Twist Bioscience (TWST) 18 Nov 222022 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Twist Bioscience Fiscal 2022 Fourth Quarter and Year-end Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Bitting, call Corporate Senior Chief Officer. like speaker to Affairs now ESG Angela today, Vice would turn over the your and I President of Please begin.

thank morning, for today today's Twist results our fourth www.twistbioscience.com. is Bioscience a call review in would questions. operator. quarter issued then questions are joining a to direction, the on of everyone. call and fiscal progress you, performance. Emily maximum you financial results which of Emily to for Twist. of our financial Good discuss with Leproust, limit the like Thank begin will to We our our We would come as CFO to all conference and Emily back on open of a us and upcoming financial then I and and XXXX call Jim your we'll recent that businesses. morning, our of you to available business With milestones website CEO call. at progress. this review on and to released courtesy at Twist; me Dr. Co-Founder Thorburn, Twist and Jim our two operational will others report on will the ask re-queue year-end

recorded. As be will available archived being reminder, Relations a this will our call website and for The be section portion audio is in weeks. of the Investor two

meaning within today's the During make the federal of securities will statements forward-looking presentation, US laws. we

future Forward-looking events future performance. operating statements or generally relate financial to or

With results forth we those the subject that more those as and in we statements as The periods may disclaim filings to and These from the these date Securities the beliefs results actual Commission. to and us the today are well hereof, in could except to to Exchange Officer turn issued to in regarding set call those materially forward-looking as and are I'll update as of Executive include and projected. risks information expectations Emily described release Co-Founder, any materialize, Leproust. differ fully risks uncertainties on our presentation press earlier by matters available cause now in actual statements, and Our financial not over forward-looking that, Dr. any law. Chief this obligation with based our required

Thank Angela, and reported XXXX $XX.X This morning, and revenue $XXX.X good fourth you, million the quarter. everyone. for record fiscal morning, million of for we

We and high-quality take our needs. in differentiated market continue to delivering Synbio expanding shares anticipating and products by both base, NGS market customer

increasing of and year-over-year, XX% slide instability call, In for published case conducted geopolitical and addition, And XXXX have optimization Twist our an of using number construction, macroeconomic a we conduct sign earnings as yet, X,XXX. we biotechnology of list some nodes to more. pharmaceutical and growth included partnerships companies one with grew discovery this customer webinars, revenue biopharma studies and deck products. In the has shutdowns, to base customers business COVID our to over our we who continues Fiscal been have of delivered projects. or

deep and and a total base. You customer just the broad that of see is contraction will list our

demonstrate Twist face the exceptional Our continues to team challenges. resilience of in

diversity Our multiple experienced hence, our in customer compete Taking each enables different technology. minute silicon DNA revenue that highlight risk market us to for platform markets reducing synthesis dynamics, base. through to a and

make These we – to chip have synthesis had of a our show you, The DNA length. traditional platform. on Lego by to XXX and process a opportunity plate to enables in day the making achieve proprietary top The than competition. lower DNA fab, chip, by DNA significantly stacking day For oligonucleotides of visit the used able bases us request our reduction this amount dramatic blocks pieces are growth XX.X% those to by making been we of have platform, called like another, material miniaturized built we to COGS, reduce reagents up of of who it compared driver silicon our DNA oligos plastic may then go the have on so not oligos. chemistry leveraging reagents using are easing each of can

and silicon being As it all oligonucleotides [ph]. common are the a magic of DNA mean, vast the We The call the magic, step our the it majority one [indiscernible]. of where reminder, sequences This meaning each is differentiation for the four any end, base building and that of happens, where originates. sales customer defined technological products, of blocks of I DNA, by half products. ACGRT of is of our and by are front chip

operators appropriate and these of the is enrichment unique processes sent to NGS might production, workflow. back-end on. flavor based front be to each back-end designed leverage how chip the we each in by parallel to the silicon then on typically, synthetic the have the are. target oligos, on orders SKU that on made processes are and power, chip, platform these oligos, processes extract can for are and batch can scale, we of orders we But cost to multiple so Once run on Indeed, scale. oligo achieve of provides can multiple chip produced. the synthesized for orders NGS our technology chip, ADC end aside we on them controls work many liquidity, pools, unremarkable oligos This protein, because every from million such they projects. for back-end – in and chip differentiated are silicon we the all Because they Each remarkable DNA automation. X customers set group and up However, low commercial XX/X the the

in are cost, which manner low specifically the rapidly provide of shipping of used reduction go as products XXXX genes and compared to back [indiscernible]. new companies To are use a complex The with to on remain to experience we order -- to XXXX. Swiss and in an oligos $XX.X to training growth, a workflow today, speed direct currently continues track of the point enable XXXX, the XXXX. products of in-house test have manufacturing Synbio, in differentiator. the intricate than XXX by board producing of overall single an revenue bringing note, complex Future revenue we support significant for manufacturing and and fiscal orders XX% true strength Oregon fiscal January ramping is multiple This now processes industrial employees XXX,XXX generate academic alternative Oligo software, in million and biotech, growth. our is million well foundation them These genes turnaround and placement XX came packaging designing in as for products magic for pools fourth which and of them An Initial knowledge of to to labs, with multiple continued our chemicals Synbio that, in quarter. more a Portland chip moved from on and approximately automated current Francisco targeting we lab for same to track we further in in Portland order are Portland, and our genes Of scale culture. of verticals pools growth, XX/X lies pharmaceutical, turnaround to processes The developed XX these genes, with quality control, time us in out to increase an from half capturing Portland, focus extending ship revenue Factory genes, shipping begin for in on Synbio we will synthesizing our at the another of for processing, second average XXX,XXX in agricultural gene of the This in the shipping. fragments, processes that genes the highly across sending days about the time our important approximately With for Portland reported efficiency today. of training days our customers correct our South as employees employees year-over-year have employees. the our manufacturing that of as team make in San oligo XX is

genes, to the production time, we turnaround with our offer DNA faster market maintaining makers ramp to which expect believe gene synthesis As us the most while Poland, introduce cost-effective position as fast into we pricing, significantly in tap premium enabling will we provider.

