TWST 10-K & 10-Q changes, risk factors and insider trading
Twist Bioscience Corp · Nasdaq · Biological Products, (No Diagnostic Substances) · CIK 1581280 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “As we continue to grow our business, we will need to implement new systems and software successfully, otherwise our business and our financial condition and results of operations could be adversely affected.”
New heading “Adverse global economic conditions and U.S. policy changes could have a negative effect on our business, financial condition and results of operations.”
New heading “We may not achieve the anticipated benefits from the spin out of our DNA data storage application.”
New heading “A violation of data privacy or data protection laws could adversely harm our operating results and financial condition, damage our reputation or otherwise materially harm our business.”
New heading “We may not be able to scale our manufacturing capacity to meet future demand, which could harm our business.”
New heading “We may require additional financing to achieve our goals, and such additional financing may not be available acceptable terms, or at all, which could have an adverse effect on our business.”
New heading “As we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of inadvertently conducting activities in a manner that violates the U.S. Foreign Corrupt Practices Act (the "FCPA") and similar laws. If that occurs, we may be subject to civil or criminal penalties which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.”
Removed heading “We may require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product manufacturing and development and other operations.”
Removed heading “If we are unable to expand into adjacent addressable markets, our business may be materially and adversely affected.”
Removed heading “If we are unable to expand our DNA synthesis manufacturing capacity, we could lose revenue and our business could be harmed.”
Removed heading “As we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of inadvertently conducting activities in a manner that violates the U.S. Foreign Corrupt Practices Act and similar laws. If that occurs, we may be subject to civil or criminal penalties which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.”
Removed heading “Any damage to our reputation or brand may materially and adversely affect our business, financial condition and results of operations.”
Removed heading “Our inability to collect on our accounts receivable by a significant number of customers may have an adverse effect on our business, financial condition and results of operations.”
Largest changes
“We are subject to data privacy and data protection laws, rules, and customer-imposed controls as a result of producing, collecting, processing, storing and transmitting confidential, personal and/or sensitive data in the course of our business. A significant number of countries where we operate have enacted privacy or data protection laws, rules and regulations, creating significant compliance challenges as we seek to maintain our global reach. In some cases, there are restrictions on the transfer of personal data outside the home country. …”see in full comparison
“The global economy has been impacted by geopolitical tensions. For example, new U.S. federal administration has recently imposed significant new tariffs on imports, which, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries. These geopolitical tensions could result in, among other things, macroeconomic uncertainty, cyberattacks, supply chain disruptions, higher costs and changes to foreign exchange rates and financial markets. …”see in full comparison
“In the course of establishing and expanding our commercial operations and complying with non-U.S. regulatory requirements, we will need to establish and expand business relationships with various third parties and we will interact more frequently with foreign officials, including regulatory authorities. Expanded programs to maintain compliance with such laws will be costly and may not be effective. …”see in full comparison
“In the course of establishing and expanding our commercial operations and complying with non-U.S. regulatory requirements, we will need to establish and expand business relationships with various third parties and we will interact more frequently with foreign officials, including regulatory authorities. Expanded programs to maintain compliance with such laws will be costly and may not be effective. …”see in full comparison
“•trade and national security disputes, particularly with China, including the effect of sanctions, tariffs and other trade restrictions that may affect supply chain or sales opportunities in the United States, China and Europe;”see in full comparison
“As we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of inadvertently conducting activities in a manner that violates the U.S. Foreign Corrupt Practices Act (the "FCPA") and similar laws. If that occurs, we may be subject to civil or criminal penalties which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.”see in full comparison
Full comparison: every changed paragraph (121)
Investing in our common stock involves a high degree of risk. You should carefully consider all information in the Annual Report onthis Form 10-K and in subsequent reports we file with SEC prior to investing in our common stock. These risks are discussed more fully in the section titled “Risk factors.Factors.” These risks and uncertainties include, but are not limited to, the following:
•We may require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product manufacturing and development and other operations;
•The continued success of our business relies heavily on our disruptive technologies and products and our position in the market as a leading provider or synthetic DNA using a silicon chip;
•We are substantially dependent on the success of our synthetic DNA products;
•We operate in a highly competitive industry and if we are not able to compete effectively, our business and operating results will likely be harmed;
•If we are unable to attract new customers and retain and grow sales from our existing customers, our business will be materially and adversely affected;
•Our revenue, results of operations, cash flows and reputation in the marketplace may suffer upon the loss of a limited number of large customers;
•If we, or our partners or suppliers, experience a significant disruption in, or breach in security of, information technology systems or other cybersecurity incidents, our business could be adversely affected;
•As we continue to grow our business, we will need to implement new systems and software successfully, otherwise our business and our financial condition and results of operations could be adversely affected;
•The continued success of our business relies heavily on our disruptive technologies and products and our position in the market as a leading provider of synthetic DNA using a silicon chip;
•If we are unable to expand our DNA synthesis manufacturing capacity, we could lose revenue and our business could be harmed.
•We depend on the continuing efforts of our senior management team and other key personnel, including our scientific and engineering personnel. If we lose members of our senior management team or other key personnel or are unable to successfully retain, recruit and train qualified researchers, engineering and other personnel, our ability to develop our products could be harmed, and we may be unable to achieve our goals;
•We may require additional financing to achieve our goals, and such additional financing may not be available acceptable terms, or at all, which could have an adverse effect on our business;
•Our products could in the future be subject to additional regulation by the U.S. Food and Drug Administration or other domestic and international regulatory agencies, which could increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations;
The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Annual Report on Form 10-K. The following information should be read in conjunction with Part II, Item 7, “Management’s discussion and analysis of financial condition and results of operations” and the consolidated financial statements and related notes in Part II, Item 8, “Consolidated financial statements and supplementary data” of this Form 10-K. The risks and uncertainties described below are not the only ones we face. Additional risk and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the events or circumstances described in the following risk factors actually occur, our business, operating results, financial condition, cash flows, and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
We have incurred net losses in every period to date, and we expect tomay continue to incur significantexperience losses as we develop our business and may never achieve profitability.
We have incurred net losses each year since inception and have generated limited revenue from product sales to date. We expect to incur increasing costs as we grow our business. We cannot be certain if or when we will produce sufficient revenue from our operations to support our costs. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the synthetic biology,biology and biologic drug and data storage industries as well as leveraging our investment in our manufacturing facility in Wilsonville, Oregon.Oregon, and investing in technology to support our growth. Even if profitability is achieved, we may not be able to sustain profitability. We incurred net losses of $208.7$77.7 million, $204.6$208.7 million and $217.9$204.6 million for the years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively. As of September 30, 2024,2025, we had an accumulated deficit of $1,241.9$1,319.6 million. We expectmay continue to incur substantial losses and negative cash flow for the foreseeable future. We may incur significantexperience losses in the future foras we continue to devote a numbersubstantial portion of reasons, many of which are beyond our control,resources including the other risks described in this Form 10-K,to market acceptance of our products, future product development, and our market penetration and margins.margins as well as the other risks described in this Form 10-K, many of which are beyond our control. In addition, inflationary pressure could adversely impact our financial results by increasing operating costs. We may not fully offset these cost increases by raising prices for our products and services, which could result in downward pressure on our margins. Further, our clients may choose to reduce their business with us if we increase our pricing.
We may require additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product manufacturing and development and other operations.
Since our inception, substantially all of our resources have been dedicated to the development of our DNA synthesis platform and our sample preparation kit for NGS. We believe that we will continue to expend substantial resources for the foreseeable future as we continue to expand our production capabilities and enter additional markets we may choose to pursue, including new COVID-19 testing products, pharmaceutical biologics drug discovery and digital data storage in DNA. These expenditures are expected to include costs associated with research and development, increasing manufacturing capabilities, including operating costs of our new Wilsonville, Oregon facility, and increasing supply capabilities as well as marketing and sales capabilities of existing and new products. In addition, other unanticipated costs may arise.
We expect that our existing cash and cash equivalents will be sufficient to fund our planned operating expenses, capital expenditure requirements and debt service payments through at least the next 12 months. However, our operating plan may change as a result of factors currently unknown to us, and as a result, we have sought and may in the future need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Such financing may result in dilution to stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business.
•the costs of expanding our sales and marketing capabilities in the United States and in other geographies;
•the costs associated with being a public company;
Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to:
•delay, limit, reduce or terminate our manufacturing, research and development activities; or
•delay, limit, reduce or terminate our establishment of marketing and sales capabilities or other activities that may be necessary to generate revenue and achieve profitability.
Our continued growth could require significant capital expenditures and might divert financial resources from other projects such as the development of new products and services, including the development and commercialization of additional products in the synthetic biology,biology and biologic drug and data storage industries. As additional products are developed and commercialized, we may need to incorporate new equipment, implement new technology systems, or hire new personnel with different qualifications. Failure to manage this growth or transition could result in delays in launching new products, turnaround time delays, higher manufacturing costs, declining product quality, deteriorating customer service, and slower responses to competitive challenges. A failure in any one of these areas could make it difficult for us to meet market expectations for our products, and could damage our reputation and the prospects for our business.
Currently, we are working simultaneously on multiple projects, expanding our capacity as well as targeting several market sectors, including activities in the academic, chemicals/materials, diagnostics, therapeutics and food sectors. In addition, we work to renew our ISO certifications from time to time. These diversified operations and activities place significant demands on our limited resources and require us to substantially expand the capabilities of our technical, administrative and operational resources and technology systems.
If we are unable to manage this growth and the periodic ISO recertification of our manufacturing facilities effectively, our shipments to our customers could be impacted, our time and resources could be diverted from other products and offerings and our business and operating results could suffer. In addition, if we fail to timely deliver products or meet quantity requirements under our contracts with customers, we may offer discounts to them, and customers' minimum purchase requirements, if applicable, may be reduced. Our ability to manage our operations and costs, including research and development, costs of components, manufacturing, sales and marketing, requires us to continue to invest in and improve our technology systems and processes and take other actions to enhance our operational, financial and management controls, reporting systems and procedures and to attract and retain sufficient numbers of talented employees. Failure to attract and retain sufficient numbers of talented employees will further strain our human resources and could impede our growth.
