Azenta, Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes contained in the 2025 Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below and in the forward-looking statements. Factors that could cause or contribute to these differences include, without limitation, those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, as well as those described in the 2025 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Information Related to Forward-Looking Statements”, Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K and Part II, Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q. All dollar amounts in the below MD&A are presented in U.S. dollars, unless otherwise noted or the context otherwise provides.

As previously disclosed in the 2025 Annual Report on Form 10-K, in connection with the preparation of the fiscal year 2025 consolidated financial statements, we identified errors in our previously issued financial statements. We evaluated the impact of the errors and concluded they were not material, individually or in the aggregate, to any previously issued interim or annual consolidated financial statements. The figures for the three and six months ended March 31, 2025 in this MD&A have been revised, where applicable, to reflect the impact of such corrections. Information regarding the impact of the revision to our previously issued condensed consolidated statements of operations, condensed consolidated statements of comprehensive income (loss), condensed consolidated statements of cash flows and condensed consolidated balance sheets for periods within fiscal 2025 is included in Note 20, Revision of Previously Issued Unaudited Quarterly Information, in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item 8 of the 2025 Annual Report on Form 10-K.

Our MD&A is organized as follows:

• Overview. This section provides a general description of our business and operating segments as well as a brief discussion and overall analysis of our business and financial performance, including key developments affecting us during the three and six months ended March 31, 2026 and 2025.
• Critical Accounting Policies and Estimates. This section discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results.
• Results of Operations. This section provides an analysis of our financial results for the three and six months ended March 31, 2026 compared to the three and six months ended March 31, 2025.
• Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows as well as a discussion of contractual commitments.

Disposition of B Medical Systems Business

On December 23, 2025, we entered into a definitive Sale and Purchase Agreement, or the Share Purchase Agreement with Thelema S.À R.L. or Thelema for the sale of the B Medical Systems business. In accordance with the Share Purchase Agreement, Thelema is acquiring the B Medical Systems business for $63.0 million. Thelema has deposited $9.0 million with us and was expected to pay the remaining $54.0 million on or before March 31, 2026. On March 27, 2026, we were informed by Thelema that it had not yet secured the financing required to complete the transaction and, solely as a result of the non‑satisfaction of that financing condition, the transaction did not close by March 31, 2026. Thelema indicated that it requires additional time to complete its financing arrangements. The transaction remains subject to the satisfaction of all closing conditions, including Thelema’s securing of the required financing, and there can be no assurance that the transaction will be completed on a revised timeline or at all. See Note 3, Discontinued Operations in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about the sale and the B Medical Systems business.

This strategic action is intended to simplify our portfolio and allow management to focus on driving revenue growth and profitability in our core Sample Management Solutions and Multiomics segments. The B Medical Systems business has been classified as held for sale and a discontinued operation under generally accepted accounting principles in the United States, or GAAP. Unless otherwise noted, this MD&A relates solely to our continuing operations and excludes the operations of our B Medical Systems business.

OVERVIEW

We are a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry. We entered the life sciences market in 2011, leveraging our in-house precision automation and cryogenics capabilities that we were then applying in the semiconductor manufacturing market. This led us to develop solutions for automated ultra-cold storage. Since then, we have expanded our life sciences offerings through internal investments and through a series of acquisitions. We support our customers from research and clinical development to commercialization with our sample management and automated storage systems, as well as genomic services expertise to help our customers bring impactful therapies to market faster. We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples including procurement, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository services. Our expertise, global footprint and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology and life sciences research institutions. In total, we employ approximately 2,900 full-time employees, part-time employees and contingent workers worldwide as of March 31, 2026 and have sales in approximately 83 countries. We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe.

Our portfolio includes product and service offerings developed by us internally, as well as obtained through acquisitions, designed to provide comprehensive capabilities to our customers, addressing their needs in sample exploration and management, automated storage and multiomics. We continue to develop new product and service offerings and enhance existing and acquired offerings through the expertise of our research and development resources. We believe our acquisition, investment and integration approach has allowed us to accelerate internal development and significantly accelerate time to market for our life sciences solutions.

