Good morning. This is Anna Marie Wagner. I'm the Senior Vice President of Corporate Development at Ginkgo Bioworks. I'm joined by Jason Kelly, our CEO and Co-founder, and Mark Dmytruk, our CFO. We're excited to host this special call with you today to update you on two exciting new acquisitions which were signed over the weekend. You can see more information in our press releases and Form 8-Ks that were released earlier this morning. Also, a reminder, during the presentation today, we'll be making forward-looking statements which involve risks and uncertainties. Please refer to our filings with the Securities and Exchange Commission to learn more about these risks and uncertainties. Now, without further ado, I'll hand it over to Jason. Thanks, Anna Marie. You know, our mission at Ginkgo is to make biology easier to engineer, and that's gonna be especially important today. We do this by combining industrial scale economics and process optimization with deep biological expertise across a range of markets. Today we're very excited to announce that we've signed definitive agreements to acquire two technologies in this vein, one from Bayer and Joyn that builds our vertical capabilities in agricultural biologicals, and the other, Zymergen, that brings in-house core hardware and software that accelerates our horizontal foundry capabilities. I have to say, it's cool to see sort of industrial automation alongside biological scales. The top image there is one of the greenhouse facilities that we'll have following closing our deal with Bayer, and down at the bottom you can see some of the robotic automation at Ginkgo and at Zymergen's facility. You know, we are building this platform really for our customers. We show this slide a lot. Our customers come to us with their biological design challenges and product ideas, and it's usual in the biotech industry for companies not to be building their own products, right? By and large, in the biotech industry, companies are vertically integrated and building their own products. Whereas at Ginkgo, we're interested in building a platform that allows our customers to ultimately deploy the solution for their hardest challenges. You know, we've talked about the challenges and opportunities that the current market environment presents for companies like Ginkgo. Today I'm gonna talk especially about some of the opportunities that we're able to take advantage of, given this climate. First, you know, I do wanna mention up front, we're in a fortunate position. You know, we ended last quarter with about $1.5 billion of cash in the bank. We have a business model that allows us sort of flex to suit the economic climate. You know, in other words, if a certain market vertical is having a challenge, you know, maybe there's some issue in an area of pharmaceuticals, we can focus more of our commercial efforts in agriculture or in food, right? If the large companies are tightening R&D budgets, we can focus more effort on small companies. The types of deals that we do, you know, we can sort of balance between taking upfront fees and downstream value share when we do our deals with our customers. This fundamental flexibility, you know, in our platform business model, I think is a strength for us. You know, secondly, I'd say the market has really changed in particular for M&A. Last year it was very hard for us to do M&A. Companies saw more lucrative opportunities staying independent and pursuing their next private financing or, you know, taking their companies public. This year our M&A pipeline, Anna Marie will tell you, is overflowing with high quality technologies as companies are facing liquidity concerns and other challenges. You know, we previously discussed the headwinds that this type of environment can create for, you know, an R&D service provider, which is what, you know, Ginkgo is. You know, for example, large companies might cut back on R&D budgets. It can also serve as a tailwind. It can help us out if companies are more open to the idea of outsourcing their biological R&D to take advantage of a more efficient platform, and also, you know, variable cost structure, being able to spend when they need to, rather than always having to carry that constant R&D cost. You know, I think this is this deal we're doing with Bayer right now is a good indication of this, right? This is you know they're choosing in this partnership with us to really be outsourcing their biologics R&D to our platform. This is very similar in spirit to what you saw with outsourcing IT departments kind of to the cloud 10 or 15 years ago. That's really the model we wanna go for, but in the area of biotech R&D. I do wanna emphasize that while Ginkgo plans to be aggressive in its scaling goals, you're seeing that both organic and inorganic we've always been focused on maintaining a multi-year runway or sort of margin of safety, as we like to call it. Both the Joyn Bio and Bayer and Zymergen transactions are gonna demonstrate how we think about that. For those who don't know the, you know, early history of Ginkgo, we actually bootstrapped the company for the first four or five years, didn't raise any external capital. We have a good longstanding appreciation for the importance of cash. I wanna talk a little bit just some framing about how we think about both kinda vertical and horizontal technologies at Ginkgo. We have a history over quite a few years now of integrating technology acquisitions and using M&A to build both vertically and horizontally at Ginkgo. I'll speak vertically first. You know, to be clear, and I know I'm a broken record on this, we do not vertically integrate into end product development at Ginkgo and commercialization. In other words, we don't develop drugs. We're not, you know, launching burgers or fragrances. Our customers do that. But we do recognize the need to ensure that we have enough vertical specific R&D expertise to hand off cell programs to customers successfully, okay? And also that we have enough expertise in that vertical to attract customers onto the platform, right? So, you know, if you look back in 2019, our first acquisition of sort of a vertically focused codebase asset was the Warp Drive Bio team and technology, in particular DNA sequence collection that they had, you know, that came from sequencing large microbial collections from big pharma partners. This asset's proven useful for current drug discovery work, like our project with Roche, in pharma, but it has also demonstrated value in other markets, right? That's a really important point for us. Even though we're investing in vertically focused technologies like we're doing here with Bayer, we expect that the biological parts of that can often be reused in other markets, right? This makes sense to us sort of intuitively, 'cause it's not like biology's out there in nature, cleanly evolving by