Ginkgo Bioworks Holdings, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2024, which is the end of the period covered by this Annual Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such terms are defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a framework designed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. As of December 31, 2024, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Based on this evaluation, we concluded that the Company's system of internal control over financial repor ting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by our independent registered public accounting firm, Deloitte & Touche LLP, as stated in their report which is included herein. Remediation of Previously Reported Material Weakness in Internal Control Over Financial Reporting In preparing our financial statements in connection with our Annual Report on Form 10-K for the year ended December 31, 2023 and continuing through the nine months ended September 30, 2024, we previously identified a material weakness in our internal control over financial reporting. The material weakness related to ineffective management review controls to address the risks of material misstatement of various significant accounts. Management’s evaluation of the completeness and accuracy of data used in the performance of its controls was insufficient, as was the precision of the review, identification and resolution of items requiring follow-up, and/or timeliness of the review. Following the identification of the material weakness, and with the oversight of the Audit Committee, we commenced remediation efforts that continued during fiscal 2024 to address the material weakness and enhance our control environment, including our internal control over financial reporting. Our remediation efforts included: • Employee training related to internal control over financial reporting specifically focused on data used in the operation of management review controls and the execution of management review controls with an appropriate level of precision and appropriate documentation of the identification and resolution of follow-up items; • Implementation and enhancement of control activities, including automation of certain control processes; and, • Development of other tools and enablers, including increasing the standardization of control support and documentation. Based on these remediation actions, as well as testing the operating effectiveness of the applicable financial reporting controls over a sustained period of financial reporting cycles, we have concluded that the previously reported material weakness has been effectively remediated as of December 31, 2024. 82 Table of Contents Changes in Internal Control over Financial Reporting Except as otherwise noted above under “Remediation of Previously Reported Material Weakness in Internal Control Over Financial Reporting”, there were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Ginkgo Bioworks Holdings, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Ginkgo Bioworks Holdings, Inc. (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 25, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts February 25, 2025 83 Table of Contents Item 9B. Other Information. None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 84 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated by reference to the relevant information from our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed not later than 120 days after December 31, 2024. Insider Trading Compliance Policy The Company has adopted an Insider Trading Compliance Policy governing the purchase, sale and/or other disposition of its securities by directors, officers and employees, or the Company itself, that it believes is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable NYSE listing standards. A copy of the Company’s Insider Trading Compliance Policy is filed with this Annual Report on Form 10-K as Exhibit 19.1. Item 11. Executive Compensation. The information required by this item is incorporated by reference to the relevant information from our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed not later than 120 days after December 31, 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item is incorporated by reference to the relevant information from our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed not later than 120 days after December 31, 2024. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference to the relevant information from our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed not later than 120 days after December 31, 2024. Item 14. Principal Accounting Fees and Services. The information required by this item is incorporated by reference to the relevant information from our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders, which will be filed not later than 120 days after December 31, 2024. 85 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (1) As part of this Annual Report on Form 10-K, the consolidated financial statements are listed in the accompanying index to financial statements on page F-1 . (2) Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto. (3) Exhibits: Exhibit Number Description 2.2 Merger Agreement, dated as of May 11, 2021, by and among Soaring Eagle Acquisition Corp., SEAC Merger Sub Inc. and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 2.1 of SRNG’s Current Report on Form 8-K filed with the SEC on May 11, 2021) 2.3 Amendment to the Agreement and Plan of Merger, dated as of May 14, 2021, by and among Soaring Eagle Acquisition Corp., SEAC Merger Sub Inc. and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 2.1 to SRNG’s Quarterly Report on Form 10-Q (File No. 001-40097) for the quarter ended March 31, 2021, filed with the SEC on May 24, 2021) 3.1 Amended and Restated Certificate of Incorporation of Ginkgo Bioworks Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2024) 3.2 Amended and Restated Bylaws of Ginkgo Bioworks Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 27, 2023) 4.1 Specimen Class A Common Stock Certificate of Ginkgo Bioworks Holdings, Inc. (incorporated by reference to Exhibit 4.5 to Amendment No. 3 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on August 4, 2021) 4.2* Description of Securities of the Registrant 4.3 Warrant Agreement, dated as of February 23, 2021, by and among Soaring Eagle Acquisition Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of SRNG’s Current Report on Form 8-K (File No. 001-40097), filed with the SEC on February 26, 2021) 4.4 Assignment and Assumption Agreement, dated as of September 16, 2021, by and among Ginkgo Bioworks Holdings, Inc., Continental Stock Transfer & Trust Company and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.4 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 29, 2022) 10.1+* Form of Ginkgo Bioworks Holdings, Inc. 2021 Incentive Award Plan 10.2+* Form of Ginkgo Bioworks Holdings, Inc. 2021 Employee Stock Purchase Plan 10.3+ Registration Rights Agreement, dated as of September 16, 2021, by and among Ginkgo Bioworks Holdings, Inc., Eagle Equity Partners III, LLC and the other Holders signatory thereto. (incorporated by reference to Exhibit 10.4 of Ginkgo’s Current Report on Form 8-K filed with the SEC on September 20, 2021) 10.4+* Ginkgo Bioworks, Inc. 2008 Stock Incentive Plan, as amended as of June 18, 2014 10.5+ Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.6+* Amendment to the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan, effective May 1, 2019 10.7+* Amendment to the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan, effective September 9, 2019 86 Table of Contents 10.8+ Amendment to the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan, effective November 14, 2019 (incorporated by reference to Exhibit 10.12 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.9+* Amendment to the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan, effective April 8, 2020 10.10+* Amendment to the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan, effective March 15, 2021 10.11+ Form of Incentive Stock Option Agreement, granted under the Ginkgo Bioworks, Inc. 2008 Stock Incentive Plan (incorporated by reference to Exhibit 10.15 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.12+ Form of Restricted Stock Unit Agreement, granted under the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.13+ Form of Restricted Stock Agreement, granted under the Ginkgo Bioworks, Inc. 2014 Stock Incentive Plan (incorporated by reference to Exhibit 10.17 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.14+ Form of Stock Option Agreement, granted under the Ginkgo Bioworks Holdings, Inc. 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022) 10.15+ Form of Global Restricted Stock Unit Agreement, granted under the Ginkgo Bioworks Holdings, Inc. 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022) 10.16†‡ Lease Agreement, dated December 22, 2011, between Zoom Group LLC and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.18 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.17† First Amendment to Lease Agreement, dated April 1, 2012 (incorporated by reference to Exhibit 10.19 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.18† Second Amendment to Lease, dated August 1, 2014 (incorporated by reference to Exhibit 10.20 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.19 Third Amendment to Lease, dated August 15, 2014 (incorporated by reference to Exhibit 10.21 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.20† Fourth Amendment to Lease, dated May 1, 2016 (incorporated by reference to Exhibit 10.22 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.21† Fifth Amendment to Lease, dated May 31, 2016 (incorporated by reference to Exhibit 10.23 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.22 Sixth Amendment to Lease, dated August 5, 2016 (incorporated by reference to Exhibit 10.24 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.23† Seventh Amendment to Lease, dated July 31, 2017 (incorporated by reference to Exhibit 10.25 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.24† Eighth Amendment to Lease, dated March 23, 2018 (incorporated by reference to Exhibit 10.26 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.25† Ninth Amendment to Lease, dated September 6, 2018 (incorporated by reference to Exhibit 10.27 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 87 Table of Contents 10.26† Tenth Amendment to Lease, dated July 29, 2020 (incorporated by reference to Exhibit 10.28 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.27† Eleventh Amendment to Lease, dated August 14, 2020 (incorporated by reference to Exhibit 10.29 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.28† Twelfth Amendment to Lease, dated January 13, 2021 (incorporated by reference to Exhibit 10.30 to Amendment No. 1 to the Registration Statement on Form S-4 (File No. 333-256121), filed with the SEC on June 28, 2021) 10.29† Thirteenth Amendment to Lease, dated September 6, 2021 (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-1 (File No. 333-258712), filed with the SEC on September 15, 2021) 10.30 Fourteenth Amendment to Lease Agreement, dated June 1, 2022, by and between BCP-CG 27 Property LLC and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022) 10.31 Fifteenth Amendment to Lease Agreement, dated August 9, 2023, by and between BCP-CG 27 Property LLC and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.31 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 29, 2024) 10.32 Lease Agreement, dated March 18, 2016, by and between Jamestown 21-23-25 Drydock, L.P. and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.31 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.33†‡ First Amendment to Lease Agreement, dated August 13, 2018 (incorporated by reference to Exhibit 10.32 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.34† Second Amendment to Lease Agreement, dated August 10, 2022, by and between IDB 21-25 Drydock Limited Partnership and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 15, 2022) 10.35 Sublease, dated December 10, 2019, by and between Stanley Convergent Security Solutions, Inc., and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.33 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.36†‡ License Agreement, dated September 11, 2020, by and between Jamestown 21-23-25 Drydock, L.P. and Ginkgo Bioworks, Inc. (incorporated by reference to Exhibit 10.35 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.37†+ Offer Letter, dated October 7, 2020, between Ginkgo Bioworks, Inc. and Mark Dmytruk (incorporated by reference to Exhibit 10.38 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.38+ Ginkgo Bioworks Holdings, Inc. Non-Employee Director Compensation Program (incorporated by reference to Exhibit 10.39 to Amendment No. 1 to the Registration Statement (File No. 333-256121), filed with the SEC on June 28, 2021) 10.39+ Form of Founder Equity Grant Agreement (incorporated by reference to Exhibit 10.40 of SRNG’s Form S-4/A (File No. 333-256121), filed with the SEC on August 4, 2021) 10.40 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.41 of SRNG’s Form S-4/A (File No. 333-256121), filed with the SEC on August 4, 2021) 10.41 Sponsor Support Agreement, dated as of May 11, 2021, by and among Eagle Equity Partners III, LLC, Ginkgo Bioworks, Inc., Soaring Eagle Acquisition Corp. and certain of its shareholders (incorporated by reference to Exhibit 10.4 of SRNG’s Current Report on Form 8-K (File No. 001-40097), filed with the SEC on May 11, 2021) 10.42+ Form of Stock Option Agreement for 2024 Founder Award Program, granted under the Ginkgo Bioworks Holdings, Inc. 2021 Incentive Award Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2024) 19.1* Insider Trading Compliance Policy 88 Table of Contents 21.1* Subsidiaries of the Registrant 23.1* Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm 23.2* Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Policy for Recoupment of Incentive Compensation (incorporated by reference to Exhibit 97 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 29, 2024) 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) ________________________________________________________ * Filed herewith. † The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request. ‡ Certain confidential information contained in this Exhibit has been omitted because it is (i) not material and (ii) of the type that the registrant treats as private or confidential. + Indicates a management contract or compensatory plan. Item 16. Form 10-K Summary None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . GINKGO BIOWORKS HOLDINGS, INC. Date: February 25, 2025 By: /s/ Jason Kelly Jason Kelly Chief Executive Officer 89 Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Jason Kelly Chief Executive Officer and Director February 25, 2025 Jason Kelly (Principal Executive Officer) /s/ Mark Dmytruk Chief Financial Officer February 25, 2025 Mark Dmytruk (Principal Financial Officer) /s/ Steven Coen Chief Accounting Officer February 25, 2025 Steven Coen (Principal Accounting Officer) /s/ Shyam Sankar Director, Chair of the Board February 25, 2025 Shyam Sankar /s/ Ross Fubini Director February 25, 2025 Ross Fubini /s/ Kathy Hopinkah Hannan Director February 25, 2025 Kathy Hopinkah Hannan /s/ Christian Henry Director February 25, 2025 Christian Henry /s/ Sri Kosuri Director February 25, 2025 Sri Kosuri /s/ Myrtle Potter Director February 25, 2025 Myrtle Potter /s/ Reshma Shetty President, Chief Operating Officer and Director February 25, 2025 Reshma Shetty /s/ Harry E. Sloan Director February 25, 2025 Harry E. Sloan 90 Table of Contents GINKGO BIOWORKS HOLDINGS, INC. Index to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024, 2023 and 2022 Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F- 5 Consolidated Balance Sheets F- 6 Consolidated Statements of Operations and Comprehensive Loss F- 7 Consolidated Statements of Stockholders’ Equity F- 9 Consolidated Statements of Cash Flows F- 11 Notes to Consolidated Financial Statements F- 13 1. Organization and Basis of Presentation F- 13 2. Summary of Significant Accounting Policies F- 13 3. Restructuring F- 23 4. Acquisitions and Divestitures F- 24 5. Fair Value Measurements F- 33 6. Investments and Equity Method Investments F- 37 7. Variable Interest Entities F- 39 8. Goodwill and Intangible Assets, net F- 40 9. Leases F- 41 10. Supplemental Financial Information F- 44 11. Commitments and Contingencies F- 46 12. Stockholders' Equity F- 47 13. Stock-Based Compensation F- 48 14. Revenue Recognition F- 52 15. Segment Information F- 53 16. Significant Collaborations Transactions with Related Parties F- 55 17. Employee Benefit Plan F- 64 18. Income Taxes F- 64 19. Net Loss per Share F- 67 20. Related Parties F- 68 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Ginkgo Bioworks Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Ginkgo Bioworks Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Cell Engineering Revenue Recognition — Refer to Notes 2 and 14 to the financial statements Critical Audit Matter Description The Company generates Cell Engineering revenue primarily through license and collaboration agreements, under which customers obtain rights to the Company’s proprietary technology and intellectual property for use in the research, development and commercialization of engineered organisms and derived products. Under these agreements, the Company typically provides research and development services, including granting a license to its intellectual property. Additionally, the customer may obtain license rights to the output of the Company’s services in order to commercialize the resulting output of such services. Cell Engineering revenue was $174 million for the year ended December 31, 2024. The Company generally recognizes Cell Engineering revenue over time based on the cost incurred to date relative to total expected costs or for cost-plus contracts, as costs are incurred. The Company evaluates its measure of progress to recognize revenue at each reporting period and, as necessary, adjusts the measure of progress and related revenue recognition. The Company’s measure of progress and revenue recognition involves significant judgment and assumptions, including, but not limited to, evaluating contract terms and estimating the cost to complete the performance obligation. Auditing the Cell Engineering revenue was challenging due to the extent of audit effort required to evaluate the volume and complexity of customer contracts, including estimates of the measure of progress. F-2 Table of Contents How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to Cell Engineering revenue included the following, among others: • We selected a sample of Cell Engineering contracts and performed the following: ◦ Evaluated whether the contracts were properly included in management’s calculation of Cell Engineering revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation(s). ◦ Compared the transaction price to the consideration expected to be received based on current rights and obligations under the contracts and any modifications that were agreed upon with the customers. ◦ Tested management’s identification of distinct performance obligations. ◦ To the extent a contract did not represent a single distinct performance obligation, we tested the allocation of the transaction price to each distinct performance obligation by comparing the relative standalone selling prices to the selling prices of similar goods or services. ◦ Tested the accuracy and completeness of the costs incurred to date for each performance obligation. ◦ Evaluated the estimates of total cost incurred and total estimated cost, when applicable, for the performance obligation by: ▪ Testing the costs incurred to date. ▪ Evaluating management’s estimates of total cost by performing corroborating inquiries with those that are responsible for managing the contract execution, and comparing the estimates to management’s work plans. ◦ Tested the mathematical accuracy of management’s calculation of revenue for the performance obligation. • We evaluated management’s ability to estimate total costs accurately by comparing actual costs to management’s historical estimates for performance obligations that have been fulfilled. Goodwill Impairment — Refer to Notes 2 and 8 to the financial statements Critical Audit Matter Description The Company’s assessment of goodwill for impairment involves the comparison of the fair value of the reporting unit to its carrying value. The Company used a discounted cash flow model and guideline public company method to estimate fair value of its Cell Engineering reporting unit, which requires management to make significant estimates and assumptions related to projected future operating results, discount rates, and peer company multiples. Changes in these assumptions could have a significant impact on either the fair value of the Cell Engineering reporting unit, the amount of any goodwill impairment charge, or both. As a result of an indicator of impairment, the Company performed an interim goodwill impairment assessment as of June 30, 2024, and determined that the fair value of the Cell Engineering reporting unit was less than its carrying value and that the goodwill was fully impaired. As a result, a goodwill impairment charge of $47.9 million was recorded in the year ended December 31, 2024. Given the Company’s determination of the fair value of its Cell Engineering reporting unit required management to make significant estimates and assumptions related to projected future operating results, discount rates, and peer company multiples, auditing the reasonableness of the assumptions used involved especially subjective judgment and an increased extent of effort, including the need to involve of our fair value specialists. We identified goodwill as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Cell Engineering reporting unit. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the projected future operating results, discount rates, and peer company multiples used by management to estimate the fair value of the Cell Engineering reporting unit included the following, among others: F-3 Table of Contents • We evaluated the reasonableness of management’s projected future operating results by comparing the projections to (1) historical operating results, (2) internal communications to management and the Board of Directors, (3) information included in analyst and industry reports as well as certain publicly available peer company information, and (4) comparing actual results to management’s historical forecasts. • With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rates and peer company multiples by: ◦ Testing the source information underlying the determination of the discount rates and peer company multiples, and the mathematical accuracy of the calculations. ◦ Developing a range of independent estimates and comparing those to the discount rates and peer company multiples selected by management. /s/ Deloitte & Touche LLP Boston, Massachusetts February 25, 2025 We have served as the Company’s auditor since 2024. F-4 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Ginkgo Bioworks Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Ginkgo Bioworks Holdings, Inc. (the Company) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company’s auditor from 2018 to 2024. Boston, Massachusetts February 29, 2024, except for note 15 and the effects of the reverse stock split described in note 2, as to which the date is February 25, 2025 F-5 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Balance Sheets (in thousands, except share data) As of December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 561,572 $ 944,073 Accounts receivable, net 21,857 17,157 Accounts receivable - related parties 586 742 Prepaid expenses and other current assets 18,729 39,777 Total current assets 602,744 1,001,749 Property, plant and equipment, net 203,720 188,193 Operating lease right-of-use assets 394,435 206,801 Investments 48,704 78,565 Intangible assets, net 72,510 82,741 Goodwill — 49,238 Other non-current assets 55,336 58,055 Total assets $ 1,377,449 $ 1,665,342 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 14,169 $ 9,323 Deferred revenue (includes $ 795 and $ 5,426 from related parties) 27,710 44,486 Accrued expenses and other current liabilities 65,387 110,051 Total current liabilities 107,266 163,860 Non-current liabilities: Deferred revenue, net of current portion (includes $ 72,260 and $ 119,053 from related parties) 98,783 158,062 Operating lease liabilities, non-current 438,766 221,835 Other non-current liabilities 16,576 24,433 Total liabilities 661,391 568,190 Commitments and contingencies (Note 11) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 200,000,000 shares authorized; none issued — — Common stock, $ 0.0001 par value (Note 12) 5 5 Additional paid-in capital 6,555,416 6,386,191 Accumulated deficit ( 5,837,557 ) ( 5,290,528 ) Accumulated other comprehensive (loss) income ( 1,806 ) 1,484 Total stockholders’ equity 716,058 1,097,152 Total liabilities and stockholders’ equity $ 1,377,449 $ 1,665,342 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share data) Year Ended December 31, 2024 2023 2022 Cell Engineering revenue (1) $ 173,972 $ 143,531 $ 143,666 Biosecurity revenue: Service 53,071 78,975 298,585 Product — 28,949 35,455 Total revenue 227,043 251,455 477,706 Costs and operating expenses: Cost of Biosecurity service revenue 38,549 46,524 183,570 Cost of Biosecurity product revenue — 7,481 20,646 Cost of other revenue 5,999 — — Research and development 424,061 580,621 1,052,643 General and administrative 246,161 385,025 1,429,799 Impairment of lease assets — 96,210 — Goodwill impairment 47,858 — — Restructuring charges 24,172 — — Total operating expenses 786,800 1,115,861 2,686,658 Loss from operations ( 559,757 ) ( 864,406 ) ( 2,208,952 ) Other income (expense): Interest income 38,612 57,217 20,262 Interest expense ( 94 ) ( 93 ) ( 106 ) Loss on equity method investments — ( 2,635 ) ( 43,761 ) Loss on investments ( 28,827 ) ( 54,827 ) ( 53,335 ) (Loss) gain on deconsolidation of subsidiaries ( 7,013 ) ( 42,502 ) 31,889 Change in fair value of warrant liabilities 5,701 5,168 124,970 Other income, net 3,870 9,138 7,634 Total other income (expense) 12,249 ( 28,534 ) 87,553 Loss before income taxes ( 547,508 ) ( 892,940 ) ( 2,121,399 ) Income tax benefit ( 479 ) ( 71 ) ( 15,027 ) Net loss ( 547,029 ) ( 892,869 ) ( 2,106,372 ) Loss attributable to non-controlling interest — — ( 1,443 ) Net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders $ ( 547,029 ) $ ( 892,869 ) $ ( 2,104,929 ) Net loss per share attributable to Ginkgo Bioworks Holdings, Inc. common stockholders : Basic $ ( 10.54 ) $ ( 18.37 ) $ ( 50.15 ) Diluted $ ( 10.54 ) $ ( 18.37 ) $ ( 50.20 ) Weighted average common shares outstanding: Basic 51,894,639 48,610,507 41,976,537 Diluted 51,894,639 48,610,507 41,995,972 Comprehensive loss: Net loss $ ( 547,029 ) $ ( 892,869 ) $ ( 2,106,372 ) Other comprehensive (loss) income: Foreign currency translation adjustment ( 4,782 ) 4,116 ( 917 ) Reclassification of foreign currency translation adjustment realized upon sale of foreign subsidiary 1,492 — — The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share data) Total other comprehensive (loss) income ( 3,290 ) 4,116 ( 917 ) Comprehensive loss $ ( 550,319 ) $ ( 888,753 ) $ ( 2,107,289 ) (1) Includes related party revenue of $ 53,041 , $ 22,222 , and $ 38,813 for the years ended December 31, 2024, 2023, and 2022, respectively. The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Stockholders’ Equity (in thousands except share data) Common Stock Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Non- Controlling Interest Total Stockholders’ Equity Balance as of December 31, 2021 40,284,804 $ 4 $ 3,805,001 $ ( 2,297,925 ) $ ( 1,715 ) $ 62,014 $ 1,567,379 Issuance of common stock upon exercise or vesting of equity awards 3,116,275 — 252 — — — 252 Tax withholdings related to net share settlement of equity awards ( 7,390 ) — ( 981 ) — — — ( 981 ) Issuance of common stock for business and asset acquisitions, net of issuance costs 2,862,931 — 279,745 — — — 279,745 Issuance of common stock pursuant to public offering, net of issuance costs 1,034,597 1 98,909 — — — 98,910 Issuance of common stock in exchange for services 8,182 — 1,000 — — — 1,000 Deconsolidation of subsidiaries — — — — — ( 55,408 ) ( 55,408 ) Acquisition of non-controlling interests — — 7,390 — — ( 7,390 ) — Adoption of ASC 842 — — — 5,195 — — 5,195 Stock-based compensation expense — — 1,945,247 — — 2,227 1,947,474 Foreign currency translation — — — — ( 917 ) — ( 917 ) Net loss — — — ( 2,104,929 ) — ( 1,443 ) ( 2,106,372 ) Balance as of December 31, 2022 47,299,399 5 6,136,563 ( 4,397,659 ) ( 2,632 ) — 1,736,277 Issuance of common stock upon exercise or vesting of equity awards 2,469,178 — 555 — — — 555 Tax withholdings related to net share settlement of equity awards ( 360 ) — ( 23 ) — — — ( 23 ) Settlement of contingent consideration 96,198 — 8,896 — — — 8,896 Issuance of common stock for asset acquisitions 119,278 — 6,820 — — — 6,820 Issuance of common stock in exchange for services 50,587 — 2,500 — — — 2,500 Forfeiture of restricted stock ( 1,407 ) — — — — — — Stock-based compensation expense and other — — 230,880 — — — 230,880 Foreign currency translation — — — — 4,116 — 4,116 Net loss — — — ( 892,869 ) — — ( 892,869 ) Balance as of December 31, 2023 50,032,873 5 6,386,191 ( 5,290,528 ) 1,484 — 1,097,152 Issuance of common stock upon exercise or vesting of equity awards 1,783,763 — 543 — — — 543 Payment for fractional shares after reverse stock split — — ( 4 ) — — — ( 4 ) Settlement of contingent consideration 1,385,532 — 14,742 — — — 14,742 The accompanying notes are an integral part of these consolidated financial statements. F-9 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Stockholders’ Equity (in thousands except share data) Common Stock Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Non- Controlling Interest Total Stockholders’ Equity Issuance of common stock for asset acquisitions 802,038 — 36,801 — — — 36,801 Issuance of common stock in exchange for services 361,579 — 4,799 — — — 4,799 Stock-based compensation expense — — 112,344 — — — 112,344 Reclassification of foreign currency translation adjustment realized upon sale of foreign subsidiary — — — — 1,492 — 1,492 Foreign currency translation — — — — ( 4,782 ) — ( 4,782 ) Net loss — — — ( 547,029 ) — — ( 547,029 ) Balance as of December 31, 2024 54,365,785 $ 5 $ 6,555,416 $ ( 5,837,557 ) $ ( 1,806 ) $ — $ 716,058 The accompanying notes are an integral part of these consolidated financial statements. F-10 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net loss $ ( 547,029 ) $ ( 892,869 ) $ ( 2,106,372 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 63,020 70,507 42,552 Stock-based compensation 112,344 229,884 1,930,641 Goodwill impairment 47,858 — — Restructuring related impairment charges 4,823 — — Non-cash customer consideration ( 1,117 ) ( 1,373 ) ( 34,263 ) Loss on equity method investments — 2,635 43,761 Loss on investments 28,827 54,827 53,335 Change in fair value of notes receivable 2,014 2,416 ( 3,757 ) Change in fair value of warrant liabilities ( 5,701 ) ( 5,168 ) ( 124,970 ) Change in fair value of contingent consideration liability 3,214 9,168 ( 1,262 ) Loss (gain) on deconsolidation of subsidiaries 7,013 42,502 ( 31,889 ) Impairment of long-lived assets 5,796 121,404 — Deferred income tax benefit ( 936 ) ( 801 ) ( 14,609 ) Loss on disposal of equipment 844 842 3,091 Non-cash lease expense 28,095 28,313 19,082 Non-cash in-process research and development 19,796 9,182 1,162 Non-cash severance and retention bonus expense associated with an acquisition — — 6,152 Other non-cash activity 1,224 3,194 2,154 Changes in operating assets and liabilities: Accounts receivable ($ 156 , $ 816 and $ 3,040 from related parties) ( 4,725 ) 50,068 55,024 Prepaid expenses and other current assets 10,085 10,473 ( 8,523 ) Operating lease right-of-use assets 23,463 9,275 13,233 Other non-current assets ( 1,394 ) 2,570 921 Accounts payable 4,771 ( 1,183 ) ( 10,844 ) Accrued expenses and other current liabilities ( 40,438 ) 16,899 ( 39,639 ) Deferred revenue, current and non-current ($( 51,422 ), $( 17,018 ) and $( 19,324 ) from related parties) ( 68,645 ) ( 35,917 ) ( 36,417 ) Operating lease liabilities, current and non-current ( 14,881 ) ( 22,800 ) ( 10,792 ) Other non-current liabilities 2,094 452 31 Net cash used in operating activities ( 319,585 ) ( 295,500 ) ( 252,198 ) Cash flows from investing activities: Purchases of property and equipment ( 62,541 ) ( 40,801 ) ( 52,271 ) Deconsolidation of subsidiaries - cash — ( 42,980 ) ( 55,721 ) Business acquisitions, net of cash acquired ( 5,400 ) — 82,367 Asset acquisitions, net of cash acquired — — ( 7,639 ) Purchases of notes receivable (2022: $ 10,000 from related party) — ( 350 ) ( 40,000 ) Proceeds from notes receivable — — 10,000 Purchase of investment in equity securities — — ( 3,691 ) Proceeds from sales of marketable securities 4,519 — — Proceeds from sale of equipment 648 4,428 — Other 538 ( 990 ) ( 439 ) Net cash used in investing activities ( 62,236 ) ( 80,693 ) ( 67,394 ) Cash flows from financing activities: The accompanying notes are an integral part of these consolidated financial statements. F-11 Table of Contents Ginkgo Bioworks Holdings, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Proceeds from exercise of stock options 84 93 240 Taxes paid related to net share settlement of equity awards — ( 23 ) ( 981 ) Principal payments on finance leases ( 897 ) ( 1,295 ) ( 1,237 ) Proceeds from public offering, net of issuance costs — — 99,303 Contingent consideration payment ( 922 ) ( 1,411 ) ( 521 ) Payment of equity issuance costs and other ( 4 ) ( 580 ) ( 1,467 ) Net cash (used in) provided by financing activities ( 1,739 ) ( 3,216 ) 95,337 Effect of foreign exchange rates on cash and cash equivalents ( 281 ) ( 588 ) 908 Net decrease in cash, cash equivalents and restricted cash ( 383,841 ) ( 379,997 ) ( 223,347 ) Cash and cash equivalents, beginning of year 944,073 1,315,792 1,550,004 Restricted cash, beginning of year 45,511 53,789 42,924 Cash, cash equivalents and restricted cash, beginning of year 989,584 1,369,581 1,592,928 Cash and cash equivalents, end of year 561,572 944,073 1,315,792 Restricted cash, end of year 44,171 45,511 53,789 Cash, cash equivalents and restricted cash, end of year $ 605,743 $ 989,584 $ 1,369,581 The accompanying notes are an integral part of these consolidated financial statements. F-12 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements 1. Organization and Basis of Presentation Business The mission of Ginkgo Bioworks Holdings, Inc. (“Ginkgo” or the “Company”) is to make biology easier to engineer. The Company provides biological research and development services for customers across multiple markets and industries. Since inception, the Company has devoted its efforts to improving its platform for programming cells to enable customers to leverage biology to create impactful products across a range of industries. The Company’s platform comprises (i) equipment, robotic automation, software, data pipelines and tools, and standard operating procedures for high throughput cell engineering, fermentation, and analytics (referred to collectively as the “Foundry”), (ii) a library of proprietary biological assets and associated performance data (referred to collectively as “Codebase”), and (iii) the Company’s team of expert users, developers and operators of the Foundry and Codebase. The Company’s Biosecurity business provides services to government and commercial customers working to identify, monitor, prevent, mitigate, and ultimately protect humanity from biological threats. