Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Our business is organized into three operating business segments and one non-operating business segment:

•Integrated Care Management—through our Thrasys subsidiary;

•Virtual Care Infrastructure—through our Glocal and Cloudbreak subsidiaries;

•Services—through our Innovations, BHS, and TTC subsidiaries; and

•Corporate—through UpHealth and our UpHealth Holdings subsidiary.

In the Quarterly Report on Form 10-Q for the six-months ended June 30, 2021 we reported our revenue, gross margin and total assets into four operating business segments and one non-operating business segment. As a result of the integration and alignment of the businesses, we are now operating along three business segments and will report financial information for the following segments: Integrated Care Management, Virtual Care Infrastructure, and Services. The Services segment includes the Digital Pharmacy and Behavioral Health business units.

The reportable segments are consistent with how management views our services and products and the financial information reviewed by the chief operating decision makers. We manage our businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and assess performance.

In the Integrated Care Management segment, we provide our customers with an advanced, comprehensive, and extensible technology platform, marketed under the umbrella “SyntraNetTM” to manage health, quality of care, and costs, especially for individuals with complex medical, behavioral health, and social needs.

In the Virtual Care Infrastructure segment, we provide technology and process-based healthcare platforms providing our customers comprehensive primary care, specialty consultations, and translation services, through telemedicine, digital dispensaries, and technology-based hospital centers.

In the Services segment, we provide custom compounded medications for the unique needs of every patient and prescriber. We are a full-service pharmacy filling prescriptions from our inventory of compounded medications, as well as drugs purchased from manufacturers. Additionally, we provide inpatient and outpatient substance abuse and mental health treatment services for individuals with drug and alcohol addiction and other behavioral health issues. We offer a complete continuum of care from detoxification services, residential care, partial hospitalization programs, and intensive outpatient and outpatient programs.

In the Corporate segment, we perform executive, administrative, finance, human resources, legal, and information technology services for UpHealth, Inc. and for its subsidiaries, managed in a corporate shared services environment. Since they are not the

responsibility of segment operating management, they are not allocated to the operating segments and instead reported within Corporate.

We evaluate performance based on several factors, of which Revenue, Cost of Goods and Services, Adjusted EBITDA, and Total Assets by service and product, are the primary financial measures:

Revenue by segment consisted of the following:

In thousands	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Integrated Care Management	$	11,858	$	29,428
Virtual Care Infrastructure	19,162		26,716
Services	18,050		37,624
Total revenue	$	49,070	$	93,768

Gross margin by segment consisted of the following:

In thousands	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Integrated Care Management	$	4,760	$	14,483
Virtual Care Infrastructure	7,673		10,606
Services	7,349		13,015
Total gross margin	$	19,782	$	38,104

Total assets by segment consisted of the following:

In thousands	September 30, 2021		December 31, 2020
Integrated Care Management	$	202,554	186,476
Virtual Care Infrastructure	369,271		—
Services	267,426		18,383
Corporate	49,790		57,531
Total assets	$	889,041	$	262,390