Twist Bioscience Corporation

Welcome to TWIS Biosciences' 2026 Third 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 on your touch-tone telephone. Please note this call is being recorded. I would like to turn the call over to Angela Bitting, SVP of Corporate Affairs. Please go ahead.

Thank you, operator. Good morning, everyone. I'd like to thank you for joining us for Twist Bioscience's conference call to review our fiscal 2026 third 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 Leproust, CEO and co-founder of Twist, Adam Laponis, 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'll 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 and 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 in actual results in financial periods or 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. On slide 3, you will see that this morning we reported our 14th quarter of consecutive growth with record revenue of 118.4 million dollars, growth of 23% year-over-year. This growth reflects the diligence and execution we have employed over the last several years, building for opportunities we see ahead. Sometimes those opportunities are clearly visible many years in advance, and others require us to be nimble and engage with our customers in real time to ensure we build and deliver what they need to be successful. On slide 4, you'll see that at Twist, we sit at a unique junction where we have spent the last decade building the infrastructure to enable our customers to advance the therapeutics, diagnostics, and industrial breakthroughs resulting from the innovation. As biology becomes increasingly computational, our ability to deliver precision and speed at scale becomes even more valuable. On slide five, I'm sure you agree that AI is shifting workflows across multiple industries. And we see an inflection point in drug discovery with more and more groups leveraging AI as their first antibody discovery screen. Where one year ago, just a handful of organizations were pursuing this path, Now we have seen large pharma, dry lab biotech, traditional biotech, and even major technology companies all employ AI through near-EIS approaches following the pattern of design-build-test-learn. Our customers can now design more sequences, test more hypotheses, and iterate faster than ever before. In parallel, we also see the benefit of data and genetic information resulting in diagnostic assays that monitor, select, and determine next steps for a wide variety of diseases. Turning to our product groups, over the past year, we've talked about AI-enabled discovery as an important emerging opportunity. Today, we are seeing that opportunity mature into a durable growth engine. We continue to support customers in building new models while others are using twist to conduct discovery for specific target and to iterate models. This combination of repeat business, new customer acquisition, and new organizations forming or expanding into the life sciences area gives us increasing confidence In the durability and longevity of AI-enabled discovery as a growth driver for the short, medium and long term. On slide 6, the promise of AI-enabled drug discovery is straightforward. Identify better drug candidates faster, reduce the cost of bringing new medicines to market and improve the probability that candidates entering development ultimately succeed. On slide 7, You'll see the workflow where our customers use AI to competentially generate thousands to millions of potential DNA sequences and iteratively refine those designs to identify the most promising therapeutic candidates for a specific disease. TWIST quickly translates those digital designs into physical biology through high-throughput DNA synthesis of individual or pooled DNA, followed by protein expression. Many customers then leverage our downstream capabilities to evaluate those proteins across assays measuring binding, developability, capitalization, and other properties associated with successful drug candidates. We enable rapid design, build, test, and learn cycles at the earliest stage of discovery, supporting our customers' ultimate objectives. When taking a partner for this work, every customer needs a trusted provider capable of manufacturing increasingly complex sequences Ecclesin Protein, generating high-quality characterization data, and delivering consistent results at the speed modern drug discovery requires. This combination of capabilities has become one of TWIST's most important competitive advantages. At our investor day in May, we guided to triple digit percentage order growth for AI-enabled discovery in fiscal 2026 versus fiscal 2025. Now that we are through the third quarter of the year, we are increasingly confident that we will meet or exceed that target. Our confidence reflects durable demand signals as existing customers return for iterative design, build, test, learn cycles, reflecting growing recognition that our platform is well suited to support AI-enabled drug discovery programs as well as traditional drug discovery. Importantly, our funnel of opportunities continues to expand meaningfully, and we believe that we have the potential to again post Triple-digit percentage order growth for AI-enabled rediscovery in fiscal 2027 when compared to fiscal 2026. Turn to slide 8. During the quarter, our platform again demonstrated its importance in supporting global public health. On May 15, 2026, public health officials in the Democratic Republic of Congo announced a developing outbreak of hemorrhagic fever. The outbreak went undetected for at least a month. escaping standard PCR assays, a gap that allowed the virus to spread further before it could be identified and contained. As of July 1st, the virus has been confirmed in both the DRC and Uganda, with an estimated spread to several thousand people and at least 399 confirmed deaths. Approximately one month into the outbreak, researchers used two comprehensive viral panels to amplify the pathogen as the Bondi-Bongio Ebola virus, underscoring the value of whole viral genome enrichment to catch emerging infectious diseases that standard testing missed. Separately, we also synthesized Hantavirus material in less than 24 hours to support rapid response efforts during the cruise ship outbreak in May. These are powerful examples of the breadth, speed, and reliability of our platform. and of our role in the global research and public health communities. On slide 9, we continue to see strong accelerating momentum for our NGS applications group, driven primarily by diagnostic customers, many of whom are focused on growing their commercial volumes with others advancing towards commercialization. We have our eyes on several new opportunities as the pipeline remains rich for next-generation assays, tumor-informed molecular residual disease tests, optimized workflows using proprietary enzymes and more. During the quarter, we increased customer adoption, strengthened our commercial pipeline, and continued to execute on new product introductions to reinforce our position as a trusted partner for next-generation sequencing workflows. As sequencing volumes continue to grow globally, we believe our differentiated technology and expanding portfolio positions do us well for continued growth. We continue to see customers turn to twist when scientific precision and rapid execution matter most. This holds true when we are supporting academic research, cancer diagnostics, agricultural biotech, responding to emerging infectious diseases, or myriad other work streams. On slide 10, one of the allies of the quarter was hosting our investor day at our fab in Wilsonville, Oregon. Many of our customers shared how TWIS products and services play a critical role in their internal workflows, providing tangible examples across multiple markets and applications. In addition, several TWIS leaders showcase their expertise and leadership throughout different areas of the business. At TWIS has grown, we have built an organization designed to repeatedly convert scientific innovation into commercial success. Great science creates opportunity. Operational excellence turned that opportunity to durable revenue growth, expanding profitability and long-term value creation. That requires manufacturing discipline, commercial execution, digital capabilities, and above all, an exceptional team. Investor Day gave us the opportunity to demonstrate the strength of that foundation through our leadership's bench, differentiated technology, highly automated manufacturing, expanding capacity, and the proprietary software that powers our business. The consistent feedback we received was that investors left with a broader appreciation of the scale of our opportunities, the strength of our execution, and the depth of our organization we have built, as well as the reality of the growth opportunities that lie ahead to drive confidence in our long-term trajectory. For me, Investor Day reinforced something I've believed since founding Twist. We do things the Twist way, and this is not the easy path. When someone says it's hard, I say, yes, that's the point. If it were easy, everyone would be doing it. Building what has never existed before requires relentless innovation, disciplined execution, and clear communication. What began as a funding principle has become how Twist operates. It's embedded in our systems, our processes, and more importantly, our people. That's how we scale innovation consistently, build trust with customers and investors, strengthen our competitive advantage, and create long-term shoulder value.

