Twist Bioscience ((TWST)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Twist Bioscience’s recent earnings call conveyed a positive sentiment, highlighting strong financial performance with record revenues and significant margin improvements. The company’s growth in SynBio, Biopharma, and NGS segments contributed to this success. Despite challenges such as the transition of a major customer and moderate growth guidance for fiscal 2026, Twist Bioscience remains optimistic about future growth driven by AI-enabled discovery and new product introductions.
Record Revenue Achievement
Twist Bioscience reported a record-breaking quarter with $99 million in revenue, surpassing guidance and marking a 17% year-over-year increase. For the fiscal year, the company achieved $376.6 million in revenue, a 20% growth over fiscal 2024, showcasing its robust financial health.
Significant Gross Margin Improvement
The company achieved a gross margin of 51.3% for the quarter and 50.7% for the year, a notable improvement from 42.6% in fiscal 2024. This nearly 20-point margin increase over the last two years underscores Twist Bioscience’s operational efficiency and cost management.
Strong SynBio and Biopharma Growth
SynBio revenue reached $39.5 million, a 17% year-over-year increase, driven by the Express portfolio. Additionally, Biopharma revenue grew by 22% year-over-year to $6.4 million, reflecting the company’s successful expansion in these segments.
NGS Revenue Growth
NGS reported revenues of $53 million, representing a 16% year-over-year growth. This was driven by successful diagnostic customer assays, indicating strong demand in the NGS market.
AI-Enabled Discovery Growth
AI-enabled drug discovery projects saw significant growth, with more than $25 million in orders compared to fiscal 2024. This highlights the potential for AI-driven innovation in drug discovery, positioning Twist Bioscience for future success.
Customer Transition Impact on NGS
A large cancer diagnostics customer is transitioning their assay from research to commercial, impacting Q4 and Q1 NGS revenue. However, Twist Bioscience expects reacceleration in Q2 of fiscal 2026, indicating a temporary setback.
Moderate Revenue Growth Guidance
Guidance for fiscal 2026 suggests a revenue growth of 13% to 15.5%, which is slower compared to the previous year’s growth rate. This moderate outlook reflects the company’s cautious approach amid market uncertainties.
Limited Contribution from MRD in Fiscal 2026
The company anticipates only 1 to 2 points of overall growth from MRD products in fiscal 2026, with a significant ramp expected in subsequent years, indicating a long-term growth strategy.
Forward-Looking Guidance
Looking ahead to fiscal 2026, Twist Bioscience projects total revenues between $425 million and $435 million, representing 13% to 15.5% growth. The company also anticipates a gross margin exceeding 52% and aims for an adjusted EBITDA breakeven by the end of fiscal 2026, driven by growth in AI-enabled drug discovery projects.
In summary, Twist Bioscience’s earnings call reflected a positive outlook with record revenues and improved margins. Despite some challenges, the company’s strategic focus on AI-enabled discovery and new product introductions positions it well for future growth. Investors can look forward to continued innovation and expansion in key segments.