Azenta (AZTA)

Sara Silverman Director, IR
Stephen Schwartz CEO
Lindon Robertson EVP & CFO
David Saxon Needham & Company
Jacob Johnson Stephens
Paul Knight KeyBanc Capital Markets
Call transcript
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Greetings, and welcome to the Azenta Q1 2022 Financial Results. [Operator Instructions].

As a reminder, this conference is being recorded Tuesday, February 8, 2022. I will now turn the conference over to Sara Silverman, Director of Investor Relations. Please go ahead.

Sara Silverman

good everyone and today. the operator, you, afternoon on to line Thank would to quarter the XXXX. you to of earnings year We welcome for our like conference call fiscal first

the close everyone many be the release at of used we the that remarks the end, available call, fourth the Investor meaning will the Relations a within results making of in Subsequent on today. investor.azenta.com in issued measures, during I press from of or the statements aforementioned the and supplementary to financial and prepared may which with at our the completed to presentation we a on section of PowerPoint financial earnings differ remind XX-K results located But semiconductor the divestiture slide quarter, number XX-Q. when reports XXXX. that cause events conjunction addition our that We on GAAP today. way considered this and course fiscal additional quarter harbor themselves. the performance. provide on of safe and market today in first after to aspects operations including release SEC, will to and the sale of measures Non-GAAP of the Our filings of be factors GAAP the the to Litigation in of of of X, they Securities viewing are of business. measures Form website forward-looking that presented reconciliation the our are statements. to PowerPoint should the We the during GAAP. business obligation measures measures, Please our make in with the financial is due that of refer our announced operations. believe the quarterly be was to financial such upon update treated data the forward-looking from on the website an automation There discontinued results more number these note Statement, future not results accordance as exclusion differ slides Private you I provide statements February various and used GAAP Harbor to may to annual would no in of complete earnings forward-looking actual Azenta addition Safe would statements to like with presented our non-GAAP Act refer business. non-GAAP We understanding events even the are Form those other an titled relied our or identified reports occur should with quarter

President the Officer, and Vice our Robertson. call Financial with Executive our Chief On Chief is and and President me Executive Schwartz; Steve Officer, today Lindon

from with the will more We a our highlights on provide for Steve fiscal will XXXX. quarter, outlook of financial the call detailed into and open our the Lindon results of first remarks quarter second then look

the the call end take to CEO, that, like turn over remarks. With would questions then will We I the of our to Schwartz. your Steve at prepared

Stephen Schwartz

and the thank continued of Good on XXXX. presented model On company. our XX, Investor target strong the X-year to performance, us for today. held another afternoon, new and Day you quarter investor we and analyst for was our fiscal Thank where you, Sara. QX everyone, top Azenta introduced for we exciting joining November community

mid-calendar for the subsequent semiconductor close ticker sale changed by we AZTA. in and name to business And of expected NASDAQ automation we addition, completion on to under $X the trading close, Azenta had the In began announced cash. December last the Tuesday, on the X, quarter the X, the February transaction our billion Recall, we officially to of year.

preparation internal more made cash our earlier However, our $X.X life deploy than regulatory company the to to pure-play Today, billion it quickly, close a a sciences this in in with we're transaction possible market came landscape. in year. approvals and vibrant

As our Azenta company, from great One life already a promise approach. seeing sciences stand-alone we're

resonating our commercial unified is customers. strategy with Our

Our closely meet engaged needs. solutions is with we're that proposition and customers value craft strong, ever-evolving to their

McManus As Sciences the most operations an as line has to to joining of Diagnostics Matt us to up that Bio-Techne, opportunity deep where Products division grow, Molecular we on team. where we organization. acquisition industry outstanding the to and Asuragen, the We're another President of of Dr. perfectly commercial for to us we understanding and Earlier He directly Matt bring continue comes Officer. Operating Chief Life he Services, recently was saw on me set leading leader its that to announced following month, a this be from Azenta. Matthew the business. Matt with and the have responsibility of fortunate and was experiences the reports a CEO. Matt brings would

color quarter. we some the and our in QX. results. trends again, on impressive So delivered to the Once turning performance saw now provide team I'll

Our reputation open Revenue continues door million, the was with year-over-year. new opportunities quarter for success up customers. the and $XXX XX% strong to to

