Twist Bioscience NASDAQ: TWST reported fiscal 2026 second-quarter results that management said extended a streak of steady execution, highlighted by its 13th consecutive quarter of sequential revenue growth and gross margin above 50%.
On the company’s earnings call, CEO and co-founder Dr. Emily Leproust attributed performance to Twist’s semiconductor-based DNA synthesis platform, describing it as a structural advantage in “cost, scale, and speed” that underpins its product portfolio and helps accelerate new product introductions. CFO Adam Laponis added that the quarter reflected continued progress toward the company’s stated profitability target, reiterating Twist remains “firmly on track for adjusted EBITDA breakeven in Q4” of fiscal 2026.
Quarterly results: revenue up 19% and gross margin at 51.6%
Twist posted second-quarter revenue of $110.7 million, up 19.3% year-over-year, which Laponis said marked the 13th consecutive quarter of sequential growth. Gross margin was 51.6%, about 200 basis points higher than the prior-year period, though management noted some sequential moderation tied to investments in capacity and new offerings.
By segment, Leproust said DNA synthesis and protein solutions grew 28%, driven by continued demand in AI-enabled drug discovery. NGS applications grew 12% year-over-year and 9% sequentially, which she characterized as a re-acceleration for the business.
- DNA synthesis and protein solutions revenue: $53.3 million (up 28% year-over-year)
- NGS applications revenue: approximately $57.4 million (up from $51.1 million a year ago)
- Adjusted EBITDA: a loss of approximately $13.3 million, improving by about $1.5 million year-over-year
AI-enabled drug discovery and AWS partnership highlighted
Leproust highlighted demand tied to AI-enabled drug discovery workflows and said Twist had invested ahead of what she described as a market acceleration. She pointed to an announcement from Amazon Web Services naming Twist as a wet lab partner for Amazon Bio Discovery, an AI-powered drug discovery application. Leproust said Twist had been working with AWS for several months ahead of the launch, providing wet lab services for launch partners including Memorial Sloan Kettering Cancer Center and the Gray Lab at Johns Hopkins University.
Leproust described how Twist supports customers using AI models to design and optimize antibody candidates, emphasizing the company’s ability to synthesize large libraries—such as pooled DNA orders of around 100,000 sequences—followed by screening and iterative cycles that advance candidates into individual synthesis, protein expression, and characterization.
In the Q&A, Leproust said AI-driven workflows “increase the number of sequences that people want to look at,” which can expand the overall value of customer engagements and support upselling into downstream services such as characterization. She also said that while AI-driven demand was initially concentrated in a small number of accounts, it has broadened over time. “Now it’s dozens of accounts that are driving that growth,” she said.
When asked about the evolution of AI orders, Leproust said early activity leaned toward model building, which can be a “big bolus up front,” but she is seeing customers increasingly “turning the crank,” with smaller orders that occur more frequently.
Management did not provide a detailed breakdown of AI-related revenue across product types on the call. Laponis said the company views “the vast majority of the outsized growth in therapeutics” as predominantly AI discovery work, while also noting it can be difficult at times to categorize activity as AI-driven versus traditional approaches.
NGS strength in oncology diagnostics and early MRD momentum
Leproust said Twist’s NGS tools business remains durable and is seeing particular strength in oncology diagnostics. She described Twist’s position “between the sample and the sequencer,” with products supporting precision and customization at scale through target enrichment and library preparation solutions.
Leproust also pointed to initial momentum in molecular, or minimal residual disease (MRD), applications, which she said require extremely high accuracy, reproducibility, and fast turnaround times. She discussed increasing technical demands as MRD testing moves from early clinical adoption toward scaled deployment, emphasizing the importance of customized panels, workflow components (including enzymes and UMIs), and rapid turnaround to support development and commercial timelines.
In response to a question on diagnostics growth, Leproust said the company is “very confident” in NGS and reiterated an expectation that NGS would return to at least 20% growth by the fourth quarter. She also noted that, from management’s perspective, dollar growth in NGS and in DNA synthesis and protein solutions can be similar in magnitude, and said the company is optimizing for total revenue growth, gross margin above 50%, and reaching adjusted EBITDA breakeven.
Platform improvements: higher sequence acceptance and complex DNA expansion
President and COO Dr. Patrick Finn described ongoing efforts to improve manufacturing acceptance rates for customer sequences. He said Twist uses an e-commerce embedded algorithm that alerts customers when uploaded sequences may be difficult to manufacture, citing issues such as repeat regions, hairpins, and extreme GC content.
Finn said Twist’s acceptance and manufacturing rates have improved over time, from accepting about 96% of clonal genes and manufacturing about 97.5% of clonal genes three years ago to accepting about 97% and manufacturing approximately 98.5% today. He also said Twist can manufacture about 99% of DNA requests more broadly.
Finn said Twist plans to expand capabilities further, aiming to accept approximately 99.5% of clonal genes and 99.9% of all DNA products more broadly. He argued that even when only one sequence in a larger set is rejected, customers may route the entire order elsewhere, making incremental improvements in acceptance rates an opportunity to capture more orders.
On automation and capacity, Leproust explained that after oligos are produced on Twist’s silicon platform, downstream “back-end” processes differ depending on the product “flavor,” such as fragments, clonal genes, IgG expression, and characterization. She said Twist adds automation to those downstream branches based on demand and characterized the related capital spending as meaningful but not comparable to building a new fab from scratch. Leproust also said the company has been “automating the automation” to expand capacity within existing space.
Operating expenses, restructuring actions, and outlook
Laponis said operating expenses (excluding cost of revenues and litigation settlement costs) were $95.8 million, up from $87.6 million in the prior-year quarter, reflecting investments in the commercial organization and digital infrastructure. He said Twist reduced 36 positions in April to reallocate resources and expects actions and additional cost initiatives to contribute to a $6 million sequential operating expense improvement in the fourth quarter of fiscal 2026.
Twist also disclosed litigation-related developments. Laponis said the company reached an agreement in principle regarding a securities class action for approximately $17.1 million and booked $7.2 million in the quarter for litigation settlement costs net of recoveries, expecting additional cost to be covered by insurance.
The company ended the quarter with $171.7 million in cash, cash equivalents, and short-term investments, down from $197.9 million at December 31, 2025. Laponis attributed the sequential change to $17.6 million in operating cash usage, $7.9 million in capital expenditures tied to manufacturing automation, and $5 million in cash related to an Invenra license and equity investment.
For guidance, Laponis said Twist expects fiscal 2026 total revenue of $442 million to $447 million (about 17% to 19% growth). For fiscal third quarter, the company guided to revenue of $114 million to $115 million, representing about 19% year-over-year growth at the midpoint. Management reiterated that NGS is expected to drive sequential growth in the second half and to return to 20% growth by Q4, while maintaining its target of adjusted EBITDA breakeven in Q4.
Leproust closed by inviting investors to a May 20 Investor Day in Oregon, where management plans to discuss performance drivers, hear from customers, and provide a tour of Twist’s platform.
About Twist Bioscience NASDAQ: TWST
Twist Bioscience Corporation is a synthetic biology company specializing in the development and commercialization of DNA-based products and solutions. Founded in 2013 and headquartered in South San Francisco, California, the company has pioneered a proprietary silicon-based DNA synthesis platform designed for high-throughput production of synthetic genes and oligonucleotides. Twist leverages semiconductor manufacturing techniques to enable precise, scalable synthesis of DNA at speeds and volumes unattainable with traditional methods.
At the core of Twist's offering is its proprietary platform that automates the synthesis of custom DNA fragments, gene libraries, and long oligonucleotides.
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