Ginkgo Bioworks Stock Falls On Disappointing Q1 Sales: 'This Trend Needs To Change'

Ginkgo Bioworks Holdings, Inc. DNA reported its first-quarter financial results after the bell Thursday. Here's a look at the key figures from the report. 

The Details:

Ginkgo Bioworks reported quarterly sales of $38 million which missed the analyst consensus estimate of $46.044 million by 17.47% and is a 52.91% decrease in sales year-over-year. The company said the decrease in sales was primarily driven by the expected ramp down of K-12 testing in Ginkgo’s Biosecurity segment.

Ginkgo said Cell Engineering revenue was $28 million for the quarter, a decrease of 18% driven by a decline in revenue from early stage customers partially offset by growth from large/enterprise customers. Biosecurity revenue was $10 million with gross profit margin of 8% which the company said is reflective of the early stages of transition to a more recurring business model.

“Ginkgo is an increasingly important part of the biotech ecosystem, and we are taking decisive action to keep it that way,” said Jason Kelly, CEO of Ginkgo. “We’ve demonstrated that we can serve a large number of diverse programs on a common platform, but I’m disappointed in our revenues in Q1.  This trend needs to change, and we are simplifying both what we sell to customers and how we do the work that drives revenue at Ginkgo.”

The company announced a plan to achieve adjusted EBITDA break-even by the end of 2026 on an annualized run-rate basis. The plan includes a reduction of its physical footprint and associated expenses by up to 60% and workforce reductions resulting in at least a 25% decrease in labor expenses.

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DNA Price Action: According to Benzinga Pro, Ginkgo Bioworks shares are down 10% after-hours at 83 cents at the time of publication Thursday.

Image: Gerd Altmann from Pixabay