What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-06 · 89 added, 60 removed, 247 unchanged (38% of the section changed)

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Our customers obtain license rights to the output of our services, which are primarily the optimized strains or cell lines, in order to manufacture and commercialize products derived from that licensed strain or cell line.

Generally, the terms of these agreements provide that we receive some combination of:

(1) service fees in the form of (i) upfront payments upon

consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products from or comprising engineered organisms arising from the collaboration or licensing agreement and/or (iii) royalties related to cost of goods sold reductions realized by our customers.

Generally, the terms of these

agreements provide that we receive some combination of:

(1) service fees in the form of (i) upfront payments upon consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products from or comprising engineered organisms arising from the collaboration or licensing agreement and/or (iii) royalties related to cost of goods sold reductions realized by our customers.

Royalties did not comprise a material amount of our revenue during any of the periods presented.

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We are currently offering biomonitoring and bioinformatics support services domestically through our partnerships with the U.S.

Centers for Disease Control and Prevention and XpresCheck, and internationally through our international programs, including those in Qatar and Ukraine.

Centers for Disease Control and Prevention and XpresCheck, and internationally through our international programs.

We are also engaged in a series of smaller partnerships that generate revenues through biosecurity services and R&D.

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We expense R&D costs as incurred.

Our R&D expenses were lower in the first quarter of 2025 compared to the first quarter of 2024, primarily due to our restructuring plan announced and commenced in the second quarter of 2024 as we rationalize our current development programs and prioritize our investments in our Foundry, Codebase and cell engineering tools offerings.

Our R&D expenses were lower in the first half of 2025 compared to the first half of 2024, primarily due to our restructuring plan announced and commenced in the second quarter of 2024 as we rationalize our current development programs and prioritize our investments in our Foundry, Codebase and cell engineering tools offerings.

We expect that our R&D expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.

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G&A expenses also include professional legal services fees and costs incurred relating to litigation, corporate, intellectual property and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, insurance costs, facility-related costs not otherwise included in R&D expenses, and asset impairments.

Our G&A expenses were lower in the first quarter of 2025 compared to the first quarter of 2024, primarily due to our restructuring plan announced and commenced in the second quarter of 2024, as we began reducing our operational overhead.

Our G&A expenses were lower in the first half of 2025 compared to the first half of 2024, primarily due to our restructuring plan announced and commenced in the second quarter of 2024, as we began reducing our operational overhead.

We expect that our G&A expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.

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Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, and other inorganic growth initiatives.

Goodwill Impairment

In the second quarter of 2024, due to a sustained decrease in the market price of our Class A common stock and overall market capitalization, we identified a goodwill impairment indicator related to our Cell Engineering reporting unit.

We performed an interim impairment test, which resulted in a full impairment of the goodwill balance.

Restructuring Charges

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(“SRNG”) on September 16, 2021, and were initially issued in connection with SRNG’s initial public offering.

Warrant liabilities are remeasured at fair value at each balance sheet date and have substantially no value as of March 31, 2025.

Warrant liabilities are remeasured at fair value at each balance sheet date and have substantially no value as of June 30, 2025.

Other Income (Expense), Net

Other income (expense), net primarily consists of sublease rent income and changes in fair value of notes receivable that we elected to account for under the fair value option.

Other income (expense), net primarily consists of changes in the fair value of notes receivable that we elected to account for under the fair value option and sublease rent income for the comparative periods in 2024.

