Twist Bioscience Corporation Q3 FY2025 earnings call

Management Statement and Operational Highlights:

• Focused on delivering value to customers, expanding product portfolio, and reaching the academic market for synthetic biology products and NGS tools. Added hundreds of net new customers and launched first in a series of portfolio expansions for SynBio.
• Record revenue of $96.1 million in Q3 2025, a 18% year-over-year increase. Gross margin was 53.4%, a significant improvement from 43.3% in Q3 2024 due to revenue growth, volume leverage, and process improvements.
• Launched gene fragments without adapters, streamlining production and enhancing vertical integration. The Atlas transaction resulted in a one-time accounting gain of $48.8 million in Q3.

Segment Performance:

• SynBio: Revenue was $35.2 million, a 7% year-over-year growth. Excluding the prior year's large customer contribution, underlying revenue grew over 20%. Revenue contribution percentage not explicitly stated but is a key segment.
• NGS: Reported $55.3 million in revenue, a 27% year-over-year increase. Strength came from commercial assays for diagnostic tests and growth in smaller accounts.
• Biopharma Services: Revenue was $5.6 million, a 10% year-over-year growth with orders of $6.2 million.

Guidance:

• Narrowed total revenue guide for fiscal 2025 to $374 million to $376 million, indicating ~19.7% growth at midpoint Y/Y.
• SynBio revenue guidance: $144 million to $145 million, ~17% growth at midpoint Y/Y.
• NGS revenue guidance: $207 million to $208 million, ~23% growth at midpoint Y/Y.
• Biopharma revenue guidance: $23 million, ~13% year-over-year growth.
• Q4 2025 total revenue expected $96 million to $98 million.
• Full year gross margin expected 50.5% to 51%, an increase of 1 margin point over prior guidance.

Risks:

• Market risks and uncertainties related to future events or financial/operating performance.
• Uncertainties in product launches and their impact on revenue.
• Customer funding dynamics and potential challenges in unlocking budgets.
• Tariff concerns and their potential impact on international revenue.

Question and Answer: Q: About SynBio growth and new products, how are customer order trends and new products contributing?

A: Emily Leproust mentions existing products resonate with customers, there's a long tail of smaller customers being reached, and a rich roadmap of new product introductions.

Q: Regarding NGS customer transition and revenue guidance, how did product launches play out?

A: Adam Laponis discusses guidance, product launches, and the impact of a key customer transition, noting MRD is small but growing.

Q: About international growth and addressing regional market demand, including tariffs?

A: Emily Leproust talks about navigating tariffs with a low variable cost platform, leveraging differentiation to take advantage of market situations.