Azenta (AZTA) 8 Feb 232023 Q1 Earnings call transcript

Greetings, and welcome to the Azenta Q1 2023 Financial Results. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, February 08, 2023.

I will now turn the conference over to Sara Silverman, Head of Investor Relations.

Thank you, operator, and good afternoon to everyone on the line today. We would like to welcome you to our earnings conference call for the first quarter of fiscal year 2023.

in press today issued our be and website at earnings of the Investor used quarter supplementary located market the remarks the is investors.azenta.com, during first the release that today. after was close Relations PowerPoint prepared Our slides to will addition available on

Securities be There everyone meaning of number forward-looking identified many within the I remind the statements. may financial of a that would cause like XXXX. the such in events results making course the Act Private factors that or Litigation of forward-looking during those are to to call, of we will actual from differ statements other

refer our differ XX-K statements various update “Safe on presentation SEC, on that occur financial aforementioned and XX-Q. would reports future presented earnings PowerPoint to our statements filings our including to our should our on quarterly annual of release obligation Harbor” make and these website today. with the We I on from forward-looking titled reports the the events our no the safe or you section Statement, Form Form harbor slide data

in We accordance of more be with additional understanding financial themselves. the the not of reconciliation to may a non-GAAP and of of complete measures, they Azenta measures and results are an the results GAAP performance, exclusion but viewing considered aspects measures even of refer way GAAP and used believe measures to upon with when GAAP measures, business. addition presented relied operations number provide which in the the should the Non-GAAP We with in an GAAP. financial non-GAAP to conjunction provide our of

based figures insights on regional estimates impacts. These to on and/or indicating customer demand such we of applications constraints addition, are may refer ability or deliver. or types product certain to our demand In to COVID-based estimated

and and Lindon our our Officer, Chief me call Chief is Robertson. President the On Officer, Financial with Executive today Steve Schwartz;

on outlook and highlights XXXX. Then of a remarks fiscal look results of from second will open the provide detailed call the Steve more our Lindon quarter. for the financial will We with quarter first our into

We prepared remarks. will of then the end your at take the questions

With the call CEO, turn Schwartz. our Steve that, like I over would to to

afternoon, we're to for thank Sarah. you past headquarters you we've from new everyone, speaking we're share the and Burlington, location Massachusetts, us. made Today, with the Good progress our joining you, over Thank pleased to X months. you and in

as expectations consistent Organic adjustments COVID, QX XX% Our were planned. are line and we hold XXXX solid as to of excluding results with the target with signal revenue our growth, that a and taking result business a X%, year-over-year. growth made in the our delivered was we've

of of growth on my be excluding rates, organic COVID. Today, comments the growth all will impacts

at business, and another grew as stability some business of contained in which year-over-year the reflecting C&I revenue saw up automated growth our was business, by a double-digit products XX%, quarter-over-quarter. our promising Looking in which no in strong segment, slightly business performance we COVID stores quarter as well our

core our and customers see we X per more Today, value and our continues offering. particular side, in in samples business the services we'd quarter. more samples the performed than got into business ago, as GENEWIZ storage double-digit genomics X up On touch Sample the and more increase SRS. million was both million first well. Solutions years A highlight handle we a occasionally, of to When Repository X month, the to growth in SRS number

capability that's individual and for our management the differentiated heavier a continue we able customers' future high needs. necessary customers sample as is aspects This valued satisfy to trial workflow. highly in around of especially more transactional critical And steps offering needs, we're sample their the automate, volume to tracking the by clinical

approach go-to-market the positive recognize of our our that the we're plans and is began genomics, In right execution to the from retooling strategy. confident we of continued impact the

was Sanger again, and Specifically, record Generation steady. Next delivered we for Sequencing quarter a once Sequencing

early Perhaps indicator China, business is most what double-digit in issues that beginning we now seeing in behind lost growth momentum importantly, our as positive in which the we're market we're saw terms a can that some our signs in to of global are we Gene do Synthesis recover logistics us.

this done we're staffing, sales has our the plans providing as about focus actions more victory remedy, and is that leadership execution, To the here clear, much be in declaring investments proper we're team. the in confident not there's but to and are which of entire all be

performance cell therapy spot was bright the quarter serving One customers. and gene in our particularly

