Twist Bioscience (TWST) 5 May 232023 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Twist Bioscience's Fiscal 2023 Second Quarter Financial Results Conference Call. [Operator Instructions]

I would now like to turn the conference call over to Angela Bitting, Senior Vice President, Corporate Affairs and EGS Officer. Please go ahead.

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

today's our Dr. progress a with on me direction. will and Twist; our CEO recent of Twist and will Emily review and businesses. then report begin on discuss come With Jim Emily Thorburn, will Leproust, operational performance back Co-Founder on Jim and and our financial CFO call are of Twist. Emily milestones upcoming of to

will We courtesy on the to the questions a We questions. maximum call. of to would others then for a ask then two you as your open that limit and call requeue

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

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

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

those and these actual in risks matters results materialize actual subject and are materially periods financial uncertainties regarding expectations differ from to that could and beliefs results may cause not Our projected. to

law. to press include in this except as presentation we those any risks by described as Commission. forward-looking as forward-looking to disclaim update statements in with the Exchange us The any available our of and set we statements as the forth are earlier filings These on today those our issued release date well in obligation fully more Securities required hereof, information and based

will may data calculated including included can conform other on in earnings reconciliation which be with When presented adjusted www.twistbioscience.com. reported GAAP found financial differently do than our also We'll EBITDA. website accepted generally not at measures non-GAAP non-GAAP that accounting and measures Investor by between a be our companies. documents similar Relations discuss principles, be Information financial

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

Thank And good everyone. morning, you, Angela.

performance in for year, we revenue. Twist. This busy million for a fiscal half is delivered first time quarter QX the pleased our our $XX first of with the I'm very in

In we biopharma am share actions expect quarterly exit to to businesses that that path we announced strategic both to is and morning of quarter addition, XXXX about for have our run accelerate I as happy achieve to adjusted we profitability. XX that this the rate EBITDA months. breakeven the September we core in a taken

on will three Today, things. I main focus

revenue confidence our near in our First, term growth.

EBITDA all And in Second, of third our forward. growth term. drivers adjusted breakeven decisive the achieve near actions the to in designed businesses moving

business order, very revenue second $XX.X into with with half reported the am line particularly result Beginning core quarter pleased year. record in I of $XX.X in solid $XX.X guidance the indicating our to million million top the growth of came second fiscal share strong drove of businesses, of fiscal Strength for beat exceeding XXXX, the million. at our NGS generating revenue growth moving our for

which we going During margin of shipments manufacturing will of facility to Future, believe Oregon Factory at quarter Wilsonville the improvement the commercial the deliver began leading efficiencies, our we forward.

We increasing turnaround Fragments, demand. rapid time and driving see consistent our Pools elaborate with products for continue Gene to Oligo our that enthusiasm

for I'd genes. our that to note is like this standout speed

pricing. to for in launch We expect are genes, we orders fall not yet taking which premium the fast with

scale unavailable and which to far ahead of continue price share because emerging and as with to resonate a way our peers players time consistent turnaround from remain with our elsewhere, perfect genes market of We continues take our our together customers.

customers, and creating which growth. and loyalty then facilitates with reliable service reorders exceptional been has to Our customer revenue products quarter-over-quarter our key

we overdeliver that because ordering In is state preferred their turnaround are continually our and we addition, customer easy provider time. surveys on

of development test advancing we traction their also NGS, the see gaining and customers market. within For

revenue we base. customer revenue quarter-to-quarter confidence And NGS there while will to that the can lumpiness, significantly be our Our have of ramp grow commercial lean year-over-year.

our The Biopharma, point We integrating to Boston remember we is to and limitations our the customer customer end contractual the grow team acquisition. began the In of expand. year, continues base is business our the of sticky. at with the following calendar

We continue portfolio ahead, to see have particularly services. as team now we integrated of opportunities and an

expect untapped that buyers' has companies emerging address share we market the we the What are services biotech system within revenue as and commercial and made is challenges months. commercial true lift market some That and of the small will said, retouched team. on come constrained funding largely facing our for by been these our to internal integrated six We've changes headwinds territories. is environment

agreements customers with with continue wallet and partners. we're sign collaborations existing expanding share our and We to

an royalties near-term when topline in arguments growth. those April, collaboration with prioritizing revenue third are As we do example, corporations fewer milestone for company. had with pharmaceutical expect we our move forward the as now we We Astellas as

is NGS we large Biopharma cylinders firing for now team a commercial and and ahead. all seeing Our SynBio are opportunities on

will I path to to expenses to now our significant and actions our profitability. line from move operating accelerate top

As outside the of customers. shipping you with know factors is no products Portland, of Oregon future the

review Oregon fact quickly. more majority and month. To achieved comprehensive we profitability, top In our code fragments to line of goals all vast and made reach our re-engineer base gene of than Oligo have genes, in accelerate Pools for our a these been conducted the to a more

more which result XXX difficult made elimination many the approximately growth throughout continuing organization, high of will decisions operate have to to support these in We our while resizing still positions the efficiently teams area. for

we've to talented We success well. them to and our wish goodbye date. say been many to difficult committed Twisters is It in integral the

identify them bring where as to their the opportunity will the front support larger look as they forward and achieve they to will next we We Twist experience ecosystem.

organization on Portland, duplication more our significantly topline sales bit We moving a across growth. shape the fixed production will South forward, cost Francisco and San to of provide To intact largely lowering remove the force of color remain the drive the SynBio structure.

