Azenta, Inc. (AZTA) Earnings Call Transcript

Greetings, and welcome to Azenta Fourth Quarter 2026 Fiscal Financial Results. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, November 11, 2026. I will now turn the conference call over to Yvonne Perron. Vice President, FP&A and Investor Relations.

Thank you, operator, and good morning, and welcome to everyone joining us today. We would like to welcome you to our earnings conference call for the fourth quarter of fiscal year 2026. Our fourth quarter earnings press release was issued yesterday after market and is available on our Investor Relations website located at investors.azenta.com in addition to the PowerPoint slides and supplementary information that will be used during the prepared remarks today. I would like to remind everyone that during the course of the call, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our fiscal 2027 outlook, strategic initiatives and recently announced transactions. Actual results may differ materially from those expressed or implied by these forward-looking statements. I would refer you to the section of our earnings release titled Safe Harbor Statement, the safe harbor slide on the aforementioned PowerPoint presentation on our website and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. We may refer to a number of non-GAAP financial measures, which are used in addition to and in conjunction with results presented in accordance with GAAP. We believe the non-GAAP measures provide an additional way of viewing aspects of our operations and performance, but when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the Azenta business. Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today are our Interim President and Chief Executive Officer, Dr. Martin Madaus; our Executive Vice President and Chief Financial Officer, Lawrence Lin; and Trey Martin, our President of Multiomics. We will begin the call with opening remarks from Martin and Trey followed by Lawrence, who will provide a detailed review of our financial results and our outlook for fiscal year 2027. We will then take your questions at the end of their prepared remarks. With that, I would like to turn the call over to our interim CEO, Dr. Martin Madaus.

