Twist Bioscience Corp (TWST) Q3 2026 Earnings Call Transcript

Welcome to TWIST Biosciences' 2026 Third Quarter Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 11 on your touchstone telephone. Please note this call is being recorded. I would like to turn the call over to Angela Bidding, SVP of Corporate Affairs. Please go ahead.

Thank you, Operator. Good morning, everyone. I'd like to thank you for joining us for TWIST Bioscience's conference call to review our fiscal 2026 third quarter financial results and business progress. We issued our financial results press release before the market, and it is available at our website at www.twistbioscience.com. With me on the call today are Dr. Emily LaPruce, CEO and co-founder of TWIST, Adam Loponis, CFO of TWIST, and Dr. Patrick Finn, President and COO of TWIST. Today we will discuss our business progress, financial and operational performance, as well as growth opportunities. We'll then open the call for questions. We ask that you limit your questions to only one and then re-queue as a courtesy to others on the call. This call is being recorded and the audio portion will be archived in the investor section of our website and will be available for two weeks. During today's presentation, we will make forward-looking statements within the meaning of the U.S. Federal Securities Log. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements except as required by law. We'll also discuss adjusted EBITDA, a financial measure that does not conform with generally accepted accounting principles. Information may be calculated differently than similar non-GAAP data presented by other companies. When reported, a reconciliation between GAAP and non-GAAP financial measures will be included in our earnings documents, which can be found on the investor section of our website. With that, I will now turn the call over to our CEO and co-founder, Emily LaProuste.

