On February 3, 2023 Twist Bioscience Corporation (NASDAQ: TWST), a company enabling customers to succeed through its offering of high-quality synthetic DNA using its silicon platform, reported financial results and business highlights for the first quarter of fiscal 2023 ended December 31, 2022 (Press release, Twist Bioscience, FEB 3, 2023, View Source [SID1234626817]).

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"We had a very good start to the year with solid revenue across SynBio, NGS and biopharma as well as robust orders, setting the stage for growth and advancement across the business," said Emily M. Leproust, Ph.D., CEO and co-founder of Twist Bioscience. "We shipped our first products out of the Factory of the Future last month, expanded our customer base, entered into antibody discovery and optimization partnerships and are nearing completion of our first proof-of-concept scalable DNA data storage writer."

Dr. Leproust continued, "Executing against the plan we shared in November to achieve adjusted EBITDA breakeven for the core business and biopharma, we will increase our manufacturing capabilities in Portland, driving down our turnaround time to tap into the DNA makers market and expect to continue to expand our customer base in both SynBio and NGS. For biopharma, we are focused on capitalizing on the efficiencies between our in vitro, in vivo and in silico approaches to offer an integrated portfolio of antibody discovery and optimization services. And for DNA data storage, we plan to launch our Century Archive solution to early access customers in late calendar 2023."

FISCAL 2023 FIRST QUARTER FINANCIAL RESULTS

•Orders: Total orders received for the first quarter of fiscal 2023 were $64.7 million compared to $49.6 million for the same period of fiscal 2022.
•Revenue: Total revenues for the first quarter of fiscal 2023 were $54.2 million compared to $42.0 million for the same period of fiscal 2022.
•Cost of Revenues: Cost of revenues for the first quarter of fiscal 2023 was $29.4 million compared to $27.1 million for the same period of fiscal 2022.
•Research and Development Expenses: Research and development expenses for the first quarter of fiscal 2023 were $31.2 million compared to $22.6 million for the same period of fiscal 2022.
•Selling, General and Administrative Expenses: Selling, general and administrative expenses for the first quarter of fiscal 2023 were $42.3 million compared to $51.1 million for the same period of fiscal 2022.

•Net Loss: Net loss attributable to common stockholders for the first quarter of fiscal 2023 was $41.8 million, or $0.74 per share, compared to $45.6 million, or $0.91 per share, for the same period of fiscal 2022.
•Cash Position: As of December 31, 2022, the company had $438.7 million in cash, cash equivalents and investments.

Recent Highlights:

•Shipped products to 2,060 customers in the first quarter of fiscal 2023, versus approximately 1,800 customers in the first quarter of fiscal 2022.
•Shipped approximately 134,000 genes during the first quarter of fiscal 2023, compared with approximately 125,000 genes during the first quarter of fiscal 2022.
•Shipped first products out of the Wilsonville, Oregon "Factory of the Future" in January 2023.
•Launched three next-generation sequencing (NGS) target enrichment panels to support rare disease and hereditary cancer research and support diagnostics with Centogene N.V. (CNTG).
•Announced a research collaboration with Astellas Pharma Inc. to discover antibodies against multiple targets of interest to develop curative therapies for patients suffering from diseases that lack treatment options.
•Signed additional partnerships for the Biopharma organization to bring the total partners for the combined South San Francisco and Boston teams to 278, with 95 active programs, 570 completed programs and 63 programs including milestones and/or royalties.
•Continued assembling our first end-to-end DNA data storage system in anticipation of pilot production to support early access to our Century Archive product toward the end of the calendar year.

Updated Fiscal 2023 Financial Guidance

The following statements are based on Twist’s current expectations for fiscal 2023 and 2024, including the second quarter of fiscal 2023. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.

For the full fiscal year 2023, Twist provided the following updated financial guidance:

•Revenue guidance is unchanged from the November 2022 guidance and is expected to be in the range of $261 million to $269 million
◦SynBio revenue is expected to be in the range of $104 million to $106 million

◦NGS revenue is expected to be in the range of $120 million to $123 million
◦Biopharma revenue is expected to be in the range of $37 million to $40 million
•Gross margin is expected to be approximately 39-40% for fiscal 2023, representing no change from the previous guidance
•Operating expenses including R&D and SG&A are now expected to be approximately $330 million for the year, a decrease compared to previous guidance of $365 million primarily driven by a decrease in expected stock-based compensation expense
◦R&D expense is expected to be approximately $130 million, a decrease compared to previous guidance of $138 million
◦SG&A expense is expected to be $204 million, a decrease compared to previous guidance of $227 million
◦Mark to market of contingent consideration and indemnity holdbacks is projected to be a credit of $4 million
•Operating loss is expected to be approximately $225 million, a decrease compared to the $260 million projection given in November 2022, and includes the following:
◦Stock-based compensation is expected to decline to approximately $50 million from previous guidance of approximately $83 million
◦Depreciation and amortization is expected to be approximately $29 million, an increase from previous guidance of $26 million
◦Operating expenses for DNA data storage is expected to be approximately $46 million, representing no change from previous guidance
◦Capital expenditure is expected to be approximately $50 million, representing no change from previous guidance
◦FY23 Year End Cash projected to be $300 million, representing no change from previous guidance

For the second quarter of fiscal year 2023, Twist provided the following financial guidance:

•Revenue is expected to be approximately $56.5 million
•SynBio revenue is expected to be approximately $24 million
•NGS revenue is expected to be approximately $25 million
•Biopharma revenue is expected to be approximately $7.5 million
•Gross margin is expected to be 30% as we bring on costs associated with the Wilsonville, Oregon manufacturing facility

Fiscal 2024 Financial Guidance

The following statements are based on Twist’s current expectations for fiscal 2024, which have not changed from the guidance provided in November 2022. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below.

For the full fiscal year 2024, Twist provided the following financial guidance:

•Revenue is expected to be approximately $350 million
•Gross margin is expected to be approximately 49%
•Operating expenses are expected to be approximately $386 million for the year
•Operating loss is expected to be approximately $215 million and includes:
◦Stock based compensation of approximately $90 million
◦Depreciation and amortization of approximately $35 million
◦Operating expenses for DNA data storage of approximately $57 million
•Capital expenditure is expected to be approximately $40 million
•FY24 Year End Cash projected to be $170 million

Conference Call Information

The company plans to hold a conference call and live audio webcast for analysts and investors at 8:00 a.m. Eastern Time today to discuss its financial results and provide an update on the company’s business. The conference call will be webcast live through the Investor Relations section under the "Company" tab at www.twistbioscience.com. Those parties interested in participating via telephone must register on the Company’s Investor Relations website or by clicking here. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. The webcast replay will be available for two weeks.