wish calendar Tuesday, expect tour. of reduce genes fall to to who XXXX. to to We Please be investors you'd like like analysts Angela, visit. personally XX, a for contact tours November tour in On invite you I'd will facility. arranging the to fast give Portland and manufacturing if we our

to Turning NGS.

above to for strong our in We the in half of continued million $XXX the XXXX just $XX.X our revenue quarter, year for with million, coming of -- revenue bringing our shy guidance. NGS back fiscal

growing. the $XX.X For again quarter, approximately similar recently, half I'd structure force. market business XX% for like million be NGS to to shifted our to that Orders loaded, sales than at we XXXX core revenue out year, the we in XXXX. coming and faster the point back grew to expect service fiscal is

revenues metrics orders on our orders structure to continue has of our and numbers the remainder incentive significance build the important margin. not from with revenue and for be forward. business, for to revenue we tied equal As where sales and shifted now commission along bonus to the to team going our sales Both of we but If moved revenue. and the track, it for compensation orders one organization, gross is based both XX% is

continues of the longer On aware that read several genome you less whole exciting solutions landscape side, with and introducing now to for available the players sequencing expensive and market are sequencing new many options evolve offerings.

will base, opportunities. platforms. with announced technical will these sell set. will they events enabler Twist, that For by their leveraging and an an we sequencer-agnostic differentiated manufacture reach across we an a kit. we robust believe customer We whereby Indeed, Illumina, Exome recently agreement and and installed integrated will are Enrichment force sales We Target offer

the with PacBio new for sequencers. In addition, we're robust their [indiscernible] solution on working

a offer et we today solution, including complete sequencing hybrid Exome [indiscernible] For arrangement, adapters, EDI, target cetera. blockers workflow

to we and all opportunity When meaning an when initiatives sequencing, will Exome continue that like time, of participating sequence sequencing, our some to cost As have [indiscernible] will happens, down, genome sequencing to Exome germline populations our whole we expect sequencing. the move groups that applications genome from move offering. government-funded to applications comes from through sequencing whole

be mainstay. deep screening, different. large cancer very exome still to be they and For like will dynamic require the sequencing opportunities Indeed, continue sequencing the will panel will and market the

or sequences, more, with liquid disease mutations low genetic For instance, at minimal customers ensure to high deep allele frequency residual of coverage need or sensitivity. the biopsy disease, sometimes capture driving coverage order X,XXXx specific pursuing in

to sequencing decreases of applications, cost what as cost to expect see For the be contract these significantly per we all today. inhibitive it sequencing, beyond even genome we

and biopsy liquid and customers. that reduction assets, Of pricing cash believe the increasingly and product MRD by them is to expected adoption these will Twist costs reimbursement applications, we encourage of make sequencing decrease for remain note, palatable Additionally, will as in in the and In fiscal overall several even product adoption we the we anticipated costs When offering reduction constant, portfolio cost new vast over in with evolved price time. products sequencing NGS XXXX, majority as sequencing of NGS we drop. and the targeting introduced cancer. in our this introduced space 'XX XXXX, routing

workflow We up panel, our rapid Alliance to methylome at controls leading CFDA Panels the Oncology MRD the targeting XXX solution, panel support between Focus efforts liquid our added have and Belo And These to mutations. and Broad cost-effective patient-specific opinion the we enable products key for have biopsy like launched [ph]. methylation leaders a sequencer. and sample the our and by customers developed dominate institutions

that see market we're broad-based changes. XX% Once target need they about share Moving long before agencies taking revalidate as is of Today, a our sale and validation, reaches prep. test investments that will clinical in library add enrichment as cycle in for panels, is share have for customers biopsy a very in including of reclearance market, testing clinical clinical sticky, to through any we forward, as to the from enrichment regards and as testing, undergo growth testing, it commercialization to market regulatory verification, research coming plan. liquid they the Because need NGS applications. well pilot up target we for investments

We the have to to a addition gain lot phase. to share enter escalating an of customers who volumes commercial market for

the to quarter revenue million XXXX continue In which million, of yet future and bodes short $XX.X growth of for still which $X.X for fiscal fourth tremendous just pilots, guidance. almost in well Revenue year, 'XX came biopharma, September. our reported We for win in over we fiscal growth. all was

our that for in a in more orders local positioning at quarter Importantly, are as strong given than feeder we fourth strengthened and $X.X partner the ever. the fully we remained the million, having, with 'XX, conversations biopharma fiscal expect net now return high-quality

completed San biopharma had the Francisco, royalties active XX, programs Biopharma milestones team XXXX. with at base Boston have of ongoing in XX as programs. associated programs XX the partners and XX The Twist XX XX September are we currently XXX in For with Twist projects. active and of

original look as portfolio the synergies As Boston Working the offering of expect ahead, we we in long a the our for. our second we We growth are quarter illustrates did the comes actually year, invested combined the when segment. reach to our product a when believe service to decisions. expand did Revelar, and Twist for market commitment, materialize. We capital we launch take shot. will us not to XXXX. of a reference towards with discipline we targeted biopharma not share together the we moving opportunity little investment in have over a not amount quickly With continued across enable do are the together small for and it exceed we incredible that see hoping up outcome to team This

data XX including on team, engineered have storage. working We to XX Moving on the employees now incentives.

