Ginkgo Bioworks Reports Third Quarter 2024 Financial Results

12.11.24 23:01 Uhr

Ginkgo provides update on its restructuring process including an acceleration of site consolidation initiatives and continued progress on cost reductions

Ginkgo signs new and expanded deals with Novo Nordisk and achieves a major research milestone with Merck 

BOSTON, Nov. 12, 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 third quarter ended September 30, 2024. The update, including a webcast slide presentation with additional details on the third quarter and supplemental financial information will be available at investors.ginkgobioworks.com.

(PRNewsfoto/Ginkgo Bioworks)

Third Quarter 2024 Financial Results

  • Third quarter 2024 Total revenue of $89 million, up from $55 million in the comparable prior year period, an increase of 61% driven by $45 million of non-cash revenue from a release of deferred revenue relating to the mutual termination of a customer agreement. Excluding this impact, Total revenue in the quarter was $44 million, a decrease of 21% over the prior year period
    • Excluding the $45 million non-cash deferred revenue release, third quarter 2024 Cell Engineering revenue of $30 million, down from $37 million in the comparable prior year period, a decrease of 20% driven by the continued shift from early stage customers to large/enterprise customers along with commercial changes related to the restructuring
    • Third quarter 2024 Biosecurity revenue of $14 million with gross profit margin of 28%. Biosecurity revenue decreased from the comparable prior year period due to the expected ramp down of K-12 testing
  • Third quarter 2024 Loss from operations of $(55) million (inclusive of stock-based compensation expense of $14 million and M&A and restructuring related costs of $2 million, net), compared to Loss from operations of $(286) million (inclusive of stock-based compensation expense of $54 million and M&A and restructuring related costs, including asset impairments, of $124 million) in the comparable prior year period. The 2024 period also benefited from the above non-cash deferred revenue release
  • Third quarter 2024 Adjusted EBITDA of $(20) million, up from $(84) million in the comparable prior year period, driven by the above non-cash deferred revenue release and a decrease in operating expenses
  • Cash and cash equivalents balance as of the end of the third quarter of $616 million

"I'm extremely proud of the significant progress we made in the third quarter," said Jason Kelly, co-founder and CEO of Ginkgo. "The team has been laser-focused on delivering for customers while driving down costs even further. We are achieving ambitious milestones, signing new deals with several new and existing customers while also launching our new Automation, Datapoints and AI offerings. Beyond customer successes, we will substantially consolidate our overall real estate footprint by exiting several facilities in Cambridge, MA and Europe by year end. We couldn't have done this without the support of our Board and we're very grateful to Arie for all of his service and contributions to our journey since going public, and look forward to working closely with Sri as he brings a wealth of knowledge in the automation and life science tools space as we expand increasingly into tools. It's an incredibly important time to be pursuing the mission of making biology easier to engineer and creating sustainable biosecurity infrastructure for the future. I am excited by the momentum we are gaining to meet that mission as we close out this year on a substantially reduced cost base."

Recent Business Highlights & Strategic Positioning

  • Cell Engineering closed deals with new and existing customers
    • Added 25 new programs and other customer contracts to the Cell Engineering platform in Q3 2024, of which 11 were comparable in size and scope to historically reported New Programs and an additional 14 contracts that represent a variety of other deal archetypes, such as Datapoints projects
    • Signed a new deal with Novo Nordisk focused on the discovery and development of proteins while also expanding Ginkgo's existing collaboration on expression systems for pharmaceutical products
    • Delivered on a major research milestone for Ginkgo's previously announced deal with Merck. As part of this milestone completion, Ginkgo will receive a fee of $9 million in cash, expected in Q4 2024, and will move to Stage 2 to work towards making an even more effective production process
    • Signed three new Datapoints deals with a major TechBio company and two of the top 25 pharmaceutical companies
  • Ginkgo Biosecurity continues to work towards creating solutions that offer persistent, pervasive monitoring
    • Ginkgo validated its approach to rapidly detect H5N1 and has updated its offerings to include DNA sequencing of raw milk, bioinformatics as a service and comprehensive analyzed data sets
  • Ginkgo made significant progress on its plan to reach Adjusted EBITDA breakeven by the end of 2026
    • The reduction in force is estimated to achieve over $85 million in annualized savings by mid-2025
    • Ginkgo has continued implementing significant non-people cost cutting measures, including rationalizing third-party costs and site consolidation
  • Dr. Sri Kosuri, CEO of Octant and former associate professor at UCLA in the Chemistry and Biochemistry Department, joined our Board on November 6, 2024. Dr. Arie Belldegrun, a director since September 2021 and member of our compensation committee, resigned from the Board on November 7, 2024