the on reprioritizing internal focus partnerships, the our assets. In Biopharma majority we addition of resize revenue generating team's

organization our where deploy greatest the platform and a on value competitive programs see long-term streamline areas the R&D including clear has to Throughout to potential creation. where in teams selectively we focus advantage for Twist we

In storage, while moment near-term market not and competitor the development our remain level data We commercial involved and ahead launch close advance effort data we to for our do It competition. continuing enables or to remains at this reduce a to it's substantially still expenses see operating that's yet of continue technology. any the significant. in integrally at our time, storage, us

the proven success. to approach business as will We on be business service a model the until to plan service our has a after focus storage delay the and distributed efforts on-premise

to expect end-to-end service Archive We gigabytes an demonstrate Century XXXX. by calendar

Archive in solution. that on XXXX, will of this calendar said, terabyte on a cash Following early deliver launch flow. believe all to we overall this, expect With year of while the we we reducing Century

our many ahead. seen into growth, we've opportunities Moving future

from the planned of need These look that and their in SynBio forward, cost buying we academia $X.X than this of in faster be can they currently it we today. make large believe DNA will and As pharmaceutical makers launch are effectively own genes any companies researchers it market. close fall, literally deliver instead it, we the more scientists and fast DNA billion targeting as

rapidly as premium price our pricing will are delivering we command we'll that leverages confident margin, area one that dynamic is contribution SynBio this for a increase believe we be This product. to able

commercial enable to to we head this our and do capabilities cost digital Additionally, add we expect count large not to acquire pursue e-commerce believe customer as portal market, marketing us effectively.

our particularly the continues oncology space. in to For increase, customers NGS,

In and both then poised commercial the large several of them. stage growing customers grow Twist have instances, development is with customers We compounding mid-tier for to growth. with group potential

We for our the opportunity assets we believe foreseeable continue be sustainable in and more to and future. be included growth will the of NGS more

time sample an in times In often as RNA tools but workflows can to term, to the different area portfolio. just state our the in extend. RNA the NGS primarily different in we near we this large we RNA workflow for opportunity market, and providing footprint translates DNA normal multiple plan date, to complements run assays issues workflow points both significantly research believe Scientists that a RNA are a tools. grow within have an smaller same where market our

several the RNA expect tools in We near future. almost

continue to the integration value the even of offerings. with higher competitively priced also for we services opportunities Biopharma, In our see

services shift we'd most drive largest are organization. topline on some R&D be while of licensing that work. we revenue, selling done We we of the our aware have The the focused internal them out from antibody on we digest where resizing see the leads, zooming until assets

model revised large we competitors more this at data we our best opportunity Therefore, advance seeing with not are our investment. modest plans the a sites, direct our very rate storage, remains competitive us using we're first commercial in because our class slowing For time while advantage. at we within

turn to I over it that, Jim. With

Emily. thanks, right, All

$XXX at quarters ended quarter, of Revenue $XX.X execution macroeconomic two had XX% an of fiscal approximately XXXX quarter cash despite We for for We robust approximately another is and the $XX.X of growth million, year-over-year which compared approximately Twist X.X%. gross million were and we as margin investments approximately of year-over-year to XX% million. And shipped increase the with of customers for increase volatile a quarter sequential and XX% the .Orders quarter was quarter 'XX. two environment. two

revenue which two XX%. is for million NGS quarter growth of $XX year-over-year was Our

pushed of shipments we quarter from As previous earnings January. had larger we December call, noted into in our couple customers a

$XX a were decline XX% sequential growth year-over-year. XX% orders Our of second of million, quarter with

accounted As revenue customer quarter-to-quarter NGS XX revenues. is customers can we Emily stated, ramp to XX% two. revenue and for fiscal for The served drive quarter of NGS the tests our lumpiness approximately in in approximately XXX in which NGS customers linked some top growth

call, we're our Twist accounts, continues last XXX adopted for pipeline to noted to opportunities last earnings XXX XXX larger compared quarter. and up tracking from XXX now have as scale in Our

increase a increase includes million sequential Now approximately Orders quarter were for IGG, quarter SynBio genes, the and preps, the $XX.X XX% rose and for Pools. turning year-over-year represents of XX% $XX.X sequential SynBio XX%. revenue growth to which Oligo million, a which of and growth. year-over-year libraries XX% DNA representing

approximately SynBio the second base grown companies. the The quarter XXXX 'XX. customer of of shipping highlights include approximately large to which mainly Some pharma has includes biotech XXXX customers in fiscal and from

Oligo with with to growth two, which genes revenue is XX%. increase quarter quarter approximately from And revenue the had shipped XXX,XXX in year-over-year. coming XX% another million, $X.X $XX year-over-year strong increased Genes demand fiscal segments. which approximately of Healthcare million We of primarily is of Pools an approximately

orders of 'XX the was the the agreements royalty and sequentially quarter XX which, due That brings had at described. end to total Biopharma, million, integration $X.X sequentially XX more up and our said, we second revenues milestone Biopharma XX. the in from to fiscal million of down million quarter, Now first down sequentially from primarily for quarter $X.X quarter $X.X for the $X million, active the three Emily to challenges of programs from added

now I'll industrial quarter 'XX $XX.X was million the revenue Academic same the fiscal compared second industry cover quarter periods to period million $XX.X quarter revenue as to million in fiscal of $X.X fiscal the quarter revenues 'XX, as in in our as same 'XX was chemical $XX.X of progress. of our of the and Healthcare of fiscal regional fiscal by million for 'XX $XX.X fiscal second 'XX. million breakdown to million second $XX.X of was in revenue the compared compared second the in 'XX.

