Welcome to the Twist Bioscience's fiscal 2022 third quarter financial results conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to turn the conference call over to Angela Bitting, SVP of Corporate Affairs and Chief ESG Officer. Thank you, operator. Good morning, everyone. I'd like to thank all of you for joining us today for Twist Bioscience's conference call to review our fiscal 2022 third quarter financial results and business progress. We issued our financial results release this morning, which is available at our website at www.twistbioscience.com. With me on today's call is Dr. Emily Leproust, CEO and Co-founder of Twist, and Jim Thorburn, CFO of Twist. Emily will begin with a review of our recent progress on Twist businesses. Jim will report on financial and operational performance. Emily will come back to discuss our upcoming milestones and directions. We will then open the call for questions. We've asked that you limit your questions to a maximum of two, and then re-queue as a courtesy to others on the call. As a reminder, this call is being recorded. The audio portion will be archived in the investor section of our website and will be available for two weeks. During today's presentation, we will make forward-looking statements within the meaning of the U.S. Federal Securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in our press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we cannot, at this time, predict the full extent of the ongoing impact of the COVID-19 pandemic and any resulting business or economic impact. We disclaim any obligation to update any forward-looking statements except as required by law. With that, I will now turn the call over to our Chief Executive Officer and Co-founder, Dr. Emily Leproust. Thank you, Angela, and good morning, everyone. During the third quarter, we continued to benefit from our position as a high quality, low cost leader, especially in the midst of a volatile macroeconomic climate. We reported record revenue of $56.1 million and almost $60 million in orders, with trends coming from both SynBio and NGS. Beginning with SynBio, we reported strong revenue of $22.1 million. While we did see some disruption coming both from China lockdown and COVID, we executed well from both a manufacturing and commercial perspective. As a reminder, we make all of our DNA in the United States, which provided an advantage over companies who make genes in China. Orders for the quarter were $20.5 million, a decrease sequentially due primarily to seasonality and a bit of softness from foreign exchange in Europe and overall consistent with our pattern last year. We have completed the build-out of our additional capacity in the San Francisco site, which allows us to produce over 200,000 genes per quarter, enabling us to meet the increasing demand for genes, in particular, while we bring on the Factory of the Future in Portland. We received temporary certificate of occupancy for the Factory of the Future in late June and are now in the process of bringing up the site. We will go through the standard process of IQOQPQ, which is Instrumentation Qualification, Operational Qualification, and Production Qualification. This is a process that we have gone through each time we move locations, so it's a familiar activity we've completed successfully three times. In the past, we physically moved the equipment from one site to another over a short period of time, usually a weekend, which is significantly more difficult than setting up a new fab with new hardware while running a 24/7 production schedule. This time, for the Factory of the Future, we're installing all new hardware while continuing operations in South San Francisco. We remain on track to generate initial revenue out of the Factory of the Future in January 2023. As a reminder, bringing this lab online will allow us to deliver DNA faster. Recall that there is a large market of people who currently make their own DNA because they needed it more quickly than is accessible today. With the Factory of the Future, we have the ability to significantly reduce our turnaround time to address this market opportunity. As a side benefit, we expect we'll be able to command premium pricing and better margin. We intend to begin operations with our SynBio product suite and work towards introducing genes with faster turnaround times shortly thereafter. For NGS, we reported revenues of $27.8 million and orders of $30.4 million. We forecasted a strong back half of the year for NGS, and this quarter is consistent with our guidance. The strength in NGS is driven by many factors, including scale-up of customers developing liquid biopsy as they prepare to launch a commercial test, our success in expanding within existing customers, and new business wins. During the quarter, we launched two new products for cancer research, the Mesothelioma panel and our product to support our customers in developing minimal residual disease test or MRD. These products build out our oncology offering and further differentiate us from our competition. For MRD specifically, we introduced a disruptive product that is customizable and highly cost effective with a rapid turnaround time. Unlike PCR or amplicon-based tests, which capture a few specific sequences. Our panel captures up to 500 sequences, is highly scalable and compatible with whole exome and whole genome protocols. To be clear, this work is incorporating into our customer workflow and must go through pilot testing, validation, and verification before scaling up for commercial use. We expect the revenue ramp to grow as customers go through this process. We have soft launched several new controls for monkeypox and the newer variants, sub-lineages of SARS-CoV-2. Importantly, we should continue the uptake of our circulating tumor DNA oncology controls, which we believe will be less dependent