TWST - Earnings call transcript Q3 2019 | Twist Bioscience Corporation

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Operator

Good day, ladies and gentlemen and welcome to the Twist Bioscience Fiscal 2019 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today's conference is being recorded.

I would like to introduce your host of this conference call, Mr. Officer. Financial Chief Thorburn, Jim

You may begin.

Jim Thorburn

XXXX you, All today, Please thank call review afternoon, results which fiscal and the press issued available Good for right. to our joining earlier progress. our conference is Thank www.twistbioscience.com. you Bioscience us everyone Twist at financial website, we Kevin. today business quarter third release review and for our

our call Cofounder with Then on upcoming today's and is progress of of a Emily me Leproust, financial and and Dr. milestones will With CEO Emily I begin Twist. will review our our report overall and Emily direction. will on discuss performance. operational

archived open and reminder, call being audio for is be in will questions. And section be available The the of our the this then will two investors website call as a weeks. recorded. We will for portion

will within Securities today's forward-looking Law. During meaning Federal make we of the presentation, statements the

generally or events relate or Forward-looking future financial future to statements performance. operating

may actual to differ beliefs those risks could results regarding actual Our are financial cause projected. and uncertainties materialize to results not these materially expectations subject periods and that and matters and from

any our as risks more we issued of date presentation as required are well press available to us those fully law. information set any to release obligation Commission. disclaim These by today update hereof Securities as as the described statements forth the earlier and the in this include in filings forward-looking and in statements Exchange forward-looking with those The based except we on

Leproust. Chief Dr. over the now Officer Executive and turn Emily I'll that, our call With Cofounder, to

Emily Leproust

everyone. you, Thank afternoon good Jim and

revenue XXXX, and offerings solidify running in areas our position continued advancements investing we the both establish of of synbio in leadership and product very are the all business, NGS well growth will sources and of space. in technological additional and that our Over across course

that year, verticals. we and, we series am pleased the of of these cases, report our exceeding of outlined to I objectives in goals. for some At each the a are beginning fiscal ambitious meeting

NGS customers we the fiscal compared quarters $XX.X Overall, to reported this of full have fiscal quarter. in customers shipped three the we And for first the of X,XXX revenues year. in and million synbio year XXXX to XXX

was a revenue topline accomplishment. quarter second we Indeed, sequentially fiscal million. a quarter, accounting $X our our over revenues While for the significant flat had single customer accrued almost last

liquid order, increased biopsy-related large by sequentially. revenues million this have $X Excluding close would our to

customers we For synbio, revenue we growth X,XXX have to and continue shipped now this year in see almost to segment. fiscal this

move San into the our facility a During in production manufacturing the prepared quarter, back-end gene third new of South we Francisco.

We are production of July orders that pleased and the without July Xst that to any weeks came move the interruptions in the smoothly period minimum delays July for first only through during XXth. report with from gene went in the

long tail increased customer fueled reaching In is We indicating QX, year-over-year, at reaching while year-over-year XX% of we're X.Xx customers about market. size trajectory, e-commerce the the orders the of that platform market. believe we're our of a the average by beginning the by this order number in smaller the decreased while

Revenue this million from Twist. of we need year quantities for them $X.X reflecting quarter continued or from the continue DNA large meet was and expect obligations their Ginkgo to third contractual $X exceed million Ginkgo's for of to

the Arzeda, workflow cycle. During design build and that the respective a we platforms the Labcyte, TeselaGen with accelerates event an create showcasing the of to co-hosted individual quarter, integration test

field value an there The biology. April, in the detailed that growing synthetic was of of And Economist article in insightful the

technologies out synbio new integrating convergence is growing in the article, research. What in described different to the technology a of is to readiness and of of market and embrace a spur the playing exciting benefits

from capabilities an play with and proprietary our synbio writing of technology. in we DNA our produce investment to the that integral part continue the We products

which a Historically, on bases to the make XXX our is longest or innovation, in long been difficult oligos up testament length, our introduction it to to believe has XXX longer oligo to in bases oligos in nucleotides oligo than due chemical we As industry. offering the announced reaction we Monday, of continuous the commercial efficiencies.

but identified way have advantage, our a a make can where this to store our data strand. at longer useful drug bases data oligos We oligos DNA oligo also a in only a are believe provides longer error rate. storage, us more and in where record very low discovery product, of proprietary per pieces competitive XXX We development in not digital

well useful and be synergistic for we very as oligos protein guides. synthesis to directly effects addition, of believe two engineering. bases enabled RNAs cooperative editing CRISPR multiple in of a gene In as study long will guide XXX Indeed,

