Twist Bioscience (TWST) 3 Feb 232023 Q1 Earnings call transcript

Welcome to Twist Bioscience's Fiscal 2023 First Quarter Financial Results Conference Call. [Operator Instructions].

I would now like to turn the call over to Angela Bitting, Senior Vice President of Corporate Affairs and Chief ESG Officer.

Thank you, operator. Good morning, everyone. results thank Twist you review Bioscience XXXX quarter to today joining our like first the progress. for conference financial would all for of us fiscal I business and call to issued our at at financial is website release morning, www.twistbioscience.com. this We which our available results

on and to With me (Operator recent discuss with begin will report Emily be come our of performance. Jim a then this The upcoming of we'll X a our archived are call on for As available operational Leproust, of Twist will Co-Founder will will the and on milestones Twist. call financial Jim questions. section and and in Emily for today's progress portion website being Investors Emily businesses. recorded. Twist; direction, audio our call back and Thorburn, Dr. and reminder, CEO our weeks. is CFO open Instructions) be of review the will

the forward-looking During today's presentation, within Securities we the making will statements Federal Laws. U.S. meaning be of

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

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

Leproust. call I over that, to Emily Officer Executive our turn and Co-Founder, Dr. the Chief now With will

good everyone. Thank and you, Angela, morning,

making an quarter a of our we $XX.X extend increasing story we consistent year-end percentage and with our a the of first base, orders $XX.X for revenues turned it NGS customer we that the posted November, expanding call million. across larger in and accounts. SynBio fiscal meaning more on with quarter 'XX, is of potential fiscal reported to are shared lending strong first guidance million, existing we within of For customers When our of an revenue,

Beginning $XX.X above with reported we SynBio, million, guidance revenues our $XX of of million.

reported we addition, $XX.X In of million. orders

market. see We continue Fragments of days. XX benefiting and share at U.S. clonal Pools around expanding buyers time ex our starting in we genes Gene to this ship our Oligo X days, business consistent DNA the and

Oligo which, of Future first Factory [indiscernible] same out We turnaround We send delivering balancing previously, our to And the genes with now the shipped month. our Pools last right of San next said to shipped the expect location. means we products and from our to the Wilsonville software we South products and our site equivalent revenue low week, leveraged as Gene be Francisco site. Fragments to that orders time clonal we are shipping

fall, which significantly our the this enable to new genes we'll time will focused addition, markets, on specifically clonal turnaround In with offering makers decreasing into launch market. with for us tap of fast DNA genes expected be

product front-end make synthetic We DNA the profile silicon different a feeds of the Virtually significantly scale. Factory proprietary at for into platforms variable our end shared across our enables our synthesis, visit product then every of lines. to manufacture of during advantage cost advantage platform competitive all Future Oligo all we November. out Twist our at which build This of

while still $XX the of with continue us This $XX our serve to provider, of total of as XX% viable approximately cost gene, a SynBio the for to enables today, clonal to to per products. oligo for cost our specifically achieving than making contribution $X for customers a variable synthesis cost less to cost gene. Speaking is profile margin low-cost, high-quality XX% genes,

cost addition, key continue to built we scale the drive. and of have our advantage is component In a

Moving able make command for their who need DNA We research a genes. medical the these the To around DNA context we faster, they leverage to it provide rather we'll forward, expect pricing believe their own who to are currently call customers pursue who and makers market, academic own buying. bit makes continue group the we because to this DNA than premium to scientists more these make advantage maker. be the

the offering. were States potential is We United and within alone. the XXXX, all for price Labor as with there of customers. reasonable market Statistics of know are We field believe right research wrapping disruption DNA These scientists of Bureau the maker from XXX,XXX in that these the synthesis

which of researchers. process the time for this is to competitors the the is per maximize particular at today are for turnaround $X day, analyze limited price Genes most product. margins primitive be up way fast discovery but to can capacity and cost While available from to their cost a

market similar has a disrupted in way, price, kit contain make are used of ready-to-use analogy to scientists many but requires it was complicated due today, was they . that a by components making some that and Initially, the exited it, whether to seamless. DNA. it's better steps. process and based disrupted globally time-consuming a these purify a process to offering simple engineers market on kits that The use a been It This

convert direct by here a buyers similarly in to products We applying commencing DNA makers see behavior. DNA appealing parallel into

our opportunity launch RNA, of fragments, including Beyond have X we out believe we to products and GMP DNA. an additional long Wilsonville facility, genes,

$XX.X and short of We to guidance orders million, quarter. NGS. Moving reported $XX.X revenue the of of million for just our

customers last in quarter, quarters with our ordering back-half last loaded X of larger another year. fiscal here, see we the shared we As

customers clinical continue calendar year As We application. expected, remain NGS this expand move game-changing and few see new to guidance business orders the fiscal a key year-over-year. from confident December saw grow we first that sequencing We offerings substantially will out to with in continue our into quarter.

