Twist Bioscience ((TWST)) has held its Q2 earnings call. Read on for the main highlights of the call.
Twist Bioscience’s recent earnings call paints an optimistic picture, highlighting record revenue growth and strategic business moves. The company has successfully navigated market uncertainties, such as tariffs and NIH funding, and continues to show strong performance across its main segments. These achievements, coupled with strategic initiatives, provide a positive outlook for the future.
Record Revenue Growth
Twist Bioscience announced a record revenue of $92.8 million for the second quarter of fiscal 2025, marking a 23% increase year-over-year and a 4.6% sequential rise. This impressive growth underscores the company’s robust performance and its ability to capitalize on market opportunities.
DNA Data Storage Spinout
In a strategic move, Twist Bioscience has spun out its DNA data storage segment into a new entity, Atlas Data Storage. This spinout attracted a $155 million investment from various partners, with Twist retaining a 24% equity interest, royalties, and potential milestone payments up to $75 million.
Improved Gross Margin
The company reported an improved gross margin of 49.6%, up from 41% in the same quarter of the previous year. This improvement highlights the company’s effective cost management and the benefits of scaling operations.
Expansion in NGS and SynBio
Twist Bioscience’s Next-Generation Sequencing (NGS) and Synthetic Biology (SynBio) segments showed significant growth, with NGS revenue increasing by 25% year-over-year to $51.1 million, and SynBio revenue rising by 21% to $36 million.
Strategic Initiatives and Customer Engagement
The introduction of the Twist Wallet and promotional programs for academic customers have boosted customer engagement and facilitated new customer acquisition, showcasing the company’s commitment to expanding its market reach.
Potential Market Uncertainties
Despite uncertainties related to tariffs and NIH funding, Twist Bioscience remains confident in its market position, anticipating continued share gains and resilience in the face of these challenges.
Limited Growth in APAC
The company’s revenue from the Asia-Pacific (APAC) region remained relatively flat, at $7 million compared to $7.2 million in the same period last year, indicating challenges in this market.
Forward-Looking Guidance
Twist Bioscience provided guidance for fiscal 2025, maintaining its revenue projection of $372 million to $379 million, reflecting about 20% growth year-over-year. The company expects its gross margin to improve further, surpassing 50% in the latter half of the year. Additionally, the spin-out of Atlas Data Storage is anticipated to positively impact adjusted EBITDA by $5 million per quarter starting in Q4 of fiscal 2025, accelerating the timeline towards adjusted EBITDA breakeven by the end of fiscal 2026.
In conclusion, Twist Bioscience’s earnings call highlights a positive trajectory with record revenue growth and strategic business decisions. Despite some market uncertainties, the company’s strong performance and forward-looking guidance suggest a promising future, making it an attractive consideration for investors interested in the biotech sector.