Segment Information

6 Months Ended

Jun. 30, 2020

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 June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net revenues:
Clinical Services	$	73,884	$	88,982	$	166,866	$	175,192
Pharma Services	13,093		12,731		26,141		22,098
Total revenue	86,977		101,713		193,007		197,290

Cost of revenue:
Clinical Services	48,757		46,380		97,680		89,031
Pharma Services	10,214		6,367		20,952		12,178
Total cost of revenue	58,971		52,747		118,632		101,209

Gross Profit:
Clinical Services	25,127		42,602		69,186		86,161
Pharma Services	2,879		6,364		5,189		9,920
Total gross profit	28,006		48,966		74,375		96,081

Operating expenses:
General and administrative	34,613		29,577		70,957		61,719
Research and development	2,105		2,587		4,165		3,796
Sales and marketing	10,195		12,324		23,453		23,540
Total operating expenses	46,913		44,488		98,575		89,055
(Loss) income from operations	(18,907)		4,478		(24,200)		7,026
Interest expense, net	1,548		1,304		2,367		3,130
Other (income) expense, net	(7,405)		(10)		(7,628)		5,159
Loss on extinguishment of debt	1,400		1,018		1,400		1,018
Loss on termination of cash flow hedge	3,506		—		3,506		—
(Loss) income before taxes	(17,956)		2,166		(23,845)		(2,281)
Income tax (benefit) expense	(11,132)		175		(10,043)		(1,848)
Net (loss) income	$	(6,824)	$	1,991	$	(13,802)	$	(433)