Full Year 2024 Outlook

  • Ginkgo previously issued 2024 guidance for Total revenue of $170-190 million; Cell Engineering services revenue of $120-140 million; and Biosecurity revenue of at least $50 million. Ginkgo updates its previously issued guidance solely to reflect the impact of the previously mentioned $45 million non-cash deferred revenue release in the third quarter to:
    • Total revenue guidance of $215-235 million in 2024;
    • Cell Engineering services revenue of $165-185 million in 2024; and
    • Biosecurity revenue of at least $50 million in 2024.

Conference Call Details
Ginkgo will host a videoconference today, Tuesday, November 12, 2024, beginning at 5:30 p.m. ET. The presentation will include an overview of third 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: 920 8859 2008

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 current expectations, operations and anticipated results of operations, both business and financial, including the timing for attaining Adjusted EBITDA breakeven and profitability, our reduction in workforce and anticipated impacts thereof, the timing and structuring of our facilities consolidation and the potential financial impact thereof, potential customer success, including successful application of our offerings by our customers, expectations with regard to revenue, expenses, including our stock-based compensation expenses, our full year 2024 outlook, 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 September 30, 2024


As of December 31, 2023

Assets





Current assets:





Cash and cash equivalents


$                                  616,214


$                                 944,073

Accounts receivable, net


23,411


17,157

Accounts receivable - related parties


531


742

Prepaid expenses and other current assets


22,324


39,777

Total current assets


662,480


1,001,749

Property, plant, and equipment, net


211,035


188,193

Operating lease right-of-use assets


405,911


206,801

Investments


62,103


78,565

Intangible assets, net


79,566


82,741

Goodwill



49,238

Other non-current assets


59,788


58,055

Total assets


$                             1,480,883


$                            1,665,342

Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable


$                                    15,700


$                                     9,323

Deferred revenue


22,894


44,486

Accrued expenses and other current liabilities


75,833


110,051

Total current liabilities


114,427


163,860

Non-current liabilities:





Deferred revenue, net of current portion


105,247


158,062

Operating lease liabilities, non-current


445,592


221,835

Other non-current liabilities


17,674


24,433

Total liabilities


682,940


568,190

Commitments and contingencies





Stockholders' equity:





Preferred stock, $0.0001 par value



Common stock, $0.0001 par value


5


5

Additional paid-in capital


6,527,698


6,386,191

Accumulated deficit


(5,730,023)


(5,290,528)

Accumulated other comprehensive income


263


1,484

Total stockholders' equity


797,943


1,097,152

Total liabilities and stockholders' equity


$                             1,480,883


$                            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 September 30,


Nine Months Ended September 30,



2024


2023


2024


2023

Cell Engineering revenue


$           75,089


$          37,176


$        139,183


$          116,555

Biosecurity revenue:









   Product



6,495



28,949

   Service


13,957


11,759


44,013


71,196

Total revenue


89,046


55,430


183,196


216,700

Costs and operating expenses:









   Cost of Biosecurity product revenue



906



7,481

   Cost of Biosecurity service revenue


9,987


6,017


30,996


39,913

   Cost of other revenue


2,016



3,930


   Research and development (1)


77,006


156,662


347,684


463,583

   General and administrative (1)


52,292


82,028


188,864


295,802

   Impairment of lease assets



96,210



96,210

   Goodwill impairment




47,858


   Restructuring charges


2,949



20,015


Total operating expenses


144,250


341,823


639,347


902,989

Loss from operations


(55,204)


(286,393)


(456,151)


(686,289)

Other income (expense):









   Interest income, net


9,251


15,020


31,275


43,914

   Loss on equity method investments





(1,516)

   Loss on investments


(6,912)


(36,324)


(16,282)


(44,815)

   Loss on deconsolidation of subsidiary


(7,013)



(7,013)


   Change in fair value of warrant liabilities


1,528


1,891


5,701


(1,387)