Thank you, Yvonne, and good morning, everyone. Thank you for joining us. In August of this year, I assumed the role of Interim President and Chief Executive Officer after the departure of the previous CEO. We closed fiscal 2026 with good progress towards improving the business. The second half was significantly better than the first. Our goal is to deliver consistent performance quarter after quarter. For fiscal year 2027, we will convert opportunity into sustained growth and stronger operational performance. During Q4, we continued to drive the business forward without delay and advanced several major in-flight improvement initiatives impacting revenue and bottom line growth. I am pleased to tell you that our Q4 2026 revenue came in slightly better than expected. We're now seeing improvements in booking trends across the business. Expanded commercial coverage and a strong operating focus have contributed to better execution for our opportunities. Now the highlights for Q4 are another quarter of double-digit year-over-year growth in the sample repository services and the consumables and instrument businesses, improved performance across selected sequencing services and continued growth in gene synthesis within Multiomics. We also took decisive restructuring actions to improve operating efficiency and return capital to shareholders through our stock repurchase program. These accomplishments in the face of many changes speak volumes about the committed leadership we have at Azenta. Now 3 months into my role as Interim CEO, I can clearly see a path to a higher-performing organization. So what does that mean specifically? We have a solid market leadership position in the SRS business, and there are market segments where we can be more successful to drive more profitable revenue growth. The focus is on commercial expansion. In the C&I business, we have differentiated capability in several market segments, and we can achieve more with commercial execution and also with new products, both are within our control. Our stores business has faced a market pullback and quality issues. The products we offer are competitive and needed in the market. This created a drag on the SMS business performance in 2026 on both revenue and profitability. Now we're seeing that product quality is improving, booking trends are better and we'll be launching two new product lines at the end of fiscal year 2027 that are expected to support future growth. Our overall focus is straightforward. The top three priorities are: profitable revenue growth, consistent execution of our initiatives and targeted cost control to drive market expansions. Now let me briefly speak about the Multiomics business, also called GENEWIZ. Following Trey Martin's arrival in April, we moved quickly to address organizational gaps and refocus the service offerings on high-growth sequencing services and gene synthesis, allowing us to better manage the transition away from the declining Sanger Sequencing segment to other offerings. The difference between the first half of fiscal 2026 and the second half has been impressive. We are still in the middle of the Multiomics business evolution that we saw encouraging booking trends in Q4. We recently announced two strategic deals in the gene synthesis space, which are intended to expand our participation in the growing AI-enabled drug discovery market and build a more competitive growth platform across our global lab network. So let me turn now to our fiscal 2026 performance, and Lawrence will provide the detailed financial review later. For Fiscal 2026, organic revenue grew 2% with an adjusted EBITDA margin of 9.4%. Revenue exceeded our latest outlook, while profitability was broadly in line with our most recent guidance. Importantly, performance improved in the second half, giving us a better momentum as we enter in our fiscal year 2027. The improvement reflects better commercial execution, stronger performance in North America Multiomics and progress against several of the operational actions we put in place during the year. Sample Management Solutions delivered low single-digit organic growth, supported by the strength in our much faster growing recurring revenue businesses, which are biorepositories and consumables and instruments, automated stores faced major headwinds in 2026, mainly from constrained customer capital spending. Multiomics also delivered low single-digit organic growth above our outlook, while performance was uneven during the year. We saw significant improvement in the second half in North America as the actions we took to strengthen execution began to produce results. China delivered another strong year, and Europe also performed well, demonstrating the value of our global presence and our ability to apply different commercial and operating approaches across the geographies. Azenta has a leadership position in sample repository services with profitable recurring revenue from our core storage business. We continue to expand a biorepositories business through high customer focus, deep workflow integration and our ability to expand into new end markets. Automated stores remains an important business with strong competitive products and attractive long-term opportunity. Fiscal 2026 performance was below our expectations, reflecting both customer capital constraints and execution challenges. Our assessment indicates that the issues we experienced in 2026 can be solved. We are cautiously optimistic now based on much better booking trends and also improvements in our quality metrics. Multiomics represents one of Azenta's compelling near and long-term growth opportunities. Our Synthesis business is performing well with particular strength in China and continued solid performance in Europe. GENEWIZ scientific expertise, our global reach, established customer relationships provide a strong platform for expansion into adjacent genomic workflows. The replacement of Sanger Sequencing by other technologies we offer now continued in Q4, particularly in North America. Under Trey's leadership, we have launched a comprehensive effort to address those challenges and reposition GENEWIZ towards faster-growing, higher-value genomic discovery and clinical workflows. Our objective is clear. Strengthen GENEWIZ's competitive position, return Multiomics to a sustainable and consistent growth and build a more scalable, profitable business. Our approach has three components for that: First, we are creating a stronger operating foundation. The restructuring of the U.S. laboratory footprint will create a leaner, more focused model designed to improve capacity utilization and profitability. It also provides a more scalable platform for introducing new genomic offerings while maintaining our commitment to quality and turnaround time. Second, we're adding differentiated capabilities. Our agreement with Allergen expands our position in rapid, high-purity DNA synthesis by the acquisition of SynPlexity as ultra-high throughput full gene synthesis. Together, these capabilities are intended to move GENEWIZ into faster-growing, higher-value parts of the genomic discovery workflow. And third, we will use GENEWIZ established scientific expertise, our customer relationships and our global commercial infrastructure to bring these capabilities to market and scale them effectively. We believe that this combination of a stronger operating model, differentiated technology and our global commercial reach and position GENEWIZ as the broader partner across the genomic discovery workflow. I will now turn it over to Trey Martin, the President of Multiomics to explain how Elegen and SynPlexity strengthen our position across the genomic discovery workflow and how we plan to bring these capabilities to customers. Trey brings more than 30 years of industry experience. Trey is a lead executive with a proven track record of bringing novel gene synthesis technologies to market, notably had integrated DNA technologies at

