Q1 2024 Twist Bioscience Corp Earnings Call

Operator: Welcome to TWST Bioscience's fiscal 2024 first quarter financial results conference call. At this time, all participants are in listen-only mode.

Welcome to twist Bioscience fiscal 2024 first quarter financial results conference call. At this time, all participants are suddenly mode.

Operator: After the speaker's presentation, there will be a question and answer session. I would now like to turn the conference over to Angela Bidding, Senior Vice President of Corporate Affairs. Thank you, operator. Good morning, everyone.

After the Speakers' presentation there'll be a question answer session and instructions will be given at that time.

Now, let's turn the conference over to Angela bidding senior Vice President of corporate Affairs.

Angela: Thank you operator, good morning, everyone I'd like to thank all of you for joining us today for twist Biosciences Conference call to review, our fiscal 2024 first quarter financial results and business progress.

Angela Bidding: I'd like to thank all of you for joining us today on the TWST Biosciences conference call to review our fiscal 2024 first quarter financial results and business progress. We issued our financial results release this morning, which is available on our website at www.twistbioscience.com. With me on today's call are Dr. Emily Leproust, CEO and co-founder of TWST, and Adam Laponis, CFO of TW

We issued our financial results released this morning, which is available at our website at Www Dot twist Bioscience dotcom.

With me on today's call are Dr. Emily, let Bruce CEO and co founder of twist and out of my CFO of Twitter.

Angela Bidding: Emily will begin with a review of our recent progress on TWST businesses. Adam will report on our financial and operational performance. Emily will come back to discuss upcoming milestones and direction. We will then open the call for questions. We would ask that you limit your questions to only one and then requeue as a courtesy to others on the call.

Emily Marine Leproust: Emily will begin with a review of our recent progress on twist businesses.

Dr. Emily: Adam will report on our financial and operational performance Emily will come back to discuss upcoming milestones and direction. We will then open the call for questions.

Speaker Change: We would ask that you limit your questions to only one and then re queue as a courtesy to others on the call.

Angela Bidding: As a reminder, this call is being recorded. The audio portion will be archived in the investor section of our website and will be available for two weeks. During today's presentation, we will make forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

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

Speaker Change: During today's presentation, we will make forward looking statements within the meaning of the U S Federal Securities laws.

Speaker Change: Forward looking statements generally relate to future events or future financial or operating performance.

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

Angela Bidding: These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and 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 CEO and co-founder, Dr. Emily Leproust. Thank you, Angela. And good morning, everyone.

Speaker Change: These risks include those set forth in the press release, we issued earlier today.

Speaker Change: As well as those more fully described in our filings with the Securities and Exchange Commission.

Speaker Change: The forward looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward looking statements, except as required by law.

Speaker Change: With that I'll now turn the call over to our CEO and co founder Dr. Emily the crews.

Emily: Thank you Angela and good morning, everyone.

Emily Marine Leproust: It is a very exciting time for TWST with revenue, margin, and market share increasing, new products introduced recently with more to come, and growing markets for products which enable a diversified customer base. Today, as we report our financial results for the first quarter of fiscal 2024, we will focus on three important items that drive our business. Revenue growth, marketing expansion, and financial discipline track our path to profitability. Our entire team at TWIST is laser focused on these initiatives, while simultaneously bringing exceptional products to our customers.

Speaker Change: Is a very exciting time for twist these revenue margin and market share increasing new products introduced recently with more to come and green market salt products, which enable a diversified customer base.

Emily Marine Leproust: Today, as we report a fan and I'm sure with them for the first quarter of fiscal 2020 full we will focus on three important items that drive our business revenue growth margin expansion and financial discipline to track to our past.

Emily Marine Leproust: Our entire team is laser focused on these initiatives, while simultaneously, bringing exceptional products for customers.

Emily Marine Leproust: We continue to deliver record revenue and consistent, robust growth year over year. We expanded market share in both Symbio and NGS with strong commercial and operational executions across our teams. We are building a resilient and diversified business with a portfolio of solutions that stem from our innovative DNA synthesis platform, which allows us to pursue multiple market opportunities simultaneously while mitigating risk.

Emily Marine Leproust: We continue to deliver record revenue and consistent <unk> growth year over year, we expanded market share in Boston by an Ns, yes, with strong commercial and operational execution across our teams.

Emily Marine Leproust: We're building a resilient and diversified business with a portfolio of solutions that stemmed from our innovative synthesis platform. This allows us to pursue multiple market opportunities simultaneously, while mitigating risk.

Emily Marine Leproust: Several years ago, we established a plan to achieve profitability for the business. We continue to execute against the plan we laid out for ourselves, and we are firing on all cylinders. Diving into the specifics, revenue for the first quarter increased significantly to $71.5 million, with others going to more than $77 million, and margin increasing to $40.5 million. Moving to the products area, revenue for SynBio increased to $26.8 million with strong orders of $29.2 million. Semi-revenue grew 25% year-over-year, excluding in both periods gap revenues from a key account that was affected by the timing of the quarter and expected to return in the current quarter. In November, we began a limited launch of our express gene product, which is our clonal genes delivered faster in five to seven days.

Emily Marine Leproust: Years ago, we established a plan to achieve profitability for the business.

Emily Marine Leproust: To execute against the plan, we laid out for films and we're firing on all cylinders.

Diving into the specifics revenue for first quarter increased significantly to $71 5 million thereof, with others going to more than $77 million and margin increasing to $40 five goes up.

Emily Marine Leproust: Moving to the products area revenue increased to $26 8 million barrels we struggle.

Emily Marine Leproust: $9 2 million barrels.

<unk> revenue grew 25% year over year, excluding in both periods <unk> revenues from a key account that was affected by timing of the quarter and excited to be doing in the current quarter.

Emily Marine Leproust: Remember, we began a limited launch with the extra 18 product, which is our clinical jeans delivered faster in five to seven days.

Emily Marine Leproust: I'm pleased to report that, as for Q1, 98% of X-ray genes ordered have been delivered in the quoted time frame. Delivering clonally perfect genes on this timeline, at scale, is an exceptional feat. This performance is driven by our platform, our site in Oregon, and our operations team that implements all the successful We are the only x-ray software that can deliver at scale. If you need one gene or thousands of genes, we can deliver perfect genes in as few as five days.

Emily Marine Leproust: I am pleased to report that as for Q1, 98% are fixed with genes ordered have been delivered in the <unk> timeframe.

Delivering not only perfect genes in this timeline.

Emily Marine Leproust: <unk> is an exceptional feat.

Performance is driven by our platform.

Emily Marine Leproust: <unk>, Oregon, and our operations team that implements although successfully.

Emily Marine Leproust: The only X ray performing that can deliver S. Kim if you need one genes.

Emily Marine Leproust: Thousands of genes, we can deliver client interfaces as U S five days.

Emily Marine Leproust: Importantly, our differentiated express offering allows us to charge a premium price over our standard clonal genes in exchange for the speed. Customers can choose to order standard genes with a turnaround time of 10 days or X-ray genes with a turnaround time beginning at five. The premium price for the express offering varies daily and by the capacity available in our manufacturing facility in Wilsonville, Oregon. To date, we have tested premiums from 20% to as high as 200%. As a reminder, we use the same manufacturing line for both express and stellar genes, so all increased pricing applies directly to margin expansion. Because the manufacturing line is the same, it also means that our capacity has increased whether we sell genes standard or express. When we launched in November, half of our clonal gene volume qualified for the express service. Last week, we announced that virtually all clonal genes at all PrEP scales now qualify for express.

Emily Marine Leproust: Importantly, our differentiated express offering allows us to charge a premium price that are clonal genes makes sense for the speed.

Emily Marine Leproust: Christina can choose to other standards into the total time of 10 days.

Emily Marine Leproust: Explorations with a turnaround time beginning at five days.

Emily Marine Leproust: Price for the express offering batteries daily and buy the capacity available in our manufacturing facility in Wilsonville, Oregon.

To date, we have tested premiums from 20% to as high as 200%.

Emily Marine Leproust: We use the same FX streamline for both express and steroids.

Emily Marine Leproust: So all increased pricing applies directly to margin expansion because of the manufacturing line is the same.

Emily Marine Leproust: Also means that our capacity is increased whether we celgene standup alright, Chris.

Emily Marine Leproust: When we launched in November also for Clonal gene volume qualified for Express service last week, we announced that yesterday, all clonal genes at all prep scale now qualify for expert services with this extension we began a full marketing launch around the express portfolio largely using digital marketing tactics to keep your cost of gifting.

Emily Marine Leproust: With this extension, we began a full marketing launch around the express portfolio, largely using digital marketing tactics to keep the course of customer acquisition. We are pleased with the early days of the launch, particularly the balance of uptake between pharma, industrial chemical, and academic. Early feedback indicates that this product resonates. We monitor orders daily, and we are seeing the early stage of a revenue rise. We consistently observe varying degrees of customer willingness to pay a premium. And daily, we gain valuable insight into pricing sensitivity, geographic nuances, industry-specific trends, and account-level patterns. Moving forward, this allows the sales team the potential to proactively secure contract pricing for key accounts in exchange for terms such as volume commitment and fixed premiums, which enables expanded margin as well as predictability for manufacturing. As of January 30, we have received confirmed interest from several pharma companies, reflecting a positive trajectory. Up until we turned on our marketing machine last week, our focus was on existing customers.

Emily Marine Leproust: The accretion.

Emily Marine Leproust: We are pleased with the early days of the launch Pascal in the balance of update between pharma and industrial chemical and academic customers.

Emily Marine Leproust: Early feedback indicates that this product resonates, we monitor orders daily and we're seeing the early stage of a revenue ramp.

Emily Marine Leproust: We consistently observed varying degrees of Keystone willingness to pay a premium and daily we gain valuable insight into pricing sensitivity geographic nuances industry specific trends and at current level patterns moving toward this allows the sales team the potential to proactively secure contract pricing for key accounts in excel short term.

Emily Marine Leproust: Such as volume commitments.

Emily Marine Leproust: Premiums, which enables extending margin as we have predictability for manufacturing.

Emily Marine Leproust: At <unk>, we have received confirmed interest from several pharma companies, reflecting a positive trajectory.

Emily Marine Leproust: <unk> return on our marketing machine last week, our focus was on existing customers. Today, we are targeting new customers. We use other providers and we plan to use our differentiation express product portfolio to take share from incumbent suppliers workflow targeting customers, who currently make their own DNA because they need it.

