Azenta Reports Moderate Revenue Growth and Profitability Improvements

Azenta, Inc. (Nasdaq: AZTA) reported financial results for the fourth quarter and fiscal year ended September 30, 2026. The company saw a modest improvement in its financial performance, with revenue growing 5% year over year and 2% on an organic basis. For the full fiscal year 2026, Azenta reported a 5% year-over-year revenue growth, also 2% on an organic basis.

Revenue for the fourth quarter of fiscal 2026 was $167 million, up 5% year over year. Organic revenue, which excludes a nominal impact from foreign exchange and a 3-percentage point impact from the acquisition of UK Biocentre Limited, was up 2% year over year. Sample Management Solutions revenue was $94 million, up 9% year over year, with organic revenue, excluding the impact from foreign exchange and the contribution from the acquisition, increasing by 4%. Multiomics revenue was $73 million, flat year over year, with organic revenue, excluding the impact from foreign exchange, down 1%.

Operating income for the quarter was $2.5 million, with an operating margin of 1.5%, an increase of 30 basis points year over year. Gross margin was 46.0%, an increase of 60 basis points year over year, driven by improved operating leverage, favorable mix, and the benefits of ongoing cost initiatives. Operating expenses in the quarter were $74 million, up 6% year over year, primarily due to higher research and development expenses, higher selling, general and administrative expenses, and higher restructuring charges, partially offset by a reversal of stock-based compensation expense related to the former CEO's unvested awards.

For the full fiscal year 2026, revenue was $622 million, up 5% year over year. Organic revenue, excluding a 1-percentage point impact from foreign exchange and a 2-percentage point impact from the acquisition of UK Biocentre Limited, was up 2% year over year. Sample Management Solutions revenue was $344 million, up 6% year over year, with organic revenue, excluding the impact from foreign exchange and the contribution from the acquisition, increasing by 2%. Multiomics revenue was $277 million, up 3% year over year, with organic revenue, excluding the impact from foreign exchange, up 1%.

Operating loss for the fiscal year was $174.7 million, with an operating margin of (28.1%), compared to (4.5%) in fiscal 2025. Gross margin was 44.2%, a decrease of 130 basis points year over year, primarily due to unfavorable fixed-cost absorption associated with lower sales volumes in certain areas of the portfolio, as well as costs related to quality remediation and rework activities in Automated Stores, and an increase in excess and obsolete inventory reserves. Operating expenses were $450 million, an increase of 51% year over year, primarily driven by a non-cash goodwill impairment charge of $149 million. The increase also reflected higher research and development expenses, partially offset by lower selling, general and administrative expenses, including a reversal of stock-based compensation expense related to the former CEO's unvested awards.

Diluted EPS from continuing operations was ($3.50) compared to $0.53 in fiscal year 2025. Diluted EPS from discontinued operations was ($0.20), compared to ($1.75) a year ago. Total diluted EPS was ($3.70), compared to ($1.22) a year ago. Adjusted operating income was $11.5 million, with an adjusted operating margin of 6.9%, an increase of 120 basis points year over year. Adjusted gross margin was 47.2%, an increase of 50 basis points year over year, driven by improved operating leverage, favorable mix, and the benefits of ongoing cost initiatives. Adjusted operating expenses in the quarter were $67 million, up 3% year over year, mainly due to higher research and development expenses, partially offset by the reversal of stock-based compensation expense related to the former CEO's unvested awards. Adjusted EBITDA was $19.4 million, and the adjusted EBITDA margin was 11.6%, a decrease of 140 basis points year over year. Adjusted diluted EPS was $0.28, compared to $0.21 one year ago.

Azenta expects fiscal 2027 revenue to range from $648 to $660 million, with organic revenue growth expected to range between 3% to 5% year over year. The company also expects the adjusted EBITDA margin to expand approximately 200 to 250 basis points year over year.