DEF: Twist Bioscience Reports Strong FY25, Sets 2026 Meeting

Twist Bioscience Corporation announces robust fiscal year 2025 financial performance, including record revenue and improved gross margin, ahead of its 2026 Annual Meeting of Stockholders.

Summary

• The Annual Meeting of Stockholders will be held virtually on February 5, 2026, at 7:00 am Pacific Standard Time.
• Stockholders will vote on the election of three Class II directors, an advisory resolution on Named Executive Officer (NEO) compensation, and the ratification of Ernst & Young LLP as the independent auditor for fiscal year 2026.
• Twist Bioscience reported a 20% increase in revenue to a record $376.6 million in fiscal year 2025, up from $313.0 million in fiscal year 2024.
• Gross margin improved by 8.1% to 50.7% in fiscal year 2025, compared to 42.6% in fiscal year 2024.
• Cash, cash equivalents, and short-term investments stood at $232.4 million as of September 30, 2025.
• NEO cash bonuses for fiscal year 2025 performance were earned at approximately 129.6% of target, driven by revenue at 119% of target and adjusted gross profit at 200% of target.
• The company completed the spin-out of its DNA digital data storage assets to Atlas Data Storage, Inc., receiving 73.0 million shares of Atlas preferred stock, $2.5 million upfront cash, $2.0 million in promissory notes, and potential future milestone and royalty payments.

Sentiment

Score: 8

Explanation: The filing presents strong financial performance for fiscal year 2025, with record revenue and significant gross margin improvement, leading to above-target executive compensation payouts. The strategic spin-out of the DNA data storage business and robust corporate governance practices, including responsiveness to stockholder feedback, contribute to a positive outlook. While net income remains negative, the trend shows improvement, and the focus on long-term performance metrics for equity awards is a positive sign.

Positives

• Revenue increased by 20% to a record $376.6 million in fiscal year 2025, exceeding the target for executive compensation payouts.
• Gross margin significantly increased by 8.1% to 50.7% in fiscal year 2025, demonstrating improved operational efficiency.
• Adjusted gross profit achieved 200% of its target for the fiscal year 2025 Cash Bonus Plan, indicating strong cost management and profitability.
• Cash, cash equivalents, and short-term investments remained strong at $232.4 million as of September 30, 2025.
• Executive compensation payouts for fiscal year 2025 were above target (129.6%), reflecting strong company performance against set goals.
• The spin-out of DNA digital data storage assets to Atlas Data Storage, Inc. generated significant consideration, including equity in Atlas, upfront cash, promissory notes, and potential future milestone and royalty payments.
• The company actively engages with stockholders, leading to governance enhancements, and received approximately 98% approval for its 2025 Say-on-Pay vote.

Negatives

• Net income for fiscal year 2025 remained negative at $(77.7) million, despite improvements from prior years.
• One Form 4 for director Robert Chess was not filed timely due to an inadvertent administrative error, indicating a minor compliance lapse.

Risks

• Risks associated with compensation plans and practices and retention of talent are overseen by the compensation committee.
• Risks related to Board composition, leadership structure, performance, sustainability, and Corporate Responsibility efforts are overseen by the nominating and corporate governance committee.
• Financial, legal, and compliance risks, including cybersecurity and information security policies and practices, are overseen by the audit and risk committee.
• The company operates in a highly competitive executive labor market, necessitating corporate housing benefits for certain NEOs to maintain their primary residences outside their primary work location.

Future Outlook

The company's executive compensation program for fiscal year 2025 includes performance-based restricted stock units (PRSUs) with aggressive performance metrics for quarterly revenue, gross margin, and adjusted EBITDA goals to be achieved by September 30, 2027. This indicates a strategic focus on driving significant long-term growth and achieving positive operating profitability. The company also continues to evaluate its director skill set and expertise for alignment with strategic objectives and aims to maintain a diverse Board.

Management Comments

• Our Board believes that Mr. Crandell brings extensive experience in the technology, life sciences and biotechnology industries and that his service on a number of boards provides an important perspective on operations, finance and corporate governance matters.
• Our Board believes that Mr. Johannessen brings extensive executive experience in the technology industry and financial and accounting expertise.
• Our Board believes that Ms. Shineman Blake brings extensive experience with customer-focused businesses and her service on a number of public company boards provides important corporate governance experience.
• Our Board believes that Mr. Chan's past experience as the Chief Executive Officer of Magellan, his senior management positions with other leading companies, his experience with corporate responsibility initiatives, risk management and commercial operations, and his service as a director and audit committee member of multiple public and private companies provide the requisite qualifications, skills, perspectives, and experiences that qualify him to serve on our Board and as our lead corporate responsibility director.
• Our Board believes that Mr. Ragusa brings extensive experience with important ecosystem partners and managing operations of large public companies, and this, in addition to his education in biotechnology, finance and management, qualifies him to serve as one of our directors.
• Our Board believes that Dr. Starovasnik's extensive experience in the biotechnology industry and significant leadership experience qualify her to serve as one of our directors.
• Our Board believes that Dr. Leproust is qualified to serve as a director because of her operational and historical expertise gained from serving as our President (until October 2022) and Chief Executive Officer, and her extensive professional and educational experience in the biotechnology industry.
• Our Board believes that Mr. Chess brings extensive board and executive experience managing the operations of biotechnology companies, and his service on a number of public company boards provides important industry and corporate governance experience.
• The Board has determined that the unified Chair and CEO role, combined with the experienced Lead Independent Director, effectively represents stockholder interests, facilitates communication between the Board and management on critical business matters, and positions the Company well to implement its business strategy.

