Q2 2020 Earnings Call
[music].
Welcome to twist Bio Sciences school, 2022nd quarter financial results Conference call.
At this time of participant line going to listen only mode.
After the speaker presentation, there will be a question and answer session to ask the question. During the session you expressed a one on your telephone.
Please be advised that today's conference is being recorded if you require any further assistance <unk> stars zero.
I like that to turn the conference call [noise].
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<unk> Chief Financial Officer.
[laughter] alright, thank you very.
Good afternoon, everyone.
First and foremost we've <unk> each of you, it's safe and healthy.
Ever yard during this time.
I like to thank all of you for joining us today for twist bias Science conference call to review, our fiscal 2022nd quarter financial results and business progress.
We did issue or financial results earlier today.
Which is available at their website W.W.W. dot twist bio science Dot com.
Me on today's call his daughter Emily lacrosse.
See you and co founder of twist.
Emily will begin with their view recent progress and twist businesses.
And I will report on our financial an operational performance.
Financially and we'll discuss our upcoming milestones and direction.
Well then open the call up for questions.
And as a reminder, this call is being recorded.
The audio portion will be archived an investor section of our website and it will be available for one week.
Financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
These risks include those set forth in the press release, we issued earlier today.
As well as us more fully described and our filings with the Securities Exchange Commission.
The forward looking statements in this presentation are based on information available to us as of the date hereof.
And we cannot at this time predict the full extent of the impact of record covert 19 pandemic.
And any results.
Businesses, our economic impact.
We disclaim any obligation to update any forward looking statements, except as required by law.
With that I'll now turn the call over to our Chief Executive Officer, and co founder Dr. Emling lacrosse.
Thank you Jim and good afternoon, everyone.
And equipment leases that we find the safe and healthy.
The global pandemic that change our life substantially since our last quarter in February.
And at twin even before the state of California cooled push it to increase.
We could see transitioned Madrid nimble I'm pleased to working from home.
Sorry, we wanted to ensure that our production work.
When it has the option of working from home safe and healthy.
That will be able to continue to develop products to customer couldn't bring important research.
This is the besides attendances goes there could be 19, we reported a record revenues of 19 point between internal for the second quarter of quickly when.
Resulting from strong India sales significant revenue from Jinko.
Initial revenue from Biopharma Corporation.
Well as the addition of two new could be like corner.
Although for the current quarter in strong I precisely on par with the previous quarter at 24.6 million dialogue on resulting in a booking rate for both you know though.
Six month of fiscal Cliff one.
For the first time, we probably the gross margins of approximately 30%.
Well I mean that as we scale our products and living you.
Building on now is that this infrastructure when able to increase on mountain.
Turning to specific reserve bookings bio.
We shipped more than 88000 team during the second quarter.
It was slow we added two new writer.
I want our capacity and continue reducing Alcorn line.
Oxycyte or whether you include some highlands Tipton them, we're developing vaccines and therapeutics against could be Nike.
So we kinda entering the break down revenue outlook because in at this time.
We recorded a took or even use are up by a revenue.
In the rather sad.
From being called which has made a substantial commitment in the fight against could be 19, and a steady CD dating substantive research.
This is a very strong quarter folks in volume.
But we do see the should the increase although I can you know academic just enough because essentially.
We have launched a new campaign, where customers can all they'll be in now.
Has there ever recorded the design portion of the design built this cycle from home.
And when their lab.
We opened we will ship the product to them immediately.
Balancing out the reduction in academic revenue, we see an acceleration in order from Bayer synergy and logistical company renting a bit I spoke to fight could be 19.
Through vaccine and therapeutic development.
And overall.
By auto remains strong as for Cooper Colombians are up as those love, though it doesn't mean open for central resets.
Well, we're optimistic about the future well closely monitoring solution as well.
Across our customer base, I mean or reason.
So that's going to best position to react to any changing market conditions.
In talking about something on Keytruda and ask them.
It was much more challenging independently immediate April we don't see new product to bring loved the massive your name.
To custom, though when you go okay.
