Azenta, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes contained in the 2024 Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below and in the forward-looking statements. Factors that could cause or contribute to these differences include, without limitation, those discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations or “MD&A”, as well as those described in the 2024 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q under “Information Related to Forward-Looking Statements”, Part I, Item 1A “Risk Factors” in the 2024 Annual Report on Form 10-K and Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 filed with the SEC on May 9, 2025 and in this Quarterly Report on Form 10-Q. All dollar amounts in the below MD&A are presented in U.S. dollars, unless otherwise noted or the context otherwise provides.

Current wording

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

Previous wording

During the first quarter of fiscal year 2025, we announced that we are pursuing a sale of our B Medical Systems business, a manufacturer and global distributor of medical refrigeration devices based in Luxembourg. This strategic action is intended to simplify our portfolio and allow management to focus on driving revenue growth and profitability in our core Sample Management Solutions and Multiomics segments. The B Medical Systems business has been classified as held for sale and a discontinued operation under generally accepted accounting principles in the United States, or GAAP. Unless otherwise noted, this MD&A relates solely to our continuing operations and excludes the operations of our B Medical Systems business.

Current wording

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

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 support our customers from research and clinical development to commercialization with our sample management and automated storage, as well as genomic services expertise to help our customers bring impactful therapies to market faster. We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples including procurement, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository services. Our expertise, global footprint and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology and life sciences research institutions. In total, we employ approximately 3,000 full-time employees, part-time employees and contingent workers worldwide as of June 30, 2025 and have sales in approximately 92 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 support our customers from research and clinical development to commercialization with our sample management and automated storage systems, as well as genomic services expertise to help our customers bring impactful therapies to market faster. We understand the importance of sample integrity and offer a broad portfolio of products and services supporting customers at every stage of the life cycle of samples including procurement, automated storage systems, genomic services and a multitude of sample consumables, informatics and data software, along with sample repository services. Our expertise, global footprint and leadership positions enable us to be a trusted global partner to pharmaceutical, biotechnology and life sciences research institutions. In total, we employ approximately 3,000 full-time employees, part-time employees and contingent workers worldwide as of December 31, 2025 and have sales in approximately 87 countries. We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Our performance for the three and nine months ended June 30, 2025 and 2024 is as follows:

Current wording

Our performance for the three months ended December 31, 2025 and 2024 is as follows:

Previous wording

Revenue was flat for the three months ended June 30, 2025 compared to the corresponding period in the prior fiscal year driven by revenue growth in Multiomics segment offset by lower revenue in Sample Management Solutions segment. Revenue increased 3% for the nine months ended June 30, 2025 compared to the corresponding period in the prior fiscal year driven by revenue growth in both our Sample Management Solutions and Multiomics segments. The revenue growth in our Sample Management Solutions segment for the nine months ended June 30, 2025 compared to the corresponding period in the prior fiscal year was primarily driven by strong performance in Sample Repository Solutions. The revenue growth in our Multiomics segment for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year was primarily driven by Next Generation Sequencing services, partially offset by declines in Sanger sequencing and Gene Synthesis services. Gross margin was 47% for both the three and nine months ended June 30, 2025 compared to 45% and 44%, respectively, for the three and nine months ended June 30, 2024. The gross margin increase for the three months ended June 30, 2025 compared to the corresponding period in the prior fiscal year was mostly driven by operational efficiencies. The gross margin increase for the nine months ended June 30, 2025 compared to the corresponding period in the prior fiscal year was primarily driven by higher revenue, operational efficiencies, and favorable sales mix. Operating expenses for the three and nine months ended June 30, 2025 decreased $4.1 million and $4.9 million, respectively, compared to the corresponding periods in the prior fiscal year, primarily driven by lower research and development expense, partially offset by higher transformation costs. The non-recurring impairment of intangible assets recorded in the three months ended March 31, 2024 also contributed to the decrease in the nine months ended June 30, 2025 compared to the corresponding period in the prior fiscal year. We generated a net income from continuing operations of $0.7 million and a net loss from continuing operations of $26.9 million, respectively, for the three and nine months ended June 30, 2025 compared to net loss from continuing operations of $0.2 million and $23.6 million, respectively, for the corresponding periods in the prior fiscal year, primarily driven by higher profit margin and operational efficiencies, partially offset by lower interest income and higher income tax expense. We generated net loss from discontinued operations, net of tax, of $51.9 million and $78.1 million, respectively, for the three and nine months ended June 30, 2025 compared to net loss from discontinued operations, net of tax, of $6.4 million and $135.6 million, respectively, for the corresponding periods in the prior fiscal year, primarily driven by the loss on assets held for sale recorded in the three and nine months ended June 3…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Revenue increased 1% for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year, mainly driven by revenue growth in our Multiomics segment. The revenue growth in our Multiomics segment for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year was primarily driven by growth in Next Generation Sequencing and Gene Synthesis, partially offset by a decline in Sanger Sequencing. Gross margin was 43% for the three months ended December 31, 2025 compared to 47% for the corresponding period in the prior fiscal year. The decrease was primarily due to lost cost leverage from lower North America sales volume for Sanger Sequencing and higher rework cost incurred on Automated Stores projects and the negative impact of a non-recurring item. Operating expenses for the three months ended December 31, 2025 decreased $6.6 million compared to the corresponding period in the prior fiscal year, primarily driven by lower selling, general and administrative expenses, partially offset by higher research and development expenses. We generated a net loss from continuing operations of $5.2 million for the three months ended December 31, 2025 compared to a net loss from continuing operations of $7.1 million for the three months ended December 31, 2024, primarily driven by lower operating expenses and income tax expense. We generated a net loss from discontinued operations, net of tax, of $10.2 million for the three months ended December 31, 2025 compared to a net loss from discontinued operations, net of tax, of $3.9 million for the three months ended December 31, 2024, primarily driven by the loss on assets held for sale recorded in the three months ended December 31, 2025.

Previous wording

Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results of operations for the three and nine months ended June 30, 2025 compared to the three and nine months ended June 30, 2024.

Current wording

Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results of operations for the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

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 and impairment of intangible assets, transformation costs, restructuring charges, 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 we believe is more comparable to the similar analysis provided by our peers. Management also excludes special charges and gains, such as gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included under “Operating Income (Loss)” and “Gross Margin” below.

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 and impairment of intangible assets, transformation costs, restructuring charges, 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 we believe is more comparable to the similar analysis provided by our peers. Management also excludes special charges and gains, such as gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management uses these non-GAAP financial measures in its review and evaluation of the performance of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure. A reconciliation of non-GAAP measures to the most nearly comparable GAAP measures is included under “Operating Income (Loss)” and “Gross Margin” below.

Previous wording

Our revenue performance for the three and nine months ended June 30, 2025 and 2024 is as follows:

Current wording

Our revenue performance for the three months ended December 31, 2025 and 2024 is as follows:

Previous wording

Our Sample Management Solutions segment revenue for the three months ended June 30, 2025 decreased 4% compared to the corresponding prior fiscal year period driven by lower revenue in Core Products, particularly in Automated Stores and Cryogenic Systems, partially offset by higher revenue in Sample Storage. Our Sample Management Solutions segment revenue for the nine months ended June 30, 2025 increased 2% compared to the corresponding prior fiscal year period driven by revenue growth in Sample Repository Services.

Current wording

Our Sample Management Solutions segment revenue was flat for the three months ended December 31, 2025 compared to the corresponding prior fiscal year period, mainly driven by lower revenues in Core Products, particularly in Automated Stores and Cryogenic Systems, partially offset by higher revenue in Sample Storage, Product Services and Consumables and Instruments during the three months ended December 31, 2025.

Previous wording

Our Multiomics segment revenue for the three and nine months ended June 30, 2025 increased approximately 4% in each period compared to the corresponding prior fiscal year periods driven by revenue growth in Next Generation Sequencing services, partially offset by declines in Gene Synthesis and Sanger sequencing services.