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) and generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board (“FASB”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, majority owned subsidiaries and variable interest entities if the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. In the accompanying consolidated balance sheet, $ 5.7 million in warrant liabilities as of December 31, 2023 were reclassified from warrant liabilities to other non-current liabilities. Total liabilities as of December 31, 2023 is not changed as a result of this reclassification. In the accompanying consolidated statements of cash flows, $ 1.0 million and $ 1.9 million were reclassified from amortization of finance lease right-of-use assets to other non-cash activity for the years ended December 31, 2023 and 2022, respectively. The total cash used in operating activities for the years ended December 31, 2023 and 2022 is not changed as a result of these reclassifications. Reverse Stock Split On August 19, 2024 (the “Effective Date”), with the approval of the Company's board of directors and shareholders, the Company effected a one-for-forty (1:40) reverse stock split (the “Reverse Stock Split”) for the Company’s common stock (inclusive of Class A common stock, Class B common stock and Class C common stock, par value $ 0.0001 per share). Accordingly, all common shares, common stock equity awards and common stock per share amounts presented herein have been retrospectively adjusted to reflect the Reverse Stock Split. On the Effective Date, every forty shares of common stock issued and outstanding immediately prior to the Effective Date were automatically combined into one share of such class of common stock without any change to the par value per share. The number of shares reserved under the Company’s equity plans and the number of shares underlying awards outstanding under the Company’s equity plans was reduced proportionately. No fractional shares were issued in connection with the Reverse Stock Split. Shareholders entitled to receive a fractional share as a result of the Reverse Stock Split received a cash payment in lieu of such fractional shares. The number of authorized shares of common stock was not reduced. F-13 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Variable Interest Entities The Company evaluates its variable interests in variable interest entities (“VIE”) and consolidates VIEs when the Company is the primary beneficiary. The Company determines whether it is the primary beneficiary of each VIE based on its assessment of whether the Company possesses both (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses that could be significant to the VIE or the right to receive benefits that could be significant to the VIE. The Company reevaluates the accounting for its VIEs upon the occurrence of events that could change the primary beneficiary conclusion. As of December 31, 2024 and 2023, the maximum risk of loss related to the Company’s VIEs was limited to the carrying value of its investment in such entities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities in the consolidated financial statements. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Reported amounts and disclosures reflect the overall economic conditions that management believes are most likely to occur, and the anticipated measures management intends to take. Actual results could differ materially from those estimates. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, trade accounts receivable and notes receivable. The Company’s cash and cash equivalents and restricted cash are maintained in bank deposit accounts and money market funds that regularly exceed federally insured limits. The Company is exposed to credit risk on its cash, cash equivalents and restricted cash in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation. The Company believes that it is not exposed to significant credit risk as its deposits are generally held in financial institutions that management believes to be of high credit quality. To date, the Company has not experienced any material write-offs related to its trade accounts receivable. A portion of the Company’s Biosecurity revenue is derived from sales of services to foreign government agencies in certain developing countries. The Company’s maximum credit risk exposure with respect to notes receivable is equivalent to the carrying value of the notes as of the balance sheet date. The Company mitigates this risk by requiring collateral for certain notes and monitoring the counterparty’s financial condition. For the year ended December 31, 2024, two customers in the Cell Engineering segment accounted for 13 % and 20 % of the Company’s total revenue, while one customer in the Biosecurity segment accounted for 16 % of the Company’s total revenue. For the year ended December 31, 2023, one customer in the Cell Engineering segment and one customer in the Biosecurity segment accounted for 12 % and 11 %, respectively, of the Company's total revenue. For the year ended December 31, 2022, two customers in the Biosecurity segment each accounted for 11 % of the Company’s total revenue. Cash and Cash Equivalents The Company’s cash is comprised of bank deposits, overnight sweep accounts and money market funds. The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The carrying value of the Company’s cash and cash equivalents approximate fair value due to their short-term maturities. Restricted Cash Restricted cash primarily includes cash balances collateralizing letters of credit associated with the Company’s facility leases and customer prepayments requiring segregation and restrictions in its use in accordance with the customer agreement. Restricted cash is included in prepaid expenses and other current assets and other non-current assets on the consolidated balance sheet. Allowance for Credit Losses The Company maintains an allowance for credit losses to provide for the estimated amounts of receivables that will not be collected over the estimated life of the assets. The allowance is calculated by considering previous loss history, delinquency of receivables balances, current economic conditions and anticipated future economic conditions in the geographies and industries in which the Company’s customers operate. To the extent an individual customer’s credit F-14 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements quality deteriorates, the Company measures an allowance based on the risk characteristics of the individual customer. Once a receivable is deemed to be uncollectible, such balance is charged against the allowance. The allowance is calculated at each reporting period with changes recorded to general and administrative expense in the consolidated statements of operations and comprehensive loss. Accounts receivable are net of an allowance for credit losses of $ 1.9 million and $ 1.0 million at December 31, 2024 and 2023, respectively. Property, Plant and Equipment, net Property, plant and equipment are stated at cost less accumulated depreciation. Land is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term for leasehold improvements. Estimated lives of property, plant and equipment are as follows: Estimated Useful Life Computer equipment and software 2 to 5 years Furniture and fixtures 7 years Lab equipment 1 to 5 years Buildings and facilities 15 to 30 years Vehicles 5 years Leasehold improvements Shorter of useful life or remaining lease term Expenditures for maintenance and repairs are expensed as incurred. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation is removed from the balance sheet and any resulting gain or loss is recorded in the consolidated statements of operations and comprehensive loss. Construction in progress relates to assets which have not been placed in service as of the period end. Equity Method Investments The Company utilizes the equity method to account for its investments in common stock, or in-substance common stock, when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The Company uses judgment when determining the level of influence over the operating and financial policies of the investee considering key factors including, among others, the Company’s ownership interest, representation on the board of directors, participation in policy-making decisions and material contractual arrangements and obligations. Income and losses are allocated based upon relative ownership interest unless there is a substantive profit-sharing agreement in place. For investments with a substantive profit-sharing agreement, the Company utilizes the hypothetical liquidation at book value (“HLBV”) method to allocate income and losses from the equity method investment. Under the HLBV method, the Company utilizes the capital account at the end of the period assuming the book value of the entity was liquidated or sold minus the same calculation at the beginning of the period. The difference is the share of earnings or losses attributable to the equity method investment. Under the equity method, if there is a commitment for the Company to fund the losses of its equity method investees, the Company would continue to record its share of losses resulting in a negative equity method investment, which would be presented as a liability on the consolidated balance sheet. Commitments may be explicit and may include formal guarantees, legal obligations, or arrangements by contract. Implicit commitments may arise from reputational expectations, intercompany relationships, statements by the Company of its intention to provide support, a history of providing financial support or other facts and circumstances. When the Company has no commitment to fund the losses of its equity method investees, the carrying value of its equity method investments will not be reduced below zero. The Company had no commitment to fund additional losses of its equity method investments during the years ended December 31, 2024, 2023 and 2022, other than dissolution costs for Joyn Bio, LLC in 2022 (see Notes 4 and 7 ). The Company evaluates its equity method investments for impairment whenever events or circumstances indicate that the carrying value of the investment may not be recoverable. The Company considers the investee’s financial position, forecasts and economic outlook, and the estimated duration and extent of losses to determine whether a recovery is anticipated. An impairment that is other-than-temporary is recognized in the period identified. The Company has no t F-15 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements recognized an impairment loss related to its equity method investments for the years ended December 31, 2024, 2023 and 2022. The Company may elect the fair value option for its equity method investments on an investment-by-investment basis. For all equity method investments accounted for under the fair value option, the Company carries the equity method investment at fair value and records all subsequent changes in fair value as a component of loss on equity method investments in the consolidated statements of operations and comprehensive loss. Investments Investments include marketable equity securities in publicly-traded companies, non-marketable equity securities in privately-held companies, Simple Agreement for Future Equity (“SAFE”) and warrants, in each case, in which the Company does not possess the ability to exercise significant influence over the investee. Investments in marketable equity securities or warrants of publicly-traded companies are measured at fair value with subsequent changes in fair value recorded in loss on investments in the consolidated statements of operations and comprehensive loss. Marketable equity securities are classified as non-current on the balance sheet as they are not currently available for sale. Investments in non-marketable equity securities of privately-held companies and SAFEs, which do not have readily determinable fair values, are carried at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Each period the Company assesses relevant transactions to identify observable price changes, and the Company regularly monitors these investments to evaluate whether there is an indication of impairment. The Company evaluates whether an investment’s fair value is less than its carrying value using an estimate of fair value, if such an estimate is available. For periods in which there is no estimate of fair value, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the value of the investment. See Notes 5 and 6 for additional information on Investments. Fair Value Measurements The Company categorizes its assets and liabilities measured at fair value in accordance with the authoritative accounting guidance that establishes a consistent framework for measuring fair value and requires disclosures for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. ASC 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes among the following: • Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2- Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and • Level 3- Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. To the extent that the valuation is based on models or inputs that are either less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. F-16 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The Company valued its money market fund holdings, notes receivable, marketable equity securities, warrant liabilities and contingent consideration liabilities at fair value on a recurring basis. The carrying amounts of the Company’s other financial instruments, which include accounts receivable, certain prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term nature. Impairment of Long-Lived Assets The Company reviews its long-lived assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. 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. In determining the expected future cash flows, the Company uses assumptions believed to be reasonable, but which inherently uncertain. Actual future cash flows may differ from the estimates used in impairment testing. The Company recognizes an impairment loss when and to the extent that the estimated fair value of long-lived asset is less than the carrying value. See Notes 3 , 9 and 10 for a description of impairment losses recorded on long-lived assets. Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The Company recognizes the identifiable assets acquired and liabilities assumed at their acquisition-date fair values and recognizes any excess of the total consideration paid over the fair value of the identifiable net assets as goodwill. Any purchase price that is considered contingent consideration is measured at its estimated fair value at the acquisition date and remeasured at each reporting period, with changes in estimated fair value recorded in general and administrative expenses in the consolidated statements of operations and comprehensive loss. Acquisition transaction costs are expensed when incurred. The operating results of an acquisition are included in the Company’s consolidated financial statements as of the acquisition date. Intangible Assets, net Intangible assets, net consist of certain definite-lived assets including patents, processes and know-how related to technology acquired through business combinations and asset acquisitions. The Company amortizes such intangible assets on a straight-line basis over their estimated useful life. Goodwill Goodwill represented the excess of the acquisition cost over the fair market value of the net assets acquired. All goodwill was allocated to the Cell Engineering reporting unit and segment identified in Note 15 . The Company considers various qualitative factors that could indicate impairment of goodwill such as macroeconomic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities and market capitalization. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment to compare the fair value of the reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the fair value, an impairment loss is recognized limited to the total amount of goodwill allocated to that reporting unit. A combination of the income approach and the market approach may be used to determine fair value of the reporting unit. The Company recorded a full goodwill impairment during the year ended December 31, 2024 (see Note 8 ). No impairment losses were recognized during the years ended December 31, 2023, and 2022. Leases The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), (“ASC 842”) on January 1, 2022 using the modified retrospective approach with a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption. In accordance with ASC 842, the Company determines if an arrangement is or contains a lease at contract inception based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset and the Company has the right to control the asset. For leases with terms greater than 12 months, the Company recognizes a right-of-use asset (“ROU asset”) and a lease liability as of the lease commencement date on the balance sheet. ROU assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are measured based on the present value of fixed lease payments that are unpaid as of the lease commencement date. The Company’s ROU assets balance is increased by any initial direct costs and reduced by lease incentives received or expected to be received. Some of the Company's F-17 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements leases include options to extend or terminate the lease; these options are included in the lease term for calculations of its ROU assets and liabilities when it is reasonably certain that the Company will exercise those options. The Company’s leases are classified as either operating or finance, as determined at inception, with the classification affecting the pattern of expense recognition in the statement of operations. A lease is classified as a finance lease if risks and rewards are conveyed without the transfer of control. For operating leases, expense is generally recognized on a straight-line basis over the lease term. For finance leases, interest on the lease liability is recognized using the effective interest method, while the ROU asset is amortized on a straight-line basis from the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term. Leases with an initial term of 12 months or less which meet the definition of a short-term lease are not recorded on the balance sheet and the lease expense for these leases is recognized on a straight-line basis over the lease term. In limited instances, the Company acts as a lessor, primarily with certain real estate subleases. Finance leases, short-term leases and subleases are not a significant component of the Company's financial condition or results of operations. The current portion of the Company’s operating lease liabilities is included in accrued expenses and other current liabilities on the balance sheet. The Company has lease agreements with both lease and non-lease components (such as real estate taxes, insurance and common area maintenance charges) and has elected the practical expedient to combine these lease and non-lease components for its real estate leases and non-lab equipment leases. The Company has not elected this practical expedient for lab equipment leases and the lease and non-lease components are accounted for separately for these leases. Non-lease components are typically variable in nature and are recognized as lease expense in the period in which they arise. As most of the Company’s leases do not provide an implicit interest rate, the Company uses an incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments and uses the implicit rate when it is readily determinable. The Company’s incremental borrowing rate is based on management’s estimate of the rate of interest the Company would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Revenue Recognition The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when the customer obtains control of the promised goods or services at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the promises and distinct performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligations. Cell Engineering Revenue The Company generates Cell Engineering service revenue by providing end-to-end cell engineering solutions and tools to customers. Cell engineering solutions offerings consist of the Company's license and collaboration agreements, under which customers obtain rights to the Company’s proprietary technology and intellectual property for use in the research, development and commercialization of engineered organisms and derived products. Under these agreements, the Company typically provides research and development services, including granting a license to its intellectual property. Additionally, the customer obtains license rights to the output of the Company’s services in order to commercialize the resulting output of such services. Generally, the terms of these agreements provide that the Company receives some combination of: (1) service fees in the form of (i) upfront payments upon consummation of the contract or other fixed payments, (ii) reimbursement for costs incurred for research and development 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 contract and (iii) royalties related to cost of goods sold reductions realized by customers. Cell engineering tools, launched in the third quarter of 2024, consist of several service offerings, including Datapoints, an artificial intelligence (AI) model application programming interface (API), and lab automation solutions. 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. The Company's model API provides users with access to both publicly available models and Ginkgo’s F-18 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements own protein sequence large language model (LLM) trained on Ginkgo’s proprietary datasets. The Company's lab automation solutions combine modular hardware, control software and managed support to provide customers the ability to automate their own lab workflows in house. The amount of revenue recognized from these new Cell Engineering offerings is not significant for the year ended December 31, 2024. The Company’s collaboration and licensing agreements often contain multiple promises, including (i) licenses and assignments of intellectual property and materials and (ii) research and development services, and the Company determines whether each of the promises is a distinct performance obligation based on the nature of each contract. As the Company is generally performing research and development services that are highly integrated and interrelated to the licenses and assignments of intellectual property and materials, the promises are generally inseparable and therefore not distinct. As such, the Company typically combines the research and development services, licenses, and assignments into a single performance obligation. However, for certain contracts, the Company only grants licenses or effects such transfers and assignments upon the successful completion of the research and development services or delivery of a developed product. For these contracts, the Company typically considers (i) the research and development services and (ii) the licenses, transfers, and assignments as distinct performance obligations, as each is transferred separately and has a separately identifiable benefit to the customer. Options to acquire additional distinct goods and services are evaluated to determine if such options provide a material right to the customer that it would not have otherwise received without entering into the contract. If so, the option is accounted for as a separate performance obligation. If not, the option is considered a marketing offer which is accounted for as a separate contract upon the customer’s election of the option. At contract inception, the Company determines the transaction price, including fixed consideration and any estimated amounts of variable consideration. Any upfront cash payment received upon consummation of the contract is fixed and generally nonrefundable. Variable consideration is subject to a constraint, and amounts are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. This is attained when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration may include reimbursement for costs incurred for the Company’s research and development efforts, milestone payments upon the achievement of certain technical and/or commercial criteria, and royalties on sales of products from or comprising engineered organisms arising from the contract. With respect to the research and development reimbursements and milestone payments, the Company uses the most likely amount method to estimate variable consideration. Milestone payments are generally not included in the transaction price until the milestone is achieved. Certain agreements include payment in the form of equity securities or other financial instruments that convert into equity upon a triggering event. Any non-cash consideration is measured at its estimated fair value at contract inception. For equity securities and financial instruments that are not actively traded, the estimated fair value is generally determined by referencing a recent financing round or utilizing a scenario-based valuation model. 