Segments

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segments

Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. Segment results are presented in the same manner as we present our operations internally to make operating decisions and assess performance. The accounting policies for the segments are the

same as those described in Significant Accounting Policies (see Note 1). The Company’s financial performance is reported in three segments. A description of each segment follows:

•Nucleic Acid Production: focuses on the manufacturing and sale of highly modified nucleic acids products to support the needs of customers’ research, therapeutic and vaccine programs. This segment also provides research products for labeling and detecting proteins in cells and tissue samples.

•Biologics Safety Testing: focuses on the manufacturing and sale of host cell protein, bioprocess impurity detection, viral clearance prediction kits and associated products. This segment also provides services for custom antibody development, assay development, antibody affinity extraction and mass spectrometry that are utilized by our customers in their biologic drug manufacturing spectrum.

•Protein Detection: focused on manufacturing and selling labeling and visual detection reagents to scientific research customers for their tissue-based protein detection and characterization needs. The Company completed the divestiture of its Protein Detection business in September 2021 (see Note 2).

The Company has determined that adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) is the profit or loss measure that the CODM uses to make resource allocation decisions and evaluate segment performance. Adjusted EBITDA assists management in comparing the segment performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the core operations and, therefore, are not included in measuring segment performance. The Company defines Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization, certain non-cash items and other adjustments that we do not consider in our evaluation of ongoing operating performance from period to period. Corporate costs, net of eliminations, are managed on a standalone basis and not allocated to segments.

The following schedule includes revenue and adjusted EBITDA for each of the Company’s reportable operating segments (in thousands):

	Year Ended December 31,
	2023		2022		2021
Revenue:
Nucleic Acid Production	$	224,769	$	813,076	$	712,520
Biologics Safety Testing	64,179		69,932		68,417
Protein Detection	—		—		18,959
Total reportable segments’ revenue	288,948		883,008		799,896
Intersegment eliminations	(3)		(7)		(656)
Total	$	288,945	$	883,001	$	799,240
Segment adjusted EBITDA:
Nucleic Acid Production	$	82,658	$	638,337	$	565,254
Biologics Safety Testing	46,908		54,841		54,440
Protein Detection	—		—		6,391
Total reportable segments’ adjusted EBITDA	129,566		693,178		626,085
Reconciliation of total reportable segments’ adjusted EBITDA to income before income taxes
Amortization	(27,356)		(24,269)		(18,339)
Depreciation	(12,898)		(7,566)		(6,413)
Interest expense	(45,892)		(20,414)		(30,260)
Interest income	27,727		2,338		—
Corporate costs, net of eliminations	(64,257)		(55,378)		(43,265)
Other adjustments:
Acquisition contingent consideration	3,286		7,800		—
Acquisition integration costs	(12,695)		(13,362)		(44)
Equity-based compensation	(34,588)		(18,670)		(10,458)
Gain on sale of business	—		—		11,249
Merger and acquisition related expenses	(4,392)		(2,416)		(1,508)
Financing costs	—		(1,078)		(2,383)
Acquisition related tax adjustment	(1,293)		(349)		—
Tax Receivable Agreement liability adjustment	668,886		(4,102)		6,101
Chief Executive Officer transition costs	(28)		(2,426)		—
Restructuring costs (1)	(6,567)		—		—
Other	(1,763)		(1,814)		—
Income before income taxes	617,736		551,472		530,765
Income tax expense	(756,111)		(60,809)		(61,515)
Net (loss) income	$	(138,375)	$	490,663	$	469,250

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(1)Equity-based compensation benefit of $0.1 million related to forfeited equity awards in connection with the restructuring is included on the equity-based compensation line item.

During the years ended December 31, 2023 and 2022, intersegment revenue was immaterial between the Nucleic Acid Production and Biologics Safety Testing segments. During the year ended December 31, 2021, intersegment revenue was $0.7 million between the Nucleic Acid Production and Protein Detection segments. The intersegment sales and the related gross margin on inventory recorded at the end of the period are eliminated for consolidation purposes. Internal selling prices for intersegment sales are consistent with the segment’s normal retail price offered to external parties. There was no commission expense recognized for intersegment sales for the years ended December 31, 2023, 2022 and 2021.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources.