Twist Bioscience: Profitability Unlocks AI-Driven DNA Demand

Twist Bioscience reported fiscal fourth-quarter revenue of $126.6 million, up 28% year over year, and achieved positive adjusted EBITDA for the first time. This milestone signals that the company's silicon-based DNA synthesis platform can generate cash flow as it scales.

The standout driver was AI drug discovery, where revenue surged 175% to $59.1 million as orders more than doubled. Customers using AI to design drugs need physical DNA and protein samples to validate their models, creating a recurring revenue stream for Twist.

Management is expanding its DNA writer fleet from 10 to 16 machines, which will boost daily capacity to over 50 million pieces of DNA. This infrastructure supports applications like molecular residual disease testing and custom gene synthesis.

With profitability achieved, Twist plans to reinvest cash flow into digital systems and production capacity rather than relying on external funding. For fiscal 2027, management guides revenue to $550–$560 million, implying ~21% growth at the midpoint.

Reaching adjusted EBITDA breakeven is a critical inflection point for Twist. It proves the business model works at scale and reduces the need for dilutive financing, giving management more flexibility to invest in growth.

The AI drug discovery segment is a powerful growth engine, growing 175% to $59.1 million and now representing a significant portion of revenue. As AI-designed drugs move into clinical testing, demand for Twist's synthetic DNA should remain robust.

Capacity expansion to 16 DNA writers positions Twist to meet rising demand across next-gen sequencing, gene synthesis, and MRD. This ahead-of-demand investment could widen its moat and drive operating leverage.

However, the stock is not without risks. Twist operates in a competitive market, and execution on capacity expansion and customer adoption will be key. The 21% growth guidance for FY2027 is solid but assumes continued momentum in AI drug discovery.