Azenta (AZTA) Q4 2026 earnings review
Azenta sold more than it planned, but cash generation fell
Azenta ended its year selling more than it promised, but turned less of that into cash. Underlying sales at the sample-storage and gene-reading group rose 2% in the quarter, against a plan for a small decline. Interim chief executive Martin Madaus credited "improving momentum". Free cash flow came to $27 million for the year, below what the business generated in 2025.
| Sales excluding acquisitions and currency | +2% +5% as reported |
|---|---|
| Adjusted EBITDA | $19.4M 7% below a year ago |
| Free cash flow, full year | $27M $38M a year earlier |
| Outlook for fiscal 2027 | New sales $648-660M, underlying growth 3% to 5% |
⚖️ Verdict: ⚪ Neutral
The case is unchanged: Azenta closed one risk and opened another. The buyer of B Medical Systems repaid all $35 million it owed, ending an awkward related-party exposure. One caution: the group missed its own profit and cash targets, and next year's plan asks for the improvement the last one promised but never delivered.
The question now is whether the cost actions behind the 2027 plan hold. If they do, the margin widens by more than two percentage points and cash follows; if not, another year of pledges passes. The December quarter's margin and cash flow, reported in February, give the first reading.
🐂 Bull Case
Azenta Got Its $35 Million Loan Back
Azenta sold B Medical Systems, its vaccine-refrigeration business, on July 1 and lent the buyer most of the purchase price rather than taking cash. That loan was the open item. Azenta now says it "received full repayment of the $35 million vendor loan, together with accrued interest, on September 3, 2026".
The repayment matters because the buyer is controlled by one of Azenta's own vice presidents, and it had already missed an earlier financing deadline, which pushed the sale past its original March date. Two separate events now close the file: the July completion and the September cash. Nothing is left outstanding.
What to watch: the discontinued-operations line in the December-quarter report, due in February. B Medical cost shareholders $0.20 per share of losses across fiscal 2026, so a clean zero there would confirm that the exit is finished and that the sample business stands on its own.
Azenta Plans a Bigger Profit Step in 2027
Azenta judges itself on adjusted EBITDA margin: operating profit before interest, tax and depreciation, measured as a share of sales and stripped of one-off items. That margin finished fiscal 2026 at 9.4%, down from 11.2% the year before, so the business starts the new year from a low base.
For fiscal 2027 the sample-storage group plans to widen it by 2.0 to 2.5 percentage points. Azenta says the plan already absorbs "the expected dilution of 100 basis points associated with the Elegen agreements and SynPlexity acquisition", its two October deals. Take that out and the underlying improvement asked of the existing business is nearer 3 points.
- Fiscal 2026 margin delivered: 9.4%, down 1.8 points
- Fiscal 2027 planned expansion: 2.0 to 2.5 points
- Implied profit before one-offs: about $76 million, by our math, against $58.3 million
- Implied sales behind it: $654 million, the middle of the $648-660 million range
Madaus said the group "took several actions to streamline our cost structure" during the year, and restructuring charges of $2.1 million in the quarter show some of that work is paid for. But promises of this size have failed here before: fiscal 2026 opened with a plan for roughly 3 points of expansion and ended 1.8 points lower.
What to watch: the December-quarter margin, reported in February. Azenta plans 1.0 to 1.5 points of improvement in that quarter, which by our math leaves about 2.6 points to be found across the rest of the year. A weak start makes the annual figure arithmetically hard.
Services Keep Growing While Products Fall
Azenta sells two different things. Laboratories buy equipment and consumables once; they pay repeatedly for services such as storing frozen samples and reading DNA. The repeat half is the one that keeps growing, and it now provides nearly three-quarters of what the group sells.
Service revenue reached $122 million in the quarter, almost 10% more than a year ago. Product sales went the other way, down 6%. The same split runs through the full year, and it has held in each of the past four quarters.
- Services, fourth quarter: $122 million, up 10% from a year ago
- Products, fourth quarter: $45 million, down 6%
- Services, full year: $456 million, up 9%
- Products, full year: $165 million, down 5%
This matters because repeat work is easier to plan for than equipment orders, and equipment is where Azenta keeps running into trouble. The release again blames "quality remediation and rework activities in Automated Stores", the robotic freezers that store samples for customers, for holding its margin down.
What to watch: product revenue in the December quarter, published in February. Another decline would show that the repair work on those robotic freezers has outlasted management's own timetable, and that the services side alone is carrying the group.