Provision for Income Taxes

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Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

The following table presents our result of operations for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 Change

2025 2024 Change

Cell Engineering revenue $ 39,134 $ 36,205 $ 2,929 $ 77,364 $ 64,094 $ 13,270

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43,279 66,285 (23,006) 92,322 136,572 (44,250)

Goodwill impairment — 47,858 (47,858) — 47,858 (47,858)

Restructuring charges 3,674 17,066 (13,392) 8,947 17,066 (8,119)

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Other income (expense), net (896) (766) (130) (5,185) 1,249 (6,434)

Total other income (expense) (1,901) 12,122 (14,023)

Total other income 4,958 5,954 (996) 3,057 18,076 (15,019)

Loss before income taxes (60,583) (216,991) 156,408 (151,452) (382,871) 231,419

Income tax expense 88 31 57

Income tax (benefit) expense (283) 190 (473) (195) 221 (416)

Net loss $ (60,300) $ (217,181) $ 156,881 $ (151,257) $ (383,092) $ 231,835

(1) Total stock-based compensation expense, inclusive of employer payroll taxes, was allocated as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Research and development $ 8,656 $ 20,693 $ 17,840 $ 44,814

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Cell Engineering Revenue

Cell Engineering revenue was $38.2 million in the three months ended March 31, 2025, compared to $27.9 million in the three months ended March 31, 2024, an increase of $10.3 million.

Cell Engineering revenue was $39.1 million for the three months ended June 30, 2025, compared to $36.2 million for the three months ended June 30, 2024, an increase of $2.9 million.

This increase was primarily due to an increase in revenue related to programs with large enterprise customers primarily in the pharmaceutical and biotechnology industries and with the U.S.

government (healthcare and defense sectors), partially offset by the recognition of $4.5 million in non-cash revenue from the release of a deferred revenue balance associated with the termination of contract with a related party in the second quarter of 2024.

Cell Engineering revenue was $77.4 million for the six months ended June 30, 2025, compared to $64.1 million for the six months ended June 30, 2024, an increase of $13.3 million.

This increase was primarily due to the recognition of $7.5 million in non-cash revenue from the release of a deferred revenue balance associated with the terminated BiomEdit, Inc.

(“BiomEdit”) contract in the first quarter of 2025 (see Note 1 5 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).

(“BiomEdit”) contract in the first quarter of 2025 (see Note 15 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) and an increase in revenue related to programs with large enterprise customers primarily in the pharmaceutical and biotechnology industries and with the U.S.

As discussed above in Components of Results of Operations, Cell Engineering revenue comprises both cash and non-cash consideration.

Cell Engineering revenue recognized relating to non-cash consideration increased from $3.8 million in the three months ended March 31, 2024 to $8.7 million in the three months ended March 31, 2025, primarily due to the

recognition of $7.5 million in non-cash revenue from the release of the deferred revenue balance associated with the terminated BiomEdit contract in the first quarter of 2025, partially offset by lower non-cash revenue from other customers.

Cell Engineering revenue recognized relating to non-cash consideration decreased from $8.2 million for the three months ended June 30, 2024 to $1.2 million for the three months ended June 30, 2025, and from $12.1 million for the six months ended June 30, 2024 to $9.9 million for the six months ended June 30, 2025, primarily due to the recognition of $4.5 million from the release of a deferred revenue balance associated with the termination of contract with a related party in the second quarter of 2024 and lower non-cash revenue from other customers, offset by the recognition of $7.5 million in non-cash revenue from the release of the deferred revenue balance associated with the terminated BiomEdit contract in the first quarter of 2025.

Biosecurity Revenue

Biosecurity revenue was $10.1 million in both of the three months ended March 31, 2025 and 2024.

Biosecurity revenue was $10.5 million for the three months ended June 30, 2025, compared to $20.0 million for the three months ended June 30, 2024, a decrease of $9.5 million.

This decrease was primarily due to lower revenue related to a program with the U.S.

Biosecurity revenue was $20.6 million for the six months ended June 30, 2025, compared to $30.1 million for the six months ended June 30, 2024, a decrease of $9.5 million.

This decrease was primarily due to lower revenue related to a program with the U.S.

Cost of Biosecurity Revenue

The cost of Biosecurity revenue was $8.0 million in the three months ended March 31, 2025, compared to $9.2 million in the three months ended March 31, 2024, a decrease of $1.2 million.