These product and expanded and extended offering of folks, Wisconsin is a pre salt format for pharma and biotech company.
And therefore expands our addressable market.
This extension of our criminal teams offering enables twist to become more of the one stop shop from five equal and basically leases common.
In addition, we're looking at different market opportunity.
In Emma nickel and Super cool in the long tale of the market.
It's just another.
Fewer genes at the time rather than massive order.
And we remain on track to loan Sharks and already in pregnant in the second half of stand up 20 Twond.
All the new preparation and the courage in Franklin target, two very different and important sustain them.
But we do not have well today.
And we believe that over time, they weixin substantive areas of growth for convey a signal.
Flux, Unix and targeted and yet.
End of the second quarter, we introduced new products.
He takes curvy 19 testing in late two in a borrower evolution.
We introduced Southgobi two entities are and they recruit sequencing, which can be used as pollution control for development that edition and verification of diagnostic assays.
As well as you know a routine testing.
These referenced sequences outlets to proceed on it is website within their reference materials for how could you too.
We also launched it target enrichment panel for viral detection and characterization of both for us because he.
Which can be useful and some are cool monitoring and civilians testing, while providing insight into whose sequence information to try to borrow an evolution and train origin.
These new product offering our perfect illustration of what twist does with.
Were presented with a new tenants like his global company.
And we look at our cost trends can address these problem.
We were able to launch this product in just a few weeks serving our existing business he and his commitment emerging global comes from.
This growth were only really there for two weeks at the end of quarter and in that time, we recorded approximately 400000 dollar revenue and we shipped to 231 kitchen.
Sure were grateful.
To be in a position, where we are able to helping the effort to combat. These direct while the business remains healthy. This is a tremendous system to the hardware and indication.
For employees across the organization.
For all engineered products.
We reported revenue and then sponsored and you end up an increase of 38% year over year as well as tronc order of 9.8 million, though.
And we had another six customers adopt our products quarter protocol of 43.
During the quarter.
One of our customers publish result of their liquid biopsy.
Which includes our customized.
I guess enrichment panel.
With that I don't want strategy that debt Reggie they're going to detect more than 50 type of cancer across all stages.
False positive rate of less than one person through a single plug drew.
These data from more than 15000 participants are extremely impressive animals for both the deficit liquid biopsy today.
As we all know.
The ability to it and thank you Ken So early remains critical twin cities treatment well real clear role in these potential type work or shift in cancer diagnosis.
More broadly.
To address it allows liquid biopsy market, we introduced a target imitation sequencing solution. During the 20 2080 beginning in February.
These freight is ideal for customers, who piece on liquid biopsy as you can be used to the imitations pattern changes in a wide range of free so cheap.
For those of you not familiar with mitigation.
In addition, and subtraction of committed group changes, which putting some made in the sense, we seem to them as deep indication for cancer genetics and noninvasive prenatal testing.
Well working with initial customers and believe it represents an important every accruals for NGL solution.
Turning to our vertical market opportunities. In addition to our collaborations supply since getting things and I really hope and I've been.
Squeeze biopharma in working with them to provide custom antibody drug discovery libraries and is creating these these libraries for potential antibody therapeutics that who treat patients with could be 19.
And in March as a global pandemic, but is gaining traction lumpy, we leverage our robust recovery in Turkey and that would you be school elaborating.
Each containing more than 10 billion antibody sequences.
Amplify and 70 days for treatment of south couldn't too.
We have identified key competitive intensity, we put on buying to the restaurants opening domain of the S. One protein on the South Korea to virus. In addition, we identified a series of antibodies that binds to the express fill out the name of ace to implement them.
As a reminder, ace too is that we shipped all that southgobi to bind to in order to enter and Cook you answer.
The fact that whoever to go from publicly remember restaurant sequences to competitive antibodies for two different targets in a matter of six weeks demonstrate the power of our bio pharma platform.
And some things that we believe we can Pete others I guess even.
Even the ones who to hospital.
Apart from our Vodafone not worked against could be 19th.
Continue our discussions with the last month of potential partner.
I'm very pleased three products, we have signed one partnership with an equal quality, which includes milestone and royalty.
