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Ginkgo Bioworks Holdings, Inc. (DNA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $44.0M (+26% YoY), with Cell Engineering up 29% YoY to $35.0M and Biosecurity at $9.1M (17% gross margin) . Adjusted EBITDA improved to $(57.1)M from $(101.4)M in Q4’23 as operating expenses fell materially .
  • Sequential cash burn improved sharply to $(55)M from $(114)M in Q3 as restructuring and site consolidation flowed through; year-end cash and equivalents were $562M with no bank debt .
  • FY25 guidance: Total revenue $160–$180M, Cell Engineering $110–$130M (potential upside from Tools), Biosecurity “at least” $50M (contingent on government funding) . Management reiterated a path to adjusted EBITDA breakeven by end of 2026 and raised cost-savings target to a $250M run-rate by Q3 2025 (vs. $190M achieved exiting 2024) .
  • Strategic catalysts: accelerating traction in Datapoints (seven new deals in Q4) and Automation (GLBRC deployment; strong SLAS interest), plus new government/consortium awards (ARPA‑H up to $9.4M; EU HaDEA up to €24M) that expand pipeline and credibility .

What Went Well and What Went Wrong

  • What Went Well

    • Cost discipline and cash preservation: Q4 adjusted EBITDA loss improved to $(57)M from $(101)M YoY; quarterly cash burn fell to $(55)M from $(114)M in Q3; cash ended at $562M with no bank debt .
    • Cell Engineering momentum with large biopharma/gov’t: Q4 CE revenue +29% YoY to $35M; record technical milestones achieved; 31 new programs/contracts (14 comparable to historical “New Programs”) .
    • New Tools traction: seven new Datapoints deals in Q4; GLBRC selected Ginkgo Automation; CFO targets 40%+ gross margins for Tools as the business scales .
    • “I’m really happy to see… a dramatically reduced level of cash burn in Q4 versus Q3… We ended this quarter with $562 million in cash and no bank debt” — CEO Jason Kelly .

  • What Went Wrong

    • Revenue mix headwinds: FY24 total revenue declined 10% YoY to $227M as Biosecurity reset post K‑12 testing; Biosecurity Q4 gross margin was just 17% (down from 28% in Q3) .
    • Continued GAAP losses: Q4 net loss was $(107.5)M (EPS $(2.00)), though improved YoY from $(211.7)M (EPS $(4.28)) .
    • Downstream value share reset: potential milestone pool fell by ~$700M YoY as fewer new milestone-bearing deals were booked under revised commercial terms .
    • Guidance conservatism driven by government funding uncertainty; Biosecurity remains largely dependent on government contracts .

Financial Results

Headline P&L, Profitability, and Liquidity (quarterly)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($M)$56.2 $89.0 $43.8
Non‑cash Deferred Revenue in Period ($M)—$45.0 —
Total Revenue ex Non‑cash ($M)—$44.0 $43.8
Cell Engineering Revenue ($M)$36.2 $75.1 $34.8
Biosecurity Revenue ($M)$20.0 $14.0 $9.1
Biosecurity Gross Margin %41% 28% 17%
Loss from Operations ($M)$(222.9) $(55.2) $(103.6)
Net Loss ($M)$(217.2) $(56.4) $(107.5)
Diluted EPS ($)$(0.11) $(1.08) $(2.00)
Adjusted EBITDA ($M)$(99.2) $(20.0) $(57.1)
Cash & Cash Equivalents ($M, period‑end)$730.4 $616.2 $561.6
Quarterly Cash Burn ($M)N/A$(114) $(55)

Notes: Q3 included $45M non‑cash deferred revenue recognized on Motif termination .

Segment Revenue

Segment ($M)Q2 2024Q3 2024Q4 2024
Cell Engineering Revenue$36.2 $75.1 (incl. $45M non‑cash) $34.8
Biosecurity Revenue$20.0 $14.0 $9.1

KPIs and Operating Indicators

KPIQ2 2024Q3 2024Q4 2024
New Programs/Contracts Added (quarter)18 25 31
“New Programs”-comparable subset10 11 14
Active Programs / Customers——138 / 85
Datapoints deals added (quarter)—3 7
Biosecurity GP margin41% 28% 17%
Quarterly Cash Burn—$(114)M $(55)M
Annualized run‑rate cost reduction——$190M achieved; target $250M by Q3’25

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025N/A$160–$180M New
Cell Engineering RevenueFY 2025N/A$110–$130M (potential upside from Tools) New
Biosecurity RevenueFY 2025N/AAt least $50M; assumes continued government funding New
Cost Savings (run‑rate)By Q3 2025$190M achieved exiting 2024Target $250M Raised

