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For discussion related to 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K, please refer to Part II, Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K, filed with the United States Securities and Exchange Commission on March 13, 2023.
+Added: Management’s Discussion and Analysis of Financial Condition
+Added: and Results of Operations in our 2023 Form 10-K, filed with the United States Securities and Exchange Commission on February 29, 2024.
This discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties.
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Our mission is to make biology easier to engineer.
−Removed: Ginkgo is the leading horizontal platform for cell programming, providing flexible, end-to-end services that solve challenges for organizations across diverse markets, from food and agriculture to pharmaceuticals to industrial and specialty chemicals.
−Removed: Ginkgo’s Biosecurity business is building a global infrastructure for biosecurity to empower governments, communities, and public health leaders to prevent, detect and respond to a wide variety of biological threats.
−Removed: We use our platform to program cells on behalf of our customers.
−Removed: These “cell programs” are designed to enable biological production of products as diverse as novel therapeutics, key food ingredients, and chemicals currently derived from petroleum.
−Removed: Biology did not evolve by end market.
−Removed: All of these applications run on cells which have a common code—DNA—and a common programming platform can enable all of them.
−Removed: Because of this shared platform, we are able to drive scale and learning efficiencies while maintaining flexibility and diversity in our program areas.
−Removed: Ultimately, customers come to us because they believe we maximize the probability of successfully developing their products.
−Removed: The foundation of our cell programming platform includes two core assets that execute a wide variety of cell programs for customers according to their specifications:
−Removed: our Foundry and our Codebase.
−Removed: • Our Foundry is a highly automated, yet flexible, lab powered by proprietary automation and software to enable flexibility and scale.
−Removed: The Foundry automates lab workflows at high levels of abstraction, enabling users to generate potentially valuable datasets labeling broad genetic sequence design space with a wide range of functional data through modular design-build-test-learn cycles or campaigns.
−Removed: Our scale economic means that the Foundry’s capacity to perform more and more diverse campaigns grows while the cost per campaign decreases.
−Removed: We call this scaling factor Knight’s Law.
−Removed: • Our Codebase is a data asset which accumulates as we operate our Foundry in service of customer projects.
−Removed: Our Codebase includes vast amounts of data at different levels of characterization and usability in engineering projects, including:
−Removed: proprietary libraries of genetic sequence data that can be used for pretraining large language models via unsupervised learning, experimental data for fine tuning task-specific generative artificial intelligence (“AI”) models, as well as sequences and optimized host cells that can be directly reusable for different applications of cell engineering.
−Removed: As the platform scales, we have observed a virtuous cycle between our Foundry, our Codebase, and the value we deliver to customers.
−Removed: We believe this virtuous cycle sustains Ginkgo’s growth and differentiated value proposition.
−Removed: As we take on more work in the Foundry, we benefit from scale economics, which over time may lead to lower program costs.
−Removed: We expect that these lower costs, in turn, will drive additional demand for our cell programming capabilities.
−Removed: Cell programs also generate Codebase, which can drive better experimental direction and improve the odds of technical success, further increasing our customer value proposition, which we believe will result in additional demand.
−Removed: we believe that as we scale, the platform improves.
−Removed: We believe that this in turn yields better program execution and customer outcomes, ultimately driving more demand, which drives further investments in scale and platform improvements, and so on.
−Removed: We believe this positive feedback loop has the potential to drive compounding value creation in the future, as new programs typically contribute to both near-term revenues and have the potential to add significant downstream economics and more positive impact.
−Removed: Our cell programming business model mirrors the structure of our platform and we are compensated in two primary ways.
+Added: Ginkgo sells services in two business segments:
+Added: cell engineering, where we provide biological research and development (“R&D”) services for our customers across a range of industries, and biosecurity, where we provide services to government and commercial customers so they can work to identify, monitor, prevent, mitigate, and ultimately protect humanity from biological threats.
+Added: Cell Engineering
+Added: Ginkgo does not make end products;
+Added: instead, we offer biological R&D services on our platform to enable our customers to bring their products to market.
+Added: Historically, Ginkgo’s primary service offering has been end-to-end cell engineering R&D services ( solutions ).
+Added: In 2024, Ginkgo expanded its service offering to also include services that provide our customers cell engineering tools for biological R&D, which are intended to provide more targeted and bespoke resources to customers that continue to conduct in-house R&D.
+Added: Compounding and mutually reinforcing improvements of our laboratory automation and software infrastructure—our Foundry—and our reusable data assets—our Codebase—enable us to improve our services with each successive project.
+Added: • Our Foundry is a flexible capability for large scale data generation;
+Added: it powers generative artificial intelligence (“AI”) and machine learning (“ML”) tools that enable more successful biological R&D.
+Added: We now offer services providing such data generation, AI and automation tools directly to Ginkgo customers.
+Added: • Our Codebase is a data asset comprising best practices for cell engineering, along with sequences and host cells that have been honed through dozens of programs and can be directly reusable for our end-to-end cell engineering solutions.
+Added: Our end-to-end cell engineering solutions are typically scoped and delivered as a program ranging in duration from several months to several years.
+Added: A typical deliverable for the program would comprise an engineered strain or cell line and an associated bioprocess.
+Added: For each of these programs, we generate economic value in two primary ways.
First, we charge usage fees for services, in much the same way that cloud computing companies charge usage fees for utilization of computing capacity or contract research organizations charge for services.
−Removed: Additionally, we negotiate a value share with our customers (typically in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.
−Removed: As we add new programs, our portfolio of programs with this “downstream” value potential grows.
+Added: Additionally, we have historically negotiated a value share with our customers (in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.
+Added: Commencing in the second quarter of 2024, we announced changes in prospective commercial terms, including the removal of downstream value share from certain program types.
+Added: We charge customers fees for the services we provide in our cell engineering tools offerings.
+Added: Typically, these fees are structured as a fixed fee for a fixed scope of work.
+Added: Fees for our Datapoints services are typically earned over a shorter period of time (weeks to months) than for end-to-end cell engineering solutions which may be multi-year programs.
+Added: Fees for our automation solutions are typically earned over a period that covers design, build, and deployment and range from six to twelve months.
+Added: In addition, we offer support services with fixed fees covering the support periods.
With a mission to make biology easier to engineer, we have always recognized the need to invest in biosecurity as a key component of our platform.
−Removed: We are building the future bioeconomy with our customers and partners, and we envision the future of biosecurity as a global immune system equipped with the capabilities to prevent, detect, and respond to biological threats.
+Added: We are building the future bioeconomy with our customers and partners, and we envision the future of biosecurity as a global immune system equipped with the capabilities to rapidly and reliably identify, monitor, prevent, and mitigate biological threats.
The first, critical step in realizing this future is to build a robust early warning system for biological threats—this is the primary focus of Ginkgo’s Biosecurity business.
−Removed: Our biosecurity offering includes biomonitoring and bioinformatic support services internationally as well as domestically.
−Removed: We are currently offering biomonitoring and bioinformatic support services domestically through our partnership with the Centers for Disease Control and Prevention (“CDC”) and XpresCheck, and internationally such as through our international programs, including those in Qatar, Rwanda and Ukraine.
−Removed: We operate in two reportable business segments:
−Removed: • Cell Engineering:
−Removed: Consists of research and development (“R&D”) services performed under collaboration and license agreements relating to our cell programming platform.
−Removed: Our cell programming platform includes two core assets:
−Removed: the Foundry, highly efficient biology lab facilities, enabled by investment in proprietary workflows, custom software, robotic automation, and data science and analytics, which is paired with our Codebase, a collection of biological “parts” and a database of biological data used to program cells.
−Removed: The Cell Engineering segment includes costs incurred for the development, operation, expansion and enhancement of the Foundry and Codebase.
−Removed: Cell Engineering revenue is derived from service fees and downstream value share in the form of milestone payments, royalties or equity interests.
−Removed: • Biosecurity:
−Removed: Consists of our end-to-end biomonitoring and bioinformatic support services primarily provided to public health authorities.
−Removed: Biosecurity revenue is derived from fees for data, analytics, and services.
−Removed: Before the fourth quarter of 2023, Biosecurity revenue was also derived from sales of test kits.
+Added: Our primary biosecurity customers are governments.
+Added: We currently provide biosecurity services via two core offerings as introduced in early 2024:
+Added: • Canopy, which helps our customers generate high value genomic data from strategically positioned nodes (like airports and border checkpoints) via end-to-end biomonitoring programs;
+Added: • Horizon, our digital surveillance, analytics and insights platform that detects and monitors biothreats worldwide.
+Added: Our recent strategic business and asset acquisitions are described in detail in Note 4 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Generating Economic Value Through Cell Programs
−Removed: Our cell programming platform is a key enabling technology and source of intellectual property for our customers’ products.
−Removed: We earn Cell Engineering revenue for our R&D services as well as through a share of the value of products created using our platform.
+Added: Our cell engineering platform is a key enabling technology and source of intellectual property for our customers’ products.
+Added: We earn Cell Engineering revenue for our R&D services as well as generally through a share of the value of products created using our platform.
We typically structure Cell Engineering revenue to include some combination of the following:
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◦ milestone payments upon the achievement of specified technical criteria;
+Added: plus, when applicable,
• downstream value share payments in the form of:
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We also provide R&D services for which we receive cash consideration on a fixed-fee or cost-plus basis.
−Removed: Platform Ventures include:
−Removed: Motif FoodWorks, Inc.
−Removed: Founded in 2018, Motif FoodWorks, Inc.
−Removed: (“Motif”) was formed to focus on the application of synthetic biology to reduce the reliance on animal products in the food industry.
−Removed: We entered into an intellectual property contribution agreement that granted Motif rights to our intellectual property, subject to mutually agreed upon technical development plans.
−Removed: In return for our contribution of intellectual property and access to our platform, we received shares of common stock in Motif.
−Removed: The initial fair value of our common stock investment in Motif was $65.1 million which has subsequently been reduced to a carrying value of zero as a result of the allocation of losses under our accounting for equity method investments.