solution for our are Therefore, improvement. margin percent cost gross we decreases and selling the [indiscernible] of a customers, Our targeted degree shipment solution leverage, essentially our the higher from oligos. our

are We continue and to agnostic. the and companies, sequencer we various sequencing work with existing new

down, we As of increase believe have last seen cost we sequencing over this continue the will as to X volumes decades. comes

that oncology, like we sequencing, disease require including and sequencing indications biopsy residual where be for minimal deep applications, will clinical panel Importantly, mainstay. exome liquid and believe to the continue

the subsequent see driving we reimbursement create which reduction sequencing increases. by key patients, access costs encouraging And of a group will areas, of broader volume across

quarter. COVID our In offering continue our as expand as areas COVID the in we cancer latest addition, to well during disease new release control with control

it to due While we not evolving the pandemic. material consistent is ordering, see nature of

plan We note, received royalty file our for from to XXXX, a do use material the authorization was cancer a opportunity in SARS-CoV-X that application revenue the panel across for XXX(k) to as believe COVID product. decelerating. continues not grow As while products this not emergency we are FDA

in of announced million we our $X.X guidance revenue, note, recorded orders. million in agreement a and Biopharma, January. multi-target $X.X bit we Of that of a Astellas was signed ahead For with

We sales are and our Boston team sell offering on focused to between integrated the South offices. our enabling now San Francisco

this engine we candidate antibody screening, silico AI discovery guarantee machine In offer with and deliverable. and with a vitro optimization, selection vivo integrated library, We synthetic discovery in in and offers optimization and believe lead learning. in the one fully a roof,

completed are average programs business. will active now integrated the as team, As include we our an operating historical total and partners

we active XX, and and/or associated with XXXX, December As programs have of XX programs with project. served our royalties have XXX XX partners, the milestones of

are stage internal In reached and continue antibodies several many the out the by and preclinical have addition, discovery we stage advance early to licensing biotech-Biopharma potential closer that candidates through have partners. we to

storage. Turning to data

data our the which our on recently proof-of-concept We chip proof-of-concept first continue combines storage writer. work development system, assembled with

We scalable steps have in to writing required are to the sequence to to code, end-to-end data. decode begin completed, to DNA system all software we and the engineered coordinate pilot production. run data system and a digital now will Once and store write,

is All the the we release of of of available year. first product, calendar end towards in of early work to our archive, which the access to be this Century expect support

through With Jim? turn Jim over that, I'd talk call to to financials. like the our to

had We execution macroeconomic quarter another a Twist despite strong All of you, right. at Thank environment. Emily. volatile

quarter growth customers, and XX% X,XXX in quarter our margin we year-over-year. of up in sequential ended which that's and cash $XX.X approximately million, Gross for million. was a XX.X% for million. approximately were quarter, Orders $XX.X the XX% shipped growth we X%, a and of with quarter with $XX from approximately of X% and customers the is 'XX year-over-year and sequential $XXX fiscal X,XXX and increase investments of X was quarter X of Revenue for which X guidance million line is decline

growth. quarter NGS slightly For and our XX% below XX.X%, was year-over-year guidance revenue for X

quarter December current a by quarter. pandemic the and As in into strong our negatively our which larger impact were customers earnings a and China China, quarter noted our shipments had the call, continues pushed in from revenue we we couple of to January COVID in impacted previous fourth

quarter Our $XX.X of and And record. first with NGS growth of and top fiscal the XX which of this X. XX% the a year-over-year. growth customers product accounted our quarter XX% NGS customers were approximately It reflects our represents we orders portfolio in sequential is XXX million, strength for XX% growth served revenue approximately

and now larger to from and last an XXX earnings last increase from for adopted continues up and Twist quarter. XXX XXX now in scale, to pipeline and noted are we're that's opportunities call tracking our Our that's accounts, XXX

SynBio which that's revenue SynBio, Orders year-over-year and to the of preps, $XX.X IgG, includes DNA XX%. approximately our Pools. for the year-over-year. growth turning XX% increase quarter was and and which quarter were exceeding million million, Oligo represents libraries guidance Now representing a $XX.X genes, for

which as approximately biotech quarter pharma X,XXX Some large X,XXX noted 'XX. to and SynBio includes previously, X highlights fiscal has shipping approximately base, customer customers, The of the grown include companies. from Emily in

up of the to shipped and X% increased of 'XX that's of XXX,XXX $XX.X genes year-over-year. XX%, from million, quarter, year-over-year and that's approximately in in million quarter revenue last fiscal increase growth an Genes first $XX.X and and the we

primarily our with in the from million of came care quarter demand revenue Pools $X.X segments. health Oligo were strong and

for XX% was year-over-year business. prior $X.X guidance. quarter we Now our to fiscal scale 'XX and consistent of is that's Biopharma, revenue million, and antibody our with first to discovery continue Biopharma growth