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. Changes in these assumptions can materially affect the fair value of the non-cash consideration and, consequently, the total revenue recognized for the contract. The Company did not have material non-cash consideration included in contracts entered into during 2024, but does continue to recognize non-cash revenue from contracts originating in prior periods. For agreements with promises that are combined into a single performance obligation, the entire transaction price is allocated to the single performance obligation. For agreements with multiple performance obligations, the transaction price is allocated to the performance obligations using the relative standalone selling price methodology. For agreements featuring variable consideration, the Company allocates variable consideration to one or more, but not all, performance obligations if certain conditions are met. Specifically, the Company assesses whether the variable consideration relates solely to its efforts to satisfy the performance obligation and whether allocating such variable consideration entirely to the performance obligation is consistent with the overall allocation objective. If these conditions are not met, the Company allocates the variable consideration based on the relative standalone selling price methodology. The key assumptions utilized in determining the standalone selling price for each performance obligation include development timelines, estimated research and development costs, commercial markets, likelihood of exercise (in the case of options considered to be material rights), and probabilities of success. For agreements where licenses or assignments are considered separate performance obligations or represent the only performance obligation, the Company recognizes revenue at the point in time when the license is effectively granted, as the F-19 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements licenses or assignments represent functional intellectual property. For agreements where licenses and research and development services are combined into a single performance obligation, the Company recognizes revenue over the performance period using the cost-to-cost method. This method measures progress based on the ratio of costs incurred to date to total estimated costs, as it best reflects the transfer of control to the customer for obligations satisfied over time. The Company evaluates its measure of progress to recognize revenue at each reporting period and, as necessary, adjusts the measure of progress and related revenue recognition. The Company’s measure of progress and revenue recognition involves significant judgment and assumptions, including, but not limited to, estimated costs to complete its performance obligations. The Company evaluates contract modifications and amendments to determine whether any changes should be accounted for prospectively or on a cumulative catch-up basis. The Company utilizes the right to invoice practical expedient when it has a right to consideration in an amount that corresponds directly with the value of the Company’s performance to date. Royalties are recognized as revenue when (or as) the later of the sales occurrence or the satisfaction (or partial satisfaction) of the related performance obligation. The Company has determined that applying this exception is appropriate when the license granted in the contract is the predominant item to which the royalties relate. As the Company receives upfront payments for technical services under certain of its arrangements, the Company evaluates whether any significant financing components exist given the term over which the fees will be earned may exceed one year. Based on the nature of the Company’s agreements, there are no significant financing components as the purpose of the upfront payment is not to provide financing, but rather to secure technical services, exclusivity rights, and Foundry capacity, or the timing of transfer of those goods or services is at the discretion of the customer. Deferred revenue represents consideration received by the Company in excess of revenue recognized and primarily results from transactions where the Company receives upfront cash payments or non-cash equity consideration. In instances where the Company has received consideration in advance for an undefined number of technical development plans (“TDPs”) under its customer agreements, the Company records the advance payments as deferred revenue, net of current portion on the consolidated balance sheet. Upon the execution of a specific TDP, the Company reclassifies the estimated consideration to be earned under that TDP within the next twelve months as current deferred revenue. The Company also classifies unexercised material rights related to future TDPs as deferred revenue, net of current portion on the consolidated balance sheet. When a TDP is executed, and the material right is exercised, the amount allocated to the material right, which will be earned within the next twelve months, is reclassified to current deferred revenue. All other deferred revenue is classified as current or non-current based on the timing of when the Company expects to earn the underlying revenue based upon the projected progress of activities under the TDP. As of December 31, 2024 any costs to obtain contracts with customers were immaterial. Biosecurity Revenue The Company generates Biosecurity revenue through its biomonitoring and bioinformatics services provided to both government and non-government customers through the Company's two core offerings: Canopy and Horizon. Prior to 2024, product revenue consisted of sales of lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits, which the Company sold to customers on a standalone basis. Product revenue was billed and recognized when the test kits were shipped, and risk of loss was transferred to the carrier. The Company’s test kits were generally not subject to a customer right of return except for product recalls under the rules and regulations of the U.S. Food and Drug Administration (“FDA”). The Company included shipping and handling fees billed to customers as a component of Biosecurity revenue. Biosecurity service revenue generally consists of various biomonitoring and bioinformatics 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. The various services are generally combined into one performance obligation as they are either not distinct or have substantially the same pattern of transfer to the customer. Service revenue is generally recognized over time using the time elapsed method as the related services are performed, which best depicts the pattern of transfer to the customer. F-20 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The Company’s contracts with customers are generally two years or less in length and contain a fixed amount of consideration. Under typical payment terms for testing services, amounts are billed monthly in arrears for services performed or in advance based on contractual billing terms. Options to acquire additional services are evaluated to determine whether they provide the customer with a material right that it would not have otherwise received without entering into the contract. If so, the option is accounted for as a separate performance obligation. If not, the option is considered a marketing offer, and upon the customer's election of the option, it is accounted for as a separate contract. Cost of Biosecurity Revenue The cost of Biosecurity service revenue consists of costs related to the Company's biomonitoring and bioinformatics services. This includes costs incurred for sample collection equipment, services and materials, outsourced laboratory analysis, access to results reported through a proprietary web-based portal, and reporting of results to public authorities. Additionally, the cost of Biosecurity service revenue includes direct labor cost associated with bioinformatics, lab network management, delivery logistics, and customer support. Prior to 2024, 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 Other Revenue Cost of other revenue consists of costs related to the Company's Cell Engineering tools offerings, including Datapoints and lab automation solutions. Such costs primarily include hardware, software, materials and labor. Costs related to the Company’s end-to-end cell engineering solutions offering are included in research and development expenses. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs consist of direct and indirect internal costs related to specific projects and initiatives, acquired intellectual property deemed to be in-process research and development, as well as fees paid to other entities that conduct certain research and development activities on the Company’s behalf. Patent Costs The Company expenses all costs as incurred in connection with the filing, prosecution, maintenance, defense, and enforcement of patent applications, including direct application fees and related legal and consulting expenses. Patent costs are included in general and administrative expenses within the consolidated statements of operations and comprehensive loss. Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated grant-date fair values recognized over the requisite service period. For awards that vest solely based on a service condition, the Company recognizes compensation expense on a straight-line basis over the requisite service period. For awards that vest based on multiple conditions, the Company recognizes compensation expense using the accelerated attribution method on a tranche-by-tranche basis over the requisite service period such that the amount of compensation expense recognized at each reporting period is at least equal to the vested tranches at that date. For awards with a performance-based vesting condition, the Company recognizes stock-based compensation when achievement of the performance condition is deemed probable. Upon achieving a performance condition that was not previously considered as probable, the Company records a cumulative catch-up adjustment to reflect the portion of the grantee’s requisite service that has been provided to date. For awards with market conditions, the compensation expense recognized over the requisite service period is not reversed if the market condition is not satisfied. The Company recognizes forfeitures as they occur. The Company estimates the grant date fair value of stock options using the Black-Scholes option-pricing model, inclusive of assumptions for expected term, expected volatility, risk-free interest rate and expected dividend yield. The expected term is determined using the “simplified” method, which estimates the expected term as the average of the vesting term plus the contractual term. The Company uses the “simplified” method as it does not have sufficient historical data regarding employee exercise behavior. Expected volatility is based on the historical volatility of the Company's Class A common stock. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to F-21 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements the expected term of the stock options. The Company has not paid, and does not expect to pay, dividends in the foreseeable future. For awards with market conditions, the Company recognizes stock-based compensation based on the estimated grant-date fair value of the awards, determined using a Monte Carlo simulation model. This model incorporates assumptions for expected stock price volatility, risk-free interest rates, expected term, and expected dividend yield. Volatility is estimated using either the historical volatility of the Company’s Class A common stock or a weighted average of its own historical volatility and the historical volatility of selected comparable publicly traded companies, particularly for awards granted when there was limited trading history for the Company’s Class A common stock. The risk-free interest rate is derived from the yield on U.S. Treasury zero-coupon securities with a duration similar to the expected term of the awards. The expected term equals the contractual term, and a dividend yield of zero is assumed. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by considering several factors, including estimating the future taxable profits expected, estimating future reversals of existing taxable temporary differences, considering taxable profits in carryback periods, and considering prudent and feasible tax planning strategies. The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. 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. The Company evaluates uncertain tax positions on an annual basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for income taxes. As of December 31, 2024 and 2023, the Company did no t have any uncertain tax positions. The Company does not expect a material change in unrecognized tax benefits in the next twelve months. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive loss consists of foreign currency translation adjustments. Net Loss per Share The Company computes basic net loss per share by dividing the net loss attributable to Ginkgo Bioworks Holdings, Inc. common stockholders by the weighted average number of common shares outstanding during the period. For the purposes of the net loss per share calculation, the Company has combined Class A common stock, Class B common stock, and Class C common stock, as all classes of common stock are legally entitled to equal per-share distributions, whether through dividends or liquidation. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period, increased to include the effect of dilutive potential common shares, such as outstanding stock options, unvested restricted stock awards, unvested restricted stock units, warrants, and contingently issued shares. Dilutive securities are excluded from the calculation of diluted weighted average common shares outstanding if their effect would be anti-dilutive under the treasury stock method. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) . This standard requires that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief F-22 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, as well as other segment items and a description of its components. Additionally, it requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The Company adopted the standard on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures. In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . This standard clarifies that contractual restrictions on the sale of an equity security are not considered part of the unit of account for the equity security and, therefore, are not factored into the measurement of fair value. It also introduced new disclosure requirements for equity securities subject to such contractual sale restrictions. The Company adopted this standard on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disaggregate, on both an interim and annual basis, each relevant expense caption presented on the face of the income statement into specific expense categories. Additionally, entities are required to provide a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as disclosure of the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that this ASU will have on its disclosures in the consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), which focuses on improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU require that public business entities on an annual basis (1) disclose specific categories in the tabular rate reconciliation, using both percentages and reporting currency amounts, and (2) provide additional information for reconciling items that meet a quantitative threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact that this ASU will have on its disclosures in the consolidated financial statements. 3. Restructuring In the second quarter of 2024, in connection with the Company’s plans to reduce operational expenditures, management, with the approval of the Board of Directors, approved and commenced a restructuring plan. This plan includes a reduction in labor expenses, primarily through a workforce reduction of more than 40 %, and the consolidation and subleasing of certain facilities. Initial workforce reductions commenced in June 2024 and continued throughout 2024, with further reductions expected in 2025. All workforce reductions are expected to be substantially completed in 2025, subject to compliance with applicable laws. The Company plans to consolidate certain facilities through various actions, including combining office and laboratory operations into fewer locations, subleasing unused or underutilized facilities, and has taken or plans to take other related measures, such as the sale of its subsidiary, Altar, in the third quarter of 2024 (see Note 4 ). While the Company aims to complete the majority of its 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 termination of such lease, depending on market conditions. 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. The costs for the reduction in force are expected to range from $ 20.0 million to $ 23.0 million primarily in the Cell Engineering segment and consist of cash severance and related costs. The employee termination costs are recognized as of the communication date to employees, given (i) the Company instituted a one-time employee termination benefit related to its restructuring, and (ii) the employees will not be retained to render service beyond a minimum retention period. The Company is currently unable to estimate the costs associated with consolidating its facilities. These costs may include, but F-23 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements are not limited to, losses on subleases, contract terminations, asset impairments, sale or disposal of equipment or other long-lived assets, and related costs and fees pertaining to the consolidation, closure, or disposition of facilities. Additional charges may be incurred as the Company progresses its restructuring plan and such charges could be material. The following table presents restructuring costs incurred during the year ended December 31, 2024, which are recorded as “Restructuring charges” in the consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2024 Employee termination costs and other $ 19,349 Impairment of right-of-use asset (1) 4,823 Total restructuring $ 24,172 ( 1) Relates to the sublease of a facility in connection with the restructuring and reflects the excess of the right-of-use asset's carrying value over its fair value, which was determined based on estimates of future discounted cash flows and is classified as Level 3 in the fair value hierarchy. Additionally, the Company recorded a $ 7.0 million loss on the sale and deconsolidation of Altar as a component of other income (expense) in the consolidated statements of operations and comprehensive loss for year ended December 31, 2024. The following table presents the change in the accrued liability balance related to the restructuring activities, which is included in “Accounts payable” and “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheet as of December 31, 2024 (in thousands): Employee Termination Costs and Other Expenses incurred $ 19,349 Cash payments ( 16,495 ) Liability balance at December 31, 2024 $ 2,854 4. Acquisitions and Divestitures 2024 AgBiome Acquisition On April 10, 2024, the Company acquired certain platform assets, including fully sequenced and isolated strains, unique gene sequences, relevant functional data and metadata, and a development pipeline from AgBiome, Inc. (“AgBiome”), a biotechnology company in the agriculture industry. These assets expand the Company’s proprietary unified metagenomics database. The fair value of the consideration transferred totaled $ 18.2 million and was paid with the issuance of 407,240 shares of Ginkgo's Class A common stock. The Company accounted for the transaction as an asset acquisition since substantially all of the value received was concentrated in the acquired developed technology, which is being amortized over a useful life of three years . 2024 Other Asset Acquisitions The Company completed three other asset acquisitions during the year ended December 31, 2024. The aggregate purchase price for the three acquisitions was $ 19.8 million and was paid with the issuance of 394,799 shares of Ginkgo's Class A common stock. Each transaction was accounted for as an asset acquisition as the acquired assets, consisting primarily of intellectual property rights, did not meet the definition of a business. The assets acquired represent in-process research and development with no alternative future use. Accordingly, the Company recorded $ 19.8 million as acquired in-process research and development expense in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. 2023 StrideBio Acquisition On April 5, 2023, the Company entered into an Asset Purchase Agreement (“APA”) with StrideBio, Inc. (“StrideBio”) to acquire StrideBio's adeno-associated virus capsid discovery and engineering platform assets, with a secondary closing contingent upon the transfer of certain additional in-license agreements to Ginkgo. The secondary closing was finalized in October 2023. The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the F-24 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements assets acquired was concentrated in a single identifiable asset. The fair value of the consideration transferred totaled $ 7.6 million and consisted of 119,278 shares of Ginkgo's Class A common stock valued at $ 6.8 million and a $ 0.8 million contingent holdback, all of which was expensed as in-process research and development during the year ended December 31, 2023. The APA, as amended, also provides for royalty payments of up to $ 21.3 million as described in Note 11 . 2022 Zymergen Acquisition On October 19, 2022 (the “Zymergen Closing Date”), the Company acquired all of the outstanding equity of Zymergen Inc. (“Zymergen”), a former company that specialized in integrating computational and manufacturing technologies to design, develop, and commercialize bio-based products across a broad range of industries (the “Zymergen Acquisition”). Under the merger agreement (“Agreement and Plan of Merger”), on the Zymergen Closing Date, each share of Zymergen common stock that was issued and outstanding as of immediately prior to the effective time was automatically cancelled, extinguished and converted into the right to receive 0.0229 shares of the Company’s Class A common stock and cash in lieu of any fractional shares. The following table summarizes the acquisition date fair value of the purchase price consideration transferred for Zymergen (in thousands): Fair value of Class A common stock issued to Zymergen shareholders (1) $ 236,331 Fair value of replacement Ginkgo RSUs and Ginkgo Class A common stock issued under Zymergen RIFs attributable to pre-combination services (2) 1,571 Less: Cash severance and retention bonuses incurred for the benefit of the combined company (3) ( 6,152 ) Total Zymergen purchase price consideration $ 231,750 (1) As consideration for the Zymergen Acquisition, the Company delivered to Zymergen stockholders 2,485,573 shares of its Class A common stock, of which approximately 2,421,490 represents consideration transferred for the Zymergen Acquisition under ASC 805. The fair value of the Company’s Class A common stock issued as consideration transferred was determined based on $ 97.60 per share, which was the closing price of the Company’s Class A common stock on the Zymergen Closing Date. An immaterial amount related to the incremental value received by the holders of Zymergen stock options was excluded from total consideration transferred and recognized as post-combination compensation expense. (2) Represents the fair value of the replacement Ginkgo RSUs and Ginkgo Class A common stock issued under the Zymergen RIFs attributable to pre-combination services. The remaining portion of the fair value is associated with future service and was recognized as stock-based compensation expense in the period subsequent to the Zymergen Acquisition over the remaining service period. (3) Represents cash bonuses payable to Zymergen employees in accordance with Zymergen severance and retention plans at the Zymergen Closing Date. These payments were determined to be for the benefit of the combined company, and accordingly, a portion of the fair value otherwise recognized as consideration transferred was allocated to post-combination compensation expense. The Zymergen Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations ("ASC 805"). The Company allocated the consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. During 2023, as a result of updated information about facts and circumstances that existed at the acquisition date regarding the collectability of an acquired accounts receivable balance and accrued expenses under a collaboration agreement, the Company recorded a measurement period adjustment to the estimated fair values initially recorded as of October 19, 2022, which resulted in a decrease to goodwill of $ 2.2 million, an increase to accounts receivable of $ 1.8 million, and a decrease to accrued expenses and other current liabilities of $ 0.4 million. Goodwill was primarily attributed to Zymergen’s assembled workforce and the expected synergies from combining operations and was assigned to the Cell Engineering segment. Goodwill is not tax deductible. F-25 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands): Final Allocation Cash and cash equivalents $ 150,553 Accounts receivable 2,817 Inventory 1,166 Prepaid expenses and other current assets 11,592 Property and equipment 97,194 Operating lease right-of-use assets 205,349 Intangible assets 18,600 Goodwill 10,660 Other non-current assets 11,898 Accounts payable ( 13,907 ) Deferred revenue ( 8,189 ) Accrued expenses and other current liabilities ( 55,541 ) Operating lease liabilities ( 194,582 ) Deferred tax liability ( 5,690 ) Other non-current liabilities ( 171 ) Net assets acquired $ 231,750 The fair value of intangible assets was determined using the relief from royalty method of the income approach. The fair value measurements were primarily based on significant inputs not observable in the market and thus represent a Level 3 measurement. The significant inputs used included the estimated annual net cash flows (including projected revenues attributable to the asset, royalty rates and obsolescence rates), and the discount rate that reflects the risks inherent in the future cash flows. Property and equipment is mostly comprised of lab equipment, leasehold improvements and construction in progress. The fair value of property and equipment was primarily determined using the cost approach, which estimates fair value by determining the replacement or reproduction cost of an asset of comparable utility, adjusted for loss in value due to depreciation and economic obsolescence. The following table presents the final purchase price allocation and remaining useful lives for identifiable intangible assets acquired as of the acquisition date (in thousands): Estimated fair value Estimated useful life (in years) Developed technology $ 14,900 10 Database 3,700 7 Total $ 18,600 In conjunction with the Agreement and Plan of Merger, Zymergen initiated a reduction-in-workforce implemented in stages (each a “RIF”) for the benefit of the combined company. Under the RIFs, employees received enhanced severance benefits consisting of cash bonuses and accelerated vesting of their outstanding Zymergen restricted stock units ("Zymergen RSU"). These benefits were triggered upon a change in control occurring within twelve months of the employee’s termination date. The Company recognized $ 11.1 million in cash-based severance and stock-based compensation costs in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 related to the RIFs. In August and September 2022, Zymergen also approved the grant of retention bonuses to certain employees denominated in cash and/or Zymergen RSUs designed to retain and reward key talent of Zymergen during the pendency of the proposed Zymergen Acquisition and thereafter. These retention bonuses were deemed for the benefit of the combined company. A portion of the retention bonuses vested and became payable upon the closing of the Zymergen Acquisition, with the remaining portion recognized as post-combination compensation expense over the requisite service period. The Company F-26 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements recognized $ 7.4 million in cash-based retention and stock-based compensation costs in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022. The Company’s revenue and net loss for the year ended December 31, 2022 included $ 2.2 million and $ 26.0 million, respectively, from Zymergen since the Zymergen Closing Date. The Company incurred transaction and integration costs of $ 11.9 million during fiscal year 2022, which were included in general and administrative expenses, inclusive of a success fee which was partly paid in 8,182 shares of Ginkgo Class A common stock. Additionally, the Company incurred $ 1.7 million of equity issuance costs during fiscal year 2022, which were included in additional paid-in capital in the consolidated balance sheet. 2023 Zymergen Bankruptcy and Deconsolidation On October 3, 2023, Zymergen and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code (the “Zymergen Bankruptcy”) in the U.S. Bankruptcy Court for the District of Delaware (“Bankruptcy Court”). Neither the Company nor any of its other subsidiaries filed for bankruptcy protection. Zymergen has been operated as a distinct legal entity, separate and apart from the Company, since it was acquired in October 2022. Shortly after its acquisition, the Company entered into a non-exclusive license with Zymergen with respect to Zymergen’s intellectual property, including its databases, automation, and software capabilities. In connection with the Zymergen Bankruptcy, also on October 3, 2023, the Company entered into an asset purchase agreement with Zymergen (the “Zymergen APA”) as the stalking horse bidder under Section 363 of the U.S. Bankruptcy Code to acquire exclusive rights to substantially all of Zymergen’s intellectual property assets and certain other assets. The Company’s bid included a $ 6.2 million cash component, assumption of a facility lease (previously included in the Company's consolidated financial statements prior to Zymergen's deconsolidation discussed below), and acquiring Zymergen's workforce. On December 14, 2023, Zymergen concluded its auction. On December 21, 2023, the Bankruptcy Court approved the sale of substantially all of Zymergen’s assets to the Company through certain of the Company's affiliates as contemplated by the Zymergen APA. While as of December 31, 2023, Zymergen remained a wholly-owned subsidiary of the Company, as a result of the bankruptcy proceedings, the Company no longer had a controlling financial interest over Zymergen as defined under ASC 810, Consolidation , and therefore deconsolidated Zymergen’s financial position as of October 2, 2023. The deconsolidation included the derecognition of the carrying amounts of Zymergen’s consolidated assets and liabilities that were previously included in the Company’s consolidated financial statements. Upon deconsolidation, the Company recorded a loss of $ 42.5 million, representing the remaining net book value of the Company’s investment that was reduced to a fair value of zero . Subsequent to the deconsolidation, the Company accounted for its investment in Zymergen using the cost method of accounting, which was recorded at zero in the Company’s consolidated balance sheet as of December 31, 2023. Zymergen’s results of operations were removed from the Company’s consolidated statements of operations and comprehensive loss beginning October 3, 2023. 