This decrease was primarily due to cost reductions implemented during the first quarter of 2025 as well as timing of revenue recognition.

The cost of Biosecurity revenue was $9.4 million for the three months ended June 30, 2025, compared to $11.8 million for the three months ended June 30, 2024, a decrease of $2.4 million.

This decrease was primarily due to cost reductions implemented during the first quarter of 2025 as well as a reduction in activities supporting a program with the U.S.

The cost of Biosecurity revenue was $17.4 million for the six months ended June 30, 2025, compared to $21.0 million for the six months ended June 30, 2024, a decrease of $3.6 million.

This decrease was primarily due to cost reductions implemented during the first quarter of 2025 as well as a reduction in activities supporting a program with the U.S.

Cost of Other Revenue

The cost of other revenue was $4.1 million in three months ended March 31, 2025 and zero in the three months ended March 31, 2024.

The cost of other revenue was $5.4 million for the three months ended June 30, 2025, compared to $1.9 million for the three months ended June 30, 2024, an increase of $3.5 million.

This increase was primarily due to an increase in activity to support Datapoints contracts.

These costs relate to our cell engineering customer offerings, Datapoints and lab automation solutions, which began in the second quarter of 2024.

Costs associated with our end-to-end cell engineering solutions offering are included in research and development expenses.

The cost of other revenue was $9.5 million for the six months ended June 30, 2025, compared to $1.9 million for the six months ended June 30, 2024, an increase of $7.6 million.

This increase was primarily due to an increase in activity to support Datapoints contracts.

These costs relate to our cell engineering customer offerings, Datapoints and lab automation solutions, which began in the second quarter of 2024.

Costs associated with our end-to-end cell engineering solutions offering are included in research and development expenses.

Research and Development Expenses

Our research and development expenses principally relate to the development of new offerings and the operation, expansion and enhancement of our existing service offerings utilizing our proprietary platform, which includes our Foundry and Codebase assets, to our cell engineering customers.

Research personnel costs, including stock-based compensation, is our largest expense, totaling $30.7 million and $62.2 million for the three months ended March 31, 2025 and 2024, respectively.

We also acquired and expensed in-process research and development primarily through the issuance of our equity, aggregating to zero and $16.9 million for the three months ended March 31, 2025 and 2024, respectively.

Research personnel costs, including stock-based compensation, is our largest expense, totaling $23.7 million and $58.3 million for the three months ended June 30, 2025 and 2024, respectively, and $54.4 million and $120.5 million for the six months ended June 30, 2025 and 2024, respectively.

We also acquired and expensed in-process research and development primarily through the issuance of our equity, aggregating to zero and $3.0 million for the three months ended June 30, 2025 and 2024, respectively, and zero and

$19.8 million for the six months ended June 30, 2025 and 2024, respectively.

Our remaining research and development costs are comprised primarily of rent and related facilities costs, information technology costs, depreciation pertaining to facilities and equipment, laboratory consumables, contract services, and routine costs and fees.

Research and development expenses were $70.9 million for the three months ended March 31, 2025, compared to $136.5 million for the three months ended March 31, 2024, a decrease of $65.5 million.

This decrease was primarily driven by reductions in stock-based compensation expense of $14.9 million (inclusive of employer payroll taxes), $16.9 million in acquired in-process research and development, $16.6 million in personnel-related compensation and benefits expenses, $6.6 million in rent and facilities expenses, $5.7 million in information technology expenses, $5.2 million in laboratory supplies, $2.3 million in allocated overhead expenses (reclassified from R&D to G&A and cost of sales), and $3.5 million in other operating expenses.

These decreases were partially offset by an increase of $6.2 million in outside services, primarily due to a loss recorded under a supply agreement related to a shortfall in meeting a minimum annual purchase commitment.

Research and development expenses were $53.4 million for the three months ended June 30, 2025, compared to $134.2 million for the three months ended June 30, 2024, a decrease of $80.9 million.

