Azenta, Inc. (AZTA) FY 2024 MD&A
This page reproduces the company's own Item 7 MD&A text from the linked SEC filing. It is filer text, not grepcent analysis, scoring, or investment advice.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes appearing elsewhere in this 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 “Information Related to Forward-Looking Statements” and Part I, Item 1A, “Risk Factors” included above in this Annual Report on Form 10-K.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. All dollar amounts in the below MD&A are presented in U.S. dollars, unless otherwise noted or the context otherwise provides.
Unless noted otherwise, this MD&A relates solely to our continuing operations and does not reflect the operations of the semiconductor automation business which we sold to Thomas H. Lee Partners, L.P. for $2.9 billion in cash on February 1, 2022, which is reflected as discontinued operations in our Consolidated Financial Statements.
Our MD&A is organized as follows:
| Column 1 | Column 2 | Column 3 |
|---|---|---|
| ● | Overview. This section provides a general description of our business and operating segments as well as a brief discussion and overall analysis of our business and financial performance, including key developments affecting us during the fiscal years ended September 30, 2024 and 2023. |
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| Column 1 | Column 2 | Column 3 |
|---|---|---|
| ● | Critical Accounting Policies and Estimates. This section discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results. |
| Column 1 | Column 2 | Column 3 |
|---|---|---|
| ● | Results of Operations. This section provides an analysis of our financial results for the fiscal year ended September 30, 2024 compared to the fiscal year ended September 30, 2023. |
| Column 1 | Column 2 | Column 3 |
|---|---|---|
| ● | Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows, as well as a discussion of contractual commitments. |
OVERVIEW
General
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 and provide solutions for automated ultra-cold storage. Since then, we have expanded our life sciences offerings through internal investments and through a series of acquisitions. We now support our customers from research and clinical development to commercialization with our sample management, automated storage, vaccine cold storage and transport, as well as genomic services expertise to help our customers bring impactful and breakthrough 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 3,300 full-time employees, part-time employees and contingent workers worldwide as of September 30, 2024 and have sales in approximately 125 countries. We are headquartered in Burlington, Massachusetts and have operations in North America, Asia, and Europe.
Our portfolio includes product and service offerings developed by us internally, as well as obtained through acquisitions, designed to provide comprehensive capabilities to our customers, addressing their needs in sample exploration and management, automated storage, multiomics, and cold chain solutions. 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.
Segments
Effective October 1, 2023, we realigned our organizational structure into three reportable segments: Sample Management Solutions, Multiomics, and B Medical Systems. The segment realignment had no impact on our consolidated financial position, results of operations, or cash flows. All segment information presented is reflective of this new structure and prior period information has been recast to conform to our current period presentation. For further information on our reportable and operating segments, please refer to Note 18, Segment and Geographic Information to our Consolidated Financial Statements included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10‑K.
Within our Sample Management Solutions segment, we operate as a single business unit offering end-to-end sample management products and services, including Sample Repository Services, or SRS, and Core Products (Automated Stores, Cryogenic Systems, Automated Sample Tube, Consumables and Instruments, and Controlled Rate Thawing Devices). This portfolio provides customers with a high level of sample quality, security, availability, intelligence and integrity throughout the lifecycle of samples, providing customers with complete end-to-end “cold chain of custody” capabilities. We also offer expert-level consultation services to our clients throughout their experimental design and implementation processes. On July 1, 2022, we acquired Barkey Holding GmbH and its subsidiaries, or “Barkey”, a leading provider of controlled rate thawing devices for customers in the medical, biotech and pharmaceutical industries. The acquisition added innovative products and capabilities that extend our extensive cold chain of condition portfolio of products and services, while also expanding our customer reach in the fast-growing CGT space.
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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 CGT, antibody development and biomarker discovery by addressing genomic complexity and throughput challenges.
Within our B Medical Systems segment, we provide temperature-controlled storage and transportation solutions that complement our cold chain capabilities, adding differentiated solutions for reliable and traceable transport of temperature-sensitive specimens worldwide. We offer end-to-end cold chain of custody capabilities for vaccines, blood components, and laboratory specimens through our portfolio of cold chain transport solutions, plasma freezers, contact shock freezers, ultra-low freezers, and real-time sample monitoring and location tracking solutions.
