Ginkgo Bioworks Holdings, Inc 8-K/A, filed Aug 8, 2024
Ginkgo Bioworks Holdings, Inc. (DNA)
8-K/A
2024-08-08
For: 2024-05-09
View Original
Added on
April 05, 2026
About this 8-K/A
Ginkgo Bioworks Holdings, Inc filed this 8-K/A on August 8, 2024, reporting on events of May 9, 2024.
Items reported
- Item 2.02: Financial results
- Item 2.05: Exit or restructuring costs
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________
FORM 8-K/A
(Amendment No. 2)
______________________________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 9, 2024
______________________________________________________________
(Exact name of registrant as specified in its charter)
______________________________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (877 ) 422-5362
(Former name or former address, if changed since last report)
______________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On August 8, 2024, Ginkgo Bioworks Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.
Item 2.05. Costs Associated with Exit or Disposal Activities.
As previously announced on May 9, 2024, in connection with the Company’s multi-year plan to reduce operational expenditures, management approved a plan for restructuring actions, including a reduction in labor expenses and a planned consolidation of certain of its facilities. Initial workforce reductions commenced in June 2024, with further reductions expected in the second half of 2024. All reductions are expected to be substantially completed in 2025, subject to compliance with applicable laws. The Company plans to consolidate certain facilities through various actions, including the consolidation of office and laboratory operations into fewer locations, subleasing unused facilities, and other related measures. While the Company aims to complete the majority of its facility consolidation actions in 2025, the actual timing may vary. The Company currently estimates the costs for the reduction in force to range from $18.0 million to $22.0 million primarily in the Cell Engineering segment and consist of one-time cash severance and related costs. Please refer to the Company’s Quarterly Report on Form 10-Q for the second quarter ended June 30, 2024 and financial statement notes for more information on the restructuring.
Forward-Looking Statements
Item 2.05 of this Current Report on Form 8-K contains certain forward-looking statements within the meaning of the federal securities laws, including statements related to the Company’s expected operating expense reductions, the expected timing of such reduction and the charges and financial impact associated with such reductions, and the timing of headcount reductions. 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 Current Report on Form 8-K, 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 the Company’s securities due to a variety of factors, including changes in the competitive and highly regulated industries in which the Company operates and plans to operate, variations in performance across competitors, and changes in laws and regulations affecting the Company’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 the Company, (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 the Company’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 the Company 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 the Company 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. The Company does not give any assurance that it will achieve its expectations.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GINKGO BIOWORKS HOLDINGS, INC. | ||||||||
| Date: August 8, 2024 | By: | /s/ Mark Dmytruk | ||||||
| Name: | Mark Dmytruk | |||||||
| Title: | Chief Financial Officer | |||||||
Exhibit 99.1
Ginkgo Bioworks Reports Second Quarter 2024 Financial Results
Ginkgo provides update on its restructuring process including estimated annualized cost savings of over $85 million from reduction in force
BOSTON, Mass – August 8, 2024 – Ginkgo Bioworks Holdings, Inc. (NYSE: DNA, “Ginkgo”), which is building the leading platform for cell programming and biosecurity, today announced its results for the second quarter ended June 30, 2024. The update, including a webcast slide presentation with additional details on the second quarter and supplemental financial information, will be available at investors.ginkgobioworks.com.
Second Quarter 2024 Financial Results
•Second quarter 2024 Total revenue of $56 million, down from $81 million in the comparable prior year period, a decrease of 30% primarily driven by the expected ramp down of K-12 testing in Ginkgo’s Biosecurity segment
◦Second quarter 2024 Cell Engineering revenue of $36 million, down from $45 million in the comparable prior year period, a decrease of 20% driven by a decline in revenue from early stage customers partially offset by growth from large/enterprise customers
◦Second quarter 2024 Biosecurity revenue of $20 million with gross profit margin of 41%
•Second quarter 2024 Loss from operations of $(223) million (inclusive of stock-based compensation expense of $38 million and M&A and restructuring related costs, including asset impairments, of $72 million), compared to Loss from operations of $(184) million (inclusive of stock-based compensation expense of $62 million and M&A and restructuring related costs, including asset impairments, of $26 million) in the comparable prior year period
•Second quarter 2024 Adjusted EBITDA of $(99) million, down from $(80) million in the comparable prior year period, driven by the decrease in Total revenue partially offset by a decrease in certain operating expenses
•Cash and cash equivalents balance as of the end of the second quarter of $730 million
“This past quarter was a quarter of focused execution for Ginkgo,” said Jason Kelly, co-founder and CEO of Ginkgo. “During the Q1 2024 earnings call, we announced that we were taking decisive action to reduce costs in order to reach Adjusted EBITDA breakeven by the end of 2026 and, in June, we commenced a reduction in force impacting 35% of the workforce. Alongside the RIF, we continued to deliver well for customers as reflected in our second quarter revenue and I’m happy we have gained initial traction with our new lab data as a service (“LDaaS”) offering, including our first few deals with a large cap tech company.”
