Ginkgo Bioworks Reports Second Quarter 2022 Financial Results

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$145 million of Total revenue in Q2 2022, representing 231% growth over Q2 2021

13 new Cell Programs added in Q2 2022, representing 86% growth over Q2 2021

Pending acquisitions of Zymergen and Bayer's West Sacramento agricultural biologicals capabilities expected to enable new growth opportunities in the coming years

Approximately $1.4 billion cash balance provides continued multi-year runway as Ginkgo drives towards profitability

BOSTON, Aug. 15, 2022 -- Ginkgo Bioworks Holdings, Inc. (NYSE: DNA) ("Ginkgo"), the leading horizontal platform for cell programming, today announced its results for the second quarter ended June 30, 2022. 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.

"We delivered a strong quarter across both our cell programming and biosecurity businesses," said Jason Kelly, co-founder and CEO of Ginkgo. "We added 13 new Cell Programs and more than doubled our second-quarter Foundry revenue year-over-year. We executed well on our biosecurity business through the remainder of the school year and are seeing traction across this business with longer-term, diversified biosecurity opportunities, including being awarded a new contract from the CDC to continue our pathogen monitoring work in airports. We are excited about our recently announced transactions with Zymergen and Bayer, which we expect to significantly improve our platform and drive future value. Our strong cash balance of approximately $1.4 billion affords us the ability to play offense when compelling opportunities arise, while we remain focused on our cash runway and can consider multiple levers as we drive towards profitability."

Recent Business Highlights & Strategic Positioning

  • Generated Foundry revenue of $44 million in Q2 2022, representing 105% growth over the comparable prior year period, including a previously announced equity milestone from the successful completion of the third productivity target in our collaboration with Cronos Group Inc.
  • Added 13 new Cell Programs to the Foundry platform in Q2 2022, representing 86% growth over the comparable prior year period
  • Concentric by Ginkgo, Ginkgo's biosecurity and public health offering, had another strong quarter, producing $100 million in revenue in Q2 2022
    • Concentric was recently awarded the contract to continue CDC's traveler-based SARS-CoV-2 genomic surveillance program, which we expect will expand inbound pathogen monitoring at ports of entry, building on our partnership over the last year with XpresCheck
  • On July 24, 2022, Ginkgo entered into a definitive agreement to acquire Zymergen in an all-stock transaction
    • The merger is expected to improve the capacity, capabilities, and efficiency of Ginkgo's platform for its diverse customer base and enable new growth opportunities across many end markets
    • The transaction is expected to close by Q1 2023, subject to approval by Zymergen's stockholders, receipt of regulatory approvals, and satisfaction or waiver of other closing conditions
  • Also on July 24, 2022, Ginkgo entered into a definitive agreement to acquire Bayer's West Sacramento agricultural biologicals R&D facility
    • As part of the transaction, Bayer will be entering into a multi-year partnership with Ginkgo, representing Ginkgo's largest ever cell programming contract (in terms of R&D service fees) and with the potential to earn downstream value in the form of royalties on net sales from products developed under the partnership
    • The transaction is expected to close in Q4 2022, subject to regulatory approvals and customary closing conditions
  • Added Dr. Kathy Hopinkah Hannan to the Ginkgo Board of Directors
    • Dr. Hannan brings over thirty years of experience as a senior C-Suite executive, corporate advisor, independent board director and strategist leading significant operations and high priority initiatives

Second Quarter 2022 Financial Highlights

  • Second quarter 2022 Total revenue of $145 million, up from $44 million in the comparable prior year period, an increase of 231%
  • Second quarter 2022 Foundry revenue of $44 million, up from $22 million in the comparable prior year period, an increase of 105%. Second quarter 2022 Foundry revenue included downstream value share revenue related to the equity milestone achievement by Cronos Group Inc.
  • Second quarter 2022 Biosecurity revenue of $100 million with a gross profit margin of 36%
  • Second quarter 2022 Loss from operations of $(647) million (inclusive of stock-based compensation expense of $607 million), compared to Loss from operations of $(60) million in the comparable prior year period. The stock-based compensation expense primarily relates to the continued GAAP accounting for the modification of restricted stock units issued prior to becoming a public company, as disclosed in our annual report on Form 10-K filed with the SEC on March 29, 2022
  • Second quarter 2022 Adjusted EBITDA of $(23) million, improved from $(38) million in the comparable prior year period
  • Cash and cash equivalents balance as of the end of the second quarter of approximately $1.4 billion puts Ginkgo in a strong financial position to pursue its strategic objectives

Full Year 2022 Guidance

  • Ginkgo continues to expect to add 60 new Cell Programs to the Foundry platform in 2022
  • Ginkgo further revised its expectation for Total revenue from $375 - $390 million to $425 -$440 million in 2022
  • Ginkgo continues to expect Foundry revenue of $165 - $180 million in 2022
  • While Biosecurity remains an uncertain business, based on strong year-to-date performance Ginkgo now expects Biosecurity revenue in 2022 of at least $260 million

Conference Call Details

Ginkgo will host a videoconference today, Monday, August 15, 2022, beginning at 4:30 p.m. ET. The presentation will include an overview of the 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 Twitter (hashtag #GinkgoResults) or by sending an e-mail to [email protected].

