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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. Please refer to our filings with the SEC to learn more about these risks and uncertainties. Today, in addition to updating you on the quarter, we are going to provide updates on our path towards adjusted EBITDA breakeven as well as customer progress in our cell engineering business and our latest H5N1 offerings. 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 e-mail investors at ginkgobio.com. All right. Over to you, Jason.

Thanks, Megan, and thanks, everyone, for joining us. We always start with our mission of making biology easier to engineer here at Ginkgo and similar to last quarter, we continue to focus on three key objectives. First, we want to reach adjusted EBITDA breakeven while maintaining a cash margin of safety. And we ended this quarter with $616 million in cash and no bank debt and have already exceeded our cost-cutting target for 2024. In other words, we've hit the target we're trying to hit by the end of the year. At the rate we were dropping costs, that makes for a nice cash margin of safety, in my opinion. Second, while we cut costs, we need to keep serving our current customers and adding new customers. I'll dive into this in the strategic section, but I'm very happy about achieving the $9 million technical milestone with Merck that we just announced this morning. That's a great indication of Ginkgo delivering R&D solutions to blue chip customers in biopharma. Finally, we want to grow our revenue in solutions while also expanding into selling tools. And I'll cover this more on the strategic section, but we're excited by the traction we are seeing in our newly launched data points business with a couple of recent wins with top 25 biopharmas that are new customers to Ginkgo. As a reminder, in the last quarter's call, we talked about how we expect to see $100 million of costs taken out on an annualized run rate basis this year with an additional $100 million coming out by mid-'25. I am happy to report we're not just in line to reach those goals, but we are actually ahead on those metrics. You'll see in the deck that our Q3 results indicate we're ahead of schedule in cost cutting with a $125 million annualized run rate cash OpEx improvement relative to Q1. Okay. I'm excited to get into all of that more in the strategic section. But before that, I want to hand it over to Mark to discuss the financial results for the quarter.

Thanks, Jason. I'll start with the cell engineering business. I'll start by noting that during the quarter, Ginkgo recognized $45 million in noncash revenue from a release of deferred revenue relating to the mutual termination of a customer agreement we had with Motif FoodWorks, one of our platform ventures. We have no further obligations to perform services under this agreement and hence, the accounting for the deferred revenue release. Excluding this impact, cell engineering revenue was $30 million in the quarter, down 20% compared to the third quarter of 2023. Similar to prior quarters of this year, this decline was driven primarily by the continued shift from small early-stage customers to large enterprise customers, along with the changes we've made as part of the restructuring. In the quarter, we supported a total of 136 active programs across 81 customers on the cell engineering platform. This represents a 17% increase in active programs year-over-year with the largest amount of growth coming from food and ag and government customers. As we discussed in our Q1 and Q2 earnings calls, the nature of programs that we take on with our customers has evolved following our recent adjustments to commercial terms and the launch of our data points offering. While still very early days, this slide gives you some detail on how the nature of programs is changing. We added a total of 25 new programs and contracts in Q3 2024, of which 11 were generally comparable in size and scope to historically reported new programs and were included in the current active program count on the prior slide. Importantly, you'll note that of those, nine out of the 11 deals were either government or biopharma programs. In addition, we commenced 14 other customer contracts in the quarter that represent a variety of small deal archetypes, these are generally much smaller in scope and shorter in duration and include two data points deals as well as seven other biopharma deals. The current sales pipeline for both categories of deals is strong, and we are encouraged that we've been able to execute on existing customer programs while converting new opportunities, which Jason will talk more about in the strategic section of the presentation. Now turning to biosecurity. Our biosecurity business generated $14 million of revenue in the third quarter of 2024 at a gross margin of 28%. Revenue and gross margin were down quarter-over-quarter. And as you'll note, lumpy during the course of the year due partly to the timing of signing of a customer contract in Q2 of this year. And now, I'll provide more commentary on the rest of the P&L, where noted, these figures exclude stock-based compensation expense, which is shown separately. And we are also breaking out M&A and restructuring-related expenses to provide you with additional comparability. A full reconciliation of the M&A and restructuring-related costs can also be found in the appendix. Starting with OpEx. R&D expense, excluding stock-based comp and M&A and restructuring costs decreased from $108 million in the third quarter of 2023 to $74 million in the third quarter 2024. This decrease was primarily driven by our restructuring efforts. G&A expense, excluding stock-based comp and M&A and restructuring costs, decreased from $49 million in the third quarter of 2023 to $42 million in the third quarter of 2024, which also reflects cost reduction actions we've taken this year. Stock-based comp. So again, you'll see a significant drop in stock-based comp this quarter, similar to what we have seen over the past year as we complete the roll-off of the original catch-up accounting adjustment related to the modification of restricted stock units when we first went public. Additional details are provided in the appendix. Net loss. It is important to note that our net loss includes a number of noncash income and/or expenses as detailed more fully in our financial statements. Because of these noncash and other nonrecurring items, we believe adjusted EBITDA is a more indicative measure of our profitability. We've also included a reconciliation of adjusted EBITDA to net loss in the appendix. Adjusted EBITDA in the quarter was negative $20 million, which was down from negative $84 million in Q3 2023. This significant improvement in adjusted EBITDA can be attributed to the impact of the previously mentioned noncash deferred revenue release as well as the major cost-cutting initiatives implemented over the last two quarters. And finally, I'll just make one additional comment relating to cash burn in the quarter as compared to Q2. The cash burn in Q3 was impacted by some nonrecurring items including a litigation settlement and employee severance related to the restructuring. Those two items together resulted in cash payments of approximately $23 million in the quarter. So, if you factor that in, along with some working capital timing impact in Q3, that will help explain why the cash burn was relatively high in the quarter despite the OpEx reduction. We would, therefore, expect to see a significant decrease in cash burn in Q4 as a result of the restructuring. In terms of outlook for the full year, we previously issued guidance for total revenue of $170 million to $190 million, cell engineering services revenue of $120 million to $140 million and biosecurity revenue of at least $50 million. We update this previously issued guidance solely to reflect the impact of the previously mentioned $45 million noncash deferred revenue release in the third quarter. With this impact in mind, we now expect our total revenue to be $215 million to $235 million, cell engineering services revenue to be $165 million to $185 million and biosecurity to remain the same of at least $50 million. In conclusion, we're pleased with our overall execution of the restructuring thus far as we navigate substantial cost reductions and commercial changes, which we see as foundational to our path to adjusted EBITDA breakeven. Back over to you, Jason.