Thank you, Martin, and good morning, everyone. As Martin described, we are strengthening the foundation of Multiomics while expanding GENEWIZ into higher-value areas of genomic discovery. Elegen's proprietary technology strengthens the DNA build step under our exclusive licensing agreement, which is subject to specified right and exceptions, GENEWIZ plans to manufacture and commercialize products using Elegen's cell for DNA synthesis platform. By producing high-purity DNA without the conventional cleaning step, this technology is designed to simplify the customer workflows and address a key bottleneck to accelerate the move from digital design to discovery testing. SynPlexity adds a complementary capability, the ability to produce thousands of full-length gene designs in parallel. This proprietary gene synthesis technology allows researchers to explore large design spaces in a single library moving beyond the traditional gene-by-gene workflows and into very high throughput, low cost discovery applications. These capabilities further position GENEWIZ to participate in the rapidly growing use of AI-enabled drug discovery workflows. AI is increasing the number and complexity of biological designs researchers can evaluate, but those digital antibody designs still need to be built, tested and validated experimentally to move the models forward. GENEWIZ connects the AI-generated designs with the wet lab through synthesis, sequencing and validation, helping customers accelerate the design, build, test, learn cycle. The new technologies from Elegen and SynPlexity come at a perfect time when the market is showing strong demand for gene and antibody synthesis products due to the accelerating investment in AI-enabled drug discovery. We believe they will further position GENEWIZ as a competitively differentiated player in the space. Our top priority is to integrate, fully commercialize the consolidated portfolio and scale these technologies globally. Importantly, we are not building commercial platform from the ground up. GENEWIZ already has the scientific expertise, customer relationships and established channels needed to bring these offerings to market. These new investments will initially strengthen our position in North America with the potential to scale across our global network. Fiscal 2027 will be a year of implementation, scale-up and early commercialization of these products as we integrate the new capabilities and expand customer adoption.

Thank you, Trey. The reshaping of Multiomics reflects our broader approach across Azenta, strengthening operating foundation, invest where we have a differentiated advantage and scale those opportunities to disciplined execution. . We're entering fiscal 2027, our focus shifts from the actions we have taken to the performance they are expected to produce. So our priorities are very clear. First, deliver more consistent and predictable performance through stronger forecasting, pipeline conversion, project execution and accountability. Second, accelerate sustainable organic growth by scaling our recurring revenue business and advancing our highest priority commercial product and digital initiatives. Third, execute the Multiomics repositioning to improve automated stores performance and successfully ramp our UK Biocentre business. Fourth, expand profitability and cash generation while continuing to invest for growth. Our fiscal outlook 2027 is a significant step-up over 2026. It's largely built on a more productive and higher-performing organization, driving revenue growth and profitability. My role as Interim CEO are focused on stabilizing the organization, setting priorities and completing organizational restructurings that were underway. With that behind us, I'm very optimistic that our execution will be better and more consistent. For fiscal 2027, we expect organic revenue growth of 3% to 5%, Sample Management Solutions growth will be supported by biorepositories and consumables and instruments, the UK Biocentre ramp and improved automated stores performance. Multiomics growth will be driven by NGS, incremental contributions from selected sequencing services and new applications and new genomic workflow, while we begin the initial commercialization of Elegen and the integration of SynPlexity. Sanger Sequencing remains a headwind in 2027, but a much smaller compared to 2026. We expect adjusted EBITDA margin to expand approximately 200 to 250 basis points driven by gross margin improvements, operating leverage, restructuring benefits and productivity while we continue to invest into the business. To conclude, fiscal 2027 is about consistent execution and accelerating performance. We have strengthened the foundation of the company established clear actions to improve execution and profitability and investing behind differentiated opportunities that can drive sustainable growth. We enter fiscal 2027 with confidence in our strategy, urgency around execution and a clear focus on creating long-term shareholder value. With that, I'll turn it over to Lawrence to review our financial results and provide additional details on our fiscal 2027 outlook.

