Azenta Inc

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1. Nature of Operations

Azenta, Inc. (“Azenta”, or the “Company”) is a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry. The Company entered the life sciences market in2011**, leveraging its in-house precision automation and cryogenics capabilities that it was then applying in the semiconductor manufacturing market. This led the Company to develop and provide solutions for automated ultra-cold storage. Since then, the Company has expanded its life sciences offerings through internal investments and a series of acquisitions. The Company supports its customers from research and clinical development to commercialization with its sample management and automated storage, as well as genomic services expertise to help its customers bring impactful and breakthrough therapies to market faster. The Company understands the importance of sample integrity and offers 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, and sample repository services. The Company’s expertise, global footprint, and leadership positions enable it to be a trusted global partner to pharmaceutical, biotechnology, and life sciences research institutions.

Discontinued Operations

During thefirst quarter of fiscal year2025, following approval by the Board of Directors of the Company, the Company publicly announced its plan to sell the B Medical Systems business. The B Medical Systems business operates as a separate business unit within the Company and operated as its own operating and reportable segment called the B Medical Systems segment focused on the manufacturing and distribution of temperature-controlled storage and transportation solutions in international markets to governments, health institutions, and non-government organizations.

The Company determined that the B Medical Systems segment met the “held for sale” criteria and “discontinued operations” criteria in accordance with Financial Accounting Standard Boards (“FASB”) Accounting Standards Codification (“ASC”)205, Presentation of Financial Statements (“FASB ASC205”) as of* November 12, 2024.Results related to the B Medical Systems segment are included within discontinued operations. Please refer to Note3,* Discontinued Operationsfor further information about the discontinued business. The Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Operations, as well as the notes to the Condensed Consolidated Financial Statements, have been reclassified for all periods presented to reflect the discontinuation of the B Medical Systems segment in accordance with FASB ASC205. The discussion in the notes to these Condensed Consolidated Financial Statements, unless otherwise stated, relate solely to the Company’s continuing operations.

Also included in discontinued operations is a loss contingency related to the Company's sale of the semiconductor automation business in* February 2022.The Company accrued a liability for the loss contingency and had $1.7 million remaining in the balance of the accrued liability as of December 31, 2024.*

2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and all entities where it has a controlling financial interest and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying year-end balance sheet as of* September 30, 2024was derived from audited, consolidated financial statements but doesnot* include all disclosures required by GAAP. The unaudited interim Condensed Consolidated Financial Statements have been prepared on the same basis as the audited, consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows for the periods presented.

Certain information and disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted and, accordingly, the accompanying financial information should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form10-K for the fiscal year ended* September**30,* 2024 and filed with the U.S. Securities and Exchange Commission (“SEC”) on* November 27, 2024 (the“2024* Annual Report on Form10-K”).

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Revisions to Previously Issued Financial Statements and Financial Information

As previously disclosed in the2024 Annual Report on Form10-K, in connection with the preparation of its fiscal year2024 financial statements, the Company identified classification errors in its Condensed Consolidated Statement of Cash Flows for the year ended* September 30, 2023and the Condensed Consolidated Statements of Cash Flows for the interim periods ended March 31, 2023,** June 30, 2023,** December 31, 2023,** March 31, 2024,and June 30, 2024**.* Specifically, the Company’s historical classification of the effects of exchange rate changes on the Company’s foreign denominated cash and cash equivalent balances was misclassified between the effects of exchange rate changes on cash and cash equivalents and cash flows from operating activities in its Consolidated Statement of Cash Flows for the year ended* September 30, 2023and its Condensed Consolidated Statements of Cash Flows for the interim periods ended June 30, 2023,** December 31, 2023,** March 31, 2024,and June 30, 2024.Additionally, the Company corrected for immaterial classification errors in between cash flows from operating activities, investing activities and financing activities, and supplemental disclosures for all revised periods. The Company's Condensed Consolidated Statements of Cash Flows for the interim periods ended March 31, 2023,** June 30, 2023,** December 31, 2023,** March 31, 2024,and June 30, 2024have been revised and disclosed in Note21,* 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, Item8 of the2024 Annual Report on Form10-K.

The effect on the Condensed Consolidated Statement of Cash Flows for the interim period ended* December 31, 2023*is as follows (in thousands):

The Company assessed the effect of the errors on prior periods under the guidance of Securities and Exchange Commission (“SEC”) Staff Accounting BulletinNo. 99, “Materiality,” codified in ASC250**, Accounting Changes and Error Corrections. Based on its assessment, the Company determined that the error correction isnot material to any previously issued financial statements. The correction hasno impact on the Company's previously reported consolidated net income, financial position, net change in cash, cash equivalents, and restricted cash, or total cash, cash equivalents, and restricted cash as previously reported on the Company's Consolidated Statements of Cash Flows.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect amounts reported in the financial statements and notes thereto. Although these estimates are based on the Company’s knowledge of current events and actions it* mayundertake in the future, actual results may*differ from these estimates. Estimates are associated with recording accounts receivable, inventories, goodwill, intangible assets other than goodwill, long-lived assets, derivative financial instruments, deferred income taxes, warranty obligations, revenue over time, stock-based compensation expense, and other accounts. The Company assesses the estimates on an ongoing basis and records changes in estimates in the period they occur and become known.