This decrease was primarily driven by reductions of $23.0 million in personnel-related compensation and benefits expenses (net of $2.6 million tax credit), $15.7 million in rent and facilities expenses, $12.0 million in stock-based compensation expense (inclusive of employer payroll taxes), $8.4 million in laboratory supplies, $5.9 million in information technology expenses, $3.0 million in acquired in-process research and development expense, $2.9 million in depreciation and amortization, $2.2 million in outside services, $1.8 million in allocated overhead expenses (reclassified from R&D to G&A and cost of sales), and $6.0 million in other operating expenses.

Research and development expenses were $124.3 million for the six months ended June 30, 2025, compared to $270.7 million for the six months ended June 30, 2024, a decrease of $146.4 million.

This decrease was primarily driven by reductions of $39.5 million in personnel-related compensation and benefits expenses (net of $2.6 million tax credit), $27.0 million in stock-based compensation expense (inclusive of employer payroll taxes), $22.3 million in rent and facilities expenses, $19.8 million in acquired in-process research and development expense, $13.6 million in laboratory supplies, $11.6 million in information technology expenses, $6.4 million in allocated overhead expenses (reclassified from R&D to G&A and cost of sales), and $6.2 million in other operating expenses.

General and Administrative Expenses

General and administrative expenses were $49.0 million for the three months ended March 31, 2025, compared to $70.3 million for the three months ended March 31, 2024, a decrease of $21.2 million.

This decrease was primarily driven by reductions in stock-based compensation expense of $8.4 million (inclusive of employer payroll taxes), $12.3 million in professional fees, $5.7 million in personnel-related compensation and benefits expenses, $2.3 million in temporary labor and contractors, and $4.1 million in other operating expenses.

General and administrative expenses were $43.3 million for the three months ended June 30, 2025, compared to $66.3 million for the three months ended June 30, 2024, a decrease of $23.0 million.

This decrease was primarily driven by reductions of $9.4 million in personnel-related compensation and benefits expenses (net of $0.9 million tax credit), $6.1 million in earnout remeasurement expenses, $6.1 million in professional fees, $6.0 million of stock-based compensation expense (inclusive of employer payroll taxes), $1.9 million in temporary labor and contractors, and $5.2 million in other operating expenses.

These decreases were partially offset by an increase of $11.6 million in rent and facilities expenses primarily due to a new lease that commenced in the second quarter of 2024 and remains unoccupied.

General and administrative expenses were $92.3 million for the six months ended June 30, 2025, compared to $136.6 million for the six months ended June 30, 2024, a decrease of $44.3 million.

This decrease was primarily driven by reductions of $18.3 million in professional fees, $15.1 million in personnel-related compensation and benefits expenses (net of $0.9 million tax credit), $14.4 million in stock-based compensation expense (inclusive of employer payroll taxes), $6.5 million in earnout remeasurement expenses, $4.2 million in temporary labor and contractors, and $9.0 million in other operating expenses.

These decreases were partially offset by an increase of $23.2 million in rent and facilities expenses primarily due to a new lease that commenced in the second quarter of 2024 and remains unoccupied.

Goodwill Impairment

During both the three and six months ended June 30, 2024, we recorded a full impairment of the $47.9 million goodwill balance related to our Cell Engineering reporting unit.

Restructuring Charges

In the three months ended March 31, 2025, we incurred restructuring charges of $5.3 million in connection with our restructuring plan, which was announced and commenced in the second quarter of 2024, primarily affecting the Cell Engineering segment.

Restructuring charges were $3.7 million and $17.1 million for the three months ended June 30, 2025 and 2024, respectively, and $8.9 million and $17.1 million for the six months ended June 30, 2025 and 2024, respectively.

Restructuring charges relate to our restructuring plan, which was announced and commenced in the second quarter of 2024, primarily affecting the Cell Engineering segment.