Thank you, Angela, and good morning, everyone. On slide three, you will see that this morning we reported our 14th quarter of consecutive growth with record revenue of $118.4 million, growth of 23% year-over-year. This growth reflects the diligence and execution we've employed over the last several years, building for opportunities we see ahead. Sometimes, those opportunities are clearly visible many years in advance, and others require us to be nimble and engage with our customers in real time to ensure we build and deliver what they need to be successful. On slide four, you'll see that at Swiss, we sit at a unique junction where we have spent the last decade building the infrastructure to enable our customers to advance the therapeutics, diagnostics, and industrial breakthroughs resulting from their innovation. As biology becomes increasingly computational, our ability to deliver precision and speed at scale becomes even more valuable. On slide five, I'm sure you agree that AI is shifting workflows across multiple industries. And we see an inflection point in drug discovery, with more and more groups leveraging AI as their first antibody discovery screen. Where one year ago just a handful of organizations were pursuing this path, now we have seen large pharma, driver biotech, traditional biotech, and even major technology companies all employ AI through mere AI approaches, following the pattern of design-built tests. Our customers cannot design more sequences, test more hypotheses, and iterate faster than ever before. In parallel, we also see the benefit of data and genetic information resulting in diagnostic assays that monitor, to select and determine next steps for a wide variety of diseases. Turning to our product groups, over the past year, we've talked about AI-enabled discovery as an important emerging opportunity. Today, we are seeing that opportunity mature into a durable growth engine. We continue to support customers in building new models, while others are using twist to conduct discovery for specific specific targets and to iterate models. This combination of repeat business, new customer acquisition, and new organizations forming or expanding into the life sciences area gives us increasing confidence in the durability and longevity of AI-enabled discovery as a growth driver for the short, medium, and long term. On slide 6, the promise of AI-enabled drug discovery is straightforward. Identify better drug candidates faster, reduce the cost of bringing new medicines to market, and improve the probability that candidates entering development ultimately succeed. On slide 7, you'll see the workflow where our customers use AI to competentially generate thousands to millions of potential DNA sequences and iteratively refine those designs to identify the most promising therapeutic candidates for a specific disease. TWIST quickly translates those digital designs into physical biology through high throughput DNA synthesis of individual or pooled DNA followed by protein expression. Many customers then leverage our downstream capabilities to evaluate those proteins across assays measuring binding, developability, characterization, and other properties associated with successful drug candidates. We enable rapid design, build, test, and learn cycles at the earliest stage of discovery, supporting our customers' ultimate objectives. When taking a partner for this work, every customer needs a trusted provider capable of manufacturing increasingly complex DNA sequences, expressing proteins, generating high-quality characterization data, and delivering consistent results at the speed modern drug discovery requires. This combination of capabilities has become one of two most important competitive advantages. As our investor today in May, we've added to triple-digit percentage order growth for AI-enabled discovery in fiscal 2026 versus fiscal 2025. Now that we are through the third quarter of the year, we are increasingly confident that we will meet or exceed that target. Our confidence reflects durable demand signals as existing customers return for iterative design, build, test, and learn cycles, reflecting growing recognition that our platform is well suited to support AI-enabled drug discovery programs, as well as traditional drug discovery. Importantly, our funnel-off opportunity continues to expand meaningfully, and we believe that we have the potential to again post triple-digit percentage order growth for AI-enabled drug discovery in fiscal 2027 when compared to fiscal 2026. Turn to slide 8. During the quarter, our platform again demonstrated its importance in supporting global public health. On May 15, 2026, public health officials in the Democratic Republic of Congo announced a developing outbreak of hemorrhagic fever. The outbreak went undetected for at least a month, escaping standard PCR assays, a gap that allowed the virus to spread further before it could be identified and contained. As of July 1st, the virus has been confirmed in both the DRC and Uganda, with an estimated spread to several thousand people and at least 399 confirmed deaths. Approximately one month into the outbreak, researchers used TWIST comprehensive viral panel to identify the pathogen as the Bondi-Bungio Ebola virus, underscoring the value of wall viral genome enrichment to catch emerging infectious diseases that standard testing missed. Separately, we also synthesized antivirus material in less than 24 hours to support rapid response efforts during the cruise ship outbreak in May. These are powerful examples of the breadth, speed, and reliability of our platform, and of our role in the global research and public health communities. On slide 9, we continue to see strong accelerating momentum for our NGS applications group, driven primarily by diagnostic customers, many of whom are focused on growing their commercial volumes, with others advancing towards commercialization. We have our eyes on several new opportunities. As the pipeline remains rich for next-generation assays, tumor-informed molecular residual disease tests, optimized workflows using proprietary enzymes, and more. During the quarter, we increased customer adoption, strengthened our commercial pipeline, and continue to execute on new products and productions to reinforce our position as a trusted partner for next-generation sequencing workflows. As sequencing volumes continue to grow globally, we believe our differentiated technology and expanding portfolio positions do us well for continued growth. We continue to see customers turn to twists when scientific precision and rapid execution matter most. This holds true when we are supporting academic research, cancer diagnostic, agricultural biotech, responding to emerging infectious diseases, or myriad other work streams. On slide 10, one of the allies of the quarter was hosting our investor day at our fab in Wilsonville, Oregon. Many of our customers shared how twist products and services play a critical role in the internal workflows providing tangible examples across multiple markets and applications. In addition, several twist leaders showcase their expertise and leadership throughout different areas of the business. At Swiss has grown, we have built an organization designed to repeatedly convert scientific innovation into commercial success. Great science creates opportunity. Operational excellence turns that opportunity to durable revenue growth, expanding profitability and and long-term value creation. That requires manufacturing discipline, commercial execution, digital capabilities, and above all, an exceptional team. Investor Day gave us the opportunity to demonstrate the strength of that foundation through our leadership bench, differentiated technology, highly automated manufacturing, expanding capacity, and the proprietary software that powers our business. The consistent feedback we received was that Investor left with a broader appreciation of the scale of our opportunities, the strength of our execution, and the depth of our organization we have built, as well as the reality of the growth opportunities that lie ahead to drive confidence in our long-term trajectory. For me, Investor Bay reinforced something I've believed since founding TWIST. We do things the TWIST way, and this is not the easy path. When someone says it's hard, I say yes, that's the point. If it were easy, everyone would be doing it. Building what has never existed before requires relentless innovation, disciplinary execution, and clear communication. What began as a founding principle has become how TWIST operates. It's embedded in our systems, our processes, and more importantly, our people. That's how we scale innovation consistently, build trust with customers and investors, strengthen our competitive advantage, and create long-term shoulder value.

