Azenta Inc

Previous wording

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 now support our customers from research and clinical development to commercialization with our sample management, automated storage, and 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 and sourcing, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository solutions. 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 3,400 full-time employees, part-time employees and contingent workers worldwide as of March 31, 2024 and have sales in approximately 150 countries. We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe.

Current wording

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 now support our customers from research and clinical development to commercialization with our sample management, automated storage, vaccine cold storage and transport, 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 solutions. 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 3,300 full-time employees, part-time employees and contingent workers worldwide as of June 30, 2024 and have sales in approximately 150 countries. We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe.

Previous wording

Revenue increased 7% for the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year, driven by a 51% increase in revenue in the B Medical Systems segment and a 4% increase in revenue in the Sample Management Solutions segment. Gross margin was 40% for the three months ended March 31, 2024 compared to 36% for the corresponding period in the prior fiscal year, driven by margin expansion in all three business segments and higher revenue in the B Medical Systems and Sample Management Solutions segments. Operating expenses increased $144.1 million during the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year, primarily due to an $111.3 million non-cash goodwill impairment charge within the B Medical Systems segment, a $4.7 million of intangible asset impairment charge associated with the discontinuation of our sample sourcing product offering within our Sample Management Solutions business, and increased restructuring charges resulting from initiatives launched in the second quarter of fiscal year 2024. Additionally, we recognized a benefit of $17.1 million of fair value contingent consideration adjustments related to the B Medical Systems segment in the three months ended March 31, 2023 which did not reoccur in fiscal year 2024. We generated a net loss of $136.9 million for the three months ended March 31, 2024 compared to a net loss of $4.9 million for the three months ended March 31, 2023, primarily driven by the impairment of goodwill and intangible assets.

Current wording

Revenue increased 4% for the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year, driven by increased revenue in the Sample Management Solutions and B Medical Systems segments, while revenue in the Multiomics segment remained flat. Gross margin was 40% for the three months ended June 30, 2024 compared to 41% for the corresponding period in the prior fiscal year, driven by higher amortization expense and transformation costs in the current period as well as purchase accounting impacts to inventory in the prior year period which did not reoccur, partially offset by higher revenue and operational efficiencies. Operating expenses remained flat during the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year driven by decreased research and development and selling, general and administrative expenses, offset by increased restructuring charges related to the Company's cost reduction initiatives launched in fiscal year 2024. Additionally, we recognized a benefit of $1.4 million of fair value contingent consideration adjustments related to the B Medical Systems segment in the three months ended June 30, 2023 which did not reoccur in fiscal year 2024. We generated a net loss of $6.6 million for the three months ended June 30, 2024 compared to a net loss of $1.5 million for the three months ended June 30, 2023, primarily driven by the decrease in interest and other income.

Previous wording

partially offset by 5% and 1% increases in revenue in the Sample Management Solutions and Multiomics segments, respectively. Gross margin was 40% for the six months ended March 31, 2024 compared to 39% for the corresponding period in the prior fiscal year, driven by margin expansion in the Sample Management Solutions and Multiomics segments, partially offset by margin pressure from decreased revenue in the B Medical Systems segment. Operating expenses increased $130.8 million during the six months ended March 31, 2024 compared to the corresponding period in the prior fiscal year, primarily due to the non-cash impairment of goodwill and intangible assets and increased restructuring charges recognized in the six months ended March 31, 2024, partially offset by decreased selling, general and administrative expenses. Additionally, we recognized a benefit of $17.1 million of fair value contingent consideration adjustments related to the B Medical Systems segment in the six months ended March 31, 2023 which did not reoccur in fiscal year 2024. We generated a net loss of $152.6 million for the six months ended March 31, 2024 compared to a net loss of $16.2 million for the six months ended March 31, 2023, primarily driven by the impairment of goodwill and intangible assets.

