stock-based compensation expense related to restricted stock units for continuing operations is **$25.5 million**, expected to be recognized over an estimated weighted average amortization period of **1.7 years**[98](index=98&type=chunk) - In October 2023, the Company amended performance goals for previously issued performance-based restricted stock units, leading to a total potential maximum compensation cost of **$3.3 million** recognized through November 2025[102](index=102&type=chunk) - In November 2024, the Company issued restricted stock unit awards with vesting based on market conditions (relative total shareholder return), with fair values estimated using the Monte Carlo simulation model[105](index=105&type=chunk) [Note 12. Fair Value Measurements](index=29&type=section&id=12.%20Fair%20Value%20Measurements) Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (in thousands) | Description | Total Fair Value (June 30, 2025) | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | | :------------------------------------ | :------------------------------- | :---------------------- | :---------------------- | :---------------------- | | **Assets:** | | | | | | Cash equivalents | $141,537 | $141,035 | $502 | — | | Available-for-sale securities | $270,985 | $9,447 | $261,538 | — | | Investment in equity securities | $2,100 | — | — | $2,100 | | Foreign exchange contracts | $142 | — | $142 | — | | **Liabilities:** | | | | | | Net investment hedge | $34,656 | — | $34,656 | — | - Cash equivalents primarily consist of money market funds and U.S. government backed securities (Level 1) and debt securities/bank certificates of deposit (Level 2)[109](index=109&type=chunk) - Available-for-sale securities include highly rated corporate debt and U.S. government backed securities (Level 1) and debt securities/bank certificates of deposit valued using matrix pricing (Level 2)[110](index=110&type=chunk) - The Company's investment in preferred stock of a private company (converted from convertible notes) is valued at **$2.1 million** and classified as Level 3 due to unobservable inputs[112](index=112&type=chunk) [Note 13. Income Taxes](index=32&type=section&id=13.%20Income%20Taxes) Income Tax Expense (in thousands) | Period | Income Tax Expense | | :------------------------------------ | :------------------- | | Three Months Ended June 30, 2025 | $2,758 | | Nine Months Ended June 30, 2025 | $14,007 | | Three Months Ended June 30, 2024 | $600 | | Nine Months Ended June 30, 2024 | $3,220 | - The nine-month tax expense for 2025 was primarily driven by a **$6.5 million** tax expense related to a change in indefinite reinvestment assertion and the repatriation of cash from a China subsidiary[116](index=116&type=chunk)[121](index=121&type=chunk) - The Company maintains a valuation allowance against U.S. deferred tax assets due to U.S. pre-tax losses and expects a **$22 million** valuation allowance for fiscal year 2025[119](index=119&type=chunk) [Note 14. Net Income (Loss) per Share](index=33&type=section&id=14.%20Net%20Income%20(Loss)%20per%20Share) Net Income (Loss) per Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Income (loss) from continuing operations | $680 | $(158) | $(26,926) | $(23,552) | | Loss from discontinued operations, net of tax | $(53,486) | $(6,424) | $(79,676) | $(135,634) | | Net loss | $(52,806) | $(6,582) | $(106,602) | $(159,186) | | Basic net loss per share | $(1.15) | $(0.12) | $(2.33) | $(2.90) | | Diluted net loss per share | $(1.15) | $(0.12) | $(2.33) | $(2.90) | | Weighted average common shares outstanding (Basic) | 45,780 | 52,963 | 45,712 | 54,914 | | Weighted average common shares outstanding (Diluted) | 45,823 | 52,963 | 45,712 | 54,914 | [Note 15. Segment and Geographic Information](index=33&type=section&id=15.%20Segment%20and%20Geographic%20Information) - The Company's continuing operations consist of two operating and reportable segments: Sample Management Solutions (SMS) and Multiomics[128](index=128&type=chunk)[131](index=131&type=chunk) Segment Revenue and Adjusted Operating Income (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 Revenue | Three Months Ended June 30, 2024 Revenue | Nine Months Ended June 30, 2025 Revenue | Nine Months Ended June 30, 2024 Revenue | Three Months Ended June 30, 2025 Adjusted Operating Income (Loss) | Three Months Ended June 30, 2024 Adjusted Operating Income (Loss) | Nine Months Ended June 30, 2025 Adjusted Operating Income (Loss) | Nine Months Ended June 30, 2024 Adjusted Operating Income (Loss) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | :--------------------------------------------------------------- | :--------------------------------------------------------------- | :-------------------------------------------------------------- | :-------------------------------------------------------------- | | Sample Management Solutions | $77,707 | $80,673 | $238,816 | $233,816 | $11,248 | $3,582 | $18,177 | $1,509 | | Multiomics | $66,235 | $63,619 | $196,054 | $188,556 | $(3,331) | $(592) | $(11,127) | $(6,736) | | Total Revenue / Segment Adjusted Operating Loss | $143,942 | $144,292 | $434,870 | $422,372 | $7,917 | $2,990 | $7,050 | $(5,227) | Revenue by Geographic Location (in thousands) | Geographic Location | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | United States | $87,833 | $95,037 | $271,244 | $272,898 | | China | $14,321 | $14,510 | $41,947 | $43,054 | | United Kingdom | $9,370 | $8,086 | $25,252 | $19,387 | | Rest of Europe | $25,430 | $21,370 | $75,009 | $66,493 | | Asia Pacific/Other | $6,988 | $5,289 | $21,418 | $20,540 | | Total Revenue | $143,942 | $144,292 | $434,870 | $422,372 | [Note 16. Commitments and Contingencies](index=36&type=section&id=16.%20Commitments%20and%20Contingencies) - The Company is subject to various legal proceedings but believes no new material provision for liability or disclosure is required as of June 30, 2025, for continuing operations[133](index=133&type=chunk) - In July 2024, the Company paid approximately **$2.5 million** in tariffs and interest related to imports from its GENEWIZ business into the United States for the period from December 2021 to July 2024[134](index=134&type=chunk) - As of June 30, 2025, the Company had non-cancellable commitments totaling **$48.7 million**, including **$37.3 million** for inventory purchase orders and **$11.4 million** for other operating expenses[135](index=135&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Azenta, Inc.'s financial condition and results of operations for the three and nine months ended June 30, 2025, compared to the corresponding periods in 2024, covering business overview, strategic decisions, detailed financial performance by segment, critical accounting policies, and an analysis of liquidity and capital resources [Overview](index=37&type=section&id=Overview) - Azenta is a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry, with approximately **3,000 employees** and sales in **92 countries**[139](index=139&type=chunk) - The Company is pursuing the sale of its B Medical Systems business to simplify its portfolio and focus on core Sample Management Solutions (SMS) and Multiomics segments[138](index=138&type=chunk) - The Sample Management Solutions segment offers end-to-end sample management products and services, including Sample Repository Services and Core Products (Automated Stores, Cryogenic Systems, etc.)[142](index=142&type=chunk) - The Multiomics segment provides genomic services such as gene sequencing, synthesis, and editing, supporting research and development in life sciences[143](index=143&type=chunk) [Business and Financial Performance](index=38&type=section&id=Business%20and%20Financial%20Performance) Key Financial Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue | $143,942 | $144,292 | $434,870 | $422,372 | | Gross profit | $67,760 | $65,478 | $202,317 | $187,885 | | Operating loss | $(714) | $(7,106) | $(28,218) | $(47,564) | | Net loss | $(52,806) | $(6,582) | $(106,602) | $(159,186) | - Revenue was flat for the three months ended June 30, 2025, but increased **3%** for the nine months, driven by Multiomics growth and strong Sample Repository Solutions performance[146](index=146&type=chunk) - Gross margin increased to **47%** for both the three and nine months ended June 30, 2025, from **45%** and **44%** respectively, primarily due to operational efficiencies and favorable sales mix[146](index=146&type=chunk) - Net loss from discontinued operations was significantly higher in Q3 2025 (**$53.5 million**) compared to Q3 2024 (**$6.4 million**), primarily due to a loss on assets held for sale[146](index=146&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements requires management to make estimates and judgments, which are evaluated on an ongoing basis[147](index=147&type=chunk) - There have been no material changes to the Company's critical accounting policies or estimates from those set forth in its 2024 Annual Report on Form 10-K[148](index=148&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) - Management uses non-GAAP financial measures, adjusting GAAP results for items like amortization, transformation costs, and restructuring charges, to provide investors with a better perspective on operations comparable to peers[150](index=150&type=chunk) [Revenue](index=40&type=section&id=Revenue) Revenue by Segment (in thousands, except percentages) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change 2025 v. 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | % Change 2025 v. 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :-------------------- | :------------------------------ | :------------------------------ | :-------------------- | | Sample Management Solutions | $77,707 | $80,673 | (3.7)% | $238,816 | $233,816 | 2.1% | | Multiomics | $66,235 | $63,619 | 4.1% | $196,054 | $188,556 | 4.0% | | Total Revenue | $143,942 | $144,292 | (0.2)% | $434,870 | $422,372 | 3.0% | - Sample Management Solutions revenue decreased **4%** in the three months ended June 30, 2025, due to lower Core Products revenue (Automated Stores and Cryogenic Systems), but increased **2%** for the nine months due to Sample Repository Services growth[151](index=151&type=chunk) - Multiomics segment revenue increased approximately **4%** for both the three and nine months ended June 30, 2025, driven by Next Generation Sequencing services, partially offset by declines in Gene Synthesis and Sanger sequencing[152](index=152&type=chunk) - Revenue generated outside the United States increased to **39.0%** and **37.6%** of total revenue for the three and nine months ended June 30, 2025, respectively, compared to **34.1%** and **35.4%** in the prior year periods[153](index=153&type=chunk) [Operating Income (Loss)](index=40&type=section&id=Operating%20Income%20(Loss)) Segment Operating Income (Loss) and Adjusted Operating Income (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 Operating Income (Loss) | Three Months Ended June 30, 2024 Operating Income (Loss) | Nine Months Ended June 30, 2025 Operating Income (Loss) | Nine Months Ended June 30, 2024 Operating Income (Loss) | Three Months Ended June 30, 2025 Adjusted Operating Income (Loss) | Three Months Ended June 30, 2024 Adjusted Operating Income (Loss) | Nine Months Ended June 30, 2025 Adjusted Operating Income (Loss) | Nine Months Ended June 30, 2024 Adjusted Operating Income (Loss) | | :------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :--------------------------------------------------------------- | :--------------------------------------------------------------- | :-------------------------------------------------------------- | :-------------------------------------------------------------- | | Sample Management Solutions | $9,834 | $2,647 | $11,963 | $(1,733) | $11,248 | $3,582 | $18,177 | $1,509 | | Multiomics | $(4,191) | $(1,630) | $(13,710) | $(9,853) | $(3,331) | $(592) | $(11,127) | $(6,736) | - Sample Management Solutions operating income increased significantly, driven by gross margin expansion, despite increased transformation costs[158](index=158&type=chunk) - Multiomics segment operating loss increased, primarily due to lower revenue from Gene Synthesis and Sanger sequencing services, partially offset by Next Generation Sequencing growth[159](index=159&type=chunk) [Gross Margin](index=43&type=section&id=Gross%20Margin) Segment Gross Margin and Adjusted Gross Margin (in percentages) | Segment | Three Months Ended June 