Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 16, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37918 | ||
Entity Registrant Name | iRhythm Technologies, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-8149544 | ||
Entity Address, Address Line One | 699 8th Street | ||
Entity Address, Address Line Two | Suite 600 | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94103 | ||
City Area Code | 415 | ||
Local Phone Number | 632-5700 | ||
Title of 12(b) Security | Common Stock, Par Value $.001 Per Share | ||
Trading Symbol | IRTC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.2 | ||
Entity Common Stock, Shares Outstanding | 30,216,279 | ||
Documents Incorporated by Reference | Portions of the information called for by Part III of this Form 10-K is hereby incorporated by reference from the definitive Proxy Statements for our annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2022. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001388658 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | San Jose, California |
Auditor Firm ID | 238 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 78,832 | $ 127,562 |
Short-term investments | 134,312 | 111,569 |
Accounts receivable, net | 49,918 | 46,430 |
Inventory | 15,155 | 10,268 |
Prepaid expenses and other current assets | 10,555 | 9,693 |
Total current assets | 288,772 | 305,522 |
Property and equipment, net | 75,670 | 55,944 |
Operating lease right-of-use assets | 60,666 | 84,587 |
Goodwill | 862 | 862 |
Other assets | 22,252 | 16,052 |
Total assets | 448,222 | 462,967 |
Current liabilities: | ||
Accounts payable | 7,517 | 10,509 |
Accrued liabilities | 65,497 | 51,486 |
Deferred revenue | 3,051 | 3,049 |
Debt, current | 0 | 11,667 |
Operating lease liabilities, current | 13,031 | 11,142 |
Total current liabilities | 89,096 | 87,853 |
Debt, noncurrent | 34,935 | 9,690 |
Other noncurrent liabilities | 1,307 | 697 |
Operating lease liabilities, noncurrent | 83,072 | 85,212 |
Total liabilities | 208,410 | 183,452 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value – 5,000,000 shares authorized at December 31, 2022 and 2021; and none issued and outstanding at December 31, 2022 and 2021, respectively | 0 | 0 |
Common stock, $0.001 par value – 100,000,000 shares authorized at December 31, 2022 and 2021; 30,193,101 and 29,493,726 shares issued and outstanding at December 31, 2022 and 2021, respectively | 28 | 27 |
Additional paid-in capital | 762,380 | 685,594 |
Accumulated other comprehensive income (loss) | (396) | (61) |
Accumulated deficit | (522,200) | (406,045) |
Total stockholders’ equity | 239,812 | 279,515 |
Total liabilities and stockholders’ equity | $ 448,222 | $ 462,967 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 30,193,101 | 29,493,726 |
Common stock, shares outstanding (in shares) | 30,193,101 | 29,493,726 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue, net | $ 410,921 | $ 322,825 | $ 265,166 |
Cost of revenue | 129,289 | 109,258 | 70,277 |
Gross profit | 281,632 | 213,567 | 194,889 |
Operating expenses: | |||
Research and development | 46,610 | 38,671 | 41,329 |
Selling, general and administrative | 322,198 | 274,839 | 197,233 |
Impairment and restructuring charges | 26,608 | 0 | 0 |
Total operating expenses | 395,416 | 313,510 | 238,562 |
Loss from operations | (113,784) | (99,943) | (43,673) |
Interest expense | (4,138) | (1,169) | (1,519) |
Other income (expense), net | 2,036 | 118 | 1,591 |
Loss before income taxes | (115,886) | (100,994) | (43,601) |
Income tax provision | 269 | 367 | 229 |
Net loss | $ (116,155) | $ (101,361) | $ (43,830) |
Net loss per common share, basic (in USD per share) | $ (3.88) | $ (3.46) | $ (1.58) |
Net loss per common share, diluted (in USD per share) | $ (3.88) | $ (3.46) | $ (1.58) |
Weighted-average shares, basic (in shares) | 29,915,720 | 29,331,010 | 27,754,404 |
Weighted-average shares, diluted (in shares) | 29,915,720 | 29,331,010 | 27,754,404 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (116,155) | $ (101,361) | $ (43,830) |
Other comprehensive income (loss): | |||
Net change in unrealized losses on short-term investments | (335) | (72) | (71) |
Comprehensive loss | $ (116,490) | $ (101,433) | $ (43,901) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2019 | 26,682,720 | ||||||
Beginning balance at Dec. 31, 2019 | $ 135,409 | $ (461) | $ 25 | $ 395,695 | $ (260,393) | $ (461) | $ 82 |
Increase (Decrease) in Stockholders' and Temporary Equity [Roll Forward] | |||||||
Issuance of common stock in connection with employee equity incentive plans, net (in shares) | 1,079,488 | ||||||
Issuance of common stock in connection with employee equity incentive plans, net | 20,244 | 20,244 | |||||
Issuance of common stock in connection with follow-on public offering, net of issuance costs (in shares) | 1,257,142 | ||||||
Issuance of common stock in connection with follow-on public offering, net of issuance costs | 206,025 | $ 2 | 206,023 | ||||
Tax withholding upon vesting of restricted stock awards | (10,009) | (10,009) | |||||
Stock-based compensation | 34,305 | 34,305 | |||||
Net loss | (43,830) | (43,830) | |||||
Net change in unrealized loss on short-term investments | (71) | (71) | |||||
Ending balance (in shares) at Dec. 31, 2020 | 29,019,350 | ||||||
Ending balance at Dec. 31, 2020 | 341,612 | $ 27 | 646,258 | (304,684) | 11 | ||
Increase (Decrease) in Stockholders' and Temporary Equity [Roll Forward] | |||||||
Issuance of common stock in connection with employee equity incentive plans, net (in shares) | 474,376 | ||||||
Issuance of common stock in connection with employee equity incentive plans, net | 8,943 | 8,943 | |||||
Tax withholding upon vesting of restricted stock awards | (25,853) | (25,853) | |||||
Stock-based compensation | 56,246 | 56,246 | |||||
Net loss | (101,361) | (101,361) | |||||
Net change in unrealized loss on short-term investments | $ (72) | (72) | |||||
Ending balance (in shares) at Dec. 31, 2021 | 29,493,726 | 29,493,726 | |||||
Ending balance at Dec. 31, 2021 | $ 279,515 | $ 27 | 685,594 | (406,045) | (61) | ||
Increase (Decrease) in Stockholders' and Temporary Equity [Roll Forward] | |||||||
Issuance of common stock in connection with employee equity incentive plans, net (in shares) | 699,375 | ||||||
Issuance of common stock in connection with employee equity incentive plans, net | 13,183 | $ 1 | 13,182 | ||||
Stock-based compensation | 63,604 | 63,604 | |||||
Net loss | (116,155) | (116,155) | |||||
Net change in unrealized loss on short-term investments | $ (335) | (335) | |||||
Ending balance (in shares) at Dec. 31, 2022 | 30,193,101 | 30,193,101 | |||||
Ending balance at Dec. 31, 2022 | $ 239,812 | $ 28 | $ 762,380 | $ (522,200) | $ (396) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net loss | $ (116,155) | $ (101,361) | $ (43,830) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 13,405 | 9,842 | 6,900 |
Stock-based compensation | 57,740 | 54,527 | 41,515 |
Amortization of premium and accretion of discounts on investments, net | (474) | 1,641 | 430 |
Provision for doubtful accounts and contractual allowances | 58,349 | 37,074 | 31,431 |
Amortization of operating lease right-of-use assets | 6,204 | 6,752 | 6,030 |
