# Twist Bioscience Corp: Form 10-Q for the period ended Dec 31, 2024

- Company: [Twist Bioscience Corp](/companies/twst.md) (CIK 1581280)
- Form: 10-Q
- Filed: 2025-02-03
- Accepted by EDGAR: Feb 3, 2025, 16:09 ET
- Period: 2024-12-31
- Accession: 0001628280-25-003461
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1581280/000162828025003461/twst-20241231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1581280/000162828025003461/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-10-01 to 2024-12-31 | $88.7m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2024-10-01 to 2024-12-31 | $45.9m | us-gaap:CostOfRevenue |
| Research and development | 3 months, 2024-10-01 to 2024-12-31 | $21.3m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-10-01 to 2024-12-31 | $56.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-10-01 to 2024-12-31 | −$34.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-10-01 to 2024-12-31 | $24.0k | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-10-01 to 2024-12-31 | $97.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-10-01 to 2024-12-31 | −$31.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | −$0.53 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-10-01 to 2024-12-31 | −$0.53 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 59,162,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-10-01 to 2024-12-31 | −$21.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-10-01 to 2024-12-31 | $2.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-12-31 | $221.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-31 | $345.3m | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-31 | $608.6m | us-gaap:Assets |
| Current liabilities | at 2024-12-31 | $69.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-31 | $152.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-12-31 | $455.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 18,162 characters.

*You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those discussed in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. In preparing this MD&A, we presume that readers have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K.*

### Overview

We are a leading, rapidly growing synthetic biology company that has developed a disruptive DNA synthesis platform to industrialize the engineering of biology. The core of our platform is a proprietary technology that pioneers a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. We have combined our silicon-based DNA writing technology with proprietary software, scalable commercial infrastructure and an e-commerce platform to create an integrated technology platform that enables us to achieve high levels of quality, precision, automation, and manufacturing throughput at a significantly lower cost than our competitors. We have applied our unique technology to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next generation sequencing, or NGS, sample preparation, and antibody libraries for drug discovery and development, all designed to enable our customers to conduct research more efficiently and effectively. Leveraging our same technology, we have expanded our footprint beyond DNA synthesis to manufacture synthetic RNA as well as antibody proteins to disrupt and innovate within larger market opportunities, in addition to discovery partnerships for biologic drugs and developing completely new applications for synthetic DNA, such as digital data storage.

We believe our products enable a broad range of applications that may ultimately improve health and the sustainability of the planet across multiple industries including healthcare, chemicals/materials, food/agriculture, academic research, and technology. We sell our synthetic DNA and synthetic DNA-based products to a customer base of approximately 3,562 customers annually across a broad range of industries. In order to address this diverse customer base, we employ a multi-channel strategy comprised of a direct sales force targeting synthetic DNA customers, a direct sales force focusing on the NGS market and an e-commerce platform that serves both commercial channels. We employ business development and sales representatives for our biopharma solutions as well. Our easy-to-use e-commerce platform allows customers to design, validate, and place on-demand orders of customized DNA online, and enables them to receive real-time customized quotes for their products and track their order status through the manufacturing and delivery process. This is a critical part of our strategy to address our large markets and diverse customer base, as well as drive commercial productivity, enhance the customer experience, and promote loyalty.

We currently generate revenue through our synthetic biology and NGS tools product lines as well as biopharma services for antibody discovery, optimization and development.

Since our inception, we have incurred net losses each year. Our net losses for the three months ended December 31, 2024 was $31.6 million compared to $43.0 million for the three months ended December 31, 2023. As of December 31, 2024 we have accumulated net deficit of $1,273.5 million and cash, cash equivalents and short-term investments of $270.8 million. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the synthetic biology, biologic drug and data storage industries as well as leveraging our investment in our manufacturing facility in Wilsonville, Oregon.

Financial highlights from three months ended December 31, 2024 compared to the three months ended December 31, 2023 include the following:

- Revenue growth of 24% to $88.7 million from $71.5 million, primarily due to order growth in NGS tools and synthetic genes;
- Gross margin increased to 48.3% from 40.5% mainly due to increase in revenue and the fixed costs being spread over a larger revenue base;
- Loss from operations decreased to $31.6 million from $43.0 million primarily due to increases in revenue and gross profit;
- The net loss per share, basic and diluted, has decreased to $0.53, a significant improvement from the previous net loss per share of $0.75;
- Net cash used in operating activities decreased to $21.4 million from $23.0 million.

### Results of operations

### Comparison of the three months ended December 31, 2024 and 2023

### Revenues

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenues | $88,713 | $71,498 | $17,215 | 24% |

### Revenues by geography

We have one reportable segment from the manufacturing of synthetic DNA products. The following table shows our revenues by geography, based on our customers’ shipping addresses. Americas consists of United States, Canada, Mexico and South America; EMEA consists of Europe, Middle East and Africa; and APAC consists of Japan, China, South Korea, India, Singapore, Malaysia, Australia, New Zealand, Thailand and Taiwan.

|  | Three months ended December 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2024%** | **2023%** |
| Americas | $53,709 61% | $43,959 61% |
| EMEA | 28,304 32% | 21,220 30% |
| APAC | 6,700 8% | 6,319 9% |
| Total revenues | $88,713 100% | $71,498 100% |

### Revenues by product

The table below summarized revenues by product:

|  | Three months ended December 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2024%** | **2023%** |
| Synthetic genes | $26,485 30% | $19,726 28% |
| Oligo pools | 5,094 6% | 4,189 6% |
| DNA libraries | 2,794 3% | 2,939 4% |
| Antibody discovery | 5,698 6% | 5,226 7% |
| NGS tools | 48,642 55% | 39,418 55% |
| Total revenues | $88,713 100% | $71,498 100% |

### Revenues by industry

The table below summarized revenues by industry:

|  | Three months ended December 31, |  |
| --- | ---: | ---: |
| **(in thousands, except percentages)** | **2024%** | **2023%** |
| Industrial chemicals/materials | $21,203 24% | $16,277 23% |
| Academic research | 17,546 20% | 13,773 19% |
| Healthcare | 49,369 56% | 40,881 57% |
| Food/agriculture | 595 1% | 567 1% |
| Total revenues | $88,713 100% | $71,498 100% |

### Product shipments including synthetic genes

The table below summarized product shipments including synthetic genes:

*(in thousands)*

|  | Three months ended December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Number of genes shipped | 205 | 196 | 212 | 193 | 171 | 177 | 171 | 152 |

The number of customers who purchased products from us were approximately 2,376 and 2,140 customers for the three months ended December 31, 2024 and 2023, respectively.

Revenues increased 24% to $88.7 million for the three months ended December 31, 2024, as compared to $71.5 million for the three months ended December 31, 2023. The increase in revenue primarily reflects growth in NGS tools revenue of $9.2 million and growth in synthetic genes revenue of $6.8 million, including the Express Genes offering, which is primarily attributable to increase in revenues from our customers in the healthcare, industrial chemicals/materials and academic research industries and an increase in the number of customers. The number of our genes shipped in the three months ended December 31, 2024 increased to approximately 205,000 genes compared to approximately 171,000 genes in the three months ended December 31, 2023, an increase of 20%.

### Cost of revenues

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenues | $45,873 | $42,536 | $3,337 | 8% |
| Gross profit | $42,840 | $28,962 | $13,878 | 48% |
| Gross margin | 48.3% | 40.5% | 7.8% |  |

Cost of revenues increased 8% to $45.9 million for the three months ended December 31, 2024, as compared to $42.5 million for the three months ended December 31, 2023. The increase is primarily attributable to an increase in material costs of $4.6 million due to higher sales volume which was offset by a decrease in depreciation and amortization expense of $1.3 million due to impairment of long-lived assets in fiscal year 2024. Gross margin increased 778 basis points to 48.3% for the three months ended December 31, 2024 as compared to 40.5% for the three months ended December 31, 2023 mainly due to increase in revenue and the fixed costs being spread over a larger revenue base.

### Research and development expenses

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $21,307 | $23,099 | $(1,792) | (8)% |

Research and development expenses decreased 8% to $21.3 million for the three months ended December 31, 2024, as compared to $23.1 million for the three months ended December 31, 2023. The decrease is primarily due to a decrease in outside service costs of $0.9 million, lab supplies costs of $0.3 million, depreciation and amortization expenses of $0.4 million and personnel costs of $0.2 million.

### Selling, general and administrative

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Selling, general and administrative | $56,177 | $52,840 | $3,337 | 6% |

Total selling, general and administrative expenses increased 6% to $56.2 million for the three months ended December 31, 2024, as compared to $52.8 million for the three months ended December 31, 2023. The increase is primarily due to an increase in personnel costs of $1.4 million, including stock-based compensation expense of $0.8 million and an increase in third party spending of $1.9M related to outside services, marketing costs and other expenses.

### Interest and other income (expense), net

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $3,240 | $4,120 | $(880) | (21)% |
| Interest expense | (24) | — | (24) | 100% |
| Other expense | (69) | (31) | (38) | 123% |
| Total interest and other income (expense), net | $3,147 | $4,089 | $(942) | (23)% |

Interest income decreased 21% to $3.2 million for the three months ended December 31, 2024, as compared to $4.1 million for the three months ended December 31, 2023, due to lower cash equivalents and short-term investments balance.

### Income tax expense

*(in thousands, except percentages)*

|  | Three months ended December 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $(97) | $(120) | $23 | (19)% |

We recorded an income tax provision of $0.1 million and $0.1 million for the three months ended December 31, 2024 and December 31, 2023, respectively.

