Financial Performance - The company incurred net losses of $208.7 million, $204.6 million, and $217.9 million for the years ended September 30, 2024, 2023, and 2022, respectively, with an accumulated deficit of $1,241.9 million as of September 30, 2024[142]. - The company expects to incur substantial losses and negative cash flow for the foreseeable future, influenced by market acceptance of products and inflationary pressures[142]. - Existing cash and cash equivalents are expected to fund planned operating expenses and capital expenditures for at least the next 12 months, but additional financing may be required sooner than planned[145]. - Future capital requirements will depend on the development of additional products, manufacturing processes, and the costs associated with expanding sales and marketing capabilities[146]. - The company has experienced significant revenue growth but may not achieve similar growth rates in the future, necessitating effective management of anticipated growth[150]. - A significant portion of sales depends on customers' research and development budgets, which can be affected by various external factors[171]. - The company relies heavily on its synthetic DNA products for revenue, with substantial investments in research and development for these products[180]. - The company relies on a limited number of large customers for a significant portion of its revenues, and the loss of any major customer could adversely affect its financial performance[194]. - The company has experienced increased operating costs due to inflation but does not believe it has materially affected its financial condition or results of operations[191]. - The company may encounter pricing pressures that could adversely affect its margins and overall financial performance if it cannot pass on cost increases to customers[213]. - The company may face potential credit risk if customers' financial conditions deteriorate, which could adversely affect its business operations[248]. - The company may face significant fluctuations in quarterly and annual operating results, making financial planning and forecasting challenging[313]. - Future sales and issuances of common stock could result in dilution of existing stockholders' ownership and potentially lower stock prices[324]. - The company’s guidance regarding future performance is speculative and may not materialize, leading to potential discrepancies between actual results and investor expectations[319]. Market and Competitive Landscape - The company aims to attract new customers and retain existing ones by delivering high-quality products and services, but faces risks related to clinical value and reimbursement determinations[152]. - Rapidly changing technology and competition in synthetic biology necessitate continuous development of new and improved products to remain competitive[160]. - The synthetic biology industry is experiencing rapid technological changes, with a focus on developing new products to meet evolving customer needs[161]. - The competitive landscape in the synthetic biology industry is intense, with the need to develop proprietary technologies to maintain a competitive edge[162]. - The company is the only DNA synthesis provider to synthesize DNA on a silicon chip at a large commercial level, which creates competitive advantages[164]. - Future revenue growth may depend on the ability to leverage DNA synthesis technology in adjacent markets, such as pharmaceutical biologics and digital data storage[169]. - The company faces intense competition from various providers in the synthetic biology and life sciences tools industries, which could impact its market position and profitability[210]. Operational Risks and Challenges - The company faces risks related to a single-source supplier for a critical component in its DNA synthesis process, which could disrupt operations if issues arise[181]. - There is a need to expand manufacturing capacity to meet increasing customer demand, which may involve significant challenges and investments[178]. - The integration of AI and machine learning into operations presents both opportunities for innovation and risks related to legal and regulatory compliance[166]. - The company must secure stable supplies of raw materials, as shortages could adversely affect production capabilities and financial performance[185]. - The company relies on third-party carriers for product delivery, making it vulnerable to disruptions that could harm customer relationships and financial results[239]. - The company is subject to strict regulatory controls for the export of its products, which could delay shipments and adversely affect revenues[226]. - The FDA's new LDT Final Rule could impose additional regulatory controls that may influence product sales and customer usage[228]. - Compliance with environmental laws and regulations is costly and may restrict operations, leading to potential