Impairment charges | 23,164 | 0 | 0 |
Other | 264 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (61,837) | (53,572) | (37,957) |
Inventory | (5,108) | (4,960) | (1,389) |
Prepaid expenses and other current assets | (862) | (2,329) | (3,027) |
Other assets | (6,200) | (1,831) | (6,149) |
Accounts payable | (2,993) | 6,135 | (3,881) |
Accrued liabilities | 14,473 | 7,946 | 1,308 |
Deferred revenue | 2 | 2,119 | (321) |
Operating lease liabilities | (6,263) | (2,087) | (4,819) |
Reimbursement of tenant improvement allowance | 3,279 | 2,351 | 0 |
Net cash used in operating activities | (23,012) | (37,753) | (13,759) |
Cash flows from investing activities | |||
Purchases of property and equipment | (29,830) | (28,067) | (13,551) |
Purchases of short-term investments | (188,569) | (122,184) | (277,510) |
Sales of short-term investments | 34,965 | 0 | 14,525 |
Maturities of short-term investments | 131,000 | 255,515 | 144,145 |
Net cash (used in) provided by investing activities | (52,434) | 105,264 | (132,391) |
Cash flows from financing activities | |||
Payment of loans | (21,389) | (11,667) | (1,944) |
Proceeds from term loans | 35,000 | 0 | 0 |
Issuance of common stock in connection with follow-on public offering, net | 0 | 0 | 206,025 |
Proceeds from issuance of common stock in connection with employee equity incentive plans | 13,182 | 8,943 | 20,244 |
Tax withholding upon vesting of restricted stock awards | 0 | (25,853) | (10,009) |
Payment of issuance costs for long-term debt | (77) | 0 | 0 |
Net cash provided by (used in) financing activities | 26,716 | (28,577) | 214,316 |
Net (decrease) increase in cash and cash equivalents | (48,730) | 38,934 | 68,166 |
Cash and cash equivalents, beginning of year | 127,562 | 88,628 | 20,462 |
Cash and cash equivalents, end of year | 78,832 | 127,562 | 88,628 |
Supplemental disclosures of cash flow information: | |||
Interest paid | 3,317 | 1,194 | 1,502 |
Cash taxes paid | 287 | 0 | 0 |
Non-cash investing and financing activities: | |||
Property and equipment costs included in accounts payable and accrued liabilities | 160 | 9 | 3 |
Right-of-use assets obtained in exchange for operating lease liabilities | 7,686 | 6,625 | 621 |
Capitalized stock-based compensation | $ 5,863 | $ 3,593 | $ 1,129 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS iRhythm Technologies, Inc. (the “Company”) was incorporated in the state of Delaware in September 2006. The Company is a leading digital healthcare company that creates trusted solutions that detect, predict, and prevent disease. The Company's principal business is the design, development, and commercialization of device-based technology to provide remote cardiac monitoring services that it believes allow clinicians to diagnose certain arrhythmias quicker and with greater efficiency than other services that rely on traditional technology. Since first receiving clearance from the U.S. Food and Drug Administration (“FDA”) for the Company's technology in 2009, the Company has supported physician and patient use of its technology and provided remote cardiac monitoring services from its Medicare-enrolled independent diagnostic testing facilities (“IDTFs”) and its qualified technicians. The Company has provided the Zio remote cardiac monitoring services, including extended Holter, traditional Holter, and mobile cardiac telemetry (“MCT”) monitoring services (“Zio Services”), using the Zio Systems. The Company is headquartered in San Francisco, California, which also serves as a clinical center. The Company has additional clinical centers in Deerfield, Illinois and Houston, Texas and a manufacturing facility in Cypress, California. The Company formed wholly-owned subsidiaries in the United Kingdom in March 2016, in Singapore in June 2021 and in Japan in June 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The Company has reclassified certain amounts previously reported in its consolidated financial statements to conform to the current presentation. Risks and Uncertainties Macroeconomic Factors and Supply Chain Constraints The Company’s operations and performance may vary based on worldwide economic and political conditions, which have been adversely impacted by continued global economic uncertainty, political instability, and military hostilities in multiple geographies, including the COVID-19 pandemic, the ongoing military conflict between Russia and Ukraine, domestic and global inflationary trends, rising interest rates, global supply shortages, and a tightening labor market. For example, the Company has experienced staff shortages at its contact centers as a result of the COVID-19 pandemic and federal, state and local responses thereto. A severe or prolonged economic downturn or period of global political instability could drive hospitals and other healthcare professionals to tighten budgets and curtail spending, which could in turn negatively impact rates at which physicians prescribe the Company’s Zio Services. In addition, higher unemployment rates or reductions in employer-provided benefits plans could result in fewer commercially insured patients, resulting in a reduction in the Company’s margins and impairing the ability of uninsured patients to make timely payments. A weak or declining economy could also strain the Company’s suppliers, possibly resulting in supply delays and disruptions. There is also a risk that one or more of the Company’s current service providers, suppliers, or other partners may not survive such difficult economic times, which could directly affect the Company’s ability to attain its goals on schedule and on budget. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. The Company cannot predict the timing, strength, or duration of an economic downturn, instability, or recovery, whether worldwide, in the United States, or within its industry. The Company’s remote work arrangements resulting from the COVID-19 pandemic and subsequent decision to pursue a sublease for its San Francisco headquarters resulted in an impairment of its right of use asset and related leasehold improvements and furniture, and the Company may incur additional impairment charges related to real property lease agreements. The Company is continuously reviewing its liquidity and anticipated capital requirements. The Company believes it will have adequate liquidity over the next 12 months to operate its business and to meet its cash requirements. As of December 31, 2022, the Company is in compliance with its debt covenants. Macroeconomic factors have contributed to delays in payments of outstanding receivables, supply chain disruptions, including shortages and inflationary pressure, uncertain or reduced demand, and the impact of any initiatives or programs that the Company has undertaken to address financial and operational challenges faced by the Company’s customers. This impact is having a material, adverse impact on liquidity, capital resources, supply chain, operations and business and those of the third parties on which the Company relies, and could worsen over time. In addition, the extent to which macroeconomic conditions, including inflation, increasing interest rates and