Twist Bioscience Corporation (TWST) Earnings & Analysis

Latest quarter

Twist reported Q3 FY2026 revenue of $118.4 million, above the $114.5 million consensus. Its adjusted earnings per share of −$0.56 missed the consensus estimate of −$0.50.

Revenue rose 23.2% from $96.1 million a year earlier. In its filing, Twist attributed the increase to growth in DNA synthesis and protein solutions and next-generation sequencing (NGS) applications, with higher sales across several customer groups and an increase in customer numbers. The filing said the company shipped approximately 369,000 genes, compared with approximately 237,000 a year earlier.

CFO Adam Laponis said therapeutics revenue reached $40.4 million, up from $27 million, as pharma, biotech and technology customers increased their use of Twist products for therapeutic discovery. Diagnostics revenue rose to $43.8 million from $38.1 million.

The filing attributed a decline in gross margin to 52.8% from 53.4% primarily to customer mix. Twist reported free cash flow of −$8.6 million, compared with −$8.1 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Emily Leproust said demand for AI-enabled drug discovery was coming from existing customers repeating design and testing cycles, as well as new customers. She said some existing customers were also moving into additional types of molecules. Twist translates customers’ digital designs into physical DNA and proteins, and can then help evaluate the proteins, she said.

Asked about customer orders, Leproust said larger AI projects involved more discussion upfront about capacity and customers’ future needs. That had given Twist more visibility into subsequent orders and more involvement in customers’ scientific work, she said. On gene volumes, she said growth was coming primarily from shorter antibody-type sequences used in human therapeutics.

CFO Adam Laponis said AI-drug discovery project timelines were usually measured in weeks. Asked about the relationship between orders and revenue, he said the two were more closely aligned in fiscal 2026 than in the prior year. He noted that Twist had not provided specific quarter-on-quarter breakouts for AI-drug discovery, while pointing to therapeutics growth as an indicator.

President and COO Patrick Finn said demand was increasing for molecular residual disease workflows. He said customers seeking higher-sensitivity tests were using more probes derived from sequencing a patient’s tumor, and described the need to deliver those probes quickly.

On margins and spending, Laponis said Q3 gross margin benefited from revenue growth even as Twist invested in new products and manufacturing capacity. He said operating expenses included approximately $2 million in employee transition costs and other one-time expenses; their absence would reduce fourth-quarter operating expenses by more than $5 million. Asked about the path to breakeven, he said those costs and investment in digital capabilities affected Q3 spending.

Leproust said Twist was adding data-characterization capacity ahead of demand. Discussing competition, she said customers focus on data capabilities, capacity, speed and flexibility, and that Twist had built protein and data capabilities in response to their needs.

Guidance

Twist raised its FY2026 revenue guidance to $456.0 million–$457.0 million from $442 to $447 million. CFO Adam Laponis said the change raised the midpoint by $12 million.