Azenta Reports Fourth Quarter and Full Year Fiscal 2024 Results; Announces the Plan to Sell B Medical Systems and Appoints Lawrence Y. Lin as CFO

Rhea-AI Summary

Azenta reported its Q4 and FY 2024 results, highlighting a 4% revenue growth in Sample Management Solutions and Multiomics. The company anticipates a 3%-5% organic revenue growth for FY 2025 and a 300 basis points EBITDA margin expansion. For Q4, revenue was $170 million, down 1% YoY, with a 2% organic decline. Sample Management Solutions and Multiomics grew by 5% and 8% organically, respectively, while B Medical Systems saw a 35% decline. FY 2024 revenue was $656 million, down 1% YoY, driven by a 27% decline in B Medical Systems revenue. The company reported an operating loss of $201 million for FY 2024, with a non-GAAP diluted EPS of $0.41. Azenta plans to sell B Medical Systems to focus on core businesses and appointed Lawrence Y. Lin as the new CFO. They ended FY 2024 with $522 million in cash and equivalents and repurchased 4.9 million shares worth $249 million in Q4.

Positive

• FY 2024 revenue growth of 4% in Sample Management Solutions and Multiomics
• 3%-5% organic revenue growth expected for FY 2025
• 300 basis points EBITDA margin expansion expected for FY 2025
• Adjusted EBITDA margin for Q4 increased to 10.2%, up 560 basis points YoY
• Non-GAAP diluted EPS for FY 2024 increased to $0.41, up 32% YoY
• Ended FY 2024 with $522 million in cash and equivalents
• Repurchased 4.9 million shares worth $249 million in Q4

Negative

• Q4 revenue declined by 1% YoY
• B Medical Systems revenue declined by 35% YoY in Q4
• FY 2024 revenue declined by 1% YoY
• Operating loss of $201 million for FY 2024
• Diluted EPS from continuing operations was ($3.09) for FY 2024

Insights

Financial Analyst

The Q4 and FY2024 results reveal mixed performance with notable strategic shifts. Core businesses (Sample Management and Multiomics) showed healthy organic growth of 5% in Q4, while B Medical Systems struggled with a 35% decline. The planned divestiture of B Medical Systems signals a strategic portfolio simplification.

Key financial metrics show improvement with Q4 Adjusted EBITDA margin expanding to 10.2% from 4.6% year-over-year. The completion of $1.5B share repurchase program and strong cash position of $522M demonstrate solid capital management. FY2025 guidance of 3-5% organic growth with 300 basis points margin expansion suggests continued operational improvements.

Market Research Analyst

The transformation program Ascend 2026 appears to be gaining traction, with visible improvements in operational efficiency and margin expansion. The strategic decision to divest B Medical Systems is likely to streamline operations and improve overall growth profile, as this segment has been a drag on performance with 27% revenue decline in FY2024.

The core business segments show resilience with Sample Management Solutions growing 4% organically and Multiomics up 3% organically for the full year. The ongoing review of cash flow statements warrants attention but doesn't impact the balance sheet or income statement integrity.

• FY'24 revenue growth of 4%, reported and organic, in combined Sample Management Solutions and Multiomics
• FY'25 organic revenue growth expected to be 3% to 5% year over year, with Adjusted EBITDA margin expansion of approximately 300 basis points
• Pursuing a sale of B Medical Systems to simplify portfolio and drive revenue growth and profitability
• Announces appointment of Lawrence Y. Lin as Chief Financial Officer; Herman Cueto to remain as advisor to ensure smooth transition

BURLINGTON, Mass., Nov. 12, 2024 /PRNewswire/ -- Azenta, Inc. (Nasdaq: AZTA) today reported financial results for the fourth quarter and fiscal year ended September 30, 2024.

Fiscal Year 2024 Highlights:

• Q4'24 revenue growth of 6% reported and 5% organic, in combined Sample Management Solutions and Multiomics
• FY'24 Adjusted EBITDA margin expansion of approximately 300 basis points versus last year

 

		Quarter Ended												Year Ended
Dollars in millions, except per share data		September 30,				September 30,								September 30,				September 30,
		2024				2023				Change				2024				2023				Change
Revenue from Continuing Operations		$	170			$	172				(1) %			$	656			$	665				(1) %
Organic growth											(2) %												(2) %
Sample Management Solutions		$	85			$	82				4 %			$	319			$	304				5 %
Multiomics		$	66			$	61				8 %			$	255			$	248				3 %
B Medical Systems		$	19			$	29				(35) %			$	83			$	113				(27) %
Diluted EPS Continuing Operations		$	(0.10)			$	0.05				NM			$	(3.09)			$	(0.19)				NM
Diluted EPS Total		$	(0.10)			$	0.06				NM			$	(3.09)			$	(0.22)				NM
Non-GAAP Diluted EPS Continuing Operations		$	0.18			$	0.13				47 %			$	0.41			$	0.31				32 %
Adjusted EBITDA Continuing Operations		$	17			$	8				119 %			$	49			$	30				62 %
Adjusted EBITDA Margin - Continuing Operations			10.2	%			4.6	%							7.5	%			4.6	%

Management Comments
"We ended fiscal 2024 strong, delivering core revenue growth in our Sample Management Solutions and Multiomics businesses, and upholding our commitment to meaningfully expand margins," stated John Marotta, President and CEO. "We are proud of the progress that we made in fiscal 2024, particularly in our Transformation Program Ascend 2026, and intend to carry that momentum forward to drive further performance, as proven by our fiscal 2025 guidance, which anticipates core revenue growth in the range of 3% to 5%, with continued margin expansion and a renewed focus on free cash flow."

