Group 1 - The article highlights the ongoing discussions in the biotech sector, particularly focusing on covered call opportunities that have gained traction in recent quarters [1] - Twist Bioscience Corporation (NASDAQ: TWST) is being spotlighted for the first time in 2025, indicating a renewed interest in the company's performance and potential [2] - The investing group, The Biotech Forum, offers a model portfolio featuring 12-20 high upside biotech stocks, along with live chat discussions and weekly research updates [2] Group 2 - The article does not provide any specific financial data or performance metrics for Twist Bioscience Corporation or other companies mentioned [3][4]

Summary of Twist Bioscience (TWST) FY Conference Call - June 03, 2025 Company Overview - **Company**: Twist Bioscience - **Industry**: Biotechnology, specifically in DNA synthesis and related applications Key Points and Arguments 1. **Revolutionary Technology**: Twist Bioscience has miniaturized DNA synthesis onto a silicon platform, enabling the writing of 1,000,000 oligonucleotides in one run, which is described as unprecedented in scale and quality [5][6] 2. **Growth Trajectory**: The company has shown consistent growth over approximately ten years, with a target of reaching $1 billion in revenue, supported by strong operational and commercial execution [7][8] 3. **Market Understanding**: The leadership team has deep knowledge of end markets, which allows for innovative product development and market share expansion [6][8] 4. **Production Capacity**: Twist has the capacity to produce 16,000,000 oligonucleotides per day, which supports a diverse product portfolio and strong differentiation in the market [7][49] 5. **Financial Performance**: For Q2 FY 2025, the company reported revenue of $92.8 million with a margin just under 50%, and an adjusted EBITDA of $14.8 million [50][51] 6. **Operational Efficiency**: The company maintains discipline in spending, with SG&A and R&D expenses controlled, allowing for margin expansion as revenue grows [10][31] 7. **Market Opportunities**: The company is positioned to capitalize on growing markets, including liquid biopsy and minimal residual disease (MRD), with innovative product offerings tailored to these segments [12][36] 8. **Customer-Centric Approach**: Twist focuses on providing a positive user experience, which is critical for customer retention and satisfaction [11][17] 9. **Sustainability**: The miniaturization of DNA synthesis significantly reduces the carbon footprint of gene production, enhancing the company's appeal in environmentally conscious markets [34][38] 10. **Diverse Product Portfolio**: The company offers a wide range of products across various segments, including Synbio, next-generation sequencing (NGS), and biopharma solutions, catering to diverse customer needs [32][47] Additional Important Insights 1. **Geopolitical Tailwinds**: The company benefits from being a U.S.-based manufacturer, which is advantageous in the current geopolitical climate [12] 2. **Long-Term Strategy**: Twist emphasizes a long-term approach to product development, focusing on sustained innovation rather than short-term gains [16][29] 3. **Competitive Landscape**: The company is aware of its competition and aims to differentiate itself through superior technology and customer service [22][40] 4. **Emerging Markets**: The company sees significant potential in the MRD market, which is characterized by bespoke tumor-informed panels that leverage Twist's strengths [58][60] 5. **Investment in Infrastructure**: Twist is investing heavily in automation and infrastructure to support its growth and capacity expansion, with a focus on maintaining low variable costs [28][31] This summary encapsulates the key points discussed during the conference call, highlighting Twist Bioscience's innovative technology, growth strategy, financial performance, and market opportunities.