30, 2025 Gross Margin | Three Months Ended June 30, 2024 Gross Margin | Nine Months Ended June 30, 2025 Gross Margin | Nine Months Ended June 30, 2024 Gross Margin | Three Months Ended June 30, 2025 Adjusted Gross Margin | Three Months Ended June 30, 2024 Adjusted Gross Margin | Nine Months Ended June 30, 2025 Adjusted Gross Margin | Nine Months Ended June 30, 2024 Adjusted Gross Margin | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :----------------------------------------------------- | :----------------------------------------------------- | | Sample Management Solutions | 52.0% | 45.0% | 48.9% | 43.8% | 53.6% | 46.1% | 50.3% | 45.2% | | Multiomics | 41.3% | 45.9% | 43.6% | 45.3% | 42.6% | 47.5% | 44.9% | 46.9% | | Azenta Total | 47.1% | 45.4% | 46.5% | 44.5% | 48.5% | 46.7% | 47.9% | 46.0% | - Sample Management Solutions gross margin and adjusted gross margin increased due to operational efficiencies and a favorable sales mix[161](index=161&type=chunk) - Multiomics segment gross margin and adjusted gross margin decreased, primarily driven by lower revenue from Gene Synthesis and Sanger sequencing services[162](index=162&type=chunk) [Research and Development Expenses](index=44&type=section&id=Research%20and%20Development%20Expenses) Research and Development Expenses (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | % of Revenue | Three Months Ended June 30, 2024 | % of Revenue | Nine Months Ended June 30, 2025 | % of Revenue | Nine Months Ended June 30, 2024 | % of Revenue | | :------------------------------------ | :------------------------------- | :----------- | :------------------------------- | :----------- | :------------------------------ | :----------- | :------------------------------ | :----------- | | Total research and development expense | $6,685 | 4.6% | $6,911 | 4.8% | $19,934 | 4.6% | $21,957 | 5.2% | - Total R&D expenses decreased by **$0.2 million** (3 months) and **$2.0 million** (9 months) year-over-year, driven by cost reduction initiatives, primarily decreased compensation and benefits[163](index=163&type=chunk) [Selling, General and Administrative Expenses](index=44&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) Selling, General and Administrative Expenses (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | % of Revenue | Three Months Ended June 30, 2024 | % of Revenue | Nine Months Ended June 30, 2025 | % of Revenue | Nine Months Ended June 30, 2024 | % of Revenue | | :------------------------------------ | :------------------------------- | :----------- | :------------------------------- | :----------- | :------------------------------ | :----------- | :------------------------------ | :----------- | | Total selling, general and administrative expense | $61,035 | 42.4% | $63,972 | 44.3% | $205,836 | 47.3% | $202,919 | 48.0% | - Total SG&A expenses decreased by **$2.9 million** for the three months ended June 30, 2025, primarily due to decreased compensation and benefits expense[164](index=164&type=chunk) - Total SG&A expenses increased by **$2.9 million** for the nine months ended June 30, 2025, primarily due to higher stock-based compensation and one-time costs related to leadership changes, partially offset by decreased compensation and benefits[164](index=164&type=chunk) [Restructuring Charges](index=45&type=section&id=Restructuring%20Charges) - Restructuring charges decreased by **$0.9 million** to **$0.8 million** for the three months ended June 30, 2025, and by **$1.2 million** to **$4.8 million** for the nine months ended June 30, 2025, compared to the prior year periods[165](index=165&type=chunk) [Non-Operating Income](index=45&type=section&id=Non-Operating%20Income) Interest Income, Net (in thousands) | Period | Interest Income, Net | | :------------------------------------ | :------------------- | | Three Months Ended June 30, 2025 | $5,000 | | Three Months Ended June 30, 2024 | $7,900 | | Nine Months Ended June 30, 2025 | $13,800 | | Nine Months Ended June 30, 2024 | $27,400 | - The decrease in interest income year over year is due to decreased investments in marketable securities[166](index=166&type=chunk) - Other income (expense), net, was an expense of **$0.8 million** for the three months ended June 30, 2025, and income of **$1.5 million** for the nine months, with the increase primarily from foreign exchange gains and a **$2.1 million** gain from a cost method investment[167](index=167&type=chunk) [Income Tax Expense](index=45&type=section&id=Income%20Tax%20Expense) Income Tax Expense (in thousands) | Period | Income Tax Expense | | :------------------------------------ | :------------------- | | Three Months Ended June 30, 2025 | $2,800 | | Nine Months Ended June 30, 2025 | $14,000 | | Three Months Ended June 30, 2024 | $600 | | Nine Months Ended June 30, 2024 | $3,200 | - The 2025 tax expense was primarily driven by a **$6.5 million** charge related to a change in indefinite reinvestment assertion and the expectation to repatriate cash from a China subsidiary, along with profits in foreign jurisdictions and a U.S. valuation allowance[168](index=168&type=chunk) - The Company does not expect the recently signed 'One Big Beautiful Bill Act' to have a significant near-term effect on its effective tax rate or cash flows[170](index=170&type=chunk) [Discontinued Operations](index=45&type=section&id=Discontinued%20Operations) Revenue and Loss from Discontinued Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenue from discontinued operations | $16,300 | $28,500 | $51,100 | $63,900 | | Loss from discontinued operations, net of tax | $53,500 | $6,400 | $79,700 | $135,600 | - The significant loss from discontinued operations in 2025 was primarily driven by the loss on assets held for sale related to the B Medical Systems business, while in 2024 it was due to goodwill impairment[171](index=171&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Cash, Cash Equivalents, Restricted Cash, and Marketable Securities (in thousands) | Metric | June 30, 2025 | September 30, 2024 | | :------------------------------------ | :------------ | :----------------- | | Cash and cash equivalents | $270,040 | $280,030 | | Restricted cash | $8,776 | $10,061 | | Short-term marketable securities | $48,817 | $151,162 | | Long-term marketable securities | $222,168 | $49,454 | | Total | $549,801 | $490,707 | - The Company believes its current cash and cash equivalents are sufficient to fund operating expenses and capital expenditures for at least one year[172](index=172&type=chunk) - Cash inflows from operating activities for the nine months ended June 30, 2025, were **$70.0 million**, primarily due to increased revenue, collections, and an **$11.5 million** U.S. federal tax refund[174](index=174&type=chunk) - The Company had **$121.9 million** of cash, cash equivalents, and restricted cash held outside the U.S. as of June 30, 2025, including **$23 million** in China, with a plan to repatriate cash from China and a **$6.5 million** tax provision for this plan[173](index=173&type=chunk) - As of June 30, 2025, the Company had no outstanding debt and non-cancellable commitments of **$48.7 million**[175](index=175&type=chunk)[176](index=176&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Azenta, Inc.'s exposure to market risks, specifically focusing on interest rate fluctuations affecting its cash and investments, and foreign currency exchange rate changes impacting its international transactions and balances, quantifying the potential impact of hypothetical changes in these market factors on the company's financial performance - A hypothetical **100 basis point** change in interest rates would result in a **$2.7 million** and **$6.1 million** change in interest income earned during the nine months ended June 30, 2025 and 2024, respectively[178](index=178&type=chunk) - Sales in currencies other than the U.S. dollar were approximately **34%** and **29%** of total sales during the nine months ended June 30, 2025 and 2024, respectively[179](index=179&type=chunk) - Liquid assets denominated in non-functional currencies (primarily Euro and British Pound) were **$50.7 million** at June 30, 2025, with foreign currency losses of **$1.3 million** and **$1.5 million** for the nine months ended June 30, 2025 and 2024, respectively[180](index=180&type=chunk) - A hypothetical **10%** change in foreign exchange rates as of June 30, 2025, would result in an approximate **$0.4 million** change in net loss during the nine months ended June 30, 2025[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of Azenta, Inc.'s disclosure controls and procedures, concluding they were not effective as of June 30, 2025, due to identified material weaknesses, specifically addressing a continuing material weakness related to the review of the cash flow statement and a new material weakness concerning the preparation and review of account reconciliations, with the company outlining its remediation plans for these control deficiencies - The Company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses[181](index=181&type=chunk) - A material weakness related to the review of the cash flow statement, previously disclosed in the 2024 Annual Report on Form 10-K, continues to exist as of June 30, 2025[182](index=182&type=chunk) - An additional material weakness was identified during Q2 fiscal year 2025, concerning the design and maintenance of effective controls related to the preparation and review of account reconciliations[183](index=183&type=chunk) - Remediation plans include implementing a new cash flow reporting tool, new processes and controls for cash flow review, and for account reconciliations, designing enhanced controls, redesigning policy, and engaging outside consultants[185](index=185&type=chunk)[186](index=186&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, other information such as Rule 10b5-1 trading arrangements and personnel appointments, and a list of exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section states that Azenta, Inc. is involved in various legal proceedings in the ordinary course of business, and while the ultimate outcome is unpredictable, the company believes that none of these current claims will have a material adverse effect on its consolidated financial condition or results of operations for continuing operations - The Company is subject to various legal proceedings arising in the ordinary course of business[190](index=190&type=chunk) - As of the filing date, the Company believes that none of these claims will have a material adverse effect on its consolidated financial condition or results of operations for continuing operations[190](index=190&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors previously disclosed in Azenta, Inc.'s 2024 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, confirming that there have been no material changes to these risk factors - There have been no material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025[191](index=191&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section provides updates on Rule 10b5-1 trading arrangements and a key personnel appointment, stating that no directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the quarter, and announces the appointment of Lawrence Lin as the Principal Accounting Officer - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[192](index=192&type=chunk) - Lawrence Lin, Executive Vice President and Chief Financial Officer, was appointed as the Company's Principal Accounting Officer, effective August 7, 2025[193](index=193&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including severance agreements, certifications from the CEO and CFO, and financial statements formatted in iXBRL - Exhibits include severance agreements, certifications pursuant to the Sarbanes-Oxley Act, and financial statements formatted in iXBRL[195](index=195&type=chunk) [Signatures](index=51&type=section&id=Signatures) This section contains the official signatures of the authorized officers of Azenta, Inc., certifying the filing of the Quarterly Report on Form 10-Q - The report was signed by Lawrence Lin, Executive Vice President and Chief Financial Officer, and Violetta A. Hughes, Vice President and Chief Accounting Officer, on August 6, 2025[199](index=199&type=chunk)

