Twist Bioscience closed fiscal 2026 with its strongest quarter of the year. The company reported a fiscal fourth-quarter loss of $0.32 per share, well ahead of the -$0.43 consensus and the -$0.40 Earnings Whisper number, a 20.0% surprise. Revenue rose 27.9% year over year to $126.64 million, 2.6% above the $123.4 million consensus and above management's own $123-124 million guide. The loss narrowed enough to register as 28.9% earnings growth. The central tension is that Twist is accelerating into the finish line while guiding to a slower pace from here. Its initial fiscal 2027 outlook calls for roughly 21% growth, below the 28% exit rate, and only in line with expectations for the full year. The first-quarter guide is above estimates.
The quality of the quarter holds up well. Revenue growth accelerated in every quarter of the year: 17%, 19%, 23% and then 28%. Management raised its fiscal 2026 revenue guidance on every call, from $435-440 million initially to $456-457 million last quarter, and full-year revenue landed at $459.4 million, up 22%. Gross margin climbed from 51.6% in the second quarter to 52.8% in the third and 53.1% in the fourth. Full-year gross margin of 52.4% beat the greater-than-52% target. Most notably, adjusted EBITDA turned positive at $2.2 million, compared with losses of $13.3 million in the second quarter and $11.3 million in the third, delivering on a long-stated breakeven commitment. Investors should keep the distinction clear, though: this is an adjusted profitability milestone, and the company still posted a per-share loss.
The call showed that the growth is broadening. NGS reaccelerated to 24% growth in the fourth quarter from 12% in both the second and third quarters, meeting management's 20%-plus commitment, and diagnostics grew 23%. The headline engine remains AI-driven drug discovery. That revenue reached $59.1 million in fiscal 2026, up 175% from $21.5 million, with hyperscalers and so-called 'Magnificent 7' companies among the customers. Management described a repeat pattern in which customers move from model-building into discovery work, and it reiterated triple-digit order growth. Fiscal 2027 assumes $100 million in AI revenue, and management said there is upside to that figure.
That assumption is also where bears have legitimate ammunition. $100 million implies roughly 69% AI growth, a sharp step down from 175%. Analysts flagged that non-AI DSPS is implied to grow only at a mid-single-digit rate as sales reps concentrate on AI. Management also acknowledged that AI revenue is becoming harder to classify, and it committed to disclosing the figure only through fiscal 2027. A customer base described as 'dozens' leaves room for concentration risk and for customers eventually bringing wet-lab work in-house. Margin expansion is also set to stall. The fiscal 2027 gross-margin guide of 52.5-53% is essentially flat with the fourth-quarter level, because roughly $15 million a year of incremental depreciation creates a 2-3 point headwind. The 60% gross-margin target is now framed as long-term.
The balance sheet changed more than anything else. Twist raised about $425 million through equity and its at-the-market program, lifting cash to $582 million from $166.8 million at the third quarter. Management is using that capital to build capacity ahead of demand. Capex rises to about $75 million in fiscal 2027 from $48 million, part of a roughly $150 million two-year plan. The number of DNA writers grows from 10 to 16, taking output to more than 50 million oligos per day from about 32 million and supporting more than $1 billion in revenue capacity. Product catalysts include the MRD Express launch, which offers 24-hour tumor-informed panels, along with higher-margin cell-free antibody screening and early-access research-grade mRNA. The trade-off is dilution and a capacity bet that depends on AI demand continuing to scale.
The market setup is more complicated than the surprise implies. Shares opened at $81.60 after the August report and spiked to a 52-week high of $219.71 on October 6. By the eve of this report they had retreated to $122.59, about 44% below that peak. The stock is still up 50.2% since the prior report and sits nearly 33% above its 200-day moving average, so it has given back much of the spike but not the underlying rerating. Investor sentiment moved from mildly positive (0.08) to clearly negative (-0.20), a meaningful shift that likely reflects the dilutive raise and the reversal from the highs. The Earnings Whispers trend signals are mixed: sequential growth and momentum remain positive, while AVWAP is negative.
The bottom line is that Twist delivered a genuinely strong finish to fiscal 2026. It posted accelerating revenue, expanding margins, positive adjusted EBITDA and a broader growth base beyond AI. The next leg is less clean. Fiscal 2027 guidance implies deceleration from the exit rate, AI growth is set to slow sharply, margin gains are paused by depreciation, and new shares are funding capacity built ahead of demand. Investors who are already skeptical after the stock's round trip will want the AI upside management cited to show up quickly in quarterly results.