Ginkgo Bioworks Holdings Inc

communications and ownership. It's my third year here at Ginkgo. I've spent much of that time working behind the scenes with our investor relations team on these earnings calls, but I'm thrilled to be joining you for the first time live on air. I'm joined by Jason Kelly, our co-founder and CEO, and Mark Dimitrick, our CFO. Thanks as always for joining us. We're looking forward to updating you on our progress. As a reminder, during the presentation today, we'll be making forward-looking statements which involve risks and uncertainties. Please refer to our filings with the SEC to learn more about these risks and uncertainties, including our most recent 10-K. Today, in addition to updating you on the quarter results, we're going to provide updates on our path towards adjusted EBITDA breakeven, traction with our government clients, as well as new offerings and opportunities emerging for our tools businesses. As usual, we'll end with a Q&A session, and I'll take questions from analysts, investors, and the public. You can submit those questions to us in advance via X, hashtag GinkgoResults, or email investors at ginkgobioworks.com. All right, over to you, Jason.

Thanks, Daniel. We always start off with our mission here at Ginkgo, which is to make biology easier to engineer. And then we had three objectives. And I first showed these are close variants of these about a year ago when we were announced that we were going to be doing a major restructuring of the company. And these three objectives were to reach adjusted EBITDA break even by the end of 2026. And importantly, doing that while maintaining a cash margin of safety. In other words, we didn't want to get in a position where we were going to need to fundraise when we didn't want to, right? We wanted to be doing that if we needed to fundraise from a position of strength, but ideally not even need to fundraise. Second, we wanted to cut cost while importantly serving our current customers. We had a lot of amazing customers. large pharmas, large ag biotechs, industrial biotechs, as well as the government. We wanted to keep serving those customers well while at the same time focusing the company. And then finally, we wanted to expand the way we sold our platform. And I'll talk more about this in the strategic section, but from not just R&D solutions where we do an end-to-end research project, but also directly as a tools business, like a traditional CRO or an equipment vendor would. These were new ways to go to market to a wider set of potential customers than we had with our solutions business. So those were our three objectives. And I'm very happy to say we made progress on all of them. But after a year, we've just made unbelievable progress on taking out costs while still serving our customers. uh you know we're we're i'm very happy uh to say we're at a 205 million dollar reduction in our annual run rate uh between q1 2024 and q125 you might remember uh the target i had set was 200 million i think by q3 or something of this year um you know like halfway through this year uh we already beat that uh we're moving and we've taken actions in the first quarter that are gonna improve this even further, Mark will mention. And so I really think this sets us up to be in an incredibly strong position. And importantly, because we did it faster, we're at this place while still having $517 million in cash and cash equivalents on the balance sheet. and no bank debt. So that among our peers in sort of the advanced sort of platform technology space in the market today, I think is a uniquely strong position. And look, biotech on the capital market is going through a tough time right now. is challenging for the companies in it. It's also opportunity, I would say, for investors. And from my standpoint, the companies that can make it out the other side of that are in a particularly strong position, since biotechnology is, I think, a fundamental industry that's not going away. And so this sets us up to be in a place to do that. And I want to be just, you know, give my thanks to the team for what's been an incredibly difficult, challenging ton of work last year to get us to where we are. But it puts us in a very, very strong spot going forward. So with that, I'm going to hand it to Mark to go off over this quarter's financials.