on public health cycles than respiratory controls. This product line as a whole has delivered consistent revenue and is a nice entry point into new accounts. This week, together with Biotia, we received expanded emergency use authorization for NGS assay for the identification and differentiation of SARS-CoV-2 Pango lineages, as well as the identification of specific genetic mutations. While we are more than 2.5 years into the pandemic, the virus continues to evolve, and our customers still need the most robust tools to respond. During the quarter and specifically at the ATCC conference in June, it was clear that the sequencing workflows are back, with new providers entering the market and bringing differentiated solutions. We believe that as the cost of sequencing comes down, it will continue to drive the upward trajectory of sequencing volumes overall. As it relates to Twist, for our NGS tools and specifically target enrichment, we expect demand to increase, particularly in applications that require deep sequencing like liquid biopsy and MRD. Importantly, our products work with a variety of sequencers for short and long read. We are sequencer-agnostic and look forward to the continued growth of this market. For Biopharma, we reported $6.2 million in revenue and $8.8 million in orders. Revenue increased significantly year-over-year, but is down sequentially primarily due to project delays and a few cancellations due primarily to budget constraints at specific customers, but we expect a strong Q4. We announced partnerships with Xilio in the United States and ILDONG in South Korea. We added six new partners for Twist Biopharma for a total of 53 partners. We initiated 11 new programs with 50 active programs ongoing as of June 30. We now have a total of 67 completed programs for Twist Biopharma. Of our 117 total active and completed programs, 55 have milestones and/or royalties. Twist Boston, also known as Abveris, has 70 projects underway. During the third quarter, Twist Boston signed seven new partnerships in addition to expanding existing relationships. With the pleasure of hosting an official ribbon cutting at our Quincy site, a streamlined facility that enables state-of-the-art individual antibody discovery work for our partners. Turning to Revelar, a company we spun out of Twist Biopharma with initial COVID-19 antibody assets. Their lead antibody candidates neutralize every then known variant of concern of the SARS-CoV-2 virus, including Omicron. Unfortunately, recent data shows that it does not neutralize the latest variant, BA.4/BA.5, though it may pair well with other treatments. At this time, Revelar does not intend to initiate a clinical study for the antibody and will seek a partner to move it forward. In April, we entered into research exclusive options and license agreements with Astellas for one of our Twist Biopharma-discovered antibodies. Under the terms of the agreement, we will work with Astellas to jointly conduct research activities to further identify and optimize proprietary Twist antagonist antibodies that target an undisclosed checkpoint inhibitor. Astellas has the exclusive option to license any development candidates generated as part of the collaboration. We are very excited about this partnership as it is our first out-licensing agreement. Astellas is a leader in immuno-oncology with its Keytruda and enfortumab vedotin, and it's a fantastic validation for the Twist Biopharma antibody discovery and optimization platform. Under the term of the agreement, Twist received an upfront payment, and upon exercise of the licensing option, Twist will receive an additional payment. We are entitled to receive success-based clinical milestones and royalties on product sales for each product developed under the agreement. This is a nice start for Twist, and will serve as an initial base to build on as we pursue larger and later-stage opportunities. Our biopharma team continues to advance multiple antibodies through the discovery and optimization path. Because we are target-agnostic, we have the capability to move multiple programs forward in parallel. In regard to the overall macro environment in biopharma and the more restrictive funding environment, we continue to find out that our current offerings resonate. We do see some projects pushed out a bit due to budget management, but in large part, we believe those projects are not going away. With differentiated approaches for antibody discovery, we see solid interest and engagement with both partners and potential partners. With a growing list of biopharma customers, our risk is diversified across a number of accounts and not dependent on just a few. For data storage, we continue to debug our fully integrated thermal chip with electronic controls at one micron pitch. Our objective is to synthesize up to a gigabyte of data in a single run. Once we are able to achieve the synthesis scale, we will introduce a commercial data storage solution for early access customers. To enable the fastest time to market, our Sanctuary archive will be offered as a storage-as-a-service solution. Initially, we will start with a writing service, which will extend into writing, storing and retrieving with pricing shared as we approach launch. As the technology matures and increasing automations can be realized, we expect to introduce an accessible archive solution targeted to our data center environments, which will be located on premises at hyperscaler sites. Earlier this week, we shared a new white paper detailing the enterprise data storage market from further market research. This report highlights the dramatic need for new enterprise storage technologies that can be deployed at massive scale with minimal power consumption. DNA data storage fits these features and has the opportunity to address the coming demand that will not be able to be