Azenta (AZTA) 6 Aug 24 2024 Q3 Earnings call transcript

Azenta, a leading provider of innovative solutions for life sciences and healthcare, recently reported its third-quarter financial results for fiscal year 2024, highlighting strong performance and strategic gains across its key business segments. The company's management team, led by President and CEO Steve Schwartz and CFO Herman Cueto, provided insights into the company's financial health, growth prospects, and strategic initiatives during the earnings call.

Strong Financial Performance and Strategic Gains

Azenta reported a 5% year-over-year organic revenue growth in Q3 2024, with all three business segments contributing positively. Sample management solutions grew by 7%, driven by a 5% increase in product revenue and an 11% increase in sample repository services. The company's cryogenic stores showed remarkable growth, with revenue up almost 40% compared to the previous year. This growth is a testament to the increasing demand for automation and high-quality sample management solutions in the life sciences industry.

In the Multiomics segment, revenue remained flat year-over-year but showed a 1% sequential growth, driven by a 4% increase in gene synthesis and a 3% increase in next-generation sequencing. The company's Multiomics GENEWIZ team had a particularly strong quarter, delivering a 2% sequential growth in a market that remains challenging. Azenta's synthesis business also showed improvement, growing by a few percentage points year-over-year.

B Medical, Azenta's vaccine cold chain business, reported a 7% increase in revenue, driven by higher-than-expected vaccine cold chain orders. The company's strategic focus on vaccine cold chain products and sample acquisition is paying off, with the business expected to be accretive to Azenta's overall EBITDA margin in the long term.

Strategic Initiatives and Transformation

Azenta's strategic initiatives, including the Ascend 2026 transformation program, are bearing fruit, with cost savings and margin expansion contributing to the company's profitability. The company has now closed 10 sites and optimized another 3, with a total of 30% of its sites optimized to date. This strategic realignment is expected to provide significant cost savings and operational efficiencies in the long run.

Azenta's focus on automation and sample management solutions is positioning the company well for future growth. The company's sample management solutions, particularly in cryogenic stores, are attracting multiple system orders from customers who have verified the benefits of automation. This trend is expected to continue, with Azenta positioning itself to capitalize on the demand for high-quality sample management solutions.

Looking Ahead

The company's outlook for the rest of the fiscal year remains cautious, with a lower full-year revenue guide of down 2% to down 1%. However, the company is optimistic about its Multiomics business, reaffirming its revenue guide of growing low single digits to mid-single digits. Azenta is also raising its non-GAAP EPS guide to a range of $0.30 to $0.36 for fiscal year 2024, driven by operational improvements and a reduction in interest income.

Conclusion

Azenta's Q3 2024 financial results demonstrate the company's strong performance and strategic gains, particularly in the areas of sample management solutions and automation. The company's focus on innovation, automation, and strategic realignment is expected to position it well for future growth and profitability. With a solid financial foundation and a clear strategic direction, Azenta is well-positioned to capitalize on the opportunities in the life sciences and healthcare sectors.