Azenta(AZTA) - 2025 Q2 - Quarterly Results

Financial Highlights Azenta reported strong Q2 FY2025 results with revenue from continuing operations increasing 5% and adjusted EBITDA growing 75% year-over-year Q2 FY2025 Performance Summary Azenta reported strong Q2 FY2025 results with revenue from continuing operations increasing 5% and adjusted EBITDA growing 75% year-over-year Q2 FY2025 Key Financial Metrics (Continuing Operations) | Metric | Q2 2025 (Mar 31, 2025) | Q2 2024 (Mar 31, 2024) | YoY Change | Q1 2025 (Dec 31, 2024) | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $143M | $136M | +5% | $148M | -3% | | Organic Growth | 6% | - | - | - | - | | Diluted EPS (GAAP) | $(0.40) | $(0.29) | -36% | $(0.21) | -93% | | Non-GAAP Diluted EPS | $0.05 | $0.06 | -23% | $0.08 | -43% | | Adjusted EBITDA | $14M | $8M | +75% | $13M | +7% | | Adjusted EBITDA Margin | 10.0% | 6.0% | +400 bps | 9.0% | +100 bps | - Management highlighted the resilience of the company's portfolio and the dedication of its teams, emphasizing a healthy balance sheet and strong cash position that allows for continued investment in long-term growth plans[4] - The financial results of B Medical Systems are treated as discontinued operations following the company's announcement of its intention to pursue a sale[2] Financial Performance The company demonstrated improved financial performance in Q2 FY2025, driven by revenue growth, gross margin expansion, and reduced operating losses across key segments GAAP Earnings Results - Continuing Operations GAAP revenue from continuing operations increased 5% year-over-year, with improved gross margin and a narrowed operating loss due to lower expenses GAAP Revenue by Segment (YoY) | Segment | Q2 2025 Revenue | YoY Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Sample Management Solutions | $80M | +8% | +8% | | Multiomics | $64M | +2% | +3% | | Total Revenue | $143M | +5% | +6% | - Gross margin increased to 45.9% from 44.5% YoY, an improvement of 140 basis points, attributed to higher revenue, favorable sales mix, and operational efficiencies[7] - Operating expenses decreased by 3% YoY to $82 million, mainly due to lower R&D expenses and the non-recurrence of a $4.7 million intangible asset impairment charge recorded in Q2 2024[7][8] Non-GAAP Earnings Results - Continuing Operations Non-GAAP results show significant operational improvement with adjusted operating loss narrowing, adjusted EBITDA growing 75%, and margin expanding 400 basis points Q2 FY2025 Non-GAAP Performance (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Operating Margin | (0.4%) | (3.2%) | +280 bps | | Adjusted Gross Margin | 47.5% | 46.2% | +130 bps | | Adjusted EBITDA | $14M | $8M | +75% | | Adjusted EBITDA Margin | 10.0% | 6.0% | +400 bps | | Non-GAAP Diluted EPS | $0.05 | $0.06 | -16.7% | - Adjusted gross margin improved by 130 basis points YoY, driven by higher revenue, favorable sales mix, and operational efficiencies[10] - Adjusted operating expenses increased 2% YoY to $69 million, primarily due to higher selling, general, and administrative expenses, partially offset by lower R&D costs[10] Segment Performance Sample Management Solutions drove growth with 8% organic revenue increase, while Multiomics grew 3% led by Next Generation Sequencing - Sample Management Solutions organic revenue grew 8% YoY, driven by higher revenues in Sample Repository Solutions and Core Products, especially in Consumables and Instruments, Sample Storage, Clinical Stores, and Product Services[7] - Multiomics organic revenue grew 3% YoY, primarily due to growth in Next Generation Sequencing, partially offset by a year-over-year decline in Sanger Sequencing and Gene Synthesis[7] Financial Position and Outlook The company maintains a strong liquidity position and reiterates its fiscal year 2025 guidance for organic revenue growth and adjusted EBITDA margin expansion Cash and Liquidity Azenta maintained a robust liquidity position with $540 million in cash and equivalents, generating $14 million in operating cash flow - The company ended the quarter with a total cash, cash equivalents, restricted cash, and marketable securities balance of $540 million[17] Q2 FY2025 Cash Flow Summary | Metric | Amount | | :--- | :--- | | Operating Cash Flow | $14M | | Capital Expenditures | $7M | | Free Cash Flow | $7M | Fiscal Year 2025 Guidance Azenta reiterated its FY2025 guidance, projecting 3% to 5% organic revenue growth and approximately 300 basis points of adjusted EBITDA margin expansion - The company reiterated its guidance for fiscal year 2025[17] - Total organic revenue is expected to grow in the range of 3% to 5% relative to fiscal 2024 - Adjusted EBITDA margin expansion is expected to be approximately 300 basis points relative to fiscal 2024[17] - The company does not provide forward-looking guidance on a GAAP basis due to the inherent difficulty in accurately forecasting various adjusting items[11] Consolidated Financial Statements (Unaudited) This section provides the unaudited consolidated statements of operations, balance sheets, and cash flows for the specified periods Consolidated Statements of Operations Presents unaudited consolidated statements of operations for the three and six months ended March 31, 2025 and 2024, detailing revenues, costs, and net loss Consolidated Balance Sheets Provides unaudited consolidated balance sheets as of March 31, 2025 and September 30, 2024, outlining assets, liabilities, and stockholders' equity Consolidated Statements of Cash Flows Contains unaudited consolidated statements of cash flows for the six months ended March 31, 2025 and 2024, showing cash flows from operating, investing, and financing activities Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, including net income, EBITDA, gross profit, and operating income Reconciliation of GAAP to Non-GAAP Net Income Provides detailed reconciliation of GAAP net loss from continuing operations to non-GAAP adjusted net income, including adjustments for amortization and restructuring Reconciliation of GAAP Net Loss to Adjusted EBITDA Reconciles GAAP net loss from continuing operations to Adjusted EBITDA, adjusting for stock-based compensation, restructuring, and non-recurring costs Reconciliation of GAAP to Non-GAAP Gross Profit Details reconciliation of GAAP gross profit to non-GAAP adjusted gross profit for the total company and by segment, primarily adjusting for amortization and transformation costs Reconciliation of GAAP to Non-GAAP Operating Income (Loss) by Segment Provides reconciliation of GAAP to non-GAAP operating income (loss) by segment, including adjustments for amortization, transformation, and restructuring charges Reconciliation of GAAP to Organic Revenue Presents reconciliation of reported GAAP revenue to organic revenue, showing currency exchange rate impact for both segments and the total company