Emily Marine Leproust: Quickly we call the little group of potential customers DNA.

Emily Marine Leproust: Today, we are targeting new customers who use other providers, and we plan to use our differentiated express product portfolio to take shares from incumbent suppliers. We're also targeting customers who currently make their own DNA because they need it quickly. We call a small group of potential customers DNA makers. And we know that to convert DNA makers to DNA buyers, it will take time to change behavior.

Emily Marine Leproust: And we know that to convert to DNA buyers it will take time to change behavior.

Emily Marine Leproust: We assume that we have the product the channel.

Emily Marine Leproust: And the operational capacity to drive a generational change where other engines, rather than making genes becomes a standard operating procedures across the globe.

Emily Marine Leproust: Moving to <unk>, our revenue increased to $39 $4 million revenue per quarter included several large customers Reorders primary diagnostic customers running clinical trials and ramp in commercial volumes for these larger kits to note when we see time and energy into the relationship and we are now included.

Emily Marine Leproust: We assume that we have the product, the channel, and the operational capacity to drive a generational change where ordering genes rather than making genes becomes a standard operating procedure across the globe. Moving to NGS, our revenue increased to $39.4 million. Revenue for the quarter included several large customers' reorders, primary diagnostic customers running clinical trials, and ramping commercial volumes for these larger customers. We invest time and energy into the relationship.

Emily Marine Leproust: Into their workflow.

Emily Marine Leproust: While the sales cycles for Mds is quite long we are now seeing the benefit of this long term investment of our time as Dev test advanced the clinical and commercial stages.

Emily Marine Leproust: As a reminder, David I think customers, including those pursuing all selling liquid biopsy.

Emily Marine Leproust: Will this is assays choose twist for the target enrichment solution meeting their testing workflow as we sell our customers about half of their downstream sequencing cost and.

In each sample run by customers uses some tweets DNA so the larger the volume the more they buy from twist.

Emily Marine Leproust: And we are now included in their work. While the cell cycle for NGS is quite long, we are now seeing the benefit of this long-term investment of our time as their tests advance to the clinical and commercial stages. As a reminder, diagnostic customers, including those pursuing or selling liquid biopsy and minimal residual disease assays, choose TWST for the target arrangement solution within their testing workflow, as we sell our customers about half of their downstream sequencing.

Emily Marine Leproust: And a constrained macroeconomic environment, our offering provides margin extension for customer and in some cases.

Emily Marine Leproust: Workflow makes a substantive difference in our customers' business viability.

Emily Marine Leproust: Over the last two quarters, we have seen customer streamlining pest selecting the test within their portfolio that includes a twist workflow to serve downstream sequencing cost and improve the overall cogs.

In addition to larger customer or in advanced stages of development and commercial scale up we see mgs workflow continents, as an increasing percentage of our NCS revenue for example, a guest is whether they can.

Emily Marine Leproust: And each sample run by our customers uses some TWST DNA. So the larger the volume, the more they buy from TWST. In a constrained macroeconomic environment, our offering provides margin expansion for our customers, and in some cases, our workflow makes a substantive difference to our customers' business viability. Over the last two quarters, we have seen customers trainlining tests, selecting the tests within their portfolio that include a twist workflow to save downstream sequencing costs and improve their overall cost.

Target enrichment panel previously May know asada elaborate script vessel speeds blocker, <unk> and MAU front with their supplier extending our shelf will it be.

Emily Marine Leproust: That counts.

Emily Marine Leproust: Our customers appreciate reducing the number of suppliers and benefit from our exceptional and responsive customer service and supply chain teams, allowing them to focus on expanding their business.

This focus on enabling the work flow between the sample and sequence, though will continue next week during the <unk> conference when we will introduce several products.

Emily Marine Leproust: I mean truly differentiated solutions for key workflows within specific applications moving forward, we expect revenue growth synergies to come from increasing commercial adoption of our kisner with assays.

Emily Marine Leproust: In addition to larger customers in advanced stages of development and commercial scale-up, we see NGS workflow components as an increasing percentage of our NGS revenue. For example, a customer who ordered a custom target enrichment panel previously may now also order library-prepped buffers, bees, blockers, UDIs, UMIs, and more from TWST as their supplier, expanding our share of wallets within existing accounts. Our customers appreciate receiving their number of suppliers and benefit from our exceptional and responsive customer service and supply chain teams, allowing them to focus on expanding their business. This focus on enabling the workflow between the sample and the sequencer will continue next week during the LGBT conference, when we will introduce several products bringing truly differentiated solutions for key workflows within specific applications.

Emily Marine Leproust: Airflow expansion in existing customer accounts and the acquisition of smaller accounts as well as the attrition of the research market.

Emily Marine Leproust: <unk>.

Emily Marine Leproust: Moving to Biopharma revenue increase was $5 $2 million with orders coming in at $4 $9 million, we were fully staffed on our commercial team as of November and we do see green shoots for this business, including 41, New program starts in the quarter.

Emily Marine Leproust: No that the process of ramping up the sales representatives to full capacity typically takes about six months and we are cautiously optimistic that revenue from Biopharma services will increase steadily in the back half of the year.

Emily Marine Leproust: <unk> to providing antibody discovery services for our partners. This area of our business build of our silicon platform, which enables the ability to create antibody discovery libraries that we can then pair with our in vivo and AI ml capabilities.

Emily Marine Leproust: There is a strategic fit here as we sell pharma and biotech customers through both often by offering and Biopharma solutions, providing a full and comprehensive Terry spectrum of offering to our customers and partners.

Emily Marine Leproust: Moving forward, we expect revenue growth in NGS to come from increasing commercial adoption of our customers' assets, workflow expansion in existing customer accounts, and the acquisition of smaller accounts as well as penetration of the research market through R&D. Moving to biopharma, revenue increased to $5.2 million, with orders coming in at $4.9 million. We were fully staffed on our commercial team as of November, and we do see green shoots for this business, including 40 when the program starts in the quarter. We know that the process of ramping up a sales representative to full capacity typically takes about six months, and we are cautiously optimistic that revenue from biopharma services will increase steadily in the back half of the year, in addition to providing antibody discovery services for our partners.

Emily Marine Leproust: Further the storage we completed the end to end demonstration of the gigabyte century archive workflow. This was an internal demonstrations designed to refine invaded our workflow and we succeeded.

Emily Marine Leproust: We're encouraged by our engineering advancements and we remain on track to deliver an early access terabyte central ACA solutions in 2025.

Emily Marine Leproust: We continue to believe that the market for the search provides a larger opportunity and we see this area of our business is a valuable asset with optionality at multiple points of development.

Emily Marine Leproust: In early January we welcomed <unk> to the team as our CFO and brings a wide range of experience in finance and operations from large companies.

Emily Marine Leproust: Is ideally positioned to support our next phase of growth.

Emily Marine Leproust: This area of our business builds off of our silicon platform, which enables the ability to create antibody discovery libraries that we can then pair with our in vivo and AI ML capabilities. There is a strategic fit here, as we serve pharma and biotech customers through both our thin bio offering and biopharma solutions, providing a full and complementary spectrum of offerings to our customers and partners. For data storage, we completed the end-to-end demonstration of the Gigabyte Century Archive workflow.

Emily Marine Leproust: Is that introduction I'll turn it over to Adam to discuss our financials.

Adam: Thank you Emily <unk>.

Revenue for the first quarter increased to $71 5 million growth of 32% year over year and approximately 7% sequentially.

Orders increased to $77 5 million and gross margin was 45% for the first quarter of fiscal 2024.

Adam: We served a total of 2140 customers during the first quarter and ended the quarter with cash cash equivalents and short term investments of approximately $311 1 million.

Adam: When we talk about cash moving forward, we will be talking about cash cash equivalents and short term investments.

Adam: Taking a deeper dive into revenue.

Emily Marine Leproust: This was an internal demonstration designed to refine and validate our workflow, and we succeeded. We are encouraged by our engineering advancements, and we remain on track to deliver an early access terabyte central archive solution in 2025. We continue to believe that the market for data storage provides a large opportunity, and we see this theory of our business as a valuable asset with optionality at multiple points of development. In early January, we welcomed Adam Laponis to the team as our CFO.

Adam: <unk> revenue increased to $26 8 million growth of 24% year over year with orders increasing at $29 2 million.

Adam: I think genes revenue a primary growth driver for <unk> and bio increased to $19 7 million growth of 22% year over year.

Adam: We shipped approximately 171000 genes during the quarter.

Adam: Within the <unk> Birla oligo pool revenue increased to $4 2 million and libraries revenue increased to $2 $90 million year over year growth of 13% and 60% respectively.

Brokerage and bio across all product lines was driven primarily by health care customers.

Emily Marine Leproust: Adam brings a wide range of experience in finance and operations from large and smaller companies and is ideally positioned to support our next phase of growth. With that introduction, I'll turn it over to Adam to discuss our financial. Thank you, Emily. Revenue for the first quarter increased to $71.5 million, growth of 32% year-over-year and approximately 7% sequentially. Orders increased to $77.5 million, and gross margin was 40.5% for the first quarter of fiscal 2024. We served a total of 2,140 customers during the first quarter and ended the quarter with cash, cash equivalents, and short-term investments of approximately $311.1 million.

<unk> revenue for the first quarter grew to approximately $39 4 million compared to $24 4 million in the first quarter of fiscal 2023.

Adam: An increase of 62% year over year.

For the quarter revenue from our top 10 customers accounted for approximately 44% of revenue.

Adam: Orders increased to $43 3 million setting the stage for further NGL growth.

Adam: We served 538 mgs customers in the quarter with 135, having adopted our products.

Adam: For Biopharma revenue increased to $5 2 million with orders coming in at $4 9 million. We had 69 active programs as of the end of December 2023, and we started 41 new programs during the quarter.

Adam: The total number of completed programs as of December 31 was 843 with 69, including milestones or royalties.

Adam: Looking at revenue from the Netherlands.

Adam: Health care revenue rose to $40 9 million for the first quarter of 2024 compared to $38 million for the same period in fiscal 2023.

Adam Wieschhaus: When we talk about cash moving forward, we'll be talking about cash, cash equivalents, and short-term. In Taking a Deeper Dive into Revit, thin biorevenue increased to $26.8 million. Growth of 24% year-over-year, with orders increasing to 29.2 million. Synthetic genes revenue, a primary growth driver for Symbio, increased to 19.7 million, a growth of 22% year-over-year. We shipped approximately 171,000 genes during this experiment.

