Participants

Angela Bitting; Senior Vice President, Corporate Affairs; Chief Corporate Responsibility Officer; Twist Bioscience Corp

Emily Leproust; Chairman of the Board, Chief Executive Officer; Twist Bioscience Corp

Patrick Finn; President, Chief Operating Officer; Twist Bioscience Corp

Adam Laponis; Chief Financial Officer; Twist Bioscience Corp

Luke Sergott; Analyst; Barclays

Matt Sykes; Analyst; Goldman Sachs

Subbu Nambi; Analyst; Guggenheim Securities LLC

Doug Schenkel; Analyst; Wolfe Research

Vijay Kumar; Analyst; Evercore ISI

Matt Larew; Analyst; William Blair & Company

Puneet Souda; Analyst; Leerink Partners

Sung Ji Nam; Analyst; Scotiabank GBM

Tom Peterson; Analyst; Robert W. Baird & Co. Incorporated

Brendan Smith; Analyst; TD Cowen

Presentation

Operator

Good day. Thank you for standing by. Welcome to Twist Bioscience's second quarter financial results conference call. (Operator Instructions) Please note that today's conference is being recorded.
 I would now like to turn the call over to Angela Bitting, SVP of Corporate Affairs. Please go ahead.

Angela Bitting

Thank you, operator. Good morning, everyone. I'd like to thank for joining us for Twist Bioscience conference call to review our fiscal 2025 second quarter financial results and business progress. We issued our financial results press release before the market, and it is available at our website at www.twistbioscience.com.
 With me on the call today are Dr. Emily Leproust, CEO and Co-Founder of Twist; Adam Laponis, CFO of Twist; and Dr. Patrick Finn, President and COO of Twist. Today, we will discuss our business progress, financial and operational performance as well as growth opportunities.
 We will then open the call for questions. (Event Instructions) This call is being recorded. The audio portion will be archived in the Investors 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 US 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 in 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 SEC.
 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.
 We'll also discuss adjusted EBITDA, a financial measure that does not conform with generally accepted accounting principles. Information may be calculated differently than similar non-GAAP data presented by a company. When we reported a reconciliation between GAAP and the non-GAAP financial measures will be included in our earnings documents, which can be found on the Investors section of our website.
 With that, I will now turn the call over to our CEO and Co-Founder, Emily Leproust.