market, right? If there's an enzyme that evolved that happens to be useful in agriculture, there's a chance that might be useful in pharmaceuticals. That's a thing that we can take advantage of, again, by nature of our platform business model. We've also acquired a couple companies with interesting strain assets and capabilities like Novogy and Dutch DNA. You know, Novogy had real experience in lipid, like fat production, which can be useful for industrial applications. And Dutch, you know, had a really terrific strain for high yield protein production. And this is a trait which is kind of broadly useful. There's a lot of markets that could use that, but it's especially critical in emerging food opportunities, things like animal-free challenges, getting fermented proteins down to a cost point that works for consumers in the food industry. Today we're excited to announce that we've signed an agreement for our previously disclosed transaction with Bayer. I'm gonna dive into that in just a second, but before that, I wanna also explain, to frame it, how we think about things on the horizontal side. We also see a ton of value in improving our horizontal platform through acquisitions, which are typically adding foundry technologies that we can deploy broadly in our program. This goes all the way back, you know, for example, in 2017, we acquired Gen9, right? Gen9 was a DNA synthesis company, and it's very well integrated at Ginkgo today. That platform runs at scale in-house. Many of the employees are still here at Ginkgo today. They're key technology leaders for us. You know, most recently, this year we acquired FGen and Bitome, and both teams are contributing to developing sort of this next generation of broadly applicable tech. We'll spend most of the time today, actually spend, you know, in this category on the horizontal side, including our just announced acquisition of Zymergen. Before that, I want to briefly walk through our transaction with Bayer. You know, we've extensively discussed the strategic rationale for this transaction, our Q1 earnings call, and I put a few slides in the appendix of this presentation. I'd recommend if you want to go watch our YouTube video on that, I encourage you to do so. I'm not going to spend as much time on that today. I do want to update on some of the transaction details to help answer questions we've gotten since the earlier announcement. First, the transaction involves two businesses, Joyn and then Bayer's West Sacramento R&D site. For the West Sacramento site, this is a traditional asset purchase. We'll be acquiring the entire site, which involves a fully owned 175,000 sq ft facility, a robust strain collection, and an experienced team from Bayer. And that'll cost $83 million in total, which we can pay in cash or stock at our choosing. In the second step of the transaction, Joyn, which was a 50/50 joint venture between Cooksonia, which is the holding company where Ginkgo was the majority shareholder, and Bayer, we're the sort of parents of Joyn, that will be dissolved and integrated into the parents. After the transaction, the assets of Joyn Bio will go to the parents. To explain it simplistically, you can generally think about it as Ginkgo's integrating the platform assets, so the intellectual property team, et cetera, at Joyn Bio, and Bayer is integrating the nitrogen fixation programs. This is one of the cell programs that was being done through that joint venture, as well as getting certain IP rights associated with the JV termination. In exchange for our equity stake, in other words, kinda losing that 50/50 split in Joyn Bio, and that Bayer is gonna be retaining the nitrogen fixation program, Ginkgo via Cooksonia will be entitled to tiered royalties on net sales of Bayer's nitrogen fixation product. These royalty rates are above market to account for the exchange of the equity interest. Finally, we're very excited about our new and expanded collaboration with Bayer, which will advance multiple programs. This represents our largest ever cell programming contract in terms of R&D service fees, and also comes with the opportunity for standard royalty-based downstream value. We're really excited to be bringing that in and working with Bayer in the future. While this is a capability acquisition, it also does tie to a big commercial opportunity like I spoke about in our last earnings call. While there's clearly a significant long-term opportunity here, it's important to note that in the near term, the collaboration with Bayer, in other words, that R&D partnership we have, does significantly de-risk this acquisition. We talked in the beginning about the importance of maintaining that sort of margin of safety in our financials so that we can continue to invest in our platform. In this case, we will pursue a combination of cost structure right-sizing, focusing on platform capabilities while products will be advanced by Bayer or other customers, right? We can have other customers on the platform, but the Bayer contract alone will significantly offset the run rate operating expenses in the early years. Beyond this, we will be free to work with other customers in the space. If you're a small ag or large ag company interested in our biologics platform at Ginkgo, please do reach out. That will create, we expect, further revenue opportunities for us. Okay, that's a quick update on Bayer, which I said is a sort of a strong vertical capability addition. Now I'm excited to announce our latest horizontal capability addition, the acquisition of Zymergen. I'll dig into why we're excited about this one, as we come up here, but first I wanted to share the high level just sort of summary of the transaction itself. As Anna Marie mentioned at the beginning, you can find much more information, including the filed merger agreement through our 8-K from earlier this morning. The merger will be all stock with a fixed exchange ratio at signing. Zymergen shareholders will be receiving 0.9179 shares of Ginkgo Class A common stock at closing for each share of Zymergen they currently own. This reduction by 25% pro forma ownership in Ginkgo following the close of the transaction and implies a market cap of Zymergen of approximately $300 million. The transaction is subject to a number of customary closing conditions, as well as the lack of a material and adverse change to Zymergen's real estate build-out or securities litigation. As part of signing, we have obtained voting agreements from shareholders representing approximately 40%, of outstanding common stock. Again, for more information, please see the 8-K and associated exhibits filed with the SEC this morning. At this time, we expect to file our Form S-4 relating to the merger shortly after reporting our Q2 earnings and expect the transaction to close by the Q1 of 2023. In the meantime, we'll be focused on integration