in QX $XX.X see million to in the to million, revenue in approximately fiscal recovery 'XX $X quarter. fiscal up in our versus million million increasing rose revenue to with 'XX. prior continue in APAC China China from $XX.X EMEA $X.X QX

$X.X to increased period same revenue in revenue the of to which period million million million same includes for overall Americas the the to APAC U.S. compared quarter fiscal $XX.X $XX.X versus of increased for million 'XX. $X.X For 'XX. second

gross sequentially million change $XX.X the and for our for Future. with XX.X% million revenue was associated two approximately with primarily Factory to SynBio million. increased of Now of of moving in quarter P&L, gross was margin down cost expected revenue commercialization due $X the The cost margin quarter the $XX.X of to of Labs as the from

the associated million of Future the In addition, approximately X scrap the quarter. Factory with we in had

mark-to-market and Our the $XX.X SG&A, in for To operating due value million $XX.X the of million break fiscal compared crossed to of in 'XX, $XX.X quarter R&D, primarily fiscal for which it quarter [indiscernible]. including QX of second as decline change the the acquisitions, the down adjustments same conclusion million, million fiscal to R&D period was $XX.X 'XX. expenses a fiscal fair from in

the the for quarter storage $X This of fiscal when million were biopharma spend commercial. million, for million one $X of second and pre-commercialization was not the in quarter in million in yet 'XX. Factory approximately was the first spend includes R&D $XX of two approximately DNA costs R&D of the quarter included $X.X Future SG&A SG&A factory

a we'll phase are in qualified In labs to that pre-commercial addition, Stock-based second fiscal the as compensation and still of in they're 'XX. transition half for COGS quarter we have million, number Depreciation amortization million. the associated Factory from $XX the of in quarter for with the approximately the and an previous million was quarter Future. the commercialization the was increase $X.X and $X.X of of

in first million. investments the approximately cash six is months year two brings total fiscal for the spend million, cash CapEx $XX which was $X quarter CapEx of

the we've launch As the well, SynBio year-over-year businesses. a as the NGS in see going highlighted Future of and of strong to performance noted, quarter had growth Factory very operational we we of is continue and

scale. profitability We're focused and breakeven on achieving as then we adjusted EBITDA to

transition first our limiting we delayed reduction managing breakeven. required in are regulatory operation by as work the of processes. We breakeven resizing years through to organization aimed Note cost storage at we the data the our Lowering side XX%. revenue as our and The structure. the point investment reductions approximately maybe

the XX% business, for the cost reductions $XXX In across core group million instead board achieve streamlined we in order have resized to staff and breakeven $XX XX% $XXX of we and our of million million. instead achieve line About the of revenue the million the organization our to of $XX effect of banks. particular, breakeven at have effect biopharma

$XX investments San ramp the we'll are million approximately up Francisco costs million per million. as of operations in 'XX. majority be fiscal our R&D well Future, the the forward in exit storage. $X to and South the and biopharma we as to Factory restructuring basis moderate go of of gene for on anticipate Savings manufacturing beginning a cash savings reductions estimated in our spend cash The quarter $X the as primarily quarter approximately first to million impacting $XX We DNA

do prudent fiscal Because to cost we we for revise structure, taken our these 'XX, address to we as changes. it actions digest is our have revenue believe

to that's guidance from down million. We to $XXX versus to are range revenue that's this revising and $XXX $XXX guidance million $XXX $XXX $XXX million prior $XX from million $XXX revenue million $XX SynBio to to $XXX million. to million and $XXX million. million $XXX our down $XX revenue approximately is million from $XX million is is to down range million million. $XX million NGS Biopharma million, of to

in to And be to million $XX anticipate in For revenue of the XX% approximately $XX QX second quarter and 'XX, fiscal quarter in four. approximately to gross and in half three, we of million $XX million QX. margin $XX million XX%

For the full fiscal year, we're projecting gross margins to approximately XX% to XX%.

$XXX guidance expense to the $XXX year operating decreasing are for to We to approximately our as compared of million, guidance previous million. million $XXX

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

million. Mark-to-market to to be reduction be decrease $XXX of that's are force separation one-time $X a from expect to We million million to from SG&A in million, previous million. to of $XXX a projected million a $XXX guidance our projected $XX $X credit is be costs and

to Operating be compensation for previous projected $XX expected $XX approximately also And $XX $XX to expense million million. million. million, decline approximately to storage operating guidance to for compared of from amortization previous be stock-based approximately projection we is compared Depreciation expect for for $XX guidance is and DNA of million. million, expense to million the fiscal $XX storage our data $XX 'XX,

which to cash $XXX $XX to of separation guidance for includes $XXX is of for $X year to loss for guidance the million operating a million. from to CapEx approximately approximately $XX million million previous year million projected one-time decrease $XX previous be million projected million, $XXX to to million is be ending the $XXX projected the of compared be Net charges costs.

commercially two Factory we're the Future. -- the had record from shipping the on structure revenue we summary, focused We're of our cost in and managing business as scale. quarter In we

to to Importantly, breakeven for core 'XX we EBITDA the exit fourth and the biopharma expect fiscal for business. quarter adjusted

at of September define million. add $XXX And of as our for cash guidance we're balance $XXX million projecting and plus previous stock-based EBITDA We EBITDA that's adjusted up back XXXX ending compensation. XX, from also

now the With call to Emily. turn that, back I'll

you, Jim. Thank

simplified We business and continue have goals, we we to have because opportunities. the aligned aggressive

to announced while we opportunities decisive risks, and proactive in preserving our leveraging outside the mitigating importantly, our past all marketplace. cash and ability As actions accelerate the

and while business the breakeven lens incredible the businesses and from the remain every laser evaluate upside on always EBITDA for core for in achieving focused adjusted maintaining we investments we see We biopharma on storage. optionality data

Our core to team and NGS deployed. near-term and in season energized each opportunities SynBio continue scale for commercial business to we have be

from we organizations the our integrated we cautious potential a competitive stand resizing revised our ensuring while upside. and level refocusing believe to And with for drive for service growth. We offering are moderated maintain revenue edge. will data that top-line guidance We have biopharma an storage our we

We this opportunities for as profitable positioning quarter have been specifically disruptive a strategic in and on leaner, our scalable meaner growth. us focused market action organization

these are the position we from changes, environment, about pricing for months extremely current a the we remain quarter, future. our September timeline businesses and as XX both accelerating to of believe substantive exited breakeven biopharma projecting the With We EBITDA we core adjusted the excited XXXX operating from strength now. about in

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

[Operator And the line question first Kumar of Evercore coming Instructions] Vijay with now ISI. from

line open. Your is

quarter high to cut, this looks think here. all back and of the half thanks this half? is the were how that on it little about guess beat stuff, is congrats on ago be digits, question. bit taking like environment digit question for here single and you're my general Biopharma - guys, just how but It back perspective, you are macro is high single first the reset a guidance in sense the makes seeing my I in for given for the Can much versus implied the I perhaps months growth comfortable guidance environment. three more this the Hi, the what versus segments is changed revenue from environment, Twist The has specific you than the talk and others. macro and

Thanks for question. the Vijay. Thanks,

So we've on. we had in step things One very where we number challenges back Biopharma of The we're of about purely good going as Biopharma, feel is is in a terms just inspirational. at.

be execution as achieve acquired Abveris our supported had we So that's last been various year to that to that NIM. we issue. important an We positioned

had and we we integrate, to Twist we integration this then independence consequently started as some between Abveris. we realized And had And challenges.

offering where revenue new for the reduced and -- about of internal the the launching because outlook there, are the we positioned we challenges good feel and We Biopharma. we're

service market, a large As we get great offering.

So we positioned. very well feel

SynBio In areas, terms reduced some other approximately that XX%. we We just time to to reduction. going of two organization growth rate the and digest the The overall order NGS take solid. have is believe by it's

of continue growth believe organization, the We're need XX%, the We new terms time to XX% top line. we NGS of prudent customers. launching our in of large in terms to same see outlook we in products. In be in

we're I a the earlier think company advantages breakeven positioned adjusted to and that to stronger come sheet. EBITDA get balance with with out

really So growth. we're from the large We're believe customer platform. well-positioned this we internal, that is seeing but

it part. our So on more is prudent

a healthy. is actions function to the taken orders back hence market half. and is that Jim. saying clarify here sorry, customers, the the commercial what But because just reduction you're just, of come in And On you're point, side be Understood. and and cuts XX% did you've restructuring guide what to from seems think saying the is I headcount the that more this

We're faster Yes, market. focused the growing strong. on as the new highlighted we than products. We're That's We're launching market correct. year-over-year. is up

the prudent great the well. issue done of XX%. going it's excellent. in same this of outlook, I job of exceptionally great. of is Factory large a pure six terms the such launching we reduction this, Turnaround we're organization to feedbacks, terms time, terms about internal digesting change. a months, are mean, due times So for going next be in we've Future, just the believe our to at of the Customer And by in

I gross the couple and of off gross commentary quarter for jump gross drives point should dollars look What and is one gross up that that a I XX% at think right for third we in How your QX, then revenues quarter gross up $X million. profit fourth the 'XX? Jim. million, margins, the margin that margin And If about here, Understood. FY quarter fourth year? but next on were think strength margins implied

Yes, good question.

to scale, XX% see We're structure. to launch in to we've And you next starting we products year. so fast want for improvements We core by want gross next Factory see We cost continue are get to grow, the as the incremental to to can off new to that continue digest fast we genes, point next of QX year. Future. well to positioned EBITDA As NGS products mean, leverage the we're continue margin. business going the and want to is imagine, breakeven focus drive we our drive adjusted adjusted to in scale, margins the gross improve is new for year. we very I genes, that, going in

And Sachs. you. Sykes next coming from Goldman our of the with Matt Thank line question

Your line is now open.

biotech funding as Hi, revenue is from any for percentage that? exposure the like this of weakness you Matt. what is then your for Are And on a environment. feeling look Eve

So same Abveris we're Biopharma terms is integration. organization in time integrated the market, getting We're offering. and to taken our overall We an biotech the adjusted environment. huge XX% clearly we're is as the We've industry. open going breakeven the the where streamlining very there and EBITDA to focused in in having for terms at business. of we on a of the adjustments impact at huge with for Biopharma terms I market on see mean anticipate an and launching opportunity mean there's at be I funding us. of

solid. saw last us dealing the of As number customers with you quarter, is

growth terms that strong number -- of of the outlook strong of the projects see feeling the outlook. good with the in and number projects about we're and to continue We offering,