Business and Financial Performance
Our performance for the fiscal years ended September 30, 2024, 2023 and 2022 is as follows (in thousands):
| Year Ended September 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||||||||
| Revenue | $ | 656,323 | $ | 665,072 | $ | 555,498 | ||||||
| Cost of revenue | 392,956 | 401,932 | 299,914 | |||||||||
| Gross profit | 263,367 | 263,140 | 255,584 | |||||||||
| Operating expenses | ||||||||||||
| Research and development | 33,525 | 33,956 | 27,542 | |||||||||
| Selling, general and administrative | 302,737 | 316,282 | 251,465 | |||||||||
| Impairment of goodwill and intangible assets | 115,975 | — | — | |||||||||
| Contingent consideration - fair value adjustments | — | (18,549 | ) | 600 | ||||||||
| Restructuring charges | 11,808 | 4,577 | 712 | |||||||||
| Total operating expenses | 464,045 | 336,266 | 280,319 | |||||||||
| Operating loss | (200,678 | ) | (73,126 | ) | (24,735 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest income, net | 33,177 | 43,735 | 15,697 | |||||||||
| Other income (expense), net | 178 | (1,042 | ) | (898 | ) | |||||||
| Loss before income taxes | (167,323 | ) | (30,433 | ) | (9,936 | ) | ||||||
| Income tax (benefit) expense | (3,153 | ) | (17,550 | ) | 1,350 | |||||||
| Loss from continuing operations | $ | (164,170 | ) | $ | (12,883 | ) | $ | (11,286 | ) | |||
| (Loss) income from discontinued operations, net of tax | — | (1,374 | ) | 2,144,145 | ||||||||
| Net (loss) income | $ | (164,170 | ) | $ | (14,257 | ) | $ | 2,132,859 |
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Results of Operations
Fiscal Year Ended September 30, 2024 compared to Fiscal Year Ended September 30, 2023
Revenue decreased 1% for fiscal year 2024 compared to fiscal year 2023 driven by decreased revenue in the B Medical Systems segment, partially offset by increased revenue in the Sample Management Solutions and Multiomics segments. Gross margin was 40.1% for fiscal year 2024 compared to 39.6% for fiscal year 2023 driven by margin expansion in the Sample Management Solutions and Multiomics segments, partially offset by margin pressure from decreased revenue in the B Medical Systems segment. Operating expenses increased in fiscal year 2024 compared to the prior fiscal year, primarily due to the $116.0 million non-cash impairment of goodwill and intangible assets, increased restructuring and transformation costs recognized in fiscal year 2024, and a benefit of $18.5 million of fair value contingent consideration adjustments related to the B Medical Systems segment in fiscal year 2023 which did not reoccur; these increases were partially offset by decreased selling, general and administrative expenses in fiscal year 2024. We generated a net loss of $164.2 million for fiscal year 2024 compared to a net loss of $14.3 million for fiscal year 2023, primarily due to the impairment of goodwill and intangible assets, a lower income tax benefit and decreased interest income during fiscal year 2024.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of the Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue, business combinations, intangible assets, goodwill and other long-lived assets, inventories, income taxes, and stock-based compensation. We base our estimates on historical experience and various other assumptions that we deem reasonable under the circumstances. We evaluate current and anticipated worldwide economic conditions, both in general and specific to the life sciences industry, that serve as a basis for making judgments about the carrying values of assets and liabilities that are not readily determinable based on information from other sources. Actual results may differ from these estimates and could have a material impact on our financial condition and results of operations.
We believe that the assumptions and estimates associated with the following critical accounting policies involve significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements.
Revenue Recognition
We generate revenue from the sale of products and services. A description of our revenue recognition policies is included in Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10‑K.
Although most of our sales agreements contain standard terms and conditions, certain agreements contain multiple performance obligations or non-standard terms and conditions. For customer contracts that contain more than one performance obligation, we allocate the total transaction consideration to each performance obligation based on the relative stand-alone selling price of each performance obligation within the contract. We rely on either observable standalone sales or an expected cost-plus margin approach to determine the standalone selling price of offerings, depending on the nature of the performance obligation. Performance obligations whose standalone selling price is estimated using an expected cost-plus margin approach relate to the sale of customized automated cold sample management systems and service-type warranties within the Sample Management Solutions segment.
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Revenue from the sales of certain products that involve significant customization, primarily automated cold sample management systems, is recognized over time as the asset created by our performance does not have alternative use to us and there is an enforceable right to payment for performance completed to date. We recognize revenue as work progresses based on actual labor hours incurred to date as a percentage of total estimated labor hours expected to be incurred. We believe this method most appropriately depicts our efforts towards satisfaction of the performance obligation. We develop profit estimates for long-term contracts based on total revenue expected to be generated from the project and total costs anticipated to be incurred in the project. These estimates are based on a number of factors, including the degree of required product customization and the work required to be able to install the product in the customer’s existing environment, as well as our historical experience, project plans and an assessment of the risks and uncertainties inherent in the contract related to implementation delays or performance issues that may or may not be within our control. We estimate a loss on a contract by comparing total estimated contract revenue to the total estimated contract costs and recognize a loss during the period in which it becomes probable and can be reasonably estimated. We review profit estimates for long-term contracts during each reporting period and revise the estimate based on changes in circumstances.
If our judgment or estimates in revenue recognition prove incorrect, our revenue in particular periods may be adversely affected and could have a material impact on our financial condition and results of operations.
Business Combinations
We account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date.
Significant judgment is used in determining fair values of assets acquired, liabilities assumed, and contingent consideration, as well as intangibles and their estimated useful lives. Fair value and useful life determinations require estimates of revenue growth rates, operating expenses, integration costs, obsolescence factors, discount rates and other assumptions used in computing present value. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as our current and future operating results. Actual results may vary from these estimates and may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair value, whichever occurs first. Adjustments to fair value of assets and liabilities made after the end of the measurement period are recorded within our operating results.
Contingent consideration is recorded at fair value as measured on the date of acquisition using an appropriate valuation model, such as the Monte Carlo simulation model. The value recorded is based on estimates of future financial projections under various potential scenarios, in which the model runs many simulations based on comparable companies’ growth rates and their implied volatility. Our estimates of forecasted revenues in the earn-out period include a consideration of current industry information, market and economic trends, historical results of the acquired business and other relevant factors. These cash flow projections are discounted with a risk-adjusted rate. Each reporting period until such contingent amounts are earned, the fair value of the liability is remeasured based on changes to the underlying assumptions. The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment and given the inherent uncertainties in making these estimates, actual results are likely to differ from the amounts originally recorded and could be materially different.