−Removed: Motif was capitalized through Series A preferred stock financings that raised approximately $119 million in gross proceeds from an investor group which included certain of our investors, Louis Dreyfus Company and Fonterra Co-operative Group Limited.
−Removed: In June 2021, Motif raised an additional $226 million through a Series B preferred stock financing.
−Removed: Ginkgo also entered into a Technical Development Agreement with Motif under which we provide R&D services in return for cash consideration on a fixed-fee or cost-plus fixed margin basis.
−Removed: Allonnia, LLC
−Removed: Founded in 2019, Allonnia, LLC (“Allonnia”) was formed to focus on the application of synthetic biology in the waste bioremediation and biorecovery industries.
−Removed: We entered into an intellectual property contribution agreement that granted Allonnia rights to our intellectual property, subject to mutually agreed upon technical development plans.
−Removed: In return for our contribution of intellectual property and access to our platform, we received common units in Allonnia with a right to additional units subject to additional closings of Allonnia’s Series A preferred units.
−Removed: The initial fair value of our common units received in Allonnia was $24.5 million, subsequently increased by $12.7 million in 2021, all of which has been reduced to a carrying value of zero as a result of the allocation of losses under our accounting for equity method investments.
−Removed: Allonnia was capitalized through Series A preferred unit financings that raised approximately $52 million in gross proceeds from an investor group which included certain of our investors and Battelle Memorial Institute.
−Removed: In 2023, Allonnia raised an additional $30 million through a Series A extension.
−Removed: Ginkgo also entered into a Technical Development Agreement with Allonnia under which we provide R&D services in return for cash consideration on a fixed fee or cost-plus basis.
−Removed: Founded in 2021, Arcaea, LLC (“Arcaea”) was formed to focus on the application of synthetic biology in the beauty and personal care products industry.
−Removed: In March 2021, we entered into an intellectual property contribution agreement that granted Arcaea rights to our intellectual property, subject to mutually agreed upon technical development plans.
−Removed: In return for our contribution of intellectual property and access to our platform, we received common units in Arcaea with a right to additional units subject to additional closings of Arcaea’s Series A preferred units.
−Removed: The initial fair value of our common units received in Arcaea was $11.9 million which has subsequently been reduced to a carrying value of zero as a result of the allocation of losses under our accounting for equity method investments.
−Removed: Arcaea was capitalized through a Series A preferred unit financing that raised approximately $77 million in gross proceeds from an investor group which included certain of our investors, CHANEL and Givaudan.
−Removed: Upon the closing of the Series A preferred unit financing in July 2021, we received an additional 5.2 million common units in Arcaea.
−Removed: The fair value of our Arcaea common units received in July 2021 of $35.5 million has subsequently been reduced to a carrying value of zero as a result of the allocation of losses under our accounting for equity method investments.
−Removed: Ginkgo also entered into a Technical Development Agreement with Arcaea under which we provide R&D services in return for cash consideration on a fixed fee or cost-plus basis.
−Removed: Ayana Bio, LLC
−Removed: Founded in September 2021, Ayana Bio, LLC (“Ayana”) was formed to identify and design new bioactive compounds for use as complementary medicine to support human health and wellness.
−Removed: Ayana was capitalized through a Series A funding that raised $30 million in gross proceeds from an investor group comprising certain of our investors.
−Removed: We hold an interest in
−Removed: 9.0 million common units (representing 100% of common units at inception) of Ayana and have also provided Ayana with certain licenses to our intellectual property for use in the development or production of products that we have agreed to research and develop under technical development plans.
−Removed: Prior to the third quarter of 2022, we consolidated Ayana as a variable interest entity.
−Removed: In the third quarter of 2022, we deconsolidated Ayana and began accounting for our retained investment in Ayana as an equity method investment.
−Removed: The initial carrying value of the equity method investment in Ayana was equal to the fair value of our retained interest of $16.0 million as of the deconsolidation date which has been subsequently reduced to a carrying value of zero due to a basis difference associated with in-process research and development identified as part of the initial accounting for the equity method investment.
−Removed: Ginkgo also entered into a Technical Development Agreement with Ayana under which we provide R&D services in return for cash consideration on a fixed fee or cost-plus basis.
−Removed: Verb Biotics, LLC
−Removed: Founded in September 2021, Verb Biotics, LLC (“Verb”) was formed to identify and design new strains of probiotic bacteria with advanced properties for human nutrition, health, and wellness.
−Removed: Verb was capitalized through a Series A funding that raised $30 million in gross proceeds from an investor group comprising certain of our investors.
−Removed: We hold an interest in 9.0 million common units (representing 100% of common units at inception) of Verb and have also provided Verb with certain licenses to our intellectual property for use in the development or production of products that we have agreed to research and develop under technical development plans.
−Removed: Prior to the first quarter of 2022, we consolidated Verb as a variable interest entity.
−Removed: In the first quarter of 2022, we deconsolidated Verb and began accounting for our retained investment in Verb as an equity method investment.
−Removed: The initial carrying value of the equity method investment in Verb was equal to the fair value of our retained interest of $15.9 million as of the deconsolidation date which has been subsequently reduced to a carrying value of zero due to a basis difference associated with in-process research and development identified as part of the initial accounting for the equity method investment.
−Removed: Ginkgo also entered into a Technical Development Agreement with Verb under which we provide R&D services in return for cash consideration on a fixed fee or cost-plus basis.
−Removed: BiomEdit, LLC
−Removed: Founded in April 2022, BiomEdit, LLC (“BiomEdit”) was formed to discover, design and develop novel probiotics, microbiome derived bioactives and engineered microbial medicines in the animal health industry.
−Removed: BiomEdit was capitalized through a Series A preferred unit financing that raised approximately $32.5 million in gross proceeds from an investor group which included one of our investors.
−Removed: In April 2022, we entered into an intellectual property contribution agreement that granted BiomEdit rights to our intellectual property, subject to mutually agreed upon technical development plans and, in return, we received 3.9 million voting common units in BiomEdit.
−Removed: In addition, Elanco Animal Health also contributed intellectual property in exchange for 3.9 million non-voting common units in BiomEdit.
−Removed: The initial fair value of our common units received in BiomEdit was $8.9 million, subsequently increased by $1.1 million in the first quarter of 2023, all of which has been reduced to a carrying value of zero as a result of the allocation of losses under our accounting for equity method investments.
−Removed: Ginkgo also entered into a Technical Development Agreement with BiomEdit under which we provide R&D services in return for cash consideration on a fixed fee or cost-plus basis.
Structured Partnerships
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and (ii) partner with existing entities with complementary assets for high potential synthetic biology applications in a large-scale, multi-program collaboration (“Legacy Structured Partnership”).
−Removed: In 2023 and 2022, we entered into 6 and 11 Startup Structured Partnerships, respectively, and received prepayments of service fees in the form of equity securities or convertible financial instruments in the amount of $18.9 million and $30.7 million, respectively, that is recognized as revenue over our period of performance.
−Removed: Our Legacy Structured Partnerships are described below:
−Removed: Genomatica, Inc.
−Removed: Genomatica, Inc.
−Removed: (“Genomatica”) is a biotechnology company specializing in the development and manufacturing of intermediate and specialty chemicals from both sugar and alternative feedstocks.
−Removed: In 2016 and 2018, we acquired preferred stock in Genomatica with an aggregate investment value of $55.0 million in exchange for cash and committed R&D
−Removed: The carrying value of the investment has been reduced to $11.9 million as of December 31, 2023, reflective of impairment losses recognized through that date.
−Removed: Synlogic, Inc.
−Removed: Synlogic, Inc.
−Removed: (“Synlogic”) is a publicly traded clinical-stage biopharmaceutical company focused on advancing drug discovery and development for synthetic biology-derived medicines.
−Removed: In 2019, we entered into several agreements with Synlogic whereby we purchased Synlogic common stock and warrants to purchase Synlogic common stock and agreed to provide R&D services to Synlogic.
−Removed: At inception, the fair value of Synlogic common stock and warrants was recorded at $35.8 million and $14.4 million, respectively.
−Removed: As of December 31, 2023, the fair value of Synlogic common stock and warrants was $1.6 million and $0.7 million, respectively.
−Removed: On February 8, 2024, Synlogic announced its decision to
−Removed: cease operations and evaluate strategic options for the company.
+Added: In 2024, we did not enter into
+Added: any new Startup Structured Partnerships.
+Added: In 2023, we entered into six Startup Structured Partnerships and received prepayments of service fees in the form of equity securities or convertible financial instruments in the amount of $18.9 million that is recognized as revenue over our period of performance.
See Notes 6 and 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details of our investments in and the material terms of our agreements with our Platform Ventures and Structured Partnerships.
Key Business Metrics
−Removed: A cell program (or “program”) is the work we do for our customers to enable their product(s) of interest.
−Removed: Programs are defined by a technical development plan or objective.
−Removed: We generally exclude proof-of-concept projects and other exploratory work undertaken on a customer’s behalf from the program count.
−Removed: In the near-term, programs typically deliver multi-year revenue from service fees.
−Removed: Over the long-term, program growth drives a physical infrastructure scale economic through our Foundry, a data and learning scale economic through our Codebase and accumulation of potential downstream value share.
−Removed: Our key business metrics comprise New Programs, Current Active Programs, and Cumulative Programs.
−Removed: Years Ended December 31,
−Removed: New Programs 78 59
−Removed: Current Active Programs 162 112
−Removed: Cumulative Programs 242 164
−Removed: New Programs represent the number of unique programs commenced within the reporting period.
−Removed: As new programs typically have multi-year durations, we view this metric as an indication of future Cell Engineering revenue growth.
−Removed: Current Active Programs
−Removed: Current Active Programs represent the number of unique programs for which we performed R&D services in the reporting period.
−Removed: We view this metric as an indication of current period and future Cell Engineering revenue.
