Welcome to Twist Bioscience's fiscal 2023 Fourth Quarter Financial Results Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Please be advised that this call is being recorded. I would like to turn the conference call over to Angela Bitting, Senior Vice President 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 2023 fourth quarter and full year 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 are Dr. Emily Leproust, CEO and co-founder of Twist, and Jim Thorburn, Acting CFO of Twist. Emily will begin with a review of our recent progress, and Jim will report on our financial and operational performance. Emily will come back to discuss our upcoming milestones and direction. We will then open the call for questions. We would ask that you limit your questions to only one and then requeue 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 the 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 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, Dr. Emily Leproust. Thank you, Angela, and good morning, everyone. Fiscal 2023 was a year of growth and strong execution for Twist. We grew our business with revenues increasing 20% year-over-year. We completed internal integration of our biopharma group, and we implemented strategic action to align our cost structure aimed at optimizing our operations with a clear focus on increasing gross margin along our accelerated path to profitability. We invested in our best-in-class innovation to set the stage for near and long-term success, and now we are focused on profitable and scalable growth moving into fiscal 2024 and beyond. Getting into the specifics for the first quarter, we grew revenue to $66.9 million and $245.1 million for the full year, exceeding our updated guidance for the quarter and the year. Our gross margin was approximately 37% for both the quarter and the year, and we ended the year with approximately $336 million of cash, cash equivalents, and investment. Across the business, our efforts over the last 24 months in building the Wilsonville facility, expanding our production line, and streamlining workflows are now benefiting both our SynBio and NGS product lines to allow us to deliver what our customers need. Within our factory in Wilsonville, we have analyzed each process in the SynBio workflow to remove excess time, and our production data shows that we are able to turn genes around in six business days consistently. This is an incredible feat and one that required all hands on deck to optimize every process and procedure. This robust workflow now allows us to make more SynBio products in less than half the time we could even one year ago. On Tuesday, we launched Express Genes, what we previously called Fast Genes. This is the first product that will directly benefit from, and has been made possible by, the time and infrastructure investment in our Wilsonville facility. With Express Genes, we have the opportunity to increase contribution margin for the SynBio product group, as well as our overarching gross margin. I'd like to note four important things about how the launch of Express Genes impacts our business. First, this is our clonal gene service, our bread and butter of the SynBio products. About half of our clonal genes order qualify for this Express Genes service today, with an eye towards expanding to the majority of clonal genes ordered moving forward. Genes that do not qualify for express service will continue to be ordered standard speed and will be priced starting at $0.09 per base pair. For Express Genes, it is the same great product delivered faster, and so we charge a premium price for that speed. The price will be dynamic based on how full the fab is. Second, all genes, whether standard or express, will be manufactured on the same manufacturing line. This is a streamlined, highly automated process where all genes go through the same steps. Standard genes will either wait before or after synthesis, as we will use standard genes to maximize capacity utilization. This is similar to how airlines use standby passengers to run planes that are as full as possible. Third, with higher revenues through premium pricing for Express Genes, we expect to see margin improve. Our objective with pricing is to expand our market opportunity significantly into the makers market, as well as capturing additional customers within the buyers market. This means that our offering must resonate as a cost-effective alternative to customers making and cloning the genes themselves. Working with pricing experts, our initial dynamic price range is designed to optimize our pricing in the way that will not alienate existing customers. At the same time, we expect to increase our margin from this differentiated product line while serving a large unmet need for our current and future customers. Fourth, because we are making all genes at express speed, our genes capacity for our recent site is now close to double compared to the 10-day turnaround time production timeline. That's a strategic and key point that allows us to continue to scale. Also note that we've implemented the improvement in turnaround time throughout the SynBio product line, so our gene fragments can now be delivered in as few as two business days and Oligo Pools in as few as three business days. For F ragments and Oligo Pools, we are pleased to offer these products at competitive pricing without the premium. The enhanced speed and efficiency of our operations has allowed us to gain a stronger foothold in the market while maintaining healthy contribution margins for these product lines. With the successful launch of Express Genes, our aim is twofold: to scale up our gene volume with existing customers and to attract new customers, thereby expanding our market reach. In the initial phase of launch, we are directing our efforts towards our current customer base. Once we know the workflow is tried and true, we will amp up our marketing efforts, targeting customer conversions from competitors, as well