Recent Business Highlights & Strategic Positioning
•Cell Engineering worked to close deals as Ginkgo’s new commercial terms begin to gain traction
◦Added 18 new programs and other customer contracts to the Cell Engineering platform in Q2 2024, of which 10 were comparable in size and scope to historically reported New Programs and an additional 8 contracts that represent a variety of smaller deal archetypes, such as LDaaS projects
◦Signed first LDaaS deals with a large cap tech company in protein characterization
◦Delivered on a major technical milestone for a large pharmaceutical customer
◦Announced a new collaboration with Syngenta Crop Protection aimed at accelerating the launch of a new biological solution to develop and optimize a microbial strain that can
meet the productivity targets of a secondary metabolite from the Syngenta Biologicals pipeline
•Ginkgo Biosecurity continues to work towards creating solutions that offer persistent, pervasive monitoring
◦Ginkgo has put forth a proposed Genomic Analysis Program to address the threat of H5N1. The program builds upon existing practices of pooling and sampling milk for food safety, and integrates novel capabilities to generate genomic analysis of H5N1 if it spreads and evolves
•Ginkgo began executing 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 is also implementing significant non-people cost cutting measures, including rationalizing third-party costs and site consolidation
Full Year 2024 Outlook
•Ginkgo reaffirms Total revenue of $170-$190 million in 2024
◦Ginkgo continues to expect Cell Engineering services revenue of $120-140 million in 2024
◦Ginkgo continues to expect Biosecurity revenue of at least $50 million in 2024
Conference Call Details
Ginkgo will host a videoconference today, Thursday, August 8, 2024, beginning at 5:30 p.m. ET. The presentation will include an overview of second 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: 991 5650 6740
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 success of our new LDaaS offering and anticipated impacts on our results, our planned reduction in workforce and anticipated impacts thereof, the timing and structuring of 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 biosecurity monitoring, surveillance and detection systems, 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 June 30, 2024 | As of December 31, 2023 | ||||||||||||||||
| Assets | |||||||||||||||||
| Current assets: | |||||||||||||||||
Cash and cash equivalents | $ 730,367 | $ 944,073 | |||||||||||||||
Accounts receivable, net | 18,589 | 17,157 | |||||||||||||||
Accounts receivable - related parties | 302 | 742 | |||||||||||||||
Prepaid expenses and other current assets | 34,104 | 39,777 | |||||||||||||||
Total current assets | 783,362 | 1,001,749 | |||||||||||||||
| Property, plant, and equipment, net | 210,582 | 188,193 | |||||||||||||||
| Operating lease right-of-use assets | 418,008 | 206,801 | |||||||||||||||
| Investments | 62,490 | 78,565 | |||||||||||||||
| Intangible assets, net | 90,602 | 82,741 | |||||||||||||||
| Goodwill | — | 49,238 | |||||||||||||||
| Other non-current assets | 60,211 | 58,055 | |||||||||||||||
Total assets | $ 1,625,255 | $ 1,665,342 | |||||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
Accounts payable | $ 23,029 | $ 9,323 | |||||||||||||||
Deferred revenue | 26,007 | 44,486 | |||||||||||||||
Accrued expenses and other current liabilities | 117,118 | 110,051 | |||||||||||||||
Total current liabilities | 166,154 | 163,860 | |||||||||||||||
| Non-current liabilities: | |||||||||||||||||
Deferred revenue, net of current portion | 152,869 | 158,062 | |||||||||||||||
Operating lease liabilities, non-current | 452,265 | 221,835 | |||||||||||||||
Other non-current liabilities | 20,895 | 24,433 | |||||||||||||||
Total liabilities | 792,183 | 568,190 | |||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Preferred stock, $0.0001 par value | — | — | |||||||||||||||
| Common stock, $0.0001 par value | 206 | 199 | |||||||||||||||