Story Continues

Emily Leproust

Thank you, Angela, and good morning, everyone. As we look across today's global landscape, it's clear that we are operating in a time of accelerated change from policy shifts and trade adjustments to evolving financial market and structural transitions in healthcare and academia. The world is transforming at an unprecedented pace.
 At Twist, we are responding proactively. We recognize that such dynamic conditions require both vigilance and vision. We are continuously analyzing the broader environment, identifying not only challenges, but also the strategic opportunities that can strengthen our long-term position.
 Our approach is grounding in agility, supported by rigorous execution and driven by our commitment to delivering lasting value. Diving into our significant news release this morning, I am very excited to announce that we have spun out DNA Data Storage as an independent company.
 The new company called Atlas Data Storage is a pure-play company focused on end-to-end data storage. As many of you know, there are nearly endless applications of synthetic DNA. Since Twist's inceptions, we have prioritized opportunities where there is a significant market potential and where our technology offers a clear competitive advantage and differentiation.
 The market for data storage remains large, and our technology for this application has been proven. However, since May of 2023, we have intentionally constrained our spending in DNA data storage to keep twist over investment in this business to less than $25 million annually. Because DNA data storage is a specialized area, the business, customers, team and investors will look different.
 To drive the commercialization, a dedicated team will be needed, which can be more easily accomplished by a pure-play DNA data storage company. We have now reached a point where we believe increased investment is essential to accelerate development with a significant $155 million investment from large venture partners, (inaudible) management, business expeditions capital in (inaudible), Earth foundry, Arcus and other undisclosed investors.
 As a pure-play DNA data storage company, Atlas Data Storage will have significant capital that will enable the new company to accelerate towards commercialization and drive success. As part of this transaction, Twist will receive consideration of approximately 24% equity interest in Atlas on a fully diluted basis as well as royalties on future commercial sales and up to $75 million in future milestone payments, ensuring we continue to participate in future upside opportunities.
 In addition, we will receive $2.5 million upfront cash payment and a $2 million secured promissory note. Importantly, Twist will benefit from technology advancement made by Atlas, where it applies to our product groups.
 By operating as two separate companies, we are able to maintain sharp focus with each organization dedicated to developing and commercializing disruptive products and services while prioritizing exceptional customer engagement. Atlas will be led by Varun Mehta, as CEO, who brings extensive data storage experience, including co-founding and leading nimble storage, which was acquired by Hewlett Packard.
 While at HP, he helped to define storage strategy and introduce new products, including an entirely new product category. George Kalifa, Managing Director of (inaudible) Equity Partners, brings more than three decades of technology operating experience and will serve as Executive Chairman of the Board for Atlas.
 (inaudible), who have been the General Manager of the (inaudible) at West will serve as Chief Technology Officer of Atlas. Turning to our financial results. I am pleased to report another quarter of strong sequential growth and record performance across revenue, gross margin and adjusted EBITDA.
 For the second quarter of fiscal 2025, we reported a record revenue of $92.8 million, an increase of 23% year over year and 4.6% sequentially. Gross margin for the quarter came in ahead of our guidance at 49.6%, compared to 41% for the second quarter of fiscal 2021, demonstrating the leverage of fixed cost with higher volume as well as our ongoing commitment to continuous improvement and margin expansion initiatives.
 In addition, this is another quarter of showing that, on average, 75% to 80% of incremental revenue drops to the gross margin line. Revenue for SynBio increased to $36 million, a growth of 21% year over year. (inaudible) course of the quarter, we have implemented programs to streamline customer experience and (inaudible) customers.
 I'd like to share two of these programs to give you a sense of how we are meeting our customers where they are today. First, we introduced the Twist Wallet the way for customers to put money into an account as a credit and then order against that crease over a period of time. This allows our customers flexibility for timing of their order and lessens the administrative burden for purchasing.
 In addition, given the new normal for academic customers today, we offer a promotional program to enable these customers to other express genes without paying the express premium for a limited period of time. Science does not stop. And we have found that when customers try the express speed, they do get hooked on receiving their products on the express timeline.
 This promotion allows more customers to try (inaudible), and we believe they may continue even after the promotional period ends. Already, this transition has resulted in many new customers accessing our products. And importantly, it's something tangible we can do to support our customers as they navigate through these times.
 I'd like to note that both programs illustrate our innovative approach to everything we do at Twist. While innovation drives our product lines, it also feeds into our approach to reaching customers, our user experience and our commitment to play the long game.
 Turning to NGS, we reported $51.1 million in revenue, an increase of 25% year over year, with trends coming primarily from our customers' commercial assets for diagnostic tests. During the quarter, we partnered with an additional software vendor to further enable the adoption of our NGS workflows in the AgBio space.
 While the conversion from an NGS (inaudible) time, the resulting opportunities could bring substantive revenue in this $500 million market, where today we have close to the market share. Turning to Biopharma Services, our revenue was $5.7 million, a growth of 21% year over year, with orders increasing to $6.4 million.
 We remain cautiously optimistic as the funnel of opportunities continues to build. By leveraging our strategic fit across our SynBio and Biopharma Services portfolio, we continue to remain focused on delivering valuable services for our customers.
 I would now like to turn the call over to Paddy for commentary on operations and innovation.

Patrick Finn

Thanks, Emily. To underscore what Emily said earlier, Twist was intentionally designed to thrive in evolving conditions. Our foundation rests in a diversified strategy, including differentiation in product lines, customer categories and international markets. What that looks like today is we are employing real-time operational agility.
 We are actively monitoring and refining our commercial and supply chain strategies to ensure continuity, speed and responsiveness across all regions. We are different customer relationships, we are engaging closely with customers and (inaudible) to reinforce trust in our platform, sustain momentum and even co-create solutions.
 We are investing judiciously and strategically to ensure we deliver on our innovative road map to continue to expand our reach, our scalability and the long-term competitive positioning of our offerings. We are relentless in driving executional discipline.
 We're prioritizing quality, efficiency and innovation to maximize value for our customers while improving operational performance. We are optimizing costs to increase our operational leverage across the company, while, in parallel, fueling long-term growth.
 Automation and scale continued to unlock meaningful cost savings across production while maintaining the highest quality and value as well as R&D velocity for new product introductions. To dive into a specific example that illustrates our focus, for our NGS product line, we know that as our customers begin to launch bespoke MRD assays, we will need additional capacity for this product line.
 We've been working with many customers over the course of the last few years as we move from the pilot stage to verification and validation to clinical studies. While some smaller tests are already commercial, we expect others to advance into clinical studies next year and more to be available in the broader commercial market in 2026.
 We also know that the workflow for this product line must be very fast, incredibly efficient and the highest quality as our customers test literally support life or death decisions. With this input, we used a Twist approach to level up our automation within the same footprint, upgrading hardware and software and leveraging an exceptional engineering and software teams.
 With a fixed headcount, we increased capacity by about 200% and lowered turnaround time by approximately 20%. In other words, we did what we're known to do. We see the ramp coming, we plan and we prepare so that our customers can count on us consistently and then we execute to ensure we are delivering. Turning to enzyme development.
 We recently developed a proprietary high fidelity preliminaries that we have deployed into select internal SynBio workflows. In addition to reducing supplier dependency, by using this internally developed product in our own manufacturing processes, we enabled enhanced performance and reduced cost. This also opens up differentiated workflow opportunities within our NGS product group they were actively exploring.
 At this time, I'd like to turn the call over to Adam to discuss our financials.