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: 924 3540 6075

If you experience technical difficulties with any of these dial-ins or if you need international dial-in numbers, please visit our web site at https://investors.ginkgobioworks.com/events/ for updated dial-in information.

About Ginkgo Bioworks

Ginkgo is building a platform to enable customers to program cells as easily as we can program computers. The company's platform is enabling biotechnology applications across diverse markets, from food and agriculture to industrial chemicals to pharmaceuticals. Ginkgo has also actively supported a number of COVID-19 response efforts, including K-12 pooled testing, vaccine manufacturing optimization, and therapeutics discovery. For more information, visit www.ginkgobioworks.com.

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, current expectations, operations and anticipated results of operations, both business and financial, 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) the effect of Ginkgo's business combination with Soaring Eagle Acquisition Corp. ("Soaring Eagle") on Ginkgo's business relationships, performance, and business generally, (ii) risks that the business combination disrupts current plans of Ginkgo and potential difficulties in Ginkgo's employee retention, (iii) the outcome of any legal proceedings that may be instituted against Ginkgo related to its business combination with Soaring Eagle, (iv) volatility in the price of Ginkgo's securities now that it is a public company 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, changes in laws and regulations affecting Ginkgo's business, changes in the combined capital structure and expectations associated with increases in the number of shares available for sale, (v) the ability to implement business plans, forecasts, and other expectations after the completion of the business combination, and ability to identify and realize additional opportunities, (vi) the risk of downturns in demand for products using synthetic biology, (vii) the unpredictability of the duration of the COVID-19 pandemic and the demand for COVID-19 testing and the commercial viability of our COVID-19 testing business, (viii) changes to the biosecurity industry, including due to advancements in technology, emerging competition and evolution in industry demands, standards and regulations, and (ix) our ability to close and realize the expected benefits of pending merger and acquisition transactions. 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 most recent quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission (the "SEC"), 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, 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:
[email protected]

MEDIA CONTACT:
[email protected]

Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share data, unaudited)








As of June 30,


As of December 31,



2022


2021

Assets





Current assets:





Cash and cash equivalents


$1,377,152


$1,550,004

Accounts receivable, net


171,624


131,544

Accounts receivable - related parties


3,253


4,598

Inventory, net


8,102


3,362

Prepaid expenses and other current assets


38,717


33,537

Total current assets


1,598,848


1,723,045

Property and equipment, net


176,221


145,770

Investments


89,068


102,037

Equity method investments


6,914


13,194

Intangible assets, net


39,180


21,642

Goodwill


30,973


21,312

Other non-current assets


53,015


43,990

Total assets


$1,994,219


$2,070,990

Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable


$19,459


$8,189

Deferred revenue


45,504


33,240

Accrued expenses and other current liabilities


70,059


93,332

Total current liabilities


135,022


134,761

Non-current liabilities:





Deferred rent, net of current portion


20,214


18,746

Deferred revenue, net of current portion


156,981


155,991

Lease financing obligation


51,545


22,283

Warrant liabilities


27,294


135,838

Other non-current liabilities


36,107


35,992

Total liabilities


427,163


503,611

Commitments and contingencies





Stockholders' equity:





Preferred stock, $0.0001 par value


--


--

Common stock, $0.0001 par value


164


161

Additional paid-in capital


5,098,018


3,804,844

Accumulated deficit


(3,557,255)


(2,297,925)

Accumulated other comprehensive loss


(5,496)


(1,715)

Total Ginkgo Bioworks Holdings, Inc. stockholders' equity


1,535,431


1,505,365

Non-controlling interest


31,625


62,014

Total stockholders' equity


1,567,056


1,567,379

Total liabilities and stockholders' equity


$1,994,219


$2,070,990

Ginkgo Bioworks Holdings, Inc.