| Additional paid-in capital | 6,508,209 | 6,385,997 | |||||||||||||||
| Accumulated deficit | (5,673,620) | (5,290,528) | |||||||||||||||
| Accumulated other comprehensive (loss) income | (1,723) | 1,484 | |||||||||||||||
| Total stockholders’ equity | 833,072 | 1,097,152 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ 1,625,255 | $ 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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||
| Cell Engineering revenue | $ 36,205 | $ 45,283 | $ 64,094 | $ 79,379 | |||||||||||||||||||||||||
| Biosecurity revenue: | |||||||||||||||||||||||||||||
| Product | — | 10,788 | — | 22,454 | |||||||||||||||||||||||||
| Service | 20,001 | 24,497 | 30,056 | 59,437 | |||||||||||||||||||||||||
| Total revenue | 56,206 | 80,568 | 94,150 | 161,270 | |||||||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||||||||
| Cost of Biosecurity product revenue | — | 2,034 | — | 6,575 | |||||||||||||||||||||||||
| Cost of Biosecurity service revenue | 11,807 | 16,062 | 21,009 | 33,896 | |||||||||||||||||||||||||
| Cost of other revenue | 1,914 | — | 1,914 | — | |||||||||||||||||||||||||
Research and development (1) | 134,221 | 144,282 | 270,678 | 306,921 | |||||||||||||||||||||||||
General and administrative (1) | 66,285 | 102,341 | 136,572 | 213,774 | |||||||||||||||||||||||||
| Goodwill impairment | 47,858 | — | 47,858 | — | |||||||||||||||||||||||||
| Restructuring charges | 17,066 | — | 17,066 | — | |||||||||||||||||||||||||
| Total operating expenses | 279,151 | 264,719 | 495,097 | 561,166 | |||||||||||||||||||||||||
| Loss from operations | (222,945) | (184,151) | (400,947) | (399,896) | |||||||||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||||||||
| Interest income, net | 10,313 | 14,349 | 22,024 | 28,894 | |||||||||||||||||||||||||
| Loss on equity method investments | — | (67) | — | (1,516) | |||||||||||||||||||||||||
| Loss on investments | (6,826) | (2,121) | (9,370) | (8,491) | |||||||||||||||||||||||||
| Change in fair value of warrant liabilities | 3,233 | (4,482) | 4,173 | (3,278) | |||||||||||||||||||||||||
| Other income (expense), net | (766) | 3,224 | 1,249 | 6,152 | |||||||||||||||||||||||||
| Total other income | 5,954 | 10,903 | 18,076 | 21,761 | |||||||||||||||||||||||||
| Loss before income taxes | (216,991) | (173,248) | (382,871) | (378,135) | |||||||||||||||||||||||||
| Income tax expense | 190 | 67 | 221 | 149 | |||||||||||||||||||||||||
| Net loss | (217,181) | (173,315) | (383,092) | (378,284) | |||||||||||||||||||||||||
| Net loss per share, basic and diluted | $ (0.11) | $ (0.09) | $ (0.19) | $ (0.20) | |||||||||||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 2,054,801 | 1,933,437 | 2,029,630 | 1,924,251 | |||||||||||||||||||||||||
| Diluted | 2,055,024 | 1,933,437 | 2,029,853 | 1,924,251 | |||||||||||||||||||||||||
| Comprehensive loss: | |||||||||||||||||||||||||||||
| Net loss | $ (217,181) | $ (173,315) | $ (383,092) | $ (378,284) | |||||||||||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | (172) | 314 | (3,207) | 1,332 | |||||||||||||||||||||||||
| Total other comprehensive (loss) income | (172) | 314 | (3,207) | 1,332 | |||||||||||||||||||||||||
| Comprehensive loss | $ (217,353) | $ (173,001) | $ (386,299) | $ (376,952) | |||||||||||||||||||||||||
(1)Total stock-based compensation expense, inclusive of employer payroll taxes, was allocated as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| Research and development | $ 20,693 | $ 40,569 | $ 44,814 | $ 88,110 | ||||||||||||||||||||||
| General and administrative | 17,533 | 21,908 | 35,809 | 49,567 | ||||||||||||||||||||||
| Total | $ 38,226 | $ 62,477 | $ 80,623 | $ 137,677 | ||||||||||||||||||||||
| Ginkgo Bioworks Holdings, Inc. | ||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||
| (in thousands, unaudited) | ||||||||||||||
| Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ (383,092) | $ (378,284) | ||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | 30,199 | 36,610 | ||||||||||||
Stock-based compensation | 77,928 | 134,474 | ||||||||||||