With that, I'd like to turn the call over to Patty, who discuss our competitive mode how we're executing against our priorities and why we believe the operational foundation will build positions twist for its next phase of growth thanks emily good morning everyone one of the things i enjoyed most about investor day is that people got to see twist from the inside they didn't just see the products they saw how we operate twist's core technology differentiation is a semiconductor-based DNA synthesis platform that provides a structural advantage in cost, scale, and speed that feeds into every product and service we offer. The same platform also enables a highly efficient new product introduction engine, allowing us to rapidly translate customer demand into scalable offerings and continuously expand our portfolio. As we increase volume on the silicon chip, we expand our wallet share, accelerate product innovation, and further strengthen our competitive advantage. However, as Twist has grown, one thing has become increasingly clear to me. You'll see on slide 11, our competitive mode expands well beyond our robust IP position around the chip into a complex infrastructure where manufacturing, automation, software, commercial execution, product development, customer engagement, scientific innovation, and critically, the customer experience all reinforce one another. Every improvement we make strengthens the platform. Every new capability benefits multiple parts of the business. Every automation project improves quality, productivity, and throughput. And every customer we add helps make the platform stronger. It's something we've been building deliberately for years. It's also why I believe our advantage continues to expand. customers are looking for a partner that can help them move faster and we're becoming more deeply embedded in our customers research and development activities that creates more durable relationships and over time a stronger business and that doesn't happen with that exceptional and consistent execution every day our teams are focused on delivering exceptional quality increasing productivity expanding capacity and reducing turnaround time These priorities don't change, there's no finish line, and we measure ourselves by how consistently we improve. On slide 12, I talked earlier about our silicon chip shown on the left. It's been the foundation of our commercial manufacturing platform since 2015. By miniaturizing known phosphoramidite chemistry and dramatically reducing reagent consumption, our economics have always been strong as we've created structural advantages in cost, scale, and throughput they extend across our entire portfolio. Just as importantly, we continue to improve that platform as shown on the right side of the slide. Over the last three years alone, we've reduced manufacturing costs by 60 percent, reduced waste by 70 percent, reduced turnaround time by roughly 73 percent, and increased oligonucleotide capacity fourfold. Those gains improve our economics, strengthen our competitive position and create additional capacity to support future growth over the past several years VC firms invested heavily in alternative DNA synthesis technologies the marketing is compelling but commercial success depends upon much more than chemistry it requires molecular quality reproducibility manufacturing scale and continuous operational improvement we believe our platform and our track record continue to set the standard our leadership in the field is one of the many things that gives us confidence in the long-term opportunity our investments aren't tied to one product cycle they're strengthening the foundation for everything we build next that's how we think about creating long-term value we do not optimize for a single quarter we focus on building a stronger company every quarter on slide 13 another tangible example of continued improvement leading to a specific product launch. Last quarter, I talked about an early access launch of our complex genes offering, extending the range of DNA sequences researchers can order from TWIST. Complex genes are highly challenging constructs that have historically been out of reach for most platforms to synthesize consistently because of high GC content, repetitive elements, or other complex characteristics. Today, we manufacture these sequences with the same automation, The same manufacturing line is part of our standard and expressed gene production workflow with the consistent speed, scale, and quality customers expect from TWIST. Early customer adoption has been very encouraging. During early access, we've worked with a select handful of customers who've ordered more than 1,800 complex genes across well over 100 orders, and execution has been superb. We've completed the overwhelming majority of these highly complex constructs in 12 days within our expected delivery window. That matters because it's one thing to produce a complex sequence once in an R&D environment. It's something entirely different to manufacture thousands of highly complex constructs repeatedly at commercial scale with consistent quality. While complex genes represent a relatively specialized market today, our execution demonstrates that we continue to expand the boundaries of what customers can manufacture on the Twist platform using the same highly automated production infrastructure. Each new capability increases the value of our platform, expands wallet share with existing customers, and further differentiates Twist from competitors. At Twist, we focus on automating and operationalizing any new product offering within our manufacturing workflow so that what we can do for one customer, we can deliver for thousands of customers with consistent quality, speed and precision at scale two weeks ago we launched our complex offering formally expanding availability broadly across the market in summary we believe our silicon platform automation software and manufacturing infrastructure uniquely positioned us to serve a wide range of customers across industries creating a competitive moat that would be exceptionally difficult to replicate with that I'll turn the call over to Adam to review our financial results