−Removed: Cumulative Programs
−Removed: Cumulative Programs represent the cumulative number of unique programs Ginkgo has commenced.
−Removed: We view this metric as an indication of our competitive advantage and as a leading indicator of the mid- to long-term potential economic value derived from downstream value share arrangements.
−Removed: The cumulative number of programs also contributes to Codebase, which accumulates with each additional program we conduct over time and drives better experimental direction and improves the odds of technical success in current and future programs.
−Removed: We believe the preceding metrics are important to understand our current business.
−Removed: These metrics may change or be substituted for additional or different metrics as our business develops.
−Removed: For example, as our program mix changes, our data gathering abilities expand or our understanding of key business drivers develops, we anticipate updating these metrics or their definitions to reflect such changes.
−Removed: Zymergen Bankruptcy and Deconsolidation
−Removed: On October 3, 2023, Zymergen and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S.
−Removed: Bankruptcy Code (the “Zymergen Bankruptcy”) in the U.S.
−Removed: Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).
−Removed: In connection with the Zymergen Bankruptcy, we entered into an asset purchase agreement with Zymergen as the stalking horse bidder under Section 363 of the U.S.
−Removed: Bankruptcy Code to acquire exclusive rights to substantially all of Zymergen’s intellectual property assets and certain other assets.
−Removed: On December 14, 2023, Zymergen concluded its auction.
−Removed: On December 21, 2023, the Bankruptcy Court approved the sale of substantially all of Zymergen’s assets to us through certain of our affiliates.
−Removed: On January 18, 2024, we completed our acquisition of such assets, and on February 5, 2024, Zymergen's plan of liquidation was confirmed by the Bankruptcy Court.
−Removed: All of our interests in the Zymergen entities were extinguished and terminated as of February 23, 2024.
−Removed: While as of December 31, 2023 Zymergen remained a wholly-owned subsidiary of ours, as a result of the Zymergen Bankruptcy, we no longer had a controlling financial interest over Zymergen and therefore deconsolidated Zymergen’s financial position as of October 2, 2023.
−Removed: The deconsolidation included the derecognition of the carrying amounts of Zymergen’s consolidated assets and liabilities that were previously included in our financial statements.
−Removed: Upon deconsolidation, we recorded a $42.5 million loss, representing the remaining net book value of our investment that was reduced to a fair value of zero.
−Removed: Zymergen’s results of operations were removed from our consolidated statements of operations and comprehensive loss beginning October 3, 2023.
−Removed: The historical financial results for Zymergen have not been classified as a discontinued operation because it does not represent a strategic shift with a major effect on our operations and financial results.
−Removed: See Note 3 , Acquisitions and Divestitures, of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
−Removed: 2021 Modification of Equity Awards in Connection with SRNG Business Combination
−Removed: Prior to our merger with Soaring Eagle Acquisition Corp.
−Removed: on September 16, 2021 (the “SRNG Business Combination”), our restricted stock units (“RSUs”) were granted based on both service-based and performance-based vesting conditions.
−Removed: Historically, we did not recognize any stock-based compensation expense related to these awards as the achievement of the performance condition required either a change in control or an initial public offering (both as defined in the underlying award agreement), events that were deemed improbable.
−Removed: The SRNG Business Combination did not satisfy the performance condition required for the vesting of our RSUs.
−Removed: On November 17, 2021 our board of directors modified the vesting terms of RSUs to allow 10% of the RSUs that met the service condition as of the closing of the SRNG Business Combination to vest with respect to the performance condition.
−Removed: The rest vested fully with respect to the performance condition by March 15, 2022.
−Removed: The change to the vesting terms was accounted for as a modification and the awards were remeasured using the fair value as of the modification date.
−Removed: RSU earnout shares were also modified as they were subject to the same performance condition as the underlying RSUs, in addition to achieving certain target stock price thresholds.
−Removed: The first target stock price of $12.50 per share was achieved on November 15, 2021.
−Removed: For the years ended December 31, 2023 and 2022, we recognized $129.7 million and $1.9 billion, respectively, of stock-based compensation expense related to the modified RSUs and RSU earnout shares.
+Added: In the past, we reported New Programs, Current Active Programs and Cumulative Programs as our key business metrics.
+Added: We have undertaken a strategic review of these metrics, including in light of our new service offerings and our restructuring plan announced and commenced in the second quarter of 2024, and, beginning with the three months ending December 31, 2024, we no longer rely on New Programs, Current Active Programs and Cumulative Programs as key business metrics.
+Added: We may in the future report on key business metrics, which metrics may change or be substituted for additional or different metrics as our business develops.
Components of Results of Operations
Cell Engineering Revenue
−Removed: We generate Cell Engineering revenue through the execution of license and collaboration agreements whereby customers obtain license rights to our proprietary technology and intellectual property for use in the development and commercialization of engineered organisms and derived products.
+Added: We generate Cell Engineering revenue primarily through license and collaboration agreements, under which customers obtain rights to our proprietary technology and intellectual property for use in the development and commercialization of engineered organisms and derived products.
Under these agreements, we typically provide R&D services for cell programming with the goal of producing an engineered cell that meets a mutually agreed specification.
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Generally, the terms of these agreements provide that we receive some combination of:
−Removed: (1) service fees in the form of (i) upfront payments upon consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products
−Removed: from or comprising engineered organisms arising from the collaboration or licensing agreement and (iii) royalties related to cost of goods sold reductions realized by our customers.
+Added: (1) service fees in the form of (i) upfront payments upon consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products from or comprising engineered organisms arising from the collaboration or licensing agreement and/or (iii) royalties related to cost of goods sold reductions realized by our customers.
Royalties did not comprise a material amount of our revenue during any of the periods presented.
+Added: Beginning in the second quarter of 2024, we announced changes to the commercial terms applicable to some new customer contracts, including revised intellectual property terms more favorable to customers and, in many cases, the removal of downstream value share from certain program types.
+Added: In the third quarter of 2024, we launched several new cell engineering tools offerings, including Datapoints, an AI model API, and lab automation solutions.
+Added: Datapoints' data generation products provide large, biological datasets for customers to train their AI models, synthesizing and testing the output of customer existing models, and generating datasets for lead selection, hit selection, or a variety of other data science applications.
+Added: Our model API provides users with access to both publicly available models and Ginkgo’s own protein sequence LLM trained on Ginkgo’s proprietary datasets.
+Added: Our lab automation solutions combine modular hardware, control software and managed support to provide customers the ability to automate their own lab workflows in house.
+Added: There has been no material impact on our revenue recognition policies to date from the announced changes in our new commercial terms and Cell Engineering offerings.
Cell Engineering revenue includes transactions with Platform Ventures and Legacy Structured Partnerships where, as part of these transactions, we received an equity interest in such entities.
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We view the upfront non-cash consideration as prepayments for licenses which will be granted in the future as we complete mutually agreed upon technical development plans.
−Removed: In these instances, we also receive cash consideration for the R&D services performed by us on a fixed fee or cost-plus basis.
+Added: In these instances, we also receive cash consideration for the R&D services
+Added: performed by us on a fixed fee or cost-plus basis.
We are not compensated through additional milestone or royalty payments under these arrangements.
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As we perform R&D services under the mutually agreed upon development plans, we recognize a reduction in the prefunded obligation on a cost-plus basis.
−Removed: These arrangements are further described in Notes 5 , 6 , 16 and 20 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
−Removed: Cell Engineering revenue also includes transactions with Startup Structured Partnerships where, as part of these transactions, we received upfront non-cash consideration in the form of current equity interests or financial instruments that are convertible into equity upon a triggering event.
−Removed: We grant the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can be drawn down as payment for R&D services performed under mutually agreed upon development plans.
+Added: These arrangements are further described in Notes 6 , 7 , 16 and 20 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.Cell Engineering revenue also includes transactions with Startup Structured Partnerships where, as part of these transactions, we received upfront non-cash consideration in the form of current equity interests or financial instruments that are convertible into equity upon a triggering event.
+Added: We issued the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can and has been drawn down as payment for R&D services performed under mutually agreed upon development plans.
Downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.
2 unchanged sentences
Biosecurity Revenue
−Removed: We offer biomonitoring and bioinformatic support services internationally as well as domestically.
−Removed: We are currently offering biomonitoring and bioinformatic support services domestically through our partnerships with the CDC and XpresCheck, and internationally through our international programs, including those in Qatar, Rwanda and Ukraine.
+Added: We offer biosecurity services through our two core offerings:
+Added: Canopy and Horizon.
+Added: We are currently offering biomonitoring and bioinformatics support services domestically through our partnerships with the CDC and XpresCheck, and internationally through our international programs, including those in Qatar and Ukraine.
We are also engaged in a series of smaller partnerships that generate revenues through biosecurity services and R&D.
−Removed: We generate service revenue through the sale of our end-to-end biomonitoring and bioinformatic support services.
−Removed: These service offerings generally consist of multiple promised goods and services including, but not limited to, sample collection, sample storage and transportation, outsourced laboratory analysis, access to results reported through a web-based portal, analytical reporting of results, and overall program management.
−Removed: Before the fourth quarter of 2023, we generated product revenue by selling lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits associated with COVID-19 tests to customers on a standalone basis.
−Removed: In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed and for product revenue upon delivery of diagnostic test kits.
−Removed: The timing of revenue recognition depends on the identified performance obligations but is generally recognized ratably over time or as results are reported to the customer.
+Added: We generate service revenue through the sale of our end-to-end biomonitoring and bioinformatics support services.
+Added: These service offerings generally consist of goods and services including, but not limited to, sample collection, sample storage and transportation, outsourced laboratory analysis, access to results reported through a web-based portal, analytical reporting of results, and overall program management.
+Added: Prior to 2024, we generated product revenue by selling lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits associated with COVID-19 tests to customers on a standalone basis.
+Added: In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed, and for product revenue, prior to 2024, upon delivery of diagnostic test kits.