CGT few year-over-year past we XX% growth, up to to observed XX% offerings. bringing sales of portfolio steady therapy the across years, was or But This XX% Over including gene quarter-to-quarter. XX% and recorded of cell B Barkey not nearly from we've our QX, XX% Medical revenue, growth approximately Systems. in

automated Contributions instruments and to products, NGS the line drivers From standpoint, NGS, key mentioned, growth U.S. amidst geographic C&I, varying this growth is even came cryosystems COVID noise. a services particularly and grower. globe. from and across the SRS. from steady especially a I remains GENEWIZ and making The at highlight and SRS Europe progress, for stores, drove genomics a rates from China top AAV remains

deliver good for our this to but the that in continue revenue still forecasting won to we us of which difficult we're year. said, quarter for and is order million million business, get we'd and predict business landed that $XX B initially the would quarterly you We That million street. saw we'll below to a $XX the The secured large the anticipated. be we commitments anticipated. news shared that revenue Medical is had refine had record one with we'll out, pushed revenue $XXX confident the

we in reputation. ceded emerging expansive encouraged our human footprint initiatives underway, and by this head remain that's health Medical's growing long-term key outstanding addition, are and B In fast start markets opportunity by unique a

technologies the pharma access and And Medical's hard-to-reach we though already B patients in how to with days, beachhead leverage early it's still in on discussions we're in geographies. companies could

and a quarter position business is macroeconomic of solid exhibits drive All challenging Even to in is in, the proofs strong in was QX significant momentum. ours more to a it's forward. we of positive to SRS proving stable signs line and capture. environment, are and opportunity growth, our to initiatives believe that base our be business and accelerate top right the our we'll that products continue genomics especially these our ones, in is

Specifically, emphasis coverage technologies we're accelerating for additional specific also our on sales talent accounts genomics investments in of with but synthesis.

coverage known development slowing outperformance. future key of continue which where services, additional recruit regional to to products investments new our not and sales are in have our and gaps, We we're we for innovative

second the necessary for We're low our will but these they're initiatives progress long-term objectives impact the in optimistic toward top line, that these It will success. take growth time for actions some of continued half. the double-digit to support

out these expected In on annualized fund reduction take a we're total, through measures we'll enhance to of value-creating We'll internal cost. $XX net operations come actions and million that of basis investments from efficiency remove XXX of about activities. realignment announcing The that today focus cost are about our cost. target points the impact of

are of these and and the We automate ensure to right believe importantly, potential. sales coordination will our recently business and tighter internal result streamline near-term take and long-term units both Most to advantage end will activities. steps enterprise between be implemented the solutions next

a to automation XD The life leading we business barcode perfectly laboratory provider acquisition our tuck-in finally, consumables we our offerings applications. and Ziath, and grow instruments the Ziath sciences workflows. for of continue And fits of high of to business. for readers opportunities throughput identify a Last with completed enhances portfolio week, portfolio designed

with of transactions the types This and great opportunity is great reach a the it. put have we we commercial a of company example take Azenta's a behind do portfolio where product can to

In address closing, I few key a want to points.

traction gives and a pole best-in-class chance sample unique position we're to to properly addressing secure measurement, portfolio us regain give that issues and will confidence all management First, our that and have outsized we us allow our growth believe services we in results that a QX us sample things profile. of products the and

and match our adjusting we're our operations current portfolio profile. Second, to

and bottom see progress this taken the results to key support continue in we're while with the top measure strategic investments results and our our to actions of in prioritizing the second year. Specifically, sales of protecting in We'll turn to and objective sales to QX line. drive the half the monitor corner initiatives line all

And investing for growth. we're

We with have $X all, billion already portfolio. powerful are very strong cash at our to more additions sheet than about balance In opportunistic a our this in positive where available we're we for moment. and momentum

customers We year, as and We have we progress value we to to we the in and strong and on forward to interest work your that leadership. look thank market continuing to update customers our shareholders. you our the conviction for support deliver throughout and high you our to bring value

call the to over turn now Lindon. I'll

to the back Thank now on you, website. deck I you our refer Steve. slide available

X Turning highlights. some for to Slide

year-over-year and $XXX estimated quarter million, XX% when is X% up sequentially. an year-over-year First This was organic you up COVID basis impacts. revenue exclude XX% up on