Our part last and and year, compared itself management Services we QX XX% solid of business to a to exploration to remains vibrant and delivered critical The of of continue proposition. business continues with menu sample the growth revenue up Products offerings. expand value XX% our prove

biotech in from December when to demand customers, holiday pharma we the down. synthesis, Americas. Repository revenue was slow revenue tend Generation NGS Next of strong businesses. and Genomics growing and even Sequencing things reported strong XX% Solutions In gene by $XX the year-over-year. notably up million was time Our Sample through both particularly with and Synthesis XX% both over frame driven business Genomics saw demand Services

to service also production is Indianapolis will synthesis in quarter This first services co-located customers. of provide expedited us U.S. our was This and facility. our our with biorepository largest to quarter allow

nearly AAV year-over-year. the Our are of a of small our core customers, therapy and gene the believe these doubled of which we're portion cell is days key had growth still the beyond very while from we and NGS in market a still are services growth. solutions with key offerings of focus a Sanger, portfolio confidence Revenue Synthesis expanding also And on markets. proprietary gaining revenue, early

wins In expand to adding ramp recently, genetics to reach our plasmid Most added continue services and workflows. a and clients' laboratory addition, our we services. proteomics And by offering, of we early X molecular our we prep adjacent garnering to Repository are both model. Solutions gene-to-lentivirus our samples continue sample interest. Sample recent XX% was as as on-site onboard growing and large strong, services well which The as continue expansion from also of to we our most pharma business

facilities global sites, going relationships continue our similar and we projects are and from see scale more to we large pharma Our well, customer the with horizon. move on samples to

value and stronger. proposition never industry. SRS Our unmatched scaled, we've to gained experience business the been customers the in we've proficiency as in has And

our As global of to portfolio Genomics, demand. while talent existing across capacity. year, In facility, and become satisfy consolidate continues potential doubling Suzhou, demand this which offerings to services our will grow, our footprint later footprint will fully multisite strong in China maintain we investments new our our operational

repository from to products. of vaccines in In the on business. the Products about us, business, is at run a we're a that a area solid for a In for addition, rate store, manage SRS, and There but satisfying remain In much product, Products cryogenic relocating record to as QX, another where existing application. and bullish growth site delivered laboratory of the We million constructing revenue truly which has Massachusetts logistics accelerated trajectory. finished critical capability new we're facility. $XX a other firmly quarter, the as pleased representing nascent the growing cell of store all Indianapolis gene This initiatives We're to demand. manufactured is more expansion revenue acceptance for therapy provide enthusiastic and year-over-year. strong Waltham business of our our doubling in and about we business by for than outgrown we've and XX% Cambridge, established year-over-year be is our that we distribute we particularly customer set tied itself automated each systems, growth larger another

portfolio and we meet a requirements broadened toward of our all Additionally, management automated for systems continues wide to these temperature volumes. sample move to storage ranges, variety across

very growth in a our Quarter-to-quarter, consumables of of capital we testing beyond. Lindon in XXXX fluctuations may consumables will second SRS. management many testing. Omicron purchases the bullish address demand this for large general, want for talk above-market and segment of and half expect specifics. some impact we projects sure variant, about COVID more in we longer in particularly people systems nature result, the and recent about which growth. us we a I so to leaves are see the healthy have But our in in about pipeline and of due sample COVID the to here. demand term, continued financials But continued the that and business opportunities, be prospects As stores to We saw curious know used

last as in some Genomic hit, the though due consistent lab with was to Services institutions. with January, recent as our of inventory week to deliver sourcing was weeks Sanger what we the in complexity some measures, The when in resilient academic revenue And remains we first we which Sanger China, teams spikes, said, that closed our The quarter back risen been of our close does implemented a management. On decrease to from but in of the side, lab have dramatic has similar to XXXX in lower created XXXX impact particularly as to contemplate in guidance it team were COVID January, very activity June saw have not customers representative difficult measurable but to of occasion. first in environment. logistics, QX ability of labs of rate, increased Sanger appears That run the observed for completely of Omicron. decrease normal as lockdown and absences are personnel. And the the COVID

able While temporary customers. continue this cost, to our to has deliver led increase we for be to in some

take accomplishments leadership. of under Before a and see employees wrap to and I Brooks the proud success many nothing moment We're team's THL. I Automation at but want to acknowledge team up, the THL's continued

fully products Moving company services and portfolio critical of therapeutics. forward, Azenta of life life-saving sciences stand-alone with strong to a development is the a

look to the we more As for opportunities growth are future, our abundant.