I'd like to turn the call over to Paddy.

We will discuss our competitive mode, how we're executing against our priorities, and why we believe the operational foundation with build positions twists for its next phase of growth.

Thanks, Emily. Good morning, everyone. One of the things I enjoyed most about Investor Day is that people got to see twists from the inside. They didn't just see the products, they saw how we operate. Twist's core technology differentiation 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. However, as Twist has grown, one thing has become increasingly clear to me. You'll see on slide 11, our competitive mode expands well beyond our robust IP position around the chip Thank you for joining us. Every automation project improves quality, productivity and throughput and every customer we add helps make the platform stronger. It's something we've been building deliberately for years. It's also why I believe our advantage continues to expand. Customers are looking for a partner that can help them move faster and we're becoming more deeply embedded in our customers' research and development activities. That creates more durable relationships and over time a stronger business and that doesn't happen without exceptional and consistent execution. Every day our teams are focused on delivering exceptional quality, increasing productivity, expanding capacity and reducing turnaround time. These priorities don't change, there's no finish line and we measure ourselves by how consistently we improve. On slide 12, I talked earlier about our silicon chip shown on the left. It's been the foundation of our commercial manufacturing platform since 2015. By miniaturizing known phosphoramidide chemistry and dramatically reducing reagent consumption, our economics have always been strong as we've created structural advantages in cost, scale, and throughput that extend across our entire portfolio. Just as importantly, we continue to improve that platform as shown on the right side of the slide. Over the last three years alone, we've reduced manufacturing costs by 60%, reduced waste by 70%, reduced turnaround time by roughly 73%, and increased oligonucleotide capacity fourfold. Those gains improve our economics, strengthen our competitive position, and create additional capacity to support future growth. Over the past several years, VC firms invested heavily in alternative DNA synthesis technologies. The marketing is compelling, but commercial success depends upon much more than chemistry. It requires molecular quality, reproducibility, manufacturing skill, and continuous operational improvement. We believe our platform and our track record continue to set the standard. Our leadership in the field is one of the many things that gives us confidence in the long-term opportunity. Our investments aren't tied to one product cycle. They're strengthening the foundation for everything we build next. That's how we think about creating long-term value. We do not optimize for a single quarter. We focus on building a stronger company every quarter. On slide 13, another tangible example of continued improvement leading to a specific product launch. Last quarter, I talked about an early access launch of our complex genes offering, extending the range of DNA sequences researchers can order from TWIST. Complex genes are highly challenging constructs that have historically been out of reach for most platforms to synthesize consistently because of high GC content, repetitive elements, or other complex characteristics. Today, we manufacture these sequences with the same automation, the same manufacturing line as part of our standard and express gene production workflow with the consistent speed, scale, and quality customers expect from Twist. Early customer adoption has been very encouraging. During early access, we've worked with a select handful of customers who've ordered more than 1,800 complex genes across well over 100 orders, and the execution has been superb. We've completed the overwhelming majority of these highly complex constructs in 12 days within our expected delivery window. That matters because it's one thing to produce a complex sequence once in an R&D environment. It's something entirely different to manufacture thousands of highly complex constructs repeatedly at commercial scale with consistent quality. While complex genes represent a relatively specialized market today, our execution demonstrates that we continue to expand the boundaries of what customers can manufacture on the Twist platform using the same highly automated production infrastructure. Each new capability increases the value of our platform, expands wallet share with existing customers, and further differentiates Twist from competitors. At Twist, we focus on automating and operationalizing any new product offering within our manufacturing workflow so that what we can do for one customer, we can deliver for thousands of customers with consistent quality, speed, and precision at scale. Two weeks ago, we launched our complex offering formally, expanding availability broadly across the market. In summary, we believe our silicon platform, automation, software, and manufacturing infrastructure uniquely position us to serve a wide range of customers across industries, creating a competitive moat that would be exceptionally difficult to replicate. With that, I'll turn the call over to Adam to review our financial results.