Condensed Consolidated Statements of Operations and Comprehensive Loss


(in thousands, except share and per share data, unaudited)














Three Months Ended June 30,


Six Months Ended June 30,




2022


2021


2022


2021


Foundry revenue


$44,242


$21,592


$65,730


$44,096


Biosecurity revenue:










Product


3,887


355


17,834


6,130


Service


96,489


21,689


229,459


37,507


Total revenue


144,618


43,636


313,023


87,733


Costs and operating expenses:










Cost of Biosecurity product revenue


2,444


1,820


10,539


11,755


Cost of Biosecurity service revenue


61,467


15,290


138,804


29,055


Research and development (1)


289,188


52,031


611,908


111,616


General and administrative (1)


438,427


34,440


873,195


52,367


Total operating expenses


791,526


103,581


1,634,446


204,793


Loss from operations


(646,908)


(59,945)


(1,321,423)


(117,060)


Other (expense) income:










Interest income (expense), net


1,674


(478)


1,277


(953)


Loss on equity method investments


(10,166)


(4,346)


(31,053)


(32,970)


(Loss) gain on investments


(38,673)


2,755


(38,223)


15,377


Change in fair value of warrant liabilities


23,509


--


108,544


--


Gain on deconsolidation of subsidiary


--


--


15,900


--


Other (expense) income, net


(51)


7,119


1,586


5,774


Total other (expense) income, net


(23,707)


5,050


58,031


(12,772)


Loss before income taxes


(670,615)


(54,895)


(1,263,392)


(129,832)


Income tax benefit


(45)


(431)


(229)


(590)


Net loss


(670,570)


(54,464)


(1,263,163)


(129,242)


Net loss attributable to non-controlling interest


(1,745)


(523)


(3,833)


(1,732)


Net loss attributable to Ginkgo Bioworks Holdings,
Inc. stockholders


$(668,825)


$(53,941)


$(1,259,330)


$(127,510)


Net loss per share attributable to Ginkgo Bioworks
Holdings, Inc. common stockholders, basic and diluted


$(0.41)


$(0.04)


$(0.78)


$(0.10)


Weighted average common shares outstanding, basic
and diluted


1,620,703,542


1,292,538,294


1,614,138,189


1,291,416,874


Comprehensive loss:










Net loss


$(670,570)


$(54,464)


$(1,263,163)


$(129,242)


Other comprehensive loss:










Foreign currency translation adjustment


(3,141)


--


(3,781)


--


Total other comprehensive loss


(3,141)


--


(3,781)


--


Comprehensive loss


$(673,711)


$(54,464)


$(1,266,944)


$(129,242)





(1) In the first half of 2022, R&D and G&A expenses included a significant charge to stock-based compensation expense as a result of the
modification of the vesting terms of restricted stock units and all related earnout shares. Total stock-based compensation expense,
inclusive of $0.8 million and $7.0 million in employer payroll taxes for the three and six months ended June 30, 2022, respectively,
was as follows:
















Three Months Ended June 30,


Six Months Ended June 30,

(in thousands)



2022


2021


2022


2021

Research and development



$217,291


$22


$483,631


$40

General and administrative



389,979


14,497


782,674


14,597

Total



$607,270


$14,519


$1,266,305


$14,637











Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)



Six Months Ended June 30,



2022


2021

Cash flows from operating activities:





Net loss


$ (1,263,163)


$ (129,242)

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










Depreciation and amortization


19,096


12,794

Stock-based compensation


1,259,336


14,637

Loss on equity method investments


31,053


32,970

Loss (gain) on investments


38,223


(15,377)

Non-cash customer consideration


(18,139)


--

Change in fair value of loans receivable


292


(4,384)

Change in fair value of warrant liabilities


(108,544)


--

Gain on deconsolidation of subsidiary


(15,900)


--

In-process research and development


1,162


--

Other non-cash activity


510


--

Changes in operating assets and liabilities:





Accounts receivable


(38,598)


(6,479)

Prepaid expenses and other current assets


4,973


4,854

Inventory


(4,740)


20

Other non-current assets


(419)


(55)

Accounts payable


10,650


(7,321)

Accrued expenses and other current liabilities


(12,758)


19,139

Deferred revenue, current and non-current


(19,708)


(6,067)

Deferred rent, non-current


1,468


914

Other non-current liabilities


(3,989)


555

Net cash used in operating activities


(119,195)


(83,042)

Cash flows from investing activities:





Cash acquired in acquisition


1,440


--

Purchase of convertible note


(6,500)


--

Purchases of property and equipment


(13,153)


(45,969)

Purchase of marketable equity securities


(3,691)


--

Deconsolidation of subsidiary - cash


(28,772)


--

Prepayment for business acquisition


--


(1,210)

Other


28


202

Net cash used in investing activities


(50,648)


(46,977)

Cash flows from financing activities:





Proceeds from exercise of stock options


76


39

Taxes paid related to net share settlement of equity awards


(981)


--

Principal payments on capital leases and lease financing obligation


(720)