served by current storage technology. For perspective, the unmet demand could be as large as 27 ZB of data in 2030. As a reminder, a zettabyte is 1 billion TB. A terabyte is the highest capacity available in an iPhone today. The report estimates that about 75% of all data will be archival data, growing from about 60% today. Key industry executive interviews indicated the need for indefinite storage of data, which means that they do not intend to delete data ever. DNA data storage is well positioned to meet this upcoming demand as a new storage media with the key features of density, permanence, durability, reproducibility, and universal read technology. In parallel with our technology development, we continue to make significant strides in building a market for DNA data storage. Last month, the DNA Data Storage Alliance became a technology affiliate of the Storage Networking Industry Association, known as SNIA. This is an important evolution of the alliance from an educational organization into a group that will also drive standard development that are required to build an interoperable ecosystem for the DNA data storage industry as a whole. Now, I'd like to turn it over to Jim to review our financials. All right. Thank you, Emily. We had another good quarter at Twist. Revenue for quarter three was $56.1 million, which is sequential growth of 17% and year-over-year growth of 60%. This brings our year-to-date revenue to $146.3 million. Orders were $59.7 million for the quarter, a sequential increase of 9% and 53% year-over-year, bringing our year-to-date orders to approximately $164 million. Gross margin for the quarter was 44.8%. We shipped to approximately 1,900 customers for the quarter and now have shipped to approximately 3,000 year to date. We ended the quarter with cash investments of approximately $528 million. Now I'll provide a deeper dive, starting with NGS. As we have highlighted on our previous calls, we anticipated a pickup in our NGS orders for the second half, and in the third quarter, orders rose to $30.4 million, an increase of 64% year-over-year and a sequential growth of 29%. This increase was primarily due to liquid biopsy as well as other clinical and diagnostic applications. During the quarter, we received orders from approximately 550 NGS customers, which is a decline from 750 in the previous quarter. This is due to fewer customers ordering COVID controls and, as noted on previous calls, that our COVID control revenue has not been material. The top 10 NGS customers placed orders of approximately $14 million or 48% of our orders, primarily due to pickup in our liquid biopsy customer demand. Our pipeline for larger opportunities continues to scale, and we're now tracking 249 accounts up from 231 noted in our last earnings call. 114 have adopted Twist, an increase from 104 last quarter. The increased orders flowed through, and our NGS revenue for the third quarter increased to $27.8 million, up sequentially 20% and an increase of approximately 50% year over year, with the top ten customers accounting for 50% of our revenue during the quarter. Now turning to SynBio. SynBio orders, which includes genes, DNA preps, IgG libraries, and Oligo Pools, declined sequentially to $20.5 million in the third quarter from $23.6 million. This is primarily due to a decline in clonal genes orders, particularly from big pharma, which we believe is mostly related to seasonality, and we had the same slowdown this time last year. Our SynBio product revenue for the quarter was approximately $22.1 million, up from $18.4 million, a 20% sequential increase and approximately 54% increase year-over-year. Some of the highlights include shipping to approximately 1,500 SynBio customers. Genes revenue was strong in the quarter and rose to $17.4 million, up from $14.2 million in the second quarter and $11.2 million in the third quarter of fiscal 2021. We shipped approximately 163,000 genes in the quarter, and that's up from 124,000 last quarter. Oligo Pools had a strong quarter, with revenue of $3.3 million, up from $2 million in Q3 FY 2021, with the increased demand primarily from the healthcare segment. Now to Biopharma. We continue to scale our Biopharma business, and orders rose to $8.8 million, from $7.8 million in the second quarter. Revenue for the quarter was $6.2 million, down from $6.6 million in quarter two, primarily due to project timing issues and five project cancellations, primarily due to budget constraints. For our Twist Biopharma antibody platform, we now have 53 partners, up sequentially from 47, and have 50 active programs with 67 programs completed and back in the hands of our partners. Of our total programs, 55 include milestones and royalty agreements. Our Abveris, our Twist Boston business, is doing well with 54 customer services in the quarter, including 37 projects on the Beacon platform. Please note, orders may not translate into revenue, but provide a trend line for each product group. I'll now cover our revenue breakdown by industry. Healthcare revenue in quarter three was $29.4 million, up from $17.4 million in the third quarter of fiscal 2021. Industrial chemical revenue in quarter three was $15.7 million, up from $9.4 million in the third quarter of fiscal 2021. Academic revenue in quarter three was $9.5 million, and that's up from $7.7 million in the third quarter of fiscal 2021. I'll now briefly cover our regional progress. EMEA third quarter revenue was $15.5 million as compared to $12.7 million in the third quarter of fiscal 2021. APAC continues to deliver robust growth, revenues increasing to $4.8 million, and that's up from $3.1 million in the third quarter of fiscal 2021. U.S., including Americas, revenue was $35.8 million in quarter three of fiscal 2022 versus $19.3 million for the same period of fiscal 2021. Now moving down the P&L. Our gross margin for the quarter