Current wording

Our Multiomics segment revenue for the three months ended December 31, 2025 increased approximately 1% compared to the corresponding prior fiscal year period driven by growth in Next Generation Sequencing and Gene Synthesis, largely offset by a decline in Sanger Sequencing.

Previous wording

Revenue generated outside the United States was 39.0% and 37.6% of total revenue, respectively, for the three and nine months ended June 30, 2025 compared to 34.1% and 35.4% of total revenue, respectively, for the corresponding prior fiscal year periods.

Current wording

Revenue generated outside the United States was 41.0% for the three months ended December 31, 2025 compared to 36.6% for the corresponding prior fiscal year period.

Previous wording

Our operating income (loss) performance for the three and nine months ended June 30, 2025 and 2024 is as follows (in thousands, except percentages):

Current wording

Our operating income (loss) performance for the three months ended December 31, 2025 and 2024 is as follows (in thousands, except percentages):

Previous wording

Operating income for the Sample Management Solutions segment was $9.8 million and $12.0 million, respectively, for the three and nine months ended June 30, 2025 compared to operating income of $2.6 million and operating loss of $1.7 million, respectively, for thecorresponding periods in the prior fiscal year. The Sample Management Solutions segment operating margin increased 937 basis points and 575 basis points, respectively, for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. The increases in operating income and operating margin were primarily driven by gross margin expansion, partially offset by increased transformation costs. Adjusted operating income was $11.2 million and $18.2 million, respectively, for the three and nine months ended June 30, 2025 compared to adjusted operating income of $3.6 million and $1.5 million, respectively, for the corresponding periods in the prior fiscal year. Adjusted operating margin increased 1,003 basis points and 697 basis points, respectively, for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. Adjusted operating income and margin exclude the impact of amortization of intangible assets, transformation costs and other adjustments.

Current wording

Operating income for the Sample Management Solutions segment was $3.7 million for the three months ended December 31, 2025 compared to operating income of $4.0 million for thecorresponding period in the prior fiscal year. The Sample Management Solutions segment operating margin decreased 37 basis points for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. The decreases in operating income and operating margin were primarily driven by higher rework cost incurred on Automated Stores projects and the negative impact of a non-recurring item, largely offset by decreased operating expenses. Adjusted operating income was $5.0 million for the three months ended December 31, 2025 compared to adjusted operating income of $4.8 million for the corresponding period in the prior fiscal year. Adjusted operating margin increased 23 basis points for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. Adjusted operating income and margin exclude the impact of amortization of intangible assets, transformation costs and other adjustments.

Previous wording

Operating loss for the Multiomics segment was $4.2 million and$13.7 million, respectively, forthe three and nine months ended June 30, 2025 compared to an operating loss of $1.6 million and $9.9 million, respectively, for the corresponding periods in the prior fiscal year. The Multiomics segment operating margin decreased 377 basis points and 177 basis points, respectively, forthe three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. The increase in operating loss and decrease in operating margin were primarily driven by lower revenue for Gene Synthesis and Sanger sequencing services, partially offset by higher revenue for Next Generation Sequencing services. Adjusted operating loss was $3.3 million and $11.1 million, respectively, for the three and nine months ended June 30, 2025 compared to adjusted operating loss of $0.6 million and $6.7 million, respectively, for the corresponding periods in the prior fiscal year. Adjusted operating margin decreased 410 basis points and 210 basis points, respectively, forthe three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology, restructuring charges and other adjustments.

Current wording

Operating loss for the Multiomics segment was $5.0 millionforthe three months ended December 31, 2025 compared to an operating loss of $3.2 million for the corresponding period in the prior fiscal year. The Multiomics segment operating margin decreased 268 basis points forthe three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. The increase in operating loss and decrease in operating margin were primarily driven by lost cost leverage from lower North America sales volume for Sanger Sequencing. Adjusted operating loss was $4.4 million for the three months ended December 31, 2025 compared to adjusted operating loss of $2.3 million for the corresponding period in the prior fiscal year. Adjusted operating margin decreased 300 basis points forthe three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology, restructuring charges and other adjustments.

