What Azenta (AZTA) Said on Its Q4 Earnings Call

Key Points

• Azenta beat fourth-quarter sales expectations, with revenue rising 5% year over year to $167 million, helped by stronger-than-expected Multiomics activity. For fiscal 2027, it forecasts $648 million to $660 million in revenue and 3% to 5% organic growth.
• Management expects adjusted EBITDA margin to expand by 200 to 250 basis points in fiscal 2027 and free cash flow to improve about 25%. The outlook includes near-term dilution from the Elegen agreement and SynPlexity acquisition, which Azenta expects to become positive in their second year.
• Improved bookings support expectations for a return to modest growth in Automated Stores, while Multiomics is being repositioned through gene synthesis deals and restructuring. The restructuring actions are expected to add about $11 million in annualized savings once substantially complete.

Azenta NASDAQ: AZTA forecast faster organic revenue growth and higher profitability for fiscal 2027 after fourth-quarter sales exceeded expectations, as the company works to improve its automated storage business and expand its gene synthesis capabilities.

The life sciences services company reported fourth-quarter revenue of $167 million, up 5% from a year earlier and 2% organically. Full-year revenue rose 5% to $622 million, including 2% organic growth. Chief Financial Officer Lawrence Lin said full-year revenue exceeded the high end of the company’s guidance primarily because of stronger-than-expected fourth-quarter Multiomics activity.

Interim President and CEO Martin Madaus said booking trends improved across the business during the fourth quarter. “Our goal is to deliver consistent performance quarter-after-quarter,” he said.

Fiscal 2027 Outlook Calls for Margin Expansion

Azenta expects fiscal 2027 revenue of $648 million to $660 million and organic revenue growth of 3% to 5%. Management forecast mid-single-digit organic growth in Sample Management Solutions and low-single-digit growth in Multiomics.

The company expects its adjusted EBITDA margin to expand by approximately 200 to 250 basis points from 9.4% in fiscal 2026. The forecast includes approximately 100 basis points of dilution associated with the Elegen licensing agreement and SynPlexity acquisition. Lin said the high end of the revenue outlook includes potential contributions from those transactions.

Azenta also expects full-year free cash flow to improve by approximately 25% from $27 million in fiscal 2026. Management expects negative free cash flow in the first quarter, reflecting the timing of capital investments, restructuring cash outlays and Multiomics integration costs.

For the first quarter, the company forecast organic revenue growth of approximately 3% to 4% and adjusted EBITDA margin expansion of approximately 100 to 150 basis points year over year.

Storage Bookings Improve as Multiomics Repositions

Fourth-quarter Sample Management Solutions revenue rose 9% on a reported basis to $94 million and increased 4% organically. Lin attributed the growth to biorepositories and Consumables and Instruments, partially offset by lower Automated Stores revenue. UK Biocentre contributed $4.5 million to reported revenue in the quarter.

Automated Stores faced customer capital spending constraints, execution challenges and quality remediation costs during fiscal 2026. Lin said the business incurred approximately $6 million in quality-related remediation costs for the year, including less than $1 million in the fourth quarter.

Madaus said some customer capital spending is being freed up and that improved bookings provide good visibility for fiscal 2027, although project timing remains a consideration. Azenta expects Automated Stores to return to modest growth. The company plans to launch two new storage products near the end of fiscal 2027, with their main impact expected in fiscal 2028.

Multiomics revenue was $73 million in the fourth quarter, flat on a reported basis and down 1% organically. For the second half of fiscal 2026, the segment’s organic revenue grew approximately 4%, compared with a roughly 1% decline in the first half, Lin said.

Gene synthesis and selected sequencing services helped results, while legacy Sanger sequencing continued to decline as customers shifted toward other technologies. Lin said that, excluding the Sanger headwind, the expected fiscal 2027 growth rate for Multiomics would be four percentage points higher.

Next-generation sequencing revenue declined in the fourth quarter partly because an approximately $3 million order moved into the third quarter and because of a difficult comparison with the prior year, Lin said. Multiomics President Trey Martin said bookings in that business had improved.

Gene Synthesis Deals and Restructuring

Azenta is seeking to broaden its participation in genomic discovery through its acquisition of SynPlexity and an exclusive licensing agreement with Elegen, subject to specified rights and exceptions. Martin said Elegen’s technology is designed to produce high-purity DNA without a conventional cloning step, while SynPlexity enables the production of thousands of full-length gene designs in parallel.

Lin said Azenta paid $15 million in cash for SynPlexity, with up to another $10 million in contingent consideration. Expected capital deployment under the Elegen agreement is approximately $32 million to $71 million, depending on equipment purchases and whether Azenta exercises an option to convert the license to a perpetual license.

Management described fiscal 2027 as a year of integration, scale-up and early commercialization for the technologies. Madaus said the transactions are initially dilutive but are expected to be positive in the second year.

Separately, Multiomics restructuring actions announced in October are expected to generate approximately $11 million in annualized savings once substantially complete, which the company expects around the end of its second fiscal quarter. That is in addition to approximately $7 million in annualized savings from actions initiated earlier in fiscal 2026.

Profitability and Capital Returns

Fourth-quarter adjusted EBITDA was $19.4 million, or 11.6% of revenue. Full-year adjusted EBITDA was $58.3 million. Non-GAAP earnings per share were 28 cents for the quarter and 48 cents for the year; both included a benefit from the reversal of stock-based compensation expense related to the former CEO’s unvested awards.

Azenta ended fiscal 2026 with $506 million in cash equivalents, restricted cash and marketable securities, and no debt outstanding. It repurchased approximately 4.4 million shares for $118 million during the year, leaving approximately $132 million available under its repurchase authorization as of Sept. 30.

About Azenta (NASDAQ:AZTA)

Azenta, Inc. provides products and services for life sciences research and the management of biological samples. Its offerings include automated sample storage systems, laboratory automation equipment, consumables, and software used to track and manage samples. The company also provides genomic services through GENEWIZ, including sequencing and other genetic analysis services for researchers and organizations in the life sciences and pharmaceutical industries. Azenta was formed in 2021 when Brooks Automation separated its life sciences business and adopted the Azenta name.

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