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 the Company's operations and financial results. The following table presents Zymergen’s consolidated assets and liabilities which have been deconsolidated from the Company's consolidated balance sheet as of October 2, 2023. The amounts presented are before the elimination of intercompany balances. F-27 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements October 2, 2023 Assets Current assets: Cash and cash equivalents $ 34,321 Accounts receivable, net 11,047 Prepaid expenses and other current assets 11,190 Total current assets 56,558 Property, plant and equipment, net 8,938 Operating lease right-of-use assets 135,800 Intangible assets, net 16,679 Goodwill 10,660 Other non-current assets 19,486 Total assets 248,121 Liabilities Current liabilities: Deferred revenue 730 Accrued expenses and other current liabilities 20,426 Total current liabilities 21,156 Non-current liabilities: Operating lease liabilities, non-current 184,301 Other non-current liabilities 172 Total liabilities 205,629 Net assets deconsolidated $ 42,492 The following table presents Zymergen’s results of operations for the periods presented, included in the Company's consolidated statements of operations and comprehensive loss prior to the elimination of intercompany balances. Period from January 1, 2023 - October 2, 2023 Period from October 19, 2022 - December 31, 2022 Total revenue $ 8,370 $ 2,249 Total operating expenses 200,975 29,459 Loss from operations ( 192,605 ) ( 27,210 ) Total other income, net 23,620 1,260 Loss before income taxes ( 168,985 ) ( 25,950 ) Income tax provision 14 3 Net loss $ ( 168,999 ) $ ( 25,953 ) Related Party Transactions Prior to the deconsolidation, the Company had an existing employee leasing arrangement with Zymergen. The employee leasing charges were considered intercompany transactions and were eliminated in the Company's consolidated financial statements. As of the deconsolidation date, the employee leasing charges were considered related party transactions and have been recognized in the Company's consolidated financial statements. Employee lease expense totaled $ 4.9 million for the period from October 3, 2023 to December 31, 2023, and was immaterial during fiscal 2024. The Company had F-28 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements $ 1.7 million due to Zymergen as of December 31, 2023, included in accrued expenses and other current liabilities on the balance sheet. This amount was subsequently paid in fiscal 2024. 2024 Zymergen Acquisition On January 18, 2024, the Company, through certain of its affiliates, completed its acquisition of substantially all of Zymergen’s assets under the Zymergen APA, including offering employment to 91 of Zymergen’s employees. On February 5, 2024, Zymergen’s plan of liquidation was confirmed by the Bankruptcy Court. All of the Company’s interests in the Zymergen entities were extinguished and terminated as of February 23, 2024. The acquisition under the Zymergen APA was accounted for as a business combination in accordance with ASC 805 and was not material to the Company's consolidated financial statements. The total cash purchase price was $ 6.2 million, with $ 5.4 million paid at closing and $ 0.8 million released from escrow. The allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date primarily includes $ 19.9 million of operating lease right-of-use assets, $ 6.0 million of property and equipment, and $ 19.9 million of operating lease liabilities. No goodwill or intangible assets were recognized. Transaction costs associated with the Zymergen APA were not material for the year ended December 31, 2024. 2022 Bayer Acquisition and Joint Venture Dissolution On October 17, 2022, the Company completed an asset purchase under the Asset Purchase Agreement (“APA”) with Bayer CropScience LP, a Delaware limited partnership (“Bayer”). Pursuant to the APA, the Company acquired certain assets and liabilities of Bayer, including Bayer’s 175,000 -square-foot West Sacramento Biologics Research & Development site, team, and internal discovery and lead optimization platform. Concurrently with the APA, Bayer and Ginkgo entered into the Joint Venture Termination Agreement (“JV Termination Agreement”) and the Technical Development Agreement (“Bayer TDA”). The JV Termination Agreement initiated the dissolution of Joyn Bio, LLC (“Joyn Bio”), the joint venture created by Ginkgo and Bayer in 2017, and provided for the disbursement of contributed intellectual property back to the respective owners, the disbursement of joint ownership of certain intellectual property rights created by Joyn Bio, including with respect to Joyn Bio’s nitrogen fixation technology to each party, the disbursement of property and equipment as agreed to by the parties, the assumption by Ginkgo of Joyn Bio's two real estate leases and the transfer of certain employees to Ginkgo. Under the Bayer TDA, (i) Ginkgo granted Bayer exclusive licenses to Ginkgo’s joint ownership right, title and interest to Joyn Bio’s nitrogen fixation intellectual property, (ii) for a three-year period, the parties will research, develop and produce microbial strains and related processes to enable the research, development, production, manufacturing and commercialization of Bayer products in agriculture as part of cell programs pursuant to TDPs agreed to by the parties, including one targeted to nitrogen fixation and (iii) for a three-year period, Ginkgo will provide certain non-cell-engineering services to Bayer related to product support as described in statements of work agreed to by the parties. In consideration for all programs, services and related licenses, Ginkgo will receive $ 90.0 million in equal quarterly installments over the three-year term plus royalties on worldwide net sales of certain Bayer products developed under the Bayer TDA. The APA, JV Termination Agreement and Bayer TDA were accounted for as a single transaction as they were entered into at the same time and in contemplation of one another, the occurrence of each agreement was dependent on the occurrence of the other agreements, and the work performed under the Bayer TDA will utilize the tangible assets acquired from Bayer under the APA and the IP distributed to Ginkgo under the JV Termination Agreement. The assets acquired under the APA and JV Termination Agreement meet the definition of a business and were accounted for under ASC 805. The Bayer TDA was accounted for under ASC 606. A summary of the purchase price relating to the business combination is as follows (in thousands): Cash $ 79,825 Fair value of previously held equity interest in Joyn Bio 14,000 Fair value of notes receivable from Joyn Bio 10,119 Total purchase consideration $ 103,944 Prior to the completion of the business combination, the Company, through its then majority-owned holding company Cooksonia, LLC (“Cooksonia”), held a 50 % equity interest in Joyn Bio that was accounted for as an equity method investment. The Company remeasured its 50 % equity interest in Joyn Bio at fair value as of the acquisition date and recorded a gain of $ 14.0 million equal to the difference between the carrying value of its equity method investment in Joyn F-29 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Bio of zero and the fair value of $ 14.0 million on the acquisition date. The gain is included within loss on equity method investments in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022. Additionally, prior to the completion of the business combination, Joyn Bio had issued to Ginkgo a series of convertible promissory notes in the aggregate principal amount of $ 10.0 million (see Note 20 ). The notes were effectively settled as part of the business combination and were included as part of the consideration transferred for the business combination. The carrying value of the notes prior to the acquisition was $ 4.8 million due to losses attributable to the equity method investment being allocated to the notes receivable as a result of the equity method investment being reduced to zero during the year ended December 31, 2022. The Company recorded a gain on the notes receivable of $ 5.3 million within other income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 for the excess of the $ 10.1 million outstanding principal and accrued interest over their carrying value of the notes. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands): Property, plant, and equipment $ 83,951 Intangible assets 11,500 Goodwill 11,172 Deferred tax liability ( 2,679 ) Net assets acquired $ 103,944 The fair value of Ginkgo’s equity interest in Joyn Bio pre-dissolution was determined using a discounted cash flow method. The fair value of intangible assets, which consists of Joyn Bio's developed technology, was determined using the relief from royalty method of the income approach. Significant assumptions used in the valuations included the estimated annual net cash flows (including projected future revenues and costs, terminal growth rates, royalty rates and obsolescence rates), and a discount rate that reflects the risks inherent in the future cash flows. Property, plant, and equipment consists of land, buildings, site improvements and personal property. The fair value of land was determined using the sales comparison approach and the fair value of the buildings, site improvements and personal property was determined using the cost and sales comparison approaches. Under the cost approach, the Company estimated the cost to acquire or construct comparable assets and made adjustments for physical deterioration. Intangible assets consist of Joyn Bio's developed technology and have an estimated useful life of five years . Goodwill primarily reflects the value of future programs expected to arise after the acquisition and the assembled workforce. Goodwill is not tax deductible. The Company incurred $ 0.2 million and $ 3.0 million in costs associated with the winding up and dissolution of Joyn Bio during the years ended December 31, 2023 and 2022, respectively, which were recorded within operating expenses. Dissolution costs are shared equally between Ginkgo and Bayer. The joint venture was fully dissolved in 2023. The Company incurred transaction and integration costs of $ 12.0 million during the year ended December 31, 2022 related to the business combination, which were included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. The transaction does not represent a material business combination and, therefore, pro forma financial information is not provided. Operating results of the acquired business have been included in the consolidated statements of operations and comprehensive loss since the date of acquisition and were not material to the Company’s results of operations for the year ended December 31, 2022. 2022 Altar Acquisition and 2024 Divestiture On October 3, 2022, the Company acquired all outstanding shares of capital stock of Altar SAS (“Altar”), a French biotechnology company with a proprietary adaptive evolution platform. Altar's fleet of automated adaptive laboratory evolution instruments was integrated into Ginkgo's Foundry to serve customers across various industries. The total purchase consideration was $ 12.0 million and consisted of $ 2.8 million in cash, $ 1.4 million in restricted shares of Ginkgo Class A common stock subject to forfeiture if certain vesting conditions are not met, $ 5.6 million in unrestricted shares of Ginkgo Class A common stock, $ 1.6 million in contingent consideration and $ 0.6 million in assumed liabilities. The Company accounted for the transaction as a business combination under ASC 805. The net assets acquired primarily consisted of $ 8.4 million of intangible assets related to Altar's developed technology and $ 4.7 million of goodwill, which is not deductible for tax purposes. The business is reported as part of the Company’s Cell Engineering reportable segment. The Company incurred $ 2.3 million in acquisition related costs during the year ended December 31, 2022, which were included in general and administrative expenses. Pro forma information has not been presented because it is not material to the financial statements. Altar's results of operations have been included in the consolidated statements of operations and F-30 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements comprehensive loss since the date of acquisition and were not material to the Company’s results of operations for the year ended December 31, 2022. On September 30, 2024, the Company sold the equity interests of Altar for a nominal amount. As a result of the sale, the Company deconsolidated all of Altar's assets and liabilities from its consolidated financial statements effective September 30, 2024, and recognized a loss on deconsolidation of $ 7.0 million in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. The loss on deconsolidation includes a $ 1.5 million reclassification of accumulated currency translation adjustments to earnings. The sale did not meet the criteria to be reported as a discontinued operation. 2022 FGen Acquisition On April 1, 2022, the Company acquired all of the outstanding equity interests of FGen AG (“FGen”), a company organized under the laws of Switzerland that specializes in strain development and optimization. FGen has developed an ultra-high-throughput screening platform built on nanoliter reactor technology which the Company believed would enhance its cell screening capabilities and potentially increase the likelihood of finding enzymes, pathways, and strains or cell lines that perform to diverse cell program specifications. The Company accounted for the transaction as a business combination under ASC 805. Accordingly, the assets and liabilities acquired were recorded at their estimated fair value on the date of acquisition. FGen's results of operations have been included in the consolidated statements of operations and comprehensive loss since the date of acquisition and were not material to the Company’s results of operations for the year ended December 31, 2022. The FGen acquisition does not represent a material business combination and, therefore, pro forma financial information is not provided. The consideration paid was comprised of common stock and contingent consideration as follows (in thousands): Fair value of Class A common stock $ 17,015 Fair value of contingent consideration - restricted stock 3,842 Fair value of contingent consideration - milestones 8,464 Total FGen consideration $ 29,321 The Company issued 143,749 shares of its Class A common stock on the acquisition date comprised of 101,278 unrestricted shares valued at $ 17.0 million based on the closing market price of $ 168.00 per share and 42,471 restricted shares classified as contingent consideration and subject to vesting conditions. The contingent consideration in the form of restricted stock was valued at $ 3.8 million as of the acquisition date based on management’s estimate of the number of shares expected to vest and the closing market price of $ 168.00 . The restricted shares were issued in three tranches with separate vesting conditions. Tranches 1 and 2 vested on April 4, 2022 when the Company filed its Form S-1 registration statement and a total of 11,530 shares vested and 14,606 shares were forfeited. The remaining 16,335 tranche 3 restricted shares vested on the 24-month anniversary of the closing. As part of the acquisition, the Company is required to make milestone payments up to a maximum of $ 25.0 million, with $ 20.0 million payable based on the successful integration and deployment of the FGen technology across the Company's programs over a 36-month period and $ 5.0 million payable to certain employees based on continuing service. The milestones are payable in cash or Class A common stock at the election of the Company. The $ 5.0 million payable to employees is accounted for separately from the business combination as post combination compensation expense and recognized over the requisite service period. The fair value of the $ 20.0 million in contingent consideration on the acquisition date was determined using a scenario-based method. The significant assumptions used include the expected time of achievement and probability of success related to each milestone and a discount rate. The Company allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. During the year ended December 31, 2022, the Company recorded measurement period adjustments which did not have a material impact on goodwill. The intangible assets acquired consist of FGen's developed technology which was measured at fair value using the multi-period excess earnings method under the income approach. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows attributable only to the intangible asset after deducting charges representing the contribution of other assets to those cash flows. The significant assumptions used include the estimated annual net cash flows (including revenue growth rates, EBITDA and EBIT margins, applicable tax rate, and contributory F-31 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements asset charges), a discount rate, and the tax amortization benefit. Goodwill represents the amount by which the purchase price exceeds the estimated fair value of the net assets acquired and primarily reflects the value of future programs expected to arise after the acquisition. The Company incurred $ 1.7 million of acquisition-related costs during the year ended December 31, 2022, which were included in general and administrative expenses in the consolidated statements of operations and comprehensive loss. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands): Final Allocation Cash and cash equivalents $ 1,430 Accounts receivable 144 Other non-current assets 10 Property and equipment 34 Intangible assets (1) 21,100 Goodwill (2) 10,615 Accounts payable and accrued expenses ( 29 ) Deferred revenue ( 104 ) Deferred tax liability ( 3,879 ) Net assets acquired $ 29,321 (1) Estimated useful life of 15 years. (2) Non-deductible for tax purposes. 2022 Asset Acquisitions On October 3, 2022, the Company completed the acquisition of all of the outstanding equity interests in Circularis Biotechnologies, Inc., (“Circularis”), a biotechnology company with a proprietary circular RNA and promoter screening platform. The aggregate purchase consideration was $ 18.6 million, of which $ 4.3 million was paid in cash, $ 10.2 million was paid in Ginkgo Class A common stock, $ 3.7 million represented contingent consideration and $ 0.4 million represented direct transaction costs. The Company accounted for the transaction as an asset acquisition as substantially all of the value received was concentrated in the acquired developed technology. The Company allocated the purchase consideration primarily to the developed technology intangible asset, which is being amortized over a useful life of five years . Additionally, the purchase agreement included $ 2.5 million of employee retention payments, which was recognized as compensation expense over the requisite service period. On August 17, 2022, the Company acquired certain epidemiological data infrastructure assets from Baktus, Inc., a Delaware-based public benefit corporation. The Company accounted for the transaction as an asset acquisition as the value acquired primarily related to a single identifiable intangible asset. The total purchase consideration was $ 11.1 million and consisted of $ 2.0 million in cash, $ 8.4 million in Ginkgo Class A common stock and $ 0.7 million of direct transaction costs. Of the shares issued, 6,470 were restricted shares that vested on the 18-month anniversary of the closing and were classified as contingent consideration liability in the consolidated balance sheet (see Note 5 ). Additionally, the purchase agreement included $ 1.0 million of employee retention payments, which was recognized as compensation expense over the requisite service period. As a result of the acquisition, the Company recognized $ 11.2 million in intangible assets consisting of developed technology, customer relationships and assembled workforce and $ 0.1 million in deferred revenue. F-32 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements 5. Fair Value Measurements The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 2024 Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ 521,457 $ 521,457 $ — $ — Synlogic, Inc. warrants (1) Investments 238 — 238 — Marketable equity securities Investments 17,559 17,559 — — Notes receivable Other non-current assets 14,170 — 12,327 1,843 Total assets $ 553,424 $ 539,016 $ 12,565 $ 1,843 Liabilities: Contingent consideration Accrued expenses and other current liabilities $ 5,438 $ — $ — $ 5,438 Contingent consideration Other non-current liabilities 4,484 — — 4,484 Total liabilities $ 9,922 $ — $ — $ 9,922 As of December 31, 2023 Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ 913,729 $ 913,729 $ — $ — Synlogic, Inc. warrants (1) Investments 654 — 654 — Marketable equity securities (2) Investments 19,190 18,401 789 — Notes receivable Prepaid expenses and other current assets 12,293 — — 12,293 Notes receivable Other non-current assets 13,601 — 11,765 1,836 Total assets $ 959,467 $ 932,130 $ 13,208 $ 14,129 Liabilities: Public Warrants Other non-current liabilities $ 3,794 $ 3,794 $ — $ — Private Placement Warrants Other non-current liabilities 1,906 — 60 1,846 Contingent consideration Accrued expenses and other current liabilities 18,468 — — 18,468 Contingent consideration Other non-current liabilities 5,805 — — 5,805 Total liabilities $ 29,973 $ 3,794 $ 60 $ 26,119 (1) The fair value of Synlogic, Inc. warrants is calculated as the quoted price of the underlying common stock, less the unpaid exercise price of the warrants. (2) Marketable equity securities classified as Level 2 reflect a discount for lack of marketability due to regulatory sales restrictions. Transfers to and from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. In 2024 and 2023, transfers from Level 2 to Level 1 occurred due to lapse of regulatory sales restrictions on marketable equity securities. Additionally, in 2024, a portion of the Private Placement Warrants' estimated fair value was transferred from Level 3 to Level 2 as a result of the Private Placement Warrants having substantially the same terms as the Public Warrants when transferred to anyone other than the initial purchasers or their permitted transferees, leading the Company to determine their fair value to be equivalent to that of the Public Warrants. There were no other transfers between Levels 1, 2, or 3 during 2024 or 2023. F-33 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The table below provides a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value using Level 3 significant unobservable inputs for the years ended December 31 (in thousands): Notes Receivable Private Placement Warrants Contingent Consideration Balance at January 1, 2024 $ 14,129 $ 1,846 $ 24,273 Additions 1,407 — — Change in fair value ( 3,217 ) ( 1,697 ) 3,214 Settlements and payments — — ( 17,565 ) Transfers to Level 2 — ( 149 ) — Conversion to common stock ( 10,476 ) — — Balance at December 31, 2024 $ 1,843 $ — $ 9,922 Balance at January 1, 2023 $ 7,660 $ 3,860 $ 24,473 Additions 2,653 — 1,397 Additions from note exchanges and amendments 13,939 — — Change in fair value ( 2,416 ) ( 2,014 ) 9,168 Settlements and payments ( 7,707 ) — ( 10,765 ) Balance at December 31, 2023 $ 14,129 $ 1,846 $ 24,273 Notes Receivable For all of its notes receivable, the Company has elected the fair value option, for which changes in fair value are recorded in other income, net in the consolidated statements of operations and comprehensive loss. As of December 31, 2024 and 2023, the Company's notes receivable includes a senior secured note in the original principal amount of $ 11.8 million, issued by Bolt Threads, Inc. (“Bolt Threads”), which bears interest at 12 % per annum, is due December 31, 2027, and is included in other non-current assets at its estimated fair value. The Company previously held a convertible promissory note, also issued by Bolt Threads, in the principal amount of $ 10.0 million, which bore interest at 8 % per annum, was convertible into equity securities of Bolt Threads upon a qualified financing, a non-qualified financing, or special purpose acquisition company transaction, at a conversion price based on certain conditions as defined in the note agreement, or was otherwise payable on demand any time after the maturity date of October 4, 2024. During the year ended December 31, 2024, $ 10.5 million in principal and accrued interest on the convertible promissory note was converted into 2.7 million shares of the issuer's common stock, which were classified as marketable equity securities until they were sold. The Company used the yield method to value the senior secured note. Under this method, the estimated future cash flows, consisting of principal and interest payments, are discounted to present value using an applicable market yield or discount rate. Increases or decreases in the market yield or discount rate would result in a decrease or increase, respectively, in the fair value measurement. The market yield is determined using a corporate bond yield curve corresponding to the credit rating category of the issuer. The fair value of the senior secured note is based on observable market inputs, which represents a Level 2 measurement within the fair value hierarchy. The Company also holds a series of convertible debt instruments issued by customers as payment for Cell Engineering services. The Company used a scenario-based method to value the convertible debt instruments issued by customers and by Bolt Threads prior to conversion. Under this method, future cash flows are evaluated under various payoff scenarios, probability-weighted, and discounted to present value. The significant unobservable (Level 3) inputs used in the fair value measurement as of December 31, 2024 included scenario probabilities ranging from 5 % to 45 %, a discount rate of 15.5 % and estimated time to event date of up to two years . The significant unobservable (Level 3) inputs used in the fair value measurement as of December 31, 2023 included scenario probabilities ranging from 5 % to 85 %, a discount rate of 17 % and estimated time to event date of one to two years . Significant changes in these inputs could have resulted in a significantly lower or higher fair value measurement. As of December 31, 2024, the convertible debt instruments had an unpaid principal balance of $ 13.2 million and a fair value of $ 1.8 million. As of December 31, 2023, the convertible debt instruments had an unpaid principal balance of $ 21.0 million and a fair value of $ 14.1 million. F-34 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements In December 2023, the Company entered into an amendment with a customer regarding two outstanding convertible promissory notes, with an aggregate principal amount of $ 10.3 million. The Company used a scenario-based method to value the convertible notes as of the amendment date. The significant unobservable (Level 3) inputs used in the fair value measurement as of the amendment date included scenario probabilities ranging from 10 % to 75 %, a discount rate of 15 %, time to event date of up to one year , and an estimated fair value per share of the equity securities to which the Company would be entitled to upon conversion of the notes, obtained from a third-party valuation. Warrant Liabilities In connection with the Company's merger with Soaring Eagle Acquisition Corp. (“SRNG”) on September 16, 2021 (“SRNG Business Combination”), the Company assumed 34.5 million warrants (formerly traded on the New York Stock Exchange (the “NYSE,” and such warrants, the “Public Warrants”) and 17.3 million private placement warrants (the “Private Placement Warrants”, and together with the Public Warrants, the “Warrants”), which were initially issued in connection with SRNG’s initial public offering. The number of outstanding Warrants did not change as a result of the Reverse Stock Split. However, each Warrant equals one-fortieth (1/40) of one share of Class A common stock (a minimum of 40 Warrants must be exercised for one share of Class A common stock) following the Reverse Stock Split. The fair value of the Public Warrants was based on their observable quoted price on the NYSE. However, the Public Warrants were delisted by the NYSE on September 4, 2024, due to abnormally low selling price levels, and subsequently began trading on the over-the-counter markets. As of December 31, 2024, the Company determined that the Public Warrants had no value. The Private Placement Warrants are identical to the Public Warrants, except that they are exercisable on a cashless basis and are non-redeemable as long as they are held by the initial purchasers or their permitted transferees. As of December 31, 2024, the Company concluded that the difference between the fair values of the Public Warrants and Private Placement Warrants was de minimis. Therefore, the Private Placement Warrants were measured by reference to the value of the Public Warrants and had no value. As of December 31, 2023, the fair value of the Private Placement Warrants was estimated using a Black-Scholes option pricing model, which was considered a Level 3 fair value measurement. The primary unobservable input used in the valuation of the Private Placement Warrants was expected stock-price volatility, estimated through a Monte-Carlo simulation of the redeemable Public Warrants that assumed optimal exercise of the Company's redemption option at the earliest possible date. A change in this input could have significantly affected the valuation. Contingent Consideration In connection with various business acquisitions, the Company is required to make contingent earnout payments payable upon the achievement of certain technical, commercial and/or performance milestones. The Company also issued restricted stock in connection with acquisitions, which is subject to vesting conditions and is classified as contingent consideration liability. The Company can settle a majority of its contingent consideration liabilities in cash or shares of Class A common stock at the Company’s election with the remainder payable in cash. During the year ended December 31, 2024, the Company settled $ 17.6 million in contingent consideration liability through payment of $ 2.8 million in cash and vesting of 1,413,909 shares of restricted stock valued at $ 14.7 million. During the year ended December 31, 2023, the Company settled $ 10.8 million in contingent consideration liabilities through payment of $ 1.9 million in cash and vesting of 137,427 shares of restricted stock valued at $ 8.9 million. Of that amount, $ 1.4 million was recorded as an increase to the acquired intangible asset with an offset to additional paid-in-capital as the contingent consideration liability was deemed not probable of occurring. The fair value of contingent consideration related to earnout payments from acquisitions was estimated using unobservable (Level 3) inputs as illustrated in the table below. The fair value of contingent consideration related to restricted stock was estimated using the quoted price of Ginkgo's Class A common stock, an estimate of the number of shares expected to vest, probability of vesting, and a discount rate. Material increases or decreases in these inputs could result in a higher or lower fair value measurement. Changes in the fair value of contingent consideration are recorded in general and administrative expense in the consolidated statements of operations and comprehensive loss. The following table provides quantitative information regarding Level 3 inputs used in the fair value measurements of contingent consideration liabilities as of the periods presented: F-35 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Contingent Consideration Liability Valuation Technique Unobservable Input December 31, 2024 Range December 31, 2023 Range Earnout payments (FGen, Dutch DNA and Altar acquisitions) (1) Probability-weighted present value Probability of payment 5 % - 50 % 10 % - 100 % Discount rate 9.3 % 13.4 % Earnout payments (Dutch DNA