Foreign Currency Translation

Certain transactions of the Company and its subsidiaries are denominated in currencies other than their functional currency. Foreign currency exchange gains (losses) generated from the settlement and remeasurement of these transactions are recognized in earnings and presented within “Other income” in the Condensed Consolidated Statements of Operations. Net foreign currency transaction and remeasurement gains were$0.5 million and losses were $0.5 million for thethree months ended* December 31, 2024and2023*, respectively.

Recently Issued Accounting Pronouncements

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*. The ASU requires the disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures pertaining to significant segment expenses. This update is effective for annual periods beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024,*and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the standard to determine the impact of adoption on its disclosures.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*):* Improvements to Income Tax Disclosures. The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after* December 15, 2024,though early adoption is permitted. The Company doesnot* expect the adoption of this standard to impact its disclosures until fiscal year2026.

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In* March 2024,the SEC issued final rules under SEC ReleaseNo.* 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. Effective fiscal year2026, the Company is required to disclose climate-related risks that are reasonably likely to have a material impact on the Company’s business strategy, results of operations, or financial condition. Additionally, the Company will be required to disclose the effects of severe weather events and other natural conditions within the notes to the financial statements, subject to certain materiality thresholds. Effective fiscal year2027, required disclosures will also include disclosure of material direct greenhouse gas emissions from operations owned or controlled (Scope1) and material indirect greenhouse gas emissions from purchased energy consumed in owned or controlled operations (Scope2). In* April 2024,the SEC issued an order voluntarily staying the effectiveness of the new rules pending the completion of judicial review of certain legal challenges to their validity. The Company, assuming adoption of the rules, is currently evaluating the impact of these rules and monitoring the status of the related litigation and SEC’s stay, which remains in effect as of December 31, 2024.*

In2021, the Organization of Economic Cooperation and Development (“OECD”) introduced its Pillar II Framework Model Rules (“Pillar2”), which are designed to impose a15% global minimum tax on the earnings of in-scope multinational corporations on a country-by-country basis. Certain aspects of Pillar2 took effect on* January 1, 2024while other aspects go into effect on January 1, 2025.The Company doesnot* expect the adoption of this standard to have a material impact on its Consolidated Financial Statements as the Company doesnot expect to meet the consolidated revenue threshold of*€750* million over the nexttwelve months.

In* November 2024,the FASB issued ASU2024*-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. The ASU requires companies to disaggregate operating expenses into specific categories such as employee compensation, depreciation, and intangible asset amortization, by relevant expense caption on the statement of operations. This update is effective for annual periods beginning after* December 15, 2026,*though early adoption is permitted. The Company is currently evaluating the standard to determine the impact of adoption on its consolidated financial statements and disclosures.

Other

For further information regarding the Company’s significant accounting policies, please refer to Note2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item8 of the2024 Annual Report on Form10-K. There wereno material changes to the Company’s critical accounting policies during thethree months ended* December 31, 2024*.

3. Discontinued Operations

Plan to Sell B Medical Systems Business

During thefirst quarter of fiscal year2025, following approval by the Board of Directors of the Company, the Company publicly announced its plan to sell the B Medical Systems business. The B Medical Systems business operates as a separate business unit within the Company and operated as its own operating and reportable segment called the B Medical Systems segment focused on the manufacturing and distribution of temperature-controlled storage and transportation solutions in international markets to governments, health institutions, and non-government organizations. This action is intended to simplify the Company's portfolio and allow management to focus on driving revenue growth and profitability in its core businesses. The decision followed work by the Board of Directors to evaluate strategic, operational and financial opportunities to maximize stockholder value. The Company anticipates entering into a definitive agreement to sell its B Medical Systems business by* November**2025.*

The Company determined that the B Medical Systems segment met the “held for sale” criteria and “discontinued operations” criteria in accordance with FASB ASC205 as of* November 12, 2024.Results related to the B Medical Systems segment are included within discontinued operations. The Condensed Consolidated Balance Sheet and Condensed Consolidated Statements of Operations, and the notes to the Condensed Consolidated Financial Statements, were retroactively reclassified for all periods presented to reflect the discontinuation of the B Medical Systems segment in accordance with FASB ASC205.*

The following table presents the financial results of the B Medical Systems segment, included within discontinued operations (in thousands):