Core Insights - Azenta reported third-quarter fiscal 2025 results with non-GAAP profitability exceeding expectations, while GAAP revenue remained flat and fell short of analyst forecasts [1][5][10] Financial Performance - Non-GAAP diluted EPS from continuing operations was $0.19, surpassing the consensus estimate of $0.14, reflecting a year-over-year increase of 35.7% [2][5] - GAAP revenue was $144 million, unchanged from the previous year and $5.38 million below the estimated $149.38 million [1][2] - Non-GAAP adjusted EBITDA was $18 million, marking a 28.6% increase year-over-year, with an adjusted EBITDA margin of 12.3%, up 260 basis points [2][5] - Non-GAAP gross margin improved to 48.5%, an increase of 1.8 percentage points from the previous year [2][5] Business Segments - The Sample Management Solutions (SMS) segment experienced a 4% revenue decline to $78 million, with organic sales down 6% year-over-year, primarily due to weaker demand for core products [6][11] - The Multiomics segment, which includes genomic analysis tools, achieved 4% growth year-over-year, reaching $66 million in revenue, driven by strong demand for Next Generation Sequencing (NGS) [7][11] Strategic Focus - Azenta has transitioned to a pure-play life sciences operation, focusing on sample management and genomics services, following the divestment of its semiconductor business [3][4] - The company serves over 14,000 customers across more than 120 countries, aligning its operations with industry trends favoring personalized medicine and secure biological sample storage [4][11] Outlook - Management maintained guidance for fiscal 2025, projecting organic revenue growth of 3% to 5% and an adjusted EBITDA margin increase of approximately 300 basis points [10][11] - The company plans to utilize its cash reserves for strategic investments, selective acquisitions, and operational enhancements, with share buybacks being a lesser priority [8][10]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue was $144 million, flat year over year on a reported basis and down 2% on an organic basis [17][19] - Adjusted EBITDA margin expanded by approximately 260 basis points year over year to 12.3%, reflecting operational turnaround efforts [9][18] - Free cash flow for the quarter was $15 million, driven primarily by improved working capital [18] Business Line Data and Key Metrics Changes - Sample Management Solutions (SMS) revenue was $78 million, down 4% year over year on a reported basis and down 6% on an organic basis, primarily due to softer bookings and timing delays [20] - Multiomics segment delivered revenue of $66 million, up 4% on a reported basis and up 3% on an organic basis, driven by growth in next-generation sequencing [21][22] - Non-GAAP gross margin for SMS was 53.6%, up 760 basis points year over year, while Multiomics gross margin was 42.6%, down approximately 500 basis points year over year [20][23] Market Data and Key Metrics Changes - China posted 10% organic growth in the Multiomics segment despite macro and geopolitical headwinds [22] - The company anticipates a 1% headwind to full year 2025 revenue due to reductions in NIH funding levels [10][90] Company Strategy and Development Direction - The company is focused on long-term value creation and operational turnaround, with key growth priorities including strengthening commercial excellence and investing in R&D [6][7] - The Azenta Business System (ABS) is being leveraged to enhance operational efficiency and drive growth [8][68] - The company plans to prioritize investments in gross margin productivity, organic growth offerings, and strategic M&A opportunities [12] Management's Comments on Operating Environment and Future Outlook - Management remains committed to full year 2025 guidance of organic revenue growth between 3% to 5% and adjusted EBITDA margin expansion of 300 basis points [9][25] - The company is optimistic about capitalizing on opportunities arising from the current dynamic environment [11] - Management noted that the operational improvements have allowed them to reaffirm guidance despite external challenges [11] Other Important Information - The company ended the quarter with $550 million in cash and no outstanding debt, positioning it well for future investments [12][24] - An Investor Day is planned for later in the calendar year to discuss achievements and outlook [13] Q&A Session Summary Question: Guidance for fiscal 2025 and thoughts on fiscal 2026 - Management indicated confidence in a step-up in Q4 due to momentum in NGS and sufficient backlog, with a commitment to 5% to 8% CAGR for fiscal 2026 [29][34] Question: Weakness in SMS core products - Management clarified that there are no cancellations, but orders are being pushed out due to capital equipment purchase delays [35][36] Question: Gene synthesis headwinds - Management noted softness in gene synthesis from pharma accounts but expects improvements in Q4 [39][40] Question: Q4 revenue expectations - Management highlighted a seasonal step-up from Q3 to Q4 and strong funnel visibility, indicating confidence in achieving revenue targets [44][46] Question: Leadership changes impact - Management discussed new commercial leadership in North America and positive early signs from the regional model [48][50] Question: M&A funnel focus - Management emphasized a disciplined approach to M&A, focusing on core biorepositories and multiomics opportunities [52][54] Question: NIH funding headwinds - Management maintained a consistent view on NIH funding as a 1% headwind but expressed optimism about potential increases in funding [89][90]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Azenta reported flat Q3 FY2025 revenue from continuing operations, with margin expansion and improved Non-GAAP EPS, driven by operational turnaround and cost management [Q3 FY2025 Highlights](index=1&type=section&id=Q3%20FY2025%20Highlights) Azenta reported flat revenue from continuing operations year-over-year for Q3 FY2025, with organic revenue declining 2%. Multiomics revenue grew 4% while Sample Management Solutions revenue decreased by 4%. The company achieved significant margin expansion and improved Non-GAAP Diluted EPS and Adjusted EBITDA Metric (Continuing Operations) | Metric (Continuing Operations) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change Prior Qtr | Change Prior Yr. | | :------------------------------ | :------------ | :------------- | :------------ | :--------------- | :--------------- | | Revenue ($ millions) | 144 | 143 | 144 | 0% | (0)% | | Organic growth | | | | | (2)% | | Sample Management Solutions ($ millions) | 78 | 80 | 81 | (3)% | (4)% | | Multiomics ($ millions) | 66 | 64 | 64 | 4% | 4% | | Diluted EPS | 0.01 | (0.40) | (0.00) | NM | NM | | Non-GAAP Diluted EPS | 0.19 | 0.05 | 0.14 | NM | 31% | | Adjusted EBITDA ($ millions) | 18 | 14 | 14 | 24% | 27% | | Adjusted EBITDA Margin | 12.3% | 10.0% | 9.7% | | | - **B Medical Systems results** are treated as discontinued operations following the company's intention to pursue a sale, impacting total diluted EPS[2](index=2&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO highlighted significant organizational changes and operational turnaround progress, achieving meaningful margin expansion through cost management despite a challenging macro environment. The company maintains a strong balance sheet and solid cash flow, remaining on track for full-year goals and confident in its long-term strategy - Operational turnaround is progressing as planned, driving **meaningful margin expansion** through disciplined cost management and focused execution[4](index=4&type=chunk) - **Strong balance sheet** and **solid cash flow** position the company to capitalize on future opportunities[4](index=4&type=chunk) - Company remains on track to meet **full-year goals for fiscal 2025**, confident in the foundation for long-term strategy[4](index=4&type=chunk) [Financial Performance (Continuing Operations)](index=1&type=section&id=Financial%20Performance%20(Continuing%20Operations)) Azenta's Q3 FY2025 saw flat revenue but improved GAAP operating loss and strong Non-GAAP earnings, reflecting effective cost management and operational efficiencies [Q3 FY2025 Revenue Breakdown](index=1&type=section&id=Q3%20FY2025%20Revenue%20Breakdown) Total revenue from continuing operations was flat year-over-year at $144 million, with organic revenue declining 2%. This was due to a decrease in Sample Management Solutions revenue, offset by growth in Multiomics revenue - Total revenue was **$144 million**, flat year over year, with **organic revenue declining 2%**[5](index=5&type=chunk) - **Sample Management Solutions Revenue:** **$78 million**, down **4%** year over year[5](index=5&type=chunk) - Organic revenue declined **6%**, primarily due to lower revenues in Core Products (Automated Stores and Cryogenic Systems), partially offset by growth in Sample Storage, Clinical Biostores, and Product Services[5](index=5&type=chunk) - **Multiomics Revenue:** **$66 million**, up **4%** year over year[5](index=5&type=chunk) - Organic revenue grew **3%**, mainly driven by growth in Next Generation Sequencing, partially offset by declines in Sanger Sequencing and Gene Synthesis[5](index=5&type=chunk) [GAAP Earnings Results](index=2&type=section&id=GAAP%20Earnings%20Results) GAAP operating loss improved significantly to $0.7 million, with operating margin increasing 440 basis points year-over-year. Gross margin also saw an increase, driven by favorable sales mix and operating efficiencies. Diluted EPS from continuing operations was positive, but total diluted EPS was negatively impacted by a non-cash impairment charge from discontinued operations - **Operating Loss:** **$0.7 million**, with operating margin at **(0.5%)**, an improvement of **440 basis points** year over year[12](index=12&type=chunk) - **Gross Margin:** **47.1%**, up **170 basis points** year over year, driven by favorable sales mix, operating efficiencies, and improved cost execution[12](index=12&type=chunk) - **Operating Expenses:** **$68 million**, down **6%** year over year, due to lower selling, general and administrative expenses, R&D costs, and restructuring charges[12](index=12&type=chunk) - **Diluted EPS from Continuing Operations:** **$0.01** (vs. ($0.00) in Q3 FY2024)[12](index=12&type=chunk) - **Diluted EPS from Discontinued Operations:** **($1.17)** due to a **$50 million** non-cash impairment charge[12](index=12&type=chunk) - **Total Diluted EPS:** **($1.15)** (vs. ($0.12) a year ago)[12](index=12&type=chunk) [Non-GAAP Earnings Results](index=2&type=section&id=Non-GAAP%20Earnings%20Results) Non-GAAP adjusted operating income and margin showed strong year-over-year improvements, reflecting effective cost management and operational efficiencies. Adjusted EBITDA and Non-GAAP Diluted EPS also increased significantly, indicating a positive trend in underlying business performance - **Adjusted Operating Income:** **$7.9 million**, with adjusted operating margin at **5.5%**, an improvement of **340 basis points** year over year[12](index=12&type=chunk) - **Adjusted Gross Margin:** **48.5%**, up **180 basis points** compared to Q3 FY2024, primarily due to favorable sales mix, operating efficiencies, and improved cost execution[12](index=12&type=chunk) - **Adjusted Operating Expense:** **$62 million**, down **4%** year over year, driven by lower selling, general and administrative expenses and R&D costs[12](index=12&type=chunk) - **Adjusted EBITDA:** **$18 million**, with Adjusted EBITDA margin at **12.3%**, an improvement of **260 basis points** year over year[12](index=12&type=chunk) - **Non-GAAP Diluted EPS:** **$0.19** (vs. $0.14 one year ago)[12](index=12&type=chunk) [Financial Position & Liquidity](index=2&type=section&id=Financial%20Position%20%26%20Liquidity) Azenta maintained a strong liquidity position with $565 million in cash and generated positive operating and free cash flow during Q3 FY2025 [Cash and Liquidity as of June 30, 2025](index=2&type=section&id=Cash%20and%20Liquidity%20as%20of%20June%2030%2C%202025) Azenta maintained a strong liquidity position with $565 million in cash, cash equivalents, restricted cash, and marketable securities. The company generated positive operating cash flow and free cash flow during the quarter - **Total Cash, Cash Equivalents, Restricted Cash, and Marketable Securities:** **$565 million** as of June 30, 2025, including **$15 million** of cash held in discontinued operations[12](index=12&type=chunk) - **Operating Cash Flow:** **$26 million** in the quarter[12](index=12&type=chunk) - **Capital Expenditures:** **$11 