管理層發言
Greetings, and welcome to Azenta Q3 2026 Fiscal Financial Results. As a reminder, this conference is being recorded, Wednesday, August 5, 2026. I will now turn the conference over to Yvonne Perron, Vice President, FP&A and Investor Relations.
Thank you, operator, and good morning, and welcome to everyone joining us today. We would like to welcome you to our earnings conference call for the third quarter of fiscal year 2026. Our third quarter earnings press release was issued yesterday after market and is available on our Investor Relations website located at investors.azenta.com in addition to the PowerPoint slides and the supplementary information that will be used during the prepared remarks today. Please note that effective the first fiscal quarter of 2025, the results of B Medical Systems are treated as discontinued operations. The previously disclosed sale of the B Medical Systems business was completed on July 1, 2026. I would like to remind everyone that during the course of the call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements. I would refer you to the section of our earnings release titled Safe Harbor Statement, the safe harbor slide on the aforementioned PowerPoint presentation on our website and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the Azenta business. Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our President and Chief Executive Officer, John Marotta; and our Executive Vice President and Chief Financial Officer, Lawrence Lin. We will begin the call with opening remarks from John, followed by Lawrence, who will provide a detailed review of our financial results and our outlook for fiscal year 2026. We will then take your questions at the end of the prepared remarks. With that, I would like to turn the call over to our CEO, John Marotta.
Good morning, everyone, and thank you for joining us today. In the third quarter, despite an uneven and challenging market, we made substantial progress delivering against our commitments towards rebuilding confidence through performance. Revenue exceeded our outlook, profitability improved sequentially and Multiomics delivered year-over-year growth. While these results reflect improved execution, our broader turnaround remains underway and sustained performance will require consistent execution over multiple quarters. The operational transformation we began last year in Sample Management Solutions is further along and has helped us strengthen our foundation. Multiomics remains a central focus of our broader transformation strategy. We are executing targeted commercial and operational initiatives to improve performance, increase scalability and position the business for long-term growth. While the work remains in the early stages, our objective is clear: build a more focused, efficient and scalable Multiomics business capable of delivering sustainable results with a market-leading position. As we enter the fourth quarter, our priorities remain unchanged: execute with discipline, advance the Multiomics turnaround and create long-term shareholder value through consistent performance. I will highlight four key takeaways from the quarter. First, despite an unpredictable demand environment where Multiomics North America showed modest sequential improvement but remained below prior year levels, organic revenue grew 9% year-over-year, driven by strong performance in biorepositories and C&I, where the investments in our recurring revenue businesses are making a meaningful contribution. Growth was further supported by solid results in Multiomics China and in Europe. Second, we began developing the actions to advance the Multiomics transformation. We are implementing commercial initiatives and working through our structural actions, including a meaningful footprint rationalization, organizational changes and a sharper focus on high-value workflows. While the effort will take time, we believe these actions are necessary to improve execution and profitability over the long term. Third, while the capital equipment environment remains uneven, customer engagement remains healthy. We continue to see interest in our automated stores as customers look for greater efficiency, scalability and operational resiliency. We continue to take a rigorous approach to how we assess the pipeline and given project timing continues to remain uncertain, we are evaluating options to optimize our cost structure to improve profitability in automated stores and cryo systems. Fourth, we continue to execute on key initiatives to build a more durable and scalable business. We are advancing our Azenta Business System efforts to strengthen operational discipline, making steady progress on the UKBC integration and allocating resources toward the highest return opportunities to support long-term value creation. In Sample Management Solutions, biorepositories and C&I delivered strong results and remain important growth drivers within the portfolio, supported by the investments we've made in these recurring revenue businesses. Today, more than half of our revenue is recurring in nature, providing greater stability and resilience across the business. Automated stores remain below prior year levels. Within biorepositories, we completed the first customer deployment of an AI-enabled biorepository inventory solution with advanced imaging and data management that creates actionable digital data. In this initial deployment, the solution meaningfully improved inventory capture productivity versus the prior manual process while creating a clearer data-driven view of customer sample inventories. This enables customers to better understand what they have, where it is stored and what actions should be taken. Over time, our expectation is to double productivity, strengthen our broader biorepository services offering, support better storage management decisions and create a path to more scalable, high-value repository workflows for customers. In automated