Current wording

Revenue decreased 1% for the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year, driven by decreased revenue in the B Medical Systems segment, partially offset by increased revenue in the Sample Management Solutions and Multiomics segments. Gross margin was 40% for the nine months ended June 30, 2024, which is consistent with the corresponding period in the prior fiscal year. Gross margin in the 2024 period was driven by margin expansion in the Sample Management Solutions and Multiomics segments, offset by margin pressure from decreased revenue in the B Medical Systems segment. Operating expenses increased $131 million during the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year, primarily due to the non-cash impairment of goodwill and intangible assets and increased restructuring charges recognized in the nine months ended June 30, 2024, partially offset by decreased selling, general and administrative expenses. Additionally, we recognized a benefit of $18.5 million of fair value contingent consideration adjustments related to the B Medical Systems segment in the nine months ended June 30, 2023 which did not reoccur in fiscal year 2024. We generated a net loss of $159.2 million for the nine months ended June 30, 2024 compared to a net loss of $17.6 million for the nine months ended June 30, 2023, primarily driven by the impairment of goodwill and intangible assets, a lower income tax benefit, and decreased interest income.

Previous wording

Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results from operations for the three and six months ended March 31, 2024 compared to the three and six months ended March 31, 2023.

Current wording

Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results from operations for the three and nine months ended June 30, 2024 compared to the three and nine months ended June 30, 2023.

Previous wording

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, restructuring charges, purchase price accounting adjustments to inventory, charges related to merger and acquisitions and share repurchases, goodwill and intangible asset impairment charges, and non-recurring costs related to the Company’s business transformation initiatives to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its 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 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 Loss” and “Gross Margin” below.

Current wording

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, purchase accounting impact on inventory, transformation costs, restructuring charges, goodwill and intangible asset impairment, fair value adjustments to contingent consideration, governance-related matters, merger and acquisition costs and costs related to share repurchase, and other unallocated corporate expenses to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its 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 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 Loss” and “Gross Margin” below.

Previous wording

Our revenue performance for the three and six months ended March 31, 2024 and 2023 is as follows:

Current wording

Our revenue performance for the three and nine months ended June 30, 2024 and 2023 is as follows:

Previous wording

Revenue for the three months ended March 31, 2024 increased 7% compared tothe corresponding prior fiscal year period, driven by a 51% increase in our B Medical Systems segment and a 4% increase in our Sample Management Solutions segment, while revenue in our Multiomics segment remained flat.

Current wording

Revenue for the three months ended June 30, 2024 increased 4% compared to the corresponding prior fiscal year period, driven by 7% increases in both our Sample Management Solutions and B Medical Systems segments, while revenue in our Multiomics segment remained flat.

Previous wording

Our B Medical Systems segment revenue for the three months ended March 31, 2024 increased 51% compared tothe corresponding prior fiscal year period, primarily due to the timing of orders for cold chain equipment.

Current wording

Our B Medical Systems segment revenue for the three months ended June 30, 2024 increased 7% compared to the corresponding prior fiscal year period, primarily due to the timing of orders for cold chain equipment.

Previous wording

Our Multiomics segment revenue for the three months ended March 31, 2024 remained flat compared tothe corresponding prior fiscal year period with consistent revenue in the Next Generation Sequencing business and revenue growth in the Gene Synthesis business, offset by a decline in Sanger sequencing services.

Current wording

Our Multiomics segment revenue for the three months ended June 30, 2024 remained flat compared to the corresponding prior fiscal year period driven by revenue growth in Next Generation Sequencing and Gene Synthesis, offset by a decline in Sanger sequencing services.

Previous wording

Revenue generated outside the United States was $70.7 million, or 44% of total revenue, for the three months ended March 31, 2024 compared to $61.8 million, or 42% of total revenue, for the corresponding period in the prior fiscal year.

Current wording

Revenue generated outside the United States was $77.6 million, or 45% of total revenue, for the three months ended June 30, 2024 compared to $76.1 million, or 46% of total revenue, for the corresponding period in the prior fiscal year.

Previous wording

Revenue for the six months ended March 31, 2024 decreased 4% compared to the corresponding period in the prior fiscal year, driven by a 38% decrease in our B Medical Systems segment, partially offset by a 5% increase in our Sample Management Solutions segment and a 1% increase in our Multiomics segment.

Current wording

Revenue for the nine months ended June 30, 2024 decreased 1% compared to the corresponding period in the prior fiscal year, driven by a 24% decrease in our B Medical Systems segment, partially offset by a 5% increase in our Sample Management Solutions segment and a 1% increase in our Multiomics segment.

Previous wording

Our B Medical Systems segment revenue for the six months ended March 31, 2024 decreased 38% compared to thecorresponding prior fiscal year period, primarily due to the timing of orders for cold chain equipment.