Acquisition of UK Biocentre

On March 4, 2026, we acquired UK Biocentre Limited, or UK Biocentre, for a purchase price of approximately $27.5 million, net of cash acquired, including contingent consideration which the Company estimated the fair value to be $2.5 million as of the measurement date. UK Biocentre is a provider of sample management, sample storage and high-throughput sample processing services in the United Kingdom. UK Biocentre’s results of operations are reported in the Sample Management Solutions, or SMS, segment from the date of acquisition.

The acquisition strengthens our ability to deliver end-to-end lifecycle solutions in the United Kingdom, a life science research epicenter, while expanding our presence in Europe by establishing UK Biocentre as a European-wide operational hub to support pharmaceutical, biotechnology, academic, and public health customers across the region. This major hub will support our already established biorepository in Griesheim, Germany with current and new customers benefiting from expanded sample storage automated capabilities, reliable and fully integrated sample management and processing services, and a broader European footprint to support the region.

Segments

Within our Sample Management Solutions, or SMS, segment, we operate as a single business unit offering end-to-end sample management products and services, including: Sample Repository Services and Core Products (Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments and Controlled Rate Thawing Devices). This portfolio provides customers with a high level of sample quality, security, availability, intelligence and integrity throughout the lifecycle of samples, providing customers with complete end-to-end “cold chain of custody” capabilities. We also offer expert-level consultation services to our clients throughout their experimental design and implementation processes.

Within our Multiomics segment, our genomic services business advances research and development activities by providing gene sequencing, gene synthesis, and related services. We offer a comprehensive, global portfolio that we believe has broad appeal in the life sciences industry and enables customers to select the best solution for their research and development challenges. This portfolio also offers unique solutions for key markets such as cell and gene therapy, antibody development and biomarker discovery by addressing genomic complexity and throughput challenges.

Business and Financial Performance

Basis of Presentation

Our condensed consolidated financial statements are prepared in accordance with GAAP.

Financial Performance

Our performance for the three and six months ended March 31, 2026 and 2025 is as follows:

In thousands

Revenue increased 1% for each of the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year, mainly driven by revenue growth in both operating segments. The revenue growth in our SMS segment for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year was primarily driven by higher revenue in Sample Storage, Product Services and Consumables and Instruments, partially offset by lower revenues in Core Products, particularly in Automated Stores and Cryogenic Systems. The revenue growth in our Multiomics segment for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year was primarily driven by Next Generation Sequencing services and Gene Synthesis services, partially offset by a decline in Sanger Sequencing services. Gross margin was 43% for each of the three and six months ended March 31, 2026 compared to 44% and 45%, respectively, for the corresponding periods in the prior fiscal year. The decreases were primarily due to lost fixed-cost leverage from lower North America sales volume for Sanger Sequencing services and higher rework cost incurred on Automated Stores projects and an increase in excess and obsolete inventory reserves, partially offset by improved operational efficiencies and favorable impact from a correction for prior period cost of goods sold. Operating expenses for the three and six months ended March 31, 2026 increased $146.8 million and $140.3 million, respectively, compared to the corresponding periods in the prior fiscal year, primarily driven by a non-cash goodwill impairment charge of $149.1 million related to the Multiomics and SMS segments, partially offset by lower selling, general and administrative expenses. We generated a net loss from continuing operations of $157.0 million and $162.2 million, respectively, for the three and six months ended March 31, 2026 compared to a net loss from continuing operations of $19.8 million and $26.9 million, respectively, for the three and six months ended March 31, 2025. The increased net loss from continuing operations was primarily driven by the non-cash goodwill impairment charge of $149.1 million, partially offset by lower income tax expense. We generated a net loss from discontinued operations, net of tax, of $3.8 million and $14.0 million, respectively, for the three and six months ended March 31, 2026 compared to a net loss from discontinued operations, net of tax, of $27.9 million and $31.8 million, respectively, for the three and six months ended March 31, 2025.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the interim condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities, including contingent consideration. On an ongoing basis, we evaluate our estimates based on historical experience and consider various other assumptions that are believed to be reasonable under the circumstances. We evaluate current and anticipated worldwide economic conditions, both in general and specifically in relation to the life sciences industry, that serve as a basis for making judgments about the carrying values of assets and liabilities that are not readily determinable based on information from other sources. Actual results may differ from these estimates under different assumptions or conditions that could have a material impact on our financial condition and results of operations.

