Ginkgo announces several initiatives to
accelerate path to Adjusted EBITDA breakeven by end of 2026
Initiatives include a reduction of
$200 million in annualized run-rate
operating expenses by mid-2025, with anticipated substantial
reduction occurring in 2024
BOSTON, May 9, 2024
/PRNewswire/ -- Ginkgo Bioworks Holdings, Inc. (NYSE: DNA,
"Ginkgo"), which is building the leading platform for cell
programming and biosecurity, today announced its results for the
first quarter ended March 31, 2024.
The update, including a webcast slide presentation with additional
details on the first quarter and supplemental financial
information, will be available at investors.ginkgobioworks.com.
First Quarter 2024 Financial Results
- First quarter 2024 Total revenue of $38
million, down from $81 million
in the comparable prior year period, a decrease of 53% primarily
driven by the expected ramp down of K-12 testing in Ginkgo's
Biosecurity segment
- First quarter 2024 Cell Engineering revenue of $28 million, down from $34
million in the comparable prior year period, a decrease of
18% driven by a decline in revenue from early stage customers
partially offset by growth from large/enterprise customers
- First quarter 2024 Biosecurity revenue of $10 million with gross profit margin of 8% is
reflective of the early stages of transition to a more recurring
business model
- First quarter 2024 Loss from operations of $(178) million (inclusive of stock-based
compensation expense of $42 million),
compared to Loss from operations of $(216)
million (inclusive of stock-based compensation expense of
$75 million) in the comparable prior
year period
- First quarter 2024 Adjusted EBITDA of $(100) million remained flat year over year as
the decrease in Total revenue was offset by a decrease in operating
expenses
- Cash and cash equivalents balance as of the end of the first
quarter of $840 million
"Ginkgo is an increasingly important part of the biotech
ecosystem, and we are taking decisive action to keep it that way,"
said Jason Kelly, co-founder and CEO
of Ginkgo. "We've demonstrated that we can serve a large number of
diverse programs on a common platform, but I'm disappointed in our
revenues in Q1. This trend needs to change, and we are
simplifying both what we sell to customers and how we do the work
that drives revenue at Ginkgo. Fortunately, we have the
experience to know which types of programs are most efficient to
run on our lab automation and can use this knowledge to further
consolidate our Foundry operations and footprint into Biofab1, our
new fully integrated lab data center, which is expected to open in
mid-2025. We are also simplifying our transaction terms in many
instances as the benefits of our IP and downstream value terms were
not worth the cost of slowing our commercial activity. With these
changes, we are targeting reaching adjusted EBITDA breakeven by the
end of 2026, while seeking to reduce interim burn substantially to
maintain a strong margin of safety throughout this transformation,
supported by our $840 million cash
balance and no bank debt."
Recent Business Highlights & Strategic
Positioning
- Cell Engineering business seeing opportunities to simplify
operations, with a focus on more profitable and scalable programs
- Added 17 new Cell Programs to the Foundry platform in Q1 2024,
representing 31% growth over the prior year period
- Expanded partnership with Novo Nordisk, creating a
flexible model to allow projects to launch more quickly across
several areas of interest in their portfolio
- Introduced Lab Data as a Service ("LDaaS") offering to
meet market demand for high quality training data for AI ("lab in
the loop") and more modular R&D workflows
- Ginkgo Biosecurity continues to gain traction on an
international scale
- Awarded a grant from the Bill & Melinda Gates
Foundation to build an open-access, AI-enabled forecasting model
for global measles outbreaks to empower proactive public health
measures
- Announced Ginkgo's new biosecurity products, Ginkgo Canopy
and Ginkgo Horizon. Ginkgo Canopy is our end-to-end system to
monitor key nodes across the world for biothreats while Ginkgo
Horizon enables global situational awareness and informs critical
decisions through AI-powered multi-source data integration,
analysis, and forecasting. With these products, Ginkgo is allowing
customers to access biosecurity data feeds on a subscription basis
and is building a true common operating picture for
biothreats.