These charges primarily consisted of employee termination costs from the reduction in force.

Note 3 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

See Note 3 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Interest Income, Net

Interest income, net was $6.1 million in the three months ended March 31, 2025, compared to $11.7 million in the three months ended March 31, 2024, a decrease of $5.6 million primarily due to lower average cash balances invested in money market funds and marketable debt securities.

Interest income, net was $6.1 million for the three months ended June 30, 2025, compared to $10.3 million for the three months ended June 30, 2024, a decrease of $4.2 million primarily due to lower average cash balances invested in money market funds and marketable debt securities.

Interest income, net was $12.2 million for the six months ended June 30, 2025, compared to $22.0 million for the six months ended June 30, 2024, a decrease of $9.9 million primarily due to lower average cash balances invested in money market funds and marketable debt securities.

Loss on Investments

Loss on investments was $3.7 million and $2.5 million in the three months ended March 31, 2025 and 2024, respectively.

The $1.1 million increase was primarily driven by fluctuations in the stock prices of marketable equity securities, partially offset by lower impairment losses on our non-marketable equity investments in privately held companies compared to the same period in 2024.

Loss on investments was $0.2 million and $6.8 million for the three months ended June 30, 2025 and 2024, respectively, and $3.9 million and $9.4 million for the six months ended June 30, 2025 and 2024, respectively.

The change was primarily driven by fluctuations in the stock prices of marketable equity securities, partially offset by lower impairment losses on our non-marketable equity investments in privately held companies, compared to the same periods in 2024.

We assess our non-marketable equity investments quarterly for potential impairment and remeasure them to fair value when events or changes in circumstances indicate that their carrying value may not be recoverable.

Change in Fair Value of Warrant Liabilities

The change in fair value of warrant liabilities was zero for the three months ended March 31, 2025, compared to a gain of $0.9 million for the three months ended March 31, 2024.

The change in fair value of warrant liabilities was zero for both the three and six months ended June 30, 2025, compared to gains of $3.2 million and $4.2 million for the three and six months ended June 30, 2024, respectively.

The fair value of warrant liabilities is primarily driven by fluctuations in the value of our common stock.

An increase or decrease in the value of our common stock results in a loss or gain, respectively, in the fair value of warrant liabilities.

As of March 31, 2025, these warrant liabilities had substantially no value.

As of June 30, 2025, these warrant liabilities had substantially no value.

Other Income (Expense), Net

We recorded a net other expense amount of $4.3 million in the three months ended March 31, 2025, compared to a net other income amount of $2.0 million in the three months ended March 31, 2024, a decrease of $6.3 million.

This decrease was primarily due to a loss on the change in fair value of a note receivable accounted for under the fair value option recorded in the first quarter of 2025.

We recorded a net other expense amount of $0.9 million for the three months ended June 30, 2025, compared to a net other expense amount of $0.8 million for the three months ended June 30, 2024, a decrease of $0.1 million.

We recorded a net other expense amount of $5.2 million for the six months ended June 30, 2025, compared to a net other income amount of $1.2 million for the six months ended June 30, 2024, a decrease of $6.4 million.

This decrease was primarily due to losses on the change in fair value of a note receivable accounted for under the fair value option recorded in 2025.

Non-GAAP Information

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We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing activities, investing activities, and certain non-cash charges and other items that are not related to our core operating performance or affect comparability period over period.

Beginning in the second quarter of 2024, we updated our definition of Adjusted EBITDA to no longer exclude the impact of acquired in-process research and development expenses.

Accordingly, the first quarter of 2024 has been recast to conform to the revised definition.

Our non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP performance measures.

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They also rely on management’s judgment to determine which items are included or excluded, making them inherently subjective.

Additionally, non-GAAP measures

lack uniform definitions and may differ from those used by other companies, limiting comparability.

Additionally, non-GAAP measures lack uniform definitions and may differ from those used by other companies, limiting comparability.