+Added: The timing of revenue recognition depends on the identified performance obligations but is generally recognized over time or as results are reported to the customer.
Costs and Operating Expenses
−Removed: Cost of Biosecurity Product Revenue
−Removed: Before the fourth quarter of 2023, cost of Biosecurity product revenue consisted of costs associated with the sale of diagnostic and sample collection test kits, which included costs incurred to purchase test kits from third parties.
Cost of Biosecurity Service Revenue
−Removed: The cost of Biosecurity service revenue consists of costs related to our end-to-end pathogen testing, sequencing, and analysis services.
−Removed: This includes costs incurred for sample collection equipment and materials, outsourced laboratory analysis, access to results reported through our proprietary web-based portal, and reporting of results to public authorities.
+Added: The cost of Biosecurity service revenue consists of costs related to our biomonitoring and bioinformatics support services.
+Added: This includes costs incurred for sample collection equipment and materials, outsourced laboratory analysis, access to results reported through our proprietary web-based portal, and reporting of results to government and non-government customers.
Additionally, the cost of Biosecurity service revenue includes direct labor cost associated with bioinformatics, lab network management, delivery logistics, and customer support.
+Added: Cost of Biosecurity Product Revenue
+Added: Prior to 2024, the cost of Biosecurity product revenue consisted of costs associated with the sale of diagnostic and sample collection test kits, which included costs incurred to purchase test kits from third parties.
+Added: Cost of Other Revenue
+Added: Cost of other revenue consists of costs related to our Cell Engineering tools offerings, including Datapoints and lab automation solutions.
+Added: Such costs primarily include hardware, software, materials and labor.
Research and Development Expenses
2 unchanged sentences
• development, operation, expansion and enhancement of our Foundry and Codebase;
+Added: • costs incurred to deliver our end-to-end cell engineering solutions offering to customers;
• development of new offerings, such as Biosecurity.
The activities above incur the following expenses:
−Removed: • laboratory supplies, consumables and related services provided under agreements with third parties and in-licensing arrangements;
• personnel compensation and benefits;
• rent, facilities, depreciation, software, professional fees and other direct and allocated overhead expenses;
−Removed: We expense R&D costs as incurred.
−Removed: As we grow our active programs and customer base and invest in our Foundry and Codebase through organic and inorganic growth initiatives, we anticipate that our R&D expenses will continue to increase.
+Added: • laboratory supplies, consumables and related services provided under agreements with third parties and in-licensing arrangements.
+Added: We expense R&D expenses as incurred.
+Added: We experienced lower R&D costs in 2024 compared to 2023 primarily due to our restructuring plan announced and commenced in the second quarter of 2024 as we rationalize our current development programs and prioritize our investments in our Foundry, Codebase, AI and new offerings.
+Added: We expect that our R&D expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.
+Added: However, our R&D expenses could increase in 2025 due to employee incentive programs offered or additional costs and expenses arising from these restructuring actions.
The nature, timing, and estimated costs required to support our growth will be dependent on advances in technology, our ability to attract new customers, and the rate of market penetration within our existing customer industries.
−Removed: In 2022, R&D expenses included a significant charge for stock-based compensation expense as a result of the modification of vesting terms of RSUs and the vesting of certain earnout shares in the fourth quarter of 2021 (as further described above in “ Modification of Equity Awards in Connection with SRNG Business Combination ”).
−Removed: The impact of the modification on stock-based compensation expense has significantly diminished by the end of 2023.
General and Administrative Expenses
1 unchanged sentence
G&A expenses also include professional legal services fees and costs incurred relating to litigation, corporate, intellectual property and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, insurance costs, facility-related costs not otherwise included in R&D expenses, and asset impairments.
−Removed: We anticipate that our G&A expenses attributable to organic business activities will either remain consistent or decline in 2024 as compared to 2023, reflecting a stabilization in our operational overhead.
−Removed: Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, and other non-organic growth initiatives.
−Removed: We will capitalize on beneficial opportunities as they arise to enhance shareholder value and support our long-term growth objectives.
−Removed: In 2022, G&A expenses included a significant charge for stock-based compensation expense as a result of the modification of vesting terms of RSUs and the vesting of certain earnout shares in the fourth quarter of 2021 (as further described above in “Modification of Equity Awards in Connection with SRNG Business Combination”).
−Removed: The impact of the modification on stock-based compensation expense has significantly diminished by the end of 2023.
+Added: We experienced lower G&A costs in 2024 compared to 2023 primarily due to our restructuring plan announced and commenced in the second quarter of 2024, as we began reducing our operational overhead.
+Added: We expect that our G&A expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.
+Added: However, our G&A expenses could increase in 2025 due to employee incentive programs offered or additional costs and expenses arising from these restructuring actions.
+Added: Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, and other inorganic growth initiatives.
Impairment of Lease Assets
−Removed: Impairment of lease assets relates to impairment losses recognized on a right-of-use asset and the related leasehold improvements associated with a Zymergen facility that we exited in the third quarter of 2023.
+Added: Impairment of lease assets relates to impairment losses recognized on a right-of-use asset and the related leasehold improvements associated with exited leased facilities.
+Added: Goodwill Impairment
+Added: In the second quarter of 2024, we fully impaired the goodwill attributable to our Cell Engineering reporting unit.
+Added: Refer to further discussion within “Critical Accounting Estimates”.
+Added: Restructuring Charges
+Added: Restructuring charges are related to our restructuring plan, which was announced and commenced in the second quarter of 2024.
+Added: These charges primarily include severance and other employee termination costs from a reduction in force that commenced in June 2024, as well as the impairment of a right-of-use asset due to the subleasing of a facility as part of real estate consolidation.
+Added: Reductions in force are expected to be substantially completed in 2025, subject to compliance with applicable laws.
+Added: While we aim to complete the majority of our facility consolidation actions in 2025, the actual timing may vary, especially for subleasing unused or underutilized facilities, which may extend beyond 2025 or may not occur prior to
+Added: termination of such lease, depending on market conditions.
+Added: Additionally, restructuring expenses related to potential asset impairments or contract amendments or terminations for any facilities no longer in use or underutilized could be material.
+Added: Additional details are included in Note 3 , Restructuring, of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Interest Income
Interest income consists primarily of interest earned on our cash and cash equivalents.
−Removed: Interest Expense
−Removed: Interest expense consists primarily of interest related to our financing lease obligations.
Loss on Equity Method Investments
2 unchanged sentences
Loss on investments includes the change in fair value of our marketable equity securities in publicly traded companies and impairment losses recognized on non-marketable equity securities in privately held companies.
+Added: Loss on Deconsolidation of Subsidiaries
+Added: Loss on deconsolidation of subsidiaries pertains to the deconsolidation of our former foreign subsidiary Altar SAS (“Altar”) in 2024 as a result of a sale and the deconsolidation of our former subsidiary Zymergen Inc.
+Added: (“Zymergen”) in 2023.
Change in Fair Value of Warrant Liabilities
−Removed: Change in fair value of warrant liabilities includes the change in fair value of private placement warrants (“Private Placement Warrants”) and publicly traded warrants (“Public Warrants”), which are classified as liabilities and were assumed as part of the SRNG Business Combination.
−Removed: Warrant liabilities are marked to market at each balance sheet date.
−Removed: (Loss) Gain on Deconsolidation of Subsidiaries
−Removed: (Loss) gain on deconsolidation of subsidiaries pertains to our deconsolidation of Zymergen in 2023 and Verb and Ayana, variable interest entities, i n 2022.
−Removed: Other Income (Expense), Net
−Removed: Other income (expense), net primarily consists of sublease rent income, changes in fair value of notes receivable that we elected to account for under the fair value option and loss on disposal of equipment.
+Added: The change in fair value of warrant liabilities reflects adjustments to the fair value of private placement warrants (“Private Placement Warrants”) and warrants formerly publicly traded on the NYSE (“Public Warrants”).
+Added: These warrants, classified as liabilities, were assumed as part of our merger with Soaring Eagle Acquisition Corp.
+Added: (“SRNG”) on September 16, 2021, and were initially issued in connection with SRNG’s initial public offering.
+Added: Warrant liabilities are remeasured at fair value at each balance sheet date and have substantially no value as of December 31, 2024.
+Added: Other Income, Net
+Added: Other income, net primarily consists of sublease rent income and changes in fair value of notes receivable that we elected to account for under the fair value option.
Provision for Income Taxes
−Removed: Income taxes are recorded in accordance with ASC 740 , Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach.
+Added: Income taxes are recorded in accordance with ASC 740 , Income Taxes , which provides for deferred taxes using an asset and liability approach.
We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our audited consolidated financial statements or tax returns.
4 unchanged sentences
The evaluation of uncertain tax positions is based on factors, including, but not limited to, changes in the law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position.
−Removed: As of December 31, 2023, we had federal net operating loss carryforwards of approximately $1.0 billion, of which $139.2 million will begin to expire in 2029 and $884.1 million can be carried forward indefinitely.
−Removed: As of December 31, 2023, we had state net operating loss carryforwards of approximately $998.2 million, of which $869.2 million will begin to expire in 2030 and $129.0 million can be carried forward indefinitely.
−Removed: As of December 31, 2023, we had foreign net operating losses of approximately $1.7 million, which can be carried forward indefinitely.
+Added: As of December 31, 2024, we had federal net operating loss carryforwards of approximately $1.2 billion, of which $139.2 million will begin to expire in 2029 and $1.1 billion can be carried forward indefinitely.
+Added: As of December 31, 2024, we had state net operating loss carryforwards of approximately $1.2 billion, of which $991.7 million will begin to expire in 2030 and $162.3 million can be carried forward indefinitely.
As of December 31, 2024, we had federal research and development tax credit carryforwards of approximately $37.7 million, which will begin to expire in 2029.
1 unchanged sentence
Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, R&D tax credits and other permanent differences.
−Removed: Our income tax provision may be significantly affected by changes to our estimates.
+Added: Our income tax provision may be affected by changes to our estimates.
