Twist Bioscience Corporation (NASDAQ:TWST) Q3 2025 Earnings Call Transcript

Twist Bioscience Corporation (NASDAQ:TWST) Q3 2025 Earnings Call Transcript August 4, 2025

Twist Bioscience Corporation beats earnings expectations. Reported EPS is $-0.47, expectations were $-0.54.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to Twist Bioscience’s 2025 Third Quarter Financial Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Angela Bitting, Senior Vice President of Corporate Affairs. Please go ahead.

Angela Bitting: Thank you, operator. Good morning, everyone. I would like to thank you for joining us for Twist Bioscience’s conference call to review our fiscal 2025 third quarter financial results and business progress. We issued our financial results press release before the market, and it is available at our website at www.twistbioscience.com. With me on the call today are Dr. Emily Leproust, CEO and Co-Founder of Twist; Adam Laponis, CFO of Twist; and Dr. Patrick Finn, President and COO of Twist. Today, we will discuss our business progress, financial and operating performance as well as growth opportunities. We will then open the call for questions. We ask that you limit your questions to one and then requeue as a courtesy to others on the call.

The call is being recorded. The audio portion will be archived in the Investors section of our website and will be available for 2 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 in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today as well as those more fully described in our filings with the Securities and Exchange Commission.

The forward-looking statements in this presentation are based on the information available to us as of the date hereof, and we disclaim any obligations to update any forward-looking statements, except as required by law. We’ll also discuss adjusted EBITDA, a financial measure that does not conform with generally accepted accounting principles. Information may be calculated differently than similar non-GAAP data presented by other companies. When reported, a reconciliation between the GAAP and non-GAAP financial measures will be included in our earnings documents, which can be found on the Investors section of our website. With that, I will now turn the call over to Dr. Emily Leproust, our CEO and Co-Founder.

Emily Marine Leproust: Thank you, Angela, and good morning, everyone. During the fiscal 2025 third quarter, we focused on delivering exceptional value for our customers, expanding our product portfolio and extending our reach into the long tail of the academic market for our synthetic biology products and NGS tools. We added hundreds of net new customers and introduced the first in a series of planned portfolio expansions for our SynBio product line, setting the stage for robust and sustained growth. Turning to our financial results. I am pleased to report another quarter of sequential growth and record performance across revenue, gross margin and adjusted EBITDA. For the third quarter of fiscal ’25, we reported record revenue of $96.1 million, an increase of 18% year-over-year.

Gross margin for the quarter came in very strong at 53.4% compared to 43.3% for the third quarter of fiscal 2024, demonstrating the leverage of fixed costs with higher volume, some benefit from mix as well as our ongoing commitment to continuous improvement. Revenue for SynBio was $35.2 million, reflecting 7% year-over-year growth. As previously communicated, results for the same quarter last year included a significant order from a large contracted customer and an anticipated event that was not expected to recur in fiscal 2025. At the same time, several of our largest U.S. academic customers continue to place orders with Twist, demonstrating sustained engagement while managing evolving funding dynamics. In response to this shift, we accelerated our strategy to increase market reach, driving a strong influx of net new customers to the platform and expanding our commercial footprint across a broader segment of the SynBio landscape.

To better illustrate the momentum of our SynBio Group, excluding the onetime contribution from a large customer in the prior year quarter, underlying revenue grew more than 20% year-over-year. This growth highlights the strength of our customer relationships, the increased demand for Twist offering and the impact of our efforts to diversify and extend our customer base. Turning to NGS. We reported $55.3 million in revenue, an increase of 27% year-over-year, with strength coming primarily from our customers’ commercial assays for diagnostic tests as well as growth in smaller accounts. Landing the smaller customers remains critical to our long-term growth strategy as these accounts have the potential to become large accounts in the future. We continue to work with many minimal residual disease customers in various stages of their development and commercialization.

We see this growth level inflecting over time following a similar pattern of growth that we have seen from our customers offering liquid biopsy test. Turning to Biopharma Services. Our revenue was $5.6 million, growth of 10% year-over-year with orders of $6.2 million. We remain cautiously optimistic as the funnel of opportunities continues to build. We continue to see synergies between our biopharma services and our SynBio business, particularly within large pharma accounts where we see them purchase products and contract services to support their ongoing research efforts. In addition, the exponential growth of AI drug discovery generates significant opportunity for us as we offer a spectrum of products and services to accelerate this new wave of growth for the industry.

