Twist Bioscience Corporation Q4 FY2025 earnings call

Management Statement and Operational Highlights:

• Record quarter: Q4 2025 had $99 million in revenue, a 17% year-over-year increase, and 11th consecutive quarter of growth. Full-year revenue was $376.6 million, up 20% from FY 2024.
• Gross margin: Q4 gross margin was 51.3%, full-year gross margin was 50.7%, up from 42.6% in FY 2024, showing fixed cost leverage with higher volume.
• Product growth: Synbio growth led by the Express portfolio. NGS saw growth from clinical assays and new workflows. Biopharma services grew due to AI-driven drug discovery companies.
• Segment realignment: Plan to combine Synbio and Biopharma under DNA synthesis and protein solutions, and NGS under NGS applications to enhance clarity.

Segment Performance:

• Synbio: Revenue of $39.5 million, up 17% year over year. Contributed to by the Express portfolio's strong performance.
• NGS: Revenue of $53 million, up 16% year over year. Driven by clinical assays and conversion to new workflows like the microarray to flex split plus sequencing.
• Biopharma services: Revenue of $6.4 million, up 22% year over year. Growth seen among AI-driven drug discovery companies.
• Geographically: Americas revenue was ~$57.3 million in Q4, up 9% year over year, accounting for 60% of total revenue. EMEA revenue was $34.6 million in Q4, up 35% year over year, representing 33% of revenue. APAC revenue was $7.2 million in Q4, up 9% year over year, accounting for 7% of revenue.

Guidance:

• Fiscal 2026 total revenue expected to be $425 million to $435 million, a 13% to 15.5% year-over-year growth.
• DNA synthesis and protein solutions: Expected revenue of $194 million to $199 million, a 15% to 18% growth from FY 2025, driven by AI discovery customers.
• NGS applications: Expected revenue of $231 million to $236 million, a 11% to 13.5% growth from FY 2025, with expectation of 20% year-over-year growth by Q4 as a large diagnostic customer ramps.
• Gross margin: Expected to be above 52% in FY 2026. Adjusted EBITDA breakeven expected in Q4 FY 2026.

Risks:

• Forward-looking statements subject to risks outlined in press release and SEC filings, including uncertainties that could cause actual results to differ from projections.
• Customer mix impact on gross margin performance.
• Timing of MRD product ramp affecting NGS growth expectations.

Q: Catherine Schulte asked about gross margins and NGS guidance.

A: Adam Laponis responded that gross margin expansion will continue, driven by revenue growth and customer mix, and that NGS growth will return to 20% year-over-year by Q4 with ramp of diagnostic customer and MRD product.

Q: Puneet Souda asked about biopharma order and segmenting.

A: Emily Leproust and Patrick Finn discussed the integration of Synbio and Biopharma under DNA synthesis and protein solutions, driven by customer workflow integration and strong AI drug discovery orders.

Q: Vijay Kumar asked about NGS guidance and MRD Express.

A: Adam Laponis and Patrick Finn explained that NGS guidance is affected by a customer transition, with ramp expected from Q2 onwards, and MRD Express shows increased sensitivity from tumor-informed assays with strong medical conference validation.

Q: Doug Schenkel asked about market opportunity and pricing.

A: Emily Leproust responded that Synbio academic promotion is working, Q1 NGS guidance is due to pacing, and market sizing for DNA synthesis and NGS MRD is complex with focus on differentiating products and value per test.