Results of Operations
1 unchanged sentence
The following table presents our result of operations for the periods indicated:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(in thousands) 2024 2023 Change
1 unchanged sentence
Biosecurity revenue:
−Removed: Product 28,949 35,455 (6,506)
Service 53,071 78,975 (25,904)
+Added: Product — 28,949 (28,949)
Total revenue 227,043 251,455 (24,412)
Costs and operating expenses:
−Removed: Cost of Biosecurity product revenue 7,481 20,646 (13,165)
Cost of Biosecurity service revenue 38,549 46,524 (7,975)
+Added: Cost of Biosecurity product revenue — 7,481 (7,481)
+Added: Cost of other revenue 5,999 — 5,999
Research and development (1)
3 unchanged sentences
Impairment of lease assets — 96,210 (96,210)
+Added: Goodwill impairment 47,858 — 47,858
+Added: Restructuring charges 24,172 — 24,172
Total operating expenses 786,800 1,115,861 (329,061)
5 unchanged sentences
Loss on investments (28,827) (54,827) 26,000
+Added: Loss on deconsolidation of subsidiaries (7,013) (42,502) 35,489
Change in fair value of warrant liabilities 5,701 5,168 533
−Removed: (Loss) gain on deconsolidation of subsidiaries (42,502) 31,889 (74,391)
−Removed: Other income (expense), net 9,138 7,634 1,504
−Removed: Total other income (expense), net (28,534) 87,553 (116,087)
+Added: Other income, net 3,870 9,138 (5,268)
+Added: Total other income (expense) 12,249 (28,534) 40,783
Loss before income taxes (547,508) (892,940) 345,432
1 unchanged sentence
Net loss $ (547,029) $ (892,869) $ 345,840
−Removed: Loss attributable to non-controlling interest — (1,443) 1,443
−Removed: Net loss attributable to Ginkgo Bioworks Holdings, Inc.
−Removed: stockholders $ (892,869) $ (2,104,929) $ 1,212,060
−Removed: (1) R&D and G&A expenses included a significant charge for stock-based compensation expense as a result of the modification of the vesting terms of RSUs and related earnout shares (as further described above in “Modification of Equity Awards in Connection with
−Removed: SRNG Business Combination”).
−Removed: Total stock-based compensation expense, inclusive of employer payroll taxes, was allocated as follows (in thousands):
+Added: (1) The following table presents the allocation of stock-based compensation expense, inclusive of employer payroll taxes.
+Added: Stock-based compensation expense during the year ended December 31, 2024 was partially offset by a $12.6 million expense reversal resulting from the forfeiture of RSUs related to our restructuring plan.
+Added: Of the total reversal, $9.2 million was recorded to research and development expenses and $3.4 million was recorded to general and administrative expenses.
Year Ended December 31,
+Added: (in thousands) 2024 2023
Research and development $ 57,723 $ 148,861
2 unchanged sentences
Cell Engineering Revenue
−Removed: Cell Engineering revenue remained relatively flat in 2023 compared to 2022, decreasing by $0.1 million.
−Removed: The flat revenue for the year ended December 31, 2023 was primarily driven by a decrease in downstream value share from equity milestones, offset by an increase in services revenue.
−Removed: The increase in services revenue was primarily due to progress of Current Active Programs with existing and new customers.
−Removed: Additionally, services revenue increased due to the launch of New Programs and was partially offset by the completion of certain programs.
+Added: Cell Engineering revenue was $174.0 million in 2024, compared to $143.5 million in 2023, an increase of $30.4 million.
+Added: The increase was primarily due to the recognition of $45.4 million in non-cash revenue from the release of a deferred revenue balance associated with the terminated Motif FoodWorks, Inc.
+Added: (“Motif”) contract in 2024 (see Note 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K) and an increase in revenue related to programs with large enterprise customers primarily in the pharmaceutical, biotechnology and U.S.
+Added: government (healthcare and defense) industries, partially offset by decreases in revenue related to programs with early stage customers in the pharmaceutical, biotechnology and industrial biotechnology (food and nutrition, industrial and environmental, and consumer and technology) industries.
As discussed above in Components of Results of Operations, Cell Engineering revenue comprises both cash and non-cash consideration.
−Removed: Cell Engineering revenue recognized relating to non-cash consideration decreased from $75.8 million in 2022 to $48.5 million in 2023 primarily due to downstream value share milestone payments received in the form of equity securities in 2022.
−Removed: In 2023, 78 New Programs commenced compared to 59 New Programs in 2022.
−Removed: The total number of Current Active Programs increased to 162 in 2023 from 112 in 2022.
−Removed: Cumulative Programs increased to 242 in 2023 from 164 in 2022.
−Removed: The number of customers increased to 91 in 2023 from 56 in 2022.
−Removed: While the majority of Cell Engineering revenue today is made up of service fees, as we increase Cumulative Programs and to the extent our customers successfully commercialize products built on our platform, downstream value share is expected to comprise a larger proportion of Cell Engineering revenue.
−Removed: Downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.
−Removed: The initial fair market value of the equity interests received may also decrease after contract inception and the amount of cash proceeds eventually realized may be less than the revenue recognized.
+Added: Cell Engineering revenue recognized relating to non-cash consideration increased from $48.5 million in 2023 to $61.4 million in 2024.
+Added: The increase was primarily due to the recognition of $45.4 million in non-cash revenue from the release of the deferred revenue balance associated with the terminated Motif contract in 2024, partially offset by lower non-cash revenue from other customers.
Biosecurity Revenue
−Removed: Biosecurity revenue decreased $226.1 million in 2023 compared to 2022 and was comprised of a decrease in product revenue of $6.5 million and a decrease in service revenue of $219.6 million.
−Removed: The amount and components of Biosecurity revenue were primarily dependent on the demand for COVID-19 testing products and services.
−Removed: The demand for COVID-19 testing in schools significantly diminished following the end of the public health emergency in May 2023, and by the third quarter of 2023, our COVID-19 testing in schools had ceased completely.
−Removed: Biosecurity revenue in the fourth quarter of 2023 was comprised of our ongoing testing services.
−Removed: The amount and components of Biosecurity revenue in future periods are expected to be comprised of our expanded offerings of biomonitoring and bioinformatic support services provided through our domestic and international partnerships.
−Removed: Cost of Biosecurity Product and Service Revenue
−Removed: Cost of Biosecurity product and service revenue decreased $150.2 million in 2023 compared to 2022.
−Removed: The decrease was driven by decreased demand for our COVID-19 testing products and services and the end of our COVID-19 testing in schools in the third quarter of 2023.
+Added: Biosecurity revenue was $53.1 million in 2024, compared to $107.9 million in 2023, a decrease of $54.9 million.
+Added: This total decrease consisted of a $25.9 million decline in service revenue and a $28.9 million decline in product revenue.
+Added: The decrease in Biosecurity revenue is primarily due to the end of our COVID-19 testing in schools in 2023, partially offset by new expanded offerings of biomonitoring and bioinformatics support services in 2023 and 2024.
+Added: Since the end of the COVID-19 public health emergency in May 2023, we shifted our Biosecurity business focus to developing scalable biosecurity infrastructure and delivering global surveillance programs and analytics services.
+Added: Biosecurity revenue in 2024 was comprised of our expanded offerings of biomonitoring and bioinformatics support services.
+Added: Through our partnerships, we operate programs for collections, testing, sequencing, and insights delivery on pathogen samples in different countries.
+Added: Cost of Biosecurity Service and Product Revenue
+Added: Cost of Biosecurity service and product revenue was $38.5 million in 2024, compared to $54.0 million in 2023, a decrease of $15.5 million.
+Added: This decrease was primarily due to the end of our COVID-19 testing in schools in 2023, partially offset by growth in our expanded offerings of biomonitoring and bioinformatics support services following the transition of our Biosecurity business to developing scalable biosecurity infrastructure and delivering global surveillance programs and analytics services.
+Added: Cost of Other Revenue
+Added: Cost of other revenue was $6.0 million in 2024 and zero in 2023.
+Added: These costs relate to our new Cell Engineering customer offerings, Datapoints and lab automation solutions, which were launched in 2024.
+Added: Costs related to our end-to-end cell engineering solutions offering are included in research and development expenses.
Research and Development Expenses
−Removed: Research and development expenses decreased $472.0 million in 2023 compared to 2022.
−Removed: The decrease was primarily attributable to a decrease in stock-based compensation expense of $590.0 million (inclusive of employer payroll taxes) due to vesting of RSUs and related earnout shares that were modified in the fourth quarter of 2021 (refer to above section “Modification of Equity Awards in Connection with SRNG Business Combination”), and decreases in professional fees of
−Removed: $11.2 million and laboratory supplies of $7.3 million, partially offset by increases in personnel-related compensation and benefits expense of $59.5 million, rent and facilities expense of $20.0 million, depreciation and amortization expense of $25.8 million, impairment of lab equipment of $12.3 million, software and technology expense of $9.1 million, acquired in-process research and development costs of $5.5 million, and other expenses of $4.3 million.
−Removed: Increases in research and development expenses, excluding stock-based compensation expense, supported the growth of Cell Engineering revenue and the integration of prior year acquisitions.
+Added: Our research and development expenses principally relate to the development of new offerings and the operation, expansion and enhancement of our existing service offerings utilizing our proprietary platform, which includes our Foundry and Codebase assets, to our cell engineering customers.
+Added: Research personnel costs, including stock-based compensation, is our largest expense, aggregating to $184.9 million and $304.3 million for the years ended December 31, 2024 and 2023, respectively.
+Added: We also acquired and expensed in-process research and development primarily through the issuance of our equity, aggregating to $19.8 million and $9.6 million for the years ended December 31, 2024 and 2023, respectively.
+Added: Our remaining research and development costs are comprised primarily of rent and related facilities costs, information technology costs, depreciation pertaining to facilities and equipment, laboratory consumables, contract services and routine costs and fees.
