Ginkgo Bioworks Holdings, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in Item 1A “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q and in our 2025 Annual Report. Overview Our mission is to make biology easier to engineer. Ginkgo currently sells cell engineering biological R&D services and tools to government and commercial customers across a range of industries. Cell Engineering Ginkgo offers 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 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 RAC systems capable of large scale data generation; it powers generative AI and 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 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 intellectual property 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. 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 25 Table of Contents 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 minimal incremental costs. 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. Discontinued Operations On April 3, 2026, the Company completed a divestiture of its Biosecurity business, which was previously reported as a separate segment, whereby the Purchaser issued to the Company shares of common equity of the Purchaser representing a minority interest in the Purchaser in exchange for substantially all of the Company’s operations comprising its Biosecurity business (see Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details). The Company is presenting the financial results for the former Biosecurity business within discontinued operations for all periods presented within its accompanying condensed consolidated statements of operations and cash flows and the accompanying condensed consolidated balance sheet as of December 31, 2025 reflect the transferred Biosecurity assets as held for sale. Prior to the Biosecurity Divestiture, the Biosecurity business provided services to government customers working to identify, monitor, prevent and mitigate biological threats. Components of Results of Operations Revenue We generate 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. 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. 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. We are not compensated through 26 Table of Contents additional milestone or royalty payments under these arrangements. 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. 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 6 , 7 , and 15 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 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. The initial fair market value of the equity interests received may also decrease after contract inception and the amount of cash proceeds eventually realized may be less than the revenue recognized. 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. Costs and Operating Expenses Cost of Other Revenue Cost of other revenue consists of costs related to our cell engineering tools offerings, including Datapoints and lab automation solutions. Such costs primarily include hardware, software, materials and labor. Costs associated with our end-to-end cell engineering solutions offering are included in research and development expenses. Research and Development Expenses The nature of our business, and primary focus of our activities, generates a significant amount of R&D expenses. R&D expenses represent costs incurred by us for the following: • development, operation, expansion and enhancement of our Foundry and Codebase; and • costs incurred to deliver our end-to-end cell engineering solutions offering to customers. The activities above incur the following expenses: • personnel compensation and benefits; • rent, facilities, depreciation, software, professional fees and other direct and allocated overhead expenses; and • laboratory supplies, consumables and related services provided under agreements with third parties and in-licensing arrangements. We expense R&D costs as incurred. Our R&D expenses were lower in the first half of 2026 compared to the first half of 2025, primarily due to our restructuring plan announced and commenced in the second quarter of 2024 as we rationalized 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 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. General and Administrative Expenses G&A expenses consist primarily of costs for personnel in executive, business development, finance, human resources, legal and other corporate administrative functions. 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, and facility-related costs not otherwise included in R&D expenses. Our G&A expenses were lower in the first half of 2026 compared to the first half of 2025, primarily due to our restructuring plan announced and commenced in the second quarter of 2024, as we reduced our operational overhead. 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 27 Table of Contents increase in 2026 due to employee incentive programs offered. Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, divestitures, and other inorganic growth initiatives. Restructuring Charges Restructuring charges are related to our restructuring plan, which was announced and commenced in the second quarter of 2024 and substantially concluded in the fourth quarter of 2025. These charges primarily included 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. While the Company has substantially completed the majority of its facility consolidation actions with excess space available for sublease, the subleasing of unused or underutilized facilities is expected to extend throughout 2026 and may not occur prior to termination of such lease, depending on market conditions. Additional details are included in Note 3 , Restructuring, of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Interest Income, Net Interest income, net consists primarily of interest earned on our cash and cash equivalents and marketable debt securities. Loss on Equity Method Investment Loss on equity method investments includes our share of losses from our equity method investment in Perimeter Systems, Inc. Gain (Loss) on Investments Gain (Loss) on investments includes the change in fair value of our marketable equity securities in publicly traded companies and impairment losses recognized on non-marketable equity securities in privately held companies. Other Income (Expense), Net 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. Provision for Income Taxes Income taxes are recorded in accordance with ASC 740 , Income Taxes , which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. For all periods presented, we have recorded a valuation allowance against the deferred tax assets that are not expected to be realized. We account for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors, including, but not limited to, changes in the law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, R&D tax credits and other permanent differences. Our income tax provision may be affected by changes to our estimates. 28 Table of Contents Results of Operations Comparison of the Three and Six Months Ended June 30, 2026 and 2025 The following table presents our results of continuing operations for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 Change 2026 2025 Change Revenue $ 20,156 $ 39,134 $ (18,978) $ 39,630 $ 77,364 $ (37,734) Costs and operating expenses: Cost of other revenue 1,719 5,380 (3,661) 4,817 9,470 (4,653) Research and development 46,210 53,370 (7,160) 96,130 124,293 (28,163) General and administrative 30,775 34,981 (4,206) 68,605 74,704 (6,099) Restructuring charges — 3,566 (3,566) — 8,032 (8,032) Total operating expenses 78,704 97,297 (18,593) 169,552 216,499 (46,947) Loss from operations (58,548) (58,163) (385) (129,922) (139,135) 9,213 Other income (expense): Interest income, net 3,232 6,083 (2,851) 6,828 12,164 (5,336) Loss on equity method investment (4,673) — (4,673) (4,673) — (4,673) Gain (loss) on investments 1,987 (229) 2,216 773 (3,922) 4,695 Other income (expense), net 809 (1,168) 1,977 (6,338) (5,806) (532) Total other income (expense) 1,355 4,686 (3,331) (3,410) 2,436 (5,846) Loss from continuing operations before income taxes (57,193) (53,477) (3,716) (133,332) (136,699) 3,367 Income tax (benefit) expense 128 (283) 411 48 (195) 243 Net loss from continuing operations $ (57,321) $ (53,194) $ (4,127) $ (133,380) $ (136,504) $ 3,124 Revenue Revenue was $20.2 million for the three months ended June 30, 2026, compared to $39.1 million for the three months ended June 30, 2025, a decrease of $19.0 million. This decrease was primarily due to a decrease in the scope of services provided to a large enterprise customer in the agriculture industry and decrease in programs with large enterprise customers primarily in the pharmaceutical and biotechnology industries. Revenue was $39.6 million for the six months ended June 30, 2026, compared to $77.4 million for the six months ended June 30, 2025, a decrease of $37.7 million. This decrease 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. contract in the first quarter of 2025, a decrease in the scope of services provided to a large enterprise customer in the agriculture industry, and decrease in programs with large enterprise customers primarily in the pharmaceutical and biotechnology industries. As discussed above in Components of Results of Operations, Cell Engineering revenue comprises both cash and non-cash consideration. Revenue recognized relating to non-cash consideration decreased from $1.2 million for the three months ended June 30, 2025 to $0.8 million for the three months ended June 30, 2026, and from $9.9 million for the six months ended June 30, 2025 to $1.3 million for the six months ended June 30, 2026, primarily due to lower non-cash revenue from other customers, and 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. 29 Table of Contents Cost of Other Revenue The cost of other revenue was $1.7 million for the three months ended June 30, 2026, compared to $5.4 million for the three months ended June 30, 2025, a decrease of $3.7 million. This decrease was primarily due to reductions in direct equipment expenses incurred for lab automation solutions customers. The cost of other revenue was $4.8 million for the six months ended June 30, 2026, compared to $9.5 million for the six months ended June 30, 2025, a decrease of $4.7 million. This decrease was primarily due to reductions in direct equipment expenses incurred for lab automation solutions customers. 