Thank you, Patty. Turning to slide 14, Q3 was another quarter of consistent execution against the financial model we've laid out. Revenue grew 23% year-over-year to $118.4 million, our 14th consecutive quarter of sequential growth. We focused on growing the top line while maintaining our commitment to adjusted EBITDA breakeven for the fourth quarter of fiscal 2026, and we understand that growth of 20% or more significantly differentiates TWIST among our peers. Gross margin was 52.8%, growth of 120 basis points sequentially, with 70% of incremental revenue dropping to the gross margin line. Let me walk you through the details. On slide 15, you'll see DNA synthesis and protein solutions revenue increased to 56.6 million compared to 40.8 million in the third quarter of fiscal 25. Growth of 39% year over year at 6% sequentially. We shipped 369,000 genes in the third quarter, plus consecutive quarter-over-quarter growth in genes manufactured for data characterization. On slide 16, we show NGS applications revenue for the third quarter grew to approximately $61.8 million, compared to $55.3 million in the third quarter of fiscal 2025, an increase of 12% year-over-year and up 8% sequentially, driven by growth in top accounts. For the quarter, revenue from our top 10 NGS applications customers accounted for approximately 48% of NGS applications revenue. We served 657 NGS applications customers in the quarter, with 182 having adopted our products. Looking geographically on slide 17, America's revenue increased to approximately 77.3 million in the third quarter, compared to 59.4 million in the same period of fiscal 2025. growth of 30% year-over-year. EMEA revenue rose to $33.6 million in the third quarter versus $30.7 million in the same period of fiscal 2025, growth of 9% year-over-year. APAC revenue increased to $7.5 million in the third quarter compared to $5.9 million in the same period of fiscal 2025, an increase of 26% year-over-year. On slide 18, looking at revenue by industry. Therapeutic revenue was $40.4 million for the third quarter of 2026, compared to $27 million in the same period of fiscal 25, growth of 49%, reflecting the increased uptake of our products by pharma, dry lab biotech, and large tech companies in their efforts on therapeutic discovery and including AI-enabled drug discovery. Diagnostics revenue was $43.8 million in the third quarter of 2026, compared to $38.1 million in the same period of fiscal 2025, and increase of 15%. Diagnostics revenue grew 10% sequentially based on strong growth from top accounts. Industry and applied revenue were 5.7 million in the third quarter of 2026 compared to 6.1 million in the same period of fiscal 25. Academic and government revenue were 15.5 million in the third quarter of fiscal 26, an increase of 32% year over year and 21% sequentially, driven by strength in US accounts where we saw several large customers returned during the quarter. The environment remains dynamic, and order patterns may fluctuate. But importantly, our outperformance this quarter for academic and government demonstrates the resilience of our business, the depth of our customer engagement, and the growth of this customer group. Global supply partner revenue was $12.9 million in the third quarter of 2026, compared to $13 million in the same period of fiscal 2025. This revenue stream continues to provide a stable recurring revenue base while our faster growing therapeutics and diagnostics product groups drive overall company growth. Moving down the P&L to slide 19. You'll see our key financial metrics. Our gross margin for the third quarter was 52.8% up sequentially and driven by strong revenue growth even as we continue to make deliberate investments in new product offerings and manufacturing capacity that we expect to result in future margin gains as we accelerate growth and implement continuous process improvement. Operating expenses excluding cost of revenues were $98.7 million for the quarter compared to $81.4 million in the prior year, which includes approximately $2 million in employee transition costs, as well as other one-time expenses that will result in more than $5 million reduction in OPEX in the fourth quarter. Looking at our progress and our path to profitability and progress towards break-even on slide 20. For the third quarter of fiscal 2026, adjusted EBITDA was a loss of approximately $11.3 million, reflecting planned one-time investment. We ended Q3 with $166.8 million in cash, cash equivalent, in short-term investments versus $171.7 million as of March 31, 2026. On slide 21, turning to guidance. For fiscal 2026, we are increasing our revenue guidance and now expect Total revenue of $456 million to $457 million, up $12 million at the midpoint, representing growth of approximately 21% year-over-year. In the third quarter, total revenue growth reflected above 20%. Facing customer demand, our current funnel and order growth, we expect momentum to continue and look forward to sharing full-year guidance for fiscal 27 in November. For Q4 of fiscal 2026, we expect total revenue of $123 to $124 million, growth of approximately 25% year-over-year at the midpoint. We expect sequential growth from both DSPS and NGS. We expect DSPS sequential growth to be driven by therapeutics and NGS to return to growth above 20% year-over-year. Well into our final quarter of the fiscal year, we remain confident in our trajectory and continue to expect to achieve adjusted EBITDA break-even this quarter. Our focus is now on sustaining that performance and continuing to execute against long-term financial objectives throughout fiscal 2027. With that, I'll turn the call back to Emily.

