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Ginkgo Bioworks Holdings, Inc. (DNA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 beat on revenue and EPS versus S&P Global consensus: Total revenue $48.32M vs $38.70M consensus (+24.9%), EPS ($1.68) vs ($1.77) consensus; benefit included ~$7M non-cash deferred revenue release tied to a customer termination .
  • Cost actions continue to reset the P&L: Adjusted EBITDA improved to ($47.45)M from ($117.00)M YoY; management reiterated path to Adjusted EBITDA breakeven by end of 2026 and highlighted run-rate cost reductions of $205M with a target of $250M by Q3 2025 .
  • FY25 guidance was raised solely to reflect the Q1 non-cash revenue: Total revenue $167–$187M (prior $160–$180M), Cell Engineering $117–$137M (prior $110–$130M), Biosecurity at least $50M (unchanged) .
  • Strategic updates: $29M ARPA‑H award (WHEAT program) de‑risks 2025; tools traction continued (Datapoints datasets, RAC automation sale/deployment) while management cautioned on government funding lumpiness and macro headwinds in outsourced R&D .
  • Stock narrative catalysts: Clear beat vs consensus and guidance lift (even if mechanical) plus visibility from ARPA‑H award; offset by continuing operating losses, reliance on non-cash revenue in recent quarters, and government funding risk .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue/EPS beat and improved profitability: Q1 revenue $48.32M (+27% YoY), Adjusted EBITDA ($47.45)M vs ($117.00)M YoY on higher revenue and lower OpEx; EPS improved to ($1.68) vs ($3.31) prior year .
    • Government and tools traction: $29M ARPA‑H WHEAT contract recognized over two years, where Ginkgo is the prime contractor, de‑risking FY25; management noted low‑single‑digit millions tools revenue in Q1 with upside through the year .
    • Cost discipline and liquidity: Annualized run-rate cost reductions reached $205M; cash, cash equivalents and marketable securities totaled ~$517M at 3/31/25 with no bank debt .

  • What Went Wrong

    • Quality of revenue remains mixed: Q1 included ~$7M non‑cash deferred revenue; similar non‑cash items benefited Q3 2024 ($45M) and raise comparability questions ex non‑cash .
    • Continued operating losses and cash burn: GAAP EBITDA ($81.58)M and net loss ($90.96)M; Q1 cash burn ~$58M despite improvements, with excess space carrying costs ($11.67)M a headwind until subleasing improves .
    • Macro and funding visibility: Management flagged industry-wide pressure on R&D outsourcing/tools demand and uncertainty in U.S. government funding; guidance conservatism reflects this risk .

Financial Results

Income statement and profitability (reported)

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($M)$89.05 $43.85 $48.32
Diluted EPS ($)$(1.08) $(2.00) $(1.68)
EBITDA ($M)$(48.86) $(99.45) $(81.58)
Adjusted EBITDA ($M)$(20.01) $(57.10) $(47.45)

Notes: Q3 2024 total revenue includes $45.4M non‑cash deferred revenue release from a customer termination . Q1 2025 total revenue includes ~$7M non‑cash deferred revenue release .

Revenue ex non‑cash (comparability view)

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ex non‑cash ($M)$44 $43.85 $41

Segment revenue (reported)

Segment Revenue ($M)Q3 2024Q4 2024Q1 2025
Cell Engineering$75.09 $34.79 $38.23
Biosecurity$13.96 $9.06 $10.09

Notes: Q3 2024 Cell Engineering was boosted by the $45.4M non‑cash release; ex non‑cash, Cell Engineering ~$30M per company commentary . Q1 2025 Cell Engineering ex non‑cash ~$31M .

KPIs and operating items

KPI / ItemQ3 2024Q4 2024Q1 2025
Revenue‑generating programsn/an/a123
Biosecurity segment gross margin %28% 17% 28%
Cash & Marketable Securities ($M)$616 (cash only at 9/30) $562 (cash only at 12/31) $517 (cash+marketable sec.)
Cash burn ($M)n/a$(55) $(58)
Carrying cost of excess space ($M)n/a$9.33 $11.67
Run‑rate cost reductionn/a$190M $205M

Q1 2025 actual vs S&P Global consensus (S&P Global data)

MetricActual Q1 2025Consensus Q1 2025Surprise
Revenue ($M)$48.32 $38.70*+$9.62M / +24.9%*
Primary EPS ($)$(1.68) $(1.77)*+$0.09*

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$160–$180M $167–$187M Raised (mechanical from non‑cash)
Cell Engineering RevenueFY 2025$110–$130M $117–$137M Raised (mechanical from non‑cash)
Biosecurity RevenueFY 2025At least $50M At least $50M Maintained