Plan to Achieve Adjusted EBITDA Breakeven and Updated Full
Year 2024 Guidance
- Ginkgo announced a plan to achieve Adjusted EBITDA break-even
by the end of 2026 on an annualized run-rate basis. The plan
includes the following:
- A target reduction in annualized run-rate operating
expenditures of $200 million by
mid-2025, driven by:
- Consolidation of Foundry operations into a small number of core
facilities, including Biofab1. If successful, including assumptions
around the ability to terminate and/or sublease excess space,
Ginkgo could reduce physical footprint and associated expenses by
up to 60%
- A reduction in labor expenses of at least 25%, across both
G&A and R&D functions, including a reduction in force
- Initiatives to simplify and standardize the nature of
customer programs on the Foundry platform, including launching Lab
Data as a Service and modular offerings, to drive a reduction in
manual R&D support and increased use of Ginkgo's high
throughput, flexible automation
- Given the changes described above, including planned changes to
our deal structures, we believe new Cell Programs as currently
defined is no longer the most relevant metric for the business.
That being said, Ginkgo does expect to add at least 100 new
customer projects in 2024, comprising traditional Cell Programs as
well as new offerings, including Lab Data as a Service.
- Ginkgo will share additional perspectives and its plan to
achieve Adjusted EBITDA breakeven on the webcast.
- Ginkgo expects Total revenue of $170-$190 million
in 2024
- Ginkgo revised its expectation for Cell Engineering services
revenue to $120-140 million in 2024.
This guidance reflects a weaker than expected revenue ramp during
the year, uncertainty relating to the timing of technical
milestones, and the potential near-term impact of the restructuring
actions described above. This guidance excludes the impact of any
potential downstream value share as well as potential upside from
new service offerings.
- Ginkgo continues to expect Biosecurity revenue in 2024 of
at least $50 million, representing
the approximate current contracted backlog, with potential upside
from additional opportunities in the pipeline
Conference Call Details
Ginkgo will host a video conference today, Thursday, May 9, 2024, beginning at 5:30 p.m. ET. The presentation will include an
overview of first quarter financial performance, recent business
updates, a discussion on Ginkgo's outlook, as well as a moderated
question and answer session.
To ask a question ahead of the presentation, please submit your
questions to @Ginkgo on X (hashtag #GinkgoResults) or by
sending an e-mail to investors@ginkgobioworks.com.
A webcast link is available on Ginkgo's Investor Relations
website and a replay will be made available following the
presentation.
Ginkgo Investor Website:
https://investors.ginkgobioworks.com/events/
Audio-Only Dial Ins:
+1 646 876 9923 (New York)
+1 301 715 8592 (Washington
DC)
+1 312 626 6799 (Chicago)
+1 669 900 6833 (San Jose)
+1 253 215 8782 (Tacoma)
+1 346 248 7799 (Houston)
+1 408 638 0968 (San Jose)
Webinar ID: 942 0961 7144
If you experience technical difficulties with any of these
dial-ins or if you need international dial-in numbers, please visit
our website at https://investors.ginkgobioworks.com/events/ for
updated dial-in information.
About Ginkgo Bioworks
Ginkgo Bioworks is the leading
horizontal platform for cell programming, providing flexible,
end-to-end services that solve challenges for organizations across
diverse markets, from food and agriculture to pharmaceuticals to
industrial and specialty chemicals. Ginkgo Biosecurity is building
and deploying the next-generation infrastructure and technologies
that global leaders need to predict, detect, and respond to a wide
variety of biological threats. For more information, visit
ginkgobioworks.com and ginkgobiosecurity.com, read our blog, or
follow us on social media channels such as X (@Ginkgo and
@Ginkgo_Biosec), Instagram (@GinkgoBioworks), Threads
(@GinkgoBioworks) or LinkedIn.