Thank you, Adam. I'd like to leave you with one final thought. When TWIS was founded more than 13 years ago, our goal wasn't simply to build a better way to synthesize DNA. It was to remove barriers that slow scientific discovery. That vision is working. Today, our platform is enabling advances across cancer diagnostics, AI-enabled drug discovery, synthetic biology, and alchemic research. We have translated innovation into durable business performance, delivering 14 consecutive quarters of revenue growth, expanding growth margin, and remaining on track to achieve adjusted beta break even this quarter. And yet, I believe we are still in the early chapters. Biology is becoming increasingly digital, data-driven, and AI-enabled. Scientists are asking bigger questions, designing more complex molecules and moving faster than ever before. Those trends play directly to twist trends and reinforce our confidence that the opportunity ahead is substantially larger than the one we set out to address 13 years ago. Importantly, we continue to execute against our plan to deliver sustainable, profitable growth. As we look ahead, We are confident not only because of the opportunities in front of us, but because of the foundation we have built to capture them. And we continue to see multiple, durable drivers of growth, as you'll see on slide 22. AI-enabled drug discovery continues to expand. Molecular residual disease continues to grow in application, with the reinforcement environment expanding. We see opportunities to introduce proprietary enzymes in our workflows, and our internal processes to optimize performance and cost as well as reduce our dependence on suppliers. And in the longer term, we believe Nucleic Acid Therapeutics provides a personalized diagnostic and therapeutic approach that will improve patient outcomes and positively impact the healthcare system. With the growth across the market we serve expanding, our serviceable addressable market is projected to be $13 billion by 2030. In addition, Our innovation engine will continue introducing new capabilities that we haven't mentioned here today, expanding that upside opportunity. On slide 24, you'll see that we feel confident in our ability to drive continued growth moving forward. Specifically, we've just delivered our 14th consecutive quarter of revenue growth at 23% growth year-over-year. We believe we have a strong growth trajectory to more than double revenue from organic growth in 2031. We guided to $123 to $124 million for the first quarter of fiscal 2026, growth of approximately 25% year-over-year. Based on customer demand, our current funnel and other growth, we expect momentum to continue. We expect to meet or exceed our guidance of triple-digit percent order growth for AI-enabled drug discovery in fiscal 2026. Based on our robust funnel, We expect to again deliver triple-digit percent growth for orders from AI enabled drug discovery in fiscal 2027. We expect growth margin above 52% for fiscal 2026 with a goal of margins of more than 60% as the business matures. We expect to achieve addressability breaking for the first quarter of fiscal 2026 and we expect to maintain this commitment for fiscal 2027. And we will continue to meet our customers where they are, enabling them to truly change the world for the better. At this time, let's open the call for questions.

