Azenta's Q2 2025: Navigating Key Contradictions on NIH Headwinds, EBITDA Margins, and Market Growth

Impact of NIH 1% Headwind, EBITDA margin expansion and growth expectations, China market growth expectations, capital deployment strategy and M&A, pricing dynamics in NGS are the key contradictions discussed in Azenta's latest 2025Q2 earnings call.



Revenue and Organic Growth:
- Azenta Inc. reported revenue of $143 million for Q2 2025, with a 5% year-over-year increase on a reported basis and 6% on an organic basis.
- The growth was driven by strong performance in Sample Management Solutions and Multiomics segments, with notable contributions from Next Generation Sequencing and Sample Storage.

Operational Improvements and Margin Expansion:
- The company achieved an adjusted EBITDA margin expansion of 400 basis points year-over-year, reflecting a solid margin improvement.
- This was attributed to operational efficiencies, cost discipline, and initiatives such as the rollout of the Azenta Business System, which aims to reduce complexity and enhance long-term value.

Impact of Macroeconomic Headwinds:
- Azenta acknowledged a potential 1% headwind to revenues due to reductions in NIH funding levels, but countermeasures were implemented to ensure near-zero impact on EBITDA.
- The company is also addressing the impact of tariffs and geopolitical tensions by identifying and implementing countermeasures to mitigate margin risks.

Geographic Performance and China Market:
- China showed organic revenue growth of 5%, outperforming expectations given the challenging broader macro and geopolitical environment.
- This performance is attributed to Azenta's regional go-to-market model, which has aligned the business to behave more locally, enhancing its competitiveness in the Chinese market.