What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-25 · 161 added, 169 removed, 273 unchanged (55% of the section changed)

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Further, this section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

For discussion related to 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K, please refer to Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition

and Results of Operations in our 2023 Form 10-K, filed with the United States Securities and Exchange Commission on February 29, 2024.

For discussion related to 2023 items and year-to-year comparisons between 2024 and 2023 that are not

included in this Form 10-K, please refer to Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K, filed with the United States Securities and Exchange Commission on February 25, 2025.

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties.

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Our mission is to make biology easier to engineer.

Ginkgo sells services in two business segments:

cell engineering, where we provide biological research and development (“R&D”) services for our customers across a range of industries, and biosecurity, where we provide services to government and commercial customers so they can work to identify, monitor, prevent, mitigate, and ultimately protect humanity from biological threats.

Ginkgo sells services to government and commercial customers in two business segments:

cell engineering, where we provide tools and biological R&D services across a range of industries, and biosecurity, where we provide services to customers who are working to identify, monitor, prevent, mitigate, and ultimately protect humanity from biological threats.

An overview of these two business segments is provided below.

Cell Engineering

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instead, we offer biological R&D services on our platform to enable our customers to bring their products to market.

Historically, Ginkgo’s primary service offering has been end-to-end cell engineering R&D services ( solutions ).

In 2024, Ginkgo expanded its service offering to also include services that provide our customers cell engineering tools for biological R&D, which are intended to provide more targeted and bespoke resources to customers that continue to conduct in-house R&D.

Compounding and mutually reinforcing improvements of our laboratory automation and software infrastructure—our Foundry—and our reusable data assets—our Codebase—enable us to improve our services with each successive project.

• Our Foundry is a flexible capability for large scale data generation;

it powers generative artificial intelligence (“AI”) and machine learning (“ML”) tools that enable more successful biological R&D.

Historically, Ginkgo’s primary service offering has been cell engineering R&D services (solutions) where Ginkgo performs technical activities.

In 2024, Ginkgo expanded its service offering to include services that provide our customers cell engineering tools for biological R&D, where Ginkgo enables its customers to conduct certain in-house R&D activities themselves.

Our services are designed to offer customers better results on the dimensions of probability of success, speed, or cost – and ideally on all three.

The fundamental advantage of our cell engineering platform over traditional cell engineering done by hand at our customers’ labs is that our platform improves with scale while in-house cell engineering in our customers' labs largely does not.

Compounding and mutually reinforcing improvements of our laboratory automation and software infrastructure—our Autonomous Lab—and our reusable data assets enable us to improve our services with each successive project.

Our Autonomous Lab is a flexible wet lab built from our Reconfigurable Automation Cart (“RAC”) systems capable of large scale data generation;

it powers generative AI and machine learning (“ML”) tools that enable more successful biological R&D.

We now offer services providing such data generation, AI and automation tools directly to Ginkgo customers.

• Our Codebase is a data asset comprising best practices for cell engineering, along with sequences and host cells that have been honed through dozens of programs and can be directly reusable for our end-to-end cell engineering solutions.

Our end-to-end cell engineering solutions are typically scoped and delivered as a program ranging in duration from several months to several years.

A typical deliverable for the program would comprise an engineered strain or cell line and an associated bioprocess.

For each of these programs, we generate economic value in two primary ways.

First, we charge usage fees for services, in much the same way that cloud computing companies charge usage fees for utilization of computing capacity or contract research organizations charge for services.

Additionally, we have historically negotiated a value share with our customers (in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.

Commencing in the second quarter of 2024, we announced changes in prospective commercial terms, including the removal of downstream value share from certain program types.

Our data assets comprise best practices for cell engineering, along with sequences and host cells that have been honed through dozens of programs and can be directly reusable for our cell engineering solutions.

We now offer licenses to our host cells and other IP assets, such as our broad metagenomic library.

Cell engineering tools offerings

We charge customers fees for the services we provide in our cell engineering tools offerings.

Typically, these fees are structured as a fixed fee for a fixed scope of work.

Fees for our Datapoints services are typically earned over a shorter period of time (weeks to months) than for end-to-end cell engineering solutions which may be multi-year programs.

Fees for our automation solutions are typically earned over a period that covers design, build, and deployment and range from six to twelve months.

In addition, we offer support services with fixed fees covering the support periods.

Fees for our automation solutions (RAC systems) are typically earned over a period that covers design, build, and deployment and range from six to twelve months.

In addition, we offer support services for our RAC systems with fixed fees covering the support periods.

Fees for our Datapoints services are typically earned over a shorter period of time (weeks to months) than for cell engineering solutions, which may be multi-year programs.

A typical deliverable for a Datapoints program is a data package.

Fees for cell engineering solutions programs are typically structured as a fixed fee for a fixed scope of work.

Cell engineering solutions

Our cell engineering solutions are typically scoped and delivered as a program ranging in duration from several months to several years.

A typical deliverable for the program would comprise an enzyme sequence, or an engineered strain or cell line and its associated bioprocess.

For each of these programs, we generate economic value in two primary ways.

First, we charge service fees for Autonomous Lab services, in much the same way that cloud computing companies charge usage fees for utilization of computing capacity or CROs charge for services.

R&D is inherently risky and our customers recognize that this is a cost they will incur regardless of success and whether they are working on the program in-house or with a partner.