And engineering, acids XXX to or about length of bases the protein for protein amino a XXX correspond subunit.

offering. revenue synbio, we forward we As through product for believe look we growth, for look continued segment significant we opportunity enhanced in synbio the pharmaceutical a have

year, currently products and we believe add calendar in line XXXX late curve in new which our growth We several synbio are this targeting to beyond. will

XXXX, For of target of third with the we customers now these genomics in fiscal targeted enrichment XXX NGS, products XX out and customers to shipped quarter production. in more than

For grow pilot our is production. NGS, our moving base continues from through to to nicely our and customer revenue pipeline

orders expect to placing [Indiscernible] another before several through be have products that as order. we we work purchase quarters will inventory lumpy their As require and said large then previously, customers large

of opportunities. In see majority source diagnostic revenue the addition we our testing which today, a of market to growing additional of our is two companies, large base

The research first is market. the in

effectively. In mouse leveraging and custom June, generating the in introduced we our exome, cost strength rapidly panels

collected, [Indiscernible] is competitors is over While based that offering our information sequence sequence the five mouse years old. data and constantly on was exome from being for mouse

expect differentiation. includes this most consensus up-to-date exome a source we to genome Our and build the mouse of be significant

an different of effectively In our is and in addition, capabilities design offering panel and a and our custom cost large exceptional the panel in species an entirely platform. feat quickly reflects technology value

broad to we additional to line, range research specific NGS our of human product need. offer a Moving addition intend panels in forward, for species to broadening non-human

area that of beginning the The is growth in the July, micro $XXX,XXX.XX arrays conversion SNP see from to the NGS. where In second NGS. are conversion from array in to we received we orders

have mentioned have target intend Twist expensive platform we previously, we sequencing running less continue and to microarrays capture, the for this to that As can customers use be DNA demonstrated for analysis [Indiscernible] we than sequencing preparation library conversion. on using and SNP enable several

million. to market represents used extensively a and beef, are arrays used the believe space, SNP other chicken, total biotech testing array the salmon, $XXX food market opportunity genotype they that also products. While segment extensively the consumer DNA in in market SNP agricultural We are together, of

some at to substantial. area this shift the expand unique opportunity SNP platform to for the time penetrate said, to provides combination the on compared We price platform. available our our market in is as Twist sequencing for attractive workflow point long-term richer do take with an it data medium to expect arrays. it And represents genotyping NGS That to a of

During the NGS platform. our we platform their e-commerce NGS of NGS to order quarter, All are products third fiscal able can status launched now track for through and products. our customers purchase standard e-commerce our customers several select

launch quarter, implementation. for several current panel and During intend features the additional custom e-commerce we to design

Therefore, indicating our ahead existing fiscal of in at to I the the detailed provide and in in the remain these QX, on guidance meet future near-term orders remain year, revenues let at commentary. revenue we track orders costs ahead X topline as $XX. into growth businesses, Looking strongly Jim for bioengineering and revenue. million turn will

libraries. our Moving continue to GPCR on we as we -- internally Therapeutics continued validate verticals partners, to Biopharma, Pandion with our for have collaborate to LakePharma and

cells As plays we Alzheimer's. pancreatic and in promotes previously reported, have Type an which from initial role important leads functional and X Parkinson's diabetes beta against identified GLPXR, -- insulin suppression and

target, and of one itself power important of note to antibodies being in scientific the like several that functional our is to of I'd identify demonstration able platform. an against GPCR

for we relevant against am report In that of and GPCR three quarter, functionally other total last addition, I targets important to targets. identified pleased a two

forward, Going these to explore monetization. the packages are needed typical workflow leads we to order their data through build in characterization the running

pipeline to continuing targets. build to other explore also leads against We're targets multiple a of

antibody domain have are Single libraries. single series smaller antibody antibodies created fragments We than whole a are that also domain much a antibody. of

chains and of stable A characterization antibodies light whole are development. that as heavy fragments. The fragments antibodies These heavy from libraries antibodies of engineered discovery for potentially two initial are modular of and VHS composed and robust both started are called chain antibody and design two single and the also small these is as other chains, faster library. well