I would now like to turn the call over to Paddy for commentary on operations and innovation.

Patrick John Finn: Thanks, Emily. I’d like to take a few minutes to dive deeper into how we think about expanding our product portfolio by focusing on our recent launch of gene fragments shipped standard without adapters. In 2023, we began shipping oligo pools, gene fragments, clonal genes and more out of our Wilsonville, Oregon facility. Building on this infrastructure, we introduced Express Genes and expanded that product line to include DNA prep and high-throughput IgG protein. We continue to iterate and add to our portfolio of SynBio products that build on this manufacturing line that truly highlights the power of our platform technology and their ability to leverage the speed, cost efficiency, quality and diversity to anticipate customer needs.

This enhanced manufacturing line for our SynBio products augmented our SynBio contribution margin so that across our business, regardless of product line, approximately 75% to 80% of all incremental revenue drops to the gross margin line. Last month, we activated a new growth lever in a high potential area of our portfolio by launching improved adapters of gene fragments. Since entering the commercial market in 2015, we’ve offered gene fragments as part of our core product offering. Historically, our manufacturing process included adapters with an option to remove them, a step that required primers sourced externally, which extended turnaround times. When one of two primer suppliers stopped shipping to us last year, our team quickly pivoted.

In under 12 months, we developed and scaled an internal primer manufacturing process, allowing us to streamline production and enhance control across the workflow. Today, we offer gene fragments without adapters as a default while providing adapter add-ons as needed, giving customers more flexibility with faster delivery. This initiative strengthens our supply chain, enhances vertical integration and builds on our existing infrastructure. With a modest investment of under $3 million and exceptional execution by our team, we’ve unlocked an opportunity to grow share in a large serviceable and addressable market. We view this as a meaningful growth engine for Twist, reinforcing our competitive edge and operational agility. This is a clear example of how we execute on portfolio expansion and product innovation.

Over the next 12 months, we expect a series of new product launches in synthetic biology to unlock new market opportunities and expand our share in existing segments. We remain focused on broadening our offering and driving top line growth while continuing to invest in differentiated high-impact innovation that fuels long-term value creation. Turning to gross margin. In a little over 2 years, we did what we promised we would do in 2023 and improved margin from 31% to over 53%. We’ve driven this initiative through expanded revenue, volume leverage as well as iteration of processes to increase contribution margin. In parallel, we are investing in innovation to sustain continued robust growth across the business for the foreseeable future. As we look towards crossing the threshold of adjusted EBITDA breakeven, we see this as an important operational milestone to validate the strength and diversity of our platform, balanced with fiscal discipline.

Breakeven is not a finish line. It’s a platform from which we intend to accelerate. We’ll continue to manage the business, redoubling our efforts to continue to drive robust top line growth. At this time, I’d like to turn the call over to Adam to discuss our financials.

Adam Laponis: Thank you, Paddy. Revenue for the third quarter of 2025 increased to $96.1 million, growth of 18% year-over-year and approximately 4% sequentially. Gross margin came in higher than expected at 53.4%, primarily due to increased revenue, volume leverage as well as some order timing and mix benefit. SynBio revenue increased to $35.2 million, growth of 7% over $33 million for the third quarter of fiscal 2024. NGS revenue for the third quarter grew significantly to approximately $55.3 million, an increase of 27% year-over-year and 8% sequentially. Revenue from our top 10 NGS customers accounted for approximately 44% of NGS revenue for the quarter. We served 608 NGS customers in the quarter with 155 having adopted our products.

For Biopharma, revenue was $5.6 million, growth of approximately 10% over $5.1 million for the same period of fiscal 2024. We had 111 active programs at the end of June 2025, and we started 88 new programs during the quarter. Looking at revenue by industry. Health care revenue rose to $56.4 million for the third quarter of 2025 compared to $42.8 million in the same period of fiscal ’24, an increase of 32%, reflecting the increased uptake of our products by large pharma, biotech and diagnostic customers. Industrial chemical revenue was $23.1 million in the third quarter, approximately flat with $23.2 million in the same period of fiscal ’24, reflecting the anticipated step back in one large contracted customer, as mentioned earlier. It is worth mentioning that we held revenue flat without the large customer, speaking to the health and growth of our accounts within the Industrial Chemical segment.