Mr. Marotta continued, "Azenta offers a unique portfolio of differentiated products and services and occupies a strong position in the marketplace. Our competitively advantaged portfolio of businesses, coupled with the capabilities of the Value Creation Committee, supported by the full Board, will accelerate our goal of delivering profitable growth and long-term shareholder value creation." 

Fourth Quarter Fiscal 2024 Results

• Revenue was $170 million, down 1% year over year. Organic revenue declined 2% year over year, which excludes the impact from foreign exchange of less than 1 percentage point. The year-over-year revenue decline was attributable to lower B Medical Systems ("B Medical") revenue. The combined Sample Management Solutions and Multiomics business segments grew 5% on an organic basis.
• Sample Management Solutions revenue was $85 million, up 4% year over year.
  • Organic revenue was up 3%, mainly driven by continued strength in Sample Repository Services and Core Products, particularly in Cryogenic Stores and Consumables and Instruments. This was partially offset by a year-over-year revenue decline in Stores.
• Multiomics revenue was $66 million, up 8% year over year.
  • Organic revenue also grew 8% year over year, primarily driven by growth in Next Generation Sequencing, partially offset by a year-over-year decline in Sanger sequencing revenue.
• B Medical Systems revenue was $19 million, down 35% year over year.
  • Organic revenue also declined 35% year over year, mainly due to lower order volume in the quarter compared to the prior year, primarily attributable to timing of orders.

Summary of GAAP Earnings Results

• Operating loss was $12 million. Operating margin increased 240 basis points year over year.
  • Gross margin was 40.8%, up 130 basis points year over year, driven by favorable product mix, operational efficiencies, and cost reduction initiatives, partially offset by increased amortization and transformation costs.
  • Operating expenses were $82 million, down 300 basis points year over year, primarily driven by lower selling, general and administrative expenses and lower amortization, partially offset by increased restructuring and transformation costs.
• Other income included $6 million of net interest income versus $11 million in the prior year period.
• Diluted EPS from continuing operations was ($0.10) compared to $0.05 one year ago.

Summary of Non-GAAP Earnings Results

• Adjusted operating income was $7 million. Operating margin was 4.1%, an improvement of 460 basis points year over year.
  • Adjusted gross margin was 45.0%, up 220 basis points year over year, primarily driven by favorable product mix, operating efficiencies, and cost reduction initiatives.
  • Adjusted operating expense in the quarter was $69 million, down 700 basis points year over year, primarily driven by the benefit of cost reduction initiatives and lower commissions on cold chain sales in B Medical.
• Adjusted EBITDA was $17 million, and Adjusted EBITDA margin was 10.2 %, up 560 basis points year over year.
• Non-GAAP Diluted EPS was $0.18, compared to $0.13 one year ago.

Full Year Fiscal 2024 Results

• Revenue for fiscal 2024 was $656 million, down 1% year over year. Organic revenue declined 2%, which excludes the impact from foreign exchange of less than 1 percentage point and a nominal contribution from acquisitions. The year-over-year revenue decline was attributable to lower B Medical revenue. The combined Sample Management Solutions and Multiomics business segments grew 4% on an organic basis.
• Sample Management Solutions revenue was $319 million, up 5 % year over year.
  • Organic revenue was up 4%. The year-over-year revenue increase was driven by growth in both, the Sample Repository Services and Core Products businesses.
• Multiomics revenue was $255 million, up 3% year over year.
  • Organic revenue also grew 3% year over year, driven by growth in Next Generation Sequencing and Gene Synthesis services, partially offset by a year-over-year decline in Sanger sequencing revenue.
• B Medical Systems revenue was $83 million, down 27% year over year.
  • Organic revenue was also down 27% year over year, primarily driven by the timing of cold chain equipment orders.

Summary of GAAP Results

• Operating loss was $201 million. Operating margin decreased 19.6% year over year.
  • Gross margin was 40.1%, up 60 basis points year over year, primarily driven by favorable product mix, operating efficiencies and cost reduction initiatives, as well as purchase accounting impacts on inventory in the prior year which did not reoccur, partially offset by increased amortization and transformation costs.
  • Operating expense was $464 million, up 38% year over year due to a $116 million non-cash impairment of goodwill and intangible assets, increased transformation and restructuring charges, and a benefit of $18.5 million of fair value contingent consideration adjustments related to B Medical recognized in the prior fiscal year that did not reoccur; these increases were partially offset by lower M&A costs and the benefit of our cost reduction initiatives.
• Other income included $33 million of net interest income versus $44 million in the prior year period.
• Diluted EPS from continuing operations was ($3.09) compared to ($0.19) in fiscal 2023.

Summary of Non-GAAP Results

• Adjusted operating loss was $3 million and operating margin was (0.4%), an improvement of 190 basis points year over year.
  • Adjusted gross margin was 44.5%, up 70 basis points year over year, primarily driven by favorable product mix, operating efficiencies and cost reduction initiatives, partially offset by margin pressure from lower revenue in the B Medical segment.
  • Adjusted operating expense was $295 million, down 400 basis points year over year, primarily driven by the benefit of cost reduction initiatives and lower commissions on cold chain sales in B Medical.
• Adjusted EBITDA was $49 million, and Adjusted EBITDA margin was 7.5%, an improvement of about 300 basis points year over year.
• Non-GAAP Diluted EPS for fiscal 2024 was $0.41, compared to $0.31 in fiscal 2023.

Cash and Liquidity as of September 30, 2024

• The Company ended fiscal year 2024 with a total balance of cash, cash equivalents, restricted cash, and marketable securities of $522 million.
• Capital expenditures were $13 million in the quarter and $38 million for the full year.

Share Repurchase Program Update

• In the fourth quarter, the Company repurchased approximately 4.9 million shares for approximately $249 million under a 10b5-1 trading program.
• The Company completed the repurchases of its common stock under the 2022 Repurchase Authorization in September 2024. As of September 30, 2024, we have repurchased and retired 30.0 million shares of common stock for the full $1.5 billion approved.

Review of Statements of Cash Flows
As part of the year end closing process, the Company is currently reviewing the classification of amounts, primarily between the line items "effects of exchange rate changes on cash and cash equivalents" and "cash provided by operating activities in the Company's consolidated statements of cash flows that could potentially impact those line items in our previously issued statements of cash flows for fiscal year ended September 30, 2023 and fiscal 2024 quarterly periods. As a result, the Company has not included statements of cash flows in this release. The Company's consolidated balance sheets and statements of operations are not impacted by any reclassification of these cash flow items for any period.  The Company expects to reflect any changes to the previously issued statements of cash flows in its Annual Report of Form 10-K for the fiscal year ended September 30, 2024.

Guidance for Continuing Operations for Full Year Fiscal 2025 Excluding B Medical Systems 

• 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.

Azenta does not provide forward-looking guidance on a GAAP basis for the measures on which it provides forward-looking non-GAAP guidance as the Company is unable to provide a quantitative reconciliation of forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because of the inherent difficulty in accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliations that have not yet occurred, are dependent on various factors, are out of the company's control, or cannot be reasonably predicted. Such adjustments include, but are not limited to, transformation costs, restructuring charges, costs related to acquisitions and divestitures costs, governance-related matters, goodwill and intangible impairments, and other gains and charges that are not representative of the normal operations of the business.

Pursuing Sale of B Medical Systems Segment
Azenta has announced it is pursuing a sale of its B Medical Systems segment, a manufacturer and global distributor of medical refrigeration devices based in Luxembourg. This action will simplify Azenta's portfolio and allow management to focus on driving revenue growth and profitability in its core businesses. The decision follows work by the Board of Directors to evaluate strategic, operational and financial opportunities to maximize value.

Azenta does not intend to comment further on the process unless and until the Company has determined a specific course of action or otherwise determined that further disclosure is appropriate or required by law.

Names Lawrence Lin Chief Financial Officer
The Company has also named Lawrence Y. Lin as Chief Financial Officer, succeeding Herman Cueto, effective after the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024 is filed with the Securities and Exchange Commission. Mr. Cueto will remain as an advisor for a period of time to help facilitate a seamless transition.

Mr. Lin joins Azenta from GeoStabilization International LLC ("GSI"), a privately held industrial company, and brings over twenty years of finance experience, including previously holding senior finance roles at PHC Holdings and Danaher. 

Mr. Marotta commented, "We're excited to have Lawrence join the Azenta team. Lawrence is an accomplished finance executive with a proven track record and a skillset that aligns perfectly with Azenta's needs for its next phase of transformation." 

Mr. Marotta continued, "We will benefit from the many significant contributions Herman made during his time at Azenta, including notably, the development of Ascend 2026, which is already driving considerable margin expansion. He played a key role in laying a terrific foundation on which to build. We wish him the best going forward." 

Before joining GSI, Mr. Lin was Senior Vice President of Finance Operations at PHC Holdings Corporation, a leading diversified diagnostic, life sciences and medical device company based in Japan. Prior roles include Vice President of Finance for North America (CFO) and Global Functions at LivaNova, a global medical technology company, and Vice President of Finance Operations at KaVo Kerr, previously part of Danaher, which was spun off as an independent public company named Envista in 2019. Mr. Lin holds a bachelor's degree in finance from California State University, Fullerton.

Conference Call and Webcast
Azenta management will webcast its fourth quarter and full year fiscal 2024 earnings conference call today at 4:30 p.m. Eastern Time. During the call, Company management will respond to questions concerning, but not limited to, the Company's financial performance, business conditions and industry outlook. Management's responses could contain information that has not been previously disclosed.

The call will be broadcast live over the Internet and, together with presentation materials referenced on the call, will be hosted at the Investor Relations section of Azenta's website at https://investors.azenta.com/events and will be archived online on this website for convenient on-demand replay. 