[Indiscernible] opportunities to Further on, libraries us screened find make to to enables functionality that and targets. difficult diverse manufacture content future rapidly be can for cost-effectively leads enabling multiple ability against with our specific us quickly such

development for capabilities. making good progress toward new collaborations tools, and are these discovery and early With we partnerships establishing

contract receive government under continuing Turning our though no to on non-dilutive storage, there the with for on remain data front, funding funding contract. a are encouraged we we progress that guarantees negotiation DNA data we will this are through this storage,

We announce our this also data forward chip storage. are we design that generation excited in anticipation to of to are next specific program, DNA the with proceeding silicon of

synthesis density. will chip part production, device a density. development chip fabricated we and execute silicon as similar key require feature would compatible driver be path CMOS designs and dramatically would continue which will engineering A our and the designed be A to design quarters increasing multiple to for roadmap to multiple with of be methodical for our

to The designs first X X phase will device be to characterize of microns.

of cost quite and as the cost oligo decrease stored of reminder, decreases, the the rapidly. size a bytes As feature

similar is designs would or tested once as instance, a cost be For to X going obtained, micron, can different chip a found by times device XX decrease smaller, XXXx. fabricated quickly. XX is and Also, the from relatively micron XX-squared reminder, which

this milestone to So, a improve. key future represents

encouraged competitive the by with cost and storage to potential long-term storage options. make Although are we progress DNA our

also consulted both we market. SanDisk. for storage to for the importantly, in flash the half he instrumental added us experience During has of our incredible was a storage last depth the Chan and Nelson and industry of year market And at in and building and the quarter, brings an Directors. of the semiconductor introducing Nelson in Board

that Imagene, supplies encoded a without Finally, as for commercial to of product. target steel in a French the a to service contract market very DNA we digital company commercial that more This data data storage signed piece DNAshells, stainless is degradation. small DNA recently with one digital capsules bring store infrastructure

our advanced strategy, of customers. in China Asian States. to from process for market, to with the technology delivery NGS we the expedite regard reiterate Finally, By the we proprietary able order a in standard products all be time I United that to keeping facility of for these more our building would will would assemble our be back-end to like the China to

facility this property products NGS be quickly. who their the In the of We be of needs with protect need initial expect shipments ready this to from customers space still and meet integral still will before will able way, our we the end XXXX. calendar our

this review the I like the time, over turn would Jim to call quarter. results to for At financial to our

Jim Thorburn

All Emily. right. Thanks,

supported all in First cash of all, allowed quarter who on like We million May. we $XX with million the thank short-term in the would which in follow close offering proceeds, $XXX.X our recent raised investments. net to to and June approximately us shareholders

for $XX as million to Emily we're well now As will $XX quarter previous million $XX the for and the our revenue year executing $XX confirm results million. million noted, to the of be our compared in guidance this of to anticipate range

quickly Bookings are record a is highlights. That's million. the quarterly for I'll some million. company. touch $XX.X on Revenue $XX.X

team continuing to is commercial extremely executing deliver. well, Our

X. is Our to book-to-bill X.X ratio

million. Our are orders $XX year-to-date

Our is for XX%. third gross margin the quarter positive

and well doing is customer reach. job a orders the of of we're our good extending Ginkgo business And $X.X quarter. base and in Ginkgo million $X.X with expanding doing our million in synbio in terms Our billings beyond

invoiced over X,XXX through year-to-date. quarter customer’s We have

details growth orders the represents $XX.X quarter. the third and I'll now of of growth X%. dig of million year-over-year orders sequential some for XX% in into of

the is Our very the were Ginkgo. driven and and XX%. markets the $XX.X genes, EMEA and growth to of was defined $X.X for in primarily our million including academic, synbio growth with as sequential X%, non-Ginkgo industrial, quarter, strength libraries, segments. well genes I'd with doing from pharma like business orders, biotech, million oligos, U.S. Sequential very, highlight orders

approximately and bookings. were from up received quarter, quarter ordering sequentially million two NGS million no the quarter, from XXX quarter from $X.X is single in up this customer We $X.X with XXX dominating orders accounts for broad-based had orders which large the two. in

grow. Our pipeline to continues

now in pilot And validation. tracked quarter. than that's that [ph] accounts from of deliver last in tracking Remember, we We have $XXX,XXX larger XX can We're the revenue. XX XX up now and them.