Typically, service fees for a program include a fixed fee for a fixed scope of work and may also include payments contingent upon hitting certain technical milestones.

If we are able to deliver program results with less work through the use of Codebase assets and/or generative AI tools, then we can achieve the same revenue with lower cost or in

a shorter duration.

Service fees provide a strong foundation of revenue that is independent of any commercialization efforts by our partners.

Second, as the key enabling technology for our customers’ products, we have historically negotiated a value share with our customers (in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.

Because we typically do not incur material downstream costs (e.g., manufacturing or product development, which our customers manage), these value share payments flow through with approximately 100% contribution margin.

We have structured a variety of value sharing mechanisms, including royalties, lump-sum milestones, and equity payments.

As Ginkgo has matured, we have shifted our downstream value towards milestone payments and commercial royalties rather than equity.

In addition, commencing in the second quarter of 2024, we announced changes in prospective commercial terms, including the removal of downstream value share from certain program types.

This flexible business model allows for more predictable near-term revenue in up-front research fees and technical milestones without sacrificing our ability to create long-term value with asymmetric upside through downstream value share (typically in the form of a royalty stream, milestone, and/or equity share).

As we add more programs to the platform over time, we expect downstream value share to contribute income, which could in turn grow our overall margins and cash flow profile for our cell engineering solutions.

The realization of potential revenue related to downstream value in the form of potential future milestone payments and royalties and/or equity consideration is dependent upon a number of factors, including our ability to successfully develop engineered cells, bioprocesses, data packages, or other deliverables, and the product development and commercialization success of our customers.

With a mission to make biology easier to engineer, we have always recognized the need to invest in biosecurity as a key component of our platform.

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Our recent strategic business and asset acquisitions are described in detail in Note 4 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Generating Economic Value Through Cell Programs

Our cell engineering platform is a key enabling technology and source of intellectual property for our customers’ products.

We earn Cell Engineering revenue for our R&D services as well as generally through a share of the value of products created using our platform.

We typically structure Cell Engineering revenue to include some combination of the following:

• service fees, which may comprise cash and/or non-cash consideration, in the form of:

◦ upfront payments upon consummation of an agreement or other fixed payments that are generally recognized over our period of performance;

◦ reimbursement for costs incurred for R&D services;

◦ milestone payments upon the achievement of specified technical criteria;

plus, when applicable,

• downstream value share payments in the form of:

◦ milestone payments, which may comprise cash and/or non-cash consideration, upon the achievement of specified commercial criteria;

◦ royalties on sales of products from or comprising engineered organisms;

◦ royalties related to cost of goods sold reductions realized by our customers;

• downstream value share in the form of equity interests in our customer.

◦ downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.

Customer arrangements which involve non-cash consideration generally fall into two categories:

Platform Ventures and Structured Partnerships.

Platform Ventures

Platform Ventures enable Ginkgo to partner with leading multinationals and financial investors to form new ventures in identified market segments with potential to benefit from synthetic biology.

In exchange for an equity position in the venture, we contribute license rights to our proprietary cell programming technology and intellectual property, while our partners contribute relevant industry expertise, other resources and venture funding.

We also provide R&D services for which we receive cash consideration on a fixed-fee or cost-plus basis.

Structured Partnerships

Structured Partnerships allow Ginkgo to:

(i) partner with early stage synthetic biology product companies to adopt our Foundry as their cell programming R&D platform, in which we offer flexible commercial terms on the service fees including the ability to pay a portion or all of such upfront fees in the form of non-cash consideration (convertible financial instruments and/or equity securities), in addition to downstream value share consideration (“Startup Structured Partnership”);

and (ii) partner with existing entities with complementary assets for high potential synthetic biology applications in a large-scale, multi-program collaboration (“Legacy Structured Partnership”).

In 2024, we did not enter into

any new Startup Structured Partnerships.

In 2023, we entered into six Startup Structured Partnerships and received prepayments of service fees in the form of equity securities or convertible financial instruments in the amount of $18.9 million that is recognized as revenue over our period of performance.

See Notes 6 and 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details of our investments in and the material terms of our agreements with our Platform Ventures and Structured Partnerships.

Key Business Metrics

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Cell Engineering Revenue

We generate Cell Engineering revenue primarily through license and collaboration agreements, under which customers obtain rights to our proprietary technology and intellectual property for use in the development and commercialization of engineered organisms and derived products.

Under these agreements, we typically provide R&D services for cell programming with the goal of producing an engineered cell that meets a mutually agreed specification.

We generate Cell Engineering revenue primarily through service and license agreements for our tools and solutions offerings.

Under our automation solutions agreements we typically provide services related to the design, build, and deployment of our RAC systems as well as ongoing support services.

Datapoints agreements typically include fixed fees for services related to producing a data package for our customers and are earned over a shorter time period than legacy

cell engineering solutions projects.

Under our solutions agreements, we typically provide R&D services for cell programming with the goal of producing an engineered cell that meets a mutually agreed specification.

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.

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

Beginning in the second quarter of 2024, we announced changes to the commercial terms applicable to some new customer contracts, including revised intellectual property terms more favorable to customers and, in many cases, the removal of downstream value share from certain program types.

In the third quarter of 2024, we launched several new cell engineering tools offerings, including Datapoints, an AI model 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.