Industry Context

Twist Bioscience operates within the dynamic biotechnology and life sciences tools and services industries. The company's strong revenue growth and improved gross margin in fiscal year 2025 suggest a robust performance relative to industry trends, especially given its focus on synthetic DNA tools that enable advancements in healthcare, food/agriculture, industrial chemicals, academic research, and data storage. The strategic spin-out of its DNA digital data storage assets to Atlas Data Storage, Inc. indicates a move to potentially unlock value from specialized segments, aligning with broader industry trends of focused innovation and strategic partnerships. The company's emphasis on performance-based executive compensation and continuous board diversity evaluation reflects a commitment to best practices in corporate governance, which is increasingly important in the highly scrutinized biotech sector.

Comparison to Industry Standards

• The company's revenue growth of 20% in fiscal year 2025 and gross margin increase to 50.7% are strong indicators of performance within the biotechnology and life sciences tools sector, where growth and profitability can vary significantly.
• The compensation committee's analysis indicated that the fiscal year 2025 annual bonus goals for revenue and adjusted gross profit required year-over-year growth above the 75th percentile of peer growth expectations, demonstrating a rigorous target setting process compared to its peer group (e.g., 10x Genomics, Azenta, Maravai LifeSciences, Natera, Pacific Biosciences of California, Quanterix, REGENXBIO, Schrdinger, Ultragenyx Pharmaceutical, Veracyte, Guardant Health, BioLife Solutions, CareDX, Cytek Biosciences, NeoGenomics, NovoCure, Insmed).
• The executive compensation structure, with approximately 95% of the CEO's and 90% of other NEOs' target total direct compensation being at-risk or long-term equity, aligns with best practices in the industry for linking pay to performance and long-term shareholder value creation.
• The company's pay ratio of 73.2 to 1 for CEO to median employee compensation is within the range observed across various industries, including biotechnology, though direct comparisons require understanding of specific methodologies used by other companies.

Management Changes

Corporate Governance

Related Party Transactions

• Twist Bioscience is a party to a master supply agreement with GeneDx Holdings Corp., from which it recognized $9.9 million in revenue in fiscal year 2025. Dr. Emily M. Leproust, Twist's CEO and Board Chair, is a member of the GeneDx Board.
• Twist Bioscience is a supplier to GRAIL, Inc., from which it recognized $2.2 million in revenue in fiscal year 2025. Mr. Robert Ragusa, a Twist director, is GRAIL's CEO.
• On May 2, 2025, Twist executed a Contribution Agreement with Atlas Data Storage, Inc. for the sale of DNA digital data storage assets. Mr. Keith Crandell, a Twist director, is a Managing Director of ARCH Venture Management, L.P., a lead investor in Atlas. Both Mr. Crandell and Dr. Leproust became members of the Atlas Board. Twist also provides transitional support services and subleased office/lab space to Atlas, generating approximately $1.1 million in revenue from the sublease in fiscal year 2025.

Stakeholder Impact

• **Shareholders**: Strong financial performance (record revenue, improved gross margin) and above-target executive compensation payouts indicate value creation. The spin-out of Atlas Data Storage could unlock further value. Enhanced corporate governance and responsiveness to stockholder feedback aim to protect shareholder interests.
• **Employees**: Executive compensation program is designed to attract, retain, and motivate talent. The company's focus on fostering a culture of excellence and engagement, and ensuring labor is not a constraint to operations, benefits employees. The compensation recovery policy promotes accountability.
• **Customers**: The company's growth in revenue and focus on customer acquisition and retention, along with expanding new product footprint, suggests a commitment to serving customer needs and driving innovation in fields like healthcare and data storage.
• **Management**: Executive officers received above-target bonuses due0 to strong company performance. The compensation structure aligns their interests with long-term company success through significant at-risk and equity-based compensation. Succession planning is in place for key positions.
• **Creditors/Suppliers**: Improved gross margin and cash position could indicate better financial health, potentially benefiting creditors and ensuring timely payments to suppliers. The Supplier Code of Conduct promotes ethical dealings.

Next Steps

• Stockholders to vote on the election of three Class II directors at the Annual Meeting on February 5, 2026.
• Stockholders to cast a non-binding, advisory vote on Named Executive Officer compensation for fiscal year 2025.
• Stockholders to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending September 30, 2026.
• The compensation committee will certify performance results for FY2025 PRSU awards based on achievement of revenue, gross margin, and adjusted EBITDA goals by September 30, 2027.
• The company will file voting results on a Current Report on Form 8-K within four business days after the Annual Meeting.

Key Dates

Keywords

Twist Bioscience, SEC filing, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Financial Performance, Revenue Growth, Gross Margin, DNA Synthesis, Biotechnology, Life Sciences, Risk Management, Atlas Data Storage, Spin-out