other effects of the COVID-19 pandemic, impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted. The full extent of potential delays or impacts on the business, financial condition, cash flows and results of operations remains unknown. Reimbursement The Company receives revenue for the Zio Services primarily from third-party payors, which include commercial payors and government agencies, such as the Centers for Medicare & Medicaid Services (“CMS”). Third-party payors require the Company to identify the service for which it is seeking reimbursement by using a Current Procedural Terminology (“CPT”) code set maintained by the American Medical Associations. These CPT codes are subject to periodic change and update, which will impact the reimbursement rates for the Company’s Zio Services. CMS updates the reimbursement rates for diagnostic tests performed by IDTFs annually via the Medicare Physician Fee Schedule, and effective January 1, 2023, CMS established national payment rates for the CPT codes the Company uses to report the long-term Holter monitoring services it performs with its Zio XT System: CPT codes 93247 (for wear-time of greater than 7 days and up to 15 days) and 93243 (for wear-time of greater than 48 hours and up to 7 days). Based on the relative value units CMS assigned to CPT codes 93247 and 93243, the national reimbursement rates for these services in 2023 are $243.65 and $231.79, respectively, and range from $247.59 to $334.46 and $235.54 to $318.17 for the Company’s Medicare-enrolled IDTF locations in Deerfield, Illinois, Houston, Texas, and San Francisco, California, when considering the geographic practice cost index for these locations. Because remote cardiac monitoring technology, including the Zio System, are rapidly evolving, there is a continuing risk that relative value units assigned, and reimbursement rates set, by CMS may not adequately reflect the value and expense of this technology and related monitoring services, and the Company cannot provide certainty that CMS will not reduce these rates in the future, which would adversely affect the Company’s financial results. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the years presented. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances, allowance for doubtful accounts, the useful lives of property and equipment, the recoverability of long-lived assets including the estimated usage of the printed circuit board assemblies (“PCBAs”), the incremental borrowing rate for operating leases, accounting for income taxes, impairment of right-of-use ("ROU") assets, and various inputs used in estimating stock-based compensation. Actual results may differ from those estimates. For further details on estimates used to calculate the impairment on ROU assets, see Note 7 . Impairment and Restructuring Charges, included in the notes to the consolidated financial statements . Reportable Segment Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker, which the Company has identified as being the chief executive officer, in deciding how to allocate resources and assessing performance. The Company operates as one operating segment. The Company's chief operating decision maker allocates resources and assesses performance at the consolidated level. Fair Value of Financial Instruments The carrying amounts of certain of the Company’s financial instruments, which include cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and debt, approximate fair value due to their short maturities. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Short-term Investments The Company's short-term investments consist primarily of commercial paper, corporate bonds, U.S. agency obligations and U.S. treasury securities. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The Company's policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. The Company classifies investments as available-for-sale at the time of purchase and re-evaluates such classification as of each balance sheet date. Available-for-sale debt securities with an amortized cost basis in excess of the estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Allowance for credit losses on available-for-debt securities are recognized as a charge in other income (expense), net on the Company's consolidated statements of operations and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive loss in accumulated deficit on the consolidated balance sheets. There were no impairment charges for any unrealized losses during the years ended December 31, 2022, 2021, and 2020. Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowances Accounts receivable includes amounts due to the Company from healthcare institutions, third-party payors, and government payors and their related patients, as a result of the Company's normal business activities. Accounts receivable is reported on the consolidated balance sheets net of an estimated allowance for doubtful accounts and contractual allowances. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on its assessment of the collectability of customer accounts and recognizes the provision as a component of selling, general and administrative expenses. The Company records a provision for contractual allowances based on the estimated differences between contracted amounts and expected collection rates. Such provisions are based on the Company's historical experience and are reported as a reduction of revenue. The Company regularly reviews the allowances by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The following table presents the changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 14,012 $ 12,711 $ 9,049 Add: adoption of ASC 326, Financial Instruments - Credit Losses — — 461 Add: provision for doubtful accounts 17,191 9,615 10,515 Less: write-offs, net of recoveries and other adjustments (12,728) (8,314) (7,314) Balance, end of year $ 18,475 $ 14,012 $ 12,711 The following table presents the changes in the contractual allowance (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 31,274 $ 21,281 $ 15,433 Add: allowance for contractual adjustments 41,158 27,459 20,916 Less: contractual adjustments (31,043) (17,466) (15,068) Balance, end of year $ 41,389 $ 31,274 $ 21,281 Concentrations of Risk Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash balances are deposited in financial institutions which, at times, may be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, U.S. government securities, corporate notes, commercial paper and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. The Company has not experienced any material losses on its deposits of cash and cash equivalents or investments. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base and their dispersion across many geographies. The Company does not require collateral. The Company records an allowance for doubtful accounts based on the assessment of the collectability of customer accounts, considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Centers for Medicare and Medicaid Services (“CMS”), accounted for approximately 25%, 14% and 27% of the Company’s revenue for the years ended December 31, 2022, 2021, and 2020, respectively. CMS accounted for 22% and 8% of accounts receivable as of December 31, 2022 and 2021, respectively. Inflationary Risk The Company continuously monitors the effects of inflationary factors, such as increases in cost of goods sold and selling and operating expenses, which may adversely affect its results of operations. Specifically, the Company may experience inflationary pressure affecting freight costs, the cost of the components for the Company’s Zio Services, overhead costs relating to maintenance of the Company’s facilities, and in the wages paid to its employees due to challenging labor market conditions. Competitive and regulatory conditions may restrict the Company’s ability to fully recover these costs through price increases. As a result, it may be difficult to fully offset the impact of persistent inflation. The Company’s inability or failure to do so could have a material adverse effect on its business, financial condition and results of operations or cause the Company to need to obtain additional capital in future earlier than anticipated. Supply Risk The Company relies on single-source vendors to supply some of its disposable housings, instruments and other materials used to manufacture the Zio patches and the adhesive that binds the Zio patch to a patient’s body. These components and materials are critical, and there could be a considerable delay in finding alternative sources of supply. A global semiconductor supply shortage is having wide-ranging effects across multiple industries. The supply shortage has impacted multiple suppliers that provide the PCBAs to the Company. The semiconductor supply shortage may have an impact on the Company until global supply is sufficient for global demand. Inventory Inventory owned by the Company is valued at cost, on the first in, first out (“FIFO”) basis, or the lower of cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand. The Company also records market value based write-downs in consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from three The Company classifies internal-use software in property and equipment. Internal-use software costs are capitalized during the application development stage. Costs related to planning and post implementation activities are expensed as incurred. Capitalized internal-use software is amortized, and recognized as cost of revenue, on a straight-line basis over the estimated useful life of three years. PCBAs The Company uses PCBAs in each wearable Zio XT patch, Zio AT patch and the Zio Monitor as well as the wireless gateway used in conjunction with the Zio AT patch. The PCBAs are used numerous times and have useful lives beyond one year. Each time a PCBA is used in a wearable Zio XT patch, Zio AT patch, or the Zio Monitor or a wireless gateway is used with a Zio AT patch a portion of the cost of the PCBA and/or gateway is recorded as a cost of revenue. The Company periodically evaluates and has based its estimates of how many times a PCBA can be used on testing in research and development, loss rates, product obsolescence, and the amount of time it takes the device to go through the manufacturing, shipping, customer shelf and patient wear time and upload process. The fair value of the Company's PCBAs is included in Other Assets on the Consolidated Balance Sheets. Implementation Costs in Cloud-Computing Arrangements The Company capitalizes qualified implementation costs incurred in a hosting arrangement that is a service contract for which it is the customer in accordance with the requirements for cloud computing arrangements ("CCA") to the extent it is incurred in the course of developing internal-use software. These capitalized implementation costs are generally amortized over the fixed, non-cancellable term of the associated hosting arrangement on a straight-line basis are recorded in prepaid expenses and other current assets or in other noncurrent assets. The Company amortizes capitalized implementation costs in a CCA on a straight-line basis over the terms of the associated hosting arrangement. The Company recorded an immaterial amount of amortization expense during the years ended December 31, 2022, 2021, and 2020. Goodwill Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill amounts are not amortized, but rather tested for impairment at least annually, and more frequently when changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates its business as one reporting unit and the Company completes its annual impairment test in the fourth quarter. In the event that the Company determines that the fair value of the reporting unit is less than the reporting unit's carrying value, goodwill impairment charge will be incurred for the amount of the difference during the quarter in which the determination is made. The Company did not record any goodwill impairment charges in the years ended December 31, 2022, 2021, and 2020. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. Any impairments to ROU assets, leasehold improvements, or other assets as a result of a sublease or other similar action are initially recognized when a decision to take such action is made and recorded as an operating expense. Similar to other long-lived assets, management tests ROU assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. For ROU assets, such circumstances may include subleases that do not fully recover the costs of the associated leases or commitments to sublease a property. For the year ended December 31, 2022, the Company recorded $23.2 million of long-lived asset impairment charges in the consolidated statement of operations. In addition, see Note 7, Impairment and Restructuring Charges , included in the notes to the consolidated financial statements . Comprehensive Loss Comprehensive loss represents all changes in stockholders’ equity during the year from non-owner sources. The Company’s unrealized gains and losses on short-term investments represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive loss. Revenue Recognition The Company has developed a proprietary system that combines an FDA-cleared and CE-marked wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data, with a proprietary cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias. The Company currently offers three Zio System options—the Zio XT System, the Zio AT System, and the Zio Monitor System. The Zio XT System is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio XT patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm. The final step in the Zio Services is the delivery of an electronic Zio report to the prescribing physician with a summary of findings. The Company’s Zio XT services are generally billable when the Zio report is issued to the physician. The Zio Monitor System is the next generation of the Zio XT System, and is a prescription-only, remote ECG monitoring system that consists of the Zio Monitor patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm. The Zio AT System is a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the patch and the ZEUS System during the patient wear period. The wireless gateway, slightly larger than a smart phone, is provided to the patient at the time of Zio AT patch application and collects and