The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q are described under Critical Accounting Policies and Estimates included in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the 2025 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies or estimates from those set forth in our Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results of operations for the three and six months ended March 31, 2026 compared to the three and six months ended March 31, 2025.

Non-GAAP Financial Measures

Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, impairment of goodwill and intangible assets, transformation costs, restructuring charges, governance-related matters, merger and acquisition costs, and other unallocated corporate expenses to provide investors better perspective on the results of operations which we believe is more comparable to the similar analysis provided by our peers. Management also excludes special charges and gains, such as gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management uses these non-GAAP financial measures in its review and evaluation of the performance of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included under “Operating Income (Loss)” and “Gross Margin” below.

Revenue

Our revenue performance for the three and six months ended March 31, 2026 and 2025 is as follows:

In thousands, except percentages

Our SMS segment revenue for the three and six months ended March 31, 2026 increased approximately 2% and 1%, respectively, compared to the corresponding prior fiscal year periods, mainly driven by higher revenue in Sample Storage,

Product Services and Consumables and Instruments, partially offset by lower revenues in Core Products, particularly in Automated Stores and Cryogenic Systems, during the three and six months ended March 31, 2026.

Our Multiomics segment revenue for the three and six months ended March 31, 2026 increased approximately 0.3% and 0.8%, respectively, compared to the corresponding prior fiscal year periods, driven by revenue growth in Next Generation Sequencing and Gene Synthesis services, offset by a decline in Sanger Sequencing services.

Revenue generated outside the United States was 43% and 42%, respectively, for the three and six months ended March 31, 2026 compared to 37% for each of the corresponding prior fiscal year periods.

Operating Income (Loss)

Our operating income (loss) performance for the three and six months ended March 31, 2026 and 2025 is as follows (in thousands, except percentages):

41

(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to us focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing our operations, processes and systems to permanently alter our operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions, and third-party consulting costs associated with process and systems re-design.

(2) Includes expenses related to governance-related matters.

Operating income for the SMS segment was $1.7 million and $5.4 million, respectively, for the three and six months ended March 31, 2026 compared to operating loss of $1.2 million and operating income of $2.8 million, respectively, for the corresponding periods in the prior fiscal year. The SMS segment operating margin increased 361 basis points and 159 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. The increases in operating margin were primarily driven by higher revenue, partially offset by higher rework cost incurred on Automated Stores projects and an increase in excess and obsolete inventory reserves. Adjusted operating income for the SMS segment was $3.1 million and $8.1 million, respectively, for the three and six months ended March 31, 2026 compared to adjusted operating income of $2.8 million and $7.6 million, respectively, for the corresponding periods in the prior fiscal year. Adjusted operating margin for the SMS segment increased 32 basis points and 27 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. Adjusted operating income and margin exclude the impact of amortization of completed technology, transformation costs and other adjustments.

Operating loss for the Multiomics segment was $10.8 million and $15.8 million, respectively, for the three and six months ended March 31, 2026 compared to operating loss of $6.4 million and $9.6 million, respectively, for the corresponding periods in the prior fiscal year. The Multiomics segment operating margin decreased 686 basis points and 470 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. The decreases in operating margin were primarily driven by lost cost leverage from lower North America sales volume for Sanger Sequencing services. Adjusted operating loss for the Multiomics segment was $10.1 million and $14.4 million, respectively, for the three and six months ended March 31, 2026 compared to adjusted operating loss of $5.5 million and $7.8 million, respectively, for the corresponding periods in the prior fiscal year. Adjusted operating margin for the Multiomics segment decreased 709 basis points and 498 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization of completed technology and intangible assets and other adjustments.