stores, we continue to make progress addressing the quality issues discussed last quarter. Remediation work has now been completed for the three remaining systems we previously highlighted, and those systems are currently in final testing and validation prior to customer sign-off. As a reminder, these are highly customizable stores with each system uniquely configured to meet specific customer requirements. Final acceptance requires customer-specific testing and validation to ensure each system performs as intended and meets our customers' expectations. While most of the related remediation spending is now behind us and meeting our customers' expectations remains our top priority, we will consider this process complete only when the remaining systems have been fully tested, validated and accepted by our customers and are operating as intended. We are confident that the remediation work we've done will resolve the issue. In addition, our strategic move into modular stores will reduce engineering complexity through greater standardization that will deliver improved quality, reduced execution risk and support more consistent performance over time. We also added new store opportunities in our backlog during the quarter, starting to build our pipeline as we enter fiscal 2027. While the revenue contribution in our fourth quarter is expected to be limited, the timing of the larger capital projects remains variable. We are encouraged by our pipeline and are seeing opportunities progress to orders. Multiomics delivered year-over-year growth during the quarter, supported by continued strength in Europe and China and modest improvement in North America, which year-to-date remains below prior year levels. While we are seeing some improvement in customer activity, including our fast RNA sequencing that I mentioned last quarter and early signs of commercial momentum, we view these developments as initial indicators rather than evidence of a sustained recovery. Strengthening our North America business remains a top priority. As we have discussed previously, adding commercial leadership in the region was an important objective, and we are pleased to have recently appointed a new regional leader for North America. We believe this addition will strengthen our execution and customer engagement while supporting broader initiatives underway to improve performance and long-term growth. From an end market perspective, conditions remain mixed. Customer engagement levels are healthy, and we continue to see strength in Europe and in China. In North America, funding visibility has improved modestly, but research spending remains below prior year levels and customers continue to take a cautious approach to capital deployment. As a result, purchasing decisions and project timing remain difficult to predict, particularly for large capital investments. Given this backdrop, we believe maintaining a disciplined outlook remains appropriate. Following our stronger-than-expected third quarter revenue performance, we revisited our full year outlook. We now expect reported revenue in the range of $613 million to $618 million, improving our organic revenue outlook to approximately flat to up 1% year-over-year, with adjusted EBITDA expected to be in the range of $59 million to $62 million. While the updated outlook reflects the benefit of the third quarter revenue performance, we continue to take a measured view of the remainder of the year, recognizing that recovery across portions of the portfolio remains uneven, and we are facing a tough fourth quarter comparison, particularly in Multiomics. We continue to execute on our disciplined capital allocation strategy during the quarter. Our priorities remain unchanged and are focused in four key areas: driving productivity and gross margin improvement, accelerating organic growth, pursuing disciplined strategic M&A and returning capital to shareholders when appropriate. Importantly, our strong balance sheet affords us the flexibility to invest in strategic acquisitions that support long-term growth while also returning capital to shareholders. On July 1, we completed the divestiture of B Medical Systems, further simplifying the portfolio and sharpening our focus on our core Life Sciences businesses. Integration of the UK Biocentre remains on track and continues to enhance our biorepository capabilities across Europe. In addition, we repurchased shares under our share repurchase authorization, reflecting our confidence in the long-term value of the business and representing an opportunistic deployment of capital within our disciplined capital allocation framework. Looking ahead, our strategic priorities remain clear: scaling biorepositories, advancing gene synthesis and Multiomics workflows and driving innovation in automated solutions. These priorities remain the same building blocks that underpin the long-range objectives we shared at Investor Day. And the operational actions we're taking today are intended to strengthen our ability to achieve them. While there is still meaningful work ahead, the operational actions underway are focused on improving execution, strengthening accountability, simplifying the operating model and aligning investment behind our highest value opportunities. Although we are not providing guidance beyond fiscal 2026, we believe these actions position the business to deliver stronger and more consistent performance over time. We look forward to sharing our fiscal 2027 outlook in November after we complete and report our fiscal 2026 year-end results. To close, we remain focused on executing the actions required to strengthen the business. As we said last quarter, many of the performance challenges we faced were within our control, and we are addressing them with discipline, accountability and focus on improving execution across the organization. With that, I'll turn it over to Lawrence to walk through the financial results and our outlook in more detail.
