10-Q/A: Twist Bioscience Q1 Revenue Jumps 17%, Narrows Loss

Twist Bioscience Corporation reported a 16.9% increase in Q1 revenue to $103.7 million and a reduced net loss of $30.5 million, driven by strong growth in DNA synthesis and NGS applications.

Summary

• Revenue increased by 16.9% to $103.7 million for the three months ended December 31, 2025, compared to $88.7 million in the prior year period.
• Gross margin improved to 52.0% from 48.3%, primarily due to increased revenues and continuous process improvement initiatives.
• Net loss decreased to $30.5 million, an improvement from $31.6 million in the same period last year.
• Loss from operations decreased to $32.9 million from $34.6 million, reflecting higher revenues and gross profit, and lower research and development expenses.
• DNA synthesis and protein solutions revenue grew by 27.4% to $51.1 million.
• NGS applications revenue increased by 8.2% to $52.6 million.
• The number of genes shipped rose by 32.2% to 271,000.
• The company expanded its South San Francisco premises by approximately 33,000 square feet and extended the lease to June 30, 2036, with a tenant improvement allowance of $24.4 million.
• Cash and cash equivalents, along with short-term investments, totaled $197.9 million as of December 31, 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, demonstrating strong revenue growth and improved operational efficiency, particularly in gross margin and reduced operating loss. While the company remains unprofitable and cash burn increased, the underlying business performance shows promising trends in a high-growth industry.

Positives

• Revenue increased by 16.9% year-over-year to $103.7 million.
• Gross margin improved significantly to 52.0% from 48.3%, indicating enhanced operational efficiency.
• Net loss narrowed to $30.5 million from $31.6 million in the prior year period.
• Loss from operations decreased to $32.9 million from $34.6 million, reflecting improved core business performance.
• Strong growth in DNA synthesis and protein solutions revenue (27.4%) and NGS applications revenue (8.2%).
• The number of genes shipped increased by 32.2% to 271,000, demonstrating increased product demand.
• Expansion of South San Francisco premises with a substantial tenant improvement allowance of $24.4 million supports future growth.

Negatives

• Net cash used in operating activities increased to $24.8 million from $21.4 million in the prior year period, indicating higher cash burn.
• Cash and cash equivalents decreased to $148.6 million from $183.0 million at the end of the previous fiscal quarter.
• Selling, general and administrative expenses increased by 24% to $69.7 million, outpacing revenue growth.
• Interest income decreased by 33% to $2.2 million due to lower cash balances and interest rates.
• The company continues to incur net losses and has an accumulated deficit of $1,350.1 million.

Risks

• Ability to increase revenue and revenue growth rate.
• Ability to accurately estimate capital requirements and needs for additional financing.
• Ability to effectively manage growth and maintain and improve operational efficiency, cost control, and gross margin as the company scales.
• Ability to successfully enter new markets and manage international expansion, including compliance with evolving international regulatory requirements.
• Ability to develop and commercialize additional products in the synthetic biology and biologic drug industries.
• Ability to leverage investment in the manufacturing facility in Wilsonville, Oregon.
• Ability to protect intellectual property, including the proprietary DNA synthesis platform, and costs associated with defending infringement claims.
• Effects of increased competition and ability to keep pace with rapid changes in technology and evolving competitive dynamics.
• Ability to integrate and leverage artificial intelligence and machine learning technologies.
• Risk of significant disruption in, or breach of security of, information technology systems.
• Ability to attract and retain qualified employees and key personnel.
• Effects of natural or man-made catastrophic events or public health emergencies.
• Uncertainty as to economic and market conditions and the impact of adverse economic conditions.
• Ongoing legal proceedings, including a securities class action and derivative lawsuits, which could result in an unfavorable outcome or significant loss.

Future Outlook

The company expects its current cash, cash equivalents, and short-term investments to be sufficient to fund operations for at least one year from February 26, 2026. Future profitability is contingent on the success of existing products, the development and commercialization of new products in synthetic biology and biologic drug industries, and effective utilization of its Wilsonville, Oregon manufacturing facility.

Management Comments

• "We offer customizable solutions across the biological continuum."
• "We have developed a disruptive DNA synthesis platform to industrialize the engineering of biology."
• "Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the synthetic biology and biologic drug industries as well as leveraging our investment in our manufacturing facility in Wilsonville, Oregon."