Academic revenue was $15.9 million for the third quarter of 2025, up 7% from $14.9 million in the same period of fiscal 2024, with growth coming from both SynBio and NGS customers. North America academic revenue grew 10% sequentially, with orders up double digits, both sequentially and over prior year. The only area of sequential decline in academic revenue was driven by a dip in EMEA NGS revenue from university-led clinical sites. Looking geographically. Americas revenue increased to approximately $59.4 million in the third quarter, up 16% compared to $51.4 million in the same period of fiscal 2024. EMEA revenue rose to $30.7 million in the third quarter versus $23.6 million, up 30% compared to the same period of fiscal 2024. Revenue growth reflects ongoing demand dynamics in the region, and we do not believe tariff concerns drove any material pull forward in EMEA.

APAC revenue was $5.9 million in the third quarter compared to $6.5 million in the same period of fiscal 2024. China continues to be a relatively small portion of our revenue at approximately 1.5% of total revenue for the third quarter of fiscal 2025. Moving down the P&L. Our gross margin for the third quarter increased to 53.4%, an improvement of over 10 margin points versus the third quarter of fiscal 2024, reflecting our strong revenue growth and customer base while holding expenses relatively flat year-over-year. We also benefited sequentially from customer mix, order timing and the acceleration of continuous process improvement initiatives. Operating expenses, excluding cost of revenues for the third quarter were approximately $81.4 million compared with approximately $79.3 million, excluding impairment of long-lived assets in the same period of 2024.

OpEx decreased by approximately $5.9 million sequentially. Operating expenses included approximately $1 million for data storage in the third quarter, net of onetime reversals of compensation accruals. We realized the majority of the OpEx benefit from the Atlas transaction in Q3 and expect we will realize the full benefit of approximately $5 million per quarter in Q4. Looking at our progress on our path to profitability. For the third quarter of fiscal 2025, adjusted EBITDA was a loss of approximately $8 million, an improvement of about $14 million versus the third quarter of fiscal 2024. The Atlas Data Storage transaction resulted in a onetime accounting gain of $48.8 million in Q3. This gain resulted in recording net income of $20.4 million for the third quarter.

As part of the Atlas transaction, our investment in Atlas was accounted for as an investment in equity securities and recorded at its fair value. We will assess the value of Atlas on a quarterly basis with any changes in value recorded as other expense. We ended the quarter with cash, cash equivalents and short-term investments of approximately $250.8 million. Turning to guidance. We are narrowing our total revenue guide to $374 million to $376 million for fiscal 2025, indicating growth of approximately 19.7% at the midpoint year-over-year. SynBio revenue guidance of $144 million to $145 million, growth of approximately 17% at the midpoint year-over-year, reflecting the continued share gains we saw in H1 driven by the Express portfolio. NGS revenue of $207 million to $208 million, growth of approximately 23% at the midpoint year-over-year.

Biopharma revenue guidance of $23 million, growth of approximately 13% year-over-year. For Q4 fiscal 2025, we expect total revenue of approximately $96 million to $98 million, growth of approximately 14.5% versus Q4 of fiscal 2024 at the midpoint. SynBio revenue of approximately $38 million to $39 million. NGS revenue of approximately $52 million to $53 million. A key top 10 account is transitioning from validation to commercial deployment, a critical inflection point, unlocking multiyear revenue opportunities and more predictable recurring revenue streams. We expect a planned $5 million revenue normalization in Q4 and some Q1 impact as this customer optimizes their rollout. This temporary adjustment positions both companies for accelerated growth ahead.

We expect biopharma revenue of approximately $6 million. For the full year fiscal 2025, we now expect gross margin of approximately 50.5% to 51%, an increase of 1 margin point over our prior margin guidance and 8.1 points of improvement year-over-year at the midpoint. We expect an adjusted EBITDA loss of approximately $45 million to $47 million for fiscal 2025, an improvement of more than $46 million versus fiscal 2024. We expect Q4 fiscal 2025 adjusted EBITDA will be a sequential improvement over Q3, which, as I mentioned earlier, did include the majority of Atlas gains. In closing, I’d like to note that although variability may occur at the product line level, our exposure across multiple end markets and customer types mitigates risk and supports our outlook of continued top line expansion.

