Azenta Reports Q1 2026 Results Amid Operational Challenges
Azenta Inc. shares fell 22.70% as the stock crossed below its 5-day SMA, reflecting investor concerns following the company's Q1 fiscal 2026 financial results.
In its earnings report, Azenta disclosed a revenue of $149 million, a 1% increase year-over-year, but faced a 7% decline from the previous quarter. The diluted EPS from continuing operations was -$0.11, showing an improvement from -$0.16 a year ago, yet the overall losses increased, indicating ongoing financial pressure. Management expressed optimism for the second half of fiscal 2026, despite the challenges.
The mixed results and operational difficulties have raised concerns among investors, leading to a significant drop in the stock price. The company’s strategic initiatives and future outlook will be closely monitored as it navigates through this transformation phase.
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- Revenue Performance: Azenta reported total revenue of $149 million for Q1 2026, reflecting a 1% year-over-year increase, yet organic revenue declined by approximately 1%, primarily impacted by a 2% foreign exchange headwind, indicating challenges in the current macroeconomic environment.
- Margin Outlook: Management anticipates an adjusted EBITDA margin expansion of about 300 basis points for 2026, despite the first quarter's EBITDA margin standing at 8.5%, down 230 basis points year-over-year, highlighting underutilized lab capacity in North America and additional costs from automated storage projects.
- Strategic Restructuring: The company confirmed the strategic sale of B Medical expected to close by March 31, alongside a $250 million share repurchase authorization, reflecting a cautious and strategic approach to capital deployment.
- Future Outlook: Azenta reaffirmed its organic revenue growth target of 3% to 5% for fiscal 2026, with expectations for accelerated growth in the second half, particularly as delayed approvals are processed and capital investments ramp up, demonstrating confidence in future market conditions.
- Earnings Overview: Azenta's Q1 2026 earnings report reveals a non-GAAP EPS of $0.09, missing expectations by $0.04, while revenue reached $149 million, up 1.4% year-over-year, exceeding forecasts by $1.9 million, indicating resilience in revenue growth.
- Organic Revenue Decline: Despite total revenue growth, organic revenue, excluding foreign exchange impacts, declined by 1% year-over-year, reflecting potential pressures from intensified market competition and demand fluctuations on the company's performance.
- Adjusted EBITDA Performance: The adjusted EBITDA stood at $13 million with an EBITDA margin of 8.5%, down 230 basis points from the previous year, indicating challenges in cost control and operational efficiency that may affect future profitability.
- Future Guidance: The company reiterates its guidance for fiscal year 2026, expecting organic revenue growth in the range of 3% to 5%, with an anticipated EBITDA margin expansion of approximately 300 basis points, demonstrating management's confidence in future growth prospects.
- Revenue Performance: In Q1 of fiscal 2026, Azenta reported $149 million in revenue from continuing operations, a 7% decline from the previous quarter but a 1% year-over-year increase, indicating slight growth potential amid market challenges.
- Earnings Per Share Shift: The diluted EPS from continuing operations was -$0.11, an improvement from -$0.16 a year ago, despite an overall increase in losses, reflecting financial pressure during the company's transformation phase.
- Adjusted EBITDA Decline: Adjusted EBITDA stood at $13 million, down 39% from the previous quarter, with the EBITDA margin decreasing from 13% to 8.5%, highlighting challenges in cost control and operational efficiency.
- Future Outlook: Management expresses optimism for the second half of fiscal 2026, emphasizing a commitment to sustainable growth through ongoing execution initiatives, despite facing multiple market and operational challenges.
- Revenue Performance: In Q1 of fiscal 2026, Azenta reported $149 million in revenue from continuing operations, reflecting a 1% year-over-year increase, but organic revenue declined by 1%, indicating sluggish growth in multiomics and sample management solutions that may impact future market competitiveness.
- Earnings Decline: The diluted EPS from continuing operations was -$0.11, an improvement from -$0.16 a year ago, yet the total diluted EPS fell to -$0.34 from -$0.25, highlighting ongoing challenges in restoring profitability amid operational difficulties.
- Cash Flow and Liquidity: As of December 31, 2025, Azenta had a total cash balance of $571 million and generated $21 million in operating cash flow, with free cash flow at $15 million, necessitating continued focus on capital expenditures and liquidity management to sustain operations.
- Share Repurchase Program: The Board approved a share repurchase program of up to $250 million to be executed by December 31, 2028, aimed at enhancing shareholder value, although no shares have been repurchased to date, reflecting uncertainties in market conditions.
- Earnings Announcement: Azenta (AZTA) is set to announce its Q1 earnings on February 4th before market open, with a consensus EPS estimate of $0.13, reflecting a significant year-over-year increase of 62.5%, indicating strong profitability potential.
- Revenue Expectations: Despite the optimistic EPS outlook, the revenue estimate stands at $147.1 million, representing a slight decline of 0.6% year-over-year, which may reflect cautious investor sentiment regarding the company's revenue growth prospects.
- Historical Performance: Over the past two years, Azenta has achieved a 100% accuracy rate in beating EPS estimates and a 75% rate for revenue estimates, showcasing the company's reliability in financial forecasting, which could bolster market confidence in its future performance.
- Revision Trends: In the last three months, there have been no upward revisions for EPS estimates, with four downward adjustments, while revenue estimates also saw no upward revisions and three downward adjustments, suggesting a potential weakening in market expectations for the company's growth trajectory.
- Earnings Announcement: Azenta will release its fiscal Q1 2026 earnings on February 4, 2026, before market open, reflecting the company's ongoing growth potential in the life sciences sector.
- Conference Call Details: The company will host a conference call and live webcast at 8:30 AM ET on the same day, allowing analysts and investors to access information directly through Azenta's website, ensuring transparent communication.
- Replay Availability: A replay of the earnings call will be available starting at 8:30 AM ET on February 5, 2026, facilitating access to key information for investors who cannot attend live, thereby enhancing investor relations management.
- Company Overview: Azenta is a leading provider of life sciences solutions globally, focusing on drug development and clinical research, with multiple industry-leading brands, underscoring its significant position in the rapidly evolving biotech market.