Company Performance - Twist Bioscience (NASDAQ: TWST) reported solid results in the second quarter of FY2025, but the management team appeared downbeat on the earnings call [1] - The company has chosen to spin out its data storage segment, with a fairly modest value attached to the business [1] Investment Insights - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to poor understanding of long-term business prospects [1] - The firm believes excess risk-adjusted returns can be achieved by identifying businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's research process emphasizes company and industry fundamentals to uncover unique insights [1] Market Trends - An aging population with low population growth and stagnating productivity growth is expected to create a different opportunity set compared to past trends [1] - Many industries may face stagnation or secular decline, which could improve business performance if competition decreases [1] - Conversely, some businesses may encounter rising costs and diseconomies of scale [1] - The economy is increasingly dominated by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A large pool of capital is chasing a limited set of investment opportunities, driving up asset prices and compressing risk premia [1]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for the period ended March 31, 2025 Condensed Consolidated Balance Sheet Highlights (unaudited) | (In thousands) | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $210,437 | $226,316 | | Total current assets | $338,442 | $346,776 | | Total assets | $595,615 | $614,323 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $74,976 | $71,006 | | Total liabilities | $155,507 | $141,634 | | Total stockholders' equity | $440,108 | $472,689 | Condensed Consolidated Statements of Operations Highlights (unaudited) | (In thousands, except per share data) | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $181,506 | $146,800 | | Loss from operations | $(76,205) | $(95,866) | | Net loss | $(70,922) | $(88,500) | | Net loss per share, basic and diluted | $(1.19) | $(1.54) | Condensed Consolidated Statements of Cash Flows Highlights (unaudited) | (In thousands) | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34,414) | $(42,396) | | Net cash used in investing activities | $(2,962) | $(1,075) | | Net cash provided by financing activities | $21,140 | $355 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue disaggregation, financial instrument valuations, stock-based compensation, legal proceedings, and a significant subsequent spin-off event - As of March 31, 2025, the company had an accumulated deficit of **$1,312.8 million**, with management believing current cash, cash equivalents, and short-term investments are sufficient to fund operations for at least one year[31](index=31&type=chunk) Revenue by Product (Six Months Ended March 31) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Synthetic genes | $54,708 | $42,083 | | NGS tools | $99,788 | $80,191 | | Other | $26,910 | $24,526 | | **Total** | **$181,506** | **$146,800** | - On October 21, 2024, the company received an upfront payment of **$15.0 million** from XOMA Royalty for half of future potential milestone and royalty payments, recorded as a liability related to the sale of future revenue[98](index=98&type=chunk) - On May 2, 2025, the company sold its DNA digital data storage assets to Atlas Data Storage, Inc. for equity, cash, promissory notes, and potential future milestone and royalty payments[101](index=101&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting a **23% revenue increase** and improved gross margin for the three months ended March 31, 2025, alongside reduced net loss and improved operating cash flow, with sufficient capital for near-term operations [Overview](index=29&type=section&id=Overview) This overview describes the company's synthetic biology business and highlights key financial improvements for the three months ended March 31, 2025, including a **23% revenue increase** and improved gross margin Q2 FY2025 Financial Highlights (vs. Q2 FY2024) | Metric | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Revenues | $92.8 million | $75.3 million | | Gross Margin | 49.6% | 41.0% | | Loss from Operations | $(41.6) million | $(48.9) million | | Net Loss | $(39.3) million | $(45.5) million | | Net Loss per Share | $(0.66) | $(0.79) | - The company serves approximately **3,562 customers** annually across healthcare, chemicals/materials, food/agriculture, and academic research industries[106](index=106&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section details financial results for the three and six months ended March 31, 2025, showing **23% revenue growth**, significant gross margin expansion, and mixed trends in operating expenses Revenue Comparison (Three Months Ended March 31) | (in thousands) | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $92,793 | $75,302 | $17,491 | 23% | - For the three months ended March 31, 2025, the increase in revenues was primarily driven by a **$10.4 million** growth in NGS tools and a **$5.9 million** growth in synthetic genes[118](index=118&type=chunk) Operating Expenses