I - there So overall maybe issues. it is think

been have issues ,our However internal.

asked. missed question you And second I sorry the

to revenue what Just like exposure was the environment? of percent the percentage biotech a overall as

and about overall business that that's XX% year-over-year. We our growing overall healthcare haven't odd been of revenue our is disclosed

gets integrated offering time we it NGS, of will fast sequencing product cost to we an made offering. biotech. mean to Biopharma back provide with the have just strength customers SynBio from And into the scale our I sequencer business So,

we moving customers large into be us. to good So see ourselves for continues trend the that pharma

is our orders up year-over-year, So overall, at our up orders, if year-over-year. are look you revenue

believe So platform, can due significant is, we base. we the mean to execution, we that to provide this I value focused on customer

Okay, board? great. segment then, towards. you. cost That's pretty helpful. is Thank And the the weighted it Is towards mostly specific reduction, equal where like one across or is it

reductions across and our Cost the data Biopharma the We've managing the structure We're are business board. Factory migrated storage our investments Future. where gene cost core to we've business. the adjusted of for

So, Factory leveraging fast investment the we're Future of there the turnaround advantage of taking time. the made and

business is outcome across core with QX to position. exit next this year, EBITDA SynBio by get adjusted segments, NGS So and Biopharma year is goal is for next breakeven a the the strong i.e. cash to and

Great. you. Thank

you. Thank with And Larew from William the our coming Blair. of Matt next question line

is open. Your line

but the you you as there, more like significant moderating obviously also pausing About you or a sort of lead of so why that level in you you're a expenses mentioned storage, one that with reduction. you maintaining spend investment or just Hi, mentioned curious have right good data morning. that reduction feel modest contemplate given perhaps just

of for of a on why what settling was wanted it level Just that to get sense sort and is investment? contemplated

the sense At is of short-term is -- some full so Yes, creation, data we make decisions. have thank capital to sort a for certain we are opportunity see to storage allocation about the it. market we I What it, very that in question, deliver creation. more way slot for the same - the have most seeing we value a Matt. tremendous are great value we time, long-term think data you, we storage Very,

I same competition a in we managing lever are our so we time the that business. data the have and storage we shoulders the mentioned as and as investment of head ahead At see

as the our and so, business focusing the to without investment we We're breakeven as in adjusted lower much competitive in edge. with there able as our possible. bank core biopharma storage And on EBITDA and losing getting ending cash data are for

a what it's the can chips. that going to a so growing have with do to gigabyte so not going terabyte the we to that next means market less, end-to-end the access go Instead, is chip, is bit early but going will And to don't do to that do the show of do on we is commercial we'll We're development. system. chip less total with demonstration, we're important that which to systems view. going from of with show ownership data-out, the which of be data-in, we cost focus the disruptive, have Instead, commercial point we

good change. can revenue for gigabyte a and one. for growth we're and really -- The chip extend from that's we're margin to the we more a on a and And service-based, from get going something day significant is that chip demonstration that chip where was demonstration that so going not commercialize focus that to commercializing disruptive is one the

understood. and -- And I this disruptors think if your as then SynBio and NGS taking quarter those look at in market of result bear sort Okay, you that we share, entered out has It's of assess been looking made more number biopharma going the there? acquisitions given in that challenging market. growing the above to how and you've look at just that on outside

market to be mentioned of right said seems you in more evolving. of What's sort that certainly From a looking your bit crowded the that kind and assets. assessment of,

is or sort you and how been that What's or offering perhaps going and revenue. asset either really competitive assessment What's also to by win have growing pitches differentiated? for of that gives a metrics the that think right rate you've looking internal the assessment their through of We at you competition internally measured you're relative some your confidence changes. your you

Yes, no that's good question. a very, very

our view, a that the from we know of best-in-class technology technology. point original technology technology from our very Twist, so And - strong is individual

well. all that various with from as best-in-class have got we amount is the scientific head-to-head amounts We data the a slow that at is

the we can together, discovery. combination as addition silicon had set the of out goal that have you is plus for And belief of stand comprehensive antibody in our so, the tools it, that, best that is

confidence the action extremely, basically. the that from of we we're view, from did of team In a we change the So story. view, made, a and a as it's different is untouched decisive technology commercial point point sales

completely However biopharma sales we team. retool in our had to

in going, and we when is have the the where place a a situation Twist in that that believe commercial to so, we're team And disruptive an in we just now we're monetize with put where advantage in that we technology. fantastic we're technology going spirit going strongly

of street what been we look have metric the reported orders terms orders, in So to done. at is

is step and look to And payments. so, orders we're the is in for orders the to and biopharma first upfront going getting are a what is reversal into orders of revenues all

there XXX% a revenue. usually So conversion to is

looking we're of internal And what customers it's at orders. we what business in. then how a metrics, activities metric, really the new sales are - get classic from and is in - So many terms

opener then a the have sales outdoor Aaron up. with CSO; can secret to team We Sato come our weapon is and we have

And to then extending scientific are we be of level able that. to our team sales the all

on. a development this and very now execution business at So the point technology we from we have it's confident in are sales

Okay. Thank you.

