DNA

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How DNA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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As of December 31, 2025, we had an accumulated deficit of approximately $6.2 billion.
We have consumed considerable amounts of capital to date, and we expect to incur continued net losses for the foreseeable future as we continue to develop our business, advance our programs, expand and enhance our platform and customer offerings, perform on behalf of our customers, and make the capital investments necessary to scale up our business.
If additional future financings, including pursuant to our at-the-market program, involve the issuance of equity securities, our existing stockholders would suffer dilution.
See “Management’s Discussion and Analysis – At-The-Market Program” for more information.
We have invested substantial time and resources in our team and have continued to nurture a culture of empowerment of, and active engagement by, our employees.
Our Biosecurity business is focused on global surveillance programs and analytic services.
If we cannot attract new customers, retain existing customers, and expand our relationships across both our cell engineering solutions and tools businesses, our business, financial condition, and results of operations could be adversely affected.
We generate revenue from our cell engineering solutions and cell engineering tools businesses.
In our cell engineering solutions business, which has been our core business since inception and continues to be the primary driver of our revenues, we receive fees for performing R&D activities and, for some of our legacy arrangements, downstream value in the form of royalties, milestone payments and/or equity.
In our more recently launched cell engineering tools business, we receive fees from performing data generation services and from the sale of our automation hardware, software and ongoing customer support services.
Our ability to achieve our growth objectives depends in significant part on our success in attracting new customers to each of these businesses, retaining and expanding our relationships with existing customers, and driving broader adoption and utilization of both our solutions and tools offerings over time.
Our ability to win new business and expand existing relationships in both businesses depends on many factors, including our reputation in the market, the quality, reliability and performance of our service and product offerings, our pricing and commercial terms, the features and interoperability of our tools, the perceived and demonstrated return on investment for our customers, our technical and operational capabilities, the effectiveness of our sales, marketing and customer success organizations, and broader conditions in our customers’ industries.
If we fail to maintain a position of strength in any of these areas, or if our offerings do not meet evolving customer expectations, we may be unable to acquire new customers, retain existing customers or increase the scope of work or level of spend with existing customers, which could adversely affect our business and prospects.
As a relatively new entrant in the cell engineering tools market, we face additional risks in establishing and expanding our customer base in this business.
We compete with incumbent providers that have established brands, larger installed bases and longer operating histories, and whose hardware and software are often already deeply integrated into customers’ laboratories and IT environments.
These factors can create significant barriers to adoption of our tools, as customers may be reluctant to incur the time, expense and operational disruption associated with evaluating, validating, integrating and maintaining new systems.
In order to justify replacing or augmenting existing systems, customers must perceive our offerings as providing meaningful and durable advantages in functionality, performance, scalability, data quality, ease of use, support and total cost of ownership.
Our sales cycles for tools can be long and resource-intensive, often involving proof-of-concept projects, technical integration work and customer-specific validation.
If we are unable to effectively demonstrate the benefits of our tools, if initial deployments do not meet customer expectations, or if we are unable to provide high-quality implementation, training, maintenance and support, customers may decide not to adopt our tools, may limit their use to smaller-scale projects or may discontinue or fail to renew support, software or service contracts.
Any of these outcomes could limit the growth of our tools business and could also negatively affect our reputation in the market.
In our cell engineering solutions business, we typically generate valuable know-how in the course of performing customer programs, such as onboarding of new high-throughput assays or the development of optimized proteins and chassis strains.
This know-how not only advances our technical and operational capabilities, but also serves as an important product development engine for expanding and refining our tools offerings.
As a result, the loss of one or more significant customer relationships, the failure to renew, extend or expand existing programs, delays in starting new programs, or our inability to attract new solutions customers or programs would not only reduce our revenues and potential downstream value, but could also slow our accumulation of know-how and data assets, thereby hindering our ability to advance our technological differentiation and improve our tools and services offerings.
We engage in conversations with prospective and existing customers regarding potential solutions and tools relationships on an ongoing basis.
We may devote substantial time and resources to business development discussions, technical evaluations, feasibility assessments, pilot projects, proof-of-concept studies and legal and regulatory diligence that may not result in a commercial agreement or that may result in only limited scope relationships.
Even where a commercial agreement is reached, the resulting relationship may not be successful for various reasons.
For example, in the case of cell engineering solutions, our customers may be unsuccessful in developing or commercializing products or processes based on our work, may change their strategic priorities or budgets, or may experience internal or external challenges that limit the size or duration of their programs with us, which has in the past and may in the future materially reduce both our near-term revenues and our downstream value opportunity from such collaborations.
Similarly, in the case of cell engineering tools, customers may fail to deploy our tools at the scale initially contemplated, may not expand to additional sites, use cases or workflows, or may discontinue use of our offerings if they do not meet expectations.
Any such outcomes could adversely affect our revenues, our ability to scale our platform, and our prospects for long-term growth.
Since our founding, alongside strategic and financial investors, we have leveraged our own resources to help secure funding for early stage and small companies.