Our model API provides users with access to both publicly available models and Ginkgo’s own protein sequence LLM trained on Ginkgo’s proprietary datasets.

Our lab automation solutions combine modular hardware, control software and managed support to provide customers the ability to automate their own lab workflows in house.

There has been no material impact on our revenue recognition policies to date from the announced changes in our new commercial terms and Cell Engineering offerings.

Cell Engineering revenue includes transactions with Platform Ventures and Legacy Structured Partnerships where, as part of these transactions, we received an equity interest in such entities.

Specifically related to the Platform Ventures, in these transactions, we received upfront non-cash consideration in the form of common equity interests in these entities, while the Platform Ventures each received cash equity investments from strategic partners and financial investors.

Cell Engineering revenue has historically included transactions with Platform Ventures and Legacy Structured Partnerships where we received non-cash consideration in the form of equity interests and financial instruments that are convertible into equity upon a triggering event.

We view the upfront non-cash consideration as prepayments for licenses which will be granted in the future as we complete mutually agreed upon technical development plans.

In these instances, we also receive cash consideration for the R&D services

performed by us on a fixed fee or cost-plus basis.

In these instances, we also receive cash consideration for the R&D services performed by us on a fixed fee or cost-plus basis.

We are not compensated through additional milestone or royalty payments under these arrangements.

Our transactions with Genomatica and Synlogic included the purchase of equity securities and the provision of R&D services.

As we perform R&D services under the mutually agreed upon development plans, we recognize a reduction in the prefunded obligation on a cost-plus basis.

These arrangements are further described in Notes 6 , 7 , 16 and 20 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.Cell Engineering revenue also includes transactions with Startup Structured Partnerships where, as part of these transactions, we received upfront non-cash consideration in the form of current equity interests or financial instruments that are convertible into equity upon a triggering event.

We issued the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can and has been drawn down as payment for R&D services performed under mutually agreed upon development plans.

In some cases we issued the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can and has been drawn down as payment for R&D services performed under mutually agreed upon development plans.

These arrangements are further described in Notes 7 , 8 , and 17 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K..

Downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.

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Equity investments are accounted for under the equity method, cost method or are carried at fair value.

As Ginkgo has matured, we have shifted our downstream value towards milestone payments and commercial royalties rather than equity.

In addition, commencing in the second quarter of 2024, we announced changes in prospective commercial terms, including the removal of downstream value share from certain program types.

Biosecurity Revenue

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Canopy and Horizon.

We are currently offering biomonitoring and bioinformatics support services domestically through our partnerships with the CDC and XpresCheck, and internationally through our international programs, including those in Qatar and Ukraine.

We are currently offering biomonitoring and bioinformatics support services domestically through our partnerships with the CDC and XpresCheck, and internationally.

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

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These service offerings generally consist of goods and services including, but not limited to, sample collection, sample storage and transportation, outsourced laboratory analysis, access to results reported through a web-based portal, analytical reporting of results, and overall program management.

Prior to 2024, we generated product revenue by selling lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits associated with COVID-19 tests to customers on a standalone basis.

In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed, and for product revenue, prior to 2024, upon delivery of diagnostic test kits.

In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed, and for product revenue.

The timing of revenue recognition depends on the identified performance obligations but is generally recognized over time or as results are reported to the customer.

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Additionally, the cost of Biosecurity service revenue includes direct labor cost associated with bioinformatics, lab network management, delivery logistics, and customer support.

Cost of Biosecurity Product Revenue

Prior to 2024, the cost of Biosecurity product revenue consisted of costs associated with the sale of diagnostic and sample collection test kits, which included costs incurred to purchase test kits from third parties.

Cost of Other Revenue

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• costs incurred to deliver our end-to-end cell engineering solutions offering to customers.

• development of new offerings, such as Biosecurity.

The activities above incur the following expenses:

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We expense R&D expenses as incurred.

We experienced lower R&D costs in 2024 compared to 2023 primarily due to our restructuring plan announced and commenced in the second quarter of 2024 as we rationalize our current development programs and prioritize our investments in our Foundry, Codebase, AI and new offerings.

We experienced lower R&D costs in 2025 compared to 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 tools offerings.

We expect that our R&D expenses will either remain consistent or decline in 2026 as compared to 2025, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.

However, our R&D expenses could increase in 2025 due to employee incentive programs offered or additional costs and expenses arising from these restructuring actions.

However, our R&D expenses could increase in 2026 due to continued investment in our tools offerings.

The nature, timing, and estimated costs required to support our growth will be dependent on advances in technology, our ability to attract new customers, and the rate of market penetration within our existing customer industries.

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We expect that our G&A expenses will either remain consistent or decline in 2026 as compared to 2025, reflecting the stabilization of our operational overhead and the impact of our restructuring actions.

However, our G&A expenses could increase in 2025 due to employee incentive programs offered or additional costs and expenses arising from these restructuring actions.

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

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In the second quarter of 2024, we fully impaired the goodwill attributable to our Cell Engineering reporting unit.

Refer to further discussion within “Critical Accounting Estimates”.

Restructuring Charges

Restructuring charges are related to our restructuring plan, which was announced and commenced in the second quarter of 2024.

These charges primarily include severance and other employee termination costs from a reduction in force that commenced in June 2024, as well as the impairment of a right-of-use asset due to the subleasing of a facility as part of real estate consolidation.

