REVENUES

12 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUES

REVENUES

Description of Revenues

Dx attributes revenues to a geographical region based upon where the diagnostic test is performed, while BLS attributes revenues to a geographical region based upon where the services are performed. The Company’s revenue by segment payers/customer groups is as follows:

	Year Ended December 31, 2024								Year Ended December 31, 2023								Year Ended December 31, 2022
	North America		Europe		Other		Total		North America		Europe		Other		Total		North America		Europe		Other		Total
Payer/Customer
Dx
Clients	24	%	—	%	—	%	24	%	24	%	—	%	—	%	24	%	22	%	—	%	—	%	22	%
Patients	10	%	—	%	—	%	10	%	9	%	—	%	—	%	9	%	8	%	—	%	—	%	8	%
Medicare and Medicaid	8	%	—	%	—	%	8	%	8	%	—	%	—	%	8	%	8	%	—	%	—	%	8	%
Third party	36	%	—	%	—	%	36	%	36	%	—	%	—	%	36	%	39	%	—	%	—	%	39	%
Total Dx revenues by payer	78	%	—	%	—	%	78	%	77	%	—	%	—	%	77	%	77	%	—	%	—	%	77	%
BLS
Pharmaceutical, biotechnology and medical device companies	9	%	9	%	4	%	22	%	10	%	9	%	4	%	23	%	10	%	9	%	4	%	23	%
Total revenues	87	%	9	%	4	%	100	%	87	%	9	%	4	%	100	%	87	%	9	%	4	%	100	%

Revenues in the U.S. were $10,858.3 (83.5%), $10,177.7 (83.7%), and $9,930.3 (83.7%) for the years ended December 31, 2024, 2023, and 2022.

The following is a description of the current revenue recognition policies of the Company:

Dx Revenues

Dx offers a comprehensive menu of frequently requested and specialty diagnostic tests through an integrated network of primary and specialty laboratories across the U.S. In addition to diagnostic testing along with occupational and wellness testing for employers and forensic deoxyribonucleic acid analysis, Dx also offered a range of other testing services.

Within the Dx segment, a majority of the revenue transactions initiated when Dx receives a requisition form to perform a diagnostic test. The information provided on the requisition form is used to determine the party that will be billed for the testing

performed and the expected reimbursement. Dx recognizes revenue and satisfies its performance obligation for services rendered when the testing process is complete, and the associated results are reported. The Dx segment also enters into agreements that have monthly and non-testing-based fees which are recognized each month as the services are provided.

Revenues are distributed among four payer portfolios: clients, patients, Medicare and Medicaid, and third party. Dx considers negotiated discounts and anticipated adjustments, including historical collection experience for the payer portfolio, when revenues are recorded.

The following are descriptions of the Dx payer portfolios:

Clients

Client payers represent the portion of Dx’s revenue related to physicians, hospitals, health systems, accountable care organizations (ACOs), employers, and other entities where payment is received exclusively from the entity ordering the testing service. Generally, client sales are recorded on a fee-for-service basis at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-testing offerings. In these cases, revenue is recognized when services are rendered or delivered.

Patients

This portfolio includes revenue from uninsured patients and member cost-share for insured patients (e.g., coinsurance, deductibles, and non-covered services). Uninsured patients are billed based upon Dx’s patient list fee schedules, net of any discounts negotiated with physicians on behalf of their patients. Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract.

Medicare and Medicaid

This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Revenue from these programs is based on the fee schedule established by the related government authority. In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented.

Third Party

Third party includes revenue related to managed care organizations (MCOs). The majority of Dx’s third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at Dx’s established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO sales are recorded based upon contractually negotiated fee schedules with sales for non-contracted MCOs recorded based on historical reimbursement experience.

In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented.

Third-party reimbursement is also received through capitation agreements with MCOs and independent physician associations. Under capitated agreements, revenue is recognized based on a negotiated per-member, per-month payment for an agreed upon menu of tests, or based upon the proportionate share earned by Dx from a capitation pool. When the agreed upon reimbursement is based solely on an established rate per member, revenue is not impacted by the volume of testing performed. Under a capitation pool arrangement, the aggregate value of an established rate per member is distributed based on the volume and complexity of the procedures performed by laboratories participating in the agreement. Dx recognizes revenue monthly, based upon the established capitation rate or anticipated distribution from a capitated pool.