Adam Laponis

Thank you, Paddy. Revenue for the second quarter of 2025 increased to $92.8 million, growth is 23% year over year and approximately 4.6% sequentially. Gross margin came in higher than expected at 49.6%, primarily due to increased revenue, volume leverage and faster-than-anticipated gains on continuous process improvements within operations.
 SynBio revenue increased to $36 million, growth of 21% over $29.8 million for the second quarter of fiscal '24. NGS revenue for the second quarter grew to approximately $51.1 million, an increase of 25% over $40.8 million for the same period last year. For the quarter, revenue from our top 10 NGS customers accounted for approximately 43% of NGS revenue.
 We served 610 NGS customers in the quarter with 150 having adopted our products. For Biopharma, revenue was $5.7 million, growth of 21% over $4.7 million for the same period of fiscal 2024. Orders were $6.4 million. We had 95 active programs as of March 31, 2025, and we started 64 new programs during the quarter. Looking at revenue by industry.
 Healthcare revenue rose to $52.8 million for the second quarter of '25 million compared to $40.9 million in the same period of fiscal '24, an increase of 29% and reflecting the increased uptake of our products by pharma, biotech and diagnostic customers. Industrial Chemical revenue rose to $22.8 million in the second quarter, up 12% from $20.3 million in the same period of fiscal '24.
 Academic revenue was $16.5 million for the second quarter of '25 million, up 20% from $13.7 million from the same period of fiscal '24, with growth coming from both SynBio and NGS customers. Looking geographically. Americas revenue increased to approximately $55.2 million in the second quarter, up 20% compared to $45.9 million in the same period of fiscal '24.
 EMEA revenue rose to $30.6 million in the second quarter versus $22.3 million, up 38% compared to the same period of fiscal '24, strong growth year over year. APAC revenue was $7 million in the second quarter compared to $7.2 million in the same period of fiscal '24. China continues to be a relatively small portion of our revenue at approximately 1.5% of total revenue for the second quarter of fiscal 2025.
 Moving down the P&L. Our gross margin for the second quarter increased to 49.6%, an improvement of almost 9 margin percentage points versus the second quarter of fiscal 2024, reflecting our strong revenue growth as well as our continuous process improvements while holding expenses relatively flat year over year.
 With the evolving landscape, we expect our supply chain to be minimally impacted by tariffs at this time. In addition to sourcing our raw materials primarily from US-based providers, our technology miniaturizes the chemical synthesis process for making DNA.
 So we use significantly less material than a traditional well plate-based approach to DNA synthesis. Importantly, we continue to expect improvements in gross margin after comprehending supplier price increases from tariffs even after the 90-day pause.
 All of these assumptions are included in our guidance. Operating expenses, excluding cost of revenues for the second quarter were approximately $87.6 million compared to approximately $79.8 million in the same period of 2024, driven by a $5.5 million increase in noncash stock-based compensation. Operating expenses included approximately $6.1 million for data storage in the second quarter.
 Looking at our progress and our path to profitability. For the second quarter of fiscal 2025, adjusted EBITDA was a loss of approximately $14.8 million, an improvement of about $11.9 million versus the second quarter of fiscal 2024. Cash flow from operating activities continues to improve, and we're driving to adjusted EBITDA breakeven.
 We ended the quarter with cash, cash equivalents and short-term investments of approximately $257.1 million. Turning to guidance. We are reiterating our total revenue guide of $372 million to $379 million for fiscal 2025, indicating growth of approximately 20% at the midpoint year over year, which comprehends NIH funding and tariff impacts and the expectation that we will continue to take share in H2 as we have in the first half of the fiscal year.
 SynBio revenue guidance of $144 million to $147 million, growth of approximately 18% at the midpoint year over year, reflecting the continued share gains we saw in H1, driven by the Express portfolio. NGS revenue guidance of $205 million to $209 million, growth of approximately 23% at the midpoint year over year. Biopharma revenue guidance of $23 million, growth of approximately 13% year over year.
 For Q3 fiscal 2025, we expect total revenue of approximately $94 million to $97 million, growth of approximately 17% versus Q3 of fiscal '24 at the midpoint. SynBio revenue of approximately $37 million to $39 million, growth of approximately 15% year over year at the midpoint.
 NGS revenue of approximately $51 million to $52 million, growth of 19% year over year at the midpoint. Biopharma revenue of approximately $6 million, growth of 18% year over year. For the full year fiscal 2025, we now expect gross margin of approximately 49.5%, with quarterly sequential improvements.
 In addition, we expect the margin above 50% in the back half of the fiscal year. We now expect adjusted EBITDA loss of approximately $48 million to $53 million for fiscal 2025, an improvement of approximately $41 million to $46 million versus fiscal 2024. This improvement includes the expected impact of the Atlas Data Storage transaction.
 Starting in Q4 of fiscal 2025, we expect a $5 million per quarter improvement to adjusted EBITDA and cash burn. We expect Q3 fiscal 2025 adjusted EBITDA loss to be approximately $13 million as improvements from the Atlas data storage transaction will be partially offset by transaction-related expenses in the current quarter, with sequential improvement in subsequent quarters. In addition, with the announcement made today regarding data storage, we expect to reach adjusted EBITDA breakeven on an accelerated time line by the end of fiscal 2026.
 With that, I'll turn the call back to Emily.

