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.