+Added: Research and development expenses were $424.1 million in 2024, compared to $580.6 million in 2023, a decrease of $156.6 million.
+Added: This decrease was primarily due to a reduction in stock-based compensation expense of $87.5 million (inclusive of employer payroll taxes) and research and development expenses of $50.5 million from the deconsolidation of Zymergen.
+Added: Additionally, there were decreases in personnel-related compensation and benefits expense of $14.6 million, professional fees of $14.2 million, lab equipment impairment of $12.3 million, temporary labor and contractors of $3.1 million, allocated overhead expenses of $6.9 million from R&D to G&A, and other operating expenses of $8.6 million, primarily due to our restructuring plan announced and commenced in the second quarter of 2024.
+Added: These decreases were partially offset by an increase in rent and related facilities costs of $19.4 million, acquired in-process research and development costs of $11.5 million, software and technology expense of $6.1 million, and depreciation of $4.2 million.
+Added: Increases in research and development expenses supported the growth of cell engineering capabilities prior to the commencement of our restructuring plan.
General and Administrative Expenses
−Removed: General and administrative expenses decreased $1,044.8 million in 2023 compared to 2022.
−Removed: The decrease was primarily attributable to a decrease in stock-based compensation expense of $1,116.1 million (inclusive of employer payroll taxes) due to vesting of RSUs and related earnout shares that were modified in the fourth quarter of 2021 (refer to above section “Modification of Equity Awards in Connection with SRNG Business Combination”), partially offset by increases in rent and facilities expense of $18.1 million, increases in personnel-related compensation and benefits expense of $14.1 million, increases in professional fees and litigation costs of $13.5 million, an impairment of lab equipment related to prior year acquisitions of $12.9 million, and increases in the fair value of contingent consideration liabilities resulting from acquisitions of $10.4 million.
−Removed: Increases in general and administrative expenses, excluding stock-based compensation expense, supported the growth of Cell Engineering and Biosecurity revenue and the integration of prior year acquisitions.
+Added: General and administrative expenses were $246.2 million in 2024, compared to $385.0 million in 2023, a decrease of $138.9 million.
+Added: This decrease was primarily due to a reduction of $72.8 million in general and administrative expenses from the deconsolidation of Zymergen.
+Added: Excluding this impact, the decrease was largely attributable to our restructuring plan announced and commenced in the second quarter of 2024, which resulted in reductions in professional fees of $49.1 million (including a $17.6 million decrease in litigation costs), stock-based compensation expense of $26.6 million (inclusive of employer payroll taxes), temporary labor and contractor fees of $7.5 million, the change in fair value of contingent consideration liabilities resulting from acquisitions of $6.0 million, and other operating expenses of $2.2 million.
+Added: These decreases were partially offset by an increase in personnel-related compensation and benefits expense of $10.1 million, rent and related facilities costs of $9.4 million from a new facility lease that commenced in 2024, and the impairment of construction in progress assets of $5.8 million.
Impairment of Lease Assets
−Removed: Impairment of lease assets increased $96.2 million in 2023 compared to 2022.
−Removed: In September 2023, Zymergen exited and ceased use of a leased facility which resulted in a $96.2 million impairment to reduce the carrying value of the right-of-use asset and the related leasehold improvements to their estimated fair value.
+Added: In 2023, we recognized an impairment loss of $96.2 million related to a right-of-use asset and the associated leasehold improvements for an exited Zymergen leased facility.
+Added: During 2023, Zymergen permanently ceased use of and vacated the leased space, which triggered an impairment analysis and resulted in a write-down of the carrying value of the assets to their estimated fair value.
+Added: Goodwill Impairment
+Added: In 2024, we recorded goodwill impairment expense of $47.9 million related to our Cell Engineering reporting unit, further discussed within “Critical Accounting Estimates” below.
+Added: Restructuring Charges
+Added: In 2024, we incurred restructuring charges of $24.2 million in connection with our restructuring plan announced and commenced in the second quarter of 2024, primarily in the Cell Engineering segment.
+Added: These charges primarily consisted of employee termination costs from the reduction in force commenced in June 2024 and the impairment of a right-of-use asset
+Added: relating to facilities consolidation.
+Added: See Note 3 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.
Interest Income
−Removed: Interest income increased $37.0 million in 2023 compared to 2022, primarily due to increased interest rates on cash held in money market accounts.
−Removed: Interest Expense
−Removed: Interest expense decreased by less than $0.1 million in 2023 compared to 2022.
+Added: Interest income was $38.6 million in 2024, compared to $57.2 million in 2023, a decrease of $18.6 million.
+Added: This decrease was primarily due to lower average cash balances in interest bearing accounts.
Loss on Equity Method Investments
−Removed: Loss on equity method investments decreased $41.1 million in 2023 compared to 2022.
−Removed: The decrease was primarily attributable to our equity method investments in Verb, Ayana, Joyn Bio, LLC ("Joyn Bio"), and BiomEdit.
−Removed: Upon the deconsolidation of Verb and Ayana in 2022, we recorded an aggregate $31.9 million loss on our retained investments in Verb and Ayana due to a basis difference associated with in-process research and development identified as part of the initial accounting for the equity method investments.
−Removed: The loss reduced the carrying value of our equity method investments in Ayana and Verb to zero and no further losses on these investments were recognized in the periods presented.
−Removed: In 2022, we recorded a $3.0 million loss on our equity method investment in Joyn Bio, a joint venture which was subsequently terminated in the fourth quarter of 2022.
−Removed: Our share of BiomEdit's losses under the HLBV method decreased by $7.0 million in 2023 compared to 2022 and the carrying value of our equity method investment in BiomEdit has been reduced to zero.
−Removed: Under the HLBV method, we absorb losses as a common unit holder prior to preferred unit holders due to a substantive profit-sharing agreement where the preferred unit holders receive preferential distribution rights.
−Removed: Because we have no commitment to fund the losses of our equity method investees, no further losses on these investments were recognized during the periods presented.
+Added: Loss on equity method investments was zero in 2024, compared to $2.6 million in 2023.
+Added: The 2023 loss represented our share of losses from certain equity method investees resulting from the application of the HLBV method.
+Added: Under the HLBV method, as a common unit holder, we absorb losses before preferred unit holders due to a substantive profit-sharing agreement that grants preferred unit holders preferential distribution rights.
+Added: Since we have no obligation to fund the losses of our equity method investees beyond our initial investment, no additional losses were recognized in 2024, as the investments had already been reduced to zero prior to that year.
Loss on Investments
−Removed: Loss on investments increased $1.5 million in 2023 compared to 2022.
−Removed: The increase was driven by a $35.4 million increase in impairment losses and downward adjustments related to our non-marketable equity securities, offset by fluctuations in the stock prices of marketable equity securities and a $12.6 million mark-to-market adjustment on equity securities received as downstream value share payments upon the achievement of a commercial milestone in 2022.
−Removed: Non-cash consideration from customers is initially measured at the fair value of the non-cash consideration at contract inception.
−Removed: Change in Fair Value of Warrant Liabilitie s
−Removed: The gain on the change in fair value of warrant liabilities decreased $119.8 million in 2023 compared to 2022.
−Removed: The change in fair value of warrant liabilities is primarily driven by changes in the value of our common stock.
−Removed: Increases or decreases in the value of our common stock results in a loss or gain, respectively, on the change in fair value of warrant liabilities.
−Removed: (Loss) Gain on Deconsolidation of Subsidiaries
−Removed: In 2023, we recorded a $42.5 million loss on our deconsolidation of Zymergen following Zymergen's bankruptcy filing in October 2023.
−Removed: In 2022, we recorded a $31.9 million gain on our deconsolidation of Verb and Ayana equal to the fair value of our retained interest in each entity measured as of the deconsolidation date.
−Removed: Other Income (Expense), Net
−Removed: Other income (expense), net increased $1.5 million in 2023 compared to 2022 primarily due to a $6.6 million unfavorable change in fair value of notes receivable offset by a $6.0 million increase in sublease rent income from Zymergen subleases prior to deconsolidation and a $2.6 million decrease in loss on disposal of equipment.
+Added: Loss on investments was $28.8 million in 2024, compared to $54.8 million in 2023, a decrease of $26.0 million.
+Added: The higher loss in 2023 was due to greater impairment losses on our non-marketable equity investments in privately held companies compared to the corresponding period in 2024.
+Added: We assess our non-marketable equity investments quarterly for potential impairment and remeasure to fair value when events or changes in circumstances indicate that the carrying value may not be recoverable.
+Added: Loss on Deconsolidation of Subsidiaries
+Added: In 2024, we recorded a $7.0 million loss on the deconsolidation of our former foreign subsidiary Altar as a result of a sale of this business.
+Added: In 2023, we recorded a $42.5 million loss on the deconsolidation of Zymergen following Zymergen's bankruptcy filing in October 2023.
+Added: Change in Fair Value of Warrant Liabilities
+Added: The change in fair value of warrant liabilities was a gain of $5.7 million in 2024, compared to a gain of $5.2 million in 2023, an increase of $0.5 million.
+Added: The change in fair value of warrant liabilities is primarily driven by fluctuations in the value of our common stock.
+Added: Increases or decreases in the value of our common stock result in a loss or gain, respectively, in the fair value of warrant liabilities.
+Added: There was substantially no value related to these warrant liabilities as of December 31, 2024.
+Added: Other Income, Net
+Added: Other income, net was $3.9 million in 2024, compared to $9.1 million in 2023, a decrease of $5.3 million.
+Added: This decrease was primarily due to reduced sublease rent income following the deconsolidation of Zymergen.
Non-GAAP Information
3 unchanged sentences
stockholders before the impact of interest income, interest expense, provision for income taxes and depreciation and amortization.
−Removed: We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, gain or loss on equity method investments, gain or loss on investments, change in fair value of warrant liabilities, gain or loss on deconsolidation of subsidiaries, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, including related litigation costs, acquired in-process research and development expenses, impairment charges, costs associated with the Zymergen Bankruptcy, and other income and expenses.
