Twist Bioscience (TWST) Q1 2026: DNA Synthesis and Protein Solutions Jump 27%, AI Demand Fuels Margin Expansion
AI-driven discovery and platform leverage propelled Twist Bioscience to its twelfth straight quarter of revenue growth, with DNA Synthesis and Protein Solutions surging 27% and gross margin reaching 52%. The company’s semiconductor-based DNA synthesis model continues to scale efficiently, as recurring investments in commercial and digital infrastructure are matched by robust demand from pharma, diagnostics, and OEM partners. With adjusted EBITDA breakeven targeted for Q4 and a growing share in emerging AI-enabled markets, Twist’s focus shifts toward sustaining outperformance through disciplined reinvestment and ongoing market expansion.
Summary
- AI-Driven Volume Surge: Pharma and tech customers are ramping orders for protein expression and data characterization, driving new growth vectors.
- Margin Leverage from Platform Scale: 75% to 80% of incremental revenue now drops to the gross margin line, reinforcing operating leverage.
- Disciplined Growth Investment: Commercial and digital investments are accelerating revenue without derailing the path to profitability.
Performance Analysis
Twist delivered a standout quarter, underpinned by double-digit growth across both its DNA Synthesis and Protein Solutions (DSPS) and Next-Generation Sequencing (NGS) Applications segments. DSPS revenue surged 27% year over year, propelled by large pharma and AI-focused tech customers seeking high-throughput protein expression and data services. NGS Applications revenue also grew, with a notable 18% increase excluding a single large customer, and OEM and APAC distributor channels contributing incremental strength.
Gross margin expanded to 52%, up four points year over year, as volume growth and process improvements compounded the benefits of Twist’s semiconductor-based platform. Regional performance was broad-based: EMEA led with 36% growth, while Americas and APAC also posted gains. Therapeutics revenue jumped 39% as AI-enabled discovery became a key demand driver, and diagnostics revenue stabilized after a temporary customer air pocket. Operating expenses rose as planned, reflecting targeted hiring and digital investments, but adjusted EBITDA loss narrowed, confirming the scalability of the business model.
- AI Discovery Tailwind: Over 50,000 genes were manufactured for data characterization, with pharma and tech clients driving repeat, high-volume orders.
- OEM and Distributor Channel Strength: Global supply partner revenue increased 50% year over year, as new NGS partners and APAC distributors came online.
- Margin Expansion with Volume: 74% of incremental revenue dropped through to gross margin, demonstrating the efficiency of the platform as scale increases.
Twist’s diversified customer base and repeatable NPI (New Product Introduction) engine continue to convert platform scale into outsized financial performance, setting up for further growth as AI adoption broadens.
Executive Commentary
"Q1 provided a strong start to fiscal 2026 and expanded the pattern of consistent execution, marking our 12th consecutive quarter of revenue growth. This performance builds directly on the operating momentum established in fiscal 2025 and reflects trends that remain intact as we move through the year."
Dr. Emily Leproust, CEO and Co-Founder
"Gross margin came in higher than expected at 52.0% for the first quarter of fiscal 2026, an increase of approximately four margin points over the first quarter of fiscal 2025, supported by increasing revenue and our continuous process improvement efforts."
Adam Loponis, CFO
Strategic Positioning
1. Semiconductor-Based DNA Synthesis Platform
Twist’s core technology is a semiconductor-based DNA synthesis platform, enabling speed, scale, and quality that competitors struggle to match. This platform underpins all products, allowing the company to serve a growing number of customers and applications without adding operational complexity. As more volume is loaded onto the chip, financial performance and market reach improve, reinforcing competitive advantages.
2. AI-Enabled Discovery as a Growth Engine
The company is rapidly emerging as a key enabler for AI-driven drug and protein discovery. Pharma, biotech, and tech companies are leveraging Twist’s throughput to generate massive experimental datasets, compressing timelines from months to days. This segment, once negligible, is now material, with $25 million in AI-driven orders in fiscal 2025 and robust repeat demand in Q1.
