Financials

Financials — What the Numbers Say

1. Financials in One Page

Ginkgo's financial story is a SPAC-era platform whose top line is going the wrong direction. Revenue peaked at $477.7M in FY2022 when COVID-era biosecurity work was running hot, then collapsed to $170.2M in FY2025 as the biosecurity business unwound and Cell Engineering revenue stalled around $130–175M. Gross margin is still high (72% in FY2025) because the work is service-priced and capacity is largely sunk, but operating expense remains 2–3x revenue, so operating margin is -185% and free cash flow is -$179M. The balance sheet is keeping the equity alive: $423M of cash against $417M of convertible debt, so net debt is effectively zero — but cash has burned by more than $1.1B since FY2021 and the share count keeps drifting up. Valuation has deflated to 0.90x book and 2.7x sales — the lowest end of the synbio peer set — but no path to break-even is yet visible. The metric that matters most is cash runway versus operating cash burn; everything else only matters if Ginkgo survives long enough for it to.

Quick definitions used on this page. Gross profit = revenue minus the direct cost of doing the work. Operating margin = operating profit divided by revenue (negative = the business loses money before financing). Free cash flow (FCF) = operating cash flow minus capex; this is the cash that's actually left for shareholders or to repay debt. Net debt = total debt minus cash and equivalents (negative = more cash than debt). Return on equity (ROE) = net income divided by book equity; for loss-makers it measures how fast equity is being destroyed.

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2. Revenue, Margins, and Earnings Power

The first thing to know about Ginkgo's income statement is that the 2021–2022 revenue is not the right baseline. Biosecurity service work — primarily school COVID-19 testing under the K-12 Operation Expanded Testing program — drove $179M of FY2021 revenue and $299M of FY2022 revenue. As that program rolled off, biosecurity revenue collapsed to $79M (FY2023), $53M (FY2024), and $37M (FY2025). The real operating business is the Cell Engineering platform, which has wandered between $113M and $174M for five years with no durable up-trend. FY2025 Cell Engineering revenue of $133M was below FY2022 ($144M).

Revenue rose nine-fold from FY2019 to FY2022, then has fallen for three straight years and is now 64% below the FY2022 peak. Operating losses peaked at $2.2B in FY2022 — that figure was dominated by ~$1.9B of non-cash stock-based compensation tied to founder award vesting after the de-SPAC. Even stripping out that one-time SBC overhang, the operating loss has been over $300M every year since FY2021 and was still -$315M in FY2025 despite aggressive cost cuts.

Gross margin is the one bright spot, structurally around 75–80% once one-time inventory write-downs are excluded. That tells you the unit economics of a delivered Cell Engineering program are reasonable; the problem is at the operating-expense line, not at cost of revenue. R&D plus SG&A combined was $427M in FY2025 against $170M of revenue — the platform's overhead is more than 2x its top line. Management has been cutting, but not fast enough to keep up with revenue declines: opex fell ~50% over three years, while revenue fell ~64%.

Recent quarterly results confirm the slide rather than break it.

The most alarming line on this entire page is the Q1 FY2026 revenue of $19.5M — down 49% year-over-year from $38.2M in Q1 FY2025 and the lowest quarterly print since Q3 FY2020. Even allowing for normal lumpiness in milestone-driven Cell Engineering revenue, this print is a step-change. Management has guided to roughly $40M of quarterly revenue through FY2026, which would require an immediate snap-back; investors have to underwrite whether that guide is achievable.

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3. Cash Flow and Earnings Quality

For a loss-making platform business, the right question is not "are earnings clean?" but "what is the relationship between the accounting loss and the cash going out the door?" In Ginkgo's case, the gap is dominated by a single line: stock-based compensation (SBC).

In FY2021 and FY2022, operating cash flow was far better than net income (losses of ~$2B reported, but only ~$250M of cash actually went out). The difference was $1.6B of SBC in FY2021 and $1.9B in FY2022 — non-cash compensation expense tied to founder award vesting after the SPAC merger. Useful for understanding the loss; misleading if used to project future cash needs.