Thank you. As a reminder, if you'd like to ask a question, please press star 1-1. If your question has been answered and you'd like to remove yourself from the queue, press star 1-1 again. Our first question comes from Brendan Smith with TD Cowan. Your line is open.

Great. Thanks for taking the questions, guys, and congrats on the quarter. I wanted to first ask actually just about the relative breakdown of FQ3 revenues. I know you talked a little bit about this already, but it looks like their PX revenues were incrementally down sequentially. The volumes do look good. So I guess just any additional color there on some of the ordering dynamics we should maybe be aware of. And then on the new FY27 outlook, of repeating triple-digit AI growth next year. I appreciate all that as well. I guess is that based on, I know you said the funnel, but is this kind of based on some visibility into orders already coming in? Is this kind of reflective of ongoing conversations you're having, any particular inflections in the type or quality of orders over the next year or so? Just kind of any color you can give us to support durability on that scale would be great.

Thanks. Thank you, Brendan. We're very excited about this quarter. We're seeing a lot of strength from existing customers as well as new customers coming in. Obviously, we had a growth of more than 20%, and we're guiding a growth of more than 20%, actually, almost 25% for people. So things are going really well. In AI, enabling discovery in particular, made us a few things happening. First, customers that have built their model are turning the crank. And then we're seeing new customers coming on top of that. And then even the existing customers that have been turning the crank now are starting to look at new modalities. So you might see people coming in with just a a VHH and then expanding to full IDG and people are not quite broadly talking about AI for bi-specific but we know it's coming. So talking to customers, looking at the quotes we're giving them, the number of sequences that they have in mind that they want to build either as full DNA or ArrayDNA give us very, very strong confidence that the triple digit percentage goal that we see in AI-enabled discovery that we know we're going to be able to deliver at 0.26, we see it continuing again from the square session with

Thank you. Our next question comes from Puneet Sudha with Lyrinc. Your line is open.

Hi, guys. Thanks for the question here. I'll wrap my questions in one. So look, on the gene shift, you're seeing quite a bit of acceleration here, 56% growth. But wondering why is the protein segment growing only 39%? Just wondering if there is any pricing or ASP compression that you're seeing. And I think the bigger question here is that you're pointing out triple-digit growth this year, next year, triple-digit order growth again for AI. But how is the AI... Order to revenue conversion. I think that's a key question we're getting. And for Adam, on adjusted bid debt, if you could, could you double click on that and provide us how do we get to adjusted bid debt break even in fourth quarter and keep that sustained or higher in fiscal 27? Thank you.

Thanks Pudit for the great questions. The number of genes is growing massively, which is great, right? I think for us we can process them easily on our automated systems and it would be very hard for anybody else to absorb that kind of provenable. So the therapeutic business grew 49% year over year, so very much in line with the growth of genes. It's correct that the SPS quote unquote only grew 36%. I think that as the volume growth comes primarily from Antibody type sequences. As you know, those sequences are shorter than maybe plant genes. And so as we see the growth coming primarily from human therapeutics, there's maybe a shift to smaller genes, which is totally fine with us. But the key is AI is doing exactly what we thought it would do. It just creates more sequences. And the stuff that I mentioned is that biology is becoming more digital, more data-driven, and more AI-enabled. And that just brings more demand for more ends, more frequencies, and we're absolutely seeing it in our data. Adam, do you want to take the second question?

No, absolutely. Thanks for the question, Vinit. In terms of order to revenue recognition, we're noticing, particularly with AI drug discovery, that the timelines for projects are usually measured in weeks. So at the end of last year, when we had a pretty significant order step up towards the end of the fiscal year, we saw there was some separation there. But as we go into 26 and look towards 27, the two metrics converge pretty nicely. The other question in terms of adjusted EBITDA, and the path and the bridge to Q4 and beyond. No, great question. And, you know, we've been very disciplined over the last number of years with how we've managed the business and our investments. And we continue to do so. And so as we look into Q4, we had the one timers associated with some of the employee transitions in Q3. as well as some continued investment in our new digital capabilities that we've here launched in Q4. So we expect to see sequential improvement in the OPEX moving forward and starting in Q4. So we see the path to adjusted EBITDA positive in Q4 and then being able to continue to make progress on that in 27 and beyond. Thank you very much.

Thank you. Our next question comes from David Westenberg with Piper Sandler. Your line is open.