million**[12](index=12&type=chunk) - **Free Cash Flow:** **$15 million** (operating cash flow less capital expenditures)[12](index=12&type=chunk) [Fiscal Year 2025 Guidance](index=2&type=section&id=Fiscal%20Year%202025%20Guidance) Azenta reiterated its full-year fiscal 2025 guidance, projecting organic revenue growth and significant Adjusted EBITDA margin expansion for continuing operations [Guidance for Continuing Operations for Full Year Fiscal 2025](index=2&type=section&id=Guidance%20for%20Continuing%20Operations%20for%20Full%20Year%20Fiscal%202025) Azenta reiterated its full-year fiscal 2025 guidance for continuing operations, projecting organic revenue growth and significant Adjusted EBITDA margin expansion - **Total Organic Revenue Growth:** Expected to be in the range of **3% to 5%** relative to fiscal 2024[12](index=12&type=chunk) - **Adjusted EBITDA Margin Expansion:** Expected to be approximately **300 basis points** relative to fiscal 2024[12](index=12&type=chunk) - The company does not provide GAAP forward-looking guidance due to the inherent difficulty in forecasting various adjusting items without unreasonable effort[8](index=8&type=chunk) [Company Overview & Forward-Looking Statements](index=3&type=section&id=Company%20Overview%20%26%20Forward-Looking%20Statements) Azenta, a global leader in life sciences solutions, provides cold-chain sample management and multiomics services, with forward-looking statements subject to various risks [About Azenta Life Sciences](index=3&type=section&id=About%20Azenta%20Life%20Sciences) Azenta, Inc. is a global leader in life sciences solutions, providing cold-chain sample management and multiomics services to accelerate breakthroughs and therapies. The company serves top pharmaceutical, biotech, academic, and healthcare institutions worldwide through its industry-leading brands - Azenta, Inc. is a leading provider of life sciences solutions worldwide, enabling organizations to bring impactful breakthroughs and therapies to market faster[14](index=14&type=chunk) - Offers a full suite of reliable cold-chain sample management solutions and multiomics services across drug development, clinical research, and advanced cell therapies[14](index=14&type=chunk) - Serves top pharmaceutical, biotech, academic, and healthcare institutions globally through brands like GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, and Barkey[14](index=14&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) The report includes forward-looking statements that involve known and unknown risks and uncertainties, which could cause actual results to differ materially from expectations. Azenta disclaims any obligation to publicly update or revise these statements - Statements in the release are forward-looking and involve known and unknown risks and uncertainties that could cause actual financial and business results to differ materially from expectations[13](index=13&type=chunk) - Factors that could cause results to differ include global political and economic conditions, cost reduction effectiveness, market volatility, supply chain issues, price competition, and intellectual property disputes[13](index=13&type=chunk) - Azenta expressly disclaims any obligation to release publicly any updates or revisions to forward-looking statements[13](index=13&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Azenta's Q3 FY2025 financial statements show a net loss due to discontinued operations, a decrease in total assets, and increased operating cash flow for the nine-month period [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Azenta reported total revenue of $143.9 million, a slight decrease from the prior year. Gross profit increased, but a significant loss from discontinued operations led to a net loss of $52.8 million Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Total Revenue | $143,942 | $144,292 | | Total Cost of Revenue | $76,182 | $78,814 | | Gross Profit | $67,760 | $65,478 | | Total Operating Expenses | $68,474 | $72,584 | | Operating Loss | $(714) | $(7,106) | | Income (Loss) from Continuing Operations | $680 | $(158) | | Loss from Discontinued Operations, net of tax | $(53,486) | $(6,424) | | Net Loss | $(52,806) | $(6,582) | | Diluted Net Loss Per Share | $(1.15) | $(0.12) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Azenta's total assets decreased to $2.02 billion from $2.10 billion at September 30, 2024. Current assets decreased, primarily due to lower short-term marketable securities and accounts receivable, while total liabilities saw a modest increase Consolidated Balance Sheets (as of) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | | :-------------------- | :------------ | :----------------- | | Total Current Assets | $678,478 | $832,807 | | Total Assets | $2,019,135 | $2,100,041 | | Total Current Liabilities | $245,435 | $204,839 | | Total Liabilities | $345,501 | $331,074 | | Total Stockholders' Equity | $1,673,634 | $1,768,967 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, net cash provided by operating activities significantly increased to $70.0 million from $32.2 million in the prior year. Investing activities resulted in a net cash outflow, while financing activities also used cash, leading to an overall decrease in cash and cash equivalents Consolidated Statements of Cash Flows (Nine Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Net Loss | $(106,602) | $(159,186) | | Net Cash Provided by Operating Activities | $70,011 | $32,151 | | Net Cash (Used in) Provided by Investing Activities | $(91,287) | $26,732 | | Net Cash Used in Financing Activities | $(10,408) | $(411,661) | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(27,174) | $(337,182) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $293,816 | $346,863 | [Non-GAAP Financial Measures Reconciliation](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) Azenta provides non-GAAP reconciliations to offer a clearer view of operational performance, highlighting improvements in adjusted earnings and gross profit by excluding specific non-recurring items [Notes on Non-GAAP Financial Measures](index=7&type=section&id=Notes%20on%20Non-GAAP%20Financial%20Measures) Azenta supplements GAAP financial measures with non-GAAP measures to provide a clearer perspective on business operations, believing these are more comparable to peer analyses. These adjustments exclude items like amortization of intangibles, restructuring charges, M&A costs, transformation costs, and other non-recurring gains/charges - Non-GAAP financial measures are used to provide investors a better perspective on business operations, comparable to peer analyses, and are not a substitute for GAAP[23](index=23&type=chunk) - Adjustments to GAAP results include amortization of intangible assets, restructuring charges, purchase price accounting adjustments, M&A costs, non-recurring business transformation initiatives, and share repurchases[23](index=23&type=chunk) - Management also excludes special charges and gains such as impairment losses, gains/losses from asset sales, and certain tax benefits/charges not representative of normal operations[23](index=23&type=chunk) [Non-GAAP Diluted EPS Reconciliation](index=7&type=section&id=Non-GAAP%20Diluted%20EPS%20Reconciliation) The reconciliation shows a significant positive adjustment from GAAP net income/loss to Non-GAAP adjusted net income for continuing operations, primarily driven by the exclusion of amortization, transformation costs, and restructuring charges. This resulted in a Non-GAAP Diluted EPS of $0.19 for Q3 FY2025 Non-GAAP Diluted EPS Reconciliation (Quarter Ended June 30, 2025) | Metric (in thousands, except per share) | June 30, 2025 | per diluted share | | :-------------------------------------- | :------------ | :---------------- | | Net income / loss from continuing operations | $680 | $0.01 | | Adjustments: | | | | Amortization of completed technology | $2,068 | $0.05 | | Amortization of other intangible assets | $4,123 | $0.09 | | Transformation costs | $1,542 | $0.03 | | Restructuring charges | $754 | $0.02 | | Tax effect of adjustments | $(742) | $(0.02) | | Non-GAAP adjusted net income from continuing operations | $8,521 | $0.19 | Non-GAAP Diluted EPS Reconciliation (Nine Months Ended June 30, 2025) | Metric (in thousands, except per share) | June 30, 2025 | per diluted share | | :-------------------------------------- | :------------ | :---------------- | | Net income / loss from continuing operations | $(26,926) | $(0.59) | | Adjustments: | | | | Amortization of completed technology | $5,876 | $0.13 | | Amortization of other intangible assets | $12,499 | $0.27 | | Transformation costs | $9,771 | $0.21 | | Restructuring charges | $4,765 | $0.10 | | Tax effect of adjustments | $748 | $0.02 | | Non-GAAP adjusted net income from continuing operations | $14,227 | $0.31 | [Non-GAAP Adjusted EBITDA Reconciliation](index=9&type=section&id=Non-GAAP%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for continuing operations significantly improved, reaching $17.7 million for Q3 FY2025 and $45.3 million for the nine months ended June 30, 2025. This adjustment primarily excludes interest, taxes, depreciation, amortization, stock-based compensation, restructuring, and transformation costs Non-GAAP Adjusted EBITDA Reconciliation (Quarter Ended June 30) | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | GAAP net income / loss from continuing operations | $680 | $(18,185) | $(158) | | EBITDA - Continuing operations | $13,055 | $(1,065) | $7,296 | | Adjustments: | | | | | Stock-based compensation | $2,215 | $8,031 | $3,691 | | Restructuring charges | $754 | $3,580 | $1,701 | | Transformation costs | $1,542 | $5,183 | $1,174 | | Adjusted EBITDA - Continuing operations | $17,662 | $14,287 | $13,936 | Non-GAAP Adjusted EBITDA Reconciliation (Nine Months Ended June 30) | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | GAAP net income / loss from continuing operations | $(26,926) | $(23,552) | | EBITDA - Continuing operations | $15,391 | $(3,651) | | Adjustments: | | | | Stock-based compensation | $15,119 | $12,102 | | Restructuring charges | $4,765 | $5,915 | | Transformation costs | $9,771 | $5,310 | | Adjusted EBITDA - Continuing operations | $45,270 | $29,155 | [Non-GAAP Adjusted Gross Profit Reconciliation](index=10&type=section&id=Non-GAAP%20Adjusted%20Gross%20Profit%20Reconciliation) Non-GAAP adjusted gross profit and margin showed consistent improvement across both the quarter and nine-month periods, driven by adjustments for amortization of completed technology and minor transformation costs. This indicates enhanced operational efficiency and favorable sales mix Non-GAAP Adjusted Gross Profit Reconciliation (Quarter Ended June 30) | Metric (in thousands) | June 30, 2025 | % | March 31, 2025 | % | June 30, 2024 | % | | :-------------------- | :------------ | :---- | :------------- | :---- | :------------ | :---- | | GAAP gross profit | $67,760 | 47.1% | $65,886 | 45.9% | $65,478 | 45.4% | | Adjustments: | | | | | | | | Amortization of completed technology | $2,068 | 1.4% | $2,308 | 1.6% | $2,047 | 1.4% | | Non-GAAP adjusted gross profit | $69,853 | 48.5% | $68,185 | 47.5% | $67,399 | 46.7% | Non-GAAP Adjusted Gross Profit Reconciliation (Nine Months Ended June 30) | Metric (in thousands) | June 30, 2025 | % | June 30, 2024 | % | | :-------------------- | :------------ | :---- | :------------ | :---- | | GAAP gross profit | $202,317 | 46.5% | $187,885 | 44.5% | | Adjustments: | | | | | | Amortization of completed technology | $5,876 | 1.4% | $5,970 | 1.4% | | Non-GAAP adjusted gross profit | $208,270 | 47.9% | $194,087 | 46.0% | [Non-GAAP Adjusted Operating Income (Loss) Reconciliation](index=12&type=section&id=Non-GAAP%20Adjusted%20Operating%20Income%20(Loss)%20Reconciliation) Non-GAAP adjusted operating income for total segments showed a positive trend, reaching $7.9 million for Q3 FY2025, a significant improvement from the GAAP operating loss. This was achieved by adjusting for amortization, transformation costs, and restructuring charges, reflecting the company's operational turnaround Non-GAAP Adjusted Operating Income (Loss) Reconciliation (Quarter Ended June 30, 2025) | Metric (in thousands) | Sample Management Solutions | Multiomics | Total Segments | Corporate | Total | | :-------------------- | :-------------------------- | :--------- | :------------- | :-------- | :---- | | GAAP operating income (loss) | $9,834 | $(4,191) | $5,643 | $(6,357) | $(714) | | Adjustments: | | | | | | | Amortization of completed technology | $1,208 | $860 | $2,068 | — | $2,068 | | Amortization of other intangible assets | — | — | — | $4,123 | $4,123 | | Transformation costs | $168 | — | $168 | $1,374 | $1,542 | | Restructuring charges | — | — | — | $754 | $754 | | Non-GAAP adjusted operating income (loss) | $11,248 | $(3,331) | $7,917 | $(46) | $7,871 | Non-GAAP Adjusted Operating Income (Loss) Reconciliation (Nine Months Ended June 30, 2025) | Metric (in thousands) | Sample Management Solutions | Multiomics | Total Segments | Corporate | Total | | :-------------------- | :-------------------------- | :--------- | :------------- | :-------- | :---- | | GAAP operating income (loss) | $11,963 | $(13,710) | $(1,747) | $(26,471) | $(28,218) | | Adjustments: | | | | | | | Amortization of completed technology | $3,296 | $2,580 | $5,876 | — | $5,876 | | Amortization of other intangible assets | — | — | — | $12,499 | $12,499 | | Transformation costs | $2,877 | — | $2,877 | $6,894 | $9,771 | | Restructuring charges | — | — | — | $4,765 | $4,765 | | Non-GAAP adjusted operating income (loss) | $18,177 | $(11,127) | $7,050 | $(10) | $7,050 | [Organic Revenue Reconciliation](index=13&type=section&id=Organic%20Revenue%20Reconciliation) Organic revenue for Q3 FY2025 declined by 2% for Azenta Total, with Sample Management Solutions seeing a 6% organic decline and Multiomics achieving 3% organic growth. For the nine months, total organic revenue grew 3% Organic Revenue Reconciliation (Quarter Ended June 30) | Metric (in millions) | Sample Management Solutions (2025) | Sample Management Solutions (2024) | Change | Multiomics (2025) | Multiomics (2024) | Change | Azenta Total (2025) | Azenta Total (2024) | Change | | :------------------- | :--------------------------------- | :--------------------------------- | :----- | :---------------- | :---------------- | :----- | :------------------ | :------------------ | :----- | | Revenue | $78 | $81 | (4)% | $66 | $64 | 4% | $144 | $144 | (0)% | | Currency exchange rates | $(2) | — | (2)% | $(1) | — | (1)% | $(2) | — | (2)% | | Organic revenue | $76 | $81 | (6)% | $65 | $64 | 3% | $142 | $144 | (2)% | Organic Revenue Reconciliation (Nine Months Ended June 30) | Metric (in millions) | Sample Management Solutions (2025) | Sample Management Solutions (2024) | Change | Multiomics (2025) | Multiomics (2024) | Change | Azenta Total (2025) | Azenta Total (2024) | Change | | :------------------- | :--------------------------------- | :--------------------------------- | :----- | :---------------- | :---------------- | :----- | :------------------ | :------------------ | :----- | | Revenue | $239 | $234 | 2% | $196 | $189 | 4% | $435 | $422 | 3% | | Currency exchange rates | $(1) | — | (1)% | $(0) | — | (0)% | $(2) | — | (0)% | | Organic revenue | $237 | $234 | 2% | $196 | $189 | 4% | $433 | $422 | 3% |

Core Viewpoint - Azenta, Inc. reported its financial results for the third quarter of fiscal 2025, showing a flat revenue year-over-year and a significant net loss due to discontinued operations and impairment charges. Financial Performance - Revenue from continuing operations was $144 million, unchanged from the previous year, with organic revenue declining by 2% year-over-year [3][8] - Sample Management Solutions revenue was $78 million, down 4% year-over-year, while Multiomics revenue increased to $66 million, up 4% year-over-year [3][8] - Diluted EPS from continuing operations was $0.01 compared to ($0.00) in the same quarter of the previous year, while total diluted EPS was ($1.15), a decrease of 30% from ($0.12) [3][8] - Adjusted EBITDA for continuing operations was $18 million, with an adjusted EBITDA margin of 12.3%, reflecting a 260 basis point improvement year-over-year [3][14] Management Commentary - The President and CEO, John Marotta, stated that significant organizational changes are underway, and the operational turnaround is progressing as planned, with a focus on cost management and execution [4][8] Cash and Liquidity - As of June 30, 2025, the company had a total balance of cash, cash equivalents, restricted cash, and marketable securities amounting to $565 million [14] - Operating cash flow for the quarter was $26 million, with capital expenditures of $11 million, resulting in free cash flow of $15 million [14] Guidance - Azenta reiterated its guidance for fiscal year 2025, expecting total organic revenue growth in the range of 3% to 5% relative to fiscal 2024 and an adjusted EBITDA margin expansion of approximately 300 basis points [14][8]

Core Insights - Fresenius Medical Care announced a collaboration involving Frenova, Nephronomics, and GENEWIZ to enhance genomic analysis for the My Reason® genomics research program, focusing on kidney, cardiovascular, and metabolic diseases [1][3][6] Group 1: Collaboration Details - The collaboration aims to leverage advanced technologies for a better understanding of kidney and related diseases, driving advancements in precision medicine [1][4] - Frenova's My Reason® program has registered over 35,000 participants, with a goal of reaching 50,000 in the next two years, focusing on genomic and clinical data to uncover insights into kidney disease [3][4] - Nephronomics holds exclusive commercial rights to the My Reason® dataset, which is integral to the Nephronomics Atlas, aimed at developing targeted therapies through precision medicine insights [4][11] Group 2: Technological Contributions - GENEWIZ will utilize its DNA sequencing technologies to generate large-scale genomic data from biospecimens collected through Frenova's nephrology research network [5][6] - Azenta will provide long-term storage solutions for the samples, enhancing the research capabilities of the collaboration [5][6] Group 3: Industry Context - Fresenius Medical Care is a leading provider of products and services for individuals with renal diseases, serving approximately 4.2 million patients globally [7] - The collaboration represents a significant step forward in advancing precision medicine and improving patient outcomes in the cardio-kidney-metabolic field [4][6]

Company Overview - Azenta, Inc. is a leading provider of life sciences solutions globally, facilitating the faster market introduction of impactful breakthroughs and therapies [2] - The company offers a comprehensive suite of reliable cold-chain sample management solutions and multiomics services, catering to drug development, clinical research, and advanced cell therapies [2] - Azenta operates under several industry-leading brands, including GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, and Barkey [2] Conference Participation - Company management will participate in the 10th Annual Needham Virtual MedTech & Diagnostics 1x1 Conference on August 12, 2025 [1]

Company Overview - Azenta, Inc. (Nasdaq: AZTA) is a leading provider of life sciences solutions globally, facilitating faster market access for impactful breakthroughs and therapies [3] - The company offers a comprehensive range of reliable cold-chain sample management solutions and multiomics services, focusing on drug development, clinical research, and advanced cell therapies [3] - Azenta operates under several industry-leading brands, including GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, and Barkey [3] Upcoming Financial Announcement - Azenta will announce its fiscal third quarter 2025 earnings on August 5, 2025, before the market opens [1] - A conference call and live webcast to discuss the financial results will take place on the same day at 8:30 a.m. Eastern Time [2] - Analysts, investors, and media can access the live webcast through the Azenta website, with a replay available starting August 6, 2025, at 8:30 a.m. ET [2] Company Operations - Azenta is headquartered in Burlington, MA, and has operations across North America, Europe, and Asia [4]

Core Insights - Azenta, Inc. has announced a strategic partnership between GENEWIZ and Form Bio to enhance adeno-associated virus (AAV) gene therapy development through an integrated sequencing and data analysis solution [1][2] Group 1: Partnership Details - The collaboration combines GENEWIZ's next-generation sequencing services with Form Bio's AI-driven analysis pipelines, aiming to provide gene therapy developers with insights into AAV capsid contents, thereby improving safety, efficacy, and manufacturability [2][3] - GENEWIZ will handle the synthesis and packaging of transgene expression cassettes, while Form Bio will perform AAV Genome Integrity Characterization using its Long-read AAV Analysis (LAAVA) software [3][4] Group 2: Benefits of the Partnership - The integration of sequencing, vector design, and development workflows is expected to reduce time and costs in reaching lead candidates, accelerating the market entry of innovative therapies [3][4] - The partnership is designed to simplify AAV gene therapy workflows, enabling researchers to make more informed decisions and overcome traditional hurdles in gene therapy development [4] Group 3: Launch and Presentation - The partnership will officially launch at the 27th Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT) in May 2025, where both companies will exhibit and present a poster on their collaborative work [4]

[Information Related to Forward-Looking Statements](index=4&type=section&id=INFORMATION%20RELATED%20TO%20FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements within the report, emphasizing inherent risks and the Company's non-obligation to update them - The report contains forward-looking statements regarding future revenue, margins, costs, operating expenses, tax expenses, capital expenditures, earnings, profitability, product development, market share, competitiveness, and other business aspects. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially[11](index=11&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the report date. The Company does not undertake any obligation to revise these statements to reflect events or circumstances occurring after the report date[11](index=11&type=chunk) [Trademarks, Trade Names and Service Marks](index=4&type=section&id=TRADEMARKS%2C%20TRADE%20NAMES%20AND%20SERVICE%20MARKS) This section clarifies the inclusion and protection of the Company's trademarks, trade names, and service marks within the report - The report includes the Company's trademarks, trade names, and service marks, which are protected under intellectual property laws. The omission of ®️, ™️, and SM symbols does not indicate a waiver of rights[14](index=14&type=chunk) [Industry and Other Data](index=4&type=section&id=INDUSTRY%20AND%20OTHER%20DATA) This section details the basis for industry and market data, acknowledging its reliance on management estimates and third-party sources, subject to inherent uncertainties - Information regarding the Company's industry and markets is based on management's estimates and research, as well as third-party publications. While believed to be reliable, this data involves assumptions and limitations subject to uncertainty and risk, which could cause future performance to differ from estimates[16](index=16&type=chunk) [PART I. Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents Azenta, Inc.'s comprehensive financial data, including statements, notes, and management's analysis of operations and financial condition [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Azenta, Inc.'s unaudited condensed consolidated financial statements for the periods ended March 31, 2025, and September 30, 2024, including balance sheets, statements of operations, comprehensive income (loss), cash flows, and changes in stockholders' equity. It also includes detailed notes explaining the nature of operations, significant accounting policies, discontinued operations, marketable securities, derivative instruments, goodwill and intangible assets, restructuring, supplementary balance sheet information, stockholders' equity, revenue recognition, stock-based compensation, fair value measurements, income taxes, net loss per share, segment and geographic information, and commitments and contingencies [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents a snapshot of the Company's financial position, detailing assets, liabilities, and equity at specific reporting dates | Metric | March 31, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $2,041,925 | $2,100,041 | | Total Liabilities | $340,433 | $331,074 | | Total Stockholders' Equity | $1,701,492 | $1,768,967 | - Total assets decreased by **$58.1 million**, primarily due to a decrease in current assets, including cash and cash equivalents and short-term marketable securities, partially offset by an increase in long-term marketable securities[19](index=19&type=chunk) - Total stockholders' equity decreased by **$67.5 million**, mainly due to a net loss and accumulated other comprehensive loss[19](index=19&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the Company's financial performance over specific periods, including revenue, gross profit, operating loss, and net loss | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Revenue | $143,418 | $136,355 | $290,928 | $278,080 | | Gross Profit | $65,886 | $60,664 | $134,557 | $122,407 | | Operating Loss | $(16,151) | $(24,213) | $(27,504) | $(40,458) | | Loss from Continuing Operations | $(18,185) | $(16,202) | $(27,606) | $(23,394) | | Loss from Discontinued Operations, net of tax | $(22,271) | $(120,678) | $(26,190) | $(129,210) | | Net Loss | $(40,456) | $(136,880) | $(53,796) | $(152,604) | | Basic Net Loss Per Share | $(0.88) | $(2.47) | $(1.18) | $(2.72) | - Total revenue increased by **5.2%** for the three months and **4.6%** for the six months ended March 31, 2025, compared to the prior year periods[22](index=22&type=chunk) - Net loss significantly decreased from **$(136.9) million to $(40.5) million** for the three months, and from **$(152.6) million to $(53.8) million** for the six months, primarily due to a substantial reduction in loss from discontinued operations[22](index=22&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the Company's comprehensive income or loss, including net loss and other comprehensive income (loss) components | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net Loss | $(40,456) | $(136,880) | $(53,796) | $(152,604) | | Total Other Comprehensive Income (Loss), net of tax | $13,088 | $(14,944) | $(28,685) | $20,698 | | Comprehensive Loss | $(27,368) | $(151,824) | $(82,481) | $(131,906) | - Comprehensive loss decreased significantly for both the three and six months ended March 31, 2025, compared to the prior year, driven by a reduced net loss and a positive shift in other comprehensive income (loss) for the three-month period[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the Company's cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $44,201 | $22,371 | | Net cash used in investing activities | $(61,586) | $(173,009) | | Net cash used in financing activities | $(10,280) | $(185,542) | | Net decrease in cash, cash equivalents and restricted cash | $(32,124) | $(319,925) | | Cash, cash equivalents and restricted cash, end of period | $288,866 | $364,120 | - Net cash provided by operating activities increased to **$44.2 million** for the six months ended March 31, 2025, from **$22.4 million** in the prior year, primarily due to increased revenue and collections, and a U.S. federal tax refund[26](index=26&type=chunk)[168](index=168&type=chunk) - Net cash used in investing activities significantly decreased to **$(61.6) million** from **$(173.0) million**, mainly due to lower purchases of marketable securities[26](index=26&type=chunk) - Net cash used in financing activities decreased to **$(10.3) million** from **$(185.5) million**, largely due to the absence of share repurchases in the current period[26](index=26&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in the Company's stockholders' equity, including common stock, retained earnings, and accumulated other comprehensive loss | Metric (in thousands) | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Stockholders' Equity | $1,701,492 | $1,768,967 | | Common Stock Shares Outstanding | 45,776,018 | 45,570,084 | | Retained Earnings | $1,423,043 | $1,476,839 | | Accumulated Other Comprehensive Loss | $(42,149) | $(13,464) | - Total stockholders' equity decreased by **$67.5 million** from September 30, 2024, to March 31, 2025, primarily due to a net loss of **$53.8 million** and an increase in accumulated other comprehensive loss[29](index=29&type=chunk)[30](index=30&type=chunk) - No share repurchases occurred during the six months ended March 31, 2025, compared to **$186.8 million** in repurchases during the same period in the prior fiscal year[80](index=80&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for the condensed consolidated financial statements, clarifying accounting policies and specific accounts 1. Nature of Operations - Azenta, Inc. is a global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry, offering sample management, automated storage, genomic services, and sample consumables[32](index=32&type=chunk) - The Company announced a plan to sell its B Medical Systems business in Q1 fiscal year 2025, which has been classified as held for sale and discontinued operations. This divestiture aims to simplify the portfolio and focus on core Sample Management Solutions and Multiomics segments[33](index=33&type=chunk)[34](index=34&type=chunk) 2. Summary of Significant Accounting Policies - The financial statements are prepared in accordance with GAAP, consolidating all entities with controlling financial interest. Certain information is condensed or omitted compared to annual statements[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - The Company revised previously issued Condensed Consolidated Statements of Cash Flows for classification errors, primarily related to exchange rate changes and other immaterial reclassifications, which did not impact net income or total cash[39](index=39&type=chunk)[40](index=40&type=chunk) - Management makes estimates and assumptions for various accounts, including accounts receivable, inventories, goodwill, and deferred income taxes, which are assessed on an ongoing basis[41](index=41&type=chunk) - Net foreign currency transaction and remeasurement losses were **$1.6 million** and **$1.1 million** for the three and six months ended March 31, 2025, respectively[42](index=42&type=chunk) - The Company is evaluating new accounting standards (ASU 2023-07, ASU 2023-09, ASU 2024-03, ASU 2025-01) and SEC climate-related disclosure rules, but does not expect a material impact from OECD Pillar II global minimum tax rules[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) 3. Discontinued Operations - Azenta announced its plan to sell the B Medical Systems business in Q1 fiscal year 2025, classifying it as 'held for sale' and 'discontinued operations' as of November 12, 2024. This aims to simplify the portfolio and focus on core life sciences businesses[49](index=49&type=chunk)[50](index=50&type=chunk) - The Company recorded a **$24 million** loss on assets held for sale during the three months ended March 31, 2025, as the B Medical Systems segment was measured at the lower of carrying value or fair value less cost to sell[51](index=51&type=chunk) B Medical Systems Segment Financial Results (Discontinued Operations, in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Revenue | $17,206 | $22,779 | $34,797 | $35,371 | | Gross Profit | $5,673 | $2,722 | $8,536 | $2,490 | | Operating Loss | $(27,808) | $(122,741) | $(33,081) | $(133,174) | | Loss from Discontinued Operations, net of tax | $(21,891) | $(120,678) | $(25,810) | $(129,210) | - The Company accrued an additional **$0.4 million** liability for the 2020 Claim related to the semiconductor cryogenics business sale, resulting in a total accrual of **$2.1 million** as of March 31, 2025[55](index=55&type=chunk) 4. Marketable Securities - Sales and maturities of marketable securities were **$59.0 million** and **$184.6 million** for the three and six months ended March 31, 2025, respectively, with immaterial realized gains or losses[59](index=59&type=chunk) Marketable Securities Summary (in thousands) | Category | March 31, 2025 Fair Value | September 30, 2024 Fair Value | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | U.S. Treasury securities and obligations of U.S. government agencies | $214,959 | $118,091 | | Bank certificates of deposit | $1,973 | $5,200 | | Corporate securities | $25,223 | $77,325 | | Municipal securities | $9,323 | N/A | | Total Marketable Securities | $251,478 | $200,616 | - The Company's marketable securities portfolio increased to **$251.5 million** as of March 31, 2025, from **$200.6 million** as of September 30, 2024, with a significant shift towards U.S. Treasury securities[60](index=60&type=chunk) 5. Derivative Instruments - The Company uses foreign exchange contracts to reduce exposure to currency fluctuations, primarily in Germany, the UK, and China. Realized losses on undesignated derivatives were **$(1.4) million** and **$(0.2) million** for the three and six months ended March 31, 2025, respectively[62](index=62&type=chunk) Notional Amounts of Derivative Instruments (in thousands) | Hedge Designation | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net Investment Hedge (Cross-currency swap) | $260,025 | $75,978 | | Undesignated (Foreign exchange contracts) | $58,920 | $60,101 | - On February 3, 2025, the Company entered into a new cross-currency swap agreement to hedge **$260.0 million** for **€250.0 million**, maturing on February 2, 2026, designated as a hedge of net investments[65](index=65&type=chunk) 6. Goodwill and Intangible Assets Goodwill by Segment (in thousands) | Segment | October 1, 2024 Balance | Currency Translation Adjustments | March 31, 2025 Balance | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions | $494,649 | $(8,454) | $486,195 | | Multiomics | $196,760 | — | $196,760 | | Total Goodwill | $691,409 | $(8,454) | $682,955 | - Goodwill decreased by **$8.5 million** from September 30, 2024, to March 31, 2025, primarily due to currency translation adjustments in the Sample Management Solutions segment[71](index=71&type=chunk) Identifiable Intangible Assets (Net Book Value, in thousands) | Category | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Completed technology | $49,817 | $54,758 | | Trademarks and trade names | $475 | $531 | | Customer relationships | $60,910 | $69,753 | | Total Intangible Assets, Net | $111,202 | $125,042 | - Net intangible assets decreased by **$13.8 million** from September 30, 2024, to March 31, 2025, mainly due to amortization expenses[72](index=72&type=chunk) 7. Restructuring - The Company initiated a 2024 Restructuring Plan to optimize resources, improve efficiency, and enhance profitability through facilities consolidation, portfolio optimization, and organizational simplification, with activities expected to complete by the end of fiscal year 2025[74](index=74&type=chunk) Restructuring Charges (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Severance and related costs | $3,449 | $1,987 | $3,769 | $2,773 | | Right of use asset abandonment | — | $901 | — | $901 | | Other | $131 | $540 | $242 | $540 | | Total Restructuring Charges | $3,580 | $3,428 | $4,011 | $4,214 | - Restructuring charges for the six months ended March 31, 2025, were **$4.0 million**, primarily for severance and related costs, allocated across the SMS segment (**$1.6M**), Multiomics segment (**$1.6M**), and Corporate (**$0.8M**)[75](index=75&type=chunk)[77](index=77&type=chunk) 8. Supplementary Balance Sheet Information Inventories (in thousands) | Category | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Raw materials and purchased parts | $40,693 | $34,134 | | Work-in-process | $10,127 | $8,402 | | Finished goods | $32,501 | $36,387 | | Total Inventories | $83,321 | $78,923 | | Inventory reserves | $9,400 | $6,100 | - Total inventories increased by **$4.4 million** from September 30, 2024, to March 31, 2025, with a notable increase in raw materials and purchased parts[78](index=78&type=chunk) Warranty and Retrofit Costs (in thousands) | Metric | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Balance at beginning of period | $5,213 | $3,974 | | Accruals for warranties during the period | $698 | $1,371 | | Costs incurred during the period | $(674) | $(650) | | Balance at end of period | $5,237 | $4,695 | 9. Stockholders' Equity - No shares were repurchased during the six months ended March 31, 2025, as the **$1.5 billion** 2022 Repurchase Authorization was fully utilized by September 30, 2024[80](index=80&type=chunk) - The Company paid **$11.4 million** in excise tax related to share repurchases under the 2022 Repurchase Authorization during the six months ended March 31, 