Thank you, Martin. I'll begin with our fourth quarter and full year financial results, review segment performance, discuss our balance sheet and capital allocation activities, and then provide an update on our outlook for fiscal 2027. To supplement my remarks today, I will refer to the slide deck available on our website. Turning to Slide 4. Let's look at the highlights from the quarter and full year. Fourth quarter revenue was $167 million, up 5% as reported and 2% organically with SMS organic growth of 4% and Multiomics down 1%. For fiscal 2026, revenue was $622 million, up 5% as reported and 2% organically, exceeding the high end of our guidance range primarily due to stronger-than-expected Multiomics activity in the fourth quarter. For the full year, on an organic basis, SMS grew 2%, led by sample repository services and C&I, while Multiomics grew approximately 1%, led by next-generation sequencing and gene synthesis. These gains were partially offset by continued weakness in automated stores and Sanger Sequencing. Adjusted EBITDA was $19.4 million in the fourth quarter, representing 11.6% margin. For the full year, adjusted EBITDA was $58.3 million within our most recent guidance range with a margin of 9.4%. Full year profitability benefited from continued strength in our recurring revenue businesses, favorable portfolio mix and cost and restructuring actions implemented during the year. These benefits were partially offset by continued investments in commercial capabilities, marketing and product development and other strategic growth initiatives. Profitability was also impacted by lower volumes and operating leverage in automated stores and Sanger Sequencing as well as quality remediation activities. Non-GAAP EPS for the fourth quarter was $0.28 and $0.48 for the full year, which included the benefit from the reversal of stock-based compensation expense related to our former Chief Executive Officer's invested awards. Free cash flow was $12 million in the fourth quarter, supported by improved working capital and higher deferred revenue. For the full year, free cash flow was $27 million, below our expectations, primarily reflecting lower working capital performance and higher capital expenditures. Cash flow generation remains a high priority while we continue to invest in the business. We ended the quarter and the year with $506 million in cash, cash equivalents, restricted cash and marketable securities. During the quarter, we received repayment in full of the $35 million secured vendor loan related to the sale of B Medical Systems, which closed on July 1, 2026. With this repayment, our receipt of the entire $63 million cash purchase price was completed. Additionally, during the fourth quarter, we repurchased approximately 2.1 million shares for $68 million under our existing share repurchase authorization, reflecting our confidence in the long-term value of the business. For the full fiscal year, we repurchased approximately 4.4 million shares for $118 million. As of September 30, 2026, approximately $132 million remained available under the repurchase program. Now let's turn to Slide 5 to take a deeper look at our results in the quarter. Total revenue was $167 million, up 5% reported and 2% organically, with a nominal impact from foreign exchange and a $4.5 million contribution from UK B.C. Sample Management Solutions generated revenue of $94 million, increasing 9% on a reported basis and 4% organically. Performance was again led by sustained momentum in biorepositories and C&I, including strong instruments performance, reflecting the durability of these recurring revenue businesses and continued commercial execution. This strength was partially offset by lower automated store revenue, reflecting the impact of softer bookings in prior periods and the timing of project conversion. Importantly, bookings improved in the fourth quarter, providing a stronger backlog entering fiscal 2027. UK Biocentre also contributed $4.5 million of reported revenue during the quarter, with increased processing activity supporting its sequential performance. Multiomics revenue was $73 million, flat on a reported basis and down 1% organically, exceeding our initial expectations, supported by stronger bookings, particularly in North America. Multiomics performance improved significantly in the second half with organic revenue shifting from approximately 1% year-over-year decline in the first half to approximately 4% growth in the second half. Within the portfolio, gene synthesis grew, led by continued momentum in China, while we also saw strength in other sequencing services, including clinical sequencing. Sanger Sequencing decline, reflecting the longer-term technology and market transition we have discussed previously. Adjusted gross margin for the quarter was 47.2%, up 50 basis points year-over-year. The improvement was driven primarily by stronger Multiomics profitability, reflecting improved operating leverage, favorable mix and the benefits of cost actions. The improvement was partially offset by lower volumes than unfavorable fixed cost absorption in automated source, continued pressure in Sanger Sequencing and quality remediation costs. Turning to Sample Management Solutions. Adjusted gross margin was 48.9% for the quarter, down 40 basis points year-over-year. The decline primarily reflected lower volumes and unfavorable fixed cost absorption in automated stores, together with quality remediation costs. These pressures were partially offset by growth in favorable mix in our recurring revenue businesses, including biorepositories and C&I. Within automated stores, we incurred less than $1 million in quality-related remediation costs during the quarter, bringing the full year total to approximately $6 million. Multiomics adjusted gross margin improved approximately 150 basis points year-over-year to 45.1%, driven primarily by improved operating leverage, favorable mix and the benefits of cost actions. These benefits were partially offset by continued margin pressure in Sanger Sequencing and regional mix. Next, let's turn to Slide 6 for a review of the balance sheet. As I mentioned, we ended the year with $506 million in cash, cash equivalents, restricted cash and marketable securities. We had no debt outstanding. Capital expenditures were approximately $10 million in the quarter, primarily supporting automation, capacity and technology initiatives across the business. Before turning to our fiscal 2027 outlook, I want to provide some financial context on the actions we have taken to reposition the Multiomics business. The restructuring actions announced in October are expected to generate approximately $11 million of annualized savings once substantially complete, which we expect around the end of our second fiscal quarter