planning, which we'll talk about more in a moment. I want to spend a minute on the technology. You know, I wanna say up front, we've always had a ton of respect for the team and technology at Zymergen. You can see this in my personal comments to analyst questions about them previously. They did choose a very different business model at Zymergen than we did at Ginkgo, focusing primarily on internal product development over the last four-five years. They have developed scalable and flexible technologies, in part because of the breadth of products they were going after, that we believe will add tremendous value to our customers at Ginkgo. That's really what this is about, right? It is about bringing in, again, as we think both vertically and horizontally, better technologies into our platform to deliver that value to our customers. In particular, we're excited about their automation platform at Zymergen, which is integrated with a mature software and data architecture. These technologies map well onto our development goals at Ginkgo, and we expect them to help drive productivity improvements across our foundry. That's something that as you know, is a big driver for us here at the company, is to see that as we grow in scale, we're able to improve the economics of our facility and then, you know, ultimately pass those types of savings on to our customers, so that we can have a better platform for them and get more people to use our infrastructure. Beyond that core hardware, software technology stack, Zymergen has pursued a diverse set of projects resulting in a rich biological database and strong cell engineering tools. Okay, why should we do this now? You know, what makes it seem like the right time to pursue a merger with Zymergen is that their announced restructuring plans over the last year align very well with how we would think about operating and organizing the business. You can go back and hear from Jay Flatley, their CEO, some of the changes in focus and tightening that they've been doing over the last six to 12 months. What Zymergen did was simplify its business into three core areas, advanced materials, drug discovery, and automation. They began discussing their thoughts around spinning out some of these assets, and it became clear that at Ginkgo, we could likely better enable some of the strategic opportunities that Zymergen saw, helping them spin out the products independently. You know, that's something we've done a lot, at Ginkgo, is, you know, sort of spinning out assets in the cell engineering space and allowing the combined platform assets to more quickly and effectively serve a wide customer base. Specifically, we have deep experience in helping with company launch and formation, like I mentioned. Zymergen explores plans to spin out or sell their advanced materials and the therapeutics, sort of drug discovery business, we believe we can be helpful. This leaves the core automation and technology platform, so the automation, enabling software and data tools, the biological assets and know-how, all of which we're excited to integrate into our business here at Ginkgo to offer customers a more effective platform. I'll note the Zymergen transaction looks quite different from Bayer. I'm not assuming it comes with any material revenue, although there is upside opportunity here. If we're successful in goals to spin out the advanced materials and therapeutics asset, you could see that. Rather we're really looking at Zymergen as accelerating growth of our capabilities at Ginkgo, enabling us to provide attractive solutions to more customers sooner, all while not dramatically increasing our planned run rate operating expenditures. Like with Bayer, there will be some standalone cost reduction, most of which we expect Zymergen will complete prior to closing, in accordance with their previously announced and continuing restructuring and program rationalization efforts. These efforts are expected to meaningfully reduce Zymergen's run rate operating expenses. Additionally, we had already planned to grow our team at Ginkgo and make investments in automation, software, data, and code-based teams here. We couldn't think of better future teammates than the incredible team at Zymergen. It is rare to find people who have both the horizontal expertise, so think things like mechanical engineering, you know, computer science, data science, automation, but also have a deep passion for biology and a desire to see biology transform the material world. You know, as such, we do not consider these to be incremental expenses versus our planned growth. At Ginkgo instead, it will enable us to accelerate our growth and also invest in more advanced capabilities. Those teams can build on, you know, the technology assets that we're ultimately bringing in here. As we work through our integration planning process and get closer to close, we'll provide more details on this topic, but at this point, we're comfortable that we will be able to maintain our financial margin of safety after these two acquisitions. In summary, we're really excited about our ability to improve our offering to customers in the coming years with this acquisition. This technology should support our platform scaling efforts, driving down costs and yielding better customer program outcomes. You know, on a personal level, I'll say it, I believe it's really important for us to be investing in technologies like this in the United States. You know, you probably have been hearing on the news of this $52 billion CHIPS bill that's going through Congress right now. You know, that is the result of the U.S. giving up our technology leadership in advanced manufacturing of semiconductors over the last, you know, 20-odd years and sending it overseas. You know, we believe technology is going to be the most impactful tool towards combating some of our most significant challenges in the next century. You know, climate change, food security, water purity, human health, biosecurity, right? You know, these are all things in the world of atoms, right? You know, it's real stuff out there and biology is the technology that we can program to work on those problems. It's much harder, you know, the world of bits, the world of computers, I think, has a lot less to add here. So we need to build biology foundries in this country, in addition to semiconductor foundries and have them onshore. We think, you know, Zymergen brings a strong technology platform to support and accelerate this effort. At Ginkgo, we're excited to drive this technology forward with them so that the U.S. can ultimately lead in what we hope will be actually the more important foundries of the next half century. All right, that just about wraps it up. As you can see, we're super excited about both of these transactions and the year ahead. Signing a deal is obviously the easy part, although