Previous wording

Our gross margin performance for the three and nine months ended June 30, 2025 and 2024 is as follows (in thousands, except percentages):

Current wording

Our gross margin performance for the three months ended December 31, 2025 and 2024 is as follows (in thousands, except percentages):

Previous wording

The Sample Management Solutions segment gross margin increased 707 basis points and 507 basis points, respectively, for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. Adjusted gross margin increased 756 basis points and 517 basis points, respectively, for the three and nine months ended June 30, 2025, compared to the corresponding periods in the prior fiscal year. The increases in gross margin and adjusted gross margin were primarily driven by operational efficiencies and favorable sales mix.

Current wording

The Sample Management Solutions segment gross margin decreased 429 basis points for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. Adjusted gross margin decreased 371 basis points for the three months ended December 31, 2025, compared to the corresponding period in the prior fiscal year. The decreases in gross margin and adjusted gross margin were primarily driven by higher rework cost incurred on Automated Stores projects and the negative impact of a non-recurring item.

Previous wording

The Multiomics segment gross margin decreased 465 basis points and 167 basis points, respectively, for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. Adjusted gross margin decreased 498 basis points and 201 basis points, respectively, for the three and nine months ended June 30, 2025 compared to the corresponding periods in the prior fiscal year. The decreases in gross margin and adjusted gross margin were primarily driven by lower revenue for Gene Synthesis and Sanger sequencing services, partially offset by higher revenue for Next Generation Sequencing services.

Current wording

The Multiomics segment gross margin decreased 322 basis points for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. Adjusted gross margin decreased 351 basis points for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year. The decreases in gross margin and adjusted gross margin were primarily driven by lost cost leverage from lower North America sales volume for Sanger Sequencing.

Previous wording

Our research and development expenses for the three and nine months ended June 30, 2025 and 2024 are as follows:

Current wording

Our research and development expenses for the three months ended December 31, 2025 and 2024 are as follows:

Previous wording

Our selling, general and administrative expenses for the three and nine months ended June 30, 2025 and 2024 are as follows:

Current wording

Our selling, general and administrative expenses for the three months ended December 31, 2025 and 2024 are as follows:

Previous wording

Total selling, general and administrative expenses decreased $2.9 million for the three months ended June 30, 2025 compared to the corresponding period in the prior fiscal year, primarily due to decreased compensation and benefits expense. Total selling, general and administrative expenses increased $2.9 million for the nine months ended June 30, 2025 compared to the corresponding period in the prior fiscal year, primarily due to higher stock-based compensation expense and one-time costs related to the Company's leadership changes, partially offset by decreased compensation and benefits expense.

Current wording

Total selling, general and administrative expenses decreased $9.4 million for the three months ended December 31, 2025 compared to the corresponding period in the prior fiscal year, primarily due to lower compensation and benefits, transformation costs and bad debt expenses. The one-time costs related to the Company's leadership changes in the corresponding period in the prior fiscal year also contributed to the decrease in the three months ended December 31, 2025.

Previous wording

Restructuring charges were$0.8 millionfor the three months ended June 30, 2025, a decrease of $0.9 million compared to the corresponding period in the prior fiscal year. Restructuring charges were $4.8 million for the nine months ended June 30, 2025, a decrease of $1.2 million compared to the corresponding period in the prior fiscal year. Please refer to 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$1.1 millionfor the three months ended December 31, 2025, an increase of $0.7 million compared to the corresponding period in the prior fiscal year. Please refer to 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$5.0 million and $13.8 million forthe three and nine months ended June 30, 2025, respectively, compared to $7.9 million and $27.4 million recorded for the three and nine months ended June 30, 2024, respectively. The decrease in interest income year over year is due to decreased investments in marketable securities. 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 for additional information.

Current wording

Interest income, net–* *We recorded interest income of$5.1 million three months ended December 31, 2025 compared to $4.3 million recorded for the three months ended December 31, 2024. The increase in interest income is due to increased investments in marketable securities during the three months ended December 31, 2025. 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 for additional information.