Thanks, John. I'll begin with our third quarter financial results, review segment performance, discuss our balance sheet and capital allocation activities and then provide an update on our outlook for the remainder of fiscal 2026. To supplement my remarks today, I will refer to the slide deck available on our website. Turning to Slide 3. Total revenue of $161 million grew 12% as reported and 9% organically, ahead of our expectations. Growth was broad-based across the portfolio with both segments delivering organic year-over-year increases, including 8% growth in Multiomics and 9% growth in Sample Management Solutions. Adjusted EBITDA margin was approximately 11.4%, down slightly from prior year by 60 basis points, but up sequentially 610 basis points. Improved Multiomics revenue performance, continued growth in our recurring revenue businesses, biorepositories and C&I and the benefits of cost and restructuring actions implemented during the year supported higher profit during the quarter. These benefits were partially offset by our ongoing investments in commercial capabilities, product development and other strategic growth initiatives, lower volumes in automated stores and Sanger sequencing negatively impacting operating leverage, quality remediation activities as well as the near-term dilutive impact of UK Biocentre. Non-GAAP EPS was $0.16. Free cash flow, including B Medical Systems, was negative $5 million, down sequentially, driven by a usage in working capital and lower deferred revenue. We ended the quarter with $529 million in cash, cash equivalents and marketable securities. As John mentioned, we completed the divestiture of B Medical Systems on July 1 for approximately $63 million, consisting of $28 million in cash proceeds and a $35 million short-term secured vendor loan. During the quarter, we recorded a partial reversal of a previously recorded held-for-sale valuation allowance in the amount of $6.5 million associated with the transaction, and we continue to expect repayment in full of the vendor loan at or before maturity. Additionally, during the quarter, we opportunistically repurchased approximately 2.3 million shares for $50 million under our existing share repurchase authorization, reflecting our confidence in the long-term value of the business. Following these purchases, approximately $200 million remained available under the current program through December 2028. Now let's turn to Slide 4 to take a deeper look at our results in the quarter. Total revenue was $161 million, up 12% reported and 9% organically with a 1% headwind from foreign exchange and a $4 million contribution from UKBC. Sample Management Solutions delivered revenue of $88 million for the quarter, up 14% on a reported basis and up 9% organically. Our recurring revenue businesses, biorepository and C&I continue to demonstrate strong growth and resilience, supported by our commercial initiatives. These gains were partially offset by the expected softness in automated stores due to slower bookings resulting from macro-driven budget constraints. Multiomics had a strong quarter with revenue of $73 million, up 10% on a reported basis and up 8% organically. Results benefited from higher activity levels in North America, where trends improved from the mid-teens decline experienced in the first half of the year. We saw a modest pickup in customer activity and volume supported by stronger commercial execution, improved customer engagement and better conversion across gene synthesis and next-generation sequencing, although demand conditions remain mixed. We also continue to see strong performance across China and Europe, contributing meaningfully to growth. As expected, Sanger continued to reflect the longer-term market and technology transitions we have discussed previously. Overall, fiscal third quarter performance was better than anticipated across the portfolio, although the broader market environment remains measured and customer capital deployment continues to be selective. Turning to gross margin. We delivered 46.2% for the quarter, down 140 basis points year-over-year. The decline primarily reflects continued pressure within portions of the portfolio, including unfavorable fixed cost absorption in automated stores, continued margin pressure in the Sanger sequencing due to the longer-term market transitions we have discussed previously, quality remediation activities and regional mix. These headwinds were partially offset by improved profitability in Multiomics from higher volumes in next-generation sequencing and gene synthesis and improved operating leverage. Turning to gross margin for Sample Management Solutions. We delivered 45.9% for the quarter, down 750 basis points versus the prior year, primarily reflecting continued pressure within the capital equipment-oriented portions of the segment, including automated stores and cryogenic systems, where lower volume levels, unfavorable fixed cost absorption and quality remediation activities continue to impact profitability. These headwinds were partially offset by strong revenue growth across the segment and improved storage economics within biorepositories, including higher utilization and storage density, demonstrating the continued strength of the underlying biorepository business. Within automated stores, we incurred approximately $1 million of quality-related remediation costs during the quarter. For fiscal 2026, we currently expect the total impact to be between $5 million and $6 million, as previously mentioned. Multiomics gross margin improved approximately 550 basis points year-over-year to 46.5%, driven primarily by stronger volumes