Substantially all of our revenue generated to date is from our synthetic DNA products. Our financial results are dependent on strengthening our synthetic biology and NGS product groups while diversifying into other developing sectors.
Our near-term prospects, including our ability to finance our research and development activities and initiatives and enter into strategic collaborations, will depend heavily on the successful development and commercialization of our synthetic DNA products. These initiatives will be substantially dependent on our ability to generate revenue from our synthetic DNA products and obtain other funding necessary to support these initiatives. We continuously innovate to expand our portfolio of products. Our inability to continue these initiatives and initiate new research and development efforts could result in a failure to develop or delay in developing new products, improve upon existing products, or expand our addressable market, which could have a material and adverse impact on our sales, business, financial position and results of operations.
We face competition from a broad range of providers of core synthetic biology products such as GenScript Biotech Corporation, GENEWIZ (owned by Azenta Life Sciences), Integrated DNA Technologies, Inc. (owned by Danaher Corporation), DNA 2.0 Inc. d/b/a/ ATUM, GeneArt (owned by Thermo Fisher Scientific Inc.), Eurofins Genomics LLC, OriGene Technologies, Inc., Eurofins Genomics Blue Heron, Elegen Corporation, Ansa Biotechnologies, Inc., Telesis Bio, Inc. and others. Additionally, we compete with both large and emerging providers in the life sciences tools and diagnostics industries focused on sample preparation for NGS such as Thermo Fisher Scientific Inc., Illumina, Inc., Integrated DNA Technologies, Inc., Roche Holding AG, New England Bioloabs, Inc., Watchmaker Genomics, Inc. and Agilent Technologies, Inc. In the antibody discovery market, we compete with contract research organizations including Curia Global, Inc., GenScript Biotech Corporation, and Genovac (formerly part of Aldevron, LLC), and antibody discovery biotechnology companies, such as FairJourney Biologics S.A/IONTAS Limited, Adimab, LLC, Distributed Bio (owned by Charles River Laboratories International, Inc.), Ablexis, LLC, Specifica Inc., OmniAb, Inc., Alloy Therapeutics, Inc. and AbCellera Biologics Inc. We may not be successful in maintaining our competitive position for a number of reasons. Some of our current competitors, as well as many of our potential competitors, have significant name recognition, substantial intellectual property portfolios, longer operating histories, greater resources to invest in new technologies, substantial experience in new product development and manufacturing capabilities and more established distribution channels to deliver products to customers than we do. These competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. Our competitors may develop disruptive technologies or products that are comparable or superior to our technologies and products. In light of these advantages, even though we believe our technology is superior to the products offerings of our competitors, current or potential customers might accept competitive products in lieu of purchasing our products. Increased competition is likely to result in continued pricing pressures, which could harm our sales, profitability or market share. Our failure to continue competing effectively or winning additional business with our existing customers could materially and adversely affect our business, financial condition or results of operations.
In order to grow our business, we must continue to attract new customers and retain and grow sales from our existing customers on a cost-effective basis. To do this, we aim to attract new and existing buyers of synthetic DNA and NGS tool kits, convert makers of synthetic DNA into buyers of synthetic DNA, monetize our antibody discovery platform by entering into partnershipspartnerships, expand the market opportunities available for our product portfolio and achieve widespread market acceptance by delivering both our current product offerings and new products and technologies at lowaffordable cost, with high-quality, reliable turnaround times and throughput, superior e-commerce services and effective technical support. We cannot guarantee that our efforts to provide these key requirements will be consistently acceptable to, and meet the performance expectations of, our customers and potential customers. Furthermore, the commercialization of certain of the applications for which our customers use our products may be subject to clinical studies and/or coverage and reimbursement determinations by government and private payors, and if they are proven to have less clinical value than anticipated and/or fail to receive adequate coverage and reimbursement determinations it could have a negative impact on our sales and revenues. For example, we currently generate a significant amount of our NGS tool revenues from sales related to liquid biopsy applicationsapplications, including MRD, that are undergoing clinical studies and/or subject to coverage and reimbursement determinations by government and private payors. If these liquid biopsy applicationsapplications, including MRD, are proven to have less clinical value than anticipated and/or fail to receive adequate coverage and reimbursement determinations, it could have a material negative impact on our sales and revenues. If we are unable to successfully attract new customers and retain and grow sales from our existing customers, our business, financial position and results of operations would be negatively impacted.
We have derived, and believe we may continue to derive, a significant portion of our revenues from a limited number of large customers. Our customers may buy less of our products depending on their own technological developments, the clinical efficacy and commercial success of the applications for which they use our products, end-user demand for our products and internal budget cycles. Customers may also buy less of our products during the transition period from product development to commercial production. In addition, existing customers may choose to produce some or all of their synthetic DNA requirements internally by using or developing manufacturing capabilities organically or by using capabilities from acquisitions of assets or entities from third parties with such capabilities. The loss of any significant customer or a significant reduction in the amount of product ordered by any significant customer would adversely affect our revenue, results of operations, cash flows and reputation in the marketplace.
If we, or our partners or suppliers, experience a significant disruption in, or breach in security of, information technology systems,systems or failother tocybersecurity implement new systems and software successfully,incidents, our business could be adversely affected. Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position.
We rely on several centralized information technology systems throughout our Company to provide products, keep financial records, process orders, manage inventory, process shipments to customers and operate other critical functions. In addition, we currently generate a growing portion of our revenue through sales on our e-commerce platform. We manage our website and e-commerce platform internally and as a result any compromise of our security or misappropriation of proprietary information could have a material adverse effect on our business, financial condition and results of operations. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure Internet transmission of confidential information, such as credit and other proprietary information. In 2024, we received ISO 27001:2022 certification, the most advanced information security standard published by the International Organization for Standardization (ISO),ISO, the world’s largest developer of voluntary international standards, and the International Electrotechnical Commission. Even though our information security management system received ISO 27001:2022 certification, our, and our partners’ or suppliers’, information technology systems have been and may still be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, cyberattacks such as phishing, social engineering, ransomware, denial-of-service and other malware attacks, telecommunication failures, user errors, catastrophes or other unforeseen events. Additionally, some actors are using artificial intelligence (“AI”) technology to launch more automated, targeted and coordinated attacks. Our, or our partners’ or suppliers’ information technology systems also may experience interruptions, delays or cessations of service or produce errors in connection with system integration, software upgrades or system migration work that takes place from time to time. If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers or suppliers, including negatively impacting our order fulfillment and order entry on our e-commerce platform, it could result in the loss of sales and customers and significant incremental costs, which could adversely affect our business.
In addition, security breaches of our, or our partners’ or suppliers’, information technology systems could result in the misappropriation or unauthorized disclosure of confidential information belonging to us or to our employees, partners, customers or suppliers, including trade secrets or other intellectual property, proprietary business information, and personal information. Cybersecurity incidents, including phishing attacks and attempts to misappropriate or compromise confidential or proprietary information or sabotage enterprise IT systems are becoming increasingly frequent.frequent and sophisticated. While we have not, to our knowledge, experienced any material system failure, accident, or security breach to date, because techniques used to obtain unauthorized access to or to sabotage systems are constantly evolving and generally are not recognized until they are launched against a target, we cannot be sure that our continued data protection efforts and investment in information technology will prevent significant breakdowns, data leakages, breaches in our systems or the systems of our third party contractors and collaborators, or other cyber incidents in the future that could have a material adverse effect upon our reputation, business, operations, or financial condition. If such an event were to occur, it could materially disrupt our operations and programs, the development of our product candidates and production and shipment of our products. Any event that leads to unauthorized access, use, or disclosure of personal information, including personal information regarding our partners, suppliers or employees, could require us to comply with federal or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information and harm our reputation. We would also be exposed to a risk of litigation and potential liability, which could materially adversely affect our business, results of operations and financial condition. In addition, the costs related to significant security breaches or disruptions could be material and exceed the limits of the cybersecurity insurance we maintain against such risks. As a result of any cyber incident, we could incur significant legal and financial exposure and reputational damages that could have a material adverse effect on our business.
As we continue to grow our business, we will need to implement new systems and software successfully, otherwise our business and our financial condition and results of operations could be adversely affected.
We will need to invest in improvements to our operational and IT systems and processes as part of our ongoing effort to improve the overall efficiency and competitiveness of our business, including improvements to prevent increasingly sophisticated cybersecurity incidents and improve standardization, systemization and automation to support growth. Transitioning to these new or upgraded processes and systems requires significant capital investments and personnel resources. Implementation is also highly dependent on the coordination of numerous employees, contractors and software and system providers. While these efforts have resulted in improvements to our operational systems, we expect to continue to incur expenses to implement additional improvements and upgrades to our systems. Many of these expenditures have been and may continue to be incurred in advance of the realization of any direct benefits to our business. Additionally, the effort to gain technological expertise, make use of data analytics, and develop new technologies in our business requires us to incur significant expenses. We cannot guarantee that we will be successful at improving our operational systems, adapting to changes in technology, including the successful utilization of data analytics, AI, and machine learning, or that our efforts will result in the anticipated benefits to us. In addition, the integration of emerging technologies, including data analytics, AI, and machine learning, into our systems and processes may require us to address rapidly developing laws and regulations governing AI. We may also experience difficulties in implementing or operating our new or upgraded operational or IT systems, including, but not limited to, ineffective or inefficient operations, significant system failures, system outages, delayed implementation and loss of system availability, which could lead to increased implementation and/or operational costs, loss or corruption of data, delayed shipments and interruptions of operations resulting in lost sales and/or profits. If our operational or IT system upgrades, improvements and associated implementation efforts are not successful or if we experience unexpected interruption in transition to new or upgraded processes or systems, our financial condition and results of operations could be adversely affected, and our business may become less competitive.