With that, I’ll turn the call back to Emily.

Emily Marine Leproust: Thank you, Adam. We continue to operate in a fast-moving, ever-evolving environment. At Twist, we view this as an opportunity. Our deep customer engagement drives sharp understanding of market needs. By anticipating our customer needs, we build products fit for purpose that evolve into high-margin competitive portfolios. As innovators, we play the long game. Product introductions today generate increasing revenue in 3 to 5 years. Our proprietary platform technology provides powerful differentiation. By driving cost and scale efficiency early in the workflow through [indiscernible] and automation, we embed the structural cost advantages across all product lines, supporting attractive unit economics and scalable margin expansion.

We continue to expand our product portfolio targeting diverse markets to enable resilience and extend our available share. Our mindset enables us to adapt quickly to both challenges and opportunities. We respond to market shifts with speed and creativity. Challenges become catalysts for innovation. Today, we have highlighted several powerful levers fueling our growth outlook. We have expanded our base of ordering customers, converting smaller accounts into future growth drivers. We have multiple opportunities in our NGS portfolio, including FlexPrep and MRD. We are seeing compelling synergies between our synthetic biology products and biopharma services, and we believe AI will serve as a catalyst for increased demand across our products and service offerings.

In parallel, our customers continue to scale commercially, further expanding our opportunity. Importantly, we recognize that certain product groups may experience short-term fluctuations, but our diversified customer base and broad portfolio create a resilient growth engine that supports sustained performance and revenue growth across market cycles. Over the past 2 years, we have made margin expansion a top priority, and our discipline has delivered. We have achieved gross margin above 50%, a level we expect to sustain and grow going forward. With that foundation in place, we are now rebalancing our focus towards top line acceleration. As we look to cross adjusted EBITDA breakeven next year and with gross margin now consistently above 50%, we are operating from a position of strength.

We see a clear path to driving top line growth while maintaining margin discipline, delivering quality growth with strong fundamentals. Our team platform and mission remains our greatest asset to best serve our customers. These cost trends drive sustainable, profitable growth and deliver lasting results. At this time, let’s open up the call for questions. Operator?

Q&A Session

Operator: [Operator Instructions] And our first question will come from Matt Larew with William Blair.

Matthew Richard Larew: I wanted to start on SynBio. So obviously, the growth high single digits year-over-year, but you referenced a large order closer to 20%. The fourth quarter, I think, also is growth maybe in the low double digits. and the 5-year CAGR for that business, of course, more in the 20% range, and you have a lot of new products coming on and you referenced net new customers in academic. So could you just give us a sense, what are you hearing from customers? What have order trends been like? Is there anything needed to unlock budgets for customers? How much are you anticipating new products to really start to contribute? I’m just trying to mix and match here between positive and more cautious signals that we’re seeing in the numbers.

Emily Marine Leproust: Yes. Thank you, Matt for a great question. And SynBio is a very important business for us. There are 2 parts to your question. One, existing products really resonate with customers. Our customers are happy, and we don’t have all the customers. Actually, we have a small fraction of the customers who are very well integrated into the big accounts. So there’s a long tail of smaller customers that when we reach them, when we bring them on the platform, they are happy and we keep growing. And so that’s the first opportunity for us is leveraging the Twist, leveraging our boosted marketing, leveraging our sales team to get people on the platform. The second part is we have a very rich road map of new product introductions that are coming.

Paddy had mentioned one today with fragment. But obviously, we can’t foreshadow to our competitors what we do, but there’s a great opportunity for us to continuing to leverage our growth engine, continue to leverage our R&D has been very productive to keep launching highly differentiated products. And to that extent, AI is going to be a great catalyst for us. I think AI is changing a little bit again about how drug discovery is being done and it’s driving that customer demand where we have the platform is great. So overall, we’re only as good as you are. And so we are definitely going to drive for growth and as you know, the last point I mentioned, when we started 2 years ago, the gross margin for SynBio maybe was not as great as the one for NGS.

