Gingko Bioworks Q1 2022 Earnings Review

First Quarter 2022 Financial Highlights

• First quarter 2022 Total revenue of $168 million, up from $44 million in the comparable prior year period, an increase of 282%

• First quarter 2022 Foundry revenue of $21 million, down from $23 million in the comparable prior year period, a decrease of 5%

• First quarter 2022 Adjusted EBITDA of $(2) million, improved from $(51) million in the comparable prior-year period; however, a decrease of $(1) million from Fourth quarter Adjusted EBITDA of $1 Million.

• Added 11 new Cell Programs to the Foundry platform in Q1 2022, representing 175% growth over the prior-year period

 2022 Guidance

• Ginkgo continues to expect to add 60 new Cell Programs to the Foundry platform in 2022

• Ginkgo increased its expectation for Total revenue from $325 – $340 million to $375 – $390 million in 2022

  • Ginkgo continues to expect Foundry revenue of $165 – $180 million in 2022

 2022 M&A

• Announced plan to expand platform capabilities in agricultural biologics and launch flagship partnership with Bayer

  • Ginkgo plans to acquire Bayer's West Sacramento agricultural biologicals site and team and gain access to Bayer's large agricultural strain collection

• Closed acquisition of FGen AG, a Swiss company specializing in ultra-high-throughput (uHT) screening for strain development and optimization

  • FGen's technology is expected to significantly enhance Ginkgo's cell screening capabilities and enable Ginkgo to explore wider expanses of genetic opportunity space

Q1 22' Thoughts

All though Gingko posted an overall revenue beat with $168 million, (driven by Biosecurity) foundry revenue was reported as less than expected. Foundry revenue decreased QoQ from $34 million in Q4 2021 to $21 million in Q1 2022. Foundry revenue is even down 5% YoY, having posted $23 million in Q1 2021. Luckily, Ginkgo's biosecurity revenue (unpredictable) has been strong as of late with $147 million with a gross profit margin of 42% in the first quarter. 

Management must be predicting a heavy 2nd half of the fiscal year with a rise in revenue guidance from $325 – $340 million to $375 – $390 million in 2022. Ginkgo continues its strong outlook by sticking with its 60 new cells programs added in 2022. 11 new programs were added to their Foundry platform in Q1. Only 1 more than the 10 new cell programs posted in Q4 of 2021. 

I would like to see more growth from their Foundry platform in revenue and new cell programs. Cash and cash equivalents balance as of the end of the first quarter of $1.5 billion puts Ginkgo in a strong financial position to pursue its strategic objectives. Here are some closing remarks from Co-founder and CEO, Jason Kelly:

"We added 11 new programs in our cell programming business in the first quarter of 2022, including in many novel areas of work, and realized record revenues in our biosecurity business. We believe we are well-positioned for this market downturn and expect to continue to invest in platform growth, both organically and through M&A, while ensuring we maintain a healthy balance sheet. We are particularly excited about our planned transactions with Bayer, in which they will be establishing a flagship partnership with Ginkgo in the field of agricultural biologicals and transferring their physical platform and team to Ginkgo to extend our platform capabilities in this field. We expect to see strategic moves like this in other industries in the coming years."