Thanks, Mark. Just to add to Mark's comments, I'm very happy with our revenue performance this quarter, but I just wanted to provide extra clarity on the Motif noncash deferred revenue release. So, Motif is one of the companies that was founded on top of Ginkgo's platform. And with these deals, we received equity in the Company in exchange for preferred access to our platform. On top of that, we also paid cash R&D fees when we did work for Motif. The accounting treatment is such that we don't actually book the equity value as revenue until more work is completed across sort of a batch of programs. And now since we terminated the relationship with Motif now, we have a catch-up where all the work is considered finished and we get a bunch of the value all at once. We don't consider this equity to have value at this point given the substantial downturn in the alternate meat space and the status of Motif, which is winding down. So, I correct to account for it as we did. We've been clear that analysts and investors shouldn't think of it as cash revenue. Okay. Let's dive in on the strategic section. So similar to last quarter, I'm going to use the first strategic section to focus on Ginkgo's efforts to reduce costs and provide you with an update on our consolidation efforts. Next, I'm super proud of the work that we've been able to accomplish with customers despite our cost cutting, and I'm excited to highlight some cell engineering successes as well as new deals with blue-chip customers, while also discussing our new data points offerings that are beginning to see traction. Lastly, I'd like to focus on the new services that our biosecurity team has been focused on specifically surrounding the recent spread of H5N1. Okay. Let's get started. So, during our Q2 call, we reiterated our plans to cut spending back by a run rate of $100 million by the end of '24 and an additional $100 million expected by mid-'25. Now although our total cash burn has not reduced significantly in the quarter due to some of the one-off costs that Mark discussed, our key recurring costs have dropped $125 million on an annualized basis since Q1 of this year and we'll hope they'll continue to drop even more as we close out the year. I'm proud of the progress we have made overall and would like to highlight some of the key measures we took to reduce costs. First, we previously announced a 35% rift that has almost been fully executed now. Second, in terms of other expenses, we have reduced our contractor and temp labor pool by nearly 60%, while also cutting back professional fees by roughly 40% since Q1 of this year. We've also significantly reduced the number of software licenses and applications at Ginko, LDaaS software spending. And then lastly, we've seen great progress within our real estate consolidation efforts as we transition out of several offices. I just want to flag it. These cost takeouts do come at a cost. The -- and it's largely that we can no longer go out and sort of an open-ended way to sell our solutions offering. So previously, we book into a large company industrial like a Merck or something, an offer to do whatever type of cell engineering work they needed and then we'd expand the platform on the back end to meet that demand. We're being much tighter now about where and what we sell in the solutions business so that we can deliver more efficiently. In other words, selling things that we've done many times before. And then we're expanding via our tool sales, as I'll talk about in a minute. So, there's a little bit of free lunch here where it's just us tightening our belts. But I do think the big trade here for the cost takeouts is in sort of reducing the scope of what we offer on the solution side when we walk into a customer site and that's a strategic choice. Okay. I want to spend another minute on our site consolidation as that's moved about six months faster than we previously planned. So very happy about this. So, in September, we announced the sale -- I'll just go through a few of the you can see on the map, sites that are closed and also sites where we've been able to even sublease some of those closed sites. So, in September, when we announced the sale of Altar, our French subsidiary, to Lesaffre. This acquisition allows Ginkgo to save these costs and simplify our operations, but we still get to access the technology developed at Altar, which was important to us. So, I want to say congrats to the team for getting this deal done. Lesaffre is a great home for this technology to live, but also importantly, for the Ginkgo employees came in from Altar and are able to go to Lesaffre. And that technology will be deployed well in-house there. We have also worked to shut down our operations in the Netherlands and expect the site to be closed on December 1. And within the U.S., we expect to have fully consolidated our Boston area footprint by the end of the year, which is approximately six months ahead of schedule. We fully closed Atwell, have fully closed our Cambridge locations by the end of November, one is already done, and we're staying at our current site rather than moving into Biofab-1, that's the Parcel O site. We could get into Biofab-l one in the future as we expand our business. I hope we do. And in the meantime, there are a few of the floors that are ready for sublease. So please feel free to send people our way that are looking for great 60% lab, 40% office space here in Boston. I'm happy with the progress we made on our cost-cutting initiatives thus far, but we have more steps we can still take to further reduce costs. So, I mentioned we're looking to sublease. Again, don't hesitate to send people. We're also optimizing our lab supply and spend and reducing inventory. And lastly, we're looking to continue to rationalize across all our expenses, both people and non-people. We made an absolute ton of changes over the summer here, and we have a much better picture now of what's working and not working after those changes. And I still see lots of opportunity to boost productivity and capitalize on cost-saving opportunities throughout the whole company. If we do this, I hope we can even exceed our $200 million cost takeout target on an annualized run rate basis by the middle of next year, while still delivering well for customers and adding new customers. Okay. That's an update on where we expect our cost takes to come from. Next, I want to talk about our cell engineering business and where we're seeing customer success. So as a reminder of what we discussed last quarter, this is how I see our offerings at Ginkgo. So, on the y-axis here, you can see how customized and offering it is that we're offering to our customer, right? And so, as well as the amount of technical risk we take as you kind of go up that axis. As they go up, you get the most extreme form sort of a custom, high technical risk, B2B solution. In other words, developing a drug asset at a small biotech and hoping you can sell it to a large biopharma. That's sort of like the top of that curve. We don't do that at Ginkgo. We've never done it at Ginkgo. We're not planning to start adding a pipeline. But what we have done is what we call our cell engineering solutions. And in this business, we bear less technical risk than we would if we were doing this ourselves, but we do bear some, right? So, you saw that milestone we announced with Merck this morning. That's as a result of us achieving a technical goal that was uncertain whether we would be able to do that, okay? Because we're taking that risk, and because it's so custom for the customer, we are able to ask for commercial milestones and royalties in many cases, on the products that come out of our solutions deals. So that dotted line in the middle, you can see to the left of it, those are things where we can take those royalties. This is a good business, okay? It has tons of upside potential in the milestones and royalties. But the time that those products take to go to market, especially for biopharma is very slow, all right? So, a lot of our challenges have been -- we had a lot of this in the industrial sector that goes to market quicker. That dried up a lot over the last couple of years. We're doing more business in biopharma, but the time to those milestones and royalties takes a while. And so, a lot of our changes in solutions is to reduce our costs down somewhere closer to where the revenues get from the fees for these deals are. So, in other words, we don't need to -- we don't need to be in a rush for those milestones royalties to hit. We can just patiently wait and see those higher returns over time as our customers commercialize products. In the meantime, while we wait for that, we're finding ways to sell our same set of underlying assets, our robotics, our data and AI models, our ability to generate complex lab data at scale via our tools business model. And so, this is the right-hand side of that dotted lines. We're not asking for royalties. The customer owns the intellectual property developed in the project and so on, and we're just charging service fees or charging for equipment. In the last quarter, we made a ton of announcements launching our first products with our AI API, our robotics offering and our data points offering. I'm going to talk about data points in a minute, but first, I want to give a quick update on how things are going in solutions. So, I'm super proud of the work. The solutions team has been doing at Ginkgo, enormous amount of change in that group. And while all that's been having, they've been delivering. I'd like to highlight the announcement this morning that I mentioned with Merck. This program surrounds our previously announced biologic manufacturing work. The Ginkgo team has reached our first technical milestone. This is a real tour to force and very impressive to our customer and also comes along with a research milestone payment of $9 million in cash, which will be reflected in our Q4 financials. We're excited by the work we completed here. We're even more excited about the next stages of this program as we continue to build our relationship with Merck. Next, beyond reaching specific technical milestones with customers. We've also worked to add new customer deals, for example, the ones we're showing here with Novo Nordisk. So, this has happened over the past few years. Several times, we've expanded our relationship most recently announcing a new deal surrounding an umbrella agreement that allows us to add more programs with Novo more efficiently. In other words, we don't have to renegotiate it to launch new work. This has resulted in a new partnership with Novo focused on the discovery and development of proteins. Additionally, we also recently expanded our previously announced collaboration for expression systems for pharmaceutical products. So, it's expanding our old work, adding new work. This is the first time we are