And so there’s been a very significant effort on bringing the gross margin to where it is today, which is significantly over 50% and will be above 50% for the rest for the foreseeable future. And so we’re going to rebalance a little bit our internal effort less on gross margin. We’ll keep moving forward, but a bit more on both. So overall, very, very bullish for the future of SynBio.

Operator: And the next question will come from Subu Nambi with Guggenheim.

Subhalaxmi T. Nambi: Adam, you have been more prudent with your guidance, especially when it comes to the NGS segment and not factoring in clinical diagnostic product ramps until they have materialized, which we think makes sense given this is out of your control. That said, you still had some internal expectations of when the assays would launch. So we were curious to know how this played out in 2025 so far. Did these launches tend to be more delayed than expected or on time or sooner? And then as you look into 2026, would you change your approach here?

Adam Laponis: Thank you for the question. We spent a lot of time talking about the forward-looking part of NGS and a lot of excitement around the future of NGS growth. As I said on previous calls, we won’t change our methodology moving forward, but we never want to be on the wrong side of the guidance, particularly around a new product launch. Our product launches in the second week versus the 11th week of the quarter going to have a meaningful impact. As you saw in the upfront section of the call, we talked about one account going through a meaningful transition towards commercialization this quarter coming up in Q4. And so that is in line with our expectations for the year, and we incorporated that into our guidance for the year, but it is also one that it will slow down and reaccelerate and really speaks to the long-term commitment and growth opportunity with this account for NGS.

When I look at other launches coming, a lot has been said around MRD. And I think what I’d say today is MRD is a very small percentage of our NGS business in 2025 and we expect a significant ramp in 2026. But remember, we’re dealing with a lot of small numbers. And while MRD revenue today is growing faster than the overall NGS business, and we expect that trend to continue in FY ’26 and beyond, it’s still a relatively small portion of our NGS business. And so I think as we look forward to 2026, we have a number of MRD customers that are finalizing their tests and going through clinical validation, and we expect commercial launch in ’26 and ’27, which we believe will continue to drive our annual growth well in the future…

Operator: And the next question will come from Luke Sergott with Barclays.

Luke England Sergott: I just wanted a quick cleanup and then to follow up there on the NGS side. So on the customer pushout that you guys said $4 million to $5 million from 4Q, is that all any timing there that we can expect in ’26? Or we get a little bit of that in at the back half of 4Q just from a modeling sense? And then on the NGS strength, you guys are — the clinical piece is clearly one of the strongest parts of that market. And so just an update there, how much of that business comes from the clinic side? And the reason I’m asking is just because you guys are also talking about penetrating the academic government market given its weakness there and you’re just commercially [ violent. ] So trying to figure out, is that NGS piece can you penetrate that A&G market with the NGS piece, given it’s considered more crowded and definitely close to commoditized with the NGS side?

Adam Laponis: Luke, this is Adam. Great question. Thank you. For the NGS, the one category going to that transition, we expect a $5 million air pocket in Q4, and we expect some additional impact in Q1 of next year. That being said, we are very confident in the guidance we gave this quarter as well as continued sequential growth in 2026 quarter-over-quarter. In terms of the other dynamics of the clinical, I’ll pass the ball over to Emily.

Emily Marine Leproust: Yes. Thanks, Luke. In terms of NGS, 100% right that the strength has been in the clinical adoption. We’ve made a big bet 2017, 2018 at the time of the IPO, and it’s paid off. We continue to see future strength. MRD, we’ve discussed it just now on the previous question, is going to — it’s still small, but it’s growing, and it will become a meaningful significant part of our growth. And so I think as far as the foreseeable future, clinical strength is going to continue to be key to our growth. And those — unfortunately, for patients, but from a business point of view, it’s a very recession-proof type of business. At the same time, we’re investing into broadening our market access. We’ve launched FlexPrep.

It’s squarely focused on AgBio. We’ve mentioned multiple times that we think the days of the microarrays are numbers and twist with NGS is going to drive the transition in AgBio. So we’ve invested in our enzyme portfolio to use in our NGS kits, and that’s going to give us more strength outside of clinical in the research market. So I would say in the short term, for sure, the clinical strength is going to continue to be the great growth engine. In the medium to longer term, we are seeing green shoots outside of clinical trends that’s going to diversify even more our portfolio and our growth opportunity.