Regulation G – Use of Non-GAAP financial Measures
The Company supplements its GAAP financial measures with certain non-GAAP financial measures to provide investors a better perspective on the results of business operations, which the Company believes is more comparable to the similar analyses provided by its peers. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. These measures should always be considered in conjunction with appropriate GAAP measures. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included at the end of this release following the consolidated balance sheets and statements of operations. Certain amounts in the tables that supplement the consolidated financial statements may not sum due to rounding. All percentages are calculated using unrounded amounts.

"Safe Harbor Statement" under Section 21E of the Securities Exchange Act of 1934
Some statements in this release are forward-looking statements made under Section 21E of the Securities Exchange Act of 1934. These statements are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Azenta's financial and business results to differ materially from our expectations. They are based on the facts known to management at the time they are made. Forward-looking statements include but are not limited to statements about our revenue and earnings expectations, the potential impact of the review of our statements of cash flows on our previously issued statements of cash flows for the fiscal year ended September 30, 2023 and fiscal 2024 quarterly periods, our ability to realize margin improvement from cost reductions, and our ability to deliver financial success in the future and otherwise related to future operating or financial performance and opportunities. Factors that could cause results to differ from our expectations include the following: our ability to reduce costs effectively; the volatility of the life sciences markets the Company serves; our possible inability to meet demand for our products due to difficulties in obtaining components and materials from our suppliers in required quantities and of required quality; the inability of customers to make payments to us when due; price competition; disputes concerning intellectual property; uncertainties in global political and economic conditions; and other factors and other risks, including those that we have described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K, Current Reports on Form 8-K and our Quarterly Reports on Form 10-Q. As a result, we can provide no assurance that our future results will not be materially different from those projected. Azenta expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based. Azenta undertakes no obligation to update the information contained in this press release.

About Azenta Life Sciences
Azenta, Inc. (Nasdaq: AZTA) is a leading provider of life sciences solutions worldwide, enabling impactful breakthroughs and therapies to market faster. Azenta provides a full suite of reliable cold-chain sample management solutions and multiomics services across areas such as drug development, clinical research and advanced cell therapies for the industry's top pharmaceutical, biotech, academic and healthcare institutions globally. Our global team delivers and supports these products and services through our industry-leading brands, including GENEWIZ, FluidX, Ziath, 4titude, Limfinity, Freezer Pro, Barkey and B Medical Systems.

Azenta is headquartered in Burlington, Massachusetts, with operations in North America, Europe and Asia. For more information, please visit www.azenta.com.

AZENTA INVESTOR CONTACTS:

Yvonne Perron
Vice President, Financial Planning & Analysis and Investor Relations
ir@azenta.com

Sherry Dinsmore
sherry.dinsmore@azenta.com

 

AZENTA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data)
		Three Months Ended								Year Ended
		September 30,								September 30,
		2024				2023				2024				2023
Revenue
Products		$	62,234			$	72,180			$	243,407			$	277,191
Services			107,828				100,177				412,916				387,881
Total revenue			170,062				172,357				656,323				665,072
Cost of revenue
Products			44,043				49,235				170,094				186,090
Services			56,606				55,088				222,862				215,842
Total cost of revenue			100,649				104,323				392,956				401,932
Gross profit			69,413				68,034				263,367				263,140
Operating expenses
Research and development			8,412				8,932				33,525				33,956
Selling, general and administrative			72,014				74,926				302,737				316,282
Impairment of goodwill and intangible assets			—				—				115,975				—
Contingent consideration - fair value adjustments			—				—				—				(18,549)
Restructuring charges			1,279				804				11,808				4,577
Total operating expenses			81,705				84,662				464,045				336,266
Operating loss			(12,292)				(16,628)				(200,678)				(73,126)
Other income (expense)
Interest income			5,527				11,329				33,177				43,735
Other, net			(472)				(338)				178				(1,042)
Loss before income taxes			(7,237)				(5,637)				(167,323)				(30,433)
Income tax (benefit) expense			(2,253)				(8,443)				(3,153)				(17,550)
Income (loss) from continuing operations			(4,984)				2,806				(164,170)				(12,883)
Income (loss) from discontinued operations, net of tax			—				569				—				(1,374)
Net income (loss)		$	(4,984)			$	3,375			$	(164,170)			$	(14,257)
Basic net income (loss) per share:
Income (loss) from continuing operations		$	(0.10)			$	0.05			$	(3.09)			$	(0.19)
Income (loss) from discontinued operations, net of tax			—				0.01				—				(0.02)
Net income (loss) per share		$	(0.10)			$	0.06			$	(3.09)			$	(0.22)
Diluted net income (loss) per share:
Income (loss) from continuing operations		$	(0.10)			$	0.05			$	(3.09)			$	(0.19)
Income (loss) from discontinued operations, net of tax			—				0.01				—				(0.02)
Diluted net income (loss) per share		$	(0.10)			$	0.06			$	(3.09)			$	(0.22)
Weighted average shares used in computing net income (loss) per share:
Basic			48,079				59,603				53,175				66,253
Diluted			48,079				59,692				53,175				66,253

 