Emily Leproust

Thank you, Adam. As you can see, we are not standing still, we are leaning in. We view this environment not just as something to manage through, but the chance to accelerate our impact and strengthen our competitive position. Our leadership team is focused on what we can control. We will make decision back back data and grounded in a culture that has always defined Twist.
 We focus on innovation, resilience and customer impact, our guiding principles of grid impact service and trust resonates in this and in any environment. Twist's ability to adjust quickly and operate with discipline gives us an edge of our competitors who are larger and less nimble.
 Our leadership team is actively prioritizing the variables we can control while tracking global shifts to stay ahead of the curve. We continue to take market share, leveraging our differentiated platform with our customers at the forefront of our attention. Our team, platform and mission remains our greatest asset, and we are leveraging all three to support sustainable growth.
 We know predictabilities on everyone's mind, including all of us at Twist. One thing that gives us confidence moving into the second half of our fiscal year is that we booked more than $100 million of orders in each of the last two quarters.
 In addition, our sales teams see strength in the funnel and opportunities ahead. Our view of the future is clear and optimistic. Every employee at Twist is aligned around our high-impact goals and empowered by our team committed to scientific advancement and market leadership. We are moving forward with confidence, prepared to withstand volatility and where possible to turn down volatility into opportunity.
 At this time, let's open the call for questions. Operator?

Question and Answer Session

Operator

(Operator Instructions) Luke Sergott, Barclays.

Luke Sergott

Big news on the DNA storage. So I just wanted to figure out what you guys are -- given all the uncertainty around tariffs, what you guys are baking in there from -- within your guide given the how the quarter played out, what you guys are seeing there?
 And if you're also seeing any demand starting to come over from competitors that manufacture in China? Ultimately, this -- the tariff situation serving as a catalyst to push forward a potential there for BioSecure.

