Azenta(AZTA) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For fiscal year 2024, the company reported revenue of $656 million, down 2% year-over-year on an organic basis, while adjusted EBITDA margin improved by approximately 300 basis points [15][48][53] - Fourth quarter revenue was$ 170 million, down 1% year-over-year on a reported basis and down 2% on an organic basis, with non-GAAP gross margin at 45%, up 220 basis points year-over-year [51][54] Business Line Data and Key Metrics Changes - Sample Management Solutions (SMS) revenue for the fourth quarter was $85 million, up 4% year-over-year reported and up 3% organic, with notable growth in Cryogenic Stores (67% growth) and Consumables & Instruments (14% growth) [55][56] - Multiomics revenue reached$ 66 million in the fourth quarter, representing 8% growth on both a reported and organic basis, driven by a 25% increase in Next Generation Sequencing [57][58] Market Data and Key Metrics Changes - The Multiomics business in China delivered organic revenue growth of 6%, outperforming a challenging market [59] - B Medical revenue was $19 million in the fourth quarter, down 35% year-over-year, reflecting a decline in orders [60] Company Strategy and Development Direction - The company announced the decision to sell B Medical to refocus on core businesses with high growth potential and margin expansion opportunities [17][46] - Key areas of focus for 2025 include portfolio optimization, operational excellence, and value-enhancing capital allocation, with a commitment to simplifying operations and aligning incentives with performance metrics [25][30][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver long-term sustainable value, citing positive indicators and a backlog secured to date [37][38] - The guidance for 2025 is for organic revenue growth in the range of 3% to 5%, with expectations for Multiomics to grow low-single-digits and SMS to grow mid-single-digits [65][66] Other Important Information - The company completed a$ 1.5 billion share repurchase program, buying back approximately 30 million shares over the last two years [54] - The company ended the quarter with $522 million in cash and no outstanding debt, indicating a strong balance sheet [61] Q&A Session Summary Question: Guidance on fiscal '26 targets and growth assumptions - Management indicated that the guidance of 3% to 5% organic growth assumes the current market environment and reflects a prudent approach given uncertainties [70][71] Question: Dynamics behind EBITDA margin guidance - The guidance for fiscal '25 implies a stable EBITDA margin, with expectations for continued margin expansion driven by operational improvements [72][73] Question: Performance of Next Generation Sequencing (NGS) and Gene Synthesis - NGS grew 25% year-over-year, with management optimistic about continued strong performance, while Gene Synthesis saw low-single-digit growth in the quarter [76][77] Question: Impact of China tariffs and growth in China - China experienced 10% growth in the fourth quarter and 12% for the full year, with management not expecting significant tariff impacts based on current operations [78][79] Question: Outlook for the freezer market - Management expressed confidence in the freezer business, highlighting strong backlog visibility and competitive advantages in automation [85][86] Question: Pricing dynamics in the guidance for 2025 - Management acknowledged potential pricing headwinds in NGS but noted recent price stabilization as a positive indicator [97][98] Question: Timeline for the B Medical transaction - The company anticipates closing the B Medical transaction within the first half of the year [100]