Twist Bioscience's Q2 Results: Revenue Growth Amid Persistent Losses

Twist Bioscience (NASDAQ: TWST) has released its fiscal 2025 second-quarter financial results, offering a mixed picture of progress and challenges for the synthetic biology pioneer. While revenue surpassed expectations, the company’s net loss widened slightly, underscoring the ongoing balancing act between scaling operations and achieving profitability.

Financial Highlights
In the quarter ending March 31, 2025, Twist reported a net loss of $39.3 million, or $0.66 per share, slightly exceeding the average analyst estimate of a $0.56 loss. Revenue, however, rose to $92.8 million, outperforming forecasts of $91.9 million. This marks a 23% year-over-year revenue increase compared to the same period in fiscal 2024. The strong top-line performance reflects robust demand for Twist’s synthetic DNA products, particularly in healthcare, agriculture, and industrial applications.

Guidance and Growth Prospects
Looking ahead, Twist maintained its fiscal 2025 revenue guidance of $372–$379 million, aligning closely with analyst expectations of $376 million for the full year. The company also projected Q3 revenue between $94 million and $97 million, a modest increase from Q2’s $92.8 million. This cautious optimism suggests management’s confidence in sustaining growth, though not without hurdles.

Key Drivers: The Silicon Platform Advantage
Twist’s silicon-based DNA synthesis technology remains its crown jewel. By leveraging semiconductor manufacturing techniques, the company can produce DNA at scale and lower cost than traditional methods. This platform underpins its partnerships with pharmaceutical companies, agricultural firms, and sustainability-focused innovators. For instance, Twist’s DNA libraries are critical in drug discovery pipelines and biomanufacturing processes, areas with high growth potential.

The company emphasized its role in enabling breakthroughs such as mRNA vaccines and carbon-neutral biofuels, positioning itself as a cornerstone of the synthetic biology revolution. This strategic focus has driven order growth, with Q2 orders reaching $93.2 million—a 23% increase from the prior year.

Challenges Ahead
Despite the revenue momentum, Twist’s net losses persist, raising questions about its path to profitability. Operating expenses grew to $47.3 million in Q2, driven by R&D investments and infrastructure expansions. With a cash balance of $270.8 million as of March 2025 (per prior disclosures), the company has runway to invest in growth but must manage cash burn effectively.

Analysts remain concerned about margin pressures. While gross margin improved to 44.5% in Q1 2025, from 31% in Q2 2023, management aims to push this above 50% by late 2025—a goal requiring further cost optimization and pricing discipline.

Another risk is the competitive landscape. Cheaper DNA synthesis solutions from Chinese firms and tariff-related headwinds (e.g., in Canada and Mexico) could limit Twist’s pricing power. Meanwhile, its struggling biopharma division—reporting $5.9 million in Q1 revenue—remains a drag, though orders in synthetic biology and next-generation sequencing (NGS) continue to offset these weaknesses.

Investor Sentiment and Valuation
Twist’s institutional ownership rose to 112.29% as of Q2 2025, indicating robust investor interest, though the figure may include short positions. The stock’s market cap of $2.39 billion reflects optimism about its long-term potential. However, with a price-to-sales ratio of ~7.8x (based on trailing 12-month revenue), the stock trades at a premium to peers like Ginkgo Bioworks (NYSE: DNA).

Conclusion: A High-Risk, High-Reward Play
Twist Bioscience’s Q2 results highlight its ability to execute on growth while underscoring the challenges of scaling a high-tech biotech firm. The revenue beat and strong order backlog suggest that its silicon platform is gaining traction in key markets. However, the widening net loss and margin pressures indicate that profitability remains distant.

Investors should weigh these factors carefully. For those bullish on synthetic biology’s transformative potential—and willing to tolerate prolonged losses—Twist’s leadership position and strategic partnerships could justify the risk. For more conservative investors, the stock’s valuation and cash burn trajectory raise red flags.

Ultimately, Twist’s success hinges on executing its margin improvement roadmap and translating its technology into profitable partnerships. With a clear path to $375 million in annual revenue and a platform that could redefine industries, Twist remains a critical player in the synthetic biology space—a space that, if realized, could make its current losses a small price to pay.