large two to bringing customers now scaling in are XX. customers In addition, to production our more volumes, total production

orders strong our industrial X.X of NGS Approximately How XX.X, China EMEA. million across is biotech, million synbio orders quarter with X.X delivered Well, we America quarter global which ex-U.S. are included for another globally? includes EMEA APAC, the XX% were doing X with in which pharma at X.X segments synbio. the expansion for bookings orders, solid X going and from our million were well. includes our stronger, academic, X.X. million. and bookings that And orders were million

we provide each orders Currently, I'd following translate for NGS the to note just revenue anticipate quarter to we although NGS quarter. to for directly provide strongly, to and orders group. and like the growing more product are quarter, lumpy both but line into synbio trend Ginkgo not to be both

with $X.X on comment million. $XX.X now million for revenue. QX a year-over-year XXXX. quarter is of compared This QX, I'll really terrific to Twist, revenue is growth XXX%

same now NGS we're year-to-date Our $XX billed million in in was XXXX. compared strong to revenue to million approximately and $X.X year million date NGS period $X.X business with in

our can customer tools be As In we and we single orders $X.X NGS noted NGS QX, revenue earlier. highlighted calls, one million as on in Emily previous lumpy. billed earnings

quarter over This product we the several not used in ship QX. this to did customer Consequently, quarters.

So, was XXX. customers NGS note being This NGS XXX this really with in is million is XX%, to that our during product strong from prior sequential our and we're second quarter quarter. demonstrating line $X.X excluding a to product about quarter shipments Please growth adopted. this the customers shipped offering results NGS shipments

which million, revenue two, up revenue Ginkgo. million Synbio $XX.X now year-to-date with $X.X was synbio $X quarter in from million, includes

accounting progress. million. great worth our from our also noting year-over-year, synbio million, for our Xkb, X% was Genes Ginkgo, including Ginkgo. demonstrating making from has by with we're million genes $X.X revenue grew It's Excluding for quarter, $X.X sequentially XX% grown revenue the longer $X revenue genes,

we customers XXX sampling noting, product. worth As our Xkb had

million. Genes year-to-date were compared to $XX million $XX.X

I'd almost was genes Excluding three grown, in Emily million when just year-on-year. to our as by Ginkgo, business back of good summarize to growing is sequentially million because out are the for and also highlighted, XX% you we've $XX.X our like close million quarter $X.X middle the $X move.

thank whole and of executing. to want continue job, the It organization am deliver. I quarter just to the great Good supportive I Twisters a for obviously So and team. they very was

commentary, our growth. year-over-year our for represents fiscal million, regional in revenue we to expand was revenue quarter, to U.S. and This accounts Turning approximately presence. third $X.X XX% million. to global brings which U.S. revenue of total year-to-date continued XXX% $XX.X

large the As million noted earlier, EMEA this quarter previous growth. approximately million million revenue U.S. was $X.X is X% representing in an from excellent $X.X as NGS shipment. for sequential the quarter the reflected QX, of for $X.X the quarter, up

year-over-year the for $X.X from $X.X in up fiscal approximately nine revenue fiscal XXX% period million, XXXX, EMEA same of the million months of growth. representing first XXXX was

growing for revenue million, $X.X quarter million. APAC sequentially from the third $X.X was

growth. revenue For $X up in year-over-year of million period the XXX% months the XXXX, million, nine the XXXX, from first APAC of $X.X was representing in same fiscal

strong. of revenue terms and In includes Academia, segment was quarter, NGS synbio this which

largest are million. two $XX.X for and revenue about healthcare, $XX.X fiscal million of For accounting our industrial segments XXXX, the first for of accounting months nine chemicals,

we mid-teens to as Now, for year last of the gross margins margin down P&L we XX% actually our are highlighted, moving and half quarter. this delivered in in gross fiscal the last the margins

So that's $X.X margin. million

we're based original our tracking guidance. So on

Our approximately operating $XX.X quarter the of million expenses million. increased $XX for from excluding the revenues cost third

the quarter. million compared to $X increased $X.X for XXXX second fiscal to million R&D

million mainly $XX.X compared with the additional legal due in organization. continued $XX.X to to Our and associated increased higher in commercial commercial investment fees the million costs our second, SG&A in third some our quarter to

or XX organization personnel last to XXX. to have X, the we from and commercial quarter XX scaled Ops year organization our During our over added

of the to expenses. in quarter, $XX.X second for million quarter up from operating loss higher $XX.X million, a due the primarily net loss was Our

for XXXX XXX% XXXX In summary, demand is revenue fiscal containing. robust products of to growth months a first our the compared nine fiscal $XX.X the is period with million, which same for

strong. Our are genes orders

is we volumes. $XX we $XX Our million range NGS revenue to adopt compares customers million The of million a to products our and momentum to a million discussed result $XX have to good production scale $XX to XXXX, fiscal as which in begin previously. are guidance to increasing more

revenue approximately is to Ginkgo and Non-Gingko $X approximately is $XX million estimated $XX million. be estimated NGS be to million. be approximately is synbio to estimated

