Earnings call transcript: Twist Bioscience Q3 2025 sees revenue rise 18%

Twist Bioscience (TWST) reported Q3 2025 revenue of $96.1 million, an 18% year-over-year increase, with gross margin significantly improving to 53.4%. Despite reducing its adjusted EBITDA loss to $8 million, the stock declined 5.58% in premarket trading, reflecting investor concerns over continued unprofitability and a planned $5 million Q4 revenue normalization due to a key NGS customer's commercial deployment transition. The company forecasts full-year 2025 revenue growth of nearly 20% and reiterated its commitment to achieving adjusted EBITDA profitability by Q4 2026, driven by strong segment performance and operational efficiencies.

Analysis

Twist Bioscience (TWST) delivered a mixed Q3 2025 earnings report, characterized by strong operational performance overshadowed by near-term guidance concerns and continued unprofitability. The company reported robust revenue growth of 18% year-over-year to $96.1 million, propelled by a 27% surge in its Next-Generation Sequencing (NGS) segment. A significant operational highlight was the gross margin expansion to 53.4%, a substantial increase from 43.3% in the prior year, demonstrating successful cost management and volume leverage. Despite this, the company posted an adjusted EBITDA loss of $8 million, and the stock reacted negatively with a 5.58% premarket decline. This market sentiment appears driven by the company's Q4 outlook, which includes a planned $5 million revenue normalization as a key NGS customer transitions to commercial deployment, creating a temporary revenue 'air pocket' expected to impact Q4 and Q1 of the next fiscal year. While the Synbio segment's 7% growth appeared modest, management clarified that underlying growth was over 20% when excluding a large, non-recurring prior-year order. The company narrowed its full-year guidance to approximately 19.7% revenue growth and reiterated its commitment to achieving adjusted EBITDA breakeven by Q4 2026, signaling a strategic pivot from pure margin expansion towards accelerating top-line growth.

Key Decisions for Investors

• Investors should anticipate near-term stock price volatility due to the guided $5 million revenue impact in Q4 and its potential spillover into Q1 2026, which creates uncertainty despite being framed as a long-term positive.
• Monitor the company's execution towards its stated goal of adjusted EBITDA profitability by Q4 2026, as the recently achieved gross margin of over 50% provides a critical foundation for this path.
• Look past the headline Synbio growth rate and focus on management's ability to deliver on its new product roadmap and capture the underlying 20% growth dynamic, which could serve as a future catalyst.
• Given the stock's high beta of 2.42 and negative reaction to operationally strong results, positions in TWST require a high tolerance for risk and are sensitive to broader market sentiment toward unprofitable growth-stage biotech companies.