acquisition) (1) Discounted cash flow Projected years of payments 2028-2031 2025-2028 Discount rate 10.6 % 10.3 % (1) For FGen and Altar acquisitions, see Note 4 . In July 2021, the Company acquired Dutch DNA Biotech B.V. (“Dutch DNA”) and is obligated to make contingent earnout payments up to a maximum of $ 20.0 million, payable upon the achievement of certain technical and commercial milestones by Dutch DNA. Nonrecurring Fair Value Measurements The Company measures the fair value of certain assets, including investments in privately held companies without readily determinable fair values, on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, or when observable price changes occur for identical or similar securities from the same issuer. The fair value of non-marketable equity securities is classified as Level 3 within the fair value hierarchy when the Company estimates fair value using unobservable inputs to measure an impairment loss. It is classified as Level 2 when fair value is estimated using the observable transaction price paid by third-party investors for an identical or similar security of the same issuer. Investment Impairments During the years ended December 31, 2024, 2023 and 2022, the Company recorded impairment losses of $ 11.9 million, $ 33.0 million, and $ 10.1 million, respectively, related to its investment in Genomatica preferred stock. The fair value estimates used to determine the impairment charges in 2023 were derived using the guideline public company method under the market approach, while an enterprise value analysis was performed in 2022, with an equal weighting between discounted cash flow analyses and the guideline public company method. Significant unobservable (Level 3) inputs included estimated annual net cash flows (including revenue and expense growth rates and capitalization rates), the weighted-average cost of capital used to discount future cash flows, and the selection of guideline public company multiples for revenue and EBITDA. Material increases or decreases in these inputs could result in higher or lower fair value measurements. As of December 31, 2024, the Company determined that the investment had substantially no value. During the years ended December 31, 2024 and 2023, the Company recorded impairment losses of $ 1.7 million and $ 8.3 million, respectively, related to an investment in the preferred stock of a privately held company. The fair value as of December 31, 2023 was determined by deriving the investee’s equity value from a 2021 financing transaction involving its own securities and applying an 87 % downward market adjustment to the implied equity value. The equity value was then allocated to the different classes of the securities of the investee using the option-pricing model (“OPM”). The OPM involves making assumptions around the investees’ expected time to liquidity and volatility derived from selected guideline public companies. These assumptions are considered Level 3 inputs. As of December 31, 2024, the Company determined that the investment had substantially no value. SAFEs During the years ended December 31, 2023 and 2022, the Company received a total purchase amount of $ 11.0 million and $ 39.5 million, respectively, in SAFEs from customers as prepayment for Cell Engineering services. The Company used a scenario-based method to value the SAFEs as of each contract inception date, which resulted in total fair value of $ 4.5 million and $ 22.1 million for SAFEs received during the years ended December 31, 2023 and 2022, respectively. Under the scenario-based method, future cash flows were evaluated under qualified financing and dissolution scenarios with partial recovery and no recovery in dissolution. The cash flows under each scenario were probability-weighted and discounted to present value. The significant unobservable (Level 3) inputs used in the fair value measurement at contract inception during 2023 were scenario probabilities in the range of 20 % to 60 %, a discount rate of 14 % and estimated time to event date of one to two years . The significant unobservable (Level 3) inputs used in the fair value measurement at contract inception during 2022 were scenario probabilities in the range of 18 % and 65 %, a discount rate of 13 % and estimated time to event date of one to two years . F-36 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements During the years ended December 31, 2024 and 2023, the Company recorded impairment losses of $ 7.2 million and $ 2.7 million, respectively, related to SAFEs. The fair values were generally estimated using the scenario-based method, where various payout scenarios were probability-weighted and discounted to present value. Additionally, during the years ended December 31, 2024 and 2023, the Company recorded impairments of lab equipment, construction in progress assets, and assets related to an operating lease. Refer to Note 10 for additional detail. 6. Investments and Equity Method Investments The Company has partnered with other investors to form business ventures, including Motif FoodWorks, Inc. (“Motif”), Allonnia, LLC (“Allonnia”), Arcaea, LLC (“Arcaea”), Verb Biotics, LLC (“Verb Biotics”), BiomEdit, LLC (“BiomEdit”) and Ayana Bio, LLC (“Ayana Bio”) (collectively “Platform Ventures”). The Company has also partnered with existing entities, including Genomatica, Inc. (“Genomatica”) and Synlogic, Inc. (“Synlogic”) (collectively, “Legacy Structured Partnerships”) with complementary assets for synthetic biology applications. The Company holds equity interests in these Platform Ventures and Legacy Structured Partnerships. The Company also holds equity interests in other public and private companies as a result of entering into collaboration and license revenue arrangements with these entities. The Company accounts for its investments in Platform Ventures under the equity method. The Company's marketable equity securities consist of Synlogic common stock, Synlogic warrants and the shares of common stock of other publicly traded companies. Marketable equity securities are measured at fair value with changes in fair value recorded in other income (expense) in the consolidated statements of operations and comprehensive loss. The Company’s non-marketable equity securities consist of preferred stock of Genomatica and preferred and common stock of other privately held companies without readily determinable fair values. Non-marketable equity securities are initially recorded using the measurement alternative at cost and subsequently adjusted for any impairment and observable price changes in orderly transactions for the identical or a similar security of the same issuer. Impairment losses and adjustments from observable price changes are recorded in loss on investments in the consolidated statements of operations and comprehensive loss. The Company also holds investments in early-stage synthetic biology product companies via SAFEs. The Company entered into SAFE agreements in conjunction with a revenue contract with a customer under which the Company grants the customer a prepaid Cell Engineering services credit equal to the principal amount of the SAFE (the “Purchase Amount”), which may be used and drawn down as payment for the Company’s research and development services. The SAFEs will automatically convert into shares of preferred stock equal to the Purchase Amount divided by the discount price, which is calculated as the price per share sold in a qualified equity financing multiplied by a discount rate. The SAFEs also provide the Company with the right to future equity of the entity in a liquidation scenario or the cash-out amount in liquidation and dissolution scenarios or at the election of the SAFE issuer prior to an agreed outside date. The Company initially records SAFEs at fair value (see Note 5 ) and adjusts the carrying amount of the instrument at each reporting period for any impairments. Investments consisted of the following (in thousands): As of December 31, 2024 2023 Investments: SAFEs $ 16,689 $ 23,898 Non-marketable equity securities 14,218 22,938 Marketable equity securities 17,559 19,190 Genomatica preferred stock — 11,885 Synlogic warrants 238 654 Total $ 48,704 $ 78,565 F-37 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Loss on investments and equity method investments consisted of the following (in thousands): Year Ended December 31, 2024 2023 2022 Loss on investments: Genomatica preferred stock $ ( 11,885 ) $ ( 33,000 ) $ ( 10,115 ) Non-marketable equity securities ( 1,735 ) ( 9,928 ) ( 195 ) Marketable equity securities ( 7,583 ) ( 7,874 ) ( 38,795 ) SAFEs ( 7,208 ) ( 2,742 ) — Synlogic warrants ( 416 ) ( 1,283 ) ( 4,230 ) Total $ ( 28,827 ) $ ( 54,827 ) $ ( 53,335 ) Loss on equity method investments: BiomEdit $ — $ ( 1,461 ) $ ( 8,503 ) Joyn Bio (1) — — ( 3,043 ) Verb Biotics — — ( 15,900 ) Ayana Bio — — ( 15,989 ) Other — ( 1,174 ) ( 326 ) Total $ — $ ( 2,635 ) $ ( 43,761 ) (1) The loss on equity method investment in Joyn Bio for the year ended December 31, 2022 is comprised of a $ 17.0 million loss offset by a $ 14.0 million gain on the remeasurement of the retained equity interest in Joyn Bio at fair value as of the acquisition date (see Note 4 ). The loss on equity method investment in excess over the carrying value of zero of the equity method investment in Joyn Bio during the year ended December 31, 2022 was recorded as a reduction in the convertible promissory notes receivable from Joyn Bio (see Note 20 ). The components of loss on investments for each period were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Impairment charges $ ( 20,828 ) $ ( 44,043 ) $ ( 10,310 ) Realized and unrealized losses recognized on marketable equity securities ( 7,999 ) ( 9,157 ) ( 43,025 ) Downward adjustments from observable price changes — ( 1,627 ) — Total loss on investments $ ( 28,827 ) $ ( 54,827 ) $ ( 53,335 ) Total realized and unrealized losses associated with equity investments accounted for at fair value or the fair value measurement alternative consisted of the following (in thousands): Year Ended December 31, 2024 2023 2022 Realized loss recognized on equity investments sold (1) $ ( 5,957 ) $ — $ — Net unrealized losses recognized on equity investments held as of the end of the period ( 22,870 ) ( 54,827 ) ( 53,335 ) Total loss on investments $ ( 28,827 ) $ ( 54,827 ) $ ( 53,335 ) (1) Reflects the difference between the sale proceeds and the carrying value of the equity investments at the beginning of the period or the acquisition date, if later. The carrying value of non-marketable equity securities accounted for using the fair value measurement alternative and still held as of December 31, 2024, including cumulative unrealized losses, were as follows (in thousands): F-38 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements As of December 31, 2024 Total initial cost $ 107,996 Impairment charges ( 75,461 ) Downward adjustments from observable price changes ( 1,628 ) Carrying value $ 30,907 7. Variable Interest Entities 2022 Deconsolidations: Ayana Bio and Verb Biotics The Company holds an interest in 9,000,000 common units (representing 100 % of common units at inception) in each of Ayana Bio and Verb Biotics, two Platform Ventures formed in September 2021 by the Company and certain of its investors. The Company has agreed to provide Ayana Bio and Verb Biotics with certain licenses to intellectual property for use in the development or production of products that the parties agree to research and develop under technical development plans (“TDPs”). Additionally, in September 2021, Ayana Bio and Verb Biotics entered into a Series A Preferred Unit Purchase Agreement under which each entity sold 9,000,000 Series A preferred units to certain of the Company’s investors for aggregate proceeds of approximately $ 30.0 million each. During 2021, the Company concluded that it held a variable interest in and was the primary beneficiary of Ayana Bio and Verb Biotics as it controlled the most significant activities of these entities. These conclusions were reached because, as of the primary beneficiary assessment dates in 2021, for both Verb Biotics and Ayana Bio: (i) the Company had substantive control of the board of directors; (ii) all capital contributions were made by related parties of Ginkgo; and (iii) Ginkgo or its related parties comprised the entirety of the joint steering committee (“JSC”), the governing body which holds significant oversight with respect to the entities' research and development programs. During 2022, Verb Biotics and Ayana Bio each hired a new chief executive officer who was not an affiliate, related party or agent of Ginkgo. The chief executive officer was also appointed to each entity's JSC and board of directors. As a result, the Company concluded it no longer had substantive control of each entity's JSC and board of directors. Accordingly, the Company concluded that it was no longer the primary beneficiary of Verb Biotics and Ayana Bio as it no longer controlled the most significant activities of the entities. As a result of this change in the primary beneficiary determination, the Company deconsolidated Verb Biotics and Ayana Bio and recorded a gain on deconsolidation of $ 31.9 million for the year ended December 31, 2022 in the consolidated statements of operations and comprehensive loss. The gain on deconsolidation was equal to the fair value of the retained interest in each entity as of the deconsolidation date and was calculated using the option pricing method. The option pricing method used a back-solve methodology to infer the total equity value based on the pricing of the Series A preferred unit financing, which is the most recent financing transaction to the deconsolidation event. The JSC, with equal representation from each of Verb Biotics or Ayana Bio and Ginkgo, governs the TDPs under which the Company will perform agreed-upon research and development services in return for consideration on a cost-plus basis for all services provided. Ginkgo has agreed to provide Verb Biotics and Ayana Bio with licenses to certain of its intellectual property for use in the development, production and commercialization of each entity's products under the TDPs. The Company's common unit investment in Verb Biotics and Ayana Bio is accounted for as an equity method investment, and accordingly, Verb Biotics and Ayana Bio are related parties of Ginkgo. The initial carrying value of the equity method investment was equal to the fair value of the retained interest of $ 15.9 million for Verb Biotics and $ 16.0 million for Ayana Bio as of the applicable deconsolidation date. The Series A preferred units issued by Verb Biotics and Ayana Bio receive a liquidation preference prior to common units. As such, the Company concluded that this represents a substantive profit-sharing arrangement and the Company is recognizing earnings and losses on the equity method investment using the HLBV method. The Company recorded a loss on its equity method investment in Verb Biotics and Ayana Bio of $ 31.9 million in the year ended December 31, 2022, due to a basis difference associated with in-process research and development identified as part of the initial accounting for the equity method investment. This loss reduced the carrying value of the equity method investment in each of Verb Biotics and Ayana Bio to zero . There is no commitment for the Company to provide further financial support to Verb Biotics and Ayana Bio, and therefore the carrying value of the equity method investment will not be reduced below zero . F-39 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Additional Variable Interest Entities With respect to the Company’s investments in Motif, Allonnia, Genomatica, Arcaea, and BiomEdit, the Company has concluded these entities represent VIEs. While the Company has board representation on certain of these entities and is involved in the ongoing development activities of these entities via its participation on such entities' JSC, the Company has concluded that it is not the primary beneficiary of these entities because: (i) the Company does not control the board of directors of any of the VIEs, and no voting or consent agreements exist between the Company and other members of each respective board of directors or other investors, (ii) the holders of preferred security interests in the VIEs hold certain rights that require their consent prior to taking certain actions, which include certain significant operating and financing decisions, and (iii) the Company’s representation on the JSC of each respective entity does not give it control over the development activities of any of the VIEs, as all JSC decisions are made by consensus and there are no agreements in place that would require any of the entities to vote in alignment with the Company. As the Company’s involvement in the VIEs does not give it the power to control the decisions with respect to their development or other activities, which are their most significant activities, the Company has concluded that it is not the primary beneficiary of the VIEs. With respect to Cooksonia’s investment in Joyn Bio prior to the joint venture’s termination on October 17, 2022 (see Note 4 ), as Cooksonia did not control Joyn Bio’s board of directors, it did not have the power to control the decisions related to the development activities of Joyn Bio, which were its most significant activities. Accordingly, the Company concluded that Cooksonia was not the primary beneficiary of Joyn Bio. The Company provided $ 10.0 million in financial support to Joyn Bio during the year ended December 31, 2022 in the form of convertible promissory notes (see Note 20 ), which were deemed necessary to fund Joyn Bio’s operations pre-dissolution. Joyn Bio was fully dissolved in 2023. Additionally, the Company holds equity interests in certain other privately-held companies that are not consolidated as the Company is not the primary beneficiary. As of December 31, 2024 and 2023, the maximum risk of loss related to the Company’s unconsolidated VIEs was limited to the carrying value of its investments in such entities. Refer to Notes 6 and 16 for additional details on the Company’s investments and equity method investments. 8. Goodwill and Intangible Assets, net During the year ended December 31, 2024, due to a sustained decrease in the market price of the Company's Class A common stock and market capitalization, the Company identified that an indicator of impairment was present during the second quarter of 2024. As such, the Company completed a quantitative impairment test related to its Cell Engineering reporting unit. To conduct the impairment test of goodwill, the estimated fair value of the reporting unit was compared to its carrying value. The estimated fair value of the 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. Significant inputs used in the DCF model included the projected future operating results of the reporting unit and the applicable discount rate, while inputs used in the GPC method consisted of a revenue multiple. The projected future operating results were based on historical experience and internal annual operating plans reviewed by management, extrapolated over the forecast period. The discount rate was determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit. The revenue multiple was based on the GPC method using comparable publicly traded company multiples of revenue for a group of benchmark companies. The DCF method was weighted 75% and the GPC 25%. The fair value measurement of the reporting unit is classified as Level 3 in the fair value hierarchy because it involves significant unobservable inputs. The Company reconciled the resulting fair value of its reporting unit to the market capitalization of the Company to corroborate the fair value estimate used in the impairment test. The result of the interim impairment test indicated that the estimated fair value of the reporting unit was less than its carrying value. As a result, the Company 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. F-40 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Changes in the carrying amount of goodwill consisted of the following (in thousands): As of December 31, 2024 2023 Beginning balance $ 49,238 $ 60,210 Goodwill impairment (accumulated impairment loss) ( 47,858 ) — Deconsolidation of Zymergen — ( 10,660 ) Measurement period adjustments (1) — ( 2,120 ) Impact of foreign currency translation ( 1,380 ) 1,808 Ending balance $ — $ 49,238 (1) Primarily related to the Zymergen acquisition. See Note 4 for a description. Intangible assets, net consisted of the following (in thousands): Gross Carrying Value (1) Accumulated Amortization (1) Net Carrying Value Weighted Average Amortization Period (in Years) December 31, 2024: Developed technology $ 111,393 $ ( 38,883 ) $ 72,510 6.6 December 31, 2023: Developed technology $ 105,279 $ ( 22,663 ) $ 82,616 8.8 Customer relationships 380 ( 261 ) 119 0.9 Assembled workforce 190 ( 184 ) 6 0.3 Total $ 105,849 $ ( 23,108 ) $ 82,741 (1) Gross carrying value and accumulated amortization include the impact of cumulative foreign currency translation adjustments. During the year ended December 31, 2024, the increase in gross intangible assets was primarily attributable to the acquisition of $ 18.2 million in developed technology from AgBiome, partially offset by a $ 8.3 million decrease in developed technology intangible assets due to the deconsolidation of Altar (see Note 4 ). During the year ended December 31, 2023, gross intangible assets decreased $ 16.7 million due to the deconsolidation of Zymergen (see Note 4 ). Amortization expense was $ 18.0 million, $ 15.7 million and $ 5.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. The estimated future amortization expense for intangible assets remaining as of December 31, 2024 is as follows (in thousands): 2025 $ 18,896 2026 18,896 2027 11,260 2028 2,633 2029 2,633 Thereafter 18,192 Total $ 72,510 9. Leases The Company leases real estate for office and lab space as well as equipment used in research and development activities under operating and finance leases. F-41 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The Company’s real estate leases have initial lease terms ranging from 17 months to 15.3 years and are all classified as operating. Real estate leases may contain periods of free rent, tenant improvement incentives, expansion options, rent escalation clauses at pre-determined rates or at the prevailing market rates at the time of the increase, and options to extend or terminate the lease without cause at the option of either party during the lease term. The Company is not reasonably certain to exercise these options at the commencement of the lease. Equipment leases have initial lease terms ranging from 26 to 60 months and are classified as operating or finance if the lease contains bargain purchase options which the Company is reasonably certain to exercise. Variable lease cost for real estate leases primarily consists of certain non-lease components such as real estate taxes, insurance and common area maintenance charges. These non-lease components are typically variable in nature and are recognized as lease expense in the period in which they arise. None of the Company's lease agreements contain material restrictive covenants or residual value guarantees. The Company's headquarters are located in the Seaport district of Boston, Massachusetts and comprise a set of non-cancellable operating leases within a facility totaling over 320,000 square feet of office and laboratory space. These leases expire on dates ranging from 2030 to 2036 and each contain one option to extend the lease for a five-year period at then-market rates. Of this 320,000 square feet, 27,000 is currently subleased. In April 2021, the Company entered into a lease, as amended, consisting of approximately 260,000 rentable square feet of new office and laboratory space being developed in Boston, Massachusetts near the Company's headquarters. The lease commenced on April 11, 2024, with rent payments beginning in June 2024, and it will expire on the fifteenth anniversary of the rent commencement date. The lease includes an option to extend for an additional ten years at then-market rates, as well as an expansion option if the owner constructs an additional building on the property. The Company has a substantial amount of excess space and is seeking to sublease excess space consistent with its restructuring plan. The leased facilities continue to be included in the Cell Engineering asset group as they have not been abandoned and do not have separately identifiable cash flows. If the Company enters into subleases at rates that are below the existing lease minimum payments, terminates or amends existing leases, or abandons the leased facilities, the right-of-use lease assets and any associated leasehold improvements would be evaluated for potential impairment and impairment charges could be material. In September 2023, the Company’s former subsidiary, Zymergen, ceased the use of and exited a leased facility consisting of approximately 300,000 square feet of office and laboratory space in Emeryville, California. The facility was used pursuant to an operating lease with a minimum term expiring in August 2033. Zymergen’s exit resulted in an impairment loss of $ 96.2 million, including $ 36.6 million for the right-of-use asset and $ 59.6 million for the related leasehold improvements. The impairment loss represents the amount by which the carrying value of the assets exceed their estimated fair values, as determined using a discounted cash flow model under the income approach. The fair value measurements are based on significant inputs not observable in the market and therefore represent Level 3 fair value measurements. The key inputs used in the valuation were estimated sublease rental income and a discount rate of 8.5 %. The impairments are presented as impairment of lease assets in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. F-42 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The following table presents the components of total lease cost (in thousands): Year Ended December 31, 2024 2023 2022 Operating lease cost $ 57,996 $ 59,588 $ 35,242 Finance lease cost: Amortization of ROU assets 655 1,047 1,871 Interest on lease liabilities 29 79 104 Finance lease cost 684 1,126 1,975 Variable lease cost 19,421 15,862 8,879 Sublease income ( 5,177 ) ( 11,170 ) ( 5,190 ) Total lease cost $ 72,924 $ 65,406 $ 40,906 Supplemental cash flow information related to the Company’s operating leases were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 45,019 $ 44,051 $ 13,587 Operating cash flows from finance leases 32 83 92 Financing cash flows from finance leases 897 1,295 1,237 Supplemental balance sheet information related to operating leases were as follows: As of December 31, 2024 2023 Weighted average remaining lease term - operating leases (in years) 11.8 10.1 Weighted average remaining lease term - finance leases (in years) 0.6 1.5 Weighted average discount rate - operating leases 7.5 % 7.1 % Weighted average discount rate - finance leases 3.8 % 3.7 % The following table summarizes the maturity of the Company’s lease liabilities (in thousands): Years Ending December 31, Operating Leases Finance Leases 2025 $ 61,225 $ 333 2026 56,218 17 2027 56,683 — 2028 58,431 — 2029 60,199 — Thereafter 430,919 — Total undiscounted payments 723,675 350 Less: imputed interest ( 256,279 ) 11 Total lease liability 467,396 361 L ess: current portion of lease liability ( 28,630 ) ( 335 ) L ease liabilities, non-current $ 438,766 $ 26 The Company subleases a portion of its office and lab space to certain of its equity method investees, which are considered related parties. These lease agreements generally have lease terms of up to 5 years and may include renewal options. Related party sublease income for the years ended December 31, 2024, 2023 and 2022 was $ 2.0 million, $ 2.1 million and F-43 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements $ 3.5 million, respectively, included within other income, net in the consolidated statements of operations and comprehensive loss. 10. Supplemental Financial Information Cash, Cash Equivalents and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the totals shown within the consolidated statements of cash flows is as follows (in thousands): As of December 31, 2024 2023 2022 Cash and cash equivalents $ 561,572 $ 944,073 $ 1,315,792 Restricted cash included in prepaid expenses and other current assets (1) 5,839 4,789 8,221 Restricted cash included in other non-current assets (1) 38,332 40,722 45,568 Total cash, cash equivalents and restricted cash $ 605,743 $ 989,584 $ 1,369,581 (1) Includes cash balances collateralizing letters of credit associated with the Company’s facility leases and customer prepayments requiring segregation and restrictions in its use in accordance with the customer agreement. Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following (in thousands): As of December 31, 2024 2023 Lab equipment $ 150,887 $ 147,185 Leasehold improvements 135,964 71,564 Buildings and facilities 48,255 47,034 Construction in progress 1,984 15,830 Computer equipment and software 14,897 14,780 Furniture and fixtures 6,545 6,458 Land 6,060 6,060 Total property, plant, and equipment 364,592 308,911 Less: Accumulated depreciation ( 160,872 ) ( 120,718 ) Property, plant and equipment, net $ 203,720 $ 188,193 Depreciation expense for the years ended December 31, 2024, 2023 and 2022 totaled $ 45.0 million, $ 54.8 million and $ 36.9 million, respectively. During the year ended December 31, 2024, the Company determined that $ 5.8 million of construction in progress assets were impaired and this loss is included in general and administrative expense in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2023, the Company identified excess lab equipment at two of its facilities whereby the assets were sold, classified as held for sale or otherwise impaired, resulting in aggregate impairment losses of $ 25.2 million, included in general and administrative expense in the consolidated statements of operations and comprehensive loss. F-44 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, 2024 2023 Operating lease liabilities $ 28,630 $ 16,419 Employee compensation and benefits 9,894 15,678 Contingent consideration liability 5,438 18,468 Biosecurity costs 4,032 3,564 Deferred other income 2,889 4,009 Employee termination costs 2,387 — Professional fees and securities litigation costs 2,167 27,884 External research and development expenses 713 2,739 Finance lease liabilities 335 1,055 Property and equipment 138 2,667 Other current liabilities 8,764 17,568 Accrued expenses and other current liabilities $ 65,387 $ 110,051 Supplemental cash flow information The following table presents supplemental cash flow information for each reporting period (in thousands): Year Ended December 31, 2024 2023 2022 Cash paid for interest $ 32 $ 83 $ 92 Cash paid for income taxes 894 670 — Non-cash investing and financing activities: ROU assets obtained in exchange for new operating lease liabilities upon adoption of ASC 842 $ — $ — $ 147,744 ROU assets obtained in exchange for new finance lease liabilities upon adoption of ASC 842 — — 3,397 ROU assets obtained in exchange for new operating lease liabilities 223,853 27,668 79,984 ROU assets obtained in exchange for new finance lease liabilities — — 1,729 Purchase of minority interest in Cooksonia — — 7,390 Purchases of property and equipment included in accounts payable and accrued expenses 2,565 2,915 12,881 Equity received in related parties — — 8,873 Convertible financial instruments received for Cell Engineering services — 4,542 29,074 Equity securities and warrants received for Cell Engineering services 55 17,450 3,423 Non-cash consideration paid for the acquisition of Zymergen — — 231,750 Common stock issued for acquisitions 18,245 6,820 40,382 Acquisition date fair value of contingent consideration liability — — 19,912 Common stock issued as settlement of contingent consideration liabilities 14,742 8,896 — Common stock issued for retention payments related to business and asset acquisitions 5,258 — — Return of investment in equity securities for reduction in deferred revenue 6,760 — — Conversion of notes receivable for common stock 10,476 — — Equity issuance costs in accounts payable and accrued expenses — — 578 F-45 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements 11. Commitments and Contingencies Purchase Obligations On August 29, 2023, the Company entered into a five-year strategic cloud and artificial intelligence (“AI”) partnership with Google Cloud, intended to enable the Company to develop and deploy AI tools for biology and biosecurity. The partnership includes minimum annual commitments over the contract year ending August 31 to purchase cloud hosting services in exchange for various discounts on such services. The minimum annual commitments are as follows: year 1, $ 8.0 million; year 2, $ 28.0 million; year 3, $ 54.0 million; year 4, $ 86.0 million; and year 5, $ 113.0 million. The Company purchased $ 11.6 million in year 1 of the contract and currently expects to have a shortfall in year 2. The minimum commitments may be terminated by the Company upon payment of a cancellation fee representing a percentage of the remaining purchase commitment. If the Company is unable to negotiate a modification to the annual commitments that align with its projected requirements, material losses could be incurred. As of December 31, 2024, the aggregate remaining purchase commitment was $ 279.3 million. The Company also entered into an agreement pursuant to which Google Cloud will provide up to $ 56.3 million in cash funding upon the Company’s achievement of certain milestones by the target completion dates through September 2026. The costs of Google Cloud services are recorded as research and development expenses as incurred in the accompanying consolidated statements of operations and comprehensive loss. Milestone payments received are recognized as a reduction of the associated Google Cloud services costs within research and development expenses when achieved. The first two milestones are initially recognized as liabilities until they become non-refundable upon the Company's achievement of a certain milestone. As of December 31, 2024, the Company has received three milestone payments totaling $ 10.0 million, with $ 5.0 million recorded as a reduction to research and development expenses during the year ended December 31, 2024 and $ 5.0 million recorded as other non-current liability on the balance sheet. On March 31, 2022, the Company entered into a four-year supply agreement with Twist for the purchase of diverse products including synthetic DNA. The agreement is effective as of April 1, 2022 and obligates the Company to spend a minimum of $ 58.0 million over the four-year term with the following minimum annual commitments (each annual year is defined as April 1 to March 31): year 1, $ 10.0 million; year 2, $ 13.0 million; year 3, $ 16.0 million; and year 4, $ 19.0 million. During the contract period ended March 31, 2024, the Company purchased $ 13.0 million and currently expects to have a shortfall for year 3 of the contract. If the Company is unable to negotiate a modification to the annual commitments that align with its expected requirements, losses could be incurred. As of December 31, 2024, the aggregate remaining purchase commitment was $ 29.6 million. Contingent Consideration Related to Asset Acquisitions In connection with the StrideBio acquisition (see Note 4 ), the Company is obligated to make royalty payments of up to $ 21.3 million payable in cash or shares of Class A common stock at the Company's election until the earlier of the tenth anniversary date of the initial closing and the date on which the aggregate amount of the royalty payments equals the amount cap. The royalties are calculated based on 10 % of the net licensing revenue and 40 % of all consideration received for a license or sale of a product incorporating the acquired platform assets. No amounts for the royalty payments have been recorded during the years ended December 31, 2024 and 2023. The Company routinely acquires rights to intellectual property that may provide for payment of future contingent consideration, including royalties, should revenue be generated from the use of such. Legal Proceedings From time to time, the Company may in the ordinary course of business be named as a defendant in lawsuits, indemnity claims and other legal proceedings. The Company accrues for a loss contingency when it concludes that the likelihood of a loss is probable and the amount of loss can be reasonably estimated. The Company adjusts its accruals from time to time as it receives additional information. The Company does not believe any pending litigation to be material, or that the outcome of any such pending litigation, in management’s judgment based on information currently available, would have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Indemnification Agreements The Company enters into standard indemnification agreements and has agreements with indemnification clauses in the ordinary course of business. Under such arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, who are generally the Company’s business partners. The terms of these indemnification arrangements are generally perpetual and effective any time after contract F-46 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements execution. The maximum potential liability resulting from these indemnification arrangements may be unlimited. The Company has never incurred costs to defend lawsuits or settle claims as a result of such indemnifications and the Company is not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations as of December 31, 2024. 12. Stockholders' Equity Capitalization The following table presents the Company’s authorized, issued, and outstanding common stock as of the dates indicated: Authorized Issued Outstanding Common stock as of December 31, 2024 Class A 10,500,000,000 45,575,423 42,696,585 Class B 4,500,000,000 9,239,682 8,669,200 Class C 800,000,000 3,000,000 3,000,000 15,800,000,000 57,815,105 54,365,785 Common stock as of December 31, 2023 Class A 10,500,000,000 40,997,131 38,126,447 Class B 4,500,000,000 9,477,690 8,906,426 Class C 800,000,000 3,000,000 3,000,000 15,800,000,000 53,474,821 50,032,873 Shelf Registration Statement On October 4, 2022, the Company filed with the Securities and Exchange Commission (“SEC”) a shelf registration statement on Form S-3 (File No. 333-267743), which was declared effective on October 14, 2022. Under the shelf registration, the Company may offer and sell from time to time, in one or more series or issuances and on terms determined at the time of the offering, any combination of its Class A common stock, preferred stock, warrants and/or units up to an aggregate amount of $ 500 million. As of December 31, 2024, approximately $ 400 million remain available under the shelf registration. Underwritten Public Offering On November 15, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with BTIG, LLC (the “Underwriter”), pursuant to which the Company agreed to issue and sell to the Underwriter an aggregate of 1,034,597 shares at a public offering price of $ 96.66 per share, representing an underwriting discount of 9 %. Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option exercisable for 30 days to purchase up to an additional 155,190 shares of its Class A common stock, which expired unexercised. The shares were sold pursuant to an effective shelf registration statement on Form S-3 (File No. 333-267743) and a related prospectus supplement filed with the SEC. The net proceeds to the Company from the offering was approximately $ 98.9 million, after deducting offering expenses. The net proceeds of this offering were used to offset the cash used to finance the acquisition of certain of the assets and liabilities of Bayer and for other general corporate purposes. Preferred Stock The Company is authorized to issue 200 million shares of preferred stock with a par value $ 0.0001 per share. The Company’s board of directors are authorized, without stockholder approval, to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, voting, and other rights, preferences and privileges of the shares. There were no issued and outstanding shares of preferred stock as of December 31, 2024. F-47 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Common Stock The Company is authorized to issue 15,800 million shares of common stock, including 10,500 million shares of Class A common stock, par value $ 0.0001 per share, 4,500 million shares of Class B common stock, par value $ 0.0001 per share, and 800 million shares of Class C common stock, par value $ 0.0001 per share. Voting Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to ten votes per share. Holders of Class C common stock are not entitled to vote except as otherwise expressly provided in the certificate of incorporation or required by applicable law. Dividends Common stockholders are entitled to receive dividends, as may be declared by the board of directors. Different classes of common stock are legally entitled to equal per share distributions whether through dividends or liquidation. No dividends have been declared to date. Conversion Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. Generally, shares of Class B common stock will convert automatically into Class A common stock upon the holder ceasing to be an Eligible Holder (i.e., director, employee, trust or legal entity of Ginkgo), unless otherwise determined by affirmative vote of a majority of independent directors of Ginkgo. Common Stock Reserved for Future Issuances The Company had the following common stock reserved for future issuance as of the date indicated: December 31, 2024 Shares available for grant under the 2021 Plan 4,868,329 Restricted stock units outstanding 3,327,398 Warrants to purchase Class A common stock 1,295,622 Shares available for grant under the ESPP 1,965,466 Shares available for grant under the 2022 Inducement Plan 186,770 Stock options issued and outstanding 767,520 Total common stock reserved for future issuances (1) 12,411,105 (1) Excludes unvested earnout shares, which are restricted shares issued to equity holders of legacy Ginkgo prior to the closing of the SRNG Business Combination and to SRNG. These earnout shares are recorded in equity as shares outstanding upon satisfying the vesting conditions. 13. Stock-Based Compensation The following table summarizes stock-based compensation expense by financial statement line item in the Company’s consolidated statements of operations and comprehensive loss for the periods presented (in thousands): Year Ended December 31, 2024 2023 2022 Research and development $ 56,020 $ 145,879 $ 731,996 General and administrative 56,324 84,005 1,198,645 Total $ 112,344 $ 229,884 $ 1,930,641 2022 Inducement Plan On October 16, 2022, the Company's Board of Directors adopted the Ginkgo Bioworks Holdings, Inc. 2022 Inducement Plan (the “2022 Inducement Plan”), which is a non-shareholder approved equity incentive plan adopted pursuant to the F-48 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements “inducement exception” provided under NYSE Listed Company Manual Section 303A.08. Pursuant to the terms of the 2022 Inducement Plan, the Company may grant nonstatutory stock options, stock appreciation rights, restricted stock units, restricted stock and other stock-based awards as an inducement material to individuals being hired or rehired following a bona fide period of interruption of employment, as an employee of the Company or any of its subsidiaries, including in connection with a merger or acquisition. The terms of the 2022 Inducement Plan are substantially similar to the terms of the Company’s 2021 Incentive Award Plan. The Company has reserved 625,000 shares of the Company’s common stock (which may be shares of Class A common stock or Class B common stock) for issuance under the 2022 Inducement Plan. As of December 31, 2024, 186,770 shares are available for future issuance under the 2022 Inducement Plan. 2021 Inc entive Award Plans On September 16, 2021, the 2021 Incentive Award Plan (the “2021 Plan”) became effective. The 2021 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and nonqualified stock options, stock appreciation rights, restricted stock, dividend equivalents, RSUs and other stock or cash-based awards to employees, consultants and directors of Ginkgo and its subsidiaries. The aggregate number of shares of common stock available for issuance under the 2021 Plan, which may be issued as Class A common stock and/or Class B common stock, was initially 5,011,024 shares. As of December 31, 2024, 4,868,329 shares are available for future issuance under the 2021 Plan. The number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase for ten years on January 1 of each year in an amount equal to the lesser of (a) 4 % of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by the Board. The maximum number of shares of common stock that may be issued pursuant to the exercise of incentive stock options granted under the 2021 Plan is 5,000,000 shares. Shares issued under the 2021 Plan may consist of authorized but unissued shares, shares purchased on the open market or treasury shares. 2021 Employee Stock Purchase Plan On September 16, 2021, the 2021 Employee Stock Purchase Plan (the “ESPP”) became effective. The ESPP authorizes (i) the grant of options that are intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code of 1986 (the “Section 423 Component”) and (ii) the grant of options that are not intended to be tax-qualified (the “Non-Section 423 Component”). All of the Company’s employees are expected to be eligible to participate in the ESPP. However, with respect to the Section 423 Component, an employee may not be granted rights to purchase stock under the ESPP if the employee, immediately after the grant, would own (directly or through attribution) stock possessing 5 % or more of the total combined voting power or value of all classes of the Company’s common stock. The ESPP initially permits the Company to deliver up to 500,000 shares of common stock pursuant to awards issued under the ESPP, which may be Class A common stock and/or Class B common stock. The number of shares of common stock reserved for issuance under the ESPP will automatically increase each January 1 by an amount equal to the lesser of (a) 1 % of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by the Board, provided that no more than 2,500,000 shares may be issued under the Section 423 Component. Prior to or in connection with issuing any shares of common stock under the ESPP, the ESPP administrator may convert awards covering shares of Class B common stock to Class A common stock. As of December 31, 2024, no awards have been granted under the ESPP, and 1,965,466 shares remain available for future issuance. 2014 Stock Incentive Plan The 2014 Stock Incentive Plan (the “2014 Plan”) provided for the Company to grant options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other stock-based awards. From and after the effective date of the 2021 Incentive Award Plan, the Company ceased granting awards under the 2014 Plan. However, the 2014 Plan continues to govern the terms and conditions of the outstanding awards previously granted thereunder. Shares of common stock underlying any awards that are forfeited, cancelled, repurchased, or otherwise terminated by the Company under the 2014 Plan will be added back to the shares available for issuance under the 2021 Incentive Award Plan. Time-based Stock Options All time-based options outstanding consist of awards granted to non-employee directors and are of two types: (i) initial awards granted to newly elected or appointed directors, which vest in three equal annual installments, and (ii) subsequent F-49 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements awards, which vest on the earlier of the first anniversary of the grant date or the day prior to the next annual shareholder meeting. These options expire no later than ten years from the grant date. The exercise price of each option is equal to the closing price of the Company’s common stock on the date of grant. A summary of time-based stock options activity for the year ended December 31, 2024 is presented below: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (1) Outstanding as of December 31, 2023 151,232 $ 35.59 Granted 246,700 14.72 Exercised ( 101,976 ) 0.80 Forfeited ( 28,436 ) 77.36 Outstanding as of December 31, 2024 267,520 25.17 9.21 $ 138 Exercisable as of December 31, 2024 33,547 94.75 6.53 — (1) The aggregate intrinsic value is calculated as the difference between the Company's closing stock price on the last trading day of the year and the exercise prices, multiplied by the number of in-the-money stock options. The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 0.9 million, $ 9.1 million and $ 21.5 million, respectively. The weighted-average fair value of options granted during the years ended December 31, 2024, 2023, and 2022 was $ 11.35 , $ 57.20 and $ 76.80 per share, respectively, and was calculated using the following key assumptions in the Black-Scholes option-pricing model: Year Ended December 31, 2024 2023 2022 Risk-free interest rate 4.27 % 3.94 % 3.13 % Expected volatility 97 % 93 % 77 % Expected term (in years) 5.7 5.5 5.6 Dividend yield — % — % — % As of December 31, 2024, there was $ 1.8 million of unrecognized compensation expense related to options recognizable over a weighted-average period of 1.7 years. Market-based Stock Options In April 2024, the Company granted to each of the Company's four founders an option to purchase in aggregate 125,000 shares of Ginkgo's Class A common stock with an exercise price of $ 100 per share, subject both to time-based and market-based vesting criteria (the “Founder Options”). The market-based vesting is tied to the achievement of four specified stock price hurdles within a five-year period, with 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 200 , 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 300 , 20 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 400 and the remaining 60 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 500 . If the market-based criteria are achieved during the five-year period, the awards will vest on the five-year anniversary of the grant date. F-50 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The weighted-average grant-date fair value of the options granted was $ 7.80 per share and was calculated using a Monte Carlo simulation model with the following assumptions : Year Ended December 31, 2024 Risk-free interest rate 4.65 % Expected volatility 72 % Suboptimal exercise multiple 2.8 Dividend yield — % As of December 31, 2024, there was $ 3.4 million of unrecognized compensation expense related to the market-based options recognizable over a weighted-average period of 4.3 years. Restricted Stock Units RSUs granted under the 2014 Plan are subject to two vesting conditions: (i) a service-based vesting condition, generally satisfied over four years with 25 % of the shares vesting on the first anniversary of the grant date and monthly vesting thereafter, and (ii) a performance-based vesting condition, which was met in 2021 in connection with the Company's merger with SRNG. RSUs granted under the 2021 Plan are subject only to the service-based vesting condition. A summary of RSU activity for the year ended December 31, 2024 is presented below: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of December 31, 2023 3,805,093 $ 125.89 Granted 3,077,650 43.81 Vested ( 1,672,658 ) 139.26 Forfeited ( 1,882,687 ) 80.77 Nonvested as of December 31, 2024 3,327,398 69.00 The weighted average grant date fair value of RSUs granted during the years ended December 31, 2024, 2023 and 2022 was $ 43.81 , $ 55.60 and $ 127.60 , respectively. The total fair value of the RSUs that vested during the years ended December 31, 2024, 2023 and 2022 was $ 232.9 million, $ 365.3 million and $ 1,783.8 million, respectively. The total amount of share-based liabilities settled was $ 9.8 million for the year ended December 31, 2022. As of December 31, 2024, there was $ 189.8 million of unrecognized compensation expense related to RSUs recognizable over a weighted-average period of 2.6 years. Earnouts Earnout shares represent equity awards, primarily in the form of restricted stock, granted to existing employees of the Company as of the closing date of the Company's merger with SRNG on September 16, 2021 (the “Closing Date”). These earnout shares are subject to the same time-based vesting and performance conditions (change in control or an initial public offering) as the underlying awards, including provisions related to vesting and termination. Additionally, the earnout shares are subject to a market condition, which is satisfied when the trading price of the Company's common stock is greater than or equal to $ 500 , $ 600 , $ 700 and $ 800 per share for any 20 trading days within a 30 consecutive trading day period, on or before the fifth anniversary of the Closing Date (collectively, the “Earnout Targets”). The first Earnout Target of $ 500 per share was achieved on November 15, 2021. F-51 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements A summary of activity during the year ended December 31, 2024 for the earnout shares is presented below: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of December 31, 2023 564,227 $ 511.17 Vested ( 8,466 ) 533.60 Forfeited ( 3,304 ) 515.30 Nonvested as of December 31, 2024 552,457 510.80 The total fair value of the earnout shares that vested during the years ended December 31, 2024, 2023 and 2022 was $ 4.5 million, $ 7.6 million and $ 52.0 million, respectively. As of December 31, 2024, there was $ 0.2 million of unrecognized compensation expense related to earnout shares recognizable over a weighted-average period of 0.5 years. 14. Revenue Recognition Disaggregation of Revenue The following table sets forth the percentage of Cell Engineering revenues by industry based on total Cell Engineering revenue: Year Ended December 31, 2024 2023 2022 Food and nutrition 32 % 16 % 9 % Pharmaceutical and biotechnology 26 30 22 Agriculture 19 24 8 Government and defense 13 6 4 Industrial and environment 6 16 12 Consumer and technology 4 8 45 Total Cell Engineering revenue 100 % 100 % 100 % Cell Engineering revenue includes both cash and non-cash consideration. The non-cash consideration primarily consists of equity received from customers as partial or full payment in certain contracts, which is recognized as revenue as services are provided or upon contract termination. The Company did not receive equity as consideration for any customer contracts entered into during the year ended December 31, 2024, but continues to recognize revenue from prior contracts. Cell Engineering revenue recognized relating to non-cash consideration was $ 61.4 million, $ 48.5 million, and $ 75.8 million for the years ended December 31, 2024, 2023, and 2022, respectively. The Company’s total revenue is derived from customers located primarily in the United States. For the years ended December 31, 2024, 2023, and 2022, the Company’s revenue from customers within the United States comprised 81 %, 82 % and 88 %, respectively, of total revenue. Contract Balances The Company recognizes a contract asset when the Company transfers goods or services to a customer before the customer pays consideration or before payment is due, excluding any amounts presented as accounts receivable. The Company had no contract asset balances as of December 31, 2024 and 2023. The Company’s accounts receivable consists of both billed and unbilled amounts. Unbilled receivables arise when revenue is recognized in excess of invoiced amounts and represent the Company’s unconditional right to consideration for goods or services already transferred to the customer. The balance of unbilled accounts receivable, included in accounts receivable, net in the accompanying consolidated balance sheets, was $ 11.3 million and $ 10.1 million as of December 31, 2024 and 2023, respectively. F-52 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Contract liabilities, or deferred revenue, primarily consist of payments received in advance of performance under the contract or when the Company has an unconditional right to consideration under the terms of the contract before it transfers goods or services to the customer. The Company’s collaborative arrangements with its investees and related parties typically include upfront payments consisting of cash or non-cash consideration for future research and development services and non-cash consideration in the form of convertible financial instruments and equity securities for licenses that will be transferred in the future. The Company records the upfront cash payments and fair value of the convertible financial instruments and equity securities as deferred revenue. The Company also invoices customers based on contractual billing schedules, which results in the recording of deferred revenue to the extent payment is received prior to the Company’s performance of the related services. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. During the year ended December 31, 2024, the Company recognized $ 88.1 million of revenue that was included in the contract liabilities balance of $ 202.5 million as of December 31, 2023. During the year ended December 31, 2023, the Company recognized $ 65.9 million of revenue that was included in the contract liabilities balance of $ 222.6 million as of December 31, 2022. Performance Obligations The aggregate amount of the transaction price that was allocated to performance obligations that have not yet been satisfied or are partially satisfied as of December 31, 2024 and 2023 was $ 85.8 million and $ 110.0 million, respectively. The Company has elected the practical expedient not to provide the remaining performance obligation disclosures related to contracts for which the Company recognizes revenue on a cost-plus basis in the amount to which it has the right to invoice. As of December 31, 2024, approximately $ 45.9 million of the unsatisfied or partially satisfied performance obligations is expected to be recognized as revenue in 2025, based on the projected customer program end date; $ 14.2 million between 2025 and 2026; and $ 25.7 million between 2025 and 2027. When a milestone subject to the variable consideration constraint is achieved, the Company updates its estimate of the transaction price to include the milestone payment and records a cumulative catch-up in revenue. For the years ended December 31, 2024, 2023 and 2022, the Company recorded $ 7.2 million, $ 2.3 million and $ 10.0 million, respectively, as cumulative catch-up in revenue, primarily due to the recognition of previously constrained variable consideration related to milestones or a contract modification. 15. Segment Information The Company operates in two operating and reportable segments: Cell Engineering and Biosecurity. This structure reflects the Company's internal management framework and the approach its CODM uses to evaluate operating results and allocate resources. The Company’s reportable segments are described as follows: • Cell Engineering consists of end-to-end cell engineering solutions and cell engineering tools offerings for biological R&D. The Company’s cell engineering platform includes two core assets: the Foundry, a highly efficient biology laboratory powered by proprietary workflows, custom software, robotic automation, and data science and analytics, and the Codebase, a collection of biological “parts” and a database of biological data used to program cells. The Cell Engineering segment includes costs incurred for the development, operation, expansion and enhancement of the Foundry and Codebase. Cell Engineering revenue is generated primarily through service fees and downstream value share in the form of milestone payments, royalties or equity interests. • Biosecurity consists of the Company’s biomonitoring and bioinformatics support services, offered to both government and non-government customers through the Company's two core offerings: Canopy and Horizon. Biosecurity revenue is generated from fees for data, analytics, and services. Prior to 2024, Biosecurity revenue also included sales of COVID-19 diagnostic and sample collection test kits. The Company's reportable segments are those for which discrete financial information is available and whose results are regularly provided to the Company’s CODM, consisting of the Chief Executive Officer and the Chief Operating Officer, for the purpose of allocating resources and assessing financial performance. The CODM evaluates the financial performance of the Company’s segments based on segment operating income (loss). The CODM is primarily provided with the segment operating income (loss) on a quarterly basis, as well as during the annual budgeting and forecasting process, and uses this information to monitor the Company’s performance, including budget-to-actual results, and to make decisions about the allocation of operating and capital resources to each segment. For management reporting purposes, the F-53 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Company’s measure of segment operating income (loss) excludes the impact of stock-based compensation expense, depreciation and amortization, asset impairment charges, restructuring charges, costs associated with excess space, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, and acquired in-process research and development expenses. The Company has determined its significant segment expenses are cost of revenue for Biosecurity, research and development expenses for Cell Engineering, and general and administrative expenses for both segments, which are regularly provided to the CODM. The CODM is not provided with asset information by segment; therefore, such information is not presented. The accounting policies used to prepare the reportable segments financial information are the same as those used to prepare the Company’s consolidated financial statements. The following table presents summary results of the Company’s reportable segments and a reconciliation of total segment operating loss to consolidated loss before income taxes (in thousands): Year Ended December 31, 2024 2023 2022 Cell Engineering Revenue $ 173,972 $ 143,531 $ 143,666 Costs and operating expenses: Cost of other revenue 5,999 — — Research and development 271,512 335,943 259,607 General and administrative 115,028 171,210 133,239 Cell Engineering operating loss ( 218,567 ) ( 363,622 ) ( 249,180 ) Biosecurity Service revenue 53,071 78,975 298,585 Product revenue — 28,949 35,455 Costs and operating expense: Cost of Biosecurity service revenue 38,549 46,524 183,570 Cost of Biosecurity product revenue — 7,481 20,646 Research and development 771 1,599 1,937 General and administrative 44,370 55,514 56,353 Biosecurity operating (loss) income ( 30,619 ) ( 3,194 ) 71,534 Total segment operating loss ( 249,186 ) ( 366,816 ) ( 177,646 ) Reconciling items to reconcile total segment operating loss to loss before income taxes: Stock-based compensation (1) 115,299 234,908 1,940,920 Impairment expense (2) 53,654 121,404 — Depreciation and amortization 63,020 70,507 42,552 Restructuring charges (3) 24,172 — — Carrying cost of excess space (net of sublease income) (4) 25,986 — — Merger and acquisition related expenses (5) 4,417 61,188 46,229 Acquired in-process research and development 19,849 9,582 1,605 Other (income) expense, net (6) ( 8,075 ) 28,535 ( 87,553 ) Loss before income taxes $ ( 547,508 ) $ ( 892,940 ) $ ( 2,121,399 ) (1) Includes $ 3.0 million, $ 5.0 million, and $ 10.3 million in related employer payroll taxes for the years ended December 31, 2024, 2023, and 2022, respectively. (2) For 2024, includes $ 47.9 million related to goodwill impairment and $ 5.8 million related to lab equipment. 