I am extraordinarily grateful to our team at Ginkgo for the immense amount of work that went into getting both of these deals done, particularly sort of at the same time, and to both the Bayer and Zymergen teams who also did an enormous amount of work and were extremely good partners and candid throughout this process. Now, we're focused on the real job, planning and, after closing, executing a robust integration. With that, I think we're ready to open it up to questions. Mark and Anna Marie will join me for Q&A. Anna Marie, do you wanna kick things off? Sure. Thanks, Jason. All right. I'm gonna go ahead and stop sharing here. We've got a number of analysts on the line, and so, if you'd like to ask a question, as usual, please just raise your hand and I will call on you and unmute your line. I think first this morning we've got Tejas. Tejas, you should be able to speak now. Hey, guys, good morning and congrats on the deal here. Just one, a couple of actually quick ones for you, Jason. I mean, as you thought about sort of, you know, acquiring the talent from Zymergen versus acquiring the company itself, can you just sort of help us think through how you came about sort of this decision? Secondly, to your point around sort of horizontal versus the vertical approach, were you tempted to sort of like keep some of these programs in-house, you know, particularly the stuff they're doing around screens, et cetera, which is the most mature and near-term opportunity? Is that sort of, you know, both the cost reduction targets that you've laid out as well as the potential evaluation of strategic alternatives for those commercial or I guess advanced pre-commercial programs part of the framework here as you think about deal close? Any color on that would be helpful. Yeah, happy to comment on that. Maybe I'll take them in turn. You first asked about, you know, how do we think about acquiring the whole company versus just, say, hiring, you know, talent that's coming out of Zymergen and people are leaving. And that we were pointing out that we had sort of needs for a lot of these roles, already, I think. One of the reasons I wanted to point that out was really just about incremental spending. In other words, you know, like we're planning to grow into a lot of these areas. Having these folks come in saves a lot of recruiting effort, but also importantly, it's sort of like a dollars and cents topic. When it comes to acquiring the whole company, the magic is the people plus the technology they've been spending the last decade building, right? You know, so there's a lot of, you know, implicit value in that technology, but also the know-how, the folks associated with it really who understand the history of creating it are some of the best people to then build on that technology in the future. Really we think the two together is particularly important. We are very excited about the technology itself and using that to help continue Knight's Law and driving down our costs at Ginkgo and increasing our scale for our customers. You also asked about, you know, "Hey, okay, I know I've heard it. Ginkgo's a platform business. You don't do end products, but Zymergen has some really cool product assets in areas like, you know, film screens and things like that. You know, there are great assets there. It is not part of the business case at Ginkgo for this because it is a different business model than we have, right? I think one of the things that was appealing about Ginkgo is we do have this experience of having launched a number of spin-out companies and finding the right strategic partners and investors to take these sort of cell engineering assets and ultimately help them go commercial. That would be our plan here with those assets, as I said, Tejas. The only thing I would add to that, Tejas, is that we do view that as upside. We think, you know, there is real value there, whether partnering those programs or spinning them out. The core thesis for us was really around the underlying technology platform. Got it. One quick follow-up for you guys. Jason, I mean, as you went through the transaction, I mean, any early read on sort of any potential FTC issues? I mean, this has obviously come up more and more, you know, given how, I guess, skeptical they've been about, you know, like-for-like sort of transactions in the space. Second, one for you, Mark. I mean, as we think about that EBITDA positive target that you've laid out at the time of the de-SPAC, you know, in that 2025 timeframe, do either, you know, the Bayer transaction or the Zymergen deal, sort of change that or do you still feel there's good line of sight to that being a realistic, sort of, scenario by 2025? Sure. I can go ahead and take the first one on just overall deal timing and process. You know, look, as we've described it, this combination for us is very complementary, and we think it provides a significant benefit to, you know, customers, through lower program costs, increased probability of technical success. For us, this is a no-brainer and very in keeping with the other kind of technical acquisitions that we've made in the past to support our customers. You know, I'd say at this time, we're expecting, you know, typical kind of four to five month process as we go through the S-4 review process, shareholder vote, et cetera, and regulatory approvals. That's, I'd say, where we're looking right now. Yeah. Tejas, on the sort of longer-term EBITDA question. First of all, I do wanna just sort of reiterate and make the point that since becoming a public company, we have adopted the approach of only issuing guidance for the current year. We're not providing any comments today, of course, on Q2 performance or guidance for this year. We'll do that during our Q2 earnings call. Now, that said, we've not provided any guidance on long-term EBITDA. That said, We do think these transactions are very consistent with our long- range planning. As mentioned, we think from an OPEX perspective, the sort of roadmap that Jason laid out on the Zymergen transaction with restructuring that's occurring prior to closing by Zymergen in accordance with its sort of previous plan, that will reduce to a very significant level the OPEX run rate that we bring on. Secondly, we would of course further cost optimize. Finally, we think, as Jason mentioned, we think that the Zymergen team that we would be bringing on in effect fills planned hiring needs that Ginkgo was already going to incur. From that, the Bayer transaction is different because it comes with revenue that significantly offsets the OPEX spend. When you take sort of all that together, these two transactions in and of themselves wouldn't change kind of any long-term view we have on things like path to profitability. Got it. Thanks, guys, and congrats again on both the deals. Thanks, Tejas. All right, Rahul, I'm gonna