Reductions in force are expected to be substantially completed in 2025, subject to compliance with applicable laws.

While we aim to complete the majority of our facility consolidation actions in 2025, the actual timing may vary, especially for subleasing unused or underutilized facilities, which may extend beyond 2025 or may not occur prior to

termination of such lease, depending on market conditions.

These charges primarily include severance and other employee termination costs from a reduction in force that commenced in 2024, as well as the impairment of a right-of-use asset due to the subleasing of a facility as part of real estate consolidation.

Reductions in force were substantially completed in 2025.

While the company completed the majority of our facility consolidation actions in 2025, we continue to look for opportunities for subleasing unused or underutilized facilities, which will extend beyond 2026 or may not occur prior to termination of such lease, depending on market

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.

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Interest Income

Interest income consists primarily of interest earned on our cash and cash equivalents.

Loss on Equity Method Investments

Loss on equity method investments includes our share of losses from certain of our equity method investments under the hypothetical liquidation at book value (“HLBV”) method.

Interest income consists primarily of interest earned on our cash, cash equivalents, and marketable debt securities.

Loss on Investments

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

Other Income, Net

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

Other (Expense) Income, Net

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

Provision for Income Taxes

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As of December 31, 2025, we had federal net operating loss carryforwards of approximately $1.8 billion, of which $139.2 million will begin to expire in 2029 and $1.6 billion can be carried forward indefinitely.

As of December 31, 2024, we had state net operating loss carryforwards of approximately $1.2 billion, of which $991.7 million will begin to expire in 2030 and $162.3 million can be carried forward indefinitely.

As of December 31, 2025, we had state net operating loss carryforwards of approximately $1.5 billion, of which $1.2 billion will begin to expire in 2030 and $257.5 million can be carried forward indefinitely.

As of December 31, 2025, we had federal research and development tax credit carryforwards of approximately $38.8 million, which will begin to expire in 2029.

As of December 31, 2025, we also had state research and development and investment tax credit carryforwards of approximately $31.4 million, which will begin to expire in 2030.

The Company also had $3.9 million of foreign net operating losses as of December 31, 2025, of which $1.5 million will begin to expire in 2034 and $2.4 million can be carried forward indefinitely.

Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, R&D tax credits and other permanent differences.

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Service 37,409 53,071 (15,662)

Product — 28,949 (28,949)

Total revenue 170,155 227,043 (56,888)

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Cost of Biosecurity service revenue (1)

Cost of Biosecurity product revenue — 7,481 (7,481)

31,521 38,549 (7,028)

Cost of other revenue (1)

15,451 5,999 9,452

Research and development (1)

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183,290 246,161 (62,871)

Impairment of lease assets — 96,210 (96,210)

Goodwill impairment — 47,858 (47,858)

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Interest expense — (94) 94

Loss on equity method investments — (2,635) 2,635

Loss on investments (16,411) (28,827) 12,416

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Change in fair value of warrant liabilities — 5,701 (5,701)

Other income, net 3,870 9,138 (5,268)

Other (expense) income, net (4,527) 3,870 (8,397)

Total other income (expense) 1,678 12,249 (10,571)

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(1) The following table presents the allocation of stock-based compensation expense, inclusive of employer payroll taxes.

Stock-based compensation expense during the year ended December 31, 2024 was partially offset by a $12.6 million expense reversal resulting from the forfeiture of RSUs related to our restructuring plan.

Of the total reversal, $9.2 million was recorded to research and development expenses and $3.4 million was recorded to general and administrative expenses.

Year Ended December 31,

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General and administrative 42,994 57,576

Cost of Biosecurity revenue 2,624 —

Cost of other revenue 2,249 —

Total $ 82,704 $ 115,299

Cell Engineering Revenue

Cell Engineering revenue was $174.0 million in 2024, compared to $143.5 million in 2023, an increase of $30.4 million.

The increase was primarily due to the recognition of $45.4 million in non-cash revenue from the release of a deferred revenue balance associated with the terminated Motif FoodWorks, Inc.

(“Motif”) contract in 2024 (see Note 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K) and an increase in revenue related to programs with large enterprise customers primarily in the pharmaceutical, biotechnology and U.S.

government (healthcare and defense) industries, partially offset by decreases in revenue related to programs with early stage customers in the pharmaceutical, biotechnology and industrial biotechnology (food and nutrition, industrial and environmental, and consumer and technology) industries.

Cell Engineering revenue was $132.7 million in 2025, compared to $174.0 million in 2024, a decrease of $41.2 million.

The decrease was primarily due to the recognition of $45.4 million in non-cash revenue from the release of a deferred revenue balance associated with the terminated Motif FoodWorks, Inc.

(“Motif”) contract in 2024, 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 2024, and decreases in revenue for certain programs with customers in the industrial biotechnology

These decreases were partially offset by 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 2025 (see Note 17 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details) and 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).

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 $48.5 million in 2023 to $61.4 million in 2024.

The increase was primarily due to the recognition of $45.4 million in non-cash revenue from the release of the deferred revenue balance associated with the terminated Motif contract in 2024, partially offset by lower non-cash revenue from other customers.

Cell Engineering revenue recognized relating to non-cash consideration decreased from $61.4 million in 2024 to $11.6 million in 2025.