Adam: Flexing the increased uptake of our products by pharma biotech and diagnostic companies.

Adam: Industrial chemical revenue rose to $16 3 million in the first quarter up from $16 3 million in the same period of fiscal 2023.

Adam: Steady growth year over year.

Adam: Academic revenue was $13 8 million for the first quarter of 2024 up from $10 million in fiscal 'twenty, three with growth coming from both the vial and Ngls customers.

Adam: Looking geographically Americas revenue increased to approximately $44 million in the first quarter compared to $33 6 million in the same period of fiscal 'twenty three growth of 31% year over year.

Adam: EMEA revenue rose to $21 2 million in the first quarter versus $16 3 million in the same period of 2023 growth of 30% year over year.

Adam: APAC revenue increased to $6 3 million in the first quarter compared to $4 3 million in the same period for fiscal 'twenty three.

Adam Wieschhaus: Within the SimBio umbrella, Oligopool revenue increased to $4.2 million, and libraries revenue increased to $2.9 million, demonstrating year-over-year growth of 13% and 60%. Growth in SimBio across all product lines was driven primarily by health care.

Adam: Growth of 48% year over year.

Adam: Our gross margin for the first quarter increased to 45% driven by large <unk> orders in the quarter higher mix of Ngls and some pricing with <unk> bio from Express G.

Adam: In total operating expenses for the first quarter were $118 5 million compared with $98 9 million in the same period for 2023.

Adam: Breaking this down.

Adam Wieschhaus: NGS revenue for the first quarter grew to approximately $39.4 million, compared to $24.4 million in the first quarter of fiscal 2020, an increase of 62% year over year. For the quarter, revenue from our top 10 customers accounted for approximately 44% of revenue. Orders increased to $43.3 million, setting the stage for further growth. We've served 538 NGS customers in the quarter, with 135 having adopted our program.

Adam: Cost of revenues increased to $42 5 million in the first quarter of 2024, compared with $29 4 million in the same period of fiscal 2023.

Adam: Primarily due to higher product volume and personnel costs.

Adam: As well as increased depreciation and amortization expense.

Adam: R&D decreased to $23 1 million compared with $31 2 million in fiscal 2023.

Adam: Primarily due to the reduction in head count as well as lab supplies.

Adam: SG&A was $52 8 million for the first quarter compared with $42 3 million.

Adam: The increase was driven largely by the increase in stock based compensation as the comp for Q1 FY2023 included a significant reversal of stock based compensation, resulting from employee stock forfeitures related to the various acquisitions.

Adam Wieschhaus: For biopharma, revenue increased to $5.2 million, with orders coming in at $4.9 million. We had 69 active programs as of the end of December 2023, and we started 41 new programs during the course. The total number of completed programs as of December 31st was 843, with 69 including milestones and or royalties.

Adam: Offset by pre commercialization cost included in the Q1 fiscal 'twenty three but not in Q1 fiscal 'twenty four as we have launched the Oregon manufacturing site.

Adam: Operating expenses included approximately $8 million for data storage stock.

Adam: Stock based compensation for the quarter was approximately $11 million.

Adam: Depreciation and amortization were $8 2 million for the quarter compared with $5 3 million for the same period of 2023.

Adam Wieschhaus: Looking at revenue from another lens, healthcare revenue rose to $40.9 million for the first quarter of 2024, compared to $30 million for the same period in fiscal 2020, reflecting the increased uptake of our products by pharma, biotech, and diagnostic companies. Industrial chemical revenue rose to $16.3 million in the first quarter, up from $16.3 million in the same period of fiscal 2023, steady growth year-over-year. Academic revenue was $13.8 million for the first quarter of 2024, up from $10 million in fiscal 2023, with growth coming from both SymBio and NGS. Looking geographic.

Net loss attributable to stockholders was $43 million or <unk> 75 per share for the first quarter 2024, compared to a net loss of $41 8 million.

Adam: 74 per share for the same period of fiscal 2023.

Speaker Change: Turning to guidance, we are updating specific metrics that we intend to use moving forward.

Speaker Change: For fiscal 2024, we now expect total revenue to increase by $3 million across the range to approximately $288 million to $293 million.

Speaker Change: Anticipated growth of 18% to 20% year over year.

Speaker Change: <unk> revenue of $114 million to $117 million, an increase of $1 million across the entire range and year over year growth anticipated to be 15% to 19%.

Speaker Change: NDS revenue $150 million to $152 million, an increase of $3 million in the range and anticipated growth of 21% to 23% year over year.

Speaker Change: Biopharma revenue of approximately $24 million, a decrease of $1 million from the prior guidance and growth of approximately 3% year.

Speaker Change: We are increasing our expected gross margin of approximately 40% to 41% for the year.

Adam Wieschhaus: America's revenue increased to approximately $44 million in the first quarter, compared to $33.6 million in the same period of fiscal 23, growth of 31% year-over-year. MEA revenue rose to $21.2 million, versus 16.3 million in the same period of 2023, growth of 30% year-over-year. APAC revenue increased to 6.3 million in the first quarter compared to 4.3 million in the same period of fiscal 23.

Loss from operations guidance before taxes of approximately $189 million to $194 million compared with prior guidance of $180 million to $188 million as we invest in G&A capabilities to continue to scale our business.

Speaker Change: Capex is projected to decrease by $5 million to approximately 15 million for fiscal 'twenty four.

Speaker Change: No change in our projected ending cash of approximately $245 million at the end of fiscal 2024.

Speaker Change: For the second quarter of fiscal 'twenty, four we expect overall revenue of approximately $70 million to $71 million.

Speaker Change: <unk> revenue increasing to approximately $28 $5 million with the full launch of express genes portfolio.

Adam Wieschhaus: Growth of 48% year-over-year. Our growth margin for the first quarter increased to 40.5 percent, driven by large NGS orders in the quarter, a higher mix of NGS, and some pricing lifts for SynBio from expansion. In total, operating expenses for the first quarter were $118.5 million, compared with $98.9 million in the same period in 2023.

Speaker Change: And GFS revenue of 37% to $38 million as we see larger accounts reordering in the second half of the year on track with our increased annual guidance.

Speaker Change: Biopharma revenue of $4 5 million.

Speaker Change: Gross margin of 39%, primarily due to mix shift.

In summary, we continue to maintain financial discipline throughout the organization and make progress on our path to profitability.

Speaker Change: I joined twist about a month ago I couldnt be more excited about where we're going.

Speaker Change: As a talented and determined mission driven team that understands the value we bring to our customers.

Adam Wieschhaus: Breaking this down, cost of revenues increased to $42.5 million in the first quarter of 2024 compared with $29.4 million in the same period of fiscal 2023, primarily due to higher product volume and personnel costs, as well as increased appreciation and amortization. R&D decreased to $23.1 million, compared with $31.2 million in fiscal 2020, primarily due to the reduction in head count, as well as laparotomy. FG&A was $52.8 million for the first quarter, compared with $42.3 million. The increase was driven largely by an increase in stock-based compensation, as the comp for Q1 FY23 included a significant reversal of stock-based compensation, resulting from employee stock forfeitures related to the avarice acquisition, offset by pre-commercialization costs included in the Q1 fiscal 23, but not in Q1 fiscal 24, as we have launched the Oregon Manufacturing Stock-based compensation for the quarter was approximately $11 million. Amortization and amortization were $8.2 million for the quarter, compared with $5.3 million for the same period of time.

Speaker Change: Our focus on driving revenue growth.

Speaker Change: Expansion and maintaining financial discipline will continue as we leverage our capabilities and supply chain management manufacturing excellence and of course delighting our customers.

Speaker Change: With that I will turn the call back to Emily.

Emily: Thank you Adam.

One quarter into our fiscal year, we continue to see momentum in our <unk> groups with a diversified customer base.

Emily: Reverse further portfolio that provides significant differentiation from competitors.

Emily: <unk> market opportunities and committed employees.

Emily: <unk> underpinning, we laid out to drive to profitability for the business claims.

Emily: <unk> exited three initiatives of twist.

We expect to grow revenues for <unk> grew revenue and Ngls with customers expansion as well as new product introductions keeps you out for launches next week during the GBT conference for Biopharma solutions will focus on increasing the number of active programs and program starts as well as signing new and repeat customers.

Emily: Second to expand our margin we plan to continue dynamic pricing for <unk>.

Emily: As we increase the number of genes shipped out margin earthly increases given the factory is fully functional and staffed we will also focus on leveraging our increased volume with our supply chain to drive efficiencies at scale.

Emily: On a corporate side in addition to driving revenue growth and increasing contribution margin for our products. We identified key initiatives that we expect to pursue over the course of the next 18 months that we believe will have a meaningful impact on Cogs selling this includes in sourcing opportunities products and packaging attended to.

Adam Wieschhaus: The net loss attributable to stockholders was $43 million, or $0.75 per share, for the first quarter of 2024 compared to a net loss of $41.8 million, or $0.74 per share, for the same period of fiscal 2023. Turning to guidance, we are updating specific metrics that we intend to use moving forward. For Fiscal 2024, we now expect total revenue to increase by $3 million across the range to approximately $288 million to $293 million. Anticipated growth of 18-20% year-over-year, to biorevenue of $114 million to $117 million, an increase of $1 million across the entire range, and year-over-year growth anticipated to be 16 to 19 percent. NGS revenue of $150 million to $152 million, an increase of $3 million in the range, and anticipated growth of 21 to 23 percent year over year. Biopharma revenue of approximately 24 million, a decrease of one million from the Loss from Operations Guidance. We've already received four taxes of approximately $189 to $194 million, compared with prior guidance of $180 to $188 million, as we invest in GNA capabilities to continue to scale our business. CapEx is projected to decrease by $5 million to approximately $15 million for fiscal 24.

Emily: <unk> workflows and minimal we're excited about these opportunities to increase our gross margin per barrel.

Emily: And third we remain diligent in our commitment to financial discipline renewing our commitment to end fiscal 2024 with $245 million in cash cash equivalents and short term investments.

Overall, we're executing on an aggressive objective to become a global company. We continued to execute effectively on our past profitability and look forward to keeping you apprised of our progress.

Speaker Change: That's about the call for questions.

Speaker Change: <unk>.

If you'd like to ask a question. Please press star one one is for you.