fines and penalties[218]. - The company has consolidated all synthetic biology production in Wilsonville, Oregon, with significant portions of NGS products still manufactured in South San Francisco[234]. Intellectual Property and Legal Matters - The company owns or exclusively in-licenses over 150 issued or allowed patents and more than 250 pending patent applications as of September 30, 2024[258]. - The company has filed a patent opposition case with the European Patent Office regarding its European Patent No. 3030682, which relates to polynucleotide synthesis[259]. - The company may not be able to protect its intellectual property rights effectively in jurisdictions with less favorable laws[267]. - The company has taken steps to protect its proprietary technology through confidentiality agreements, but these may not provide adequate protection[271]. - The company may face challenges in enforcing its patent rights in foreign jurisdictions, which could limit its competitive advantage[270]. - The company may incur significant costs and management distraction from litigation to enforce its patents and proprietary rights, which is prevalent in the biotechnology industry[275]. - Patent infringement lawsuits can be expensive and disruptive, with unpredictable outcomes that may harm the company's reputation and financial condition[278]. - The company may need to obtain licenses from third parties in the event of a successful infringement claim, which could incur substantial costs and negatively affect gross margins[279]. - The complexity of products and patents may lead to disputes regarding the scope of licenses and royalty obligations, potentially impacting product marketing[294]. Management and Governance - The company is highly dependent on its senior management team and key personnel, particularly its CEO, and any loss of these individuals could harm its product development and business growth[197]. - The company has engaged in strategic transactions, including a business acquisition in Q1 2022, to expand its synthetic DNA product offerings[200]. - The company is subject to compliance with Section 404 of the Sarbanes-Oxley Act, which requires maintaining effective internal controls over financial reporting[251]. - The company has experienced at least one material weakness in internal control over financial reporting for the fiscal years ended September 30, 2020, 2021, 2022, and 2023[252]. - Provisions in the company's charter documents may delay or prevent changes in control, potentially reducing stock market value[298]. - The exclusive forum provisions in the company's amended and restated certificate of incorporation may limit stockholders' ability to bring claims in favorable jurisdictions, potentially increasing legal costs[305]. - The company may incur additional costs if courts find its choice of forum provisions unenforceable, impacting its financial resources[305]. Investment and Financial Strategy - The primary objective of the company's investment activities is to preserve capital while maximizing income from investments without assuming significant risk[461]. - The company maintains a portfolio of high credit quality and short-term duration investments, which mitigates the impact of interest rate fluctuations[461]. - A hypothetical 10% relative change in interest rates would not materially impact future interest income or the fair values of the investment portfolio[461]. - The majority of the company's transactions are conducted in U.S. dollars, but it is also exposed to foreign exchange risk due to transactions in Euro, Chinese Yuan, and British Pound[462]. - The company does not use derivative financial instruments for speculative trading and does not fully hedge foreign currency exchange rate exposure[463]. - Counterparties to forward foreign currency exchange contracts are creditworthy multinational commercial banks, minimizing counterparty risk[463]. Regulatory and Compliance Issues - The company has established a biosecurity program to comply with regulations, but inadvertent noncompliance could lead to legal penalties and reputational damage[222]. - Legislative initiatives regarding corporate tax reform may adversely affect the company's plans to expand internationally and impact its financial condition[247]. - The company is subject to risks related to evolving expectations around environmental, social, and governance (ESG) practices, which could adversely affect its reputation and financial condition[330]. - The company currently does not have additional insurance coverage for legal liability related to hazardous materials, which could expose it to significant financial risks[218]. - The company uses biological and hazardous materials, which require expertise and may result in claims against it[216]. - Changes in currency exchange rates may negatively impact the company's ability to compete internationally and affect costs of materials[241].

