10-Q: Twist Bioscience Q2 2026 Earnings: Revenue Up, Net Loss Widens

Twist Bioscience reports a 19.3% revenue increase for Q2 2026, reaching $110.7 million, but net loss also widened to $44.0 million.

Summary

• Twist Bioscience reported revenues of $110.7 million for the three months ended March 31, 2026, a 19.3% increase compared to $92.8 million in the same period last year.
• For the six months ended March 31, 2026, revenues increased by 18.1% to $214.4 million from $181.5 million in the prior year.
• The company experienced a net loss of $44.0 million for the three months ended March 31, 2026, an increase from $39.3 million in the prior year.
• The net loss for the six months ended March 31, 2026, was $74.5 million, compared to $70.9 million in the prior year.
• Gross margin improved to 51.6% for the quarter and 51.8% for the six months, up from 49.6% and 49.0% respectively, driven by increased revenues and cost savings.
• Selling, general, and administrative expenses increased by 19% for the quarter and 22% for the six months, attributed to personnel costs, IT services, and marketing.
• Research and development expenses decreased by 18% for the quarter and 19% for the six months, largely due to the sale of the DNA data storage business.
• The company recorded $7.2 million in litigation settlement costs during the period.
• As of March 31, 2026, Twist Bioscience had $122.7 million in cash and cash equivalents and $49.0 million in short-term investments, which management believes is sufficient for at least 12 months.
• The company entered into a license agreement with Invenra Inc. for its B-Body bispecific antibody discovery platform and acquired an ownership interest in Invenra for a total commitment of $33.8 million.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the widening net loss and increased operating expenses, despite revenue growth.

Positives

• Revenue increased by 19.3% to $110.7 million for the three months ended March 31, 2026, and by 18.1% to $214.4 million for the six months ended March 31, 2026.
• Gross margin improved to 51.6% for the quarter and 51.8% for the six months, indicating improved operational efficiency and cost management.
• The number of genes shipped increased by 32% for both the three-month and six-month periods, demonstrating strong demand for the company's core products.
• The company believes its current cash, cash equivalents, and short-term investments are sufficient to fund operations for at least 12 months.
• The Invenra Inc. license agreement and equity investment represent a strategic move to enhance the company's antibody discovery capabilities.

Negatives

• Net loss increased to $44.0 million for the three months ended March 31, 2026, from $39.3 million in the prior year.
• Net loss for the six months ended March 31, 2026, increased to $74.5 million from $70.9 million in the prior year.
• Selling, general, and administrative expenses increased significantly by 19% for the quarter and 22% for the six months, impacting profitability.
• The company recorded $7.2 million in litigation settlement costs.
• Net cash used in operating activities increased by 23.1% to $42.4 million for the six months ended March 31, 2026.

Risks

• The company has incurred annual losses from operations since inception and has an accumulated deficit of $1,394.1 million as of March 31, 2026.
• There is uncertainty regarding the company's ability to generate sufficient product revenue to achieve profitability.
• Future capital requirements may necessitate additional financing, with no assurance of success on acceptable terms.
• The company faces risks related to increased competition, rapid technological changes, and evolving competitive dynamics.
• Disruptions in IT systems, security breaches, or catastrophic events could adversely affect the business.
• The company is subject to ongoing litigation, including a securities class action lawsuit with a settlement in principle of $17.1 million.

Future Outlook

The company believes its current cash, cash equivalents, and short-term investments will be sufficient to fund its operations for at least one year from the date of issuance. However, future capital requirements depend on revenue growth, R&D, investments, acquisitions, and legal costs. The company expects selling, general, and administrative expenses to moderate in the second half of fiscal 2026 due to cost-saving initiatives.

Management Comments

• "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..."
• "We expect selling, general and administrative expense to moderate in the second half of fiscal 2026 resulting from a number of cost saving initiatives."
• "We take a long-term view in growing and scaling our business and we regularly review acquisition and investment opportunities..."

Industry Context

StockSavvy.ai notes that Twist Bioscience's Q2 2026 results reflect continued revenue growth in the synthetic biology and NGS sectors, aligning with broader industry trends of increasing demand for DNA synthesis and sequencing applications in therapeutics and diagnostics. However, the widening net loss and increasing SG&A expenses highlight the ongoing challenges of scaling operations and achieving profitability in this competitive landscape.

Comparison to Industry Standards

• While specific comparable company data for Q2 2026 is not provided in the filing, Twist Bioscience's revenue growth of 19.3% for the quarter is robust, particularly within the specialized synthetic biology market. Competitors in this space, such as Integrated DNA Technologies (IDT) and Thermo Fisher Scientific's synthetic biology offerings, also focus on expanding their product portfolios and customer bases.
• The improvement in gross margin to over 51% is a positive indicator, suggesting efficient production scaling. Industry benchmarks for gross margins in specialized biotech manufacturing can vary, but maintaining margins above 50% is generally considered strong.
• The net loss, while widening, is not uncommon for companies in the growth phase of the biotechnology sector, where significant investment in R&D and commercialization is required. Many early-stage and growth-stage biotech firms operate at a loss for extended periods while building market share and developing new technologies.

Legal Proceedings

• A putative securities class action lawsuit was filed against the Company, its Chief Executive Officer, and its Chief Financial Officer alleging violations of federal securities laws. A settlement in principle of approximately $17.1 million has been reached, with liability insurers expected to fund the majority.
• A shareholder derivative suit was filed against directors and an employee, based on similar allegations as the securities class action, seeking to recover damages on behalf of the Company. This action has been consolidated with another derivative lawsuit and stayed pending further proceedings in the securities class action.

Related Party Transactions

• The filing notes that certain balances on the Condensed Consolidated Balance Sheets include related party balances.
• Transactions with related parties, excluding an unconsolidated VIE, included revenue of $2.2 million for the three months ended March 31, 2026, and $3.6 million for the six months ended March 31, 2026.
• Accounts receivable balances with related parties (excluding an unconsolidated VIE) were $0.8 million as of March 31, 2026.

Stakeholder Impact

• Shareholders may be concerned by the widening net loss and increased operating expenses, despite revenue growth.
• Employees may be impacted by the ongoing investments in commercial organization and corporate infrastructure, as well as potential cost-saving initiatives.
• Creditors and suppliers may be affected by the company's continued operating losses and reliance on cash reserves, though management believes current liquidity is sufficient for the next 12 months.

Next Steps

• The company expects to recognize revenue over the next twelve months relating to performance obligations unsatisfied as of March 31, 2026.
• The lease for additional premises in South San Francisco is expected to commence on September 1, 2026.
• The company has the right to elect to expand its premises to include additional space by December 31, 2026.
• The company will adopt ASU 2023-09 in its fourth quarter of fiscal year 2026.
• The company is evaluating the impact of ASU 2024-03 and ASU 2025-06.

Key Dates

Recommendation

While revenue growth is positive, the widening net loss, increased operating expenses, and significant litigation settlement costs temper enthusiasm. The company's belief in sufficient liquidity for the next 12 months is a mitigating factor, but the path to profitability remains uncertain. A 'hold' recommendation reflects a balanced view of growth potential against current financial performance and risks.

Keywords

Twist Bioscience, 10-Q, Quarterly Report, DNA Synthesis, NGS Applications, Biotechnology, Synthetic Biology, Antibody Discovery, Financial Results, Revenue Growth, Net Loss, Invenra Inc.