Yahoo Finance Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) Q1 2024 Earnings Call Transcript
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) Q1 2024 Earnings Call Transcript May 9, 2024
Ginkgo Bioworks Holdings, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Megan LeDuc: Good evening, I’m Megan LeDuc, Manager of Investor Relations at Ginkgo Bioworks. I’m joined by Jason Kelly, our Co-Founder and CEO; and Mark Dmytruk, our CFO. Thanks as always for joining us, we’re looking forward to updating you on our progress. As a reminder, during the presentation today, we will be making forward-looking statements, which involve risks and uncertainties. Today, in addition to updating you on the quarter, we’re going to provide more detail into our drive towards adjusted EBITDA breakeven, and the necessary steps we’re talking to get there. As usual, we’ll end with a Q&A session, and I’ll take questions from analysts, investors and the public. You can submit those questions to us in advance via X at #GinkgoResults or email investors@ginkgobioworks.com. All right. Over to you, Jason.
Jason Kelly: Thanks, everyone for joining us. We always start with our mission of making biology easier to engineer, and that's especially critical today. Ginkgo's a founder-led company and myself and the other founders have been pouring our lives into this company for the past 15 years, and many of our senior leaders for more than a decade. The advantage of this is we're very motivated to see the most out of Ginkgo. We've invested a ton of our lives in it. And as a consequence, we want to see the most out of the investment of your capital in Ginkgo as well. So today, we're going to be announcing major changes to how we do our work at Ginkgo. These are going to be difficult for many on the team, and I want to say that upfront, it's going to involve substantial headcount reductions, alongside important changes to improve our operations.
The mission of what we're doing matters at Ginkgo to everyone at the company. And you will see us collectively take difficult, but decisive action when needed to ensure we deliver on it and today is one of those days. So Ginkgo is an increasingly important part of the technology ecosystem in biotech, and that's why I think it's important we get this right. I'm really proud of this customer list. It’s unbelievably broad, it showcases our core thesis that a common platform can provide biotechnology R&D services for very demanding customers across ag, food, industrial, biopharma and consumer biotech. I'm also happy with how we've been expanding this list. In particular, many of the big names in that biopharma column were added in just the last 18 months, Merck, Novo Nordisk, Boehringer, Pfizer.
However, the next step for Ginkgo is to take what we've been learning across now hundreds of customer programs and make changes in the business that deliver those programs more efficiently. In particular, I'm going to talk later about how we can achieve greater scalability via simplification of the business. We want to simplify both our technology back-end, ultimately consolidating to consolidate to a single automation platform and simplify on the front-end. We've gotten a lot of feedback from mobile logos on this page about what they like and don't like about our deal terms. So we're going to be simplifying those, too, and that hopefully will increase sales velocity and simplify our deal making. More on that in a minute, but first, Mark is going to walk you through our Q1 performance.
And there are a couple of things that are indications that we do need to change course. In particular, you'll see an increase in programs without a matching increase in revenue. This is a problem that I'll be working to fix via the changes you're going to hear about today. We're fortunate to be in a position of financial strength as we execute these changes. We have $840 million in cash. We have no bank debt. And so we have a large margin of safety, which is really the position you want to be in when you make large changes like this. In other words, we're not doing this with our back against the wall, and that's a very deliberate choice on our part. We're also setting a target of achieving adjusted EBITDA breakeven by the end of 2026. The attitude internally at Ginkgo, and I know many at the company are listening right now, will be to collectively set our plan for reaching that, which is going to involve input from all the folks on the team and then commitment from all of us to not spend outside of that tight plan.
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