Speaker Change: Question has been answered and you'd like to remove yourself from the queue. Please press star one again.

Our first question comes from Matt <unk> with Goldman Sachs. Your line is open.

Good morning, and thanks for taking my questions. Congrats on the quarter could you talk about the volume and mix of express genes in the quarter just given the mid November launch in limited marketing for a period during the quarter.

Matt: How do you see express genes contribute to margin expansion for the full year.

Speaker Change: Thank you, Mike, Matt and I will stop.

Speaker Change: No.

Speaker Change: There is really two phases. The first is the mid November launch the launch last week and then the second phase is now so in the first phase.

Speaker Change: The volume was.

Really focused on exists.

Speaker Change: Existing system and we have seen.

Speaker Change: Really good.

Speaker Change: Bye bye.

Speaker Change: Biopharma and academia.

Adam Wieschhaus: No change in our projected ending cash of approximately $245 million at the end of Fiscal 2022. For the second quarter of fiscal 24, we expect overall revenue of approximately $70 to $71 million, with biorevenue increasing to approximately $28.5 million with the full launch of ExpressGene's portfolio. NGS revenue of $37 to $38 million as we see larger accounts reordering in the second half of the year, on track with our increased annual guidance, and biopharma revenue of $4.5 million.

Speaker Change: Thats quite exciting to see that.

Speaker Change: Both of our target markets have been destined to products and experiencing.

Speaker Change: Great.

Speaker Change: The product and reordering.

Speaker Change: That's what the the mix then.

Speaker Change: It's a bit too soon to say, but the second phase.

The second thing is the goal is to continue.

Speaker Change: Having existing customers.

Adam Wieschhaus: Gross margin of 39%, primarily due to mixed... In summary, we continue to maintain financial discipline throughout the organization and make progress on our path to profitability. I joined TWST about a month ago, and I couldn't be more excited about where we are going.

Speaker Change: Use the product.

They did a great value for them and improve gross margin.

Speaker Change: But the big dry saw US now is to bring net new custom now onto.

Speaker Change: Onto the platform.

Speaker Change: And then you've got revenue growth and margin growth. So.

Adam Wieschhaus: This is a talented and determined mission-driven team that understands the value we bring to our mission. Our focus on driving revenue growth, margin expansion, and maintaining financial discipline will continue as we leverage our capabilities in supply chain management, manufacturing excellence, and, of course, delighting our customers. With that, I'll turn the call back to Emily.

Speaker Change: Q2, sorry, Q3 will be the first clean quarter, where.

Speaker Change: We have.

Speaker Change: The full marketing launch for the entire quarter.

Speaker Change: Already.

Speaker Change: Into Q2.

Speaker Change: And.

Speaker Change: So therefore Q3 would be the first clean quarter, where we will have the full quarter expenses ex <unk>.

Emily Marine Leproust: Thank you, Adam. Once we're into our fiscal year, we continue to see momentum in our thin bio and NGS groups; with a diversified customer base, a reverse portfolio that provides significant differentiation from competitors, growing market opportunities, and committed employees; we are executing on the plan we laid out to drive profitability for the business. Coming back to the three initiatives, First, we expect to grow revenues through X-rays, genes, and bio, and grow revenue in NGS through customer expansion, as well as new product and service launches. Keep your eye out for launches next week during the LGBT conference.

Speaker Change: And what we expect is as the year progresses.

Speaker Change: We will have more penetration into those new net new just the mills and then it will start to see the benefit of experts in on gross margin.

Speaker Change: Got it and then just two quick follow ups can you just talk about this I know youre focused on existing customers.

Speaker Change: But could you just talk about the split in the quarter of gene buyers versus gene makers for express genes and then just do you think that digital marketing will be enough to drive growth or do you plan on augmenting that with additional marketing efforts over the course of the year.

Speaker Change: Thank you.

Speaker Change: Yes so.

Speaker Change: I think we.

Speaker Change: One one week.

Emily Marine Leproust: For biopharma solutions, we will focus on increasing the number of active programs and program start-ups, as well as signing new and repeat customers. Second, to expand our margin, we plan to continue dynamic pricing for express genes in bios. As we increase the number of genes shipped, our margin also increases, given the factory is fully functional and. We will also focus on leveraging our increased volume with our supply chain to drive efficiencies at scale. On the corporate side, in addition to driving revenue growth and increasing contribution margin for our products, we identified key initiatives that we expect to pursue over the course of the next 18 months that we believe will have a meaningful impact on COGS selling. This includes insourcing opportunities, products, and packaging, alternative workflows, and many more. We are excited about these opportunities to increase our growth margin further. And third, we remain diligent in our commitment to financial discipline, renewing our commitment to end fiscal 2024 with $245 million in cash, cash equivalents, and short-term investments.

Speaker Change: We can have of trying to buy and make us I would say that right now.

Speaker Change: All intents and purposes.

Speaker Change: The volume so far has been.

Speaker Change: DNA buyers.

So it's very early innings, so for the <unk>.

Speaker Change: We know it at the two.

Speaker Change: And.

Speaker Change: In terms of.

Speaker Change: Digital marketing.

Speaker Change: It is our strategy.

Speaker Change: To reach smaller customers so suites in school.

Speaker Change: Customers.

Speaker Change: However, in addition to that.

Speaker Change: We have our sales team.

Speaker Change: Theres been engage hold now yields we <unk>.

Speaker Change: Top accounts now.

Speaker Change: The.

Speaker Change: Working converting.

Speaker Change: <unk> accounts to op ex Brazil.

Speaker Change: Mentioned in my remarks, we've had some initial success.

Getting.

Speaker Change: Level of interest to convert two expansions goes how big accounts as well so it's going to be.

Speaker Change: All hands on deck and we.

Speaker Change: We want to see growth in both.

Once you do just as well as two suites.

Thank you.

Speaker Change: Thank you. Our next question comes from Steven Mah with Cowen Your line is open.

Operator: Overall, we're executing on an aggressive objective to become a profitable company. We continue to execute effectively on our past profitability and look forward to keeping you apprised of our progress. With that, let's open the call to questions. Operator?

Steven Mah: Oh, great. Thanks for taking the questions.

Steven Mah: Congrats on the quarter.

Maybe just a follow up to Matt's questions on the gross margin in the quarter. It's much higher than we had modeled was there any impact at all from expressed genes in the quarter or was it driven entirely by the scale up at the factory of the future or not.

Operator: Thank you. If you'd like to ask a question, please press star 1 1. If your question has been answered and you would like to remove yourself from the queue, please press star 11 again.

Speaker Change: Kind of.

Speaker Change: Drove the gross margin beat and then could you also then provide your thoughts around that.

Matt Sykes: Our first question comes from Matt Sykes with Goldman Sachs. Your line is open. Good morning.

Emily Marine Leproust: Thanks for taking my questions. Congratulations on the quarter. Could you talk about the volume and mix of Express Genes in the quarter? Just given the mid-November launch and limited marketing for a period during the quarter, how do you see Express Genes contributing to margin expansion for the full year?

Speaker Change: Full year guide of $40 to 41% given youre already at 45% in Q1.

You want to take that question, Adam those questions sure happy to so.

Speaker Change: Steven.

Adam: I'm very encouraged by the record quarter, we had them both on the growth on the revenue front as well as the progress we saw in gross margin expansion.

Adam: I'm also encouraged by the alignment we have across the executive team to focus on gross margin expansion is a key priority not just a business priority, but even in our paper performance goals.

Emily Marine Leproust: There are really two phases. The first phase is the mid-November launch till the launch last week, and then the second phase is now. So in the first phase, the volume was basically fully focused on existing customers, and we've seen really good pickup by actually both biopharmaceutical and academic customers. So that's quite exciting to see that both of our target markets have been testing the products and experiencing the great performance of the product and reordering. So that was the mix then.

Adam: So in terms of where we were in Q1 really the biggest driver for the gross margin expansion was the some of the large orders we had in Ngls.

Adam: Particularly in this calendar year and while we saw a big star.

Adam: Up in those orders and we're seeing that and you look at our guidance you can see that we're going to see that pull back a bit in Q2 and that drove some of the expansion at the most of the expansion.

Adam: And the Q1 numbers.

Adam: You'd also asked about how we're thinking about the full year guide and I.

Emily Marine Leproust: It's a bit too soon to say about the second phase. As you know, in the second phase, the goal is to continue having existing customers use the product, which they have great value for them and improve gross margin for us. But the big drive for us now is to bring net new customers onto the platform and deliver revenue growth and margin growth. So Q2, sorry, Q3 will be the first clean quarter where we'll have the full marketing launch for the entire quarter. We are already into Q2.

Adam: I am confident in the business performance and we raised our guidance on both the revenue and the gross margin side.

Speaker Change: I also recognize I've been in the role now for less than a month.

Want to get over my skis with overly aggressive guidance. So yes. There is some conservatism in there, but we have included.

Speaker Change: The effects that we're seeing already today.

Speaker Change: The.

Speaker Change: Expansion Sym bio on express genes as well as the factory of the future now being fully operational.

Emily Marine Leproust: And so, therefore, Q3 would be the first clean quarter where we'll have the full quarter expenses expressed in. And what we expect is, as the year progresses, we'll have more penetration into those new net new customers, and then we'll start to see the benefit of ExpressGene on gross margin. Got it. And then, just two quick follow-ups. Talk about this.

Speaker Change: Okay, Great that's helpful and sorry, if I can just sneak one more in.

Speaker Change: I know you haven't done the full launch of express change yet but.

Speaker Change: No.

Speaker Change: Could you tell us what the average premium you guys are getting I know Emily throughout a range of 20.

Emily Marine Leproust: I know you're focused on existing customers, but could you just talk about the split in the quarter of gene buyers versus gene makers for express genes? And then just do you think digital marketing will be enough to drive growth, or do you plan on augmenting that with additional marketing efforts over the course of the year? Yeah, so, um...

Speaker Change: 200% on and I'm, just wondering if you could give us a sense of the average youre getting right now thank you.

Speaker Change: Yeah. So so.

Speaker Change: We are not able to give.

As a reminder.

Emily: The dynamic pricing is strongly based on the capacity.

Emily Marine Leproust: I think we basically have one, one week, one week and a half of trying to convert buyer into maker. So I would say that right now, for all intents and purposes, all of the volume so far has been from DNA buyers. So it's very early innings for DNA makers. We now have the tool.

Emily: In the fab at the time at on that day.