Intangible Assets, Goodwill and Other Long-Lived Assets
We have identified intangible assets and recorded significant goodwill as a result of our acquisitions. Intangible assets other than goodwill are valued based on estimated future cash flows and amortized over the assets' estimated useful lives. Goodwill is tested for impairment annually or more often if impairment indicators are present, at the reporting unit level. Intangible assets other than goodwill and long-lived assets are subject to impairment testing if events and circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable.
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In performing a quantitative test for impairment, annually or in the interim period if required based on qualitative factors (as described further in Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10‑K), we determine fair values of our reporting units based on an income approach in accordance with the discounted cash flow method, or “DCF Method”. The DCF Method is based on projected future cash flows and terminal value estimates discounted to their present value. The key inputs used in the DCF Method include revenue growth rates, forecast gross profit margins, operating expenses and capital expenditures, terminal period growth rate, economic and market trends, and discount rate. We derive discount rates that are commensurate with the risks and uncertainties inherent in the respective reporting units and our internally developed projections of future cash flows.
Application of the goodwill impairment test requires judgment based on market and operational conditions at the time of the evaluation, including management’s best estimate of the reporting unit’s future business activity and the related estimates and assumptions of future cash flows from the assets that include the associated goodwill. Different assumptions for inputs used in the DCF Method could result in different estimates of reporting unit fair value as of each testing date.
In the event the financial performance of one of our business segments does not meet our expectations in the future, we experience a prolonged macro or market downturn, or there are other negative revisions to key assumptions used in our DCF Method analysis, we may be required to perform additional impairment analyses and could be required to recognize a non-cash impairment charge.
We are required to test long-lived assets, other than goodwill, for impairment when impairment indicators are present. For purposes of this test, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If we determine that indicators of potential impairment are present, we assess the recoverability of the long-lived asset group by comparing its undiscounted future cash flows to its carrying value. If the carrying value of the long-lived asset group exceeds its future cash flows, we determine fair value of the individual assets within the long-lived asset group to assess potential impairment. If the aggregate fair value of the individual assets of the group are less than their carrying value, an impairment loss is recognized for an amount in excess of the group’s aggregate carrying value over its fair value. The loss is allocated to the assets within the group based on their relative carrying values, with no asset reduced below its fair value.
Inventory
We state our inventory at the lower of cost or market and make adjustments to reduce the inventory cost to its net realizable value through estimated reserves for excess or obsolete inventory. The reserves are established for the difference between the cost of inventory and its estimated market value based on assumptions related to future demand and market conditions. We fully reserve for inventories and non-cancelable purchase orders for inventory deemed obsolete. We perform periodic reviews of our inventory to identify excess inventory on hand. We compare on-hand inventory balances to anticipated inventory usage based on our recent historical activity and forecasted demand for our products developed through our planning systems and sales and marketing inputs.
We adjust the reserves for excess or obsolete inventory and record additional inventory write-downs based on unfavorable changes in estimated customer demand or actual market conditions that differ from management's previous projections.
Deferred Income Taxes
We evaluate the realizability of our deferred tax assets and assess the need for a valuation allowance on a quarterly basis. We operate in numerous countries under many legal forms and, as a result, we are subject to the jurisdiction of numerous domestic and foreign tax authorities. We evaluate the profitability of our 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. During fiscal year 2024, we recorded $5.6 million U.S. federal and state valuation allowances against deferred tax assets, resulting in a total U.S. valuation allowance of $7.7 million as of September 30, 2024. We also maintain valuation allowances against net deferred tax assets in foreign jurisdictions totaling $40.2 million as of September 30, 2024.
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Stock-Based Compensation
We measure compensation cost for all employee stock awards at fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest. The fair value of restricted stock units is determined based on the number of shares granted and the closing price of our common stock quoted on the Nasdaq Global Select Market on the date of grant. In addition, for stock-based awards where vesting is dependent upon achieving certain operating performance goals, we estimate the likelihood of achieving the performance goals. Each reporting period we review and revise, as needed, estimated achievement of performance goals as part of calculating compensation cost. Actual results may differ from our estimates.
Recently Issued Accounting Pronouncements
For a summary of recently issued accounting pronouncements applicable to our Consolidated Financial Statements which is incorporated here by reference, please refer to Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10‑K.
RESULTS OF OPERATIONS
Please refer to the commentary provided below for further discussion and analysis of the factors contributing to our results from operations for the twelve months ended September 30, 2024 and 2023. A comparison of our results for the fiscal year ended September 30, 2023 to the fiscal year ended September 30, 2022 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on November 21, 2023.
Non-GAAP Financial Measures
Non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management adjusts the GAAP results for the impact of amortization of intangible assets, purchase accounting impact on inventory, transformation and rebranding costs, restructuring charges, goodwill and intangible asset impairments, fair value adjustments to contingent consideration, governance-related matters, merger and acquisition costs and costs related to share repurchase, and other unallocated corporate expenses to provide investors better perspective on the results of operations which the Company believes is more comparable to the similar analysis provided by its peers. Management also excludes special charges and gains, such as gains and losses from the sale of assets, certain tax benefits and charges, as well as other gains and charges that are not representative of the normal operations of the business. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not rely on any single measure. A reconciliation of each non-GAAP measure to the most nearly comparable GAAP measure is included under "Operating Income (Loss)" and "Gross Margin" below.