Industry Context

StockSavvy.ai notes that Twist Bioscience's continued revenue growth and improved gross margin in the synthetic biology and NGS sectors align with broader industry trends emphasizing precision medicine, drug discovery acceleration, and advanced genomic research. The company's strategic reclassification of revenue streams, combining synthetic biology tools with biopharma services, reflects an industry-wide move towards integrated solutions that streamline the drug discovery pipeline. The increased number of genes shipped and customer base expansion indicate a healthy demand for foundational synthetic DNA products, a key driver in the burgeoning biotech landscape.

Comparison to Industry Standards

• The 16.9% revenue growth is robust, potentially outpacing some competitors in the broader life sciences tools sector, though direct comparisons require specific competitor quarterly data (e.g., Danaher's Life Sciences segment or Thermo Fisher Scientific's Life Sciences Solutions).
• The gross margin improvement to 52.0% is a positive indicator of operational efficiency, positioning Twist favorably against peers who may face higher manufacturing costs in complex synthetic biology production.
• The continued net loss, despite improvement, indicates the company is still in a growth and investment phase, common for innovative biotech firms, but contrasts with more mature, profitable industry giants.
• The increase in net cash used in operating activities suggests ongoing investment in scaling operations, which is typical for companies expanding their market footprint and product offerings, but warrants monitoring for cash burn rates relative to capital raises.

Corporate Governance

Legal Proceedings

• A putative securities class action lawsuit, Peters v. Twist Bioscience Corporation, et al., alleging violations of federal securities laws based on a Scorpion Capital report. The court granted in part and denied in part the motion to dismiss, and discovery is ongoing.
• A shareholder derivative suit, Shumacher vs. Leproust et al., and a consolidated derivative lawsuit, Sell v. Leproust, et al., both stayed pending further proceedings in the Securities Class Action.

Related Party Transactions

• Revenues from related parties, including a Variable Interest Entity (VIE), amounted to $1.4 million for the three months ended December 31, 2025 (down from $4.0 million in the prior year).
• Accounts receivable balances with related parties, including a VIE, were $1.3 million as of December 31, 2025.
• Sublease income from a related party was $0.7 million for the three months ended December 31, 2025 (up from $0 million in the prior year).
• Investment in a related party (equity securities) was $53.9 million as of December 31, 2025.
• A promissory note receivable from a related party had a carrying value of $1.8 million as of December 31, 2025.
• Interest income of $0.1 million was recognized from a related party during the three months ended December 31, 2025.

Stakeholder Impact

• Shareholders: Positive impact from revenue growth, gross margin improvement, and narrowing net loss, but continued cash burn and ongoing legal proceedings present risks.
• Employees: Stock-based compensation remains a significant component of overall compensation, and the company's growth trajectory could offer career opportunities.
• Customers: Benefit from increased DNA production, reduced turnaround times, and cost reductions, as well as expanded product offerings in DNA synthesis and NGS applications.
• Creditors: The company's liquidity position with $197.9 million in cash and short-term investments, and expectation to fund operations for at least one year, provides some assurance.

Next Steps

• Continue to increase DNA production, reduce turnaround times, and drive cost reductions for customers.
• Effectively manage growth and maintain and improve operational efficiency, cost control, and gross margin.
• Successfully enter new markets and manage international expansion, complying with evolving regulatory requirements.
• Develop and commercialize additional products in synthetic biology and biologic drug industries, including the Express products portfolio.
• Leverage investment in the manufacturing facility in Wilsonville, Oregon.
• Protect intellectual property, including the proprietary DNA synthesis platform.
• Integrate and leverage artificial intelligence and machine learning technologies.
• Identify, evaluate, and manage any future acquisitions.
• Continue vigorously defending remaining claims in the Securities Class Action.
• Monitor the derivative lawsuits, which are currently stayed.
• Evaluate the impact of new accounting pronouncements (ASU 2024-03, ASU 2025-06).
• Consider exercising the option to expand South San Francisco premises by December 31, 2026.

Key Dates

Recommendation

The company demonstrated strong revenue growth and significant gross margin improvement, indicating positive operational momentum. However, it continues to incur net losses and increased cash burn from operating activities. The ongoing legal proceedings introduce uncertainty. While the underlying business shows promise in a high-growth sector, the path to profitability and resolution of legal matters warrant a cautious 'hold' stance for seasoned investors, balancing growth potential against financial risks.

Keywords

Twist Bioscience, TWST, Synthetic Biology, DNA Synthesis, NGS Applications, Biologic Drugs, Antibody Discovery, Financial Results, Quarterly Report, SEC Filing, Biopharma Services, Genomics, Biotechnology, Q1 2026