go ahead and unmute your line, and then Steven Mah, you'll be next. Good morning. Can you hear me? Yes. Terrific. Good morning, Anna Marie, Jason, Mark. Congratulations on the transactions. I'll try and keep mine tight here. Recognizing your comment, Anna Marie, that the core thesis really is the underlying tech platform. You know, given that both Zymergen and Ginkgo have built these such unique integrated machines of systems, you know, combining these two very large, uniquely developed machines is probably not a simple task. I wanted to understand how you see integrating these over time, and how does the synergy create sort of one plus one equals three as you do this? Yeah, super good question. Yeah, we thought a lot about this, going into the transaction. The only thing about Ginkgo, again, is we talk about there's two parts to the platform, right? There's the foundry, right? Which is the physical infrastructure, and it's basically trying to solve the problem of lab work done in the traditional way. Like, in other words, like, what we're competing with at our customers, where they're doing it themselves at a lab bench by hand, right? Is very expensive and low throughput. The idea is, can we automate that in order to reduce costs with scale like you've seen in things from auto manufacturing to chip fabs and so on? That's one half. Then the other half is our Codebase, right? The data, the learning, the genetic assets that make it easier to do the next project, okay? There's a bit of both of these actually that are coming in through the Zymergen transaction, but I'd say like probably 70% on the foundry and automation side in terms of the technology value to Ginkgo. Okay, what are we trying to solve for in the foundry? Well, you know, if you speak with our my co-founder, Barry Canton, our CTO, you know, he'll have a roadmap, you know, over the coming years of the technologies we would plan to invest in and deploy in order to continue to drive upscale and reduce sort of unit costs in our facility, right? What we're doing basically is looking at the technology at Zymergen and saying, "How does that fit into our roadmap? Is it something that can be useful to us?" I would say, you know, to nerd out for a minute, you know, they did focus on sort of very general purpose and repurposable automation, these sort of rack systems and things like that allow you to quickly deploy automation in a customized way. It's pretty, you know, it's quite impressive tech. It's one of the reasons we're excited to do the transaction. It would be on the roadmap for us in the future. By bringing this in, it sort of both speeds it up and makes it more sure that we develop that technology correctly, as they've done at Zymergen. I think that's one of the things that as a specific example is sort of like an ability for us to speed up and improve surety on delivering on those scaling challenges. It's also, like I said earlier, a great team of folks associated with that technology who really know it and can help us out figuring out what has to come after that, right? 'Cause this is the magic of doing something, you know, like what the semiconductor industry did with Moore's Law. You're always having to invent, you know, what the technology is gonna be three or four years from now, because you wanna keep pushing it, right? Having these folks here at Ginkgo also will help us invent the next thing. Does that make sense, Rahul? Yes, absolutely. If you would indulge just me shortly, one more quick question in. Maybe thinking about both the Bayer and the Zymergen transactions. Got it. Yeah. Given the relative co-location, you know, between the Bay Area and Sacramento, can you talk about maybe the additional synergies between that, but also, you know, this three-year partnership with Bayer? Could you give us a little bit more color in terms of what has been committed to, you know, over that period? From there, I'll yield the floor. Anna Marie, do you want to take parts of this? Yeah, I can chat about that for a little bit. There was just one other thing I wanted to add to what Jason was sharing, which is one of the things that's been most interesting to see at Zymergen over the last few months is how they've been partnering their automation platform, which really gives us confidence in their ability to deploy automation in new environments with different systems and integrate with those systems. Having that, like, strong kind of interface, and having pressure tested that out in the real world is really important to us as well. In terms of the, you know, sort of West Coast presence question, I will note that West Sacramento and Emeryville are still about an hour away. Probably not those locations. We do have a small office out in Emeryville right now, so we'll certainly look to consolidate the footprint, you know, just so that the team can be together, and we can obviously be, you know, rational about real estate costs over time. I would not expect that the West Sacramento facility would integrate with our other Emeryville facilities in a meaningful way. Although obviously it gives the employees a little bit more flexibility there. Yeah. Then on the Bayer collaboration in terms of what's been committed to. The best way to think about it is Bayer becomes a customer of Ginkgo's, just like other large customers. We would be providing services to Bayer, sort of pursuant to programs, again, very typical of other customers. And Bayer would be paying us cash revenues for those services. We haven't disclosed the specific commercial terms here, other than to say that it is a multi-year collaboration, and in aggregate, it is the largest customer collaboration that Ginkgo has had. Perfect. Thanks so much. Congratulations. Congratulations again, guys. Thanks. All right, Steve, I'm gonna go ahead and unmute your line, and then, Mike, you'll be next. Okay, got it. Can you guys hear me? Yep. Yeah. Oh, great. Hey, congrats on the deals. Thanks. One question, one follow-up question on the consolidation question you guys have been getting. You know, with maintaining, you know, Zymergen facilities or consolidating, you know, how should we think about the, you know, 10-year operating leases that Zymergen has right now? You know, just, you know, let us know how we should think about that going forward. Yeah, I can comment a bit and then maybe Mark can add on. This is obviously something that we spent quite a bit of time thinking about during diligence. You know, well aware of the real estate footprint and the sort of headquarters build-out that Zymergen has been pursuing. As I mentioned earlier, we will be looking to consolidate the footprint there, you know, whether it's subleasing out spaces. Zymergen's actually started that process to some extent. They've been trying to consolidate their real estate portfolio, so I think we'll be building on the good work that team's already done. Okay. Got it. Thanks for that color. A question on Zymergen's automation business, you know, where they're selling racks. Are you guys gonna be potentially adding any sort of Ginkgo capabilities to those rack offerings? Follow-up question, is that gonna potentially cannibalize foundry service revenue as it enables sort of like a, you know, a do it yourself work? Thanks. Yeah. Super good question. Yeah, the first thing to point out is Ginkgo has a view that by consolidating scale, you can basically drive costs down, right? Think like data centers at Amazon, right? Like, you wanna have a giant data center that gives you the lowest cost for compute. At the same time, like, certain companies do have their own internal data centers, right? Whether it's for some special security reasons or other things, there are reasons to do it. I mean, I think we'll have to see how the market develops. I think we would have that optionality here. My impulse is that we're primarily gonna be building it out, you know, here in Boston to continue to drive scale and actually make it cheaper and faster and easier for our customers to engineer cells, that that's actually the dominant thing that people want. But I do think you could see situations where people wanna have, for, again, a particular reason, their own kinda data center, their own foundry. We also see in the academic market some opportunities for that. I think you've seen other companies often, you know, kinda launch their sort of platform technologies in academia just so that people learn to use them, right? 'Cause that's something that we would really benefit from, would be, you know, more biologists. 'Cause one of the challenges is I did a PhD in bioengineering, right? Like, you learn to use your two hands to do lab work for five years, and you go to a company that tells you to use your two hands to do lab work, and we're over here at Ginkgo saying, like, "Stop. Just stop." Right? Like, you know, like, it needs to move on to robotics automation. You haven't actually been trained to design cells and to engineer biology using that kind of infrastructure. Even to hire people into Ginkgo, they have to do a whole, you know, training exercise. It would be a heck of a lot better if people during their training were learning how to leverage automation platforms like what we have. There's maybe an edge case there too, you know, in places where you're seeing a lot of training. It's a great question, Steve. Okay, great. Thanks for the color. Yep, you're muted, Anna Marie. Sorry about that. Thanks, Steve. Mike, I just unmuted your line, so, go ahead if you've got a question. Great. Thanks. Can you hear me? Yep. Hey, great. Thanks. This is Mike Ryskin on for Derik De Bruin at BofA. Couple quick questions. One on sort of everything you walked through as it relates to Zymergen, the integration, some of the restructuring, you know, the cost synergies, the divestments or the spins of some of those verticals. Could you give us a sense of timing here? 'Cause as you said, Zymergen was already pursuing some of these restructuring and cost-cutting efforts themselves. You know, everything you kinda walked through on slide 13, slide 14, is that a two-year plan, a five-year plan? I just get a better sense for sort of like the OPEX ramp and things like that. Yeah, great question, Mike. As Zymergen sort of announced this morning, they are continuing the restructurings that they've been doing really for the past year or so. Quite a lot of this, at least on their side, will happen prior to close over the coming months, which you know is certainly helpful from a timing perspective of getting to sort of a steady state. You know, post-close obviously we'll need time to integrate and to sort of complete that work, transition systems over, do all the normal office integration work as well. We would expect that all of that work would certainly be completed within the first year post-acquisition. Okay. Great. Thanks. You also, Jason, you talked earlier about flexibility when it comes to M&A and capital deployment, but you also do have a sizable cash equivalents balance. Can you talk about why this is an all-equity deal instead of mixing in a cash component or doing all cash? At the same time, you know, we're into late July, is there a reason you guys didn't factor in, like, a flash 2Q update, as part of the announcement? Sure. I'm happy to take the first one. Jason and Mark can feel free to chime in. You know, I'd say, look, from our perspective, and I think from Zymergen's perspective as well, continuing to recognize the growth in this story is important to everybody. You know, we want shareholders and employees who are excited to build Ginkgo. You know, I think there are no better group of employees and shareholders than the folks that are over at Zymergen to help continue to invest in and realize that story. As Jason alluded to at the beginning as well, we do have a large balance sheet, but that balance sheet is important to us to ensure that we can continue to make the kinds of strategic decisions like this while doing that margin of safety. It's helpful to have the optionality. In this case, you know, we certainly thought that incentives would be better aligned and that the deal would be more attractive for all parties if we structured this as equity. Mark, I'll let you comment if you do. Yeah. Yeah. I mean, like, it was really an unplanned coincidence that these two transactions occurred this past weekend that came together at the same time, and all of that occurring just a couple weeks before our Form 10-Q filing deadline. Yeah, no particular reason, Mike, why we didn't provide a flash today other than the sort of normal, I think, consideration that we wanted to get through our full process, and that includes the review with our auditors of the quarter, the discussions that we had with the audit committee, et cetera. We wanna just go through the process, complete that before we talk about Q2 performance. August, just so folks can look forward to it. Great. Thank you. All right. Thanks. All right, Matt, you're up next and then Matt. Matthew Sykes, you're up next and then Matt Larew, you'll be right after that. Great. Thanks. Sorry, Matt, that was totally my fault. Okay. Can you hear me now? Yeah, we can. Okay. Congrats on the deal. I just wanted to, Jason, talk about how this scales, the economies of scale will allow for lower costs that will enable you to earn margin on the foundry or higher on the foundry. I'm just wondering, post the integration of Zymergen's automation technology, do you think that accelerates the scalability? If so, can you give sort of a timing as to what you might have pulled forward that scalability with the addition of this automation technology, obviously contingent upon integration, et cetera, but just wanted to get an idea from you. I mean, 100% our goal is to drive down unit economics in our facilities by virtue of increasing scale. That can then affect customers in two ways. One, they can like do the same project and we can make more margin on it. I can see what the project looks like and at my cost, you know, I read more value from it, right? Our take at Ginkgo largely has been that customers of cell engineering technologies are like getting the short end of the stick right now, right? Like, they're being asked to do things at incredibly low throughput by hand using technologies that simply don't get that much better every year. As our technologies improve, the other way to approach it is to pass those improvements on to our customers so that they drive innovation, that they decide to develop new cell programs and apps that they would never have done before. Then we make money through the part of our business model that is the downstream value share, right? Which, you know, kind of the analogy is more like a, think like a mobile app store, right? Like taking a piece of the value of the application. That really has to do with how many programs customers go after and how successful they are, right? Which is another real challenge in biotechnology, is sort of the failure rate of a lot of these programs, again, with the technology of today. Not that people aren't trying hard, but it's just that, you know, the technology is at a certain state and if that gets better, you could also hope to see improvements in sort of likelihood of success. So that's a real balance, right? This is what I was kind of talking about with the having the knobs, you know, right? Like, I don't know, right? It depends on the market conditions. If we're in a spot where we have a strong margin of safety, it may be a hell of a lot smarter for us to just get more programs on the platform by really reducing our costs and making money in downstream value share, right? So we'll see. You know, I don't actually know, like, how we will make the most of improvements. I know that it is important for us to make improvements in scale and platform. That's to your second question, should we, you know, like how much faster will it make it and all that sort of thing. What I'd say again is we already have a very aggressive sort of scaling goals internally with Knight's Law, where we've been sort of roughly tripling our output and halving our unit costs annually. You know, that's already a very fast rate. A lot of what we're trying to do here is really just bring in the technologies to keep that going. Nothing more than we're trying to shore up and ensure that we can do that, and have access to some technology probably that we, like, we would have had to build something like it anyway, and that would have been its own expense. We're able to bring that in a little faster. I'd say it's more about trying to be sure that we can do it. Great. Thanks for that color. You had mentioned maybe for Anne Marie and Mark, you'd mentioned that the acquisition of Zymergen helps fill your hiring plans. Was that for 2022 or is that beyond? Could you just give us a bit of an idea of to what extent does it fill your hiring plans? Yeah, I guess characterize it as 2023 hiring plans, maybe a little bit beyond because the Zymergen deal isn't expected to close until Q1 of this year. We're not necessarily thinking of it as replacing a lot of this year's hiring plans, but maybe it does some of that as well, indirectly. Okay. Thank you very much. Thanks, Matt. All right, Matt Larew, I'm unmuting your line. Okay. Thanks, Anna Marie. Jason, I think you referenced that maybe 70% of the value from a tech perspective you saw coming from foundry and automation. Just curious in terms of their metagenomics database, if you all had a chance to look at that, obviously, and if there's anything of particular interest, maybe specific segments or areas that you found might bolster your capabilities, maybe take the place of other M&A you were looking at. Just kinda curious what you found as you looked at that. Yeah. You know, Zymergen's built up an internal genomics database. It's like. It's of an ilk, like, sort of remember I mentioned that Warp Drive Bio acquisition. They made some acquisitions of Lodo Therapeutics and Radiant Genomics. And so they have, you know, have access to kind of a DNA sequence library and also, like, physical assets in some cases, of strains and so on. That. Absolutely. That's of interest to us. Sometimes we can, you know, pull a specific strain out of that, you know, right? Like, we also have this with the Bayer transaction, you know, there's like the strain collection. But also very importantly, it's just the raw DNA data can be useful, right? With the Warp Drive Bio asset, that was an asset developed in pharmaceuticals. We have found, you know, enzymes in that genome databases, that base that have been useful outside of pharmaceuticals, right? Part of the hope here is, yes, those would add value as well. That is value we'd be hope to be getting. Yeah. It's a great thing to bring up, Matt. Okay. Just the other one, the strategic alternatives process, while you intend to help them, are those things you expect to be resolved before the deal closes next year? That'd be piece one. I think someone mentioned the deal is in part contingent on some real estate actions or non-actions. Could you maybe just confirm what exactly that was referring to? Sure. Happy to chat about both of those. So on the strategic alternatives, again, as we mentioned, as we've been having conversations with the Zymergen team over the past, you know, several months, you know, it's clear that they've been interested in exploring a variety of different types of partnerships for their product portfolio across advanced materials and drug discovery. And that's something that, you know, we're very supportive of them continuing to do. Obviously, that's a process they'll need to run, you know, until the deal is closed. We can't comment on likelihood or timing at this point, but it's something we're certainly supportive of. And, you know, and if it has not occurred prior to close, then something we would continue to explore post-close. In terms of the contingencies that you mentioned, I would suggest that you read the 8-K and the merger agreement filed alongside it for more details, of course. There is a you know, a condition around certain discrete events, in particular, the build-out of their real estate, their new headquarters, and just unanticipated, you know, risk of, you know, just build out cost skyrocketing. We needed to make sure that there was protection there, as well as you know, securities litigation matter. Those two items, you know, fall into this category where, if there's been a material, you know, an adverse development in those, that is