Revenue
Our revenue performance for the fiscal years ended September 30, 2024, 2023, and 2022 is as follows (in thousands, except percentages):
| Year Ended September 30, | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % Change | ||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 v. 2023 | 2023 v. 2022 | ||||||||||||||||
| Sample Management Solutions | $ | 318,646 | $ | 303,654 | $ | 304,561 | 4.9 | % | (0.3 | )% | ||||||||||
| Multiomics | 254,552 | 248,296 | 250,937 | 2.5 | % | (1.1 | )% | |||||||||||||
| B Medical Systems | 83,125 | 113,122 | — | (26.5 | )% | NM | ||||||||||||||
| Total revenue | $ | 656,323 | $ | 665,072 | $ | 555,498 | (1.3 | )% | NM |
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Fiscal Year Ended September 30, 2024 compared to Fiscal Year Ended September 30, 2023
Revenue decreased 1% in fiscal year 2024 compared to the prior fiscal year driven by a decline in our B Medical Systems segment, partially offset by revenue growth in our Sample Management Solutions and Multiomics segments.
Our B Medical Systems segment revenue decreased 27% in fiscal year 2024 compared to the prior fiscal year, primarily due to lower order volume for cold chain equipment.
Our Sample Management Solutions segment revenue increased 5% in fiscal year 2024 compared to the prior fiscal year driven by broad based revenue growth across most product lines in both the Sample Repository Services and Core Products businesses.
Our Multiomics segment revenue increased 3% in fiscal year 2024 compared to the prior fiscal year driven by revenue growth in Next Generation Sequencing and Gene Synthesis, partially offset by a decline in Sanger sequencing services.
Revenue generated outside the United States was $290.1 million, or 44% of total revenue, for fiscal year 2024 compared to $310.0 million, or 47% of total revenue, in the prior fiscal year.
Operating Income (Loss)
Our operating performance for the fiscal years ended September 30, 2024, 2023 and 2022 is as follows (in thousands, except percentages):
| Sample Management Solutions | Multiomics | B Medical Systems | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended September 30, | Year Ended September 30, | Year Ended September 30, | |||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |||||||||||||||||||||||||||
| Revenue: | $ | 318,646 | $ | 303,654 | $ | 304,561 | $ | 254,552 | $ | 248,296 | $ | 250,937 | $ | 83,125 | $ | 113,122 | $ | — | |||||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 6,383 | $ | (5,633 | ) | $ | 22,335 | $ | (12,152 | ) | $ | (18,652 | ) | $ | (518 | ) | $ | (25,949 | ) | $ | (20,757 | ) | $ | — | |||||||||||
| Amortization of completed technology | 3,909 | 2,973 | 1,631 | 4,157 | 4,874 | 5,693 | 16,704 | 10,647 | — | ||||||||||||||||||||||||||
| Purchase accounting impact on inventory | — | — | — | — | — | — | — | 9,664 | — | ||||||||||||||||||||||||||
| Amortization of intangible assets other than completed technology | 154 | 311 | 5 | — | — | 340 | — | 1,366 | — | ||||||||||||||||||||||||||
| Transformation(1) and rebranding costs | 395 | — | — | — | — | — | 3,576 | — | — | ||||||||||||||||||||||||||
| Other adjustments | — | — | (1 | ) | — | (1 | ) | (483 | ) | — | (1 | ) | — | ||||||||||||||||||||||
| Total adjusted operating income (loss) | $ | 10,841 | $ | (2,349 | ) | $ | 23,970 | $ | (7,995 | ) | $ | (13,779 | ) | $ | 5,032 | $ | (5,669 | ) | $ | 919 | $ | — | |||||||||||||
| Operating margin | 2.0 | % | (1.9 | )% | 7.3 | % | (4.8 | )% | (7.5 | )% | (0.2 | )% | (31.2 | )% | (18.3 | )% | NM | ||||||||||||||||||
| Adjusted operating margin | 3.4 | % | (0.8 | )% | 7.9 | % | (3.1 | )% | (5.5 | )% | 2.0 | % | (6.8 | )% | 0.8 | % | NM |
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| Segment | Corporate | Azenta Total | ||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended September 30, | Year Ended September 30, | Year Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | ||||||||||||||||||||||||||||
| Revenue: | $ | 656,323 | $ | 665,072 | $ | 555,498 | $ | — | $ | — | $ | — | $ | 656,323 | $ | 665,072 | $ | 555,498 | ||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | (31,718 | ) | $ | (45,042 | ) | $ | 21,817 | $ | (168,960 | ) | $ | (28,084 | ) | $ | (46,552 | ) | $ | (200,678 | ) | $ | (73,126 | ) | $ | (24,735 | ) | ||||||||||
| Amortization of completed technology | 24,770 | 18,494 | 7,324 | — | — | — | 24,770 | 18,494 | 7,324 | |||||||||||||||||||||||||||
| Purchase accounting impact on inventory | — | 9,664 | — | — | — | — | — | 9,664 | — | |||||||||||||||||||||||||||