2025[81](index=81&type=chunk) Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Balance at September 30, 2024 | Other comprehensive income (loss) before reclassifications (6 months ended March 31, 2025) | Amounts reclassified from accumulated other comprehensive loss (6 months ended March 31, 2025) | Balance at March 31, 2025 | | :-------------------------------- | :-------------------------------- | :------------------------------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------ | :-------------------------------- | | Currency Translation Adjustments | $(34,170) | $(23,860) | — | $(58,030) | | Unrealized Gains (Losses) on Available-for-Sale Securities, Net of tax | $(263) | $363 | — | $100 | | Gains (Losses) on Derivative, Net of tax | $21,468 | $(5,088) | — | $16,380 | | Pension Liability Adjustments, Net of tax | $(499) | $(136) | $36 | $(599) | | Total | $(13,464) | $(28,721) | $36 | $(42,149) | 10. Revenue from Contracts with Customers Revenue by Significant Business Line (in thousands) | Business Line | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Multiomics | $63,522 | $62,218 | $129,820 | $124,938 | | Core Products | $47,969 | $44,844 | $97,668 | $93,730 | | Sample Repository Services | $31,927 | $29,293 | $63,440 | $59,412 | | Total Revenue | $143,418 | $136,355 | $290,928 | $278,080 | - Total revenue increased by **5.2%** for the three months and **4.6%** for the six months ended March 31, 2025, driven by growth across all significant business lines[84](index=84&type=chunk) - Contract liabilities (deferred revenue) increased to **$41.6 million** at March 31, 2025, from **$30.5 million** at September 30, 2024[87](index=87&type=chunk) - Remaining performance obligations as of March 31, 2025, totaled **$83.8 million**, with **$54.9 million** expected to be recognized within one year[88](index=88&type=chunk) 11. Stock-Based Compensation Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Restricted stock units | $7,820 | $5,092 | $12,435 | $7,741 | | Employee stock purchase plan | $211 | $318 | $469 | $670 | | Total Stock-Based Compensation Expense | $8,031 | $5,410 | $12,904 | $8,411 | - Total stock-based compensation expense for continuing operations increased by **$2.6 million** for the three months and **$4.5 million** for the six months ended March 31, 2025, primarily due to restricted stock units[90](index=90&type=chunk) - As of March 31, 2025, unrecognized stock-based compensation expense related to restricted stock units is **$32.2 million**, expected to be recognized over an average of **1.8 years**[92](index=92&type=chunk) - The Company amended performance goals for previously issued performance-based restricted stock units in October 2023, resulting in a total potential maximum compensation cost of **$3.8 million** recognized through November 2025[97](index=97&type=chunk) 12. Fair Value Measurements Financial Assets and Liabilities Measured at Fair Value (in thousands) | Category | March 31, 2025 Total Fair Value | September 30, 2024 Total Fair Value | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | **Assets:** | | | | Cash equivalents | $120,491 | $157,990 | | Available-for-sale securities | $251,478 | $198,616 | | Investment in equity securities (Level 3) | $2,100 | N/A | | Foreign exchange contracts | N/A | $9 | | **Liabilities:** | | | | Net investment hedge | $10,500 | $1,915 | | Foreign exchange contracts | $340 | $213 | - Cash equivalents are primarily Level 1 (money market funds, U.S. government backed securities) and Level 2 (debt securities, bank certificates of deposit). Available-for-sale securities are also classified as Level 1 and Level 2[102](index=102&type=chunk)[103](index=103&type=chunk) - The Company converted convertible notes into **$2.1 million** of preferred stock of a private company during Q1 fiscal year 2025, which is measured at fair value using unobservable inputs (Level 3)[105](index=105&type=chunk)[106](index=106&type=chunk) 13. Income Taxes Income Tax Expense (in thousands) | Period | Income Tax Expense | | :-------------------------------- | :-------------------------------- | | Three Months Ended March 31, 2025 | $7,700 | | Six Months Ended March 31, 2025 | $11,200 | | Three Months Ended March 31, 2024 | $1,200 | | Six Months Ended March 31, 2024 | $2,600 | - Income tax expense for the three and six months ended March 31, 2025, was primarily driven by a **$6.6 million** tax expense related to a change in the indefinite reinvestment assertion for a China subsidiary and profits in foreign jurisdictions[110](index=110&type=chunk)[114](index=114&type=chunk) - The Company expects a **$16 million** valuation allowance against its U.S. net deferred tax assets for fiscal year 2025 due to U.S. pre-tax losses[113](index=113&type=chunk) 14. Net Loss per Share Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net Loss | $(40,456) | $(136,880) | $(53,796) | $(152,604) | | Basic Net Loss Per Share | $(0.88) | $(2.47) | $(1.18) | $(2.72) | | Diluted Net Loss Per Share | $(0.88) | $(2.47) | $(1.18) | $(2.72) | | Weighted Average Shares Outstanding (Basic & Diluted) | 45,732 | 55,440 | 45,658 | 56,078 | - Basic and diluted net loss per share improved significantly for both the three and six months ended March 31, 2025, primarily due to a reduced net loss[119](index=119&type=chunk) - Potentially dilutive common stock equivalents were excluded from diluted EPS calculations due to the net loss from continuing operations, making their effect antidilutive[119](index=119&type=chunk) 15. Segment and Geographic Information - The Company's continuing operations consist of two operating and reportable segments: Sample Management Solutions (SMS) and Multiomics. Adjusted operating income (loss) is the primary performance metric for evaluating segments[123](index=123&type=chunk)[126](index=126&type=chunk) Revenue by Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions | $79,896 | $74,137 | $161,108 | $153,142 | | Multiomics | $63,522 | $62,218 | $129,820 | $124,938 | | Total Revenue | $143,418 | $136,355 | $290,928 | $278,080 | Adjusted Operating Income (Loss) by Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions Operating Income (Loss) | $4,613 | $(1,457) | $6,930 | $(2,073) | | Multiomics Operating Income (Loss) | $(5,296) | $(2,880) | $(7,796) | $(6,144) | | Segment Adjusted Operating Loss | $(683) | $(4,337) | $(866) | $(8,217) | Revenue by Geographic Location (in thousands) | Geographic Location | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | United States | $89,943 | $87,735 | $183,412 | $177,861 | | China | $12,739 | $13,646 | $27,626 | $28,544 | | United Kingdom | $8,083 | $5,625 | $15,881 | $11,301 | | Rest of Europe | $25,259 | $22,393 | $49,578 | $45,123 | | Asia Pacific/Other | $7,394 | $6,956 | $14,431 | $15,251 | | Total Revenue | $143,418 | $136,355 | $290,928 | $278,080 | 16. Commitments and Contingencies - The Company is involved in various legal proceedings but believes no material provision for liability or disclosure is required, except for claims related to Edwards (disclosed in Note 3)[129](index=129&type=chunk) - In July 2024, the Company paid approximately **$2.5 million** in tariffs and interest related to imports from its GENEWIZ business into the U.S. for the period from December 2021 to July 2024, with no anticipated penalties[130](index=130&type=chunk) - As of March 31, 2025, non-cancellable commitments totaled **$57.2 million**, including **$44.2 million** for inventory purchase orders and **$13.0 million** for other operating expenses[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of Azenta, Inc.'s financial condition and results of operations for the three and six months ended March 31, 2025, compared to the corresponding periods in the prior fiscal year. It covers the Company's strategic decision to sell the B Medical Systems business, an overview of its core life sciences segments (Sample Management Solutions and Multiomics), key financial performance metrics, critical accounting policies, and an analysis of revenue, operating expenses, non-operating income, and liquidity and capital resources. The discussion focuses solely on continuing operations unless otherwise noted Plan to Sell B Medical Systems Business - The Company is pursuing the sale of its B Medical Systems business to simplify its portfolio and focus on core Sample Management Solutions and Multiomics segments, with the segment classified as held for sale and a discontinued operation[133](index=133&type=chunk) Overview - Azenta is a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry, supporting customers from research to commercialization with sample management, automated storage, and genomic services[134](index=134&type=chunk) - The Company employs approximately **3,000** full-time employees, part-time employees, and contingent workers worldwide, with sales in about **86** countries and operations in North America, Asia, and Europe[134](index=134&type=chunk) Segments - The Sample Management Solutions (SMS) segment offers end-to-end sample management products and services, including Sample Repository Services and Core Products (Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments, and Controlled Rate Thawing Devices)[137](index=137&type=chunk) - The Multiomics segment provides genomic and other sample analysis services, such as gene sequencing, synthesis, and editing, with a comprehensive global portfolio for the life sciences industry[138](index=138&type=chunk) Business and Financial Performance | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Revenue | $143,418 | $136,355 | $290,928 | $278,080 | | Gross Profit | $65,886 | $60,664 | $134,557 | $122,407 | | Operating Loss | $(16,151) | $(24,213) | $(27,504) | $(40,458) | | Net Loss | $(40,456) | $(136,880) | $(53,796) | $(152,604) | - Revenue increased **5%** for both the three and six months ended March 31, 2025, driven by growth in both Sample Management Solutions and Multiomics segments[141](index=141&type=chunk) - Gross margin improved to **46%** for both periods, up from **44%** in the prior year, due to higher revenue, operational efficiencies, and sales mix[141](index=141&type=chunk) - Net loss significantly decreased due to a reduced loss from discontinued operations, despite an increased loss from continuing operations[141](index=141&type=chunk) Critical Accounting Policies and Estimates - The preparation of financial statements requires management to make estimates and judgments, which are evaluated based on historical experience and current economic conditions[142](index=142&type=chunk) - There have been no material changes to the Company's critical accounting policies or estimates from those disclosed in the 2024 Annual Report on Form 10-K[143](index=143&type=chunk) Results of Operations Revenue Revenue by Segment (in thousands, except percentages) | Segment | Three Months Ended March 31, 2025 | % Change (YoY) | Six Months Ended March 31, 2025 | % Change (YoY) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions | $79,896 | 7.8% | $161,108 | 5.2% | | Multiomics | $63,522 | 2.1% | $129,820 | 3.9% | | Total Revenue | $143,418 | 5.2% | $290,928 | 4.6% | - Sample Management Solutions revenue growth was driven by Sample Repository Services and Core Products, particularly Consumables and Instruments and Clinical Stores Systems[141](index=141&type=chunk)[146](index=146&type=chunk) - Multiomics segment revenue growth was primarily driven by Next Generation Sequencing services, partially offset by declines in Sanger sequencing and Gene Synthesis services[141](index=141&type=chunk)[147](index=147&type=chunk) - Revenue generated outside the United States accounted for **37.3%** and **37.0%** of total revenue for the three and six months ended March 31, 2025, respectively[148](index=148&type=chunk) Operating Income (Loss) Operating Income (Loss) by Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions Operating Income (Loss) | $567 | $(2,894) | $2,129 | $(4,380) | | Multiomics Operating Income (Loss) | $(6,132) | $(3,920) | $(9,519) | $(8,223) | | Total Operating Loss | $(16,151) | $(24,213) | $(27,504) | $(40,458) | - Sample Management Solutions segment operating income improved significantly, driven by higher revenue and gross margin expansion, partially offset by increased transformation costs[153](index=153&type=chunk) - Multiomics segment operating loss increased, primarily due to lower revenue for Gene Synthesis and Sanger sequencing services, despite