Thank question Mah you. our coming next Steven the with Cowen. from of And line

Your now is line open.

then million on XXXX Factory gene could A of Future to Okay, of to CapEx going launches the of and out of out the because build RNA for on some impact follow-up that? is you be fast pullback $XX in question other the the and Future great, the the Factory it from on thanks any the for launches Jim, million and and that, give color $XX the question. us

the for Steve. thanks question, Yes,

to impact. just The of of for headcount. in physically terms factory terms - CapEx. the four, in execute We CapEx months thing reduction no is us five our key over next managing pullback the picking In is in see

an ongoing focus net to this, we capital CapEx, managing in and time, continuing balance drive part sheet. at growth terms with same our So of have managing working of our manage as and the the

So, just prudent we the part in of terms have of Factory no of Future. and the management impact

little early give that enhanced Could of partner Thank bit sequencing been question Aster how Emily on programs. and how and whole the secondly, Okay. with And give has color traction you has noticed you. on Thanks color. and enhance work Aster sequencing And been for the share a the on Insights? whole genome you access like there? on economics us response some revenue a then the, partial for a the I us release exome how then Insights. Can color

Yes, question. great

So eWGS been the positive. initial on has very customer feedback

per to business that that's extremely technology internally sample tight, our where where pricing to the going we are say cost agricultural is We leverage scheme.

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the It share you're platform? economic on was on content some your on with your their where Insights kits Aster of using

great tools channel, Yes, they is and can't built economics. that have say some not a the expertise sharing with what customer but we're we engineering it's our NGS with

Okay, all you. right. Thank

Steve. you, Thank

Thank you.

question the coming line of Scotiabank. with Our Sung-Ji Nam next from

open. Your line is

the Hi, thanks for questions. taking

could earlier, aggressive and enough the I and this you process, growth be And to, of magnitude sufficient Matt's the just or with if guess color what drive to restructuring? the of that terms around thought either You the confidence expand regards more in you in might gives not provide just of the timing rationale kind future. on not question your overly

a - of you bit give kind Just if information more there. could us

ahead, - I yes Yes, mean go Emily.

the level, fill Jim high and and Maybe with in details. I'll start will -

So it the of do view, a morale general done. point wanted company principle once to was that we and from

want we hires happen. so, didn't the make that some room drip, have we we has same it. to time, and to know drip, we'll do strategic really get that we so have so that that really, so and also deep, have we enough we hire for those strategic that to sure At get to drip deep have And didn't we make,

the So then the fill details. I'll that principle. let was high level And guiding in Jim

Yes.

over the of Factory seeing the in the of for well. launched of in we're opportunities we're invested XX the seeing Future middle right of going now it's we timing, months. the terms our And the We've and in benefit commercialization the marketplace. the investment quarter the of terms in significantly timing last So really

maintaining to adjusted next fast of support sheet terms We in launch what's breakeven strong interest to QX We're losses well-positioned the to got a is balance we business important genes, of to Factory getting Future. a of lot move the by also us, as and from to EBITDA year.

So this our gives business us runway core for the to there. get

the And And balance restructuring the our sheet, continued top supports for for supports innovation company opportunity growth organizations and focus growth. this at the and supports same see opportunity our on time, we and anyway. line R&D

remaining market of the manufacturing of us And that then the your got in could launch? capability kind of fast standpoint terms the it. standpoint are where steps you Okay, from genes, remaining before - terms key in remind development or

question. Yes, no you great thank

as of most being March So, genes and late in genes fragments all made Wilsonville, of Pools of are Oligo Oregon. the

now to we volume And the current final the time stress now high Francisco so, has were fast. very and the what the getting are we performance, we're time fab. is under And South the with factory tested the that equivalent San blazing happy turnaround and in right yields

average our think and shipping about gene XX of XX in days. I days XX is percentile

it's great really So really, performance.

And avenues terms are still on - and is both working there to software. two now of in your on we're questions gene that fast

internally tools is, revenue fast we software finalizing first enable The genes. we that have are to some

happen but intervention, the of next. process such So, terms to thinking what adding human we're there less human that the has more software same, tools is less is in

next. do genes happen the where freezer, that means time the that less waiting in it has spend And - will to but

The that's is software tools. the on software doing it's So track. team fantastic,

that the pricing very to the key external would that tool tool of The the second software be updated, our in out view be we're will sort be feature e-commerce extracting adding is the and is just tool most in needs created. of value a piece critical that that dynamic of speed

thank Great, you much. so

question from with the of Luke Barclays. you. line next Thank Sergott our coming And

Your line open. is

incremental so up on question there margins about good provided and that in Hi, revs to step wanted Factory you I some here XQ but doc's follow there, color of the online? early coming of of be coming and your maybe fast so kind of the cannibalizing dynamic talk and was some fast of past genes the the to about Couple guys, That I about with in the up morning. in just Future Factory the going the work things is thought the with how Future genes all minimal the there up step online.