quantified at about $25 million, combined, cost to, you know, the company and Ginkgo in cash, then we would have the opportunity to evaluate that in the context of the overall transaction. Okay. Thank you. Congrats. Thanks, Matt. All right, last but not least, Mark Massaro. Go for it. Hey, guys. Can you hear me? Yeah. Yeah. Great. Well, thanks for taking the questions. I recognize Zymergen is undergoing a restructuring, but can you maybe provide a sense for the number of people that might be coming over to Ginkgo? Can you comment about any potential board member additions? Specifically, can you comment on Jay Flatley? I don't think we have disclosed. Yeah, again, Anna Marie Wagner, if you wanna chime in on Yeah, I can start with what's been disclosed at least. Zymergen this morning in their 8-K did disclose that they're continuing their restructuring plans and that there will be a series of reductions in force over the coming months, the first of which will impact about 80 employees in the near term. You know, beyond that, it wouldn't be appropriate for us to comment on that. We have not shared any details around any planned changes to the board or Jay, but Jason, I think it's fine for you to comment on that to some degree. Probably happy to have Jay if he wants to come over. No, no specific plans. Yeah. Understood. Thank you for indulging that question. You know, when I look at, say, you know, consensus estimates on Zymergen, you know, you talked about how you're not expecting Zymergen to provide material revenue, and recognizing that it's small relative to, your pie at this time. You know, looks like analysts are looking for $20 million or 33 million of revenue in 2023 and 2024 respectively, but they're also baking in net losses of about $300 million and 200 million, respectively. Maybe can you just comment about, obviously you're bringing some people over. I know maybe you're not prepared to talk about how many at this time, but how should we think about potential revenue contribution and potential changes to your, P&L in terms of any expenses you're bringing over? Yeah. In terms of revenue contribution, I mean, the best way to think about it, Mark, is that we have not baked in a revenue contribution into how we're thinking about the deal. When we make comments like our ability to maintain a multi-year cash runway with this transaction, we're not assuming a bunch of revenue comes over to mitigate expenses. Now there is some upside opportunity there for sure, and we think certainly in the medium term, the capabilities that Zymergen brings from a technology perspective, we think will help drive program growth, will help drive program success rates. We're not layering in sort of a revenue contribution into our math on the impact of the deal. On the sort of OpEx side, when you look at what Zymergen does disclose with respect to its OpEx run rates, so the numbers that you just talked about, Mark, you'll wanna sort of consider that today they announced additional restructuring efforts which wouldn't have factored into that sort of consensus view. That's new. That would provide sort of a further mitigant to the cash OpEx. As we discussed, we think a lot of that would be completed before closing. To the extent it isn't, then Ginkgo would sort of continue on that path of finishing that restructuring. There would be further cost optimizing that Ginkgo would do, as we complete the integration. Finally, the Zymergen employees that would be joining Ginkgo, again, we said would fill future planned kinda hiring growth needs. Really, we put an enormous amount of thought around this particular point, Mark, so that this transaction doesn't become sort of an undue burden from a future cash OpEx point of view on the Ginkgo long-term profile. Perfect. If I can sneak one last one in. Obviously, the additional foundry coming in and building your codebase asset is important. You know, for investors that are not super familiar with Zymergen, can you maybe just expand on any programs or opportunities within their advanced materials and drug discovery businesses which made you excited and maybe as a source or rationale to go out and acquire them? Yeah. I mean, what I would say there, we've been very familiar with like the kinda history of synthetic biology. Again, the way to get synthetic biology in your head is it's like underlying technologies that make it cheaper and easier and faster to engineer cells separate from the applications. A lot of people confuse it, and they think synthetic biology just equals non-pharmaceutical biotechnology. Why is that? Well, that's because most of the effort in syn bio in the beginnings of it was outside of pharmaceuticals. There's some technical reasons for that and so on. We know that space really well, the industrial space, like a part of which is the materials space Zymergen’s been operating in. I think what was unique about what they did was you've seen a lot of folks in that space really focus on, like, basically replacements for existing things. There's this cosmetic ingredient, there's this, you know, in some cases, commodity chemical, right? We work with partner Genomatica. They have amazing large-scale fermentation to produce commodities, certain commodity chemicals, right? That's replacing a thing in the market. You know, what Zymergen really focused on was novel, new materials, right? You know, you saw that obviously Hyaline and a few others, but they had a pipeline of things that were, "Hey, I'm gonna try to make a thing based on chemistry that biology can make that you actually can't get from synthetic chemistry, or not easily or not economically. That's gonna open up new markets in the, in the specialty chemical, and ultimately, hopefully even commodity chemical space. You know, that's the thing they did that was new, right? I think it was hard, right? You know, some of the early things didn't hit, which created, you know, some challenges. That's a great, I mean, what the heck, you know, like when we think we're done with chemistry, like, I hope not, you know, right? You know, I like that line of work. That pipeline there I do think is pretty unique and interesting to go take out to, you know, big chemical players and say, "Hey, listen, this is a way to explore chemical space that you have no other way to get to." That, you know, in the general sense. You can go read, you know, obviously, you know, they speak better to their products than I do. So you should go take a look at the specifics. That's kinda how I get it in my head in terms of where it fits in the market. Terrific. Thanks, and congrats on the deal. Yeah. Thanks, Mark. Thanks, all. Well, seeing no further questions, I think that concludes our call this morning. Thanks for everyone who joined, and this recording will be up online on YouTube forever. Thanks, everyone. Thanks, everybody. Bye.