BURLINGTON, Mass. — Azenta reported third-quarter fiscal 2026 revenue from continuing operations of $161 million, up 12 percent from $144 million a year earlier, as growth in its Sample Management Solutions and Multiomics businesses exceeded the company’s expectations.
Organic revenue increased 9 percent after excluding the effects of foreign exchange and the acquisition of UK Biocentre Limited.
“Despite an uneven and challenging market backdrop, our third quarter results exceeded our expectations, with continued strength in our recurring revenue businesses, and a modest improvement in Multiomics in North America,” President and CEO John Marotta said.
“While these results represent an encouraging step forward, our turnaround continues, and we remain focused on executing against our strategic priorities,” Marotta added.
Sample Management Solutions revenue rose 14 percent to $88 million. Organic revenue increased 9 percent, driven mainly by higher sales in Sample Repository Solutions and Consumables and Instruments, partly offset by lower Automated Stores revenue.
Multiomics revenue increased 10 percent to $73 million. Organic revenue rose 8 percent, reflecting growth in next-generation sequencing and gene synthesis, partially offset by lower Sanger sequencing revenue.
Azenta reported an operating loss from continuing operations of $4.2 million, representing a negative operating margin of 2.6 percent. That compared with a negative margin of 1.3 percent a year earlier.
Gross margin declined to 44.9 percent from 46.2 percent, primarily because of lower sales volumes in parts of the portfolio and costs associated with quality remediation and rework in the Automated Stores business.
Operating expenses increased 12 percent to $77 million, reflecting higher research and development and selling, general and administrative expenses.
The company reported a loss from continuing operations of 3 cents per diluted share, compared with a loss of 1 cent per share a year earlier.
Including discontinued operations, Azenta earned 5 cents per diluted share, compared with a loss of $1.05 per share in the prior-year quarter.
Adjusted operating income was $4.7 million, with an adjusted operating margin of 2.9 percent, down from 4.7 percent a year earlier.
Adjusted earnings were 16 cents per diluted share, compared with 17 cents a year ago. Adjusted EBITDA increased 6 percent to $18.5 million, while adjusted EBITDA margin declined to 11.4 percent from 12.1 percent.
Azenta ended the quarter with $529 million in cash, cash equivalents, restricted cash and marketable securities. Operating cash flow was $1 million, while free cash flow was negative $5 million after $7 million in capital expenditures.
The company repurchased 2.3 million shares for $50 million during the quarter under a $250 million stock-buyback program authorized through the end of 2028.
Azenta completed the sale of its B Medical Systems business on July 1. Results from that business were classified as discontinued operations.
For the fourth quarter, the company expects organic revenue from continuing operations to decline by a low-single-digit percentage from a year earlier. Adjusted EBITDA is projected to range from $20 million to $23 million.
For fiscal 2026, Azenta now expects revenue from continuing operations of between $613 million and $618 million, narrowing its previous forecast of $603 million to $621 million.
Organic revenue is expected to range from flat to growth of 1 percent, compared with the previous forecast of a decline of 2 percent to growth of 1 percent.
The company expects organic revenue in Sample Management Solutions to grow by a low-single-digit percentage. Multiomics organic revenue is now projected to range from a decline of 1 percent to flat, an improvement from the previous forecast for a mid-single-digit decline.
Adjusted EBITDA is expected to range from $59 million to $62 million. Azenta continues to expect full-year free cash flow to improve between 10 percent and 15 percent from fiscal 2025.