Thank you so much. And maybe I'll just add on to Puni's question on the EBITDA bridge. I appreciate the color there. Do you expect 2027 to have Continued Momentum in 2027 with that EBITDA bridge, i.e., do you think that you could stay EBITDA positive throughout, or do you think it's going to be quarter on quarter, but the year you're really focusing on that EBITDA? And then kind of for a second question, I was hoping you could give maybe some color on the new product mix in NGS, particularly around some of your new whole genome offering, and then maybe some of the more expansive or Faster Growing New Products from Customers in NGS. I mean, I'm thinking about Shield, but, you know, any other ones like that that could be just incredibly high growth potential and how they did. Thank you.

Thanks, David. Great to have you. Thanks for initiating and for your first double question. I'm excited to add on for your first one on the just a bit of momentum and then add it for for the new clerk in NTS.

David, great to hear you on the call. In terms of our commitment, we've said we're going to give full year guidance in November, and we plan to give a robust outlook. We're not in the business typically of going backwards, that being said. You know, we look at our full year adjusted EBITDA this year, improving year on year to being positive for the year. And we look to make sequential improvements wherever possible. We also recognize we love our employees and give them a raise at the beginning of every fiscal year. So we're going to balance that. We'll give a full guidance as we approach November. And then also in terms of how we look at the business long term, you know, very positive progress on both the growth trajectory as well as the commitment on continued progress across the board.

And Dave, just topping off what Adam was saying, just coming over to your questions on products and the NGS space. And from a workflow standpoint, it's a good time just as a reminder on how we've built out some really well-differentiated insights using AI-driven discovery and development methods The critical in whole genome and other workflows is high-performing ligase and high stealth and high-performing polymerase, both of which are featuring in our kits, which are benchmarking incredibly well, both internally and in our customers' hands. And so that's a long-term commitment to enhance our customers' success in their experiments. And it's going to be an ongoing drive into the market. And if I move across into the emerging applications that we're excited about, you know, I'll just call out MRD again, molecular residual disease. Obviously, we have workflows for any approach, but in particular, maybe just spend 30 seconds on the tumor informed platform. And what you're seeing there, obviously, is a correlation between increasing probe count derived from knowledge gained from sequencing the patient's tumor, leading to higher sensitivity tests and therefore better patient outcomes. And we see demand continue to increase. And if I just go way, way back to talking about something like our current capacity for something like 32 million oligos per day, if you can imagine a situation of hundreds of thousands to millions of tests in the future, all demanding thousands of probes, tumor-informed, delivered to a patient in or sorry, delivered to a service lab or to a hostel or wherever a customer is in a very, very short period of time. And by that, I mean, you know, a couple of days max. And we're pretty excited about where that segment's going. It's another beautiful application of our synthesis platform.

Thank you. Our next question comes from Sabu Nambi with Guggenheim. Your line is open.

Hey, guys. Thank you for taking my question. Good morning. As we get closer to 2027 fiscal year, do you have any preliminary thoughts on 27 growth outlook? I know you said you'll give providers full guidance, but then you touched on this a little bit about 20% growth for both NGS and DSPS. Is that reasonable? And if yes, this will be above your LRP of mid-teens growth. And then I had a clarifying question. You had 25 million AI-related orders in 2025. Even assuming 100% as bare minimum triple digit, that would be 50 million. And now you're confident that 50 million growing to 100 million. Did I get that right? Thank you so much.

Yeah, thank you, Subbu. Yes, you got that right. That's some sort of clarifying comment. In terms of long-term growth, I think that overall the trends are in our favor. I did just mention the trends in MRD where I will fully repeat this comment. Basically, what we're hearing is for high-sandage VT, people want more folks. And in order to be able to fit their window for the therapeutic, it needs to be delivered flat. but specifically what we feel is the speed of delivering thousands of flows to another industry. We think that that trend there is going to be a very strong sell in our wind. In terms of AI discovery, it's just incredible. The business is peaking through all the cylinders. Last year, a year ago, was a big order in the SPS and now it's a regular small order. Really, we've seen a change in the order pattern. We are pushing just big, chunky orders and then sticking to customers in what they need going forward. We've heard about the the model for those AI bots needing more and more data points. It's the same for every source. There's a growing number of data points that are needed and we can feel that hunger for data points. That's great for us, that's what we deliver. So we're going to be there to serve our customers. Overall, again, we're not guiding to 2027. But Q4, we're guiding to a very, very strong Q4. We're guiding to a fiscal 26 years above 20% growth. We're guiding to just a little bit of recovery in Q4. And we couldn't be more excited. about what's going on. Again, the SWIFT platform is really meeting the moment of what our customers need both on the NGS and the DNA synthesis and protein solution side.

Thank you. Our next question comes from Kyle Mixon with Canaccord Genuity. Your line is open.