Gross Margin

Our gross margin performance for the three and six months ended March 31, 2026 and 2025 is as follows (in thousands, except percentages):

(1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to us focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing our operations, processes and systems to permanently alter our operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions, and third-party consulting costs associated with process and systems re-design.

The SMS segment gross margin increased 44 basis points and decreased 194 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. Adjusted gross margin increased 35 basis points and decreased 169 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. The increases in gross margin and adjusted gross margin for the three months ended March 31, 2026 were driven by improved operational efficiencies, favorable product sales mix, higher-margin revenue streams, and favorable impact from a correction for prior period cost of goods sold, partially offset by higher rework costs and an increase in excess and obsolete inventory reserves. The decreases in gross margin and adjusted gross margin for the six months ended March 31, 2026 were primarily driven by higher rework cost incurred on Automated Stores projects and an increase in excess and obsolete inventory reserves.

The Multiomics segment gross margin decreased 276 basis points and 299 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. Adjusted gross margin decreased 304 basis points and 327 basis points, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year. The decreases in gross margin and adjusted gross margin were primarily driven by lost fixed-cost leverage from lower North America sales volume for Sanger Sequencing services.

Research and Development Expenses

Our research and development expenses for the three and six months ended March 31, 2026 and 2025 are as follows:

In thousands

In thousands

In thousands

In thousands

Total research and development expenses increased $1.8 million and $3.9 million, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year, driven by our increased investment in development to support new product introductions.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three and six months ended March 31, 2026 and 2025 are as follows:

In thousands

In thousands

In thousands

In thousands

Total selling, general and administrative expenses decreased $1.9 million and $11.3 million, respectively, for the three and six months ended March 31, 2026 compared to the corresponding periods in the prior fiscal year, primarily due to lower compensation and benefits expenses and contract labor costs. The one-time costs related to our leadership changes in the corresponding periods in the prior fiscal year also contributed to the decrease in the six months ended March 31, 2026.

Impairment of Goodwill

Based on the results of our quantitative goodwill impairment analysis as of March 31, 2026, the carrying amounts of our Multiomics and SMS reporting units exceeded their respective fair values, resulting in non-cash impairment charges of $112.4 million for Multiomics and $36.6 million for SMS. The total goodwill impairment charge of $149.1 million was recorded within “Impairment of goodwill and intangible assets” in our condensed consolidated statements of operations during the three months ended March 31, 2026. We made significant estimates and assumptions in our quantitative goodwill impairment analysis as of March 31, 2026. Actual results may vary significantly and may expose us to material impairment charges in the future. Please refer to Note 7, Goodwill and Intangible Assets in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

In the event the performance of any of our reporting units does not meet management expectations in the future, we experience a prolonged macroeconomic or market downturn, or there are other negative revisions to key assumptions used in the analysis used to estimate fair value, we may be required to perform additional impairment analyses which could result in one or more additional impairment charges, any one of which could have a material and adverse effect on our financial position and results of operations.

Restructuring Charges

Restructuring charges were $1.4 million and $2.6 million, respectively, for the three and six months ended March 31, 2026, a decrease of $2.2 million and $1.4 million, respectively, compared to the corresponding periods in the prior fiscal year. Please refer to Note 8, Restructuring in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Non-Operating Income

Interest income, net – We recorded interest income of $4.4 million and $9.5 million, respectively, for the three and six months ended March 31, 2026 compared to $4.5 million and $8.8 million, respectively, for the three and six months ended March 31, 2025. The slight changes in interest income are a result of interest rate fluctuations in our investment portfolios. Please refer to Note 5, Marketable Securities and Note 6, Derivative Instruments in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Other income, net – We recorded other income of $4.1 million for each of the three and six months ended March 31, 2026 compared to $1.2 million and $2.4 million, respectively, in the corresponding periods in the prior fiscal year. Other income, net primarily relates to foreign exchange gains and losses resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities. On March 4, 2026, we acquired UK Biocentre and settled a preexisting contractual relationship with UK Biocentre upon the business combination. As a result, we recognized $3.9 million of non-cash gain from the settlement, which is included in “Other income, net” on the condensed consolidated statements of operations for the three months ended March 31, 2026. Please refer to Note 4, Business Combination in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Income Tax Expense