The decrease was primarily due to the recognition of $45.4 million in non-cash revenue from the release of the deferred revenue balance associated with the terminated Motif contract in 2024, partially offset by lower non-cash revenue from other customers.

Biosecurity Revenue

Biosecurity revenue was $37.4 million in 2025, compared to $53.1 million in 2024, a decrease of $15.7 million.

This total decrease consisted of a $25.9 million decline in service revenue and a $28.9 million decline in product revenue.

The decrease in Biosecurity revenue is primarily due to the end of our COVID-19 testing in schools in 2023, partially offset by new expanded offerings of biomonitoring and bioinformatics support services in 2023 and 2024.

Since the end of the COVID-19 public health emergency in May 2023, we shifted our Biosecurity business focus to developing scalable biosecurity infrastructure and delivering global surveillance programs and analytics services.

Biosecurity revenue in 2024 was comprised of our expanded offerings of biomonitoring and bioinformatics support services.

Through our partnerships, we operate programs for collections, testing, sequencing, and insights delivery on pathogen samples in different countries.

Cost of Biosecurity Service and Product Revenue

Cost of Biosecurity service and product revenue was $38.5 million in 2024, compared to $54.0 million in 2023, a decrease of $15.5 million.

This decrease was primarily due to the end of our COVID-19 testing in schools in 2023, partially offset by growth in our expanded offerings of biomonitoring and bioinformatics support services following the transition of our Biosecurity business to developing scalable biosecurity infrastructure and delivering global surveillance programs and analytics services.

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

government and a foreign government.

Cost of Biosecurity Service Revenue

Cost of Biosecurity service revenue was $31.5 million in 2025, compared to $38.5 million in 2024, a decrease of $7.0 million.

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

Cost of Other Revenue

Cost of other revenue was $6.0 million in 2024 and zero in 2023.

These costs relate to our new Cell Engineering customer offerings, Datapoints and lab automation solutions, which were launched in 2024.

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

Cost of other revenue was $15.5 million in 2025 and $6.0 million in 2024.

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 commenced 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

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Research personnel costs, including stock-based compensation, is our largest expense, aggregating to $97.6 million and $184.9 million for the years ended December 31, 2025 and 2024, respectively.

We also acquired and expensed in-process research and development primarily through the issuance of our equity, aggregating to $19.8 million and $9.6 million for the years ended December 31, 2024 and 2023, respectively.

We also acquired and expensed in-process research and development primarily through the issuance of our equity, aggregating to zero and $19.8 million for the years ended December 31, 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 $243.8 million in 2025, compared to $424.1 million in 2024, a decrease of $180.3 million.

This decrease was primarily due to a reduction in stock-based compensation expense of $87.5 million (inclusive of employer payroll taxes) and research and development expenses of $50.5 million from the deconsolidation of Zymergen.

Additionally, there were decreases in personnel-related compensation and benefits expense of $14.6 million, professional fees of $14.2 million, lab equipment impairment of $12.3 million, temporary labor and contractors of $3.1 million, allocated overhead expenses of $6.9 million from R&D to G&A, and other operating expenses of $8.6 million, primarily due to our restructuring plan announced and commenced in the second quarter of 2024.

These decreases were partially offset by an increase in rent and related facilities costs of $19.4 million, acquired in-process research and development costs of $11.5 million, software and technology expense of $6.1 million, and depreciation of $4.2 million.

Increases in research and development expenses supported the growth of cell engineering capabilities prior to the commencement of our restructuring plan.

This decrease was primarily driven by reductions of $64.5 million in personnel-related compensation and benefits expenses (net of $2.6 million tax credit), $39.6 million in rent and facilities expenses, $22.9 million in stock-based compensation expense (inclusive of employer payroll taxes), $19.8 million in acquired in-process research and development expense, $16.7 million in laboratory supplies, $7.9 million in allocated overhead expenses (reclassified from R&D to G&A and cost of sales), $9.3 million in depreciation and amortization, $5.4 million in temporary labor and contractors, and $1.8 million increase in other operating expenses.

These decreases were partially offset by an increase of $7.6 million in information technology expenses primarily due to a shortfall in contractually committed spending related to our strategic cloud and AI partnership with Google Cloud (see Note 12 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details).

General and Administrative Expenses

General and administrative expenses were $183.3 million in 2025, compared to $246.2 million in 2024, a decrease of $62.9 million.

This decrease was primarily due to a reduction of $72.8 million in general and administrative expenses from the deconsolidation of Zymergen.

Excluding this impact, the decrease was largely attributable to our restructuring plan announced and commenced in the second quarter of 2024, which resulted in reductions in professional fees of $49.1 million (including a $17.6 million decrease in litigation costs), stock-based compensation expense of $26.6 million (inclusive of employer payroll taxes), temporary labor and contractor fees of $7.5 million, the change in fair value of contingent consideration liabilities resulting from acquisitions of $6.0 million, and other operating expenses of $2.2 million.

These decreases were partially offset by an increase in personnel-related compensation and benefits expense of $10.1 million, rent and related facilities costs of $9.4 million from a new facility lease that commenced in 2024, and the impairment of construction in progress assets of $5.8 million.

Impairment of Lease Assets

In 2023, we recognized an impairment loss of $96.2 million related to a right-of-use asset and the associated leasehold improvements for an exited Zymergen leased facility.