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 to our cell engineering customers. Research personnel costs, including stock-based compensation, is our largest expense, totaling $17.9 million and $23.7 million for the three months ended June 30, 2026 and June 30, 2025, respectively and $41.5 million and $54.4 million for the six months ended June 30, 2026 and June 30, 2025, 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 $46.2 million for the three months ended June 30, 2026, compared to $53.4 million for the three months ended June 30, 2025, a decrease of $7.2 million. This decrease was primarily driven by reductions of $4.8 million in stock-based compensation expense (inclusive of employer payroll taxes), $4.4 million in personnel-related compensation and benefits expenses, and $3.0 million in depreciation and amortization. These decreases were partially offset by an increase of $4.3 million in allocated overhead expenses and $0.7 million in other operating expenses. Research and development expenses were $96.1 million for the six months ended June 30, 2026, compared to $124.3 million for the six months ended June 30, 2025, a decrease of $28.2 million. This decrease was primarily driven by reductions of $13.7 million in personnel-related compensation and benefits expenses, $9.8 million outside services, $5.9 million in stock-based compensation expense (inclusive of employer payroll taxes), $4.9 million in depreciation and amortization, and $0.2 million in other operating expenses. These decreases were partially offset by an increase of $6.3 million in allocated overhead expenses. General and Administrative Expenses General and administrative expenses were $30.8 million for the three months ended June 30, 2026, compared to $35.0 million for the three months ended June 30, 2025, a decrease of $4.2 million. This decrease was primarily driven by reductions of $6.2 million in stock-based compensation expense (inclusive of employer payroll taxes) and $3.1 million in personnel-related compensation and benefits expenses. These decreases were partially offset by increases of $2.9 million in earnout remeasurement, $2.0 million in rent and facilities expenses, and $0.2 million in other operating expenses. General and administrative expenses were $68.6 million for the six months ended June 30, 2026, compared to $74.7 million for the six months ended June 30, 2025, a decrease of $6.1 million. This decrease was primarily driven by reductions of $8.9 million in personnel-related compensation and benefits expenses, $6.1 million in stock-based compensation expense (inclusive of employer payroll taxes), and $1.1 million in other operating expenses. These decreases were partially offset by increases of $5.8 million in rent and facilities expenses and $4.2 million in earnout remeasurement. Restructuring Charges Restructuring charges were zero and $3.6 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and zero and $8.0 million for the six months ended June 30, 2026 and June 30, 2025, respectively. Restructuring charges relate to our restructuring plan, which was announced and commenced in the second quarter of 2024 and substantially concluded in the fourth quarter of 2025. These charges primarily consisted of employee termination costs 30 Table of Contents from the reduction in force. 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 $3.2 million for the three months ended June 30, 2026, compared to $6.1 million for the three months ended June 30, 2025, a decrease of $2.9 million primarily due to lower average cash balances invested in money market funds and marketable debt securities. Interest income, net was $6.8 million for the six months ended June 30, 2026, compared to $12.2 million for the six months ended June 30, 2025, a decrease of $5.3 million primarily due to lower average cash balances invested in money market funds and marketable debt securities. Loss on Equity Method Investment Loss on equity method investment includes our share of losses from our equity method investment in Perimeter Systems, Inc. Gain (Loss) on Investments Gain on investments was $2.0 million and a loss of $0.2 million for the three months ended June 30, 2026 and June 30, 2025, respectively. The change was primarily driven by gains on our marketable equity investments in the second quarter of 2026. Gain on investments was $0.8 million and a loss of $3.9 million for the six months ended June 30, 2026 and June 30, 2025, respectively. The change was primarily driven by gains on our marketable equity investments in the second quarter of 2026 and higher impairment losses on our non-marketable equity investments in privately held companies in 2025. 