Twist Bioscience Corporation

ladies and gentlemen thank you for standing by welcome to twist bioscience fiscal 2026 first quarter financial results conference call at this time all participants are in the listen only mode after the speaker's presentation there will be a question and answer session to ask a question during the session you will need to press star 1 1 on your telephone you will then hear an automated message advising your hand is raised To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Angela Bidding, Senior Vice President of Corporate Affairs. Please go ahead.

Thank you, Operator. Good morning, everyone. I would like to thank you for joining us for TWIST Biosciences conference call to review our fiscal 2026 first 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 LaProust, 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 will 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. 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 laws. 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 can 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 the 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 suggested 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 Investors section of our website. With that, I will now turn the call over to our CEO and co-founder, Emily Leproust.

Thank you, Angela, and good morning, everyone. Q1 provided a strong start to fiscal 2026 and expanded the pattern of consistent execution, marking our 12th consecutive quarter of revenue growth. This performance builds directly on the operating momentum established in fiscal 2025, and reflects trends that remain intact as we move through the year. Notably, over the last three years, we have delivered a revenue CAGR of 24% and increased margin by 20 percentage points on relatively flat OPEX, materially outpacing growth across much of the life science tool industry. We believe the combination of sustained growth and meaningful operational progress clearly differentiates TWIST within our peer group. Going back to basics, at TWIST, Our strategy is simple and very deliberate. We built a semiconductor-based DNA synthesis platform that gives us a technology advantage that translates into speed, scale, quality, and affordability for our customers. Everything we do builds on this differentiated and foundational platform. As we load more volume onto our chip, serving more customers with more products, we improve our financial performance, strengthen our competitive position, and expand our addressable markets. This quarter's results reflect that our model is working as intended, and we are building for the opportunities we see that leverage our advantage to accelerate growth. Over the last several years, we have transformed Twist into what we internally describe as an NPI machine. We consistently launch new products that sit on top of the same core manufacturing infrastructure, allowing us to expand into new applications and customer workflows without adding risk or complexity. As a result, Our estimated serviceable market has expanded from approximately $2 billion in 2020 to roughly $7 billion today, driven by our current portfolio of products and services. Based on our market growth and customer adoption patterns, we continue to see a clear path to more than $12 billion of serviceable markets by 2030, with additional growth opportunities as we launch new products. Importantly, this SAMS expansion is occurring while serving some of the most sophisticated customers in life sciences across therapeutics, diagnostics, and applied markets. These customers choose TWAIS because we future-proof their supply chains and innovation to enable them to move faster, at scale, with confidence. Paddy will dive deeper into one of the opportunities in the DNA Synthesis and Protein Solutions group to detail how we are planning to win in the AI-enabled discovery market as it forms and scales in real time. For our NGS applications group, we see a serviceable market of over $3 billion, with about 7% market share today. Looking at our serviceable markets within this group, we expect a blended CAGR for the industry, also approximately 14% across oncology and rare disease diagnostics, microarray, biopharma R&D, and academic markets. Keep in mind, our revenue for NGS comes both through direct sales and Oslo partners who sell our panel and reagents under their brand. Importantly, We expect our growth to outpace industry levels as we leverage our NPI engine and commercial intensity to outperform our peers. We expect to drive growth in NGS applications by expanding volumes with existing dynasty customers as they have testing skills, particularly in oncology where recurring testing supports sustained demand. In addition, we expect to add new customers in the diagnostic space. SWIS will also pursue market share gains by converting legacy macrory workflows in agrigenomics and procreation genetics. In bio from R&D and academic research, growth will be driven by increasing adoption of twist multi-anomics portfolio and by expanding product offerings to support new applications and workflows. The key to our ongoing success is that over the last decade, we have built deep, long-standing customer relationships that gives us clear insight into unmet needs and emerging demand. We pair that customer insight with our proprietary platform to consistently deliver a strong product roadmap and a disciplined cadence of commercial launches. About a year ago, we recognized the early formation of a new category in AI-enabled therapeutics discovery, a market that was effectively non-existent in 2024. With Cisco 2025, we had booked more than $2,500 in orders specifically tied to AI discovery. This exemplifies 2S's ability to help define new categories by listening closely to customers, adapting our roadmap ahead of market inflection points, and investing early to establish leadership. This was done with flat operating expenses through the fourth quarter of last year. Going forward, we see meaningful growth ahead as this category continues to develop. In the first quarter, we made targeted, deliberate, transient, and structural investments to expand our advantages for all the opportunities we see across the business. Some of these investments are in the commercial team to amplify our success in the market. Others are in the infrastructure and operations to support the scale of the full portfolio. Importantly, we made these investments while remaining focused on our core financial priorities, including revenue growth, growth margin, and adjusted EBITDA break-even. To be clear, we are committed to adjusted EBITDA break-even in the fourth quarter of fiscal 2026. On top of this, we see an opportunity to increase our growth rate And we have tax-rated our operating expenses up by about $10 million per quarter, without putting adjusted EBITDA break-even at risk. As you know, investment in growth is like a turbo on an engine. There is a lag between pushing the gas pedal and the acceleration. On an ongoing basis, we expect approximately 75% to 80% of all incremental revenue growth across all product lines to drop to the gross margin line. We have worked hard to get to this point, and we'll continue to tune the machine. As a team, we are focused on three key performance metrics, revenue, gross margin, and adjusted EBITDA break-even. We measure many other things within the company and the business, but ultimately, these three metrics drive our future growth. Our management team and every employee at Twist are measured and incentivized on these three metrics. Overall, we are managing the business, keeping an eye on the gas and the growth like ox, We expect to become an even more formidable force in the coming years as we sustain growth through disciplined reinvestment of our profits. At this time, I'd like to turn the call over to Paddy to further expand on our growth initiatives around AI-enabled discovery.