0001581280-26-000019
SEC filingTwist Bioscience's revenue grew 16.9% YoY to $103.7M with gross margin expanding 370 bps to 52.0%, driven by strong DNA synthesis and protein solutions growth and cost efficiencies.
Twist Bioscience reported total revenues of $103.7 million for the three months ended December 31, 2025, a 16.9% increase compared to $88.7 million in the prior-year period. This top-line growth was fueled by a 27.4% surge in DNA Synthesis and Protein Solutions revenue and an 8.2% increase in NGS Applications revenue. The company's customer base expanded to approximately 2,538 customers from 2,376 a year ago, while the number of genes shipped increased 32.2% to 271,000.
Gross profit rose 26% to $54.0 million, with gross margin expanding 370 basis points to 52.0% from 48.3%. Management attributed the margin improvement to higher revenues and additional cost savings achieved through continuous process improvement initiatives. Cost of revenues increased only 8% to $49.7 million, driven by a $2.7 million rise in material costs and a $1.4 million increase in personnel costs, both linked to higher sales volumes.
Operating loss narrowed to $32.9 million from $34.6 million, as the $11.1 million increase in gross profit was partially offset by a $13.6 million rise in selling, general and administrative (SG&A) expenses. SG&A grew 24% to $69.7 million, primarily due to a $7.7 million increase in personnel costs (including $2.4 million in higher stock-based compensation) and a $5.4 million increase in outside services as the company scaled its commercial organization. Research and development expenses decreased 20% to $17.1 million, largely attributable to the prior-year sale of the DNA digital data storage business, which reduced personnel, outside services, and facilities costs.
Net loss improved slightly to $30.5 million from $31.6 million. Interest income declined 33% to $2.2 million due to lower cash balances and interest rates. Net cash used in operating activities increased to $24.8 million from $21.4 million, driven by working capital outflows including a $12.4 million decrease in accrued compensation and a $7.7 million increase in prepaid and other current assets.
Beginning in fiscal 2026, Twist reorganized its revenue reporting into two categories: DNA Synthesis and Protein Solutions (combining the former synthetic biology and biopharma services) and NGS Applications (formerly NGS tools). This change reflects the strategic convergence of the company's synthetic biology and biopharma offerings as it moves up the value chain.
DNA Synthesis and Protein Solutions generated $51.1 million in revenue, representing 49% of total revenue and growing 27.4% year-over-year. NGS Applications contributed $52.6 million, or 51% of total revenue, with 8.2% growth. The revenue mix shift toward DNA Synthesis and Protein Solutions (up from 45% of total revenue a year ago) underscores the momentum in the company's core synthetic biology franchise.
From a geographic perspective, the Americas remained the largest region at 56% of revenue ($58.4 million), though its share declined from 61% as EMEA grew to 37% of revenue ($38.4 million) from 30% a year ago. APAC contributed 7% of revenue ($7.0 million).
By industry, Therapeutics emerged as the largest and fastest-growing vertical at $37.2 million (36% of revenue), up from $26.8 million (30%) in the prior year. Diagnostics revenue was essentially flat at $35.3 million, while Global Supply Partners grew to $12.8 million from $8.5 million. Academic Research and Government declined slightly to $12.2 million.
Management did not provide specific quantitative guidance for upcoming periods. The company continues to invest in scaling its commercial organization and corporate infrastructure, as evidenced by the significant increase in SG&A expenses. Twist ended the quarter with $197.9 million in cash, cash equivalents, and short-term investments, and an accumulated deficit of $1,350.1 million. The company's ability to achieve profitability depends on the success of existing products, development of additional products, and leveraging its manufacturing facility in Wilsonville, Oregon. Capital expenditure commitments stood at $12.9 million as of December 31, 2025, with an operating lease liability of $98.1 million.
Cash and cash equivalents stood at $148.591 million with short-term investments of $49.358 million, bringing total liquidity to $197.949 million. Restricted cash added $2.394 million. Stockholders' equity was $456.095 million against total liabilities of $181.99 million. Operating lease liabilities totaled $98.05 million after $24.773 million of new right-of-use assets were recognized.
Note 9 discloses total minimum operating lease payments of $155.003 million through 2044, with imputed interest of $56.953 million. The company also reports $19.0 million in unsatisfied performance obligations expected to convert to revenue within the next twelve months. No inventory purchase or capacity commitments are quantified.
No share repurchase authorizations, dividend declarations or new debt issuances appear in the Notes. The $15 million liability related to sale of future revenue remains unchanged. Capital expenditures are visible only through cash-flow and balance-sheet movements; no forward commitments are stated.
Note 15 confirms a single operating segment. Revenue disaggregation in Note 3 shows geographic breakdown (Americas $58.381M, EMEA $38.365M, APAC $6.952M) and product split (DNA synthesis and protein solutions $51.06M, NGS applications $52.638M), but no segment-level operating income or margins are provided.
Operating cash flow (CFO) was -$24.8M, worse than the net loss of $30.5M due to non-cash charges (depreciation $6.2M, stock-based compensation $13.3M) and working capital outflows (inventories +$4.6M, prepaids +$7.7M, accrued compensation -$12.4M). The negative CFO indicates cash burn from operations.
Capital expenditures (capex) of $10.0M were significantly higher than $2.3M in the prior year, reflecting increased investment. Free cash flow (CFO minus capex) was -$34.8M, a substantial cash burn.
Financing activities provided only $0.3M, primarily from stock option exercises. No share repurchases or dividends were paid. The company's cash position decreased by $34.4M to $151.0M.
Anomalies: A large operating lease right-of-use asset of $24.8M was obtained in exchange for lease liabilities (non-cash). Income taxes paid were minimal ($0.2M).