speaking about these new and updated deals publicly, but I'm really excited about the opportunity that this illustrates because I believe the ability to reach our revenue and EBITDA targets relies heavily on our ability to execute inside sales deals with key customers. In other words, when you see us signing up a new large biopharma for the first time, and we'll talk about we're doing some of that now with our data points products, that's kind of where we were back with Novo in June of '22, right? Your first getting that relationship going, you're proving yourself to customer, but success breeds success in these relationships particularly in solutions given the close relationship with the partners team needed in these complex R&D partnerships. So, I'm really excited about this. I think you'll see us keep doing this again and again, particularly with the large biopharma customers. Okay. So now, I want to talk about our new tools offerings and in particular, data points, which has been getting rapid traction in the market. Many customers, both start-ups and large biopharma companies are looking to produce large data sets to train AI models for both target discovery, and therapeutic development, okay? In other words, they want to generate these big data sets so that they can take the data in-house in their own models to get better at these two activities. So, our first data points product is what we call functional genomics, and it provides large perturbation data sets to power really target discovery AI models at our customers' sites. This product addresses key problems customers face when training these AI models, data availability, quality and uniformity. We generate large high-fidelity transcriptomic and phenotypic data sets in the disease context of your choice as the customer. We introduced genetics changes, in other words, like CRISPR edits and chemical perturbations such as a compound library in major cell types, including your own internal cell line, if that's what you're interested in. And we provide you with your readouts of choice. Our highly automated workflow means we can deliver data as quickly as three weeks for chemical screens and within three months for genetic screens, depending on the type of cells used and the type of genetic perturbation you're looking for. And the great thing is we can do this over 10,000 perturbations for both chemical and genetics. So, the sort of scale of data you need really for AI model training. And we think this is really a unique service offering in the market today. We also have a sample data set that you can just go to our website and download and interact with that includes a compressed data set, metadata plus raw UMI counts and a short report detailing the workflow and data with a link to the full data set. Customers have really been loving this -- so you should go over and download it if you're a bioinformatician or a drug discovery expert that wants to take a look. Finally, I'm excited to report that we recently signed deals with a leading tech bio company as well as a top 10 pharma company for functional genomics, and these will be reflected in our Q4 program count, okay? The second data point product we launched just a couple of weeks ago is antibody developability, okay? This is applied more on the development of a new drug asset. Our world-class wet lab infrastructure offers customers the scale and breadth to unlock AI in this area. We basically ask a customer to send us their antibody sequences as input, okay? And then we perform wet lab workflows and high throughput and then give back that AI-ready data set. And so, in this case, we are synthesizing, expressing and purifying the antibodies. We're performing broad biophysical characterization across 10-plus developability assays to analyzing and integrating that data and then giving it back in a way that your ML team can work with. And just like functional genomics, we've already created a sample data set. We produced and tested 20 IgG antibodies that were previously characterized in Jain et al, sort of a famous antibody paper back in 2017. And you can just download that data set on our website right now. But we also expanded on this and tested another 200-plus commercial antibodies with the same set of developability assays. And if you reach out to e-mail us, you can get access to that, too. Okay. The downloadable data set includes assay parameters and data output for each of these 10 different assays. There's also read me file with more details on the assays and descriptions of the fields and the data set. Similar to our functional genomics offering. We've already signed a pioneer deal with a top 25 pharma company which will be in our Q4 program count. And one of the things that really excites me is that because the data point deals are initially smaller than solutions and don't involve royalties, we're able to sell them to customers via traditional procurement channels. In other words, it's a much faster sales cycle than we see in solutions where we're really working with the BD group at our customer and sort of doing a longer deal and partnership. It can be as short as a few weeks to close one of these deals. This is especially exciting when it allows us to get a first deal with a new large biopharma that we don't have a relationship with, and we had a couple of those. And so, if we can prove ourselves in data points, I think it will help us sell solutions or robotics offerings in the future. So super excited about this. And again, congratulations to the data points team at Ginkgo for getting those projects launched and adopted so quickly. All right. So that illustrates the catalyst we're seeing within our cell engineering business. I'm now going to turn to what we're seeing within our biosecurity business especially with the recent spread of H5N1 in the U.S. and now actually recently in Canada, too. Now, we talked about H5N1 last quarter. But here, you can see how the spread of this disease has evolved just over the last few months. We've gone from how the flu is spreading and how it's impacting birds and livestock and wildlife to large detections of the disease in humans and how this could turn into the next pandemic if we don't take it seriously. Last quarter, I spoke about how we were working to validate our novel method for genomic surveillance of H5N1 among dairy cow populations. You can see by our map on the left, which pulls together a number of public databases that the spread is impacting several species now, including humans. Because of this rapid spread, we're updating our offering to include DNA sequencing of raw milk, bioinformatics as a service and then comprehensive analyzed data sets. Our first testing method detects and provides genomic information for flu A in raw milk. Our genomic sequencing delivers necessary information to accelerate development of diagnostics, vaccines and therapeutics and also gives early warnings. This is, I think, a pretty clever approach where we test raw milk after it's all pulled together from a bunch of different forms. This protects farmers privacy. People are concerned. There's a lot of analogs here to what we saw with COVID where people don't necessarily want to know that they have this because it has economic impacts. And so, this protects farmers privacy as well as offering insights that might not otherwise be gleaned if only tracking symptomatic cows. Next, we have bioinformatics as a service, our bioinformatic specialist give in-depth analysis of genomic information through a suite of capabilities and tools, including data and insights generation from any samples, it could be from raw milk or wastewater, state-of-the-art AI tools to process that data and then finally, custom analysis of the genome. In other words, is this a viral sequence I should be essentially worried about or not? And lastly, we can offer comprehensive analyzed data sets. We bring in a bunch of data sets and data streams at scale, including our proprietary international nodes for aircraft wastewater that we've talked about before, also wildlife surveillance and so on. And this data has been integrated, analyzed and standardized to give consistent results and comparability across sets. And with that, this landscape of integrated data, we can create sort of a common operating picture to give actual insights to decision-makers typically in governments. With last week's CDC announcement, highlighting the need to identify and implement strategies to prevent transmission among dairy cattle to reduce worker exposures, which is focused on timely identification of infected herds to support the rapid initiation of monitoring testing and treatment of human illness. What -- I think you're seeing CDC start to lean in. We're hopeful Ginkgo can play a role in these efforts. Look, the thing we're trying to avoid -- everyone wants to avoid here is human-to-human transition of this disease. And what's happening is it's spreading in livestock, different animals, humans that are close to that, are occasionally getting it. And the question is, will it mutate in a way that allows a human to spread it to a human. If that happens, that is very bad. So, we're continuing to socialize these threats with the U.S. government so you can hear things like what I just said and we're currently in discussion with potential commercial partners to expand our testing capabilities. As you can see on the slide there some but that allow us to get into sort of about 50% of the milk supply for monitoring. Bottom line is there currently low participation in the government offered voluntary programs that are happening today. So, this is not a business for us yet here, but we think our approach offers a very common-sense solution that sort of protects farmers and producers, but allows this milk supply to still be tested to help us mitigate spread and reduce the odds of human-to-human transition. Our pooled testing approach has quick turnaround on results. We know this from our K-12 testing program, large-scale surveillance can really work. We got a lot of reps handling the complexities of testing and privacy during COVID-19, let me tell you. So, we stand ready to support the dairy industry with the tools that can be used the same way for herds as well as exposed farm workers. This is a good idea, and I hope the U.S. government stays on top of it. Okay. In conclusion, I'm extremely proud of our execution this quarter as we continue to cut back our cost while still delivering on our revenue target and on critical technical milestones for our customers. We deliver for our customers, both with our traditional offerings and our new tools offerings such as data points and I'm excited for the opportunity we have ahead of us as we continue to strive towards adjusted EBITDA breakeven by mid-2026, while maintaining that cash margin of safety. All right. Now I'll hand it back to Megan for Q&A.

