• Revenue: $88.7 million, an increase of 24% year-over-year and 5% sequentially.
• Gross Margin: 48.3%, up from 40.5% in the first quarter of fiscal 2024.
• SynBio Revenue: $34.4 million, an increase of 28% year-over-year.
• NGS Revenue: $48.6 million, an increase of 23% year-over-year.
• Biopharma Revenue: $5.7 million, with orders of $5.9 million.
• Operating Expenses: Approximately $77.5 million, compared to $75.9 million in the same period of 2024.
• Adjusted EBITDA: Loss of approximately $16.3 million, an improvement of about $11.5 million versus the first quarter of fiscal 2024.
• Cash and Investments: Approximately $270.8 million at the end of the quarter.
• Fiscal 2025 Revenue Guidance: Increased to $372 million to $379 million, indicating growth of approximately 20% at the midpoint year-over-year.
• Q2 Fiscal 2025 Revenue Guidance: Expected to be approximately $91 million to $93 million, growth of approximately 21% to 24% year-over-year.

• Warning! GuruFocus has detected 4 Warning Signs with TWST.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Twist Bioscience Corp (NASDAQ:TWST) reported record revenue of $88.7 million for the first quarter of 2025, marking a 24% year-over-year increase.
• The company achieved a gross margin of 48.3%, an improvement from 40.5% in the same quarter of the previous year.
• Revenue from the SynBio segment increased by 28% year-over-year to $34.4 million, driven by a diverse global customer base.
• NGS revenue grew by 23% year-over-year to $48.6 million, with strong demand from liquid biopsy and rare disease applications.
• Twist Bioscience Corp (NASDAQ:TWST) increased its fiscal 2025 revenue guidance, reflecting confidence in continued growth across its business segments.

Negative Points

• Despite improvements, Twist Bioscience Corp (NASDAQ:TWST) reported an adjusted EBITDA loss of approximately $16.3 million for the first quarter.
• Operating expenses increased slightly to $77.5 million, up from $75.9 million in the same period of 2024.
• The company faces potential challenges from geopolitical factors and tariff impacts, particularly concerning its operations in Canada and Mexico.
• The academic market, a significant customer base, is under pressure, which could impact future revenue growth.
• Twist Bioscience Corp (NASDAQ:TWST) is cautious about the biopharma segment, despite seeing some early signs of opportunity.

Q & A Highlights

Q: Can you discuss the mix shift in SynBio towards Express genes and expectations for its contribution over the year? A: Adam Laponis, CFO, explained that there is sequential improvement in Express gene revenue, with the full Express portfolio enabling expanded wallet share with existing customers and attracting new ones. The shift includes customers moving from buying gene fragments to Express genes and IgG Express, enhancing revenue and customer base.

Q: Given the adjusted EBITDA beat, what is the path to profitability in terms of timing? A: Adam Laponis, CFO, stated that they are committed to sequential improvements, aiming for over 50% gross margin by Q4. They focus on revenue growth, gross margin expansion, and disciplined OpEx management, with a goal of not returning to the market for additional equity.

Q: How are you addressing potential tariff impacts from Canada and Mexico? A: Emily Leproust, CEO, noted that since Twist manufactures in the USA, their prices remain unaffected by tariffs. Competitors importing from China face a 16.5% tariff, which could be a headwind for them. Twist's products are better and faster, providing a competitive edge.

Q: How much did the Express dynamic contribute to better-than-expected margins? A: Adam Laponis, CFO, indicated that while Express contributes to margins, the primary driver is revenue growth. Approximately 75% to 80% of revenue growth drops to the gross margin, with process improvements also playing a role.

Q: Can you elaborate on the proprietary enzyme production and its impact on gross margin leverage? A: Emily Leproust, CEO, highlighted that proprietary enzymes benefit high-throughput synthesis processes, ensuring supply chain security and enabling innovative product development. The impact is integrated into their guidance, with ongoing work expected to enhance margins.

Q: What are the anticipated milestones for the DNA storage segment over the next 12 to 24 months? A: Emily Leproust, CEO, outlined milestones including achieving terabyte-scale data storage using CMOS silicon chips and enzymatic synthesis. Progress involves integrating silicon, chemistry, hardware, and software, with disciplined capital allocation guiding development pace.

Q: How are you addressing the geopolitical and NIH funding uncertainties in your guidance? A: Adam Laponis, CFO, explained that academic customers represent a small portion of their business. Twist sees uncertainty as an opportunity to gain market share, leveraging their differentiated offerings to attract more customers despite funding challenges.

Q: Can you provide insights into customer penetration and growth within existing accounts? A: Emily Leproust, CEO, confirmed that they track revenue growth and new user acquisition within accounts. The strategy involves expanding within existing accounts by introducing more labs to their products, thereby increasing wallet share and customer satisfaction.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.