Ginkgo Bioworks Holdings Inc
For the period ended Dec 31, 2023. Filed Feb 29, 2024.
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FY2023 · Filed Feb 29, 2024
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Report of Independent Registered Public Accounting Firm (PCAOB ID:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Ginkgo Bioworks Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Ginkgo Bioworks Holdings, Inc. (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an adverse opinion thereon.
Adoption of New Accounting Standard
As discussed in Note 2 to the consolidated financial statements, the Company changed its method for accounting for leases in 2022 due to the adoption of Accounting Standards Update (ASU) No. 2016-02 Leases(ASC 842), and the related amendments.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Cell Engineering Revenue Recognition | |
| Description of the Matter | Cell Engineering revenues were $143.5 million for the year ended December 31, 2023. As discussed in Note 2 to the consolidated financial statements, for certain Cell Engineering revenue agreements, the Company recognizes revenue over the period of performance using a measure of progress based on costs incurred to date as compared to total estimated costs. The Company evaluates its measure of progress to recognize revenue for these agreements at each reporting period and, as necessary, adjusts the measure of progress and related revenue recognition. Auditing Cell Engineering revenue recognized using a measure of progress is especially challenging because the determination of the measure of progress involves significant management judgment and assumptions related to the estimated costs to satisfy the applicable performance obligation under the agreement. |
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| How We Addressed the Matter in Our Audit | To test the measure of progress used to recognize revenue for certain Cell Engineering revenue agreements, our audit procedures included, among others, evaluating the identified measure of progress by reviewing customer contracts and the contract analyses prepared by management. We also evaluated the accuracy and completeness of the underlying data used in management’s determination of the measure of progress. We tested management’s estimate of costs by performing inquiries of individuals responsible for managing the execution of the Cell Engineering revenue agreements and inspecting evidence related to the progress under the agreement. We also performed analytical comparisons of actual costs incurred compared to estimated remaining costs, compared management’s historical estimates of remaining costs to actual costs incurred, and performed sensitivity analyses over management’s estimates of costs. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2018.
Boston, Massachusetts
February 29, 2024
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