A reconciliation of EBITDA and Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is presented below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

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Interest income, net (6,083) (10,313) (12,164) (22,024)

Income tax expense 88 31

Income tax (benefit) expense (283) 190 (195) 221

Depreciation and amortization 15,793 17,330 31,159 30,199

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22,526 38,226 43,326 80,623

Goodwill impairment — 47,858 — 47,858

Restructuring charges (3)

3,674 17,066 8,947 17,066

Merger and acquisition related expense (income) (4)

(3,617) 4,512 (4,535) 6,906

Loss on investments 229 6,826 3,922 9,370

Change in fair value of warrant liabilities — (3,233) — (4,173)

Merger and acquisition related expense (income) (4)

Change in fair value of convertible notes — (480) 5,285 846

Adjusted EBITDA $ (28,061) $ (99,199) $ (75,512) $ (216,200)

(1) All periods include non-cash revenue when earned, including $7.5 million recognized in the three months ended March 31, 2025, pursuant to the release of deferred revenue related to the mutual termination of a customer agreement.

(2) Includes $0.4 million and $1.6 million in employer payroll taxes for the three months ended March 31, 2025 and 2024, respectively.

(1) All periods include non-cash revenue when earned, including $7.5 million recognized in the six months ended June 30, 2025, pursuant to the release of deferred revenue related to the mutual termination of a customer agreement.

(2) Includes $0.3 million and $1.1 million in employer payroll taxes for the three months ended June 30, 2025 and 2024, respectively, and $0.6 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively.

(3) Restructuring charges primarily consist of employee termination costs from the reduction in force commenced in June 2024.

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and (iv) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs.

Not included in this adjustment are acquired in-process research and development expenses, which totaled zero and $16.9 million for the three months ended March 31, 2025 and 2024, respectively.

Not included in this adjustment are acquired in-process research and development expenses, which totaled zero and $3.0 million for the three months ended June 30, 2025 and 2024, respectively, and zero and $19.8 million for the six months ended June 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

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Upon the closing of our merger with SRNG in September 2021, we received net proceeds totaling approximately $1.5 billion, inclusive of $760.0 million from investments from certain accredited investors for 1.9 million shares of our Class A common stock.

As of March 31, 2025, we had cash and cash equivalents and marketable securities of $516.9 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Quarterly Report on Form 10-Q.

As of June 30, 2025, we had cash and cash equivalents and marketable securities of $473.7 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Quarterly Report on Form 10-Q.

Material Cash Requirements

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• continue our R&D activities under existing and new programs and further invest in our Foundry and Codebase;

• develop and expand our offerings;

• upgrade, expand or adapt our operational, financial and management systems and support our operations;

• develop and expand our tools offerings;

• upgrade or adapt our operational, financial and management systems and support our operations;

• potentially acquire and integrate companies, assets or intellectual property that advance our company objectives;

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The following table provides information regarding our cash flows for each period presented:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

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Operating Activities

Net cash used in operating activities for the three months ended March 31, 2025 consisted of a net loss of $91.0 million, adjusted for net change in operating assets and liabilities of $11.6 million and non-cash charges of $51.0 million.

The net change in operating assets and liabilities was primarily due to (i) a $12.5 million decrease in deferred revenue primarily from a one-time release of a deferred revenue balance associated with a terminated customer contract, (ii) a $4.8 million decrease in operating lease liabilities from rent payments, and (iii) a $4.7 million increase in accounts receivable due to timing of customer billings, partially offset by (iv) a $6.4 million increase in accounts payable, accrued expenses and other current liabilities primarily due to a loss accrual associated with a minimum purchase obligation under a supplier agreement, and (v) a $3.7 million decrease in operating lease right-of-use assets from lease incentives received.

Net cash used in operating activities for the six months ended June 30, 2025 consisted of a net loss of $151.3 million, adjusted for net change in operating assets and liabilities of $34.3 million and non-cash charges of $93.8 million.