as new customers who have not yet used Twist for their clonality needs. As we run Express Genes, we expect the book-to-bill ratio will essentially approach one, as there are so few days between order and delivery. As such, orders for SynBio becomes less informative. The trend to watch will be revenue growth in SynBio. Importantly, the speed of Express Genes unlocks additional applications, including long genes, complex genes, additional IgG antibodies, as well as mRNA production. So not only are Express Genes an opportunity to increase margin and take market share, but they also lay the foundation for growth into the future. Moving to NGS. Over the course of the year, and particularly in the fourth quarters, we saw the work we have done with customers to optimize their workflow over time, beginning to pay off. Several key customers are now scaling production for validation and commercialization. In addition, we see strength driving into the middle of the market. We see an increasing number of customers using our RNA- seq workflow, and several customers are implementing our minimal residual disease or our MRD workflow. We believe both of these product groups validate our innovative approach to develop and commercialize products that our customers need. At a high level, our Life Science SynBio and NGS products grew at more than 23% year-over-year. Production is ripping. As we think about our trajectory towards profitability, we believe we have set ourselves up for success. We have momentum going into fiscal year with the launch of Express Genes and the ability to unlock future product lines. We have NGS traction with the top and middle of the market, as well as initial RNA- seq and MRD uptake, and an energized team that is committed to driving the business forward towards profitability and scalable growth. As a management team, we have a strong track record for executing against our strategy, growing our customer base, and driving best-in-class product innovation. We are now laser-focused on increasing our gross margin and driving towards profitability. Turning to Biopharma, we have effectively addressed our internal integration challenges, and as of early October, our commercial team was fully staffed with all territories covered. We've shared that it typically takes about six months for a new representative to come up to speed, and orders for Biopharma directly translate into revenue in a three to six month timeframe. For the fourth quarter, orders increased quarter-over-quarter for the first time this fiscal year. We see this uptick as a positive sign of health for the overarching Biopharma Services business. Of note, the majority of our orders came from large pharma. The last few months, we announced agreements with Ono Pharmaceutical, Bayer, and more, and we are cautiously optimistic that the fourth quarter of 2023 will represent the low point for Biopharma revenue, as the spectrum for SynBio all the way through Biopharma services is gaining traction. The Biopharma group continues to provide strategic advantage, allowing us to utilize our SynBio products, including genes, fragments, Oligo Pools, libraries, and IgG antibodies, all the way through to antibody discovery, optimization, and humanization services, differentiating us from our competition and providing upside through potential milestones and royalties. Our acquisition of Abveris broadened our offering beyond synthetic libraries and enabled in vivo discovery through animal models. This has been integral in extending our comprehensive offering. Now, fully integrated Biopharma provides a full menu of in vivo, in vitro, and in silico services to our customers. This means that we have a powerful, comprehensive offering that is able to meet varying customer needs under one roof. For example, our large pharma and biotech customers often pick and choose from a broad menu based on their needs, whereas smaller companies often benefit from a full end-to-end offering. Finally, our in silico services enable us to provide more sequences and hits for our customers in vivo and in vivo projects, which maximizes their chances of success. For data storage, we have made progress in our approach to enzymatic synthesis for this application. We're working to implement an industrial-grade codec, the encoding and decoding algorithm, with a large industry partner. We remain on track with our plan to demonstrate an end-to-end gigabyte Century Archive workflow by the end of December, with the early access launch of a terabyte Century Archive solution expected in calendar 2025. On the corporate side, we added a key operational leader in Mark Buck as our SVP of Operations. He brings a military background as well as deep expertise in supply chain, quality, and production. At his prior company, he was responsible for 21 production facilities, and we look forward to the perspective he brings with respect to optimizing our operations further for scale and improving gross margin. With that, I'll turn it over to Jim. All right. Thank you, Emily. We're happy to report we hit another record in orders and revenue for our fourth quarter and full fiscal year 2023. I want to thank all our Twisters, customers, and partners who made this possible. Revenue for quarter four grew to $66.9 million, which brings our revenue for fiscal year ending September 30 to $245.1 million, as compared to $203.6 million in fiscal 2022, and that's year-over-year growth of approximately 20%. Orders increased to $71.1 million for the quarter, bringing orders for the year to approximately $264 million, and that's year-over-year growth of 17%. Gross margin for the quarter increased to 36.6% and was 36.6% for the year. We also increased our customer base to approximately 3,450, and that's up from 3,300 in fiscal 2022. We ended the year with cash investments of approximately $336.4 million. Now I'll provide a deeper dive, starting with NGS. NGS revenue for the fourth quarter grew to approximately $37.1 million, compared