| Amortization of intangible assets other than completed technology | 154 | 1,677 | 345 | 26,346 | 28,207 | 24,620 | 26,500 | 29,884 | 24,965 | |||||||||||||||||||||||||||
| Transformation(1) and rebranding costs | 3,971 | — | — | 9,885 | (49 | ) | 2,741 | 13,856 | (49 | ) | 2,741 | |||||||||||||||||||||||||
| Restructuring charges | — | — | — | 11,808 | 4,577 | 712 | 11,808 | 4,577 | 712 | |||||||||||||||||||||||||||
| Impairment of goodwill and intangible assets | 115,975 | — | — | 115,975 | — | — | ||||||||||||||||||||||||||||||
| Contingent consideration - fair value adjustments | — | — | — | — | (18,549 | ) | 600 | — | (18,549 | ) | 600 | |||||||||||||||||||||||||
| Merger and acquisition costs and costs related to share repurchase(2) | — | — | — | 4,874 | 13,842 | 17,329 | 4,874 | 13,842 | 17,329 | |||||||||||||||||||||||||||
| Other adjustments | — | (2 | ) | (484 | ) | — | 1 | — | — | (1 | ) | (484 | ) | |||||||||||||||||||||||
| Total adjusted operating income (loss) | $ | (2,823 | ) | $ | (15,209 | ) | $ | 29,002 | $ | (72 | ) | $ | (55 | ) | $ | (550 | ) | $ | (2,895 | ) | $ | (15,264 | ) | $ | 28,452 | |||||||||||
| Operating margin | (4.8 | )% | (6.8 | )% | 3.9 | % | (30.6 | )% | (11.0 | )% | (4.5 | )% | ||||||||||||||||||||||||
| Adjusted operating margin | (0.4 | )% | (2.3 | )% | 5.2 | % | (0.4 | )% | (2.3 | )% | 5.1 | % |
| (1) | Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. |
|---|---|
| (2) | Includes expenses related to governance-related matters. |
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Operating income for the Sample Management Solutions segment was $6.4 million for fiscal year 2024 compared to an operating loss of $5.6 million in the prior fiscal year. The Sample Management Solutions segment operating margin was 2.0%, an increase of 386 basis points year over year. The increases in operating income and operating margin were primarily driven by higher revenue, supported by operating leverage and cost reduction initiatives. Adjusted operating income for the Sample Management Solutions segment was $10.8 million for fiscal year 2024 compared to adjusted operating loss of $2.3 million in the prior fiscal year. Adjusted operating margin for the Sample Management Solutions segment was 3.4%, an increase of 418 basis points year over year. Adjusted operating income (loss) and margin exclude the impact of amortization of intangible assets of $4.1 million and $3.3 million for fiscal years 2024 and 2023, respectively, and transformation costs of $0.4 million for fiscal year 2024.
Operating loss for the Multiomics segment was $12.2 million for fiscal year 2024 compared to an operating loss of $18.7 million in the prior fiscal year. The Multiomics segment operating margin was (4.8)%, an increase of 274 basis points year over year. The decrease in operating loss and increase in operating margin were primarily driven by higher revenue and gross profit, supported by operating leverage. Adjusted operating loss for the Multiomics segment was $8.0 million for fiscal year 2024 compared to adjusted operating loss of $13.8 million in the prior fiscal year. Adjusted operating margin for the Multiomics segment was (3.1)%, an increase of 241 basis points year over year. Adjusted operating loss and margin exclude the impact of amortization related to completed technology of $4.2 million and $4.9 million for fiscal years 2024 and 2023, respectively.
Operating loss for the B Medical Systems segment was $25.9 million for fiscal year 2024 compared to an operating loss of $20.8 million in the prior fiscal year. The B Medical Systems segment operating margin was (31.2)%, a decrease of 1,287 basis points year over year. The increase in operating loss and decrease in operating margin were primarily driven by lower revenue and gross profit due to lower volume of cold chain sales in the product mix, partially offset by lower operating expenses due to decreased commissions on cold chain sales and cost reduction initiatives. Adjusted operating loss for the B Medical Systems segment was $5.7 million for fiscal year 2024 compared to adjusted operating income of $0.9 million in the prior fiscal year. Adjusted operating margin for the B Medical Systems segment was (6.8)%, a decrease of 763 basis points year over year. Adjusted operating income (loss) and margin exclude the impact of amortization of intangible assets of $16.7 million and $12.0 million for fiscal years 2024 and 2023, respectively, transformation costs of $3.6 million for fiscal year 2024 and purchase accounting impact on inventory of $9.7 million for fiscal year 2023.