Partnering with and investing in early stage and small companies has exposed and may continue to expose us to losses on our invested capital and the loss of revenue from the inability to recover fees for our services from these companies.
Such companies are exposed to a number of risks that could impair an early stage or small company’s financial condition, results of operation, or cash flow or result in other adverse events, such as bankruptcy.
Although we have a reserve of supplies and although alternative suppliers exist for some of these critical products, services, and equipment, our existing processes used in our Autonomous Lab have been designed based on the functions, limitations, features, and specifications of the products, services, and equipment that we currently utilize.
For the year ended December 31, 2025, our cost of lab equipment, lab supplies, and lab services accounted for a significant portion of our total R&D expenses.
Bribery Act, and similar laws in other jurisdictions; ● multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, tariffs, including tariffs announced by the Trump administration in 2025, trade regulations, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; ● failure by us, our collaborators or our customers to obtain regulatory clearance, authorization or approval for the use of our services in various countries; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; ● difficulties in staffing and managing foreign operations, including difficulties related to the increased operations, travel, infrastructure and legal compliance costs associated with international locations; ● logistics and regulations associated with shipping chemicals, biomaterials and product samples, including infrastructure conditions and transportation delays; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, widespread inflationary pressure, the impact of local and regional financial crises, on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, the outbreak of disease, or public health epidemics/pandemics, which could have an adverse impact on our employees, contractors, customers, partners, travel and the global economy; ● breakdowns in infrastructure, utilities and other services; ● boycotts, curtailment of trade and other business restrictions; and ● the other risks and uncertainties described in this Annual Report.
In August 2023, we entered into a strategic partnership with Google Cloud to develop and deploy AI tools for biology and biosecurity, which included certain minimum annual commitment obligations that we must pay.
Effective October 3, 2025, we entered into an amendment to the partnership to reduce our annual commitment amounts, which required a one-time payment of $14 million to be released from the obligations of the original agreement.
If we are not able to meet our minimum annual commitment obligations again in the future, additional shortfall liabilities may be incurred.
Initial workforce reductions commenced in June 2024 and continued throughout 2025.
Our reductions in force were substantially completed in 2025, although certain reductions will continue into 2026, subject to compliance with applicable laws.

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Our net loss attributable to our stockholders was approximately $547.0 million, $892.9 million, and $2.1 billion for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2024, we had an accumulated deficit of approximately $5.8 billion.
We expect that our operating expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting a stabilization in our operational overhead and restructuring actions commenced in 2024.
However, our operating expenses could increase in connection with employee incentive programs offered or from additional costs or expenses resulting from our restructuring actions.
We have consumed considerable amounts of capital to date, and we expect to incur continued net losses for the foreseeable future as we continue to develop our business, advance our programs, expand and enhance our platform and customer offerings, perform on behalf of our customers, make the capital investments necessary to scale up our Foundry operations and Codebase assets and as we continue our restructuring actions commenced in 2024 .
If future financings involve the issuance of equity securities, our existing stockholders would suffer dilution.
We have invested substantial time and resources in building our team and nurturing a culture of empowerment of, and active engagement by, our employees.
For example, the White House and World Health Organization each announced the end of the public health emergency effective May 2023 and the revenue stream of our COVID-19 school testing services ended in the third quarter of 2023.
As a result, our Biosecurity business is now focusing on global surveillance programs and analytic services.
If we cannot maintain and expand current customer partnerships and enter into new customer partnerships, our cell engineering business could be adversely affected.
We do not generate substantial revenue from our own products, and instead generate revenue from selling end-to-end cell engineering solutions and tools service offerings.
We receive fees for such solutions and tools, and for our end-to-end cell engineering solutions, we also have historically received downstream value in the form of royalties, milestone payments, and/or equity.
As a result, our success depends on our ability to expand the number, size and scope of our customer programs.
Our ability to win new business depends on many factors, including our reputation in the market, the quality of our service offerings relative to alternatives, the pricing and efficiency of our services relative to alternatives, our technical and operational capabilities, our sales team effectiveness, and the customer’s ability to fund new work.
If we fail to maintain a position of strength in any of these factors, our ability to deliver on customer programs, sign new customer programs, and/or launch new programs with existing customers may suffer and this could adversely affect our prospects.
Additionally, in the process of delivering programs, we generate Foundry know-how and accumulate meaningful biological and data assets, including optimized proteins and organisms, characterized genetic parts, enhanced understanding of metabolic pathways, biological, chemical, and genetic libraries, and other elements of biological data.
Data and know-how generated from our programs provide the basis for expanded capabilities that we believe further supports our customer relationships.
As a result, in addition to reducing our revenue or delaying the delivery of our programs, the loss of one or more of our customer relationships or the failure to add new customers or programs may hinder our accumulation of such information, thus hindering our efforts to advance our technological differentiation and improve our platform.
We engage in conversations with companies regarding potential customer relationships on an ongoing basis.