Comparison (Three Months Ended March 31) | (in thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Cost of Revenues | $46,765 | $44,420 | 5% | | Research & Development | $23,917 | $24,149 | (1)% | | Selling, General & Administrative | $63,671 | $55,622 | 14% | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$210.4 million** in cash and equivalents, with operations financed through equity, debt, and revenue, and improved operating cash flow usage for the six-month period - As of March 31, 2025, the company held **$210.4 million** in cash and cash equivalents and **$46.7 million** in short-term investments[138](index=138&type=chunk) - Net cash used in operating activities decreased to **$34.4 million** for the six months ended March 31, 2025, compared to **$42.4 million** for the same period in 2024[143](index=143&type=chunk)[144](index=144&type=chunk) - Financing activities provided **$21.1 million** in cash, primarily from a **$15.0 million** upfront payment from XOMA for the sale of future revenue, alongside proceeds from stock option exercises and the ESPP[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risk has not materially changed since September 30, 2024, with further details available in the Annual Report on Form 10-K - The company's exposure to market risk has not materially changed since September 30, 2024[155](index=155&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[156](index=156&type=chunk) - No changes occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[157](index=157&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against a securities class action lawsuit and a related shareholder derivative suit, both stemming from a November 2022 short-seller report, with potential loss currently inestimable - The company is defending against a securities class action lawsuit (Peters v. Twist Bioscience Corporation, et al.) filed in December 2022, based on allegations from a Scorpion Capital report[75](index=75&type=chunk) - A shareholder derivative suit (Shumacher vs. Leproust et al.) was filed in September 2023 based on substantially the same allegations as the securities class action, currently stayed pending a motion to dismiss in the class action case[79](index=79&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include adverse global economic conditions, geopolitical tensions, U.S. policy changes, and the potential failure to realize anticipated benefits from the DNA data storage business spin-out - Adverse global economic conditions, geopolitical tensions, and U.S. policy changes like new tariffs and halts on federal research grants could negatively affect the company's business and financial condition[163](index=163&type=chunk) - The company may not achieve the anticipated benefits from the May 2025 spin-out of its DNA data storage business to Atlas Data Storage, and the divestiture reduces business diversification[164](index=164&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[165](index=165&type=chunk) [Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[166](index=166&type=chunk) [Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[167](index=167&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[168](index=168&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amendments to the Certificate of Incorporation, the 2018 Equity Incentive Plan, and CEO/CFO certifications - Key exhibits filed include the Certificate of Amendment to Amended and Restated Certificate of Incorporation, the Amended and Restated 2018 Equity Incentive Plan, and certifications by the CEO and CFO[170](index=170&type=chunk)

Group 1 - Twist Bioscience reported a quarterly loss of $0.66 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.56, but an improvement from a loss of $0.79 per share a year ago, indicating an earnings surprise of -17.86% [1] - The company posted revenues of $92.79 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.95% and showing an increase from year-ago revenues of $75.3 million [2] - Over the last four quarters, Twist Bioscience has exceeded consensus revenue estimates four times, indicating a positive trend in revenue performance [2] Group 2 - The stock has underperformed the market, losing about 15.6% since the beginning of the year compared to the S&P 500's decline of -3.3% [3] - The earnings outlook for Twist Bioscience is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.56 on revenues of $94.77 million, and for the current fiscal year, it is -$2.14 on revenues of $374.42 million [7] Group 3 - The Medical - Biomedical and Genetics industry, to which Twist Bioscience belongs, is currently in the top 34% of Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Financial Performance - Second quarter fiscal year 2025 revenue reached $92.8 million[18,42] - The company's gross margin was 49.6%[18,42], progressing towards exceeding 50% by the fourth quarter of fiscal year 2025[18] - Adjusted EBITDA loss was $(14.8) million[18,42], beating guidance[18] Business Segment Highlights - SynBio revenue was $36.0 million, a 21% year-over-year growth, with approximately 227,000 genes shipped[22] - NGS revenue was $51.1 million, a 25% year-over-year growth[25] - Biopharma Solutions revenue was $5.7 million, a 21% year-over-year growth, with $6.4 million in orders[28] Atlas Data Storage - Atlas Data Storage launched with $155 million in funding from leading investors[11,13] Fiscal Year 2025 Guidance - The company anticipates full fiscal year 2025 revenue to be between $372 million and $379 million[45] - The company anticipates full fiscal year 2025 adjusted EBITDA to be between $(48) million and $(53) million[45]