From FY2023 onward the gap inverts: cash burn (FCF) is larger than the headline loss in FY2024 (-$382M FCF vs -$547M NI? no, FCF is closer to NI), and approaches the loss in FY2025. That convergence is healthy in one sense — there's no more SBC distortion — but it also confirms that the reported loss is now mostly real cash going out.

SBC as a percentage of revenue is the loudest single signal on the cash-flow statement. In FY2021–FY2022 it was 4–5x revenue, dwarfing the actual business. After the founder grants vested, SBC fell — but at $81.5M in FY2025 it still equals 48% of revenue, well above any reasonable SaaS or biotech-tools comparable. Adjusted-EBITDA presentations that exclude SBC are misleading.

Cash-flow distortion	FY2024	FY2025	Comment
Stock-based compensation	$112.3M	$81.5M	Still ~48% of revenue; should be treated as a real cost.
Capex	$62.5M	$7.7M	Collapsed in FY2025 — capex now under 5% of revenue, signaling deferred maintenance on the foundries.
Acquisitions	$5.4M	$0	Bolt-on M&A is paused.
Stock buybacks	$0	$19.5M	First non-trivial buyback; modest relative to dilution.
Net change in cash	-$383.8M	-$393.4M	Cash continues to drain at ~$400M/yr including investments.

The capex line is worth dwelling on. Capex fell from $62.5M (FY2024) to $7.7M (FY2025) — an 88% drop. Some of that is genuine cost discipline; some of it is "we already built it and now we have to live with it" — property, plant and equipment is still $528M, and depreciation runs $59M/yr. Spending less than D&A is a near-universal signal that the company is harvesting rather than investing.

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4. Balance Sheet and Financial Resilience

The balance sheet has done all the work of keeping Ginkgo alive. At the end of FY2021 the company sat on $1.55B of cash raised through the SPAC merger and a March-2022 convertible note issuance. Four years later cash is $422.6M, a $1.1B decline driven entirely by operating losses and capex.

In FY2022 Ginkgo issued $700M of convertible senior notes (later partially repurchased). The remaining ~$413M of debt is convertible — meaning it can either be repaid in cash or converted into shares if the stock recovers. With the stock at $8.93 vs convert strike well above current price, that debt is economic debt, not equity-in-waiting.

The result is that the balance sheet has shifted from "fortress" to "tight":

Three things to note. (1) The current ratio of 4.92x is still healthy — short-term obligations are well covered for now. (2) Debt/equity went from effectively zero to 0.82x in four years; equity shrank faster than debt rose. (3) Book value per share has collapsed from $44.26 to $9.17 — most of it is the cumulative deficit, which now stands at -$6.15B of retained earnings. Every year of losses that retained-earnings line gets bigger and the equity buffer gets thinner.

The traditional "runway" math: $423M of cash, FY2025 operating burn of $171M, capex of $8M — that's ~2.4 years of runway if FY2025 burn is the new normal. Q1 FY2026 revenue cratered to $19.5M, so the burn could re-accelerate. Convertible debt of $417M does not mature until 2027, but absent a stock recovery above the conversion price, cash needed to redeem those notes is roughly equal to cash on hand today. The survival window is real, but finite.

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5. Returns, Reinvestment, and Capital Allocation

For a profitable company, return on invested capital tells you whether management is compounding shareholder wealth. For Ginkgo, the metric tells you how rapidly capital is being destroyed. Every dollar of equity has earned a deeply negative return for seven straight years.

ROE is improving in the sense that the losses are smaller — but ROE of -51% in FY2025 means the company is destroying about half of its remaining book equity every year. Returns to capital cannot be improving while the revenue base is shrinking and operating costs still exceed gross profit by ~3x.

The capital-allocation pattern is a textbook melt-down sequence: massive equity issuance in FY2021 (SPAC + PIPE), large convertible debt raise in FY2022, then steady dilution while cash burns away.

Share counts here are post the 1-for-40 reverse stock split executed in October 2024. EPS values pre-split have been restated.

Shares outstanding have grown ~7% per year on a 3-year CAGR even after the reverse split, primarily from SBC vesting and at-the-market offerings. By Q1 FY2026 the count is already at 59.6M, up another 7% in one quarter. Buybacks in FY2025 ($19.5M) are a rounding error against the dilution.