to $29.2 million in the fourth quarter of fiscal 2022, and that's an increase of 27% year-over-year. For the full year, revenue increased to $123.7 million for fiscal 2023, as compared to $99.3 million in fiscal 2022, and that's year-over-year growth of 25%. The record revenue for fiscal 2023 was due primarily to an increase in revenue from our top 10 customers, which accounted for approximately 37% of revenue for the year. We served approximately 1,020 NGS customers in fiscal 2023, and we believe our NGS products have a compelling competitive advantage and save our customers downstream sequencing costs. This advantage is reflected in our orders for the fourth quarter of $39.1 million and $131.5 million for the year, and that's 26% year-over-year growth. As we've noted in our previous calls, we track the larger account opportunities, that is, accounts we believe have potential to be larger than $250,000 per year, and the overall count remains at 279, with 131 adopted, which is the same as last quarter. At this stage, we believe we identified the vast majority of players in this market, and we'll be focused on landing and expanding these accounts. Now turning to SynBio products, which includes genes, DNA preps, IgG, DNA libraries, and Oligo Pools. We had another strong year and excited about leveraging our investment in our Wilsonville facility. SynBio revenue for the quarter was $26.5 million, bringing revenue for fiscal 2023 to $98.2 million, up from $80 million in fiscal 2022, as we continue to expand our customer base and product offering. SynBio orders for quarter four were $26.2 million, which brings our fiscal 2023 orders to $110.9 million, up from $90.7 million in fiscal 2022, and that's 22% year-over-year growth. Some of the highlights include growing our customer base to approximately 2,700 SynBio customers in fiscal 2023, as compared to 2,300 in fiscal 2022. We increased our genes revenue to $72.5 million versus $61.5 million, which is year-over-year growth of approximately 20%, and we shipped 634,000 genes in fiscal 2023 as compared to 558,000 in fiscal 2022. Oligo pools revenue grew to $14.5 million, and that's up from $12.4 million in fiscal 2022, mainly due to strong growth in academic and large pharma customers. Libraries revenue was $10.2 million, and that's up from $6.1 million, predominantly due to growth in large pharma industrial biotech. For biopharma revenue for the fourth quarter, it was $3.4 million, bringing the total revenue for biopharma to $23.2 million in fiscal 2023, and that's a decline from $24.2 million in fiscal 2022. Importantly, orders for the quarter rose sequentially to $5.8 million from $3.5 million in quarter three, and the number of active programs declined from 82 to 69. However, new projects started in the quarter increased from 34 in quarter three to 44 in the fourth quarter, and that's associated with a recovery in orders, and the total number of completed programs as of September 30th was 806, with 68, including milestones and/or royalties. I'll now briefly cover our revenue breakdown by industry and provide a regional update. Healthcare revenue rose to $137.1 million for fiscal 2023, compared to $106.4 million in fiscal 2022. Industrial chemical revenue rose to $59.3 million, and that's up from $57.9 million in fiscal 2022. Academic revenue was $45.8 million, and that's up from $37.1 million in fiscal 2022. On a regional basis, EMEA revenue rose to $71.4 million, versus $62.1 million in fiscal 2022. APAC increased to $22.5 million, compared to $19.1 million in fiscal 2022, including China revenue of $7 million, which is flat for the previous fiscal year. US, including Americas revenue, increased to $151.3 million in fiscal 2023, versus $122.5 million for fiscal 2022. Now moving down to P&L. Our gross margin for the fourth quarter increased to 36.6%, bringing our overall gross margin to 36.6% for the year. Cost of revenues increased from $119.3 million in the prior year to $155.4 million in the year ended September 30, 2023. The major factors contributing to the increase in cost of sales were a $14.7 million increase in material costs due to higher volume, $9.9 million payroll, and approximately $12 million depreciation amortization costs. Our operating expenses for fiscal 2023, which includes R&D, SG&A, and change in fair value and mark-to-market adjustments of acquisitions, decreased to approximately $306.8 million, as compared to approximately $319 million in fiscal 2022. To break it down, R&D for the year was $106.9 million, a decline from $120.3 million in the previous fiscal year, primarily due to the conclusion of Revelar. Depreciation included in R&D was $4 million for fiscal 2023. SG&A for the year was $190 million, and that's a decline from $212.9 million, which includes a $43 million reduction in stock-based compensation expense, offset by increases in pre-commercialization costs, facilities, payroll, and IT-related service costs. OpEx includes approximately $38 million for data storage spend in FY 2023. Change in fair value of contingent considerations and indemnity holdbacks for the year resulted in a gain of $6 million, versus a gain of $14 million in fiscal 2022. For restructuring and other costs, we invested approximately $16.2 million for the strategic initiatives we announced in May, with $9.4 million to support our valued employees with severance packages, as well as assets impairment charges of $6.8 million. Stock-based compensation for the year was approximately $30.3 million, as compared to $80 million in fiscal 2022. Depreciation and amortization costs were $29 million for fiscal 2023, and loss from operations was approximately $217.2 million in fiscal 2023, as compared to $234.8 million in fiscal 2022. Other income and expense was a gain of $14.3 million associated with interest income. CapEx for the year declined significantly to approximately $28 million from $101.9 million in fiscal 2022, and we exited the year with $32.1 million in