🐻 Bear Case
Cash Generation Fell Instead of Rising
Three months ago Azenta told investors that free cash flow would improve by 10% to 15% across fiscal 2026. Free cash flow is the money left after the business pays for the new laboratories, freezers and equipment it installs. It did not improve. It dropped.
The year produced $27 million, against $38 million twelve months earlier, a decline of 28%. The fourth quarter brought in $12 million. By our math the plan that management held in July needed somewhere between $26 million and $28 million from that quarter alone, so the shortfall sits almost entirely in the final three months.
That sits awkwardly beside Madaus's description of a year closing with "improving momentum". Sales did improve in the second half, but the cash did not follow, because inventories rose, the group spent $30 million on plant and equipment, and profit before one-off items shrank by $8 million over the year.
What to watch: the cash flow statement that arrives with the December quarter in February. Azenta now plans a 25% improvement for fiscal 2027, roughly $34 million by our math, and a first quarter that again consumes working capital would put that target out of reach early.
Profit Per Share Rose on a Pay Reversal
Azenta reported adjusted profit of $0.28 per share for the quarter, a third more than a year ago. Most of that gain came from an accounting entry rather than from trade. The group reversed share-based pay it had already charged, a credit it attributes to "a reversal of stock-based compensation expense related to our former Chief Executive Officer's unvested awards".
The company publishes a second figure that removes share-based pay altogether. On that measure the quarter earned $0.24 per share, against $0.28 twelve months ago. Adjusted EBITDA, which also excludes the credit, came to $19.4 million, some 7% below last year's fourth quarter.
- Adjusted profit per share: $0.28, up 33%
- The same figure excluding share-based pay: $0.24, down 14%
- Adjusted EBITDA: $19.4 million, margin 11.6% against 13.0%
- Selling and administrative costs: 1.7 percentage points lighter as a share of sales
- Research spending: 1.1 percentage points heavier, and restructuring charges of $2.1 million against $0.4 million
So the cost picture is genuinely mixed rather than simply better. Sales and overhead costs fell as a share of revenue, but research and restructuring absorbed the saving, and the quarter's reported improvement in profit per share rests on a credit that cannot repeat.
What to watch: adjusted profit per share for the December quarter, where no pay reversal is available. Last year that figure was $0.09. A reading near it would show that the fourth quarter's headline flattered a business whose profit was still shrinking.
Multiomics Sales Went Backwards Again
Multiomics is Azenta's gene-reading arm: it sequences DNA and builds synthetic genes to order for drug companies and universities. Madaus wants "to turn Multiomics into a growth engine for Azenta", and he said so in the same release that showed the unit standing still.
Revenue came to $73 million, exactly where it stood a year ago, and 1% lower once currency movements are removed. The release blames "lower Sanger Sequencing and Next Generation Sequencing revenue, partially offset by growth in Gene Synthesis". Sanger, the older reading method, has been shrinking since 2024 and still is.
One thing did improve: the unit's gross margin reached 45.1%, up 1.4 percentage points, so the cost work is showing. But the fiscal 2027 plan asks Multiomics for low-single-digit growth only, which is roughly what it just delivered. This is also the unit that absorbed $112 million of the $149 million goodwill charge taken in March.
What to watch: Multiomics underlying growth in the December quarter against an easy comparison, since the unit was flat a year earlier. A reading at or below zero would mean the October gene-synthesis deals are filling a hole rather than adding to a rising base.
Risks This Quarter Didn't Answer
Four standing worries got no new figures in this release, and the annual report has not yet been filed. Each needs a number Azenta chose not to print, so a reader weighing the turnaround is working from the same evidence as three months ago.
- Automated Stores: the release repeats "quality remediation and rework activities in Automated Stores" but gives no order book and no date for customer acceptance.
- Sanger sequencing: named again as a drag on Multiomics with no revenue attached, so nobody outside the firm can size the decline.
- Multiomics profitability: the release gives adjusted operating profit of $11.5 million for both segments together, not separately, so the unit's loss is not readable.
- Laboratory consolidation: management said in September that specific site actions would follow; this release names none and books $2.1 million of restructuring charges instead.
What to watch: the annual report on Form 10-K, due within weeks. It carries segment operating profit, the inventory breakdown and the restructuring note, and it will show whether the work-in-progress built up against those robotic freezer projects has finally cleared.