In addition, there is extensive competition in theour syntheticend biology industry,markets, and our future success will depend on our ability to maintain a competitive position with respect to technological advances. Technological development by others may result in our technologies, as well as products developed using our technologies, becoming obsolete. Our ability to compete successfully will depend on our ability to develop proprietary technologies and products that are technologically superior to and/or are less expensive than our competitors’ technologies and products. Our competitors may be able to develop competing and/or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time.
Issues relating to the use of artificial intelligenceAI and machine learning and compliance with evolving regulations and industry standards could adversely affect our business and operating results.
In our ongoing efforts to innovate and optimize operational efficiency, we have integrated AI and machine learning into various aspects of our workplace. While AI and machine learning presents opportunities for enhanced productivity and innovation, it also introduces inherent risks, including legal and regulatory,regulatory compliance risks and potential liability, that could adversely impact our business and reputation. Proper use of AI and machine learning can lead to improved decision-making, cost reduction, and competitive advantage. However, improper use, including algorithmic biases, ethical considerations, data privacy issues, and potential regulatory non-compliance, could result in reputational damage, legal liabilities, and financial losses. The rapidly evolving regulatory landscape surrounding AI also poses a risk,risks, as new laws and regulations could impose additional compliance burdens, resulting in increased operational costs. We are committed to implementing robust governance and control mechanisms to mitigate these risks, but there can be no assurance that such measures will adequately prevent or mitigate the adverse effects that the integration and use of AI may have on our business, financial condition, and results of operations.
Adverse global economic conditions and U.S. policy changes could have a negative effect on our business, financial condition and results of operations.
The global economy has been impacted by geopolitical tensions. For example, new U.S. federal administration has recently imposed significant new tariffs on imports, which, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries. These geopolitical tensions could result in, among other things, macroeconomic uncertainty, cyberattacks, supply chain disruptions, higher costs and changes to foreign exchange rates and financial markets. In addition, tariffs and trade restrictions may result in increased production costs and product pricing, supply chain disruptions, limited access to markets and uncertainty related to planning long-term investments and strategies. Additionally, the administration's halt on certain federal research grants may negatively impact our industry. Any prolonged reductions in such funding could slow innovation, delay collaborations and limit the adoption of new technologies that contribute to our business growth. If these or similar policy changes continue or expand, we may face increased costs or impact on the demand for our products. We are monitoring and evaluating any potential impacts that global economic conditions and other policy changes may have on our business, and we are considering ways in which we may offset any impacts. However, there is no assurance that we will be successful in mitigating the effects in the current environment. Although we cannot predict the full extent of these impacts, any such policy changes could adversely affect our business, financial condition and results of operations.
If we are unable to expand into adjacent addressable markets, our business may be materially and adversely affected.
Our future revenue growth and market potential may depend on our ability to leverage our DNA synthesis platform together with our custom libraries and other proprietary tools, such as our antibody discovery and optimization platform, in adjacent businesses such as pharmaceutical biologics drug discovery and digital data storage in DNA. There can be no assurance that we can continue to utilize our biopharma services offerings to accelerate the lead identification and lead optimization steps of antibody discovery or to discover more effective antibody drugs. In addition, our technology may not develop in a way that allows data storage in DNA to become cost competitive with traditional data storage media or in a way that otherwise enables us to address the markets opportunities that we believe exist. If we are unable to expand into adjacent addressable markets, our business, financial position and results of operations could be negatively impacted.
Our customers’ spending on research and development impacts our sales and profitability. Our customers and potential customers include those conducting research and development in academia, as well as the chemicals/materials, diagnostics, therapeutics,therapeutics and food/agriculture,agriculture industries, and their budgets can have a significant effect on the demand for our products. Their research and development budgets are based on a wide variety of factors, including factors beyond our control, such as:
•political climate or macroeconomic conditions, including government shutdowns, economic downturns or market uncertainty or reduced spending in response to emergency public health situations;
•our sales, marketing and service force may be unable to initiate and execute successful commercialization activities with respect to new products or markets we may seek to enter.
If we are unable to expand our DNA synthesis manufacturing capacity, we could lose revenue and our business could be harmed.
In order to expand our manufacturing capacity of new and existing products, we may need to either build additional internal manufacturing capacity, contract with one or more partners, or both. Our production facility in Wilsonville, Oregon has increased our manufacturing capacity, but if customer demand increases, we may need to expand manufacturing capacity further, which could impact our revenue growth. Our technology and the production process for our DNA synthesis equipment and tools are complex, involving specialized parts, and we may encounter unexpected difficulties in the manufacture, improvement or increasing the capacity of our DNA synthesis equipment and tools, and addressing these difficulties may cause us to divert our time and resources from our other product offerings. There is no assurance that we will be able to continue to increase manufacturing capacity internally or that we will find one or more suitable partners to help us towards this objective, in order to meet the volume and quality requirements necessary for success in our existing and potential markets. Manufacturing and product quality issues may arise as we continue to increase the scale of our production. If our DNA synthesis equipment and tools do not consistently produce DNA products that meet our customers’ performance expectations, our reputation may be harmed, and we may be unable to generate sufficient revenue to become profitable. Any delay or inability in expanding our manufacturing capacity could diminish our ability to develop or sell our products, which could result in lost revenue and materially harm our business, financial condition and results of operations.
Substantially all of our revenue generated to date is from our synthetic DNA products. Our financial results are dependent on strengthening our synthetic biology and NGS product groups while diversifying into other developing sectors such as pharmaceutical biologics drug discovery, creating useful DNA libraries and data storage.
Our near-term prospects, including our ability to finance our research and development activities and initiatives and enter into strategic collaborations, will depend heavily on the successful development and commercialization of our synthetic DNA products. These initiatives will be substantially dependent on our ability to generate revenue from our synthetic DNA products and obtain other funding necessary to support these initiatives. Our inability to continue these initiatives and initiate new research and development efforts could result in a failure to develop or delay in developing new products, improve upon existing products such that sectors such as pharmaceutical biologics drug discovery, DNA library creation and data storage may never be fully developed, and expand our addressable market, which could have a material and adverse impact on our sales, business, financial position and results of operations.
We typically do not enter into supply and quality agreements with our critical suppliers butto secureensure oursupply rawas materialswell andas componentmaintain partshealthy welevels useof inonsite ourinventory equipmentto onsupport aongoing purchasemanufacturing order basis.processes. Our suppliers may reduce or cease their supply of raw materials, component parts and outsourced services and products to us at any time in the future. If the supply of raw materials, component parts and the outsourced services and products is interrupted due to shortages or other reasons, our production processes may be delayed. If any such event occurs, our operation and financial position may be adversely affected.
Although we believe that we have stable relationships with our existing suppliers, we cannot assure you that we will be able to secure a stable supply of raw materials going forward. A deterioration of our relationship with any of our suppliers, or problems experienced by these suppliers, could lead to shortages in our production capacity for some or all of our products. In such case, we may not be able to fulfill the demand of existing customers or supply new customers. In addition, shortages of raw materials or component parts or an increase in the cost of the raw materials or component parts we use could result in decreased revenue or could impair our ability to maintain or expand our business.
Currently, we are working simultaneously on multiple projects, expanding our capacity as well as targeting several market sectors, including activities in the chemicals/materials, diagnostics, therapeutics, food and data storage sectors. In addition, we work to renew our ISO certifications from time to time. These diversified operations and activities place significant demands on our limited resources and require us to substantially expand the capabilities of our technical, administrative and operational resources.
If we are unable to manage this growth and the periodic ISO recertification of our manufacturing facilities effectively, our shipments to our customers could be impacted, our time and resources could be diverted from other products and offerings and our business and operating results could suffer. In addition, if we fail to timely deliver products or meet quantity requirements under our contracts with customers, we may offer discounts to them, and customers' minimum purchase requirements, if applicable, may be reduced. Our ability to manage our operations and costs, including research and development, costs of components, manufacturing, sales and marketing, requires us to continue to enhance our operational, financial and management controls, reporting systems and procedures and to attract and retain sufficient numbers of talented employees. Failure to attract and retain sufficient numbers of talented employees will further strain our human resources and could impede our growth.
We have derived, and believe we may continue to derive, a significant portion of our revenues from a limited number of large customers. Our customers may buy less of our products depending on their own technological developments, the clinical efficacy and commercial success of the applications for which they use our products, end-user demand for our products and internal budget cycles. In addition, existing customers may choose to produce some or all of their synthetic DNA requirements internally by using or developing manufacturing capabilities organically or by using capabilities from acquisitions of assets or entities from third parties with such capabilities. The loss of any significant customer or a significant reduction in the amount of product ordered by any significant customer would adversely affect our revenue, results of operations, cash flows and reputation in the marketplace.
We depend on the continuing efforts of our senior management team and other key personnel, including our scientific and engineering personnel. If we lose members of our senior management team or other key personnel or are unable to successfully retain, recruit and train qualified researchers, engineering and other personnel, our ability to develop our products could be harmed, and we may be unable to achieve our goals.
Our future success depends upon the continuing services of members of our senior management team and scientific and engineering personnel. We are highly dependent on Dr. Emily Leproust, our Chief Executive Officer,Officer ("CEO"), who is employed “at will,” meaning we or she may terminate the employment relationship at any time. In particular,addition, our researchers and engineers are critical to our future technological and product innovations, and we will need to hire additional qualified personnel. We have had, and may not be ablecontinue to attracthave, difficulty attracting and retainretaining qualifiedsuch personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.talent. Our industry, particularly in the San Francisco Bay Area, is characterized by high demand and intense competition for talent, and the turnover rate can be high. We compete for qualified management and scientific personnel with other life science companies, academic institutions and research institutions, particularly those focusing on genomics. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.
Many of theseOur employees could leave our Company with little or no prior notice and would be free to work for a competitor. If one or more of our senior executives or other key personnel were unable or unwilling to continue in their present positions, we might not be able to replace them easily or at all, and other senior management may be required to divert attention from other aspects of the business. In addition, we do not have “key person” life insurance policies covering members of our management team or other key personnel except Dr. Leproust.personnel. While we conduct succession planning to identify the person(s) for key positions who possess the skills and capabilities to take on the responsibilities filled by our leaders, we cannot assure you that these strategies will successfully mitigate the loss of any key personnel. The loss of any of these individuals or our inability to attract or retain qualified personnel, including researchers, engineers and others, could prevent us from pursuing collaborations and adversely affect our product development and introductions, business growth prospects, results of operations and financial condition.