Great. Thanks, Jason. As usual, I’ll start with the question from the public and remind the analysts on the line that if they like to ask a question, please raise their hand on

Yes. This is a good question. And I tried to show a chart with that curve on it during the earnings call, to describe a little bit of this, but Ginkgo has our historical solutions business and we are expanding into tools, and I'll give a little bit of the reason behind the strategy. So, the major takeaway I have being out in the market recently as I think Ginkgo is still uniquely kind of providing advanced bioengineering technologies at a level, I don't see other companies really working on. So, I think we remain a very unique technical asset in the market. And so -- and I don't see a lot of places nipping at our heels at the moment. So, I think the biggest thing in this kind of like biotech market downturn right now is Ginkgo needs to be there on the other side of this to then grow into all demand -- those of us who believe in the biotech industry fundamentally expect we'll be there. And so, my overwhelming focus is really on us getting to breakeven. In other words, Ginkgo not need to raise more capital, tightening our spending, getting our cash burn down. Those folks of the Company that are listening today know that, that is sort of what's getting pounded in across the organization. So that's the focus. Okay. So then why are we expanding into tools? Well, the simple reason is, it allows us to take assets we already have our robotics, our data and AI infrastructure and our ability to generate complex data sets with the data points to bring and basically sell our existing assets in a new way. I don't need to spend years building out a new product line to then go and launch it. We're already, as you saw, signing up new large customers in these tools businesses already. And that's because those assets were already there. And so, my hope is this is really a new go-to-market motion that adds revenue to an existing base without adding a lot of additional cost to develop that product. And so that's why we're doing the strategy we are. So even though it is adding a new thing, it's really a new way to sell assets we already have.

