Boston, Massachusetts, USA
February 29, 2024

• $251 million of Total revenue in 2023
• $139 million in Cell Engineering services revenue, representing 31% growth over 2022
• 78 new Cell Programs added in 2023, representing 32% growth over 2022 and continued penetration in biopharma
• Year-end cash balance of nearly $950 million provides meaningful multi-year runway as we drive towards profitability and begin recognizing benefits from improved platform efficiency

Ginkgo Bioworks Holdings, Inc. (NYSE: DNA, "Ginkgo"), which is building the leading platform for cell programming and biosecurity, today announced its results for the fourth quarter and year ended December 31, 2023. The update, including a webcast slide presentation and supplemental financial information, will be available at investors.ginkgobioworks.com.

"2023 was a breakout year for Ginkgo," said Jason Kelly, co-founder and CEO of Ginkgo. "We're working to build a durable platform that fundamentally transforms R&D in biotech. I'm particularly pleased with our growth in biopharma, which represents our largest untapped market - we added several new programs across modalities with large enterprises including Boehringer Ingelheim, Merck, Novo Nordisk, and Pfizer and are seeing strong momentum in pharma going into 2024. I am also thrilled to see a real ecosystem building around Ginkgo - we're honored by the trust placed in us by the terrific founders of Patch Biosciences, Reverie Labs, and Proof Diagnostics to bring their technologies to customers and by the over 25 inaugural partners in our newly announced Technology Network. We are committed to bringing the best technologies together to support our customers, and we've never been better positioned to deliver."

Recent Business Highlights & Strategic Positioning

• Added 78 new Cell Engineering Programs in 2023, representing 32% growth over the prior year period
• Ginkgo's Cell Engineering segment generated services revenue, which does not include downstream value share revenue, of $139 million in 2023, a 31% increase versus 2022
• Ginkgo's Biosecurity segment generated $108 million of revenue in 2023 as the Biosecurity business shifted to a more recurring model focused on global reach and multiple pathogens to build a long-term biosecurity global infrastructure
  • Ginkgo continues to expand its global bioradar network— with pilots, programs, or MOUs now in 14 countries and 10 airports—and advance capabilities for multi-target and multimodal biological threat detection, characterization, and forecasting for next-generation biological intelligence
  • Ginkgo is partnering with the Qatar Free Zones Authority (QFZ) and Doha Venture Capital (DVC) to build a Center for Unified Biosecurity Excellence in Doha (CUBE-D), envisioned as the first of several hubs for biosecurity sample and data analysis in our global network
  • Ginkgo is partnering with Illumina, a global leader in DNA sequencing and array-based technologies, to advance localized biosecurity capabilities in countries around the world
• Downstream value share – which consists of potential value to Ginkgo from its Cell Engineering customers and includes potential royalties, milestone payments, and equity interests – is an important component of the financial potential of most programs. As of December 31, 2023 Ginkgo has approximately $2.4 billion in aggregate revenue potential from downstream milestone payments alone in addition to royalties.
• Ginkgo recently announced the launch of its Technology Network of over 25 companies, creating a more integrated approach to biotech R&D. Ginkgo has a long history of integrating diverse technologies to deliver on customers' complex program goals and believes that customers should not have to choose a technical approach prematurely but should be able to test many approaches in an unbiased way. Ginkgo customers will be able to benefit from the integration of technologies from network partners in their programs, and Ginkgo expects to expand the network based on customer needs and feedback.
• Ginkgo also announced several acquisitions including Patch Biosciences, Proof Diagnostics and Reverie Labs. These acquisitions are expected to expand Ginkgo's capabilities in AI and biopharma.

Fourth Quarter 2023 Financial Highlights

• Fourth quarter 2023 Total revenue of $35 million, down from $98 million in the comparable prior year period, a decrease of 65% primarily driven by the expected ramp down of K-12 testing in Ginkgo's Biosecurity segment and the impact of Cell Engineering downstream value share from equity milestones in 2022 that did not recur in 2023
  • Fourth quarter 2023 Cell Engineering services revenue, which does not include downstream value share revenue, of $27 million, down 26% from $36 million in the comparable prior year period. There was no material downstream value share revenue received in the fourth quarter of 2023.
  • Fourth quarter 2023 Biosecurity revenue of $8 million with gross profit margin of 15% is reflective of the early stages of transitioning to a more recurring business model
• Fourth quarter 2023 Loss from operations of $(178) million (inclusive of stock-based compensation expense of $44 million), compared to Loss from operations of $(231) million in the comparable prior year period (inclusive of stock-based compensation expense of $111 million). Just under half of the stock-based compensation expense relates to the continued GAAP accounting for the modification of restricted stock units issued prior to Ginkgo becoming a public company, as disclosed in our annual report on Form 10-K filed with the SEC on March 13, 2023, and which we expect to continue to ramp down significantly in the coming quarters.
• Fourth quarter 2023 Adjusted EBITDA of $(96) million, down from $(76) million in the comparable prior year period driven by the decline in Total revenue partially offset by a decline in operating expenses
• Cash and cash equivalents balance as of the end of the fourth quarter of $944 million puts Ginkgo in a strong financial position to pursue its strategic objectives

Full Year 2023 Financial Highlights

• Full year 2023 Total revenue of $251 million, down from $478 million in the prior year, a decrease of 47% as Biosecurity revenue transitioned from K-12 testing to a more recurring business model
  • Full year 2023 Cell Engineering revenue of $144 million remained stable over the prior year, representing 31% growth in services revenue offset by a decrease in downstream value share from equity milestones
  • Full year 2023 Biosecurity revenue of $108 million, down from $334 million in the prior year, a decrease of 68%, with full year 2023 Biosecurity gross profit margin of 50%
• Full year 2023 Loss from operations of $(864) million (inclusive of stock-based compensation expense of $235 million), compared to $(2.2) billion (inclusive of stock-based compensation expense of $1.9 billion) in the prior year
• Full year 2023 Adjusted EBITDA of $(355) million, down from $(173) million in the prior year

Full Year 2024 Guidance

• Ginkgo expects to add 100-120 new Cell Programs to the Cell Engineering platform in 2024
• Ginkgo expects Total revenue of $215-$235 million in 2024
  • Ginkgo expects Cell Engineering services revenue of $165-185 million in 2024 driven by expected growth in biopharma and government programs. This guidance excludes the impact of any potential downstream value share revenue.
  • Ginkgo expects Biosecurity revenue in 2024 of at least $50 million, representing approximate current contracted backlog, with potential upside from additional opportunities in the pipeline

Website: http://www.ginkgobioworks.com.

Published: March 5, 2024