In excluding growth we organic in delivered and by C&I. products, XX% XX% XX% growth in driven systems COVID, automated growth,

In XX%. Next up services, Sequencing business XX%. business, And by Sample genomics Solutions organic COVID, Generation within growth, up X%, excluding Repository was led our was our our business

record range expectations. came October a for right record of the And On B base B I closed our quarter. with quarter team a When had business a a our revenue the while which B the achieved revenue of on quarter, Medical, short it sequential basis, the level was in bit X. business was our consider driven million by significant expansion $XX QX Medical in The their results, the our addition Medical of in of expectations.

can dependencies. in fluctuate funding As we to revenue quarter business have described due this project previously, each

year-over-year. of EPS approximately EBITDA EPS GAAP Non-GAAP flat and was loss margin $X.XX, X%. adjusted was a $X.XX

decisive position remarks, discussed Steve long-term we're his best in several the to company for actions taking success. As

we making recently others. costs inflationary areas in growth actions continued and certain removing targeted fine-tune of margin light structure, In while to business pressures, investments our initiated in

XXXX. to expansion cost X to second expect of reduction to contribute approximately the half of fiscal for points We net margin

quarter You see of these third the should actions to impact in financials. our expect

Moving to capital an update on deployment.

As the plan last shareholders the share XX. $XXX to In the we we June within to this announced to accelerated return billion program, approximately $X third year. quarter of fiscal by we a we expect complete into entered ending which call, repurchase still total, million during calendar end

Beyond in share of over will After focused expected $XXX the in in M&A. cash for resources shareholders, sheet return deployment strategic million repurchases, to have form capital investment. billion still remain investment available we our balance the $X on

In all, deliver near well-established the taking position to a we we into results a and markets, and the in we should believe the have term actions are portfolio, us high-growth over strong future.

Let's to X quarter address to the Slide on results. first move

of a revenue. XX% up sequentially. was show XX% To revenue provided million right, to the the $XXX mentioned, and table reported we on the As year-over-year have up color

X%. headwinds points $XX removed we organic of X revenue, of foreign from an reported acquisitions, of From provides million exchange and which decline revenue

the an from organic remove excluding we when of the impacts of there, XXXX was code-related estimated when this quarter. impact and fiscal was growth COVID, each of QX million year-over-year $XX in revenue From in was On zero period, X%. which estimated basis, approximately a

Looking of share repurchase $X.XX a loss at $X.XX include GAAP program as on the total well associated earnings as P&L adjustments. to in XXXX. the of the quarter, of the left costs side, impact loss amortization with accounting fiscal compared increased M&A, Compared per of share quarter prior a expenses accelerated was purchase to the fourth our

Medical. the the revenue higher P&L XX.X% basis addition $XX by XXX increase primarily Now quarter-to-quarter side driven B The the right up non-GAAP at and to the on carried margins, million of let's look the page. points services of gross segment of

Operating which expense approximately accruals annual from due coming X% reset corporate increased to translates of from million and margin. stock of B EBITDA $XX the the compensation coming expenses, the quarter-over-quarter $X various compensation $XX Medical, and remainder into million and commercial with million variable adjusted increase

to please Life a review Slide turn results. Now Products over X our of for segment Sciences

reported can operations you the segment. the we see products the that today, Medical be have as part B in determined of As results will

and With $XX million segment totaled of and $X that, respectively. contributed acquisitions B Products the revenue The million, quarter. Barkey for Medical $XX million

substantially XX% was year-over-year and basis, B reported revenue a driven the Medical acquisitions. up quarter Barkey by on First

year-over-year. have large-automated and quarter XX% bookings organic was translate have systems, Products during COVID, the supported revenue. noted recent which in bookings, which was we excluding up those by grew year-over-year into segment robust was This XX% to begun by supported quarters strong, growth, as

are demand from resulting and show a business in COVID, to and In in customers, new we consumables of X% revenue. by increase most instruments, quarter-over-quarter some our improvement existing impacted starting

business Organic was a growth, excluding on this COVID, for basis year-over-year XX%.