Forward-Looking Statements of Ginkgo Bioworks
This
press release, the presentation, and the conference call and
webcast contain certain forward-looking statements within the
meaning of the federal securities laws, including statements
regarding our plans, strategies, including with respect to our
balance sheet and cash runway, current expectations, operations and
anticipated results of operations, both business and financial,
including the timing for attaining adjusted EBITDA breakeven and
profitability, the timing of opening Biofab1 and anticipated
impacts on our results, our planned reduction in workforce and
anticipated impacts thereof, our planned site consolidation and the
potential financial impact thereof, opportunities for and timing of
increased operational efficiency and the expected impact on our
operational expenditures, our manufacturing capabilities, potential
customer success, including successful application of our offerings
by our customers, the capabilities and potential operational and
financial success of our acquisitions, partnerships and
collaborations, and expected timing thereof, expectations with
regard to revenue, the nature of such revenue and any related
downstream value share associated with such revenue, funding that
is contingent upon Ginkgo's achievement of milestones, expenses,
including our stock-based compensation expenses, our full year 2024
outlook, the expansion, timing and potential capabilities of our
bioradar network and the national biodefense strategy, plans to
develop and deploy AI tools for biology and biosecurity for both
internal use and external release, including the expected timing
thereof, and the market environment, all of which are subject to
known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements, market
trends, or industry results to differ materially from those
expressed or implied by such forward-looking statements. These
forward-looking statements generally are identified by the words
"believe," "can," "project," "potential," "expect," "anticipate,"
"estimate," "intend," "strategy," "future," "opportunity," "plan,"
"may," "should," "will," "would," "will be," "will continue," "will
likely result," and similar expressions. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to: (i) our ability to realize near-term and long-term cost
savings associated with our site consolidation plans, including the
ability to terminate leases or find sub-lease tenants for unused
facilities, (ii) volatility in the price of Ginkgo's securities due
to a variety of factors, including changes in the competitive and
highly regulated industries in which Ginkgo operates and plans to
operate, variations in performance across competitors, and changes
in laws and regulations affecting Ginkgo's business, (iii) the
ability to implement business plans, forecasts, and other
expectations, and to identify and realize additional business
opportunities, (iv) the risk of downturns in demand for products
using synthetic biology, (v) the uncertainty regarding the demand
for passive monitoring programs and biosecurity services, (vi)
changes to the biosecurity industry, including due to advancements
in technology, emerging competition and evolution in industry
demands, standards and regulations, (vii) the outcome of any
pending or potential legal proceedings against Ginkgo, (viii) our
ability to realize the expected benefits from and the success of
our Foundry platform programs, (ix) our ability to successfully
develop engineered cells, bioprocesses, data packages or other
deliverables, (x) the product development or commercialization
success of our customers, and (xi) the potential negative impact on
our business of our planned reduction in force or the failure to
realize the anticipated savings associated therewith. The foregoing
list of factors is not exhaustive. You should carefully consider
the foregoing factors and the other risks and uncertainties
described in the "Risk Factors" section of Ginkgo's annual report
on Form 10-K filed with the U.S. Securities and Exchange Commission
(the "SEC") on February 29, 2024 and
other documents filed by Ginkgo from time to time with the SEC.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Ginkgo assumes no obligation and does not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Ginkgo does
not give any assurance that it will achieve its expectations.
Use of Non-GAAP Financial Measures
Certain of the
financial measures included in this release, including Adjusted
EBITDA, have not been prepared in accordance with generally
accepted accounting principles ("GAAP"), and constitute "non-GAAP
financial measures" as defined by the SEC. Ginkgo has included
these non-GAAP financial measures because it believes they provide
an additional tool for investors to use in evaluating Ginkgo's
financial performance and prospects. Due to the nature and/or size
of the items being excluded, such items do not reflect future
gains, losses, expenses or benefits and are not indicative of our
future operating performance. These non-GAAP financial measures are
supplemental to, and should not be considered in isolation from, or
as an alternative to, financial measures determined in accordance
with GAAP. In addition, these non-GAAP financial measures may
differ from non-GAAP financial measures with comparable names used
by other companies. See the reconciliation below for additional
information regarding certain of the non-GAAP financial measures
included in this release, including a description of these non-GAAP
financial measures and a reconciliation of the historic measures to
Ginkgo's most comparable GAAP financial measures.
