Ginkgo Bioworks (US:DNA)2023-05-11 01:58Financial Data and Key Metrics Changes - The company reported a net loss of $100 million in Q1 2023, compared to a net loss of $1 million in the same period last year, primarily due to increased operating expenses and a decline in Biosecurity revenue [43] - Adjusted EBITDA was negative $100 million, reflecting higher expenses in cell engineering and expected declines in Biosecurity revenue [43] - Capital expenditures (CapEx) for Q1 2023 were $19 million, with expectations for lower levels in subsequent quarters [43] Business Line Data and Key Metrics Changes - Cell Engineering revenue reached $34 million in Q1 2023, a 59% increase from Q1 2022, driven entirely by services revenue [40] - The Biosecurity business generated $47 million in revenue in Q1 2023, with over 20% coming from recurring sources such as federal and international contracts [40] - The company added 13 new cell programs, supporting a total of 97 active programs across 60 customers, up from 64 active programs in Q1 2022 [39] Market Data and Key Metrics Changes - The company is expanding its Biosecurity efforts internationally, having collected samples from flights originating in 72 countries [41] - The company noted that the tighter capital market is making it harder for start-up companies in non-biopharma biotech to access capital, extending deal close times [93] Company Strategy and Development Direction - The company is focused on improving its platform for customers, emphasizing the importance of customer feedback to enhance service offerings [34][60] - New service offerings include Ginkgo Microbe Services, Ginkgo Cell Therapy Services, Ginkgo AAV Services, and Ginkgo RNA Therapeutic Services, aimed at leveraging platform assets [81] - The company aims to treat biology as an engineering discipline, moving towards a success-only payment model for certain services to enhance customer trust [83] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the goal of adding 100 new cell programs in 2023, supported by a robust sales pipeline [66] - The company is navigating a challenging macroeconomic environment while focusing on cost structure and maintaining liquidity of $1.2 billion [44] - Management highlighted the importance of AI and large data sets in driving innovation within the biotech sector, positioning Ginkgo as a key player in this transformation [68] Other Important Information - The company is experiencing a significant shift in its Biosecurity business, moving from K-12 COVID testing services to more sustainable revenue sources [40] - The company has seen a significant reduction in stock-based compensation expenses due to the rolling off of prior RSUs [42] Q&A Session Summary Question: How do you feel about your original forecast of adding 100 projects for 2023? - Management expressed confidence in the forecast, citing a good pipeline and ongoing expansion in biosecurity programs [63][65] Question: Can you provide an overview of Ginkgo's AI and code-based strategy? - Management highlighted the importance of AI in generating large data assets and its relevance to customers across various industries [67][69] Question: How is Ginkgo leveraging its existing code base for new cell programs? - Management noted that leveraging existing data and infrastructure significantly aids in sales and project acceleration [72][73] Question: How does Ginkgo balance leveraging collective learning while ensuring client confidentiality? - Management stated that the focus is on broad reusability of certain components while ensuring that proprietary client information remains protected [75]