Group 1 - The biotech forum has seen significant discussions around profitable buy-write or covered call strategies on selected biotech stocks over recent months [1] - Twist Bioscience Corporation (NASDAQ: TWST) recently released its quarterly results, which were solid and warranted further analysis [2] - The investing group, The Biotech Forum, offers a model portfolio featuring 12-20 high upside biotech stocks, along with live chat for trade discussions and weekly market commentary [2] Group 2 - The article emphasizes the importance of ongoing analysis and updates in the biotech sector, particularly following quarterly earnings reports [2]

Financial Data and Key Metrics Changes - The company reported a record revenue of $84.7 million for Q4 2024, representing a 27% year-over-year increase and a 4% sequential increase [10] - For the full fiscal year 2024, total revenue reached $330 million, an increase of 28% compared to fiscal 2023 [10] - Gross margin for Q4 was 45.1%, exceeding guidance, while the annual gross margin improved to 42.6% from 36.6% in fiscal 2023 [11][47] - Adjusted EBITDA loss for Q4 was approximately $17 million, an improvement of $9 million year-over-year, while the annual adjusted EBITDA loss was approximately $93.5 million, improving by $54 million from fiscal 2023 [51] Business Line Data and Key Metrics Changes - SynBio revenue for Q4 increased to $33.9 million, a 28% year-over-year growth, with full-year revenue of $123.5 million, up 26% from fiscal 2023 [43] - NGS revenue for Q4 grew to approximately $45.5 million, a 23% year-over-year increase, with full-year revenue of $169.1 million, reflecting exceptional growth of 37% [44] - Biopharma revenue was $5.3 million for Q4, with full-year revenue of $20.3 million [45] Market Data and Key Metrics Changes - Revenue from the Americas increased to approximately $52.7 million for Q4, a 21% year-over-year growth, while EMEA revenue rose to $25.5 million, a 48% increase [45] - APAC revenue increased to $6.5 million for Q4, an 8% year-over-year growth, with China accounting for approximately 2% of total revenue for fiscal 2024 [46] Company Strategy and Development Direction - The company aims to reach adjusted EBITDA breakeven and become cash flow positive while investing in profitable growth through its innovation engine [17][60] - The strategy includes leveraging proprietary technology for custom synthesis at scale, expanding product offerings, and enhancing operational efficiency [14][18] - The company is focused on developing proprietary enzymes, which are expected to provide significant ROI and reduce supply chain risks [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum into fiscal 2025, driven by strong customer demand and operational improvements [12][58] - The company sees opportunities for market share gains, particularly in light of potential NIH budget constraints, as it offers high-quality products at competitive prices [68] - Management highlighted the importance of continuous process improvements and automation in driving profitability [34][38] Other Important Information - The company ended Q4 with cash, cash equivalents, and short-term investments of approximately $276.4 million, not including an additional $15 million received from XOMA in October 2024 [42][53] - Capital expenditures for fiscal 2024 were $5 million, a reduction from $28 million in fiscal 2023 [53] Q&A Session Summary Question: Trends in Express Genes and operational efficiencies - Management indicated modest increases in operating expenses, primarily due to annual bonuses, while expecting continued sequential improvement in gross margins [65][66] Question: Exposure to NIH budgets and competitive landscape - The company has minimal exposure to NIH budgets, which is less than 1%, and sees this as an opportunity for market share gains [68] Question: Related-party revenue clarification - Related-party revenue was approximately $12 million in Q4, and the company disclosed this due to accounting requirements [70][118] Question: Insights on DNA storage and commercialization - The company is focused on developing competitive DNA storage solutions and is making significant progress in technology development [81] Question: Contribution of Express Genes to future targets - The Express portfolio is boosting revenue and converting makers into buyers, contributing positively to margins [123]

Twist Bioscience (TWST) came out with a quarterly loss of $0.59 per share versus the Zacks Consensus Estimate of a loss of $0.73. This compares to loss of $0.81 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.18%. A quarter ago, it was expected that this maker of synthetic DNA for the biotechnology industry would post a loss of $0.79 per share when it actually produced a loss of $0.86, delivering a surprise of -8.86%.Over t ...

