Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.22.2
Segment Information
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company recognizes revenue under two reportable segments, (1) Clinical Services and (2) Pharma Services. The 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 self-pay patients. The Pharma Services segment supports pharmaceutical firms’ drug development programs by assisting with various clinical trials and research as well as providing informatics related services often supporting pharmaceutical commercialization efforts.
The financial information reviewed by the Chief Operating Decision Maker (“CODM”) includes revenues, cost of revenue, and gross profit for both reportable 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 June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net revenues:
Clinical Services $ 105,635  $ 101,405  $ 204,426  $ 197,892 
Pharma Services 19,437  20,319  37,815  39,365 
Total revenue 125,072  121,724  242,241  237,257 
Cost of revenue:
Clinical Services(1)
67,035  57,233  132,302  118,798 
Pharma Services(2)
14,091  11,501  27,761  23,895 
Total cost of revenue 81,126  68,734  160,063  142,693 
Gross Profit:
Clinical Services 38,600  44,172  72,124  79,094 
Pharma Services 5,346  8,818  10,054  15,470 
Total gross profit 43,946  52,990  82,178  94,564 
Operating expenses:
General and administrative 57,951  54,638  124,199  95,114 
Research and development 8,626  3,495  16,339  5,951 
Sales and marketing 17,071  17,224  33,370  30,973 
Total operating expenses 83,648  75,357  173,908  132,038 
Loss from operations (39,702) (22,367) (91,730) (37,474)
Interest expense, net 926  902  2,227  2,079 
Other expense (income), net 405  (171) 237  (341)
Gain on investment in and loan receivable from non-consolidated affiliate, net —  (96,534) —  (91,510)
(Loss) income before taxes (41,033) 73,436  (94,194) 52,298 
Income tax benefit (5,730) (2,437) (9,483) (1,461)
Net (loss) income $ (35,303) $ 75,873  $ (84,711) $ 53,759 
(1) Clinical Services cost of revenue for the three months ended June 30, 2022 and June 30, 2021 includes $4.3 million and $0.7 million, respectively, of amortization of acquired Inivata developed technology intangible assets. Clinical Services cost of revenue adjustments for the six months ended June 30, 2022 include $8.5 million of amortization of acquired Inivata developed technology intangible assets. Clinical Services cost of revenue for the six months ended June 30, 2021 include write-offs of $5.3 million for COVID-19 PCR testing inventory and $0.7 million of amortization of acquired Inivata developed technology intangible assets.
(2) Pharma Services cost of revenue for the three months ended June 30, 2022 includes $0.6 million of amortization of acquired Inivata developed technology intangible assets. Pharma Services cost of revenue for the six months ended June 30, 2022 includes $1.2 million of amortization of acquired Inivata developed technology intangible assets. There were no such amounts for the three and six months ended June 30, 2021.