Twist Bioscience Corporation Common Stock 2026 Q3 Earnings Call

Please go ahead. Thank you, operator.

Good morning, everyone. I'd like to thank you for joining us for Twist Bioscience's conference call to review our fiscal 2026 third quarter financial results and business progress. We issued our financial results press release before the market, and it is available at our website at www.twistbioscience.com. With me on the call today are Dr. Emily Leproust, CEO and co-founder of Twist, Adam Laponis, CFO of Twist, and Dr. Patrick Finn, President and COO of Twist. Today, we will discuss our business progress, financial and operational performance, as well as growth opportunities. We'll then open the call for questions. We ask that you limit your questions to only one and then re-queue as a courtesy to others on the call. This call is being recorded and the audio portion will be archived in the investor section of our website and will be available for two weeks.

During today's presentation, we will make forward-looking statements within the meaning of the U.S. Federal Securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof. We disclaim any obligation to update any forward-looking statements except as required by law. We'll also discuss adjusted EBITDA, a financial measure that does not conform with generally accepted accounting principles.

Information may be calculated differently than similar non-GAAP data presented by other companies. When reported, a reconciliation between GAAP and non-GAAP financial measures will be included in our earnings documents, which can be found on the investor section of our website. With that, I will now turn the call over to our CEO and co-founder, Emily Leproust.

Thank you, Angela, and good morning, everyone. On slide three, you will see that this morning we reported our 14th quarter of consecutive growth with record revenue of $118.4 million, growth of 23% year-over-year. This growth reflects the diligence and execution we have employed over the last several years, building for opportunities we see ahead. Sometimes those opportunities are clearly visible many years in advance. Others require us to be nimble and engage with our customers in real time to ensure we build and deliver what they need to be successful. On slide four, you'll see that at Twist, we sit at a unique junction where we have spent the last decade building the infrastructure to enable our customers to advance their therapeutics, diagnostics, and industrial breakthroughs resulting from their innovation.

As biology becomes increasingly computational, our ability to deliver precision and speed at scale becomes even more valuable. On slide five, I'm sure you agree that AI is shifting workflows across multiple industries. We see an inflection point in drug discovery with more and more groups leveraging AI as their first antibody discovery screen. Where 1 year ago, just a handful of organizations were pursuing this path, now we have seen large pharma, dry lab biotech, traditional biotech, and even major technology companies all employ AI through ML/AI approaches following the pattern of design, build, test loop. Our customer can now design more sequences, test more hypotheses, and iterate faster than ever before. In parallel, we also see the benefit of data and genetic information resulting in diagnostic assays that monitor, select, and determine next steps for a wide variety of diseases.

Turning to our product groups, over the past year, we've talked about AI-enabled discovery as an important emerging opportunity. Today, we are seeing that opportunity mature into a durable growth engine. We continue to support customers in building new models, while others are using Twist to conduct discovery for specific therapeutic targets and to iterate models. This combination of repeat business, new customer acquisition, and new organizations forming or expanding into the life sciences area gives us increasing confidence in the durability and longevity of AI-enabled discovery as a growth driver for the short, medium, and long term. On slide six, the promise of AI-enabled drug discovery is straightforward. Identify better drug candidates faster, reduce the cost of bringing new medicines to market, and improve the probability that candidates entering development ultimately succeed.

On slide seven, you'll see the workflow where our customers use AI to computationally generate thousands to millions of potential DNA sequences and iteratively refine those designs to identify the most promising therapeutic candidates for a specific disease. Twist quickly translates those digital designs into physical biology through high-throughput DNA synthesis of individual or pooled DNA, followed by protein expression. Many customers then leverage our downstream capabilities to evaluate those proteins across assays, measuring binding, developability, characterization, and other properties associated with successful drug candidates. We enable rapid design, build, test, and learn cycles at the earliest stage of discovery, supporting our customers' ultimate objectives. When seeking a partner for this work, every customer needs a trusted provider capable of manufacturing increasingly Complex Genes, expressing proteins, generating high-quality characterization data, and delivering consistent results at the speed modern drug discovery requires.