Yes.

margins to in in Future. the the three Factory terms Just continue that's driven we up step four, quarter the from as top line of of by leverage revenue growth quarter to

our year. restructuring, there Future coming QX, of of due impact in seeing impact really to benefits of this QX see cost step-up In 'XX and benefits the cost the leverage to terms in partial we is you're the the Factory

of as get But improvements see impact QX, cost into we the we of and fall. fast in launch you them genes, we as the full the benefit then move the the

genes of In you So is QX from benefits all starting we 'XX reductions of 'XX. cost benefit and the fiscal see full see the also fast reductions. the short-term, cost benefit the in partial

We next by moving see move we revenue fiscal scale year, the cost EBITDA 'XX. then we as anticipate you the QX into of fixed towards will breakeven leveraging as of benefit sequentially. adjusted And

right. All

follow-up mean, just I that. on So to

the lot of So a the cost you're to is - guide ramp? if but the taking on fast Factory it the longer I recognizing benefits, those of and that is down, it's - get genes that Future

No.

only we'd in an such some any key Biopharma The we've is managing It's of SynBio it's of because of Biopharma, potential guide a our is down XX% a issues, risk and we've in down issues market our business because guide organization. of internal Why own guide taken see reduction of is of not because down is, down digesting so the reason terms more prudence organizational transition. the had So terms commercial point components. NGS. One is, business. integration two view, guide both internal the on in is

here right And great. and for internal candidates the there. Emily then the All last decision on

you're You said going development. stop you I said to going you're think internal the that to

So had basically and basically but oversimplifying just the you or it those, I was store keep when it those, I you thought thought when like you could it, that this on guys have code ice. be was might

interest spend required. the then those guess the there guess, what for incremental lack among just lack And of So of talk partnerships about the that those was driving, candidates? I I

candidates, Great question investments. so, some doing slowing been those those away is are yes. done further not stringing investment were assets. we've what investments R&D we the We've that internal into We're developing

that could accretive on monetizing those we and further assets are side. the then we the but be trigger focusing develop as assets. them the We'll are as so, allocate And now decide to we monetize other capital,

$XX us breakeven prudent send point, this revenue EBITDA million. of the But million be to business it's biopharma $XX it such can at that instead adjusted at for

monetization And not we've are R&D that's asset on so there'll our - efforts been be the the but we effort stopping less own of doing. assets,

say time We've we year, - And that capabilities have we it. is limited only do the that I have resources we had we've wouldn't no company antibodies. there interest, and last have limited to but NFX, inside least on we done don't at out-licensing but outsourcing

we scheme. want of don't R&D ahead to so, monetization the And the get development

doing. we're what so, And that's

Thanks. Okay.

Thank Securities. And SVB Souda line you. next Puneet our question coming from with the of

open. now is line Your

Yes taking questions. for hi, and Thanks Jim. Emily the

guide of. Those this on given why everyone and Dx really market. in the is macro the situation the the call the which aware biotech immediately I is improving the cut moderations one first last just this necessarily think not is, are So in one, things funding

We have multiple guide a seen companies times? reductions from of number

of this reductions point in spend. companies workforce also and So time, cutting and they're are diagnostic sort at - happening

the is So your of XX% space. reduction this one in meaningful of most

FY update given on there XX% gross you dynamic, mean, Thank 'XX gives us just you I in was with that you. $XXX guide 'XX and So guide before help what 'XX, a all, that overall Can million too? guide FY us the just margin. understand for for confidence

All polish Emily what I and start right, Puneet. say. can can I off

In last We're terms gives of in strong highlighted this quarter. what we us our confidence, orders.

build Continuing as NGS SynBio On customer side. the has quarter the last on call. commercialization in continue to of our to Factory continue this just We build our Emily base. well extremely highlighted to side, done on portfolio, Future

excellent. are Number continues to of Our customers turnaround increase. times

is Factory the in in a meaningful, So the purely It's digesting for that and to such time, because the in terms of And Future seeing SynBio, significantly are upside same are headcount the terms due meaningful. is going NGS very at headcount. we opportunities of looking of we - invested we've well. reduction that's the and in because meaningful reduction there outlook guide just in reduction

in to look. be going prudent of terms right We're

in We're of terms being In terms quarter. commercial base. could of execution not from projects. a of and number Abveris integrated internal year. We last to feel of do execution last biopharma terms that seeing customer active launching issues offering. integrate XX the We're absorption the good organization. able in the of interest We this purely We're with for our strong

same prudent of our because of meaningful be terms reductions at And the outlook. to in want the we time,

going we're from the we continue of to where increase continue reductions. margin the as of benefits leverage as the see QX next to QX, we we We Factory terms as cost year In see the Future. the

call. on We'll see years next each the updates QX. in of to the for the two outlook will and launch by EBITDA give of adjusted And to our progress to genes terms breakeven of continue quarterly fast get earnings we

turn that. to going Emily I'm run So, over to,

you I covered well. it think, Jim,

Okay.

the overall NGS Just on you market? And in give what of can the in pricing us products, to the Okay. SynBio Thank then expect any products of on pricing update the competition changing you. you're of sense market? seeing you of some sort us. competitive from Do larger you a the and or raise the dynamics just can competitors,

Yes, question. great

In NGS we fast at is did - that do planned a for strategy price summer, on was well launching increase did price this the increase value of last SynBio, increase Except SynBio, our gene. second the product. annual not So In the we our to received. point.

confident, quality able an to pricing. using and going pricing be to ordering, speed dynamic we add to scale get and we'd the and addition premium the In of of ease were amazing approach we're

providing exchange increase price coming to to the in in customer. that's but value it's So the better SynBio

And Thank question Peterson coming the of our line next Tom with you. from Baird.

line is Your open.

