Skip to content
    TWST
    Earnings call· Mar 2026(Q2 FY26)

    Twist Bioscience Q2 FY26 earnings call TWST

    May 4, 2026 Source

    Executive summary

    Twist Biosciences Q2 FY26 — Strong Revenue Growth Driven by AI-Enabled Discovery and NGS Reacceleration

    Twist Biosciences delivered robust Q2 FY26 results, extending its track record of sequential revenue growth, primarily fueled by strong demand in AI-enabled drug discovery within DNA Synthesis and Protein Solutions, alongside reaccelerated growth in NGS applications. The company continues to expand gross margins and remains on course for adjusted EBITDA breakeven by Q4 FY26, driven by strategic investments in capacity and digital infrastructure, and disciplined cost management.

    Highlights

    5

    • Total revenue grew to $110.7 million, up over 19% year-over-year, marking the 13th consecutive quarter of sequential growth.

    • DNA Synthesis and Protein Solutions revenue increased by 28% year-over-year to $53.3 million, powered by AI-enabled drug discovery.

    • NGS applications revenue reaccelerated, growing 12% year-over-year to $57.4 million and 9% sequentially.

    • Gross margin expanded to 51.6%, an improvement of approximately 200 basis points year-over-year.

    • Adjusted EBITDA loss narrowed to $13.3 million, an improvement of $1.5 million year-over-year, remaining on track for breakeven in Q4 FY26.

    Concerns

    3

    • Global Supply Partner revenue decreased to $11.4 million from $12 million in the prior year, primarily due to order timing.

    • Industry and Applied revenue decreased to $5.8 million from $7 million in the prior year.

    • Academic and Government end market is suffering from funding pressures, though Twist is gaining market share.

    Guidance & targets

    4
    CategoryTargetConfidence
    Total Revenue
    $442 million to $447 million
    high materiality
    High
    Total Revenue
    $114 million to $115 million
    medium materiality
    High
    Adjusted EBITDA
    breakeven
    high materiality
    High
    NGS Applications Growth
    return to 20%
    medium materiality
    High

    Segment performance

    10
    SegmentRevenueYoYQoQMargin
    DNA Synthesis and Protein Solutions
    Powered by continued strength in AI-enabled drug discovery.
    		$53.3 million28%——
    NGS Applications
    Grew from $51.1 million in Q2 FY25. Driven by growth in top accounts, with particular offense in oncology diagnostics. Top 10 customers accounted for approximately 39% of NGS revenue. Served 627 NGS applications customers in the quarter, with 174 having adopted products.
    		$57.4 million12%9%—
    Americas
    Increased from $55.2 million in Q2 FY25.
    		$64.3 million17%——
    EMEA
    Increased from $30.6 million in Q2 FY25.
    		$37.3 million22%——
    APAC
    Increased from $7 million in Q2 FY25. Accounted for 8% of total revenue. China continues to be approximately 1% of total revenue.
    		$9.1 million30%——
    Therapeutics
    Increased from $26.3 million in Q2 FY25. Reflects increased uptake of products by large pharma and biotech customers in their efforts on therapeutic discovery, including AI-enabled discovery.
    		$40.8 million55%——
    Diagnostics
    Increased from $35 million in Q2 FY25. Based on strong growth from top accounts.
    		$40 million14%13%—
    Industry and Applied
    Decreased from $7 million in Q2 FY25.
    		$5.8 million-17.1%——
    Academic Research and Government
    Increased from $12.5 million in Q2 FY25. Driven by strength in U.S. accounts, despite suffering from funding pressures.
    		$12.8 million3%5%—
    Global Supply Partner
    Decreased from $12 million in Q2 FY25, primarily due to order timing.
    		$11.4 million-5%——

    Operational metrics

    19
    Total Revenue Growth
    19.3%YoY
    Q2 FY26

    This marks the 13th consecutive quarter of sequential growth.

    Gross Margin
    51.6%200 bps improvement YoY
    Q2 FY26

    Gross margin expansion was driven by strong revenue growth and moderated sequentially due to investments in new product offerings and manufacturing capacity.

    Adjusted EBITDA
    -$13.3 million$1.5 million improvement YoY
    Q2 FY26

    The loss narrowed significantly, remaining on track for breakeven in Q4 FY26.

    Operating Expenses (ex-COGS & litigation)
    $95.8 millionvs $87.6 million in prior year
    Q2 FY26

    The increase reflects deliberate investment in commercial organization and digital infrastructure to support growth.

    Litigation Settlement Costs
    $7.2 million
    Q2 FY26

    Booked net recoveries, with additional costs expected to be covered by insurance.

    Cash, Cash Equivalents and Short-Term Investments
    $171.7 millionvs $197.9 million as of December 31, 2025
    Q2 FY26 end

    The sequential change reflects operating cash usage, CapEx, and cash for the Invenra license.

    Operating Cash Usage
    $17.6 million
    Q2 FY26

    Part of the sequential change in cash balance.

    Capital Expenditure
    $7.9 million
    Q2 FY26

    Investment in manufacturing automation.

    Cash for Invenra License and Equity Event
    $5 million
    Q2 FY26

    Part of the sequential change in cash balance.

    Operating Expense Sequential Improvement Target
    $6 million
    Q4 FY26

    Expected contribution from reduced positions and additional cost initiatives.