AZENTA, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except share and per share data)
		September 30,				September 30,
		2024				2023
Assets
Current assets
Cash and cash equivalents		$	310,929			$	678,910
Short-term marketable securities			151,162				338,873
Accounts receivable, net of allowance for expected credit losses ($6,558 and $8,057, respectively)			172,711				156,535
Inventories			115,256				128,198
Derivative asset			—				13,036
Short-term restricted cash			2,069				4,650
Prepaid expenses and other current assets			80,680				98,754
Total current assets			832,807				1,418,956
Property, plant and equipment, net			202,654				205,744
Long-term marketable securities			49,454				111,338
Long-term deferred tax assets			837				571
Operating lease right-of-use assets			63,992				66,580
Goodwill			691,409				784,339
Intangible assets, net			248,030				294,301
Other assets			10,858				3,891
Total assets		$	2,100,041			$	2,885,720
Liabilities and stockholders' equity
Current liabilities
Accounts payable		$	44,433			$	35,796
Deferred revenue			31,978				34,614
Accrued warranty and retrofit costs			10,129				10,223
Accrued compensation and benefits			30,713				33,911
Accrued customer deposits			22,324				17,707
Accrued VAT payable			106				20,595
Accrued income taxes payable			13,278				7,378
Accrued expenses and other current liabilities			51,878				50,704
Total current liabilities			204,839				210,928
Long-term tax reserves			398				380
Long-term deferred tax liabilities			54,177				67,301
Long-term operating lease liabilities			58,792				60,436
Other long-term liabilities			12,868				12,175
Total liabilities			331,074				351,220
Stockholders' equity
Preferred stock, $0.01 par value - 1,000,000 shares authorized, no shares issued or outstanding			—				—
Common stock, $0.01 par value - 125,000,000 shares authorized, 59,031,953 shares issued and 45,570,084 shares outstanding at September 30, 2024, 71,294,247 shares issued and 57,832,378 shares outstanding at September 30, 2023			590				713
Additional paid-in capital			505,958				1,156,160
Accumulated other comprehensive loss			(13,464)				(62,426)
Treasury stock, at cost - 13,461,869 shares at September 30, 2024 and September 30, 2023			(200,956)				(200,956)
Retained earnings			1,476,839				1,641,009
Total stockholders' equity			1,768,967				2,534,500
Total liabilities and stockholders' equity		$	2,100,041			$	2,885,720

Notes on Non-GAAP Financial Measures
Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, restructuring charges, purchase price accounting adjustments and charges related to M&A, non-recurring costs related to the Company's business transformation initiatives and share repurchases to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as impairment losses, gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure.

		Quarter Ended
		September 30, 2024								June 30, 2024								September 30, 2023
						per diluted								per diluted								per diluted
Dollars in thousands, except per share data		$				share				$				share				$				share
Net income (loss) from continuing operations		$	(4,984)			$	(0.10)			$	(6,582)			$	(0.12)			$	2,806			$	0.05
Adjustments:
Amortization of completed technology			6,454				0.13				6,316				0.12				4,769				0.08
Purchase accounting impact on inventory			—				—				—				—				927				0.02
Amortization of intangible assets other than completed technology			6,364				0.13				6,621				0.13				7,481				0.13
Rebranding and transformation costs(1)			5,114				0.11				4,255				0.08				(15)				—
Restructuring charges			1,279				0.03				2,064				0.04				804				0.01
Merger and acquisition costs and costs related to share repurchase(2)			52				—				74				—				1,767				0.03
Tax adjustments(3)			(561)				(0.01)				(9)				—				(6,691)				(0.11)
Tax effect of adjustments			(4,870)				(0.10)				(4,000)				(0.09)				(4,379)				(0.07)
Non-GAAP adjusted net income from continuing operations		$	8,848			$	0.18			$	8,739			$	0.16			$	7,469			$	0.13
Stock-based compensation, pre-tax			1,845				0.04				3,818				0.07				(715)				(0.01)
Tax rate			14	%			—				15	%			—				15	%			—
Stock-based compensation, net of tax			1,587				0.03				3,245				0.07				(608)				(0.01)
Non-GAAP adjusted net income excluding stock-based compensation - continuing operations		$	10,435			$	0.22			$	11,984			$	0.23			$	6,861			$	0.11
Shares used in computing non-GAAP diluted net income per share							48,079								52,963								59,692

 

		Year Ended
		September 30, 2024								September 30, 2023
						per diluted								per diluted
Dollars in thousands, except per share data		$				share				$				share
Net loss from continuing operations		$	(164,170)			$	(3.09)			$	(12,883)			$	(0.19)
Adjustments:
Amortization of completed technology			24,770				0.47				18,494				0.28
Purchase accounting impact on inventory			—				—				9,664				0.15
Amortization of intangible assets other than completed technology			26,500				0.50				29,884				0.45
Rebranding and transformation costs(1)			13,856				0.26				(49)				—
Restructuring charges			11,808				0.22				4,577				0.07
Impairment of goodwill and intangible assets			115,975				2.18				—				—
Contingent consideration - fair value adjustments			—				—				(18,549)				(0.28)
Merger and acquisition costs and costs related to share repurchase(2)			4,874				0.09				13,842				0.21
Indemnification asset release			—				—				(19)				—
Tax adjustments(3)			2,945				0.06				(8,102)				(0.12)
Tax effect of adjustments			(14,758)				(0.28)				(16,260)				(0.25)
Other special charges			4				—				—				—
Non-GAAP adjusted net income from continuing operations		$	21,804			$	0.41			$	20,599			$	0.31
Stock-based compensation, pre-tax			14,467				0.27				9,497				0.14
Tax rate			14	%			—				15	%			—
Stock-based compensation, net of tax			12,442				0.23				8,072				0.12
Non-GAAP adjusted net income excluding stock-based compensation - continuing operations		$	34,246			$	0.64			$	28,671			$	0.43
Shares used in computing non-GAAP diluted net income per share			—				53,175				—				66,253