Hey guys, thanks for the questions. Congrats on the 49% growth in therapeutics. Very impressive. However, as was mentioned earlier, the revenues were down or kind of flat quarter to quarter. There was some competitive action taken by other vendors in the field. There was some discounting, I believe. Is that having any impact on the therapeutics and the AI for discovery business? at all. And then secondly, Adam, you raised the guidance by $10 million or so. The beat was $4 million. Where are you expecting this app performance in fiscal fourth quarter to come through among the different industries and the products? Thanks.

Yeah, thanks, Kyle, for initiating and the question. Yeah, 49,000 growth quarter-by-quarter is outstanding. We are raising The Guide by Troy Mendeleev, which is three times the beat. So obviously, there's a lot of confidence. Maybe I'll step back to one sentence that Patti said in his remarks, which really encompasses us to do a twist, which is that we do not optimize for a single quarter. Instead, what we're doing is we are focusing on building a stronger company every quarter. So we have our highest firmly looking ahead. Frankly, not worried about competition at all. The kinds of numbers in terms of thousands of frequencies that people need in an array format, or the millions that people need in a full format, I don't know if there's any other platform that actually can deliver that kind of number. So for us, we're not really worried about competition. It's about being there for our customers, hearing what they need, and meeting their first data point target. And we think we're doing really, really well. And as people start to expand to new modalities, and a lot of the AI so far has been done for DHH and we're trying to see IGGs. At Ripple, we're going to new modalities as more customers that maybe a year ago were on the sideline, now squarely engaged. Again, we would not guide to a triple-digit percent growth on AI drug discovery for 2027. Thank you. Our next question comes from Matt Larue with William Blair. Your line is open.

Hi, good morning. You provided some details on customers who have sort of progressed from model building to crank turning and then expansion of their overall work. I'm curious if you maybe speak more to the new customer activity that you've seen over the last 12 months and if there's any way you can help us put a number or direction on the number of customers still sort of just starting or getting into AI Drive Discovery as part of their workflow today. That's the first part. The second is related, which is when we were at the Investor Day, it was clear that one area of physical investment you were making was broadening the data capabilities or the capabilities to serve data characterization. And we'd just be curious if you could, again, sort of put in numbers on how that business is growing, demand, what kind of services are being asked for there. and that would be helpful again to contextualize the order growth for next year. Thanks.

Thank you. Thank you, Matt. The growth for next year is anticipated to be very broad-based. We are actually adding capacity now ahead of the demand in the data characterization. As you know, the capacity that we have on the DNA synthesis and protein expression is really outstanding and ahead of what people need. And so, we know that the data piece is very exciting for our customers. They don't have to build a lab, they don't have to worry about maintenance, about calibration, Machine to machine reproducibility, we take care of all of that. So being able to have a one-stop shop where you give sequences, thousands of sequences, and the target that you're interested in, and being able to get data is very appealing. At the same time, we are a custom business. Our customers want different things. different blend of tests, different conditions, different buffer, different solution. And so our platform is built for that as well. So to your question in terms of where will the growth come from? Frankly, it doesn't really matter. We don't really care. We will be there for wherever the science takes our customer. At the same time, we anticipate that a lot of it will come from the data side.

Thank you. Our next question comes from Mac Etoc with Stevens. Your line is open.

Hey, good morning, and thank you for taking my questions. Maybe just a clarifying, sorry, my connections may be a little bit spotty, so if you answer this, I apologize already. But the Change in expectations from 3Q to 4Q, 4Q implying a sequential step up and DSPS now. Can you just double tap on the drivers that you're looking at there and what's changed and how you're looking at that from the past quarter and now in 3Q? Thank you.

Adam. Thanks for the question. So in terms of the guide for Q4, we are expecting sequential growth in both DSPS and NGS Applications. We continue to see both strength continuing in the diagnostic space sequentially as well as in the therapeutics, often driven by the AI drug discovery. As we look at that strength continuing, it's really a sediment to the pipeline of opportunities we see. We see growth both in terms of the new customers coming in as well as in the repeat business across the DSPS and the ADRA discovery space.

Thank you. Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.

Hi, Emily. Congrats on the next print share. And my first question was, you know, getting back to those AI orders, I think in the past, you know, Twist has necessarily had its short cycle or order cycle, right? Shorter duration order cycle. I'm curious on commenting on fiscal 2017 AI orders. That, you know, implies a lot of visibility. Maybe could you elaborate what is different about AI that gives you this longer-term visibility versus the typical order book which seems to be more short a cycle?