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The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to the B Medical Systems segment that are included in the Condensed Consolidated Statements of Cash Flows (in thousands):

The carrying value of the assets and liabilities of the discontinued operations with respect to the B Medical Systems segment reflected as “held for sale” on the Condensed Consolidated Balance Sheets as of* December 31, 2024and September 30, 2024*was as follows (in thousands):

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Disposition of Semiconductor Business

On* February 1, 2022,the Company completed the sale of the semiconductor automation business for $2.9 billion in cash to Thomas H. Lee Partners, L.P. On July 1, 2019,the Company completed the sale of the semiconductor cryogenics business for $659.8 million to Edwards Vacuum LLC (a member of the Atlas Copco Group) (“Edwards”). Both the semiconductor automation business and the semiconductor cryogenics business are considered discontinued operations. The Company still mayhave certain indemnification obligations pursuant to claims made under the definitive agreement it entered into with Edwards in connection with the Company’s sale of its semiconductor cryogenics business in thefourth* quarter of fiscal year2018. In thethird quarter of fiscal year2020, Edwards asserted claims for indemnification under the definitive agreement relating to alleged breaches of representations and warranties relating to customer warranty claims and inventory (the*“2020* Claim”). In addition, in* January 2023,Edwards filed a lawsuit against the Company in the Supreme Court of the State of New York in the County of New York seeking indemnification from the Company under such definitive agreement for $1.0 million and other related damages, including interest and attorney’s fees, arising from athird*-party claim that was included as part of their initial claims (the*“2023* Claim”).

In* April 2023,the Company responded to and filed a counterclaim against Edwards for the2023* Claim alleging breach of the definitive agreements by Edwards and seeking a declaratory judgment. During thethird quarter of fiscal year2023, the Company and Edwards entered into a settlement agreement related to the2023 Claim to avoid the costs and uncertainties of potential litigation. Under the settlement agreement, the Company paid Edwards $0.8 million fromone of the indemnification escrows established at closing of the sale in return for the release of the2023 Claim and the release to the Company of $1.0 million from a separate indemnification escrow. The Company accrued a liability of $2.5 million for the2020 Claim and2023 Claim of which $0.8 million was paid during thethird quarter of fiscal year2023. The2020 Claim remains outstanding and $1.7 million remains in the balance of the accrued liability as of* December 31, 2024.*

The Company had been informed that Edwards sought recovery for the2020 Claim from the representation and warranty insurance Edwards obtained in connection with the closing of the sale of the semiconductor cryogenics business. During thefirst quarter of fiscal year2025, the Company was further informed that Edwards agreed to a payment under such insurance for claimed amounts in excess of the applicable indemnification deductibles established under the definitive agreement, but less than the total of claimed amounts submitted for recovery. Although management believes that any indemnifiable losses in excess of the applicable deductibles established in the definitive agreement would be covered by such insurance, Edwards is seeking recovery from the Company for claimed amounts purportedlynot covered, or inadequately covered, by such insurance (the “Claim for Uncovered Amounts”). The Company cannot determine the probability of any losses or outcome of the Claim for Uncovered Amounts including the amount of any indemnifiable losses, if any, resulting from this claim. The Company, however, doesnot believe that this claim will have a material adverse effect on its consolidated financial position or results of operations, in each case, for continuing operations. Any potential expense incurred by the Company for these claims would be reflected in discontinued operations.

In the event of unexpected subsequent developments and given the inherent unpredictability of these matters, there can beno assurance that the Company’s assessment of these claims will reflect the ultimate outcome, and an adverse outcome in these matters could, from time to time, have a material adverse effect on the Company’s consolidated financial position or results of operations in particular quarterly or annual periods.

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4. Marketable Securities

The Company had sales and maturities of marketable securities of $125.6 million and$110.3 million in thethree months ended* December 31, 2024and2023*, respectively. There were immaterial realized gains in thethree months ended* December 31, 2024and2023* on sales and maturities of marketable securities.

The following is a summary of the amortized cost and the fair value, including accrued interest receivable as well as unrealized gains (losses) on the short-term and long-term marketable securities as of* December 31, 2024* and* September 30, 2024* (in thousands):

The amortized cost and fair value of the marketable securities by contractual maturities as of* December 31, 2024* are presented below (in thousands):

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Expected maturities could differ from contractual maturities because the security issuers* may*have the right to prepay obligations without prepayment penalties.

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. The Company doesnot believe any unrealized losses represent impairments based on the evaluation of the available evidence.