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. Other Income (Expense), Net We recorded net other income of $0.8 million for the three months ended June 30, 2026, compared to net other expense of $1.2 million for the three months ended June 30, 2025, a decrease of $2.0 million. This increase was primarily due to increased sales of excess equipment. We recorded net other expense of $6.3 million for the six months ended June 30, 2026, compared to net other expense of $5.8 million for the six months ended June 30, 2025, a decrease of $0.5 million. This increase was primarily due to losses on the change in fair value of a note receivable accounted for under the fair value option recorded in 2026 and 2025. Non-GAAP Information In addition to our results determined in accordance with GAAP, we use earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA internally to evaluate our performance and make financial and operational decisions. We believe these non-GAAP measures, when viewed with our GAAP results, may be helpful to investors in assessing our operating performance. We define EBITDA as net loss from continuing operations attributable to Ginkgo Bioworks Holdings, Inc. 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, acquisitions, and divestitures, including related litigation costs, restructuring and impairment charges (inclusive of impairments of goodwill and long-lived assets), 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. 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. These measures exclude significant expenses and income required by GAAP, which impacts their alignment with consolidated financial statements. They also rely on management’s judgment to 31 Table of Contents 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. A reconciliation of EBITDA and Adjusted EBITDA to net loss from continuing operations, the most directly comparable GAAP financial measure, is presented below: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Net loss from continuing operations (1) $ (57,321) $ (53,194) $ (133,380) $ (136,504) Interest income, net (3,232) (6,083) (6,828) (12,164) Income tax (benefit) expense 128 (283) 48 (195) Depreciation and amortization 12,315 15,249 25,114 30,071 EBITDA (48,110) (44,311) (115,046) (118,792) Stock-based compensation (2) 8,037 18,770 24,745 36,483 Restructuring charges (3) — 3,566 — 8,032 Merger and acquisition related expense (income) (4) 1,106 (3,617) 1,106 (4,535) Loss (gain) on investments (1,987) 229 (773) 3,922 Loss on equity method investment 4,673 — 4,673 — Change in fair value of convertible notes — — 6,759 5,285 Adjusted EBITDA $ (36,281) $ (25,363) $ (78,536) $ (69,605) (1) All periods include non-cash revenue when earned, including $7.5 million recognized in the six 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 $0.2 million in employer payroll taxes for the three months ended June 30, 2026 and 2025, respectively. Includes $1.3 million and $0.5 million in employer payroll taxes for the six months ended June 30, 2026 and 2025, respectively. (3) Restructuring charges primarily consist of employee termination costs from the reduction in force commenced in June 2024. (4) Represents transaction and integration costs directly related to mergers, acquisitions, and divestitures, including: (i) legal, consulting, and accounting fees associated with acquisitions; (ii) post-acquisition employee retention bonuses; (iii) (gain)/loss from changes in the fair value of contingent consideration liabilities resulting from acquisitions; and (iv) securities litigation costs. Not included in this adjustment are acquired in-process research and development expenses, which totaled zero for both the three and six months ended June 30, 2026 and June 30, 2025, respectively. Liquidity and Capital Resources Sources of Liquidity As of June 30, 2026, we had cash and cash equivalents and marketable securities of $302.2 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. 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 the Sales Agreement with Allen, who is acting as 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 ATM offerings. Since inception of the Sales Agreement through June 30, 2026, the Company has issued 3.7 million shares of Class A common stock under the Sales Agreement for net proceeds of $34.6 million. We currently intend 32 Table of Contents 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 Quarterly Report on Form 10-Q, as we: • 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; • potentially acquire and integrate companies, assets or intellectual property that advance our company objectives; and • maintain, expand, and protect our intellectual property. Surety Bond In April 2026, the Company was required to restrict $47.0 million of cash and cash equivalents to secure a surety bond of the same amount 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 remain restricted until the Company completes all of its obligations under the contract. Currently the Company expects the cash to be restricted until 2029. Cash Flows The following table provides information regarding our cash flows for each period presented: Six Months Ended June 30, (in thousands) 2026 2025 Net cash provided by (used in): Operating activities - continuing operations $ (88,606) $ (81,305) Operating activities - discontinued operations (2,353) (10,470) Investing activities 34,219 (262,572) Financing activities 16,470 (305) Effect of exchange rate changes (86) 260 Net decrease in cash, cash equivalents and restricted cash $ (40,356) $ (354,392) Operating Activities - Continuing Operations Net cash used in operating activities for the six months ended June 30, 2026 consisted of a net loss from continuing operations of $133.4 million, adjusted for net change in operating assets and liabilities of $27.3 million and non-cash charges of $72.1 million. The net change in operating assets and liabilities was primarily due to (i) a $10.7 million decrease in operating lease liabilities from rent payments, (ii) a $7.7 million decrease in accounts payable, accrued expenses and other current liabilities primarily due to a payment associated with a minimum purchase obligation, (iii) a $6.1 million decrease in other non-current liabilities primarily due to a payment associated with a minimum purchase obligation, (iv) a $5.6 million decrease in deferred revenue primarily from the recognition of previously deferred revenue, partially offset by (v) a $3.5 million decrease in accounts receivable due to timing of customer billings. Non-cash adjustments primarily consisted of $25.1 million of depreciation and amortization, $23.4 million of stock-based compensation expense, $13.3 million non-cash lease expense, a $6.8 million change in fair values of various assets and liabilities, a $4.7 million loss on our equity method investment in Perimeter, and a $0.8 million gain on investments. Net cash used in operating activities for the six months ended June 30, 2025 consisted of a net loss from continuing operations of $136.5 million, adjusted for net change in operating assets and liabilities of $30.9 million and non-cash charges of $86.2 million. The net change in operating assets and liabilities was primarily due to (i) a $24 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, partially offset by (iii) a $3.8 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $3.3 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 $2.2 million decrease in 33 Table of Contents accounts receivable due to timing of customer billings. Non-cash adjustments primarily consisted of $36.2 million of stock-based compensation expense, $30.1 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. Operating Activities - Discontinued Operations Net cash used in operating activities for the six months ended June 30, 2026 consisted of net income from discontinued operations of $4.1 million, adjusted for net change in operating assets and liabilities of $0.2 million and non-cash charges of $6.6 million. The net change in operating assets and liabilities was primarily due to (i) a $7.8 million decrease in accounts receivable due to collections of customer billings, partially offset by (ii) $8.1 million decrease in accounts payable, accrued expenses and other current liabilities. Non-cash adjustments primarily consisted of a $24.5 million gain on deconsolidation recorded upon the closing of the sale of the Biosecurity business (see Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q), $17.3 million of stock-based compensation expense, and $0.6 million of depreciation and amortization. Net cash used in operating activities for the six months ended June 30, 2025 consisted of a net loss from discontinued operations of $14.8 million, adjusted for net change in operating assets and liabilities of $3.3 million and non-cash charges of $7.6 million. The net change in operating assets and liabilities was primarily due to (i) a $2.6 million increase in accounts receivable due to timing of customer billings, (ii) a $1.8 million decrease in accounts payable, accrued expenses and other current liabilities, partially offset by (iii) a $0.8 million decrease in prepaid expenses and other current assets, and (iv) a $0.3 million increase in deferred revenue. Non-cash adjustments primarily consisted of $6.5 million of stock-based compensation expense and $1.1 million of depreciation and amortization. Investing Activities Net cash provided by investing activities for the six months ended June 30, 2026 primarily consisted of purchases of marketable debt securities of $127.4 million, maturities of marketable debt securities of $166.2 million, and purchases of property and equipment of $4.6 million primarily related to the build out of our Autonomous Lab. 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. Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026 primarily consisted of $16.5 million in net proceeds from the ATM offering. Net cash used in financing activities for the six months ended June 30, 2025 primarily consisted of principal payments on finance leases. Critical Accounting Estimates There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report. Recently Issued Accounting Pronouncements See Note 1 , Basis of Presentation and Summary of Significant Accounting Policies, of our condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently issued accounting pronouncements, as disclosed in our 2025 Annual Report.