Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has determined that its chief executive officer (“CEO”) is its chief operating decision maker (“CODM”). The Company’s CEO evaluates the financial performance of the Company based on two reportable segments: Software and Drug Discovery. The Software segment is focused on licensing the Company’s software to transform molecular discovery. The Drug Discovery segment is focused on building a portfolio of preclinical and clinical drug programs, internally and through collaborations.

The CODM reviews segment performance and allocates resources based upon segment revenue and segment gross profit of the Software and Drug Discovery reportable segments. Segment gross profit is derived by deducting operational expenditures, with the exception of research and development, sales and marketing, and general and administrative activities from U.S. GAAP revenue. Operational expenditures are expenditures made that are directly attributable to the reportable segment. These expenditures are allocated to the segments based on headcount. The reportable segment expenditures include compensation, supplies, and services from contract research organizations.

Certain cost items are not allocated to the Company’s reportable segments. These cost items primarily consist of compensation and general operational expenses associated with the Company’s research and development, sales and marketing, and general and administrative. These costs are incurred by both segments and due to the integrated nature of the Company’s Software and Drug Discovery segments, any allocation methodology would be arbitrary and provide no meaningful analysis.

Segment revenue is primarily earned in the United States and there are no intersegment revenues. Additionally, the Company reports assets on a consolidated basis and does not allocate assets to its reportable segments for purposes of assessing segment performance or allocating resources.

Presented below is financial information with respect to the Company’s reportable segments for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Segment revenues:
Software	$	29,352	$	30,011	$	61,565	$	63,092
Drug discovery	5,837		8,458		38,406		24,040
Total segment revenues	$	35,189	$	38,469	$	99,971	$	87,132
Segment gross profit:
Software	$	22,657	$	22,910	$	47,755	$	48,480
Drug discovery	(8,847)		(5,776)		11,748		(3,363)
Total segment gross profit	13,810		17,134		59,503		45,117
Unallocated:
Research and development	(42,705)		(31,123)		(83,446)		(58,945)
Sales and marketing	(9,022)		(7,428)		(18,167)		(14,099)
General and administrative	(23,216)		(22,056)		(49,524)		(44,189)
Gain on equity investments	—		11,828		147,322		11,828
Change in fair value	40,654		(15,700)		76,391		(21,864)
Other income (expense)	4,326		(308)		7,263		31
Income tax benefit (expense)	20,431		(33)		(5,928)		(5)
Consolidated net income (loss)	$	4,278	$	(47,686)	$	133,414	$	(82,126)

Revenues by geographic area are determined based on the address provided by our customers and partners. The following table sets forth revenues by geographic area for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
United States	$	23,964	$	27,104	$	74,308	$	57,379
APAC	6,237		2,966		13,310		4,523
EMEA	4,832		5,106		11,660		17,751
Rest of World	156		3,293		693		7,479
	$	35,189	$	38,469	$	99,971	$	87,132