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Gross Margin
Our gross margin performance for the fiscal years ended September 30, 2024, 2023 and 2022 is as follows (in thousands, except percentages):
| Sample Management Solutions | Multiomics | B Medical Systems | Azenta Total | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended September 30, | Year Ended September 30, | Year Ended September 30, | Year Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||
| Revenue | $ | 318,646 | $ | 303,654 | $ | 304,561 | $ | 254,552 | $ | 248,296 | $ | 250,937 | $ | 83,125 | $ | 113,122 | $ | — | $ | 656,323 | $ | 665,072 | $ | 555,498 | ||||||||||||||||||||||||
| Gross profit | 142,035 | 132,806 | 140,940 | 115,434 | 109,820 | 114,644 | 5,895 | 20,514 | — | 263,367 | 263,140 | 255,584 | ||||||||||||||||||||||||||||||||||||
| Adjustments: | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of completed technology | 3,909 | 2,973 | 1,631 | 4,157 | 4,874 | 5,693 | 16,704 | 10,647 | — | 24,770 | 18,494 | 7,324 | ||||||||||||||||||||||||||||||||||||
| Purchase accounting impact on inventory | — | — | — | — | — | — | — | 9,664 | — | — | 9,664 | — | ||||||||||||||||||||||||||||||||||||
| Transformation costs(1) | 377 | — | — | — | — | — | 3,576 | — | — | 3,953 | — | — | ||||||||||||||||||||||||||||||||||||
| Tariff adjustment | — | — | — | — | — | (484 | ) | — | — | — | — | — | (484 | ) | ||||||||||||||||||||||||||||||||||
| Other adjustments | — | — | 7 | — | — | 295 | — | (1 | ) | — | — | (1 | ) | 302 | ||||||||||||||||||||||||||||||||||
| Adjusted gross profit | $ | 146,321 | $ | 135,779 | $ | 142,578 | $ | 119,591 | $ | 114,694 | $ | 120,148 | $ | 26,175 | $ | 40,824 | $ | — | $ | 292,090 | $ | 291,297 | $ | 262,726 | ||||||||||||||||||||||||
| Gross margin | 44.6 | % | 43.7 | % | 46.3 | % | 45.3 | % | 44.2 | % | 45.7 | % | 7.1 | % | 18.1 | % | NM | 40.1 | % | 39.6 | % | 46.0 | % | |||||||||||||||||||||||||
| Adjusted gross margin | 45.9 | % | 44.7 | % | 46.8 | % | 47.0 | % | 46.2 | % | 47.9 | % | 31.5 | % | 36.1 | % | NM | 44.5 | % | 43.8 | % | 47.3 | % |
| Column 1 | Column 2 |
|---|---|
| (1) | Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 cost reduction plan, and primarily relate to one time asset write-downs associated with changes in technology, one time inventory write-downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process and systems re-design. |
The Sample Management Solutions segment gross margin was 44.6% for fiscal year 2024, an increase of 84 basis points compared to the prior fiscal year. Adjusted gross margin for the Sample Management Solutions segment was 45.9% for fiscal year 2024, an increase of 120 basis points compared to the prior fiscal year, driven by higher gross margin for both the Core Products and Sample Repository Services businesses. Adjusted gross margin excludes the impact of amortization related to completed technology of $3.9 million and $3.0 million for fiscal years 2024 and 2023, respectively, and transformation costs of $0.4 million for fiscal year 2024.
The Multiomics segment gross margin was 45.3% for fiscal year 2024, an increase of 112 basis points compared to the prior fiscal year. Adjusted gross margin for the Multiomics segment was 47.0% for fiscal year 2024, an increase of 79 basis points compared to the prior fiscal year, driven by higher gross margin for the Next Generation Sequencing and Gene Synthesis, partially offset by lower gross margin for Sanger sequencing services. Adjusted gross margin excludes the impact of amortization related to completed technology of $4.2 million and $4.9 million for fiscal years 2024 and 2023, respectively.
The B Medical Systems segment gross margin was 7.1% for fiscal year 2024, a decrease of 1,104 basis points compared to the prior fiscal year. Adjusted gross margin for the B Medical Systems segment was 31.5% for fiscal year 2024, a decrease of 460 basis points compared to the prior fiscal year, primarily due to lower volume of cold chain sales in the product mix. Adjusted gross margin excludes the impact of amortization related to completed technology of $16.7 million and $10.6 million for fiscal years 2024 and 2023, respectively, purchase accounting impact on inventory of $9.7 million for fiscal year 2023, and transformation costs of $3.6 million for fiscal year 2024.
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Research and Development Expenses
Our research and development expense for the fiscal years ended September 30, 2024, 2023, and 2022 is as follows (in thousands, except percentages):
| Year Ended September 30, | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||||||||||||||||||||
| % of Revenue | % of Revenue | % of Revenue | ||||||||||||||||||||||
| Sample Management Solutions | $ | 17,122 | 5.4 | % | $ | 17,934 | 5.9 | % | $ | 15,565 | 5.1 | % | ||||||||||||
| Multiomics | 11,766 | 4.6 | % | 11,976 | 4.8 | % | 11,977 | 4.8 | % | |||||||||||||||
| B Medical Systems | 4,637 | 5.6 | % | 4,046 | 3.6 | % | — | — | ||||||||||||||||
| Total research and development expense | $ | 33,525 | 5.1 | % | $ | 33,956 | 5.1 | % | $ | 27,542 | 5.0 | % |
Total research and development expenses remained flat in fiscal year 2024 compared to fiscal year 2023, driven by cost reduction initiatives across all three business segments, primarily from decreased expenditures for external services, offset by increased research and development expenses in our B Medical Systems segment related to vaccine cold chain.