Thanks, Jason. I'll start with the cell engineering business. Cell engineering revenue was $38 million in the first quarter of 2025, up 37% compared to the first quarter of 2024. The first quarter of this year included $7.5 million in non-cash revenue from a release of deferred revenue relating to the mutual termination of a customer agreement we had with Biome Edit, one of our platform ventures. Excluding this impact, cell engineering revenue was $31 million, up 10% compared to the first quarter of 2024. This increase was primarily driven by strong growth with biopharma and government customers. In the first quarter of 2025, we supported a total of 123 revenue generating programs on the cell engineering platform. This represents a 32% increase in revenue generating programs year over year. As discussed on our last earnings call, this quarter represents the first time we are reporting the new revenue generating program metric and are no longer reporting the original program metrics. As a reminder on the rationale here, the nature of programs that we take on with our customers has evolved significantly following our adjustments to commercial terms and the launch of our tools offerings in 2024. This new metric includes all programs that generated meaningful revenue in the quarter, including smaller programs that were previously reported as other contracts, and further excludes programs that did not generate meaningful revenue in the quarter, which typically would be those programs either just starting or in final stages of completion. We believe the new metric will be more useful to analysts who are using this to model revenue. We have also updated the 2024 comparables using this new metric in the appendix. Now turning to biosecurity. Our biosecurity business generated $10 million of revenue in the first quarter of 2025 at a segment gross margin of 28%. Segment gross margin excludes stock-based compensation. Turning to the next slide, I'll provide more commentary on key items for the rest of the P&L. Now that we are almost a year into our restructuring, you can see the various substantial cost reductions and improvements in profitability that we have executed when compared to the first quarter of 2024. As a reminder, a full reconciliation between segment operating loss, adjusted EBITDA, and gap net loss can be found in the appendix. Starting with the more significant items in segment OpEx. In the first quarter of 2025, cell engineering R&D expense decreased 41% from $82 million in the first quarter of 2024 to $49 million in the first quarter of 2025. Cell engineering G&A expense decreased 53% from $38 million in the first quarter of 2024 to $18 million in the first quarter of 2025. And while smaller in amount, you can also see a decrease in biosecurity operating expenses by 33% year over year. All these decreases were driven by our restructuring efforts. Net loss. It is important to note that our net loss includes a number of non-cash income and or expenses as detailed more fully in our financial statements. Because of these non-cash and other non-recurring items, we believe adjusted EBITDA is a more indicative measure of our profitability. And we are now showing you adjusted EBITDA at the segment level so that you can more clearly see the relative profitability of cell engineering and biosecurity. The significant improvement in cell engineering segment operating loss in the first quarter of 2025 compared to the comparable prior year period was due to the previously discussed drivers of improved revenue and reduced operating expenses as well as the non-cash deferred revenue release within the quarter. Biosecurity segment operating loss also improved significantly due to the primarily cost reduction efforts. Moving further down the page, you'll note that total company adjusted EBITDA in the first quarter of 2025 was negative $47 million, which was up from negative $117 million in the first quarter of 2024. The principal differences between segment operating loss and total company adjusted EBITDA in the first quarter relates to the carrying cost of excess lease space which you can see was 12 million dollars in q1 this year this cost represents the base rent and other charges relating to leased space which we are not occupying net of sublease income we'll continue to break that out for you going forward since that is a cash operating cost that is not related to driving revenue right now and can be potentially mitigated through subleasing And finally, I'll just make one additional comment relating to cash burn in the quarter. Cash burn in the first quarter of 2025 was $58 million, down from $104 million in the first quarter of 2024. This significant decrease in cash burn was a result of the restructuring. We expect to further reduce the cash burn run rate significantly from this level by the fourth quarter of 2025, though we expect some lumpiness in the progression during the year due to timing of working capital. In terms of outlook for the full year, we previously issued guidance for total revenue of 160 to 180 million dollars, cell engineering services revenue of 110 to 130 million dollars, and biosecurity revenue of at least 50 million dollars. We update this previously issued guidance solely to reflect the impact of the previously mentioned $7.5 million non-cash deferred revenue release in the first quarter. With this in mind, we now expect our total revenue to be $167 to $187 million, cell engineering revenue to be $117 to $137 million, and biosecurity to remain the same of at least $50 million. In conclusion, we're pleased with the substantial improvements in cash burn and profitability when looking back over the past year. In the first quarter, we continued to execute against our core objectives while navigating significant uncertainty in the macro environment. And with that, I will hand it back over to you, Jason.