twst-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38720

Twist Bioscience Corporation

(Exact Name of Registrant as Specified in its Charter)


Delaware			46-2058888
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

681 Gateway Blvd, South San Francisco, CA 94080

(Address of principal executive offices and zip code)

(800) 719-0671

(Registrant’s telephone number, including area code)

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

TWST

The Nasdaq Global Select Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


Forward-looking statements		2
PART I. Financial information		4
Item 1.	Unaudited Financial Statements	4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s discussion and analysis of financial condition and results of operations	23
Item 3.	Quantitative and qualitative disclosures about market risk	28
Item 4.	Controls and procedures	29
PART II. Other information		30
Item 1.	Legal proceedings	30
Item 1A.	Risk factors	30
Item 2.	Unregistered sales of equity securities and use of proceeds	32
Item 3.	Defaults upon senior securities	32
Item 4.	Mine safety disclosures	32
Item 5.	Other information	32
Item 6.	Exhibits	33
Signatures		34


(In thousands except per share data)	December 31, 2023		September 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	266,269	$	286,470
Short-term investments	44,875		49,943
Accounts receivable, net	35,354		44,064
Inventories	30,863		32,063
Prepaid expenses and other current assets	12,870		11,716
Total current assets	$	390,231	$	424,256
Property and equipment, net	126,225		131,830
Operating lease right-of-use assets	69,093		71,531
Goodwill	85,811		85,811
Intangible assets, net	53,190		54,483
Restricted cash, non-current	2,847		2,811
Other non-current assets	5,418		5,681
Total assets	$	732,815	$	776,403
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,256	$	14,052
Accrued expenses	13,959		10,754
Accrued compensation	20,787		25,818
Current portion of operating lease liability	14,808		14,896

Other current liabilities	6,418		7,803
Total current liabilities	$	65,228	$	73,323
Operating lease liability, net of current portion	77,070		79,173
Other non-current liabilities	475		475
Total liabilities	$	142,773	$	152,971
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $0.00001 par value —100,000 and 100,000 shares authorized at December 31, 2023 and September 30, 2023, respectively; 57,779 and 57,557 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively	$	—	$	—
Additional paid-in capital	1,666,797		1,657,222
Accumulated other comprehensive income	(565)		(756)
Accumulated deficit	(1,076,190)		(1,033,034)
Total stockholders’ equity	$	590,042	$	623,432
Total liabilities and stockholders’ equity	$	732,815	$	776,403


	Three months ended December 31,
(In thousands, except per share data)	2023		2022
Revenues [1]	$	71,498	$	54,243
Operating expenses:
Cost of revenues	$	42,536	$	29,442
Research and development	23,099		31,242
Selling, general and administrative	52,840		42,324
Change in fair value of contingent considerations and holdbacks	—		$	(4,135)
Total operating expenses	$	118,475	$	98,873
Loss from operations	$	(46,977)	$	(44,630)
Interest income	4,120		3,040
Interest expense	—		(1)
Other income (expense), net	(31)		(157)
Loss before income taxes	$	(42,888)	$	(41,748)
Income tax provision	(120)		$	(76)
Net loss attributable to common stockholders	$	(43,008)	$	(41,824)
Other comprehensive loss:
Change in unrealized (gain) loss on investments	$	134	(868)
Foreign currency translation adjustment	57		(366)
Comprehensive loss	(42,817)		(43,058)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.75)	$	(0.74)
Weighted average shares used in computing net loss per share attributable to common stockholders—basic and diluted	57,497		56,444


	Common stock			Additional paid-in capital		Accumulated Other comprehensive loss		Accumulated deficit		Total stockholders' equity
(In thousands)	Shares	Amount
Balances as of September 30, 2023	57,557	$	—	$	1,657,222	$	(756)	$	(1,033,034)	$	623,432
Impact of ASU 2016-13 adoption (Note 2)	—	$	—	$	—	$	—	$	(148)	$	(148)
Vesting of restricted stock units	260	$	—	$	—	$	—	$	—	$	—
Exercise of stock options	58	—		951		—		—		951
Repurchases of common stock for income tax withholding	(96)	—		(2,424)		—		—		(2,424)
Stock-based compensation	—	—		11,048		—		—		11,048
Other comprehensive income	—	—		—		191		—		191
Net loss	—	—		—		—		(43,008)		(43,008)
Balances as of December 31, 2023	57,779	$	—	$	1,666,797	$	(565)	$	(1,076,190)	$	590,042


	Common stock			Additional paid-in capital		Accumulated Other comprehensive income		Accumulated deficit		Total stockholders' equity
(In thousands)	Shares	Amount
Balances as of September 30, 2022	56,523	$	—	$	1,619,644	$	(1,843)	$	(828,416)	$	789,385
Vesting of restricted stock units	124	$	—	$	—	$	—	$	—	$	—
Exercise of stock options	35	—		603		—		—		603
Issuance of shares associated with a business acquisition	1	—		—		—		—		—
Repurchases of common stock for income tax withholding	(38)	—		(999)		—		—		(999)
Stock-based compensation	—	—		(2,074)		—		—		(2,074)
Other comprehensive income	—	—		—		1,234		—		1,234
Net loss	—	—		—		—		(41,824)		(41,824)
Balances as of December 31, 2022	56,645	$	—	$	1,617,174	$	(609)	$	(870,240)	$	746,325


(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
Cash and cash equivalents	$	266,269	$	—	$	—	$	266,269
Short-term investments:
Corporate bonds	5,974		—		(3)		5,971
U.S. government treasury bills	38,852		58		(6)		38,904
Non-current assets - investment in equity securities	3,711		—		—		3,711
Total	$	314,806	$	58	$	(9)	$	314,855


(in thousands)	Level 1		Level 2		Level 3		Fair value
Assets
Money market funds	$	234,679	$	—	$	—	$	234,679
Corporate bonds	—		5,971		—		5,971
U.S. government treasury bills	38,904		—		—		38,904
Non-current assets - investment in equity securities	—		—		3,711		3,711
Total	$	273,583	$	5,971	$	3,711	$	283,265

Total financial liabilities	$	—	$	—	$	—	$	—


(in thousands)	Equity investments		Total
Balance as of September 30, 2023	$	3,711	$	3,711
Change in fair value	—		—
Additions during the year	—		—
Balance as of December 31, 2023	$	3,711	$	3,711


(in thousands)	December 31, 2023		September 30, 2023
Balance at beginning of period/year	$	85,811	$	85,811
Balance at end of period/year	$	85,811	$	85,811


	December 31, 2023
(in thousands, except for years)	Weighted average Amortization period in years	Gross carrying amount		Accumulated amortization		Net book value
Developed Technology	15	$	50,020	$	(8,451)	$	41,569
Customer Relationships	11	15,210		(3,864)		11,346
Tradenames & Trademarks	3	900		(625)		275
Total finite-lived intangible assets		$	66,130	$	(12,940)	$	53,190


(in thousands)	December 31, 2023		September 30, 2023
Raw materials	$	23,753	$	27,024
Work-in-process	2,390		1,113
Finished goods	4,720		3,926
	$	30,863	$	32,063


(in thousands)	December 31, 2023		September 30, 2023
Laboratory equipment	$	105,517	$	104,508
Furniture, fixtures and other equipment	3,575		3,484
Vehicles	129		85
Computer equipment	3,128		3,103
Computer software	8,813		5,507
Leasehold improvements	57,410		57,271
Construction in progress	5,259		8,528
	$	183,831	$	182,486
Less: Accumulated depreciation	(57,606)		(50,656)
	$	126,225	$	131,830

SEC Form 10-Q filed by Twist Bioscience Corporation