megabyte chip, bring of to us expect one in continue enable which will of our silicon move from a megabase one gigabyte to up chip. We one writing data data proof-of-concept to we --

the also our early working enable customers. system. to chip to [indiscernible] integrate our first pilot us DNA to are prototype electrochemistry access This We will system into writer launch

new October, partnering expected aggressive controls of announced retention data has financials. to President eight of Importantly, objectives. conducted I external us years, he been to the to of Jim? was the phase our success. newly of responsibility. to and look central turn With our we archive Patrick provision team are appointment and late a that, to next plant like company for fiscal I'd and and In Finn executive an lead to archive longevity. and call position take equipped person the demonstrated a the Patrick over search COO. set for is our with the We Patrick standard right our to taking Patrick the to growth forward for Jim through greater achieve in

quarter quarter, All million, environment. growth from that's XX% the an $XXX for year-over-year. for margin quarter and from of right. with Thank to record year volatile increase and to XXXX year million million great XX%, and XX.X% Emily. to year $XX.X with million. another you, a for up was growth $XX.X a was Gross fiscal that's investments fiscal for which was terrific We brings leverage. XX% macroeconomic four had despite Twist Revenue another at year-over-year and year our for the $XXX growth of and XX%. which shipped the margin of We Twist, cash were orders brings revenue and for million X,XXX last approximately closed fiscal fiscal last million and $XXX.X gross reflecting improved Orders approximately year, and for quarter the that's year the we approximately customers, $XXX

has revenue year $XX.X was XX% and Our is growth million, another strong which year-over-year. NGS business

was fourth product X,XXX of revenue year-over-year. an quarter of increase approximately in of portfolio XXXX. accounting approximately XX customers NGS fiscal NGS $XX.X the the This XX% and top growth that's and Our strength for with reflects one-third our our revenue customers received million,

noted up earnings from now on increase XXX large quarter. for We're adopted last pipeline call, Twist, have an to our opportunities XXX XXX scale. accounts, tracking from Our continues last XXX

libraries XX%. and Now million to compared year all an increase fiscal genes, preps, rose which to good revenue $XX DNA million $XX.X pulls. turning in that's of The Synbio for XXXX, Synbio, to includes IGG, and the

customer with in million, from from increase the year fiscal $XX.X customers. This from fiscal companies. to million million, in a fiscal Genes genes base, XXXX Synbio $X primarily strong approximately XXXX Healthcare of demand XXX,XXX biotech shipped pharma increased year. we a including Oligo the and segment. up revenue includes to diverse large that's Pools significant approximately previous million, X,XXX increased in from had revenue a include and up and the $XX.X with $XXX,XXX of shipping highlights Some and $XX

business our revenue low $XX fiscal range was million. Nevertheless, antibody our We discovery and XXXX. for continue up below in of was XXXX $X $XX.X million, to the fiscal million of from scale end

noted which quarter the loaded And our orders back-end were $X.X Emily million the in was quarter. flat As quarter. earlier, million, third four was $X.X consequently, of revenue to

our in customers XX XX Twist For Twist sequentially Beacon platform. the Biopharma antibody EMEA growth on I'll XXXX of with APAC the the our increasing in regional business fiscal $XX.X XX and versus customers rose from up deliver from XX total $XX programs million now XXXX. active continues royalty million platform, fiscal quarter, we for progress. is fiscal programs agreements. now US Abaris, then have including revenue quickly of our XX doing back million $XX.X XX well include versus partners, to completed with XXXX. million serviced projects milestone million -- Boston revenue and $XXX.X under in XXXX revenue programs XX cover $XX.X was million million XXXX, fiscal in fiscal in our to the $XX.X XXXX in hands in fiscal $XX robust to in

the down moving Now, P&L.

million. and gross for of was Our brings $X.X margin our the comp the depreciation gross overall margin million, to for margin includes fiscal XX.X% stock-based gross Note XXXX. quarter XX.X% of this $X.X

from contributed XXXX $XXX.X increase operating break for fiscal and value continued our million reflecting acquisitions new change million, in $XX and $XX $XX million continue of up for it million R&D $XX as to our fiscal fiscal Core in XXXX. million, R&D R&D R&D spend products invest down, storage investment in fiscal To in expenses million million development. year adjustments from Our antibody million, approximately XXXX. million in an $XXX including process was to $XX $XX was in Antibody the million was and for was in compared $XXX the $XX mark-to-market from business. we spend up Revelar XXXX. to discovery to fiscal XXXX, year. Data year, million fair was SG&A in fiscal fiscal compared as $XX the business previous

original previously $XX have be million. We the given spend storage data guidance that would