Goodwill impairment | 47,858 | — | ||||||||||||
Restructuring related impairment charges | 4,823 | — | ||||||||||||
Loss on investments and equity method investments | 9,370 | 10,007 | ||||||||||||
Change in fair value of warrant liabilities | (4,173) | 3,278 | ||||||||||||
Change in fair value of contingent consideration liability | 2,284 | 8,453 | ||||||||||||
Non-cash lease expense | 13,070 | 16,327 | ||||||||||||
Non-cash in-process research and development | 19,795 | 3,981 | ||||||||||||
Impairment loss on assets held for sale | — | 9,001 | ||||||||||||
Other non-cash activity | 2,097 | 2,429 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | (1,102) | 15,397 | ||||||||||||
Prepaid expenses and other current assets | 1,770 | 12,087 | ||||||||||||
Operating lease right-of-use assets | 14,373 | 4,096 | ||||||||||||
Other non-current assets | (833) | (2,426) | ||||||||||||
Accounts payable, accrued expenses and other current liabilities | 10,864 | (4,004) | ||||||||||||
Deferred revenue, current and non-current | (17,012) | (21,372) | ||||||||||||
Operating lease liabilities, current and non-current | (3,866) | (13,250) | ||||||||||||
Other non-current liabilities | 1,998 | (922) | ||||||||||||
Net cash used in operating activities | (173,649) | (164,118) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchases of property and equipment | (33,742) | (32,974) | ||||||||||||
| Business acquisition | (5,400) | — | ||||||||||||
| Proceeds from sale of equipment | 191 | 2,926 | ||||||||||||
| Other | — | (590) | ||||||||||||
Net cash used in investing activities | (38,951) | (30,638) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from exercise of stock options | 84 | 24 | ||||||||||||
| Principal payments on finance leases | (494) | (648) | ||||||||||||
| Contingent consideration payment | (661) | (1,042) | ||||||||||||
| Other | — | (603) | ||||||||||||
Net cash used in financing activities | (1,071) | (2,269) | ||||||||||||
| Effect of foreign exchange rates on cash and cash equivalents | (173) | (495) | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | (213,844) | (197,520) | ||||||||||||
| 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 | 730,367 | 1,105,787 | ||||||||||||
| Restricted cash, end of period | 45,373 | 66,274 | ||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ 775,740 | $ 1,172,061 | ||||||||||||
| Ginkgo Bioworks Holdings, Inc. | ||||||||||||||||||||||||||
| Selected Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| (in thousands, unaudited) | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| Net loss | $ (217,181) | $ (173,315) | $ (383,092) | $ (378,284) | ||||||||||||||||||||||
| Interest income, net | (10,313) | (14,349) | (22,024) | (28,894) | ||||||||||||||||||||||
| Income tax expense | 190 | 67 | 221 | 149 | ||||||||||||||||||||||
| Depreciation and amortization | 17,330 | 17,652 | 30,199 | 36,610 | ||||||||||||||||||||||
| EBITDA | (209,974) | (169,945) | (374,696) | (370,419) | ||||||||||||||||||||||
Stock-based compensation (1) | 38,226 | 62,477 | 80,623 | 137,677 | ||||||||||||||||||||||
Impairment expense (2) | 47,858 | 9,001 | 47,858 | 9,001 | ||||||||||||||||||||||
Restructuring charges (3) | 17,066 | — | 17,066 | — | ||||||||||||||||||||||
Merger and acquisition related expenses (4) | 4,512 | 12,212 | 6,906 | 30,874 | ||||||||||||||||||||||
| Loss on equity method investments | — | 67 | — | 1,516 | ||||||||||||||||||||||
| Loss on investments | 6,826 | 2,121 | 9,370 | 8,491 | ||||||||||||||||||||||
| Change in fair value of warrant liabilities | (3,233) | 4,482 | (4,173) | 3,278 | ||||||||||||||||||||||
| Change in fair value of convertible notes | (480) | (152) | 846 | (196) | ||||||||||||||||||||||
| Adjusted EBITDA | $ (99,199) | $ (79,737) | $ (216,200) | $ (179,778) | ||||||||||||||||||||||
(1)Includes $1.1 million and $1.0 million in employer payroll taxes for the three months ended June 30, 2024 and 2023, respectively, and $2.7 and $3.2 million for the six months ended June 30, 2024 and 2023, respectively.