Earnings Call Themes & Trends

TopicQ2 2024 (prior)Q3 2024 (prior)Q4 2024 (current)Trend
AI/Tools (Datapoints)Initial LDaaS traction incl. large-cap tech; 10 “New Programs”-comparable, 8 smaller LDaaS deals Three new Datapoints deals incl. top-25 pharmas Seven new Datapoints deals; CFO targets 40%+ Tools gross margin; double‑digit $M FY25 contribution assumed Accelerating adoption and revenue visibility
Automation (RAC carts)——GLBRC deployment; strong SLAS interest; modular automation strategy highlighted Building pipeline and awareness
Government funding/macro——Biosecurity guided on backlog; explicit caution on gov’t uncertainty baked into low end of guidance Conservative stance; risk acknowledged
Cell Engineering mixEarly-stage customer softness; shift toward enterprise CE revenue ex‑non‑cash down YoY; mix transition ongoing CE +29% YoY in Q4 on large biopharma/gov’t; 31 new programs Mix shift bearing fruit
Cost actions/EBITDA pathRIF and non‑people cuts; targeting 2026 breakeven Site consolidation accelerated $190M run-rate achieved; target $250M by Q3’25; Q4 cash burn halved QoQ; 2026 breakeven reiterated Execution improving
Downstream value share——Potential milestones down ~$700M YoY given commercial changes; royalties remain Reset; less milestone upside near term
Controls/Compliance——SOX material weakness remediated Improved control environment

Management Commentary

  • “We ended this quarter with $562 million in cash and no bank debt and significantly exceeded our original cost‑cutting target… a dramatically reduced level of cash burn in Q4 versus Q3.” — Jason Kelly, CEO .
  • “Cell Engineering revenue was $35 million in the fourth quarter… primarily driven by growth with large biopharma customers and government accounts… we added 31 new programs and contracts in Q4.” — Mark Dmytruk, CFO .
  • “Our Biosecurity business generated $9 million of revenue in the fourth quarter… at a gross margin of 17%… revenue and gross margin were down quarter‑over‑quarter… lumpy due partly to timing.” — CFO .
  • “We are… targeting what you would see in a solid CRO services market of 40%+ gross margins” for Tools/Datapoints — CFO .
  • “We’re seeing customer interest in large data assets to enable AI models… our expansions into life science tools with our Datapoints and Automation offerings are going well.” — CEO .

Q&A Highlights

  • Tools contribution and margins: FY25 guide assumes double‑digit $M revenue from Tools off a single‑digit $M 2024 base; Tools targeted at 40%+ gross margins as scale builds .
  • EBITDA breakeven path: Starting from Q4’24 adj. EBITDA $(57)M, management expects at least ~$15M/quarter improvement from the added $60M run‑rate cost takeout in 2025, with further opportunities (plus potential sublease offsets and downstream value share in 2026) .
  • Guidance conservatism: Government contracts incorporated conservatively (Biosecurity guided to backlog and renewals); Cell Engineering guidance framed with risk in biotech R&D markets .
  • Funnel health and sales cycles: Tools model reduces sales cycles and expands entry points (seven Datapoints deals; five new large pharma logos); Automation follows more traditional workcell sales initially, with modular expansion over time .
  • Controls: SOX material weakness remediated, improving financial reporting posture .

Estimates Context

  • S&P Global consensus estimates for revenue and EPS were not retrievable at time of query due to an API rate limit (we will update when available). As such, we cannot characterize Q4’24 “beat/miss” vs. Street at this time. Values from S&P Global are unavailable at time of writing.

Key Takeaways for Investors

  • Cost-down and cash discipline are working: sequential cash burn nearly halved to $(55)M and adjusted EBITDA improved YoY, extending runway with $562M cash and no bank debt .
  • Mix shift to enterprise customers is showing up in the numbers: Q4 Cell Engineering +29% YoY with growing large pharma exposure; expect revenue lumpiness to persist given milestone timing, but underlying mix is healthier .
  • Tools (Datapoints, Automation) are a key 2025 growth vector with structurally better gross margins (40%+ target) and faster sales cycles; management only embeds conservative double‑digit $M in FY25, leaving upside if pipelines convert .
  • Biosecurity remains government-dependent; guidance is anchored to backlog and renewals with explicit funding risk. Monitor policy/agency leadership developments and EU HaDEA program execution .
  • Milestone/royalty optionality persists long term, but near‑term “downstream” pool was reset ~$700M YoY; near‑term focus is fee revenue and profitability .
  • 2025 playbook: hit the $250M run‑rate cost‑savings target by Q3’25, drive Tools uptake, pursue subleases to offset excess space costs, and preserve the cash “margin of safety” en route to 2026 adjusted EBITDA breakeven .

Appendix: Source Documents

  • Q4’24 8‑K and press release (financial statements, guidance, KPIs) .
  • Q4’24 earnings call transcript (financial color, strategy, Q&A) .
  • Q3’24 press release (comps, non‑cash deferred revenue, margin) .
  • Q2’24 press release (baseline, LDaaS inception, margin) .
  • Related press releases: ARPA‑H REACT (up to $9.4M), EU HaDEA (up to €24M), GLBRC Automation deployment .