burn fiscal stock-based the year million $X.X storage. million, of $XXX.X that contingent $XX the fiscal of costs million, fair fiscal However, Change SG&A were million. in XXXX. and XXXX, $XXX.X compensation managed Stock-based for including $XX Start-up resulted the was increase of an year for $XXX we fiscal in in that in and million includes approximately $X costs. million value of year was and which million fiscal XXXX, in spend SG&A million as $XX holdback for in Portland includes fiscal for in XXXX. million million compensation manage unfolded, costs year approximately this comp of compared to versus gain a $XX in compensation indemnity in of a $XX gain as considerations the data

four, estimate enjoyed million in higher accumulative U.S. fiscal now million highlighted XXXX. XXXX, the accounting Our XX, to growth, like for net record earlier. for another $XX auditors. have a We approximately million, million QX We range in due in the costs by year, to XXXX, been million $XXX is inventory be for was to and to published the million, projecting total to this down I'll $XX CapEx million our to impact our seasonal variants $XX conformance and to of GAAP, capitalized million. $XXX as environment first million. and seasonal $XX will the million for customers approximately large fiscal year million. the September CapEx XXXX Portland million we North the OpEx year QX million XXXX and no $X million We is a antibody revenue $XXX $X QX, standards quarter, $XX of revenue The guidance be and of fiscal fiscal million is for the vacations for material for of XXXX. $XXX $XXX million approximately fiscal shipments million. be adjustments revenue for which And primarily first of the NGS, we're of fiscal before includes estimate quarter continue and the approximately and with however, fiscal with of cash as under for more estimate be We sequentially. compared are year the note, macroeconomic equipment in to is $XXX $XXX.X there due provide due software. taking bookings taxes loss improvements, for was $XXX quarter, guidance year as average for in our to fiscal and exited million I'd and investments XXXX, along approximately couple our to year SARS-CoV-X strong $XX vacations. proposed for with reason $XXX SynBio for million. a to to lab $XX to $XX be the in We $XX quarter report million independent of $XXX.X discovery to million. NGS year manage

expense Our the to $XXX our gross be fiscal which and for million in is in to includes operating XXXX and XX%, $XXX margin million SG&A. R&D projected be approximately year, to $XXX projected million XX%

$XXX $XX be $XX amortization million is expense is for $XX Our approximately to guidance expected and of projected million. year-end be cash to before and $XXX with includes million. of is of for at deployed expected be net and the million, XXXX $XX balance expected to storage projected approximately approximately CapEx data million, to comp Wilsonville, another stock-based approximately be fiscal loss depreciation which million in fiscal XXXX approximately million, year of taxes $XX

operating stock-based OpEx anticipating $XX $XX and For to projecting of includes and antibody choice depreciation leading summary, we and approximately NGS sample be had synthetic we're expanding approximately And DNA across year discovery. million, is our scaled loss capabilities and high-quality, to DNA We're capabilities, storage XXXX approximately storage of of position million, In to million. and be a OpEx were of that continuing approximately $XX approximately $XXX CapEx prep. and on million, be for the million affordable year-end includes $XXX XXXX, discovery of of amortization to $XX revenue XX%, fiscal million build Gross to which to million, approximately margin to and $XX continue be $XXX million provider approximately a data our to comp data a be $XXX industries. as cash in antibody of our now customers have multiple record strategy. supplier our deliver balance related we million

there outlined Although and macroeconomic back on opportunities focused about in on projections that, volatility, the is excited we're financial call. ahead With executing today's the to call are Emily. I'll turn the

you, Thank Jim.

As fiscal three-year We've and XXXX the remains the to is profitability focus our core the driving business our $X out adjusted path on breakeven now million outside with core and well targeting breakeven underway, our In Factory in Synbio, we laid business. of for January to for guidance reach of Portland, Oregon XXXX. to revenue we initial adjusted in the of out expect biopharma. generate to in EBITDA Future are revenue EBITDA

larger footage we products to new that Synbio this Genes, the production in our add square impossible begin will qualify products. facility, new from we panels, genes long Fast for of the R&D-based and processes benefits As including site,

sample library biopsy making up storage. to larger been synthesis AI are For writer. Archive good have the solution With bringing calendar four and seamless market discovery another they new NGS, access down, the and portfolio and of Boston between as focused back chip hasn't while both an reach data stage the data to gave offering, At complemented as owning years sequencer. collaborations. half-loaded continue little machine our In deal costs with I easy. in for electronic speech in antibody early In and preparing of coming pilot run the learning and biopharma, Century the in-house, we cancer with by on with launch leaders results. sequencing the public in storage to the producing and DNA from parallel, their and discovery solutions our approach when integrated continue to to with we accessible individual the first XXXX. production between workflow Century it our across paired commercial an expanding partner will team offering our ago. chip data In efficiencies integrated we late reminded Archive expect fully our customer our plan capitalizing always our Overall, commercial a we are we I'm liquid went controls remain tests storage, planning over optimization progress Twist, we for set the success on We

fact, it always In overcome we challenges never been has contribute we easy, face. but the to

the the opportunity to year We again that, have throughout have And of Operator? discipline for day, call questions. confident. open growth. embodied strong each resilience the we and at go another organization report financial With let's the to

Thank moment [Operator for One Instructions] you. first question. our

Mah comes question Cowen. first Our with from Steven

line Your now is open.

hear guys Can you Great. Okay. me?