was approximately $25.2 million or 44.8% of revenue as compared to 40% in Q3 FY 2021 and up from 38.3% in Q2. The increased gross margin reflects the impact of higher revenues, in particular higher NGS revenues, and thus leveraging our fixed cost. Also note, the Factory of the Future startup costs are recorded in G&A, and COGS includes stock-based compensation of $1.2 million and depreciation of $1.7 million for the quarter. Now to operating expenses. Our Q3 operating expenses, which includes R&D, SG&A, and change in fair value and mark-to-market adjustments of acquisitions, was approximately $86.3 million as compared to $79.2 million in quarter two. To break it down, R&D for the quarter was $36.8 million, an increase from $31.2 million in quarter two, and that's primarily due to increased spend associated with Biopharma, which includes Abveris and Revelar, and also increased data storage and NGS spend. SG&A in quarter three was $53.7 million as compared to $54 million in quarter two. Startup costs for the Factory of the Future included in G&A expenses were $4 million in quarter three, and that's up from $2 million in quarter two. Change in fair value of contingent considerations and indemnity holdbacks for the quarter results in a gain of $4 million versus a gain of $6 million in quarter two. Stock-based compensation for quarter three was approximately $20 million. Depreciation was $3.1 million for the quarter. Amortization was $1.4 million, primarily associated with acquisition, amortization and intangibles. Our net loss before tax was approximately $51.2 million as compared to $6.8 million for quarter two. CapEx for the quarter was $40 million, including approximately $30 million for the Factory of the Future. This now brings our Factory of the Future CapEx investment to approximately $73 million. Given the global supply chain challenges, we've been strategic about investing in our inventory, which remains at approximately $43 million compared to $45 million at the end of quarter two. We ended the quarter with cash investments of approximately $528 million, and I'll now provide updated financial guidance for fiscal 2022. We enjoyed strong bookings in the quarter. However, due to seasonality and as more SARS-CoV-2 variants continue to emerge, we're projecting our Q4 revenue to be approximately $56.5 million, which brings our revenues for the year to be approximately $203 million, and that's up from previous guidance in the range of $191 million-$199 million. SynBio revenue in quarter four is estimated to be $21 million, sequentially down from Q3, which we noted earlier was particularly strong, combined with lower Q4 revenue expectations in EMEA. Our SynBio guidance for the year is now $80 million, which is up from previous guidance of $71 million-$73 million. NGS revenue is estimated to be $27 million in quarter four, and our total revenue is now projected to be approximately $97 million for NGS, and that's up from our previous guidance of $94 million-$96 million. Biopharma revenue, including Twist Boston, is estimated to be $8.5 million, and our Biopharma revenue guidance for the fiscal year is expected to be $26 million as compared to our previous guidance of $26 million-$30 million. Our FY 2022 gross margin is projected to be approximately 40%. Operating expense, which includes R&D, SG&A, and mark-to-market, are expected to be approximately $330 million for the year, including $125 million in R&D expenses. That's down from our previous guidance of $130 million. Mark-to-market for the year is projected to be $12 million favorable. Factory of the Future startup costs included in SG&A are projected to be $12 million for the year. Our net loss guidance for the year will be approximately $250 million, which includes stock-based comp of approximately $80 million, depreciation of $14 million. Amortization of intangibles is projected to be $5 million. CapEx for FY 2022 is projected to be in the range of $95 million-$100 million. As we highlighted on our last call, we're focused on managing our cash and scaling our core business to $300 million in annual revenue and adjusted EBITDA to break even. We have line of sight on scaling our Biopharma business to adjusted EBITDA breakeven at $80 million in annual revenue and believe we have the cash runway to achieve both. With that, I'll turn the call back to Emily. Thank you, Jim. To echo Jim's comments, we remain focused on driving toward profitability. Specifically for SynBio, we are focused on bringing in the Factory of the Future outside of Portland, Oregon, with initial revenue generated from this facility in January 2023. For NGS, moving into our fourth quarter with $30 million in orders sets the stage to finish the second half strong. We will continue to focus on penetrating within existing customers, offering differentiated products and expanding our market share as we seek to own the market between the sample and the sequencer, particularly in the areas of liquid biopsy, MRD, and RNA. In Biopharma, we expect to have partnerships, programs, and move up the value chain both for our service offerings and for our internally generated antibodies. As we get closer to the earn-out for the Boston team, we are planning an integrated portfolio of antibody discovery and optimization offerings, capitalizing on efficiencies and showing that one plus one equals more than two. The combined solution truly differentiates Twist from the rest of the pack, and we look forward to cross-selling as well as broadening our reach following the earn-out period. In data storage, we have a roadmap to reach terabyte scale. We have our first fully integrated CMOS chip with electronic control in-house and are actively building the system to achieve synthesis up to 1 GB of data in a single run. We will continue to drive market awareness while actively participating in the development of interoperability standards for the industry. Overall, while we cannot control the overarching macro environment, we have a differentiated platform technology in our silicon-based DNA synthesis process. We have an exceptional team who comes to work every day to be the best. We have a plan to reach adjusted EBITDA breakeven for the core business without accessing the capital markets again, and we have tremendous opportunities ahead to grow our market share in each area to introduce new products and to truly disrupt markets. With that, let's open up the call for questions. Operator? Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Matt Sykes with Goldman Sachs. Your line is open. Hi, good morning, Emily and Jim. Thanks for taking my questions. Maybe the first question just on the Biopharma business. I know the full year guide is coming at the low end of your kind of previous guidance. You guys talked about some project cancellations due to budget constraints, but also about trying to shift into later stage programs. Could you talk about sort of your mix of, you know, potential emerging biotech targets and their funding issues, and do you expect additional project cancellations? Secondly, you know, what is the strategy to kind of move into later stage for Biopharma, and how do you think that plays out from a timing standpoint? Yeah, thank you, Matt, for the question. As you're aware, there's a little bit of macroeconomic headwinds where the funding for a private company in biotech is a little bit more difficult now than it was a few quarters ago. We have seen a little bit of that. However, we have a very strong and differentiated offering. We have a large number of partners. We are not as sensitive as if we only had a few partners that had issues. The combination of our offering and the breadth of the people we are talking to insulates us a little bit. As a reminder, we are the high-quality, low-cost leader. We are the leading edge of antibody discovery. The offering that we have still resonates quite a bit. As far as your second point, what we have seen on the biopharma side, the historical Twist antibody discovery is that we have been able to secure milestone royalties, which means that we're able to participate a little bit more into a little later stage value add. We have not done that yet with the Abveris team, the Twist Boston that we brought in. Historically, that's not what their business was doing. Now we can apply some of the learnings of how to approach commercialization of our services from the Twist Biopharma, the original one. We can apply those learnings to the Twist Boston and participate more in the downstream economics. Like you said, there'd be some timing to it, but it's on the side that we'd like to start capturing. Great. Thanks for that, Emily. Kind of like a similar version of the first question, but taking the other side of it, and you kind of mentioned a little bit. Just given your scale and cost advantage, not just in biopharma, but probably more importantly in SynBio, and given the kind of cost containment environment that we're in, how do you feel Twist is competitively, you know, advantaged in this space, given the fact that you can probably provide your customers cheaper materials at a larger scale? Do you think that will resonate if this, you know, cost containment environment continues into 2023, and do you feel like you're well positioned in that area? Absolutely. On the SynBio side, that is definitely a strong selling point. We've always been significantly less expensive than our competitors with exceptionally high quality, same or higher than the competition. There were some segments where that resonated really well. If you look at the Ginkgo Bioworks of the world where their approach is to try more data points to get an advantage, they're having a vendor, Twist, a partner with a lower price per gene, and that is extremely advantageous to that business model. There we were already being strong. On the Biopharma side, frankly in our interactions in the past with some biopharma company, they were telling us, "Oh, you know, budget not an issue." Now budget is an issue for them. For that segment, the biopharma segment where they buy our tools, so DNA library tools, libraries, IgG, the MRD products that we've already had, are essentially resonating. Definitely a much bigger impedance match than on the biopharma services. Services are always a bit more expensive. They are somewhat premium pricing. on the SynBio side, there's definitely a perfect match between what the researchers are feeling on their pinches on their budget, or the perception of future pinches on their budget and the product that we have that really stretches their dollar and enable them to get more and better data for a fixed budget. Great. Thanks for taking my question. We have a question from Vijay Kumar with Evercore ISI. Your line is open. Hey, guys. Thanks for taking my question. Congrats on the 3Q brief here. Maybe Jim, one on the guidance here. A look at the gross margins in 3Q, really strong, but the guide implies Q4 a step down. Your book-to-bill came in a little low. You implied Q4 revenues, see, you know, implies flattish Q- on- Q. Was there any timing of revenues that benefited in 3Q? Or maybe just explain what drove the strength in 3Q from the revenue and gross margin perspective. Good question, Vijay. We had a really strong quarter. Revenue was strong, particularly in NGS, and you know, overall SynBio revenue was also good. We do have seasonality, primarily driven by EMEA. You saw the same step down last year in orders. So when we're putting together the plan based on the view in terms of where we see some of the European countries in terms of the vacation period, so we're prudent in terms of our forecast for the quarter. We're very mindful of what's happening