Yeah, no, thank you. That's a great comment. It's true that you're 100% correct that in the past, we've talked to pharma companies, and they will send us some sequences, and we would not, you know, we would ship them very quickly, we'd get paid, and we don't, we didn't always have visibility as to when the next batch would be. I think for AI it's a little bit different because now we're thinking about very big numbers. Now we have all the from the DNA synthesis and protein solution side that's similar from what we're getting in the NGS side. And when you're thinking about big numbers, millions of dollars, and now you need an MSA and there's some discussion up front of What do they need? And it's more our customers making sure that convincing themselves that we have the capacity to do. And so they are a lot more transparent in what they need. And then when the others come in, again, those are big numbers. There's a lot more engagement and transparency on their side. with what they're going to do with it, what the next batch is coming in. And so, in some ways, we have been much more engaged in the science of what our customers are doing than we were before, where we were, quote, unquote, just a DNA provider or just a sequence provider. Now, you know, we've moved to the next level of providing a solution. and they're talking to our CSO with a drug discoverer, right? And so it's a much higher level of engagement and that's why we have more visibility than we had before.

Thank you. Our next question comes from Luke Sergat with Barclays. Your line is open.

Great, thanks guys. Just a couple of cleanups. Did you already call out the amount of AI revs you guys had in the quarter or what's embedded for the full year guide? So that's my first one. And then the second one is more, we're getting a more, I guess more not pushback from the market, but just more interest in the market from GenScript Turbo Show. We're hearing about that side as we're doing more work on the AI labs and like what this could mean for you guys, but we're also hearing them come up more in conversations given the cost and they have a different scale than you guys so kind of talk about where you see the competitive dynamic shaking out what you would need to do you know from a scale or you know uh turnaround time anything that you guys can do there to to to continue to to win share and own the market and i'll say so i'll start and then uh i'll pass the question to

and Adam on the financial question. We don't worry too much about the competition, frankly. We try to hear what customers want and then do that. At the same time, having a healthy family area and looking over the shoulder is important. I think in this case, it's a bit different. We started as a DNA company and We didn't have, 18 months ago, we didn't have a big presence in protein. And through the engagement with customers, we understood that they needed protein and data. And so over the last 18 months, we built something that we think is pretty unique. In some ways, we are leaping ahead of GeneScript because we don't believe they have the same data capacity and capabilities as we as we are so in some ways we are the descriptor not the other way around. Cubotro has been around for a long time and frankly our customers don't care what kind of show you need you use they want to know what Thank you very much. Thank you very much. are being produced. And then, very importantly, the end. How many sequence can I test? If you're talking about millions of data forms in a pool of assays, I think we are unbeatable there. If you're talking about tens of thousands of sequences, In terms of AI orders and revenue, I hit on it earlier, but if you looked back a year ago at this time, in Q4 of 2025, we had a record order from an AI drug discovery project.

that really made the cutover at the end of the fiscal year. Some of that order drifted into revenue recognition into Q1 fiscal 26. Looking at 26, the timelines are much more lined up. The progress has been smoother, and we've had a broader base of customers upon which to grow on, and we're seeing that the orders and the revenue are much more lined up with each other. Although we haven't given specific breakouts for AI drug discovery quarter and quarter, I point everybody to the progress in therapeutics and really the outside growth in therapeutics primarily being driven by AI drug discovery. So looking forward into 27 and beyond, we'd expect the revenue and the orders to be more lined up like they are in 26.

Thank you. Our next question comes from Robert Bamberger with Baird. Your line is open.

Yeah, thanks for taking my question. Academic and government went from 3% growth last quarter to 32% this quarter and up pretty nicely sequentially. So any change in what you're seeing in academic and I guess what caused those outsized gains and then any commentary on the academic promotions as well?

Eddie? Yeah, good question. Thanks for that. Yeah, the academic segment, good quarter, team executed well. It remains a A dynamic environment, and we'll continue to execute well into that segment. Our value proposition continues to resonate. You imagine a budget-constrained environment, cost, speed, quality, essentially more shops on goal for your budget, and it resonates well. It's something that's a segment we've underserved in the history of TWISP. and Express Genes and Promotions into the segment continue. And we just focused on, like all of our customers, delivering a really fantastic customer experience. Once you're on the platform, you're not going to go back to pay more or slower products. We'll continue to execute day by day and we'll look to continue our strength in that segment.

Thank you. I'm sure no further questions at this time. I'd like to turn the call over to Emily Leproust for closing remarks.

Thank you for your questions. The story this quarter is simple. Customer demand continues to strengthen. Our execution continues to deliver. And the platform we've built over the more than 10 years that we've been doing this is creating an advantage that continues to widen. We remain confident in our trajectory and excited about the opportunities ahead. Thank you.

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone, have a great day.