(1)	Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design.
(2)	Includes expenses related to governance-related matters.
(3)	Tax adjustments during all periods include adjustments to tax benefits related to stock-based compensation. These adjustments are recognized in the period of vesting for US GAAP but included in the annual effective tax rate for Non-GAAP reporting. Tax adjustments for the twelve months ended September 30, 2023 also include a $1.4M increase in expense related to the exclusion of a benefit from an incentive tax rate change in China, and the exclusion of a one-time GAAP tax benefit related to the outside basis difference of a foreign subsidiary of $6.1 million.

 

		Quarter Ended												Year Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
Dollars in thousands		2024				2024				2023				2024				2023
GAAP net income (loss)		$	(4,984)			$	(6,582)			$	3,375			$	(164,170)			$	(14,257)
Less: Income (loss) from discontinued operations			—				—				569				—				(1,374)
GAAP net income (loss) from continuing operations			(4,984)				(6,582)				2,806				(164,170)				(12,883)
Adjustments:
Less: Interest income, net			(5,527)				(8,004)				(11,329)				(33,177)				(43,735)
Add / Less: Income tax benefit			(2,253)				(450)				(8,443)				(3,153)				(17,550)
Add: Depreciation			9,055				9,749				9,891				37,500				37,206
Add: Amortization of completed technology			6,454				6,316				4,769				24,770				18,494
Add: Amortization of intangible assets other than completed technology			6,364				6,621				7,481				26,500				29,884
Earnings before interest, taxes, depreciation and amortization - Continuing operations		$	9,109			$	7,650			$	5,175			$	(111,730)			$	11,416
		Quarter Ended												Year Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
Dollars in thousands		2024				2024				2023				2024				2023
Earnings before interest, taxes, depreciation and amortization - Continuing operations		$	9,109			$	7,650			$	5,175			$	(111,730)			$	11,416
Adjustments:
Add: Stock-based compensation			1,845				3,818				(715)				14,467				9,497
Add: Purchase accounting impact on inventory			—				—				927				—				9,664
Add: Restructuring charges			1,279				2,064				804				11,808				4,577
Add: Impairment of goodwill and intangible assets			—				—				—				115,975				—
Add: Merger and acquisition costs and costs related to share repurchase(2)			52				74				1,767				4,874				13,842
Less: Contingent consideration - fair value adjustments			—				—				—				—				(18,549)
Less: Rebranding and transformation costs(1)			5,114				4,255				(15)				13,856				(49)
Less: Indemnification asset release			—				—				—				—				(19)
Adjusted earnings before interest, taxes, depreciation and amortization - Continuing operations		$	17,399			$	17,861			$	7,943			$	49,250			$	30,379

(1)	Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design.
(2)	Includes expenses related to governance-related matters.

 

		Quarter Ended
Dollars in thousands		September 30, 2024								June 30, 2024								September 30, 2023
GAAP gross profit		$	69,413				40.8	%		$	69,056				40.0	%		$	68,034				39.5	%
Adjustments:
Amortization of completed technology			6,454				3.8	%			6,316				3.7	%			4,769				2.8	%
Purchase accounting impact on inventory			—				—				—				—				927				0.5	%
Rebranding and transformation costs(1)			588				0.3	%			2,656				1.5	%			—				—
Non-GAAP adjusted gross profit		$	76,455				45.0	%		$	78,028				45.2	%		$	73,730				42.8	%

 

		Year Ended
Dollars in thousands		September 30, 2024								September 30, 2023
GAAP gross profit		$	263,367				40.1	%		$	263,140				39.6	%
Adjustments:
Amortization of completed technology			24,770				3.8	%			18,494				2.8	%
Purchase accounting impact on inventory			—				—				9,664				1.4	%
Rebranding and transformation costs(1)			3,953				0.6	%			—				—
Non-GAAP adjusted gross profit		$	292,090				44.5	%		$	291,298				43.8	%

(1)

Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design.

 