and aware our of are make more that portfolio assure rich attention how balance of use strong a interest we're of this the add opportunities. Our I And growing. sheet are consideration of sciences there's driving giving heart a as life over team scale we'll with the and rich deal that's And all We're and company. to at to a capabilities solutions all the to considerable business opportunity. can you that markets to pool

our from with remains we hold objectives organic portfolio are and for that and them products to services by also encouraging that the to and faster. to will be there expand However, it's delivered of more emphasize today, and opportunity us scale their who important scientists achieve that chain customers footprint value sample tremendous engineers driven our allow to also growth

at potential from for strong solutions opportunities. in years, solutions the and we're new actively we've services to business. repository we In uncover performance of remains the continue growth And aggressive portfolio. organic is in Over targets, cryogenic like demonstrated offerings, AAV looking sample And growth profitable remain past XX%. more growth investing current organic service course tremendous And X acquisition high-value there our summary, although from our strong. our vectors we'll to the offerings close still

prospects opportunity eager as markets the We're on take opportunity Our And us. are ahead and And ready the as call over work our enthusiastic leverage. growth always, with to of we're profitability to I'll the and value your to to interest shareholders. thank that growing support we significant our about well Lindon. comes for as and you strong now for deliver we as turn customers healthy.

Lindon Robertson

back I you, Thank deck our to now on refer slide available Steve. you website. the

Slide to Turning X.

to CAGR events that highlighted, underlying roughly we Azenta margin year-over-year. of held continued margin execute as from a of X-year of fiscal financial on here of Adjusted XX% and with fiscal see on QX expansion. up Amidst XXXX. sequentially, sale to landmark the XX% Non-GAAP points come transformational structure. of segments objectives. Services earnings significant $X.XX, substantially supported all exciting many operating Steve changes G&A these X, XX.X% Investor of Day it's events, X-year XX now our we our We a was revenue you basis times We strong year-over-year. X% from by revenue for target a and basis in enter per million, the outlined year And solidly out headwind share up As the touch on strength QX. presented $XXX In costs operations and was net also color team model new up in to at the XX% continuing and expectations expect points to QX, commercial EBITDA Growth by is with segment, February with driven fiscal XXXX. the of closed overlapping for XXX we these XX%. should was started

start As you a with can at see, XX% year-over-year fast this we quarter. began growth

the through walk the will also profile on we results, As is see track. earnings you

cash of us completion After we in QX net the semi close, approximately see can the we possession sheet in to our sale, expect transaction to P&L will in the and are proceeds are confirm for $X.X was which investment. billion today's complete, approximately and brings the the cash discontinued $X.X subsequent and of still proceeds. net operations. are assets available in for the With of assets strategic the held is sale currently on settled, completely deploy category indeed I balance But the which to fees taxes results in billion, report you

basis the earnings onetime basis of name. GAAP name quarter. continuing sciences per Reviewing $X.XX share left to was reflects for was to of year-over-year. GAAP includes discontinued the a Slide the which portfolio The a as Moving operations primarily up GAAP X. and classified up Total as operations. from the of company life page, the the you $X.XX of significant Azenta side profit per XX% revenue share improvement sequentially impairment $X.XX we sequential the on GAAP earnings $X.XX, was on the rebranded X% and assets see The trade

we lower professional in fees addition, supporting company's the this separation In had quarter.

primarily X-point P&L revenue growth $XXX with and page for performance. with Breaking approximately million margin organic the on the let's right XX% lower year Gross was growth business, on in FX the look effect this non-GAAP business. color additional that started million top little basis in COVID-related lower while was M&A $XX off for Products due again, quarter, quarter. consumables grew XX% business into by revenue quarter-over-quarter. of additional from was the remained the margins COVID higher XXXX Now partially year-over-year. margin. side our last, the stable, down, on relatively in year-over-year. Normalized generating the points an this XX.X%, Services the to We strong offset line and of XX by had This XX% gross contribution fiscal