Previous wording

Other income (expense), net– We recorded other expense of $0.8 million for the three months ended June 30, 2025 compared to $0.4 million in the corresponding period in the prior fiscal year. We recorded other income of $1.5 million for the nine months ended June 30, 2025, an increase of $1.7 million compared to the corresponding period in the prior fiscal year. Other income (expense) primarily relates toforeign exchange gains and losses resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities. The increase in the nine months ended June 30, 2025 was also attributable to a $2.1 million gain from cash proceeds received from a cost method investment which had no cost basis.

Current wording

Other income, net– We recorded other income of $0.1 million for the three months ended December 31, 2025 compared to $1.2 million in the corresponding period in the prior fiscal year. Other income, net primarily relates to foreign exchange gains and losses resulting from foreign currency denominated transactions and the revaluation of foreign currency denominated assets and liabilities.

Previous wording

We recorded income tax expense of $2.8 million and $14.0 million during the three and nine months ended June 30, 2025, respectively. The tax expense for the three and nine months ended June 30, 2025 was primarily driven by a $6.5 million tax expense related to a change in the indefinite reinvestment assertion and the expectation to repatriate cash to the United States from a China subsidiary. The tax expense is also driven by profits in foreign jurisdictions and current state income taxes in jurisdictions where we do not have a net operating loss carryover. Additionally, tax expense is generated on a global loss because we do not benefit from the U.S. tax loss due to a valuation allowance against U.S. deferred tax assets.

Current wording

We recorded income tax expense of $3.1 million and $3.9 million during the three months ended December 31, 2025 and 2024, respectively. The tax expense in each period was primarily driven by the profits in foreign jurisdictions and state income taxes in jurisdictions where we do not have a net operating loss carryover.

Previous wording

On July 4, 2025, the "One Big Beautiful Bill Act" was signed into US tax law, extending many international tax provisions of the 2017 Tax Cuts and Jobs Act and providing additional favorable incentives. We will continually monitor the financial impact of these changes. In the near term, we do not expect these changes to have a significant effect on our effective tax rate or cash flows.

Current wording

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

Previous wording

During the first quarter of fiscal year 2025, following approval by our Board of Directors, we publicly announced our plan to sell the B Medical Systems business. Results related to the B Medical Systems business are included within discontinued operations for the three and nine months ended June 30, 2025 and 2024. Revenue from discontinued operations was $16.3 million and $28.5 million for the three months ended June 30, 2025 and 2024, respectively. Revenue from discontinued operations was $51.1 million and $63.9 million for the nine months ended June 30, 2025 and 2024, respectively. Loss from discontinued operations, net of tax, was $53.5 million and $79.7 million for thethree and nine months ended June 30, 2025, respectively, primarily driven by the loss on assets held for sale recorded in the three and nine months ended June 30, 2025. Loss from discontinued operations was $6.4 million and $135.6 million for the three and nine months ended June 30, 2024, respectively, primarily driven by the impairment of goodwill recorded in the nine months ended June 30, 2024. Loss from discontinued operations includes only direct operating expenses incurred that (1) are clearly identifiable as costs being disposed of upon completion of the sale and (2) will not be continued by the Company on an ongoing basis. Indirect expenses which supported the B Medical Systems business and remain part of continuing operations, are not reflected in loss from discontinued operations. Please refer to Note 3,Discontinued Operations, in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

Results related to the B Medical Systems business and legal fees related to the ongoing indemnification dispute with the buyer of the semiconductor cryogenics business are included within discontinued operations for the three months ended December 31, 2025 and 2024. Revenue from the B Medical Systems business was $13.1 million and $17.6 million for the three months ended December 31, 2025 and 2024, respectively. Loss from discontinued operations, net of tax, was $10.2 million for thethree months ended December 31, 2025, primarily driven by the loss on assets held for sale recorded in the three months ended December 31, 2025. Loss from discontinued operations was $3.9 million for the three months ended December 31, 2024. Loss from discontinued operations includes only direct operating expenses incurred that (1) are clearly identifiable as costs being disposed of upon completion of the sale and (2) will not be continued by us on an ongoing basis. Indirect expenses which supported the B Medical Systems business and remain part of continuing operations, are not reflected in loss from discontinued operations. Please refer to Note 3,Discontinued Operations, in the notes to the unaudited condensed consolidated financial statements included in the section titled “Financial Statements” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

