Ginkgo Bioworks Holdings (NYSE: DNA) stock plunged over 10% in pre-market trading Friday following the release of disappointing Q1 sales figures.
Ginkgo Bioworks (DNA) recently released its first-quarter financial results, revealing key figures that missed analyst consensus estimates. The company reported quarterly sales of $38 million, falling short of the analyst consensus estimate of $46.044 million by 17.47%. This represents a significant 52.91% decrease in sales year-over-year. Ginkgo attributed the decline in sales primarily to the expected reduction in K-12 testing within its Biosecurity segment.
Ginkgo reported Cell Engineering revenue of $28 million for the quarter, reflecting an 18% decrease driven by a decline in revenue from early-stage customers, partially offset by growth from large/enterprise customers. Meanwhile, Biosecurity revenue reached $10 million, with a gross profit margin of 8%, indicating the early stages of transitioning to a more recurring business model.
Jason Kelly, CEO of Ginkgo, acknowledged the company’s importance within the biotech ecosystem and emphasized decisive action to maintain its significance. Kelly expressed disappointment in the Q1 revenue performance, stating,
“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.”
In response to the financial challenges, Ginkgo unveiled a strategic plan to achieve adjusted EBITDA break-even by the end of 2026 on an annualized run-rate basis. This plan includes significant cost-saving measures, such as reducing the company’s physical footprint and associated expenses by up to 60%. The company also aims to implement workforce reductions resulting in at least a 25% decrease in labor expenses.
Ginkgo Bioworks (NYSE: DNA) Stock Reaction
As of 04:37 a.m. (Eastern Time) Friday, DNA stock traded at $0.8244, marking a 10.39% decrease compared to the previous trading session.
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