Twist Bioscience (TWST) Q3 FY26 earnings call: guidance and Q&A

Twist Bioscience is seeing AI-enabled drug discovery mature into a durable growth engine, with increasing confidence in triple-digit order growth for both fiscal 2026 and 2027. This growth is fueled by existing customers returning for iterative design-build-test-learn cycles, new customer acquisition, and new organizations expanding into life sciences. The company's platform is well-suited to support both AI-enabled and traditional drug discovery, translating digital designs into physical biology through high-throughput DNA synthesis and protein expression.

Twist's core competitive advantage extends beyond its semiconductor-based DNA synthesis platform to a complex infrastructure encompassing manufacturing, automation, software, and commercial execution. Over the last three years, the company has reduced manufacturing costs by 60%, waste by 70%, and turnaround time by approximately 73%, while increasing oligonucleotide capacity fourfold. These continuous operational improvements strengthen its competitive position and create additional capacity for future growth, making its platform exceptionally difficult to replicate.

The company's platform demonstrated its importance in global public health by enabling the identification of the Ebola virus during an outbreak in Congo and Uganda. Researchers used Twist's comprehensive viral panel to identify the pathogen, underscoring the value of viral genome enrichment for emerging infectious diseases. Additionally, Twist synthesized virus material in less than 24 hours to support rapid response efforts during a cruise ship outbreak, showcasing the breadth, speed, and reliability of its capabilities.

Twist is experiencing strong accelerating momentum in its NGS Applications Group, primarily driven by diagnostic customers focused on commercial volume growth. The company is expanding its portfolio with new product introductions, including proprietary enzymes like high-performing polymerases and preliminary, which are critical for whole genome and other workflows. These innovations are enhancing customer success and supporting emerging applications such as minimal residual disease (MRD) testing, where high-sensitivity tests are crucial for better patient outcomes.

Following a successful early access program, Twist formally launched its complex genes offering, expanding the range of DNA sequences researchers can order. This offering allows for the consistent synthesis of highly challenging constructs with high GC content or repetitive elements, using the same automated production workflow. During early access, over 1,800 complex genes were ordered across more than 100 orders, with the majority completed within 12 days, demonstrating the platform's ability to deliver at commercial scale with consistent quality and speed.

Twist remains committed to achieving adjusted EBITDA breakeven in Q4 FY26 and sustaining this performance into FY27, while also targeting gross margins of over 60% as the business matures. The company projects to more than double its revenue from organic growth by 2031, driven by the increasing digitalization and AI-enablement of biology. Its serviceable addressable market is projected to reach $13 billion by 2030, with continuous innovation expected to expand this opportunity further.