Azenta, Inc.

Greetings and welcome to the Azenta Q2 2025 financial results. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the star followed by 1 on your telephone. As a reminder, this conference is being recorded Wednesday, May 7, 2025. I will now turn the conference over to Yvonne Perron. Vice President, FP&E, and Investor Relations.

Thank you, Operator, and good morning to everyone on the line today. We would like to welcome you to our earnings conference call for the second quarter of fiscal year 2025. Our second quarter earnings press release was issued before the open of the market today and is available on our investor relations website located at investors.azenta.com in addition to the supplementary PowerPoint slides that will be used during the prepared remarks today. Please note that effective the first fiscal quarter of 2025, the results of B Medical Systems are treated as discontinued operations. I would like to remind everyone that during the course of the call, we will be making a number of forward looking statements within the meaning of the Private Litigation Securities Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward looking statements. I would refer you to the section of our earnings release titled Safe Harbor Statement, the Safe Harbor slide on the aforementioned PowerPoint presentation on our website, and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the event of business. Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Murata, and our Executive Vice President and Chief Financial Officer, Lawrence Lin. We will open the call with remarks from John. Then Lawrence will provide a detailed look into our financial results and our outlook for fiscal year 2025. We will then take your questions at the end of the prepared remarks. And with that, I would like to turn the call over to our CEO, John Murata.