Yes.

percentage margin and then core you grows year Okay. revenues? of factor the margins. you year $XXX scales Thanks in margins Would question the Jim, that Future gross guide? the million the taking Great. to And XXXX for XX% in mentioned it in year A you fiscal question. on the are XX% dropping in expect XX% fiscal Future utilization fiscal to the of gross XXXX. gross at I XX% to know XXXX as of they're achieve also, the factory then reiterating

Yes.

improved So in what growth terms factory And the Future utilization. utilization disclosed haven't for margin -- business. the as terms XX% gross longer-term achieving to we reflect XX% of where looks gross terms of the reflects still we in does and sight continue line XX% in line utilization, business, we're a in the see to margin top we the of of revenue of like. rate still scale The

you the question, the you your noted for validating part of that MRD, Great. that People lab are Are these validating developed the hospitals on MRD my Thank second is then you academic Thanks mix labs, users tests? Emily, doing your customers? sense are And reference that. give And product of basic business or us of the well. -- MRD a your then R&D? that Okay. mean lab-developed second for assays. is Did could you.

Steve. Yes, that's question. a great

run MRD to provide test. as reminder, regions So customers we enable a the to

So MRD just we are to clear. selling not be test, own our

majority the our developing customers MRD own are therefore, and that test. so companies validating diagnostic liquid and biopsy And their are of

Okay. into that’s helpful. the I’ll hop back queue.

Catherine moment our RW next comes next from question One for with you. Schulte question. Thank our And Baird.

Your line is open.

Hi. Thanks talk there NGS step you I first, for orders drivers the were sequentially. question. the Can going that to just in down the on? maybe guess

Yes.

And the I had seeing large some think the couple us quarter. noted of to in ship orders We first the call, of are our we in come a quarter customers couple asking issues. a actually year. -- calendar in previous of as

down customers just step terms of is are backlog onetime event very as pushing QX. of and in a their got a the number just in We orders orders strong that's customers. out So these

Our grow. to pipeline continues

So think, some good outlook impact NGS same the just fiscal where of going strong. lockdown about dealing I see next anticipate we're of that And China. year-end year time, for products and at strong we're our We're we vacations. signaling We are customers our at. quarter the one the feeling is in us be to with, on

other think business no auditors. efforts have a you highlighted the of earlier now. any while And regarding can you highlighted it. from -- those material how report material that's been your that for week, then been the Got are this just make proposed you your Can comments And a week? remediation I probably had given you adjustments Okay. talk events filings by to short Can in this you've progressing?

Yes.

Thanks, Catherine. So

of & practice. remediated no report. Ernst up and Young, a access terms PwC ITGCs. remains, issue highlights, & both mean impact helped order on is actually remediated user that issues. with the our one journal Ernst is business. we get the weaknesses, other personal an I a auditors. We weakness the material in strong firm. our moved ITGC weaknesses. purely the terms collaborate The with We've business, material our other health general references out And organization. we've Young ITGCs due significantly a of worked [ph]. I We short entry, and financials. grown well care me, in couple entry brought against three in some And things of we short eventually as order And report, our weakness, of health in Young. at to entry on So No on PwC care that's & business, that look if great We Ernst you we the because to entries

moved We is a this get executives and great wrong. ownership. XXX,XXX a prisons I social new get impact. of but and in the And are they the I them in help got share report build to to statements decline was had lot careers, companies on that to have decided development country I I and would a share actually to believe totally prefer offered think be I trained, ladies in shares, they

to you provide we as itself. for on we won't great a report. short speaks Mondays team questions just transparency always on Catherine, our comment strive business, We're very further that take to metal the and And happy but management state the know, the as

you. Thank Right.

our for moment One Goldman our you. Matthew question. Thank next from next And question with Sykes Sachs. comes

Your line is now open.

And market future relates about Hi. in capacity? Good for a a to Emily, my just like the one gene is about, a just I'm characteristic was time. market think turnaround important market, price but Could taking of you market know a will that it's time talk to sure be addition, market. building? about there what Factory that billion the because on can you're of I kind improvement talk what that thought bring and a there's out for question. to the little solve really just Future significant more the originally, the factor for else of building to you first mentioned and Thanks time, unlock you enough to is it's that market as talk bit factor that maybe with maker that turnaround $X.X them that really what looking for little it in Future you maybe past, capacity but make for? bit just time. for you've the going Factory morning. that's defining you're turnaround sure turnaround Could you, the the in it's I what more how

Matt. Hi,

genes now we've in for we million tube the alone. marketplace that than more Matt, been question, individual shipped years, this a of For the esoand year number X.X

really as groups. we in-source, want work makers that well what academic the resident of a and see as that the There's And the what big so is in market. have There grasp companies we good labs the customers products and two from find average. which if would free, What them. now, speed we that And the not groups very was from we get DNA. the speed that is they industry DNA those is need even is important have us it for at

so so we use that it to And them twice, the spending found the did of XX-step It's machine same production linear next do or for And analyze steps, themselves. machines an analyze South the we gene time and available. reason made is basis. the everything It go is And XX is a they to that data, in when why machine not effort freezers back-end We gene but of is be synthesis data order process create if we the waiting logged DNA San that's we today. we has its lay and that process same can synthesis. in a plan Francisco, conflict. why basically, have that when the is a process faster offer XX to we half the in to than that a to

there the time. directly chain. waiting So we machine. as the that into half in facility, one production fast done the the know process In we to where machines and we And bottlenecks, no fact goes Portland. it's one intrinsically, the we to go XX the now plate machine have next true finish can plays linear those can and And such is for a be remove we've one that's production if next next wait is that Portland what the

it's We're in low it's we there's side the changing not it' the we that's feel just the chemistry. steps. are between instrument. times process. so because the same – And It risk process why in not It's a – we think wait on no

with that digital slow the combination strategy marketing. of market back-end commercialization Portland addition, production in market. a different genes. enable to the There's the a us five So in to the layout unlock will makers of And will and that offer understanding leverage e-commerce

to And to has sure making with beautiful. when work to that our so five our frictionless we customer on intuitive, be e-commerce great and go the genes, we in solutions that, make through will have the transactability effort BXB