by overlap compensation, basis But the the you corporate, company. variable this lower stock expense, look offset planned was structure, update over you transaction operating points XX If added XXX million sized operating had Since previously still operating the basis expense. separated see margin quarter, the less quickly overlapping applying and it than we pressure. the quarter points $X a about at XX G&A QX, closed by a was quarter was up effective cost. we full the quarter-over-quarter. this we you the income, quarter be Adjusted some but approximately of we the in Within basis approximately without basis is trailing structure, in points down completely. for driven To dropping week, performance-based EBITDA last commercial quarter-over-quarter to off falling able leverage then G&A points away XXX both By margin as QX little this on comp. will see XX.X%, and including corporate we to

may It out excluded this FX EBITDA. is is adjusted burdened measure The line expense our a more stock losses. compensation also primarily with quarter the that pointing worth of with little other be from

to not So line. EBITDA help to in translate the margin operating income brought it the help this does

by that XX%. performing Importantly, range in an be the with we continue margin to of we QX, EBITDA will project adjusted

million XX% our generated for Life results. segment review for the The X than lower quarter. a Products business on Sciences but revenue, X% and $XX of quarter Products fourth year-over-year to Turning up of our Slide the expectations

year. to comparative would As well height as I results complete XXXX provide XXXX XXXX. we start the as line Day, first on second This revenue the then growth Investor Products lower the first at demands of the to growth the of our of rates we like periods half here. in half in with the clarity of expected of rates around sight reflects in described the additional was the with strengthen COVID and as business of growth half consumables to our higher

unique the automated stores increased which total, partially continued cell margins softer the second years, revenue. shipments growth for our And stores, strength and for we basis, largest the have a the pressure for our reflecting of solid continues on the space quarter-over-quarter executed come that was leverage over in business Products portfolio XXX including coming earlier in basis referenced corporate are Products The year, a points the margin line, last the quarter year-over-year. Products margin, both the in which XX% the of we margin engine by effect XX systems see and will C&I business The revenue the softer led cryo on QX store. to operating to improvement continuous pipeline that growth with and estimated business, basis On growth was rate gene the and infrastructure remains would revenue exclude growth. expansion and in adoption offset and half basis was through including For commercial a track cryo growth in base be the drivers, gross allocated by automated operating points of lower gross the and a customers The margin expenses which XX% expectations healthy with higher has cell QX. in XX%. QX, stronger if investments and in Life margin a operating of quarter-over-quarter QX year came expense offerings applications. off X.X% COVID in year-over-year. with the store rate to grew therapy the investments consumables but segment. gene in by strong in each margin XX driven strength declined XX.X% Science business, to the of including therapy point Gross

in Genomics year-over-year a points during storage, leverage Sequentially, stronger gross customers to the expansion lower Services XXX to XX saw high Next, stream recurring segment Solutions revenue moderation This research from of business of demand X%. $XX we due our an samples. margin, entrust an please and Services turn utilization basis to basis, of Services in Repository higher XX% gross million, margins quarter-over-quarter for XX% X% was Services our by quarter-over-quarter delivered initial basis than of on results. both operating review us X On NGS stream a business. margin, revenue and revenue the The X% delivered was driven year declined offset gross of SRS global generated in basis, demand. very Sample up Sequentially, revenue. Services delivering business leverage and from by was XX% Synthesis Genomics driven Life Sciences led by continuous the where Page a in X% The increase revenue in grew XX%. year-over-year. with growth an of sharp year-over-year positive of improvement year-over-year, the a when expanded strong points quarter the points, XX expanding significantly increase Genomic hold sequentially for basis margins The Repository above up the XX% also accelerating up XX.X% Genomic Operating X.X%, reflecting driven by up NGS year-over-year Solutions with Sample recovery, excess their sequential expectation. of year-end strong first growth, earlier an business a by growth. margin margin

not stock portion reduction of dropped from the in the to the through a EBITDA. adjusted a of improvement benefits As comes comp, all

the the to summary turn Let's for X cash for flow of quarter. Slide

operating the operations. shown working necessary in as investments flow flow discontinued on inside in totaled quarter's a quarter the the the China. Our generated pressure consolidated a operations. quarter, for approximately $XX the from traditionally December out of discontinued and We million, for semi. expenditures results basis, operating some of million on $X both million for quarter. the our million was annual including $XX including we putting spend reminder, is cash cash cash We pay pay made capital $XX Capital building continuing for And new performance. variable