We indication compares this revenue, of is have the growth growth in QX tough but quarter one ex-COVID of a business. more COVID-related from capability the strong in

quarter-over-quarter. points gross Products' basis XXX margin XX.X%, up first quarter was

income EBITDA decline Operating margin of $X increased flat gross was as Excluding were compared million for gross year the B Adjusted year. lower from approximately expense. income year revenue softness was quarter over prior margin is due Medical, to on This roughly margins QX. as to million the SG&A X%. well $X

turn a decrease segment to results. the for our organic segment $XX million, first generated of year-over-year. for The a please Next, quarter, The review Services growth of excluding X quarter of Slide Services X%, revenue was by Sample X% Sequencing, XX% Solutions. reflecting and performance basis. ex-COVID organic led COVID, genomics an Repository grew was XX% in services on Next year-over-year genomic in growth which growth X% The Generation

time are lower, convenience. growth of in offer first In our well. Sanger, we and our speed increasingly be that notable tends saw industry value which recognizing customizable We that saw results the larger this and some accounts, to in as seasonally quarter leading solutions

outbreak. well quarter Synthesis, we as logistics we impact discussed believe will shipped initiatives out from business COVID over for to we gain Synthesis, China largely months. as modest been have resolved, continued in challenges traction coming Gene the softness the Gene the have last continue of sales China to and place The in see In we that

of XX% and storage excluding which recurring by COVID, to continues year-over-year expand once driven revenue, our our Sample organic was XX% base. Repository Solutions grew revenue growth, again

in customers storage our value large capabilities and quarter, management. in similar our have win to of we from biotech This our the This we business mentioned in addition benefited to others bring the around sample demonstrates past, another core customer.

point drop margin, well as XXX sequencing by operating pressures in to Services EBITDA the higher loss basis volumes business as expenses. well still a delivered of X%. driven margin next-generation points year-over-year basis margin million quarter-over-quarter, Gene as a inflationary XX.X% with lower as $X operating was reflecting Synthesis. XXX gross Adjusted QX expansion lower due gross was

review sheet. over Slide X to turn the to Let's balance

no we outstanding. had restricted December of and debt marketable of cash with XX, billion As cash, $X.X securities

million B debt we noted Medical which ahead paid of previously, B fiscal As in completed $XX for was close. million $XXX the Medical acquisition we XXXX the down of in cash, that

November, to enter to additional to In calendar a to million We year accelerated committed into late remain of approximately $XXX total cash an $X we an million used shareholders of for repurchase billion cash program. shareholders. $XXX this returning share in

significantly B cost that capital continue for organically Medical. our this, a balance we lens weighted exceed to through clear of and sheet addition X The both with within M&A Beyond the to invest with growth, deals average returns toward of years. due changes

and the You capability plant in this areas payables. inventory, can of including see and B goodwill intangibles, as and manufacturing as in but also property, rotomolding [ph] and assets addition well equipment Medical's their receivables with

total turn in organic to our million guidance. to approximately This a approximately We midpoint midpoint. That and of $XXX is an approximately range exchange be for final includes a expect XX% to from is X% million million to Barkey, of revenue year-over-year. foreign $XX to slide Systems approximately Revenue to the excluding with be the $XX we and growth of supporting estimate million, million. Medical Let's the growth COVID approximately the B for $XX contribute X expected headwind $X rate, at a points the to of $XXX impact acquisitions be of million.

show a revenue, a its December it Medical We business we tends be increase to expect expect to the as of the including B vaccine of comes to decline the quarter-to-quarter year orders. acquisitions, in to the $XX $XX for off million base and cold-chain of products which be as million couple of busiest quarter-over-quarter range to quarter, million

teens products the impact supports COVID. growth the excluding organic guidance when low In rate all, of a

and roughly $X to genomics to Adjusted of range. $XX reflecting revenue the guidance $XX quarter-to-quarter the both services approximately at anticipated our million expect be midpoint in million EBITDA be flat to of in range is SRS We million.

for as per to March earnings base breakeven, the B minus quarter is lower And in Non-GAAP you be guidance, share $X.XX or in second the our can is and Medical. business plus expected quarter reflects per see share. stable the

we profitability a low in the fiscal our point XXXX. perspective, to quarter anticipate be From second