We recorded income tax benefit of $0.3 million and income tax expense of $2.8 million, respectively, during the three and six months ended March 31, 2026, which were primarily driven by the profit mix in foreign jurisdictions, valuation allowance implications in the United States and state income taxes in jurisdictions where we do not have a net operating loss carry over.

We recorded income tax expense of $7.2 million and $11.1 million, respectively, during the three and six months ended March 31, 2025. The tax expense in each period was primarily driven by the profits in foreign jurisdictions and state income taxes in jurisdictions where we do not have a net operating loss carry over.

On July 4, 2025, the "One Big Beautiful Bill Act" was signed into U.S. tax law, extending many international tax provisions of the 2017 Tax Cuts and Jobs Act and providing additional favorable incentives. We will continue to monitor the financial impact of these changes. In the near term, we do not expect these changes to have an impact on our effective tax rate or cash flows as we are not electing to utilize many of the key incentives available under the "One Big Beautiful Bill Act."

Discontinued Operations

Results related to the B Medical Systems business and legal fees related to the ongoing indemnification dispute with the buyer of the semiconductor cryogenics business are included within discontinued operations for the three and six months ended March 31, 2026. Revenue from the B Medical Systems business was $22.8 million and $17.2 million for the three months ended March 31, 2026 and 2025, respectively. Revenue from the B Medical Systems business was $35.9 million and $34.8 million for the six months ended March 31, 2026 and 2025, respectively. Loss from discontinued operations, net of tax, was $3.8 million and $14.0 million, respectively, for the three and six months ended March 31, 2026, compared to $27.9 million and $31.8 million, respectively, for the three and six months ended March 31, 2025. The decrease is primarily due to lower loss on assets held for sale during three and six months ended March 31, 2026. Loss from discontinued operations includes only direct operating expenses incurred that (1) are clearly identifiable as costs being disposed of upon completion of the sale and (2) will not be continued by us on an ongoing basis. Indirect expenses which supported the B Medical Systems business and remain part of continuing operations, are not reflected in loss from discontinued operations. Please refer to Note 3, Discontinued Operations, in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2026, we had cash and cash equivalents, restricted cash, and marketable securities of $564.8 million and stockholders’ equity of $1.6 billion. We believe that our current cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least one year from the date of this Quarterly Report on Form 10-Q and for the foreseeable future thereafter. The current global economic environment makes it difficult for us to predict longer-term liquidity requirements with certainty. We may be unable to obtain financing that may be required on terms favorable to us, if at all. If adequate funds are not available to us on acceptable terms or otherwise, we may be unable to successfully develop or enhance products and services, respond to competitive pressures, or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business, financial condition and operating results.

Cash Flows and Liquidity

The discussion of our cash flows and liquidity that follows is stated on a total company consolidated basis and excludes the impact of discontinued operations.

Our cash and cash equivalents, restricted cash and marketable securities for our continuing operations as of March 31, 2026 and September 30, 2025 are as follows:

In thousands

As of March 31, 2026, we had $158.6 million of cash, cash equivalents and restricted cash held outside of the United States which are not currently needed for U.S. operations. We had approximately $25.1 million of cash in China as of March 31, 2026. We began repatriating cash from China to the United States during the third quarter of the fiscal year 2025 and have provided for $6.4 million of income taxes related to the repatriation plan as of March 31, 2026. We have repatriated $41.1 million from China during fiscal year 2026 and have a plan to repatriate cash from China in the future. Our marketable securities are generally readily convertible to cash without a material adverse impact.