see Orders million, seen the by $X.X from for $X.X quarter the been did as in years. impacted were Christmas an we've not million fourth weaker sequentially in orders Pharma the down past Biopharma have the and in environment, quarter. we overall quarter

up total more in noted up the the from which earnings to four and the agreements, million $XX added we said, brings we call. $XX that's That previous and million, royalty milestone

reported first for we including of antibody quarter 'XX, services. agreements, Twist the adverse historical solely various total fiscal programs While for metrics, and had active combined XX Emily Biopharma the

in quick care $XX.X to compared a of million quick 'XX. revenue terms first fiscal breakdown million in update 'XX $XX.X first to a quarter Health period I'll compared our the as was to million revenue 'XX the period quarter on update academic in of of $XX quarter in of fiscal the industry Industrial the the million 'XX. for same million first of the Chemical as approximately in regional was $XX quarter give $X first of by compared million progress. $XX.X and and in was 'XX same

fiscal revenue of million in $XX.X On a in the to 'XX EMEA fiscal quarter regional compared first 'XX. to basis, $XX.X rose QX million

earlier, the million million as compared impacted slight of first but the we same $XX.X Americas negatively period as to 'XX. U.S., a As in same revenue increased to APAC compared million by increase to 'XX. revenue million pandemic the $X in China, the had $X.X period noted in for for of was quarter fiscal including COVID $XX.X to

down the Now P&L. moving

$XX.X of include revenue of gross of depreciation. revenue Our for cost $X stock-based the for X expenses million margin and operating with million our Cost compensation 'XX. compared to $XX.X does expenses, quarter quarter to Net and $XX.X expenses XX.X% $X.X million. fair approximately was value in adjustments operating including fiscal million and QX million SG&A in quarter, R&D, fiscal mark-to-market for of as the acquisitions were change of

million million it increase for number increased To does fiscal does and quarter increased R&D of of storage. period $X.X story of spend of compensation in million, the R&D $X.X fiscal $X [indiscernible] include an were $XX.X employees, was in and contributors associated the that's include Biopharma break DNA $XX.X of 'XX. same This down, the from The fiscal major first 'XX. data primarily to DNA million quarter increased of million spend XX costs adding additional which with the spend

was with forfeitures of approximately of employees in hold X annual Depreciation approximately we includes R&D hurdle. associated determine back release combination million quarter in as various credit [indiscernible] due a that SG&A QX $XX million. departing and stock to $X the for revenue

earning, enthusiastic and the combined Boston forward achieving to close for Abveris very team the came team Abveris Twist the look The to integrating Twist organization. and we with We team the into organization. remain and the opportunity potential fully very

$X.X in Included expenses includes million; include associated the material of of were depreciation facilities million compensation for the first the services as million credits pre-commercialization costs was Future credit costs million trading Stock-based $X.X of Factory which with activities; a the million. SG&A quarter, of $XX.X $X associated costs of the and of well as with $X.X primarily Abveris pre-commercialization to million $X.X acquisition. quarter in aforementioned compensation due

the for approximately amortization and $X.X the spend quarter and quarter Depreciation in million was $XX million. CapEx was

for cover fiscal We year outlook our will now 'XX.

continue to range no of including $XXX revenue million guidance previous to during in change And We revenue million million, million. $XXX $XXX SynBio $XX been $XXX revenue NGS $XX our the to 'XX has project from $XXX November. revenue was million; fiscal projections to to of Biopharma to revenue, million million million; and our $XXX there

increase SynBio of NGS $XX million. $XX sequential million, follows. revenue approximately For the fiscal higher of breaks the as second quarter of revenue we anticipate a down $XX.X reflecting million, orders revenue which of 'XX,

were orders quarter translating of in million the half this revenue in the in million, beneficial approximately orders our $X.X the revenue reflects X. $XX we approximately saw orders quarter of year. second strong and those Biopharma of We lower see Although X. at into impact fiscal

X margin the on as facility. anticipate bring approximately we the costs associated Wilsonville the gross for We with quarter XX% manufacturing

the the the provided in line previous fiscal reduction revenue our earnings in to XX% of calls. year of margin be primarily $XXX to million 'XX, compensation. to guidance scale expected our projecting we year, gross with our we're half million for compared as As for guidance to $XXX reflect decreased second to in the previous XX% stock-based is the approximately which of expense our operating We guidance

expense million R&D compared projecting now to in as We're of million $XXX $XXX previous our guidance.