We starting well as progress as to in strategic expect investments tangible QX. the actions the cost show

full can XX% expectations for margin. our efforts exit year EBITDA we and revenue that year support we above together, expect adjusted the And these

our of success to In taking set return on cash deliver indications to for actions we up front. continue And to to will growth. momentum, and in conclusion, to maintaining see cost stance are we ourselves continue base while shareholders active lastly, and profitable the M&A we an

As always, we the updates will year. throughout provide continue on our progress to

operator will to I your remarks. prepared our over questions. concludes the back take call now This the to turn

of [Operator you. And from Stephens. Thank Johnson line Instructions] with question come first Your will the Jacob

is line open Your

just the Hey touched maybe on on. guidance you to good evening start that Lindon, everybody. just

I the business. like the but kind been versus revenue bit it in think pushed what's you're the have margin talk and some out growth, XQ cost kind talking XX% you're terms just costs and expectations? margin about of seems of little about expectations of changed you maybe a of Can targeting still taking kind same print out of now

being top think right, cost to effectiveness that, and see going margin partially we of to year. I said, an the to We've total. we And a the that equation, that's we see efficiencies some as first being gain operations. to still enhance With you in heavier some little taken do for ourselves XX% Jacob, captured the reaction in half growth actions that, in and actions. some that our opportunity in offset do pressures of also those Yes. that lines getting the revenue

or $XX with some drive we'll at and of selective investments continue We're million to out. cost proceeding And taking fairly specific growth. to about a time, $X be million quarter same the

first had or the better margins you're in pressures would the be half, EBITDA that we with So year. the on that we Previously, have XX% for identified said with though, about margin we right.

quarter. by fourth saying or XX% we're better we'll at be the Here

for that I Okay. gene seen end Steve, you And an one. therapy it market. in of from sounds cell growth the correctly, like saw you you've Thanks kind and if heard -- then acceleration

I growth think we've decelerated a this healthy, is think but some there's of maybe And little earnings where other relatively seen that season, I some been think weakness. bit market. that I pockets market in end companies

about just pickup growth end can you saw So cell from therapy? market what of gene you from drove talk and the what kind that and in

Sure.

offerings were So some of surprised the attribute little we increase. the we that actually, have. bit I But new think it magnitude Jacob, we by to a

that services has AAV some breadth have But the after is the We able going great. opportunities we there. the the of really team, aggressive provide been we're to offering, think

of in -- XX% from was and roughly business, came XX% from and SRS. roughly rough terms, About genomics the the cell XX% gene from GENEWIZ products

it see So to -- win -- as lumpy. We'll this do offerings a seems projects, little be pretty the bit attractive. We are offering is might that necessary. be these complete believe the we

general, by know in of GENEWIZ of this that customers. is we've for momentum, performance. But of and because quarter team. to pleased the quarter, next scientific with we're the added come the the sustainable We just customers each offerings from the expect with a I stronger the but is really type think value don't what engagement

Got it. Thanks for taking the questions.

Your next with from David of question comes line Saxon the Needham.

line open. Your is

The taking strong. start evening was for thanks with Yes, SRS. I'll part the that of and storage business Good guys Maybe questions. really

a XX% said going per now X I million to think month. quarter million you from X samples

growth of good a So of terms for point the you wondering of have the kind part year? of kind visibility that that for storage is part high how in And starting just business? teens storage revenue much do in

Yes, organic and add everyone. we of multiple just I'll elements Inside the the some David, year-over-year. XX% ex-COVID storage. right in delivery, for on Steve but color your piece SRS We we add customer in clarity service growth reference, of storage, exactly that, have pure But you're start, first, side. demand the is saw largest let highlighted will me

revenue that includes off-site more getting is includes base. customers we which being that our that's that services It's locations, little thing That on on-site for said, going the recurring of the But site. represents And at to about our the where primarily is storage perform into storage, bit a total prevalent. samples sample with grew be stored that nice also their XX%. freezers, of that

now stay So once tend thing the you The we to that samples of sight. about the is, freezers, know there. line they nice are asked about in

us gives more a revenue it So base. recurring solid

of So it that is clear. part

with simply growth samples. I've of this a seasons seasons often business of described accumulating low because high-growth, of as we're millions

pretty period And a show growth growth, so base the samples now. of where freezers that's each on in we large

outsourced So you that momentum is rate see increasing. can of an outsourced really adoption demands this the a are where business

is highlight higher a are on high line I not the so teens And starting continue. still growth to being of good revenue. would going as the growth, of Seasons lower base point. sight

up a I on the think will growth to good business in the store SRS XX% be is overall. point, teens. or plus But starting minus total times organic probably the that there we're

And back mid-teens. if in ago, years the as we said you usual couple wouldn't recall, went we be us it a said of to if we show

may certainly, So some be projecting that.