Our is $XX guidance the $XXX million guidance net million, $XX million from loss for year up previous to $XXX to million. of

the up organization stepping growth in are our strong to investment commercial We us position for in XXXX.

sales want takes sales full It six personnel. nine to approximately report XX and to months about board full capability. to on We to our to personnel ramp staff

will approximately writers combined to four ability facility And to anticipate million us in $X in in We the the expenses facility our revenue. Francisco. new new to give with with scale million move-related associated this San $XXX new

over well summary, We've year growth. strengthened of our made strategic extremely have strong executed The ourselves is balance we've organization business last and business doing deliver the positioning is ahead our sheet. in and executing and plan. In our investments we're to

I to will now call the Emily. turn over back

Emily Leproust

Thank you, Jim.

As now we the we continue business. our several year, our aggregate plan with have an key in quarter fiscal achieved of final to to grow milestones are

For synbio, growth market. revenue from have Ginkgo as uptick the continued we larger we synbio expect an from in

We pools expect contribution our from well long [ph]. gene long and oligo fragment genes as as

to would we solid Looking products we have believe drive growth the XXXX, pharmaceutical roadmap into market. a in introduce

the pilot move and [Indiscernible] market, continue we the along market. For early making we from in inroads continuum to customers the we encouraged to the genomics are production large by are

and both We as opportunities. the research direct-to-consumer traditional NGS will as continue we diagnostic in focus to market the bio

capabilities and For biopharma, partnerships. we and through to plan our our progress build to continues collaborations science non-dilutive

discovery true partnerships. moving signing look services forward We spectrum the forward, revenue generating agreements beginning smaller focused moving on and more with into additional partnerships to value also along

case to financing One ongoing expect and Relations May June Agilent, note, be contract our In under to and from final post both the Investor which to the and we section detailing it drive litigation with developments section in storage, completion. of non-dilutive we events the data in did the news found can updates continuing negotiations within look website. forward

is We continue the and believe meritless we vigorously. case plan defend to ourselves to

on As discussing to encourage will you the updates you litigation be we not the We read call. do can appreciate, the on the website.

With up questions. the that, call open for Operator? let's

Operator

Tycho first with JPMorgan. Instructions] comes from [Operator question Our Peterson

Unidentified Analyst

quarter, Tycho. is in shipped order business. know up much [ph] book the XXX shaping you to on platform And can Emily, driven -- I that just guys. with has been you was the e-commerce mentioned of Hey, the you customers that launch? strong Tejas start there? NGS for by plus well. as This that wanted really How how I to over

Emily Leproust

That's a you the question. growth Most e-commerce has launch. very much. Thank that yet of been reflected great not by

of So, benefit we the are waiting still e-commerce. for

Unidentified Analyst

it. had up mode. customers quarter production, to I surprising only it Was read anything and there? quarter, quarter moving you? first Got just you on to production into to customers then normal like six validation to second you NGS, or from so cadence It incremental Was the lumpiness? mentioned And following think two the that who went between to sounds seven

Emily Leproust

Not a issue. timing it's many --

it's question bit. quite I well invalidation a of as a think

it's people the time, are the up already difference we quarter. one-time had same picked production So $X.X the last And timing. at order the in

Jim Thorburn

in that customers I is validation Tejas stage. now. in of them are validation we stage XX add, the What Most would almost late have

moved having terms not surprises me late into through of is think in of tied surprise. are which teams the going is is up pipeline. in of a negotiations, we're stage, scaling, terms, it's validation it's and how actually a I So, many What discussions encouraging. lot the that Part

Unidentified Analyst

so optimization LakePharma, you customer your in And of about far and can one that little a here terms base talk penetrating it. platforms? mean, follow-up on you bit had the Got discovery success with quick I

Emily Leproust

Yes.

us in clients. have in useful with of LakePharma very front multiple we So We're discussion people. getting been in

But been of As some far. contribute. quite imagine, activities it's you take those time can positive so types to

Jim Thorburn

did The lab other we thing quarter, on would San add move Francisco. I consolidated this is NGS our in

The extremely very has that managing been well. cautious So, actually executed team of customer for base how we've we're our process. in terms

Unidentified Analyst

calendar opening your business? it Anything year. sense. up be makes now to That on a end normal course it. it's there? like to there delay Got China, sounds of of It was in elaborate On or facility going was slight

Emily Leproust

had quarter, year. sorry, the guided previous I year Same for to first end end we the guided of of previous the calls, earnings we calendar fiscal -- had shipment previous misspoke. to In

So, I on track we here. think are

Unidentified Analyst

sense. Make Got it.