Thanks, Jason. Like I said, Tejas, you're up first. Your line is now open.

Perfect. Jason, maybe to kick things off your -- last quarter, you talked about a narrowing of your focus in pharma and industrial along with ag. And I'm just curious as to have you started to notice a clear improvement in resource utilization and efficiency. And sort of on a related note, one of the things that I think you guys have talked about with the large [rift] that you've pulled the trigger on here was the chance of attrition on the delivery teams and the foundry side of the business, right? So, could you just share a little bit of color on anything related to that dynamic?

Yes, I can speak to that. Yes. So, if I restate, we were tightening -- and the way I would describe the tightening -- I think I'll say a few things. You've seen us shift over the last three years since when we went public, from having a large majority of our business in sort of the industrial biotech sector to now government and pharma and ag, which are sort of the mainstay areas of biotechnology accounting for more than 70% of our business today. And so that shift has been a function of people moving out of more like grow the new applications of biotech that were sort of supported by looser capital and people being willing to take longer-term bets in a lower interest rate environment to I know we can make therapeutics. I know we can make strains and the government funds R&D. And so that -- those are really like the bedrock of biotech. And so that's where we shifted as a platform just in terms of where we were focusing in the market. Separately, we have -- even in those areas, like I said on the call, we won't just walk in and say, "I'll do any type of cell engineering for you now." We have our lines of business, protein production and protein design, enzyme engineering, a variety of things. that are sort of what we're good at, RNA work, for example. And so, we'll go in and pitch that in solutions, but not anything under the sun, all right? And that focusing I do -- it is what has allowed us to bring cost down and be able to actually beat costs while still holding on our revenue targets. And so, I do think we are seeing those efficiency gains of that focus, Tejas. That's exactly what you see in the numbers this quarter. In terms of the RIF and attrition, yes, that's something we watch closely, right? I think the team has done an amazing job being able to get that with those areas of focus, really rebuild how we do our work at the Company to deliver it more efficiently. And so, I'm hopeful we can keep doing that, driving down costs in the future. It feels like a good direction. And then the hope is same base assets, we start being able to sell them in a new way with solutions, and that helps us close the gap on cash spending.

