Azenta, Inc.

Total Q3 revenue was $161 million, up 12% reported and 9% organically, with a 1% foreign exchange headwind and a $4 million contribution from UKBC. Non-GAAP EPS was $0.16, adjusted EBITDA margin was approximately 11.4% (down 60 bps year over year, up 610 bps sequentially), and free cash flow was negative $5 million. Gross margin was 46.2%, down 140 bps year over year; Sample Management Solutions gross margin was 45.9% (down 750 bps), and Multiomics gross margin was 46.5% (up about 550 bps). For the quarter, SMS revenue was $88 million (up 14% reported and 9% organic) and Multiomics revenue was $73 million (up 10% reported and 8% organic). The company ended the quarter with $529 million in cash, cash equivalents and marketable securities and no debt outstanding. Full-year fiscal 2026 guidance was raised to reported revenue of $613 million-$618 million, organic revenue of approximately flat to up 1%, adjusted EBITDA of $59 million-$62 million, and full-year free cash flow improvement of approximately 10% to 15% year over year. Q4 organic revenue is expected to decline low single digits, and Q4 adjusted EBITDA is expected to be $20 million-$23 million.

John Marotta framed the quarter as evidence of progress in a broader turnaround, emphasizing improved execution, stronger recurring revenue businesses and early signs of stabilization in Multiomics North America. He said the company is taking targeted commercial and structural actions, including footprint rationalization, a more standardized modular stores strategy and stronger focus on high-value workflows, while also noting the recovery will take multiple quarters. His tone was constructive but cautious, repeatedly stressing that the broader market remains uneven and that sustained performance will depend on consistent execution.

Lawrence Lin highlighted the quarter’s financial improvement: $161 million in revenue, 46.2% gross margin, $0.16 non-GAAP EPS and an 11.4% adjusted EBITDA margin, with sequential margin expansion driven by higher Multiomics volumes, recurring revenue growth and cost actions. He noted $5 million of negative free cash flow in Q3, $529 million of cash on the balance sheet, no debt, and approximately $50 million spent to repurchase 2.3 million shares, leaving about $200 million remaining under the buyback authorization through December 2028. He also said automated stores remediation costs were about $1 million in the quarter and are expected to total $5 million-$6 million for fiscal 2026, and that UKBC will dilute FY26 EBITDA margin by about 30 bps.

Analysts focused on whether Multiomics North America’s improvement was demand-driven or execution-driven, and management said it reflected a mix of delayed projects, improved commercial execution, a new North America sales leader and about $3 million of PC&S timing that shifted into Q3. On the outlook, management said the improvement is encouraging but does not yet prove a broad recovery, citing still-selective customer spending and a mixed end-market backdrop. Questions also centered on stores/capex conversion, modular stores, and FY27 margin cadence; management said the stores funnel is healthy but timing remains uncertain, modularization should reduce complexity and risk, and margins should continue to accrete over time, with more meaningful flow-through expected in 2027.