Twist Bioscience ((TWST)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Twist Bioscience’s recent earnings call painted a picture of robust financial health, marked by record-breaking revenue and a notable improvement in gross margins. The company has successfully expanded its customer base, particularly in the Next-Generation Sequencing (NGS) and healthcare segments, which saw substantial growth. However, challenges remain, including the impact of customer transitions on revenue and stagnant performance in the industrial chemical sector.
Record Revenue and Growth
Twist Bioscience reported a record revenue of $96.1 million for the third quarter of fiscal 2025, marking an impressive 18% increase compared to the previous year. The company’s gross margin also saw a significant improvement, rising to 53.4% from 43.3% last year, underscoring enhanced operational efficiency.
NGS Segment Performance
The NGS segment demonstrated remarkable growth, with revenue climbing to $55.3 million, a 27% year-over-year increase. This growth was primarily driven by the demand for commercial assays for diagnostic tests and an increase in smaller accounts.
Strong Performance in Healthcare Revenue
Healthcare revenue surged to $56.4 million, reflecting a 32% year-over-year increase. This growth was fueled by increased uptake from large pharmaceutical, biotech, and diagnostic customers.
Expansion of Customer Base
Twist Bioscience successfully expanded its customer base, adding hundreds of new customers and broadening its commercial reach in the Synthetic Biology (SynBio) landscape.
SynBio Underlying Growth
Excluding a one-time contribution from a large customer, SynBio revenue grew by more than 20% year-over-year. This highlights the increased demand and diversification of the customer base.
Revenue Impact from Customer Transition
A key NGS customer is transitioning to commercial deployment, which resulted in a $5 million revenue impact in Q4, with further impact expected in Q1 of the next fiscal year.
Flat Industrial Chemical Revenue
The industrial chemical segment reported flat revenue at $23.1 million, reflecting an anticipated reduction from a large contracted customer.
Challenges in EMEA Academic Revenue
The EMEA region faced challenges, with NGS revenue from university-led clinical sites experiencing a sequential decline.
APAC Revenue Decline
APAC revenue decreased to $5.9 million from $6.5 million year-over-year, with China contributing only 1.5% to the total revenue.
Forward-Looking Guidance
Looking ahead, Twist Bioscience has narrowed its fiscal guidance, projecting total revenue between $374 million and $376 million for 2025. The company anticipates a gross margin improvement of over 8 percentage points year-over-year. Despite the challenges, Twist ended the quarter with a strong cash position of $250.8 million, and its adjusted EBITDA loss improved by $14 million compared to the prior year.
In summary, Twist Bioscience’s earnings call highlighted a strong financial performance with record revenue and improved margins. While the company faces challenges in certain segments, its growth in NGS and healthcare, along with an expanded customer base, positions it well for future success. Investors will be keenly watching how the company navigates customer transitions and regional revenue challenges in the coming quarters.