Revenue from Contract with Customer (Policies)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

REVENUES

The Company's revenues by segment and by payers/customer groups for the three months ended March 31, 2023, and 2022, were as follows:

	For the Three Months Ended March 31, 2023								For the Three Months Ended March 31, 2022
	North America		Europe		Other		Total		North America		Europe		Other		Total
Payer/Customer
Dx
Clients	17	%	—	%	—	%	17	%	17	%	—	%	—	%	17	%
Patients	8	%	—	%	—	%	8	%	5	%	—	%	—	%	5	%
Medicare and Medicaid	7	%	—	%	—	%	7	%	6	%	—	%	—	%	6	%
Third party	31	%	—	%	—	%	31	%	35	%	—	%	—	%	35	%
Total Dx revenues by payer	63	%	—	%	—	%	63	%	63	%	—	%	—	%	63	%
DD
Pharmaceutical, biotechnology and medical device companies	18	%	12	%	7	%	37	%	17	%	13	%	7	%	37	%
Total revenues	81	%	12	%	7	%	100	%	80	%	13	%	7	%	100	%

Revenues in the U.S. were $2,959.2 (78.3%) and $3,000.5 (76.9%) for the three months ended March 31, 2023, and 2022, respectively.

DD Contract costs

DD incurs costs to fulfill contracts with customers. Contract fulfillment costs include software implementation costs and setup costs for certain market access solutions.

	March 31, 2023		December 31, 2022
Sales commission assets	$	38.3	$	38.2
Deferred contract fulfillment costs	14.3		15.0
Total	$	52.6	$	53.2

Amortization related to sales commission assets and associated payroll taxes for the three months ended March 31, 2023, and 2022, was $8.4 and $7.2, respectively. Amortization related to deferred contract fulfillment costs for the three months ended March 31, 2023, and 2022, was $2.4 and $3.1, respectively.

Accounts Receivable, Unbilled Services and Unearned Revenue

The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers:

	March 31, 2023		December 31, 2022
Dx accounts receivable	$	1,131.6	$	1,046.9
DD accounts receivable	1,266.0		1,218.6
Less DD allowance for doubtful accounts	(52.8)		(43.5)
Accounts receivable	$	2,344.8	$	2,222.0
Gross unbilled services	$	715.9	$	805.9
Less reserve for unbilled services	(10.8)		(10.5)
Unbilled services	$	705.1	$	795.4
Unearned revenue	$	586.7	$	582.1

Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $165.3 and $163.8 for the three months ended March 31, 2023, and 2022, respectively.

Credit Loss Rollforward

The Company estimates future expected losses on accounts receivable, unbilled services and notes receivable over the remaining collection period of the instrument. The rollforward for the allowance for credit losses for the three months ended March 31, 2023, is as follows:

	Accounts Receivable		Unbilled Services		Note and Other Receivables		Total
Balance as of December 31, 2022	$	43.5	$	10.5	$	0.7	$	54.7
Plus, credit loss expense	11.1		—		—		11.1
Less, write offs	(1.8)		0.3		—		(1.5)
Balance as of March 31, 2023	$	52.8	$	10.8	$	0.7	$	64.3

The credit loss expense in the first quarter primarily related to the the collection risk from several biotech receivable balances.

Performance Obligations Under Long-Term Contracts

Long-term contracts at the Company consist primarily of fully managed clinical studies within DD. The amount of existing performance obligations unsatisfied under such long-term contracts were $4,720.0 as of March 31, 2023. DD expects to recognize approximately 30.0% of the remaining performance obligations as of March 31, 2023, as revenue over the next 12 months. DD's long-term contracts generally range from 1 to 8 years.

Within DD, revenues of $10.4 and $31.7 were recognized during the three months ended March 31, 2023 and 2022, respectively, from performance obligations that were satisfied in previous periods. This revenue primarily relates to adjustments related to changes in scope in full service clinical studies, and to a lesser extent, changes in estimates.