Got it. That's helpful. And then a quick follow-up for me. Biopharma funding, any signs of sequential stabilization. I think it's too early to call an infection. No one's kind of like there yet, but curious as to what you guys are seeing in more conversations. And then on the biosecurity side, one of the questions that we've been getting of late -- just given the outcome, how confident are you that the government is committed to funding these biosecurity initiatives, pathogen monitoring and airport sort of even H5N1 surveillance that you called out. I think on one of Mark's slides, actually, there were a bunch of government programs even on the cell engineering side this quarter. So, any color you can share on anything shifting in your mind as it relates to the election?

Yes. So, I can take this both again. So, on the biopharma side, are we seeing increases in sort of venture capital and growth and R&D spending generally. I think like signs of life, green shoots a bit. It's still like a tough time, I would say, in general in biotech. We have the advantage, like I mentioned earlier, that we're getting our first deals with some major biopharma. So, I've said this on color I think in the biopharma industry, it's not like Ginkgo has broadly penetrated with our offerings, right? So, I think for the larger there's not -- it doesn't really matter what's going on with macro relative to Ginkgo today. They would matter for like a Thermo or Charles River something that's sort of like an everywhere already, but Ginkgo is much earlier in our journey. So mostly for us, it's about getting and growing those first relationships in this area. Certainly, outside of biopharma, we got hit really hard. And so -- but I think it biopharma's not been too bad. The start-up companies, the major thing in biopharma is our previous like R&D deal like the solutions business when it comes to start-ups was a hard sell, right? Because it's a little more protective of their research programs. They really didn't like what we were doing with IP and other things there. And so, the tools business, I think, gives us more ability to even sell start-ups. So, we'll see how that goes. But like I said, signs of progress there and data points that I'm excited about. Does that make sense?

Yes. I think that makes sense.

And then on biosecurity and the change of administration, I'll actually point to you, Matt McKnight, who heads up our biosecurity business had an op-ed in the Washington Post yesterday alongside Ashish Jha who was one of the COVID -- senior COVID coordinators in the Biden administration, and then Matt Pottinger, who is on the National Security Council under the First Trump administration, who heading up their focus on China. And that editorial was not so much about infectious disease and public health, but really about biological weapons. And so, I think what you'll see with regards to this administration, we might have also seen there was a say, a couple of weeks ago, another -- I think it was Washington Post also, article about Russia expanding, what was previously a biological weapons plant, and you can see from satellite images, expansion of a number of fermentation facilities, underground tunnels, all these sorts of things. So, I think there's going to be a little bit of a shift on the defense side, monitoring the weaponization of this technology under this administration.

Next up, we have Matt Sykes at Goldman Sachs. Matt, your line is now open.

Jason, maybe a high-level one for you. Just given sort of all the changes you made the addition of various products and services over the last year, how has the transition been towards what I would call like a multiproduct or multiservice company in a time when you're actually cutting spend well, meaning like, has that expanded market opportunity from new products and services offset potential friction with the focus being kind of spread across multiple products? Or are there synergies between these offerings are the decision-makers the same ones that you might have been approaching on the cell engineering? And then to kind of close that out, like how have you changed the commercial focus of the Company to make sure that the commercial team is on the same page as the product development team as you're making all of these changes?

Yes. So maybe I'll speak to that from like two ads on the house internally and then at the customer. So, at the customer, I think it's a net win in the sense that like we might go in talking to someone about solutions and that can be a tough sale. It really depends, if we're like finding a person who really has a need or a research project that got internally that they're stuck on or something else. And so, a sales person would be having an interaction understanding their problems and then say, well, you might want to take a look at what we just launched with functional genomics for target discovery and neural cell or something, right? Like that's a very natural handoff and we've already had a ton of that because all of our products are focused on the research enterprise, right? It just really is a little more about like at what level in the organization, the decision maker is. So, when it comes to a solution’s deal, we're almost always dealing with like tiptop senior leadership in the research organization just because of the size of those deals and the fact that there's milestones and royalties. It's essentially a combination of the BD team and senior R&D leadership. But a proof of concept, "hey, try out our antibody developability," you can do a proof-of-concept deal, that's a 100,000 or less, right? So that can be picked up at the scientist level, more folks at a mid-level in the R&D organization. That's an inlet. Now we're showing progress for an organization I can easily see, we obviously haven't had enough time to do this yet, but I can see us come back after we get a few wins there and talk to people about solutions. So, I do think that's on the sales side. It's actually not confusing. And I think if you look at the history of life science tools companies like a Thermo or Danaher, my God, they do everything under the sun, like it's not like they've narrowed in and focused on one thing, right? And so, I do think that's not that big of a deal on the customer side from like a customer confusion or anything. That's not a problem. On the internal side, there's a question of can you -- to delivering these things like additive or do they live with each other. I think pretty good. I mean, we have internally not to go too far under the hood, but have really split the teams up to make sure each one is focused on delivering its product, whether it's our solutions offering or what we're doing with these new tools businesses. So, the internal teams, we have a little more said, look, I want to focus on what you're doing, so that make sure you deliver for customers. It's the sales teams that kind of are able to jump around a little more. And so that's been working so far. But yes, you're correct, we need to keep an eye on it.

