Twist Bioscience Corporation (NASDAQ: TWST)

Twist Bioscience’s fiscal Q3 2025 financial performance demonstrated strong operational execution across all key metrics. Total revenue reached a record $96.1 million, representing 18% year-over-year growth and marking the company’s 10th consecutive quarter of sequential growth. This sustained growth trajectory reflects the company’s ability to expand its customer base and deepen relationships with existing clients.

The most impressive aspect of the quarter was the significant margin expansion, with gross margin improving 10.1 percentage points to 53.4% compared to 43.3% in Q3 2024. This improvement was driven by operational efficiencies, better product mix, and the company’s continued focus on higher-margin offerings. Cost of revenues decreased to $44.8 million from $46.2 million in the prior year, despite the significant revenue increase, demonstrating strong cost discipline and operational leverage.

The company achieved a remarkable turnaround in profitability, reporting net income of $20.4 million ($0.34 per share) compared to a net loss of $85.6 million ($1.47 per share) in Q3 2024. This improvement was primarily driven by the strong operational performance and a $48.8 million one-time gain from the sale of a business unit. Even excluding this gain, the underlying operational improvement was substantial.

Adjusted EBITDA improved significantly to $(8.0) million from $(22.0) million in the prior year period, representing a $14 million improvement year-over-year. This improvement reflects the company’s continued progress toward profitability and demonstrates the scalability of its business model as revenue grows.

The company maintained a strong balance sheet with $250.8 million in cash, cash equivalents, and short-term investments, providing substantial financial flexibility for continued growth investments and strategic initiatives. This cash position supports the company’s growth strategy while maintaining financial stability.

Next Generation Sequencing (NGS) was the standout performer in Q3 2025, delivering $55.3 million in revenue, a robust 27% year-over-year increase from $43.4 million in Q3 2024. This segment represents the largest portion of Twist’s revenue at 58% of total revenue, and its strong growth was the primary driver of the company’s overall revenue performance. The NGS business benefits from increasing demand for DNA synthesis applications in genomics research and continues to see expansion in both academic and commercial markets.

Synthetic Biology (SynBio) generated $35.2 million in revenue, growing 7% year-over-year from $33.0 million in Q3 2024. While this growth rate was more modest compared to NGS, it represents steady progress in this important segment. SynBio revenue comprised 37% of total revenue in the quarter. The company launched the first in a series of planned SynBio portfolio expansions during the quarter, which should support accelerated growth in future periods as these new offerings gain market traction.

Biopharma showed solid growth with revenue of $5.6 million, up 10% year-over-year from $5.1 million in Q3 2024. Although this is the smallest segment at 6% of total revenue, the double-digit growth rate demonstrates the potential for this business as pharmaceutical companies increasingly adopt synthetic DNA tools for drug discovery and development applications. The recent launch of a humanized transgenic mouse model expands Twist’s antibody discovery services offering and should support continued growth in this segment.

Across all segments, Twist demonstrated its ability to expand its customer base, serving approximately 2,484 customers in Q3 2025 compared to approximately 2,300 customers in Q3 2024. The company shipped approximately 237,000 genes during the quarter, up from 212,000 genes in the prior year period, reflecting both new customer acquisition and increased engagement from existing customers.

The balanced growth across segments, with particularly strong performance in NGS, positions Twist well for continued revenue expansion. The company’s focus on deepening its reach into the long tail of the academic market while expanding commercial applications continues to drive customer diversification and revenue growth.

Twist Bioscience demonstrated exceptional margin improvement and cost discipline in Q3 2025, achieving significant operational leverage as the business scales:

Gross margin performance was the highlight of the quarter, with gross margin expanding 10.1 percentage points to 53.4% compared to 43.3% in Q3 2024. This improvement was particularly impressive given the 18% revenue growth, demonstrating the company’s ability to achieve operational leverage while scaling the business. The margin expansion was driven by manufacturing efficiencies, improved product mix toward higher-margin offerings, and better capacity utilization.

Cost management showed mixed results across different expense categories:

• Cost of Revenues: Decreased to $44.8 million from $46.2 million in the prior year, despite an 18% increase in revenue, demonstrating excellent operational efficiency
• Research and Development: Expenses decreased to $18.0 million from $22.5 million in Q3 2024, reflecting focused R&D investments and improved project prioritization
• Selling, General & Administrative: Expenses increased to $63.4 million from $56.8 million, including a $2.8 million increase in stock-based compensation, reflecting growth investments in sales and marketing capabilities

The company’s loss from operations improved substantially to $(30.1) million in Q3 2025 from $(88.9) million in Q3 2024, representing a $58.8 million improvement. This dramatic improvement reflects both the revenue growth and margin expansion achieved during the quarter.

Looking at the broader operating leverage, Twist’s total operating expenses as a percentage of revenue improved significantly. While SG&A expenses increased in absolute terms due to growth investments, the company achieved substantial leverage on fixed costs, particularly in R&D and manufacturing overhead.

The company’s adjusted EBITDA improvement of $14 million year-over-year demonstrates the underlying profitability trends of the business. Management’s commitment to achieving adjusted EBITDA breakeven by the end of fiscal 2026 appears increasingly achievable given the current trajectory of margin improvement and operational efficiency gains.

Twist Bioscience continued to execute on key strategic initiatives that position the company for sustained growth and market leadership in synthetic biology:

Key Strategic Developments

• Portfolio Expansion: Launched the first in a series of planned SynBio portfolio expansions, laying the groundwork for enhanced product offerings and market penetration
• Customer Base Growth: Added hundreds of net new customers, expanding reach into the long tail of the academic market across both synthetic biology and NGS applications
• Partnership Expansion: Revised collaboration with Ginkgo Bioworks and expanded partnership with Element Biosciences to enable AVITI systems with additional Twist workflows
• Service Enhancement: Expanded Express turnaround time for all Gene Fragments with turnaround starting at two business days
• Antibody Discovery: Launched humanized transgenic mouse model to expand antibody discovery services offering

Fiscal 2025 Updated Guidance

Management provided updated full-year fiscal 2025 guidance reflecting strong Q3 performance:

• Total revenue: $374-376 million (revised from $372-379 million), indicating 19-20% year-over-year growth
• SynBio revenue: $144-145 million (16-17% growth)
• NGS revenue: $207-208 million (22-23% growth)
• Biopharma revenue: $23 million (13% growth)
• Gross margin: 50.5%-51.0% (raised from previous guidance of 49.5%)
• Adjusted EBITDA: $(45.0) to $(47.0) million (improved from $(48.0) to $(53.0) million)

Q4 2025 Expectations

• Total revenue: $96-98 million
• Gross margin: 51%-52%
• Adjusted EBITDA: $(6.0) to $(8.0) million

The company reaffirmed its commitment to achieving adjusted EBITDA breakeven by the end of fiscal 2026, which appears increasingly achievable given the current margin expansion trajectory and operational improvements.