0001581280-26-000040
SEC filingTwist Bioscience delivered 19% revenue growth and 200 bps gross margin expansion in Q2 FY2026, driven by strong DNA synthesis and protein solutions demand, though operating losses widened due to increased SG&A and a $7.2M litigation charge.
Twist Bioscience reported total revenues of $110.7 million for the three months ended March 31, 2026, a 19% increase compared to $92.8 million in the same period of the prior fiscal year. This growth was primarily fueled by a 28% increase in DNA synthesis and protein solutions revenue and a 12% increase in NGS applications revenue. The number of genes shipped grew 32% year-over-year to approximately 300,000, reflecting strong commercial execution and increased customer adoption. Gross profit rose 24% to $57.1 million, with gross margin expanding 200 basis points to 51.6%, driven by higher revenues and cost savings from continuous process improvement initiatives.
Despite top-line growth, loss from operations widened by 10.4% to $45.9 million. This was primarily due to a 19% increase in selling, general and administrative (SG&A) expenses to $76.1 million, reflecting headcount additions and investments in the commercial organization and corporate infrastructure. Additionally, a non-recurring litigation settlement charge of $7.2 million weighed on operating income. These factors were partially offset by an 18% reduction in research and development expenses to $19.7 million, largely attributable to the prior year sale of the DNA data storage business. Net loss for the quarter was $44.0 million.
Beginning in fiscal 2026, Twist consolidated its product revenue reporting into two categories: DNA synthesis and protein solutions, and NGS applications. DNA synthesis and protein solutions generated $53.3 million in revenue (48% of total), up 28% year-over-year, driven by strong demand from therapeutics and diagnostics customers. NGS applications contributed $57.4 million (52% of total), growing 12% year-over-year, with momentum in therapeutics, diagnostics, and academic research.
Geographically, the Americas remained the largest region at 58% of revenue, growing 17% year-over-year. EMEA showed robust growth of 22%, increasing its mix to 34% of total revenue. APAC grew 30% but remained a smaller contributor at 8% of total revenue. From an industry perspective, the Therapeutics vertical saw the most significant growth, surging 55% to $40.8 million and becoming the largest industry segment at 37% of revenue, up from 28% a year ago. Diagnostics revenue grew 14%, while Industry and Applied and Global Supply Partners saw declines, indicating a strategic mix shift toward higher-value therapeutic and diagnostic applications.
Management expects SG&A expense to moderate in the second half of fiscal 2026 as a result of several cost-saving initiatives, suggesting a potential path toward improved operating leverage. The company continues to invest in scaling its commercial organization and manufacturing infrastructure to support long-term growth. A significant strategic move was the February 2026 entry into a license agreement with Invenra Inc. for its B-Body bispecific antibody discovery platform, alongside a 6.24% equity investment, totaling a $33.8 million commitment. This transaction, settled primarily through equity, aims to enhance Twist's biologics discovery capabilities without a material near-term cash impact. The company believes its current cash, cash equivalents, and short-term investments of $171.7 million, combined with anticipated cash flow from operations, are sufficient to meet capital requirements for more than 12 months.
As of March 31, 2026, Twist Bioscience held $122.7M in cash and cash equivalents and $49.0M in short-term investments (U.S. government treasury bills), totaling $171.7M. The company has no debt. Shareholders' equity stood at $455.1M, down from $473.0M at September 30, 2025, primarily due to net losses. Inventory increased to $33.5M from $28.3M, driven by raw materials buildup. Contract liabilities (deferred revenue) were $7.1M, relatively flat.
Total future minimum lease payments under noncancelable operating leases are $151.1M, with $6.2M due within the next 12 months. The company also has a $15.0M liability related to the sale of future revenue. A litigation settlement accrual of $17.1M was recorded, with $14.9M insurance receivable recognized as probable. The asset acquisition of Invenra's B-Body platform involves $20.0M total consideration ($5.0M cash, $10.0M stock issued, $5.0M stock to be issued upon tech transfer).
No share buybacks or dividends were executed. Capital expenditures totaled $17.9M for the six months ended March 31, 2026 (8.3% of revenue). The company issued $10.0M in common stock for the Invenra investment and $10.0M for the asset acquisition. Stock-based compensation was $32.2M.
Revenue is disaggregated into two product categories: DNA synthesis and protein solutions ($53.3M, +27.9% YoY) and NGS applications ($57.4M, +12.3% YoY) for Q2 FY2026. Geographically, Americas contributed $64.3M (58%), EMEA $37.3M (34%), and APAC $9.1M (8%). By industry, therapeutics ($40.8M), diagnostics ($40.0M), academic/government ($12.8M), global supply partners ($11.4M), and industry/applied ($5.8M).
Net loss of $(74,528) was reconciled to operating cash use of $(42,373) after adding back $32,209 stock-based compensation and $12,608 depreciation. Working-capital swings were mixed: prepaid expenses rose $(18,861) while accrued liabilities added $22,793. Capex intensity increased markedly to $(17,861) versus $(6,412) a year earlier, driving investing outflows to $(22,639). No dividends or material share repurchases occurred; only $(10) tax-withholding repurchases were recorded. Financing inflows dropped sharply after the prior-year $15,000 liability-related financing. No free-cash-flow metric is disclosed. Anomalies include several non-cash investing items such as $10,000 common-stock issuance for equity securities and asset acquisitions.