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5. Derivative Instruments

The Company has transactions and balances denominated in currencies other than the functional currency of the transacting entity. Most of these transactions carry foreign exchange risk in Germany, the United Kingdom and China. The Company enters into foreign exchange contracts to reduce its exposure to currency fluctuations. Net gains and losses related to foreign exchange contracts are recorded as a component of “Other income, net” in the Condensed Consolidated Statements of Operations and were as follows for thethree months ended* December 31, 2024and2023* (in thousands):

The notional amounts of the Company’s derivative instruments as of* December 31, 2024* and* September 30, 2024* were as follows (in thousands):

The fair values of the foreign exchange contracts are recorded in the Condensed Consolidated Balance Sheets as “Prepaid expenses and other current assets” and “Accrued expenses and other current liabilities”. Foreign exchange contract assets and liabilities are measured and reported at fair value based on observable market inputs and classified within Level2 of the fair value hierarchy described further in Note2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item8 of the2024 Annual Report on Form10-K and in Note12,** Fair Value Measurementsbelow due to a lack of an active market for these contracts.

Hedging Activities

On* February 1, 2023,the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $436.0 million for€400.0 million at a weighted average interest rate of 1.66%. The Company designated the cross-currency swap as a hedge of net investments againstone* of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity. At the maturity of the cross currency-swap on* February 1, 2024,*the Company delivered a notional amount of€400 million and received a notional amount of $436.0 million at a Euro to U.S. dollar exchange rate of 1.09, which included a gain of $1.4 million.

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On* February 1, 2024,the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $76.0 million for€70.0 million at a weighted average interest rate of 1.44%. The Company designated the cross-currency swap as a hedge of net investments againstone* of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity on* February 3, 2025.*

Following thethree months ended on* December 31, 2024,at the maturity of the cross currency-swap on February 3, 2025,*the Company delivered a notional amount of€70.0 million and received a notional amount of $73.0 million at a Euro to U.S. dollar exchange rate of 1.0419, which included a gain of $3.0 million.

On* February 3, 2025,the Company also entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $260.0 million for€250.0 million at a weighted average interest rate of 1.80%. The Company designated the cross-currency swap as a hedge of net investments againstone* of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity on* February 2, 2026.*

The cross-currency swaps were recorded as a derivative asset within “Prepaid expenses and other current assets” as of* December 31, 2024* in the Condensed Consolidated Balance Sheets and a derivative liability within “Accrued expenses and other current liabilities” as of* September 30, 2024* in the Condensed Consolidated Balance Sheets.

The cross-currency swap is marked to market at each reporting period, representing the fair value of the cross-currency swap, any changes in fair value are recognized as a component of “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. The cross-currency swap is classified within Level2 of the fair value hierarchy, described in Note2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item8 of the2024 Annual Report on Form10-K and in Note12,** Fair Value Measurements below.

Interest earned on the cross-currency swap is recorded within “Interest income, net” in the Condensed Consolidated Statements of Operations. For thethree months ended* December 31, 2024and2023*, the Company recorded interest income of $0.3 millionand $1.8 million, respectively, on these instruments.

6. Goodwill and Intangible Assets

The Company conducts an impairment assessment annually on* April 1,or more frequently if impairment indicators are present. Changes to the Company’s operating segments effective October 1, 2023resulted in a change to the Company’s reporting units, which are aligned to the Company’s operating and reportable segments (as further described below in Note15,* Segment and Geographic Information). ​

The following table sets forth the changes in the carrying amount of goodwill by operating and reportable segment since* September 30, 2024 (*in thousands).

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The components of the Company’s identifiable intangible assets as of* December 31, 2024* and* September 30, 2024* are as follows (in thousands):

Amortization expenses for intangible assets were $6.1 million and $7.2 million, respectively, for thethree months ended* December 31, 2024and2023*.

Estimated future amortization expense for the intangible assets for the remainder of fiscal year2025 and the subsequentfive fiscal years are as follows (in thousands):

7. Restructuring

2024 Restructuring Plan

In thesecond quarter of fiscal year2024, the Company launched initiatives designed to optimize resources for future growth and improve efficiency across its organization. The focus of the initiatives is to improve the Company’s profitability, which includes facilities consolidation, portfolio optimization, and organization structure simplification. The Company expects to complete the activities included in these initiatives by the end of fiscal year2026. As of the date of issuance of the accompanying Condensed Consolidated Financial Statements, the Company hasnot identified restructuring actions related to these initiatives that will result in additional material charges. The Company expects to identify additional actions as it further refines its plan, and the related initiatives in future periods will be recorded when specified criteria are met, including butnot limited to, communication of benefit arrangements or when the costs have been incurred.

The majority of the restructuring expenses associated with the initiatives described above for thethree months ended* December 31, 2024* are severance and other related costs. Of the total restructuring expenses in thethree months ended* December 31, 2024*, $0.2 million is related to the SMS segment, $0.1 million is related to the Multiomics segment, and $0.1 million is related to Corporate.

