Ginkgo Bioworks Q4 2025 Earnings Highlight Turnaround Progress Amid Persistent Liquidity and Execution Risks

What happened

Ginkgo Bioworks reported in its Q4 2025 earnings call that Cell Engineering revenue showed modest growth, while Biosecurity continued to face post-COVID declines, aligning with earlier trends of $77.4 million and $20.6 million in 1H25. The company emphasized progress in its restructuring, including the ongoing consolidation into Biofab1 to improve unit economics and reduce costs, though this has incurred significant charges. Liquidity remained a concern, with cash and restricted cash at $251 million as of June 30, 2025, and negative free cash flow persisting at approximately $40-$44 million per quarter, raising dilution risks. Management reiterated its target for adjusted EBITDA breakeven by end-2026, relying on converting high-profile partnerships like Merck and DARPA into milestones. However, the earnings call revealed no major breakthroughs to alleviate near-term financial pressures, underscoring the challenges in the pivot to fee-for-service models.

Implication

Ginkgo's Q4 earnings confirm that revenue growth in Cell Engineering is insufficient to offset Biosecurity weakness, keeping overall performance subdued. The restructuring into Biofab1 may yield long-term efficiencies but adds near-term charges and operational disruption, with liquidity dwindling to $251 million. Negative free cash flow of about $40-$44 million quarterly threatens the cash runway, likely necessitating further capital raises or aggressive cost measures. Achieving EBITDA breakeven by end-2026 hinges on timely execution of partnerships, but intense competition and technological risks complicate this path. Consequently, while the platform offers optionality, the stock remains a high-risk hold with elevated execution and financial uncertainty.

Thesis delta

The Q4 earnings call reinforces the existing HOLD thesis of a mid-turnaround with no material shift in risk or opportunity. Revenue mix and liquidity trends continue to highlight modest growth and cash burn, with execution on partnerships and cost consolidation still critical. However, the lack of new positive catalysts or financial improvements suggests the turnaround timeline may be prolonged, warranting heightened vigilance on restructuring outcomes and dilution risks.