transmits data from the Zio AT patch to the cloud via a LTE protocol. The Zio AT service revenue is recognized over the patient wear period and delivery of electronic Zio reports with two performance obligations. The Company recognizes as revenue the amount of consideration to which it expects to be entitled in exchange for performing the service. The consideration the Company is entitled to varies by portfolio, as further defined below, and includes estimates that require significant judgment by management. A unique aspect of healthcare is the involvement of multiple parties to the service transaction. In addition to the patient, often a third-party, for example a commercial or governmental payor or healthcare institution, will pay the Company for some or all of the service on the patient’s behalf. Separate contractual arrangements exist between the Company and third-party payors that establish amounts the third-party payor will pay on behalf of a patient for covered services rendered. A small portion of the Company’s transactions are covered by third-party payors with whom there is neither a contractual agreement nor an established amount that the third-party payor will pay. In determining the collectability and transaction price for its service, the Company considers factors such as insurance claims which are adjudicated as allowable under the applicable policy and payment history from both payors and patient out-of-pocket costs, payor coverage, whether there is a contract between the payor or healthcare institution and the Company, historical amount received for the service, and any current developments or changes that could impact reimbursement and healthcare institution payments. Certain of these factors are forms of variable consideration which are only included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. A summary of the payment arrangements with third-party payors and healthcare institutions is as follows: • Contracted third-party payors – The Company has contracts with negotiated prices for services provided to patients with commercial healthcare insurance coverage. • CMS – The Company has received IDTF approval from regional Medicare Administrative Contractors and will receive reimbursement per the relevant CPT code rates for the services rendered to the patient covered by CMS. • Healthcare institutions – Healthcare institutions are typically hospitals or physician practices in which the Company has negotiated amounts for its monitoring services, including certain governmental agencies such as the Veterans Administration and Department of Defense. • Non-contracted third-party payors – Non-contracted commercial and government payors often reimburse out-of-network rates provided under the relevant CPT codes on a case-by-case basis. The transaction price used for determining revenue recognition is based on factors including an average of the Company’s historical collection experience for its non-contracted services. This rate is reviewed at least quarterly. The Company is utilizing the portfolio approach practical expedient under ASC 606, Revenue from Contracts with Customers, whereby services provided under each of the above payor types form a separate portfolio. The Company accounts for the contracts within each portfolio as a collective group, rather than individual contracts. Based on history with these portfolios and the similar nature and characteristics of the patients within each portfolio, the Company has concluded that the financial statement effects are not materially different than if accounting for revenue on a contract-by-contract basis. For contracted and CMS portfolios, the Company recognizes revenue, net of contractual allowances, and recognizes an allowance for doubtful accounts for uncollectible patient accounts receivable. The transaction price is determined based on negotiated rates, and the Company has historical experience of collecting substantially all of these contracted rates. These contracts also impose a number of obligations regarding billing and other matters, and the Company’s noncompliance with a material term of such contracts may result in a denial of the claim. The Company accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price recognized as revenue. The Company estimates the denied claims which require management judgment. The estimated denied claims are based on historical information and judgement includes the historical period utilized. The Company monitors the estimated denied claims against the latest available information, and subsequent changes to the estimated denied claims are recorded as an adjustment to revenue in the periods during which such changes occur. Delays in claims submissions could lead to an increase in denials if the Company misses the payors’ filing deadlines and could result in a reduction in the Company’s receipt of payments. Historical cash collection indicates that it is probable that substantially all of the transaction price, less the estimate of denied claims, will be received. Contracted payors may require that the Company bills patient co-payments and deductibles and from time to time the Company may not be able to collect such amounts due to credit risk. The Company provides for estimates of uncollectible patient accounts receivable, based upon historical experience where judgment includes the historical period utilized, at the time revenue is recognized, with such provisions presented as bad debt expense within the selling, general and administrative line item of the consolidated statement of operations. Adjustments to these estimates for actual experience are also recorded as an adjustment to bad debt expense. As discussed in the Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowances section above, the inherent uncertainty caused by the longer collection cycle and claims adjudication process related to delays in submission because of the CPT code transition in 2021 could result in additional provisions for contractual allowances and doubtful accounts which would negatively impact the Company’s results of operations in future periods. For healthcare institutions, the transaction price is determined based on negotiated rates, and the Company has historical experience collecting substantially all of these contracted rates. Historical cash collections indicate that it is probable that substantially all of the transaction price will be received. As such, the Company is not providing an implicit price concession but, rather, has chosen to accept the risk of default, and any subsequent uncollected amounts are recorded as bad debt expense to selling, general and administrative expense in the consolidated statements of operations. For non-contracted portfolios, the Company provides an implicit price concession due to the lack of a contracted rate with the underlying payor. As a result, the Company estimates the transaction price based on historical cash collections utilizing the expected value method. All subsequent adjustments to this transaction price are recorded to revenue. Leases The Company determines if an arrangement is a lease at inception. The Company's lease agreements generally contain lease and non-lease components. Payments under its lease arrangements are primarily fixed. Non-lease components primarily include payments for maintenance and utilities. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of the Company’s ROU assets and lease liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the ROU assets and lease liabilities. ROU assets and lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate, because the interest rate implicit in its leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the ROU assets and lease liabilities. ROU assets are adjusted for any prepaid lease payments and lease incentives. Cost of Revenue Cost of revenue includes direct labor, material costs, overhead, data analysis, customer care, equipment and infrastructure expenses, amortization of internal-use software, and shipping and handling. Direct labor includes payroll and personnel-related costs involved in manufacturing. Material costs include both the disposable costs of the device and amortization of the PCBAs. Each time the PCBA is used in a wearable Zio XT System, a portion of the cost of the PCBA is charged to cost of revenue. Research and Development The Company’s research and development costs are expensed as incurred. Research and development costs include, but are not limited to personnel costs, laboratory supplies, consulting costs and overhead charges. In addition, the Company expenses milestone payments, when probable, for the development agreement with Verily. Selling, General and Administrative Expenses The Company's sales and marketing expenses consist of personnel costs, including stock-based compensation, and sales commissions. Other significant costs include travel expenses, consulting, public relations costs, direct marketing, tradeshow and promotional expenses and allocated facility overhead costs. The Company incurred an immaterial amount of advertising expense during each of the years ended December 31, 2022, 2021, and 2020, which is included in selling, general and administrative expenses. The Company's general and administrative expenses consist primarily |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by payor type. The Company believes these categories aggregate the payor types by nature, amount, timing and uncertainty of its revenue streams. Disaggregated revenue by payor type and major service line for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Contracted third-party payors $ 223,984 $ 193,871 $ 135,939 Centers for Medicare and Medicaid 103,032 44,529 72,536 Healthcare institutions 59,772 57,496 41,396 Non-contracted third-party payors 24,133 26,929 15,295 Total $ 410,921 $ 322,825 $ 265,166 Revenue generated from the United States comprised substantially all of the Company's revenue. No other country comprised 10% or greater of the Company's revenue during each of the years ended December 31, 2022, 2021, and 2020. Contract Liabilities ASC 606, Revenue from Contracts with Customers, requires an entity to present a revenue contract as a contract liability when the Company has an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer, or an amount of consideration from the customer is due and unconditional (whichever is earlier). Certain of the Company’s customers pay the Company directly for the Zio XT service upon shipment of devices. Such advance payments are contract liabilities and are recorded as deferred revenue and revenue is recognized when reports are delivered to the healthcare provider. During the year ended December 31, 2022, $3.0 million relating to the contract liability balance at the beginning of 2022 was recognized as revenue. Total revenue recognized during the year ended December 31, 2021 that was included in the contract liability balance at the beginning of 2021 was $0.9 million. Contract Costs Under ASC 340, Other Assets and Deferred Costs ("ASC 340"), the incremental costs of obtaining a contract with a customer are recognized as an asset. Incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The Company’s current commission programs are considered incremental. However, as a practical expedient, ASC 340 permits the Company to immediately expense contract acquisition costs, because the asset that would have resulted from capitalizing these costs will be amortized in one year or less. |
CASH EQUIVALENTS AND SHORT-TERM
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Cash Equivalents And Investments [Abstract] | |
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The fair value of cash equivalents and short-term investments at December 31, 2022 and 2021, were as follows (in thousands): December 31, 2022 Amortized Gross Unrealized Fair Value Gains Losses Money market funds $ 24,263 $ — $ — $ 24,263 U.S. government securities 134,709 12 (409) 134,312 Total cash equivalents and short-term investments $ 158,972 $ 12 $ (409) $ 158,575 Classified as: Cash equivalents $ 24,263 Short-term investments 134,312 Total cash equivalents and short-term investments $ 158,575 December 31, 2021 Amortized Gross Unrealized Fair Value Gains Losses Money market funds $ 110,137 $ — $ — $ 110,137 U.S. government securities 50,490 — (46) 50,444 Corporate notes 31,158 — (15) 31,143 Commercial paper 29,982 — — 29,982 Total cash equivalents and short-term investments $ 221,767 $ — $ (61) $ 221,706 Classified as: Cash equivalents $ 110,137 Short-term investments 111,569 Total cash equivalents and short-term investments $ 221,706 Unrealized losses during the years ended December 31, 2022, 2021, and 2020 were not material. As of December 31, 2022, the weighted average maturity for the Company's short-term investments was 114 days. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The corporate notes, commercial paper and government securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The Company's interest-bearing obligation is classified as Level 1 input. As of December 31, 2022, the fair value of the Company’s outstanding interest-bearing obligation approximated the carrying value of $34.9 million . As of December 31, 2021, the fair value of the Company’s outstanding interest-bearing obligations approximated the carrying value of $21.4 million. The Company had no transfers between levels of the fair value hierarchy of its assets measured at fair value. The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 24,263 $ — $ — $ 24,263 U.S. government securities — 134,312 — 134,312 Total $ 24,263 $ 134,312 $ — $ 158,575 December 31, 2021 Level 1 Level 2 Level 3 Total Assets Money market funds $ 110,137 $ — $ — $ 110,137 U.S. government securities — 50,444 — 50,444 Corporate notes — 31,143 — 31,143 Commercial paper — 29,982 — 29,982 Total $ 110,137 $ 111,569 $ — $ 221,706 |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Inventory Inventory consisted of the following (in thousands): December 31, 2022 2021 Raw materials $ 9,338 $ 5,101 Finished goods 5,817 5,167 Total $ 15,155 $ 10,268 Other Assets Other assets consisted of the following (in thousands): December 31, 2022 2021 PCBAs $ 18,599 $ 13,863 Cloud computing arrangements 2,523 1,427 Other 1,130 762 $ 22,252 $ 16,052 The Company uses PCBAs in each wearable Zio XT patch and Zio AT patch, as