Good day, ladies and gentlemen. And welcome to the Twist Bioscience Fiscal 2019 First 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 follow at that time. [Operator Instructions] As a reminder, today's conference may be recorded. I would now like to introduce your host for today's conference Mr. Jim Thorburn, Chief Financial Officer. Sir, you may begin.

Thank you, Al. Good afternoon, everyone, and thank you for joining us today for Twist Bioscience conference call to review our fiscal 2019 first quarter's financial results and business progress. Please review the press release we issued earlier today, 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. Emily will begin with a review of our progress, I will report on our financial and operational performance, then Emily will discuss our upcoming milestones and direction. We will then open up the call for questions. As a reminder, this call is being recorded. The audio portion will be available on our Investor website for the next two weeks. During today's presentation we will also make Forward-Looking Statements within the meaning of the Federal Securities Laws. Forward-looking statements generally relate 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 SEC. The forward-looking statements in this presentation are based on information available to us as of the date here off 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 and Co-Founder, Dr. Emily Leproust.

Thank you, Jim, and good afternoon, everyone. We remain for focused on our reason to leverage our silicon platform to rise DNA as an emphasis to scale improving health and system ability with progressed in all areas of our business. In the first quarter of fiscal 2019, we reported revenues of $11.5 million for the quarter an increase of the 166% over the first quarter of fiscal 2018 and 37% for the last quarter. Jim will provide a specific financial details shortly, but I would like to highlight a couple of important trends we are seeing in our revenue growth. Beginning within Syn Bio. We shipped approximately 71,000 genes during the quarter compare to 45,000 genes in the same period last year an increase of 60%. This is a slight increase in the number of genes over the last quarter, however we see an increase in the average length of genes shipped and as you know long year genes bring in more revenue. In addition, we can see that our e-commerce ordering system is enabling us to capture their long-tail of the market in Syn Bio. Excluding Ginkgo incorporation to the first quarter of 2018 our average order size for the first quarter of 2019 was 45% lower as we are reaching customers with smaller order. However, in the same period we received 3.5 times more order. So overall non-Ginkgo revenue grew 92% year-over-year and 16% quarter-over-quarter. Our current times continues to improve with the average current time flow 1.8 TB genes at 14 days. For 3.2 KB genes we are first no less than 15 days. We call that in fiscal 2018 our turnaround time was an average of 15 to 20 days. By sustain the turnaround time and continuing to reduce it. We can enable further growth in…

Thanks, Emily. We had another strong quarter. Bookings were at $15.2 million, so a sequential growth of 18%, year-over-year growth of 105%, book-to-bill ratio of 1.3 to 1, we are executing in our game plan of expanding Syn Bio reach beyond Ginkgo, expanding our global business and aggressively scaling our NGS genomics products. Our Syn Bio order quarter excluding Ginkgo rose 7.3 tremendous growth year-over-year of 58 and sequential 17, and was notable as we are seeing very strong orders from EMEA and the U.S. market. Our Ginkgo orders for the quarter of 0.5 million. As we have highlighted on our last call, we expect to see Ginkgo decline as a percentage of total revenue as we continue to scale in Syn Bio non-Ginkgo to obviously and NGS. I will note that Ginkgo has placed orders earlier this quarter and our Ginkgo annual revenue projections are on-track for approximately 8 to 8.5 million which is consistent with our Ginkgo contract. I will cover NGS with genomics. our genomics products are doing extremely well, and as Emily highlighted, we have a very, very strong competitive advantage which is translating into orders with robust traction as order volume scales when our clients move from pilot to production. The funnel for our larger opportunities continues to build and we have now approximately 16 potential customers in pilot up from 11 in December, we have 28 in validation up from 24 and 18 have now adopted. Consequently we saw extremely stronger orders in Q1 from NGS $7.4 million which is 70% sequential growth and 2000% growth year-on-year. I will note that one of our key customers placed a great order on us, it was $3 million, which helped propel this growth and just really highlights the opportunities ahead of us in NGS as we…