Ginkgo Bioworks Contacts:
INVESTOR
CONTACT:
investors@ginkgobioworks.com
MEDIA CONTACT:
press@ginkgobioworks.com
Ginkgo Bioworks
Holdings, Inc.
|
Condensed Consolidated
Balance Sheets
|
(in thousands, except
per share data, unaudited)
|
|
|
|
|
|
|
|
As of March
31,
|
|
As of March
31,
|
|
|
2024
|
|
2023
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
840,440
|
|
$
944,073
|
Accounts receivable,
net
|
|
24,189
|
|
17,157
|
Accounts receivable -
related parties
|
|
370
|
|
742
|
Prepaid expenses and
other current assets
|
|
38,021
|
|
39,777
|
Total current
assets
|
|
903,020
|
|
1,001,749
|
Property, plant, and
equipment, net
|
|
195,992
|
|
188,193
|
Operating lease
right-of-use assets
|
|
220,785
|
|
206,801
|
Investments
|
|
76,021
|
|
78,565
|
Intangible assets,
net
|
|
77,407
|
|
82,741
|
Goodwill
|
|
47,909
|
|
49,238
|
Other non-current
assets
|
|
60,627
|
|
58,055
|
Total
assets
|
|
$
1,581,761
|
|
$
1,665,342
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
26,995
|
|
$
9,323
|
Deferred
revenue
|
|
33,612
|
|
44,486
|
Accrued expenses and
other current liabilities
|
|
108,436
|
|
110,051
|
Total current
liabilities
|
|
169,043
|
|
163,860
|
Non-current
liabilities:
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
166,067
|
|
158,062
|
Operating lease
liabilities, non-current
|
|
234,497
|
|
221,835
|
Other non-current
liabilities
|
|
24,884
|
|
24,433
|
Total
liabilities
|
|
594,491
|
|
568,190
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.0001 par value
|
|
—
|
|
—
|
Common stock, $0.0001
par value
|
|
202
|
|
199
|
Additional paid-in
capital
|
|
6,445,058
|
|
6,385,997
|
Accumulated
deficit
|
|
(5,456,439)
|
|
(5,290,528)
|
Accumulated other
comprehensive loss
|
|
(1,551)
|
|
1,484
|
Total stockholders'
equity
|
|
987,270
|
|
1,097,152
|
Total liabilities and
stockholders' equity
|
|
$
1,581,761
|
|
$
1,665,342
|
Ginkgo Bioworks
Holdings, Inc.