Got it. And then, Mark, just for my follow-up. As we think about Lab Data as a Service and the data point offering, like how should we think about sort of the margin profile of these offerings? I'm assuming the capital intensity is significantly lower. And so, as these things start picking up and sort of -- and the legacy cell engineering is still, but these are kind of driving future growth. How should we think about sort of that breakeven point that you're reaching? And could that accelerate bringing forward that breakeven? Are the margins that much higher and more substantial than the businesses that we could see a shift in sort of your profitability going forward?

I mean it's still early days on the revenue side with those products. And so, you really have to think about kind of at scale what would the gross margin profile look like? And certainly, we're targeting margins that sort of look normal for kind of services in this space. But I think, Matt, it's just still too early like we need to get to a higher revenue scale before the margin profile for the tools businesses would have a kind of move the needle impact on the whole company.

Next up, we have John Kim from Bank of America. John, your line is now open.

So, as you continue to take out costs, I would think there would continue to be also severance packages and also one-off costs. So, can we expect those costs to repeat? And if so, what sort of impact should we model in for the next few quarters?

Yes. So, what we've disclosed in the Q is that we would expect at this point, total onetime costs associated with the restructuring to be in a range of $18 million to $22 million. Around $15 million of that has been accrued to date. So, through Q3, $15 million or $16 million of that has been accrued to date. And so that gives you a sense of sort of what would be left to go. What that doesn't include would be things we don't know about right now or I can't estimate. So, for example, when you think about a site consolidation, it's difficult to know exactly like what costs would be incurred to affect a consolidation, depending on what the sort of outcome with that space is, for example, is a sublease or is it some other sort of type of exit. And so -- but that $18 million to $22 million, of which more than half of that has been kind of booked to date is where we're at right now.

Our next question comes from Mark Massaro at BTIG. Mark, your line is now open.

Yes, I appreciate all the breakouts and the detail. So, you signed 11 new programs in Q3 that are sort of comparable to what you've signed in prior years. Last quarter, it was 10, is it fair to think that like this low double-digit number might be a run rate going forward, recognizing that you're clearly also promoting some data point products and fee-for-service products. So, I'm just trying to get a sense, as we think about modeling out, how do you think about prioritizing sort of the traditional programs with some of the newer product offers.

Yes. That's a good question. Yes. I think you will see us -- obviously, we're trying to grow that second category of our new kind of tool steel, the ones that we had these 14 of this quarter. We love getting the solutions deals. It just is a question of like the rate at which people are going to adopt these R&D partnerships And the other thing I'll say is like it's certainly like the size, like they're more variable, right? Like just some of them are just a hell of a lot more valuable than others. And so that kind of metric is one of the reasons that we kind of decided to come off it this year. I'm not sure how indicative it is. I know solutions has always been a pain the [expletive] for people to try to model for us. And the time, like I said, milestones and scale the milestones, we're obviously occasionally say, how much we have in milestones, it's just a ton, but it's all sort of down the road and unpredictable a little bit, so I'm not sure -- I don't know which way it will go in terms of number. I don't think it's actually like the best way to track the progress in solutions even. But yes, as you can see across the year, it's been around that kind of low double digits.

Okay. Great. And I recognize you're not planning to provide guidance for 2025 today, though, when I look at your cell engineering services guide for this year, at the high end, you're close to growth. And so, with the combination of some new product offerings, I'm curious if you think you have an opportunity to grow that business in '25. And then the second part of that is, I think last year, you reported the aggregate future cash revenue potential added, I think it was $2 billion last year. Should we expect an update to that in the coming months?

You mean on that last point, Mark, you're talking about downstream value share?

Yes. Yes.

Yes. So just to quickly address that. Yes, in the Q4 earnings call, we would provide an update on downstream value share in that portfolio, similar to what we've done over the past couple of years. On the -- sorry, Mark, can you repeat the first question?

Yes, yes, yes. The first part was on the cell engineering services growth.

Yes. I think a good way to think about cell engineering growth. So yes, the tools businesses effectively starting at a baseline revenue of sort of close to zero would be a source of growth in 2025 that would be additive to anything that you would see in the comps in 2024. So that would be true. What we don't know is sort of how much of a contributor that will be, but it would be additive. On the solutions side, I think a good way to think about it is we're primarily focused on aligning our cost structure with revenue-generating programs that we like, given our cash burn, our objective to reduce cash burn and get to adjusted EBITDA breakeven. So, we're not going to grow cell engineering solutions revenue at the expense of missing burn targets or losing the kind of cash margin of safety. And so, there is sort of a -- we will be evaluating very carefully what is like the right level of growth and where it is sort of like the real baseline for cell engineering solutions. So, that's sort of the -- yes, like we could grow it, but we also only want to grow it in a way that is consistent with the cash flow profile that we're looking for in 2025. And then just one final point. We also don't know what will happen with the capital markets. As you can see, most of our new programs has been with biopharma and government customers, not industrial biotech customers. And so, if the industrial biotech market comes back then because of looser capital markets, that could also be another source of growth for us potentially in 2025.