I think in the have rate outsourced these seems adoption to momentum. environments,

that add and seeing mid-teens. between Steve demands XX somewhere may of types some to So here. color we're the

little a I'll bit. add David, So

We I and first to have SRS was think business, dramatically. Lindon storage. pretty our capabilities talk in way the It really the to changed. samples we manage the beneficial allowed when archival that's handle change samples. got most automation customers about And as mentioned, business this into ability to business has us a we of to

the to more doing Now can out in [Indiscernible], by in participate customers help before. much than clinical We frequently able by moving samples and we're trials. did we

nature what have an or at they to of site on of And done what and them. an to had to to able on and are outbound efficiency we're pretty CRO. the we an samples ability is So manage maybe our inbound play they dramatic them, offer historically to change used touch a and for the element a

the our trials. significant the samples store. our storage ability But large So and is traffic amount touches, clinical to the to getting increase of we're of reasons for one in a business the revenue and manage transit, a storage more the ability literally

of And so So talk you much us the it's about pretty it's one hear reasons expansion. automation. a dramatic

ability millions handle month, handle and to to X a to a samples not eventually on just ability million need depend of but month is samples going our Our these samples.

dock, of as terms But there. possible, on line challenge process get of at into where storage been management our those of we always facilities, and a sight have in the what's freezers, short and So area cycle customers, in put all to has that's receiving them our the quickly line the we the to on of focus. of as sight for

So the will is we in And of anticipate their in the the will good. transformation The just workflow, customers volumes and more archival that's we better business participate increase continue direction us get at to the seen. it, allow storage. that not to we've the

has Yes, on And M&A M&A, all then maybe mean far. I helpful. on product side the so Okay. that's the super been

I M&A? focusing gaps see adding you'd side? you're on cross how just the think where to should is portfolio is finish forward, that more through just product because where wanted we on ask, the And that deals so Thanks the about then Or So going much. line?

Yes.

have correct. on are is the I being more product actionable. observation So think your those Things been about And side.

that think have side, And there like become you'll we're And us the a active equivalent you on areas, we're could genomics we'd they and as are interested. add. in pipeline participate. that We and I to both that's imagine -- see actionable, capabilities

you. Thank it. Got

line the next comes of with KeyBanc. Knight your from Paul question And

open. is line Your

therapy? it Is Thanks Steve, is and to XX%? the Lindon cell could -- of what talk and revenue gene you percentage was

that just B B should captured at excluding I We're we Medical, for And we're equation. haven't XX%. over highlight Overall, that there. starting the cross the revenue so to Medical Yes. that's

business? portion, trend there? slowest continue the Life And Is guessing it the Okay. and part obviously, Services the then was specifically in part March. the oligo I'm going production, slower that's Science what's to the growth of And of

Yes.

We've Paul, head. you but bit steady in could is have that's portion, is show really slower synthesis a right Sanger imagine, of a That's I NGS slower. is is you green business. thousands the shoots The customers. good. on business of been been Synthesis. Gene the record. that seasonal, We've little as hit production was little the got a Oligo bit it So we think some that -- the side activity We're another small

this of capability, a where of got and and our sales initiatives we're We've to back. capabilities, get efforts lot high-quality is a focused sales capacity, with that lot

It's strong, So we this just path to indeed, we're but the that's been time, good and soft side. encouraged growth on where bit But are. get we'll by particularly a on of us we're the back a by bullish offerings going the spot genomics take year-end. little the are that for