		Sample Management Solutions																								Multiomics
		Quarter Ended																								Quarter Ended
		September 30,								June 30,								September 30,								September 30,								June 30,								September 30,
Dollars in thousands		2024								2024								2023								2024								2024								2023
GAAP gross profit		$	39,541				46.6	%		$	36,279				45.0	%		$	38,296				46.8	%		$	30,043				45.5	%		$	29,199				45.9	%		$	26,808				43.9	%
Adjustments:
Amortization of completed technology			1,056				1.2	%			1,010				1.3	%			867				1.1	%			1,040				1.6	%			1,038				1.6	%			1,211				2.0	%
Transformation costs(1)			145				0.2	%			(127)				(0.2)	%			—				—				—				—				—				—				—				—
Non-GAAP adjusted gross profit		$	40,742				48.0	%		$	37,162				46.1	%		$	39,163				47.9	%		$	31,083				47.1	%		$	30,237				47.5	%		$	28,019				45.8	%
		B Medical Systems																								Total Segments
		Quarter Ended																								Quarter Ended
		September 30,								June 30,								September 30,								September 30,								June 30,								September 30,
Dollars in thousands		2024								2024								2023								2024								2024								2023
GAAP gross profit		$	(173)				(0.9)	%		$	3,578				12.5	%		$	2,930				10.0	%		$	69,413				40.8	%		$	69,056				40.0	%		$	68,034				39.5	%
Adjustments:
Amortization of completed technology			4,358				22.7	%			4,268				15.0	%			2,691				9.1	%			6,454				3.8	%			6,316				3.7	%			4,769				2.8	%
Purchase accounting impact on inventory			—				—				—				—				927				3.1	%			—				—				—				—				927				0.5	%
Transformation costs(1)			442				2.3	%			2,783				9.8	%			—				—				588				0.3	%			2,656				1.5	%			—				—
Non-GAAP adjusted gross profit		$	4,627				24.1	%		$	10,629				37.3	%		$	6,548				22.3	%		$	76,455				45.0	%		$	78,028				45.2	%		$	73,730				42.8	%

 

		Sample Management Solutions																Multiomics
		Year Ended																Year Ended
Dollars in thousands		September 30, 2024								September 30, 2023								September 30, 2024								September 30, 2023
GAAP gross profit		$	142,035				44.6	%		$	132,806				43.7	%		$	115,434				45.3	%		$	109,820				44.2	%
Adjustments:
Amortization of completed technology			3,909				1.2	%			2,973				1.0	%			4,157				1.6	%			4,874				2.0	%
Transformation costs(1)			377				0.1	%			—				—				—				—				—				—
Non-GAAP adjusted gross profit		$	146,321				45.9	%		$	135,779				44.7	%		$	119,591				47.0	%		$	114,694				46.2	%
		B Medical Systems																Total Segments
		Year Ended																Year Ended
Dollars in thousands		September 30, 2024								September 30, 2023								September 30, 2024								September 30, 2023
GAAP gross profit		$	5,895				7.1	%		$	20,514				18.1	%		$	263,367				40.1	%		$	263,140				39.6	%
Adjustments:																														$	—
Amortization of completed technology			16,704				20.1	%			10,647				9.4	%			24,770				3.8	%			18,494				2.8	%
Purchase accounting impact on inventory			—				—				9,664				8.5	%			—				—				9,664				1.4	%
Transformation costs(1)			3,576				4.3	%			—				—				3,953				0.6	%			—				—
Other adjustment			—				—				(1)				—				—				—				—				—
Non-GAAP adjusted gross profit		$	26,175				31.5	%		$	40,824				36.1	%		$	292,090				44.5	%		$	291,298				43.8	%

(1)

Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design.

 

		Sample Management Solutions												Multiomics												B Medical Systems
		Quarter Ended												Quarter Ended												Quarter Ended
		September 30,				June 30,				September 30,				September 30,				June 30,				September 30,				September 30,				June 30,				September 30,
Dollars in thousands		2024				2024				2023				2024				2024				2023				2024				2024				2023
GAAP operating income (loss)		$	8,641			$	2,469			$	4,992			$	(1,888)			$	(1,768)			$	(4,502)			$	(6,815)			$	(5,142)			$	(7,153)
Adjustments:															.								.				.								.
Amortization of completed technology			1,056				1,010				867				1,040				1,038				1,211				4,358				4,268				2,691
Purchase accounting impact on inventory			—				—				—				—				—				—				—				—				927
Amortization of intangible assets other than completed technology			—				51				51				—				—				—				—				—				—
Transformation costs(1)			163				(127)				—				—				—				—				442				2,783				—
Other adjustment			—				1				—				—				—				—				—				(1)				(1)
Non-GAAP adjusted operating income (loss)		$	9,860			$	3,404			$	5,910			$	(848)			$	(730)			$	(3,291)			$	(2,015)			$	1,908			$	(3,536)

 

		Total Segments						Corporate						Total
		Quarter Ended						Quarter Ended						Quarter Ended
		September 30,		June 30,		September 30,		September 30,		June 30,		September 30,		September 30,		June 30,		September 30,
Dollars in thousands		2024		2024		2023		2024		2024		2023		2024		2024		2023
GAAP operating income (loss)		$ (62)		$ (4,441)		$ (6,663)		$ (12,230)		$ (10,313)		$ (9,965)		$ (12,292)		$ (14,754)		$ (16,628)
Adjustments:
Amortization of completed technology		6,454		6,316		4,769		—		—		—		6,454		6,316		4,769
Purchase accounting impact on inventory		—		—		927		—		—		—		—		—		927
Amortization of intangible assets other than completed technology		—		51		51		6,364		6,570		7,430		6,364		6,621		7,481
Rebranding and transformation costs(1)		605		2,656		—		4,509		1,599		(15)		5,114		4,255		(15)
Restructuring charges		—		—		—		1,279		2,064		804		1,279		2,064		804
Contingent consideration - fair value adjustments		—		—		—		—		—		—		—		—		—
Merger and acquisition costs and costs related to share repurchase(2)		—		—		—		52		74		1,767		52		74		1,767
Other adjustment		—		—		(1)		2		(1)		—		2		(1)		(1)
Non-GAAP adjusted operating income (loss)		$ 6,997		$ 4,582		$ (917)		$ (24)		$ (7)		$ 21		$ 6,973		$ 4,575		$ (896)