I look forward to advancing additional deal.
As a result, we reported 600000 barrels in revenue fall bio pharma division this quarter.
While we expect the older and revenues to be lumpy.
Coalescing that's in the increase.
As we continue to derive value from these growing market the protein.
All right near term and sometimes because they couldn't making funding.
As we generate additional data and validation for our income and ingenuity targets.
Expect to move along the spectrum to thing of value added.
Pharma partner, rather than just reagent provider.
We do expect this will take time, but quite encouraged by the progress we are seeing today.
As we shared last quarter, we will not give an update on the restoration due to the length of time. It takes for the Silicon design built this soccer.
However, you can sell that added an additional pointing you to drive this important product form.
Well actually consummated twist that will attracted and retained it and resilience, absolutely well and higher by automation.
Hello can sustainably.
Well in put to the says in the last three months and the channel continue Im pleased to lead the company that is rising to address a global pandemic and this will serve our customers with many other important areas of except this time.
I'd like to turn the corner. According to review our financial results for the quarter.
All right. Thank you Emily.
Our results for quarter, two were strong and proved out and business model in an extremely challenging environment.
Revenue was 19.3 million.
And that's 42% growth year over year.
12% sequential growth from the 17.2 million in the previous quarter.
Our gross margin for the quarters kitchen, 9.7%.
As compared to approximately 13% and the same quarter last year, an up from 20% in quarter one.
This reflects the benefit of scaling our revenue.
Leveraging our fixed costs.
Before I cover the detailed financials, we would like to thank all of our investors for their continued support in the last quarter.
As we continue to strengthen our balance sheet, but approximately 119 million and a follow on offering plus our at the market offering.
In addition, you're like thank our customers.
Suppliers under incredible twisters for their loyalty.
Dedication and commitment during these challenging times.
Our operations R&D logistics and supply chain teams have been adjusting to this challenging environments for launching new products.
Aimed at combating the virus.
The commercial team executed well and would've been 24.6 million in orders in the quarter.
Which includes approximately 10 million of orders in March a very challenging minds as many of the geographies implemented shelter in place.
Our gingko business is going well with $4 million revenue in the quarter.
Finally, we continue to build our broader customer base and rebuilds approximately 1100 60 customers.
During the quarter.
And 14 40 year to date.
Our public products launched in the middle of March.
Doing well in.
In fact, the contributed approximately 400000 doors in the revenue.
And and Biopharma antibody products continued to gain traction with orders are approximately 700, Kay and revenue of 600 Kay.
Now I'll give you some more detail on our orders in the quarter.
Just breaking down or are those the 24.6 million.
And for the year no boot almost 50 may actually 49.4 million last approximately 55% year over year over year growth.
Over the first six months of 29 team.
[noise] are sitting by orders, which are defined as genes libraries, all the get pulled some quarter to were 14.1 million and this includes game or this is 3 million.
Our jeans business is doing extremely well, regardless of 11.3 million during the quarter and year to date orders of almost 21 million actually trying to point 8 million.
Which is 42% year over year growth.
Primarily from Mia and the U.S. markets.
[noise] Ngs Arguers, our genomics products, which are a captures our ngs products continued to perform well.
Were booked approximately 9.8 million and orders in the quarter, which brings year to date orders to 21.6 million for Ngls.
Although Q2 was lower than Q1, we anticipate fluctuations quarter to quarter.
Received orders from 357 accounts in the quarter and that's up from approximately 250 in quarter one.
Even in these uncertain times that pipeline for our largest ngs opportunities continues to scale and were no tracking 113 customers progressing through the pilot validation and adoption phases with 43 adopting up from 37 and that totaled 17 pilot.
And validation.
We're very encouraged by what we're seeing in these uncertain challenging times.
Our biopharma antibody discovery products are also scaling and we continue to build the pipeline bookings of approximately 700.
Thousand dollars.
In terms of our progress for the global expansion and managing while bookings up almost 9 million.
Now includes approximately 4.4 million from Ngs with solid orders across industrial biotech academic and pharma segments in EMEA.
