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Ginkgo Bioworks Q3 Revenues Drop as It Lowers Guidance on New Cell Engineering Programs in 2023

NEW YORK – Ginkgo Bioworks said after the close of the market on Wednesday that it is lowering its full-year guidance for new cell engineering programs. 

The firm now expects between 80 to 85 new programs in 2023. Previously, it had expected 100 new programs. 

"Ginkgo signed several technology licensing evaluation agreements in the third quarter, which do not involve Foundry service work and therefore are not included in our Cell Program count, though they represent a new source of potential future revenue," the firm said in a statement. 

Investment bank BTIG downgraded shares of Ginkgo from "Buy" to "Neutral" in response to the lowered cell programs guidance. “This wasn't a major surprise to us, but for Ginkgo to make this adjustment in November … is disappointing,” BTIG analyst Mark Massaro wrote Thursday in a note to investors. 

In Thursday morning trading on the New York Stock Exchange, shares of Ginkgo Bioworks were down 11 percent at $1.32. 

The Boston-based firm also reported that its third quarter 2023 revenues fell 17 percent year over year driven by the ramp down of COVID-19 testing in schools. 

For the three months ended Sept. 30, Ginkgo reported $55.4 million in total revenues compared to $66.4 million a year ago, beating the consensus Wall Street estimate of $48.1 million. 

Biosecurity revenues fell 56 percent year over year to $18.3 million from $41.7 million in Q3 2022. Biosecurity service revenues in the quarter were $11.8 million, down 68 percent from $36.5 million a year ago, while biosecurity product revenues were $6.5 million, up 25 percent from $5.2 million a year ago. 

Cell engineering revenues were $37.2 million, up 51 percent from $24.7 million in Q3 2022. The firm added 21 new cell programs representing 40 percent growth over the prior-year period. 

Ginkgo's net loss for the quarter totaled $302.9 million, or $.16 per share, compared to a net loss of $670.1 million, or $.41 per share, in Q3 2022, missing the consensus Wall Street estimate of a $.09 loss per share. The number of weighted average shares of common stock used to compute its Q3 net loss per share was approximately 1.95 billion compared to approximately 1.63 billion in Q3 2022. 

Ginkgo reported $156.7 million in R&D expenses for the quarter compared to $261.5 million a year ago, driven by stock based-compensation expenses. 

Its SG&A expenses were $82.0 million compared to $435.2 million a year ago. The year-ago SG&A expenses were also driven by stock-based compensation expenses. Excluding stock-based compensation, those expenses rose by 39 percent compared to $59 million a year ago. 

As disclosed in Q4 2021, Ginkgo's stock-based compensation was due to "catch-up" expenses resulting from the firm's historical practice of not booking restricted stock unit grants. 

As of Sept. 30, Ginkgo had $1.05 billion in cash and cash equivalents. 

Ginkgo also slightly raised the floor on its 2023 total revenue guidance. It now expects between $250 million and $260 million. Previously it had expected between $245 million and $260 million.