Current wording

Our B Medical Systems segment revenue for the nine months ended June 30, 2024 decreased 24% compared to the corresponding prior fiscal year period, primarily due to the timing of orders for cold chain equipment.

Previous wording

Our Sample Management Solutions segment revenue for the six months ended March 31, 2024 increased 5% compared to thecorresponding prior fiscal year period driven by revenue growth in the large-automated Store Systems and Sample Repository Solutions businesses.

Current wording

Our Sample Management Solutions segment revenue for the nine months ended June 30, 2024 increased 5% compared to the corresponding prior fiscal year period driven by revenue growth in the Automated Stores and Sample Repository Solutions businesses.

Previous wording

Our Multiomics segment revenue for the six months ended March 31, 2024 increased 1% compared to thecorresponding prior fiscal year period primarily driven by revenue growth in Gene Synthesis and Next-Generation Sequencing services, partially offset by a decline in Sanger sequencing services.

Current wording

Our Multiomics segment revenue for the nine months ended June 30, 2024 increased 1% compared to the corresponding prior fiscal year period driven by revenue growth in Next-Generation Sequencing and Gene Synthesis, partially offset by a decline in Sanger sequencing services.

Previous wording

Revenue generated outside the United States was $134.5 million, or 43% of total revenue, for the six months ended March 31, 2024 compared to $152.5 million, or 47% of total revenue, for the corresponding period in the prior fiscal year.

Current wording

Revenue generated outside the United States was $212.1 million, or 44% of total revenue, for the nine months ended June 30, 2024 compared to $228.5 million, or 46% of total revenue, for the corresponding period in the prior fiscal year.

Previous wording

Our operating loss performance for the three and six months ended March 31, 2024 and 2023 is as follows (in thousands, except percentages):

Current wording

Our operating loss performance for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands, except percentages):

Previous wording

Operating loss for the Multiomics segment was $4.0 million for the three months ended March 31, 2024 compared to an operating loss of $5.0 million in the corresponding period in the prior fiscal year. The Multiomics segment operating margin was (6.4)%, an increase of 170 basis points for the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. The decrease in operating loss and increase in operating margin were primarily driven by higher gross profit and lower operating expenses due to cost reduction initiatives. Adjusted operating loss was $3.0 million for the three months ended March 31, 2024 compared to adjusted operating loss of $3.8 million in the corresponding period of the prior fiscal year. Adjusted operating margin was (4.8)%, an increase of 130 basis points for the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology of $1.0 million and $1.2 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Operating loss for the Multiomics segment was $1.8 million for the three months ended June 30, 2024 compared to an operating loss of $4.6 million in the corresponding period in the prior fiscal year. The Multiomics segment operating margin was (2.8)%, an increase of 448 basis points for the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. The decrease in operating loss and increase in operating margin were primarily driven by higher gross profit and lower operating expenses due to cost reduction initiatives. Adjusted operating loss was $0.7 million for the three months ended June 30, 2024 compared to adjusted operating loss of $3.4 million in the corresponding period of the prior fiscal year. Adjusted operating margin was (1.1)%, an increase of 420 basis points for the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology of $1.0 million and $1.2 million for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Operating loss for the B Medical Systems segment was $5.8 million for the three months ended March 31, 2024 compared to an operating loss of $9.0 million in the corresponding period in the prior fiscal year. The B Medical Systems segment operating margin was (25.5)%, an increase of 34.2 percentage points for the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. The decrease in operating loss and increase in operating margin were primarily due to higher volume of cold chain sales in the product mix, partially offset by higher operating expenses due to increased commissions on cold chain sales. Adjusted operating loss was $1.2 million for the three months ended March 31, 2024 compared to adjusted operating loss of $3.4 million in the corresponding period in the prior fiscal year. Adjusted operating margin was (5.1)%, an increase of 17.2 percentage points for the three months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology of $4.3 million and $2.7 million for the three months ended March 31, 2024 and 2023, respectively, transformation costs of $0.4 million for the three months ended March 31, 2024 and purchase accounting impact on inventory of $2.9 million for the three months ended March 31, 2023.