Emily: So we get the benefits beyond that but.

Emily: The one thing that you can you can.

Emily: Is that that pricing daily is perfect.

Emily Marine Leproust: And, In terms of digital marketing, it is our strategy to reach smaller customers, so Tier 3, Tier 4 customers. However, in addition to that, we have our sales team that has been engaged for years with top accounts. They are also working on converting big accounts to express genomes. As mentioned in my remarks, we've had some initial success in getting a level of interest to convert to expressions both for big accounts as well. So it's going to be all hands on deck, and we want to see growth in both Tier 1, Tier 2 customers as well as Tier 3. Thank you. Thank you. Our next question comes from Stephen Ma with Cowen. Your line is open.

Emily: It's on the website.

Emily: So.

Emily: Anybody can can look at what is the pricing right now again based on the capacity okay.

Speaker Change: Okay. Thank you.

Speaker Change: Okay.

Thank you. Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.

Vijay Muniyappa Kumar: Hey, guys. Thanks for taking my question.

Vijay Muniyappa Kumar: Congratulations on a nice print here.

Vijay Muniyappa Kumar: My first one here.

Vijay Muniyappa Kumar: The guidance you guys beat revenues by $2 million.

Vijay Muniyappa Kumar: The annual was raised by $10 million.

Vijay Muniyappa Kumar: And it looks like more of that came from <unk>.

Speaker Change: Yes, but also seen bio has raised I'm just curious.

Speaker Change: The B, which is carried through.

Stephen Ma: Oh, great. Thanks for taking the questions and congrats on the quarter. Maybe just a follow-up to Matt's questions. You know, the gross margin in the quarter was much higher than we had modeled. Was there any impact at all from express genes in the quarter? Or was it driven entirely by the scale up of the factory of the future?

Speaker Change: Why despite comps getting easier, perhaps we shouldn't see it.

More.

Speaker Change: Robust growth in <unk> in back half.

Speaker Change: Vijay and then quickly great.

Vijay: Great Great question, and I'm happy to give a bit more color on it.

Vijay: In terms of where we are right now we had a great quarter. So I mentioned that in the previous question that we do expect that NGL pullback, particularly in Q2.

Adam Wieschhaus: Or if not, you know, what kind of drove the gross margin beat? And then could you also then provide your thoughts around the full year guide of 40 to 41% given you're already at 40 and a half? And Q1. Do you want to take that question, Adam, those questions? Sure, happy to.

Vijay: And I think when you look at the early stages.

Vijay: <unk> Express gene is going positively, but it's really early days and again <unk> being brand new in this year I didn't want to get ahead of my skis on that in the full year Guide we will keep you posted on progress as the year continues on both fronts, but yes there is.

Adam Wieschhaus: So, you know, Stephen, I am very encouraged by the record quarter we had on both the growth and the revenue front, as well as the progress we saw in gross margin. I'm also encouraged by the alignment we have across the executive team to focus on gross margin expansion as a key priority, not just as a business priority, but even in our paperwork. So in terms of where we were in Q1, really, the biggest driver for the gross margin expansion was some of the large orders we had in India. Particularly at the calendar year end, we saw a big step up in those orders. And we're seeing that, if you look at our guidance, you can see that we're going to see that pull back in Q2, and that drove some of the most expansion.

Vijay: We feel pretty good that the full year guidance rates, both on that on the top end and the margin side.

Vijay: Fantastic.

Speaker Change: My follow up is on the.

Speaker Change: The gross margin guidance here when I look at the sequential ramp.

Speaker Change: What is the primary driver from the Q1.

Speaker Change: To the Q2.

<unk> down, 39% and I think the annual guidance implies your back half Mr. Ken stepped back to 41% from Q2.

Speaker Change: Is there anything specific that's going on in Tokyo, maybe just walk us through the cadence.

Ken: No no. It's a great question and so it's really more of a factor in Q1, we got a pretty substantial sequential lift from the higher NGL mix, we're actually expecting that to pull back slightly in Q2 as the mix shifts more towards sym bio and so we'll see that but I think as the year progresses.

Adam Wieschhaus: Q1. You also asked how we're thinking about the full year guidance, and I said, I am confident in the business performance, and we raised the guidance on both the revenue and the gross margin side. But I also recognize that I've been in this role now for less than a year. I don't want to get over my skis with overly aggressive guidance, so yes, there's some conservatism in there, but we have included the effects that we're seeing already today, expansion from SimBio and ExpressGenes, as well as the factory. Big boy. Okay, great, that's helpful. Sorry, if I can just sneak one more in.

Ken: We've seen more customers switching to a full quarter of express genes in the NGL business continuing to expand we feel pretty confident in the back half guide as well.

Speaker Change: Fantastic Thanks, guys.

Speaker Change: Thank you. Our next question comes from Luca <unk> with Barclays. Your line is open.

Great Good morning, everybody.

Luca: Can you.

Luca: So I want to start talking about first on the the increase in the Opex spend.

Luca: I know that you've always talked about growing that slower than your revenue growth, but just incremental step ups through here throughout the year like where is that investment going in.

Stephen Ma: I know you haven't done the full launch of ExpressChange yet, you know. Could you tell us what the average premium you guys are getting? I know Emily threw out a range of $20,000 100%. Center, the average you're getting.

Luca: Because it just to fill more more commercialization on the express genes or you can just give us some color.

Speaker Change: I'm happy to step in on that one and actually in the G&A line specifically.

Emily Marine Leproust: Yeah, so we're not, we're not able to give a range. As a reminder, the daily pricing is strongly based on the capacity in the fab at the time on that day. So we get a lot of benefits beyond that, but the one thing that you can check is that that daily pricing is public, right? It's it's on the website.

Speaker Change: It's not.

Incremental medicine on infrastructure, particularly around some of our IP and financial capabilities is we're really focused on building out those capabilities.

Right now so we've made some choices around how we're going to invest in that to scale not only for the current year, but future years to come as well.

Emily Marine Leproust: And so anybody can look at what the pricing is right now, again, based on the, Thank you. Thank you. Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.

Speaker Change: Okay. That's helpful.

And then you talked about like some of the early learnings from the elasticity that from the dynamic pricing talk about any trends that youre seeing there from <unk>.

Speaker Change: Types of orders or customers are.

Vijay Muniyappa Kumar: Hey guys, thanks for taking my question and congratulations on a nice sprint here. Maybe my first one here is on the guidance. You guys beat revenues by $3 million. The annual was raised by $3 million. And it looks like more of that came from NGS, but also SimBio. I'm just curious.

Speaker Change: And how thats kind of pacing out.

Speaker Change: <unk>.

Speaker Change: Where the dynamic pricing is really starting to contribute to the to the margin if it's going to create any lumpiness or anything throughout the year.

Speaker Change: Okay. Thank you. Thank you that's a great question. So we haven't been met as we have.

Adam Wieschhaus: The beat was just carried through, and why, despite comps getting easier, perhaps we shouldn't see a more robust growth in 2Q and the back half, and VJR. Thank you. Great, great question.

Speaker Change: The number of data sets, we've been deeply looking into the.

Speaker Change: But the price sensitivity response gifts so looking at on the excess excess what it what is the capacity of the debt and what is the premier of the day.

Adam Wieschhaus: And I'm happy to give a bit more color on that. In terms of where we are right now, we had a great quarter. So I think I mentioned in the previous question that we do expect that NGS pullback, particularly in Q2. And I think when you look at the early phases of the SynBio Express gene, it is going positively. But it's really early days, and again, me being brand new to the chair, I didn't want to get ahead of my skis on that in the full year guide.

Speaker Change: On the underway exit what is the percentage of <unk>.

But chose to.

Speaker Change: Two.

Speaker Change: Sure Chase.

Speaker Change: Express and.

Speaker Change: We see a quite quite.

Speaker Change: Great to see.

Speaker Change: But you will expect as a response scale so at very low of a high percentage of.

Adam Wieschhaus: We'll keep you posted on progress as the year continues on both. But yeah, there is, you know, I feel pretty good that the full-year guide is raised both on the top and bottom and, and, Fantastic. And then my follow-up is on the gross margin guidance here. When I look at the sequential ramp, what is the primary driver from the Q1 to the Q2 step down of 39 percent?

Speaker Change: Premium you see a situation.

Speaker Change: And then you see kind of Carina response in between so.

Speaker Change: It's an incredible view into the.

Speaker Change: The press the CCT.

Speaker Change: Sure.

Speaker Change: That that our customers.

Speaker Change: And.

Speaker Change: We are still able to see.

Speaker Change: By geography and by.

Speaker Change: Industry types. So for instance, biopharma.

Speaker Change: Jamie.

Speaker Change: What what kind of sort of pricing.

Vijay Muniyappa Kumar: And I think the annual guidance implies your bank half needs to again step back to 41 percent from Q2. So is there anything specific that's going on in Q2? Maybe just walk us through the cadence.

Speaker Change: So.

Speaker Change: We are working to re sign model overtime, but.

Yes, it's quite encouraging.

Speaker Change: To see that.

That the.

Speaker Change: The outcome is.

Speaker Change: You would expect.

Adam Wieschhaus: No, no, it's a great question. And so it's really more of a fact in Q1, we got, you know, a pretty substantial sequential lift from the higher NGS mix. We are actually expecting that to pull back slightly in Q2, as the mix shifts more towards Symbio. And so we'll see that. But I think as the year progresses, and we see more customers switch the full quarter of Express Genes, and the NGS business continuing to expand, we feel pretty confident in the back. Thanks, guys.

Speaker Change: And then we will be from them.

Speaker Change: Great. Thanks.

Speaker Change: Thank you. Our next question comes from Matt <unk> with William Blair. Your line is open.

Matt: Hi, good morning.

Matt: Question for Adam and just going back to Ricks question Lance on the SG&A investments.

Matt: On the IP and financial capability side are these.

Matt: What you view as kind of the only set of meaningful investments Adam it need to be made or are there multiple layers over the course of a couple of years.

Luke Sergott: Thank you. Our next question comes from Luke Sergott with Barclays. Your line is open. Great morning, everybody.

Matt: And sort of within that context, how do these investments for future investments affect the goal to get to adjusted EBITDA breakeven on the core business.

Adam Wieschhaus: Can you start talking first about the increase in the OPEX spend? You know, I know that you've always talked about growing that slower than your revenue growth, but just the incremental step up through here throughout the year, like, where's that investment going? Is it just to fill more commercialization on the express genes and just give us some color.