During 2023, Zymergen permanently ceased use of and vacated the leased space, which triggered an impairment analysis and resulted in a write-down of the carrying value of the assets to their estimated fair value.

This decrease was primarily driven by reductions of $28.8 million in personnel-related compensation and benefits expenses (net of $0.9 million tax credit), $23.0 million in professional fees, $14.6 million in stock-based compensation expense (inclusive of employer payroll taxes), $8.1 million in allocated overhead expenses (reclassified from R&D to G&A), $7.4 million in earnout remeasurement expenses, $5.8 million reduction in impairment of construction in progress assets, $4.7 million in temporary labor and contractors, $4.0 million in travel, and $1.2 million in other operating expenses.

These decreases were partially offset by an increase of $34.7 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

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Restructuring Charges

In 2024, we incurred restructuring charges of $24.2 million in connection with our restructuring plan announced and commenced in the second quarter of 2024, primarily in the Cell Engineering segment.

These charges primarily consisted of employee termination costs from the reduction in force commenced in June 2024 and the impairment of a right-of-use asset

relating to facilities consolidation.

Restructuring charges were $11.4 million in 2025, compared to $24.2 million in 2024, a decrease of $12.8 million.

The change was primarily driven by lower employee termination costs.

See Note 3 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

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Interest income was $22.6 million in 2025, compared to $38.6 million in 2024, a decrease of $16.0 million.

This decrease was primarily due to lower average cash balances in interest bearing accounts.

Loss on Equity Method Investments

Loss on equity method investments was zero in 2024, compared to $2.6 million in 2023.

The 2023 loss represented our share of losses from certain equity method investees resulting from the application of the HLBV method.

Under the HLBV method, as a common unit holder, we absorb losses before preferred unit holders due to a substantive profit-sharing agreement that grants preferred unit holders preferential distribution rights.

Since we have no obligation to fund the losses of our equity method investees beyond our initial investment, no additional losses were recognized in 2024, as the investments had already been reduced to zero prior to that year.

This decrease was primarily due to lower average cash and investment balances.

Loss on Investments

Loss on investments was $16.4 million in 2025, compared to $28.8 million in 2024, a decrease of $12.4 million.

The higher loss in 2023 was due to greater impairment losses on our non-marketable equity investments in privately held companies compared to the corresponding period in 2024.

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

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

Loss on Deconsolidation of Subsidiaries

In 2024, we recorded a $7.0 million loss on the deconsolidation of our former foreign subsidiary Altar as a result of a sale of this business.

In 2023, we recorded a $42.5 million loss on the deconsolidation of Zymergen following Zymergen's bankruptcy filing in October 2023.

Change in Fair Value of Warrant Liabilities

The change in fair value of warrant liabilities was a gain of $5.7 million in 2024, compared to a gain of $5.2 million in 2023, an increase of $0.5 million.

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

There was substantially no value related to these warrant liabilities as of December 31, 2025 and 2024.

The change in fair value of warrant liabilities was a gain of $5.7 million in 2024.

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

Increases or decreases in the value of our common stock result in a loss or gain, respectively, in the fair value of warrant liabilities.

There was substantially no value related to these warrant liabilities as of December 31, 2024.

Other Income, Net

Other income, net was $3.9 million in 2024, compared to $9.1 million in 2023, a decrease of $5.3 million.

This decrease was primarily due to reduced sublease rent income following the deconsolidation of Zymergen.

Other (Expense) Income, Net

Other (expense) income, net was $(4.5) million in 2025, compared to $3.9 million in 2024, a decrease of $8.4 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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stockholders before the impact of interest income, interest expense, provision for income taxes and depreciation and amortization.

We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, gain or loss on equity method investments, gain or loss on investments, change in fair value of warrant liabilities, gain or loss on deconsolidation of subsidiaries, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, including related litigation costs, restructuring and impairment charges (inclusive of impairments of goodwill and long-lived assets), costs associated with the bankruptcy filing of our former subsidiary, Zymergen (the “Zymergen

Bankruptcy”), and certain other income and expenses.

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

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

Accordingly, the comparable 2023 period 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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Impairment expense (3)

53,654 121,404

Restructuring charges (4)

11,398 24,172

Merger and acquisition related expenses (5)

Loss on equity method investments — 2,635

(5,998) 4,417

Loss on investments 16,411 28,827

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Adjusted EBITDA $ (167,026) $ (293,311)

(1) All periods include non-cash revenue when earned, including $45.4 million in the year ended December 31, 2024, recognized pursuant to the termination of revenue contracts with Motif.

(1) All periods include non-cash revenue when earned.

For the year ended December 31, 2025 this included $7.5 million in non-cash revenue from the release of a deferred revenue balance associated with the terminated BiomEdit, Inc.

(“BiomEdit”) contract.

For the year ended December 31, 2024 this included $45.4 million recognized pursuant to the termination of revenue contracts with Motif and $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.

(2) For the years ended December 31, 2025 and 2024, includes $1.2 million and $3.0 million, respectively, in related employer payroll taxes.

(3) 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.

(4) Restructuring charges consist of employee termination costs from the reduction in force commenced in June 2024, as well as the impairment of a right-of-use asset relating to facilities consolidation.

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(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.