Operator: And the next question is going to come from Vijay Kumar with Evercore.

Vijay Muniyappa Kumar: Congrats on a nice execution here on gross margins. Maybe back on this prior question from Luke on this customer transition. I thought I heard a $5 million number. Is that the dollar revenue impact in Q4? Is that what’s driving this NGS step down Q-on-Q? And sort of related, I think you said you expect those revenues to be recognized in Q1. So is all $5 million coming in Q1? And should seasonality, should we be expecting normal seasonality just because of this of revenue push out when you think of the cadence from Q1 to Q2 of next fiscal?

Adam Laponis: Vijay, this is Adam. Thanks for the question. What we’ve contemplated in the guidance is a $5 million step down in Q4 for that one customer sequentially versus Q3, and that’s incorporated and that’s driving the NGS guidance. In Q1 and beyond, we do expect overall sequential growth in the business, but we expect some of that slowdown from that customer to also occur in Q1. So hopefully, that clarifies that…

Emily Marine Leproust: But we are committed…

Adam Laponis: And we’re committed to sequential growth in Q1.

Operator: And the next question comes from Puneet Souda with Leerink.

Michael Sonntag: You have Michael on for Puneet this morning. I was wondering if you could talk a little bit about the U.S. academic market. I think you noted 10% year-over-year growth, which sounds pretty positive given the backdrop. I wonder if you could attribute that to share gains that you’re pursuing with the waivers or if the end market has evolved differently than you expected?

Patrick John Finn: Yes. Thanks for the question. Good results is underpinned again by our core value proposition in a tough market, our technology advantage gives us a product and a value proposition that resonates with the customer. More shots on goal for the same budget spend is really what’s driving our growth and share grab in that segment. And when you couple that with — that’s people trying the platform and you couple that with a product portfolio that’s shown some good breadth and really solving customer problems, some runway to build from here.

Adam Laponis: And Michael, just to clarify, the growth in the U.S., both on orders and on revenue was up 10% sequentially…

Operator: And the next question will come from Doug Schenkel with Wolfe Research.

Madeline Kendall Mollman: This is Madeline Mollman on for Doug. You mentioned in the prepared remarks that the timing of orders benefited gross margin. Is it possible to give us a sense of how much of the strength in the quarter was due to that versus volume and leverage? And then as we look past 2025, is the Q4 exit rate of sort of 51%, 52% a good jumping off point for 2026? And then just a point of clarification on the $5 million normalization. Was that contemplated in the prior guidance?

Adam Laponis: This is Adam, and thanks for the question. On a full year basis, the normalization was contemplated into the guidance. The timing was always the big question mark for us. In terms of the gross margin benefit, when you dissect the Q4 guidance that 51% to 52%, you see basically the majority of that step back 1 to 2 points, you can attribute to some of the timing elements of the benefits we saw in Q4. We do expect improvements in gross margin moving forward. So when I look at ’26 versus ’25 in aggregate, there’s no going backwards from the 50% that we can across it, but we expect continued improvement year-on-year in the gross margin. But as Emily mentioned, we are putting a lot of that energy that is driving the gross margin into continuing to meet customer unmet needs, but continue process improvements and new product introductions. So we are focusing on growth while also continuing to expand our gross margin.

Operator: And the next question will come from Tom Peterson with Baird.

Thomas Peterson: Congrats on a solid quarter. I was just wondering, as we think about sort of the gross margin progression in the fourth quarter and into 2026 as well as some of the comments on the adjusted EBITDA breakeven target by ’26. How should we think about the balance of reinvestment back into the business here over the next 12 months or so? How are you contemplating that versus further adjusted EBITDA improvements? And just how should we think about sort of your OpEx investment priorities over the next 12 months?

Adam Laponis: Tom, thank you for the question. And we are looking towards the future, I think there’s a couple of things on 2026 to say. One — first is we’ll be giving full formal guidance when we close out Q4 in November, and we will initiate then. But we do expect continued sequential growth across the business in every quarter. We also expect improvement year-on-year in the gross margin line, and we are reestablishing our commitment to being adjusted EBITDA positive by Q4. All that is to say is the investments we see in OpEx are going to be modest. We still see the #1 driver of our path to profitability is the continued revenue growth of the business, but we will be looking to ensure that we continue to accelerate growth and where there’s opportunities to invest efficiently and profitably, we absolutely…

Operator: And the next question will come from Brendan Smith with TD Cowen.