with the new COVID variants. So as we thought about our guidance, we thought we'd give prudent guidance for the quarter. Overall, NGS continues to do well. The pipeline continues to grow. As we highlighted, I mean overall NGS, you know, the orders for the first nine months are now $76 million, so very strong. We saw a very strong pickup in orders in Q3. Some of that translated into revenue in Q3. I mean, our view is that we'll see a good solid Q4, and we put together a prudent guidance just based on the seasonality. That's extremely helpful, Jim. Emily, one for you on data storage. If I just understood you know, we're now at the alpha chip stage, is that right? What are the hurdles, I guess, going from alpha to beta? Is that a technological hurdle, or maybe just lay it out to us, on what needs to be done and how much risk is there on this project? Yes. Thank you, Vijay. Great question. On the data storage, the way I look at it, there's three components. One is the bottom side of the silicon chip, so the CMOS logic. Then there's the top layer of the silicon chip where the DNA is made. Then there's the chemistry that we are going to deploy and then we have to get all of those three components to work together. The CMOS section, which is very complicated, very advanced silicon technology, is very similar from the alpha chip to the beta chip. Getting it to work gives us massive confidence for the beta chip. What has to mostly get developed from the alpha to the beta chip is the top layer of the silicon chip, which from our analysis has substantially less risk. Now that we have been able to get the chip working at 5 micron, we are in the final stages of debugging a 1 micron chip, we believe it will be relatively straightforward. It still takes some time, but there's not a lot of miracles that need to happen. It's just serious engineering to go from the alpha to beta. Just to put things in perspective, the chip we have is at 1 micron pitch, and we have 256 million features as a silicon chip. Just in the recent past, one of our competitor, DNA Script, released a paper about their progress on data storage, and their silicon chip has 256 features, but we have 256 million features, and their feature size is 100 micron. And our feature size is 1 micron. Hopefully it gives you the perspective of the leaps and bounds how we are you know leaps and bounds away from what others are doing. That's helpful. Thank you, guys. One moment. Our next question comes from Luke Sergott with Barclays. Your line is open. Hey, this is Jacob Putman in for Luke today. Thanks for the question. On Factory of the Future, can you give a sense of the backlog that you're seeing there and how quickly the new capacity is gonna fill and contribute to revenues? Will it be all at once or in steps? I can start. Thanks for the question. You know, Factory of the Future, we're going through qualification right now, and we anticipate over the rest of this year, we'll start to do the initial debugging and testing and running initial runs. We don't start shipping revenue until early next year. You know, this quarter we had a really solid quarter in terms of orders, NGS and SynBio. We've increased our capacity in San Francisco. We're well poised to grow the business and we're really well positioned to see the impact of the Factory of the Future next year as we start to record revenues in January 2023. That's really helpful. Thank you. Just one more, if you don't mind. Could you update us on what's going on in China and what's happening there from a share dynamic, how big the business is and what the mix is like? Yeah. For China, we had, as we indicated in the earnings call, we had another strong quarter in Asia. Our actual China business revenue is about $1.7 million, slightly, I think, it was flat with last quarter. Last year, last fiscal year, revenue for China was $4 million. This year we're anticipating revenue for $7 million. Although, obviously the Chinese market has been impacted, we've done an exceptionally good job of being able to service our customers. We're continuing to be optimistic about our opportunities in China and Asia, where we're doing extremely well in terms of gaining customers in Korea and Japan and other countries. That's perfect. Thank you so much. We have a question from Puneet Souda with SVB Securities. Your line is open. Hi, Emily, and Jim, thanks for taking the question. Just a couple from me. In biopharma, you know, given the cancellations that you're seeing and maybe, you know, fewer customers given the smaller biotechs, do you think this pushes out timeline to get a product into the clinic or into the phase one? You know, more importantly, what are you doing in that business now to ensure that you strengthen the funnel, the incoming funnel for projects again? Because I assume that, you know, the guidance reduction that you have is related to that, but there were a number of other smaller biotechs that are under pressure that could potentially cancel those projects as well. Just wondering, you know, what are you doing in that business to ensure that you have a stronger funnel for 2023? Well, thank you. Great question. The first question, whether it delays having a Twist antibody in the clinic. As a reminder, once we are done with our work, we give the antibody to the customer. The customer does the preclinical development, and then it goes into the clinic. As a reminder, we don't have really any impact at all on the timing of those programs. We don't have also a lot of visibility to that. However, we do know that some Twist DNA is very close to going into the clinic and we look forward to celebrating that milestone when it happens. It is possible that some of the partners to whom we've given back antibodies and that we're planning, that we're in the process of the IND, it is possible that some of those