of 2027. These savings are incremental to the approximately $7 million of annualized savings associated with the actions initiated earlier in fiscal 2026. The benefits are expected to build progressively through the year. In October, we announced the acquisition of SynPlexity and an exclusive license agreement with Elegen subject to specified retained rights and exceptions to expand our gene synthesis portfolio into a high-growth market. For SynPlexity, we paid $15 million in cash with up to an additional $10 million of contingent consideration. For Elegen, we expect aggregate capital deployment under agreement of approximately $32 million to $71 million. Depending on future equipment purchases and whether we exercise our option, exercisable between 12 and 18 months after signing to convert the license to a perpetual license for $25 million plus any unpaid license fees subject to the license terms. Strategically, the investments add complementary capabilities to our gene synthesis portfolio. SynPlexity adds high-throughput gene library capabilities that broaden our participation in discovery workflows while Elegen is intended to expand our position in rapid high-purity DNA synthesis. And combined with our existing infrastructure and commercial engine, we believe these investments will support a substantial growth in gene synthesis over the longer term. Fiscal 2027 will be primarily an integration, scale-up and early commercialization year, and our outlook incorporates the associated investment in commercialization and customer adoption. We are funding the initial investments from cash on hand and expect revenue contributions to ramp progressively over the course of the year. Taken together, these actions expand our participation in differentiated higher-value genomic workflows. Turning to guidance on Slide 8. For fiscal 2027, we expect total reported revenue in the range of approximately $648 million to $660 million, representing organic growth of approximately 3% to 5% year-over-year. This outlook reflects an acceleration in organic growth with the high end of our revenue outlook, including potential contributions for Elegen and SynPlexity. Fiscal 2027 is expected to be primarily a year of integration stop and commercialization of these capabilities. At the segment level, we expect Sample Management Solutions to deliver mid-single-digit organic growth. We expect continued strength in sample repository services supported by the reoccurring nature of biorepository activities and continued growth in consumables and instruments, reflecting healthy demand across the installed base and improved commercial execution. We also expect automated source to return to modest growth. Our backlog provides good visibility into the year, although project timing and conversion remains in current considerations. In Multiomics, we expect low single-digit organic growth. Continued growth in next-generation sequencing and gene synthesis, together with incremental contributions from selected sequencing services and new applications is expected to more than offset continued pressure in legacy Sanger Sequencing services. At the company level, Growth is also expected to benefit from modest price realization and the commercial product and digital initiatives underway across the organization. These include improved sales force productivity and coverage, new product launches, digital customer acquisition and commercial enablement tools. From a profitability perspective, we expect adjusted EBITDA margin to expand by approximately 200 to 250 basis points year-over-year. This improvement is expected to be driven by gross margin expansion, operating leverage and the benefits of our footprint optimization, restructuring as well as productivity and automation initiatives. Our outlook includes approximately 100 basis points of expected dilution associated with the Elegen agreement and SynPlexity acquisition. As mentioned, the expected savings from Rx restructuring actions will build progressively during fiscal 2027. Our guidance incorporates those benefits as well as the investments required to integrate and commercialize the new Multiomics capabilities. These benefits are expected to be partially offset by normal compensation increases and continued investment in commercial execution, R&D, product development and digital capabilities. This is an important element of our fiscal 2027 framework. The actions we are taking to simplify the cost structure and improve productivity allows us to reinvest selectively in priority growth areas while still delivering margin expansion. Finally, we expect full year free cash flow to improve by approximately 25% relative to fiscal 2026 supported by earnings expansion and continued operating discipline while deploying capital investment for growth. Taken together, our fiscal 2027 outlook reflects stronger organic growth, margin expansion and improved cash generation. Importantly, it is driven primarily by actions within our control, strengthening commercial execution, improving productivity, simplifying the operating model and investing selectively in differentiated growth opportunities. Before I close, I want to provide some additional perspective on the expected phasing of the year. For the first quarter, we expect organic revenue growth of approximately 3% to 4% and adjusted EBITDA margin expansion of approximately 100 basis points to 150 basis points versus first quarter 2026. Our first quarter outlook reflects continued momentum in key growth areas. Balanced by the timing of larger customer orders and other revenue phasing with margin expansion also reflecting the initial investments in Elegen and SynPlexity. We expect free cash flow to be negative in the first quarter, primarily reflecting the timing of capital investments, restructuring related cash outlays and Multiomics integration and commercialization investments. We anticipate cash generation to improve over the remainder of the year. As we move through the year, we expect growth and profitability to strengthen, supported by commercial pipeline conversion, increasing restructuring benefits and continued execution of our productivity initiatives. This expected phasing is incorporated into our full year outlook. As we enter fiscal 2027, we are focused on delivering stronger financial performance, realizing the expected savings, integrating and commercializing our new capabilities, reinvesting selectively in priority growth areas and delivering stronger organic growth, meaningful margin expansion and improved cash generation. We believe this framework positions Azenta to deliver more consistent, profitable growth and create sustainable long-term value. This concludes our prepared remarks, and I will now turn this over to the operator for questions.

