Segment Information

3 Months Ended

Mar. 31, 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 March 31,
	2020		2019
Net revenues:
Clinical Services	$	92,982	$	86,210
Pharma Services	13,048		9,367
Total revenue	106,030		95,577

Cost of revenue:
Clinical Services	48,923		42,651
Pharma Services	10,738		5,811
Total cost of revenue	59,661		48,462

Gross Profit:
Clinical Services	44,059		43,559
Pharma Services	2,310		3,556
Total gross profit	46,369		47,115

Operating expenses:
General and administrative	36,344		32,142
Research and development	2,060		1,209
Sales and marketing	13,258		11,216
Total operating expenses	51,662		44,567
(Loss) income from operations	(5,293)		2,548
Interest expense, net	819		1,826
Other (income) expense	(223)		5,169

Loss before taxes	(5,889)		(4,447)
Income tax expense (benefit)	1,089		(2,023)
Net loss	$	(6,978)	$	(2,424)