Management emphasized the only change was to reflect the Q1 non‑cash deferred revenue release; underlying outlook unchanged .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Cost restructuring and breakeven pathAccelerated consolidation; run‑rate reduction $190M by Q4; breakeven goal reiterated Run‑rate reduction $205M; target $250M by Q3 2025; EBITDA breakeven by end 2026 reaffirmed Improving cost base; incremental actions in flight
Tools (Datapoints & Automation)Launch traction, SLAS debut of RAC carts; 7 new Datapoints deals in Q4 Low‑single‑digit millions tools revenue in Q1; Datapoints GDPa1 dataset; RAC sale/deployment (GLBRC; Aura Genetics) Growing, with conservative FY25 guide
Government & BiosecurityBiosecurity transitioning; HaDEA/EU program up to €24M; guidance conservative given funding risk $29M ARPA‑H WHEAT 2‑yr contract; government backlog ~$180M across 28 projects; funding uncertainty acknowledged Mixed: new awards vs policy risk
AI/data generation demandDemand for large datasets to train models; internal/external datasets shared Continued AI pull; new datasets (GDPa1) and partnerships (Plex Research) Positive momentum
Revenue metric changesShift away from old new‑program metric; move to revenue‑generating program metric previewed New revenue‑generating programs metric reported (123) New KPI adopted
Real estate/subleasesExcess space costs highlighted; $9.33M Q4 cost Excess space carrying cost $11.67M Q1; sublease mitigation ongoing Headwind persists

Management Commentary

  • “We’re starting the year on a solid base thanks to the significant restructuring efforts of the past year... maintaining our commitment to achieving our cost reduction targets.” – Jason Kelly, CEO .
  • “Adjusted EBITDA... was negative $47M, up from negative $117M... principal differences... include the carrying cost of excess lease space... $12M in Q1.” – Mark Dmytruk, CFO .
  • On ARPA‑H WHEAT: “It’s a $29 million 2‑year contract… from our perspective, that really significantly derisks the guide for the year.” – Mark Dmytruk, CFO .
  • On tools strategy: “We can offer the same platform directly to customer scientists… fee‑for‑service work… near‑term fees, faster sales cycle, and many more potential customers.” – Jason Kelly .
  • On macro: “There is a lot of hesitancy in general around R&D services… headwinds for us on the solutions side… whole sector under pressure.” – Jason Kelly .

Q&A Highlights

  • ARPA‑H revenue recognition and structure: $29M over 2 years; Ginkgo is prime and recognizes full revenue, with subcontractor costs reflected in COGS/OpEx .
  • Tools revenue contribution and outlook: Tools contributed low single‑digit millions in Q1 and are modeled conservatively to low double‑digit millions for FY25; potential upside as year progresses .
  • New KPI – revenue‑generating programs: Metric includes only programs with meaningful quarterly revenue; excludes programs just starting/finishing; intended to make revenue per program analysis more meaningful .
  • Diagnostics opportunity for RAC automation: Modular racks enable scalable capacity and workflow flexibility; first diagnostics customer (Aura Genetics) highlighted .
  • Cost path to breakeven: Additional $60M run‑rate OpEx reduction expected by YE 2025 (actions largely taken), plus potential sublease mitigation and revenue growth; EBITDA breakeven targeted by end of 2026 .

Estimates Context

  • S&P Global consensus for Q1 2025 revenue was $38.70M vs actual $48.32M; EPS consensus ($1.77) vs actual ($1.68); both represent beats. Management also cited EBITDA and Adjusted EBITDA improvements, though consensus typically focuses on revenue/EPS near‑term performance .*

Values retrieved from S&P Global.

Where estimates may adjust:

  • Sell‑side models likely lift FY25 revenue and EPS trajectories to reflect the Q1 revenue upside and mechanical guidance increase; however, some may normalize for the ~$7M non‑cash revenue . Continued caution on government exposure and tools ramp may temper out‑year revisions .

Key Takeaways for Investors

  • Revenue/EPS beat with improved Adjusted EBITDA underscores restructuring traction; however, quality-of-revenue adjustments (non‑cash) remain part of the story .
  • Visibility enhanced by ARPA‑H WHEAT ($29M over 2 years) and a growing government backlog (~$180M), but funding policy remains a key risk variable; Biosecurity guidance appropriately conservative .
  • Tools (Datapoints and Automation) are the medium‑term growth vector with faster sales cycles and better margin potential; near‑term contribution still small but building via datasets, partnerships, and early RAC deployments .
  • Cost discipline is central to the 2026 breakeven plan; watch quarterly cash burn, sublease progress on excess space, and carrying cost line .
  • Expect estimate revisions to reflect Q1 beat and the mechanical FY25 guidance lift; underlying run‑rate ex non‑cash remains the better comp base for trend analysis .
  • Narrative catalysts ahead: incremental tools deals, additional government awards/renewals, sublease progress, and continued evidence of operating leverage; risk: macro R&D budgets and U.S. government funding changes .

Additional Business Updates (Q2 calendar period, relevant to Q1 narrative)

  • Twist Bioscience collaboration revised (3‑year, $15M; Ginkgo continues ordering DNA without minimums; technology/IP arrangements updated) .
  • Aura Genetics selected Ginkgo’s RAC system for a new 22,000 sq. ft. high‑throughput diagnostics facility at UPS Healthcare Labport (Louisville, KY) .
  • ARPA‑H WHEAT $29M award to develop wheat‑germ cell‑free systems for distributed API manufacturing .
  • Phytolon collaboration achieved second milestone with ~3x production efficiency in natural color strains; Ginkgo received additional equity .
  • Plex Research partnership leveraging Ginkgo’s GDPx2 transcriptomics dataset for AI‑driven MOA insights .

Notes on non‑GAAP: Company reports EBITDA and Adjusted EBITDA; Adjusted EBITDA excludes items such as stock‑based compensation, restructuring, investment losses, and fair‑value changes; reconciliations provided in the 8‑K/press release .