Not included in this adjustment are acquired in-process research and development expenses, which totaled $19.8 million and $9.6 million for the years ended December 31, 2024 and 2023, respectively.

Not included in this adjustment are acquired in-process research and

development expenses, which totaled zero and $19.8 million for the years ended December 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

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Sources of Liquidity

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

As of December 31, 2024, we had cash and cash equivalents of $561.6 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K.

As of December 31, 2025, we had cash and cash equivalents of $167.2 million and marketable securities of $255.4 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K.

At-The-Market Program

On August 7, 2025, we filed a universal shelf registration statement on Form S-3, which was declared effective by the SEC on August 14, 2025, on which we registered for sale up to $500 million of any combination of our Class A common stock, preferred stock, warrants, and/or units from time to time and at prices and on terms that we may determine.

On September 4, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Allen & Company LLC, who is acting as the sales agent (the “Agent”), pursuant to which the Company may sell shares of its Class A common stock from time to time at prices and on terms determined by market conditions at the time of offering, up to an aggregate offering price of $100.0 million through or directly to the Agent in one or more at-the-market (“ATM”) offerings.

Since inception of the Sales Agreement through December 31, 2025, the Company has issued 1.9 million shares of Class A common stock under the Sales Agreement for net proceeds of $18.1 million.

We currently intend to use the net proceeds from this offering for general corporate purposes, which may include, but are not limited to, financing our operations, technology development, working capital and capital expenditures.

Material Cash Requirements

We anticipate that our expenditures will exceed our revenue through at least the next 12 months from the date of filing of this Annual Report on Form 10-K, as we:

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

• develop and expand our offerings, including Biosecurity;

• continue our R&D activities under existing and new programs and further invest in and expand our tools offerings;

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

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• maintain, expand, and protect our intellectual property.

• continue our restructuring actions.

We have various noncancelable operating leases for office and laboratory space, with significant leases expiring between 2030 and 2039.

As of December 31, 2024 , we have minimum rental commitments under noncancellable operating leases of $61.2 million in 2025 and $662.5 million thereafter.

As of December 31, 2025 , we have fixed minimum rental commitments under noncancellable operating leases of $56.3 million in 2026 and $606.5 million thereafter, plus additional variable rents.

See Note 10 to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Purchase Obligations

In August 2023, we entered into a five-year strategic cloud and AI partnership with Google Cloud, which includes minimum annual commitments to purchase cloud hosting services.

As of December 31, 2024, the remaining aggregate commitment was $279.3 million, with approximately $44.3 million payable in 2025 and $235.0 million thereafter.

In March 2022, we entered into a four-year noncancelable supply agreement with Twist for the purchase of diverse products including synthetic DNA.

Under this agreement, we are obligated to spend a minimum of $58.0 million over the four-year term, with approximately $24.8 million payable in 2025 and $4.8 million thereafter.

In August 2023, the Company entered into a five-year strategic cloud and AI partnership with Google Cloud, which included minimum annual commitments to purchase cloud hosting services.

The partnership previously included minimum annual commitments over the contract years ending August 27, 2027 to purchase cloud hosting services in exchange for various discounts on such services.

The aggregate $289 million future purchase commitment included minimum annual commitments were 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.

Effective October 3, 2025, the Company entered into amendment that revised the total aggregate future purchase commitment to $110 million and reset the annual commitments as follows (each annual year is defined as October 3 to October 2):

year 1 (starting on October 3, 2025), $6.0 million;

year 2, $8.0 million;

year 3, $12.0 million;

year 4, $18.0 million;

year 5, $28.0 million;

year 6, $38.0 million.

The Company recognized a contractual liability of $20.9 million during year ended December 31, 2025 as a result of shortfall in purchasing relative to its commitments under the original agreement.

The Company is required to make a one-time payment of $14.0 million to be released from its

minimum annual commitment obligations under the original agreement in January 2026.

If the Company does not meet its minimum annual commitment obligations in the future, additional shortfall liabilities may be incurred and future contractual losses may be material.

Effective April 1, 2025, the Company entered into an amendment to its four-year supply agreement with Twist for the purchase of diverse products including synthetic DNA.

The original agreement was effective as of April 1, 2022 and obligated 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.

The amendment converts the remaining minimum annual commitments into non-refundable payments creditable against future purchases by the Company, with no expiration.

The Company paid $4.0 million in April 2025 and is obligated to non-refundable payments of $5.0 million on April 1, 2026 and $6.0 million on April 1, 2027, respectively.

A contractual loss of $8.7 million was recorded in the year ended December 31, 2025.

In 2026, the Company will be required to fund a surety bond in the amount of $47.0 million to fulfill its obligations under a contract with a U.S.

Government National Laboratory related to the sale of RAC automation equipment.

The $47.0 million will be restricted until the Company completes all of its obligations under the contract.

Currently the Company expects the cash to be restricted until 2029.

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

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(in thousands) 2025 2024

Net cash used in:

Net cash (used in) provided by:

Operating activities $ (171,059) $ (319,585)

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Net cash used in operating activities for the year ended December 31, 2025 consisted of a net loss of $312.8 million, adjusted for a net decrease in cash due to changes in operating assets and liabilities of $44.1 million and non-cash charges of $185.8 million.