in next-gen sequencing and gene synthesis, improved operating leverage and the benefits of cost actions. These benefits were partially offset by continued margin pressure in Sanger sequencing and regional mix. Next, let's turn to Slide 5 for a review of the balance sheet. As I mentioned, we ended the quarter with $529 million in cash, cash equivalents and marketable securities. We had no debt outstanding. Capital expenditure for the quarter were approximately $7 million, reflecting continued investment in automation and technology to support scalable growth. Turning to guidance on Slide 7. Turning to our outlook, we revisited our full year fiscal 2026 guidance. For the full year, we now expect total reported revenue to be in the range of approximately $613 million to $618 million, including the contribution of UKBC. We now expect organic revenue to range from approximately flat to up 1% versus our prior outlook of down 2% to up 1% year-over-year. At a segment level, we continue to expect Sample Management Solutions to deliver low single-digit growth, while Multiomics is now expected to range between down 1% to flat versus our prior guidance of down mid-single digit year-over-year. These assumptions reflect the improved performance we saw in the third quarter while maintaining a prudent outlook given what remains a dynamic demand environment. Funding conditions have improved relative to where we began the year and customer engagement remains healthy. However, the broader research funding and biotechnology spending environment continues to be uneven and customer purchasing patterns remain selective across portions of the portfolio. We expect Q4 organic revenue to decline low single digits, consistent with our prior outlook as we face a challenging comparison against Q4 of 2025, particularly within Multiomics, which represented the highest quarterly revenue performance in the history of the business. In addition, portions of the portfolio continued to progress through structural transitions, most notably within Sanger sequencing, while demand for larger capital equipment opportunities remain subject to normal customer funding and project timing considerations. Taken together, we believe our current outlook appropriately balances the encouraging trends we experienced in the third quarter with the conditions that continue to characterize the broader market environment. From a profitability standpoint, we expect adjusted EBITDA to range between $20 million to $23 million in the fourth quarter. For the full year, adjusted EBITDA will range from $59 million to $62 million, including an anticipated impact of approximately 30 basis points of margin dilution from UKBC. Importantly, while we continue to take actions to optimize and rightsize our cost structure, we remain committed to investing in the business to support long-term growth and strengthen our competitive positioning. We continue to balance disciplined cost management with investments in our commercial organization, innovation and strategic initiatives that we believe will drive sustainable value creation over time. Finally, we continue to expect full year free cash flow to improve approximately 10% to 15% year-over-year, reflecting continued focus on working capital management and cash generation in the fourth quarter. In closing, Q3 represents a step forward in a positive direction, but it does not define the pace of recovery, and we remain cautious. However, we are confident that we are addressing the right issues, executing the right actions and building the foundation for more consistent financial performance moving forward. As John noted, we believe the operational actions underway today are strengthening the business and positioning us for improved performance over time. This concludes our prepared remarks, and I will now turn the call over to the operator for questions.
分析師問答
Your first question comes from David Saxon from Needham.
Really nice to see the improvement in the quarter. So first question, I wanted to focus on Multiomics, specifically North America. Really nice to hear the comments there. Can you talk about the drivers of that performance? How much of that was demand starting to firm up versus on the execution side as some of those new reps ramp productivity? And then what's your level of confidence in the trajectory of that improvement you saw in the quarter given some of the initiatives you called out in the script around footprint rationalization, et cetera?
David, thanks for the question. So Multiomics specifically, NGS, we saw higher activity benefiting specifically from the catch-up of projects delayed earlier in the year, including certain NIH-funded work. Commercially, I think that's the biggest impact with our strategic investments of sales becoming accretive after the team — some of the team members have been there for three to six months now in the seat. Secondly, we've now filled our gap in our Vice President of Sales for Multiomics in North America. Trey has come in and he's hit the ground running and he's just filled that gap as well. Thirdly is around our PC&S business, which is our clinical services business. Timing of one of our customers came in earlier into Q3 instead of Q4; that was approximately about $3 million worth. And from a market perspective, we feel good about finishing the year strong based on what we see in the monthly NGS quoting numbers. Still, there's some headwinds from our legacy Sanger business, and we're encouraged by the significant growth in Plasmid-EZ, which partially offsets that. I'm going to hand it over to Lawrence in terms of the outlook in this specifically.
