Segment Information

12 Months Ended

Dec. 31, 2021

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, 2021, 2020 and 2019 (in thousands):

	2021		2020		2019
Net revenue:
Clinical Services	$	404,172	$	382,337	$	361,161
Pharma Services	80,157		62,111		47,669
Total net revenue	484,329		444,448		408,830
Cost of revenue:
Clinical Services(1)	244,360		215,529		185,612
Pharma Services(2)	52,909		43,026		26,382
Total cost of revenue	297,269		258,555		211,994
Gross profit:
Clinical Services	159,812		166,808		175,549
Pharma Services	27,248		19,085		21,287
Total gross profit	187,060		185,893		196,836
Operating expenses:
General and administrative	221,347		143,794		127,993
Research and development	21,873		8,229		8,487
Sales and marketing	62,594		47,862		47,350
Total operating expenses	305,814		199,885		183,830
(Loss) income from operations	(118,754)		(13,992)		13,006
Interest expense, net	5,082		7,019		3,713
Other expense (income), net	499		(7,906)		4,630
Gain on investment in and loan receivable from non-consolidated affiliate, net	(109,260)		(3,955)		—
Loss on extinguishment of debt	—		1,400		1,018
Loss on termination of cash flow hedge	—		3,506		—
(Loss) income before taxes	(15,075)		(14,056)		3,645
Income tax benefit	(6,728)		(18,228)		(4,361)
Net (loss) income	$	(8,347)	$	4,172	$	8,006

(1) 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 2021 includes $1.2 million of amortization of acquired Inivata developed technology intangible assets.