$XX $XXX million, guidance credit projected stock-based Depreciation that's million is from expense a that 'XX We to is $XX of Mark-to-market the stock-based be due and credits. for of $XXX lower $XX impact fiscal million, for the declined million primarily our amortization and to previous million for year. decrease compensation million combination and from the be projected expect of of approximately our projection aforementioned the to a to SG&A to $X compensation. due of

approximately a we to projected addition, price our executives, reduced granted employees a X in to at projected. stock share shares And of than lower million number originally awards

Net $XXX to $XXX loss cash to is is be million a million. With $XX approximately million, CapEx and to projected decrease for approximately from million. be year $XXX ending the projected be and that's our projected

to our fiscal In guidance November. 'XX addition, change provided there in is we no

in In products January, of fiscal we're on commercial to breakeven summary, we business businesses. in We quarter had a initial in robust the our core start scaling adjusted to our X. focused our our our EBITDA pharma the Factory year with and from Future record orders shipped achieve and

turn the I'll that, with call to back And Emily.

our SynBio, our operating our feedback breakeven with X-year core profitability adjusted mind. fits Jim. EBITDA you, see Wilsonville, our executing will business, manufacturing few this is Future, Thank that our the first shareholders' on plan November, toward revenue capabilities years. In increase that outlined Oregon top at of Factory our remains in shipment past plan of January. in ramp been and that we objective When out for Working in of we we achieving the we to our This of the to have our end focus. building

into all bring and expand the time maker expect to of the commercialization offer fast to gene our for frame, full-time on Looking down and customers products our current we market. our efforts

year. we our the half For large a of base of well in continued customers expect few generating the revenue NGS, customer as as expansion back fiscal

a we addition, between DNA to owning augment the consistent the are on sample workflow sequencer. looking workflows with focus and RNA our the In towards workflows

of in Canada pilot to writer. production bring an optimization between integrated up in and on data to portfolio capitalizing in We our early efficiencies the we in making silico Archive offering progress antibody discovery are good we're XXXX. and chip an solution Biopharma, late Century launch beginning new vitro, our services, and storage access vivo In DNA plan storage, offer as In our to approaches. data

DNA we look our you to market stage commercial extremely storage. In while to our seek and forward opportunities for ahead parallel, set We the for to with continue will leaders progress. of data to success keeping excited preparing partner the about remain appraised

open questions. call let's that, With the Operator? for

Instructions]. Cowen. [Operator with question first Mah from Steve comes And our

sense which makers, grads analogy is My branching started on in This I give it people sense And think adoption the into. discovery? this academic a first prep. you you're how to be long commercial, that question price find given are to going get have like this to thing the But there's of to with give track take Can to a us DNA market? this us part in a out [indiscernible] flavor. of the for going them this of the market cheaper will try XXX,XXX how

Steve.

XXX,XXX but academia, a price was that discovery. very line You're you, asking, will thank gene for the those in bit choppy, Your makers, the are do

groups. So to at a to a possibly -- the the differentiate them. started We've X academia different would It's and account price little versus just for share. those expect now probably recently That's be between industry we be for gene, those -- that we'll be bit. past, X for the different I'll pricing meaning things Twist value we product And price in there I pricing for industry, -- One, and differentiate fast groups. uniform to going to a number of there academia had didn't could that X that one. a convert different

our do now get take brightest team given, Gibson we've competition kits. with the mutagenesis. to from use there And we is few years, [indiscernible] for clone They'll best academia, to And own used their They'll students we've of multiple the we've time, synthetic nobody they what apply supporting but assembly last prep been a get been to And more. items, iGEM and now them two, their and where think, every biology. in on, get the thousands years Number similarly own team year, in think is not iGEM is that for I will does the part doing every any goal had early past, student XX,XXX reasons. cloning. bases some it and to right group

this time, transformation. I can drive we over think

the like of So and we've already And we'll clone close just don't frame changing from just easier been to price. companies the be focused much to so in working mind get that you on us. faster

Okay. Got a next Jim. gross question, for it. Really that. appreciate on it's question margins, And

in gross up some bit the give maybe us Can margins also quarter we the on yes, a So And than on in back color to XX%. expected. was fiscal then 'XX year some lower you margin that? recovery gross the color

Yes.

So your if up picked correctly. I Steve, question

You said XX.X%. Gross is margin margin gross lower. a QX was in little

are decline quarter to costs associated We projecting the that the Future. we this the as bring on XX% Factory with to of

mean As in touched us, first the opportunity we've already a the it's billion. first the and year. orders used we records. The strong SynBio -- quarter seeing I half makers huge in scale We're business, over last growth market, for on the were $X.X this

growth So the the we half. in about second good feel

about revenue is percent First line is of years. XX-odd half with the previous business, which in

in So continued to $XXX by about second million driven half we SynBio, pharma in up. NGS, feel million. We see pharma, $XXX picking good can growth the growth the

to continue base. the year by as gross the and our XX% that's next see the below. And We highlighted see of to scaling in do costs in continue gross executing expanding as of scale, to business. our previous terms Factory fixed XX% margins we margins XX% of scale to year, well customer leveraging this and the range Future, continue consistent with of driven we As we our forecast we in