Emily. one for Jim, you. then, Thanks, it. And Got

on there's is million flexibility looking Just bit as period. $XX Could maybe R&D the at down storage. $XXX a SG&A million OpEx little you a is you within versus fiscal segments $XXX time DNA that split about little the million, talk that R&D SG&A closer of guidance that to know your that XXXX $XXX I expectations to the start two bit moving and those within million for that come the where is versus for

Yeah.

been growth breakeven as a see been line, grow the than And flexibility data manage to see terms back-end particular, which of that infrastructure, in We've line the storage income. in the rate three will continue we in the investment base out top to to slower forward, at haven't adjusted clearly and continue our rate the of us intend and we in previous manage our calls to we broken – investing our in SG&A, heavily last cost And office will years, getting infrastructure. to getting grow terms few we investment, portion. we support So highlighted R&D continue to our to see, then our OpEx, top to going scale as we've you infrastructure. manage specs, out that growth. OpEx is EBITDA continue we'll positive over to as the down leverage can SG&A to slowed – building of continue we've as of organization The

So we're end of close to that XXXX. very at

we can opportunity plenty to of the manage we've our as that adjusted runway to to have and breakeven, data EBITDA spend. As storage see, got we cash you get close to

Got it. Thank you.

Barclays. question. comes moment from our question next Thank for with you. One our And next Luke Sergott

Your line open. is

of everybody. -- cleanup one here. couple cleanup morning, A Good Great.

the give us assumption And you well? throughout year? sense that kind a So give for this as how year us of can of next FX trended

Yes.

So, it's morning. Jim. look, Good

So in business actually of in dollars and are most terms of most FX, our our dollars. of in is actually costs

there's in our business is a a impact, far. so maybe as although, not So, XX% impact huge

of some our go-forward actually In we're already locked a customers NGS, larger pricing a on of of with the lot basis, particularly, terms our in the prices. who

fringes, the impact a we not So, headwind some see in yes, terms around it's us. FX, but for of significant

All right. That's Cool. Thank fine. you.

so the about push-outs. On business, NGS the you talked rest of the

are they to customers orders this what related is all there? XQ? out to those to new So out on And saying technologies push anything the why

their it's timing, in be to it's going that terms matter based of a of customer in aware not just demand. -- The It's just head end it's I'm the of of where December, in timing. And not technologies. it's of, January. on couple aware to new customers shipped that's I'm

technology side Emily, I the any? So on anything haven't had if

I period it business. their purely of No, think Yes. of timing

last weeks especially this we always are the of and So and experience awkward. awkward have shipping, in year is December

And shut the so we that think customers be last of week most our of will December. down

And so, we are planning for that.

then one is And right. itself. gave impressive growth and by growth is, assumption -- roughly the flat me very of the XXXX you one All in last for guide XX% here and

online? Is you and the So the the coming it what's just to growth is factory then satisfying assumption really there's acceleration as XXXX, because future on, are wondering bring you printers future Synbio NGS here. of no to from online implication going your ramps, guys the any as that -- coming as of the factory on something the it why a here, like -- then, the continue scale mix the dynamics goes more And to or business? margin of that

Yes.

mean, future we're NGS So in factory XX% terms I XX%, of mix. but days, terms seeing early roughly we're of the in seen yes, of roughly the ramp, -- it's Synbio,

environment terms In the still is outlook, of macroeconomic volatile.

years we're here. of couple So a protecting

terms our So prudent in forecasting. we're always of

made the capacity. investments. terms We've In of

we've ample overall, investment, of that's getting and supports beyond. about $XX with of what, previous terms guidance to million And future, the we've made, in million million another and going capacity think terms the in of be to go, $XX we consistent $XXX I that's got factory the given. to

see execution makers headwinds highlight analysts capacity executing So into that on point as from we all as – a the and market. any the the then don't view of

Great. Thanks.

question. next our next Kumar for And moment Vijay One our comes Evercore you. Thank with question ISI. from

Your line open. is now

one Thanks guys. my taking for Hey, here. Jim, on question. accounting had I

operating the when comment Can accounting the this on maybe the or the past, a as Future two looked being classified And COGS last of expenses with raised lease how orders, third it's at how you CapEx. as is the when the works, cost, associated issues? address one is think quarter were in short change costs recorded lease I that? move and some the XX-Q, of the I the just by of OpEx, you being in from a Factory those that into points facility

Yeah.

moved that the it's balance being onto that I idea from. So in comes where of – no observation, terms interesting sheet, have COGS an

If you look million slides in of invested one $X we've at out the about today the and to laid improvements. We $X tenant took shows investment XXX,XXX for growth square the on over It's Portland offices, we the invoices. this all the CapEx, the the – et the and all structure interest feet piping, need essentially out installing improvement tenant cetera. building all building for labs, in

that the with in So items are investment on the sitting Portland, our sheet. associated balance

In terms of your other part of -- the what was Vijay? question,

going related under expenses factor a Is future a operating some of change the The to and…. lease that's versus that expense, prior of the OpEx.

and for that The year, million call we this leasing qualification was expenses that prior related $XX sitting the Future that in quarter. factory of to that to every part and and startup SG&A, out is is the of Factory

been for no there's we account in change that. So how

margins second there when are Thank you. gross basis going the when XXXX, XXX steep at from very at fiscal on Jim. XXXX gross points ramp, XXXX? is here to I cadence look cadence fiscal the confidence look maybe that first And one any on up margin that versus QX, a what's the like I here, half margins half And issues by seems here gross

Yeah.