We our XXXX June in out We more expect to continue inception shareholders complete frame. $X brings to quarter. time This our pay total dividends to than by move million billion. the the did paid $X.XX since of in dividends to its

previously closed semiconductor and we the announced sale have quarterly we that the business, discontinue the As of we dividend. now will

strategic in plan Going forward, to returns balance X sheet. we to our expect we Slide for will shareholders. review use investment way the cash Turn all excess that to optimize for and

securities, cash. the line The assets were and PP&E semi QX. cash, $XXX a of of by building moved providing and assets line driven net and million $XXX approximately lab As the $XX $XX the million China with the million in to of sample reflecting million million for reminder, quarter-over-quarter, cash marketable restricted $XXX closed balance of debt, held the with million net We sale project on equipment. $XX increased significantly storage along

will contribute, the statement. recent divestiture $X The billion billion cash. completion hand noted, and is you next done, in an the today, is quarter's $X.X proceeds estimated see cash of As it in will all for when debt of

our our of also closed We have million we applied revolving credit. to $XX and line debt, eliminate have

$XX growth lighter guidance to this the to COVID be there be per And growth softer challenging earnings an XXXX. be of show the year-over-year approximately million on from Revenue in to continuing anticipated with to business of Services is of share. turn revenue at to continues million approximately Adjusted guidance XX% environment per in year-over-year. business the $X.XX million to $XXX our for compare by $XXX to reflects supporting to the with expected of Slide The a year-over-year. million. X% EBITDA be fiscal midpoint quarter we midpoint. second is share X the non-GAAP This approximately have at with expected Products range $XX Let's in operations is $X.XX expectation XX% to

around by expect to XXXX. return XX% As fiscal margin fourth to earlier, EBITDA quarter stand-alone the business to adjusted the I of we said continue

moment to As concluded our to analyze like to take I point divestiture, a the we and resources readily available you have to understand you to would business.

business Our XX, on leaders recent provided capabilities. our November our and Investor dive deep featured a Day, into held

continue receive on feedback website. insights section the view great our transparency can Investors provided, and to still of and We Azenta you leaders the this on our

target financial find fiscal describing also XXXX, objectives each business our X-year from our for supported will the there model with leaders. our goals You of

those these to For story, hold is have many these practice years. metrics as you to followed have a ourselves well. newer this a and responsible of metrics our We we for history of delivering on

In website we encourage addition, materials, financial all first I included in XXXX. the back as appendix your analysts of on have historical to to information which to and out posted quarter reference build you the quarterly this models. our deck, of for are refer your investors these

reflect stand on path. sciences we stand-alone are today, our now where As fully we on I life

has excited have to full about a reception in strong opportunities is We have The the incredibly support XXXX, strategic the across going had is team the Azenta speed for in we marketplace to fiscal our to the customers to and investment. deploy many start cash $X.X industry. and seen billion available address

will So prepared remarks. to take turn our questions. over back this the Session to I the Question-and-Answer operator your concludes call


Instructions]. [Operator

Saxon Needham. with question first is Our from David

David Saxon

Lindon, and congrats on on quarter. One one the Steve, margins. Yes. on SRS

them with much those you've It on First contracts? in. still you're bringing of progress you give sense made bringing how pharma two the on working from large SRS, a sounds samples can us like

to of you're additional next customers? quarters? the on color growth any over sort some modest potential other And in few SRS you So fair then traction is sequential with can it getting assume give

Stephen Schwartz

I'll Sure. that. take is Steve. This

couple of So things. thanks, David. A

increases should and You expect in it's SRS, said. as exactly, you

to an other one of we've is that and working of bring Europe. of up of by months. in large we thousands now behind the to the the from it But ramped send onboarding, fiscal But that if through particular, of always And samples X these halfway us. Everything number should probably that think, yes, exhausted things is ultimately basis I'd X millions the plan. we're samples is those tens a for pretty of on help the significant to significant. are typically. they one the will, weekly duration one continue And But And X is on we've schedule almost involves year. contracts of pipeline, on and contracts anticipate pretty been North And them that contracts revenue a through. expansion are contracts, see presence to samples. on have organized before on-site the you of in a We us On you we'll in. say track. American we on, We've sites, the this get

contract we it maybe who from now capability capability, brings as for opposed who of interest a could thousand hundred As few to handle large a millions thousands customers prove samples. more samples can somebody consider could who or somebody handle

both contracts. is about now picked has on So we're bullish as good. the cautious business. We'll North progress American up be we guided, Europe but