Thank you, Jim. We set aggressive milestones at the end of calendar 2018 and we remain on-track to meet them. Beginning with overall revenue, we experienced significant growth as revenue grew from $6.7 million in Q3 to $8.7 million in Q4 to $11.4 million in Q1 across all product categories and geographic regions. To reiterate the guidance that Jim just provided, we are increasing our revenue guidance to $47 million to $49 million. But we do expect that both NGS and Ginkgo would be lumpy. I believe this is a strength of our platform to have these three diversified opportunities with Ginkgo , non-Ginkgo, Syn Bio and NGS as each of the phasing and seasonality balance each other and contribute to overall growth. Looking at Syn Bio, we expect continued momentum as we service our current account as this market share in this area. We are implementing and educating our new product introduction roadmap and in January we introduce genes up to 5KB as a disruptive price and we now offer our customers the opportunity to use our Twist API. Similarly on NGS, orders and revenues are well on-track to reach our objective this year as customers continue to validate our superior performance. We received ISO 13485 certification of our great management system for NGS target enrichment panels and we have invested in the longer term capacity. Now we focus on improving our overall operations efficiency to improve our gross margin. Finally, we expect to launch our e-commerce solution for NGS in the first half of 2019. For Biopharma, we generated early proof-of-concept data from our wholly owned GPCR library and our antibody optimization solution. Once we generate a robust data package, we intend to advance the programs from non-dilutive collaboration and longer term seek revenue generating partnerships. In data storage, we intent execute on our roadmap to increase synthesis density on our Silicon platform which we recued the cost of DNA storage while we pursue non-dilutive sources of funding for this particular opportunity. Finally, we selected a site in China to launch our backend production for NGS, as well as other products by the end of 2019. With that, let's open up the call for questions. Joel?

Thank you. [Operator Instructions] Our first question comes from Tycho Peterson with J.P Morgan. Your line is now open.

Hi this is [indiscernible] on for Tycho, thanks for taking the question. Maybe to start off, I was wondering in terms of your academic end-market exposure you mentioned in the past you have around 25% exposure to that market. Was just wondering if you are seeing any impact from the Government shutdown over the last couple of weeks?

Thank you for the question. No, we have not seen any impact from the Government shutdown, if anything we have really, really end of year bookings, which is used somewhat to seasonality from pharma, but don't see any impact from the Government shutdown and which bodes well for us looking forward in terms of revenue.

Great. And then I was just wondering you have talked a bit of quarter-to-quarter volatility in terms of the cadence of order patterns your largest customers, I was just wondering how we should think about that over the course of this year?

Yes, it’s a good question. Thank you. That's why it was given guidance for the year in terms of - revenue guidance in range of 47 to 49. We already delivered $11.5 million this year. Bookings are strong and we try to help swing - Ginkgo should be roughly about $2 million this quarter and we will see some lumpiness in NGS, but right now we are going to have a strong quarter two I guess and I would just keep the range of guidance between 47 to 49 right now for the year.

Okay and then separately in terms of plans to launch your back-end production facility in China was in the first half of this year, was just wondering what impact you are expecting from that over the course of this year or do you think it will take a couple of quarter to start to seeing that sort of kick in.

So [indiscernible] in China we plan to start production in the second half of the year. The benefit of that production is that we will be able to sever the Chinese market with production in China. In the mean time, we can serve that market from the U.S. so as you mentioned we are seeing some good other growth there. So we can serve the Chinese market now and we deliver to set it every better once we have the back-end production, but we have a very strong offering in the U.S., but globally as well in EMEA and back in China.

Yes. The demand for our products that we are seeing that demand increase, there is a lot of customers coming from China and Asia particularly for NGS, was incredible the performance in Europe as well. I mean bookings of almost $5 million and we are seeing that strong bookings continue into this quarter. So we are very encouraged by global growth.

Great. Thank you.

Thank you. And our next question comes from Doug Schenkel with Cowen. Your line is now open.

Hey good afternoon Emily and Jim. Thank you for taking my questions. Starting on the impact of making the 5KB products available to your broader customer base. Could you just talk about the impact both in terms of I guess revenue and order and then maybe as if not more importantly, whether or not this has already put you in a position to open up new accounts given that you have brought in your competitor breadth.

Yes. I believe the greater - for us to be able to serve more broadly customers needs, and so people that are currently buying genes, there was a sentiment to the market that we could not sell, because we were not making those genes available except for Ginkgo. So defiantly now that we can serve the broader wallet share for that customer. So those are customer we already have and we just can take more of their budget, but in addition there is a vast majority of 5KB genes not purchased they are made. So people buyers of small fragments and then they assemble those fragments together themselves, so they are buyers of small fragments and they are makers of 5KB genes. So that is an opportunity for us to reach to new customers [indiscernible] and to convert them through - and have them become buyers. And the overall benefit of Twist is that we can get to more people, so new customers. We get a higher revenue per gene than we used to and we will get potentially higher margins as 5KB is bigger margins for us.