Jim Thorburn

is Francisco. our San Plus get priority to consolidation inside of our

Unidentified Analyst

Got then… it. And

Emily Leproust

from In but can It China, here. the we're ship in from would when meantime, we better here. be still can to serve we China

Unidentified Analyst

the given Is fiscal Jim, the to specifically How baseline the ramping gross this sequential we but of just that back trajectory off year then think or should to next investments I months And want you've to and about margin back too up in XX half in much that so speak of guided other probably you're know it. progression? year apartments year here. of half good margin Got we next the are obviously, the move the think mid-teens moving or to you margins don't gross of mid-teens that there in that commercial improvement fiscal terms which as some a any materially? number alter yet, might

Jim Thorburn

on. So, focus of San question. can the synergies. we in That's Francisco leverage one consolidating of organization we good is Part

between our rate That's And about a – to XXX We to back toward business run are margins. toward think $XXX end to delivering be XXX writers the scale that the new next around level at million, of scale year. we of calendar this goal And roughly be we as as targeting XXX, year. as we And to roughly and approximately going adding should we us gross possible. of quickly is around million. help four that the the should end sort XX% anticipate

Unidentified Analyst

on it. very helpful. so guys quarter. Got and much That's Thanks congrats the

Jim Thorburn

Okay.

Emily Leproust

you. Thank

Operator

ISI. question with Ross next from Our Muken comes Evercore

Jim Thorburn

Ross. Hi,

Operator

open. is line your Ross,

question. ask can your You

is your line? phone the please you could phone unmute If mute line

Unidentified Analyst

you me? can hear Hi,

Emily Leproust

Yes.

Unidentified Analyst

on It's John Ross. for HI.

vision does throughput the going require a space technology for what wondering take and have What it as to the Focusing to storage was does and such on it I was reading? commercialize. package you're data your complementary commercial imaging how deal, in

Emily Leproust

That's a great question.

able be need data out. to you storage, to data [Indiscernible] So, in/data

DNA. store DNA. that DNA. software. the our the That's to need into to chip. to need you So need Then you silicon write first data Then encode the you That's mean

you [Indiscernible] software. that's data and is, when to have have for the understood. then decode, which And PCR PCR out, needed, the it to it useful So sequence is is that. well then And you again,

is of go data data, terms is go-to-market initially, often. makes code In for it to so, read that sense strategy, most not where the very

So, sequencing you be be read perfect small able needed, need means to What be technology to when current a of percentage data only ever this but will is point. the the will a read. data that for that at

over sequencing go reading the technology technology markets sequencing initially As there more control will because to improves the the that time, cheaper enable don't there markets data will data once be read focus we us data The often. FYI, data where read that side, WORN into never. maybe we in which world is the data. where and is write majority is read vast means is and called very the WORN, of infrequently on But

Unidentified Analyst

you. Got it. Thank

get lines? Do is it data? a concerned, to closer timeframe to deal much we anything expect you have does as As could those imaging in along an how you this far when offering see WORN of

Emily Leproust

We sell today.

small storage. sales by limiting actually a the the Today per data today, in of density in megabyte. ramp silicon limited it's the have cost. the about $X,XXX number what's is That's We chip. But

want to bitcoins, storing that books, quite but If to financial very store if or bitcoins, photo your expensive inexpensive you're personal you store could today. data it is be

market. limited a So, there's why only that's

of us next the can the we writing. significantly when so opportunity lower for is And cost

enabling developing that are that silicon the transition. through we are And we chip

to So, target At start the some once $X,XXX would around that, interesting have you next that point somewhere per serving point, can $XXX very you gigabyte. be markets.

go price of which can be point, the market. after then will bigger after hard again a At the step next So, and be opportunity about that terabyte, the $XXX the for you per that to is would drive. entire go

roadmap. will have per take we build gradual, the quarters is to news good $X,XXX to first $XXX as few but design the and So step a And mentioned, it that it is chip. gigabyte. next But a silicon we the be will