So at XX%. look margin if gross our quarter, was you last

are there. of We've in levers the in through of of market. the our makers the Factory scale we and successful growing and number we improve got terms Future utilization a As

You underutilized get capacity. reducing reduced under impact of impact the of

higher get there. Second a highlighted, market, good faster is the Emily in get leverage terms genes, We of has price. makers the we

was mean that processes if investments transparency. of keep from give We our scientists. that the million in Synbio. R&D NGS our this to refining where just We're million investment we hired terms $XX terms products. increased In Synbio of made and R&D, million, What does that investment in $XX mean? in short keep new to to report launching point $XX million increasing additional look NGS I -- our in and from slide R&D, so at our another the $XXX increased in you we

A antibodies. to happen while of million in makers one-time to combination from increased that of XXXX a the storage gross spent investment I'm up million, roughly We revenue, position $XX Revelar we've stepped a $XX XXXX, scaling growth antibodies, growth in D& by our improving overall to market in So, million. makers market contribute on -- in our XXXX products. you're the R&D our in margin. $X event. just in the new was terms and $XXX in in $XX And Future, those up launching improving million million. will of going the have Factory seeing and in All not comment, R&D elements in the Revelar's terms then

see actually contributes in to our margin and gross growth well business improvement. as that we'll biopharma So,

Understood. one one. are I up. And Revenues if may, last

cash revenue growth ex-FPC expectations up look level that think, R&D Is I SG&A the low the our I of OpEx the think sustain that when OpEx XXXX of at X% versus think XXXX, and to here? I initial singles. up, I is is enough is XX%, the guide spend spend,

we look back the couple mean, last I over Yes, of years.

we Synbio for from after in to R&D there my Synbio million. have to of in NGS We back increased $XX point terms R&D, and spend XXXX in million $XX NGS,

XX% growth. about that what's So,

advantage us to So, market. Factory makers the of Future genes, allows fast in access which and is fast turnaround the the the time

the investment allows and a the of in that our we're projecting. historical growth and deliver Future Factory us that impact antibodies the it's investment of of the combination So, to

Thanks Understood. guys.

question the And Souda you. SVB Thank next from Puneet Securities. comes with

is line open. Your

Yes, hi questions. guys. taking for Thanks the

on we've book terms in you from order the Europe, questions from first just if book? of that. that. given And was been impact So, are conditions hearing you wondering what elaborate one, European customers just the in Could getting market any there order NGS

the down. a So of so -- step I QX, terms sequential order book, can QX, in

from looks The outlook of hearing are we what However, our selective. good. customers kind is

of bit being we biopsy The liquid Some of conversations a actually a pushed pushed into QX. September. good. kind And we're surprised a from little with from We which encouraged Europe, bit as September Europe, good. are little strong on been side. by orders in Conversations are -- what us, out was weaker. China have year And hearing would had strong. are the that quarter QX anticipated we're MRD it

sequentially to bit will from about And QX fiscal impact seen that impact have our lockdowns. QX little QX. a We of of talking us

Overall, base because but China the the from quarter, that's will by impact that quality So -- China. in see we of of September is to feedback the lockdowns strong is of down, the being Asia December product. customer

this low-cost a suits have We And provider. Twist. quality environment

that helpful. more number, questions liquid lately biopsy liquid Could business customers driver these is your you being That's XX on these I from quantify, I being customers liquid early book are the Emily, ask towards know if and think NovaSeq had And of any you don't I biopsy that's asked, or past. could shift. targeted the what if so is utilized validation the Okay. how about a you in provided biopsy an of commercial XXXX could just given your large the quantify X with probes whole even important because customers. all are obviously biopsy you genome liquid today? are expectations launch, versus in contribution which plus where products for

our the revenue to ship see commercialization the not bigger with phase. R&D, always orders, validation in. the fill probably for to customers or likely But we're It's actually in they if revenue was we it's Yes, customers get but... of know development easy that orders phase. commercial we slow Jim now bigger can I'll Yes. a what the the past, going can we're from starting find and in and Maybe most but pilot. in as are start see used how of test to are the are in see, We contracts

of large but we with feel continue feedback applications. the from there's more biopsy on well I grow. the to And customers. not positioned No, can really accounts and our add other We discussed some liquid

timing. it's of Some

market. the in We it's inroads next about year. over execution all the And make continue to

great a so. organization. products, cash great got have We We've

of should you sort of elaborate in in customer. be guide XXXX, these for how larger terms a XXXX can about Anything we your Okay. would think XXXX, by and obviously,

So in just contribution biopsy? could terms liquid that of you from wondering overall see

bring have we for the that don't agreements that out. customers. And with No, is our reason we

only public GRAIL. the customer, that's So is gone think I

Yes.

Okay.