Selling, General and Administrative Expenses
Our selling, general and administrative expense for the fiscal years ended September 30, 2024, 2023, and 2022 is as follows (in thousands, except percentages):
| Year Ended September 30, | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||||||||||||||||||||
| % of Revenue | % of Revenue | % of Revenue | ||||||||||||||||||||||
| Sample Management Solutions | $ | 118,531 | 37.2 | % | $ | 120,495 | 39.7 | % | $ | 103,035 | 33.8 | % | ||||||||||||
| Multiomics | 115,820 | 45.5 | % | 116,491 | 46.9 | % | 103,200 | 41.1 | % | |||||||||||||||
| B Medical Systems | 27,206 | 32.7 | % | 37,225 | 32.9 | % | — | — | ||||||||||||||||
| Corporate | 41,180 | 6.3 | % | 42,071 | 6.3 | % | 45,230 | 8.1 | % | |||||||||||||||
| Total selling, general and administrative expense | $ | 302,737 | 46.1 | % | $ | 316,282 | 47.6 | % | $ | 251,465 | 45.3 | % |
Total selling, general and administrative expenses decreased $13.5 million for fiscal year 2024 compared to fiscal year 2023, driven by cost reduction initiatives across the business and lower commissions on cold chain sales in our B Medical Systems segment.
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Restructuring Charges
Restructuring charges were $11.8 million for fiscal year 2024, an increase of $7.2 million from fiscal year 2023, driven by initiatives launched in fiscal year 2024. See Note 9, Restructuring, in the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Other Income (Expense)
Interest income, net – We recorded interest income of $33.2 million for fiscal year 2024, a decrease of $10.6 million year over year, driven by decreased investments in marketable securities. See Note 5, Marketable Securities, in the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Other income (expense), net – We recorded other income of $0.2 million and other expense of $1.0 million in fiscal years 2024 and 2023, respectively, primarily due to foreign exchange gains and losses.
Income Tax (Benefit) Expense
We recorded an income tax benefit on continuing operations of $3.2 million in fiscal year 2024 compared to an income tax benefit of $17.6 million in fiscal year 2023. The decreased tax benefit for the year was primarily driven by the decreased global taxable loss from operations and by $5.6 million of charges related to a valuation allowance recorded against U.S. deferred tax assets. The pretax global loss and global taxable loss are significantly different primarily due to the goodwill impairment charge which is not deductible for tax purposes. During fiscal year 2024, we repatriated approximately $455.0 million in cash from our German subsidiary. We recorded a net tax benefit in the amount of $3.2 million related to the repatriation. The benefit included $5.2 million related to deductible U.S. foreign exchange losses on the repatriation measured at the foreign exchange rate on the date of repatriation. This benefit was offset by $2.0 million of state income taxes, net of federal benefit. The tax provision impacts in fiscal year 2024 were offset by the reversal of the related deferred tax asset recorded in fiscal year 2023. Additionally, during fiscal year 2024, we reversed $2.9 million of the deferred tax asset previously established due to changes in foreign exchange rates up to the repatriation date. The impact was recorded against other comprehensive income.
Discontinued Operations
Discontinued operations in fiscal year 2022 consisted of the semiconductor automation business. On February 1, 2022, the Company completed the sale of the semiconductor automation business for $2.9 billion in cash.
There was no revenue from discontinued operations for fiscal year 2024 or fiscal year 2023. Revenue from discontinued operations was $264.4 million for fiscal year 2022. There was no net income or loss from discontinued operations for fiscal year 2024. Net loss from discontinued operations was $1.4 million for fiscal year ended 2023 and net income from discontinued operations was $2.1 billion for fiscal year 2022. The net loss from discontinued operations in fiscal year 2023 was primarily driven by adjustments to liabilities related to discontinued operations of the semiconductor cryogenics business, specifically the accrued liability for the litigation with Edwards Vacuum LLC which was recorded during the second quarter of fiscal year 2023 and is discussed in Note 19, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10 K. Net income from discontinued operations in fiscal year 2022 is primarily the gain on the sale of the semiconductor business. Income from discontinued operations only includes 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 our company on an ongoing basis. Indirect expenses which supported the semiconductor automation business and semiconductor cryogenics business, and which remained as part of the continuing operations, are not reflected in income from discontinued operations. See Note 3, Discontinued Operations in the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10 K.
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LIQUIDITY AND CAPITAL RESOURCES
The Consolidated Statement of Cash Flows for the year ended September 30, 2023 has been revised to correct for prior period errors as discussed in Note 2, Summary of Significant Accounting Policies – Revisions to Previously Issued Financial Statements and Financial Information to our Consolidated Financial Statements included under Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10 K. Accordingly, this MD&A reflects the effects of the revisions.
As of September 30, 2024, we had cash, cash equivalents, and restricted cash of $321.0 million, marketable securities of $200.6 million, and stockholders’ equity of $1.8 billion. Net cash provided by operating activities was $50.3 million and $7.2 million for fiscal years 2024 and 2023, respectively. We incurred a net loss of $164.2 million and $14.3 million for fiscal years 2024 and 2023, respectively. The net loss for fiscal year 2024 is primarily due to $116.0 million non-cash impairment of goodwill and intangible assets. 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 Annual Report on Form 10-K and for the foreseeable future thereafter. The current global economic environment makes it difficult for us to predict longer-term liquidity requirements with sufficient certainty. We may be unable to obtain any additional financing that may be required on terms favorable to us, if at all. If adequate funds are not available to us on acceptable terms or otherwise, we may be unable to successfully develop or enhance products and services, respond to competitive pressures, or take advantage of acquisition opportunities, any of which could have a material adverse effect on our business, financial condition and operating results.
Cash Flows and Liquidity
The discussion of our cash flows and liquidity that follows is stated on a total company consolidated basis and excludes the impact of discontinued operations.