higher revenue and gross margin expansion for Next Generation Sequencing services[154](index=154&type=chunk) Gross Margin Gross Margin by Segment (in percentages) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions Gross Margin | 47.9% | 44.4% | 47.4% | 43.2% | | Multiomics Gross Margin | 43.5% | 44.6% | 44.8% | 45.0% | | Azenta Total Gross Margin | 45.9% | 44.5% | 46.3% | 44.0% | - Sample Management Solutions gross margin increased due to higher revenue, operational efficiencies, sales mix, and the impact of certain non-recurring items in the prior year[156](index=156&type=chunk) - Multiomics gross margin decreased, primarily driven by lower revenue for Gene Synthesis and Sanger sequencing services, partially offset by higher revenue and operational efficiency for Next Generation Sequencing services[157](index=157&type=chunk) Research and Development Expenses Research and Development Expenses (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions | $4,102 | $4,609 | $7,885 | $8,996 | | Multiomics | $2,767 | $3,124 | $5,364 | $6,050 | | Total R&D Expense | $6,869 | $7,733 | $13,249 | $15,046 | - Total R&D expenses decreased by **$0.9 million** and **$1.8 million** for the three and six months ended March 31, 2025, respectively, primarily due to cost reduction initiatives and decreased compensation and benefits expense[158](index=158&type=chunk) Selling, General and Administrative Expenses Selling, General and Administrative Expenses (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sample Management Solutions | $33,581 | $31,230 | $66,351 | $61,599 | | Multiomics | $31,022 | $28,516 | $62,348 | $58,635 | | Corporate | $6,985 | $9,312 | $16,102 | $18,713 | | Total SG&A Expense | $71,588 | $69,058 | $144,801 | $138,947 | - Total SG&A expenses increased by **$2.5 million** and **$5.9 million** for the three and six months ended March 31, 2025, respectively, primarily due to higher stock-based compensation and one-time costs related to leadership changes, partially offset by decreased compensation and benefits[159](index=159&type=chunk) Restructuring Charges - Restructuring charges were **$3.6 million** for the three months ended March 31, 2025 (up **$0.2 million** YoY) and **$4.0 million** for the six months ended March 31, 2025 (down **$0.2 million** YoY)[160](index=160&type=chunk) Non-Operating Income Interest Income, Net (in thousands) | Period | Interest Income, Net | | :-------------------------------- | :-------------------------------- | | Three Months Ended March 31, 2025 | $4,489 | | Six Months Ended March 31, 2025 | $8,787 | | Three Months Ended March 31, 2024 | $9,479 | | Six Months Ended March 31, 2024 | $19,434 | - Interest income decreased year-over-year due to decreased investments in marketable securities[161](index=161&type=chunk) Other Income (Expense), Net (in thousands) | Period | Other Income (Expense), Net | | :-------------------------------- | :-------------------------------- | | Three Months Ended March 31, 2025 | $1,157 | | Six Months Ended March 31, 2025 | $2,360 | | Three Months Ended March 31, 2024 | $(268) | | Six Months Ended March 31, 2024 | $250 | - The increase in other income was primarily due to foreign exchange gains and a **$2.1 million** gain from cash proceeds received from a cost method investment[162](index=162&type=chunk) Income Tax Expense - Income tax expense for the three and six months ended March 31, 2025, was **$7.7 million** and **$11.2 million**, respectively, primarily driven by a **$6.6 million** tax expense related to a change in indefinite reinvestment assertion for a China subsidiary[163](index=163&type=chunk) - Tax expense is also influenced by profits in foreign jurisdictions and current state income taxes, and the Company does not benefit from U.S. tax losses due to a valuation allowance against U.S. deferred tax assets[163](index=163&type=chunk) Discontinued Operations Discontinued Operations Financials (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $17,200 | $22,800 | $34,800 | $35,400 | | Loss from Discontinued Operations, net of tax | $22,300 | $120,700 | $26,200 | $129,200 | - Loss from discontinued operations significantly decreased year-over-year, reflecting the impact of the B Medical Systems business being classified as discontinued[165](index=165&type=chunk) Liquidity and Capital Resources Cash Flows and Liquidity Cash, Cash Equivalents, Restricted Cash, and Marketable Securities (in thousands) | Category | March 31, 2025 | September 30, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $253,642 | $280,030 | | Restricted cash | $8,199 | $10,061 | | Short-term marketable securities | $74,697 | $151,162 | | Long-term marketable securities | $176,781 | $49,454 | | Total | $513,319 | $490,707 | - The Company had **$513.3 million** in cash, cash equivalents, restricted cash, and marketable securities as of March 31, 2025, an increase from **$490.7 million** at September 30, 2024[167](index=167&type=chunk) - Cash inflows from operating activities for the six months ended March 31, 2025, were **$44.2 million**, primarily due to increased revenue and collections and a **$11.5 million** U.S. federal tax refund[168](index=168&type=chunk) - The Company had approximately **$52 million** of cash in China as of March 31, 2025, and began repatriating cash to the United States during Q3 fiscal year 2025, providing for **$6.6 million** in deferred income taxes[167](index=167&type=chunk) Capital Resources - As of March 31, 2025, the Company had no outstanding debt on its balance sheet[169](index=169&type=chunk) - Non-cancellable commitments totaled **$57.2 million**, comprising **$44.2 million** for inventory purchase orders and **$13.0 million** for other operating expense commitments[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Azenta, Inc.'s exposure to various market risks, including interest rate fluctuations affecting investments and foreign currency exchange rate changes impacting transactions and balances in non-functional currencies. The Company employs strategies such as timely settlement of intercompany advances and forward contracts to mitigate these risks Interest Rate Exposure - The Company's cash, cash equivalents, and investments are subject to interest rate risk. A hypothetical **100 basis point** change in interest rates would result in a **$2.0 million** and **$4.8 million** change in interest income for the six months ended March 31, 2025 and 2024, respectively[172](index=172&type=chunk) Currency Rate Exposure - The Company is exposed to foreign exchange risk, primarily in Germany, the United Kingdom, and China, with sales in non-U.S. dollar currencies representing approximately **34%** and **30%** of total sales for the six months ended March 31, 2025 and 2024, respectively[173](index=173&type=chunk) - Foreign currency losses were **$1.1 million** and **$1.0 million** for the six months ended March 31, 2025 and 2024, respectively. A hypothetical **10%** change in foreign exchange rates would result in an approximate **$0.4 million** change in net loss for the six months ended March 31, 2025[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details Azenta, Inc.'s evaluation of its disclosure controls and procedures and internal control over financial reporting. It identifies material weaknesses related to cash flow statement review and account reconciliations, which led to the conclusion that disclosure controls were not effective as of March 31, 2025. The Company is actively implementing remediation plans to address these weaknesses Evaluation of Disclosure Controls and Procedures - The Company's management concluded that its disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses[175](index=175&type=chunk) - Despite the material weaknesses, the CEO and CFO concluded that the unaudited Condensed Consolidated Financial Statements are fairly stated in all material respects[175](index=175&type=chunk) Material Weaknesses in Internal Control over Financial Reporting - A material weakness in controls related to the review of the cash flow statement, previously disclosed in the 2024 Annual Report on Form 10-K, continues to exist as of March 31, 2025[177](index=177&type=chunk) - An additional material weakness was identified during Q2 fiscal year 2025, related to the design and maintenance of effective controls over the preparation and review of account reconciliations[178](index=178&type=chunk) - These material weaknesses resulted in immaterial misstatements in consolidated financial statements and could lead to material misstatements not prevented or detected on a timely basis[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) Remediation Plans - For cash flow statement weaknesses, the Company implemented a new reporting tool and enhanced processes and controls, but they have not operated for a sufficient period to assert remediation as of March 31, 2025[180](index=180&type=chunk) - For account reconciliations, management is forming a plan to design and implement enhanced controls, redesign the reconciliation policy, and engage outside consultants[181](index=181&type=chunk) Changes in Internal Control over Financial Reporting - Other than the material weakness related to account reconciliations, there were no other changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected or are reasonably likely to materially affect internal control over financial reporting[182](index=182&type=chunk) [PART II. Other Information](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional disclosures beyond financial statements, covering legal proceedings, risk factors, other information, and exhibits [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses Azenta, Inc.'s involvement in various legal proceedings. The Company assesses potential losses quarterly and believes that, apart from claims related to Edwards (detailed in Note 3), no material provision for liability or disclosure is required for continuing operations. However, unexpected developments could still have a material adverse effect on financial condition or results of operations - The Company is subject to various legal proceedings but believes none will have a material adverse effect on its consolidated financial condition or results of operations for continuing operations, except for claims related to Edwards[184](index=184&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors previously disclosed in the 2024 Annual Report on Form 10-K, highlighting new or materially changed risks. Key risks include the potential impact of international trade disputes, tariffs, and export controls, particularly concerning China, and the ongoing material weaknesses in the Company's internal control over financial reporting - International trade disputes, including recently announced tariffs on imports from China, could materially impact the Company's business by affecting customer demand, increasing manufacturing costs, decreasing margins, or inhibiting product sales and supply chain[187](index=187&type=chunk) - The BIOSECURE Act, if enacted, could impact the supply of products and services manufactured or provided by third parties in China, potentially causing delays and adverse effects on business operations[188](index=188&type=chunk) - The Company's identified material weaknesses in internal control over financial reporting (cash flow statement review and account reconciliations) could adversely affect financial results, stock price, and investor confidence, and may result in material misstatements[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section reports on Rule 10b5-1 trading arrangements. During the three months ended March 31, 2025, no director or officer of the Company adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[195](index=195&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002) and the iXBRL formatted financial statements - The report includes certifications from the CEO and CFO (Exhibits 31.01, 31.02, 32) and iXBRL formatted financial statements (Exhibit 101, 104)[196](index=196&type=chunk) [Signatures](index=52&type=section&id=SIGNATURES) This section formally attests to the accuracy and completeness of the report through authorized signatures - The report is duly signed on behalf of Azenta, Inc. by Lawrence Lin, Executive Vice President and Chief Financial Officer, and Violetta A. Hughes, Vice President and Chief Accounting Officer, on May 9, 2025[199](index=199&type=chunk)[200](index=200&type=chunk)