Azenta (NASDAQ:AZTA) reported third-quarter fiscal 2026 revenue that exceeded its outlook, as growth in recurring-revenue businesses and improved Multiomics performance helped offset continued unevenness in capital equipment markets.
Total revenue was $161 million, up 12% on a reported basis and 9% organically from the prior-year period. Both operating segments posted organic growth: Sample Management Solutions revenue rose 9% organically, while Multiomics increased 8% organically.
Recurring businesses support growth
President and CEO John Marotta said the company’s biorepository and consumables and instruments, or C&I, businesses were important contributors to the quarter’s performance. More than half of Azenta’s revenue is now recurring in nature, he said.
Sample Management Solutions generated $88 million of quarterly revenue, rising 14% as reported and 9% organically. Growth in biorepositories and C&I was partly offset by expected weakness in Automated Stores, where bookings have been affected by macro-driven budget constraints.
Marotta said Azenta completed its first customer deployment of an AI-enabled biorepository inventory solution featuring advanced imaging and data-management capabilities. The initial deployment improved inventory-capture productivity compared with the prior manual process, he said. Over time, the company expects the solution to double productivity and support more scalable repository workflows.
Automated Stores remained below prior-year levels, though Azenta added new opportunities to its backlog during the quarter. The company completed remediation work on three remaining systems previously affected by quality issues, with those systems now undergoing final testing and customer validation.
Chief Financial Officer Lawrence Lin said the company incurred about $1 million of quality-related remediation costs in the quarter and continues to expect a total fiscal 2026 impact of $5 million to $6 million.
Multiomics improves, but North America remains mixed
Multiomics revenue was $73 million, up 10% as reported and 8% organically. The segment benefited from continued strength in Europe and China, along with improved activity in North America. Multiomics gross margin increased about 550 basis points year over year to 46.5%, helped by higher Next Generation Sequencing and Gene Synthesis volumes, operating leverage and cost actions.
Marotta said North American NGS activity benefited partly from catch-up work on projects delayed earlier in the fiscal year, including certain National Institutes of Health-funded projects. He also cited commercial investments, the appointment of a new North American regional leader, and roughly $3 million in clinical-services customer work that arrived in the third quarter rather than the fourth quarter.
Management cautioned that the improvement does not yet demonstrate a broad-based recovery. Research spending remains below prior-year levels in many areas, and the Sanger Sequencing business continues to face longer-term market and technology transitions.
In contrast, management described Europe and China as areas of continued momentum. Marotta said Multiomics growth was approximately 26% in Europe and 23% in China, supported by turnaround time and product quality in the company’s oligonucleotide-related offerings.
Cost actions and modular Stores strategy
Azenta is continuing structural and commercial actions intended to improve profitability and scalability, including footprint rationalization, organizational changes and a greater focus on high-value workflows in Multiomics.
For its Automated Stores business, the company is moving toward modular, configurable systems rather than highly customized installations. Marotta said customers primarily prioritize storage density, throughput, footprint, labware compatibility and temperature requirements. Greater standardization is intended to reduce engineering complexity, improve quality and lower execution risk.
The company is also evaluating cost-structure changes in Automated Stores, cryogenic systems and Sanger Sequencing. Lin said that, using the low end of the company’s fiscal-year adjusted EBITDA outlook as an example, approximately $5 million of quality costs and about $5 million of strategic investments would not recur, alongside certain one-time inventory, mix and other items. He said U.K. Biocentre, which is expected to dilute fiscal 2026 adjusted EBITDA margin by about 30 basis points, is expected to become accretive as it scales next year.
Guidance raised following third-quarter performance
Following the stronger-than-expected quarter, Azenta raised its fiscal 2026 revenue outlook. The company now expects reported revenue of $613 million to $618 million, including the contribution from U.K. Biocentre. It expects organic revenue to be approximately flat to up 1% year over year, improving from its earlier outlook of a 2% decline to 1% growth.
- Sample Management Solutions is still expected to post low-double-digit growth for the full year.
- Multiomics is now expected to range from a 1% decline to flat, compared with prior guidance for a mid-single-digit decline.
- Adjusted EBITDA is expected to be $59 million to $62 million for fiscal 2026.
- Fourth-quarter adjusted EBITDA is expected to be $20 million to $23 million.
- Fourth-quarter organic revenue is expected to decline by low single digits, reflecting a difficult comparison with the prior year, particularly in Multiomics.
Azenta completed the sale of B Medical Systems on July 1 for approximately $63 million, consisting of $28 million in cash proceeds and a $35 million secured vendor loan. During the quarter, the company also repurchased approximately 2.3 million shares for $50 million. About $200 million remains authorized under its repurchase program through December 2028.
Marotta said Azenta will provide its fiscal 2027 outlook after reporting fiscal 2026 year-end results in November. He said the company remains focused on scaling biorepositories, advancing Gene Synthesis and Multiomics workflows, and driving innovation in automated solutions.
About Azenta (NASDAQ:AZTA)
Azenta, Inc (NASDAQ: AZTA) is a life sciences technology company specializing in sample management, cryogenic storage and genomic services for research and clinical applications. Formerly the Life Sciences division of Brooks Automation, Azenta provides integrated solutions that enable customers to store, track and analyze biological samples with high levels of automation, data integrity and efficiency. Its offerings span automated storage systems, biorepository management software and end?to?end sample tracking workflows.
In addition to hardware and informatics platforms for sample storage, Azenta’s Genomics business delivers next?generation sequencing (NGS), DNA synthesis, and molecular biology services.