Yes, David, good to hear from you. Q3 was certainly an encouraging quarter, and we're really pleased with the execution across the businesses. Revenue grew 9% organically, and our adjusted EBITDA exceeded consensus. As John noted, we saw improved customer activity, really strong commercial execution with some of the investments we put in place and increased volumes in both NGS as well as gene synthesis. That being said, we believe it's important to keep the quarter in perspective. Some of the improvements in NGS really reflected activity that had been delayed earlier in the year, including certain government projects that John mentioned. While funding visibility has improved modestly, customer engagement remains healthy, research spending levels remain below prior year levels in many areas. And so we're encouraged by the trends, but one quarter doesn't really evidence a broad-based sustained market recovery yet. We're cautiously optimistic about our outlook in the fourth quarter.
Okay. That was really helpful. And then, Lawrence, maybe just keeping with you and not asking for fiscal '27 guidance. But just on the EBITDA margin guide for '26 comes down slightly. So maybe help us bridge that versus prior guide? What's more one-time in nature versus dynamics we should think about continuing into fiscal '27? And then UKBC 30 basis points dilution now, is that a good starting point as we think about the dilution for fiscal '27?
Yes, David, when we look at our overall adjusted EBITDA guide, as we look at Q4 in the range of about $20 million to $23 million of adjusted EBITDA, there are a couple of drivers to that. The positive is we're seeing mix benefit from Sample Management Solutions, particularly in C&I and SRS. We're seeing better fixed cost absorption in Multiomics. As we mentioned earlier, we are also looking at cost optimization in both stores and Sanger. Some of these items will be offset in the quarter because of the better Multiomics performance on the top line; we will have to top up more bonus than expected. As I mentioned last quarter, some of this EBITDA step-up in the third to fourth quarter relies on bonus. Additionally, we're looking at accelerating some of our commercial investment in digital and incremental go-to-market investments. And that's where you see us adjust our overall EBITDA. As you think about what doesn't reoccur, $5 million of quality issues is one item. Strategic investments are about $5 million and some one-time items such as inventory adjustments and mix. That gives you a better resting point around the mid-70s as a jump-off point. And around UKBC, we mentioned the 30 basis points of dilutive impact, but next year it will come in as increasing scale and be accretive.
The next question comes from Matt Stanton from Jefferies.
Maybe just on the fourth quarter guide being left unchanged. I mean I think the rationale there makes sense given the tough comp in Multiomics and a still choppy demand backdrop. But maybe just talk about what you're seeing in order trends, customer activity levels. I think, John, you mentioned NGS looks pretty good. What about the rest of Multiomics and some of the shorter cycle order book in C&I? How are you feeling about orders, bookings into Q4 as we think about exiting this year and into next year? And then maybe any color just around the longer cycle order book, too. It sounds like things are maybe firming up there a little bit as we think about next year, but would love a little bit more between both the shorter cycle and longer cycle order book and demand trends here.
Sure, Matt. Thanks for the question. So from an end market perspective, what we're seeing on the short sales cycle side of the business, so Multiomics specifically, a lot of positivity in our businesses in China and Europe on all of our product lines. We're seeing double-digit growth in gene synthesis, specifically in China and Europe, a lot of good momentum there. A lot of good momentum on the NGS side in those regions as well. Where we're seeing a bit of lumpiness from an end market perspective, we talked about it on the PC&S business and preclinical in the clinical side of the business, a little lumpiness in terms of where these bigger projects are landing in the quarters right now, and that's really driven by where the end markets are lining up, specifically in North America. When we go over to our C&I business, as you know, SRS and C&I, about 70% to 80% of that business is recurring revenue. So the SRS side of the house, nice growth, good long-term visibility and sequential improvement in the business right now; we're seeing a lot of momentum there. C&I is very similar, especially because of the recurring revenue nature of the business, specifically on consumables. Now where it's a mixed story is around instruments in C&I right now, and that's regionally dependent. Same similar headwinds around lumpiness on instrumentation and CapEx. Now let's move over to the headwind side of the business, that is Sanger. We've talked about our issues there in Multiomics and then in stores and cryo, which is a very similar story to what we've been dealing with throughout this year, and that's a healthy funnel and pipeline, but converting that right now has been challenging based on the end markets. We're seeing challenges in our stores business because of the lumpiness on the end markets. We're seeing a bit more CapEx relief in Europe and less so in North America right now. So again, it's a mixed bag and regionally specific.
That's great. And maybe just sticking with the point on regions within Multiomics, Europe and China have been strong here for a number of quarters. Just talk about the durability of that strength as we look into next year, you'll start to have a bit of tougher comps. And then any flavor in terms of Europe and China, what's driving that? Is it biotech, pharma? Are you seeing better academic or government trends there relative to U.S.? Would just love some color on the durability and what's underpinning the demand in those regions for Multiomics.