And expand oligo what, the the to you said China? I was question How And in China kind to you follow-on is had expanded know China China Are to mid-single-digit in oligo getting is you normal and growth? China production production. that? of in

mostly bringing I'm a going back. is The Yes. Paul, production for business. raw you oligo to keep as material our synthesis

to on customers. is in in We the engagement environment. and Synthesis Gene the the and back side, COVID in China, China have the particular, The oligos was oligo businesses. light This about of It's and growth strong. relatively small. But the getting very production strong capability both customers synthesis in is

well both Gene the a services And China, exporting. as Synthesis And low on on products that When and Paul, say I'll there. We're round double-digit quite highlight, we actually growth competitive on encouraging sides. I struck as side that weren't the we was supported on side. growth just site it's where the in

were of back and areas COVID on putting As sales mentioned logistics in behind we're that the in the But again. now, that other we've issues us we environment. overcome things that's power held some call, the one

accounts. beginning of just recovering those some of see to starting we're think signs I

Okay. Thank you.

Yes, thanks.

Kumar the of from comes Evercore Vijay question next ISI. Your line with

open. is line Your

X%. think numbers. would some Hey growth look that Lindon for your at a for growth, question. I my back the XQ what visibility guys decelerated just X% for think driving to for What's the shaking back is half the when look or guidance organic And XX% I And XQ thanks to maybe I up XX%. out. at the And us ex-COVID right? If that of in just I in taking given Steve, guidance understand from half, second What midpoint, guide? here, I is for the half XX% look at gives total of where this growth the the XQ? first I wanted XQ deceleration just in guide here drives acceleration? at this XX% annual revenue your When imply half

Yes, Vijay, reasonable a really question. it's

we Let like really right delivered our first say, quarter, expectations. the feel me in we on

me X pieces. break it into let So

base of was Our objectives. our saw both businesses B excluding business, right And signs on some Medical strength.

we're single-digit that we double basis, that achieve shaped said, starting, is the second I ex-COVID low through is would that. digits low double consistent counting would growth move what this toward digits it the but when last half, on to have There, organic in guidance or on and we low quarter the

I think truly the We've actually think, further in believe -- that's also fuel we the of And our coordination business. We're efficiencies going what will seeing I investments we're making the creating, help And we're that that. are got we're we of fuel signs seeing. momentum. to -- that

On the projects to just still and our why Lumpy a we're because Still the not we the concerned up you reminders so business were of there us a other are just XX%. we as that fell midpoint. there. It's had it but in we demands Medical, to But timing. two reached here. business, we attributes know touch short, in just B piece said, of short bit number the

didn't The quarter other and That the in we through in can't at some you're three you've you we the next coming are but quarter peak aspect to we got significant with linear carry and is the that to lumpy, the of see, going of quarters. that project that you -- drop but year know that this you're every highlighted, fuel then of means that it's the calendar that's March going year. all, rest first And December come quarter. is business what be off orders the the the in particularly to

way that another of about described we'll Medical So Medical in quarter you that achieved at we've we We'll we've year million. our needle. the about through half them for time pushing by in B $XXX be what guidance, be the talk inferred get second to if B look at is that

first feel about we So pretty good that half.

basis, first have year-over-year B that what it's out but obviously delivered the in of second We we'll woods to half a relative Medical will half. year-over-year. in not show The more growth it's on the

Lindon. Sorry, to just that, clarify

with So sequential X% organic. guys $XXX million QX? reiterating are And second drives on like looks from that the think deceleration right? Medical, comps that I of don't ex-COVID B What I wasn't the is It revenues. harder. the that $XXX million, quarter, you clear get

trying on. I'm going just So to anything that's XQ, whether timing else or understand it's

separate quarter. to in but December again, where drop-off so from so natural first. funding year-end one, project less the a and it's it a December first quarter, calendar B Medical, B Medical the drives budgets So

right, On year-over-year some you're an on deceleration the business organic of basis overall base ex-COVID. comparison there's

is digits to the going if double second digits momentum But you're -- of that low still of you're single that be see expect about still, probably and see finish it that, territory. quarter, SRS still that the we'll about low Sample the business. say, in is I those up. business is talking genomics picking growth the should still momentum genomics strength signs both But we'll the we to still see ex-COVID. single-digit business you be talking break business the Repository -- I in products businesses, apart, when going we But is lagging, services in Solutions and

zero high at Because single margins maybe squeeze flat the What's negative could you And midpoint, like are this is I was we I at indicating EBITDA more. of had think Understood. operating here, maybe looking EPS And Lindon? declines, I EPS X% just operating guys right? margins, that this margins I margins. Operating looks negative operating last had look XQ? XQ, year, when it at margins, QX driving one margins. if guidance year-on-year in that