### Liquidity and capital resources

### Sources of liquidity

To date, we have financed our operations principally through public equity raises, private placements of our convertible preferred stock, borrowings from credit facilities and revenue from our commercial operations. At December 31, 2024, we had a balance of $221.4 million of cash and cash equivalents and $49.4 million in short-term investments.

During the three months ended December 31, 2024, we received an upfront payment of $15.0 million from XOMA (US) LLC ("XOMA") in cash in exchange for XOMA's right to receive half of the future potential milestone and royalty payments resulting from existing antibody discovery and biopharma services collaborations with Company’s partners. We accounted for the transaction as liability for the sale of future revenue under the accounting guidance for sale of future revenues (see note 15 of the condensed consolidated financial statements included elsewhere in this Form 10-Q).

### Operating capital requirements

Our primary uses of capital are, and we expect will continue to be for the near future, compensation and related expenses, manufacturing costs, laboratory and related supplies, legal and other regulatory expenses and general overhead costs and capital expenditures. We had $5.9 million in commitments for capital expenditures as of December 31, 2024.

### Cash flows

The following table summarizes our sources and uses of cash and cash equivalents:

*(in thousands)*

|  | Three months ended December 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(21,428) | $(22,973) |
| Net cash provided by (used in) investing activities | (1,536) | 4,165 |
| Net cash provided by financing activities | 17,944 | (1,473) |

### Operating activities

Net cash used in operating activities was $21.4 million during the three months ended December 31, 2024 primarily due to a net loss of $31.6 million adjusted for non-cash items including depreciation and amortization expense of $6.4 million, stock-based compensation expense of $12.0 million and a net cash outflow from operating assets and liabilities of $8.2 million. The net cash outflow from operating assets and liabilities was mainly due to an increase in accounts receivable of $4.5 million due to timing of collections, a decrease in accrued compensation of $11.9 million offset by increases in accrued expenses of $3.1 million and accounts payable of $5.7 million. The changes in accrued compensation, accrued expenses, and accounts payable are due to timing of payments to vendors and employees.

Net cash used in operating activities was $23.0 million in the three months ended December 31, 2023 primarily due a net loss of $43.0 million adjusted for non-cash items including depreciation and amortization expenses of $8.2 million and stock-based compensation expense of $11.0 million and a net cash inflow from operating assets and liabilities of $0.5 million. The net cash inflow from operating assets and liabilities was mainly due to decreases in accounts receivable of $8.1 million, inventories of $1.2 million, and other non-current assets of $0.3 million and an increase in accrued expenses of $2.9 million, offset by an increase in prepaid expenses and other current assets of $1.1 million and decreases in accounts payable of $4.2 million, accrued compensation of $5.1 million and other liabilities of $1.5 million.

### Investing activities

Net cash used in investing activities was $1.5 million during the three months ended December 31, 2024, which consisted of the purchases of laboratory property, equipment and computers of $2.3 million offset by the proceeds from the net impact of purchases and maturity of investments of $0.7 million.

In the three months ended December 31, 2023, our investing activities provided net cash of $4.2 million, which was comprised of the proceeds from the net impact of purchases and maturity of investments of $5.7 million, offset by the purchases of laboratory property, equipment and computers of $1.5 million.

### Financing activities

Net cash provided by financing activities was $17.9 million in the three months ended December 31, 2024, which consisted of $15.0 million from sale of future revenue and $3.0 million from the exercise of stock options.

Net cash used in financing activities was $1.5 million in the three months ended December 31, 2023, which consisted of $2.4 million in repurchases of common stock for income tax withholdings, offset by $1.0 million from the exercise of stock options.

### Off-balance sheet arrangements

We do not have any off-balance sheet arrangements.

### Contractual obligations and other commitments

Our contractual obligations have not materially changed from those reported in our Annual Report on Form 10-K.

### Critical accounting policies and significant management estimates

The preparation of our Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and judgments that affect the reported amounts in the financial statements and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates. A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K. There were no changes to our critical accounting policies and estimates during the three months ended December 31, 2024.

### Recent issued accounting pronouncements

For a description of accounting changes and recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our condensed consolidated financial statements, see Note 2, “Summary of significant accounting policies” in Item 1 of Part I of this Form 10-Q.

## Market risk

As filed, 243 characters.

Information about our market risk is presented in Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K. Our exposure to market risk has not changed materially since September 30, 2024.

## Controls and procedures

As filed, 1,918 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024, which is the end of the period covered by this Quarterly Report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures to ensure that information required to be disclosed by the Company in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures were effective as of December 31, 2024.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

## Risk factors

As filed, 814 characters.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report on Form 10-K filed with the SEC on November 18, 2024, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.

Filed Feb 3, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-003461. Last ingested by Listed: Nov 3, 2026, 18:01 ET. No prices; not investment advice.