Current wording

Operating loss for the B Medical Systems segment was $5.1 million for the three months ended June 30, 2024 compared to an operating loss of $4.1 million in the corresponding period in the prior fiscal year. The B Medical Systems segment operating margin was (18.0)%, a decrease of 260 basis points for the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. The increase in operating loss and decrease in operating margin were primarily driven by lower volume of cold chain sales in the product mix, partially offset by higher revenue and lower operating expenses due to cost reduction initiatives. Adjusted operating income was $1.9 million for the three months ended June 30, 2024 compared to adjusted operating income of $1.5 million in the corresponding period in the prior fiscal year. Adjusted operating margin was 6.7%, an increase of 101 basis points for the three months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating income and margin exclude the impact of amortization related to completed technology of $4.3 million and $2.7 million for the three months ended June 30, 2024 and 2023, respectively, transformation costsof $2.8 million for the three months ended June 30, 2024 and purchase accounting impact on inventory of $3.0 million for the three months ended June 30, 2023.

Previous wording

Operating loss for the B Medical Systems segment was $14.0 million for the six months ended March 31, 2024 compared to an operating loss of $9.5 million in the corresponding period in the prior fiscal year. The B Medical Systems segment operating margin was (39.6)%, a decrease of 23.0 percentage points for the six months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. The increase in operating loss and decrease in operating margin were primarily due to lower volume of cold chain sales in the product mix, partially offset by lower operating expenses due to decreased commissions on cold chain sales. Adjusted operating loss was $5.6 million for the six months ended March 31, 2024 compared to adjusted operating income of $2.9 million in the corresponding period in the prior fiscal year. Adjusted operating margin was (15.7)%, a decrease of 20.9 percentage points for the six months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization of intangible assets of $8.1 million and $6.6 million for the six months ended March 31, 2024 and 2023, respectively, transformation costs of $0.4 million for the six months ended March 31, 2024 and purchase accounting impact on inventory of $5.8 million for the six months ended March 31, 2023.

Current wording

Operating loss for the B Medical Systems segment was $19.1 million for the nine months ended June 30, 2024 compared to an operating loss of $13.6 million in the corresponding period in the prior fiscal year. The B Medical Systems segment operating margin was (29.9)%, a decrease of 1,370 basis points for the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. The increase in operating loss and decrease in operating margin were primarily due to product mix with lower volume of cold chain sales, partially offset by lower operating expenses due to decreased commissions on cold chain sales and cost reduction initiatives. Adjusted operating loss was $3.7 million for the nine months ended June 30, 2024 compared to adjusted operating income of$4.5 million in the corresponding period in the prior fiscal year. Adjusted operating margin was (5.7)%, a decrease of 1,104 basis points for the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization of intangible assets of $12.3 million and $9.3 million for the nine months ended June 30, 2024 and 2023, respectively, transformation costs of $3.1 million for the nine months ended June 30, 2024 and purchase accounting impact on inventory of $8.7 million for the nine months ended June 30, 2023.

Previous wording

Our gross margin performance for the three and six months ended March 31, 2024 and 2023 is as follows (in thousands, except percentages):

Current wording

Our gross margin performance for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands, except percentages):

Previous wording

The Multiomics segment gross margin was 44.6% for the three months ended March 31, 2024, an increase of 120 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 46.2% for the three months ended March 31, 2024, an increase of 80 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for the Gene Synthesis business, partially offset by lower gross margin for Sanger sequencing services. Adjusted gross margin excludes the impact of amortization related to completed technology of $1.0 million and $1.2 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

The Multiomics segment gross margin was 45.9% for the three months ended June 30, 2024, an increase of 158 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 47.5% for the three months ended June 30, 2024, an increase of 130 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for the Next Generation Sequencing and Gene Synthesis businesses, partially offset by lower gross margin for Sanger sequencing services. Adjusted gross margin excludes the impact of amortization related to completed technology of $1.0 million and $1.2 million for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

The B Medical Systems segment gross margin was 11.9% for the three months ended March 31, 2024, an increase of 20.6 percentage points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 32.4% for the three months ended March 31, 2024, an increase of 370 percentage points compared to the corresponding period in the prior fiscal year, driven by higher volume of cold chain sales in the product mix. Adjusted gross margin excludes the impact of amortization related to completed technology of $4.3 million and $2.7 million for the three months ended March 31, 2024 and 2023, respectively, transformation costs of $0.4 million for the three months ended March 31, 2024 and purchase accounting impact on inventory of $2.9 million for the three months ended March 31, 2023.