3. Repeatable NPI Engine and Market Expansion
Twist has institutionalized a repeatable New Product Introduction (NPI) process, launching products across DSPS and NGS atop its core platform. This has expanded the serviceable market from $2 billion in 2020 to $7 billion today, with a clear path to $12 billion by 2030. The approach enables Twist to quickly address new applications—such as protein expression and antibody characterization—without diluting operational focus or margin structure.
4. Commercial and Digital Infrastructure Investments
Strategic investments in sales headcount and digital channels, including the launch of e-commerce for NGS, are designed to capture demand and future-proof the business. These investments are balanced between structural (permanent salesforce expansion) and transient (short-term digital projects), and are managed to avoid jeopardizing the EBITDA breakeven target.
5. Market Share Gains in NGS and Diagnostics
Twist is expanding its NGS applications market share, currently at about 7%, with a focus on oncology, rare disease, and diagnostic partnerships. The company expects the bulk of 2026 growth to come from existing partners, with new partnerships targeted to fuel growth beyond 2027. OEM and supply chain excellence are key differentiators in this segment.
Key Considerations
Twist’s Q1 performance signals a business scaling at the intersection of technology, operational discipline, and market expansion. The company’s ability to convert commercial wins and new product launches into margin-accretive growth is rare among life science tools peers.
Key Considerations:
- AI Adoption Accelerates Platform Utilization: Pharma and tech clients are fueling sustained, high-volume orders for data and protein solutions, validating the platform’s value proposition.
- Gross Margin Discipline vs. Growth Investment: Management is intentionally prioritizing top-line acceleration and capacity expansion over near-term margin maximization, aiming for long-term scale.
- OEM and Channel Diversification: Supply partner and distributor channels are expanding, reducing dependence on any single customer and broadening geographic reach.
- Execution on NPI and Commercial Ramp: The repeatable NPI engine and disciplined sales hiring are key to maintaining growth momentum as new markets emerge.
Risks
Key risks include potential over-reliance on AI-enabled discovery demand, execution challenges in scaling new digital channels, and the need to continually win new diagnostic partnerships for sustained NGS growth beyond 2026. Any slowdown in pharma or tech sector investment, or delays in ramping new partnerships, could impact the growth trajectory. Operating expenses are rising, and the path to profitability remains contingent on continued commercial execution and process automation.
Forward Outlook
For Q2 2026, Twist guided to:
- Total revenue of $107 to $108 million (approximately 16% year-over-year growth at midpoint)
For full-year 2026, management raised guidance to:
- Total revenue of $435 million to $440 million (16% growth at midpoint)
Management highlighted several factors that support confidence:
- AI-driven discovery orders are recurring, not one-off, and pharma customers are increasing reorder frequency.
- Gross margin is expected to remain above 52% as investments in automation and commercial infrastructure are absorbed.
Takeaways
Twist’s quarter demonstrates the power of a platform business model in life sciences, with AI adoption and channel expansion driving both growth and operating leverage.
- AI Demand Drives Durable Volume: High-throughput orders from pharma and tech are now a structural growth vector, not a temporary spike.
- Operational Model Scales Efficiently: Platform leverage is yielding high incremental margins, with disciplined investment supporting future growth and margin stability.
- Watch NGS Partnerships and Digital Ramp: Future growth will depend on continued NGS partner expansion and successful digital commercialization, especially as competition intensifies.
Conclusion
Twist Bioscience is executing a repeatable, margin-accretive growth model, with AI-driven demand and platform scale setting the stage for sustained outperformance. The company’s disciplined reinvestment and expanding serviceable markets support a credible path to profitability and continued market leadership.
Industry Read-Through
Twist’s results highlight the accelerating convergence of AI and life sciences, with high-throughput experimental data becoming a new bottleneck for drug and protein discovery. Platform-based infrastructure is emerging as a key differentiator, favoring companies that can deliver both speed and scale. For the broader industry, the shift toward data-driven, automated workflows will likely increase demand for integrated synthesis and analytics platforms, while OEM and channel partnerships become increasingly critical for diagnostics and applied markets. Competitors unable to match the pace of NPI and operational scale may face margin compression and slower growth as customers consolidate around best-in-class providers.