2023 Cost Savings Plans

In thesecond andthird quarters of fiscal year2023, the Company announced cost savings plans designed to position the Company to meet the needs of its customers and accelerate growth of the business. The cost savings plans were completed and costs from the actions were fully realized by the end of thefirst quarter of fiscal year2024**.

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The restructuring expenses associated with the2023 cost savings plans for thethree months ended* December 31, 2023* are severance and related costs.

The following table presents restructuring charges recognized for thethree months ended* December 31, 2024and2023* (in thousands):

The following table presents activity in the severance and related costs accruals for thethree months ended* December 31, 2024and2023* (in thousands):

8. Supplementary Balance Sheet Information

Inventories

The following is a summary of inventories at* December 31, 2024* and* September 30, 2024* (in thousands):

Inventory reserves were $7.2 million and $6.1 million, respectively, at* December 31, 2024* and* September 30, 2024*.

Warranty and Retrofit Costs

The following is a summary of product and warranty retrofit activity for thethree months ended* December 31, 2024and2023* (in thousands):

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9. Stockholders’** Equity**

Share Repurchases

On* November 4, 2022**,* the Company's Board of Directors approved an authorization to repurchase up to $1.5 billion of the Company's common stock (the*“2022* Repurchase Authorization”). During thethree months ended* December 31, 2023,the Company repurchased 2.3 million shares of common stock for $112.9 million (excluding fees, commissions, and excise tax) under this authorization. As of September 30, 2024**,* the Company had repurchased and retired 30.0 million shares of common stock for the full $1.5 billion approved under the2022 Repurchase Authorization. All shares repurchased under the2022 Repurchase Authorization were 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.No additional repurchase authorization has been approved and as such there wereno shares repurchased during thethree months ended* December 31, 2024.*

Effective* January 1, 2023**,* all corporate share repurchases are subject to aone percent excise tax on the value of the repurchase, net of share issuances, subject to certain exclusions. The excise tax was part of The Inflation Reduction Act passed by the U.S. government in2022**. The Company's accrual for excise tax related to share repurchases is considered an additional cost of the share repurchases and a reduction to stockholders’ equity in the Condensed Consolidated Balance Sheets. During thethree months ended* December 31, 2024,the Company made an excise tax payment of $4.9 million, reducing the excise tax accrual to $6.5 million as of December 31, 2024.*

Accumulated Other Comprehensive Income (Loss)

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The following is a summary of the components of accumulated other comprehensive income (loss), net of tax for thethree months ended* December 31, 2024and2023* (in thousands):

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As described in Note2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item8 of the2024 Annual Report on Form10-K, unrealized gains (losses) on available-for-sale marketable securities are reclassified from “Accumulated other comprehensive income (loss)” into results of operations at the time of the securities’ sale, gains (losses) on derivative are the effective portions of changes in the fair value of the net investment hedges which are recorded in “Accumulated other comprehensive income (loss)”, and amounts reclassified from “Accumulated other comprehensive income (loss)” related to pension liability adjustments represent amortization of actuarial gains and losses. ​

10. Revenue from Contracts with Customers

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers in a manner that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following is revenue by significant business line for thethree months ended* December 31, 2024and2023* (in thousands):

(1) Core Products are Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments and Controlled Rate Thawing Devices.

Contract Balances

Accounts Receivable, Net.Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required before payment is due. Accounts receivable donot bear interest and are recorded at the invoiced amount. The Company maintains an allowance for expected credit losses representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for expected credit losses based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends, historical experience, and other information through the payment periods. Accounts receivable, net were $155.0 million and $156.3 million at* December 31, 2024and September 30, 2024,*respectively.

Contract Assets.Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company and payment is conditional on something other than the passage of time. These amounts typically relate to contracts where the right to invoice the customer isnot present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current as they are expected to convert to cash withinone year. Contract asset balances which are included within “Prepaid expenses and other current assets” in the Condensed Consolidated Balance Sheet, were $34.3 million and $28.9 million at* December 31, 2024* and* September 30, 2024*, respectively. Revenue of $9.2 million recognized during thethree months ended* December 31, 2024and $9.1 million recognized during thethree* months ended* December 31, 2023contributed to the contract asset balances at December 31, 2024and September 30, 2024.*

Contract Liabilities.Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contract’s position at the end of each reporting period. Contract liabilities are included within “Deferred revenue” in the Condensed Consolidated Balance Sheet. Contract liabilities were $41.8 million and $30.5 million at December 31, 2024 and* September 30, 2024*, respectively. The Company recognized revenues of $14.4 million and$21.6 million in thethree months ended* December 31, 2024and2023*, respectively, that were included in the contract liability balance at the beginning of each period*.*

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Remaining Performance Obligations.Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater thanone year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of* December 31, 2024* was $84.6 million. The following table summarizes when the Company expects to recognize the remaining performance obligations as revenue; the Company will recognize revenue associated with these performance obligations as transfer of control occurs (in thousands):

11. Stock-Based Compensation

In accordance with the Company's2020 Equity Incentive Plan, the Company* mayissue to eligible employees options to purchase shares of the Company’s common stock, restricted stock units and other equity incentives, which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues common stock to participating employees pursuant to an employee stock purchase plan, and may*issue common stock awards and deferred restricted stock units to members of its Board of Directors in accordance with its Board of Director compensation program.