Current wording

The B Medical Systems segment gross margin was 12.5% for the three months ended June 30, 2024, a decrease of 532 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 37.3% for the three months ended June 30, 2024, a decrease of 170 basis points compared to the corresponding period in the prior fiscal year, driven by product mix with lower volume of cold chain sales, partially offset by higher revenue. Adjusted gross margin excludes the impact of amortization related to completed technology of $4.3 million and $2.7 million for the three months ended June 30, 2024 and 2023, respectively, transformation costs of $2.8 million for the three months ended June 30, 2024 and purchase accounting impact on inventory of $3.0 million for the three months ended June 30, 2023.

Previous wording

The Sample Management Solutions segment gross margin was 44.4% for the three months ended March 31, 2024, an increase of 560 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 46.3% for the three months ended March 31, 2024, an increase of 620 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for both the Core Products and Sample Repository Solutions businesses. Adjusted gross margin excludes the impact of amortization related to completed technology of $1.0 million and $0.9 million for the three months ended March 31, 2024 and 2023, respectively, and transformation costs of $0.4 million for the three months ended March 31, 2024.

Current wording

The Sample Management Solutions segment gross margin was 43.8% for the nine months ended June 30, 2024, an increase of 123 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 45.2% for the nine months ended June 30, 2024, an increase of 160 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for both the Core Products and Sample Repository Solutions businesses. Adjusted gross margin excludes the impact of amortization related to completed technology of $2.9 million and $2.1 million for the nine months ended June 30, 2024 and 2023, respectively, and transformation costs of $0.2 million for the nine months ended June 30, 2024.

Previous wording

The Multiomics segment gross margin was 45.0% for the six months ended March 31, 2024, an increase of 60 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 46.6% for the six months ended March 31, 2024, an increase of 30 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for the Gene Synthesis business, partially offset by lower gross margin for Sanger sequencing services. Adjusted gross margin excludes the impact of amortization related to completed technology of $2.1 million and $2.4 million for the six months ended March 31, 2024 and 2023, respectively.

Current wording

The Multiomics segment gross margin was 45.3% for the nine months ended June 30, 2024, an increase of 94 basis points compared to the corresponding period in the prior fiscal year. Adjusted gross margin was 46.9% for the nine months ended June 30, 2024, an increase of 63 basis points compared to the corresponding period in the prior fiscal year, driven by higher gross margin for the Gene Synthesis business, partially offset by lower gross margin for Next Generation Sequencing and Sanger sequencing services. Adjusted gross margin excludes the impact of amortization related to completed technology of $3.1 million and $3.7 million for the nine months ended June 30, 2024 and 2023, respectively.

Previous wording

Our research and development expenses for the three and six months ended March 31, 2024 and 2023 are as follows:

Current wording

Our research and development expenses for the three and nine months ended June 30, 2024 and 2023 are as follows:

Previous wording

Total research and development expenses increased $0.2 million and $1.1 million, respectively, for the three and six months ended March 31, 2024 compared to the corresponding periods in the prior fiscal year, primarily due to increased product development expenses at the Sample Management Solutions segment.

Current wording

Total research and development expenses increased$0.1 million for the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year, driven by increased product development expenses in our Sample Management Solutions segment.

Previous wording

Our selling, general and administrative expenses for the three and six months ended March 31, 2024 and 2023 are as follows:

Current wording

Our selling, general and administrative expenses for the three and nine months ended June 30, 2024 and 2023 are as follows:

Previous wording

Total selling, general and administrative expenses decreased $9.0 million for the six months ended March 31, 2024 compared to the corresponding period in the prior fiscal year, driven by savings from cost reduction initiatives, decreased governance-related costs, and non-recurring expenses for the accelerated share repurchase arrangement in the six months ended March 31, 2023.

Current wording

Total selling, general and administrative expenses decreased$10.6 million for the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year, driven by savings from cost reduction initiatives across the business, as well as decreased governance-related costs and non-recurring expenses for the accelerated share repurchase arrangement in the nine months ended June 30, 2023.

Previous wording

Restructuring charges were $7.3 million and $8.5 million, respectively, for the three and six months ended March 31, 2024, an increase of $5.8 million and $5.5 million, respectively, compared to the three and six months ended March 31, 2023 driven by initiatives launched in the second quarter of fiscal year 2024. See Note 7,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.

Current wording

Restructuring charges were$2.1 million and $10.5 million, respectively, for thethree and nine months ended June 30, 2024, an increase of $1.3 million and $6.8 million, respectively, compared to the three and nine months ended June 30, 2023 driven by initiatives launched in the fiscal year 2024. See Note 7,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.