The verdict: management has done what they can — they cut SG&A, paused acquisitions, stopped most capex, and reduced SBC. But they cannot compound capital when the operating model loses money on every dollar of revenue. The reinvestment math fails not because of bad allocation but because the underlying business does not earn its cost of capital.

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6. Segment and Unit Economics

Ginkgo reports two segments — Cell Engineering (the core platform: bioengineering services, foundries, Datapoints) and Biosecurity (Concentric Biosciences: COVID-era school testing, now wastewater and federal biosecurity surveillance).

This single chart explains the entire revenue history. Biosecurity ran up from $17M in FY2020 to $334M in FY2022 entirely on K-12 Operation Expanded Testing service revenue. That program ended; by FY2025 biosecurity revenue is back to $37M. Ginkgo announced the divestiture of the Concentric Biosciences biosecurity unit in April 2026, meaning the FY2026 reported top line will be Cell Engineering–only.

Cell Engineering revenue — the actual core business — has stalled. FY2021 $113M → FY2022 $144M → FY2023 $144M → FY2024 $174M → FY2025 $133M. There is no durable up-trend over five years. New program adds also peaked: 78 in FY2023, 52 in FY2024.

The unit economics here are sobering: Cell Engineering has never produced segment operating income, in any year, since the company started reporting segments. The smallest loss was -$58M in FY2020 on $59M of revenue. The segment operating loss in FY2025 was -$95.5M against $133M of revenue — still a -72% segment operating margin, even after excluding Corporate. Biosecurity was briefly profitable in FY2021–FY2022 when government COVID work was running; it returned to losses in FY2023 and is now being divested.

Programs KPI — Ginkgo's headline operational metric — also shows the platform losing momentum:

New program adds peaked at 78 in FY2023 and dropped to 52 in FY2024. The active-program count keeps climbing because programs accumulate, but the flow of new platform deals is contracting just as the COVID tailwind exited.

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7. Valuation and Market Expectations

With persistent negative earnings and negative free cash flow, the only meaningful valuation lenses are price-to-sales (EV/Sales) and price-to-book. P/E, EV/EBITDA, and P/FCF are all negative and therefore meaningless.

The multiple has compressed by 94% from peak: P/S 42.7x at the FY2021 close (the IPO/SPAC peak) to 2.7x at end-FY2025. P/B compressed from 8.9x to 0.9x — Ginkgo is now trading below tangible book value of $8.21/share. (Share prices for FY2021–FY2023 in this table are post-1-for-40 reverse split equivalent.)

Ginkgo trades at the lowest P/S in the synbio/AI-bio peer set, except for CDXS (a much-smaller and shrinking enzyme platform). The market is paying for growth and platform optionality elsewhere; it is paying for survival risk at Ginkgo.

Analyst price targets and fair-value indicators (consensus, last 90 days):

Source	Target	Note
TD Cowen	$12.00	Cut from $14.00 in Jan 2026, fair-value reset to ~$10
Goldman Sachs	$0.30	Maintained Sell; lowest target on the street
Wall Street consensus (Benzinga, 7 analysts)	$4.63 avg	High $12 (TD Cowen) / Low $0.30 (Goldman)
Wall Street consensus (MarketWatch, 3 analysts)	$8.50 avg	Range $5.00–$12.00; current price $8.93
William Blair	—	Downgraded to Sell in FY2025

The dispersion is the story. Bulls are betting on a successful pivot to AI/Datapoints and Lab Automation services with cost discipline. Bears are betting that revenue continues to deteriorate and the convertible note creates a refinancing crisis when the stock cannot redeem in equity. The consensus 12-month price target of ~$8.50 is essentially flat to current price; the market thinks the next year is a coin flip.