2020 Equity Incentive Plan

The following table reflects the total stock-based compensation expense for continuing operations recorded during thethree months ended* December 31, 2024and2023* (in thousands):

The Company recorded $0.2 million of stock-based compensation expense for discontinued operations during each of thethree months ended* December 31, 2024and2023*.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for thethree months ended* December 31, 2024*:

Awards vested during thethree months ended* December 31, 2024* per the table above include 9,209 shares from discontinued operations. The fair value of restricted stock units vested during thethree months ended* December 31, 2024and2023* was $4.7 million and $7.2 million, respectively, for continuing operations.

As of* December 31, 2024*, the future unrecognized stock-based compensation expense related to restricted stock units for continuing operations expected to vest is $34.8 million and is expected to be recognized over an estimated weighted average amortization period of 1.9 years.

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Restricted stock units granted with performance goals* mayalso have a required service period following the achievement of all or a portion of the performance goals. The following table reflects restricted stock units granted during thethree* months ended* December 31, 2024and2023*:

Restricted stock units granted during thethree months ended* December 31, 2023per the table above include 31,475 units for discontinued operations. All restricted stock units granted during thethree* months ended* December 31, 2024* per the table above are for continuing operations.

Time-Based Restricted Stock Unit Grants

Restricted stock units granted with a required service period typically have three-year vesting schedules in whichone-third of awards vest at each annual anniversary of grant date, subject to the award holders meeting service requirements.

Performance-Based Restricted Stock Unit Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Company's Board of Directors. The criteria for performance-based awards are weighted and have threshold, target, and maximum performance goals.

Performance-based restricted stock unit awards granted allow participants to earn 100% of restricted stock units if the Company’s performance meets or exceeds its target goal for each applicable financial metric, and up to a maximum of 200% if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals are measured over athree-year period for each year’s restricted stock unit awards and at the end of the period to determine the number of restricted stock units earned, if any, by recipients who continue to meet the service requirement. Upon thethird anniversary of each year’s restricted stock unit awards’ grant date, the Company’s Board of Directors approves the number of restricted stock units earned for participants who continue to meet the service requirements on the vesting date. For restricted stock unit awards that include vesting based on performance conditions, the fair values are estimated based on the intrinsic values of the awards at the grant date.

In* November 2024,the Company issued restricted stock unit awards with vesting based on market conditions, which will vest based on achievement of the Company's relative total shareholder return against the defined peer group over athree-year period. The fair values for those grants that include vesting based on market conditions are estimated using the Monte Carlo simulation model. The key assumptions used in the Monte Carlo simulation included (i) the expected volatility based on thethree*-year daily historical volatility as measured on the grant date, (ii) risk-free interest rate based on U.S. Treasury constant maturities yields as of the grant date, (iii) correlation assumption based on daily share price changes overthree years between the Company and the peer companies measured on the grant date, and (iv)no expected dividend yield.

In* October 2023,the Company’s Board of Directors approved an amendment to the performance goals associated with the previously issued performance-based restricted stock units for all impacted employees, excluding members of the executive team. The performance goals, as amended, are more reflective of the current macroeconomic environment and consideration toward employee retention in the competitive life sciences industry. Before the amendment, the original performance goals werenot* expected to be satisfied. Subsequent to the amendment, vesting became probable based on the forecasted achievement of the amended performance goals. The amendment of these restricted stock units is treated as a modification with the total potential maximum compensation cost of $3.8 million recognized over the service period through* November 2025.The Company recorded expense of $0.6 million in thethree* months ended* December 31, 2024* related to the modified awards. ​

12. Fair Value Measurements

See Note2, Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements included in the section titled “Financial Statements and Supplementary Data” in Part II, Item8 of the2024 Annual Report on Form10-K for information on the fair value hierarchy and the level of inputs used by the Company in determining fair value.

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Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize assets and liabilities measured and recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheets as of* December 31, 2024* and* September 30, 2024* (in thousands):

Cash Equivalents

The Company considers all highly liquid interest-earning investments with a maturity ofthree months or less at the date of purchase to be cash equivalents. Cash equivalents primarily consist of money market funds and U.S. government backed securities with a maturity ofthree months or less. They are classified within Level1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The fair values of these investments approximate their carrying values. Investments classified as Level2 consist of debt securities valued using matrix pricing benchmarking because they arenot actively traded and bank certificates of deposit with a maturity ofthree months or less. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

Available-For-Sale Securities

Available-for-sale securities primarily consist of highly rated corporate debt securities, and U.S. government backed securities, which are classified as Level1. Investments classified as Level2 consist of debt securities that are valued using matrix pricing and benchmarking because they arenot actively traded, and bank certificates of deposit.