Previous wording

*Interest income, net –*We recorded interest income of $9.6 million and $19.6 million, respectively, for the three and six months ended March 31, 2024 compared to $10.4 million and $21.1 million, respectively, recorded for the three and six months ended March 31, 2023. The decrease in interest income is due to decreased investments in marketable securities during the six months ended March 31, 2024 compared to the corresponding period in the prior fiscal year. Please refer to Note 4,Marketable Securities and Note 5,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.

Current wording

Interest income, net–* *We recorded interest income of$8.0 million and $27.7 million, respectively, for thethree and nine months ended June 30, 2024 compared to $11.3 million and $32.4 million, respectively, recorded for the three and nine months ended June 30, 2023. The decrease in interest income is due to decreased investments in marketable securities during the nine months ended June 30, 2024 compared to the corresponding period in the prior fiscal year. Please refer to Note 4,Marketable Securities and Note 5,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.

Previous wording

Other, net – We recorded other income of $0.3 million and $0.9 million, respectively, for the three and six months ended March 31, 2024 compared to other loss of $2.7 million and $1.5 million, respectively, for the three and six months ended March 31, 2023, which primarily relates toforeign exchange gains and losses resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities.

Current wording

Other income (expense), net– We recorded other expense of $0.3 million and other income of $0.7 million, respectively, for the three and nine months ended June 30, 2024 compared to other expense of $0.8 million and $0.7 million, respectively, for the three and nine months ended June 30, 2023, which primarily relates to foreign exchange gains and losses resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities.

Previous wording

We recorded an income tax benefit of $0.3 million and $0.5 million, respectively, during the three and six months ended March 31, 2024. The tax benefit was primarily driven by the pre-tax loss from operations offset by $1.7 million of charge related to a valuation allowance recorded against deferred tax assets in a foreign subsidiary during the three months ended March 31, 2024. The pre-tax benefit was further offset by $0.5 million of stock compensation shortfall expense for tax deductions that were lower than the associated book compensation expense during the six months ended March 31, 2024 and a $0.7 million expense related to a valuation allowance on beginning of year U.S. state deferred tax

Current wording

We recorded an income tax benefit of $0.5 million and $0.9 million during the three and nine months ended June 30, 2024, respectively. The tax benefit for the three months ended June 30, 2024 was driven by our loss from operations. The tax benefit for the nine months ended June 30, 2024 was primarily driven by the pre-tax loss from operations offset by $1.7 million of charges related to a valuation allowance recorded against deferred tax assets in a foreign subsidiary, $0.5 million of stock compensation shortfall expense for tax deductions that were lower than the associated book compensation expense and $0.7 million of expenses related to a valuation allowance on beginning of year U.S. state deferred tax assets. Our tax rate on the loss from operations was lower than statutory rates because we were not providing a full tax benefit on U.S. losses due to a partial valuation allowance being recorded against U.S. federal and state deferred tax assets during the current year. As a result of the valuation allowance, the benefit was reduced by $1.3 million and $9.6 million during the three and nine months ended June 30, 2024.

Previous wording

We recorded an income tax benefit of $3.3 million and $7.9 million, respectively, during the three and six months ended March 31, 2023. The tax benefit for the three months ended March 31, 2023 was primarily driven by the pre-tax loss from operating during the period. The tax benefit for the six months ended March 31, 2023 was primarily driven by the pre-tax loss from the operations and a $1.4 million deferred tax benefit resulting from the extension of a tax incentive in China. The effective tax rates for the three and six months ended March 31, 2023 were substantially higher than statutory rates. The effective rates were driven higher than the statutory rates by the discrete tax benefit in China and the fair value adjustment of the contingent consideration related to the B Medical acquisition. The contingent consideration generated $17.1 million of pre-tax income that was not subject to income taxes, therefore, the tax benefit was being driven by a tax loss that was significantly higher than the book loss for these periods.

