On November 8, 2023, Ginkgo Bioworks Holdings Inc (DNA, Financial) released its financial results for the third quarter ended September 30, 2023. The company, a leader in cell programming and biosecurity, reported a total revenue of $55 million for the quarter, a decrease of 17% from the $66 million reported in the same period of the previous year. This decline was primarily attributed to the anticipated reduction in COVID-19 testing revenue within the Biosecurity segment.
Performance and Strategic Developments
Ginkgo Bioworks Holdings Inc (DNA, Financial) experienced significant growth in its Cell Engineering segment, with service revenues increasing by 52% to $36 million compared to Q3 2022. The company added 21 new Cell Programs to its Foundry platform, marking a 40% growth over the prior year period. Notably, a multi-target RNA drug discovery collaboration with Pfizer could potentially bring Ginkgo up to $331 million in research fees and milestone payments, in addition to potential royalties on sales.
Moreover, Ginkgo entered into a five-year strategic partnership with Google Cloud to pioneer new AI tools for biological engineering applications. The company's Biosecurity segment generated $18 million in revenue, transitioning towards a more sustainable model focused on long-term biosecurity infrastructure.
Financial Highlights and Outlook
The third quarter saw Ginkgo's Biosecurity revenue at $18 million with a gross profit margin of 62%. The loss from operations showed a marked improvement, with a decrease to $(286) million from $(655) million in the same quarter of the previous year. This included a non-cash impairment charge of $96 million related to the exit of a Zymergen lease facility. Adjusted EBITDA for the quarter was $(84) million, a decrease from $(72) million in Q3 2022.
Looking ahead, Ginkgo revised its full-year 2023 outlook, expecting total revenue between $250 - $260 million. The company anticipates Cell Engineering revenue to be in the range of $145 - $150 million, inclusive of $4 million of downstream value share revenue recognized year-to-date. Biosecurity revenue expectations have been revised to up to $110 million for the year.
Balance Sheet and Cash Flow
As of September 30, 2023, Ginkgo Bioworks Holdings Inc (DNA, Financial) reported a strong balance sheet with over $1.0 billion in cash and cash equivalents. The company's total assets stood at $2.026 billion, with total liabilities at $773.7 million, resulting in total stockholders' equity of $1.252 billion.
The condensed consolidated statements of cash flows indicate a net cash used in operating activities of $(237.7) million for the nine months ended September 30, 2023. The company's cash position provides a multi-year runway as it continues to drive towards profitability.
Conclusion
Ginkgo Bioworks Holdings Inc (DNA, Financial) continues to leverage its platform for cell programming and biosecurity, with strategic partnerships and growth in its Cell Engineering segment. Despite a decrease in total revenue due to the expected decline in COVID-19 testing, the company's financial position remains robust, with a strong cash balance to support its strategic objectives. Investors and stakeholders can look forward to Ginkgo's continued innovation and potential revenue growth from its diverse partnerships and programs.
For more detailed information, please visit Ginkgo's Investor Relations website at https://investors.ginkgobioworks.com/events/.
Explore the complete 8-K earnings release (here) from Ginkgo Bioworks Holdings Inc for further details.