inventory, down from $39 million at the end of fiscal 2022, and concluded the year with cash investments of approximately $336 million. I will now provide updated financial guidance for fiscal 2024. We enjoyed record bookings in quarter four and are excited about the launch of our Express Genes. Our Wilsonville facility is doing well, and we took actions during the year to manage our cost structure as we transition SynBio activities to Wilsonville. For fiscal 2024, we expect total revenues to increase in the range of approximately $285 million-$290 million. SynBio revenue, approximately $113 million-$116 million. NGS revenue of $147 million-$149 million, and Biopharma revenue, approximately $25 million. Gross margin of approximately 39%-40%. Operating expense, approximately $294 million-$298 million, which includes $100 million-$102 million in R&D expenses, $194 million-$196 million SG&A expenses. Loss from operations guidance for tax is approximately $180 million-$188 million, which includes stock-based compensation of $58 million-$60 million, depreciation and amortization of approximately $40 million. Data storage operating expense of approximately $37 million-$39 million. CapEx for FY 2024 is projected to be approximately $20 million, ending cash of approximately $245 million. For the first quarter of fiscal 2024, we expect overall revenue of $67 million-$68 million, SynBio revenue of $27 million, NGS revenue of $36 million-$37 million, Biopharma revenue of $4 million, gross margin of 38%-39%, OpEx of $73 million, and loss from operations of $47 million-$48 million. In summary, we continue to maintain financial discipline throughout the organization and make progress in reducing our operating losses. We expect to exit the fourth quarter of fiscal 2024 with $78 million in revenue and our estimated loss from operations to be $38 million-$40 million, which excludes any one-time adjustments and includes stock-based compensation of $15 million, depreciation of $10 million, and data storage cash operating expenses of $8 million. We continue to make decisive and proactive actions to achieve profitable growth. To achieve this, we're focused on scaling Express Genes, offering and leveraging our investment in the Wilsonville facility, managing our costs, and then continuing to execute by growing revenue, expanding our gross margin. We're incredibly excited about the future and confident that the year ahead will bring many exciting milestones and achievements. With that, I'll turn the call back to Emily. Thank you, Jim. I'd like to take a minute to thank all of the Twisters for their dedication, commitment, and excellence through the last fiscal year. The year required perseverance and discipline across the board, and our financial results reflect the hard work of the team. Our SynBio and NGS groups are stronger than ever, demonstrating consistent and sustained growth in revenue, customers, and market share. We expect our strategic investments in these areas will fuel our next leg of growth and path to profitability. In the months ahead, we look forward to reporting on the uptake of our Express Genes launch and the resulting impact on gross margin. We've given guidance for fiscal 2024, and in that guidance, we assume that Express Genes will grow over time with some current customers transitioning to these new products, but primarily, new opportunities moving forward as we leverage our digital marketing infrastructure and tools to reach new customers and the long tail of the DNA makers. The Biopharma Services group booked increasing orders in the fourth quarter, and we expect the positive momentum to continue. In addition, we continue to advance our solutions for DNA data storage that has the potential to be a valuable asset longer term. In summary, we exceeded fiscal 2023 with a solid cash position, growing revenues, reduced cost structure, and incredible opportunities ahead. We have built a diversified and complementary portfolio of products, services, and future opportunities that puts the company in a strong position to achieve consistent and sustained growth while minimizing risk. Our gross margin for fiscal 2023 was just under 37%, and this is an area of our current and future focus. In May, we implemented strategic adjustments aimed at optimizing our operations with a clear focus on enhancing gross margins. Our objective is to set a positive trajectory to our financial performance, moving towards profitability as a business. Looking at the financials, we can exceed this target if we grow the same rate as the market, and we believe we are positioned to take market share, exceeding market CAGRs. We look forward to delivering increasing value to each of our shareholders as we continue to work in service of our customers, who inspire us each and every day to go faster, run harder, and truly make a difference in the world. With that, let's open the call for questions. Operator? Thank you. If you'd like to ask a question, please press star one, one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Luke Sergott with Barclays. Your line is open. With Barclays? Hey, guys. Thanks again for the, for the time here. I guess when I look at the guide, can you talk about how much of the guidance implies or bakes in the Express Genes? You know, you see the margin step up here from 38% in Q1 and ending the year, you know, at 39-40. Kind of give us a sense of the cadence there and how the Express Genes or, you know, how much of your guide bakes in this business in the revenue and in margins. You want to, you want to take it, Jimmy? Yeah, I'll start. Luke, thanks for the question. Yeah, so in terms of past Express Genes, excited to launch this week. As Emily highlighted in the call, you know, we're going through the price discovery. Factory of the Future is going well. I think we're excited about the endpoint in terms of exiting this year margins. You know, revenue increased sequentially from quarter three to quarter four by roughly $3 million, and our gross margin dollars increased by $3 million. So that highlights the leverage from Q3 to Q4. As we're thinking about next year, fiscal year 2024, which we're now in, we've got some macroeconomic environment issues that we're taking into account. We're seeing, and Emily can talk about the early days of Express Genes. We're seeing good feedback from the marketplace. As usual, as we look out into the future, we're prudent in terms of forecast. NGS is going well. SynBio is going well. We've got the added boost from Express Genes, and we want to be thoughtful in terms of the guidance we're giving. You saw Biopharma last quarter. We saw a pickup in Biopharma. So we feel that, as we look next year, good solid growth and gross margin. As we continue to scale the factory, we're gonna see upside in terms of that gross margin as we execute. We're very focused on having a strong cash position and very focused on operational excellence, and I'll turn it across to Emily to talk a little bit more about the Express Genes. Yes, thank you, Jimmy. So we're one week in for Express Genes. We have nice orders. So far we've tested premium pricing of starting Monday 50%, Tuesday 60%, and then we dropped to 40%, went back to 40, and then today we are at 20%. So we are in that exploration of the price range and it's great to see that we're getting orders. And on Monday, we should have the first shipment of Express Genes. So it's early days, but quite optimistic in the uptake. Great. And then can you talk about the feedback you're getting for Express Genes now, I guess? And where this is coming from and from the makers market, you know, are you getting most interest from pharma, or is it pretty broad-based? And then, like, within that makers market, a lot of these companies and businesses had internal teams there. So talk about, like, the conversations that you're having with them and what their plans are, and some of the, you know, how they're thinking about ramping on the Express Gene platform. Yes, so maybe a quick clarification. So, so far, we've turned on Fast Genes on the website, and we can go and look at it. And then we only did a press release, so it's a little bit of a muted launch on purpose. We right now want to focus on existing customers. We want to give existing customer a choice when they order to upgrade to Fast. Right now, we are not yet trying to beat up all the drums and send the balloons and do the marketing launch. That will happen early in Q1 in calendar year 2025. The reason is, again, we want to make sure that the process is fully baked and for any net new customer, we want it to be undeniably an amazing performer the first time, so we want to bake it in a little bit. So far, the process is going great, but we've learned that it's always better to try new product with existing customers. So we are not yet trying to reach out to the net new DNA buyers. That being said, in the order so far, we have a great mix of the spectrum of the customers we expect from big pharma, small pharma, even academia who need the speed. Thank you. Our next question comes from Matt Sykes with Goldman Sachs. Your line is open. Great. Good morning. Thanks for taking my questions. Maybe just to follow up on the Express Genes. Just one point of clarification, when you said that you're gonna do the marketing launch in calendar year 2025, did you mean 2024? And then just, Oh, thank you, Matt. Thank you so much. Yeah. And then just on your current penetration of the makers market with your standard genes, can you give us a reminder of where you are today and what the potential white space is to to expand into that market? I think just giving that context of sizing would be helpful in terms of what the opportunity is. Yes. Thank you. And thank you for doing the proofreading on the fly. I appreciate it. So our analysis shows that the makers market, so people that do cloning themselves, that is a $1.4 billion market of people that buy enzymes and PCR primers, and mutation kits, and competent cells, and agar plates and so on. And so that is the bogey that we think we can convert to the DNA bio site. So far, we have a very, very tiny slice of the DNA makers. The one slice we have are people that need to make very long genes, so they are makers of very long genes. What they do is they buy shorter genes, so 1.1, 1.835 kb from us. So they are buyer of those genes, small genes, and then they assemble the small ones into bigger ones themselves. So that is the small slice of the pie we have. And the opportunity is to really go after the bulk of the DNA makers market, and that bulk are people that do need short genes. They need a 5 kb, 3 kb, and 1 kb gene, but they need them fast. And right now, the only choice is to go clone it yourself. And with size, with our Express Genes launch, I think we have an opportunity to go after them. Got it. And then just to follow up on, on Express Genes, I think it would be helpful just for us to understand how you are gonna communicate, the Express Gene, either revenue or margin contribution over the course of next year, just to give us a sense of how that's going. I think, you know, following up on Luke's question about the gross margins, I guess we'd have expected there to be a little bit more gross margin expansion, given the premium pricing. How should we kind of think about tracking that, and what's your kind of level of disclosure on a quarterly basis for that business specifically? Yeah, Matt, I can touch on that. If you look at our 10-Q and you look at the 10-K, you'll see that we do cover, you know, the gene revenue and gene shipments. And if you look over the last few years, you'll see that our gene pricing has in fact increased over the last two or three years. So every quarter, you'll be able to see, right, what's the gene revenue and how many genes we shipped, and what's the average price per gene. So you'll be able to track it that way. Great. Thank you very much. We'll start giving