Our cash flows on a total company consolidated basis for the six months ended March 31, 2026 and 2025 were as follows:

In thousands

Cash inflows from operating activities for the six months ended March 31, 2026 were $34.4 million, a decrease of $9.8 million compared to the corresponding period in the prior fiscal year. The decrease is primarily due to a U.S. federal tax refund of $11.5 million received in the six months ended March 31, 2025 compared to an immaterial U.S. federal tax refund received in the six months ended March 31, 2026.

Investing activities for the six months ended March 31, 2026 include $328.8 million in purchases of marketable securities, which was offset by $266.5 million in sales and maturities of marketable securities. Investing activities for the six months ended March 31, 2026 also include the $9.0 million deposit in connection with the pending sale of the B Medical Systems business and the $11.0 million closing cash payment for the acquisition of UK Biocentre, net of cash acquired.

Financing activities for the six months ended March 31, 2026 include $2.4 million of tax payments on net share settlements on equity awards during the six months ended March 31, 2026.

As of March 31, 2026, we had no outstanding debt on our balance sheet.

Capital Resources

Share Repurchase Program

On December 8, 2025, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $250 million of our common stock through December 31, 2028, or the 2025 Repurchase Program. Repurchases under the 2025 Repurchase Program may be made in the open market or through privately negotiated transactions (including under an accelerated share repurchase agreement), or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, subject to market and business conditions, legal requirements, and other factors. We are not obligated to acquire any particular amount of common stock under the 2025 Repurchase Program and share repurchases may be commenced or suspended at any time at our discretion. As of the date of this Quarterly Report on Form 10-Q, there have been no repurchases under the 2025 Repurchase Program.

Contractual Obligations and Requirements

As of March 31, 2026, we had non-cancellable commitments of $41.1 million comprised of purchase orders for inventory of $20.4 million and other operating expense commitments of $20.7 million.

We are exposed to a variety of market risks, including changes in interest rates affecting the return on our cash and cash equivalents, restricted cash and short-term and long-term investments and fluctuations in foreign currency exchange rates.

Interest Rate Exposure

Our cash and cash equivalents and restricted cash consist principally of money market securities which are short-term in nature. At March 31, 2026, our aggregate short-term and long-term investments were $324.3 million, consisting mostly of U.S. government backed securities and highly rated corporate debt securities. At March 31, 2026, there was a $0.7 million net unrealized loss position on marketable securities included in “Accumulated other comprehensive loss” in the condensed consolidated balance sheets included elsewhere in this Quarterly Report on Form 10-Q. A hypothetical 100 basis point change in interest rates would result in a $2.0 million change in interest income earned for each of the six months ended March 31, 2026 and 2025.

Currency Rate Exposure

Sales in currencies other than the U.S. dollar were approximately 39% and 34% of our total sales, respectively, during the six months ended March 31, 2026 and 2025. These sales were made primarily by our foreign subsidiaries, which have cost structures that substantially align with the currency of sale. We believe the cost structure alignment minimizes our currency risk on these transactions.

We have transactions and balances denominated in currencies other than the functional currency of the transacting entity. Most of these transactions carrying foreign exchange risk are in Germany, the United Kingdom, and China. In the normal course of our business, we have liquid assets denominated in non-functional currencies which include cash, short-term advances between our legal entities and accounts receivable which are subject to foreign currency exposure. Such balances were $45.8 million and $49.7 million, respectively, at March 31, 2026 and September 30, 2025, and primarily relate to the Euro and British Pound. We mitigate the impact of potential currency translation losses on these short-term intercompany advances by the timely settlement of each transaction, generally within 30 days. We also utilize forward contracts to mitigate our exposures to currency movement. We incurred foreign currency losses of $1.5 million and $1.1 million during the six months ended March 31, 2026 and 2025, respectively, which related to the currency fluctuation on these balances between the time the transaction occurred and the ultimate settlement of the transaction. A hypothetical 10% change in foreign exchange rates as of March 31, 2026 would result in an approximate change of $0.4 million in our net loss during the six months ended March 31, 2026.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q due to the material weaknesses described below. Notwithstanding the material weaknesses and based on additional analysis and other procedures management performed, our Chief Executive Officer and our Chief Financial Officer have concluded that the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with GAAP for each of the periods presented.