+Added: We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, gain or loss on equity method investments, gain or loss on investments, change in fair value of warrant liabilities, gain or loss on deconsolidation of subsidiaries, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, including related litigation costs, restructuring and impairment charges (inclusive of impairments of goodwill and long-lived assets), costs associated with the bankruptcy filing of our former subsidiary, Zymergen (the “Zymergen
+Added: Bankruptcy”), and certain other income and expenses.
We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing activities, investing activities, and certain non-cash charges and other items that are not related to our core operating performance or affect comparability period over period.
−Removed: Our non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
−Removed: In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by future income or future expenses similar to those excluded when calculating these measures.
−Removed: Our computation of these measures, especially Adjusted EBITDA, may not be comparable to similarly titled measures of other companies because not all companies calculate these measures in the same way.
−Removed: We compensate for these limitations by providing a reconciliation of EBITDA and Adjusted EBITDA to their most directly comparable GAAP financial measure.
−Removed: The following table reconciles net loss attributable to Ginkgo Bioworks Holdings, Inc.
−Removed: stockholders to EBITDA and Adjusted EBITDA for the years ended December 31, 2023 and 2022, respectively:
+Added: In 2024, we updated our definition of Adjusted EBITDA to no longer exclude the impact of acquired in-process research and development expenses.
+Added: Accordingly, the comparable 2023 period has been recast to conform to the revised definition.
+Added: Our non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP performance measures.
+Added: These measures exclude significant expenses and income required by GAAP, which impacts their alignment with consolidated financial statements.
+Added: They also rely on management's judgment to determine which items are included or excluded, making them inherently subjective.
+Added: Additionally, non-GAAP measures lack uniform definitions and may differ from those used by other companies, limiting comparability.
+Added: A reconciliation of EBITDA and Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is presented below:
Year Ended December 31,
(in thousands) 2024 2023
−Removed: Net loss attributable to Ginkgo Bioworks Holdings, Inc.
−Removed: stockholders $ (892,869) $ (2,104,929)
+Added: $ (547,029) $ (892,869)
Interest income (38,612) (57,217)
5 unchanged sentences
115,299 234,908
−Removed: Impairment of long-lived assets (2)
−Removed: Merger and acquisition related expenses (3)
+Added: Impairment expense (3)
53,654 121,404
−Removed: Loss on investments 54,827 53,335
−Removed: Loss (gain) on deconsolidation of subsidiaries 42,502 (31,889)
+Added: Restructuring charges (4)
+Added: Merger and acquisition related expenses (5)
Loss on equity method investments — 2,635
+Added: Loss on investments 28,827 54,827
+Added: Loss on deconsolidation of subsidiaries 7,013 42,502
Change in fair value of warrant liabilities (5,701) (5,168)
−Removed: Change in fair value of notes receivable 2,295 (4,153)
+Added: Change in fair value of convertible notes 2,014 2,295
Adjusted EBITDA $ (293,311) $ (364,965)
+Added: (1) All periods include non-cash revenue when earned, including $45.4 million in the year ended December 31, 2024, recognized pursuant to the termination of revenue contracts with Motif.
(2) For the years ended December 31, 2024 and 2023, includes $3.0 million and $5.0 million, respectively, in related employer payroll taxes.
−Removed: (2) For the year ended December 31, 2023, includes $25.2 million impairment loss on lab equipment and $96.2 million impairment loss on a right-of-use asset and the related leasehold improvements associated with an exited Zymergen leased facility.
+Added: (3) For 2024, includes $47.9 million related to goodwill impairment and $5.8 million related to lab equipment.
+Added: For 2023, includes a $25.2 million impairment loss on lab equipment and a $96.2 million impairment loss on lease assets associated with an exited Zymergen leased facility.
+Added: (4) Restructuring charges consist of employee termination costs from the reduction in force commenced in June 2024, as well as the impairment of a right-of-use asset relating to facilities consolidation.
(5) Represents transaction and integration costs directly related to mergers and acquisitions, including:
−Removed: (i) due diligence, legal, consulting and accounting fees associated with acquisitions, (ii) post-acquisition employee retention bonuses and severance payments, (iii) the fair value adjustments to contingent consideration liabilities resulting from acquisitions, (iv) acquired intangible assets expensed as in-process research and development, and (v) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs, net of insurance recovery.
−Removed: (4) Represents losses on equity method investments under the HLBV method, net of losses attributable to non-controlling interests.
+Added: (i) due diligence, legal, consulting and accounting fees associated with acquisitions, (ii) post-acquisition employee retention bonuses and severance payments, (iii) the fair value adjustments to contingent consideration liabilities resulting from acquisitions, and (iv) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs, net of insurance recovery.
+Added: Not included in this adjustment are acquired in-process research and development expenses, which totaled $19.8 million and $9.6 million for the years ended December 31, 2024 and 2023, respectively.
Liquidity and Capital Resources
+Added: On August 19, 2024, with the approval of our board of directors and shareholders, we effected a one-for-forty (1:40) reverse stock split for our common stock.
+Added: Accordingly, all common shares presented herein have been retrospectively adjusted to reflect the reverse stock split.
Sources of Liquidity
−Removed: Upon the closing of the SRNG Business Combination in September 2021, we received net proceeds totaling approximately $1,509.6 million, inclusive of $760.0 million from investments from certain accredited investors for 76 million shares of our Class A common stock at a price of $10.00 per share.
+Added: Upon the closing of our merger with SRNG in September 2021, we received net proceeds totaling approximately $1.5 billion, inclusive of $760.0 million from investments from certain accredited investors for 1.9 million shares of our Class A common stock.
As of December 31, 2024, we had cash and cash equivalents of $561.6 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K.
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• continue our R&D activities under existing and new programs and further invest in our Foundry and Codebase;
−Removed: • hire additional personnel and secure facilities to support our expanding R&D efforts;
• develop and expand our offerings, including Biosecurity;
−Removed: • upgrade and expand our operational, financial and management systems and support our operations;
−Removed: • acquire and integrate companies, assets or intellectual property that advance our company objectives;
+Added: • upgrade, expand or adapt our operational, financial and management systems and support our operations;
+Added: • potentially acquire and integrate companies, assets or intellectual property that advance our company objectives;
• maintain, expand, and protect our intellectual property;
+Added: • continue our restructuring actions.
We have various noncancelable operating leases for office and laboratory space, with significant leases expiring between 2030 and 2036.
3 unchanged sentences
In August 2023, we entered into a five-year strategic cloud and AI partnership with Google Cloud, which includes minimum annual commitments to purchase cloud hosting services.
−Removed: As of December 31, 2023, the remaining aggregate commitment was $286.1 million, with approximately $14.4 million payable in the next 12 months and $271.7 million thereafter.
+Added: As of December 31, 2024, the remaining aggregate commitment was $279.3 million, with approximately $44.3 million payable in 2025 and $235.0 million thereafter.
In March 2022, we entered into a four-year noncancelable supply agreement with Twist for the purchase of diverse products including synthetic DNA.
−Removed: Under this agreement, we are obligated to spend a minimum of $58.0 million over the four-year term, with approximately $17.6 million payable in the next 12 months and $23.0 million thereafter.
−Removed: Capital Expenditures
−Removed: We anticipate our cumulative spending on capital expenditures to be in the range of $70 million over the next 12 months, subject to management’s ongoing reassessment, to support our commercial plan as we strategically invest in capacity and technology to deliver new cell programs.
+Added: Under this agreement, we are obligated to spend a minimum of $58.0 million over the four-year term, with approximately $24.8 million payable in 2025 and $4.8 million thereafter.
The following table provides information regarding our cash flows for each period presented:
1 unchanged sentence
(in thousands) 2024 2023
−Removed: Net cash (used in) provided by:
+Added: Net cash used in:
Operating activities $ (319,585) $ (295,500)
4 unchanged sentences
Operating Activities
−Removed: Net cash used in operating activities for the year ended December 31, 2023 consisted of net loss of $892.9 million, adjusted for net change in operating assets and liabilities of $29.8 million and non-cash charges of $567.5 million.
−Removed: The net change in operating assets and liabilities was primarily due to (i) a $50.1 million decrease in accounts receivable from collections of Biosecurity receivables and the end of COVID-19 testing in schools in the third quarter of 2023, (ii) a $10.5 million decrease in prepaid expenses and other current assets primarily from depletion of inventory coinciding with the reduction of Biosecurity product revenue in the third quarter plus the timing of directors and officers insurance payments in the prior year, (iii) a $9.3 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $16.9 million increase in accrued expenses and other current liabilities primarily from accrued litigation costs, partially offset by (v) a $35.9 million decrease in deferred revenue and (vi) a $22.8 million decrease in operating lease liabilities from rent payments.
+Added: Net cash used in operating activities for the year ended December 31, 2024 consisted of a net loss of $547.0 million, adjusted for a net decrease in cash due to changes in operating assets and liabilities of $89.7 million and non-cash charges of $317.1 million.
+Added: The net change in operating assets and liabilities was primarily driven by a $40.4 million decrease in accrued expenses and other current liabilities primarily due to the payment or release of restructuring-related accruals and litigation costs, a $68.6 million decrease in deferred revenue primarily from a one-time release of a deferred revenue balance associated with a terminated customer contract, and a $14.9 million decrease in operating lease liabilities from rent payments, partially offset by a $23.5 million decrease in operating lease right-of-use assets from lease incentives received and a $10.1 million decrease in prepaid expenses and other current assets, primarily driven by the derecognition of an insurance receivable and a reduction in contract renewals resulting from our restructuring actions.
+Added: Non-cash adjustments primarily consisted of $63.0 million in depreciation and amortization, $112.3 million in stock-based compensation expense, $28.8 million loss on investments, $28.1 million non-cash lease expense, $19.8 million in acquired in-process research and development expense, and $58.5 million in various asset impairment charges.