Thank you, Patty. Turning to slide 14, Q3 was another quarter of consistent execution against the financial model we've laid out. Revenue grew 23% year-over-year to $118.4 million, our 14th consecutive quarter of sequential growth. We focused on growing the top line while maintaining our commitment to adjusted EBITDA break-even for the fourth quarter of fiscal 2026, and we understand that growth of 20% or more significantly differentiates twist among our peers. Gross margin was 52.8%, growth of 120 basis points sequentially, with 70% of incremental revenue dropping to the gross margin line. Let me walk you through the details. On slide 15, you'll see DNA synthesis and protein solutions revenue increased to $56.6 million compared to $40.8 million in the third quarter of fiscal 25, growth of 39% year-over-year at 6% sequentially. We shipped 369,000 genes in the third quarter, plus consecutive quarter-over-quarter growth in genes manufactured for data characterization. On slide 16, we show NGS applications revenue for the third quarter grew to approximately $61.8 million, compared to $55.3 million in the third quarter of fiscal 2025, an increase of 12% year-over-year and up 8% sequentially, driven by growth in top accounts. For the quarter, revenue from our top 10 NGS applications customers accounted for approximately 48% of NGS applications revenue. We served 657 NGS applications customers in the quarter, with 182 having adopted our products. Looking geographically on slide 17, America's revenue increased to approximately $77.3 million in the third quarter, compared to $59.4 million in the same period of fiscal 2025, rose to 30% year-over-year. MIA revenue rose to $33.6 million in the third quarter versus $30.7 million in the same period of fiscal 2025, rose to 9% year-over-year. APAC revenue increased to $7.5 million in the third quarter compared to $5.9 million in the same period of fiscal 2025, an increase to 26% year-over-year. On slide 18, looking at revenue by industry, therapeutic revenue was $40.4 million for the third quarter of 2026, compared to $27 million in the same period of fiscal 25, growth of 49%, reflecting the increased uptake of our products by pharma, dry lab biotech, and large tech companies in their efforts on therapeutic discovery and including AI-enabled drug discovery. Diagnostics revenue was $43.8 million in the third quarter of 2026, compared to $38.1 million in the same period of fiscal 2025, an increase of 15%. Diagnostics revenue grew 10% sequentially based on strong growth from top accounts. Industry and applied revenue were $5.7 million in the third quarter of 2026, compared to $6.1 million in the same period of fiscal 2025. by. Academic and government revenue were $15.5 million in the third quarter of Fiscal 26, an increase of 32% year-over-year and 21% sequentially, driven by strength in U.S. accounts where we saw several large customers return during the quarter. The environment remains dynamic and order patterns may fluctuate, but importantly our outperformance this quarter for academic and government demonstrates the resilience of our business, the depth of our customer engagement, and the growth of this customer group. Global supply partner revenue was $12.9 million in the third quarter of 2026, compared to $13 million in the same period of fiscal 2025. This revenue stream continues to provide a stable, reoccurring revenue base, while our faster-growing therapeutics and diagnostics product groups drive overall company growth, moving down the P&L to slide 19. You'll see our key financial metrics. Our gross margin for the third quarter was 52.8 percent, up sequentially and driven by strong revenue growth even as we continue to make deliberate investments in new product offerings and manufacturing capacity that we expect to result in future margin gains as we accelerate growth and implement continuous process improvements. Operating expenses excluding cost of revenues were $98.7 million for the quarter compared to $81.4 million in the prior year, which includes approximately $2 million in employee transition costs as well as other one-time expenses that will result in more than $5 million reduction in OPEX in the fourth quarter. Looking at our progress in our path to profitability and progress towards break even on slide 20. For the third quarter of fiscal 2026, adjusted EBITDA was a loss of approximately $11.3 million, reflecting planned one-time investment. We ended Q3 with $166.8 million in cash, cash equivalents in short-term investments versus $171.7 million as of March 31st, 2026. On slide 21, turning to guidance. For fiscal 26, we are increasing our revenue guidance and now expect total revenue of $456 million to $457 million, up $12 million at the midpoint, representing growth of approximately 21% year over year. In the third quarter, total revenue growth inflected above 20%. Based on customer demand, our current funnel and order growth, we expect momentum to continue and look forward to sharing full-year guidance for fiscal 27 in November. For Q4 of fiscal 2026, we expect total revenue of $123 to $124 million, growth of approximately 25% year-over-year at the midpoint. We expect sequential growth from both DSPS and NGS. We expect DSPS sequential growth to be driven by therapeutics and NGS to return to growth above 20% year-over-year. Well into our final quarter of the fiscal year, we remain confident in our trajectory and continue to expect to achieve adjusted EBITDA breakeven this quarter. Our focus is now on sustaining that performance and continuing to execute against long-term financial objectives throughout fiscal 2027. With that, I'll turn the call back to Emily.

Thank you, Adam. I'd like to leave you with one final thought. When TWiST was founded more than 13 years ago, our goal wasn't simply to build a better way to synthesize DNA. It was to remove biops that slow scientific discovery. That vision is working. Today, our platform is enabling advances across cancer diagnostics, AI-enabled drug discovery, synthetic biology, and academic research. We have translated innovation into durable business performance, delivering 14 consecutive quarters of revenue growth, expanding growth margin, and remaining on track to achieve adjusted beta break-even this quarter. And yes, I believe we are still in the early chapters. Biology is becoming increasingly digital, data-driven, and AI-enabled. Scientists are asking bigger questions, designing more complex molecules, and moving faster than ever before. Those trends play directly to twist strengths, and we enforce our confidence that the opportunity ahead is substantially larger than the one we set out to address 13 years ago. Importantly, we continue to execute against our plan to deliver sustainable, profitable growth. As we look ahead, we are confident not only because of the opportunities in front of us, but because of the foundation we have built to capture them. And we continue to see multiple durable drivers of growth, as you'll see on slide 22. The high-enabled drug discovery continues to expand. Molecular residual disease continues to grow in application, with the reimbursement environment expanding. We see opportunity to introduce proprietary enzymes in our workflows and our internal processes to optimize performance and cost, as well as reduce our dependence on suppliers and in the longer term we believe nucleic acid therapeutics provides a personalized diagnostic and therapeutic approach that will improve patient outcomes and positively impact the healthcare system with the growth across the market we serve expanding our serviceable addressable market is projected to be 13 billion dollars by 2030. in addition our innovation engine will continue introducing new capabilities that we haven't mentioned here today expanding that upside opportunity. On slide 24, you'll see that we feel confident in our ability to drive continued growth moving forward. Specifically, we've just delivered our 14th consecutive quarter of revenue growth at 23% growth year by year. We believe we have a strong growth trajectory to more than double revenue from organic growth in 2021. We guided $123 to $124 million for the fourth quarter of fiscal 2026 growth of approximately 25 percent year-over-year. Based on customer demand, our current funnel and order growth, we expect momentum to continue. We expect to meet or exceed our guidance of triple digit percent order growth for AI-enabled drug discovery in fiscal 2026. Based on our robust funnel, we expect to again deliver triple digit percent growth for orders from AI-enabled drug discovery in fiscal 2027. We expect gross margin above 52% for fiscal 2026, with a goal of margins of more than 60% as the business matures. We expect to achieve adjusted Vita break-in for the first quarter of fiscal 2026, and we expect to maintain this commitment for fiscal 2027. And we will continue to meet our customers where they are, enabling them to truly change the world for the better. At this time, let's open the call for questions.