Goldman Our Sachs. Matt question from comes with next Sykes

that that point is prior talk be gene the the will shipping and Factory for getting sort of about Matt. launch? of you've fast fall how to for just into about market Or Could into break to commercially been market? able you talked of you you've in the being launched year. This an I gene Future, the realize makers launch on from inflection that this

last the maker long little We've a bit years getting difficulty). over been question. with Great few into our the market (technical

know that to is customers genes. short buy then assemble genes they we genes So with some short what long themselves

revenue So they very long converting when they are genes of we buy but of far, and offering, our genes. is genes, gene offer And our some us very growth comes effective short cost it some makers. from makers long long

makers which an hedging, out, see a DNA little in are in the -- when point. means speed, as But pointed should that's bit do we we markets need we you the So are -- market. inflection that the from we when

Okay. for in come or through the ramp gross then helpful. you That's this mostly of enough year? us see Will And it to year? fast uplift 'XX gene that come potential margin what Great. is in roll it think do for next

just gross under Overall, The our we QX XX%. see gross margins. in margins are

our quarter, This of margins fall We're gross see we this genes year. XX%. fast in launching

and as overall, we'll driven are pick range year, genes. volume to scale primarily to the gross up genes next fast success and this be margins manufacturing leverage XX% fast fixed going to of So our costs, in by continue And of we XX%. operations, year, that's

So that in 'XX. FY kicks

question Ji Our Scotiabank. with Nam next from Sung comes

seeing to trends be next of Maybe for segments there provide prolonged wondering more you're -- could high-level across And the you throughout able to kind are solid any market differentiated expect might the trend with muted, if year? Just starting you expecting of you the there, you out think was bit end if different be quarter. Biopharma. I color a growth term, of the within was wondering, weakness to in if kind I of trends couple have Any a kind of if the near Biopharma also, kind there? obviously, growth call questions. And

there very last in any helpful. be And to the were seeing able might the worsened -- China, whether would see headwinds you you continuing in of from compare China of called Just has out like situation. And materially if Europe quarter? as that of Europe as color be question in of COVID current kind ex-U.S. quarter whether additional kind what terms terms you then also second well versus the markets is to

Jim cover Thank answer the and first Ji. on markets. question Maybe the you, Sung second question I'll global the will

of terms are of have that the trends our headwinds. have others lesser funding big some in for funding some and customers definitely companies headwinds, some we companies of So are maybe some very the Biopharma, seeing is

them, is opportunity what I an more It is take basically and think we budget. for but add goal, so short-term may to offer us. it extend time their we

So I think very well our them. fit is for offering

The other do trend less work, that for a X maybe less. they're little we that is which more and budget. means people bit they in or of is towards the projects see will the shrinking a there balancing stage spend Maybe a balance bit maybe upfront XX discovery and maybe maybe to discovery later they're year

into barely We're penetrated market. the

project just we And it's for something us, so but projects, win a big two a if we that issue, it's so necessarily not seeing. get are one or

think in I is relying back platform we best-in-class. and our are so on general, And of stepping And the our really strength platform.

silico. in in vitro, in have vivo, We

team as because playing can X were back little with trying offering. as we we now to team, make We earnout. possible being the we have their oneX And Abveris we But product can integrate. bit are year, intend last led [indiscernible] a can have to

you the the enable our market, share the in general Jim, get experiencing in in headwinds question? very powerful to us is silico will take in than powerful -- in do want vivo, those think in a offering market even Biopharma. vitro, second though of I X, the fair very integration that is to more some

Yes.

couple weeks. China, So with last team I in of the met China actually terms of

up i.e., was lockdowns. That's extended COVID. the December October, November interesting. is China companies February. then by were opened into in it first So, impacted the and China quarter, Then by January, obviously, impacted impacted quarter, the

million. up in to the in modest pick just sales $X.X quarter. over million, approximately China second declined see So $X QX We

Our significant second our things you is about the XX%, see at first look normalize last you then see overall the year. in if And our revenue, we half And of half revenue XX% March. which quarter, of the year. is XX%, pickup if

NGS seeing impact customers the We're some You the in, the in see coming a cost having of China second large overall. from year. modest half

in So increased positioned economy overall, in We've with well as up continue China. accounts we're good leadership they're increased the we're doing China, as in China, added there leadership our and we've dealing -- well win we and normalize enhanced open COVID. to to starts and our

we In mean, -- continues terms and -- a Europe, I see because good in tricky in actually Europe, is be of opportunity had but vacations we December strong the see was to one of year-over-year. Europe Biopharma. quarter good always opportunities up the

We continue to make in good. looking SynBio inroads NGS with is portfolio Europe. our

You've And we're strengthened Future. announcements excited there. and why of seen some winning, the Factory about portfolio the it's back we're launching to

with great us gives us that think our and of opportunities I customers engage next to year. some for larger positions well

next Our Barclays. Sergott with Luke from comes question

you seasonal is expected down, like I everybody this couple the but margin were in or about had strength some came It step here above, a type the can Emily, for. they well So usually for me. -- you strength Jim, quarter. talk what of that guys just first on think, looking gross in the

Yes.

working So margins. -- and driven great just of XX%, terms quarter under came of manage in first focusing start the back strength terms gross margin contribution continuing in been mix our year. product was we've the to the in of a That to by in is which to

we both a -- actually So in saw SynBio contribution strong in margins and NGS.