Management's Discussion & Analysis (MD&A)
New heading “Additional information related to the comparison of our results of operations and liquidity and capital resources between the years 2024 and 2023 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with U.S. Securities and Exchange Commission.”
New heading “Number of Genes Shipped”
New heading “Gain on Sale of Business”
New heading “Calculation of the fair value of investment in equities”
Removed heading “Financial highlights”
Removed heading “Product shipments including synthetic genes”
Removed heading “Value of orders received”
Removed heading “Restructuring and other costs”
Removed heading “Change in fair value of contingent considerations and holdbacks”
Removed heading “Gain on deconsolidation of a subsidiary”
Removed heading “Sources of liquidity”
Removed heading “Capital resources”
Removed heading “Restructuring costs”
Largest changes
“Additional information related to the comparison of our results of operations and liquidity and capital resources between the years 2024 and 2023 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with U.S. Securities and Exchange Commission.”see in full comparison
Research and development expenses decreasedsee in full comparison15%12% to $80.3 million for the year ended September 30, 2025, as compared to $90.9 million for the year ended September 30,2024,2024.asThiscompared to the $106.9 million for the year ended September 30, 2023. The decreasereduction is primarilydueattributed toa decrease inlower personnel costs of$9.3$4.9million,millionincludingand a decrease in stock-based compensation expense of$2.7$2.2millionmillion,duebothtodriven by thereductionsale ofheadcountDNArelateddigitaltodatathestorage2023 restructuring plan.business. The remaining decrease is attributable todecreasesa reduction in outside services costs of$2.2 million, depreciation expenses of $1.0$1.1 million andlabasupplies costsreduction of$6.1depreciation and amortization of $1.8 million.TheseThedecreasesdecreaseareinpartiallydepreciationoffsetandbyamortizationaislackmainly due to impairment ofgrantBiopharmareimbursementassets in 2024whereandwethereceivedsale$2.7ofmillionDNA digital data storage business in2023, which are netted againsttheresearchcurrentand development expenses.year.
“We believe that the value of orders we receive is a leading indicator of our ability to generate revenue in subsequent quarters, although there can be no assurance orders will translate into revenue. We define an order as a contract with a customer or purchase order from a customer, which outlines the promised goods at an agreed upon-price. …”see in full comparison
Full comparison: every changed paragraph (94)
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to promote understanding of the results of operations and financial condition. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk factorsFactors” and elsewhere in this Form 10-K. The last day of our fiscal year is September 30, and we refer to our fiscal year ended September 30, 2022 as fiscal year 2022 or 2022, September 30, 2023 as fiscal year 2023 or 2023 and our fiscal year ended2023, September 30, 2024 as fiscal year 2024 or 2024.2024 and our fiscal year ended September 30, 2025 as fiscal year 2025 or 2025.
Additional information related to the comparison of our results of operations and liquidity and capital resources between the years 2024 and 2023 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with U.S. Securities and Exchange Commission.
We are a leading, rapidly growing synthetic biology company that has developed a disruptive DNA synthesis platform to industrialize the engineering of biology. The core of our platform is a proprietary technology that pioneers a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. We have combined our silicon-based DNA writing technology with proprietary software, scalable commercial infrastructure and an e-commerce platform to create an integrated technology platform that enables us to achieve high levels of quality, precision, automation, and manufacturing throughput at a significantly lower cost than our competitors We have applied our unique technology to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next generation sequencing,sequencing or NGS,("NGS"), sample preparation, and antibody libraries for drug discovery and development, all designed to enable our customers to conduct research more efficiently and effectively. Leveraging our same technology, we have expanded our footprint beyond DNA synthesis to manufacture synthetic RNA as well as antibody proteins to disrupt and innovate within larger market opportunities, in addition to discovery partnerships for biologic drugs and developing completely new applications for synthetic DNA, such as digital data storage.drugs.
We believe our products enable a broad range of applications that may ultimately improve health and the sustainability of the planet across multiple industries including healthcare, chemicals/materials, food/agriculture, academic research, and technology. We sell our synthetic DNA and synthetic DNA-based products to a customer base of approximatelymore 3,562than 3,800 customers annually across a broad range of industries. In order to address this diverse customer base, we employ a multi-channel strategy comprised of a direct sales force targeting synthetic DNA customers, a direct sales force focusing on the NGS market and an e-commerce platform that serves both commercial channelschannels. We employ business development and sales representatives for our biopharma solutions as well. Our easy-to-use e-commerce platform allows customers to design, validate, and place on-demand orders of customized DNA online, and enables them to receive real-time customized quotes for their products and track their order status through the manufacturing and delivery process. This is a critical part of our strategy to address our large markets and diverse customer base, as well as drive commercial productivity, enhance the customer experience, and promote loyalty.
As we have moved further up the value chain from fragments to genes to preps to proteins and beyond, the strategic connection between our SynBio and Biopharma products tightens. More customers now leverage both products and services to accelerate discovery and identify breakthrough therapeutics. This growing convergence highlights the power of our integrated platform and reinforces Twist’s unique position to serve the full spectrum of innovation in discovery.
We currently generate revenue through our synthetic biology and NGS tools product lines as well as biopharma services for antibody discovery, optimization and development.
We currently generate revenue through our synthetic biology and NGS tools product lines as well as biopharma services for antibody discovery, optimization and development. We generated revenues of $376.6 million, $313.0 million in the year ended September 30, 2024, $245.1 million in the year ended September 30, 2023million, and $203.6 million in the year ended September 30, 2022, while incurring net losses of $208.7 million, $204.6 million and $217.9$245.1 million in the years ended September 30, 2025, September 30, 2024, 2023 and 2022,September 30, 2023, respectively, while incurring net losses of $77.7 million, $208.7 million and $204.6 million in the years ended September 30, 2025, 2024 and 2023, respectively. Since our inception, we have incurred significant operating losses and have accumulated a net deficit of $1,241.9$1,319.6 million. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the synthetic biology,biology and biologic drug and data storage industries as well as leveraging our investment in our manufacturing facility in Wilsonville, Oregon.
We sold our DNA data storage business to Atlas Data Storage, Inc. ("Atlas"), a newly formed company, that will focus solely on DNA data storage technology and commercialization, with $155.0 million in seed financing round from third-party investors. The purpose of the transaction was to unlock value by accelerating data storage technology development and allowing each company to focus strategically on its unique products, customers and investors. Under the terms of the contribution agreement executed with Atlas, we assigned and licensed our DNA data storage technology to Atlas in exchange of receiving a minority ownership interest upon close, an upfront cash payment and a secured promissory note. We retained an ownership stake in Atlas and may participate in the upside of DNA data storage through future technology and commercial milestone payments, and a revenue share through royalties on future sales of Atlas’ products and services.
HighlightsFinancial highlights from fiscal year 20242025 compared with fiscal year 20232024 include:
•Revenue growth of 28%20% to $313.0$376.6 million from $245.1$313.0 million, primarily due to order growth in NGS tools and synthetic genes;
•Gross margin increased to 50.7% from 42.6%, mainly due to increase in revenues and holding fixed manufacturing costs relatively flat and driving additional cost savings through continuous process improvement initiatives;
•Loss from operations decreased to $(136.3) million from $(220.8) million primarily due to an increase in both revenues and gross profit for the year ended September 30, 2025, and impairment of long-lived assets recognized in the year ended September 30, 2024. Additional contributing factors were a decrease in research and development expenses offset by an increase in selling, general and administrative expenses for the year ended September 30, 2025;
•Gross margin increased to 42.6% from 36.6%;
•Net cash used in operating activities for the year ended September 30, 20242025 decreased to $64.1$47.6 million from $142.5$64.1 million for the year ended September 30, 2023.2024; and
•Gain on the sale of DNA digital data storage business of $48.8 million.
Financial highlights
The following table summarizes certain selected historical financial results:
Number of Genes Shipped
Product shipments including synthetic genes
We believe that the number of genes shipped serves as a direct indicator of our operational efficiency and market demand. This metric is crucial for assessing our performance in meeting customer demand and generating revenues. Shipments of number of genes in years ended September 30, 2024, 20232025 and 20222024 were as follows:
We believe that the number of customers who have purchased from us since inception is representative of our ability to drive adoption of our products. We define a customer as a unique "Bill To" account where a single customer may have many "Ship To" locations and may have many unique points of contact within a single "Bill To" customer. In 2024, 20232025 and 20222024, the number of customers who purchased products from us were approximatelymore 3,562,than 3,4503,800 and 3,3003,550 customers, respectively.
Value of orders received
We believe that the value of orders we receive is a leading indicator of our ability to generate revenue in subsequent quarters, although there can be no assurance orders will translate into revenue. We define an order as a contract with a customer or purchase order from a customer, which outlines the promised goods at an agreed upon-price. In some cases, we receive a blanket purchase order from our customers, which includes pricing, payment and other terms and conditions, with quantities defined at the time each customer subsequently issues periodic releases against the blanket purchase order. We regularly assess trends relating to the value of orders we receive, including with respect to our customer concentration.
Orders may never convert into actual revenue and the timing of delivery of our orders and recognition of revenue, if any, may vary based on the nature of the order, and there can be no assurance that orders will result in recognized revenue. The following table lists the value of orders received during the periods indicated:
Comparison of the yearsYears endedEnded September 30, 2024, 20232025 and 20222024
We generate revenue from the sales of synthetic biology tools, such as synthetic genes, oligo pools, NGS tools, DNA libraries and biopharma services for antibody discoverydiscovery, services.optimization and development. Our ability to increase our revenues will depend on our ability to further penetrate the domestic and international markets, generate sales through our direct sales force, distributors, and over time, from our e-commerce digital platform and the launch of new products.