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Convertible Debt Securities and Investment in Equity Securities

In thethird quarter of fiscal year2024, the Company purchased $2.0 million principal amount of convertible notes issued by a private company. The Company accounted for the investment in convertible notes at fair value with changes in fair value recognized in the income statement. As of the conversion date, the fair value of the convertible notes was*$2.1* million.

During thefirst quarter of fiscal year2025, the Company converted the convertible notes into 420,000 shares of preferred stock of the private company. The conversion didnot result in the recognition of additional gain or loss on the convertible notes. The shares of preferred stock are equity securities and within the scope of ASC321, Investments - Equity Securities. The Company elected the measurement alternative for its investment in the shares of preferred stock of the private company because the shares of preferred stock donot have a readily determinable fair value. As of* December 31, 2024,the carrying value of the investment in the shares of preferred stock of the private company was $2.1 million and is included in “Other assets” on the Condensed Consolidated Balance Sheets. The Company performs a qualitative assessment of whether the investment is impaired at each reporting date and will reduce the carrying value accordingly when an impairment is identified. The fair value determination is based on unobservable inputs (Level3* on the fair value hierarchy) which were based on the best information available in the circumstance, including transaction pricing, recent acquisition, and market participant assumptions. The unobservable inputs used in the determination of the fair value of assets classified as Level3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of the assets as of the reporting date.

Foreign Exchange Contracts & Net Investment Hedge

The Company’s foreign exchange contract assets and liabilities, and its net investment hedge assets are measured and reported at fair value using the market method valuation technique. The inputs to this technique utilize current foreign currency exchange forward market rates published bythird-party leading financial news and data providers. These are observable data that represent the rates that the financial institution uses for contracts entered into at that date; however, they arenot based on actual transactions, so they are classified as Level2.

Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During thethree months ended* December 31, 2024* and2023, the Company didnot record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.

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13. Income Taxes

The Company recorded an income tax benefit of $3.6 million during thethree months ended* December 31, 2024*. The tax benefit for thethree months ended* December 31, 2024* was primarily driven by the profits in foreign jurisdictions and current state income taxes in jurisdictions where the Company doesnot have a net operating loss carryover. Additionally, tax expense is generated on a global loss because the U.S. tax loss isnot being benefited due to a valuation allowance against U.S. deferred tax assets.

The Company recorded an income tax expense of$1.4 million during thethree months ended* December 31, 2023*. The tax expense for thethree months ended* December 31, 2023*was primarily driven by the pre-tax income from foreign operations during the period, a $0.5 million stock compensation shortfall expense for tax deductions that are lower than the associated book compensation expense, and a $0.6 million expense related to a valuation allowance on beginning of year U.S. state deferred tax assets.

The Company evaluates the realizability of its deferred tax assets and assesses the need for a valuation allowance on a quarterly basis. The Company operates in numerous countries under many legal forms and, as a result, is subject to the jurisdiction of numerous domestic and foreign tax authorities. The Company evaluates the profitability of its operations in each jurisdiction on a historic cumulative basis and on a forward-looking basis, while carefully considering carry-forward periods of tax attributes and ongoing tax planning strategies in assessing the need for the valuation allowance.

The Company has generated U.S. pre-tax losses in recent years and provided a valuation allowance against U.S. deferred tax assets during fiscal year2024. The Company expects to generate a U.S. book loss during fiscal year2025 and expects a valuation allowance of $11.9 million in the United States against its U.S. net deferred tax assets for fiscal year2025.

The Company also maintains a valuation allowance against net deferred tax assets on certain foreign tax-paying components.

The Company hasnot provided deferred income taxes on the outside basis difference of any foreign subsidiary and maintains its general assertion of indefinite reinvestment regarding those subsidiaries and the remaining earnings of its German subsidiary as of* December 31, 2024.*

The Company maintains liabilities for unrecognized tax benefits based on its estimates and assumptions. The Company recognizes interest related to unrecognized tax benefits as a component of the income tax provision or benefit. The Company recognized minimal interest expense related to its unrecognized tax benefits during thethree months ended* December 31,*2024.

The Company is subject to U.S. federal, state, local and foreign income taxes in various jurisdictions. The amount of income taxes paid is subject to the Company’s interpretation of applicable tax laws in the jurisdictions in which it files.