Yes.

were So those projections should take first to of I And were or really the trends year-over-year. pressures. that or up, gross margin Those B course, business say on observation two Medical. and year-over-year structure the on down correct more added you're we've to

you're margin pressures right, gross are But exactly there.

will that actions of second of points, be $XX made I a out. of That couple million $X -- -- in million We net the haven't we'll with or in and said, taking, the couple as about points of investments up a net annual we'll take we're half. cost about

again, total, as we're And So will made a but at operating more year second in that's at looking I of position in looking in part. profit that's negative cognizant the also my us that. you be confident and point be to you're efficiencies. fiscal somewhat quarter, When of it for our commentary, very the reaction to will that, low

actions seeing it going two set it convictions are on We've momentum and more got for that. secondly, we it on to base going signs very forward. are continue to of One, profitable back with reinforcing we on the strong. a growth. we're making and not the We're invest. We're set business cost pulling leverage But

Thanks guys Understood.

Yes. Vijay. Thanks

line Zhi And comes Riley. Yuan from your the next of B. with question

open. Your line is

covered Thank you our questions. you for Maybe have this. of taking part

and Have different So seen Big customers, for to break customer Biotech. the down we Pharma genomic change if quarter? and government behavior you over academic it last services institutions, then

would difference I we wouldn't say is there. a indicate significant What

align in there, there We out to In a think spending academics little constraints acceleration we it's have But have spending? for call I for seen us little -- slower read, in and but across a space a biotech, what have bit we we participate could on is we budgets? pharma, academics Are board. touch a us. see trend. are -- the there's to difficult that see NGS, and general, that

I this lagging highlight I'll out sector still -- continued overall. a wouldn't I for nicely Yuan, centric. and in see So us. just bit driving pretty weakness. somewhat is this Americas a China space grew the Europe as particular stable, that be call has this We to market

don't could. I reflects know And that, that again, It markets.

certainly share-wise but leader we are heavier, -- player Europe still share-wise. small in also in capabilities, challenges but in see relative a think that I we're small

to for market. there's putting we'll lots That's win. our us opportunities be so each in of And investments where

reconstruct how on sales that clarify sales structure. so mean certain you can it in you own? regional region, Maybe their it. more plan Does Got more of a to the they focus have

Steve. but -- specifically, talent regions, Yes. we genomics-focused this a have and more more special there. in hiring some Indeed, and -- it requires there's very critical training Yuan, we're is

We in to out hard hiring. are filling hire intact and have And positions. is but couple our working So of we're now teams their right there. addition, in each and aggressive specific we're a we're regional -- making do we're one gaps, sure that the

find we're I we've just lot talent So been with exceptional takes to progress. we're to the a able -- that making really We're pleased of people. the right bring, think but work

taking you our Thank questions. it. for Got

Thank you Yuan.

there very And Schwartz. turn questions. Mr. closing I'll further Mr. Robertson, Thank are you it no much. back for to remarks. you

Thanks I times mode looking know much tuning investments while We're analyzing seeing right and of that We're we're a positive with Thank in. the growth. the you, in a find us. to David. are really for in us. These markets you're as moderated, everyone for at where juncture key growth

it the not positive, So growth we're strong and past. been as talking about as could what it in has but why be our is

I right investments. objectives We and headed expect intent believe toward that that's here. and we're the We're our making acceleration,

to and remarks. with are rightsize Steve team the We're generation to talent and for by that I'll highlight structures, that with that performance dollars as it skills outlined we demand putting so relative tuning also the that we're in behind our market of market some some the sales of investments. we questions, more facilitate going his and facilitate

to our second delivering a today. think, objective, So ago that's our headed talk the convictions where second to see and progress to you that, talked second about fiscal out months with the look we of I quarter, been about are I but quarter as stronger into, not being three on able to And we that you half. the just forward that

to talk abreast we'll our out very keeping The the Thank you you on year, Thank progress move We much. of to through and you you. as Street. soon we look forward

much your And conference thank ask line. We you you conclude for that and does please that very your participation the call disconnect today. for