Adam Laponis

Luke, this is Adam. Thanks for the question. A couple of comments here. We did see strong share gains in this quarter across the business. Obviously, our team's innovation and our ability to remain nimble in that, react quickly to some of the macro challenges that we highlighted in the call were a big part of this.
 As I look to the -- what's baked into the guide is, we do see opportunity for upside in our 2025 guidance, up 20% growth at the midpoint, but we never want to be on the wrong side of the guide. With today's announcement on the data storage, we're more focused than we've ever been, and we see that path to profitability, but we also want to be understanding and respectful of the fact that there is uncertainty, and we have baked in what we know today around the tariffs.
 And in terms of the -- we discussed in terms of Q3 and beyond, we know we're lapping some tougher numbers in Q3, where last quarter a year in SynBio, we had a bump in revenue. But the key for us is we're going to win by winning. We view any market disruptions and opportunity to take share.
 And for the last few years, even with restrained budgets in biotechnology, we were able to take share. We see this similar opportunity today in academic research and really encouraged by the performance in Q2 where we saw 20% growth year over year with our academic customers across the board.
 So we're confident moving forward, but we're also understanding that there is uncertainty in the market, but we'll take advantage of that (inaudible).

Operator

Matt Sykes, Goldman Sachs.

Matt Sykes

Maybe just one on the promotions that you guys are doing at SynBio. I know earlier this year, you rolled out a promotion for academic customers given the stress they're under. And it sounds like if I heard it right, you're broadening that out across the business.
 So I guess my question would be, one, is that 20% growth you saw in the academic market this quarter partly a result of that promotional activity? And were there any visible market share shifts that were helped by that promotion?
 And two, do you expect a similar dynamic if that is the case for the rest of your customers for SynBio? And how long do you believe that you'll stick with this promotional period? And what are the impacts on gross margins for that?

Emily Leproust

Thank you, Matt. Great question. So one of the reasons why we push for the promotion is really anchored in the performance of the product. When we said that we can ship genes in five to six days, it does what it says on the tube, we do do it.
 And we do it not just for one gene, but we can do it for all of our genes so a very, very high throughput. And we saw that there were some confusion worry in the conic field around funding. And so it was a way to do one to (inaudible), one to assist our customers and to making sure that the Express going into more hands.
 And we believe that's going to help us long term to convert the academic market where we are still at the beginning of that conversion. So in terms of how long it's going to last, we said it will at least last until -- for the next -- until the end of our fiscal year. We want to make sure that our customers know that.
 In terms of impact on margin, I think it's positive. As you know, from the math, if we -- if the sales price is 5% lower than average, but your volume increased more percent, it is positive. And as far as the impact on the quarter, it was not complete impact since we started about midway through the quarter.
 But at the end of the day, a lot more academic customers are getting their hands on extra genes and getting -- they're seeing the value of it by doing the reordering. And so we see it as a win for the customers and a win for us as well.

Operator

Subbu Nambi, Guggenheim Securities.

Subbu Nambi

You have been reporting the percent of NGS revenue from your top 10 customers each quarter. How much of the second half guidance is from these top 10 customers, especially in NGS?

Adam Laponis

Subbu, this is Adam. Thank you for the question. And if I look at the guidance for NGS, I'd say the -- we expect to see growth from both the existing customers in the top 10 as well as other customers who aren't in the top 10 today.
 One thing we talk about a lot is it's not always the same top 10 customers every quarter. So we do see a rotation there. We are seeing new customers launching. We haven't baked in any assumed increases for things like MRD in that back half guide. But we do see the top 10 growing at about the same rate as the entire NGS business.

Operator

Doug Schenkel, Wolfe Research.

Doug Schenkel

I want to just dig a little deeper into guidance questions. So the first is on the SpinCo. Are you planning to reinvest some of the spin savings into higher priority R&D initiatives? If we're interpreting guidance right, it seems like that might be the case. So that's the first part.
 The second is on the MRD launches that you referenced. You talked about customers moving into clinical studies. When would they start to build inventory? And how is that contemplated into guidance?
 And then the third part is on pacing. Guidance implies about 28% of sales in the fourth quarter at the midpoint. That's a smidge more back-end loaded compared to the last two years. Is there anything to read into that?

Adam Laponis

Doug, this is Adam here. I'll see if I hit all three parts. Emil8y, I need you to help me out a bit because I'll forget them as I start talking. So in terms of the last one first, I think the pacing is -- we've said consistently that we're going to see sequential growth, and we feel confident in that growth.
 When you look at it year on year, the impact of growth in both quarters is slower than it was in the front half, but it is seeing that sequential increase, and we're seeing that set up nicely in terms of the continued adoption of share taking both in SynBio and the growth in our existing and new customers in NGS.
 Stepping back into the first two questions, if you could repeat them for me, I'd appreciate it.