Bear / Base / Bull at-a-glance (1-year stylized scenarios):

• Bear ($2–$5): Cell Engineering revenue stays sub-$130M, biosecurity divest yields little net cash, $417M convertibles refinanced with dilutive equity; P/B compresses to 0.3x–0.5x.
• Base ($6–$10): Cost cuts hold, FY2026 revenue stabilizes around analyst $159M, FCF burn narrows toward $100M; stock trades near tangible book.
• Bull ($11–$15): Cell Engineering returns to 20%+ growth, Datapoints and lab-automation produce visible revenue inflections, convertible notes refinanced on reasonable terms; multiple expands toward 4x sales.

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8. Peer Financial Comparison

The peer set is constructed around synthetic biology platforms (TWST), AI/TechBio drug discovery (RXRX, SDGR), antibody discovery (ABCL), and enzyme engineering (CDXS). All have similar challenges — long sales cycles, heavy SBC, persistent operating losses — but the financial spreads tell you which businesses are leveraging on revenue growth and which are not.

The peer table makes Ginkgo's position visible: it is the only peer with revenue contracting (-25% YoY). Every other comparable is growing 19–161%. Ginkgo's gross margin (72%) is competitive with SDGR/TWST and well below ABCL/CDXS — that's a real strength. Its FCF margin of -105% is among the worst in the set; only RXRX (the largest cash burner) is worse. Cash position is workable but no longer dominant — SDGR has 70% of DNA's cash with less than half the debt and positive FCF. DNA's P/S of 2.7x is the lowest in the group except for CDXS, but the market is right to apply that discount: DNA is the only peer where the business is shrinking.

The peer comparison says the market is not under-pricing Ginkgo on cash flow; it is fairly pricing it as a contracting platform with a finite cash runway. A re-rating requires DNA to start growing again, full stop.

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9. What to Watch in the Financials

metric	why_it_matters	latest_value	better	worse	where_to_check
Cell Engineering quarterly revenue	The only durable revenue stream after biosecurity divestiture.	$19.5M (1Q26)	$35M+/qtr signals stabilization	<$25M extends decline	10-Q segment table
Operating cash burn	Sets the survival window vs the $423M cash balance.	-$171M (FY2025)	<-$120M run-rate	>-$200M	Cash flow statement
Cash & equivalents	Direct runway indicator vs $417M convertible due 2027.	$423M (FY2025)	Stable q/q	Falls below $350M	Balance sheet
Convertible note plan	$413M of converts coming due; refinancing terms determine dilution.	$413M outstanding	Refinanced at par with low coupon	Equity exchange at distressed terms	10-Q/8-K filings
SBC as % of revenue	A 48% SBC-to-revenue ratio means non-cash dilution is structural.	48% (FY2025)	<30%	>50%	Cash flow statement
Gross margin	Tells you whether unit economics are intact even as scale slips.	72% (FY2025)	>75%	<65%	Income statement
Shares outstanding	Dilution is the silent return-killer.	59.6M (Q1 FY26)	<60M flat	>65M by year-end	Cover of 10-Q
New programs (KPI)	Forward-looking demand signal for Cell Engineering.	52 (FY2024)	>70	<40	Q4 earnings deck
Biosecurity divestiture proceeds	One-time cash event that can extend runway.	Pending	$50M+ cash	<$10M, write-down	8-K, 10-Q

What the financials confirm. The accounting losses are increasingly real cash losses now that SBC has come down from $1.9B founder-grant levels to ~$80M. Cost discipline is happening — opex fell ~50% over three years — but not fast enough to outrun a 64% revenue decline. The balance sheet is no longer a fortress: net debt is effectively zero, and the cash buffer roughly equals the convertible note balance.

What they contradict. The "platform that gets cheaper to run as it scales" thesis is not visible in the numbers. Cell Engineering has been segment-loss-making in every year reported, and the most recent quarter (1Q26) is the lowest quarterly revenue print in over five years. The 80% gross margin is real, but it doesn't matter if revenue does not scale into the opex base.

The first financial metric to watch is Q2 FY2026 Cell Engineering revenue. A bounce from $19.5M back toward $35–40M would suggest Q1 was a milestone-driven trough and analyst guidance of ~$159M for FY2026 is achievable. A second sub-$25M print would mark the platform business toward a melt-down trajectory and put the convertible refinancing in serious doubt.