Thank you. As a reminder, if you'd like to ask a question, please press star 1-1. If your question has been answered and you'd like to remove yourself from the queue, press star 1-1 again. Our first question comes from Brendan Smith with TD Cowan. Your line is open.

Great. Thanks for taking the questions, guys, and congrats on the quarter. I wanted to first ask actually just about the relative breakdown of FQ3 revenues. I know you talked a little bit about this already, but it looks like therapeutics revenues were incrementally down sequentially. The volumes do look good. So I guess just any additional color there on some of the ordering dynamics we should maybe be aware of. And then on the new FY27 outlook of repeating triple-digit AI growth next year, I appreciate all that as well. I guess, is that based on, I know you said the funnel, but is this kind of based on some visibility into orders already coming in? Is this kind of reflective of ongoing conversations? You're having any particular inflections in the type or quality of orders over the next year or so? Just kind of any color you can give us to support durability on that scale would be great.

Thank you, Brandon. We're very excited about this quarter. We're seeing a lot of strength from existing customers as well as new customers coming in. Obviously, we had a growth of more than 20%, and we're guiding a growth of more than 20%, actually, almost 25% for people. So things are going really well. In AI, enabled look discovery in particular made a few things happening. First, customers that have built their models are turning the crank. And then we're seeing new customers coming on top of that. And then even the existing customers that have been turning the crank now are trying to look at new modalities. So you might have people coming in with just a VHH and then expanding to a full IDG. And people are not quite broadly talking about AI for Bi-specific, but we know it soon. So talking to customers, looking at the quotes we're giving them, the number of sequences is that they have in mind that they want to build either as full DNA or as arrayed DNA. It gives us very, very strong confidence that the triple-digit percentage goals that we've seen in AI-enabled discovery. And we know we're going to be able to deliver at 20.6. We see it continuing, again, from the screen session with...

Thank you. Our next question comes from Puneet Suda with Lyrink. Your line is open.

Yeah, hi, guys. Thanks for the question here. I'll wrap my questions in one. So, look, on the gene shift, you know, you're seeing quite a bit of acceleration here, 56% growth. But wondering why is, you know, the protein segment growing only 39%. I'm just wondering if there is any pricing or ASP compression that you're seeing. And I think the bigger question here is that you're pointing out triple-digit growth this year. Next year, triple-digit order growth, again, for AI. But how is the AI order-to-revenue conversion? I think that's a key question we're getting. And for Adam, on adjusted EBITDA, if you could, could you double-click on that and provide us how do we get to adjusted EBITDA break-even in fourth quarter and keep that sustained or higher in fiscal 27?

For the great question, the number of genes is growing massively, which is great, right? I think, for us, we can process them easily on our automated systems, and it would be very hard for anybody else to absorb that kind of provenance growth. So the therapeutic business will be 40% over a year, so very much in line with the growth of genes. It's correct that the SPS quote-unquote only grew 36%. I think that as the volume growth comes primarily antibody-type sequences, as you know, those sequences are shorter than maybe plant genes. And so as we see the growth coming primarily from human therapeutics, there is maybe a shift to smaller genes, which is totally fine with this. But the key is AI is doing exactly what we thought it would do. It just creates more sequences. The test of that I mentioned is that biology is becoming more digital, more data-driven, and more AI-enabled, and that just brings more demand for more end, more frequency, and we're absolutely seeing it in our data. Adam, do you want to take the second question?