So Factory Future. products. associated down to bring direction. costs the right reaffirm the It of driven is a Step on in it down impact the of the driven was by that. fixed the about We're excited in we're XX% going with mix to to purely that by richer continues QX

constraint And mostly the a quarter okay. perspective, capacity on due Factory a the revenue on this second to of is then guide mostly Is this Yes, from the Future. being flat. relatively

tight at get what as that's And out XQ with that the strong revs going and assuming Am that Factory future to that guys GM your taking down selling those that is a at so of of you're you the to bringing that's fixed factory trying not about thinking then really full you're the first and the factory all going of are gross I'm really second guess I have on capacity? your capacity lot stay kind steps margin, in I right? running there. So you costs, be massively of quarter, utilization full you're Future, the why a

Yes.

is up. of interesting what's revenue, actually if did capacity. at driven look QX, genes the to margins So volume calls Francisco to interesting on. up, What's you customers, in the consistent bringing good step continue our marginal saw down And in the in SynBio right and genes fixed is terms we at South full The San by SynBio NGS. pick see you're we improvement we and pick is continue build was

this our part of by and focus driven as driven SynBio is well. So by mix growth, part of footprints the expanding on this its

absolutely You're XX%. QX, we XX%. for margin and fixed the the to in see range the down in to QX cost as QX, XX% margin line of we year bring right, dipped then scale in gross And

Great. how lastly, Okay. of of trying get the really active program the had bookings, to cadence then step going the Can a sense -- is talk meaningfully. the year. roll I Biopharma just through from you lot of really the your different step they're the and seeing And to a up about on there. rest saw I'm the up segments on big guys you're what because you that of

to answer because saw what's mean, number higher going half. is second higher Yes. NGS. we're good is much strong. why NGS isn't is be, We bookings had impact than interesting orders The projecting. those in question revenue, record okay, we the I than The QX

We well impact in in beginning continues continue to see IgG's. well to on genes, SynBio, some do to do

well. I and value. driving performance, the And great scale the turnaround SynBio ability deliver mean, customer across we're what's time, experience, that doing a portfolio, is to

in time new or down. us number gives that, because offer Because proposition, of of of number small terms that, pricing We particularly into reduction a of you sequencing. A makers the the continue to adopted of customers That the our We customers in a if So brought customers. for market. terrific in. terms after market. NGS assays value platform we're come a turnaround springboard customers we're winning seeing at significant SynBio look of in in going And good genes, scale. keep gives getting we've larger the portfolio, the

[indiscernible] to according executing we're say would I So

It's going be to to interesting Yes. Great. watch.

comes Larew question next William from Our Matt Blair. with

more meaningfully per the increase years. the increased even of through walk what X over key last you what's nice a has been. gene been price few the over than that just line Your here trend Can so last drivers quarters, has

nice I fast higher? mentioned of a assume the drivers IgG are trend of key had think what some even ahead I quarter, line maybe just but which push that Jim will genes,

I'll have Maybe bit be good -- really have per little gene, Matt, price Thanks, little we start. a either a careful at be looking question. but sometimes you a can can your like story way. Yes. for -- bit to I

what So base. genes is at our per short priced are $X.XX happens

Our base. priced long genes are at $X.XX per

base. of And it's short so we per $X.XX now makers when penetrate up. long then genes market because the buy the where instead into per so long buying And ASP a goes genes it's they the more ASP gene up gene goes

of a good. from story, view, great point that that's So that's

are genes goes the At small. because same when down in average gene the size we're Biopharma, antibody time, well really doing

goes so And bit. down of that the from ASP point a little view,

is little in the the human business it is bit -- that of in the done. gene -- of so the strength size genes is a strength are that long mix And a

in little addition then we have bit. been And increases a pushing price to that,

our summer. SynBio, NGS, And annual on And we've did in we so increased in prices January. started then price increase second last

that So there's well. of bit little as a benefit from

software to those us as particularly, think half, back on of gene that and the get your then in required here remind is kind I look fast mentioned from you the what else software, there. towards just on And on end to just market? training you Okay. us but get