+Added: Net cash used in operating activities for the year ended December 31, 2023 consisted of a net loss of $892.9 million, adjusted for a net increase in cash due to changes in operating assets and liabilities of $29.8 million and non-cash charges of $567.5 million.
+Added: The net change in operating assets and liabilities was primarily driven by (i) a $50.1 million decrease in accounts receivable from collections of Biosecurity receivables and the end of COVID-19 testing in schools in 2023, (ii) a $10.5 million decrease in prepaid expenses and other current assets primarily from depletion of inventory coinciding with the reduction of Biosecurity product revenue plus the timing of directors and officers insurance payments in the prior year, (iii) a $9.3 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $16.9 million increase in accrued expenses and other current liabilities primarily from accrued litigation costs, partially offset by (v) a $35.9 million decrease in deferred revenue and (vi) a $22.8 million decrease in operating lease liabilities from rent payments.
Non-cash adjustments primarily consisted of $70.5 million of depreciation and amortization, $229.9 million of stock-based compensation, $57.5 million loss on investments including equity method investments, $9.2 million loss on the change in fair value of contingent consideration liabilities, $28.3 million of non-cash lease expense, $121.4 million in impairments of long-lived assets, and $42.5 million loss on deconsolidation of Zymergen.
−Removed: Net cash used in operating activities for the year ended December 31, 2022 consisted of net loss of $2.1 billion, adjusted for net change in operating assets and liabilities of $37.0 million and non-cash charges of $1.9 billion.
−Removed: The net change in operating assets and liabilities was primarily due to (i) a decrease in accounts receivable of $55.0 million from increased Biosecurity collections, partially offset by (ii) increase in prepaid expenses and other current assets of $8.5 million primarily due to prepaid insurance for directors and officers, (iii) decrease in accounts payable of $10.8 million due to timing of invoices, (iv) decrease in accrued expenses and other current liabilities of $39.6 million, (v) decrease in deferred revenue of $36.4 million, and (vi) lease incentives received of $13.2 million offset by (vii) $10.8 million decrease in operating lease liabilities from rent payments.
−Removed: Non-cash adjustments primarily consisted of depreciation and amortization of $42.6 million, stock-based compensation expense of $1.9 billion, loss on investments and equity method investments of $97.1 million, non-cash lease expense of $19.1 million associated with operating lease right-of-use assets, partially offset by deferred income tax benefit of $14.6 million related to acquisitions, gain on the change in fair value of warrant liabilities of $125.0 million, non-cash equity consideration of $34.3 million from commercial milestones associated with a customer collaboration arrangement, and $31.9 million gain on the deconsolidation of Verb and Ayana.
Investing Activities
+Added: Net cash used in investing activities for the year ended December 31, 2024 primarily consisted of $62.5 million in purchases of property and equipment related to a build out of new office and laboratory space being developed near our headquarters, $5.4 million paid for the acquisition of certain Zymergen assets, offset by $4.5 million in proceeds from the sale of marketable securities.
Net cash used in investing activities for the year ended December 31, 2023 primarily consisted of purchases of property and equipment of $40.8 million associated with Foundry capacity and capability investments, relinquishment of $43.0 million in cash upon the deconsolidation of Zymergen, offset by $4.4 million in proceeds from the sale of equipment.
−Removed: Net cash used in investing activities for the year ended December 31, 2022, primarily consisted of purchases of property and equipment of $52.3 million associated with Foundry capacity and capability investments, purchases of notes receivable and marketable equity securities of $43.7 million, relinquishment of $55.7 million in cash upon the deconsolidation of Verb and Ayana, partially offset by a $10.0 million cash redemption of a convertible note and net cash received from business and asset acquisitions of $74.7 million.
Financing Activities
Net cash used in financing activities for the year ended December 31, 2024 primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.
−Removed: Net cash provided by financing activities for the year ended December 31, 2022, primarily consisted of $99.3 million in net cash proceeds from our underwritten public offering in November 2022.
+Added: Net cash used in financing activities for the year ended December 31, 2023 primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.
Critical Accounting Estimates
8 unchanged sentences
Cell Engineering Revenue
−Removed: For certain Cell Engineering revenue agreements, we recognize revenue over the period of performance using a measure of progress based on costs incurred to date relative to total expected costs (i.e., cost-to-cost method).
+Added: For certain Cell Engineering revenue contracts, we recognize revenue over the period of performance using a measure of progress based on costs incurred to date relative to total expected costs (i.e., cost-to-cost method).
A significant level of judgment is involved in estimating the total expected costs.
−Removed: The amount of revenue recognized in a given period is dependent on the accuracy of our estimates of the cost to complete each project.
−Removed: When estimating total expected costs, we make assumptions and estimates regarding the contracted scope of work, tasks required to complete each project, technical and schedule risks associated with the science, the expected duration of each project, and the total amount of internal and
−Removed: external (i.e., subcontractor) resources required.
−Removed: We evaluate our measure of progress to recognize revenue for these agreements at each reporting date and, as necessary, adjust the measure of progress and related revenue recognition.
−Removed: We also evaluate contract modifications and amendments to determine whether any changes should be accounted for prospectively or on a cumulative catch-up basis.
−Removed: Certain customer agreements contain payment in the form of shares of equity securities or other financial instruments that are convertible into equity upon a triggering event.
−Removed: Any non-cash consideration is measured at the estimated fair value of the non-cash consideration at contract inception.
−Removed: For equity securities and financial instruments received that are not actively traded, we generally engage a third-party valuation specialist to determine the estimated fair value of the upfront non-cash consideration.
−Removed: The fair value is generally determined based on a recent round of financing or by using a scenario-based valuation model.
−Removed: Significant unobservable inputs are used in the fair value measurements including expectations regarding future financings of the customer, scenario dates and probabilities, expected volatility, discount rates and recovery rates.
−Removed: Changes in these assumptions can materially affect the value of the non-cash consideration at contract inception and, accordingly, the total amount of revenue recognized for the contract.
+Added: When estimating total expected costs, we make assumptions and estimates regarding the contracted scope of work, tasks required to complete each project, technical and schedule risks associated with the science, the expected duration of each project, and the total amount of internal and external resources required.
+Added: Our collaboration and licensing agreements often include multiple promises, such as (i) licenses and assignments of intellectual property and materials and (ii) research and development services.
+Added: We assess whether each promise constitutes a distinct performance obligation based on the specific terms of each agreement.
+Added: Determining whether the promises within a customer contract should be accounted for separately as distinct performance obligations requires significant judgment.
+Added: Therefore, we review customer contracts to identify all individual promises to transfer goods and services that qualify as performance obligations.
+Added: Options to acquire additional goods and services are evaluated to determine whether they provide a material right to the customer that would not otherwise be available without entering into the contract.
+Added: Judgment is required to assess whether a customer option constitutes a material right.
+Added: If a material right is identified, the option is treated as a separate performance obligation, and the revenue allocated to the option is deferred until the option is either exercised or expires.
+Added: We also evaluate contract modifications and amendments to determine whether any changes should be accounted for as a separate contract, prospectively or on a cumulative catch-up basis.
+Added: Certain customer contracts include payment in the form of equity securities or other financial instruments that convert into equity upon a triggering event.
+Added: Any non-cash consideration is measured at its estimated fair value at contract inception.
+Added: For equity securities and financial instruments that are not actively traded, we generally determine the estimated fair value by referencing a recent financing round or utilizing a scenario-based valuation model.
+Added: Significant unobservable inputs are used in these valuations, including expectations regarding future financings of the customer, scenario dates and probabilities, expected volatility, discount rates, and recovery rates.
+Added: Changes in these assumptions can materially affect the fair value of the non-cash consideration and, consequently, the total revenue recognized for the contract.
Impairment of Long-Lived Assets
−Removed: We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
−Removed: Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate.
−Removed: If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value.
+Added: We review our long-lived assets and asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.
+Added: Recoverability is measured by comparing the carrying value of the long-lived assets to the future undiscounted cash flows expected to be generated by the assets.
+Added: In determining the expected future cash flows, we use assumptions believed to be reasonable, but which are unpredictable and inherently uncertain.
+Added: Actual future cash flows may differ from the estimates used in impairment testing.
+Added: We recognize an impairment loss when and to the extent that the estimated fair value of the long-lived assets is less than their carrying value.
+Added: We assess goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
+Added: Goodwill impairment assessments require a significant amount of management judgment and the use of estimates and assumptions that could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge.
+Added: During the year ended December 31, 2024, due to a sustained decrease in the market price of our Class A common stock and market capitalization, we identified that a possible indicator of impairment was present as of June 30, 2024.
+Added: As such, we completed a quantitative impairment test related to our Cell Engineering reporting unit.
+Added: To conduct the impairment test of goodwill, the estimated fair value of the reporting unit was compared to its carrying value.
+Added: The estimated fair value of the Cell Engineering reporting unit was determined using a weighted approach that considered a discounted cash flow (“DCF”) model under the income approach and the guideline public company (“GPC”) method under the market approach.
+Added: Inputs used in the DCF model included the projected future operating results of the reporting unit and the applicable
+Added: discount rate, while inputs used in the GPC method consisted of a revenue multiple.
+Added: The projected future operating results were based on historical experience and internal annual operating plans reviewed by management, extrapolated over the forecast period.
+Added: The discount rate was determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit.
+Added: The revenue multiple was based on the GPC method using comparable publicly traded company multiples of revenue for a group of benchmark companies.
+Added: The DCF method was weighted 75% and the GPC 25%.
+Added: We reconciled the resulting fair value of the reporting unit to our market capitalization to corroborate the fair value estimate used in the impairment test.
+Added: The interim impairment test indicated that the estimated fair value of the reporting unit was less than its carrying value.
+Added: As a result, we fully impaired goodwill and recorded an impairment loss of $47.9 million in the second quarter of 2024 and for the year ended December 31, 2024.
Investments in Non-Marketable Equity Securities
8 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.