And are I we it. the We are executing moving non-dilutive that. forward. accelerate add, get funding If we expect may would to that

Unidentified Analyst

Thank Understood. you. That's helpful. very

Operator

question Schenkel next Our from with Cowen. Doug comes

Doug Schenkel

Hey. Good afternoon.

go way. earlier want just different question to I maybe So, or it to an a back frame

some from that around folks customer a XXX. XX The of went recapping numbers just then from to are XX. XXX of jumped to So, of over evals in XX of couple and been went number to XX the have the that times. covered pilots production number

So, And think we're evals. pilots customers. production are lot bigger The a more waiting what is you're jumping getting too. for in I a jump

Is year. revenue. we're talking guidance we've this of know the it at three there tougher. that, from that another little to how the with may of can had long We move typically off bit at of second about? type maybe rule building share then you one and thumb But what kind to one be some for what takes quarters stage of That of us on a dollars -- obviously, point, your for is segment NGS

have you ask the additional seems in more And seems think this this if clearly rules building I baked us year. least to can thumb don't next But the my fiscal these guess on momentum will It it segment fourth this conversion heading it of is lot of like point. end happen us you the conservativism year? just until which intelligently things, at terms into in a think because I at quarter, could like you're a to some of about give little allow what bit

Jim Thorburn

negotiations San customers. We're lot And have of still we're tracking conservatism. finding are the dug in consolidating into facility but is anyway in we terms over some this. Francisco. conservative, part going of the because into is There the we consolidating our we're here last Yes. What a conservatism remember, few months with

take on in July, you one interesting XXX,XXX. started that if one… is what's think the I microarray, came that had which We negotiating order we

Emily Leproust

February XXXX. In

Jim Thorburn

February XXXX.

shipping taken to when start six and almost us convert a we'll quarter. So probably September over that's that. that year And months --

of terms we'd in going we're year, back. to step be what We do expecting, XX. So this around have to would

You're in late validation. the right, And more negotiation. validation There's that's getting momentum. we're sitting

difficult It's validation, months looking now three doubling that We when adoption. adoption, we right should into my they flip say talking is should be six once going be get but to those that for into at probably are validations view about year. almost next anticipating business to to you're

Doug Schenkel

helpful. super that Go Jim. sorry And ahead,

Jim Thorburn

And then that's late validation.

Doug Schenkel

Okay.

Jim Thorburn

And we're and about we the terms define late the pricing validation actually and C's. T's talking the as and negotiating

Doug Schenkel

Okay.

we got too still from tightening out imagine conversion another that and comment like year, other early that that It's a are fair? where early less year would these to there You've momentum. taken has on signs bit where one ton a half are the if timelines to a Is My that time. move take today, phase there's days, big any of presumably up. one is get a you it now. I'd one guess to

Emily Leproust

several what definitely. Yes, want. can That better times, done we've it people anticipate we

And is of are needs a exploration And lot less the of are. in so, funnel. those the already there what

lot there are seems growth. year we yet. It what of to So are think I like in don't want next terms a conservative fiscal for talking people very I feel of this for deliver to year. are And not we well-positioned

Jim Thorburn

we investment point support Doug, there, other is have in to the increased growth. the our the organization And commercial

is resource to we salespeople, If almost around supporting be to are at technical of that and NGS it look a build you sale. up it, XX because that going technical we're ramping XX-odd

whether it's different As to their NGS, idiosyncrasies. requires own the value segment and and business, we they've got a each or clinical diagnostics, really proposition within touch segment start different it through

be a the in right definitely So, well, the to get the a place but That's we're that product. talking ramp right to to of has customers as the knowledge. good building people right part

Doug Schenkel

ask this me follow-up one more Let topic. on

in, a expect part that you've bit about I at more XX big of because this go some the number of think think lower to capture target least the with big it commercial and allow where converting lot those already commercial of help the really more with to the segment. you at converting actually of with Just market folks does you you're but are of new been That on tools in that reach strong who Does big last or price? more focused a some bigger I you XX research terms basically customers? after bringing Do good be and them less them? may point quickly need [Indiscernible] are help spending you little labs customers of customers types a there the

Emily Leproust

Yes.

all I think of it's above. the

– It extends that put little behooves more on same have have the the It people of high of more think do and big But the every more that knock more touch will then ones. accounts to can and as to both. into the bit the we pilot doors move time get high the funnel to managing people there's a help with I early we win, we ground accounts. it a with to account more we at as big on if the from people ability the the medium comp pilot do time, us production. so grow to more well