|
Condensed Consolidated
Statements of Operations and Comprehensive Loss
|
(in thousands, except
per share data, unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Cell Engineering
revenue
|
|
$
27,889
|
|
$
34,096
|
Biosecurity
revenue:
|
|
|
|
|
Product
|
|
—
|
|
11,666
|
Service
|
|
10,055
|
|
34,940
|
Total
revenue
|
|
37,944
|
|
80,702
|
Costs and operating
expenses:
|
|
|
|
|
Cost of Biosecurity product
revenue
|
|
—
|
|
4,541
|
Cost of Biosecurity service
revenue
|
|
9,202
|
|
17,834
|
Research and
development (1)
|
|
136,457
|
|
162,639
|
General and
administrative (1)
|
|
70,287
|
|
111,433
|
Total operating
expenses
|
|
215,946
|
|
296,447
|
Loss from
operations
|
|
(178,002)
|
|
(215,745)
|
Other income
(expense):
|
|
|
|
|
Interest income,
net
|
|
11,711
|
|
14,545
|
Loss on equity method
investments
|
|
—
|
|
(1,449)
|
Loss on
investments
|
|
(2,544)
|
|
(6,370)
|
Change in fair value of
warrant liabilities
|
|
940
|
|
1,204
|
Other income, net
|
|
2,015
|
|
2,928
|
Total other income
(expense)
|
|
12,122
|
|
10,858
|
Loss before income
taxes
|
|
(165,880)
|
|
(204,887)
|
Income tax
expense
|
|
31
|
|
82
|
Net loss
|
|
$
(165,911)
|
|
$
(204,969)
|
Net loss per share,
basic and diluted
|
|
$
(0.08)
|
|
$
(0.11)
|
Weighted average common
shares outstanding:
|
|
|
|
|
Basic
|
|
2,004,460
|
|
1,914,963
|
Diluted
|
|
2,005,336
|
|
1,916,637
|
Comprehensive
loss:
|
|
|
|
|
Net loss
|
|
$
(165,911)
|
|
$
(204,969)
|
Other comprehensive
(loss) income:
|
|
|
|
|
Foreign currency translation
adjustment
|
|
(3,035)
|
|
1,018
|
Total other
comprehensive (loss) income
|
|
(3,035)
|
|
1,018
|
Comprehensive
loss
|
|
$
(168,946)
|
|
$
(203,951)
|
(1)
|
Total stock-based
compensation expense, inclusive of employer payroll taxes, was
allocated as follows (in thousands):
|
|
|
Three Months Ended
March 31,
|
|
|
2024
|
|
2023
|
Research and
development
|
|
$
24,120
|
|
$
47,541
|
General and
administrative
|
|
18,277
|
|
27,659
|
Total
|
|
$
42,397
|
|
$
75,200
|
Ginkgo Bioworks
Holdings, Inc.
|
Condensed Consolidated
Statements of Cash Flows
|
(in thousands,
unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(165,911)
|
|
$
(204,969)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
12,869
|
|
18,958
|
Stock-based
compensation
|
40,782
|
|
72,986
|
Loss on investments
and equity method investments
|
2,544
|
|
7,819
|
Change in fair value
of warrant liabilities
|
(940)
|
|
(1,204)
|
Change in fair value
of contingent consideration liability
|
(926)
|
|
5,177
|
Non-cash lease
expense
|
5,637
|
|
8,039
|
Non-cash in-process
research and development
|
16,816
|
|
—
|
Other non-cash
activity
|
(442)
|
|
1,121
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(6,770)
|
|
(526)
|
Prepaid expenses and
other current assets
|
1,154
|
|
7,442
|
Operating lease
right-of-use assets
|
—
|
|
2,665
|
Other non-current
assets
|
(707)
|
|
(2,036)
|
Accounts
payable, accrued expenses and other current liabilities
|
10,871
|
|
19,080
|
Deferred revenue,
current and non-current
|
(2,912)
|
|
(17,233)
|
Operating lease
liabilities, current and non-current
|
(4,097)
|
|
(8,521)
|
Other non-current
liabilities
|
2,773
|
|
617
|
Net cash used in
operating activities
|
(89,259)
|
|
(90,585)
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(6,710)
|
|
(19,441)
|
Business
acquisition
|
(5,400)
|
|
—
|
Other
|
—
|
|
27
|
Net cash used in
investing activities
|
(12,110)
|
|
(19,414)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from exercise
of stock options
|
70
|
|
12
|
Principal payments on
finance leases
|
(294)
|
|
(322)
|
Contingent
consideration payment
|
(621)
|
|
—
|
Payment of equity
issuance costs
|
—
|
|
(578)
|
Net cash used in
financing activities
|
(845)
|
|
(888)
|
Effect of foreign
exchange rates on cash and cash equivalents
|
(157)
|
|
(26)
|
Net decrease in cash,
cash equivalents and restricted cash
|
(102,371)
|
|
(110,913)
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
944,073
|
|
1,315,792
|
Restricted cash,
beginning of period
|
45,511
|
|
53,789
|
Cash, cash equivalents
and restricted cash, beginning of period
|
989,584
|
|
1,369,581
|
|
|
|
|
Cash and cash
equivalents, end of period
|
840,440
|
|
1,206,086
|
Restricted cash, end of
period
|
46,773
|
|
52,582
|
Cash, cash equivalents
and restricted cash, end of period
|
$
887,213
|
|
$
1,258,668
|
|
|
Ginkgo Bioworks
Holdings, Inc.