wondering on year. Catherine. line for for was could overall fiscal provide you if in the more XQ any on just Tom expectations guide product I given question. reduction for the the and for thanks the by Yes, the revenue XQ color

that? take you can Jim,

Yes, I for question. thanks sorry, was mute. I the Tom, on forgot

and we've mean Biopharma also for for NGS for SynBio and overall, the So I given year. guide the

million it $XX for range million $XX for the QX So break QX just year revenue out SynBio NGS $XX $XX the transmission million. quarter the million, million revenues to $XXX $XX the to we to overall outlook Biopharma to million and of $XX million, million because for range $XXX $XX million, didn't and is

good. XX% the total the of it's for sometimes prudent, business. year-over-year So NGS we've take in we is mean prudent. just The looks outlook, organization. Right. reduction pipeline believe Why XX% it business is up overall

launch go and to the And of same QX at the made adjusted EBITDA positioned is getting forward on appreciate continue marketplace. Really the to in to meaningful Twist a mean, the time, And milestone new We we've the time everybody I do same we great reduction growth. who products, continue year. to contribution next has we the first we're as that. at there from focused to in very get And getting we're feedback profitability our headcount. supported

overall the tough. environment is overall comments environment, any And

we as breakeven. have deliver our we're to portfolio going And to and leverage market. great are get results scale than solid However, growing investments EBITDA to the to and faster and a adjusted we we continue we

for I how room maybe then EBITDA towards additional OpEx left And the fiscal next adjusted for the still helpful. there's reduction just Thanks. one guidance more of more flexibility much guess the see we think target about and That's business. XQ year. on if basically you appreciate me reductions. do Thanks. of within for How that it. Got should any the reduction, forward look obviously OpEx headcount significance

business, mean, future. of predict I nobody So in the can terms

do going we're based business to is the on manage what environment. However,

key of to DNA our environment. we've of profitability -- look environment investment Overall, does highlighted, manage manage then and So, the we're breakeven what Emily our Factory we'll adjusted like. to get the Future, storage. as We investments investments market has moderated our in in in on growing couple the focus and that metrics, will we EBITDA getting significant investments

the execution focused those to environment that that part of got having customers, growth delivering And our on culture this to and employees. -- for, is we it -- the value supporting and and shareholders, than innovation that sheet we're then and that is a our for in fast the year. decisions make ensure transitioning balance take to other So we're continue based strong opportunities we've our is on we've genes strong calendar are part Twist QX delivering got known of

Thanks. it. Got

Thank you. line Vatnsdal our with And of next question from Rachel JPMorgan. the coming

Your line is open.

Great. Thanks the question. taking for

fiscal was between active and Abveris during questions to programs. active So partnerships have XQ it today XXX like active Biopharma That's legacy like and set Biopharma, during few fiscal it you programs down then on XQ. XX XX roughly looks looks at

a much in and really step just expect from that are can you count additional down integrational program execution mentioned you the of cut related. that walk programs was year to you've us how that Biopharma follow-up and declines due So as through do to purely and challenges just then being throughout

the the So can there was you breakdown just help what integration us exactly from understand issues?

Yes. Thank you, great question.

we in program order an of a So terms active number get program. of is, for work

we the right. goes or an that after down, provided so probably is We've the quarter then one reported And that done. the the the to until program as And order customers. and next revenue gets answers

and But is metric. revenue those And to small metric of they order most likely cut the programs been the that revenue, it's is so why that were lagging may cancellation. move completed programs number been not that are leading those have that's and have very and

run integrations, commercial the of its various terms we at had own. in led then And on to

confident customers the and be systems, were but they of than so rationalized, and have sales that you. bit to new a And high point a and conflict. been is BD And in at it there team and technology to later I'm having the were territories this territories we we learned front activities time and getting than on happened Thank of re-platformed the cadence them. have some more that all the wanted were bit right closing there have we it, had that

storage the I quite operating given the about the plans spend competitive which has DNA some the in Great. for of DNA and that just to just you have data be own your maybe on data If backdrop, you kind I going their And guidance shift products. been key recall, of that enzymatic macro that terms there appreciate peers a support over are thesis then what you're rationalizing here backdrop, I'll your were offering. is talk just to a that online getting on with to few follow-up to can questions and entered but macro planning of positioning storage enzymatic as offering, just maybe fully gears

as us well. walk terms Thank can that's shifted through, that you can update So you. offering. of does timeline of has give your asthmatic you us how And in tech trended

it's question. a And great

are we machine. And in-house the the be XXX% chemical we so we will in even and now we've synergies program. development some We on-premise to test been not an optionality. and product mostly, advantage had though house current on-premise, program the So that asthmatic touched for to Right that needed in have choice asthmatic there the that first it's use the that said yes, have asthmatic have storage, for the made, that think us saw could asthmatic. we we asthmatic have use we delaying that for of actions pursuing potential to technology and the decisive we going we is and we

storage product chemicals, asthmatic that data both, first first launch. I'm we asthmatic but may leverage The could that optimistic the be pursuing or technology we're for

the to any Thank now I remarks. closing will Emily you. back call Leproust over for turn And

bit look Thank Goldman next William at appreciate you. to little the today ahead. Sachs, a getting you beyond very some in seeing We you months few us much for and Scotiabank forward schedule. joining of Blair and Thank

end gentlemen, you today. that for for and does our your participation. conference Ladies Thank

disconnect. now may You