There was plenty of action in Ginkgo Bioworks (DNA 10.60%) stock on Thursday, but not the kind the company probably like. Investors sold out of the biotech following the publication of its latest earnings release. In mid-afternoon trading, Ginkgo's share price was down by nearly 15%. At that point, the S&P 500 index had only dipped by 0.6%.
Ginkgo missed badly on the bottom line in its third quarter
For its third quarter, Ginkgo's revenue fell by 17% year over year to $55 million. The company said an expected decline in schools dampened sales in its biosecurity business segment. An encouraging 51% rise in cell engineering segment revenue (to $37 million) couldn't offset that drop.
On a somewhat brighter note, the biotech managed to cut its non-GAAP (adjusted) net loss by more than half. The quarter's shortfall was nearly $303 million, or $0.16 per share, against the year-ago deficit of $670 million.
This meant a mixed quarter for Ginkgo since analysts were modeling only $48 million on the top line but $0.09 for adjusted per-share net loss.
As for the future, Ginkgo believes its tally for new cell programs to its platform will amount to 80 to 85 in full-year 2023. Buoyed by this, it's modeling total revenue for the period of $250 million to $260 million. Rather uncomfortably, however, that range is well below the nearly $478 million the company earned in 2022.
Accentuating the positive
In its comments about the quarter, Ginkgo management, understandably, put a bullish spin on its performance. It quoted CEO and co-founder Jason Kelly as saying, "We have continued to expand our customer base and partnerships this quarter."
He also touted the five-year partnership the company has signed with Alphabet unit Google, covering cloud and artificial intelligence services, and its RNA research collaboration with pharmaceutical giant Pfizer.
