Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

14. Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company develops, manufactures and sells products that unlock genetic information from very small amounts of tissue. Products, consisting of instruments, consumables and related services, are provided to researchers in the life sciences industry and to clinical laboratories providing diagnostic testing. The Company is organized as, and operates in, two reportable segments: life sciences segment and diagnostics segment. The life sciences business provides instruments, consumables and services for efficiently profiling the activity of hundreds of genes from a single tissue sample. The diagnostics business provides molecular diagnostic kits to pathology labs enabling complex molecular testing on a decentralized basis.

The Company’s chief operating decision maker is the chief executive officer. The chief operating decision maker reviews financial information presented on a total Company basis, accompanied by information about segment revenue and certain direct sales and marketing expenses by segment. The chief operating decision maker does not review segment information related to cost of revenue, research and development or other selling, general and administrative expenses. The Company’s chief operating decision maker evaluates performance based on these two measures.

Operating results for each segment and a reconciliation of segment profit (loss) to loss from operations are as follows:

	Years Ended December 31,									Nine Months Ended September 30,
	2010			2011			2012			2012			2013
	(In thousands)
										(Unaudited)
Product revenue:
Instruments	$	6,472		$	7,112		$	8,786		$	6,262		$	7,226
Consumables		5,034			9,997			13,036			9,325			12,380
Service revenue		224			691			1,151			893			1,148
Total life sciences segment		11,730			17,800			22,973			16,480			20,754
Diagnostics segment
Instruments		—			—			—			—			488
Consumables		—			—			—			—			41
Total diagnostics segment		—			—			—			—			529
Total revenue		11,730			17,800			22,973			16,480			21,283
Selling, general and administrative expenses:
Life sciences segment		4,806			5,304			7,175			5,174			7,869
Diagnostics segment		—			—			2,378			1,486			3,993
Life sciences segment profit		6,924			12,496			15,798			11,306			12,885
Diagnostic segment loss		—			—			(2,378	)		(1,486	)		(3,464	)
Total segment profit		6,924			12,496			13,420			9,820			9,421
Adjustments:
Cost of revenue		(9,128	)		(9,777	)		(12,361	)		(9,076	)		(10,188	)
Research and development expenses		(7,547	)		(8,990	)		(11,635	)		(8,253	)		(10,469	)
Unallocated selling, general and administrative expenses		(3,221	)		(4,225	)		(5,933	)		(3,928	)		(8,960	)
Loss from operations	$	(12,972	)	$	(10,496	)	$	(16,509	)	$	(11,437	)	$	(20,196	)

The following table is based on the geographic location of distributors or end users who purchased products and services. For sales to distributors, their geographic location may be different from the geographic locations of the ultimate end user. Revenue by geography was as follows:

	Years Ended December 31,						Nine Months Ended September 30,
	2010		2011		2012		2012		2013
	(In thousands)
							(Unaudited)
North America	$	10,643	$	14,044	$	15,906	$	11,809	$	15,028
Europe & Middle East		909		2,918		4,167		2,863		3,702
Asia Pacific		178		838		2,900		1,808		2,553
Total revenue	$	11,730	$	17,800	$	22,973	$	16,480	$	21,283

Total revenue in the United States was $10.2 million, $13.5 million, $14.9 million, $11.2 million (unaudited) and $13.0 million (unaudited) for the years ended December 31, 2010, 2011 and 2012 and the nine months ended September 30, 2012 and 2013, respectively.

The Company’s assets are primarily located in the United States and not allocated to any specific segment or geographic region. All of the Company’s long-lived assets are located in the United States.