David Saxon

Got on caused down. like operating It for was one for Products Lindon wasn't I clear margins margins. then that. what maybe it. And Okay. looks on

expecting And can sounds correctly, cryo gross with then you Can that? line? that you So Products just the around down about flows And confirm the drove you I can Was case, heard X%. prepared the you're to that's remarks like be that stores through mix C&I? talk talk the that? it what about versus margin how if kind if of

Lindon Robertson

Yes, very thanks David, much.

expect about was right. first down Product I'll of in then refer QX a in had -- to the mix. to little QX. and bit So highlight as basis on away. We margins mix quarter. in timing see, in And do the this quarter project points you Gross space a this I'll -- the to we QX, compared reflected right could up customer pick XXX bit quarter-to-quarter, it as the you're

a more QX, in a In So little mix. little QX, favorable had weaker. we customer

that projects sign off come receive projects times its end, we Sometimes final and as of timing. an to and out

put the perturbations. it I'll category -- in it's So of

my highlight this as years think over margin remarks, As see, past We roughly seeing XXX year-over-year. -- I in gross tried structurally, the we're to what business. points I could you gained X still in up we're

seeing perturbations to the to continued we're will at where I on us sitting course, so product the points And future, line margin it gross horizon. the I to this looking quarter-to-quarter. particularly we're love for cryo basis as the encouraged have but quarter-to-quarter at timing don't delivery. We the really in products the gains And of in X-year a the continued help engine -- growth the grow, And product where we over we're XX% XXX when really comes, have going structurally and forward But is. are. as indicate we would it mix of encouraged range

on we down the curve as and sharp in the area the were, to it we're the that quarter-to-quarter see when come upward, leverage you're revenue snap quarter-to-quarter, down face while of we a back you grow we're us bit. going of kind when in Now as we're see

a parts. that expense. know We to the pain adds this the on a -- in operating we'll leverage invest. the to it is equation over in So little both And growth business continue

seen As continuously, highlighted growth. see the product a a in that second huge the half. you've had we pipeline We've been source of

lighter at on let now address the million about $X the of looking to basis. revenue a in year-over-year QX me midpoint. So We're expansion

business. of in roughly expansion the expansion Products to talk million business in and the Services midpoint, $X of about the me let million Now $X

in So that it that to X X of midpoint, think you go as from XX range. XX

down or was roughly COVID consumables revenue Now instruments our and year that's COVID And ago. of quarter of In context, comparison, COVID peaked. highest had that us QX result last it a X we year. ago that a percentage when points. in in that revenue has to growth QX X revenue Products year in higher a from

we seeing we a data And back As it. $XX to round had million, had -- in a roughly my year that business, the just C&I got I I'm million. we company, had ago. correctly, if numbers $XX me in let C&I refer

So this year. heavily last business hits the Products

we So the this compare it Day, is tough about at that talked talked talked quarter. this last quarter, again we we about about Investor

compare. second you the million. as in space on half, total of $XX as As C&I $X COVID million was demand to to $X our was And pipeline and into But in And COVID is a store million, we as leveled go for 'XX, of half about the got therapy is a we going realize, product cryo. tougher about seen well the it systems demand, as we large C&I a the toward about cell the company QX, expect $XX the which on we've million into space. second to out continue what may be gene BX

the that half So if of the the you Products of same we're business promising you? stable million at growth. growth the in showing business. -- but running is us. the nicely year-over-year wedges down that level because $X slows It got or $XX rest in you year, million But it this do quite rest What's the second not stays for and to


Instructions]. [Operator

Next question Stephens. is from Jacob Johnson with

Jacob Johnson

the side those the company. Congrats on launched about believe you think Lindon Maybe record when for freezer growth years? guess, and life therapy. freezers large and broadly to posted especially, specifically, lot on Certainly, cryogenic recently. gene the of just potential the I for the we cell tools called on relates it I here. about look quarter Maybe But another as it freezers, BX first couple next engine. as stores, continued becoming Product out think are pure-play cryo I of a but innovation, we and freezer I new the you think talk a just cryo a focus

