DNA

Ginkgo Bioworks Holdings, Inc. - 10-Q Summary (Q2 2026)

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. Ginkgo Bioworks provides cell engineering biological R&D services and tools to government and commercial customers. A significant strategic shift occurred on April 3, 2026, with the completion of the Biosecurity Divestiture, where the company sold its Biosecurity business to Perimeter Systems, Inc. in exchange for a minority equity interest. Consequently, the Biosecurity business is now reported as discontinued operations, and the company operates as a single reportable segment focused on cell engineering.

Key Financial Metrics

Note: Q2 Operating Cash Flow is estimated based on YTD figures minus Q1 data not explicitly broken out in the summary text, though YTD operating cash burn is confirmed.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 48.5% year-over-year in Q2 2026. This was driven by a reduction in scope for a large agriculture customer and fewer programs with pharmaceutical/biotech enterprise customers. YTD revenue dropped 48.8%.
• Expense Reduction: Operating expenses decreased significantly due to the restructuring plan initiated in 2024. R&D expenses fell 13.4% in Q2 and 22.7% YTD. G&A expenses fell 12.0% in Q2 and 8.2% YTD.
• Discontinued Operations Impact: The divestiture of the Biosecurity business resulted in a $24.5 million gain on deconsolidation in Q2 2026, which significantly improved the reported Net Loss compared to the loss from continuing operations.
• Investment Losses: A $4.7 million loss was recorded on the equity method investment in Perimeter Systems (the buyer of the Biosecurity business) in Q2 2026.
• Asset Write-down: The company reduced the carrying value of a senior secured note receivable from Bolt Threads to zero after Bolt ceased operations.

Guidance, Outlook, and Risks

• Liquidity Outlook: Management believes current cash, cash equivalents, and marketable securities ($302.2 million) are sufficient to fund operations for at least the next 12 months. However, expenditures are expected to exceed revenue through this period.
• Capital Raising: The company utilized an At-The-Market (ATM) offering, raising net proceeds of $16.5 million in the first half of 2026. The ATM program allows for up to $100 million in aggregate sales.
• Restructuring Status: The workforce reduction (over 50%) and facility consolidation are substantially concluded, though subleasing of excess space is expected to continue through 2026. No restructuring charges were incurred in Q2 2026.
• Key Risks:
  • Cash Burn: Continued reliance on capital markets to fund operations.
  • Customer Concentration: Revenue volatility linked to large enterprise customers in agriculture and pharma.
  • Restricted Cash: $47.0 million of cash is restricted until 2029 to secure a surety bond for a U.S. Government National Laboratory contract.
  • Investment Volatility: Exposure to the performance of equity interests in customers and partners (e.g., Perimeter Systems).

Investor Verification Checklist

• Restricted Cash: Verify the impact of the $47.0 million restricted cash balance on immediate liquidity and working capital availability.
• Revenue Quality: Assess the sustainability of revenue given the 48% decline and the shift away from non-cash consideration (equity) revenue recognition.
• Perimeter Investment: Monitor the valuation and performance of the retained equity interest in Perimeter Systems, which recently generated a $4.7 million loss.
• ATM Utilization: Track the remaining capacity under the $100 million ATM program and the dilution impact of recent share issuances.
• Facility Costs: Review the "carrying cost of excess space" ($14.2 million in Q2) and the timeline for subleasing to reduce this fixed cost burden.