And maybe just the extra color I'd put on that, just back to the plan -- answer to that kind of retail strategy question at the beginning. In the solutions business, I think last year, we said we had several billion dollars in these milestone payments, right? Like a lot of what this is about is can we persist to the other side of that? When I look strategically at technology competitors. I don't -- like I said, I don't see people nipping at our heels, right? So, for me in 2025, $1 taken out of cost or $1 added in revenue, I treat it the same, right? Like I really am focused on that Ginkgo does not need to raise money under adverse conditions and we make it to the other side of this. That's certainly like my strategic target because I think it's optimal, right? Like I just don't think unlike it at crazy race. And so that's what you'll see us doing. Now capital markets chain, customer drive chains, then I'll come with a different strategy, like that's my job. But this -- just so you know, like Mark said, we're not going to chase revenue at the expense of cash in '25.

Other questions, Megan?

Our last set of questions comes from Jacquie Kesa at TD Cowen. Jacquie, your line is now open.

Sorry, this is Jacquie on for Brent. Just one on your AI capabilities. I'm pretty curious as to what your next steps are when you're thinking about building out your platform. Are you kind of aiming to develop larger-scale data generation capabilities and sort of drill down on that main offering or are you thinking of it spending into like different analysis tools and generating more of a full software platform for your customers?

Yes, it's a good question. So,, the first thing I would say about AI is it's probably the most substantial like change driver in biopharma and biotech R&D departments right now. In other words, like the reason an R&D leader is looking to bring in new technology, whether it's a new service or a new piece of equipment or other stuff in software. At this moment, if you walk in, like seven out of 10 of the change drivers are going to be AI. And so that's a really good thing, right? Like Ginkgo wants to be in that mix. What we've been producing on our AI team, we've been launching these models, you can go to models like Ginkgo Bioworks at AI and go hit our API, you can access models just like you would access them at OpenAI, right? I just pay for tokens, really straightforward business, put in a credit card. The reason we're doing that is it gets us out in the community, at launch, it shows that we can push out these sort of frontier models in the protein space, bringing open-source models and get them all just on an API that scientists can use, okay? So that's sort of our first volley, right? And then from there, you can take it a few different ways, like our data points business where we generate large data sets is a very natural complement to these AI models. So, a customer might say, "well, great, I like this. Let's say, we recently put an mRNA model on the platform. Let's say, we had an antibody model on the platform." And I say, "Hey, look, great, I want to take that model. I want to generate a bunch of designs. I want to create developability data associated with that from data points and then use it to fine-tune the model." All right. Well, that's getting us data points business, our AI team could offer consultancy work. We could offer cloud services around that and so on. And that's like a nice complete package. We'll see -- that's one example of a direction it could go in, maybe tons of people just start building on top of it like you see with an OpenAI, right? Like that's a different direction it could go in. So, I think right now, we're being very open-minded, like the rate of change in that area, the rate you're seeing new technologies, it's all really good and really exciting. And so, we'll see. Right now, but we are trying to keep -- we're watching costs. We're trying to spend a ton of money on things. And we're looking to see as the technology develops which way it's going to go. But we do see ourselves as a leader there. And I think we're doing like first of its kind work by putting these models out, which is a straightforward API that you can pay for [indiscernible]. So, I'm excited about the area.

That's great. And then maybe just one more on Q4 OpEx. And apologies if you mentioned this before, my YouTube really just crash at an opportune time. Given you've already hit your goal for fiscal year '24, should we expect cost savings and OpEx rate to continue at the same rate quarter-over-quarter for the fourth quarter as it did for Q3? Or do you think it's going to kind of level out a little bit when we get to Q4?

Yes, you won't see the same magnitude of quarter-over-quarter reduction. But we are continuing to take costs out. Just for example, like not all of the headcount reduction that has happened this year is even reflected in the Q3 numbers, but every cost line item in the Company is under a pretty high level of scrutiny. So, you'll see costs come down, but it was a pretty significant drop in Q2 to Q3, and you're not going to see the same drop in Q4.

That concludes the Q&A portion of the call. So, I'm going to hand it over to Jason for any last closing thoughts.

Closing thoughts. I think it's the right quarter. Really happy, we established sort of getting our cost out and holding the line on revenue. I think that's really been critical, and I want to congratulate the Ginkgo team on that. I will say we did have one question on the call about voluntary attrition and what's happening there. And I do want to call out there is one voluntary attrition I'm quite sad about, which is Megan, will be leaving us, she had great opportunity, good growth opportunity to go to a new place. They're very lucky to have her. So, Megan, I want to say thank you for doing a great job being a steady hand on IR for us, particularly over the last six months, but the whole time you've been here. So, thank you.

Well, thank you. And the team is in very good hands with everyone that's taking over my responsibility. So, I appreciate it.

Yes. Thanks, everybody. Appreciate the questions.