NEW YORK - Ginkgo Bioworks Holdings Inc (NYSE: NYSE:DNA) reported a significant revenue shortfall for the first quarter of 2024, with figures coming in at $37.94 million against a consensus estimate of $46.37 million.
The company's revenue saw a dramatic 53% decline to $38 million from $81 million in the same quarter last year, primarily due to the anticipated reduction in K-12 testing within its Biosecurity segment.
The adjusted loss per share of -$0.08 was in line with analyst expectations, but the revenue miss led to an 11% drop in the company's stock, signaling investor concerns over the company's financial performance.
The Cell Engineering segment also experienced an 18% decrease in revenue, dropping to $28 million from $34 million in the prior year, attributed to a decline in revenue from early-stage customers.
However, this was partially offset by growth from larger enterprise customers. Biosecurity revenue stood at $10 million with a gross profit margin of 8%, reflecting the early stages of a transition to a more recurring business model. The company's adjusted EBITDA remained flat YoY at -$100 million as decreased revenues were balanced by lower operating expenses.
Ginkgo's CEO, Jason Kelly, expressed disappointment with the company's revenue performance and emphasized the need for change. He outlined initiatives to simplify operations and reduce costs, targeting an adjusted EBITDA breakeven by the end of 2026.
This includes consolidating Foundry operations into Biofab1, a new integrated lab data center, and simplifying transaction terms to accelerate commercial activity. The company's strong cash balance of $840 million and absence of bank debt provide a solid foundation for these transformation efforts.
For the full year 2024, Ginkgo has updated its revenue guidance to $170-$190 million, with Cell Engineering services expected to bring in $120-140 million, reflecting a slower than expected revenue ramp and potential impacts from restructuring. Biosecurity is projected to generate at least $50 million, in line with current contracted backlog and additional pipeline opportunities.
Despite the revenue miss and subsequent stock drop, Ginkgo added 17 new Cell Programs in the first quarter, a 31% increase YoY, and expanded its partnership with Novo Nordisk (NYSE:NVO). The company also introduced its Lab Data as a Service offering and announced new biosecurity products, Ginkgo Canopy and Ginkgo Horizon, to enhance global biothreat monitoring and response.
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