👓 Other Themes
Azenta Has an Interim Chief Executive
Martin Madaus signed this release as interim president and chief executive. John Marotta, who had run the turnaround since 2024, has gone, and Azenta booked a credit for its "former Chief Executive Officer's unvested awards". The release gives no reason for the change and no timetable for a permanent appointment.
Two Gene Synthesis Deals Close in October
On October 28 Azenta licensed gene synthesis technology from Elegen for fixed payments of $23 million, and bought SynPlexity, "a synthetic biology company", for $15 million in cash. Spending under the Elegen agreements could reach $71 million. Azenta calls fiscal 2027 "primarily a year of integration, scale-up, and commercialization of these capabilities", so sales arrive later.
💲 Other KPIs
Customers are paying earlier. Deferred revenue, the cash collected for work not yet delivered, ended the year 27% above last September while sales rose 5%. It now equals 24% of a quarter's revenue, against 20% a year ago, and Azenta added $8.5 million to the balance this year after $1.1 million last year.
The count sits 5.5% below last year's fourth quarter. Azenta bought 4.4 million shares for $118.2 million during fiscal 2026, at an average of roughly $27 each, and $131.8 million of the authorisation runs to the end of 2028. A smaller count lifts per-share figures even when profit stands still.
The balance fell from $546 million a year ago, as buybacks took out more than the business brought in, and the October deals will draw on it again. Azenta carries no debt, and interest on this pile earned $17.8 million during the year, more than the group made from operating its businesses.
🔮 Guidance
New. Azenta expects $648 million to $660 million of sales, about 5% more than fiscal 2026 by our math, the same reported pace as this year. The top of the range depends on the two October deals contributing, and the company treats next year as integration work, so most of the growth has to come from what it already owns.
New. Growth of 3% to 5% excluding deals and currency would be the strongest year since 2024, against 2% delivered. The record argues for caution. Fiscal 2026 opened with that identical target, Azenta cut it in April, lifted it part-way in July, and the year finished below the original plan.
New. The December quarter is planned at 3% to 4%, against a 1% decline a year earlier, so the comparison is a gentle one. By our math the full-year plan then leaves about 4% for the remaining nine months, which means Azenta expects the pace to hold rather than fade as the comparisons get harder.
New. The sample-storage unit, which runs freezer rooms and sells the tubes and instruments that go with them, is planned to grow about 5%, after 2% this year. It is the larger and the more profitable of the two divisions, so it carries most of the improvement the group plan needs.
New. The gene-reading unit is planned to grow roughly 2%, after 1% this year. Underlying sales there rose in only one of the past four quarters, so the plan asks for little. The two October purchases sit mainly in this division and are not expected to bring revenue with them next year.
New. Azenta plans to widen its profit margin before one-offs by 2.0 to 2.5 percentage points, after losing 1.8 points this year. The plan already carries a full point of dilution from the October deals, so the underlying ask is nearer 3 points. By our math the middle of the range equals about $76 million of profit on that measure.
New. The December quarter adds 1.0 to 1.5 points, reaching about 9.8% by our math. That is below the 11.6% just delivered, because the first quarter is seasonally the thinnest. It also leaves roughly 2.6 points to be found over the following nine months if the annual plan is to be met.
New. Azenta expects the cash left after capital spending to improve about 25%, roughly $34 million by our math. The same line was planned to rise 10% to 15% this year and fell 28% instead. Reaching the new figure needs inventories and receivables to release cash rather than swallow it.
❓ Key Questions
How big is Sanger sequencing now?
Azenta names the older DNA-reading method as a drag in report after report but never sizes it. Without that figure nobody outside the company can judge how much longer it holds Multiomics back.
Which laboratories close, and when?
Management said in September that specific site actions in the gene-reading division would follow. This release names none, while the division's cost base is the main reason its profits lag the rest of the group.
What swallowed the cash this year?
Cash after capital spending fell 28% against a plan to rise. Investors need the working-capital detail quarter by quarter before they can judge the 25% improvement promised for fiscal 2027.
Have customers accepted the reworked sample stores?
Repair work on the robotic freezer systems has held margins down all year. Formal acceptance would end the charges and free the inventory built against those projects.
Who will lead Azenta permanently?
An interim chief executive signed this release, with no explanation of the change and no timetable for a successor. The fiscal 2027 plan depends on whoever has to execute it.