[Operator Instructions] Your first question is from David Saxon from Needham.

Congrats on a nice quarter here. I wanted to double quick on Multiomics, specifically the North America business. I think fiscal fourth quarter lost a big order to fiscal third quarter, so the stability there was nice to see. So can you just double-click there, what's driving that stability given the order kind of came out in the fourth quarter? What's -- how much of that is driven by improved execution, given some of the recent commercial investments versus some market demand kind of firming up? And then what's assumed in that multi-low single-digit guide around the North America business stability? Or does that return to growth? And I'll have a follow-up.

Yes. Thanks, David. We did mention there was a large order pull forward from Q4 into Q3, which benefited Q3. But as you said, Q4 had sustained performance. we've seen that generally, you can look at some of the larger public company proxies for next-gen consumables and see a nice steady continued improvement there as frankly as we lapped the 1-year anniversary of the shutdown. So we saw a continued execution. You mentioned, I think, appropriately the initiative to expand commercial significantly across all the businesses at Azenta. We've been using the term seasoning a couple of quarters under their belt and the reps start to really gain momentum, and we've been pleased to see that sustained as well. So really, all of those things were factors. The continued execution, the seasoning of the sales folks. And I'll point also to our geographic diversity as a strength as certain markets have had different issues, it's been really great to be able to take advantage of markets that are growing while you're dealing with headwinds in other markets. The NGS issue, as you said, was particularly a U.S. phenomenon in Q2, but all of those things have been factors for the recovery.

And David, it's Lawrence. Maybe I'd just add something around the 2027 guide for Multiomics at a low single-digit rate. One of the things, I think, it's worth noting that shows kind of what Trey has been talking about is excluding the significant headwinds from our legacy Sanger business our core growth for the Multiomics business would be 4 points higher and then certainly 2 points higher for Azenta to give you a little bit more color.

Okay. That's super helpful. And then hopefully, this is a superstar question, but just wanted to get a temperature check on the company's commitment to the LRP certainly seems like you're on track for that, I guess, extended fiscal '29 time line. But any components of the LRP, whether it's on the top line or bottom line that you feel better or worse about relative to kind of earlier in fiscal '26 when it was extended?

Yes. This is Martin here. Our focus is really on '27 and delivering the commitments we laid out for this year. Certainly, we see opportunities beyond that for improved commercial execution growth across the different core businesses. But we are, at this point, really focused on 2027 and also the quarter-to-quarter consistency continuing what we've done in the last quarter, many more quarters and then delivering on a really good '27. That's what we're really focused on.

Your next question is from Matt Stanton from Jefferies.

