Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

11. Segment Information

Prior to 2022, the Company operated as a single reportable segment. In the first quarter of 2022, the Company reorganized its operations into two operating and reportable segments: Foundry and Biosecurity. The reorganization reflects changes made to the Company’s internal management structure and how the Company’s chief operating decision makers (“CODMs”) evaluate operating results and make decisions on how to allocate resources. All prior-period comparative segment information was recast to reflect the current reportable segments in accordance with ASC 280, Segment Reporting. The Company’s reportable segments are described as follows:

• Foundry consists of research and development services performed under collaboration and license agreements relating to the Company’s cell programming platform. The Company’s cell programming platform includes two core assets: the Foundry, highly efficient biology lab facilities, enabled by investment in proprietary workflows, custom software, robotic automation, and data science and analytics, which is paired with the Company’s Codebase, a collection of biological “parts” and a

database of biological data used to program cells. The Foundry segment includes costs incurred for the development, operation, expansion and enhancement of the Foundry and Codebase. Foundry revenue is derived from Foundry usage fees and downstream value share in the form of milestone payments, royalties or equity interests.

• Biosecurity consists of COVID-19 testing products and services primarily provided to public health authorities. Biosecurity revenue is derived from sales of test kits and testing and reporting services fees.

The reportable segments are the segments of the Company for which discrete financial information is available and for which segment results are regularly reviewed by the Company’s CODMs, comprised of the Chief Executive Officer and the Chief Operating Officer, for purposes of allocating resources and assessing financial performance. The Company’s CODMs evaluate the financial performance of the Company’s segments based upon segment revenues and operating income. The Company’s measure of segment operating income for management reporting purposes excludes the impact of stock-based compensation expense, depreciation and amortization and changes in fair value of certain contingent liabilities. The Company’s CODMs do not evaluate operating segments using asset information. The accounting policies used in the preparation of reportable segments financial information are the same as those used in the preparation of the Company’s consolidated financial statements.

The following table presents summary results of the Company’s reportable segments for the periods indicated (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue:
Foundry	$	44,242		$	21,592		$	65,730		$	44,096
Biosecurity		100,376			22,044			247,293			43,637
Total revenue		144,618			43,636			313,023			87,733
Segment cost of revenue:
Biosecurity		63,911			17,110			149,343			40,810
Segment research and development expense:
Foundry		62,779			40,828			110,068			71,722
Biosecurity		443			4,374			960			27,777
Total segment research and development expense		63,222			45,202			111,028			99,499
Segment general and administrative expense:
Foundry		36,601			14,722			63,294			27,877
Biosecurity		12,409			5,084			25,644			9,619
Total segment general and administrative expense		49,010			19,806			88,938			37,496
Segment operating income (loss):
Foundry		(55,138	)		(33,958	)		(107,632	)		(55,503	)
Biosecurity		23,613			(4,524	)		71,346			(34,569	)
Total segment operating income (loss)		(31,525	)		(38,482	)		(36,286	)		(90,072	)
Operating expenses not allocated to segments:
Stock-based compensation (1)		607,270			14,519			1,266,305			14,637
Depreciation and amortization		9,326			6,944			18,532			12,351
Change in fair value of contingent consideration liability		(1,213	)		—			300			—
Loss from operations	$	(646,908	)	$	(59,945	)	$	(1,321,423	)	$	(117,060	)

(1) Includes $0.8 million and $7.0 million in employer payroll taxes for the three and six months ended June 30, 2022, respectively. Employer payroll taxes for the three and six months ended June 30, 2021 were not material.