Doug Schenkel

Absolutely. Yes. Sorry to rattle through those so quickly. So the first was on reinvestment of spend savings and R&D initiatives. It looks like that's what you're doing, at least partially a small amount.
 And then the second was on the MRD launches. You talked about customers moving into clinical studies. I'm just wondering when they would build inventory and how is that contemplated in the guidance?

Adam Laponis

Yes. Great question. So in terms of the launch of Atlas Data Storage, we did raise our adjusted EBITDA at the midpoint about $7 million this quarter. That does reflect most of the savings from not having data storage, which is about a $5 million a quarter cash burn in our P&L.
 So that is contemplated in Q4. In Q3, given the timing of it as well as some transaction-related costs, the impact will be only partial. But we are assuming that most of that savings is dropping to the bottom of the P&L. And then in terms of the MRD, we're not assuming any material launches ramping in the back half of 2026.

Operator

Vijay Kumar, Evercore ISI.

Vijay Kumar

I guess just to clarify one on the macro here, Adam, or Emily, if you will. On tariffs, are you assuming no impact at all? Or is there any impact with your offsetting those impacts?
 And sticking to that macro theme, academic and government, can you just remind us what is US A&G as a percentage of revenues? I think there's a proposal for NIH budgets being down 37%. So are you assuming second half growth to moderate? Or should that sustain at second quarter levels?

Emily Leproust

Thanks for the question. As far as the tariffs, so obviously, the tariffs are on pause now. Even when the tariffs were not on pause, the vast majority of our products were exempt to any tariffs into Europe. As far as China tariffs, first of all, China is a very small number for us.
 And similarly, even now, even though there is big tariffs on most US product into China, DNA-related products are exempt as well now. So overall, we think that if tariffs are back, it will be more of a headwind for our competitors than for us.
 And again, as Adam mentioned earlier, we will win by winning. Our products are faster, better, have better scale, we have higher quality, better user experience. And so tariffs, in the end, are a tailwind for us and a headwind for competition, but we will win by winning.
 As far as academia, we had a very good growth in academia of 20% in the last quarter -- sorry, year over year. So great growth. We are still massively underpenetrated in academia. So we have a big opportunity ahead of us. It's a very similar opportunity to what we had experienced over the last few years with Biopharma when Biopharma funding was under pressure.
 Our product quality, the value of our products from a quality to cost point of view was just so positive that we've grown significantly. And we think the same opportunity will happen here.

Operator

Matt Larew, William Blair.

Matt Larew

Maybe just following up on the question on the environment. You referenced a couple of times on the call that the guidance assumes continued share taking in the back half of the year. And clearly, this has been a story of share taking for many years, so maybe it's not that unusual.
 But just the emphasis on that. Can we read into that, that you're observing softer market conditions or softer customer wallets in April versus March and moving on and thus, the share taking aspect is more important? Maybe just speak a little bit to what you're seeing broadly for some of your customers, their spend and behavior relative to what you're seeing in terms of your own activity levels with your customers?

Emily Leproust

Yes. Thank you, Matt. I mean it's a very broad question. As you know, we have a lot of SKUs in many different applications, many different geographies. In terms of academia, for sure, it's clear that there is some pressure in academia.
 However, in a world with funding pressure, I think we have a very strong value proposition. In NGS diagnostics, we don't have the same the same dynamic at all. I'll say that liquid biopsy MRV broadly, genetic testing is doing really well. And so it's a completely different dynamic there.
 In terms of Biopharma, I think there's a little bit of a continuation of dynamic from the past where they have and they have not in terms of funding. And so for the customers that don't have -- that have tight funding, we resonate really well. Even with the companies that have good funding, they are cautious about budget.
 And so in this environment where our brand is high quality, high speed and low cost, I think it resonates really well. Plus we've launched a number of new products over the last few quarters to expand our aperture. For instance, FlexPrep, still early days, but it seems to be doing really well in AgBio.
 Our new library preps are doing great. So overall, yes, there is different and -- almost macro environment for each of the different markets we serve, but I think that's where we are good at. We are not the one size fits all, right? We are a customization of biology company, and we'll meet customers where they are in terms of their funding, what they need.
 And our products are just based in innovation of, again, speed, quality at very, very competitive, if not leading cost. So I think that makes us, in any environment, we can win, but we adjust and adapt our tactics for each of the products and the markets we serve.

Operator

Puneet Souda, Leerink Partners.