    Clonal Genes Acceptance Rate
    96%
    3 years ago

    Historical acceptance rate for clonal genes.

    Clonal Genes Manufacturing Rate
    97.5%
    3 years ago

    Historical manufacturing rate for clonal genes.

    DNA Sequences Manufacturing Rate (broadly)
    98%
    3 years ago

    Historical manufacturing rate for DNA sequences including oligo pools, DNA libraries, gene fragments.

    Clonal Genes Acceptance Rate
    97%
    current

    Current acceptance rate for clonal genes.

    Clonal Genes Manufacturing Rate
    98.5%
    current

    Current manufacturing rate for clonal genes.

    DNA Sequences Manufacturing Rate (broadly)
    99%
    current

    Current manufacturing rate for DNA requests more broadly.

    Gross Margin Target
    52%
    FY26

    Company remains confident in achieving 52% or better gross margin for the year.

    Incremental Revenue to Gross Margin Drop-through
    75% to 80%
    future

    Expected average drop-through as workflows are automated and improved.

    Gene Characterization Shift
    58%
    last quarter

    Referenced by an analyst regarding strong growth in physical gene shift for characterization.

    Deals & partnerships

    1
    Amazon Web Services (AWS)Wet lab partner for Amazon BioDiscovery, an AI-powered drug discovery application.Several months

    Twist has been working with the AWS team for several months, providing wet lab services for Amazon BioDiscovery's scientific launch partners, including Memorial Sloan Kettering Cancer Center and the GRAIL Lab adjuncts of Kim Senior City.

    Risks & headwinds

    1
    Academic and Government funding pressuresCurrent

    Market is basically shrinking right now.

    Mitigation: Taking market share through product offerings and premium discounts (e.g., express genes) that resonate with customers facing funding constraints.

    What to watch in Q3 FY26

    4

    Adjusted EBITDA breakeven

    Q4 FY26
    Current-$13.3 million (Q2 FY26 loss)
    TargetBreakeven

    Why it matters

    This is a key profitability milestone for the company, indicating operational efficiency and financial health.

    We remain firmly on track to achieve adjusted EBITDA breakeven in the fourth quarter of fiscal 2026.

    Q&A highlights

    9

    How did AI-driven workflows perform relative to expectations, and how does the segment outlook contribute to updated fiscal guidance?

    Emily Leproust highlighted strong performance in DNA Synthesis and Protein Solutions (SPS), growing 28% YoY, with therapeutics cracking $40M. AI-driven discovery significantly increases the number of sequences customers want, leading to upsell opportunities. The broad menu and NPI engine are driving growth, with AI being a major contributor.

    “Obviously, we're very excited with the performance of the SPS growing 28% year-over-year. And for the therapics category, we cracked the $40 million for the quarter... AI-driven drug discovery has been a big help in that area. It just increases the number of sequences that people want to look at.”

    asked by Steven Etoch · answered by Emily Leproust

    2 min read5 chapters

    Detailed Narrative

    01

    AI-Enabled Drug Discovery Momentum

    Twist is seeing robust growth in AI-enabled drug discovery, with Amazon Web Services announcing Twist as a wet lab partner for Amazon BioDiscovery. This collaboration involves providing lab services for scientific launch partners like Memorial Sloan Kettering Cancer Center, focusing on accelerating antibody candidate design and optimization. The company noted that AI-driven discovery complements traditional discovery and increases the number of sequences customers want to analyze, leading to upselling opportunities for data and cell characterization. Emily Leproust noted that many drug discovery companies 'tap out at $50 million a year', highlighting Twist's significant progress in this area.

    02

    DNA Synthesis Platform Advantage

    The core technology, a semiconductor-based DNA platform, provides structural advantages in cost, scale, and speed, enabling efficient new product introduction and continuous portfolio expansion. This platform allows for cost-effective synthesis of hundreds of thousands of unique sequences in parallel, supporting diverse customer workflows from pooled libraries to fully managed programs. The company highlighted its ability to run large, complex sequence sets in parallel, accelerating every stage of the workflow and delivering high-quality data.

    03

    NGS Applications Strength

    NGS growth reaccelerated in Q2, driven by oncology diagnostics, particularly in minimal residual disease (MRD) testing. Twist's target enrichment and library preparation solutions are critical for high-sensitivity applications, ensuring uniform coverage and reproducibility. The company's ability to combine high-throughput DNA synthesis with precision panel design and manufacturing at scale enables rapid delivery of customized panels, supporting recurring revenue as these applications extend.

    04

    Manufacturing Acceptance Rate Improvements

    Twist announced plans to increase its acceptance rate for clonal genes to approximately 99.5% and all DNA products to 99.9%. This improvement aims to unlock incremental market share gains by addressing manufacturing challenges for complex sequences (e.g., repeat regions, extreme GC content) and ensuring customers can rely on Twist as a single partner for their diverse needs. This continuous drive to improve sets Twist apart from competitors with narrower offerings.

    05

    Path to Profitability

    The company is focused on achieving adjusted EBITDA breakeven in Q4 FY26 through continued revenue growth, gross margin expansion, and operating expense discipline. Recent actions include a reduction of 36 positions and other cost initiatives expected to contribute $6 million in sequential OpEx improvement in Q4 FY26. These are considered revenue-generating investments with a clear line of sight to return.

    AI-generated summary of the company’s earnings call. Not investment advice.