Material Weaknesses in Internal Control over Financial Reporting

As previously disclosed in the 2025 Annual Report on Form 10-K, the following material weaknesses were identified as of September 30, 2025 and remain outstanding as of March 31, 2026:

• As initially disclosed in our Annual Report on Form 10-K for the year ended September 30, 2024, we did not design and maintain effective controls related to the review of the cash flow statement. This material weakness resulted in immaterial misstatements in our consolidated statements of cash flows for the Q2 and Q3 interim periods during fiscal year 2023, the year ended September 30, 2023, the Q1, Q2, and Q3 interim periods during fiscal year 2024, the Q1 interim period during fiscal year 2025, and in our supplemental cash flow disclosures for the year ended September 30, 2022, each interim and annual period during fiscal year 2023 and the Q1, Q2 and Q3 interim periods during fiscal year 2024.
• As initially disclosed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2025, we did not design and maintain effective controls related to the preparation and review of account reconciliations. This material weakness resulted in immaterial misstatements in our condensed consolidated financial statements for

the Q1, Q2, and Q3 interim periods during fiscal year 2025, and our consolidated financial statements as of and for the year ended September 30, 2025.

• As initially disclosed in the 2025 Annual Report on Form 10-K, we did not design and maintain effective controls over the classification of certain costs in our consolidated statement of operations. This material weakness resulted in misstatements in the classification of certain costs between cost of revenue and selling, general and administrative and research and development costs that resulted in the revision of the annual financial statements for the year ended September 30, 2023, the Q1, Q2, and Q3 interim periods and the annual financial statements for the year ended September 30, 2024, and the Q1, Q2, and Q3 interim periods during the year ended September 30, 2025.

Additionally, these material weaknesses could result in misstatements of substantially all account balances and disclosures that would result in a material misstatement to our interim or annual consolidated financial statements that would not be prevented or detected on a timely basis.

Remediation Plans

Statements of Cash Flows – During fiscal year 2026, management has continued to take steps to remediate the material weakness, including implementing a new cash flow reporting tool which automates the calculation of the effect of exchange rate changes on cash and cash equivalents. In addition, we designed and implemented new processes and controls over the review of the consolidated statement of cash flows. While the new and enhanced controls have been designed and implemented and we monitored and evaluated their effectiveness during each of the first and second quarters of fiscal year 2026, they have not operated for a sufficient period as of March 31, 2026 to assert the material weakness has been remediated. Management will continue to evaluate and monitor the operating effectiveness of these controls over subsequent periods to determine whether the material weakness has been remediated.

Account Reconciliations – Since the identification of the material weakness in the fiscal second quarter of 2025, including during fiscal year 2026, we have started taking the necessary steps to work towards remediating the material weakness. Specifically, we have been designing and enhancing the controls and precision level over balance sheet reconciliations, drafting a new policy, and working with outside consultants to assist in certain aspects of the remediation plan. We will continue to take the necessary steps to address this material weakness.

Expense Classification – During the first quarter of fiscal year 2026, management initiated actions to remediate the identified material weakness. Specifically, we designed and implemented new controls related to the review of the classification of certain costs within the consolidated statements of operations. While the new controls have been designed and implemented and we monitored and evaluated their effectiveness during the second quarter of fiscal year 2026, they have not operated for a sufficient period as of March 31, 2026 to assert the material weakness has been remediated. Management will continue to evaluate and monitor the operating effectiveness of these controls over subsequent periods to determine whether the material weakness has been remediated.

These material weaknesses will not be considered remediated until we have completed the design and implementation of the applicable controls and they operate for a sufficient period of time for management to conclude, through testing, that such controls are operating effectively.