more insight on that in our earnings call as we go forward. Got it. Thank you very much. Okay. Thank you. Our next question comes from Vijay Kumar, with Evercore ISI. Your line is open. Hey, guys, thanks for taking my question. I had two, both related on guidance here. Q1, a pretty solid front-loaded guidance. I think guide implies, you know, mid-twenties kind of growth. But if you look at the components here, I think NGS is up to like 50% implied by the guide. SynBio, perhaps a little bit softer, and I think the guide, the annual guide implies like SynBio to growth rates to further detail. So maybe if you can just talk about the assumptions here between those segments and what you're seeing from end markets. Yeah, I mean, I can start, Vijay. Thanks for the question. So NGS, we're doing extremely well. We ended the year very, very strong NGS orders just under $40 million. Making great progress on NGS. Obviously, some of that's driven by some of our liquid biopsy customers, MRD customers. So we feel well positioned. In terms of SynBio, we had another strong year of growth. You know, the overall business, if you step back and look at it, you know, excluding biopharma, I think everyone's familiar with our biopharma issues, and it's good to see biopharma recovering. The year-over-year, you know, NGS products, SynBio products, I mean, the orders and revenue are 24%-25%. We feel good about where our Express Genes, the guide for this quarter reflects the fact that we get vacation and it's year-end for some of our customers. So we ended the year in a good solid position, doing well in terms of both NGS and bio. And at the same time, when we're looking at the guide, as in previous years, you know, there's always some macroeconomic environment issues that we need to comprehend. I was thrilled to see that in terms of margins, if you look sequentially, we've gone from low 30s up towards 37%. You look at the revenue growth last quarter, almost 100% of that fell through the margins. So that gets back to the point in terms of leverage we've talked about. We're gonna manage our cost structure going forward. We're very focused on profitability. We're excited about the opportunity Express Genes brings in terms of margin enrichment. As I highlighted to Matt, we'll be giving an update on a quarterly basis in terms of pricing for genes. So, factory is doing well. We're well positioned, and at the same time, when we're building our forecast, we want to comprehend any potential macroeconomic impact. Understood. Then one, Jim, maybe on that operating leverage you brought up. If you look at the cadence here, gross margin, it seems like a more modest ramp puts your Q1 versus Q4 exit rate, I think, implied numbers. Your OpEx is gonna step down while your revenues are up from Q1 to Q2, Q4, I think are up, like, $10 million. Mm-hmm. OpEx is down. So just, is there some incremental cost actions coming in? What is driving that OpEx, and why are we assuming a more muted gross margin ramp? Yeah. So in terms of, gross margin ramp, you know, if you look at the revenue on a go-forward basis, you know, the revenue is almost flat with Q4. The gross margin ramp will come later in the year as we continue to leverage the fixed costs, Factory of the Future. I think what's interesting is if you do take a look at our forward guidance, you know, the loss from operations this coming quarter is about $47 million-$48 million, and revenue $67 million-$68 million. If you look at the guidance we gave for Q4, we're projecting revenue of roughly $78 million, and the loss from operations $38million-$40 million. So revenue is up by roughly $10 million, and loss from operations is, you know, down by roughly $8 million or $9 million. So our focus is, as we scale, reduce the loss. And that loss from operations also includes, you know, stock-based comp of $15 million, and depreciation of $10 million. And as we begin to scale, you'll see the loss from operations decline, so cash loss declines. You know, this year, the numbers are fairly noisy, but there's, you know, a step up in stock-based comp. So the thing to focus on next year is, you know, what is our cash operating loss as we go forward, and that's gonna decline sequentially throughout the year. Understood. Thanks, guys. Thank you. Our next question comes from Puneet Souda with Leerink Partners. Your line is open. Yeah. Hi, Emily, Jim. Thanks for taking the question. So, maybe Emily, I'll start at a one sort of high-level question for you. I mean, you're seeing, you know, NGS growth here. Your orders are up on, NGS. Your, you know, your top end of your fiscal 2024 guide is just sort of slightly shy of where, you know, Street was, in revenue, and you just delivered, you know, 20% growth. You're expecting what implies is somewhere around 17%-18% next year, mid-20% for 4Q December ending quarter. So again, all of this, you know, looks like, you know, you, you're doing, better versus what the backdrop is. You're expecting significant pickup from Express Genes. I mean, it seems like you're production ready. So I think the question is really, you know, the demand in the market, which according to most of the life science tools peers, is weak, to put it briefly. So maybe just help us understand how Twist is seeing the market sort of differently, versus other NGS oligo peers and overall, what we're hearing from the broader market. Just help us conceptualize, where you think, you're gonna continue to win, and despite the, despite the market backdrop. Yeah, no, thank you. That's a very thoughtful question, and, I think, it, at the end of the day, it all comes down to the platform. We, we've always said that the success that we have comes from two things. One is the innovation and the silicon, the silicon technology that we have, and the second is the very violent commercial execution that we have. And I think you see it in our guide for next year. I can see that—I agree with you that, when you look at our peers, it seems like