8-K: Twist Bioscience Reports Record Fiscal 2024 Revenue, Exceeds Guidance

Twist Bioscience announced record full-year revenue of $313.0 million for fiscal year 2024, a 28% increase year-over-year, and exceeded its financial guidance.

Summary

• Twist Bioscience reported record revenue of $313.0 million for fiscal year 2024, a 28% increase compared to $245.1 million in fiscal year 2023.
• The company's fourth-quarter revenue reached a record $84.7 million, a 27% increase from $66.9 million in the same quarter of the previous year, marking the seventh consecutive quarter of sequential growth.
• Gross margin for the fourth quarter was 45.1%, an improvement of 8.5 percentage points compared to 36.6% in the fourth quarter of fiscal year 2023.
• For the full year, SynBio revenue grew by 26% to $123.5 million, NGS revenue increased by 37% to $169.1 million, while Biopharma revenue decreased to $20.3 million.
• Total orders for fiscal year 2024 grew to $344.2 million, compared to $263.8 million in the previous year.
• The company's net loss for fiscal year 2024 was $208.7 million, or $3.60 per share, compared to $204.6 million, or $3.60 per share, in fiscal year 2023.
• Adjusted EBITDA for fiscal year 2024 was $(93.5) million, an improvement from $(147.3) million in fiscal year 2023.
• Twist Bioscience expects full-year fiscal 2025 revenue to be between $367 million and $377 million, with a gross margin of approximately 48% and 50% for 4QFY25.
• The company anticipates adjusted EBITDA of approximately $(60) to $(65) million for fiscal year 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth, improved gross margins, and a clear path towards profitability. The company exceeded guidance and is making progress towards adjusted EBITDA breakeven. However, the company is still operating at a loss and faces risks, which prevents a perfect score.

Positives

• Twist Bioscience achieved record revenue for both the full year and the fourth quarter of fiscal year 2024.
• The company experienced its seventh consecutive quarter of sequential revenue growth.
• Gross margins improved significantly in the fourth quarter of fiscal year 2024.
• The company shipped a higher number of genes in fiscal year 2024 compared to the previous year.
• Twist Bioscience has a strong cash position of $276.4 million.
• The company is projecting continued revenue growth and margin improvement for fiscal year 2025.
• Adjusted EBITDA improved year-over-year.

Negatives

• The company reported a net loss of $208.7 million for fiscal year 2024, although this was similar to the $204.6 million loss in fiscal year 2023.
• Biopharma revenue decreased in fiscal year 2024 compared to fiscal year 2023.
• The company is still operating at a loss, with an adjusted EBITDA of $(93.5) million for fiscal year 2024.

Risks

• The company's forward-looking statements are subject to market conditions and other factors that could cause actual results to differ materially.
• Twist Bioscience faces risks related to attracting new customers, retaining existing customers, and achieving profitability.
• The company is exposed to risks associated with rapidly changing technologies and competition in the synthetic biology industry.
• The company's ability to expand manufacturing capacity and maintain intellectual property protection are also risks.
• The company is dependent on one supplier for a critical component.

Future Outlook

Twist Bioscience expects full-year fiscal 2025 revenue to be in the range of $367 million to $377 million, with a gross margin of approximately 48% and 50% for 4QFY25. The company anticipates adjusted EBITDA of approximately $(60) to $(65) million for fiscal year 2025.

Management Comments

• Emily M. Leproust, Ph.D., CEO and co-founder of Twist Bioscience, stated that the company saw another quarter of record revenue and its seventh consecutive quarter of revenue growth.
• Dr. Leproust also mentioned that the company continues to leverage its proprietary platform to add to its portfolio of solutions that deliver growth and margin expansion.
• She noted that the company ended the quarter and the year exceeding its guidance across the board.
• Dr. Leproust stated that the company is building on its momentum as it continues its final push toward achieving adjusted EBITDA breakeven while investing in research and development.

Industry Context

Twist Bioscience operates in the competitive life sciences segment of the healthcare sector, focusing on synthetic biology and genomics. The company's growth in revenue and gross margin suggests a positive trajectory in a market with increasing demand for DNA synthesis and NGS technologies. The company is also expanding into new areas such as DNA data storage and biologics drug discovery.

Comparison to Industry Standards

• Twist Bioscience's revenue growth of 28% year-over-year is strong compared to many established companies in the life sciences tools sector, such as Illumina, which has seen slower growth in recent periods.
• The gross margin improvement to 45.1% in Q4FY24 is a positive sign, although it still lags behind some of the more profitable companies in the sector, such as Thermo Fisher Scientific, which typically reports gross margins above 60%.
• The company's adjusted EBITDA of $(93.5) million for fiscal year 2024 indicates that it is still in a growth phase and not yet profitable, which is common for companies in the synthetic biology space. Companies like Ginkgo Bioworks are also operating at a loss while focusing on growth.
• Twist's focus on innovation, such as the launch of new products like the FlexPrep Ultra-High Throughput Library Preparation Kit, is consistent with the industry trend of developing more efficient and cost-effective solutions for genomics research.

Management Changes

Stakeholder Impact

• Shareholders will likely view the record revenue and improved gross margins positively.
• Employees may benefit from the company's growth and expansion.
• Customers will have access to a broader range of products and services.
• Suppliers may see increased demand for their products and services.
• Creditors may view the company's improved financial performance favorably.

Next Steps

• The company plans to continue its push towards achieving adjusted EBITDA breakeven.
• Twist Bioscience will continue to invest in research and development to deliver precision, efficiency, and scalability in its products and services.
• The company will focus on expanding its portfolio of solutions, including its Express portfolio, NGS tools, and Twist-developed enzymes.

Key Dates

Keywords

Twist Bioscience, Synthetic Biology, Genomics, DNA Synthesis, NGS, SynBio, Biopharma, Revenue, Gross Margin, EBITDA, Financial Results