This combination of capabilities has become one of Twist's most important competitive advantages. At our Investor Day in May, we guided to triple-digit percentage order growth for AI-enabled discovery in fiscal 2026 versus fiscal 2025. Now that we are through the third quarter of the year, we are increasingly confident that we will meet or exceed that target. Our confidence reflects durable demand signals as existing customers return for iterative design, build, test, learn cycles, reflecting growing recognition that our platform is well-suited to support AI-enabled drug discovery programs, as well as traditional drug discovery. Importantly, our funnel of opportunities continues to expand meaningfully, and we believe that we have the potential to again post triple-digit percentage order growth for AI-enabled drug discovery in fiscal 2027 when compared to fiscal 2026. Turning to slide eight. During the quarter, our platform again demonstrated its importance in supporting global public health.

On May 15, 2026, public health officials in the Democratic Republic of Congo announced a developing outbreak of hemorrhagic fever. The outbreak went undetected for at least a month, escaping standard PCR assays, a gap that allowed the virus to spread further before it could be identified and contained. As of July 1st, the virus has been confirmed in both the DRC and Uganda, with an estimated spread to several thousand people and at least 399 confirmed deaths. Approximately one month into the outbreak, researchers used Twist Comprehensive Viral Research Panel to identify the pathogen as the Bundibugyo ebolavirus, underscoring the value of whole viral genome enrichment to catch emerging infectious diseases that standard testing missed. Separately, we also synthesized hantavirus material in less than 24 hours to support rapid response efforts during the cruise ship outbreak in May.

These are powerful examples of the breadth, speed and reliability of our platform and of our role in the global research and public health communities. On slide nine, we continue to see strong accelerating momentum for our NGS Applications group, driven primarily by diagnostic customers, many of whom are focused on growing their commercial volumes, with others advancing towards commercialization. We have our eyes on several new opportunities as the pipeline remains rich for next-generation assays to inform molecular residual disease tests, optimize workflows using proprietary enzymes, and more. During the quarter, we increased customer adoption, strengthened our commercial pipeline, and continued to execute on new product introductions to reinforce our position as a trusted partner for next-generation sequencing workflows. As sequencing volumes continues to grow globally, we believe our differentiated technology and expanding portfolio positions us well for continued growth.

We continue to see customers turn to Twist when scientific precision and rapid execution matter most. This holds true when we are supporting academic research, cancer diagnostic, agricultural biotech, responding to emerging infectious diseases, or myriad other work streams. On slide 10, one of the highlights of the quarter was hosting our Investor Day at our fab in Wilsonville, Oregon. Many of our customers shared how Twist products and services play a critical role in their internal workflows, providing tangible examples across multiple markets and applications. In addition, several Twist leaders showcased their expertise and leadership throughout the different areas of the business. As Twist has grown, we have built an organization designed to repeatedly convert scientific innovation into commercial success. Great science creates opportunity. Operational excellence turn that opportunity to durable revenue growth, expanding profitability and long-term value creation.

That requires manufacturing discipline, commercial execution, digital capabilities, and above all, an exceptional team. Investor Day gave us the opportunity to demonstrate the strength of that foundation through our leadership bench, differentiated technology, highly automated manufacturing, expanding capacity, and the proprietary software that powers our business. The consistent feedback we received was that investors left with a broader appreciation of the scale of our opportunities, the strength of our execution, and the depth of our organization we have built, as well as the reality of the growth opportunities that lie ahead to drive confidence in our long-term trajectory. For me, Investor Day reinforced something I've believed since founding Twist. We do things the Twist way, and this is not the easy path. When someone says it's hard, I say, "Yes, that's the point." If it were easy, everyone would be doing it.