Current wording

We recorded an income tax benefit of $1.2 million and $9.1 million, respectively during the three and nine months ended June 30, 2023. The tax benefit for the three months ended June 30, 2023 was primarily driven by the pre-tax loss from operations during the period. The tax benefit for the nine months ended June 30, 2023 was primarily driven by the pre-tax loss from operations and a $1.4 million deferred tax benefit resulting from the extension of a tax incentive in China. The effective tax rates for the three and nine months ended June 30, 2023 are slightly higher than statutory rates. The effective rates are driven higher than statutory rates by the discrete tax benefit in China noted above and the fair value adjustment of the contingent consideration related to the B Medical acquisition. The contingent consideration generated $18.5 million of pre-tax income that is not subject to income taxes, therefore, the tax benefit is being driven by a tax loss that is significantly higher than the book loss for these periods.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $353.5 million and stockholders’ equity of $2.2 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 sufficient certainty. We may be unable to obtain any additional 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.

Current wording

As of June 30, 2024, we had cash and cash equivalents of$336.5 million and stockholders’ equity of$2.0 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 sufficient certainty. We may be unable to obtain any additional 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.

Previous wording

Our cash and cash equivalents, restricted cash and marketable securities as of March 31, 2024 and September 30, 2023 were as follows:

Current wording

Our cash and cash equivalents, restricted cash and marketable securities as of June 30, 2024 and September 30, 2023 are as follows:

Previous wording

As of March 31, 2024, we had $129.7 million of cash, cash equivalents and restricted cash held outside of the United States. If these funds are needed for U.S. operations, we would need to repatriate these funds. Based on current U.S. tax laws, any repatriation in the future would likely not result in U.S. federal income tax. Our marketable securities are generally readily convertible to cash without a material adverse impact.

Current wording

As of June 30, 2024, we had$131.5 million of cash, cash equivalents and restricted cash held outside of the United States. If these funds are needed for U.S. operations, we would need to repatriate these funds. Based on current U.S. tax laws, any repatriation in the future would likely not result in U.S. federal income tax. Our marketable securities are generally readily convertible to cash without a material adverse impact.

Previous wording

Our cash flows for the six months ended March 31, 2024 and 2023 were as follows:

Current wording

Our cash flows for the nine months ended June 30, 2024 and 2023 were as follows:

Previous wording

Cash inflows from operating activities for the six months ended March 31, 2024 were $34.8 million, primarily due to improved inventory management and decreased selling, general and administrative expenses as a result of our cost savings plans and transformation initiatives. Investing outflows of $172.2 million include $345.4 million of purchases of marketable securities, offset by $190.5 million for sales and maturities of marketable securities. Financing activities for the six months ended March 31, 2024 include $186.8 million of outflows related to our share repurchase program described below.

Current wording

Cash inflows from operating activities for the nine months ended June 30, 2024 were$36.6 million, primarily due to improved inventory management and decreased selling, general and administrative expenses as a result of our cost savings plans and transformation initiatives. Investing activities for the nine months ended June 30, 2024 include $378.3 million of purchases of marketable securities, offset by $431.5 million for sales and maturities of marketable securities. Financing activities for the nine months ended June 30, 2024 include$412.8 million of outflows related to our share repurchase program described below, partially offset by proceeds from our employee stock purchase plan.

Previous wording

As of March 31, 2024, we have repurchased 20.9 million shares of common stock for $1.025 billion (excluding fees, commissions, and excise tax) under the 2022 Repurchase Authorization and $475 million of the 2022 Repurchase Authorization remained. All shares of common stock repurchased by the Company under the 2022 Repurchase Authorization have been retired, accounted for as a reduction to stockholders’ equity in the Condensed Consolidated Balance Sheets and treated as a repurchase of common stock for purposes of calculating earnings per share as of the applicable settlement dates.

Current wording

As of June 30, 2024, we have repurchased 25.1 million shares of common stock for $1.25 billion (excluding fees, commissions, and excise tax) under the 2022 Repurchase Authorization and $249 million of the 2022 Repurchase Authorization remained. All shares of common stock repurchased by the Company under the 2022 Repurchase Authorization have been retired, accounted for as a reduction to stockholders’ equity in the Condensed Consolidated Balance Sheets and treated as a repurchase of common stock for purposes of calculating earnings per share as of the applicable settlement dates.

Previous wording

At March 31, 2024, we had non-cancellable commitments of $52.0 million, comprised primarily of purchase orders for inventory of $47.9 million, and information technology related commitments of $4.1 million.

Current wording

At June 30, 2024, we had non-cancellable commitments of $71.4 million, comprised primarily of purchase orders for inventory of $53.3 million, and other operating expense commitments of $18.1 million.