Twist Bioscience Corporation

Welcome to Twist Biosciences' 2026 Second Quarter Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1-1. In the interest of time, we ask that you please limit yourself to one question. Also note, this call is being recorded. I would like to turn the call over to Angela Bidding, SVP of Corporate Affairs. Please go ahead.

Thank you, Operator. Good morning, everyone. I would like to thank you for joining us for TWIST Bioscience's conference call to review our fiscal 2026 second 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 LaPruce, CEO and co-founder of TWIST, Adam Loponis, CFO of TWIST, and Dr. Patrick Finn, President and CEO of TWIST. Today we will discuss our business progress, financial and operational performance, as well as growth opportunities. We will then open a 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 and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks 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 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 adjusted 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 investor 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. To which delivered another strong quarter, I extended our track record of consistent execution, posting our 13th quarter of sequential revenue growth. We have outperformed the broader lifetime tools market with a model that scales efficiently and drives increasing value creation. Twist Core Technology Advantage is a semiconductor-based DNA synthesis platform that provides a structural advantage in cost, scale, and speed that feeds into every product and service we offer. The same platform also enables a highly efficient new product introduction engine allowing us to rapidly translate customer demand into scalable offerings and continuously expand our portfolio. As we increase volume on the silicon chip, we expand our wallet share, accelerate product innovation, and further strengthen our competitive advantage. The model works exactly as designed. We have delivered sustained revenue growth, expanded gross margin above 50%, invested strategically to drive continued return on that investment, and we remain firmly on track to achieve HSBC beta break-even in the first quarter of fiscal 2026. Focusing our results for the second quarter of fiscal 2026, we grew total revenue to $110.7 million, up more than 19% year-over-year. DNA synthesis and protein solutions grew 28%, powered by continued strength in AI-enabled drug discovery. NGS applications grew 12% year-over-year and 9% sequentially. Studying deeper into DNA synthesis and protein solutions, we continue to see robust growth. Last month, Amazon Web Services announced Twist as a web lab partner for Amazon BioDiscovery, its AI-powered drug discovery application. This is an exciting validation of our DNA synthesis, protein solutions, and biologics capabilities. In advance of the launch, Twist has been working with AWS team for several months, providing web lab services for the applications scientific launch partners, including Memorial Sloan Kettering Cancer Center and the Gray Lab at Johns Hopkins University. The objective for researchers using Amazon BioDiscovery is to deploy AI models to design and optimize antibody candidates faster. We're here to support them with products and services that accelerate that pathway. By staying in close contact with our customers, we identified this emerging category of AI-enabled drug discovery early, and invested ahead of the market acceleration, with increasing adoption across pharma, dry lab, and big tech companies. Importantly and unbalanced, the growth of AI-enabled rediscoveries complements our work with customers pursuing traditional rediscovery, which remains a robust area of our business. Regardless of approach, Our customers for DNA synthesis and protein solutions are all working through the same fundamental design-build-test-learn cycle. What differs is how they execute against that framework. There is no one-size-fits-all model. Each program is tailored to the customer scientific approach, resources, and stage of discovery. What remains constant across every engagement is the foundation, twist silicon platform, which enables cost-effective synthesis of hundreds of thousands of unique sequences in parallel. That unique and proprietary capability is what makes speed at scale possible, no matter where the customer enters the workflow. No two orders are identical, so we see consistent patterns in how these campaigns are structured. On slide six, to give you some context, one example is our work with Memorial Sloan Catering and Amazon. where the team ordered approximately 100,000 specific DNA sequences as a pooled library. This approach is highly efficient precisely because of how our platform is built. Pooled DNA can be manufactured collectively rather than individually cloned and processed, driving down curves per sequence dramatically. And with this DNA provider, we can deliver hundreds of thousands of specific sequences pooled at speed and scale. Once they have the pooled DNA, either twist or the customer then screens that library to identify promising candidates, selects the most relevant sequences, and advances those