The net change in operating assets and liabilities was primarily driven by a $32.4 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, a $27.9 million decrease in operating lease liabilities from rent payments, and a $5.2 million increase in prepaid expenses and other current assets;

partially offset by a $10.4 million increase in accrued expenses and other current liabilities and an $11.5 million increase in other non-current liabilities due to shortfalls in contractually committed spending related to our contracts with Twist and Google Cloud (see Note 12 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details), and a $3.8 million decrease in operating lease right-of-use assets from lease incentives received.

Non-cash adjustments primarily consisted of $59.0 million in depreciation and amortization, $81.5 million in stock-based compensation expense, $16.4 million loss on investments, and $30.1 million non-cash lease expense.

Net cash used in operating activities for the year ended December 31, 2024 consisted of a net loss of $547.0 million, adjusted for a net decrease in cash due to changes in operating assets and liabilities of $89.7 million and non-cash charges of $317.1 million.

The net change in operating assets and liabilities was primarily driven by a $40.4 million decrease in accrued expenses and other current liabilities primarily due to the payment or release of restructuring-related accruals and litigation costs, a $68.6 million decrease in deferred revenue primarily from a one-time release of a deferred revenue balance associated with a terminated customer contract, and a $14.9 million decrease in operating lease liabilities from rent payments, partially offset by a $23.5 million decrease in operating lease right-of-use assets from lease incentives received and a $10.1 million decrease in prepaid expenses and other current assets, primarily driven by the derecognition of an insurance receivable and a reduction in contract renewals resulting from our restructuring actions.

Non-cash adjustments primarily consisted of $63.0 million in depreciation and amortization, $112.3 million in stock-based compensation expense, $28.8 million loss on investments, $28.1 million non-cash lease expense, $19.8 million in acquired in-process research and development expense, and $58.5 million in various asset impairment charges.

Net cash used in operating activities for the year ended December 31, 2023 consisted of a net loss of $892.9 million, adjusted for a net increase in cash due to changes in operating assets and liabilities of $29.8 million and non-cash charges of $567.5 million.

The net change in operating assets and liabilities was primarily driven by (i) a $50.1 million decrease in accounts receivable from collections of Biosecurity receivables and the end of COVID-19 testing in schools in 2023, (ii) a $10.5 million decrease in prepaid expenses and other current assets primarily from depletion of inventory coinciding with the reduction of Biosecurity product revenue plus the timing of directors and officers insurance payments in the prior year, (iii) a $9.3 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $16.9 million increase in accrued expenses and other current liabilities primarily from accrued litigation costs, partially offset by (v) a $35.9 million decrease in deferred revenue and (vi) a $22.8 million decrease in operating lease liabilities from rent payments.

Non-cash adjustments primarily consisted of $70.5 million of depreciation and amortization, $229.9 million of stock-based compensation, $57.5 million loss on investments including equity method investments, $9.2 million loss on the change in fair value of contingent consideration liabilities, $28.3 million of non-cash lease expense, $121.4 million in impairments of long-lived assets, and $42.5 million loss on deconsolidation of Zymergen.

Non-cash adjustments primarily consisted of $63.0 million in depreciation and amortization, $112.3 million in stock-based compensation

expense, $28.8 million loss on investments, $28.1 million non-cash lease expense, $19.8 million in acquired in-process research and development expense, and $58.5 million in various asset impairment charges.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2025 primarily consisted of purchases of marketable debt securities of $418.6 million, maturities of marketable debt securities of $159.5 million, and sales of marketable debt securities of $25.9 million, and $7.7 million in purchases of property and equipment related to the build-out of new office and laboratory space near our headquarters.

Net cash used in investing activities for the year ended December 31, 2024 primarily consisted of $62.5 million in purchases of property and equipment related to a build out of new office and laboratory space being developed near our headquarters, $5.4 million paid for the acquisition of certain Zymergen assets, offset by $4.5 million in proceeds from the sale of marketable securities.

Net cash used in investing activities for the year ended December 31, 2023 primarily consisted of purchases of property and equipment of $40.8 million associated with Foundry capacity and capability investments, relinquishment of $43.0 million in cash upon the deconsolidation of Zymergen, offset by $4.4 million in proceeds from the sale of equipment.

Financing Activities

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

Net cash used in financing activities for the year ended December 31, 2025 primarily consisted of $18.1 million in net proceeds from the ATM offering and $0.4 million of principal payments on finance leases.

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Options to acquire additional goods and services are evaluated to determine whether they provide a material right to the customer that would not otherwise be available without entering into the contract.

Judgment is required to assess whether a customer option constitutes a material right.

Judgment is required to assess whether a

customer option constitutes a material right.

If a material right is identified, the option is treated as a separate performance obligation, and the revenue allocated to the option is deferred until the option is either exercised or expires.

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We recognize an impairment loss when and to the extent that the estimated fair value of the long-lived assets is less than their carrying value.

We assess goodwill for impairment at the reporting unit level on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill impairment assessments require a significant amount of management judgment and the use of estimates and assumptions that could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge.

During the year ended December 31, 2024, due to a sustained decrease in the market price of our Class A common stock and market capitalization, we identified that a possible indicator of impairment was present as of June 30, 2024.

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The estimated fair value of the Cell Engineering reporting unit was determined using a weighted approach that considered a discounted cash flow (“DCF”) model under the income approach and the guideline public company (“GPC”) method under the market approach.

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.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis