Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.22.4
Segment Information
 12 Months Ended
Dec. 31, 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 segment information for the years ended December 31, 2022, 2021 and 2020 (in thousands):
  2022 2021 2020
Net revenue:
   Clinical Services $ 418,754  $ 404,172  $ 382,337 
   Pharma Services 90,974  80,157  62,111 
Total net revenue 509,728  484,329  444,448 
Cost of revenue:
   Clinical Services(1)
261,742  244,360  215,529 
   Pharma Services(2)
60,090  52,909  43,026 
Total cost of revenue 321,832  297,269  258,555 
Gross profit:
   Clinical Services 157,012  159,812  166,808 
   Pharma Services 30,884  27,248  19,085 
Total gross profit 187,896  187,060  185,893 
Operating expenses:
   General and administrative 243,356  221,347  143,794 
   Research and development 30,326  21,873  8,229 
   Sales and marketing 67,321  62,594  47,862 
   Restructuring charges 4,516  —  — 
Total operating expenses 345,519  305,814  199,885 
Loss from operations (157,623) (118,754) (13,992)
   Interest expense, net 1,506  5,082  7,019 
   Other expense (income), net 213  499  (7,906)
   Gain on investment in and loan receivable from
   non-consolidated affiliate, net		 —  (109,260) (3,955)
   Loss on extinguishment of debt —  —  1,400 
   Loss on termination of cash flow hedge —  —  3,506 
   Loss before taxes (159,342) (15,075) (14,056)
   Income tax benefit (15,092) (6,728) (18,228)
Net (loss) income $ (144,250) $ (8,347) $ 4,172 
(1) Clinical Services cost of revenue in 2022 includes $17.1 million of amortization of acquired Inivata developed technology intangible assets. Clinical Services cost of revenue in 2021 includes $9.2 million of amortization of acquired Inivata developed technology intangible assets and write-offs of $5.3 million for COVID-19 PCR testing inventory.
(2) Pharma Services cost of revenue in 2022 includes $2.4 million of amortization of acquired Inivata developed technology intangible assets. Pharma Services cost of revenue in 2021 includes $1.2 million of amortization of acquired Inivata developed technology intangible assets.