Fair Value Measurements

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	As of March 31, 2025
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents:
Money market funds	$	135,564	$	135,564	$	—	$	—
Commercial paper	39,526		—		39,526		—
U.S. Treasury securities	115,640		115,640		—		—
Corporate bonds	1,417		—		1,417		—
Marketable securities:
Commercial paper	23,462		—		23,462		—
U.S. Treasury securities	99,064		99,064		—		—
Corporate bonds	69,138		—		69,138		—
Marketable equity securities (1)	12,838		12,838		—		—
Investments:
Synlogic, Inc. warrants (2)	211		—		211		—
Marketable equity securities	2,899		2,899		—		—
Other non-current assets:
Notes receivable	8,901		—		—		8,901
Total assets	$	508,660	$	366,005	$	133,754	$	8,901
Liabilities:
Accrued expenses and other current liabilities:
Contingent consideration	$	5,438	$	—	$	—	$	5,438
Other non-current liabilities:
Contingent consideration	3,182		—		—		3,182
Total liabilities	$	8,620	$	—	$	—	$	8,620

	As of December 31, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents:
Money market funds	$	521,457	$	521,457	$	—	$	—
Investments:
Synlogic, Inc. warrants (2)	238		—		238		—
Marketable equity securities	17,559		17,559		—		—
Other non-current assets:
Notes receivable	14,170		—		12,327		1,843
Total assets	$	553,424	$	539,016	$	12,565	$	1,843
Liabilities:
Accrued expenses and other current liabilities:
Contingent consideration	$	5,438	$	—	$	—	$	5,438
Other non-current liabilities:
Contingent consideration	4,484		—		—		4,484
Total liabilities	$	9,922	$	—	$	—	$	9,922

(1)These securities were previously reported within investments on the condensed consolidated balance sheet and, as of March 31, 2025, are classified as current assets, as they are considered to be available for use in current operations.

(2)The fair value of Synlogic, Inc. warrants is calculated as the quoted price of the underlying common stock, less the unpaid exercise price of the warrants.

Transfers between Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. During the three months ended March 31, 2025, transfers into Level 3 consisted of a note receivable that was transferred from Level 2 to Level 3 upon a change in valuation technique. During the three months ended March 31, 2024, transfers from Level 2 to Level 1 occurred due to the lapse of regulatory sales restrictions on marketable equity securities. There were no other transfers between Levels 1, 2, or 3 during the three months ended March 31, 2025 or 2024.

The table below provides a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value using Level 3 significant unobservable inputs for the three months ended March 31 (in thousands):

	Notes Receivable		Private Placement Warrants		Contingent Consideration
Balance at January 1, 2025	$	1,843	$	—	$	9,922
Additions	75		—		—
Change in fair value	50		—		(1,302)
Settlements and payments	(50)		—		—
Transfers into Level 3	6,983		—		—
Balance at March 31, 2025	$	8,901	$	—	$	8,620
Balance at January 1, 2024	$	14,129	$	1,846	$	24,273
Additions	50		—		—
Change in fair value	961		(309)		(926)
Settlements and payments	—		—		(2,753)
Balance at March 31, 2024	$	15,140	$	1,537	$	20,594

Notes Receivable

For all of its notes receivable, the Company has elected the fair value option, under which changes in fair value are recorded in other income (expense), net, in the condensed consolidated statements of operations and comprehensive loss.

The Company holds a senior secured note in the original principal amount of $11.8 million issued by Bolt Threads, Inc., which bears interest at 12% per annum, is due December 31, 2027, and is included in other non-current assets at its estimated fair value.

As of March 31, 2025, the Company used a discounted cash flow model to estimate the fair value of the senior secured note, incorporating significant unobservable inputs such as the recovery rate and a risk-adjusted discount rate. These inputs reflect the Company’s own assumptions and, therefore, represent a Level 3 measurement within the fair value hierarchy.