Revenue Growth - Record revenue of $313.0 million in Fiscal 2024, a 28% increase over $245.1 million in Fiscal 2023[2] - Q4FY24 revenue grew 27% to $84.7 million, marking the 7th consecutive quarter of sequential growth[2] - SynBio revenue grew 26% to $123.5 million in Fiscal 2024, while NGS revenue grew 37% to $169.1 million[5][6] - Revenues for the three months ended September 30, 2024, were $84.71 million, compared to $66.95 million in the same period in 2023, representing a 26.5% increase[22] - Fiscal 2025 revenue guidance is projected to be in the range of $367 million to $377 million, representing 17-20% year-over-year growth[11] Gross Margin Improvement - Gross margin improved to 45.1% in Q4FY24, up 8.5 margin points from 36.6% in Q4FY23[2] - Gross margin for Fiscal 2025 is expected to reach 48%, with Q4FY25 gross margin projected at 50%[11] Orders and Shipments - Total orders received in Fiscal 2024 grew to $344.2 million, a 30.5% increase from $263.8 million in Fiscal 2023[6] - Shipped approximately 772,000 genes in Fiscal 2024, a 21.8% increase from 634,000 in Fiscal 2023[9] Adjusted EBITDA - Adjusted EBITDA improved to $(93.5) million in Fiscal 2024, compared to $(147.3) million in Fiscal 2023[6] - Adjusted EBITDA for Fiscal 2025 is expected to improve to $(60) to $(65) million[11] - Adjusted EBITDA for the three months ended September 30, 2024, was $(17.04) million, compared to $(26.37) million in the same period in 2023, a 35.4% improvement[26] Net Loss and Operating Expenses - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $34.66 million, compared to $46.24 million in the same period in 2023, a 25.1% improvement[22] - Total operating expenses for the three months ended September 30, 2024, were $120.75 million, compared to $117.06 million in the same period in 2023, a 3.2% increase[22] - Research and development expenses for the three months ended September 30, 2024, were $21.13 million, compared to $23.75 million in the same period in 2023, an 11.0% decrease[22] - Selling, general and administrative expenses for the three months ended September 30, 2024, were $53.14 million, compared to $47.39 million in the same period in 2023, a 12.1% increase[22] Cash and Assets - Cash and cash equivalents decreased to $226.32 million as of September 30, 2024, from $286.47 million as of September 30, 2023, a 21.0% decline[24] - Total current assets decreased to $346.78 million as of September 30, 2024, from $424.26 million as of September 30, 2023, an 18.3% decline[24] - Total liabilities decreased to $141.63 million as of September 30, 2024, from $152.97 million as of September 30, 2023, a 7.4% decline[24] Stock-Based Compensation - Stock-based compensation expense for the three months ended September 30, 2024, was $12.35 million, compared to $11.75 million in the same period in 2023, a 5.1% increase[26]

Twist Bioscience Corporation (NASDAQ: TWST ) focuses on synthetic DNA manufacturing, leveraging its proprietary silicon-based platform. Since my analysis in February 2024, the company has made significant strides in biotechnology, expanding its influence through new partnerships, innovative product launches, and strategic financial agreements to promoteMy name is Myriam Hernandez Alvarez. I received the Electronics and Telecommunication Engineering degree from the Escuela Politecnica Nacional, Quito, Ecuado ...

Core Viewpoint - Twist Bioscience has shown improved revenue and gross margins but continues to face significant financial challenges, including a notable EPS miss and an impairment charge affecting future growth prospects [2][8]. Financial Performance - The company reported revenue of $81.5 million in Q2 2024, a 28% increase from Q2 2023, exceeding analyst estimates by approximately $4 million [2]. - The gross margin improved to 43.3% from 34.4% year-over-year, indicating enhanced operational efficiency [5]. - EPS came in at -$1.47, missing expectations of -$0.74, primarily due to a $44.9 million impairment charge related to the biopharma segment [2][8]. Revenue Estimates - For fiscal Q4, Twist raised revenue estimates to between $82 million and $83 million, up from a previous estimate of $77 million to $80 million [2]. Market Segments - The next-generation sequencing (NGS) segment saw a 31% year-over-year revenue growth to $43.4 million, driven by demand from clinical customers [5]. - The biopharma segment, previously expected to be a significant growth driver, has underperformed, leading to a reassessment of long-term growth forecasts [8]. Research and Development - R&D expenses for the nine months ended June 30, 2024, were reported at $69 million, indicating a potential limitation in growth and market leadership [7]. - The company aims for gross margins exceeding 50% by the end of fiscal 2025, but ongoing R&D investments are critical to achieving this goal [5]. Financial Health - As of June 30, Twist had $239.142 million in cash and cash equivalents, indicating the ability to meet short-term obligations [10]. - The comprehensive loss for the nine months ended June 30, 2024, was $174 million, suggesting a cash burn of approximately $58 million per quarter, providing an estimated runway of about 5 quarters [11]. Competitive Landscape - Twist's proprietary silicon-based DNA synthesis platform offers potential advantages, but faces competition from established companies and other emerging technologies [6]. - The NGS market is highly competitive, with major players like Thermo Fisher Scientific and Illumina dominating due to continuous innovation [5].

