US-based synthetic biology company Ginkgo Bioworks has published its financial results for Q1 2024. Due to lower-than-expected revenues, Ginkgo has announced several initiatives to accelerate its path to operational breakeven by the end of 2026.
The company’s total Q1 revenue was $38 million, down from $81 million in the comparable prior year period. This was predominantly driven by the ramp-down of Covid-19 testing in schools. Cell engineering revenue decreased by 18% to $28 million due to a decline in revenue from early-stage customers, partially offset by growth from large customers. Biosecurity revenue was $10 million, with a gross profit margin of 8%.
“Ginkgo is an increasingly important part of the biotech ecosystem, and we are taking decisive action to keep it that way”
Q1 loss from operations was $(178) million, compared to $(216) million in the same period last year; stock-based compensation expenses were reduced from $42 million to $75 million. Adjusted EBITDA remained flat at $(100) million, as a decrease in total revenue was offset by a reduction in operating expenses. Cash and cash equivalents balance at the end of Q1 was $840 million.
Reducing expenditures
To achieve operational breakeven by the end of 2026, Ginkgo plans to reduce annualized expenditures by $200 million by mid-2025. To do this, the company will consolidate its Foundry operations into a smaller number of facilities, reducing related expenses by up to 60%. Ginkgo also plans to lay off staff to reduce labor expenses by at least 25%, and will bring in initiatives such as increased automation. Total revenue for 2024 is expected to be $170–$190 million, about 20% lower than previously predicted.
Despite these financial challenges, Ginkgo has had several successes over the past year, including receiving a grant in conjunction with Israel’s Imagindairy to accelerate the introduction of a new wave of animal-free dairy proteins. The company also recently announced a partnership with Aqua Cultured Foods to produce sushi-grade fermented seafood alternatives at scale.
Additionally, Ginkgo is working with the Netherlands’ Vivici and Switzerland’s QL AG to produce fermentation-derived dairy proteins.
“Ginkgo is an increasingly important part of the biotech ecosystem, and we are taking decisive action to keep it that way,” said Jason Kelly, co-founder and CEO of Ginkgo. “We’ve demonstrated that we can serve a large number of diverse programs on a common platform, but I’m disappointed in our revenues in Q1. This trend needs to change, and we are simplifying both what we sell to customers and how we do the work that drives revenue at Ginkgo.”