(448)

Contingent consideration payment


(521)


--

Payment of deferred offering costs


--


(2,147)

Net cash used in financing activities


(2,146)


(2,556)

Effect of foreign exchange rates on cash and cash equivalents


(104)


--

Net decrease in cash, cash equivalents and restricted cash


(172,093)


(132,575)






Cash and cash equivalents, beginning of period


1,550,004


380,801

Restricted cash, beginning of period


42,924


5,076

Cash, cash equivalents and restricted cash, beginning of period


1,592,928


385,877






Cash and cash equivalents, end of period


1,377,152


235,893

Restricted cash, end of period


43,683


17,409

Cash, cash equivalents and restricted cash, end of period


$ 1,420,835


$253,302

Ginkgo Bioworks Holdings, Inc.

Selected Non-GAAP Financial Measures

(in thousands, unaudited)












Three Months Ended June 30,


Six Months Ended June 30,



2022


2021


2022


2021

Net loss attributable to Ginkgo Bioworks Holdings, Inc.
stockholders


$ (668,825)


$ (53,941)


$(1,259,330)


$ (127,510)

Interest (income) expense, net


(1,674)


478


(1,277)


953

Income tax benefit


(45)


(431)


(229)


(590)

Depreciation and amortization


9,608


7,165


19,096


12,794

EBITDA


(660,936)


(46,729)


(1,241,740)


(114,353)

Stock-based compensation (1)


607,270


14,519


1,266,305


14,637

Loss on equity method investments (2)


9,952


3,823


30,216


31,238

Loss (gain) on investments


38,673


(2,755)


38,223


(15,377)

Change in fair value of warrant liabilities


(23,509)


--


(108,544)


--

Gain on deconsolidation of subsidiary


--


--


(15,900)


--

Merger and acquisition related expenses (3)


2,716


--


6,562


--

In-process research and development (4)


1,605


--


1,605


--

Other (5)


906


(6,406)


332


(4,831)

Adjusted EBITDA


$ (23,323)


$ (37,548)


$ (22,941)


$ (88,686)


(1) For the three and six months ended June 30, 2022, includes employer payroll taxes of $0.8 million and $7.0 million, respectively.

(2) Represents losses on equity method investments under the hypothetical liquidation at book value method, net of losses attributable to non-
controlling interests.

(3) Represents transaction and integration costs directly related to mergers and acquisitions including (i) due diligence, legal and other
professional fees associated with acquisitions and (ii) the fair value adjustments to contingent consideration liabilities resulting from
acquisitions. In the second quarter of 2022, we redefined Adjusted EBITDA to exclude the impact of merger and acquisition related
expenses. We elected to recast our previous first quarter 2022 Adjusted EBITDA calculation to exclude these costs and conform to the
new presentation.

(4) Represents acquired intangible assets expensed to research and development associated with an asset acquisition.

(5) For the three and six months ended June 30, 2022, includes change in fair value of Access Bio Convertible Notes. For the three and six
months ended June 30, 2021, includes change in fair value of Access Bio Convertible Notes and gain related to a settlement payment.











Ginkgo Bioworks Holdings, Inc.

Segment Information

(in thousands, unaudited)










Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Revenue:








Foundry

$ 44,242


$ 21,592


$ 65,730


$ 44,096

Biosecurity

100,376


22,044


247,293


43,637

Total revenue

144,618


43,636


313,023


87,733

Segment cost of revenue:








Biosecurity

63,911


17,110


149,343


40,810

Segment research and development expense:








Foundry

62,779


40,828


110,068


71,722

Biosecurity

443


4,374


960


27,777

Total segment research and development expense

63,222


45,202


111,028


99,499

Segment general and administrative expense:








Foundry

36,601


14,722


63,294


27,877

Biosecurity

12,409


5,084


25,644


9,619

Total segment general and administrative expense

49,010


19,806


88,938


37,496

Segment operating income (loss):








Foundry

(55,138)


(33,958)


(107,632)


(55,503)

Biosecurity

23,613


(4,524)


71,346


(34,569)

Total segment operating income (loss)

(31,525)


(38,482)


(36,286)


(90,072)

Operating expenses not allocated to segments:








Stock-based compensation (1)

607,270


14,519


1,266,305


14,637

Depreciation and amortization

9,326


6,944


18,532


12,351

Change in fair value of contingent consideration
liability

(1,213)


--


300


--

Loss from operations

$ (646,908)


$ (59,945)


$(1,321,423)


$ (117,060)









(1) Includes $0.8 million and $7.0 million in employer payroll taxes for the three and six months ended June 30, 2022, respectively.

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SOURCE Ginkgo Bioworks