As of June 30, 2025, we had cash and cash equivalents, restricted cash, and marketable securities of $549.8 million and stockholders’ equity of$1.7 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 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 December 31, 2025, we had cash and cash equivalents, restricted cash, and marketable securities of $570.9 million and stockholders’ equity of$1.7 billion. We believe that our current cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements for at least one year from the date of this Quarterly Report on Form 10-Q and for the foreseeable future thereafter. The current global economic environment makes it difficult for us to predict longer-term liquidity requirements with certainty. We may be unable to obtain financing that may be required on terms favorable to us, if at all. If adequate funds are not available to us on acceptable terms or otherwise, we may be unable to successfully develop or enhance products and services, respond to competitive pressures, or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business, financial condition and operating results.

Previous wording

As of June 30, 2025, we had $121.9 million of cash, cash equivalents and restricted cash held outside of the United States whichare not currently needed for U.S. operations. We had approximately $23 million of cash in China as of June 30, 2025. We began repatriating the cash to the United States from China during the third quarter of the fiscal year 2025 and have provided for $6.5 million of income taxes related to the repatriation plan as of June 30, 2025. Our marketable securities are generally readily convertible to cash without a material adverse impact.

Current wording

As of December 31, 2025, we had $163.6 million of cash, cash equivalents and restricted cash held outside of the United States whichare not currently needed for U.S. operations. We had approximately $28.0 million of cash in China as of December 31, 2025. We began repatriating the cash to the United States from China during the third quarter of the fiscal year 2025 and have provided for $6.4 million of income taxes related to the repatriation plan as of December 31, 2025. We have repatriated $41.1 million from China during fiscal year 2025 and may repatriate cash from China in the future. Our marketable securities are generally readily convertible to cash without a material adverse impact.

Previous wording

Our cash flows on a total company consolidated basis for the nine months ended June 30, 2025 and 2024 were as follows:

Current wording

Our cash flows on a total company consolidated basis for the three months ended December 31, 2025 and 2024 were as follows:

Previous wording

Cash inflows from operating activities for the nine months ended June 30, 2025 were$70.0 million, primarily due to increased revenue and collections and a U.S. federal tax refund of $11.5 million received in the nine months ended June 30, 2025. Investing activities for the nine months ended June 30, 2025 include $313.0 million in purchases of marketable securities, partially offset by $242.5 million in sales and maturities of marketable securities. Financing activities for the nine months ended June 30, 2025 include $11.4 million of excise tax payments related to our share repurchases settled in fiscal year 2024.

Current wording

Cash inflows from operating activities for the three months ended December 31, 2025 were$20.8 million, a decrease of $9.0 million compared to the corresponding period in the prior fiscal year. The decrease is primarily due to a U.S. federal tax refund of $11.5 million received in the three months ended December 31, 2024 compared to an immaterial amount received in the three months ended December 31, 2025. Investing activities for the three months ended December 31, 2025 include $108.7 million in purchases of marketable securities, which was offset by $142.7 million in sales and maturities of marketable securities. Investing activities for the three months ended December 31, 2025 also include the $9.0 million deposit in connection with the pending sale of the B Medical Systems business. Financing activities for the three months ended December 31, 2025 include $2.4 million of tax payments on net share settlements on equity awards during the three months ended December 31, 2025.

Previous wording

As of June 30, 2025, we had non-cancellable commitments of $48.7 million comprised of purchase orders for inventory of $37.3 million and other operating expense commitments of $11.4 million.

Current wording

As of December 31, 2025, we had non-cancellable commitments of $40.9 million comprised of purchase orders for inventory of $18.0 million and other operating expense commitments of $22.9 million.