Doug Schenkel

you it. Got Thank Emily.

market? up real And Just do more of maybe you a of quick do that the in year-end? by important terms turnaround couple you gene Where be cleanup opening time how think of ones. will is think

Emily Leproust

reach. people. to faster the to more critical a market more that it's more Basically add, additional ours appealing our DNA for can think sense, focus and turnaround of I growing the we reach will is, enabled be flavors researchers it a us in time more in features the product of

have. So, is that XX it's the as further. point be future you be we'll days Then XX extremely days, to competitive. at below the and our we XX then goal days, the time turnaround ten price resistible in scale and consistently near then even get push and to that At

Doug Schenkel

last the discussing to one customers that of to it as to on what say you that accounts? fair remarks, to able call to your Novaseek. ability be tools there? that use over an And would we from the of validation that Is some getting Ag in look from RNA that early nice for context a the of upcoming of validation drive are your disclose should SNP mentioned being big prepared Is a in you're drivers growth to interest migrate guys progressing increasingly Twist-enabled Okay. you arrays one, newer next indications

Emily Leproust

– a market. the is There's mention that I'd segments them like – to Ag of one I number the of think

Another testing. of DNA proof be is those will I the point. direct-to-consumer And any think a

for of happy with think those in early were $XXX,XXX our of quite I we conversions. one order July

proof that in the is, that a sense, that point can market. compete first we in So,

prove going it's you the time part remarks, important point take price it's but shift is then you shows in do is there, in we workflow, that can it As to once because in mentioned some big the which a most genotyping it.

If you can with it it. [Indiscernible] can the go and once do that have, we we then repeat

Doug Schenkel

Got it.

you Okay. again. Thank

Emily Leproust

Thank you.

Operator

comes from question Catherine next Our Baird. with Schulte

Catherine Schulte

questions. Hi. Thanks the for

you has on just been protocol? the launched the AGBT, to back Fast products curious, NGS, at particularly Going Hyb uptake how

Emily Leproust

been the cost that's mentioned product. the we we that a because enabled where lower switching Fast revalidating really cost enable door bring open but have sequencing, cost not we great is we an has Fast they may you. the people cover Hyb some not cost opener under Thank validated. workflow is product. that people, had we new fantastic advantage. saving us of saving, a a some Hyb And case, already plus the what that point, as by samples, at already for asset to only but before, entire bring a In doors, plus It's bring

so, very reaction It's door been the a customer well opener. it's positive my and overall, it received really the of expectation been it. actually customer, And to exceeded

Catherine Schulte

Okay.

seeing you today, application about to from talked You've lot that are that conversion NGS. many serving How arrays? SNP from currently arrays switching a customers in

Emily Leproust

digits this very So five. it's at a small few – numbers less it's It's point. than

Jim Thorburn

get been close is on obviously early some very which working for we the when We've in inning. full time. in actually, fairly order And set expected. July, Yes. did that We're to we it

slightly our So, It's would plans. say tracking probably ahead. tracking we're on I based

Catherine Schulte

the be think what lastly, in and of might from do out you do before drug you we side, think then package monetize else you your Okay. terms can And just how you discovery data that capability far on need that?

Jim Thorburn

That's question. a great

So, have are find right functional. know they now, that we [Indiscernible] know we we ourselves

little will go long I of way. very bit think a NVivodata a

you area clinical where then that's candidate. it's we most a at focused NVivodata, point. well have are that Once the So of

Catherine Schulte

you. Thank Great.

Jim Thorburn

you. Thank

Operator

the further at back showing to not questions I'm turn any call this over time. our I'd like host. to

Emily Leproust

Kevin. Thank much very you

it's So, Bioscience. exciting an at to Twist be to conclude, time

As opportunities of we and synbio and year, and businesses the biopharma our our are our deliver storage. fiscal we to we in quarter genomics long-term into data growth of final across strong move investing continue

our the revenue With truly a execute great customers opportunities driven the to to team up well place change to world, DNA Thank to mission way our progress. stream long-term our date on on provide by We forward much. in toward to improve health a very growing very and are and you and support implementing keeping continued vertical our sustainability. we your you demonstrating market on sensitive ability aggregate appreciate look to plan,

Operator

this and Ladies gentlemen, today's presentation. conclude does

You may now disconnect and have a day. wonderful

Twist Bioscience (TWST) 4 Aug 192019 Q3 Earnings call transcript