Segment Information

9 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Information

5. Segment Information

The Company currently operates in two reporting segments: Consumer and Research Services, and Therapeutics. The Consumer and Research Services segment consists of revenue and expenses from PGS and telehealth, as well as research services revenue and expenses from certain collaboration agreements (including the GSK Agreement (as defined below)). The Therapeutics segment consists of revenues from the out-licensing of intellectual property associated with identified drug targets and expenses related to therapeutic product candidates under clinical development. Substantially all of the Company’s revenues are derived from the Consumer and Research Services segment. See Revenue Recognition within Note 2, “Summary of Significant Accounting Policies,” for additional information regarding revenue. There are no inter-segment sales.

Certain department expenses such as Finance, Legal, Regulatory and Supplier Quality, Corporate Communications and CEO Office are not reported as part of the reporting segments as reviewed by the CODM (as defined below). These amounts are included in Unallocated Corporate in the reconciliations below. The chief operating decision-maker (“CODM”) is the Chief Executive Officer (“CEO”). The CODM evaluates the performance of each segment based on Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) before net interest income (expense), net other income (expense), income tax expenses (benefit), depreciation and amortization, impairment charges, stock-based compensation expense, acquisition-related costs, and other items that are considered unusual or not representative of underlying trends of our business, including but not limited to: changes in fair value of warrant liabilities, litigation settlement, and restructuring and other charges, if applicable for the periods presented.

Adjusted EBITDA is a key measure used by the Company’s management and Board of Directors to understand and evaluate the Company’s operating performance and trends, to prepare and approve the annual budget, and to develop short-term and long-term operating plans. In particular, the exclusion of the items eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of the Company’s business. Accordingly, Adjusted EBITDA provides useful information in understanding and evaluating the Company’s operating results in the same manner as management and the Board of Directors. Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. Other companies, including companies in the Company’s industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. There are a number of limitations related to the use of these non-GAAP financial measures rather than net loss, which is the most directly comparable financial measure calculated in accordance with GAAP.

Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, the Company will incur expenses similar to the adjustments in this presentation in the future. The presentation of Adjusted EBITDA should not be construed as an inference that the Company’s future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating the Company’s performance, Adjusted EBITDA should be considered alongside other financial performance measures, including net loss and other GAAP results.

The Company’s revenue and Adjusted EBITDA by segment is as follows:

	Three Months Ended December 31,						Nine Months Ended December 31,
	2022			2021			2022			2021
	(In thousands)
Segment Revenue:
Consumer and Research Services	$	66,940		$	56,891		$	207,112		$	171,334
Total revenue (1)	$	66,940		$	56,891		$	207,112		$	171,334
Segment Adjusted EBITDA:
Consumer and Research Services Adjusted EBITDA	$	(8,313	)	$	(31,967	)	$	(22,986	)	$	(33,232	)
Therapeutics Adjusted EBITDA		(21,471	)		(19,916	)		(58,599	)		(57,046	)
Unallocated Corporate		(13,488	)		(12,129	)		(41,057	)		(30,692	)
Total Adjusted EBITDA	$	(43,272	)	$	(64,012	)	$	(122,642	)	$	(120,970	)
Reconciliation of net loss to Adjusted EBITDA:
Net loss	$	(91,961	)	$	(89,396	)	$	(247,558	)	$	(147,946	)
Adjustments
Interest (income) expense, net		(3,671	)		(76	)		(5,307	)		(213	)
Other (income) expense, net		(855	)		(22	)		267			(39	)
Change in fair value of warrant liabilities		—			(3,695	)		—			(32,989	)
Income tax benefit		(613	)		(3,512	)		(2,139	)		(3,512	)
Depreciation and amortization		5,257			4,681			15,512			14,188
Amortization of acquired intangible assets		4,265			2,898			12,847			2,898
Impairment of acquired intangible assets		9,968			—			9,968			—
Stock-based compensation expense		34,338			17,409			93,768			37,473
Acquisition-related costs (2)		—			7,701			—			9,170
Total Adjusted EBITDA	$	(43,272	)	$	(64,012	)	$	(122,642	)	$	(120,970	)

(1)There was no Therapeutics revenue for the three and nine months ended December 31, 2022 and 2021.

(2)For the three and nine months ended December 31, 2021, acquisition-related costs primarily consisted of advisory, legal and consulting fees.

Customers accounting for 10% or more of segment revenues were as follows:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2022				2021				2022				2021
	(In thousands, except percentages)
Consumer and Research Services Segment Revenue:
Customer C (1)	$	14,680	22	%	$	9,676	17	%	$	41,365	20	%	$	33,123	19	%
Customer B (2)	$	13,068	20	%	$	8,069	14	%	$	36,258	18	%	$	29,281	17	%

(1)Customer C revenues are primarily in the United States.

(2)Customer B revenues are in the U.K.

Revenue by geographical region can be found in the revenue recognition disclosures in Note 2, “Summary of Significant Accounting Policies.” Substantially all of the Company’s property and equipment, net of depreciation and amortization, was located in the United States during the periods presented. The reporting segments do not present total assets as they are not reviewed by the CODM when evaluating their performance.