Revenue and Growth - Revenue increased by 28% to $81.5 million for the three months ended June 30, 2024, compared to $63.7 million for the same period in 2023[102] - Revenues increased 28% to $228.3 million for the nine months ended June 30, 2024, compared to $178.2 million for the same period in 2023[123] - Revenue from NGS tools reached $43.4 million, accounting for 54% of total revenues for the three months ended June 30, 2024[109] - Revenue from synthetic genes was $24.9 million, representing 29% of total revenues for the same period[109] - The number of genes shipped rose to approximately 212,000, a 24% increase from approximately 171,000 genes shipped in the three months ended June 30, 2023[113] - The number of customers purchasing products increased to approximately 2,300 in the three months ended June 30, 2024, compared to 2,200 in the same period last year[102] Financial Performance - Gross margin improved to 43.3%, up from 34.4% in the same period last year, reflecting better revenue spread over fixed costs[114][115] - Gross profit increased 46% to $95.1 million for the nine months ended June 30, 2024, compared to $65.2 million for the same period in 2023[124] - Net loss attributable to common stockholders was $85.6 million for the three months ended June 30, 2024, compared to a net loss of $57.4 million for the same period in 2023[105] - The company experienced a net loss of $174.1 million for the nine months ended June 30, 2024, adjusted for non-cash items including depreciation and stock-based compensation[136] - The company has accumulated a net deficit of $1,207.3 million since inception[102] Expenses and Cost Management - Research and development expenses decreased 8% to $22.5 million for the three months ended June 30, 2024, compared to $24.5 million for the same period in 2023[116] - Research and development expenses decreased 16% to $69.7 million for the nine months ended June 30, 2024, compared to $83.1 million for the same period in 2023[125] - Selling, general and administrative expenses increased 23% to $56.8 million for the three months ended June 30, 2024, compared to $46.1 million for the same period in 2023[117] - Selling, general and administrative expenses increased 16% to $165.3 million for the nine months ended June 30, 2024, compared to $142.3 million for the same period in 2023[126] - Cost of revenues increased 18% to $133.1 million for the nine months ended June 30, 2024, compared to $112.9 million for the same period in 2023[124] Cash Flow and Financing - Net cash used in operating activities decreased to $48.8 million for the nine months ended June 30, 2024, down from $121.8 million for the same period in 2023[103] - Net cash provided by financing activities was $3.3 million for the nine months ended June 30, 2024, compared to $0.5 million in the same period of 2023, indicating improved financing activity[138][139] - The company raised a total of $1,333.7 million from public equity offerings and $13.8 million from debt issuances since inception, with cash and cash equivalents of $239.1 million and short-term investments of $50.3 million as of June 30, 2024[133] - Cash flows from investing activities resulted in a net cash outflow of $1.8 million for the nine months ended June 30, 2024, contrasting with a net cash inflow of $52.9 million in the same period of 2023[138] Impairment and Asset Management - Impairment of long-lived assets recognized was $44.9 million for the nine months ended June 30, 2024, compared to $3.6 million for the same period in 2023[129] - The company recorded impairment charges of $44.9 million related to long-lived assets during the nine months ended June 30, 2024, primarily due to lower than forecasted revenues in the Biopharma asset group[143] - The remaining carrying amount of long-lived assets within the Biopharma asset group is approximately $11.6 million after the impairment charge[146] Tax and Commitments - The income tax provision for the nine months ended June 30, 2024, was $(0.7) million, a decrease of 52% from $(1.4) million in the same period of 2023[131] - The company had $1.1 million in commitments for capital expenditures as of June 30, 2024, indicating ongoing investment in operational capabilities[134] - The company does not have any off-balance sheet arrangements, indicating a straightforward financial structure[140]

Twist Bioscience Corporation (NASDAQ:TWST) Q3 2024 Earnings Conference Call August 2, 2024 8:00 AM ET Company Participants Angela Bitting - Senior Vice President, Corporate Affairs Emily Leproust - Chief Executive Officer & Co-Founder Adam Laponis - Chief Financial Officer Patrick Finn - President and COO Conference Call Participants Steven Mah - Cowen Matt Larew - William Blair Luke Sergott - Barclays Vijay Kumar - Evercore ISI Sung-Ji Nam - Scotiabank Subbu Nambi - Guggenheim Securities Puneet Souda - Lee ...

Twist Bioscience (TWST) came out with a quarterly loss of $0.86 per share versus the Zacks Consensus Estimate of a loss of $0.79. This compares to loss of $1.01 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -8.86%. A quarter ago, it was expected that this maker of synthetic DNA for the biotechnology industry would post a loss of $0.84 per share when it actually produced a loss of $0.79, delivering a surprise of 5.95%. Over ...