Matt: In fiscal 'twenty four.

Speaker Change: No Matt I think great question, and I think the a couple of comments here.

Matt: In terms of the focus of the business and the priorities.

Matt: Very clear to me and it's been clear for them hopefully in her commentary as well, but the priority is around revenue growth margin expansion and that cash management. So we're never in a place where we need to go back to the markets for an equity raise in the future and so that path to profitability is very much a key part of everything we're doing and how we're thinking about it.

Luke Sergott: I'm happy to step in on that one. I'm actually in the GNA line specifically. It's not the incremental magnitude of the infrastructure, particularly around some of our IT and financial capabilities as we're really focused on building out those capabilities right now. So we've made some choices around how we're going to invest in that to scale not only for the current year but for future years. Okay, it's helpful.

Speaker Change: <unk> provided the exact timing and I'm not giving guidance on when we will get to profitability, but I am saying that confidence we won't be coming back to the market in terms of the investments again im going to lean on the fact that is week three.

Speaker Change: I'm still getting my bearings I think about it pretty carefully right now.

Speaker Change: Don't want to make any major changes in investment strategy. That's not we're looking to do here I want to make sure you continue to see progress and if you think about areas like supply chain. For example, where the teams are laser focused on driving out costs throughout the system supplier consolidation in sourcing and desktop inventory optimization all of these things are.

Emily Marine Leproust: And then you talked about some of the early learnings from the elasticity of the dynamic pricing. Talk about any trends that you're seeing there from types of orders or customers and how that's kind of pacing out, and where the dynamic pricing is really starting to contribute to the margin if it's going to create any lumpiness or anything throughout the year. Yes, thank you. Thank you. It's a great question. So we have been, now that we have a number of data sets, we've been deeply looking into the price sensitivity response scale. So, looking at on the x-axis, what is the capacity of the day?

Speaker Change: Getting easier as we continue to scale, we gained leverage so that the focus and momentum on top of that I don't want to make sure. We're balancing that any investment with those savings overtime. So Michael is very much still to keep a tampon NDA expansion the SG&A investment by making sure we're pacing any incremental investments with the savings are driving in other areas.

Speaker Change: Hopefully that provides clarity.

Emily Marine Leproust: And what is the premium of the day? And on the y-axis, what is the percentage of customers that chose to purchase express? And we actually see what you would expect as a response curve. So at very low or very high percentage of premium, you see saturation. And then you see kind of a linear response in between.

Speaker Change: Yeah, if that's helpful.

Speaker Change: And then Emily you referenced in the half.

Speaker Change: Potential new products being launched next week.

Speaker Change: The question on <unk>, you, obviously have quite a bit of knowledge about what purchasers of DNA want an increasingly sort of what they are willing to pay for as you think about moving into areas like RNA synthesis, maybe Thats Express RNA.

Emily Marine Leproust: So it's an incredible view into the price sensitivity that our customers have, and we're also able to see by geography and by industry types. So, for instance, by pharma versus academia, what kind of price sensitivity they have.

Speaker Change: What do you know about what.

Speaker Change: RNA customers might value differently DNA customers, how are you sort of assessing.

Emily Marine Leproust: So obviously, we are going to refine our model over time. But it's quite encouraging to see that the outcome is what you would expect, and then we'll build from there. Great, thanks. Thank you. Our next question comes from Matt LaRue with William Blair. Your line is open. Good morning.

Speaker Change: Sort of the key attributes of what those products would need to look like relative to DNA, maybe if you can extend that even things like protein Daiichi et cetera.

Yes, Thank you Matt.

Speaker Change: So I spend a lot of time with customers.

Speaker Change: I think the.

Speaker Change: <unk>.

Matt LaRue: My first question here is for Adam, and just going back to Luke's question on the SG&A investments you referenced sort of on the IT and financial capability side. Are these, you know, what you view as kind of the only set of meaningful investments that need to be made, or are there multiple layers over the course of a couple of years? And sort of within that context, how do these investments or future investments affect the goal to get to adjusted EBITDA break-even on the Corp? No, Matt, this is a great question and I think I have a couple of comments, in terms of the focus. The Bulletproof Executive 2013, It's very clear to me, and it's been clear, hopefully, in our commentary as well, that the priority is around revenue growth, market expansion, and cash management. So we're never in a place where we need to go back.

Speaker Change: Primary questions and then.

Speaker Change: <unk> of secondary ones the primary questions with just the mill.

Always.

Speaker Change: When and how much it's always when the when.

Speaker Change: When will they get it and Amish wheat costs.

Speaker Change: And then after that.

Speaker Change: There's a number of secondary questions around <unk>.

Speaker Change: <unk> brought in.

And packaging.

Speaker Change: And so.

Speaker Change: Awesome product features that you need to have.

Speaker Change: For instance, <unk>.

Speaker Change: In order to be in business, but assuming that does.

Speaker Change:

Speaker Change: Amit.

It was about speed.

Speaker Change: And Carsten.

Speaker Change: It's really when it really well.

Speaker Change: Brenda we're making we've always been really good at cost and that comes from the silicon chip that gives us an advantage.

Speaker Change: By using less reagents, we're able to at a lower cost base than our competitors.

Adam Wieschhaus: Thanks for watching. That path to profitability is very much part of everything we're doing and how I'm thinking. I haven't provided the exact timing, and I'm not giving guidance on when we'll get the product, but I am saying that with confidence, and we won't become.

Speaker Change: So we've always been really good on the cost side Easter equally.

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: Late 2022, well nut.

Speaker Change: Great.

Speaker Change: On speed, we're probably on par.

Adam Wieschhaus: And in terms of the investments, again, I'm gonna lean on the fact that it is week three. I'm still getting my bearings, and I think about it pretty carefully right now. I don't wanna make any major changes in investment strategy. And that's not what we're looking to do here.

Speaker Change: Yes.

Speaker Change:

But now that we've made the investment and the speed is really becoming the.

The second.

Speaker Change: <unk>.

Speaker Change: Strengths that we have.

Speaker Change: And we will keep leveraging that brand. So when you think twist, it's very high quality product very good customer experience, we can customize any packaging deliveries could you that you want.

Adam Wieschhaus: I wanna make sure we continue to see progress. And if you think about areas like supply chain, for example, with a team that is laser-focused on driving out costs throughout the system in supplier consolidation, insourcing, and investor inventory optimization. All of these things are getting easier as we continue to scale and gain leverage so that the focus and momentum is on that, and I want to make sure we're balancing any investment with those savings over time. So my goal is very much still to keep a tamp on any expansion of the SG&A investment by making sure we're pacing any increment to the savings account. Hopefully, that provides- Yep, yep, that's helpful. And then, you know, Emily, you referenced some potential new products being launched next, and so the question would be, you obviously have quite a bit of knowledge about what purchasers of DNA want and increasingly sort of what they're willing to pay for. As you think about moving into areas such as RNA synthesis, maybe not to express RNA, you know, what do you know about that? RNA customers might value them differently than DNA customers. How are you sort of assessing this? Key attributes of what those products would need to look like relative to DNA

Speaker Change: And.

Speaker Change: That's all great, but most importantly, it's going to be.

Yes.

Speaker Change: Have a great price to enable.

The science, you're going to get more shots on goal.

Speaker Change: And.

Speaker Change: And that means that we'd get all your budget because you choose us exclusively.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you. Our next question comes from Catherine Schulte with Baird. Your line is open.

Catherine Ramsey Schulte: Hi, Thanks for the question maybe first on Mds is what's driving the sequential decline in your second quarter guidance are there any one timers in the first quarter.

Catherine Ramsey Schulte: I think you mentioned some large orders does there just any way to quantify those.

Catherine Ramsey Schulte: Yeah, maybe I'll jump in.

Speaker Change: So as you.

One of the one of the number we report is.

Speaker Change: The percentage of revenue and engineers that come through.

Speaker Change: And just.

Speaker Change: As you can see it is a very meaningful number.

So.

Speaker Change: When you have a number of big customers.

Emily Marine Leproust: And maybe you could extend that to even things like proteins. Yes, thank you, Matt. So I spend a lot of time with customers, and I think there are two primary questions and then a bunch of secondary ones. The primary questions with customers are always when and how much. It's always, "When will I get it, and how much will it cost?"

Speaker Change: It can be a little bit lumpy quarter over quarter.

Speaker Change: Year over year.

Speaker Change: It's fine but equivalent quota.

Speaker Change: Can be lumpy.

Speaker Change: <unk>.

Speaker Change: As you remember Q1 of last year with kind of the opposite situation, where some big customers.

Speaker Change: Sure.

Speaker Change: <unk> delayed.

Speaker Change: <unk> segment.

Speaker Change: And.

Emily Marine Leproust: And then after that, there are a number of secondary questions around quality, support, and packaging. And so there are some product features that you need to have, for instance, quality, in order to be in business. But assuming that those are met, it's always about speed and cost. That fits really well with the TWST brand that we're making.

Speaker Change: And so.

The solution for US is let's go find more lips right. So we're going to we're pushing on adding more and more of those.

Speaker Change: Top accounts.

Speaker Change: Over time since we smooth smooth over so we have great confidence will be useful to for the year and at the same time.

Speaker Change: We are there to serve our customers and.

Emily Marine Leproust: We've always been really good at cost, and that comes from the silicon chip that gives us an advantage. By using less reagents, we're able to have a lower cost base than our competitors. And so we've always been really good on the cost side. Historically, I would say up until late 2022, we are not great at speed.

Speaker Change: Some of those to some no swamps shipments early or later.

Speaker Change: Accommodate them.

Speaker Change: Their needs to make sure that customer.

Speaker Change: Customer satisfaction is high as possible.

Speaker Change: Okay, and then maybe on Capex, there was a pretty decent step down versus your prior guide on a percentage basis can you just talk to what projects are either being pushed out or just where the savings are coming from.

Emily Marine Leproust: We are probably on par with others. But now that we've made the investment, speed is really becoming the second strength that we have. And we'll keep leveraging that brand. So when you think TWST, it's a very high quality product, a very great customer experience. We can customize any packaging delivery schedule that you want.

Speaker Change: This is Adam and I am happy to take that one.

Adam: If I look at it just as we went through after one quarter in our budget, we were seeing some favorable disability and that we haven't stopped with the projects. We were initially starting it's just purely a reality.