Stephen Schwartz

Sure, initiative a Jacob. automated We've manner significant cryogenic all stores. got around pretty of

for tool is cell gene therapy and applications. significant. pretty necessary The we see a it's all ramp So

comfortable As one modest-sized you for launched think mentioned, we configurations. just that lab many a we is

promise is SLAS that stand-up wheel here -- this an So fully system. through automated like door. it's particularly think this at is in promise for can a the it put been tool we cryogenic in were somebody tool appliance, week, a it will Boston And it's but and The showing the demand received actually for think, conference very the tool, well. we great. the strong. We It's

we anticipate year-over-year a the sizes. range we of to talked portfolio, about doubling this We demand build. So -- continues demand a And have that complete just continue. And will volume.

the samples, toward general fidelity the automation, we again, And nothing the that complexity automated of second on see now, remember trend as also, samples, stores ever stores, we as to the it's in of it of see in we comment than We of And calendar once for we large with we acceptance can the samples technology strong units. the because both necessity. to we of stores. have continued building we the And the -- a just but really and automation the large customers number think but is large go way can because automated going. a 'XX as the and forward. -- think are cells fidelity it's customers on feel half some of just pipeline. We critical. more the think And the it That's XX

standpoint little we're a customers across And offering the And automated all across about always have portfolio engaged build, confident we of to we're sizes. to of what these like close, but bit really a back half portfolio of to ranges book like been we've complete take looks the and across time before. from never temperature and stores. year a So fully with the

Jacob Johnson

of just If maybe just then I follow-up, Got think XX% XQ. you're in calculator it. margins like as is kind EBITDA XX% Lindon, my And margins. a looking again to towards right, on

the planning You're I at help margin some moving XX%. year could to you kind know exiting the still exit bridge there, of XQ us XX%? just year at to there's but maybe the from pieces

Lindon Robertson


got still you land QX, right. it So would about range We of right in overhang. the guidance point margins. the on EBITDA there X.X us In XX% our around got

it as of think XX.X. So

points about need XX%. X.X more so still to to produce get And we to the

with at as is to we spell model quarters. just longer-term we the starts be to as for we're growth ahead managers out key clarity by of total. through very move and consistent We'll not The expand bullish, I'm going we're give we services line through highlight, us. see the as yet. line. each our see going products a But that top it We second the growth year As general one, more as half. top the

is also second going We're to business, Secondly, looking just we've through specific contemplated area. space Services area a move relatively little of stable. we've new be things we're be we think at bump a in this this certainly contemplated, bit into the And In QX some expectation gross in XX.X% in It's in for skills we to highlighted. here labor little Boston made moving about Waltham in also the into to we labor investments costs key as some where on of bit nearby retention support our and we're In quarters quarter, our with before, turned Cambridge cost we're the we'll as our a margins. in. Products. out we've gross for some said, margins stable those hiring building and the of in And to taking But move there. of And to be of we're We've investments. China. going continue costs. the as duplicate some a total, up I've our couple highlighted

little quarter. lower Board we'll the always half. do a in the be Now as we in grant we bump appear in the highlighted, a second as mind, with But be noncash the And second some have while somewhat at annual while expense, a in our stable, bit keep in -- and to we're some quarter, stock G&A. comp back of overlapping the I going will that it's expenses falloff of

don't to in -- simple you, And to color then for model. this arithmetic. so mean detail we you put to and it but you But comes when just give it together, some enough say I down and I'll made -- I fill

highlight to with the quarter a that as second the And it. I as think growth rates the on we higher in the balance get our leverage year, a expense to be more So better touch deliver rate, growth half. operating model of the we see will you up a take the supports at level. consistent XX or We I the the margin. leave we fourth longer-term we'll at revenue that gross with said, back will out at gross level margin

I we're where thought at executing highlighted slower. would because thought the There's just this almost the a first little So give at question bit always confidence, would we we but as everyone half we exactly point. appreciate start to we've little want expected. where I be of the And exactly consistently, perturbation, we we're midpoint a


KeyBanc. from is question next our Knight with Paul And

Paul Knight

essay about Steve, would obviously, M&A do on right on you've getting expect we're lag kind side? of pipeline. A you that's So be? different ready a now? lag Or guess seeing question kind that this a balance go, common but sell-off. M&A that Are got your sheet what to I equity the you is in pricing talk and of