No, absolutely. So thanks for the question, Vinit. In terms of order to revenue recognition, we're noticing, particularly with AI drug discovery, that the timeline for projects are usually major in weeks. So at the end of last year, when we had a pretty significant order step up towards the end of the fiscal year, we saw there was some separation there. But as we go into 26 and look towards 27, the two metrics converged pretty nicely. The other question in terms of adjusted EBITDA and the path and the bridge to Q4 and beyond. No, great question. And, you know, we've been very disciplined over the last number of years. with how we've managed the business and our investments, and we continue to do so. And so, as we look into Q4, we had the one-timers associated with some of the employee transitions in Q3, as well as some continued investment in our new digital capabilities that we've here launched in Q4. So, we expect to see sequential improvements in the OPEX moving forward, starting in Q4, so that we see the path to adjusted EBITDA positive in Q4 and then being able to continue to make progress on that in 27 and beyond. So thank you very much.

Thank you. Our next question comes from David Westenberg with Piper Sandler. Your line is open.

Thank you so much. And maybe I'll just add on to Puneet's question on the EBITDA bridge. I appreciate the color there. Do you expect 2027 to have continued momentum in 2027 with that EBITDA bridge, i.e., do you think that you could stay EBITDA positive throughout, or do you think it's going to be, you know, quarter on quarter, but the year you're really focusing on that EBITDA? And then kind of for a second question, I was hoping you can give maybe some color on the new product mix in NGS, particularly around some of your new whole genome offering, and then maybe some of the more expansive or faster growing new products from customers in NGS. I mean, I'm thinking about Shield, but, you know, any other ones like that that could be just incredibly high growth potential and how they did. Thank you.

Thanks, David. Great to have you. Thanks for initiating and for your first double question. I'll start to Adam for your first one on the just a bit of momentum and then add it for the new perk in NCS.

David, great to hear you on the call. In terms of our commitment, we've said we're going to give full year guidance in November, and we plan and give a robust outlook. We're not in the business typically of going backwards, that being said. And so, you know, we look at our full year adjusted EBITDA this year, improving year on year to being positive for the year, and we look to make sequential improvements wherever possible. We also recognize we love our employees and give them a raise at the beginning of every fiscal year. So we're going to balance that. We'll give us full guidance as we approach November. And then also in terms of how we look at the business long term, you know, very positive progress on both the growth trajectory as well as the commitment on continued progress and progress.

David, just building off what Adam was saying, just coming over to your questions on products in the NGS space. From a workflow standpoint, it's a good time just as a reminder how we've built out some really well differentiated enzymes using AI-driven discovery and development methods. And they're critical in whole genome and other workflows is high-performing ligase and high-fidelity, high-performing glimmerase, both of which are featuring in our kits, which are benchmarking incredibly well both internally and in our customers hands so that's a long-term commitment to you know enhance our customers success in their experiments and you know it's going to be an ongoing drive into the market um and if i move across into the emerging applications that we're excited about you know i'll just call out mrd again from molecular residual disease Obviously, we have workflows for any approach, but in particular, maybe just spend 30 seconds on the tumor-informed platform, and what you're seeing there, obviously, is a correlation between increasing probe count derived from knowledge gained from sequencing the patient's tumor, leading to higher sensitivity tests and therefore better patient outcomes. We see demand continue to increase, and if I just go way, way back to talking about something like our current capacity for something like 32 million oligos per day if you can imagine a situation of hundreds of thousands to millions of tests in the future all demanding thousands of probes tumor informed delivered to a patient in or sorry delivered to a service lab or to a hostel or wherever a customer is in a very very short period of time and by that i mean you know a couple of days max and we're pretty excited about where that segment's going it's another are a beautiful application off our synthesis platform.

Thank you. Our next question comes from Sabu Nambi with Guggenheim. Your line is open.

Hey, guys. Thank you for taking my question. Good morning. As we get closer to 2027 fiscal year, do you have any preliminary thoughts on 27 growth outlook? I know you said you'll give providers full guidance, but then you touched on this a little bit about 20% growth for both NGS and DSPS. Is that reasonable? And if Yes, this would be above your LRP of mid-teens growth. And then I had a clarifying question. You had 25 million AI-related orders in 25, even assuming 100% as bare minimum triple digit. That would be 50 million. And now you're confident that 50 million growing to 100 million. Did I get that right? Thank you so much.

Yeah, thank you, Subhu. Yes, you got that right. I think for the clarifying comment. In terms of long-term growth, I think that overall the trends are in our favor. I did just mention the trends in MRD where, I will fully repeat this comment, it's basically for high-standard PT, people want more proof. In order to be able to fit their window of the therapeutics, it needs to be delivered flat. So, specifically, what we feel is the speed of data rings with another, so we think that that trend there is going to be very, very strong sales and can now win. In terms of AI discovery, it's incredible, the business is kicking through all the cylinders. last year, a year ago, was a big order in the SPS and now it's a regular and small order. Really we've seen a change in the order, just big, chunky orders and then speaking to customers in what they need going forward. We've heard about the model for needing more and more That number of data points are needed.

Our next question comes from Kyle Mixon with Canaccord Genuity. Your line is open.