BLS Revenues

BLS revenue is generally recognized over time, as the services are delivered to the customer, based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. The majority of the segment’s contracts contain a single performance obligation, as the segment provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another. For contracts that include multiple performance obligations, BLS allocates the contract value to the goods and services based on a customer price list, if available. If a price list is not available, BLS will estimate the transaction price using either market prices or an “expected cost plus margin” approach. The total contract value is estimated at the beginning of the contract, and is equal to the amount expected to be billed to the

customer. These contracts generally take the form of fixed-price or fee-for-service arrangements subject to pricing adjustments based on changes in scope. Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that are specific to the service provided. In an output method, revenue is determined by dividing the actual units of output achieved by the total units of output required under the contract and multiplying that percentage by the total contract value. When using an input method, revenue is recognized by dividing the actual costs incurred by the total estimated cost expected to complete the contract, and multiplying that percentage by the total contract value. Contract costs principally include direct labor costs, research model costs, and allocated overhead. The estimate of total costs expected to complete the contract requires significant judgment, and these estimates are reviewed periodically. Any adjustments to the estimates are recognized on a cumulative catch-up basis in the period they become known.

Fee-for-service contracts are typically priced based on transaction volume or time and materials. For volume-based contracts, the contract value is entirely variable, and revenue is recognized as the specific service is completed. For services billed based on time and materials, revenue is recognized using the right to invoice practical expedient.

Contracts are often modified to account for changes in contract specifications and requirements. Generally, when contract modifications create new performance obligations, the modification is considered to be a separate contract and revenue is recognized prospectively. When contract modifications change existing performance obligations, the impact on the existing transaction price and measure of progress for the performance obligation to which it relates is generally recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Most contracts are terminable with or without cause by the customer, either immediately or upon notice. These contracts often require payment to BLS of expenses, fees earned to date and, in some cases, a termination fee or a payment to BLS of some portion of the fees or profits that could have been earned by BLS under the contract if it had not been terminated early. Termination fees are included in revenues when services have been performed and realization is assured.

BLS incurs sales commissions in the process of obtaining contracts with customers, which are recoverable through the service fees in the contract. Sales commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term, along with related payroll tax expense. The amortization of commission expense is based on the weighted-average contract duration for all commissionable awards in the respective business in which the commission expense is paid, which approximates the period over which goods and services are transferred to the customer. The amortization period of sales commissions ranges from approximately 1 to 5 years, depending on the business. For businesses that enter into primarily short-term contracts, BLS applies the practical expedient, which allows costs to obtain a contract to be expensed when incurred if the amortization period of the assets that would otherwise have been recognized is one year or less. Amortization of assets from sales commissions is included in Selling, general, and administrative expense in the Consolidated Statements of Operations.

Accounts Receivable, Unbilled Services, and Unearned Revenue

Differences in the timing of revenue recognition and associated billing and cash collections result in recording accounts receivable, unbilled services, and unearned revenue in the Consolidated Balance Sheets. Payments received in advance of services being provided are contract liabilities recognized as unearned revenue. Revenue recognized in advance of billing are recognized as unbilled services and the majority of BLS’s unbilled services represent unbilled receivables. Once a customer is invoiced, the contract asset is reduced for the amount billed, and a corresponding accounts receivable is recognized. All contract assets are billable to customers within one year from the respective balance sheet date.

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

	December 31,
	2024		2023
Dx accounts receivable	$	1,259.3	$	1,135.2
BLS accounts receivable	729.5		810.8
Less BLS allowance for credit losses	(44.7)		(32.7)
Accounts receivable, net	$	1,944.1	$	1,913.3
Gross unbilled services	$	160.5	$	192.9
Less reserve for unbilled services	(7.6)		(7.5)
Unbilled services	$	152.9	$	185.4
Unearned revenue	$	392.2	$	421.7

Revenue recognized during the period that was included in the unearned revenue balance at the beginning of the period, for the years ended December 31, 2024, 2023, and 2022 was $113.0, $78.9, and $99.7, respectively.

Credit Loss Rollforward

BLS estimates future expected losses on accounts receivable and unbilled services over the remaining collection period of the instrument. The rollforward for the allowance for credit losses is as follows:

	Accounts Receivable		Unbilled Services		Total
Allowance for credit losses at December 31, 2022	$	30.8	$	10.5	$	41.3
Credit loss expense	6.3		—		6.3
Write-offs	(4.4)		(3.0)		(7.4)
Allowance for credit losses at December 31, 2023	32.7		7.5		40.2
Credit loss expense	14.6		0.1		14.7
Write-offs	(2.2)		—		(2.2)
Foreign currency impact	(0.4)		—		(0.4)
Allowance for credit losses at December 31, 2024	$	44.7	$	7.6	$	52.3

The credit loss expense in the year ended December 31, 2024, was mainly related to the collection risk for specific biotechnology receivable balances.