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. (3) See Note 3 , Restructuring, for composition of costs. F-54 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements (4) The carrying cost of excess space includes base rent, common area maintenance charges, and real estate taxes associated with facilities the Company is not occupying, net of any sublease income from these spaces. (5) Represents transaction and integration costs directly related to mergers and acquisitions, including: (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. (6) Includes interest income, interest expense, loss on investments, losses/gains on deconsolidation of subsidiaries, changes in fair value of certain assets and liabilities, and other gains or losses. 16. Significant Collaboration Transactions with Related Parties BiomEdit, LLC In April 2022, the Company, along with one of its investors and third-party investors, including Elanco Animal Health Inc. (“Elanco”), launched BiomEdit, LLC (“BiomEdit”), a microbiome innovation company that intends to discover, design and develop novel probiotics, microbiome derived bioactives and engineered microbial medicines in the field of animal health. Concurrently with the launch, the Company entered into (i) an Intellectual Property Contribution Agreement (“BiomEdit IP Agreement”) that granted BiomEdit a license to certain of the Company’s intellectual property, (ii) a Technical Development Agreement (“BiomEdit TDA”) that establishes the terms under which the Company will provide technical research and development services, and (iii) a Common Unit Issuance Agreement (“BiomEdit CUIA”) which compensates the Company for its intellectual property contribution. Contemporaneous with these agreements, BiomEdit entered into a Series A Preferred Unit Purchase Agreement under which it sold 6.7 million Series A preferred units to one of the Company’s investors and a third-party investor, for aggregate proceeds of approximately $ 32.5 million. After the initial closing, BiomEdit may issue up to an additional 1.5 million Series A preferred units (the “Additional Units”) to one or more purchasers reasonably acceptable to the existing holders of Series A preferred units. In a subsequent closing in 2023, BiomEdit sold 0.8 million Additional Units for aggregate proceeds of $ 4.0 million and closed its Series A preferred unit financing. Under the BiomEdit IP Agreement, the Company licensed certain intellectual property to BiomEdit for use in the development or production of BiomEdit’s products that the parties will subsequently agree to research and develop under technical development plans (“TDP”). The license rights provide BiomEdit with the ability to commercialize the specified products from the corresponding TDP under the BiomEdit TDA. In return for the license to the intellectual property, BiomEdit issued the Company 3.9 million common units upon execution of the BiomEdit CUIA, with 0.7 million of those units subject to forfeiture in the event BiomEdit does not sell all of the Additional Units. Under the BiomEdit TDA, the parties jointly agree on TDPs, through equal representation on a joint steering committee, under which the Company will perform agreed-upon research and development services in return for consideration on a fixed fee or cost-plus basis for all services provided. Accounting Analysis The common unit investment in BiomEdit is considered an equity method investment as a result of the Company’s ability to exercise significant influence over BiomEdit’s financial and operating policies through its ownership of common units. The initial carrying value of the equity method investment in BiomEdit is the fair value of the nonforfeitable common units of $ 8.9 million received in exchange for the BiomEdit IP Agreement which, as discussed below, is being accounted for as non-cash consideration under ASC 606. The Company determined that the 0.7 million common units held by Ginkgo subject to forfeiture are considered variable consideration that is fully constrained at contract inception until the contingencies related to the issuance of the additional shares are resolved. Upon the closing of BiomEdit's Series A preferred unit financing in 2023, Ginkgo forfeited 0.3 million common units and retained 0.4 million common units for total consideration of $ 1.1 million. The fair value of BiomEdit’s common units was determined at inception of the agreements using the option pricing method. The option pricing method used a back-solve methodology to infer the total equity value based on the pricing of the Series A preferred unit financing, which was contemporaneous with the BiomEdit IP Agreement. The Series A preferred units issued by BiomEdit receive a liquidation preference prior to common units. As such, the Company concluded that this represents a substantive profit-sharing arrangement, and the Company is recognizing earnings and losses on the equity method investment using the HLBV method. The Company recorded a $ 1.5 million loss on its equity method investment in BiomEdit during the year ended December 31, 2023, which reduced the carrying value of the F-55 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements equity method investment in BiomEdit to zero . There is no commitment for the Company to provide further financial support to BiomEdit, and therefore the carrying value of the equity method investment will not be reduced below zero . The relationship with BiomEdit is a vendor-customer relationship and is within the scope of ASC 606, as the provision of services and corresponding license rights are considered a part of the Company’s ordinary activities. The common units issued to the Company represent non-cash consideration. While the BiomEdit TDA has been executed by the parties and provides the payment terms for future services, the BiomEdit TDA does not provide for any transfer of goods or services between the parties. However, the Company will provide licenses and services upon execution of the contemplated TDPs. Accordingly, the Company concluded that the BiomEdit TDA, in combination with the BiomEdit CUIA, met the definition of a contract under ASC 606. Each TDP executed under the BiomEdit TDA will be accounted for in accordance with ASC 606. The Company’s performance obligations under the BiomEdit TDA consist of four material rights to future technical research and development services and commercial licenses under individual TDPs that the Company expects to execute. The material rights represent an advance payment for the license rights, which will be granted upon the execution of future TDPs. As there is no additional payment for these license rights when future TDPs are executed, the Company has determined that there is a material right associated with each of the contemplated TDPs under the BiomEdit TDA. The Company has allocated approximately $ 2.2 million of the upfront non-cash consideration to each of the four material rights based on the estimated standalone selling price of the performance obligations. In 2023, the additional $ 1.1 million of non-cash consideration, which represents previously constrained variable consideration, was allocated to each of the four performance obligations under the arrangement with BiomEdit of $ 0.3 million each consistent with the initial relative selling price allocation. Upon the execution of a TDP underlying a material right, the Company is obligated to provide technical research and development services under the TDP and a license to applicable patents and other intellectual property designed and developed under the TDP. The technical research and development services and license provided under a TDP are highly interdependent and interrelated with one another. Without the Company’s knowledge, expertise, and platform, there would not be a licensable strain or other commercializable product to transfer to BiomEdit. Further, BiomEdit has rights to intellectual property created as part of each TDP, irrespective of the result of the development. Therefore, each executed TDP underlying a material right consists of one combined performance obligation for the technical research and development services and license to be provided by the Company. For each TDP underlying a material right, the transaction price consists of (i) either a fixed fee or, if a cost-plus arrangement, variable consideration for the most likely amount of estimated consideration to be received and (ii) non-cash consideration allocated to the material rights. As the services performed by the Company under a TDP create or enhance an asset that BiomEdit controls as the asset is created or enhanced, the Company satisfies the performance obligation and recognizes revenue over time. The Company uses an input method that compares total costs incurred relative to total estimated cost to complete to estimate progress under the contract. Any revisions to the estimated total budgeted costs to complete, and the resulting impact on revenue recognition, are reflected in the period of the change through a cumulative catch-up adjustment. As of December 31, 2024 and 2023, the Company had a deferred revenue balance of $ 7.6 million and $ 7.7 million, respectively, with BiomEdit. During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue of $ 0.2 million, $ 2.2 million and $ 1.0 million, respectively, from services provided to BiomEdit. Arcaea, LLC Summary of Arrangement Arcaea was formed in March 2021 to focus on the application of synthetic biology in the personal care products industry. In March 2021, the Company entered into (i) an Intellectual Property Contribution Agreement (“Arcaea IP Agreement”) that granted Arcaea a license to certain of the Company’s intellectual property, (ii) a Technical Development Agreement (“Arcaea TDA”) that establishes the terms under which the Company will provide technical research and development services, and (iii) a Common Unit Issuance Agreement (“Arcaea CUIA”) which compensates the Company for its intellectual property contribution. Contemporaneous with these transactions, Arcaea entered into a Series A Preferred Unit Purchase Agreement under which it sold 1.8 million Series A preferred units to certain of the Company’s investors, for F-56 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements aggregate proceeds of approximately $ 19.5 million. The Series A Preferred Unit Purchase Agreement provided for the sale and issuance of up to an additional 7.2 million Series A preferred units subsequent to the initial closing. In subsequent closings during 2021, Arcaea issued an additional 5.1 million Series A preferred units to existing and third-party investors for aggregate proceeds of approximately $ 57.1 million and closed its Series A preferred unit financing. As a result, the Company received an additional 5.2 million common units in Arcaea for total consideration of $ 35.5 million. Under the Arcaea IP Agreement, the Company licensed certain intellectual property to Arcaea for use in the development or production of Arcaea’s products that the parties will subsequently agree to research and develop under TDPs. The license rights provide Arcaea with the ability to commercialize the specified products from the corresponding TDP under the Arcaea TDA. In return for the license to the intellectual property, Arcaea has agreed to issue the Company up to 9.0 million common units in accordance with certain terms and conditions set forth within the agreements. The Company received 1.8 million common units upon execution of the Arcaea CUIA and an additional 5.2 million common units upon subsequent closings of the Series A preferred unit financing in 2021 (as discussed above). No additional common units are expected to be issued to the Company. Under the Arcaea TDA, the parties jointly agree on TDPs, through equal representation on a joint steering committee, under which the Company will perform agreed-upon research and development services in return for consideration on a fixed fee or cost-plus basis for all services provided. Accounting Analysis The common unit investment in Arcaea is considered an equity method investment as a result of the Company’s ability to exercise significant influence over Arcaea’s financial and operating policies through its ownership of common units. The initial carrying value of the equity method investment in Arcaea is the fair value of the common units of $ 11.9 million received in exchange for the Arcaea IP Agreement which, as discussed below, was accounted for as deferred revenue at inception. The fair value of Arcaea’s common units was determined at inception of the agreements using the option pricing method. The option pricing method used a back-solve methodology to infer the total equity value based on the pricing of the Series A preferred unit financing, which was contemporaneous with the Arcaea IP Agreement. Further, the Company determined the rights to up to an additional 7.2 million common units did not meet the definition of a freestanding financial instrument and are not representative of a derivative. The right to the additional common units is considered variable consideration that is fully constrained at inception and until the contingencies related to the issuance of the additional shares are resolved. The Series A preferred units issued by Arcaea receive a liquidation preference prior to common units. As such, the Company concluded that this represents a substantive profit-sharing arrangement, and the Company is recognizing earnings and losses on the equity method investment using the HLBV method. The Company recorded a $ 11.9 million loss on its equity method investment in Arcaea in 2021. The loss allocated to the Company primarily relates to Arcaea’s accounting for the non-cash consideration related to the Arcaea IP Agreement as in-process research and development, which resulted in the full value of the Company’s intellectual property contribution being expensed in 2021. As of December 31, 2021, the carrying value of the equity method investment in Arcaea has been reduced to zero . There is no commitment for the Company to provide further financial support to Arcaea, and therefore the carrying value of the equity method investment will not be reduced below zero. The relationship with Arcaea is a vendor-customer relationship and is within the scope of ASC 606, as the provision of services and corresponding license rights are considered a part of the Company’s ordinary activities. The common units issued to the Company represent non-cash consideration. While the Arcaea TDA has been executed by the parties and provides the payment terms for future services, the Arcaea TDA does not provide for any transfer of goods or services between the parties. However, the Company will provide licenses and services upon execution of the contemplated TDPs. Accordingly, the Company concluded that the Arcaea TDA, in combination with the Arcaea CUIA, met the definition of a contract under ASC 606. Each TDP executed under the Arcaea TDA will be accounted for in accordance with ASC 606. The Company’s performance obligations under the contract consist of ten material rights to future technical research and development services and commercial licenses under individual TDPs that the Company expects to execute under the Arcaea TDA. The material rights represent an advance payment for the license rights, which will be granted upon the execution of future TDPs. As there is no additional payment for these license rights when future TDPs are executed, the Company has determined that there is a material right associated with each of the contemplated additional TDPs under the Arcaea TDA. The Company has allocated approximately $ 1.2 million of the upfront non-cash consideration to each of the ten material rights based on the estimated standalone selling price of the performance obligations. During the year ended F-57 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements December 31, 2021, the additional $ 35.5 million of non-cash consideration, which represents previously constrained variable consideration, was allocated to each of the ten performance obligations under the arrangement with Arcaea of $ 3.6 million each consistent with the initial relative selling price allocation. Unexercised material rights are recorded as non-current deferred revenue until such time as the parties execute a TDP conveying a commercial license. Upon the execution of a TDP underlying a material right, the Company is obligated to provide technical research and development services under the TDP and a license to applicable patents and other intellectual property designed and developed under the TDP. The technical research and development services and license provided under a TDP are highly interdependent and interrelated with one another. Without the Company’s knowledge, expertise, and platform, there would not be a licensable strain or other commercializable product to transfer to Arcaea. Further, Arcaea has rights to intellectual property created as part of each TDP, irrespective of the result of the development. Therefore, each executed TDP underlying a material right consists of one combined performance obligation for the technical research and development services and license to be provided by the Company. For each TDP underlying a material right, the transaction price consists of variable consideration for the most likely amount of estimated consideration to be received under the cost-plus arrangement and non-cash consideration allocated to the material rights. As the services performed by the Company under a TDP create or enhance an asset that Arcaea controls as the asset is created or enhanced, the Company satisfies the performance obligation and recognizes revenue over time. The Company uses an input method that compares total costs incurred relative to total estimated cost to complete to estimate progress under the contract. Any revisions to the estimated total budgeted costs to complete, and the resulting impact to revenue recognition, are reflected in the period of the change through a cumulative catch-up adjustment. As of December 31, 2024 and 2023, the Company had a deferred revenue balance of $ 28.4 million and $ 33.1 million, respectively, with Arcaea. During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue of $ 4.7 million, $ 6.0 million and $ 13.5 million, respectively, from services provided to Arcaea. Allonnia, LLC Summary of Arrangement In December 2019, the Company entered into (i) an Intellectual Property Contribution Agreement (“Allonnia IP Agreement”) that granted Allonnia a license to certain of the Company’s intellectual property, (ii) a Technical Development Agreement (“Allonnia TDA”) that establishes the terms under which the Company is providing technical development services, and (iii) a Common Unit Issuance Agreement which provides for the issuance of common units of Allonnia to the Company in exchange for the license rights granted under the Allonnia IP Agreement. Contemporaneous with these agreements, Allonnia entered into a Series A Preferred Unit Purchase Agreement under which Allonnia sold 3.0 million Series A Preferred Units to certain of the Company’s investors, as well as a third-party investor, for aggregate proceeds of approximately $ 33.0 million. Allonnia also agreed to issue an additional 0.6 million Series A Preferred Units to a strategic partner as compensation for the delivery of future services to Allonnia. The Series A Preferred Unit Purchase Agreement also provided for the sale and issuance of up to an additional 5.4 million Series A Preferred Units subsequent to the initial closing. In 2020, Allonnia issued an additional 1.8 million Series A Preferred Units, 1.7 million of which were sold for aggregate proceeds of $ 18.5 million and 180,000 of which were issued in exchange for the rights to certain intellectual property which will vest based on the achievement of milestones associated with the development of the intellectual property received. In 2021, Allonnia issued an additional amount of less than 0.1 million Series A Preferred Units for aggregate proceeds of $ 0.2 million and closed its Series A Preferred Unit financing. In 2023, Allonnia raised an additional $ 30 million through a Series A extension. Under the Allonnia IP Agreement, the Company licensed intellectual property to Allonnia for use in the development or production of its products that the parties will subsequently agree to develop under TDPs. The license rights provide Allonnia with the ability to commercialize the specified products from the corresponding strain or enzyme, which can only be developed by the Company under the Allonnia TDA. The Company received 3.6 million common units as consideration for the license upon execution of the Allonnia IP Agreement and an additional 1.9 million common units during the year ended December 31, 2021 in connection with the closing of the Series A preferred unit financing. Under the Allonnia TDA, the parties jointly agree, through equal representation on a joint steering committee, on TDPs for specific strains and enzymes, in which the Company will perform agreed upon development services in return for consideration on a fixed fee or cost-plus basis for all services provided. F-58 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Accounting Analysis The common unit investment in Allonnia is considered an equity method investment as a result of the Company’s ability to exercise significant influence over Allonnia's financial and operating policies through its ownership of common units. The initial carrying value of the equity method investment in Allonnia is the fair value of the common units of $ 24.5 million received in exchange for the Allonnia IP Agreement which, as discussed below, was accounted for as deferred revenue at inception. The fair value of Allonnia’s common units was determined at inception of the agreements using the option pricing method. The option pricing method used a back-solve methodology to infer the total equity value based on the pricing of the Series A Preferred Unit financing, which was contemporaneous with the Allonnia IP Agreement. Further, the Company determined the rights to up to an additional 5.4 million common units did not meet the definition of a freestanding financial instrument and are not representative of a derivative. The right to the additional common units is considered variable consideration that is fully constrained at inception and until the contingencies related to the issuance of the additional shares are resolved. This contingency was resolved in 2021 when the Company received an additional 1.9 million common units in connection with the closing of the Series A preferred unit financing. The Series A Preferred Units issued by Allonnia receive a liquidation preference prior to common units. As such, the Company concluded that this represents a substantive profit-sharing arrangement and the Company is recognizing earnings and losses on the equity method investment using the HLBV method. The Company recorded a loss on equity method investment of $ 24.5 million in 2019 and $ 12.7 million in 2021 as a result of the application of the HLBV method. The loss allocated to the Company primarily relates to Allonnia’s accounting for the non-cash consideration related to the Allonnia IP Agreement as in-process research and development, which resulted in the full value of the Company’s intellectual property contribution being expensed in the year that the shares were issued. As of December 31, 2021, the carrying value of the equity method investment in Allonnia has been reduced to 0 . There is no commitment for the Company to provide further financial support to Allonnia and therefore the carrying value of the equity method investment will not be reduced below zero. The relationship with Allonnia is a vendor-customer relationship and is within the scope of ASC 606 as the provision of services and corresponding license rights are considered a part of the Company’s ordinary activities and the common units represent non-cash consideration. While the Allonnia TDA has been executed by the parties and provides the payment terms for future services, the Allonnia TDA does not provide for any transfer of goods or services between the parties. However, the Company will provide licenses and services upon execution of the contemplated TDPs. Accordingly, the Company concluded that the Allonnia TDA met the definition of a contract under ASC 606 and each TDP executed under the Allonnia TDA will be accounted for in accordance with ASC 606. The Company’s performance obligations under the contract consist of ten material rights related to the estimated number of TDPs the parties expect to execute under the Allonnia TDA. The material rights represent an advance payment for the license rights which will be granted upon the execution of each TDP. As there is no additional payment for these license rights upon execution of a TDP, the Company has determined that there is a material right associated with each of the contemplated future TDPs. The Company has allocated $ 2.5 million of the upfront non-cash consideration to each of the 10 performance obligations under the contract based on the estimated standalone selling price of the performance obligations. Unexercised material rights are recorded as non-current deferred revenue until such time as the parties execute a TDP. Upon the execution of each TDP, the Company is obligated to provide development services under the TDP and a license to applicable patents and other intellectual property to the ingredient developed under the plan. The license and research and development services under a TDP are highly interdependent and interrelated with one another. Without the Company’s knowledge, expertise, and platform, there would not be a licensable strain or other commercializable product to transfer to Allonnia. Further, Allonnia has rights to all development intellectual property created as part of each TDP, irrespective of the result of the development. Therefore, each executed TDP consists of one combined performance obligation for the license and research and development services to be performed by the Company. For each TDP, the transaction price consists of variable consideration for the most likely amount of estimated consideration to be received under the cost-plus arrangement and the $ 2.5 million allocation of the fixed non-cash consideration. As the services performed by the Company create or enhance an asset that Allonnia controls as the asset is created or enhanced, the Company satisfies the performance obligation and recognizes revenue over time. The Company uses an input method that compares total costs incurred relative to total estimated cost to complete to estimate progress under the contract. Any revisions to the estimated total budgeted costs to complete, and the resulting impact to revenue recognition, are reflected in the period of the change through a cumulative catch-up adjustment. In 2023, the additional non-cash consideration of $ 12.7 million, which represents previously constrained variable consideration, was allocated to all of the performance obligations F-59 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements consistent with the initial relative selling price allocation and a cumulative catch up was recognized for the TDPs in process. As of December 31, 2024 and 2023, the Company had a deferred revenue balance of $ 36.5 million and $ 36.1 million, respectively, with Allonnia. During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue of $ 0.1 million, $ 0.5 million and $ 4.3 million, respectively, from services provided to Allonnia. Motif FoodWorks, Inc. Summary of Arrangement In September 2018, the Company entered into (i) an Intellectual Property Contribution Agreement (“Motif IP Agreement”) with Motif that granted Motif a license to certain of the Company’s intellectual property and (ii) a Technical Development Agreement (“Motif TDA”) that establishes the terms under which the Company is providing technical development services. Under the Motif IP Agreement, the Company licensed intellectual property to Motif for use in strain development to produce ingredients that the parties will subsequently agree to develop under TDPs. The license rights provide Motif with the ability to commercialize the specified ingredients from the corresponding strain, which can only be developed by the Company under the Motif TDA. In return for the license to the intellectual property, Motif granted the Company 9.0 million shares of common stock. Concurrent with the Motif IP Agreement, Motif also sold 8.1 million shares of Series A preferred stock to certain of the Company’s investors, as well as third-party investors, for aggregate proceeds of approximately $ 90.0 million. The Motif TDA governs the procurement of the Company’s expertise and technical development services to collaborate in the research, development, and commercialization of specified ingredients. Under the Motif TDA, the parties jointly agree on TDPs for specific ingredients, in which the Company will perform agreed upon development services in return for consideration on a fixed fee or cost-plus fixed margin basis for all services provided. At inception, the Company estimated that it would execute ten TDPs with Motif. Accounting Analysis The investment in Motif common stock is considered an equity method investment as a result of the Company’s ability to exercise significant influence over the financial and operating policies through its common stock ownership. The initial carrying value of the equity method investment in Motif is the fair value of the common stock received in exchange for the Motif IP Agreement of $ 65.1 million which, as discussed below, is being accounted for as non-cash consideration under ASC 606. As Motif’s Series A preferred stockholders