The net change in operating assets and liabilities was primarily due to (i) a $23.7 million decrease in deferred revenue primarily from one-time releases of deferred revenue balances associated with terminated customer contracts and the recognition of previously deferred revenue, (ii) a $11.6 million decrease in operating lease liabilities from rent payments, and (iii) a $0.4 million increase in accounts receivable due to timing of customer billings, partially offset by (iv) a $5.1 million increase in accounts payable, accrued expenses and other current liabilities primarily due to a loss accrual associated with a minimum purchase obligation under a supplier agreement, and (v) a $3.8 million decrease in operating lease right-of-use assets from lease incentives received.

Non-cash adjustments primarily consisted of $42.7 million of stock-based compensation expense, $31.2 million of depreciation and amortization, $14.9 million non-cash lease expense, a $1.1 million change in fair values of various assets and liabilities, and a $4.0 million loss on investments.

Net cash used in operating activities for the three months ended March 31, 2024 consisted of a net loss of $165.9 million, adjusted for a net change in operating assets and liabilities of $0.3 million and non-cash charges of $76.3 million.

The net change in operating assets and liabilities was primarily due to (i) a $10.9 million increase in accounts payable, accrued expenses and other current liabilities and (ii) a $6.8 million increase in accounts receivable, partially offset by (iii) a $4.1 million decrease in operating lease liabilities from rent payments and (iv) a $2.9 million decrease in deferred revenue.

Non-cash adjustments primarily consisted of $40.8 million of stock-based compensation expense, $16.8 million of in-process research and development expense from asset acquisitions, $12.9 million of depreciation and amortization, and $5.6 million of non-cash lease expense.

Net cash used in operating activities for the six months ended June 30, 2024 consisted of a net loss of $383.1 million, adjusted for net change in operating assets and liabilities of $6.2 million and non-cash charges of $203.3 million.

The net change in operating assets and liabilities was primarily due to (i) a $10.9 million increase in accounts payable, accrued expenses and other current liabilities primarily due to restructuring-related accruals, (ii) a $14.4 million decrease in operating lease right-of-use assets from lease incentives received, partially offset by (iii) a $17.0 million decrease in deferred revenue and (iv) a $3.9 million decrease in operating lease liabilities from rent payments.

Non-cash adjustments primarily consisted of $30.2 million of depreciation and amortization, $77.9 million of stock-based compensation expense, $9.4 million loss on investments, $13.1 million non-cash lease expense, $19.8 million in acquired in-process research and development expense, and $47.9 million of goodwill impairment.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 primarily consisted of purchases of marketable debt securities of $191.2 million and purchases of property and equipment of $7.6 million related to the build-out of new office and laboratory space near our headquarters.

Net cash used in investing activities for the three months ended March 31, 2024 primarily consisted of purchases of property and equipment of $6.7 million associated with Foundry capacity and capability investments and $5.4 million paid for the acquisition of Zymergen.

Net cash used in investing activities for the six months ended June 30, 2025 primarily consisted of purchases of marketable debt securities of $320.1 million, maturities of marketable debt securities of $65.0 million, and purchases of property and equipment of $7.7 million related to the build-out of new office and laboratory space near our headquarters.

Net cash used in investing activities for the six months ended June 30, 2024 primarily consisted of purchases of property and equipment of $33.7 million associated with Foundry capacity and capability investments and $5.4 million paid for the acquisition of Zymergen.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2025 primarily consisted of principal payments on finance leases.

Net cash used in financing activities for the three months ended March 31, 2024 primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.

Net cash used in financing activities for the six months ended June 30, 2025 primarily consisted of principal payments on finance leases.

Net cash used in financing activities for the six months ended June 30, 2024 primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.

Critical Accounting Estimates

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What changed 10-Q

Item 2. Management’s Discussion and Analysis