Puneet Souda

So just a couple here, if I could. First, I don't know if you provided the US academic growth. I think you provided the -- the worldwide growth. And what are you assuming in the second half for the US academic growth? On the order side, you had more than $100 million you said in the orders in the last two quarters.
 Can you elaborate a bit into what is the assumption there? What's growing within that NGS versus SynBio versus other segment? And then was there any pull forward due to tariffs, meaning European customers assuming tariffs as retaliation retaliatory tariffs? And did you see any impact from that?

Adam Laponis

Yes. So let me start on that with the US academics. We did not disclose the US academics, but we did see strong growth across the board in both NGS and SynBio, and we expect the growth to continue in the second half.
 With orders more than $100 million in the -- each of the first two quarters, we did see significant growth across all of our platforms, SynBio, NGS and Biopharma products and services, and we expect that to continue. We did not see any meaningful pull forward from tariffs. We see the demand continuing to grow, and we are confident that we'll continue to see sequential share gains in the back half.

Operator

Sung Ji Nam, Scotiabank.

Sung Ji Nam

Maybe on the US academic one as well. Could you talk about how important is the academic market for the DNA makers market? And in terms of -- based on all the policy discussions going on, do you have your assumptions in terms of that -- the Express Gene growth opportunity? Has that changed at all, especially targeting the US academic market?

Patrick Finn

Yes. Thanks. Good question. Look, I think that the value proposition is really starting to resonate. We know there's about a $1.4 billion opportunity to convert the makers into buyers. It's underpinned by economics and speed. From an academic standpoint, in a constrained budget environment, then the Twist value proposition resonates very, very strongly again, either it's more shots on goal.
 But then secondly, in a situation where you maybe want to focus on higher value research, sending Twist more clonal work to do more cloning and delivering more product to the customer base is actually a very, very favorable offering. So we continue to be very optimistic and bullish looking forward.

Operator

Tom Peterson, R.W. Baird.

Tom Peterson

Congrats on the quarter. Adam, maybe just a follow-up on the adjusted EBITDA commentary. I appreciate some of the color on the OpEx spend for the DNA Data Storage business. I guess what other assumptions underpin the fiscal '26 adjusted EBITDA breakeven target that you've put out? How should we be thinking about core OpEx growth over the medium term?

Adam Laponis

Tom, thanks for the question and happy to talk about it. So we did announce that we expect to be adjusted EBITDA positive by the end of fiscal 2026. I think given the Atlas announcement, we can see a clear path to that.
 What we've said previously is that we see continued sequential improvements, not just in revenue and gross margin, but also in adjusted EBITDA moving forward. And that trend will continue. In terms of investment level, what we've talked about in the past is inflationary levels of investment in OpEx across the business. I think we'll see a general trend similar to that moving forward on the path to adjusted EBITDA positive.

Operator

Brendan Smith, TD Cowen.

Brendan Smith

Congrats on all the progress. Kind of piggybacking on that last question. I guess with that adjusted EBITDA breakeven now by the end of next year, I just want to ask maybe how do your expectations for profitability of each revenue segment with this new guidance compare to your prior adjusted EBITDA issuance?
 And I guess I'm really just wondering if you can give any additional color on where you see the profitability bar for each segment, just given all the new product launches and internal initiatives you've implemented since that prior issuance?

Adam Laponis

Brendan, thank you for the question. And we do look at the business in aggregate not as a single segment. But what I've talked about a lot in the past, and I think it will continue on average in the future moving forward is as the gross margin continues to expand above 50%, we won't be happy and we want to continue marching.
 And we see about 75% to 80% of incremental revenue dropping to the gross margin line on all of our product lines across the business. And we'll continue to adapt and adjust the investment levels in the OpEx line to meet the growth that we want to attain across different products.
 So we're pretty pleased with all three, seeing the growth and the contribution to the growth in gross margin as well. And I expect that trend to continue beyond just 2025.

Operator

And I'm showing no further questions in the queue at this time. I will now turn the call back over to Dr. Emily Leproust for any closing.

Emily Leproust

Thank you for your questions and for joining us today. At Twist, we remain committed to transparency, disciplined growth and long-term value creation. We recognize that the world around us is shifting, but our focus is steady.
 We're executing with purpose, investing in innovation and continuing to build a business designed not just to endure complexity, but to lead through it. We appreciate your continued confidence in our team and our mission, and we look forward to updating you on our progress in the next quarters ahead. Thank you.

Operator

Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect.

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