Hey, guys. Thanks for the questions. Congrats on the 49% growth in therapeutics. Very impressive. However, as was mentioned earlier, the revenues were down or kind of flat quarter to quarter. There was some competitive action taken by other vendors in the field. There was some discounting, I believe. Is that having any impact on the therapeutics and the AI for discovery business at all? And then secondly, Adam, you raised the guidance by 10 million or so. The beat was 4 million. Where are you expecting this out before the fiscal fourth quarter to come through among the different industries and the products?

Thanks, Kyle, for initiating and the question. Yeah, 49% growth, quarter by quarter is outstanding, we are raising the guide by $12 million which is three times the beat, so obviously there's a lot of confidence. Maybe I'll step back to one sentence that Ali said in his remark which really encompasses to do a twist which is that we do not optimize a single quarter and instead what we're doing is we are focusing on building a stronger company every quarter so we have our eyes firmly looking ahead frankly not worried about competition at all the kinds of numbers in terms of that people need in an array format, or the millions that people need in a full format. I don't know if there's any other platform that I can deliver that kind of money. So for us, we're not really worried about competition. It's about being there for our customers, hearing what they need, and meeting their faster data point target and and we think we're doing really really well and as people start to expand to new modalities again a lot of the AI so far has been done for DHH and we're saying to see IGGs as people are going to new modalities as more that maybe a year ago we're the sideline now, clearly engaged. We would not die to a triple-digit person's growth on AI drug discovery for 2027. Again, as I've been doing in 2026, without maybe a transitional forecast.

Thank you. Our next question comes from Matt LaRue with William Blair. Your line is open.

Hi, good morning. You provided some details on customers who have sort of progressed from model building to crank turning and then expansion of their overall work. I'm curious if you can maybe speak more to the new customer activity that you've seen over the last 12 months and if there's any way you can help us put a number or direction on the number of customers still sort of just starting or getting into AI drug discovery as a part of our workflow today. That's the first part. The second is related, which is when we were at the investor day, it was clear that one area of physical investment you were making was broadening the data capability or the capabilities to serve data characterization. And we'd just be curious if you could, again, sort of put in numbers on how that business is growing, demand, what kind of services you're being asked for there. And that would be helpful, again, just to contextualize the order growth for next year.

Yeah, thank you. Thank you, Matt. The growth for next year is anticipated to be very broad days. We are actually adding capacity now ahead of the demand in the data characterization. As you know, the capacity that we have on the DNA synthesis and protein expression is really outstanding and ahead of what people need. And so we know that the data piece is very exciting to our customers. They don't have to be in the lab, they don't have to worry about maintenance, about calibration, about machine-to-machine reproducibility, we take care of all of that. So being able to have a one-stop shop where you give sequences, thousands of sequences, and the target that you're interested in, and being able to get data is very appealing. At the same time, we are a custom business. Our customers want different things, different blend of text, different conditions, different buffer, different pollution. And so our platform is built for that as well. So to your question in terms of where where will the growth come from? Frankly, it doesn't really matter. We don't really care. We will be there for wherever the science takes our customers. At the same time, we anticipate that a lot of it will come from the data site.

Thank you. Our next question comes from Mac Etalk with Stevens.

Your line is open. hey good morning and thank you for taking my questions maybe just to clarify sorry my connections may be a little bit spotty so as you answer this i apologize already but the change in expectations from 3q to 4q 4q implying it you know sequential step up and dsps now can you just double tap on the drivers that you're looking at there and what's changed What's changed in how you're looking at that from the past quarter and now in pre-Q?

Thanks for the question. So, in terms of the guide for Q4, we are expecting sequential growth, both DSPS and NGS applications. We continue to see both strength continuing in the diagnostic space sequentially, as well as in the therapeutics, often driven by the AI drug discovery. You know, as we look at that strength continuing, it's really a sediment to the pipeline about opportunities we see. We see growth both in terms of the new customers coming in as well as in the repeat business across the DSPS and the Azure Discovery space.

Thank you. Our next question comes from BJ Kumar with Evercore ISI. Your line is open.

Hi, Emily. Congrats on the nice print share. And my first question was, you know, getting back to this AI orders, I think in the past, you know, Twist has necessarily had a short cycle order cycle, right, shorter duration order cycle. I'm curious on commenting on fiscal 27 tripled AI orders. That, you know, implies a lot of visibility. Maybe could you elaborate what is different about AI that gives you this longer-term visibility versus the typical order book, which tends to be more short a cycle?