   Other income, net


1,572


2,893


2,821


9,045

Total other income (expense)


(1,574)


(16,520)


16,502


5,241

Loss before income taxes


(56,778)


(302,913)


(439,649)


(681,048)

Income tax expense (benefit)


(375)


(22)


(154)


127

Net loss


$      (56,403)


$     (302,891)


$     (439,495)


$       (681,175)

Net loss per share, basic and diluted


$          (1.08)


$           (6.21)


$           (8.58)


$           (14.09)

Weighted average common shares outstanding:









   Basic


52,240


48,770


51,244


48,330

   Diluted


52,246


48,770


51,250


48,330

Comprehensive loss:









Net loss


$     (56,403)


$     (302,891)


$     (439,495)


$  (681,175)

Other comprehensive income (loss):









   Foreign currency translation adjustment


494


(1,599)


(2,713)


(267)

   Reclassification of foreign currency translation

   adjustment realized upon sale of

   foreign subsidiary


1,492



1,492


Total other comprehensive income (loss)


1,986


(1,599)


(1,221)


(267)

Comprehensive loss


$     (54,417)


$     (304,490)


$     (440,716)


$       (681,442)


 (1) Total stock-based compensation expense, inclusive of employer payroll taxes, was allocated as follows (in thousands):




Three Months Ended September 30,


Nine Months Ended September 30,



2024


2023


2024


2023

Research and development


$             3,214


$         33,976


$         48,028


$         122,086

General and administrative


10,799


19,671


46,608


69,238

Total


$           14,013


$         53,647


$         94,636


$         191,324

 

Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)








Nine Months Ended September 30,



2024


2023

Cash flows from operating activities:





Net loss


$                         (439,495)


$                          (681,175)

Adjustments to reconcile net loss to net cash used in operating activities:





Depreciation and amortization


47,368


57,670

Stock-based compensation


91,783


187,047

Goodwill impairment


47,858


Restructuring related impairment charges


4,823


Loss on investments and equity method investments


16,282


46,331

Loss on deconsolidation of subsidiary


7,013


Change in fair value of warrant liabilities


(5,701)


1,387

Change in fair value of contingent consideration liability


3,698


10,217

Non-cash lease expense


20,619


24,635

Non-cash in-process research and development


19,796


3,981

Impairment of long-lived assets



121,404

Other non-cash activity


655


3,053

Changes in operating assets and liabilities:





Accounts receivable


(6,101)


21,168

Prepaid expenses and other current assets


3,487


13,557

Operating lease right-of-use assets


19,224


9,277

Other non-current assets


(196)


(2,733)

       Accounts payable, accrued expenses and other current    liabilities


(31,099)


(4,822)

Deferred revenue, current and non-current


(67,779)


(29,382)

Operating lease liabilities, current and non-current


(11,383)


(18,310)

Other non-current liabilities


1,998


(974)

Net cash used in operating activities


(277,150)


(237,669)

Cash flows from investing activities:





Purchases of property and equipment


(48,831)


(37,355)

Business acquisition


(5,400)


Proceeds from sales of marketable securities


3,951


Proceeds from sale of equipment


591


3,000

Other


538


336

Net cash used in investing activities


(49,151)


(34,019)

Cash flows from financing activities:





Proceeds from exercise of stock options


84


79

Principal payments on finance leases


(694)


(977)

Contingent consideration payment


(922)


(1,082)

Other


(4)


(604)

Net cash used in financing activities


(1,536)


(2,584)

Effect of foreign exchange rates on cash and cash equivalents


(208)


(690)

Net decrease in cash, cash equivalents and restricted cash


(328,045)


(274,962)






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


616,214


1,049,244

Restricted cash, end of period


45,325


45,375

Cash, cash equivalents and restricted cash, end of period


$                           661,539


$                          1,094,619

 

Selected Non-GAAP Financial Measures

(in thousands, unaudited)




Three Months Ended September 30,


Nine Months Ended September 30,



2024


2023


2024


2023

Net loss (1)


$        (56,403)


$       (302,891)


$        (439,495)


$       (681,175)

Interest income, net


(9,251)


(15,020)


(31,275)


(43,914)

Income tax expense (benefit)


(375)


(22)


(154)


127

Depreciation and amortization


17,171


21,060


47,368


57,670

EBITDA


(48,858)


(296,873)


(423,556)


(667,292)

Stock-based compensation (2)


14,013


53,647


94,636


191,324

Impairment expense (3)



112,403


47,858


121,404

Restructuring charges (4)


2,949



20,015


Merger and acquisition related expenses (5)


(796)


12,253


6,110


43,127

Loss on equity method investments





1,516

Loss on investments


6,912


36,324


16,282


44,815

Loss on deconsolidation of subsidiary


7,013



7,013


Change in fair value of warrant liabilities


(1,528)


(1,891)


(5,701)


1,387

Change in fair value of convertible notes


281


317


1,127


121

Adjusted EBITDA


$        (20,014)


$        (83,820)


$        (236,216)


$        (263,598)



(1)

All periods include non-cash revenue when earned, including $45.4 million in the three and nine months ended September 30, 2024, recognized pursuant to the termination of revenue contracts with Motif.

(2)

Includes $0.2 million and $1.1 million in employer payroll taxes for the three months ended September 30, 2024 and 2023, respectively, and $2.9 and $4.3 million for the nine months ended September 30, 2024 and 2023, respectively.

(3)

For 2024, includes $47.9 million related to goodwill impairment. For the three months ended September 30, 2023, includes a $16.2 million impairment loss on lab equipment and a $96.2 million impairment loss on an operating lease right-of-use asset and related leasehold improvements associated with an exited Zymergen leased facility. For the nine months ended September 30, 2023, includes a $25.2 million impairment loss on lab equipment and a $96.2 million impairment loss on lease assets associated with the exited Zymergen leased facility.

(4)

Restructuring charges consist of employee termination costs from the reduction in force commenced in June 2024, as well as the impairment of a right-of-use asset relating to facilities consolidation.

(5)

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) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs, net of insurance recovery. Not included in this adjustment are non-cash charges for acquired in-process research and development expenses, which totaled $19.8 million and $4.0 million in the nine months ended September 30, 2024 and 2023, respectively.

 

Ginkgo Bioworks Holdings, Inc.

Segment Information

(in thousands, unaudited)










Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023

Revenue:








Cell Engineering

$          75,089


$         37,176


$       139,183


$       116,555

Biosecurity

13,957


18,254


44,013


100,145

Total revenue

89,046


55,430


183,196


216,700

Segment cost of revenue:








Cell Engineering

2,016



3,930


Biosecurity

9,987


6,923


30,996


47,394

Segment research and development expense:








Cell Engineering

57,201


90,889


253,790


275,494

Biosecurity

141


313


720


1,408

Total segment research and development expense

57,342


91,202


254,510


276,902

Segment general and administrative expense:








Cell Engineering

29,319


42,617


103,167


155,216

Biosecurity

10,040


12,207


33,169


42,862

Total segment general and administrative expense

39,359


54,824


136,336


198,078

Segment operating (loss) income:








Cell Engineering

(13,447)


(96,330)


(221,704)


(314,155)

Biosecurity

(6,211)


(1,189)


(20,872)


8,481

Total segment operating loss

(19,658)


(97,519)


(242,576)


(305,674)

Operating expenses not allocated to segments:








Stock-based compensation (1)

14,013


53,647


94,636


191,324

Depreciation and amortization

17,171


21,060


47,368


57,670

Impairment expense (2)


112,403


47,858


121,404

Restructuring charges

2,949



20,015


Change in fair value of contingent consideration liability

1,413


1,764


3,698


10,217

Loss from operations

$      (55,204)


$    (286,393)


$    (456,151)


$    (686,289)



(1)

Includes $0.2 million and $1.1 million in employer payroll taxes for the three months ended September 30, 2024 and 2023, respectively, and $2.9 million and $4.3 million in employer payroll taxes for the nine months ended September 30, 2024 and 2023, respectively.

(2)

For 2024, includes $47.9 million related to goodwill impairment. For the three months ended September 30, 2023, includes a $16.2 million impairment loss on lab equipment and a $96.2 million impairment loss on an operating lease right-of-use asset and related leasehold improvements associated with an exited Zymergen leased facility. For the nine months ended September 30, 2023, includes a $25.2 million impairment loss on lab equipment and a $96.2 million impairment loss on lease assets associated with the exited Zymergen leased facility.

 

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