into individual synthesis, protein expression, and characterization. Through iterative cycles, this process yields validated antibody leads. The second model involves customers ordering hundreds to thousands of gene fragments and executing downstream workflow internally. Here again, TWIST platform delivers an edge in the ability to synthesize diverse sequence sets quickly and at accessible cost, meaning customers can explore broader design spaces. In these cases, customers convert fragments into clonal genes, express proteins, and perform characterization assays within their own laboratories. Others choose to start further downstream, purchasing clonal genes or antibodies and binding proteins, such as IgG, SCID, DHH, and others, to focus their internal efforts on functional characterization and validation. Even at this entry point, the advantage traces back upstream. The parallel synthesis capability underpinning our platform ensures the sequences they receive reflect the speed at scale that alternatives cannot match. And we have a growing segment of customers we rely on as an end-to-end partner. In these engagements, We handle DNA synthesis, clonal gene constructions, protein expression, and characterizations. Our platform's ability to run large, complex sequence sets in parallel accelerates every stage of that workflow, and we deliver high-quality experimental data that enables customers to focus on critical analysis, decision making, and iterative design. We also have a number of customers who give us a biological target and ask us to do all of the work through individual, in vitro, and our AI ML discovery approaches. Across all of these models, Curve scales with the scope and complexity of the workflow, ranging from smaller exploratory programs to multi-million dollar discovery efforts. Our role is to provide flexibility across the spectrum. Because our platform was purpose-built for parallel synthesis at scale, we can meet customers where they are, whether they need a pool of libraries of hundreds of thousands of sequences or a fully managed discovery program. We support them as their research advances. On slide 7, you'll see our portfolio for DNA synthesis and protein solutions serving customers across the biological continuum. Building on our success in serving therapeutic discovery customers, in February, We license the B-body bispecific platform to expand our capabilities in this rapidly growing modality. We now enable high throughput discovery in bispecifics, an area that has strictly been limited by scale. We have already received our first orders for this platform with a robust funnel looking forward. Moving to slide 8, NNGS grows re-accelerated in the second quarter. Our NGS tools business remains a durable and growing part of the portfolio with particular strengths in oncology diagnostics. We operate at the critical part in the workflow between the sample and the sequencer, where our products support precision and customization at scale. Our target enrichment and laboratory preparation solutions deliver the uniformity and on-target performance required for high-sensitivity applications. This is especially relevant in the continuum of cancer care on slide 9, where we are seeing increasing adoption in commercial diagnostic tests, including initial momentum in molecular or minimal residual disease or MRD. These applications demand extremely high accuracy and reproducibility, fast and on time, and our chemistry is well aligned to these requirements. Specifically, on slide 10, as MRD testing transitions from early clinical adoption to scale deployment across oncology diagnostics, the technical and operational requirements become significantly more demanding. These assays are pushing the limit of sensitivity, often requiring detection of variants at extremely low allele frequencies. That places a premium on panel design as well as the entire workflow to ensure uniform coverage and reproducibility across REM. In this environment, success depends on the ability to deliver highly customized target enrichment panels, laboratory preparation enabled by novel enzymes, as well as the buffer, BCDI, UMIs, and other components optimized for specific indications and evolving clinical needs. Equally important is speed. As these tests move into broader clinical workflows, laboratories, and diagnostic developers need a rapid turnaround on panel design, synthesis, and deployment to support asset development timelines and commercial scale-up. At Waze, we combine high-throughput DNA synthesis with precision probe design and manufacturing at scale, enabling fast, reliable delivery of customized panels with consistent performance characteristics. That allows our customers to move quickly from development to validation and commercialization without compromising on data quality, and importantly, securing and future-proofing their stable supply chain. For bespoke or tumor-informed MRD panels, like all of our NGS panels, this is a consumer-driven workflow that scales with state volume, supporting recurring revenue as these applications expand. This time, I'd like to turn the call over to Paddy to expand further on our growth initiative around the coming product offering.