So a lot of durability there. We feel pretty good about being on the launching pad with China and Europe, specifically in Multiomics. Those regions are performing well. We're continuing to see productivity gains on our commercial investments. So we feel positive going into next year there. Of course, a lot of the issues we're dealing with in North America are specifically in Sanger, a lot of the headwinds. Those we are in the early stages of optimizing that cost structure and addressing. On balance, Europe and China, we feel pretty strongly about right now. Biorepository and C&I continue to build momentum quarter-on-quarter and are sequentially improving. We focused on those businesses last year in investments, making sure that we had the cost structure in line with our go-forward strategy. A lot of that work has been done, and the team is accelerating performance there as well.
Your next question comes from Mac Etoch from Stephens.
Maybe just double tapping on the equipment side. It's really nice to see the pickup in overall interest, and it sounds like some potential conversion to orders in the near future or maybe 2027. But in your view, what remains the key gating factor to client interest actually converting to more durable orders in the near term?
There's a healthy tension between onshoring bioprocessing and some of the CapEx investments that are made in these larger equipment items such as ours. I think that's going to continue with some of the reshoring trends. What we're doing in terms of controlling what we can control, we're evaluating options to optimize our cost structure and really improve profitability in our automated stores and cryo systems. In parallel, we're strategically repositioning the stores portfolio by simplifying and standardizing a lot of the offerings. We're focusing our investments on the highest value opportunities to scale this business and position it for long-term profitable growth. The work we started last year in Sample Management Solutions provides real traction here. You're seeing some of that performance in biorepositories and C&I, but that's where we restructured the business last year. On balance, that's how I would look at CapEx in our BioStores business right now.
I appreciate that. And then maybe just following up on that point. Is there maybe an element of a refresh cycle, like existing pieces of equipment in the field that need to be updated? And if so, what percentage of the interest that you're currently seeing might be related to that?
So refresh in this business depends on the store. We have roughly 300 stores in the field. Typical refresh cycles are around 10 to 20 years, usually centering near the 15-year mark. Some of those are coming online now, but much of the interest is around capacity expansion in certain applications — for example, small molecule, some legacy needs, optimizing storage specifically in therapeutics. We're seeing APIs, manufactured product and some therapeutics as use cases for our BioStores. Lastly, supporting R&D in sample management remains a driver for new investments. The key driver is organizations need productivity gains and a BioStore can create substantial improvements in throughput for R&D and margin.
The next question comes from Paul Knight from KeyBanc.
On the stores business where I think you mentioned it was going modular. It's probably hard to explain the engineering quickly, but is this kind of a step-up in terms of simplicity and lower risk for what even pre your tenure has been kind of an unpredictable performing product line?
Here's the way I would think about it, Paul. Everything has been an N of 1 in recent years across installs. Customers care most about density of storage, throughput footprint and what labware they can use. Overlay that with temperature elements, there are really five key components that matter. We're aligning our offerings so customers can configure the store based on those five elements rather than full customization. That will reduce engineering complexity, improve quality and reduce execution risk. We're also developing smaller stores and kiosks to address parts of the market we've not been playing in. Structurally, we now have an NPI team, a sustaining engineering team and a POC team focused on different aspects of R&D and product delivery. There's clarity there and a more disciplined approach going forward.
It does. And then we hear in the market competitive noise around other oligo players. What do you think your advantage is on the oligo synthesis side of the business, particularly now that Trey is on board?
First, having industry expertise leading the business is an advantage; Trey has deep experience in this market. On the portfolio side, our competitive advantage in oligos is turnaround time and quality, especially in Europe and China. We've been doing this for a long time; customers rely on our high-quality product, reliability and quick turnaround. You can see that in the numbers: Multiomics growth double digit in Europe at around 26% and China at 23%. That competitive advantage reads through in those regional results.
Your next question comes from Brendan Smith from TD Cowen.
Congrats on all the progress. I actually wanted to follow up a bit on your commentary on M&A. I'm just wondering maybe, first, where that falls in your capital allocation priorities among the other pieces of the framework that you mentioned? And then second, what kind of M&A you're considering there? Is that something we should expect more of in FY '27? And maybe as a follow-up, I wanted to check in on the longer-term goals — are you still aiming for the same metrics in top line growth by 2029 or are any of those under review?