programs have been rationalized. Again, we have absolutely no visibility to that. On your second question in terms of what are we doing, actually, we have a very nimble and leading edge R&D team, both in biopharma in San Francisco as well as in Twist Boston in Boston. Based on the recent dynamics in the market, they actually have developed a slightly different product offering that leverage all of the infrastructure that we have, but that are slightly more in tune with what researchers are looking for at the moment. Especially at Twist Boston, we have new offerings that where maybe the cost of what we're offering is a little bit lower to the customer. Interestingly, when we look into the process, it has a better margin for us. Early indications are that that is also resonating with customer. There's an opportunity to maybe get a little bit less revenue per project, but have some product line in addition to what we already had that is potentially resonating for a market that is newly price sensitive. We are definitely continuing to innovate to be very close to what the customer need, understand their need and be able to respond with best-in-class services that responds to their scientific need and that fits their budget and that fits our financial milestones in terms of the margin profiles that we want to achieve. Got it. That makes sense. For Jim, I mean, on gross margin came in strong this quarter. You're guiding to a number that is higher than what we had for the year. I mean, when we think about a Factory of the Future you're coming online, shouldn't that impact gross margins at least, you know, initially in 2023, and how should we start, you know, think about gross margin, you know, cadence here over the next couple of quarters? Yeah. Good question, Puneet. Yeah, I mean, as we launch the Factory of the Future, we're gonna underutilize capacity that will impact gross margin. However, our line of sight is to scale the Factory of the Future as quickly as possible. When we're targeting $300 million revenue adjusted EBITDA to break even, I mean, our gross margin target there is about 51%. As we continue to scale the business, we're looking at gross margin range of 55%-60%. I think it's notable this quarter that we achieved gross margin 45%. When you look at adding back depreciation and stock-based comp, you know, you can figure out the math for the cash gross margin. The setup is extremely strong for us. I mean, our goal is to scale Factory of the Future as quickly as possible. We haven't broken out the guidance for next year yet, and we'll do that on our earnings call, our next earnings call. Got it. Then on the EBITDA guidance, that's for $300 million. Does that include only, just to be clear, that includes only NGS and SynBio or? Yeah. As we said in the call, that's for NGS and SynBio, that's our core business, the $300 million. Also, we're targeting adjusted EBITDA to break even at $80 million for our Biopharma business as well. Got it. Okay. All right. Thank you. Thanks, Jim. Our next question comes from Matt Larew with William Blair. Your line is open. Hi, Jim. Hi, Emily. This is Max on from Matt. Appreciate you taking our questions. I wanted to follow up on Vijay's first question, specifically asked about the massive gene shipments number this quarter. Is there anything that we should be aware of there in terms of large one-time orders? In terms of the guidance for SynBio revenue in 2023, your updated guidance for this year I think calls for over 50% growth, and you've been pretty clear that you had the potential to grow twice as fast as the market. Is it fair to think about SynBio growth potentially being up, you know, close to another 50% next year? Or just in general, how are you thinking about the outlook for SynBio moving forward? Yeah. Why don't you go, Emily? Maybe I'll take the first part. You take the second part. On the first part on the gene volume, if you recall, we talked about capacity in two axes. One is total capacity, and then the second is served capacity. You know, as management, what we have to do is predict volume. We could see a few quarters ago that not only the total demand was growing, but this was a sales demand, where there were big orders once in a while coming, where happening. That's why we decided a few quarters ago to increase capacity in San Francisco before we had the Factory of the Future, because we knew that if we didn't do that, there could be a point where we may not have the capacity to say yes to those big orders coming in. That's what I think we do well as a management team is anticipate the need and execute really well. That's what we did. The team built extra capacity. Indeed, that's what happened. There's been a few big orders coming in, and those are very lumpy. They've been great for amortizing the fixed cost. We're able to take them, book them, ship them in great turnaround time. The expectation is that this will continue. It's hard to predict, are they going to come in this week or three weeks from now? Now there is multiple customer that come in regularly with very big orders. That's one of the things we have to plan for it. Again, not just the total capacity, but the surge capacity. Jim, maybe I'll turn it to you for the second part of the question. Max, if you just step back, I mean, we're the low cost provider in the market. You know, when we bring on Factory of the Future, we're gonna have very fast turnaround. This macroeconomic environment is a great setup for us. You know, SynBio, you know, it's interesting, SynBio orders year to date are $6 million. You know, as Emily highlighted, we have increased capacity in San Francisco, and we're excited about the potential opportunities to continue to scale up in Factory of the Future and really bring a tremendous platform to the market. You're right, we're growing twice as fast as the