We are committed to continuing to improve our internal control over financial reporting, and as we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of the remediation measures described above.

Changes in Internal Control Over Financial Reporting. The Remediation Plans described above are the only changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

You should carefully review and consider the information regarding certain factors that could materially affect our business, consolidated financial condition or results of operations set forth under the section titled “Risk Factors” in Part I, Item 1A of the 2025 Annual Report on Form 10-K and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 filed with the SEC on February 5, 2026. There have been no material changes from the risk factors disclosed in the 2025 Annual Report on Form 10-K and such Quarterly Report on Form 10-Q, except for the changes to the risk factor set forth below. We may disclose additional changes to risk factors or additional factors from time to time in our future filings with the SEC.

Our business could be adversely affected if Thelema S.À R.L. fails to secure financing necessary to complete its acquisition of the B Medical Systems business.

As discussed in Note 3, Discontinued Operations in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q, the completion of our sale of the B Medical Systems business was conditioned upon the acquirer securing final residual financing for the remaining acquisition payment of $54.0 million on or before March 31, 2026. On March 27, 2026, we were informed by Thelema that it had not yet secured the financing required to complete the transaction and, solely as a result of the non‑satisfaction of that financing condition, the transaction did not close by March 31, 2026. Thelema has indicated that it requires additional time to complete its financing arrangements. The transaction remains subject to the satisfaction of all closing conditions, including Thelema’s securing of the required financing, and there can be no assurance that the transaction will be completed on a revised timeline or at all. The parties have not amended or terminated the Share Purchase Agreement and we are evaluating potential paths forward with respect to the transaction while Thelema continues to complete its financing arrangements. As a result of Thelema not satisfying the financing condition by March 31, 2026, either party may terminate the Share Purchase Agreement, in which case we will retain $5.0 million from the $9.0 million deposit as a break-up fee. A prolonged delay in closing the acquisition or Thelema’s failure to complete the acquisition, however, may require us to continue operating the B Medical Systems business for an indeterminate period of time and to include the results of the business in the results of our continuing operations. We would likely experience adverse consequences as a result thereof, including a negative and dilutive impact on our top and bottom-line performance, the distraction of management away from our core Sample Management Solutions and Multiomics segments and the potential need to recognize additional impairment charges related to the B Medical Systems business, any of which could have a material adverse effect on our business, results of operations, or financial condition.

Our goodwill and intangible assets may become impaired.

As of March 31, 2026, we had $553.1 million of goodwill and $91.4 million in net intangible assets as a result of our acquisitions. We periodically review our goodwill and the estimated useful lives of our identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value, or for intangible assets, a revised useful life. These events and circumstances include significant changes in the business climate, legal factors, operating performance indicators, advances in technology and competition. Any impairment or revised useful life could have a material and adverse effect on our financial position and results of operations and could harm the trading price of our common stock.

During the second quarter of fiscal year 2026, we assessed several events and circumstances that could affect the significant inputs used to determine the fair value of our reporting units, including updates to forecasted cash flows, increased uncertainty in the macroeconomic and geopolitical environment, and a sustained decline in our stock price. We concluded it was more likely than not the fair value of each of the SMS and Multiomics reporting units was less than their respective carrying amounts due to the combined impact of declining stock price and revised forecasts. As a result, we completed a quantitative goodwill impairment test for our reporting units. Based on the results of the quantitative impairment test performed as of March 31, 2026, the carrying amounts of the SMS and Multiomics reporting units exceeded their respective fair values, resulting in non-cash impairment charges of $36.6 million for SMS and $112.4 million for Multiomics. Please refer to Note 7, Goodwill and Intangible Assets in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

In the event the performance of any of our reporting units does not meet management expectations in the future, we experience a prolonged macroeconomic or market downturn, or there are other negative revisions to key assumptions used in the analysis used to estimate fair value, we may be required to perform additional impairment analyses which could result in one or more additional impairment charges, any one of which could have a material and adverse effect on our financial position, results of operations and trading price of our common stock.