Chad M. Wiatrowski: It’s Chad Wiatrowski on for Brendan. Now that Atlas, the spinout is executed, I just wanted to kind of take this opportunity to ask about M&A. Sort of what do you view as maybe potential white space in the business today? Is that something you’re thinking about? Or is the focus in the near term as you march towards profitability just to continue to launch new products, which you’ve obviously been doing pretty efficiently in terms of R&D expense.

Patrick John Finn: Yes. Thanks for the question. I think we have just relentless focus on the drive to adjusted EBITDA breakeven. We’ve a good track record in delivering just sequential performance over the last few years, and there’s no reason for that to continue or not to continue, excuse me. We’re building the muscle to learn what’s going out in the market and think about inorganic augmentation of the product portfolio. And so — but for the near term, we’re concentrating just — on our game.

Operator: And the next question will come from Tom DeBourcy with Nephron Research.

Thomas DeBourcy: Just around, I guess, international growth. I know it’s been a little lumpy over time, but just wanted to understand kind of how the company is adapting its platform and kind of addressing regional market demand and maybe challenges given tariffs and other situations internationally and I guess, your opportunity to grow there?

Emily Marine Leproust: Yes. Thanks, Tom, for the question. Obviously, there’s some uncertainty around tariffs, but we have a good advantage is that we have a low variable cost in our platform. And for us, very important is to drive volume. And the last quarter or so, there has been tariff on, tariff off. But I think we were able to navigate that, and we’re able to take more than our fair share. I think Paddy mentioned earlier that — and I’ll reiterate because it’s just very important, is what we offer to our customers is fast, high quality and lower cost DNA than the competition, and which means that any time there is a funding issue from — because of government funding or due to tariffs, we are in a better position to take advantage of it because we offer more short-term goals for a given budget.

So we’ll keep leaning into our differentiation into our opportunity, and we are committed to delivering continued sequential growth quarter after quarter. And it’s all thanks to the very varied market that we serve, the hundreds of SKUs that we have thousands of customers. We have a very resilient growth engine, and we keep leveraging.

Operator: And the next question comes from Rachel Vatnsdal with JPMorgan.

Unidentified Analyst: This is [indiscernible] on for Rachel. I just had a quick one on SynBio for the quarter. I was wondering if you could speak more about what drove weakness on SynBio versus what you were originally guiding for of $37 million to $39 million.

Emily Marine Leproust: Yes. Thanks for the question. So we knew we had a tough comp because we had a big contract with customers that didn’t repeat quarter-over-quarter. And so we knew we had to bring more customers on the platform, which we did. We added hundreds of customers; however, those are new customers, and we are still learning with them. And so there was a little bit of uncertainty in the forecast in terms of the speed at which they will ramp up. So if you exclude that one tough comp, the business is absolutely reaping more than 20% growth. So overall, the business is doing really, really well. And that is before the full introduction of the NPI road map that we have. So overall, I think the future opportunity in SynBio is brighter than ever.

And it happens at a time where we have a gross margin — contribution margin for Synbio that is very close to NGS and at a time when we’ve crossed the initial threshold of 50% gross margin for our business. And so now it’s really time for us to put the foot on the gas in terms of commercial execution. And just go find all those new customers that are not yet customers because we know that once they are on the platform, and they’re very happy and they are very sticky with the potential to create growth. So overall, that platform with the hundreds of applications and thousands of customers is going to give us resilience and growth.

Operator: I show no further questions at this time. I would now like to turn the call back over to Emily for closing remarks.

Emily Marine Leproust: At Twist, we turn complexity into opportunity with a strong platform, definitive execution and a relentless focus on customer-driven innovation, we are making high-value products that scale with margin. With gross margins now consistently above 50% and adjusted EBITDA breakeven in sight, we are operating from a position of strength. We are well positioned to accelerate growth, deliver impact and to create lasting value. Thank you.

Operator: This concludes today’s conference call. Thank you for participating, and you may now disconnect.