No, question. no, great

of a So there's things. yes, couple

to So genes. all, need be fast of we to make able first

to And do Future it. developed able of to the Factory the be so we design

have we place. so instruments in the And

to enable so training San We components the make the instruments few then there to the Francisco. faster. we have current about more the us and in deliver are as software genes -- to speed place factory and a South in and what team is we need of be able do genes to software same make And the

one. So that's step

book but choose incentivized And on genes, and the we and orders e-commerce able why, we an it price to if can't are your customer feel bad. At to is If step afford and people there X, adapted you like fast people to make want want them gene, a don't versus money same website to the we time, for coming wallet fast know to there's big don't slow need experience. the that have be fast Apple where the to is genes. out of effort

So there's e-commerce. of bit quite a

Software design that intuitive. needs to it's happen, and so frictionless beautiful

lot customers. continue us gene the the fast our another enhance develop engine. of XXX,XXX and gives last then digital And is to A piece marketing

We to effective. to account are going an lab not University just in is cost send manager the the not

get approach multiple And other there's mindset. a the website, frictionless. them is no them to do of people But e-commerce, customers being so being reach a and teams, that's the digital where those conferences, to that, we on part get shipped have and to of touchless order it the so Twist interaction to goal a ways Twist the then through is on in part human at already iGEM again, need way digital have through

lot So still a basically. we components software those the are of that are refining,

comes question Vijay Our Evercore. with next from Kumar

the Emily, I first there the here Factory $XX apologies on? bring when which $XXX gene in guidance maybe still revenue in number something on order share about going spoken When my there that quarter impact macro revenue Is in million, roughly -- Is second XX% if you there annualizes growth In and the any some [indiscernible]. set on or as guidance you're facing front is in capacity about the Future at on And here issues your of assumptions. Is guidance. that on million, at that you've look revenue the China to know look going quarter you've and was your and I of this on QX. commented XX%. question past, I line? at is your gains --

maybe Well, you number the and our Jim pointed trends needed. can yes, But out, start towards as I'll order guidance. as add

ratio year, delivering growth we've half And about of second that half. if before, year above this somewhere look first we anticipate last back our or for first that year half year last it's the at the as and The is year. before loaded is And the ratio XX% first mentioned story. quarter half, which year XX% to the between QX XX%, this the we second half, XX% of it would the be a --

business that's we've been that's the there. in. living is -- So what we And market the

great We have a technology.

have We a products. aggressive sales team that and is extremely great

are the want execute anything what would. have to I I we else Jim, but then don't add? And deliver you there's So and bases we think said loaded, know we to

orders second on your so well quarter, I we've of in, number positioned mean correct I did the I place getting for mention the come half. strong NGS, mean, first Vijay, think the earlier customers in larger -- overall, I a China done in particularly call. large us orders,

you October then from impacted in Notes was lockdown. give to the September sequentially China. I'll China down November by So [indiscernible] December. and quarter our

up in COVID, X% of -- their opened get to That's economy with COVID, obviously about offices As some January, our in out. of people the some weeks staffer and February. impacted

we pickup see a the this as in in through, we pandemic way half. So China. the quarter its second And see pickup little works

even about year, last the million in a this see to put with COVID. $X pickup China China on half in In $X still about was We year. million, impact first perspective

the and terms customers. tough bookings, the going are got as lot of the I've getting Future. quarters of with keep we happy our opportunity building after there's of to more a this interest and for us, highlighted, overall, We're Emily And that. aggressively in organization. year commercial Factory And the meet of number

to and Our core grow well. to of focus and get back adjust to adjusted business the breakeven terms line top EBITDA EBITDA continue to and focus and breakeven to pharma in getting then on at our and $XXX continue million deliver focus to as execute

comps revenues right? from well gross perhaps the right, sub annual second implied XX%. on acceleration. the think at looking above what same guidance. perspective, And your more, would XX% XX%, -- think in your is around gross margins, the for in right? half on margins, just north you What second I your And revenue half of Jim, maybe a is like XX%, one for that half that the first goes and first half? I Like imply is get cadence, harder both driving

is what half. half in growth back gross You both back the perspective need and XX% to Like this a margins? about driving from hit strength revenue

Yes.

touched I the a that our with quarter, $XX were bookings the So first little on bit question. approximately our I it million. in orders first quarter the for mean

terms of in NGS. pickup the saw You

second NGS is the driving So the overall in half. growth

half, first NGS about terms at of look it's you million $XX If in revenue.

million roughly say, million. the $XX in growth $XXX the So is second has half a

driving that. So what's

SynBio that's were You SynBio, to of see it's million. where in see view. that San a number pickup NGS driving excess deliver -- has what's Francisco of in The We done a in job point QX can terms a been market, the the for see there continue customers from see well that in received to time, aggressively fantastic of reducing in the so you orders $XX performance in continue the sequential of team execution. turnaround and

It's bring commercially question quarter this less around about now costs, second half, the pipeline Future focus operational. number of fixed our product, the we the that billion improvement online as makers growing exciting $X.X leveraging is continues margin scale do the line, facility actually opportunity. the gross market, for In top costs of that's NGS is continues And this to we shipped first the going as and It Factory is and in execution. to the our terms your wins of the scale. the after