As of December 31, 2024, the Company used the yield method to value the senior secured note. Under this method, the estimated future cash flows, consisting of principal and interest payments, are discounted to present value using an applicable market yield or discount rate. The market yield is determined using a corporate bond yield curve corresponding to the issuer’s credit rating category and is considered an observable market input, representing a Level 2 measurement within the fair value hierarchy. Increases or decreases in the market yield or discount rate would result in a decrease or increase, respectively, in the fair value measurement.

The Company also holds a series of convertible debt instruments issued by customers as payment for Cell Engineering services. The Company used a scenario-based method to value the convertible debt instruments. Under this method, future cash flows are evaluated under various payoff scenarios, probability-weighted, and discounted to present value. The significant unobservable (Level 3) inputs used in the fair value measurement as of March 31, 2025 and December 31, 2024 included scenario probabilities ranging from 5% to 45%, a discount rate of 15.5% and estimated time to event date of approximately one year. Significant changes in these inputs could have resulted in a significantly lower or higher fair value measurement.

As of March 31, 2025, the Company’s notes receivable had an unpaid principal balance of $24.9 million and a fair value of $8.9 million, compared to an unpaid principal balance of $25.1 million and a fair value of $14.2 million as of December 31, 2024.

Contingent Consideration

In connection with various business acquisitions, the Company is required to make contingent earnout payments payable upon the achievement of certain technical, commercial and/or performance milestones. The Company also issued restricted stock in connection with acquisitions, which is subject to vesting conditions and is classified as contingent consideration liability.

The Company can settle a majority of its contingent consideration liabilities in cash or shares of Class A common stock at the Company’s election with the remainder payable in cash. During the three months ended March 31, 2024, the Company settled $2.8 million in contingent consideration liabilities through payment of $0.9 million in cash and vesting of 31,127 shares of restricted stock valued at $1.9 million. No contingent consideration was settled during the three months ended March 31, 2025.

The fair value of contingent consideration related to earnout payments from acquisitions was estimated using unobservable (Level 3) inputs as illustrated in the table below. The fair value of contingent consideration related to restricted stock was estimated using the quoted price of Ginkgo’s Class A common stock, an estimate of the number of shares expected to vest, probability of vesting, and a discount rate. Material increases or decreases in these inputs could result in a higher or lower fair value measurement. Changes in the fair value of contingent consideration are recorded in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss.

The following table provides quantitative information regarding Level 3 inputs used in the fair value measurements of contingent consideration liabilities as of the periods presented:

			March 31, 2025		December 31, 2024
Contingent Consideration Liability	Valuation Technique	Unobservable Input	Range		Range
Earnout payments (FGen and Dutch DNA acquisitions)	Probability-weighted present value	Probability of payment	5% - 25%		5% - 50%
		Discount rate	11.7%		9.3%
Earnout payments (Dutch DNA acquisition)	Discounted cash flow	Projected years of payments	2028 - 2031		2028 - 2031
		Discount rate	10.6	%	10.6	%

Nonrecurring Fair Value Measurements

The Company measures the fair value of certain assets, including investments in privately held companies without readily determinable fair values, on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable and when observable price changes occur for identical or similar security of the same issuer.

The fair value of non-marketable equity securities is classified within Level 3 in the fair value hierarchy when the Company estimates fair value using unobservable inputs to measure the amount of the impairment loss. The fair value of non-marketable equity securities is classified within Level 2 in the fair value hierarchy when the Company estimates fair value using the observable transaction price paid by third party investors for the identical or similar security of the same issuer.

During the three months ended March 31, 2025, the Company recorded an impairment loss of $1.8 million related to an investment in the preferred stock of a privately held company after concluding that the investment had substantially no value.

During the three months ended March 31, 2024, the Company recorded impairment losses of $5.2 million related to Simple Agreements for Future Equity (“SAFEs”). Fair value was generally estimated using the scenario-based method, in which various payout scenarios were probability-weighted and discounted to present value.