Financial Data and Key Metrics Changes - For the second quarter of fiscal 2025, the company reported record revenue of $92.8 million, an increase of 23% year over year and 4.6% sequentially [13][24] - Gross margin for the quarter was 49.6%, up from 41% in the same quarter of fiscal 2024, reflecting improved operational efficiency [13][29] - Adjusted EBITDA loss was approximately $14.8 million, an improvement of about $11.9 million compared to the second quarter of fiscal 2024 [30] Business Line Data and Key Metrics Changes - Revenue from Synbio increased to $36 million, a growth of 21% year over year [13][24] - NGS revenue grew to approximately $51.1 million, an increase of 25% year over year [16][25] - Biopharma services revenue was $5.7 million, reflecting a growth of 21% year over year [16][25] Market Data and Key Metrics Changes - Healthcare revenue rose to $52.8 million, up 29% year over year [26] - Industrial chemical revenue increased to $22.8 million, a 12% rise from the previous year [26] - Academic revenue was $16.5 million, up 20% year over year [27] Company Strategy and Development Direction - The company has spun out DNA Data Storage as an independent entity, Atlas Data Storage, to focus on commercialization and drive success [9][11] - The strategy emphasizes operational agility and customer engagement to maintain competitive positioning [18][19] - The company aims to achieve adjusted EBITDA breakeven by the end of fiscal 2026, with a focus on innovation and market share growth [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong order bookings exceeding $100 million in the last two quarters [38] - The company is prepared to navigate market volatility and leverage it as an opportunity for growth [36][38] - Management acknowledged challenges in the academic sector but remains confident in the value proposition of their products [72][74] Other Important Information - The company ended the quarter with cash, cash equivalents, and short-term investments of approximately $257.1 million [31] - The company expects gross margin improvements to exceed 50% in the latter half of the fiscal year [34] Q&A Session Summary Question: Impact of tariffs on guidance and demand from competitors - Management indicated that they have accounted for potential tariff impacts in their guidance and noted strong share gains despite macro challenges [40][42] Question: Effect of promotions on academic market growth - Management confirmed that the 20% growth in the academic market was partly due to promotional activities, which they plan to continue until the end of the fiscal year [47][50] Question: Guidance for NGS revenue from top customers - Management expects growth from both existing and new customers, with top customers growing at a rate similar to the overall NGS business [53][54] Question: Reinvestment of savings from the spin-off into R&D - Management confirmed that savings from the spin-off will be partially reinvested into higher priority R&D initiatives [56][61] Question: Academic market's importance and growth assumptions - Management highlighted a significant opportunity in the academic market, with expectations for continued growth despite budget constraints [83][84]

Financial Data and Key Metrics Changes - For the second quarter of fiscal 2025, the company reported record revenue of $92,800,000, an increase of 23% year over year and 4.6% sequentially [13][23] - Gross margin for the quarter was 49.6%, up from 41% in the same quarter of fiscal 2024, reflecting improved operational efficiency [13][28] - Adjusted EBITDA loss was approximately $14,800,000, an improvement of about $11,900,000 compared to the second quarter of fiscal 2024 [29][32] Business Line Data and Key Metrics Changes - Revenue from Synbio increased to $36,000,000, a growth of 21% year over year [13][24] - NGS revenue grew to approximately $51,100,000, an increase of 25% year over year [16][24] - Biopharma services revenue was $5,700,000, reflecting a growth of 21% year over year [16][24] Market Data and Key Metrics Changes - Healthcare revenue rose to $52,800,000, a 29% increase year over year [25] - Industrial chemical revenue increased to $22,800,000, up 12% from the same period last year [25] - Academic revenue was $16,500,000, a 20% increase year over year [26] Company Strategy and Development Direction - The company has spun out DNA Data Storage as an independent entity, Atlas Data Storage, to focus on end-to-end data storage solutions [8][11] - The strategy emphasizes agility and innovation to capture market opportunities while maintaining operational efficiency [18][19] - The company aims to reach adjusted EBITDA breakeven by the end of fiscal 2026, leveraging the Atlas Data Storage