Stephen Schwartz


I'll the Paul, So with pretty start rich. is pipeline

before we the having conversations the cash, were conversations think we're the now. I same having we so And had

multiples and the XX companies. of transactions are We've we've past in aware public done with the the over -- is And everybody think I here years. private markets. always that X

we So different there value the means and apply are things can to bring to company. that a

we're anticipate term. it are The that ways lot we discussions the expectations companies get There pricing, in in a also think deals. in long to I long So to it I -- for the term. are But construct for of we're as with high. are that

to that things the true know pencil always value. way. they'll are you going to we'll focus. we We're our out going do, things So stay add and ROIC sense And to make if that

we of little again, There a that's enthusiastic So a for And with companies, sense now opened opportunities, good are have. things have though. sheet that we bit of a lot good lot aperture kind of of make we're that lot really Azenta. a the more balance an

and much will that we So come we're is the we're do, something And we're and stick The like will pricing to down to, as as busy, to we enthusiastic. outlook. that. it like going shareholders

Paul Knight

is up addition the GENEWIZ we this Indianapolis, GENEWIZ terms capacity will regarding and array by then centering around And XX%? What June of XX, GENEWIZ. XX%, other, the it capacity time in Between what's expansions, capacity for we China call -- where Yes. it? with wrap -- let's these of be is it expansion it

Stephen Schwartz

Paul. sure, Yes,

across percent growth eye we've few have is And Genomics now But front the that. stay useful. for the there. us side, with that. particularly XX-plus Doubling to expand up last China of toward in and It board more in on a room So a capacity years, an will we have years. been always keeping always we we'll

XX% to the we XX% to growth. any up, in with think, able demand be keep we'll So

of with Beyond We on And do all plans, the pretty bit. never sustain a growth. on We that standpoint. as have to up always keep side, biorepository production can hustle to genomics not constrained. can our we'll been of that, we certainly, little can it But side. just but imagine, And a are kind -- from quickly. you we've move the

to fortunate that. to job, good that. if we do up enough the against were pretty continue we've tired, and keep a we So think we'd remain skills we've but with to got We'll XX%, done bump up

And won't we so be constrained.

Paul Knight

for And mid-single double COVID. on fiscal down thought then last, full digits? Lindon, year, year? What full What's digits, expecting your you on are

Lindon Robertson


forward. could past we Demands to have we've about going mentioned, around it are it's C&I. a tubes testing think prevalent. high around in space. in on as the I think think, the million line Customers $XX be as to I is But million, I some tell, of it's need to have the have And confess or the it's We don't range have revenue to going sight customer first I got And been going factored reason of tell world. dire little still over in as is orders quarter. I've stability consistent in will be you looking around this But test whether we $XX we this So got transactional everybody year, to kit. of had $X million we that perturbations. to we've that see

in tubes the the most stability. some been some this, see but we've is where certainly of delivering research, So we

some On vaccine are the management we We do do have other contracts the that of later. fringes, into coming play vaccine management. -- we other

biggest the more the of there, that add value here I C&I the to year. rest would peripheral think But so more site, is And driver we call a think. and I the have I of


Lindon back We have to Robertson. turn no further it questions. I'll

Lindon Robertson

the to unsatisfied quarter. delivering talking recently. you. but this have grow. high team I of demonstrated company, it up with forward are I to lot growth, a completely our capability able and at can Thank leadership say the to able Steve transformation And to where right. able of every have pride and being value-add year portfolio thank to a not expectation life All love becoming Azenta a next unique We talk in. a we've just And the years first high-growth, of one with see to that, portfolio every we're continuous and we this to the the as today. of bad the structure don't rest you science under about X more over slice of have under we've think being milestone have closed of element next to a producing that we front forward I attention, continues really wrapped on of time place point that's look And for outlined new and spot name of under been a the stand-alone of portfolio. of proud you. have again just a It's CFO, excitement that Well, as quarter in the we be that. at fiscal we you envious we accomplish, with the lot Thank customer the to banner look this you We're and we what only an that's each and your that our completely legal


conclude can does that participating, And for today. our for call and you everyone now We disconnect. thank