Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. The Company’s Clinical Services segment provides various clinical testing services to community-based pathology and oncology practices, hospital pathology labs, and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Company’s Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research as well as providing informatics related services often supporting Pharma commercialization efforts.
The financial information reviewed by the Chief Operating Decision Maker (“CODM”) includes revenues, cost of revenue and gross profit for each of the Company’s operating segments. Assets are not presented at the segment level as that information is not used by the CODM.
The following table summarizes the segment information (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net revenues:
Clinical Services $ 102,227  $ 108,733  $ 300,119  $ 275,599 
Pharma Services 19,113  16,711  58,478  42,852 
Total revenue 121,340  125,444  358,597  318,451 
Cost of revenue:
Clinical Services(1)
59,560  60,607  178,358  158,287 
Pharma Services 14,541  10,772  38,436  31,724 
Total cost of revenue 74,101  71,379  216,794  190,011 
Gross Profit:
Clinical Services 42,667  48,126  121,761  117,312 
Pharma Services 4,572  5,939  20,042  11,128 
Total gross profit 47,239  54,065  141,803  128,440 
Operating expenses:
General and administrative 63,839  36,128  158,953  107,085 
Research and development 7,409  1,964  13,360  6,129 
Sales and marketing 15,704  11,304  46,677  34,757 
Total operating expenses 86,952  49,396  218,990  147,971 
Loss (income) from operations (39,713) 4,669  (77,187) (19,531)
Interest expense, net 1,296  2,458  3,375  4,825 
Other income, net (89) (11) (431) (7,639)
Gain on investment in and loan receivable from non-consolidated affiliate, net (17,750) —  (109,260) — 
Loss on extinguishment of debt —  —  —  1,400 
Loss on termination of cash flow hedge —  —  —  3,506 
(Loss) income before taxes (23,170) 2,222  29,129  (21,623)
Income tax benefit (2,822) (335) (4,283) (10,378)
Net (loss) income $ (20,348) $ 2,557  $ 33,412  $ (11,245)
(1) Clinical Services cost of revenue for the three months ended September 30, 2021 includes $4.3 million of amortization of acquired developed technology intangible assets. Clinical Services cost of revenue for the nine months ended September 30, 2021 includes $5 million of amortization of acquired Inivata developed technology intangible assets and write-offs of $5.3 million for COVID-19 PCR testing inventory. Pharma Services cost of revenue for the three and nine months ended September 30, 2021 includes $0.5 million of amortization of acquired Inivata developed technology intangible assets.