transaction for improved financial performance [32][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing over $100,000,000 in orders booked in each of the last two quarters [37] - The leadership team is focused on innovation and customer impact, adapting to market conditions while maintaining a competitive edge [36][70] - The company anticipates continued share gains in the academic market despite funding pressures [65][72] Other Important Information - The company ended the quarter with cash, cash equivalents, and short-term investments of approximately $257,100,000 [29] - The company expects total revenue guidance for fiscal 2025 to be between $372,000,000 and $379,000,000, indicating a growth of approximately 20% at the midpoint [30] Q&A Session Summary Question: What is the impact of tariffs on guidance? - Management indicated that they have accounted for potential tariff impacts in their guidance, noting that tariffs may serve as a headwind for competitors rather than themselves [41][64] Question: How are promotions affecting Synbio growth? - Promotions have contributed to a 20% growth in the academic market, with expectations for continued positive impacts on margins [46][50] Question: What is the significance of the top 10 customers in NGS revenue? - The top 10 customers are expected to grow at a rate similar to the overall NGS business, with no specific increases assumed for the second half [52][54] Question: How will savings from the spin-off be reinvested? - The company plans to reinvest savings from the spin-off into higher priority R&D initiatives, contributing to improved adjusted EBITDA [56][60] Question: What is the outlook for the academic market? - The academic market presents a significant growth opportunity, with the company underpenetrated in this segment and optimistic about future performance [82][84]

Revenue Growth - Record revenue of $92.8 million in Q2 FY25, a 23% increase from $75.3 million in Q2 FY24, marking the 9th consecutive quarter of sequential growth[1] - Full year fiscal 2025 revenue expected to be in the range of $372 million to $379 million, indicating a year-over-year growth of 19% to 21%[8] - SynBio revenue projected at $144 million to $147 million, a growth of 17% to 19% year-over-year[8] - NGS revenue expected to be $205 million to $209 million, reflecting a growth of 21% to 24% year-over-year[8] - Biopharma revenue anticipated at $23 million, representing a growth of 13% year-over-year[8] Profitability and Loss - Adjusted EBITDA for Q2 FY25 was $(14.8) million, an improvement from $(26.8) million in Q2 FY24[4] - Net loss attributable to common stockholders for Q2 FY25 was $39.3 million, or $0.66 per share, compared to a net loss of $45.5 million, or $0.79 per share, in Q2 FY24[4] - GAAP net loss for the three months ended March 31, 2025, was $39,328,000, compared to a net loss of $45,492,000 for the same period in 2024, representing an improvement of about 13%[23] - Adjusted EBITDA for the six months ended March 31, 2025, was a loss of $31,102,000, compared to a loss of $54,547,000 for the same period in 2024, indicating a 43% improvement[23] Customer and Market Expansion - The company shipped products to approximately 2,431 customers in Q2 FY25, up from 2,253 customers in Q2 FY24[7] - Twist announced the spin-out of its DNA data storage application as Atlas Data Storage, with a $155 million investment from various strategic partners[1] Asset and Liability Management - Total current assets decreased from $346,776,000 in September 2024 to $338,442,000 in March 2025, a decline of approximately 2%[21] - Total liabilities increased from $141,634,000 in September 2024 to $155,507,000 in March 2025, an increase of approximately 10%[21] - Cash and cash equivalents decreased from $226,316,000 in September 2024 to $210,437,000 in March 2025, a decline of about 7%[21] - Accounts receivable, net increased significantly from $34,903,000 in September 2024 to $49,949,000 in March 2025, an increase of approximately 43%[21] - Total stockholders' equity decreased from $472,689,000 in September 2024 to $440,108,000 in March 2025, a decline of about 7%[21] Operating Expenses - Stock-based compensation expense for the three months ended March 31, 2025, was $20,328,000, compared to $13,824,000 for the same period in 2024, reflecting a 47% increase[23] - Operating lease liability, net of current portion decreased from $70,221,000 in September 2024 to $65,080,000 in March 2025, a reduction of approximately 7%[21] - Inventories decreased from $24,078,000 in September 2024 to $20,860,000 in March 2025, a decline of about 13%[21]

Group 1 - The marketplace channel Haggerston BioHealth offers exclusive stock tips focused on Pharma, Biotech, and Healthcare, providing access to investment bank-grade financial models and research [1] - The group caters to both novice and experienced biotech investors, offering insights on catalysts, buy and sell ratings, product sales forecasts, and integrated financial statements [2] - Edmund Ingham, a biotech consultant with over 5 years of experience, leads the Haggerston BioHealth investing group and has compiled detailed reports on over 1,000 companies [2]