We may spend considerable time and money engaging in these conversations and feasibility assessments, including understanding the technical approach, customer concerns and limitations, and legal or regulatory landscape of a potential program or offering, which may not result in a commercial agreement.
Even if an agreement is reached, the resulting relationship is not always successful, which may be for many reasons, including our inability to complete a program to our customers’ specifications or within our customers’ time frames, or, in the case of end-to-end cell engineering solutions, unsuccessful development or commercialization of products or processes by our customers.
In such circumstances, our revenues and downstream value potential from such a collaboration has been and might in the future be meaningfully reduced.
Since our founding, we have helped to launch new companies by bringing together strategic and financial investors to secure funding for early stage and small companies.
Partnering with and investing in early stage and small companies may expose us to a number of risks, including that early stage and small companies may have: ● shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render small companies more vulnerable to competitors’ actions and market conditions, as well as general economic downturns; ● more limited access to capital and higher funding costs, may be in a weaker financial position and may need more capital than originally anticipated to expand, compete and operate their business; ● the inability to obtain financing from the public capital markets or other traditional sources, such as commercial banks, in part because loans made to these types of companies entail higher risks than loans made to companies that have larger businesses, greater financial resources or are otherwise able to access traditional credit sources on more attractive terms; ● a higher likelihood of holding cash deposits or maintaining lines of credit with banks focused on providing banking services to early stage or venture-backed companies, such as Silicon Valley Bank (“SVB”), which failed in March 2023; ● a higher likelihood of depending on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on such company and, in turn, on us; ● less predictable operating results, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; ● particular vulnerabilities to changes in customer preferences and market conditions, depend on a limited number of customers, and face intense competition, including from companies with greater financial, technical, managerial and marketing resources; and ● fewer administrative resources, which can lead to greater uncertainty in their ability to generate accurate and reliable financial data, including their ability to deliver audited financial statements.
Any of these factors or changes thereto could impair an early stage or small company’s financial condition, results of operation, cash flow or result in other adverse events, such as bankruptcy.
This, in turn, could result in losses in our investments and a change in our income (loss) on investments.
Although we have a reserve of supplies and although alternative suppliers exist for some of these critical products, services, and equipment, our existing processes used in our Foundry have been designed based on the functions, limitations, features, and specifications of the products, services, and equipment that we currently utilize.
For the year ended December 31, 2024, our cost of lab equipment, lab supplies, and lab services accounted for a significant portion of our total R&D expenses.
Bribery Act, and similar laws in other jurisdictions; ● multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, tariffs, including tariffs announced by the Trump administration in 2025, trade regulations, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; ● failure by us, our collaborators or our customers to obtain regulatory clearance, authorization or approval for the use of our services in various countries; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; ● difficulties in staffing and managing foreign operations, including difficulties related to the increased operations, travel, infrastructure and legal compliance costs associated with international locations; ● logistics and regulations associated with shipping chemicals, biomaterials and product samples, including infrastructure conditions and transportation delays; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, widespread inflationary pressure, the impact of local and regional financial crises, on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, the outbreak of disease, or public health epidemics/pandemics, such as COVID-19, which could have an adverse impact on our employees, contractors, customers, partners, travel and the global economy; ● breakdowns in infrastructure, utilities and other services; ● boycotts, curtailment of trade and other business restrictions; and ● the other risks and uncertainties described in this Annual Report.
In August 2023, we entered into a strategic partnership with Google Cloud to develop and deploy AI tools for biology and biosecurity.
Initial workforce reductions commenced in June 2024 and continued throughout 2024, with further reductions expected in 2025.
All reductions are expected to be substantially completed in 2025, subject to compliance with applicable laws.
The Company plans to consolidate certain facilities through various actions, including combining office and laboratory operations into fewer locations, subleasing unused or underutilized facilities, and has taken or plans to take other related measures.
While the Company aims to complete the majority of its facility consolidation actions in 2025, the actual timing may vary, especially for subleasing unused or underutilized facilities, which may extend beyond 2025 or may not occur prior to termination of such leases, depending on market conditions.
The Company currently estimates the costs for the reduction in force to range from $20.0 million to $23.0 million primarily in the Cell Engineering segment and to consist of cash severance and related costs.
Risks Related to Our Customers We are dependent on our customers’ willingness and ability to develop, produce and manufacture products using the engineered cells, other biological assets and/or biomanufacturing processes that we develop and on the success of our customers’ development, production, and manufacturing efforts.
We sell end-to-end cell engineering solutions and cell engineering tools service offerings.
For our solutions offerings, we rely on our customers to commercialize products that may be enabled by our engineered cells, other biological assets (e.g., enzyme DNA sequences) and/or biomanufacturing processes.
A portion of the value in such customer collaborations has historically been earned through downstream value sharing in the form of royalty streams, milestone payments, and/or equity interests.
If our customers are not successful in bringing these products to market, or if these products are not successful once on the market, the downstream portion of our value will be adversely impacted.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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