(2)Impairment expense includes $47.9 million related to goodwill impairment in the three and six months ended June 30, 2024 and $9.0 million related to lab equipment acquired as part of the Zymergen acquisition in the three and six months ended June 30, 2023.
(3)Restructuring charges include $12.2 million in employee termination costs from the reduction in force commenced in June 2024 and $4.8 million in impairment of right-of-use asset relating to facilities consolidation.
(4)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 $3.0 million and $4.0 million in the three months ended June 30, 2024 and 2023, respectively, and $19.8 million and $4.0 million in the six months ended June 30, 2024 and 2023, respectively.
| Ginkgo Bioworks Holdings, Inc. | |||||||||||||||||||||||
| Segment Information | |||||||||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
Cell Engineering | $ 36,205 | $ 45,283 | $ 64,094 | $ 79,379 | |||||||||||||||||||
Biosecurity | 20,001 | 35,285 | 30,056 | 81,891 | |||||||||||||||||||
Total revenue | 56,206 | 80,568 | 94,150 | 161,270 | |||||||||||||||||||
| Segment cost of revenue: | |||||||||||||||||||||||
Cell Engineering | 1,914 | — | 1,914 | — | |||||||||||||||||||
Biosecurity | 11,807 | 18,096 | 21,009 | 40,471 | |||||||||||||||||||
| Segment research and development expense: | |||||||||||||||||||||||
Cell Engineering | 96,487 | 86,083 | 196,588 | 184,605 | |||||||||||||||||||
Biosecurity | 458 | 528 | 578 | 1,095 | |||||||||||||||||||
| Total segment research and development expense | 96,945 | 86,611 | 197,166 | 185,700 | |||||||||||||||||||
| Segment general and administrative expense: | |||||||||||||||||||||||
Cell Engineering | 33,615 | 50,907 | 73,848 | 112,599 | |||||||||||||||||||
Biosecurity | 11,179 | 16,699 | 23,130 | 30,655 | |||||||||||||||||||
| Total segment general and administrative expense | 44,794 | 67,606 | 96,978 | 143,254 | |||||||||||||||||||
| Segment operating (loss) income: | |||||||||||||||||||||||
Cell Engineering | (95,811) | (91,707) | (208,256) | (217,825) | |||||||||||||||||||
Biosecurity | (3,443) | (38) | (14,661) | 9,670 | |||||||||||||||||||
Total segment operating loss | (99,254) | (91,745) | (222,917) | (208,155) | |||||||||||||||||||
| Operating expenses not allocated to segments: | |||||||||||||||||||||||
Stock-based compensation (1) | 38,226 | 62,477 | 80,623 | 137,677 | |||||||||||||||||||
Depreciation and amortization | 17,330 | 17,652 | 30,199 | 36,610 | |||||||||||||||||||
Impairment expense (2) | 47,858 | 9,001 | 47,858 | 9,001 | |||||||||||||||||||
Restructuring charges | 17,066 | — | 17,066 | — | |||||||||||||||||||
| Change in fair value of contingent consideration liability | 3,211 | 3,276 | 2,284 | 8,453 | |||||||||||||||||||
Loss from operations | $ (222,945) | $ (184,151) | $ (400,947) | $ (399,896) | |||||||||||||||||||
(1)Includes $1.1 million and $1.0 million in employer payroll taxes for the three months ended June 30, 2024 and 2023, respectively, and $2.7 million and $3.2 million in employer payroll taxes for the six months ended June 30, 2024 and 2023, respectively.
(2)Includes $47.9 million related to goodwill impairment in the three and six months ended June 30, 2024 and $9.0 million related to impairment of lab equipment acquired as part of the Zymergen acquisition in the three and six months ended June 30, 2023.