the demand is weak. However, we just have very, very differentiated product. And I think in a difficult environment, our platform just shines. If you think about NGS, our big customers in NGS are diagnostic customers. What they need, as their own funding environment is difficult, as their own reimbursement is difficult, they need really improved margin, and that's what we sell at in NGS, is if you switch to Twist, because of the quality of the product that we provide, because we have all the reagents from A to Z, we're able to provide a comprehensive solution that expands margins for our customers because of the lower cost of sequencing. And so that resonates really well now, and as some of our customers that we've been working with for years are finally going to commercialization, as those panels and tests start to run commercially, we benefit because we, for every patient, there's some DNA that is being burned. In pharma, on the SynBio side, there's definitely some funding pressure. And at the same time, that means that the researchers, they are under pressure to get the latest and greatest technologies to get to discover and develop their therapies. And that is exactly what we provide, is more shots on goal. Now with our huge investment in improving the speed, we're able to enable them to again do that work not only better, because they can get access to margins, but also faster, which is very useful to for them. So I think what you're saying is just a combination of the great work that the Twisters have done and leveraging the technology where it's a real differentiator based on technology. We've helped competitor trying to emulate our marketing, but at the end of the day, it's not about marketing, it's about real product capabilities, and I think we just shine thanks to the platform. Got it. That's, that's helpful. And then, if I could touch on biopharma. I mean, you're implying a, you know, high single-digit growth here. Could you maybe outline how much of that is from services or any other, you know, sort of milestone payments that you're, that you're expecting here? Because when we look at some of the antibody discovery peers, obviously the market is pressured by the emerging biotechs, so pulled back meaningfully. Maybe can you talk a little bit about how much of the mix is large pharma versus those emerging biotechs, and what does that mean for the source of new projects that you expect to receive in biopharma in 2024, I mean, fiscal 2024? Yeah, maybe I'll start. So, the guide implies no milestones or royalties. It's all a fee for service guide. And, I agree with you that, if you look year-over-year, the growth looks not very big. However, actually, if you look at the low point of biopharma in 2023 compared to the higher point, to Q4 2024, we're gonna see some substantial growth. We had, you know, we had a stumble in commercial execution, and so, we had a few quarters of biopharma services going down. But now we've rebuilt the commercial team. We had a sequential growth in our orders. As we say inside the company, we've done it one quarter in a row, and now we have to just go do it again. I expect to see some significant growth when you look from the low point to Q4, and that's the directions we want to see. Okay, got it. And then if I could ask one, brief one to Jim. Jim, what, what are you expecting for the spend on, data storage in, fiscal 2024? And then maybe, if you can provide, you know, how should we think about the cash burn, as we go into, in sort of over the next, 2 years? Yeah. So, overall operating expense for data storage is gonna be in the range of $37 million-$39 million for this year. In terms of cash burn, approximately about $32 million in terms of cash burn. Burn data storage. Thank you. Our next question comes from Catherine Schulte with Baird. Your line is open. Hi, thanks for the questions. Maybe first, it looks like you are, but can you just confirm that you're still expecting to achieve Adjusted EBITDA breakeven for NGS and SynBio in the fourth quarter? Thanks for parsing out the DNA data storage spend. You know, how should we be thinking about Adjusted EBITDA loss for Biopharma for the year? Yeah. Yeah, so we, as we highlighted, I mean, our focus is getting to Adjusted EBITDA breakeven for biopharma, NGS, and SynBio as soon as quickly as possible. You look at the guidance we've given, loss from operations in Q4 next year, roughly $38 million-$40 million. That comprehends stock-based comp $15 million, depreciation of $10 million, and there you get data storage cash costs in Q4, approximately $8 million. So, you can see from those numbers that we're within striking point of getting to break even from a cash position. And as we continue to scale, I mean, our focus is, as Emily highlighted, we call it, to get to profitability as fast as possible, and having a very solid balance sheet to support the growth going into 2025. Okay. And then, Emily, just to your point on the ramp for biopharma throughout fiscal 2024, I guess, just how much visibility do you have in that $25 million number? Maybe how much is already accounted for in current programs versus assumptions around winning new products, because it does imply a pretty steep ramp throughout the year. And is there any way to quantify the impact of the new Bayer partnership? Yes. So great question. As we've mentioned previously, in biopharma, for services, we get orders, and we can convert those orders into revenue in 2-3 quarters. So the great, you know, quarter that we had in Q4 will be converted from an order point of view into revenue in the coming 2 quarters. So in terms of visibility, we have the visibility of the order. This is pretty much as much as we have. And then to get to that order number, we have definitely a funnel, and so we do measure the strength of the funnel. And now that we have a commercial team in every territory, we can track and push each of those business managers to make sure that they achieve their