|
Selected Non-GAAP
Financial Measures
|
(in thousands,
unaudited)
|
|
|
Three Months
Ended March 31,
|
|
2024
|
|
2023
|
Net loss
|
$
(165,911)
|
|
$
(204,969)
|
Interest income,
net
|
(11,711)
|
|
(14,545)
|
Income tax
expense
|
31
|
|
82
|
Depreciation and
amortization
|
12,869
|
|
18,958
|
EBITDA
|
(164,722)
|
|
(200,474)
|
Stock-based
compensation (1)
|
42,397
|
|
75,200
|
Loss on equity method
investments
|
—
|
|
1,449
|
Loss on
investments
|
2,544
|
|
6,370
|
Change in fair value of
warrant liabilities
|
(940)
|
|
(1,204)
|
Merger and acquisition
related expenses (2)
|
19,265
|
|
18,662
|
Change in fair value of
convertible notes
|
1,326
|
|
(44)
|
Adjusted
EBITDA
|
$
(100,130)
|
|
$
(100,041)
|
|
(1)
|
Includes
$1.6 million and $2.2 million in employer
payroll taxes for the three months ended March 31, 2024 and
2023, respectively.
|
(2)
|
Represents transaction
and integration costs directly related to mergers and acquisitions,
including: (i) due diligence, legal, consulting
and accounting fees associated with acquisitions, (ii)
post-acquisition employee retention bonuses and severance payments,
(iii) the fair
value adjustments to contingent consideration liabilities resulting
from acquisitions, (iv) acquired intangible assets expensed as
in-
process research and development, and (v) costs associated with the
Zymergen Bankruptcy, as well as securities litigation costs, net
of
insurance recovery.
|
Ginkgo Bioworks
Holdings, Inc.
|
Segment
Information
|
(in thousands,
unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Revenue:
|
|
|
|
Cell
Engineering
|
$
27,889
|
|
$
34,096
|
Biosecurity
|
10,055
|
|
46,606
|
Total
revenue
|
37,944
|
|
80,702
|
Segment cost of
revenue:
|
|
|
|
Biosecurity
|
9,202
|
|
22,375
|
Segment research and
development expense:
|
|
|
|
Cell
Engineering
|
100,101
|
|
98,522
|
Biosecurity
|
120
|
|
567
|
Total segment research
and development expense
|
100,221
|
|
99,089
|
Segment general and
administrative expense:
|
|
|
|
Cell
Engineering
|
40,232
|
|
61,692
|
Biosecurity
|
11,951
|
|
13,956
|
Total segment general
and administrative expense
|
52,183
|
|
75,648
|
Segment operating
(loss) income:
|
|
|
|
Cell
Engineering
|
(112,444)
|
|
(126,118)
|
Biosecurity
|
(11,218)
|
|
9,708
|
Total segment
operating loss
|
(123,662)
|
|
(116,410)
|
Operating expenses
not allocated to segments:
|
|
|
|
Stock-based
compensation (1)
|
42,397
|
|
75,200
|
Depreciation and
amortization
|
12,869
|
|
18,958
|
Change in fair value
of contingent consideration liability
|
(926)
|
|
5,177
|
Loss from
operations
|
$
(178,002)
|
|
$
(215,745)
|
|
(1) Includes $1.6 million and $2.2 million in employer
payroll taxes for the three months ended March 31, 2024 and
2023, respectively.
|
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SOURCE Ginkgo Bioworks