I that's big think liquid is before what is growth strategy, big the one our point in is good commercial. we comment of a can and why part have we we strategy this abilities revenue for biopsy to assay as a go confidence shared deliver our

a broader Okay. more question. I That's if ask And helpful. could

you. the Just given sort what philosophy been market? the of Factory the COGS terms as the elaborate on benefits pricing and is And the you question inflationary just environment, pricing versus of expectations? from that we higher you've Thank XXXX you in you've the could of in Because out? are and your pricing of is, some at the I Future, scale is as are think a this Obviously, asked here lately about questions pricing, -- in have in guide elaborate you you you Factory the laid terms sort the a that of the of competitive your been about bit how in getting past. little thinking could the within Future, but

since significant how quite to we the factory prices, the useful so little a much lot than anybody less were regions in go inflationary because use X%, is so we than bit production XX% us environment small. impact on XX%, in regions if else, the a us can Yes, actually be less for up competition, so

the very when increase signed we for it's rate we think a in and I long-term the lease Portland, of the a long on time. lease basically cap when rent

we rent at And inflation. than have so lower basically,

us. great to benefit So that's another

on the the then value on priced. side And is cost be So that's to on side. price the of it

that ASP so be fast And the we to genes And for genes. going when launch expect our higher. fast we

However, be production the it will exact facilities.

require IgG we've the X-genes therefore, to when X to flavors margins so IgG make $XXX that $XXX a the between customers IgG ASP is IgG is anticipate the that And and line, depending opportunity great of us. want. will product somewhere that Similarly, we on for launched increase.

us boost margins. an And so that's for to opportunity our again,

or differentiated, So opportunities. from are we're but the in those either dominate RNA as because chip, still our genes charge a always come products, value all or for looking product, impossible the silicon And you genes make of can help to see long up gene IgG, higher-value and fast be improve silicon their it other chip. more to the or product, we but harder for margins. we'll chain, have go because us They premium that and they able

it. Got

Okay. Thanks, guys.

Thank Vatnsdal you. our for next And moment Chase. question. question our One Rachel from next with [ph] comes JMP

Your line open. is

fitting Hi. and Thanks the questions me for in. taking

So, first you're that up, on year. launching storage, for next calendar you access data that DNA early customers offering mentioned late

the to can offering expected data million remind how you do contributor to you for that in expect be? a profile margin fiscal towards what you much then, us storage can talk Thanks. So storage just year XXXX? is about And data that guide revenue DNA the of gross be DNA $XXX

to a margins. in the And our technology. compelling. storage One because anything XX% the marketplace. that what break contribution in be storage margins. have margins to don't the $XXX that? Why from going is, data our Long-term out reflected So the be And under IP gross is and XX% models could will expectation do revenue leading leverage Initial We gross was quite gross in indicate our -- investment we data the position of for million. is, we're

follow-up. there's Great. a And then

Okay.

Rachel. Sorry,

Yes. of Yes, then, that. both you And on as a answered just them. follow-up

You commercial enzymatic launch storage. a to that approach you for support full previously developing data were mentioned that had DNA

latest your left Thanks. us update And do have how the give on can milestones fully you just you that you developed? can enzymatic before -- should, enterprise offering? So what

Yes.

a think, great I it's question.

this CMOS with help an drive at we we synthesis, the data giving the the have are except on that update process. chip synthesis not enzymatic point chip, to say our DNA that enzymatic we're So storage incorporating to

are point. but reemphasizing is our at not are to strategy enzymatic product we we this be better going any giving that of synthesis So offering, key update storage a technical

However, NTP looking and be to do the tethered only it do enzymatic low importantly, it and get to profile margin to high COGS it our The XX,XXX NTP high that to for speed. synthesis done what enzyme. enzyme. low most be quality, mentioned to is with where the is developing high cannot to the we tether not to just to way it basis at to margin at as And is, is Jim add are process and do the COGS. able

our we details -- the us technical winning approach what's approach. in we’ll We’ll details. buck a like appropriate terms time think another think But our to I day. for is like biggest releasing for progress. and So happening our we pick of get for most bang reserve the We

That’s great. for Sounds it you. Thank me.

Thank you.

you. Thank

Larew And question Matt the William with from Blair. next comes

open. now is line Your

This Hi, actually for thank Mollman Madeline on Larew. Matt you. is

an are downstream to Within milestones a this Just -- you XX biopharma, you've between IND when from about now years, over wanted about filing to you months -- for you've start two one us. it expecting to little talked could XX some royalties? for quick Since to see one application. been you from taking talk go partners and working with start doing and to program

past, you effort ready have we and own Thank plan. have we progress And those to those in announce the and point, we've to said the track royalty. any our much. model Actually milestones quite to at the be But on this of views internally so a of upside robust as Yes. assets our we're of not will our value. those

our business as So, we make. again, That that looking with are the we being not point we said, because One It's as the definitely utilization in well the to stay partners something last of subsidizing I'll track are both forward sensitive validation. definitely tuned. partners. our

the And a margin gross charge. we about to on so as make we XX% that XX% upfront reminder, fee do

will on margin-related gross that of we that and So, on the be triggers the top additional upside monetization margin work we did. the made

Great. Thank you.

the questions. Thank At you. time, your hand over to comments. back for Emily this you to closing Leproust like conference Thank I'd for

wish to the much And Portland very the at you Thanksgiving very like following today. Evercore live you this all virtually Health in us wonderful thank see December. With and I'd others Care joining of for a hopefully, holidays week. you in holiday you we some Conference that, Thank much.

conference for This Thank today's participation. call. you your concludes

wonderful a day. may disconnect. have You Everyone, now