Our cash and cash equivalents, restricted cash and marketable securities as of September 30, 2024 and 2023 consist of the following (in thousands):
| September 30, 2024 | September 30, 2023 | ||||||
|---|---|---|---|---|---|---|---|
| Cash and cash equivalents | $ | 310,929 | $ | 678,910 | |||
| Restricted cash | 10,061 | 5,135 | |||||
| Short-term marketable securities | 151,162 | 338,873 | |||||
| Long-term marketable securities | 49,454 | 111,338 | |||||
| $ | 521,606 | $ | 1,134,256 |
As of September 30, 2024, we had $146 million of cash, cash equivalents and restricted cash held outside of the United States. If these funds are needed for U.S. operations, we would need to repatriate these funds. Based on current U.S. tax laws, any repatriation in the future would likely not result in U.S. federal income tax. Our marketable securities are generally readily convertible to cash without a material adverse impact.
Fiscal Year Ended September 30, 2024 compared to Fiscal Year Ended September 30, 2023
Our cash flows for fiscal years 2024 and 2023 were as follows (in thousands):
| Year Ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||||
| Net cash provided by operating activities | $ | 50,289 | $ | 7,158 | ||||
| Net cash provided by investing activities | 224,739 | 431,384 | ||||||
| Net cash used in financing activities | (659,207 | ) | (840,459 | ) | ||||
| Effects of exchange rate changes on cash and cash equivalents | 21,124 | 44,666 | ||||||
| Net decrease in cash, cash equivalents and restricted cash | $ | (363,055 | ) | $ | (357,251 | ) |
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Operating Activities
Cash flows from operating activities can fluctuate significantly from period to period as earnings, working capital needs and the timing of payments for income taxes, restructuring activities and other charges impact reported cash flows.
Cash inflows from operating activities for fiscal year 2024 were $50.3 million, primarily due to improved inventory management and decreased selling, general and administrative expenses as a result of our cost savings plans and transformation initiatives.
Cash inflows from operating activities for fiscal year 2023 were $7.2 million, primarily resulted from collections on accounts receivable, and efficient working capital management partially offset by payment of retention bonuses and cash settled stock-based awards, as well as state income taxes resulting from the sale of the semiconductor automation business.
Investing Activities
Cash flows from investing activities consist primarily of proceeds from divestitures, cash used for acquisitions, capital expenditures and purchase of marketable securities as well as cash proceeds generated from sales and maturities of marketable securities.
Cash inflows from investing activities were $224.7 million for fiscal year 2024 and consisted of $666.2 million of sales and maturities of marketable securities, partially offset by $405.6 million for purchases of marketable securities and $38.4 million of capital expenditures.
Cash inflows from investing activities were $431.4 million for fiscal year 2023 and consisted of $1.1 billion of sales and maturities of marketable securities, partially offset by $236.2 million for purchases of marketable securities and $386.5 million paid for the acquisition of B Medical and Ziath.
Financing Activities
Cash outflows for financing activities were $659.2 million and $840.5 million for fiscal years 2024 and 2023, respectively, which primarily consisted of cash outflows for share repurchases.
China Facility
In April 2019, we committed to construct a facility in Suzhou China, to consolidate the Suzhou operations of our genomic services business and provide infrastructure to support future growth. The facility is being constructed in two phases. Construction of phase one of the facility was completed in fiscal year 2023 with a total cost of $43.0 million. As of September 30, 2024, we have incurred $3.2 million in costs for the construction of phase two which we expect to complete in the first quarter of fiscal year 2026 with a total cost of $15.4 million.
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Capital Resources
As of September 30, 2024 and September 30, 2023, we have no outstanding debt on our balance sheet.
Dividends
Dividends are declared at the discretion of our Board of Directors and depend on actual cash flow from operations, our financial condition, debt service and capital requirements and any other factors our Board of Directors may consider relevant.
Since the completion of the sale of the semiconductor automation business on February 1, 2022 we have not paid a quarterly dividend and do not have plans to pay any dividends at this time. During fiscal year 2022, prior to the sale, we paid a $0.10 per share quarterly dividend totaling $7.5 million in December 2021.
Share Repurchase Program
On November 4, 2022, our Board of Directors approved an authorization to repurchase up to $1.5 billion of our common stock (the “2022 Repurchase Authorization”). As part of the 2022 Repurchase Authorization, we entered into an accelerated share repurchase (“ASR”) agreement for the repurchase of $500.0 million of our common stock on November 23, 2022. We received delivery of, and retired, 10.1 million shares of common stock under the ASR agreement, which terminated on April 3, 2023. In April 2023, other arrangements commenced under the 2022 Repurchase Authorization with the intent of repurchasing the remaining $1.0 billion of shares of our common stock through open market repurchases. As of September 30, 2024 we have repurchased and retired 19.9 million shares of common stock for $1.0 billion in open market repurchases. Through the ASR agreement and open market repurchases, as of September 30, 2024, we have repurchased and retired 30.0 million shares of common stock for the full $1.5 billion approved under the 2022 Repurchase Authorization and no authorization is available for additional repurchases.
See Note 12, Stockholders’ Equity in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information about the share repurchase authorization.
Contractual Obligations and Requirements
At September 30, 2024, we had non-cancelable commitments of $69.9 million, including purchase orders for inventory of $53.1 million, and information technology related commitments of $16.8 million.
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Off-Balance Sheet Arrangements
As of September 30, 2024, we had no obligation, assets or liabilities which would be considered off-balance sheet arrangements.