8-K: Twist Bioscience Reports Record Revenue in First Quarter of Fiscal 2024, Raises Full Year Guidance

Twist Bioscience announced record revenue of $71.5 million for the first quarter of fiscal year 2024, a 32% increase year-over-year, and raised its full-year revenue and gross margin guidance.

Summary

• Twist Bioscience reported a record revenue of $71.5 million for the first quarter of fiscal year 2024, which is a 32% increase compared to $54.2 million in the same period last year.
• The company's orders also increased to $77.5 million, a 19% rise from $64.7 million in the first quarter of fiscal year 2023.
• SynBio revenue reached $26.8 million, up from $21.7 million year-over-year, with synthetic genes contributing $19.7 million, oligo pools $4.2 million, and DNA libraries $2.9 million.
• NGS revenue saw a significant increase to $39.4 million, compared to $24.4 million in the prior year's first quarter.
• Biopharma revenue was $5.2 million, down from $8.2 million in the same quarter of the previous year.
• The company's gross margin for the quarter was 40.5%.
• Twist Bioscience shipped products to 2,140 customers and approximately 171,000 genes during the quarter.
• The company has updated its full fiscal year 2024 revenue guidance to a range of $288 million to $293 million and gross margin guidance to 40% to 41%.
• The net loss for the quarter was $43.0 million, or $0.75 per share, compared to a net loss of $41.8 million, or $0.74 per share, in the same period last year.
• As of December 31, 2023, Twist Bioscience had $311.1 million in cash, cash equivalents, and short-term investments.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to record revenue, increased guidance, and strong growth in key segments like NGS. However, the net loss and increased operating expenses temper the overall optimism.

Positives

• The company achieved record revenue for the quarter, demonstrating strong growth.
• Orders increased significantly, indicating continued demand for Twist's products.
• The company has increased its full-year revenue and gross margin guidance, reflecting confidence in future performance.
• NGS revenue experienced substantial growth, highlighting the strength of this segment.
• The expansion of the Express Genes service to all prep scales is expected to drive further growth.
• The company shipped more genes and served more customers compared to the same period last year.

Negatives

• Biopharma revenue decreased to $5.2 million from $8.2 million in the same quarter of the previous year.
• The net loss for the quarter was $43.0 million, slightly higher than the $41.8 million loss in the same period last year.
• Selling, general and administrative expenses increased to $52.8 million from $42.3 million year-over-year.
• Loss from operations before taxes is expected to increase to approximately $189 million to $194 million for the full year, up from the previous estimate of $180 million to $188 million.

Risks

• The company's ability to achieve profitability remains a challenge.
• The company faces risks related to rapidly changing technologies and competition in the synthetic biology market.
• There are risks associated with the retention of significant customers.
• The company's proprietary rights may be insufficient to protect its technologies.
• The company's forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially.

Future Outlook

Twist Bioscience has increased its full-year 2024 revenue guidance to $288 million to $293 million and gross margin guidance to 40% to 41%. The company expects to continue focusing on revenue growth, margin expansion, and financial discipline as it progresses towards profitability. They also plan to introduce new products and differentiated solutions throughout the year.

Management Comments

• Emily M. Leproust, Ph.D., CEO and co-founder of Twist Bioscience, stated that they are starting fiscal 2024 off strong with record revenue and a gross margin of 40.5%, coming in above their projection.
• Dr. Leproust mentioned that the expansion of Express Genes will allow them to expand their market share and convert researchers who make their own genes into DNA buyers.
• Dr. Leproust also noted that NGS had a strong quarter, with their top ten customers accounting for 44% of NGS revenue.

Industry Context

The results indicate a strong demand for synthetic DNA and NGS products, aligning with the broader growth trends in the synthetic biology and genomics industries. The company's focus on expanding its product offerings and customer base is consistent with strategies employed by other companies in this sector.

Comparison to Industry Standards

• Twist Bioscience's 32% year-over-year revenue growth in Q1 FY24 is strong compared to the average growth rates of many companies in the synthetic biology sector, which often range from 15-25%.
• Companies like Ginkgo Bioworks and Amyris, while operating in slightly different niches, also focus on synthetic biology and have seen varying growth rates, making Twist's performance noteworthy.
• In the NGS space, companies like Illumina and Pacific Biosciences are established players, and Twist's 61% growth in NGS revenue suggests they are gaining market share and competing effectively.
• The gross margin of 40.5% is within the expected range for companies in this industry, but there is room for improvement as some competitors achieve higher margins through economies of scale and more efficient production processes.

Management Changes

Stakeholder Impact

• Shareholders will likely react positively to the increased revenue and guidance.
• Employees may be encouraged by the company's growth and positive outlook.
• Customers will benefit from the expanded Express Genes service and new product offerings.
• Suppliers may see increased demand for their products and services.
• Creditors may view the company's financial performance as a positive sign.

Next Steps

• The company plans to introduce new products and differentiated solutions throughout the year.
• Twist Bioscience will continue to focus on revenue growth, margin expansion, and financial discipline.
• The company will hold a conference call and live audio webcast to discuss the financial results.

Key Dates

Keywords

synthetic biology, genomics, DNA synthesis, next-generation sequencing, NGS, synthetic genes, biopharma, revenue, gross margin, financial results