In the normal course of business, the Company is subject to income tax audits in various global jurisdictions in which it operates. The years subject to examination vary for the United States and international jurisdictions, with the earliest tax year being 2018. Based on the outcome of these examinations or the expiration of statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits could change from those recorded in the Condensed Consolidated Balance Sheets. The Company currently anticipates that it is reasonably possible that the unrecognized tax benefits and accrued interest on those benefits willnot be reduced in the nexttwelve months due to the statute of limitations expirations. These unrecognized tax benefits would impact the effective tax rate if recognized.

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14. Net Loss per Share

The calculations of basic and diluted net loss per share and basic and diluted weighted average shares outstanding are as follows for thethree months ended* December 31, 2024and2023* (in thousands, except per share data):

As a result of incurring a net loss from continuing operations for thethree months ended* December 31, 2024and2023*, outstanding restricted stock units and shares issued by the Company under the employee stock purchase plan were excluded from the computation of diluted loss per share as their effect would be antidilutive to earnings per share for continuing operations based on the treasury stock method. The following table contains all potentially dilutive common stock equivalents for thethree months ended* December 31, 2024and2023*.

15. Segment and Geographic Information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance. The Company’s Chief Executive Officer is the Company’s CODM.

As of* November 12, 2024,the Company’s B Medical Systems segment met the “held for sale” criteria and “discontinued operations” criteria in accordance with FASB ASC205* and the results of the B Medical Systems segment are included within discontinued operations.

The Company’s continuing operations includes the following operating and reportable segments:

​

​

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Management considers adjusted operating income (loss), which excludes charges related to amortization of intangible assets, transformation costs, restructuring charges, goodwill and intangible asset impairment, merger and acquisition costs and costs related to share repurchase, governance-related matters, and other unallocated corporate expenses, as the primary performance metric when evaluating each segment’s operations.

The following is the summary of the financial information for the Company’s operating and reportable segments for thethree months ended* December 31, 2024and2023* (in thousands):

​

The following is the summary of the asset information for the Company’s reportable segments as of* December 31, 2024* and* September 30, 2024* (in thousands):

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The following is a reconciliation of the segment assets to the corresponding amounts presented in the Condensed Consolidated Balance Sheets as of* December 31, 2024* and* September 30, 2024* (in thousands):

Revenue from external customers is attributed to geographic areas based on locations in which the product is shipped. Net revenue by geographic area for thethree months ended* December 31, 2024and2023* are as follows (in thousands):

For thethree months ended* December 31, 2024and2023*, the Company didnot have any individual customers that accounted for10% or more of its consolidated revenue. As of* December 31, 2024*, one customer within the SMS segment accounted for12% of the Company’s accounts receivable balance. As of* September 30, 2024,there wereno customers that accounted for more than10%* of the Company's accounts receivable balance.

16. Commitments and Contingencies

Contingencies

The Company is subject to various legal proceedings, both asserted and unasserted, that arise in the ordinary course of business. The Company cannot predict the ultimate outcome of such legal proceedings or, in certain instances, provide reasonable ranges of potential losses. The Company considers all claims on a quarterly basis and based on known facts assesses whether potential losses are considered reasonably possible, probable, and estimable. Based upon this assessment, the Company then evaluates disclosure requirements and whether to accrue for such claims in the Condensed Consolidated Financial Statements. At* December 31, 2024and as of the date of filing of these Condensed Consolidated Financial Statements, the Company believes that, other than the claims related to Edwards disclosed in Note3,* Discontinued Operations,no material provision for liability nor disclosure is required related to any claims. In the event of unexpected subsequent developments and given the inherent unpredictability of these matters, there can beno assurance that the Company’s assessment of any claim will reflect the ultimate outcome, and an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated financial position or results of operations in particular quarterly or annual periods.

Tariff Matter

With the assistance of athird-party consultant, during thefirst quarter of fiscal year2021, the Company initiated a review of the value of transactions it used for intercompany imports into the U. S. from its GENEWIZ business. As a result of this review and an interpretation surrounding the valuation method used to calculate the estimated transaction value, the Company revised its estimate of the tariffs owed and paid $5.9 million to U.S. customs authorities in fiscal year2022 related to transactions prior to* December 2021.In July 2024,the Company paid approximately $2.5 million in tariffs as well as interest related to the imports from its GENEWIZ business into the U.S. during the period from December 2021to July 2024.As of December 31, 2024,the Company doesnot* anticipate any penalties associated with this payment because its valuation methodology was accepted by U.S. customs authorities during previous voluntary disclosures. It is expected that U.S. customs authorities will issue the final audit results for these periods in thethird quarter of fiscal year2025.

Purchase Commitments

As of* December 31, 2024*, the Company had non-cancellable commitments of $50.1 million, comprised of purchase orders for inventory of $36.0 million and other operating expense commitments of $14.1 million.

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