Revenues increased 28%20% to $313.0$376.6 million infor the year ended September 30, 2024,2025, as compared to $245.1$313.0 million infor the year ended September 30, 2023.2024. The increase in revenue primarily reflects growth in NGS tools revenue of $45.4$39.0 million andmillion, growth in synthetic genes revenue of $19.1$20.9 million,million includingand thegrowth Expressin Genesantibody offering,discovery whichrevenue isof primarily$3.1 attributablemillion. toThese increaseimprovements in revenues from NGS tools and synthetic gene are largely due to higher sales to our customers in the healthcare, industrial chemicals/materials and academic research industriesindustries, andas well as an increase in the number of customers. The number of our genes shipped infor the year ended September 30, 2025 increased to approximately 938,000 genes, compared to approximately 772,000 genes for the year ended September 30, 2024, increased to approximately 772,000 genes, compared to approximately 634,000 genes in the year ended September 30, 2023, an increase of 22%.
Revenues increased from $203.6 million to $245.1 million in the year ended September 30, 2023, which was an increase of $41.5 million, or 20%, as compared to the same period in 2022. The increase in revenue was primarily due to the increase in revenue from NGS tools, which grew from $99.3 million in 2022 to $123.7 million in 2023, an increase in revenue from synthetic genes, which grew from $61.5 million in 2022 to $73.5 million and an increase in revenue from DNA libraries revenue, which grew from $6.1 million in 2022 to $10.2 million. The growth in NGS tools revenue is primarily attributable to an increase in revenue from our top customers and the adoption of our product by a larger customers base. Our synthetic genes revenue grew mainly from our top customers and growth in the healthcare and academic research industries as well as an improved turnaround time. In the year ended September 30, 2023, we shipped approximately 634,000 genes compared to approximately 558,000 genes in the year ended September 30, 2022, an increase of 14%. Changes in our synthetic gene pricing, while favorable, had a minimal impact on our results of operations period-over-period. Our DNA libraries revenue grew year over year as a result of increased customers, mainly in the healthcare and academic research industries.
A discussion of our revenues for the year ended September 30, 2022 as compared to the year ended September 30, 2021 can be found on page 54 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the SEC on November 21, 2023, or our 2023 Annual Report.
Cost of revenues reflects the aggregate cost incurred in the production and delivery of our products and consists of production materials, personnel costs, cost of expensed equipment and consumables, laboratory supplies, consulting costs, depreciation, production overhead costs, information technology (“IT”), maintenance and facility costs. Personnel costs consist of salaries, employee benefit costs, bonuses, and stock-based compensation expenses.expense. In addition, cost of revenue includes royalty costs for licensed technologies included in the Company’s products and provisions for slow-moving and obsolete inventory. We expect that our cost of revenues will vary with changes in our revenues and our revenue mix.
Cost of revenues increased 16%3% to $179.6$185.6 million infor the year ended September 30, 2024,2025, as compared to $155.4$179.6 million infor the year ended September 30, 2023.2024. The increase is primarily attributable to an increase in material costs of $19.0$9.4 million, due to higher sales volume,volume and an increase in stock-based compensation expense of $3.0 million. These cost increases were partially offset by decreases in depreciation and amortization expense of $3.2$4.6 million primarilyand duea to the capital investment to increase manufacturing capacitydecrease in prioroutside years. The remaining increase is attributable to an increase in lab supplies and facilitiesservice costs of $1.4$2.2 million. Gross margin increased 6008.1% basisto points50.7% for the year ended September 30, 2025, as compared to 42.6% for the year ended September 30, 2024 as compared to 36.6% for the year ended September 30, 20232024, mainly due to increase in revenue and the fixed costs being spread over larger revenue base resulting in an increase in grossrevenue, margin.holding fixed manufacturing costs relatively flat, and driving additional cost savings through continuous process improvement initiatives.
Cost of revenues increased from $119.3 million in the prior year to $155.4 million in the year ended September 30, 2023, an increase of $36.1 million, or 30%. The material costs increase by $14.7 million due to higher volume. Payroll, including stock-based compensation, increased $9.9 million, which included $7.4 million of savings related to the 2023 restructuring plan. Depreciation and amortization increased by $11.9 million associated with the capital investment to increase capacity. The increase in payroll costs and depreciation expenses was primarily due to the build out of the second manufacturing facility located in Wilsonville, Oregon.
A discussion of our cost of revenues for the year ended September 30, 2022 as compared to the year ended September 30, 2021 can be found on page 54 of our 2023 Annual Report.
Research and development expenses consist primarily of costs incurred for the development of our products, which include personnel costs, laboratory equipment and supplies, consulting costs, depreciation, rent, IT, maintenance and facility costs. Personnel costs consist of salaries, employee benefit costs, bonuses, and stock-based compensation expenses.expense. We expense our research and development expenses in the period in which they are incurred.
Research and development expenses decreased 15%12% to $80.3 million for the year ended September 30, 2025, as compared to $90.9 million for the year ended September 30, 2024,2024. asThis compared to the $106.9 million for the year ended September 30, 2023. The decreasereduction is primarily dueattributed to a decrease inlower personnel costs of $9.3$4.9 million,million includingand a decrease in stock-based compensation expense of $2.7$2.2 millionmillion, dueboth todriven by the reductionsale of headcountDNA relateddigital todata thestorage 2023 restructuring plan.business. The remaining decrease is attributable to decreasesa reduction in outside services costs of $2.2 million, depreciation expenses of $1.0$1.1 million and laba supplies costsreduction of $6.1depreciation and amortization of $1.8 million. TheseThe decreasesdecrease arein partiallydepreciation offsetand byamortization ais lackmainly due to impairment of grantBiopharma reimbursementassets in 2024 whereand wethe receivedsale $2.7of millionDNA digital data storage business in 2023, which are netted against the researchcurrent and development expenses.year.
Research and development expenses decreased by $13.4 million to $106.9 million for the year ended September 30, 2023, as compared to the same period 2022. The decrease is primarily due to the deconsolidation of Revelar in fiscal year 2022, which contributed to a decrease of $14.1 million. Excluding the impact of Revelar, research and development expenses increased $0.7 million. The increase is primarily due to increases in lab supplies of $1.5 million, outside services of $0.7 million, and depreciation of $0.6 million. Additionally, grant reimbursements, which are netted against our research and development expenses, were $1.6 million lower during the year ended September 30, 2023 than the prior year. The increase was partially offset by a $4.0 million decrease in payroll, which consists of a $1.6 million increase in payroll, offset by a decrease of $5.6 million in stock-based compensation.
A discussion of our research and development expenses for the year ended September 30, 2022 as compared to the year ended September 30, 2021 can be found on page 55 of our 2023 Annual Report.
Selling expenses consist of personnel costs, customer service expenses, direct marketing expenses, educational and promotional expense, market research and analysis. General and administrative expenses are incurred for executive, finance and accounting, legal and human resources functions and consist of personnel costs, audit and legal expenses, consulting costs, depreciation, insurance costs, travel expenses, rent, IT, maintenance and facility costs. Personnel costs consist of salaries, employee benefit costs, bonuses, commissions and stock-based compensation expenses.expense. We expense all selling, general and administrative expenses as incurred. We expect our selling costs will continue to increase in absolute dollars, primarily driven by our efforts to expand our commercial capability, with an increased presence both within and outside the United States, and to expand our brand awareness and customer base through targeted marketing initiatives.
Selling, general and administrative expenses increased 13% to $247.0 million for the year ended September 30, 2025, as compared to $218.4 million for the year ended September 30, 2024. The increase is primarily due to increases in stock-based compensation expense of $12.7 million, personnel costs of $6.8 million, IT services costs of $4.0 million, marketing costs of $1.5 million and other outside service costs of $3.1 million.
Total selling, general and administrative expenses increased 15% to $218.4 million for the year ended September 30, 2024, as compared to $189.7 million for the year ended September 30, 2023. The increase is primarily due to an increase in personnel costs of $37.7 million, including an increase in stock-based compensation expense of $24.2 million. The increase in stock-based compensation expense is primarily due to a reversal of $15.9 million in the first quarter 2023 because of employee stock forfeitures related to an acquisition performance condition not being met and the remaining increase is due to stock-based awards granted to existing and new employees during fiscal year 2024. Further, the increase is attributable to increases in outside service costs of $1.1 million, facilities costs of $2.3 million, marketing costs of $3.4 million, IT services costs of $2.9 million and depreciation and amortization expense of $0.9 million. These increases are partially offset by the decrease in the Wilsonville manufacturing facility pre-commercialization costs of $19.3 million, which was completed when the Wilsonville manufacturing facility began shipping product in January 2023.
For the year ended September 30, 2023, selling, general and administrative expenses decreased by $23.2 million to $189.7 million, compared to the same period for 2022. The decrease is primarily attributable to a decrease in stock-based compensation of $43.0 million due to employee stock forfeitures related to an acquisition performance condition not being met and changes to the probability of achieving future performance conditions. The decrease was partially offset by increases in pre-commercialization Factory of the Future costs of $4.4 million, facility costs of $6.5 million, payroll costs of $5.3 million and IT-related services costs of $5.1 million.
A discussion of our selling, general and administrative expenses for the year ended September 30, 2022 as compared to the year ended September 30, 2021 can be found on page 55 of our 2023 Annual Report.
Restructuring and other costs
We recognized restructuring and other costs of $9.4 million resulting from the 2023 restructuring plan during the year ended September 30, 2023. Refer to Note 16 to the consolidated financial statements for further details.
Change in fair value of contingent considerations and holdbacks
There was no change in fair value of contingent consideration and holdbacks for the year ended September 30, 2024, as the contingent consideration and holdbacks liabilities were settled in the prior year. During the year ended September 30, 2023, we recognized a change in the fair value of contingent consideration and holdbacks of $5.5 million and $0.4 million related to the acquisitions of Abveris and iGenomX, respectively. The changes were the result of not achieving the Abveris revenue target for calendar year 2022 and a change in fair value of our stock price.
