v3.25.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company’s specialized clinical services are performed based on a written test requisition form or electronic equivalent. The performance obligation is satisfied and revenues are recognized at the point in time the clinical services have been performed and the results have been delivered to the ordering physician. These clinical services are billed to various payers, including client direct billing, commercial insurance, Medicare and other government payers, and patients. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive based on negotiated discounts, historical collection experience, and other anticipated adjustments, including anticipated payer denials.
For the Company's pharmaceutical development services, the Company generally enters into contracts with pharmaceutical and biotech clients as well as other CROs to provide research and clinical trial services. Such services also include validation studies and assay development. The Company records revenue on a unit-of-service basis based on the number of units completed towards the satisfaction of a performance obligation. In addition, certain contracts include upfront fees and the revenue for those contracts is recognized over time as services are performed.
Additional offerings within the Company's portfolio include oncology data solutions, which involves the licensing of de-identified data to pharmaceutical and biotech clients in the form of either retrospective records or prospective deliveries of data. Revenue is recognized at a point in time upon delivery of retrospective data or over time for prospective data feeds. The Company negotiates billing schedules and payment terms on a contract-by-contract basis. Contract terms generally provide for payments based on a unit-of-service arrangement and are primarily short-term.
Amounts collected in advance of services being provided are deferred as contract liabilities on the Consolidated Balance Sheets. The associated revenue is recognized and the contract liability is reduced as the contracted services are subsequently performed. Contract assets are established for revenue recognized but not yet billed. These contract assets are reduced once the client is invoiced and a corresponding receivable is recorded. Additionally, the Company incurs sales commissions in the process of obtaining contracts with clients. Sales commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term. 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 client. For short-term contracts, the Company 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. Contract assets and capitalized commissions are included in other current assets and other assets on the Consolidated Balance Sheets.
Most contracts are terminable by the clients, either immediately or according to advance notice terms specified within the contracts. All contracts require payment of fees to the Company for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract.
The following table summarizes the values of contract assets, capitalized commissions and contract liabilities (in thousands):
June 30, 2025December 31, 2024
Current contract assets (1)
$— $100 
Total contract assets$— $100 
Current capitalized commissions (1)
$199 $206 
Long-term capitalized commissions (2)
43 11 
Total capitalized commissions$242 $217 
Current contract liabilities$1,084 $409 
Long-term contract liabilities (3)
443 336 
Total contract liabilities$1,527 $745 

(1) Recorded within other current assets on the Consolidated Balance Sheets.
(2) Recorded within other assets on the Consolidated Balance Sheets.
(3) Recorded within other long-term liabilities on the Consolidated Balance Sheets.
Revenue recognized for the three and six months ended June 30, 2025 related to contract liability balances outstanding at the beginning of the period was $0.04 million and $0.1 million, respectively. Revenue recognized for the three and six months ended June 30, 2024 related to contract liability balances outstanding at the beginning of the period was $0.3 million and
$1.4 million, respectively. Amortization of capitalized commissions for the three and six months ended June 30, 2025 was $0.1 million and $0.2 million, respectively. Amortization of capitalized commissions for the three and six months ended June 30, 2024 was $0.2 million and $0.5 million, respectively.
Disaggregation of Revenue
The Company considered various factors in determining appropriate levels of homogeneous data for its disaggregation of revenue, including the nature, amount, timing, and uncertainty of revenue and cash flows. The categories align with the types of clients due to similarities of billing method, level of reimbursement, and timing of cash receipts. Unbilled amounts are accrued and allocated to payer categories based on historical experience. In future periods actual billings by payer category may differ from accrued amounts.
The following table details the disaggregation of net revenue for the three and six months ended June 30, 2025 (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Client direct billing$131,157 $118,305 $253,195 $230,493 
Commercial insurance28,766 24,843 53,623 48,447 
Medicare and other government21,387 21,197 42,488 41,566 
Self-pay20 157 59 236 
Total net revenue$181,330 $164,502 $349,365 $320,742