Emily Marine Leproust: And that's all great, but most importantly, it's going to be fast. It's going to be a great prize to enable your science. You're going to get more shots on goal.

Adam: As you refine the numbers, we're seeing we're seeing a lower need for Capex I think the key message here in Wilsonville came online really fully for the first time in Q1 of this fiscal year. So even even the depreciation for that we still have a small step up as we get into Q2 on that but we're really excited about.

Emily Marine Leproust: And that means that we'll get all your budget because you'll choose us exclusively. Thank you. Thank you. Our next question comes from Catherine Schulte with Baird. Your line is open.

Catherine Ramsey Schulte: Hi, thanks for the questions. Maybe first on NGS, I guess, what's driving the sequential decline in your second quarter guidance? Are there any one-timer customers in the first quarter?

Adam: The capacity it brings and I'm sure there'll be minor things to continue.

Spanned.

Adam: The capabilities and efficiency the site, but we're really focused on optimizing where we are this year.

Speaker Change: Okay, great. Thank you.

Emily Marine Leproust: I think you mentioned some large orders. So is there any way to quantify those? Yeah, maybe I'll jump in. So, as you know, one of the numbers we report is the percentage of revenue in NGS that comes from the top 10 customers. And as you can see, it is a very meaningful number.

Speaker Change: Thank you. Our next question comes from Puneet <unk> with Leerink partners. Your line is open.

puneet: Sorry, if I missed that.

puneet: What we need from Leerink.

puneet: First question maybe for Adam.

puneet: I mean, your orders increased by almost $6 5 million sequentially.

Emily Marine Leproust: And so when you have a number of big customers, it can be a little bit lumpy, quarter over quarter, year over year, it's fine, but quarter over quarter, it can be lumpy. As you remember, Q1 of last year was kind of the opposite situation, where some big customers had a delayed shipment. And so the solution for us is, let's go find more lumps.

puneet: But your guide is only up by the beat maybe just could you talk a little bit about.

Adam: Where these orders are coming from sort of.

Adam: In terms of customer type and GFS and bio maybe just talk to us about that and then the level of conservatism.

Emily Marine Leproust: So we are pushing on adding more and more of those top accounts, and over time, things will smooth over. So we have great confidence in our outlook for the year. And at the same time, we are there to serve our customers. And if some of those customers want shipment early or later, we always accommodate their needs to make sure that customer satisfaction is as high as possible.

Adam: You have that you talked about maybe Adam just help us understand.

Adam: The level of conservatism kind of conservatism that you have versus that.

Adam Wieschhaus: OK, and then maybe on CapEx, there's a pretty decent step down versus your prior guide on a percentage basis. Can you just talk through what projects are either being pushed out or just where those savings are coming from? This is Adam, and I'm happy to take that one, Emily. If I look at it, just as we went through, you know, after one quarter of our budget, we were seeing some favorable results in that we haven't stopped with the projects we were initially starting. It's just purely a reality of, you know, as you refine the numbers, we're seeing, we're seeing a lower need for.

Adam: The step down that we're seeing in Ngls.

Adam: In the second half and then I have a follow up for Emily.

Adam: I'm happy to help happy to help provide additional color and thank you for the question.

Adam: I mean, if I look at the first part of it.

Speaker Change: Theres always going to be a dynamic if im learning this business. The orders don't always translate in the same period to revenue there is a natural delay, particularly on both large NGL customers, who put in large pose for multi period as well as we have.

Adam Wieschhaus: I think the key message here is Wilsonville came online really fully for the first time in Q1 of this fiscal year. So even the depreciation for that, we still have a small step up as we get into Q2, on that, but we're really excited about the capacity that brings. And I'm sure there'll be minor things to continue to expand the capabilities and efficiency of the site, but we're really focused on optimizing. All right, great.

Speaker Change: On the Biopharma side customers, who had multi period so for many quarters. So typically the revenue impact comes in over the next three to six months, how can we get the get the order.

Speaker Change: From that perspective, I don't expect all the Q1 orders to turn into revenue in Q2, but I do expect them to converge as we progress throughout the year.

Speaker Change: Even in the 25 gig.

Speaker Change: The nature of the year the type of orders in.

Speaker Change: In terms of in terms of where we are and what's driving it.

Catherine Ramsey Schulte: Thank you. Thank you. Our next question comes from Puneet Suda with Lyrinc Partners. Your line is open.

Speaker Change: The guide I will be really clear.

Speaker Change: I have a lot of confidence in the progress we're seeing.

Puneet Suda: Sorry if I missed that. This is Puneet from Lear Inc. First question, maybe for Adam. I mean, your orders increased by almost six and a half million sequentially, but your guide is only up by the beat. Maybe just could you talk a little bit about, you know, where these orders are coming from, sort of, you know, in terms of customer type, NGS and bio, maybe just talk to us about that. And then the level of conservatism you have that you talked about, maybe, Adam, just help us understand the level of conservatism that you have versus the, you know, the step down that we're seeing in NGS in the second half. And No, Puneet, I'm happy to help provide additional color, and thank you for the question.

You don't come out of a record quarter in revenue without without confidence.

Speaker Change: The team firing on all cylinders, whether it be from the.

Speaker Change: Express genes and bio or beyond the the progress, we're making on the NGL front with them with new.

<unk>, so I'm very confident in the guide, we're giving but I'm also I said it before it is early days for me. So I don't want to get over my skis and any element of it so hopefully that clarifies it.

Sung Ji Nam: Thank you. Our next question comes from sung <unk> Nam with Scotiabank. Your line is open.

Sung Ji Nam: Hi, Thank you and congrats on the quarter.

Sung Ji Nam: Just one question on the NGL segment great.

Sung Ji Nam: Great to see obviously continued strength, there, especially from the top customers.

Sung Ji Nam: If you look at the sales funnel just kind of curious.

Adam Wieschhaus: I mean, if I look at the first part of it, you know, there's always going to be a dynamic as I'm learning this business where the orders don't always translate in the same period into revenue. There's a natural delay, particularly for large NGS customers who put in large POs for multi-period, as well as for customers on the biofarm side who have multi-period POs over many quarters. So typically, revenue comes in over the next three to six months after we get the money. From that perspective, I don't expect all the Q1 orders to turn into revenue in Q2, but I do expect them to convert as we progress throughout the year and potentially even in the 25, given some of the news. www.twistbioscience.com. In terms of where we are and what's driving the guide, I will be really clear. I have a lot of confidence in the progress. I'm.

Nam: Is it pretty much the usual suspects or are you seeing kind of more new diversified customer lead.

Especially with the product like R&D seek.

Speaker Change: Yes. Thank you great question. So the tendency that that's been the the focus on new product introduction.

Speaker Change: We launched seek.

Speaker Change: Last last summer on the purpose is to expand into.

Speaker Change: The research market.

Speaker Change: You'll see the GPT next week.

Speaker Change: We would have.

Speaker Change: Products focused on.

Speaker Change: Strengthening our position in liquid biopsy.

Speaker Change: Those are slow.

Speaker Change: We.

Speaker Change: Very interested in converting the microarray.

Speaker Change: Market, two mgs and that has not gone as.

Adam Wieschhaus: You don't come out of a record quarter in revenue without confidence. We see the team firing on all cylinders, whether it be from ExpressGenes and SynBio or beyond the progress we're making on the NGS front.

Speaker Change: Fast as we wanted and so it'll.

Speaker Change: There'll be more product introduction squarely focused on on going after that market.

Sung Ji Nam: So I'm very confident in the guide we're giving, but I'm also, I said it before, it's early days for me, so I don't want to get over my skis. www.twistbioscience.com. Thank you. Our next question comes from Sung Jee Nam with Scotiabank. Your line is open. Hi, thank you, and congrats on the quarter. Just one question.

Speaker Change: With really best in class tools.

Speaker Change: Tools, so I would expect in terms of market expansion.

Continuation of our efforts.

Speaker Change: Academia.

Speaker Change: And <unk>.

Speaker Change: I think those are two additional.

Speaker Change: Gross so positive for US in addition to I think to the.

The great performance, we've been having in liquid biopsy and MLB.

Speaker Change: So over time.

Right now a lot of success in GSE.

Emily Marine Leproust: On the NGS segment, great to see, obviously, continued strength there, especially from the top customers. But as you look at the sales funnel, just kind of curious, are you seeing kind of more new diversified customer leads, especially with the product launches like R&AC? Yeah, thank you. Great question.

Speaker Change: Yes.

Speaker Change: Writing the enabling LC <unk>.

Speaker Change: Okay.

Speaker Change: But.

Speaker Change: Great.

Speaker Change: We are quite focused on extending towards the market such as baidu in academia.

Speaker Change: Thank you we will get back in the queue.

Speaker Change: Thank you.

Speaker Change: Next question comes from Rachel <unk> with Jpmorgan. Your line is open.

Emily Marine Leproust: So definitely, that has been the focus of our new product introduction. We launched RNA-Seq last summer, and the purpose is to expand into the research market. You'll see at AGPT next week that we'll have products focused on strengthening our position in liquid biopsy, but we are very interested in converting the microarray market to NGS.

Rachel: Good morning, and thank you for taking the question. So first off I just wanted to ask on Biopharma, you mentioned that you're in discussions for antibody licensing. So can you spend a minute talking about that opportunity and how meaningful licensing deals can potentially be and also just whats the timeline in terms of when can we expect to see any headlines related to this deal.

Emily Marine Leproust: And that has not gone as fast as we've wanted, and so there will be more product introductions squarely focused on going after that market with really best-in-class tools. And I would expect, in terms of market expansion, a continuation of our efforts around academia and ag bio. Those are two additional growth opportunities for us, in addition to, I think, the great performance we've been having in liquid biopsy and MRD. So over time, right now, a lot of our success in NGS is riding on the – or enabling, I'll say, the liquid biopsy market.

Speaker Change: Yes. Thank you Richard Good question. So for context, just a quick reminder, the main effort of our Biopharma business is to sell a service where customers give us a target then we use our AI.

Speaker Change: <unk> in vitro teams to deliver a preclinical asset for them. So that's the main thrust.

Speaker Change: First of all a fault.

Speaker Change: In the past.

Speaker Change: We had also spend some internal R&D dollars to.

Emily Marine Leproust: But I'm quite – we are quite focused on expanding to other markets, such as ag bio and academia. Thank you. We'll get back in the queue.

Speaker Change: Our own assays and.

Speaker Change: Yes, maybe.

Speaker Change: A dozen of asset.