receive a liquidation preference prior to common stock, the Company concluded that this represents a substantive profit-sharing arrangement. Accordingly, the Company is recognizing earnings and losses on the equity method investment using the HLBV method. The Company recorded a loss on equity method investment of $ 65.1 million from inception through December 31, 2018 which reduced the carrying value to zero. The loss allocated to the Company primarily relates to Motif’s accounting for the non-cash consideration related to the Motif IP Agreement as in-process research and development, which resulted in the full value of Company’s intellectual property contribution being expensed in the period ended December 31, 2018, at which time the carrying value of the equity method investment in Motif had been reduced to zero. There is no commitment for the Company to provide further financial support to Motif and therefore the carrying value of the equity method investment will not be reduced below zero. As a result, no loss was recognized during the years ended December 31, 2024, 2023 and 2022 on the equity method investment. The overall arrangement with Motif is a vendor-customer relationship and is within the scope of ASC 606 as the provision of development services and corresponding license rights are considered a part of the Company’s ordinary activities. The licenses contemplated under the Motif IP Agreement are contingent upon a TDP being agreed to by the parties under the Motif TDA and only relate to strains that are developed under a TDP. While the TDPs require approval by the parties, the parties initially estimated that ten TDPs would be negotiated under the arrangement. The Company’s performance obligations under the Motif IP Agreement consist of ten material rights, related to the initial set of ingredients that the parties desired to develop in the first two years . The material rights represent an advance payment for the license rights which will be granted upon the execution of each TDP. As there is no additional payment for these license rights upon execution of a TDP, the Company has determined that there is a material right associated with each of the contemplated TDPs. The common stock received under the Motif IP Agreement is considered non-cash consideration and has been recognized at fair value. The Company determined the fair value of the common stock was $ 65.1 million at F-60 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements inception of the agreement with the assistance of a third-party valuation specialist, which was initially recorded as non-current deferred revenue. The option pricing model used a back-solve methodology to determine the total equity value based on the pricing of the Series A financing, which was contemporaneous with the Motif IP Agreement. The Company has allocated $ 6.5 million to each of the ten material rights. The Company allocated the transaction price based on the estimated standalone selling price of the material rights which is, in turn, based on the intrinsic value of the right and the probability of exercise. Upon the execution of each TDP, the Company is obligated to provide development services under the TDP and a license to applicable patents and other intellectual property to the ingredient developed under the plan. The license and research and development services under a TDP are highly interdependent and interrelated with one another. Without the Company’s knowledge, expertise and platform, there would not be a licensable strain or other commercializable product to transfer to Motif. Further, Motif has rights to all development intellectual property created as part of each TDP, irrespective of the result of the development. Therefore, each executed TDP consists of one combined performance obligation for the license and research and development services to be performed by the Company. For each TDP, the transaction price consists of variable consideration for the most likely amount of estimated consideration to be received under the fixed fee or cost-plus arrangement and the $ 6.5 million which was allocated to the associated material right under the Motif IP Agreement. As the services performed by the Company create or enhance an asset (i.e., the specified ingredient) that Motif controls as the asset is created or enhanced, the Company satisfies the performance obligation and recognizes revenue over time. The Company uses an input method that compares total costs incurred relative to total estimated cost to complete to estimate progress under the contract. Any revisions to the estimated total budgeted costs to complete, and the resulting impact to revenue recognition, are reflected in the period of the change through a cumulative catch-up adjustment. As of December 31, 2023, the Company had a deferred revenue balance of $ 45.4 million with Motif. Effective in August 2024, the Motif IP Agreement and the Motif TDA were mutually terminated with no adjustment to the original consideration. As a result, the Company has no further obligation to perform services for Motif and, accordingly, the remaining $ 45.4 million in deferred revenue has been recognized in full as revenue during the year ended December 31, 2024. Revenue recognized during the years ended December 31, 2023 and 2022 was $ 6.7 million and $ 1.9 million, respectively. Genomatica, Inc. 2016 Genomatica Agreement In 2016, the Company purchased Series A preferred stock of Genomatica, Inc. (“Genomatica”), a biotechnology company specializing in the development and manufacturing of intermediate and specialty chemicals from both sugar and alternative feedstocks. The Company also entered into a Collaboration Agreement with Genomatica (“Genomatica Collaboration”) in connection with the financing. The Genomatica Collaboration was entered into to share expertise on biotechnology solutions. Specifically, Genomatica provided the Company with scale-up and process optimization functions, and the Company has provided Genomatica with certain technology development functions generally centered on high throughput strain engineering capabilities. The Genomatica Collaboration’s focus was on obtaining new customers for either party that could benefit from the combined expertise of both parties, and the agreement provides for profit-sharing allocations between Genomatica and the Company depending on the category of the potential product. Each party is responsible for their own costs incurred under an agreed upon TDP. 2018 Genomatica Agreement In September 2018, the Company entered into a stock purchase agreement with Genomatica under which it received $ 40.0 million of Series B preferred stock from Genomatica. In lieu of cash consideration, the Company entered into a Foundry Terms of Service Agreement (“Genomatica FSA”) with Genomatica in which the Company would provide up to $ 40.0 million in services at no charge to Genomatica (“Initial Prepayment”). The Genomatica FSA terminated the Genomatica Collaboration and changed the pricing terms for work performed under TDPs to a cost-plus fixed margin agreement. Genomatica can apply a portion of the $ 40.0 million in prepaid services to outstanding invoices under the Genomatica FSA, subject to certain limitations that require cash payment for services over certain monthly thresholds. Further, while the Genomatica FSA replaced the Genomatica Collaboration, any fees that would have been paid to or by the Company under contracts previously governed by the Genomatica Collaboration continued to be shared between the parties. These amounts are either (i) added to, if payable to the Company, or (ii) reduced from, if payable to Genomatica, the balance of F-61 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements the prepaid services over the term of the arrangement, with certain restrictions. As of December 31, 2021 and 2020, the Company has received $ 8.3 million and $ 6.9 million, respectively, under the Genomatica FSA. All contracts previously governed by the Genomatica Collaboration have ended as of December 31, 2021, therefore, no additional payments are expected. Accounting Analysis The Company concluded the preferred stock investment was not in-substance common stock and therefore did not qualify for accounting as an equity method investment. Rather, the Company concluded the preferred stock investment should be accounted for as an equity security as it represents an ownership interest in Genomatica that is not mandatorily redeemable nor does the Company have the unilateral right to redeem the preferred stock. Genomatica’s preferred stock is not exchange-traded and does not have a readily determinable fair value. Therefore, the Company accounts for the Genomatica preferred stock under the measurement alternative for equity investments that do not have a readily determinable fair value, which in this case is at historical cost. As of December 31, 2024 and 2023, the cost of the investment in Genomatica preferred stock was zero and $ 11.9 million, respectively, and is included in investments on the consolidated balance sheet. Under the Genomatica Collaboration, the Company was entitled to receive a portion of fees earned from third party customers of Genomatica that were within the scope of the agreement. The Company accounted for the collaboration under ASC 808, however the Company applied ASC 606 by analogy for measurement and recognition purposes. Under the Genomatica Collaboration, the Company’s promises consisted of (i) licenses to the Company’s intellectual property, related to the specified development work, and (ii) research and development services. The Company determined that there was a single, combined performance obligation consisting of research services and licenses to certain intellectual property. The Company recognized the revenue for the combined performance obligation using an over-time input method, as the Company’s performance under the contract created or enhanced the target product or strain as such product or strain was developed. The Company measured progress based on the cost incurred relative to total forecasted cost. The Genomatica FSA represents a modification to the Genomatica Collaboration that resulted in a change in transaction price from milestones to a cost-plus fixed margin structure. The Genomatica FSA did not result in the addition of any distinct promised goods or services, and the Company’s remaining obligation post-modification was to finish the partially satisfied development work that had commenced under the Genomatica Collaboration. This performance obligation was satisfied during the year ended December 31, 2019 and the parties have entered into subsequent TDPs under the Genomatica FSA. As of December 31, 2024 and 2023, the Company had a deferred revenue balance of $ 0.6 million and $ 2.0 million, respectively, with Genomatica. During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue of $ 1.5 million, $ 4.2 million and $ 10.9 million, respectively, from services provided to Genomatica. Joyn Bio, LLC Summary of Arrangement In September 2017, the Company and certain other investors formed Cooksonia for the purposes of holding the Company’s investment in Joyn Bio. Concurrently, Cooksonia entered into a commitment agreement with Bayer CropScience LP (“Bayer”) to form Joyn Bio. The purpose of Joyn Bio was to research, develop, discover, and commercialize engineered microbes for use in agriculture. The initial program used advanced techniques in biology to study and engineer naturally occurring soil microbes and their nitrogen-fixing genes to enable crops to produce their own fixed nitrogen and reduce the nitrogen fertilizer required. The Company contributed $ 5.0 million in cash and certain intellectual property to Cooksonia in exchange for a 70 % equity interest in Cooksonia (“Class A Units”). Cooksonia received $ 20.0 million in cash from another investor, who is a related party of the Company, for a 20 % equity interest in Cooksonia (“Class B Units”). Cooksonia also received certain intellectual property from Genomatica and issued Genomatica a 10 % equity interest in Cooksonia (“Cooksonia Class C Units”) and paid Genomatica $ 5.0 million in cash. Subsequently, Cooksonia contributed $ 20.0 million and all intellectual property received from the Company and Genomatica in exchange for a 50 % equity interest in Joyn Bio. Bayer contributed $ 20.0 million in cash funding plus specified intellectual property. In addition, Bayer committed to contribute up to an additional $ 60.0 million to be paid subject to certain funding procedures. In return, Bayer obtained a 50 % equity interest in Joyn Bio. The agreements may be terminated by mutual agreement, following a change in control, and for breach. F-62 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements Joyn Bio was governed by a Board of Managers (“Joyn Bio Board”) comprised of equal representation of the Company and Bayer. The Joyn Bio Board had all the rights, powers, obligations, and authority to manage the business and affairs of Joyn Bio. The Company also entered into a Foundry Services Agreement (“Joyn Bio FSA”) with Joyn Bio under which the Company will provide Joyn Bio with technical services and preferred access to the Company’s facilities. Joyn Bio paid the Company a nonrefundable $ 20.0 million prepayment for services to be provided under the Joyn Bio FSA (“Joyn Bio Prepaid Services”). The Joyn Bio Prepaid Services can be utilized for technical services performed by the Company, its subcontractors, and third parties involved in the performance of the overall technical services. Amounts due to the Company are applied to the balance of Joyn Bio Prepaid Services as earned. During the year ended December 31, 2019, Joyn Bio made an additional $ 15.0 million prepayment for services (“Joyn Bio Additional Prepaid Services”). Under certain Joyn Bio termination scenarios, any amount of unused Joyn Bio Additional Prepaid Services shall be repaid by the Company to Joyn Bio. Accounting Analysis From inception, the Company’s investment in Cooksonia has represented a controlling financial interest, resulting in consolidation of Cooksonia within the Company’s consolidated financial statements (see Note 7 ). The initial cash and in-kind contributions the Company made to Cooksonia have been recorded at carrying value as the transaction was with entities under common control. All assets of Cooksonia after the initial investments, net of the amounts paid to Genomatica, were contributed to Joyn Bio for a 50 % equity interest in Joyn Bio. The initial carrying value of the Company’s equity interest in Cooksonia was $ 13.1 million, comprised of the initial $ 5.0 million cash investment and an $ 8.1 million adjustment for Cooksonia’s claim on net assets in accordance with ASC 810, Consolidation, recognized to reflect a certain investor’s liquidation preference in a termination event that represents a substantive profit-sharing agreement. The initial carrying value of the non-controlling interest was comprised of cash and intellectual property contributions from the other investors of $ 29.7 million, less the $ 8.1 million adjustment for the non-controlling interest holders’ claim on the net assets of Cooksonia. Cooksonia accounted for its 50 % equity interest in Joyn Bio as an equity method investment based on the size of its equity interest and its influence on the board of directors. The equity method investment in Joyn Bio was recorded at an initial carrying value of $ 97.9 million, which was the fair value of Cooksonia’s interest in Joyn Bio. The fair value was determined by management with the assistance of a third-party valuation specialist. The option pricing model used a back-solve methodology to determine the total equity value based on the pricing of the Class B Units which were exchanged for cash. The license of intellectual property to Joyn Bio has been accounted for under ASC 606 as described below. Upon liquidation, the net assets of Joyn Bio are not distributed in accordance with each party’s respective ownership interest. Depending on the circumstances or type of liquidation event, Bayer or Cooksonia may receive certain preference payments or priority in the assets that are distributed. These preferences represent a substantive profit-sharing arrangement and, accordingly, Cooksonia recognized earnings and losses on its equity method investment using the HLBV method. Refer to Note 7 for additional details on Cooksonia's investment in Joyn Bio. The Company accounted separately under ASC 606 for Cooksonia’s contribution of its intellectual property and the services performed by the Company under technical project plans governed by the Joyn Bio FSA. The Company accounted for the intellectual property sale and the technical services separately as the two agreements were not negotiated with a single commercial objective, the consideration under each agreement was not interdependent, and the intellectual property contribution from Cooksonia was separate and distinct from the research and development services performed under the Joyn Bio FSA. The Company considers the granting of licenses to the Company’s intellectual property as part of its ordinary business activities, and therefore Cooksonia’s contribution of intellectual property to Joyn Bio represented a contract with a customer. The intellectual property contained multiple licenses for which control transferred at inception and all revenue associated with the licenses was recognized during the year ended December 31, 2017. The Joyn Bio FSA functioned as a master services agreement that provided a framework for the research and development services relationship between the Company and Joyn Bio. The Joyn Bio FSA did not create a contract under ASC 606 as it did not identify goods or services to be performed nor did it define consideration under the contract. Upon the execution of a technical project plan under the Joyn Bio FSA, the arrangement qualified as a contract under ASC 606. F-63 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The Company accounted for each technical project separately. Each technical project plan provided for distinct services in the context of the contract, was separately negotiated with Joyn Bio, focused on different specified strains with separate scopes of work, and had its own budget. The sole performance obligation under each individual technical project plan consisted of the research and development services as the requisite licenses were transferred prior to the execution of the technical project plans. The transaction price for each technical project plan was determined at plan inception based on the consideration that the Company negotiated in exchange for the services to be provided. The Company’s performance under each technical project plan created or enhanced assets under Joyn Bio’s control. Joyn Bio received the benefits of the output of the research and development services which allowed Joyn Bio to make strategic business decisions on the direction of each product candidate. Therefore, the Company satisfied the respective performance obligations and recognized revenue over time. On October 17, 2022, Bayer and Ginkgo entered into the JV Termination Agreement, which initiated the dissolution of Joyn Bio (see Note 4 ). Upon dissolution, the Company's deferred revenue balance with Joyn Bio was applied to Bayer’s Technical Development Agreement with the Company. During the year ended December 31, 2022, the Company recognized revenue of $ 2.9 million from services provided to Joyn Bio for which the balance was applied against deferred revenue. 17. Employee Benefit Plan The Company maintains a 401(k) retirement savings plan for its employees who satisfy certain eligibility requirements. Under this plan, the Company makes a 5 % non-elective contribution to all eligible employees equal to up to 5 % of eligible compensation, which fully vests once such eligible participant has completed two years of continuous service. Effective January 1, 2024, the 5 % non-elective contribution is capped for employees earning $ 100,000 or more in annual salary, resulting in a maximum employer contribution of $ 5,000 . For the years ended December 31, 2024, 2023 and 2022, the Company contributed $ 5.8 million, $ 8.2 million and $ 6.1 million, respectively, to the plan. 18. Income Taxes For the years ended December 31, 2024, 2023 and 2022, the loss before income taxes consisted of the following (in thousands): Year Ended December 31, 2024 2023 2022 Domestic $ ( 514,354 ) $ ( 890,986 ) $ ( 2,118,095 ) Foreign ( 33,154 ) ( 1,954 ) ( 3,304 ) Total $ ( 547,508 ) $ ( 892,940 ) $ ( 2,121,399 ) For the years ended December 31, 2024, 2023 and 2022, the Company recorded the following income tax expense (benefit) (in thousands): Year Ended December 31, 2024 2023 2022 Current: State $ 566 $ 690 $ 271 Foreign ( 109 ) 123 159 Total current 457 813 430 Deferred: Federal — — ( 10,500 ) State — — ( 3,943 ) Foreign ( 936 ) ( 884 ) ( 1,014 ) Total deferred ( 936 ) ( 884 ) ( 15,457 ) Income tax benefit $ ( 479 ) $ ( 71 ) $ ( 15,027 ) F-64 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements A reconciliation of income tax benefit computed at the statutory corporate income tax rate to the effective income tax rate for the years ended December 31, 2024, 2023 and 2022 is as follows: Year Ended December 31, 2024 2023 2022 Federal income tax at statutory rate 21.0 % 21.0 % 21.0 % State income tax 0.1 1.3 — Change in valuation allowance ( 10.4 ) 13.6 0.8 Stock-based compensation ( 7.7 ) ( 14.2 ) ( 16.7 ) Executive compensation 0.2 8.1 ( 5.3 ) Tax credits 0.5 0.8 0.6 Investments in subsidiaries and other ( 0.6 ) ( 29.0 ) — Other ( 3.0 ) ( 1.6 ) 0.3 Effective tax rate 0.1 % — % 0.7 % The Company’s deferred tax assets and liabilities consist of the following (in thousands): Year Ended December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 332,482 $ 277,559 Tax credit carryforwards 61,497 64,157 Capitalized research and development costs 214,208 185,462 Accrued expenses 986 616 Deferred revenue 28,549 36,225 Stock-based compensation 52,388 83,037 Amortizable intangibles 10,695 5,505 Lease liabilities 116,118 60,197 Investments in subsidiaries 57,534 58,447 Other 1,232 952 Deferred tax assets before valuation allowance 875,689 772,157 Valuation allowance ( 771,852 ) ( 711,778 ) Deferred tax assets, net of valuation allowance 103,837 60,379 Deferred tax liabilities: Amortizable intangibles ( 11,660 ) ( 16,873 ) Property, plant and equipment ( 545 ) ( 410 ) Lease right-of-use assets ( 98,184 ) ( 52,409 ) Deferred tax liabilities ( 110,389 ) ( 69,692 ) Net deferred taxes $ ( 6,552 ) $ ( 9,313 ) Activity in the deferred tax assets valuation allowance is summarized as follows (in thousands): Beginning of Period Additions (Subtractions) End of Period Deferred tax assets valuation allowance: Year ended December 31, 2024 $ 711,778 $ 60,074 $ 771,852 Year ended December 31, 2023 $ 833,086 $ ( 121,308 ) $ 711,778 F-65 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. The Company considered its history of cumulative net losses incurred since inception and has concluded that it is more likely than not that it will not realize the benefits of the deferred tax assets. Accordingly, a valuation allowance has been established against the deferred tax assets as of December 31, 2024 and 2023 that are not expected to be realized. The Company reevaluates the positive and negative evidence at each reporting period. The valuation allowance increased on a net basis by $ 60.1 million during the year ended December 31, 2024 primarily due to increases in the deferred tax assets related to net operating loss carryforwards, and capitalized research and development costs as required by the Tax Cuts and Jobs Act of 2017, and decreases in the deferred tax liabilities related to intangible assets due to the sale of Altar SAS, partially offset by decreases in the deferred tax asset related to equity compensation. As of December 31, 2024, the Company 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. As of December 31, 2024, the Company 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, the Company had federal research and development tax credit carryforwards of approximately $ 37.7 million, which will begin to expire in 2029. As of December 31, 2024, the Company also had state research and development and investment tax credit carryforwards of approximately $ 30.2 million, which will begin to expire in 2030. Under Sections 382 and 383 of the U.S. Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited. The Company may have experienced an ownership change in the past and may experience ownership changes in the future as a result of future transactions in its share capital, some of which may be outside of the Company’s control. As a result, if the Company earns net taxable income, the Company's ability to use its pre-change net operating loss carryforwards, or other pre-change tax attributes, to offset U.S. federal and state taxable income and taxes may be subject to significant limitations. The Company evaluates the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where it operates to assess their potential effect on its business and assumptions regarding future taxable income. The Company cannot predict whether specific proposals will be enacted, the terms of such proposals, or their potential impact on its business if enacted. In 2024, no major tax legislation was enacted in the jurisdictions where the Company operates that materially impacted its consolidated financial statements. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which the Company operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local, and foreign taxing authorities, where applicable. There are currently no tax examinations in progress. As of December 31, 2024, with few exceptions, the Company is no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for tax years before 2015. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state taxing authorities to the extent utilized in a future period. The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax 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. The Company evaluates uncertain tax positions on an annual basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for income taxes. As of December 31, 2024 and 2023, the Company had no recorded liabilities for uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions. The Company does not expect a material change in unrecognized tax benefits in the next twelve months. F-66 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements 19. Net Loss per Share The calculation of basic and diluted earnings per common share is as follows (in thousands, except share data): Year Ended December 31, 2024 2023 2022 Numerator: Net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders, basic $ ( 547,029 ) $ ( 892,869 ) $ ( 2,104,929 ) Less: change in fair value of contingent consideration common shares liability — — 3,143 Net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders, diluted $ ( 547,029 ) $ ( 892,869 ) $ ( 2,108,072 ) Denominator Weighted average common shares outstanding, basic 51,894,639 48,610,507 41,976,537 Effect of dilutive securities: Contingent consideration common shares — — 19,435 Weighted average common shares outstanding, diluted 51,894,639 48,610,507 41,995,972 Basic net loss per share $ ( 10.54 ) $ ( 18.37 ) $ ( 50.15 ) Diluted net loss per share $ ( 10.54 ) $ ( 18.37 ) $ ( 50.20 ) The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to Ginkgo Bioworks Holdings, Inc. common stockholders for the periods presented because including them would have been anti-dilutive: As of December 31, 2024 2023 2022 Warrants to purchase Class A common stock 1,295,622 1,295,622 1,295,622 Unvested RSUs 3,327,398 3,804,189 3,360,911 Earnout shares (1) 3,794,243 3,803,049 3,919,517 Outstanding stock options 767,520 192,208 317,768 Escrow shares (2) 20,332 — — 9,205,115 9,095,068 8,893,818 (1) Represents employee and non-employee earnout shares for which the service-based and/or market-based vesting conditions have not been satisfied. (2) Represents restricted common stock issued in connection with asset acquisitions, held in escrow for indemnification purposes, and subject to forfeiture. F-67 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements 20. Related Parties The Company’s significant transactions with its related parties are primarily comprised of revenue generating activities under collaboration and license agreements. Significant related party transactions included in the consolidated balance sheet, excluding the Company’s investments and equity method investments, are summarized below (in thousands): As of December 31, 2024 2023 Deferred revenue, current and non-current: Allonnia $ 36,495 $ 36,062 Arcaea 28,413 33,066 BiomEdit 7,583 7,712 Genomatica 564 2,018 Motif FoodWorks — 45,426 Ayana Bio — 56 Other equity investees — 139 $ 73,055 $ 124,479 Significant related party transactions included in the consolidated statements of operations and comprehensive loss, excluding the losses on the Company’s investments and equity method investments, are summarized below (in thousands): Year Ended December 31, 2024 2023 2022 Cell Engineering revenue: Motif FoodWorks $ 45,445 $ 6,660 $ 1,937 Arcaea 4,653 6,024 13,490 Genomatica 1,453 4,232 10,861 Ayana Bio 1,028 1,323 1,266 BiomEdit 197 2,171 1,016 Verb Biotics — 584 2,359 Allonnia 126 523 4,332 Joyn Bio — — 2,896 Other equity investees 139 705 656 $ 53,041 $ 22,222 $ 38,813 Refer to Notes 6 and 16 for additional details on the Company’s investments and equity method investments held in its related parties. Beginning in April 2022, the Company purchased a series of convertible promissory notes from its then equity method investee, Joyn Bio, in the aggregate principal amount of $ 10.0 million for the purpose of financing Joyn Bio's working capital needs. Each convertible promissory note was unsecured, had a maturity date of March 31, 2023 and an interest rate of 4.5 % per annum. The notes were automatically convertible into equity at a 20 % discount upon a qualifying equity financing. Additionally, the Company could elect to convert the notes into equity at a 20 % discount upon a non-qualifying equity financing, at maturity, or elect to be repaid in cash upon a change in control or initial public offering. The Company evaluated the notes’ conversion and redemption features for embedded derivatives and determined that there is no embedded derivative to record. The Company also determined that the convertible notes are not in-substance common stock and therefore are not considered an additional investment in the equity method investee. During the year ended December 31, 2022, the carrying amount of the notes was reduced by $ 5.3 million, which represents the excess loss on the equity method investment in Joyn Bio over the carrying value of the investment, which has been reduced to zero during the year ended December 31, 2022. The outstanding balance of the notes receivable was effectively settled as part of the F-68 Table of Contents Ginkgo Bioworks Holdings, Inc. Notes to Consolidated Financial Statements business combination transaction with Bayer and Joyn Bio described in Note 4 and was included as part of the consideration paid for the business combination. F-69