market. I mean, our view is that we're gonna continue to aggressively expand. Got it. Thank you both for the color. That's very helpful. I wanted to turn to NGS. Jim, I think you mentioned during the call that the strength in NGS was driven by a pickup in liquid biopsy revenue. Last quarter you had mentioned that you're working with more than 20 companies developing liquid biopsy tests. Just as a first part, do you have any update on this figure in terms of how many companies you're working with today? Any detail you can share around how many of these customers are actually in production versus pilot and validation. What have you learned about how volumes from these liquid biopsy developers scale over time as they move towards commercialization? Yeah. Very strong quarter. As we highlighted, the second half of this year, we're gonna see a step up in NGS that happened in Q3, and that was driven primarily by liquid biopsy. Number of customers we're dealing with is roughly around the same. Overall setup is we continue to expand the large customers we're dealing with. The number of adopters continues to scale. We're seeing tremendous opportunities. You got all these new platforms coming in the marketplace. What that means is there's more opportunities for Twist. I think the setup for us on NGS, whether it's liquid biopsy or other applications is really looking good. I mean, we've got great product and we've got great team and, you know, it's really nice to see that orders this last quarter are $30 million. We're very optimistic in terms of where this business is going. Got it. Thanks again for taking our questions. We have a question from Catherine Schulte with Baird. Your line is open. Hi. Thanks for the questions. I guess first on NGS, great to see the orders picking up there. Were there any one-timers in that order book or in revenue for the quarter? Then guidance assumes that revenue there is down slightly quarter to quarter despite that uptick in orders. Jim, it sounds like you said some of those orders turned into 3Q revenue, but any color on the moving pieces there sequentially? I mean, there was a pickup in terms of the business, but by customer, we did see some large orders come in, but that's driven by liquid biopsy and that's driven by the nature of the demand from those customers. The small sequential decline in Q4 from Q3, I mean, that's really driven by seasonality and mainly driven by seasonality in EMEA. We're just being prudent in our guidance there. We did see a big jump up from Q2 to Q3 in business and, you know, the pipeline continues to scale and at the same time we're being prudent in our forecasting. Okay, great. I was hoping you could give some more color on the Astellas out licensing agreement. You know, what are the next steps there? And any key steps in the timeline that, where we should expect to hear updates on how that's progressing? Yeah. Maybe I'll jump in. The business terms have been agreed to and announced. Now we are doing biology, basically. We're doing the work that we do at Twist. The path to the next steps from a scientific point of view is extremely well-defined and has been extensively agreed to in the contract. It's all about going through those scientific steps and delivering the milestones that we agreed to Astellas and then start booking some of the more downstream milestones. We're very excited about it. It's a great template for what we want to do more of. Great. Thank you. We have a question from Steven Mah with Cowen. Your line is open. Oh, great. Thanks for taking the question. A lot of ground already covered, so I'll keep it quick. But yeah, maybe just to continue on the Astellas license agreement. Just wondering how, you know, how has your pipeline discussions evolved post Astellas, given that it was, you know, validating partnership in a hot area in oncology. Has that increased the number of inbound deals you guys have been getting? Yeah. So, you know, we've had a very robust business development team and approach to adding more deals like Astellas. If you follow some of the industry conferences, for the first time last year in 2021, we had a significant presence at BIO. We did that again this year. As you probably know, BIO is where a lot of those business development discussions around deals happen. We can definitely see that the level of engagement gets more and more robust over time. Definitely that deal is a great win in itself to engage further with other partners on other targets that we have. Okay, great. That's helpful. My second question is, you know, given this macro environment where people are trying to conserve cash, has that impacted the calculus on new partner deal structures? That is, you know, are you seeing less upfront payments, for instance, and then, you know, more back-end economic weightings? You know, what kind of trends are you guys seeing there? That's not our business model. We're not in the business of subsidizing someone else's work. So far, we have been, you know, very steady in the pricing and actually the pricing increased from last year to this year. We haven't been trading gross margin for more downstream later. We have not been doing that. I don't think we have any plans to do that. Okay. That's really helpful. Thanks for the questions. Thank you. There are no other questions in the queue. I'd like to turn the call back to management for any closing remarks. Thank you very much for joining us today. Our team continues to execute across the board, and we have a path to adjusted EBITDA breakeven with significant opportunities in SynBio, NGS Biopharma, and Data Storage. We look forward to seeing some of you in person at the UBS conference in Southern California and the Baird conference in New York. With that, I will close the call. Thank you so much. Callers, thank you for participating. You may now disconnect.