Speaker Change: Think are valuable.

Speaker Change: We do.

Rachel Vattenstahl: Thank you. Our next question comes from Rachel Vattenstahl with J.P. Morgan. Your line is open. Perfect. Good morning.

Speaker Change: Spending.

Speaker Change: Internal R&D dollars to advance them.

Speaker Change: And no one description.

Speaker Change: <unk>.

Speaker Change: Partners too.

Emily Marine Leproust: And thank you for taking the question. So first off, I just want to ask about biopharma. You mentioned that you're in discussions for antibody outlicensing. So can you spend a minute talking about that opportunity and how meaningful these licensing deals can potentially be? And also just what's the timeline in terms of when can we expect to see any headlines related to those deals? Thank you, Rachel. It's a good question.

To license them those out.

Speaker Change: As you know biopharma licensing deals can be.

Lindsay.

Speaker Change: And so.

Speaker Change: Sometimes I.

Speaker Change: I think the bottom line for me is we are not expanding.

Speaker Change: And as you can.

Speaker Change: Cash too.

Speaker Change: Pursue those licensing deals and those licensing deals.

Speaker Change: In the forecast so they would be it would be nice upsides.

Speaker Change: When they happened.

Emily Marine Leproust: So for context, just as a quick reminder, the main effort of our biopharma business is to sell a service where customers give us a target, and we use our AI in vivo and in vitro tools to deliver a preclinical asset for them. So that's the main thrust of our effort. In the past, we'd also spend some internal R&D dollars to develop our own assays. And we now have, you know, maybe a dozen assets that we think are valuable. We've stopped spending internal R&D dollars to advance them.

Speaker Change: Great. Thank you and then just yet.

Speaker Change: Oh, Yes, sorry go ahead.

Speaker Change: No no go ahead.

Speaker Change: I'm, sorry, you were saying.

Speaker Change: Then just as my follow up you mentioned some of these cost actions impact Cogs over the next 18 months. So can you just walk us through the levers that you're pulling from that cost action perspective, and then how much of that is already contemplated within guidance right now for that.

Speaker Change: For the year.

Speaker Change: Thank you and so great question.

Emily Marine Leproust: And now we're in discussions with partners to license those out. As you know, biopharmaceutical licensing deals can be lengthy. And so, and at the same time, I think the bottom line for me is that we are not expending significant cash to pursue those licensing deals, and those licensing deals are not in the forecast.

So we're really taking advantage of.

Speaker Change: <unk> of the management team.

Speaker Change: That we've done over the last few quarters.

Speaker Change: Great.

Speaker Change: So a great GP.

Speaker Change: Our supply chain.

Emily Marine Leproust: So they will be nice upsides when they happen. Great. Thank you. And then just, Oh, yeah.

Speaker Change: And.

Speaker Change: And now as a company that is growing in a market that is not.

Rachel Vattenstahl: Sorry. Go ahead. No, no, go ahead, go ahead.

Speaker Change: We have.

Emily Marine Leproust: Oh, sorry, I thought one of you were saying something. Then, just as my follow-up, you mentioned some of these cost actions to impact COGS over the next 18 months. So can you just walk us through the levers that you're pulling from that cost action perspective, and then how much of that is already contemplated within guidance right now for those cost actions for the year? No, thank you.

Speaker Change: Nice.

Speaker Change: Profile was all resolved.

Speaker Change: Suppliers, we have an opportunity to.

Speaker Change: So I have a choice of in sourcing.

Speaker Change: Some of the products we have.

Speaker Change: The opportunity to consolidate.

Speaker Change: Vendors and so we're really.

Emily Marine Leproust: And so great question. So we're really taking advantage of the up-scaling of the management team that we've done over the last few quarters. We have a great new VP of Operations, a great VP of supply chain, and now, as a company that is growing in a market that is not, we have a nice profile with our suppliers. We also have the choice of insourcing some of the products. We have the opportunity to consolidate vendors, and so we're really exercising our muscle with our supplier to make sure that we get the best target cost over time to benefit our gross margin. In addition, when we launch our express gene, we really turn over a lot of stones in our processes, and we've seen a lot of opportunities where we can swap out reagents, we can shorten or skip steps, and that has given us opportunities in the future to So that takes time to realize.

Speaker Change: Well really exercising our muscle.

Speaker Change: Those who plan to make sure that that.

Speaker Change: We get.

Speaker Change: The best target costing over time.

Speaker Change: To benefit.

Speaker Change: Our gross margin.

Speaker Change: In addition, when we launched <unk>, we really.

Speaker Change: Turnover a lot of tools in our processes.

Speaker Change: And we've seen a lot of opportunities where we can.

Speaker Change: We can swap out regions, we can.

Speaker Change: Shorten.

Speaker Change: Ill skip steps and that's given us opportunities in the future to.

Oh slow lean on the process processes that we have in.

Speaker Change: And tweak some of the regions to take cost out.

With that.

Speaker Change: It takes time to realize.

Speaker Change: But at the same time.

Emily Marine Leproust: But at the same time, we see the opportunity, and we'll do the work to get the best cross-margin outcome. And I'd say it's a natural evolution of our maturation as a company. The first step was always, "Let's have the best product possible." And we had a natural advantage with the silicon chip, where we always had the cost advantage.

We see the opportunity and we'll do the work to two.

To get.

Speaker Change: The best gross margin outcome and I'd say, it's a it's a natural evolution of <unk>.

Speaker Change: <unk> as a company.

Speaker Change: The first step was always let's have the best.

<unk> placebo and we had a natural advantage with a silicon chip, where we always add the cost advantage.

Emily Marine Leproust: But now that we have the best product out there, we can focus maybe a little bit less on new product introduction and a bit more on continuous process improvements to start taking costs out and get better and better at cross-margin, so I hope that that helped. Thank you. Our next question comes from Puneet Suda. Lyrinc Partners, your line is open. Yeah, thanks again Emily. I just wanted to follow up on, you know, a broader question around expressed genes. What's your expectation for a competitive response on express genes or these fast genes?

Speaker Change: Now that we have the best product out there.

Speaker Change: We can maybe a little bit less on new product introduction in a bit more on continuous process improvements to start taking costs out.

And get better and better at gross margins.

Speaker Change: So free.

Speaker Change: Yes.

Yeah.

Speaker Change: Thank you. Our next question comes from Puneet <unk> with Leerink partners. Your line is open.

puneet: Yes, thanks again.

puneet: Just wanted to follow up.

puneet: On a.

puneet: Broader question around express genes.

puneet: What's your expectation for a competitive response.

Puneet Suda: I mean, it's a great strategy to manufacture it all at once and deliver it right away or later and modulate your pricing accordingly. But just thinking about the industry overall for oligos, how do you think about the sort of competitive response there would be from the competitors and sort of the defensibility you have against that competitive response? I appreciate that. Thank you. So the way I think about it is, our competitors have been in business way longer than we have, right? And so they've really optimized all of their processes using the 96-well plate, and there's not much more they can do.

Speaker Change: Express to answer these SaaS James I mean, it's a great strategy to manufacture at all at once and deliver it right away or later and modulate your pricing accordingly, but just thinking about the industrial overall for all of those.

Speaker Change: Do you think about the sort of the competitive response would be from the competitors and then sort of the defensibility you have two about competitive response.

Speaker Change: Appreciate that thank.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: So the way I think about it is.

Speaker Change: Competitors have been in business way longer than yet right and so we've really optimized all of their processes using the next its well played.

And.

Emily Marine Leproust: What we have is really the advantage of the silicon chip that gives us a tremendous advantage, and then we build the back end around it to make at scale express gene, and so at this point, we're the only company that can make all of their genes fast, and I think it's going to be a very, very difficult task for competitors to try to match it. So we'll see what the response is, but we are ready. We think we have an absolute.

Speaker Change: Yes.

Speaker Change: They can do.

Speaker Change: What we have is.

Speaker Change: Really the advantage of the silicon chip that.

Speaker Change: Gives us a tremendous advantage and then in the back.

Second around it too to make at scale.

Speaker Change: Express gene and so at this point.

Speaker Change: The only company that can make all of the ethane.

Speaker Change: Fast.

Speaker Change: And.

Speaker Change: I think it's going to be a very very difficult.

Speaker Change:

Speaker Change: It would be.

Speaker Change: Difficult task for our competitors to try to match it so.

Speaker Change: Yes.

Speaker Change: We'll see with the with the <unk>.

Speaker Change: Responses, but we're already we think we have.

Speaker Change: And so to grow.

Emily Marine Leproust: Great, great product in terms of its great quality, its customer experience, speed, and actually, great pricing. And so we provide tremendous value to our customers, and we look forward to seeing anybody on the playground. Anytime, anytime, you need a playground.

Speaker Change: Great great product in terms of.

Speaker Change: It's great.

Speaker Change: Customer experience.

Speaker Change: Speed and actually even grid pricing and so we knew provide tremendous value to our customers.

Speaker Change: We look forward, we see anybody.

Speaker Change: On the playground.

Speaker Change: And you cite anything.

Puneet Suda: Okay, thanks, Emily. Thank you. There are no further questions.

Indeed, a playground, okay. Thanks Emily.

Emily: Thank you there are no further questions I'd like to turn the call back over to Emma Li for any closing remarks.

Emily Marine Leproust: I'd like to turn the call back over to Emily for any closing remarks. Thank you very much. So, in closing, we reported a record quarter, and our product portfolio continues to resonate with our customers. We introduced the full ExpressGenes portfolio last week, and we have more product launches planned for the next week at EGBT. As we move forward, we'll continue to focus on revenue growth, margin expansion, and financial discipline to drive our path to profitability.

Emily Marine Leproust: Thank you very much so in closing we reported a record quarter and our Propofol continues to resonate with our customers. We introduced a fully equipped jeans portfolio last weekend, we have more product launches planned for the next week at the <unk> as we move forward, we'll continue to focus on revenue growth.

Emily Marine Leproust: Margin expansion and financial disciplines to drive our past profitability.

Emily Marine Leproust: We look forward to seeing some of you at LGBT conferences in the March time frame. Thank you. Thank you for participating in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day. Thanks for watching!

Emily Marine Leproust: We look forward to seeing some of you at <unk> conference is in the March timeframe. Thank you.

Speaker Change: Thank you for participating in today's conference. This does conclude the program and you may now disconnect everyone have a great day.

Speaker Change: Okay.

[music].