Twist Bioscience(TWST) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a record revenue of $84.7 million for Q4 2024, representing a 27% year-over-year increase and a 4% sequential increase [10] - For the full fiscal year 2024, total revenue reached$ 330 million, an increase of 28% compared to fiscal 2023 [10] - Gross margin for Q4 was 45.1%, exceeding guidance, while the annual gross margin improved to 42.6% from 36.6% in fiscal 2023 [11][47] - Adjusted EBITDA loss for Q4 was approximately $17 million, an improvement of$ 9 million year-over-year, while the annual adjusted EBITDA loss was approximately $93.5 million, improving by$ 54 million from fiscal 2023 [51] Business Line Data and Key Metrics Changes - SynBio revenue for Q4 increased to $33.9 million, a 28% year-over-year growth, with full-year revenue of$ 123.5 million, up 26% from fiscal 2023 [43] - NGS revenue for Q4 grew to approximately $45.5 million, a 23% year-over-year increase, with full-year revenue of$ 169.1 million, reflecting exceptional growth of 37% [44] - Biopharma revenue was $5.3 million for Q4, with full-year revenue of$ 20.3 million [45] Market Data and Key Metrics Changes - Revenue from the Americas increased to approximately $52.7 million for Q4, a 21% year-over-year growth, while EMEA revenue rose to$ 25.5 million, a 48% increase [45] - APAC revenue increased to $6.5 million for Q4, an 8% year-over-year growth, with China accounting for approximately 2% of total revenue for fiscal 2024 [46] Company Strategy and Development Direction - The company aims to reach adjusted EBITDA breakeven and become cash flow positive while investing in profitable growth through its innovation engine [17][60] - The strategy includes leveraging proprietary technology for custom synthesis at scale, expanding product offerings, and enhancing operational efficiency [14][18] - The company is focused on developing proprietary enzymes, which are expected to provide significant ROI and reduce supply chain risks [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining momentum into fiscal 2025, driven by strong customer demand and operational improvements [12][58] - The company sees opportunities for market share gains, particularly in light of potential NIH budget constraints, as it offers high-quality products at competitive prices [68] - Management highlighted the importance of continuous process improvements and automation in driving profitability [34][38] Other Important Information - The company ended Q4 with cash, cash equivalents, and short-term investments of approximately$ 276.4 million, not including an additional $15 million received from XOMA in October 2024 [42][53] - Capital expenditures for fiscal 2024 were$ 5 million, a reduction from $28 million in fiscal 2023 [53] Q&A Session Summary Question: Trends in Express Genes and operational efficiencies - Management indicated modest increases in operating expenses, primarily due to annual bonuses, while expecting continued sequential improvement in gross margins [65][66] Question: Exposure to NIH budgets and competitive landscape - The company has minimal exposure to NIH budgets, which is less than 1%, and sees this as an opportunity for market share gains [68] Question: Related-party revenue clarification - Related-party revenue was approximately$ 12 million in Q4, and the company disclosed this due to accounting requirements [70][118] Question: Insights on DNA storage and commercialization - The company is focused on developing competitive DNA storage solutions and is making significant progress in technology development [81] Question: Contribution of Express Genes to future targets - The Express portfolio is boosting revenue and converting makers into buyers, contributing positively to margins [123]