Yeah, no, thank you. That's a great comment. It's true that you're 100% correct that in the past, we've talked to some companies and they will send us some sequences and we will ship them very quickly, we get paid, and we didn't always have visibility as to when the next batch would be. I think for AI, it's a little bit different because now we're thinking about very, very big numbers. Now we have all the from the DNA synthesis and protein solution sites that are similar from what we are getting in the NGS sites. And when you're thinking about a big number of millions of dollars, and now you need an MSA and there's some discussion up front of what do they need and it's more our customers making sure that convincing themselves that we have the capacity to do. and so they are a lot more transparent in what they need and then when the orders comes in again those are our big numbers there's a lot more engagement and transparency on their side with what they're going to do with it what the next batch is coming in and so in some ways we have been much more engaged in the science of what our customers are doing than we were before, where we were, quote unquote, just a DNA provider, just a sequence provider. Now we've moved to the next level of providing a solution. And they're talking to our CSO, you know, with a drug discoverer, right? And so it's a much higher level of engagement. And that's why we have more visibility than we had before.

Thank you. Our next question comes from Luke Sergat with Barclays. Your line is open.

Great. Just a couple of cleanups. Did you already call out the amount of AI revs you guys had in the quarter or what's embedded for the full-year guide? So that's my first one. And then the second one is more, we're getting a more, I guess more not pushback from the market, but just more interest in the market from GenScript Turbo Show. We're hearing about that side as we're doing more work on the AI labs and like what this could mean for you guys, but we're also hearing them come up more in conversations given the cost. and they have a different scale than you guys so kind of talk about where you see the competitive dynamic shaking out um what you would need to do you know from a scale or you know uh turnaround time anything that you guys can do there to to to continue to to win share and own the market and i'll say so i'll start and then uh i'll pass the question to adam on the on the financial question um yeah when we uh uh we don't worry too much over the competition frankly uh we

try to hear what customers want and and then do that at the same time you know having a healthy family area and looking over the shoulder is is important i think in this case it's a bit different. We started as a DNA company and we didn't have, 18 months ago, we didn't have a big presence in protein and through the engagement with customers we understood that they needed protein and data and so over the last 18 months we built something that we think is really pretty unique. In some ways we are leaping ahead of GeneScript because we don't believe they have the same data capacity and capabilities as we are. So in some ways we are the descriptor, not the other way around. We've been around for a long time, and frankly, our customers don't care what kind of tool you need, you use. They want to know what data capability we have, what capacity we have, and what speed we can deliver that data. And so it's not the differentiation, it's not around the tool that you're using, the depreciation is around the breadth of the menu, the flexibility in the condition that those of the sets are being produced. And then, very importantly, the end. How many sequence can I test? If you're talking about millions of data points I think we are unbeatable there, because you're talking about tens of thousands of sequences in an arrayed format. I think we're also pretty unbeatable. Yeah, if you want five, ten sequences, you may have a choice of supplier, but for a large number, I think we are in a very, very good position. Adam?

Yeah, Luke, thanks for the question. In terms of AI orders and revenue, I hit on it earlier, but if you looked back a year ago at this time, in Q4 of 2025, we had a record order from an AI drug discovery project that really made the cutover at the end of the fiscal year. Some of that order dripped into revenue recognition into Q1 fiscal of 26. Looking at 26, the timelines are much more lined up, just that the progress has been smoother and we've had a broader base of customers upon which to grow on and we're seeing that the orders and the revenue are much more lined up with each other we have although we haven't given specific breakouts for AI drug discovery quarter and quarter I point everybody to the progress in therapeutics and really the outside growth in therapeutics primarily being driven by AI drug discovery so looking forward into 27 and beyond we'd expect the revenue and the orders to be more lined up like they are in 2016.

Thank you. Our next question comes from Robert Bamberger with Baird. Your line is open.

Yeah, thanks for taking my question. Academic and government went from 3% growth last quarter to 32% this quarter and up pretty nicely sequentially. So, any change in what you're seeing in academic and, I guess, what caused those outside gains? And then any commentary on the academic promotions as well?

Eddie? Yeah, good question. Thanks for that. Yeah, the academic segment, good quarter team executed well, and it remains a dynamic environment and will continue to execute well into that segment, and our value proposition continues to resonate. You imagine a budget-constrained environment, cost, speed, quality, essentially more shots on the goal in your budget and resonates well. It's something that the segment we've underserved, really, the history of twist. And Express Genes and Promotions into the segment continues. And we're just focused on, like all of our customers, delivering a really fantastic customer experience. Once you're on the platform, you're not going to go back to pay more or slower products. We'll continue to execute day by day, and we'll look to continue our strength in that segment.

Thank you. I'm sure no further questions at this time. I'd like to turn the call over to Emily LaProuste for closing remarks.

Thank you for your question. The story this quarter is simple. Customer demand continues to strengthen. Our execution continues to deliver. And the platform we've built over the more than 10 years that we've been doing this is creating an advantage that continues to be wide and wide enough. We remain confident in our trajectory and excited about the opportunities ahead. Thank you.

Thank you for your participation. this does conclude the program. You may now disconnect. Everyone, have a great day.