A discussion of our change in fair value of contingent considerations and holdbacks for the year ended September 30, 2022 as compared to the year ended September 30, 2021, can be found on page 56 of our 2023 Annual Report.
We recognized an impairment of intangible assets and property and equipment of $44.9 million related to the Biopharma asset group during the year ended September 30, 2024 (see discussion in critical accounting policies and estimates — impairment of long-lived assets below), as compared to impairment of property and equipment of $6.8 million during the year ended September 30, 2023, related to write-off of lab equipment and leasehold improvements for decommissioned labs and computer software.2024.
Gain on Sale of Business
We recognized a gain on the sale of business of $48.8 million related to the sale of our DNA digital data storage business during the year ended September 30, 2025.
Other income (expense), netnet, consists of realized foreign exchange gains and losses, loss on disposal of property and equipment andequipment, impairment of equity investments.investments, and sub-lease income.
Interest income increaseddecreased 7%,26%, to $15.3$11.4 million in the year ended September 30, 2024,2025, as compared to $14.4$15.3 million for the year ended September 30, 2023,2024, resultingdue fromto our cash andlower cash equivalents and short-term investments balance.balances and lower interest rates. Other income (expense) was $0.9 million in fiscal year 2025, as compared to $2.7 million in fiscal year 2024, as compared to $0.7 million in fiscal year 2023, mainly due to fiscal year 2024 impairment losses on an equity investment.investment recognized in fiscal year 2024.
A discussion of our interest and other income (expense), net for the year ended September 30, 2022 as compared to the year ended September 30, 2021, can be found on page 56 of our 2023 Annual Report.
Gain on deconsolidation of a subsidiary
Gain on deconsolidation of a subsidiary represents the gain associated with the deconsolidation of a variable interest entity, Revelar, on September 30, 2022.
For the years ended September 30, 2025 and 2024, we recognized income tax provisions of $0.7 million and $0.6 million, respectively, mainly attributable to our foreign operations.
We recorded income tax provision of $0.6 million and $1.2 million for the year ended September 30, 2024 and 2023, respectively. We recorded income tax benefit of $10.4 million in 2022 mainly as a result of the business acquisition of Abveris.
Sources of liquidity
On October 21, 2024, the Company executed the Royalty Purchase Agreement with XOMA (US) LLC ("XOMA Royalty"). Under the Royalty Purchase Agreement, XOMA Royalty provided Twist Bioscience an upfront payment of $15.0 million in cash in exchange for the right to receive half of the future potential milestone and royalty payments resulting from certain antibody discovery and biopharma services agreements between the Company and its customers (see note 17 of the consolidated financial statements included elsewhere in this Form 10-K).
On May 2, 2025, the Company executed the Contribution Agreement with Atlas for the sale and transfer of its DNA digital data storage assets including the related intellectual property, equipment and contracts and the license of certain other intellectual property and the license of certain other intellectual property for a consideration of 73.0 million shares of Series Seed-1 Preferred Shares of Atlas, upfront cash consideration of $2.5 million, promissory notes of $2.0 million issued by Atlas, contingent manufacturing and commercial milestone payments of up to $75.0 million, and royalty payments based on a percentage of Atlas sales of the DNA data storage products (see note 6 of the consolidated financial statements included elsewhere in this Form 10-K).
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report on Form 10-K filed with the SEC on November 17, 2025, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Gain on sale of business”
New heading “At-the-Market Equity Offering Program”
Largest changes
Net cash used in operating activities wassee in full comparison$42.4$41.3 million during thesixnine months endedMarchJune31,30,2026,2026.which wasThis primarilydueconsistedtoof a net loss of$74.5$109.6 million, adjusted for non-cashitems,itemsincludingof $69.1 million, primarily stock-based compensation expense of $50.4 million and depreciation and amortization of$12.6 million, stock-based compensation expense of $32.2$19.4 million, and a net cash outflow from changes in operating assets and liabilities of$11.8$0.8 million. The net cash outflow from changes in operating assets and liabilities wasmainlyprimarily due to increases ininventoriesprepaid expenses and other current assets of$5.2$19.0 million, primarily driven by insurance receivable for litigation settlement costs, accounts receivable of$7.4$8.5 million due to the increase in revenues and the timing of collections, andprepaid and other current assetsinventories of$18.9$6.9million,millionandtoasupportdecreaseanticipated demand, substantially offset by increases in accruedcompensation of $4.3 million, partially offset by an increase in accruedexpenses and other liabilities of$22.8$25.7million.million,Theprimarilychangesrelatedintoaccruedlitigationcompensation,accruals,accruedindirectexpensestaxes payable andothertimingliabilities,ofandpayments to vendors, accounts payableareof $4.6 million and accrued compensation of $3.6 million due to the timing of payments to vendors and employees.
Cost of revenues increasedsee in full comparison15%25% to$53.6$55.9 million for the three months endedMarchJune31,30, 2026, as compared to$46.8$44.8 million for the three months endedMarchJune31,30, 2025. The increaseiswas primarily attributable to an increase in material costs of$6.3$8.5 million driven by increasedsalessales,anda $0.9 million increase in laboratory supplies, a $0.7 million increase in personnelcosts.costs and a $0.5 million increase in depreciation and amortization. Gross marginincreaseddecreased2.0%0.6 percentage points to51.6%52.8% for the three months endedMarchJune31,30, 2026, as compared to49.6%53.4% in the same period of the prioryear,yearmainlyprimarily due toancustomerincrease in revenues and driving additional cost savings through continuous process improvement initiatives.mix.
“Interest income decreased 39% to $1.7 million for the three months ended March 31, 2026, as compared to $2.8 million for the three months ended March 31, 2025, due to lower cash equivalents and short-term investments balances and lower interest rates.”see in full comparison
“Interest income decreased 38% to $5.4 million for the nine months ended June 30, 2026, as compared to $8.7 million for the nine months ended June 30, 2025, due to lower cash equivalents and short-term investments balances and lower interest rates.”see in full comparison
Full comparison: every changed paragraph (46)
We generate revenuerevenues primarily from DNA synthesis and protein solutions and NGS applications. As we have expanded from DNA fragments to genes, sample preparation, protein expression, and biologics discovery, the integration of our offerings has strengthened. Beginning in fiscal 2026, we combined synthetic biology tools and biopharma services into a single category, DNA synthesis and protein solutions, and renamed NGS tools to NGS applications to reflect their role in sequencing workflows.
Since our inception, we have incurred net losses each year. Our net loss for the three and sixnine months ended MarchJune 31,30, 2026 was $44.0$35.1 million and $74.5$109.6 million, respectively. As of MarchJune 31,30, 2026, we have an accumulated net deficit of $1,394.1$1,429.2 million and cash, cash equivalents and short-term investments of $171.7$166.8 million. Our ability to generate product revenuerevenues sufficient to achieve profitability will depend heavily on the success of our existing products and the development and commercialization of additional products in the therapeutics, diagnostics, industry and applied, academic research and government, and global supply partners revenue industries as well as leveraging our investment in our manufacturing infrastructure.
In June 2026, we established an at-the-market equity offering program (the "ATM Program") under a Sales Agreement with TD Securities (USA) LLC, as sales agent, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $200.0 million from time to time. We are under no obligation to sell any shares under the ATM Program. As of June 30, 2026, no shares had been sold and the full $200.0 million of capacity remained available.
•For the three and sixnine months ended MarchJune 31,30, 2026, revenues increased 19.3%23.2% to $110.7$118.4 million and 18.1%20% to $214.4$332.8 million, respectively, driven by strong performance in DNA synthesis and protein solutions and NGS applications.
•For the three andmonths sixended June 30, 2026, gross margin decreased to 52.8% from 53.4% for the same period in the prior year primarily due to customer mix. For the nine months ended MarchJune 31,30, 2026, gross margin increased to 51.6%52.1% from 49.6%50.5% andin tothe 51.8%prior fromyear 49.0%, respectively,period, primarily due to increases inhigher revenues and driving additional cost savings realized through continuous process improvement initiatives.initiatives partially offset by investments for capacity expansion and automation.
•For the three and sixnine months ended MarchJune 31,30, 2026, loss from operations increased 10.4%20.5% to $45.9$36.3 million and 3.4%8.2% to $78.8$115.0 millionmillion, respectively, primarily due to an increase in selling, general and administrative expenses and litigation settlement costs, net of recoveries, offset by increases in both revenues and gross profit and a decrease in research and development expenses.
•For the sixnine months ended MarchJune 31,30, 2026, net cash used in operating activities increased 23.1%15.2% to $42.4$41.3 million from $34.4$35.8 million.
Comparison of the Three and SixNine Months Ended MarchJune 31,30, 2026 and 2025
We historically reported our revenuerevenues by the following products: synthetic genes, oligo pools and DNA libraries (collectively, synthetic biology), antibody discovery, and NGS tools. Beginning in fiscal 2026, we combined revenuerevenues from synthetic genes, oligo pools, DNA libraries, and biopharma services for antibody discovery into DNA synthesis and protein solutions. We also changed the name of NGS tools to NGS applications, as these products and services facilitate DNA reading and sequencing workflows. The table below summarizes revenues by the new products:
We historically reported revenuerevenues by industrial chemicals/materials, academic research, healthcare, and food/agriculture. Beginning in fiscal 2026, we disclose revenuerevenues by therapeutics, diagnostics, industry and applied, academic research and government, and global supply partners revenue.partners. These updated categories better align with our operations and increase clarity around our key customer groups. The table below summarizes revenues by industry:
The number of customers who purchased products from us was approximately 2,5832,664 and 2,4312,484 customers for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.
Revenues increased 19%23% to $110.7$118.4 million for the three months ended MarchJune 31,30, 2026, as compared to $92.8$96.1 million for the three months ended MarchJune 31,30, 2025. The increase in revenues primarily reflects growth in DNA synthesis and protein solutions revenuerevenues of 28%39% and growth in NGS applications revenuerevenues of 12%, both of which are primarily attributable to anhigher increasesales in revenues fromto our customers in therapeutics, diagnostics, academic research and government industries, as well as an increase in the number of customers. The number of genes shipped in the three months ended MarchJune 31,30, 2026, increased to approximately 300,000369,000 genes, compared to approximately 227,000237,000 genes in the three months ended MarchJune 31,30, 2025, an increase of 32%.56%.