Brendan, thanks. On capital allocation, we're continuing to evaluate strategic M&A opportunities and have a healthy funnel. However, the current environment makes valuations and seller willingness to transact challenging. We will remain disciplined and not pursue transactions just to deploy capital. Our balance sheet strength allows us to both pursue M&A that makes sense and repurchase shares. We repurchased approximately $50 million of shares during the quarter, and buybacks remain an important tool within our broader capital allocation framework. We'll continue to evaluate opportunities to deploy capital through repurchases while maintaining flexibility to invest in the business and pursue strategic M&A where the right opportunities arise. On turnaround initiatives, we're evaluating options to optimize cost structure and profitability in automated stores and cryo systems in parallel with repositioning the stores portfolio. We're also in the early stages of Multiomics transformation, including evaluating the structure of Sanger to optimize and consolidate footprint to improve performance and address profitability. Trey has reviewed the network and we're focused on improving utilization, workflow simplification and aligning capacity around market conditions. We executed a small restructuring in March for about $3 million of annualized savings in Multiomics. Regarding margins for 2027, the flow-through and margins from higher revenue performance will be more meaningful compared to 2026 as we implement these actions. On long-range plan metrics, we are not providing formal 2027 guidance at this time. Our focus remains on executing the priorities outlined at Investor Day, including building strength in recurring revenue businesses like biorepositories and C&I and advancing gene synthesis and Multiomics workflows. These are foundational to our long-range plan.
Your next question comes from Vijay Kumar from Evercore Partners.
Congrats on a nice win here. I have two questions. First, when I look at this Q4 guidance, right, down low singles, that's your exit rate. But on the other hand, you do have end markets improving. Most of your tools peers have sounded constructive and numbers have come in better. When I look at the Street's modeling close to 4% organic for next year, just in the context of a low single-digit exit rate, are you comfortable with how the Street is thinking about fiscal '27 given end markets are improving? Any color on what could be the puts and takes for fiscal '27 would be helpful. Second, on margins, I know the prior long-range plan assumed almost a 300 basis points annual expansion. Is that slope still relevant?
From an end market perspective, with our capital equipment side of the business, it's still a mixed bag, particularly for stores and cryo. We're seeing sequential improvement in biorepository and C&I. Investments are taking hold and we're seeing productivity gains in Multiomics, but we are not commenting on 2027 guidance today. For us, stores and cryo are mixed and regional in nature. Multiomics is accelerating in China and Europe, but North America remains mixed.
Vijay, I'll walk sequentially from Q3 to Q4. We raised the midrange of our guide. From Q3 to Q4, Multiomics will be flat to slightly down sequentially due to the timing shift of a roughly $3 million preclinical order that moved into Q3 from Q4. Remember, last year's Q4 was the highest revenue quarter in the history of the business, so comparisons are tough. For Sample Management Solutions, particularly SRS and C&I, momentum continues in the second half of the year. Stores and cryo on the low end are projected not to have new deals close. To reach the higher end of our guide, additional opportunities in Multiomics North America as reps continue to ramp and a couple of deals closing in stores and cryo would help. Regarding margins and the long-range plan, margins will continue to accrete every year and will ramp at the back end of 2028 and 2029. We feel confident about the opportunities within our control on margin expansion and expect to achieve the long-range plan targets over time.
That's helpful, Larry. If I may, one more on margins — the prior long-range plan assumed 300 basis points of annual expansion. Is that pacing still intact or should we expect a different trajectory?
Yes, we'll certainly hit the full LRP basis and get to the 18% to 20% adjusted EBITDA margin that we've talked about. The trajectory will see more meaningful ramp at the back end of the plan horizon, but the margin expansion path remains intact.
As there are no further questions, I'll turn the call back over to John.
Very good. Thank you, operator. Our third quarter results exceeded our expectations, supported by continued strength of our recurring revenue businesses, biorepositories and C&I, which have consistently performed well. We also saw modest improvement in Multiomics North America. However, the broader end market remains uneven, and we continue to approach the environment with appropriate caution. We are encouraged by the progress we are making, but we recognize that sustained performance will require consistent execution over multiple quarters. We remain focused on the actions within our control and on advancing our strategic priorities to drive long-term profitable growth and shareholder value creation. Finally, I'd like to thank our employees for their dedication to our customers. I also want to thank our customers for their continued trust and partnership and our shareholders for their ongoing support. We remain committed to delivering consistent execution and building a stronger Azenta for the future. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.