Segment Information

9 Months Ended

Sep. 30, 2019

The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. Our Clinical Services segment provides various clinical testing services to community-based pathology 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. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research.

The financial information reviewed by the Chief Operating Decision Maker (“CODM”) includes revenues, cost of revenue and gross margin 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,
	2019		2018		2019		2018
Net revenues:
Clinical Services	$	92,565	$	59,449	$	267,757	$	175,960
Pharma Services	12,107		9,647		34,205		24,306
Total Revenue	104,672		69,096		301,962		200,266

Cost of revenue:
Clinical Services	47,526		31,509		136,557		94,586
Pharma Services	6,314		5,266		18,492		15,525
Total Cost of Revenue	53,840		36,775		155,049		110,111

Gross Profit:
Clinical Services	45,039		27,940		131,200		81,374
Pharma Services	5,793		4,381		15,713		8,781
Total Gross Profit	50,832		32,321		146,913		90,155

Operating expenses:
General and administrative	33,054		21,055		94,773		59,106
Research and development	2,611		446		6,407		2,475
Sales and marketing	11,508		6,900		35,048		21,355
Total operating expenses	47,173		28,401		136,228		82,936
Income from Operations	3,659		3,920		10,685		7,219
Interest expense, net	203		1,873		3,333		4,766
Other (income) expense	(35)		(30)		5,124		31
Loss on extinguishment of debt	—		—		1,018		—
Income before taxes	3,491		2,077		1,210		2,422
Income tax expense (benefit)	1,348		54		(500)		135
Net income	$	2,143	$	2,023	$	1,710	$	2,287