Revenues increased 18%20% to $214.4$332.8 million for the sixnine months ended MarchJune 31,30, 2026, as compared to $181.5$277.6 million for the sixnine months ended MarchJune 31,30, 2025. The increase in revenues primarily reflects growth in DNA synthesis and protein solutions revenuerevenues of 28%31% and growth in NGS applications revenuerevenues of 10%,11%, both of which are primarily attributable to anhigher increasesales in revenues fromto our customers in therapeutics, diagnostics, academic research and government and global supply partners industries, as well as an increase in the number of customers. The number of genes shipped in the sixnine months ended MarchJune 31,30, 2026, increased to approximately 571,000940,000 genes, compared to approximately 432,000669,000 genes in the sixnine months ended MarchJune 31,30, 2025, an increase of 32%.41%.
Cost of revenues increased 15%25% to $53.6$55.9 million for the three months ended MarchJune 31,30, 2026, as compared to $46.8$44.8 million for the three months ended MarchJune 31,30, 2025. The increase iswas primarily attributable to an increase in material costs of $6.3$8.5 million driven by increased salessales, anda $0.9 million increase in laboratory supplies, a $0.7 million increase in personnel costs.costs and a $0.5 million increase in depreciation and amortization. Gross margin increaseddecreased 2.0%0.6 percentage points to 51.6%52.8% for the three months ended MarchJune 31,30, 2026, as compared to 49.6%53.4% in the same period of the prior year,year mainlyprimarily due to ancustomer increase in revenues and driving additional cost savings through continuous process improvement initiatives.mix.
Cost of revenues increased 12%16% to $103.3$159.2 million for the sixnine months ended MarchJune 31,30, 2026, as compared to $92.6$137.4 million for the sixnine months ended MarchJune 31,30, 2025. The increase iswas primarily attributable to an increase in material costs of $9.0$17.5 million driven by increased sales and a $2.1$2.8 million increase in personnel costs. Gross margin increased 2.8%1.6 percentage points to 51.8%52.1% for the sixnine months ended MarchJune 31,30, 2026, as compared to 49.0%50.5% in the same period of the prior year, mainly due to an increase in revenues and driving additional cost savings through continuous process improvement initiatives.initiatives partially offset by investment in capacity expansion.
Research and development expenses for the three months ended June 30, 2026 were relatively consistent with the prior year period, as decreases in professional services of $2.3 million and IT services of $0.5 million were largely offset by increases in personnel-related costs of $2.3 million, which included stock-based compensation of $0.8 million, and lab supplies of $0.4 million.
Research and development expenses decreased 18% to $19.7 million for the three months ended March 31, 2026, as compared to $23.9 million for the three months ended March 31, 2025. The decrease is primarily driven by a $2.0 million decrease in personnel costs, including a $1.4 million decrease in stock-based compensation expenses, a $1.2 million decrease in professional services costs, and a $0.9 million decrease in costs for facilities and depreciation and amortization. These decreases are largely attributable to the sale of our DNA data storage business in fiscal year 2025.
Research and development expenses decreased 19%13% to $36.8$54.8 million for the sixnine months ended MarchJune 31,30, 2026, as compared to $45.2$63.3 million for the sixnine months ended MarchJune 31,30, 2025. The decrease iswas primarily driven by a $4.6$4.3 million decrease in professional services costs, a $2.3 million decrease in personnel costs, includingwhich included a $2.5$1.8 million decrease in stock-based compensation expenses, a $2.0 million decrease in professional services costs, and a $1.6 million decrease in facilities costs for facilities and depreciation and amortization. These decreases are largely attributable to the sale of our DNA data storage business in fiscal year 2025.
Selling, general and administrative expenses increased 19% to $76.1 million for the three months ended March 31, 2026, as compared to $63.7 million for the three months ended March 31, 2025. The increase is primarily attributable to an $8.2 million increase in personnel costs, including a $0.4 million increase in stock-based compensation expense, a $2.4 million increase in IT services costs, an $0.8 million increase in marketing costs, and a $1.9 million increase in other costs. These increases were partially offset by a $0.9 million decrease in professional services costs. The increase in selling, general and administrative expenses reflect headcount additions and investments in our commercial organization and corporate infrastructure to support the continued growth of the business.
Selling, general and administrative expenses increased 22%27% to $145.8$80.7 million for the sixthree months ended MarchJune 31,30, 2026, as compared to $119.8$63.4 million for the sixthree months ended MarchJune 31,30, 2025. The increase iswas primarily attributable to a $15.9$10.6 million increase in personnel costs, includingwhich include a $2.7$1.9 million increase in stock-based compensation expense, anda $2.6 million increase in professional services costs, a $5.0$1.9 million increase in IT services,services costs, a $2.3$0.9 million increase in marketing costs, and a $4.6$1.0 million increase in other costs. These increases were partially offset by a $1.8 million decrease in professional services costs. The increase in selling, general and administrative expenses reflectreflects headcount additions and investments in our commercial organization and corporate infrastructure to support the continued growth of the business.
Selling, general and administrative expenses increased 24% to $226.5 million for the nine months ended June 30, 2026, as compared to $183.2 million for the nine months ended June 30, 2025. The increase was primarily attributable to a $26.5 million increase in personnel costs, which included a $4.7 million increase in stock-based compensation expense, and a $6.9 million increase in IT services, a $3.2 million increase in marketing costs, a $0.8 million increase in professional services costs and a $5.6 million increase in other costs. The increase in selling, general and administrative expenses reflects headcount additions and investments in our commercial organization and corporate infrastructure to support the continued growth of the business.
We expect selling, general and administrative expense to moderate in the secondfourth halfquarter of fiscal 2026 resulting from a number of cost saving initiatives.
We recorded litigation settlement costs, net of recoveries of $7.2 million for the three and sixnine months ended MarchJune 31,30, 2026.
Gain on sale of business
We recognized gain on sale of business of $48.8 million related to the sale of our DNA digital data storage business during three and nine months ended June 30, 2025.
Interest income decreased 39% to $1.7 million for the three months ended March 31, 2026, as compared to $2.8 million for the three months ended March 31, 2025, due to lower cash equivalents and short-term investments balances and lower interest rates.
Interest income decreased 36%44% to $3.9$1.5 million for the sixthree months ended MarchJune 31,30, 2026, as compared to $6.0$2.7 million for the sixthree months ended MarchJune 31,30, 2025, due to lower cash equivalents and short-term investments balances and lower interest rates.
Interest income decreased 38% to $5.4 million for the nine months ended June 30, 2026, as compared to $8.7 million for the nine months ended June 30, 2025, due to lower cash equivalents and short-term investments balances and lower interest rates.
We recorded an income tax provision of less than $0.1 million and $0.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively. We recorded an income tax provision of $0.3 million and $0.3$0.2 million for the sixthree months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. We recorded an income tax provision of $0.6 million and $0.5 million for the nine months ended June 30, 2026 and June 30, 2025, respectively.
As of MarchJune 31,30, 2026, we had a balance of $122.7$117.4 million of cash and cash equivalents and $49.0$49.4 million in short-term investments. We have incurred losses and negative cash flows from operations since our inception, and as of MarchJune 31,30, 2026, we had an accumulated deficit of $1,394.1$1,429.2 million.
Since our inception, we have financed our operations and capital expenditures principally through public equity raises, private placements of our convertible preferred stock, borrowings from credit facilities, proceeds from the royalty purchase agreement, sale of DNA data storage assets and revenuerevenues from our commercial operations.
Our primary uses of capital are, and we expect will continue to be for the near future, compensation and related expenses, manufacturing costs, laboratory and related supplies, legal and other regulatory expenses and general overhead costs, including facilities costs and capital expenditures. We had $15.7$12.2 million in commitments for capital expenditures as of MarchJune 31,30, 2026.
Our contractual obligations have not materially changed from those reported in our Annual Report on Form 10-K except for lease commitments. As of MarchJune 31,30, 2026, our operating lease liability was $95.8$93.6 million. See Note 10, Leases of the notes to our condensed consolidated financial statements included elsewhere in this Form 10-Q for information on our operating lease commitments.
Of the total $33.8 million commitment, $5.0 million represented an outflow of cash, with the remaining $28.8 million was settled or to be settled through the issuance of the Company's common stock, thereby limiting the cash impact on liquidity. The contingent issuance of common stock, which is dependent on the completion of the technology transfer,transfer as well as the common stock issuance for the subsequent closing related to acquiring ownership interests in Invenra, are bothis recorded as accrued expenses and other current liabilities in the consolidated balance sheet as of MarchJune 31,30, 2026.
We filed a prospectus supplement under our existingprior shelf registration statement on Form S-3 to register the resale of up to 632,328 shares of common stock issued or issuable in connection with these transactions, which will not provide any proceeds to us and will have no material impact on our liquidity or capital resources.
At-the-Market Equity Offering Program
In June 2026, we entered into a Sales Agreement (the "Sales Agreement") with TD Securities (USA) LLC, as sales agent, pursuant to which we may offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $200.0 million through the ATM Program. We will pay the Sales Agent a commission of up to 3.0% of the gross proceeds from each sale of shares under the Sales Agreement. We are not obligated to sell any shares under the Sales Agreement.
The shares to be sold under the ATM Program are registered under our automatic shelf registration statement on Form S-3ASR and related prospectus supplement, each filed with the SEC on June 18, 2026. The Form S-3ASR replaced our prior shelf registration statement and permits us to offer and sell, from time to time, common stock, preferred stock, debt securities, units and warrants in one or more offerings.
As of June 30, 2026, no shares had been sold under the ATM Program and the full $200.0 million capacity remained available.