Thank you, Yvonne. Good morning, everyone, and thank you for joining us today. I would like to start by providing an overview of our performance in the quarter, then moving to commenting on the broader macro environment and devote the remainder of my opening comments to discussing the significant operational progress we have made this quarter while providing some tangible examples of what we have been up to and the opportunities we see. We are pleased to announce that we delivered a solid second quarter and that the positive momentum we saw starting this fiscal year continued. On a year-over-year basis, organic revenue grew 6% and adjusted EBITDA margin expanded by 400 basis points. Revenue in multiomics grew 3% on an organic basis with the strength of next-gen sequencing. In sample management solutions, revenue grew 8% on an organic basis, where we saw growth in consumables and instruments, product services, as well as sample storage. Despite the uncertainty of the broader macro picture, we remain committed to our full-year 2025 guidance of organic revenue growth, between 3% and 5%, and adjusted EBITDA margin expansion of 300 basis points. Regarding Bean Medical, the sale process is ongoing and we believe the transaction remains on track to be announced in the second half of the fiscal year 2025. Lawrence will go into more details on the financials. The last several months have presented us with an uncertain and evolving macro environment, including tariffs, funding headwinds for U.S. academic research, and rising geopolitical tensions. In response to these developments, our executive team continually evaluates the impact we anticipate to our business lines, and we meet weekly to monitor, assess, and counteract any issues. We have supplemented our understanding by reaching out to over 100 customers and asking them a set of standardized questions that we track to understand how the macro uncertainty impacts them and better understand what Azenta can do to be a great partner. Based on our assessments to date, we believe the impact from the recently announced reductions of NIH funding levels will result in approximately 1% headwind to our revenues. We've immediately put in place countermeasures such that this reduced revenue will have near zero impact on our EBITDA. We've also analyzed recently announced tariffs and have similarly identified countermeasures to negate the margin risk. Given the operational improvements we have made in the business, we are pleased that despite these impacts, we are able to reaffirm our guidance today. More broadly, while the uncertain macro environment presents challenges, we are grateful to be in a position where we can capitalize on the considerable opportunities we anticipate. Given we can serve as a lower-cost outsourcing solution, we believe we can help alleviate pressures on our customers, and we are already seeing examples of this play out. We also benefit from having $540 million of cash on our balance sheet, representing nearly $12 per share of cash, having no debt outstanding, and from generating meaningful free cash flow in the first half of the fiscal year. From this position of financial strength, we are starting to see interesting potential tuck-in acquisitions become available, a trend which we expect to continue or possibly even accelerate if business conditions remain challenging for subscale companies. We are actively evaluating potential acquisitions of high-quality assets that would naturally fold into our core business and would help us accelerate revenue growth and margin expansion. We are also investing in our digital capabilities to enhance our e-commerce platforms. This will improve our data analytics and insights, allow for more targeted marketing, and enhance the customer experience while maximizing conversion. Importantly, we will maintain an exceedingly high bar when deploying capital. We're keenly aware of the power of buybacks, especially given our undervalued stock price, and should our current valuation disconnect persist, we remain open to buying back our own stock. However, our North Star through all of this will always be long-term value creation to our shareholders. I would like to now focus on the remainder of my comments on the significant strides we have made in driving operational excellence. We're focused on reducing complexity and simplifying how we create long-term value. As I mentioned in the first quarter, we started rolling out the Azenta Business System. I'm excited to announce Will Simmons has joined us as Vice President of the Azenta Business Systems to lead the development and execution of ABS. Will brings a wealth of experience in implementing lean methodologies, enhancing problem-solving capabilities, and ensuring alignment to our strategic goals. In the second quarter, we held daily management boot camps with our operating company leadership teams to train them in the fundamentals of daily management, including how to implement and effectively use it. In addition, we held ABS awareness sessions for employees globally, offering sessions designed to introduce lean principles, daily management, and problem solving. These sessions introduced the concepts of eliminating waste, improving processes, enhancing collaboration. We are creating a lean culture and mindset, sparking curiosity and creating momentum. We will learn through practice and application. We are not striving for perfection. We're requiring progress. The business system model will harness our talented people, unify our culture, and drive our performance. Over the first six months, we have structurally realigned the organization to operate more effectively and support future growth. In the first quarter, we executed our corporate restructuring. And in this quarter, we completed both operating company restructurings. Our objectives were to right-size our G&A functions, shift centralized resources into the operating companies to provide clarity and accountability, address spans and layers, realign to strategic locations. We restructured almost 10% of our workforce and are reinvesting in R&D, sales, marketing, and product management resources to maximize our customer and market focus. Invest in staffing open sales territories, expand regional capabilities, and accelerate organic growth, and begin our new product development investment. Our global organization redesign is substantially complete, and we can now focus on growth and productivity. We remain hyper-focused on our customer-facing performance metrics, quality, and on-time delivery. While we've seen improvement, we are not where we need to be and are taking decisive action to close the gap. As an example, in February, we completed a Kaizen at one of our manufacturing facilities to reduce the quote to delivery cycle time. We've seen the initial improvement with further actions underway to reach our target. The team is now using highly effective tools to help them visualize the manufacturing process, identify issues, and quickly take corrective action. As an organization, we are being programmatic in how we spend our time. We are prioritizing on-time delivery and products and services quality, which will lead to higher customer satisfaction, gross margin improvements, indirect cost savings, and lower inventory. The impact on profitability will be immediate, while improvements in customer satisfaction will help fuel organic growth over time. The second Kaizen held in the quarter was our sample repository business focused on simplification of order-to-cash process to shorten the cycle time and improve process quality. Through the process, we identified the need for greater standardization and enhanced system capabilities to streamline our billing process. Additional workshops and Kaizens are already planned to continue this work. The third Kaizen was in GeneWiz. While it began to focus to automate payment capabilities, the value stream mapping revealed an underlying inefficiency within the order-to-cash process that is directly impacting customer experience. Addressing this now became a top priority. The flywheel of continuous improvement is underway, and we are building real momentum in each of our businesses. As you can see, there is a lot going on both inside Azenta and out in the broader environment. We are planning to host an investor day later in the calendar year to update the investment community on what we've achieved and our aspirations for the business in a longer form setting. Stay tuned for more details on this event. I'm excited about Azenta's potential and confident in our ability to deliver long-term sustainable value to our customers, our employees, and our shareholders. With that, I'm pleased to turn the call over to Lawrence. Thank you.