Maybe for Trey. I appreciate some of the color on the deals. I guess, can you just talk about a little bit more, what has to happen as you integrate these, you have the license agreement, a small tuck-in and existing gene synthesis business, like just operationally as we think about layering these in and when they could start to show up in revenue? Can you talk about that a little bit more? And then also, you noted the ability to make you more competitive in the U.S., this has been an area that's historically been more challenging on the gene synthesis side. Just what gives you confidence in the ability to compete more competitively there? And then also any -- I know it's very early, but just any early feedback from customers since you've announced these deals within the existing GENEWIZ footprint?

Yes. Great. Thank you, Matt. The as really was -- when gene was founded 27, almost 28 years ago in New Jersey, there were two primary strategic differentiators for the company. One was the overnight Sanger Sequencing and the other was the, I'll call it, the traditional cloning workflow and gene synthesis. We've remained very strong in the traditional cloning workflow, which recently has been augmented by the gene to antibody program, and which was well timed, of course, for this surge of activity all around AI-enabled drug discovery. What we were missing, honestly, is a significant part of the addressable market which shows up not in the traditional E.coli clone workflow, but in the fragment market. So fragments are also synthetic DNA double stranded, but they tend to be used disproportionately in antibody discovery workflows and in genome engineering and protein engineering were at large. So that was a product. We had a few products, but the technology deal, specifically the Elegen deal gives us the opportunity to participate in that, I'll say, half of the market to double our addressable. And that's going to be significant because the call points for those products are the same as the call points for the traditional E.coli cloning market. And then SynPlexity is another layer on top of that. So this is a newer workflow. It does exist in the market today, but it's quite new. And this is going from no 1 or a plate, say, of 96 or 384 fragments for plasma to a pool of thousands of discrete -- double streamed DNA sequences which can be used in multi to megaplex experiments. If we think about it on a frame of data per dollar, the SynPlexity pools will allow us to reach levels of scale and levels of cost efficiency for the customers that are not available in the two markets I previously mentioned. But really, you need all three to support the entire drug discovery framework because as people refine their models as they go from leads to kits as they scale our traditional our traditional workflow is going to kick in and help people scale up compounds of interest. So it's really important to have all three elements, I'd say, in that market, and these deals bring both of those additional layers to us.

Maybe one more comment on the commercial side. These are small companies that have products in the market. So they're kind of validated with the customer. Our task is to integrate these companies, scale it up and commercialize and that will happen in 2027, and that's what we included in our guidance. We think the conditions are good for us. They help us. It's a good allocation of capital. it's slightly dilutive, but it will be positive in the second year. So I think that meets our M&A criteria. But with the expertise that we have and the ability to scale this up, we think the sale have a positive impact already in this fiscal year.

Great. Appreciate that. And then maybe just going back to the Multiomics, low singles and then you have the headwind from Sanger, so kind of mid-single excluding that. Anything to call out just between NGS and gene synthesis are both kind of going to be in that mid-single-digit range in terms of the guide for the year? And then also within Multiomics, China has been really strong in overall in '26, I think up over 20% for both periods. Just talk about durability or visibility into China demand trends built into that Multiomics guide for '27 here.

Yes. Matt, good to hear you -- hear your voice here. So when we look at NGS and Synthesis, certainly what we're seeing in terms of the momentum in the fourth quarter and what Trey mentioned around the bookings, positive booking trends will continue. So contemplate our guy is kind of what we are seeing in the last -- certainly, in the last 4 or 5 weeks, but in the fourth quarter. So that is good. In terms of China, and I'll let Trey opine a little bit more on it. We certainly have been seeing double-digit growth for a while. As I've mentioned in prior calls, we've got a really strong commercial team and the demand is there. Maybe Trey, do you want to add any additional color?

Yes. Thanks, Lawrence. I mentioned a little bit earlier that the geographic diversity of the Multiomics segment is a real strength. For example, we had 23% growth in China for China for fiscal '26. So we're able to participate in different markets and as they differentiate, frankly. So there are product line movements, market movements. I like our diversification in that way.

Your next question is from Mac Etoch from Stephens.

Maybe building off of Matt's question around the Multiomics additions there and specifically on SynPlexity. I just was curious how you view the value of stepping into that part of the discovery workflow compared to your legacy Multiomics business, specifically in terms of the customer base pricing and margin profile? And then I'll have a follow-up as well.