Net cash used in operating activities was $42.4$41.3 million during the sixnine months ended MarchJune 31,30, 2026,2026. which wasThis primarily dueconsisted toof a net loss of $74.5$109.6 million, adjusted for non-cash items,items includingof $69.1 million, primarily stock-based compensation expense of $50.4 million and depreciation and amortization of $12.6 million, stock-based compensation expense of $32.2$19.4 million, and a net cash outflow from changes in operating assets and liabilities of $11.8$0.8 million. The net cash outflow from changes in operating assets and liabilities was mainlyprimarily due to increases in inventoriesprepaid expenses and other current assets of $5.2$19.0 million, primarily driven by insurance receivable for litigation settlement costs, accounts receivable of $7.4$8.5 million due to the increase in revenues and the timing of collections, and prepaid and other current assetsinventories of $18.9$6.9 million,million andto asupport decreaseanticipated demand, substantially offset by increases in accrued compensation of $4.3 million, partially offset by an increase in accruedexpenses and other liabilities of $22.8$25.7 million.million, Theprimarily changesrelated into accruedlitigation compensation,accruals, accruedindirect expensestaxes payable and othertiming liabilities,of andpayments to vendors, accounts payable areof $4.6 million and accrued compensation of $3.6 million due to the timing of payments to vendors and employees.
Net cash used in operating activities was $34.4$35.8 million during the sixnine months ended MarchJune 31,30, 20252025. This consisted primarily due to a net loss of $70.9$50.5 million adjusted for non-cash items includingof $20.3 million, primarily stock-based compensation expense of $48.4 million and depreciation and amortization expense of $12.8$18.8 million, stock-basedpartially compensationoffset expenseby a gain on sale of $32.3business of $48.8 million and a net cash outflow from operating assets and liabilities of $9.4$5.6 million. The net cash outflow from changes in operating assets and liabilities was mainlyprimarily due to an increase in accounts receivable of $15.3$15.2 million due to increased revenues and the timing of collections, increases in inventories of $1.9 million and prepaid expenses and other current assets of $1.8 million and a decrease in accrued compensation of $8.7$4.7 millionmillion, partially offset by decreases in inventories of $3.2 million, increases in accrued expenses of $3.3 million, accounts payable of $6.4$9.6 million and accrued expenses and other liabilities of $1.3$8.9 million. The changes in accrued compensation, accrued expenses, and accounts payable aremillion due to the timing of payments to vendors and employees.
Net cash used in investing activities was $22.6$32.8 million during the sixnine months ended MarchJune 31,30, 2026, which primarily consisted of the purchases of property and equipment of $17.9$27.6 million and cash paid for an asset acquisition of $5.0 million. Purchases of investments of $38.5 million were substantially offset by proceeds from maturities of investments of $38.4 million.
Net cash used in investing activities was $3.0$12.4 million during the sixnine months ended MarchJune 31,30, 2025, which consisted of the purchases of property and equipment of $6.4$15.6 millionmillion, partially offset by the proceeds from the sale of our data storage business of $2.5 million and the net impact of purchases and maturity of investments of $3.5$0.7 million.
Net cash provided by financing activities was $4.4$8.2 million induring the sixnine months ended MarchJune 31,30, 2026, which primarily consisted of $2.1$5.9 million of proceeds from the exercise of stock options and $2.4 million of proceeds from the issuance of sharescommon stock under the ESPP.employee stock purchase plan.
Net cash provided by financing activities was $21.1$23.0 million induring the sixnine months ended MarchJune 31,30, 2025, which consisted of $15.0 million of proceeds from the Royalty Purchase Agreement with XOMA for(US) LLC related to the sale of future revenue, $3.7$5.6 million of proceeds from the exercise of stock options and $2.4 million of proceeds from the issuance of sharescommon stock under the ESPP.employee stock purchase plan.
The preparation of our Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and judgments that affect the reported amounts in the financial statements and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates. A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K. There were no changes to our critical accounting policies and estimates during the sixnine months ended MarchJune 31,30, 2026.
TWST insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 73 filings (10 insiders, 39 trade dates, 1,029,410 shares, about $135.2M; 23 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -1,029,410 (purchases minus sales); net value about -$135.2M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
1,840 | $200.44 | $368.8K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
481 | $201.26 | $96.8K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
1,017 | $202.32 | $205.8K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
432 | $203.61 | $88.0K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
290 | $204.80 | $59.4K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
297 | $205.78 | $61.1K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
146 | $206.84 | $30.2K |
| 2026-10-05 | Leproust Emily M. |
Open-market sale |
45 | $207.46 | $9.3K |
| 2026-10-02 | Laponis Adam |
Open-market sale | 8,057 | $188.88 | $1.5M |
| 2026-10-02 | Green Paula |
Open-market sale | 10,088 | $188.88 | $1.9M |
| 2026-10-02 | Finn Patrick John |
Open-market sale | 25,714 | $188.88 | $4.9M |
| 2026-10-02 | Leproust Emily M. |
Open-market sale |
45,736 | $188.88 | $8.6M |
| 2026-10-02 | Cho Dennis |
Open-market sale | 9,514 | $188.88 | $1.8M |
| 2026-10-02 | Werner Robert F. |
Open-market sale | 1,482 | $188.88 | $279.9K |
| 2026-10-01 | Leproust Emily M. |
Open-market sale |
655 | $200.00 | $131.0K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
16 | $182.50 | $2.9K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
501 | $183.76 | $92.1K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
21 | $181.45 | $3.8K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
515 | $180.39 | $92.9K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
143 | $179.93 | $25.7K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
330 | $178.67 | $59.0K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
164 | $177.17 | $29.1K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
945 | $176.39 | $166.7K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
2,485 | $175.23 | $435.4K |
| 2026-09-24 | Leproust Emily M. |
Open-market sale |
83 | $184.60 | $15.3K |
| 2026-09-21 | Cho Dennis |
Open-market sale | 348 | $165.49 | $57.6K |
| 2026-09-21 | Green Paula |
Open-market sale | 294 | $165.49 | $48.7K |
| 2026-09-21 | Leproust Emily M. |
Open-market sale | 1,687 | $165.49 | $279.2K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
4,175 | $154.17 | $643.7K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
2,565 | $162.31 | $416.3K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
11,169 | $161.49 | $1.8M |
| 2026-09-17 | Leproust Emily M. |
Option exercise |
133,269 | $26.66 | $3.6M |
| 2026-09-17 | Leproust Emily M. |
Option exercise |
75,439 | $8.82 | $665.4K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
2,440 | $151.46 | $369.6K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
6,644 | $152.21 | $1.0M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
3,399 | $153.40 | $521.4K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
869 | $163.39 | $142.0K |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
13,378 | $155.46 | $2.1M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
9,097 | $156.47 | $1.4M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
32,260 | $157.49 | $5.1M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
232,173 | $158.09 | $36.7M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
23,884 | $159.53 | $3.8M |
| 2026-09-17 | Leproust Emily M. |
Open-market sale |
14,493 | $160.44 | $2.3M |
| 2026-09-08 | Cho Dennis |
Open-market sale | 412 | $122.62 | $50.5K |
| 2026-09-08 | Green Paula |
Open-market sale | 907 | $122.62 | $111.2K |
| 2026-09-08 | Leproust Emily M. |
Open-market sale | 2,302 | $122.62 | $282.3K |
| 2026-09-08 | Werner Robert F. |
Open-market sale | 238 | $122.62 | $29.2K |
| 2026-08-25 | Leproust Emily M. |
Open-market sale |
9,181 | $153.93 | $1.4M |
| 2026-08-25 | Leproust Emily M. |
Open-market sale |
6,412 | $152.75 | $979.4K |
| 2026-08-25 | Leproust Emily M. |
Open-market sale |
12,236 | $151.36 | $1.9M |
| 2026-08-25 | Leproust Emily M. |
Open-market sale |
12,648 | $150.56 | $1.9M |
| 2026-08-25 | Leproust Emily M. |
Open-market sale |
1,093 | $154.45 | $168.8K |
| 2026-08-24 | Werner Robert F. |
Open-market sale | 854 | $140.77 | $120.2K |
| 2026-08-21 | Cho Dennis |
Open-market sale | 1,598 | $139.07 | $222.2K |
| 2026-08-21 | Finn Patrick John |
Open-market sale | 4,046 | $139.07 | $562.7K |
| 2026-08-21 | Green Paula |
Open-market sale | 1,360 | $139.07 | $189.1K |
| 2026-08-21 | Laponis Adam |
Open-market sale | 1,965 | $139.07 | $273.3K |
| 2026-08-21 | Leproust Emily M. |
Open-market sale | 6,639 | $139.07 | $923.3K |
| 2026-08-21 | Werner Robert F. |
Open-market sale | 669 | $139.07 | $93.0K |
| 2026-08-19 | Cho Dennis |
Open-market sale |
14,205 | $129.75 | $1.8M |
Well-known investors holding TWST (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| ARK Investment Management (Cathie Wood) | 2026-06-30 | 4,549,803 | $468.1M | 3.04% | Reduced 28% |
| D. E. Shaw & Co. | 2026-06-30 | 1,185,605 | $122.0M | 0.08% | Added 2442% |
| Baillie Gifford | 2026-06-30 | 1,086,779 | $111.8M | 0.1% | Reduced 11% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 862,042 | $88.7M | 0.05% | Reduced 29% |
| Millennium Management (Israel Englander) | 2026-06-30 | 347,148 | $35.7M | 0.02% | Reduced 1% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 669,732 | $31.8M | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 129,391 | $13.3M | 0.0% | Added 4% |
| Two Sigma Investments | 2026-06-30 | 94,600 | $9.7M | 0.01% | Added 154% |
| Polen Capital Management | 2026-06-30 | 55,310 | $5.7M | 0.05% | Added 130% |
| Bridgewater Associates | 2026-06-30 | 18,647 | $1.9M | 0.01% | New position |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 3,169 | $326.0K | 0.0% | New position |
| Duquesne Family Office (Stanley Druckenmiller) | 2026-06-30 | 206,000 | $9.8K | — | Sold out |