Twist Bioscience Corporation (NASDAQ:TWST) stock plunged Thursday despite the company reporting better-than-expected fourth-quarter results and issuing an upbeat fiscal 2027 sales forecast.

The decline followed the company's fiscal 2027 outlook, which implies slower AI drug discovery revenue growth despite strong demand and plans to expand capacity.

Twist Bioscience Beats Q4 Earnings Estimates

The life sciences company reported a fourth-quarter GAAP loss of 32 cents per share, narrower than the consensus loss of 34 cents.

Revenue climbed 28% year over year to $126.64 million, beating analysts' estimate of $123.09 million. Sales also exceeded management's forecast of $123 million to $124 million.

DNA Synthesis and Protein Solutions revenue rose 33% to $61 million. Meanwhile, NGS Applications revenue increased 24% to $65.7 million.

Twist shipped products to approximately 4,100 customers in fiscal 2026, up from 3,800 a year earlier. Gene shipments climbed to 1.3 million from 938,000.

Adjusted EBITDA improved to $2.2 million from a loss of $7.8 million.

AI Drug Discovery Revenue Surges 175%

CEO Emily Leproust said AI drug discovery revenue surged 175% to $59.1 million in fiscal 2026 from $21.5 million a year earlier. Orders more than doubled.

On Thursday's earnings call, Leproust highlighted repeat customer orders and growing demand for Twist's drug discovery services.

The company increased protein and antibody manufacturing capacity by nearly 200% over the past year. It also expanded characterization capabilities by two to five times, depending on the assay.

Twist plans further capacity expansion across DNA, protein and characterization operations.

Twist Bioscience Forecasts 21% Revenue Growth in 2027

Twist forecasts fiscal 2027 revenue of $550 million to $560 million, above the analyst consensus of $547.14 million.

The forecast includes approximately $100 million in AI drug discovery revenue, representing 69.2% annual growth, compared with 175% in fiscal 2026. However, management sees potential for stronger growth as it expands manufacturing capacity.

Management forecasts a fiscal 2027 gross margin of 52.5% to 53% and expects positive adjusted EBITDA for the full year.

For the first quarter, Twist forecasts revenue of $130 million to $132 million, exceeding analysts' estimate of $126.35 million.

TWST Price Action: Twist Bioscience shares were down 9.12% at $111.41 at the time of publication on Thursday, according to market data.