In fact, we've almost get about 600 customers and EMEA now.
Hi bookings were million Dollarss and as we expected to be impacted by cobot, we saw a week January.
We said they are very strong recovery in March.
America's orders for quarter, two for approximately 15 million of which 9 million was sitting by on.
And 5 million.
Was ngs and biopharm on her spurts $700000.
Please note we provide orders not directly translates into recognition following quarter, but more to provide a trend line for each product group.
Additionally, and certain business, an economic environment like the one we're in today. It is possible that he's orders will not congrats into revenue.
While we feel our orders are from we're closely monitoring the situation to ensure we are poised to react to any changing market conditions.
Now, let me cover revenue Ngs product revenue for the quarter was 7.7 million plus 10% sequential growth.
And year over year growth of approximately 38%.
This brings our year to date Ngs revenue to 14.7 million, which is a 57% growth than last year.
As noted we continue to expand our customer base and shipped approximately 340 customers versus 119 previous quarter.
Our Symbio product revenue was 11 million up from approximately 10 million in first quarter.
And for the first six months or fiscal Twentytwenty sitting by our revenue grew to 21 million compared to 15.7 million in the same care to fiscal 2019, there's about 33% year, where you're of course.
Our jeans business continues to do very well with quarter revenue of 9.1 million.
This is 50% growth year over year, and 16% sequential growth.
Although March was challenging for is all we ship set to 2000 genes in the month.
And for the quarter, we shipped 88000 jeans up from 80000 in previous quarter.
It's worth noting that longer jeans accounted for approximately 50%.
Our revenue gene revenue in the quarter.
Our biopharma antibody product revenue was 600000 for the quarter and we continue to make progress and building pipeline.
I'll quickly touch on lane geography is.
EMEA revenues of 6 million and that brings EMEA revenue first half to 12 million compared to just under 6 million in the same period last year impact revenue for the quarter second quarter declined.
As expected to 0.9.
And that's compared 2.9 million on us compared to 1.2 million first quarter.
It's worth noting the eight patch revenue for the first half of this year is double what it was last year I 2.2 million for the first half of 2000 1920 to 28 vessels or $1.1 million will first half of 219.
In terms of segment revenue, a larger segments for industrial chemicals 7.5 million.
Followed by health care at 5.8 million academic at 5.5 million.
Now moving down the TNL gross margins.
Continue to to grow.
As we scale the business I'm very excited to announce we actually hit the 29.7% or nearly 30% gross margin.
In quarter two.
And that includes about 300000 stock based comp for the quarter approximately 100000 in shelter in place compensation for operations employees.
Our operating expense, excluding the cost of revenue for the second quarter increased approximately 37.8 million compared to 36.9 million in the first quarter.
R&D was 10.6 million compared to 10.3 million first quarter.
SG any increased to 27.2 million of second quarter, reflecting additional commercial costs.
Mainly marketing and stock based comp of 600000.
Our net loss for the second quarter, especially 1.8 mine.
In summary.
The quarter ended was 250 million in cash.
Weve proven out our business model.
Strong revenue growth.
Gross margin nearly 30% and we're focused on growing aggressively.
However, due to the evolving environment.
We believe it is prudent to withdraw our fiscal Twentytwenty international guidance and with that I'll now turn the call back over to family.
Thank you again.
As Jim said with a strong cook.
And now we are monitoring business conditions, and the impact that could be 19 on our customers.
Well it could be 19 banking business it does not being a burst known a boon to operation.
We see a positive impact of Queen 19 in the resilience of concrete and our new and innovative products to meet marketing.
Overall, although it's remained strong.
Our team continues to innovate in a challenging environment and we continue to execute our businessmen.
Looking ahead of his bio we expect continued revenue growth and then a certification of customer.
We expect to extent occurring for both physical companies and for their own aftermarket.
Friends yet.
We expect to be our customer base by offering new product that expand.
Infectious disease occurring or those who.
We remain focused on pursuing new market opportunities, including liquid biopsy and then could open organization tend to be using my current.
Well by Uh Huh.