Doug, I think what is interesting is you just look at the bookings this last quarter its $15 million of bookings of that that $0.5 was Ginkgo. It just highlights that we are executing, expanding beyond Ginkgo and Sym Bio to obviously doing well on the NGS.

Got it, alright that is all very helpful background and a good way of putting it in perspective Jim. What percentage of customers were on your e-commerce platform during the quarter? I'm just wondering how quickly that is evolving now that you have opened that up.

The vast majority of our orders e-commerce, I don’t have the exact percentage, but its more than 90% of the transactions were done through e-commerce.

Okay. And last one, it’s really I guess a guidance question. You increased your net loss guidance by $12 million at the midpoint I believe, I think you went from $80 million to $82 million to $92 million to $94 million. So based on your comments, I mean some of this is just public company new types of expenses that probably go away, but in your prepared remarks as well as in the press release you also talked about the opportunity to invest more in growth and hire more folks on your team to address stronger than anticipated demand. You increased revenue guidance by only $1 million at the midpoint of relative to our prior guidance and that is even though you beat consensus expectations by $2 million in the quarter. It just seems like there is a little bit of disconnect there, I'm just wondering if this is just a function of the fact that it's early in the year and you might want to get another quarter under your belt similar to what you saw in Q1 before you more meaningful bump up the top-line guide.

So, yes it’s a good question there Doug. So the investments, couple years of investment. One is Biopharma as $1.5 million. Team are executing well on biopharm. We have no revenue forecast for Biopharma. The second area is NGS from an operational point of view and quite frankly we saw large orders coming in, in the last quarter. So we took a risk and skill the head to support the potential for delivering more in the future. I mean obviously as we go down the year, we are consolidating into our new facility and we will make sure we are well positioned to consolidate into new facility and scale next year. One of things we are dealing with Doug is that if you look at the funnel for large customers for NGS that keeps growing. We are doing a good job the team converting, A team have adopted, so we need to get more visibility into how that translates into revenue as the year progresses. So there is a little bit of a disconnect, but we want to sort of under promise and over deliver that is our internal goals here, we are comfortable with giving the revenue guidance, we have given in terms of 47 to 49 we did break it out for everybody to give more granularity in terms of how much is Ginkgo, how much is in Syn Bio, how much is in NGS hopefully we think that is helpful.

Yes, the only think I would add to Jim, but on increasing guidance a lot, but we have the capacity available [Indiscernible] funnel transform.

Understood. Thanks for all that detail.

Thank you. And our next question will be from Catherine Schulte with Baird. Your line is now open.

Hi, thanks for the question. Earlier this week you have a Syn Bio company announce a large agreement for [Indiscernible] development. This is a company that you have press released was an early adopter of your platform. Any comments on that deal or just your general thoughts on the potential opportunity of that application?

I think it's one example of synthetic biology becoming an important technology for a clinical growth, there was a slow over this week the announcement of the third luxury watch where the bracelet for the watch was made out of a [Indiscernible] and that was $3 million watch and that is accessible for everybody. But overtime you would have seen more and more of the stories coming out and what I’m excited about that we are talking less about the technology, technology is important, but we are now talking more about the applications. And so that deal is just one example things to come and I think it's quite exciting and it's great for us to see that our customers are growing and making progress.

Okay. And then on the Biopharma GPCR side what additional data - before you think you would be ready for our potential partnership and what is the timeline we should expect around that data and timing of the potential partnership?

Yes. So what we have so far is we have been able to show that we had a number of antibodies that have great [indiscernible] and that they are functional. Next layer of data it's characterizations of those antibodies around immunogenicity, extra stability - durability and so on, so that is one area of the data package. Another area is the expansion to order target and order examples to show that the platform is universal and then working with people to have some of those data generating not a Twist only but flow with order lap and which will increase the credibility and the value of our offering. So in Biopharma it takes time. Overall, I think the team is ahead [indiscernible] to give data too early and so it’s great to be ahead. And in the next two quarter we will keep you updated as to further progress.

Great. Thank you.

Thank you. I’m not showing any further questions at this time. I would now like to turn the call over back to Emily Leproust for closing remarks.

Thank you John. We will continue execute on our plans moving forward and we believe that DNA will ride the future. So we look forward to seeing some of you at the [executive] (Ph) conference at the end of February and as well as the Cowen Conference in March. So with that thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Everyone have a great day.