So in gain it's as impacting more to products new well, market. has some of execution obviously us continued growing a share

Our Puneet Souda Securities. next with question comes from SVB

Emily and Jim.

here the driven elaborate margins, then gross on how just more NGS is So customer you just is volume the versus pickup and biopsy book-to-bill, the much pickup in you the following I in of on liquid too. -- well But is sort half pickup elaborate of second growth NGS on both demand, the bit are on up pricing? you're a meaningful that. obviously, a higher. of more or as, all expecting And mean more, that obviously, side, could as this

and volume for in trying the gross just XX% that of quarter? of context is of cost how the understand fixed that So have you margin the that pricing to you sort the NGS. next much the And given have and now

Emily. start, can I

the of so Future scaling the primarily address I XX% this driven Factory margin in coming of just me let Future. quarter, the we're this gross mean, That's question. fixed So quarter. the Puneet, the online costs the by appreciate Factory the

volumes next in call. of update give of terms in the the earnings the we'll products terms so of the Future and in -- So being through an Factory

And see we're we as bringing But the QX, got second fixed recovery. we're so gross we'll that cost scale the margins our And commercially time then volume our margin of under the that XX%. dips gross consequence is QX, combined, to then improve. in

in In the the NGS, -- terms see to that terms those win this a the larger gain customers of customers And this provide that approximately We NGS in We've in define NGS see in of I that terms as months XXX now that's of XX scale $XXX,XXX tracking as metrics of what's providing of XXX, continue run to scale. and year. at orders, working years. pickup continued continue than larger to number in We're We service. we terms second a of for been customers That's been assets. assets, from less terms in ago, mean, we've are of revenue excess year. picking half continue the we placing up. of we share, bookings, them. we impact and we to And to continue that of

margins half second NGS up a picks positioned picks we're for in strong improve. up, gross And So NGS. revenue and well as

And Got have are appreciate -- of Emily. the your some you're I makers then it. Okay. from reagents that. market, smaller talked any on if the just comments then softness about That's peers Wondering wondering helpful. And lastly, the biotechs. maybe seeing

show customers out there, more of but Just a sensitive. price wanted academic understand number large to them

maybe what's you -- product that, there product of and your the too? Could quality on elaborate liquid the customers. of So the both the a sort bit of sort wondering on of pricing expectation biopsy

academia around grade for academia academia get I for have NGS, companies companies, majority in think same for revenues that the but quality. [indiscernible] Yes, past the product. we entire not for companies. we've break seen And You the for clinical are but product the second It's and it's the and here. revenues don't our and I NGS different for think one we

weakness of peers And that commented in currently, on And any the you quarter? are smaller the the biotechs, are impact? you Some in your reagents. had for segment of any seeing around seeing

don't No, comment our any versus have clinical. think I around ReO we specific Yes.

Our Vatnsdal JPM. from next with question comes Rachel

for is Rachel. This Noah

get potentially here. additional a just could I clarity little if First,

to increase relates it you pushed you there price is annual that as that January. NGS, mentioned Just through in an

did So more. pre-price you then pricing post-price here. could one we trend get How And a little the in NGS have strategy orders see regarding commentary versus I increase increase?

Yes.

on And price to think think increase, I on of put quality going on there's I strength tried value. going we understanding costs -- which our of we able product to the were to the we our received. so based quite price based up an that are and has in a product, are well been

data layoffs. had some seen relating about the starting giants into these the you conversations you've non-core industry tech you partnered belts tech existence. we've weeks recent DNA some and in storage to Awesome. offering, Can around talk to their investments businesses do And some data with just with of as tighten then bring regarding to big partners storage

customers from do your regarding to hearing storage? the how Or adoption have So expect lines like for you what adoption of time curve you been push DNA there?

very, question. good a That's Yes. very

got storage, last data into alliance, creating a just storage data alliance the several concerted made think and I not DNA over in so us, efforts the but it's an years, industry, we've that we've created stand.

storage on where conference storage their own, data the have they putting to you track. a are DNA Now

and I talk a I never it. the don't about but -- heard it. it when lot to a heard moves to I DNA about DNA storage where of in DNA they oh, And I've I believe heard would used to be DNA then storage industry. storing And so data It buy will can storing customers, in now it's, say,

just there's because in well are taking there's where for such suited. deep and not storing so DNA archive, And definitely mind shift a hard paper need drive

get just like people on because my And strong and drive is the so becoming, think because market need than just it's a such view, inevitability it. paper archiving hard to something better there that is an in I don't know

Leproust Emily further like turn to to questions. call for over There no back remarks. the are I'd closing

for and today. following seeing the Conference to looking and very you. few you minutes joining next Thank forward at we late, and apologize you AGBT March. I at Barclays much a in week Healthcare are Thank us Cowen

does program. This you. Thank the conclude

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