quota. Thank you. Our next question comes from Steven Mah with TD Cowen. Your line is open. Great. Thanks for taking the questions. I've got a three-part follow-up question on Express Genes. One, on the existing customers, are you doing a dynamic pricing model with them? And then, if so, what's been the early reaction to that pricing model as that's something that's new to them? And then the second, how long do you expect to be in this early launch mode? And then third, given that Express Genes, the turnaround time seems to be a little bit faster, is there a new annual revenue capacity for the Factory of the Future we should keep in mind? Thank you. Yes. Thank you. Thank you, Steve. So, the way the dynamic pricing works, we've designed our e-commerce to have two characteristics. One is very subtle, but at the same time, which means that as people order the genes the regular way, it's subtle that there is an option to get Fast Genes. However, at the point of ordering, it is a very strong in your face and very clear differentiation in terms of for that extra $1, you can get that extra benefit, and customers have to make a yes or no decision. And so on the one hand, yeah, we've done it subtly, but customers have to make a decision. As far as the early reaction that you were asking, you know, we can look at 20% of customer chose the Express genes option as a function of different prices. So that's ongoing. In terms of your second question, how long will we be in that early launch phase? It should be until early calendar 2024. Matt won't have to correct me this time. So early 2024, that's when we'll do the full launch to all the customers. And then, what was your third question? I think there was a third question that I don't remember. Capacity for Factory of the Future, given the turnaround times faster for Express Genes. Oh, yes, yes. Yes, thank you, thank you, Steve. Sorry about that. Yeah, in terms of capacity, yes. Because now if all the orders were ordered fast, yeah, we basically double the capacity that we have in our fab. So, we have not quantified that with the dollar at this point, but we will over time. Thank you. Thank you. Our next question comes from Sung Ji Nam with Scotiabank. Your line is open. Hi, thanks for taking the question. Just to pile on one more question on biopharma, just for that customer base, kind of curious whether you're seeing any signs of improvement. Obviously, there are, you know, definitely macro factors that everyone's talking about, but do you think the growth next year is largely due to Twist's own, you know, integration efforts and restructuring efforts that are bearing fruit? Or are you kind of seeing any signs of improvement, whether, you know, from a prioritization standpoint from large pharma or even the smaller biotech at this point? Thank you. Yes, thanks for the question. I know that definitely there is a funding pressure in biopharma. The few quarters that we had down, our analysis was that it was a self-inflicted wound. It was. We were not suffering from market headwinds, it was more from a commercial execution headwinds. And we have a very, very strong offering with in vivo, in vitro, and in silico. We're, I think, the only company that offers that very wide breadth of opportunity. And so, we think that we can, if we execute commercially, be very successful in the current market. And lately, we've been focusing on larger companies and that has been working quite well. Of course, we're open for business for all customers, but we have a especially focused effort on larger pharma companies. Great. We'll get back into queue. Thank you. Thank you. Our next question comes from Matthew Larew with William Blair. Your line is open. Hi, this is Madeline on for Matt. Just a quick one from me on the Express Genes. I know it's early stages now, but I was just wondering if there was sort of an optimum proportional breakdown between Express Genes and the more standard clonal genes that you're targeting long term, or that allows the Factory of the Future to be at its maximum efficiency, if there was sort of a ideal breakdown between the two pricing points. No, Madeline, that's a great question. So, as a point of clarification, what we have with fast genes, something that is actually quite unique because, it's the same production line for Express and standard. Meaning that if all our customers decided to pick Express Genes, we would be able to make them all express. And that is very different from what other competitors can do. Maybe they can do a few genes fast by cutting the queue and skipping ahead and managing their backlog. But for us, we don't have to do that. We've built something that is intrinsically fast for 100% of the genes. To go back to your question around optimum pricing, for us, our goal will be to maximize our gross margin dollars. So making sure that the fab is fully utilized, and find the pricing that maximizes the penetration into the DNA makers. And ultimately really delight our customers, enable them to do their science, you know, faster. And I think that would be a win-win because they'll get faster science and we'll get more of them, and we think we'll be able to take very, very significant market share. So the intrinsic technology really enables us to be very flexible on what the ultimate price is going to be. If need be, we can make all of orders express, and that is hugely differentiating. Great. Thank you. Thank you. There are no further questions at this time. I'd like to turn the call back over to Emily for any closing remarks. As we've shared today, it is a very exciting time for Twist. We've launched Express Genes this week that is further differentiating our SynBio product offering, and we have taken steps to position the company for enduring and consistent growth. In fiscal 2024, we have the opportunity for expanded margin, and we look forward to keeping you apprised of our progress. Thank you. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day.