 

		Sample Management Solutions				Multiomics				B Medical Systems
		Year Ended				Year Ended				Year Ended
		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
Dollars in thousands		2024		2023		2024		2023		2024		2023
GAAP operating income (loss)		$ 6,383		$ (5,633)		$ (12,152)		$ (18,652)		$ (25,949)		$ (20,757)
Adjustments:
Amortization of completed technology		3,909		2,973		4,157		4,874		16,704		10,647
Purchase accounting impact on inventory		—		—		—		—		—		9,664
Amortization of intangible assets other than completed technology		154		311		—		—		—		1,366
Transformation costs(1)		395		—		—		—		3,576		—
Other adjustments		—		—		—		(1)		—		(1)
Non-GAAP adjusted operating income (loss)		$ 10,841		$ (2,349)		$ (7,995)		$ (13,779)		$ (5,669)		$ 919

 

		Total Segments								Corporate								Total
		Year Ended								Year Ended								Year Ended
		September 30,				September 30,				September 30,				September 30,				September 30,				September 30,
Dollars in thousands		2024				2023				2024				2023				2024				2023
GAAP operating loss		$	(31,718)			$	(45,042)			$	(168,960)			$	(28,084)			$	(200,678)			$	(73,126)
Adjustments:
Amortization of completed technology			24,770				18,494				—				—				24,770				18,494
Purchase accounting impact on inventory			—				9,664				—				—				—				9,664
Amortization of intangible assets other than completed technology			154				1,677				26,346				28,207				26,500				29,884
Rebranding and transformation costs(1)			3,971				—				9,885				(49)				13,856				(49)
Restructuring charges			—				—				11,808				4,577				11,808				4,577
Impairment of goodwill and intangible assets											115,975				—				115,975				—
Contingent consideration - fair value adjustments			—				—				—				(18,549)				—				(18,549)
Merger and acquisition costs and costs related to share repurchase(2)			—				—				4,874				13,842				4,874				13,842
Other adjustments			—				(2)				—				1				—				(1)
Non-GAAP adjusted operating loss		$	(2,823)			$	(15,209)			$	(72)			$	(55)			$	(2,895)			$	(15,264)

(1)	Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company's operations, processes and systems to permanently alter the Company's operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company's 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design.
(2)	Includes expenses related to governance-related matters.

 

		Sample Management Solutions												Multiomics												B Medical Systems												Azenta Total
		Quarter Ended												Quarter Ended												Quarter Ended												Quarter Ended
		September 30,				September 30,								September 30,				September 30,								September 30,				September 30,								September 30,				September 30,
Dollars in millions		2024				2023				Change				2024				2023				Change				2024				2023				Change				2024				2023				Change
Revenue		$	85			$	82				4	%		$	66			$	61				8	%		$	19			$	29				(35)	%		$	170			$	172				(1)	%
Acquisitions/divestitures			—				—				0	%			—				—				0	%			—				—				0	%			—				—				0	%
Currency exchange rates			0				—				(0)	%			0				—				(0)	%			0				—				(1)	%			1				—				(0)	%
Organic revenue		$	85			$	82				3	%		$	66			$	61				8	%		$	19			$	29				(35)	%		$	169			$	172				(2)	%
		Sample Management Solutions												Multiomics												B Medical Systems												Azenta Total
		Year Ended												Year Ended												Year Ended												Year Ended
		September 30,				September 30,								September 30,				September 30,								September 30,				September 30,								September 30,				September 30,
Dollars in millions		2024				2023				Change				2024				2023				Change				2024				2023				Change				2024				2023				Change
Revenue		$	319			$	304				5	%		$	255			$	248				3	%		$	83			$	113				(27)	%		$	656			$	665				(1)	%
Acquisitions/divestitures			1				—				(0)	%			—				—				0	%			—				—				0	%			1				—				(0)	%
Currency exchange rates			1				—				(0)	%			(1)				—				0	%			1				—				(1)	%			1				—				(0)	%
Organic revenue		$	316			$	304				4	%		$	255			$	248				3	%		$	82			$	113				(27)	%		$	654			$	665				(2)	%

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/azenta-reports-fourth-quarter-and-full-year-fiscal-2024-results-announces-the-plan-to-sell-b-medical-systems-and-appoints-lawrence-y-lin-as-cfo-302303325.html

SOURCE Azenta, Inc.

FAQ

What was Azenta's Q4 2024 revenue?

Azenta's Q4 2024 revenue was $170 million, down 1% year over year.

What is Azenta's revenue growth forecast for FY 2025?

Azenta expects organic revenue growth of 3% to 5% for FY 2025.

How did Azenta's B Medical Systems perform in Q4 2024?

B Medical Systems revenue declined by 35% year over year in Q4 2024.

What was Azenta's non-GAAP diluted EPS for FY 2024?

Azenta's non-GAAP diluted EPS for FY 2024 was $0.41.

What are Azenta's EBITDA margin expectations for FY 2025?

Azenta expects an EBITDA margin expansion of approximately 300 basis points for FY 2025.