well as the wireless gateway used in conjunction with the Zio AT patch. The PCBAs are used numerous times and have useful lives beyond one year. Each time a PCBA is used in a wearable Zio XT patch or Zio AT patch, a portion of the cost of the PCBA is recorded as a cost of revenue. Each time a wireless gateway is used with a Zio AT patch, a portion of the gateway is recorded as a cost of revenue. PCBAs, which are recorded as other assets, were $18.6 million a nd $13.9 million as of December 31, 2022 and 2021, respectively. The amortization wa s $5.2 million, $4.4 million and $3.0 million for the years ending December 31, 2022, 2021, and 2020, respectively. Property and Equipment Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Laboratory and manufacturing equipment $ 4,911 $ 3,192 Computer equipment and software 2,315 2,269 Furniture and fixtures 4,119 4,174 Leasehold improvements 23,144 20,401 Internal-use software 44,877 30,922 Internal-use software in development 28,069 15,739 Construction in progress 3,451 1,951 Total property and equipment, gross 110,886 78,648 Less: accumulated depreciation and amortization (35,216) (22,704) Total property and equipment, net $ 75,670 $ 55,944 Depreciation and amortization expense for the years ended December 31, 2022, 2021 and 2020 was $13.4 million, $9.8 million and $6.9 million, respectively. During the year ended December 31, 2022, internal-use-software increased by $26.3 million . This increase relates to the enhancements to the Company’s core technology, products and services and artificial intelligence, as well as investment in future technology, such as the Zio Monitor System, the Company's new biosensor technology platform, and the clinically-integrated ZEUS System for the Zio Watch. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued payroll and related expenses $ 34,752 $ 34,484 Accrued vacation 8,608 7,431 Accrued professional services fees 7,234 1,724 Accrued expenses 7,006 3,112 Claims payable 4,464 2,988 Accrued state and foreign income and sales taxes 2,388 745 Accrued employee share purchase plan contributions 1,045 1,002 Total accrued liabilities $ 65,497 $ 51,486 |
IMPAIRMENT AND RESTRUCTURING CH
IMPAIRMENT AND RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
IMPAIRMENT AND RESTRUCTURING CHARGES | IMPAIRMENT AND RESTRUCTURING CHARGES In February 2022, the Company's board of directors (the “Board”) approved a restructuring plan ("Restructuring Plan") to allow it to effectively and efficiently scale its business, which resulted in severance and other employment related costs of $3.4 million during the year ended December 31, 2022. Also in February 2022, the Board approved reducing the Company's leased space for its headquarters in San Francisco, California, by a total amount of leased square footage of approximately 50%. As a result, the Company recognized an impairment of its ROU asset and related leasehold improvements and furniture and fixtures in the amount of $23.2 million during the year ended December 31, 2022. The Company's restructuring and impairment charges are described below (in thousands): Year Ended Restructuring charges $ 3,444 Impairment charges 23,164 Total $ 26,608 Restructuring The following table provides a summary of changes in the restructuring liabilities associated with the Restructuring Plan (in thousands): December 31, Charges Cash Payments December 31, Employee severance $ — $ 3,444 $ (3,050) $ 394 Total $ — $ 3,444 $ (3,050) $ 394 Impairment On February 15, 2022, the Board agreed to pursue a sublease of one floor (approximately 50%) of the San Francisco Lease. The Company recorded $20.5 million in impairment charges on its ROU asset during the year ended December 31, 2022 and $2.7 million for the impairment of related leasehold improvements and furniture and fixtures. The impairment was recorded to restructuring and impairment expenses within the consolidated statement of operations. The Company accounts for the impairment of long-lived assets in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets . An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. If an asset is determined to be impaired, the impairment is measured by the amount that the carrying value of the asset exceeds its fair value. The Company estimated undiscounted future cash flows from its vacant office lease based on the Company’s intent and ability to sub-lease the vacant office space, based on the facts and circumstances discussed below, which it had ceased using and estimated future sub-lease income considering the local real estate market conditions. The Company also factored into its estimate the amount of time to identify a tenant and to enter into an agreement. The Company estimated the fair value of the ROU asset related to the vacant office lease by discounting the estimated undiscounted future cash flows using the average lease capitalization rate, plus average inflation rate, for other lease transactions in the local area during the year. The Company has engaged a leasing broker and has formalized a marketing plan for the San Francisco office market. The sublease market for commercial office space is currently very challenging in the San Francisco area due to lower demand for leased office space as most companies have adjusted to allowing their employees to work from home during and after the COVID-19 pandemic that persisted throughout 2020 and 2021. The Company believes that it is likely to be able to sublease a portion of its existing office space, but at a rate below the amount that it is currently paying. Significant judgment and estimates are required in assessing impairment of ROU assets, including identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, and determining appropriate discount rates. The following table presents impairment charges recorded during the year ended December 31, 2022: Year Ended ROU asset $ 20,451 Leasehold improvements 2,211 Furniture and fixtures 502 Total $ 23,164 For further details on the Company's leases, refer to Note 8 . Commitments and Contingencies . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Purchase Commitments The Company is party to various purchase arrangements related to its manufacturing and research and development activities. As of December 31, 2022, the Company' purchase commitments during the years ended December 31, 2023 and 2024 are $62.0 million and $1.5 million, respectively, primarily to purchase the Zio Monitor patch and inventory. Leases The Company leases office, manufacturing, and clinical centers under non-cancelable operating leases which expire on various dates through 2031. These leases generally contain scheduled rent increases or escalation clauses and renewal options. Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The operating lease ROU assets also include any lease payments made to the lessor at or before the commencement date as well as variable lease payments which are based on a consumer price index. The Company is also subject to variable lease payments related to janitorial services and electricity which are not included in the operating lease ROU asset as they are based on actual usage. The Company recognizes operating lease expense on a straight-line basis over the lease period. Contractual obligations under operating lease liabilities were as follows (in thousands): Year Ended December 31: 2023 $ 20,826 2024 20,586 2025 20,379 2026 20,131 2027 19,731 Thereafter 31,003 Total lease payments 132,656 Less: imputed interest (36,553) Total lease liabilities $ 96,103 Other information related to the operating leases were as follows: Year Ended December 31, 2022 2021 2020 Operating lease costs ( in thousands) $ 13,524 $ 13,500 $ 12,800 Weighted average remaining lease term (years) 8.75 9.62 10.59 Weighted average discount rate (percentage) 7.3 % 7.3 % 7.4 % Operating lease costs include an immaterial amount of non-operating lease rent expense for each of the years ended in December 31, 2022, 2021, and 2020. Legal Proceedings From time to time, the Company is involved in claims and legal proceedings or investigations, that arise in the ordinary course of business. Such matters could have an adverse impact on the Company's reputation, business, and financial condition and divert the attention of its management from the operation of the Company's business. These matters are subject to many uncertainties and outcomes that are not predictable. On February 1, 2021, a putative class action lawsuit was filed in the United States District Court for the Northern District of California (the “Court”) alleging that the Company and its former Chief Executive Officer, Kevin M. King, violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder (“Securities Class Action Lawsuit”). On August 2, 2021, the lead plaintiff filed an amended complaint, and filed a further amended complaint on September 24, 2021. The amended complaint names as defendants, in addition to the Company and Mr. King, its former Chief Executive Officer, Michael J. Coyle, and former Chief Financial Officer and current Chief Operating Officer, Douglas J. Devine. The purported class in the amended complaint includes all persons who purchased or acquired the Company's common stock between August 4, 2020 and July 13, 2021, and seeks unspecified damages purportedly sustained by the class. On October 27, 2021, the Company filed a motion to dismiss the amended complaint. The motion to dismiss was fully briefed and the Court held a hearing on the motion on February 4, 2022, after which the Court took the matter under submission. On March 31, 2022, the Court issued an order granting the Company's motion to dismiss the Securities Class Action Lawsuit, without allowing plaintiff further leave to amend, and entered judgment in favor of the Company and the other defendants. On April 29, 2022, the plaintiff that filed the initial complaint in the action filed a notice of appeal. On September 7, 2022, the plaintiff-appellant filed its opening brief, and the Company filed a motion to dismiss for lack of standing to appeal and Article III standing on September 27, 2022. On October 17, 2022, the plaintiff filed its response to the Company's motion to dismiss, and the Company filed its reply in support of the motion to dismiss on November 3, 2022. The Company's motion to dismiss the appeal was denied without prejudice on December 8, 2022. The Company filed its responding brief on the appeal on February 16, 2023. The Company believes the Securities Class Action Lawsuit to be without merit and plan to defend itself vigorously. On March 26, 2021, the Company received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of California requesting information related to communications with the Food and Drug Administration and the Company's products. On September 14, 2021, the Company received a second subpoena requesting additional information. The Company is cooperating fully and is providing the requested information. Development Agreement On September 3, 2019, the Company entered into a Development Collaboration Agreement with Verily Life Sciences LLC, an Alphabet company (“VLS”) and Verily Ireland Limited (“VIL” And together with VLS, “Verily”) (such Development Collaboration Agreement, as amended by Amendment No.1 dated April 26, 2021 and Amendment No.2 dated January 24, 2022, the “Development Agreement”). The Development Agreement involves joint development and production of intellectual property between the Company and Verily. Each participant has primary responsibility for certain aspects of development and approval, with all processes to be performed at each respective party’s own cost. Costs incurred by the Company in connection with the Development Agreement will be expensed as research and development expense in accordance with ASC 730, Research and Development . The Company and Verily will develop certain next-generation atrial fibrillation (“Afib”) screening, detection, or monitoring products pursuant to the Development Agreement, which products will involve combining Verily and the Company’s technology platforms and capabilities. Under the terms of the Development Agreement, the Company paid Verily an upfront fee of $5.0 million in 2019. In addition, the Company agreed to make additional cash payments to Verily up to an aggregate of $12.75 million in milestone payments upon achievement of various development and regulatory milestones over the term of the Development Agreement. The Company has achieved milestones tied to payments totaling $11.0 million to date and expects to make additional payments over the term of the Development Agreement of $1.75 million, subject to the achievement of certain development and regulatory milestones including provisioning of the Zio Watch to enable market evaluation scheduled to begin in 2023. No payment-triggering milestones were achieved during the year ended December 31, 2022. The Development Agreement provides each party with licenses to use certain intellectual property of the other party for development activities in the field of Afib screening, detection, or monitoring. Ownership of developed intellectual property will be allocated to the Company or Verily depending on the subject matter of the underlying developed intellectual property, and, for certain subject matter, shall be jointly owned. Indemnifications |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBTIn October 2018, the Company entered into the Third Amended and Restated Loan and Security Agreement with the Silicon Valley Bank (“SVB Loan Agreement”). Under the SVB Loan Agreement, the Company had borrowed $35.0 million and had made repayments through March 2022, at which time the outstanding balance was $18.5 million. On March 28, 2022, the Company entered into a Second Amendment (“2022 Amendment”) to its SVB Loan Agreement which provided for a term loans facility in the aggregate principal amount of up to $75.0 million (the “2022 Term Loans”), of which $35.0 million was borrowed at closing and a portion of the proceeds was used to pay in full the outstanding balance of $18.5 million under the SVB Loan Agreement. The remaining $40.0 million of 2022 Term Loans may be borrowed from time to time at the Company’s option, in increments of at least $10.0 million, through December 31, 2023. The Company will pay interest only on the 2022 Term Loans until April 1, 2025, when it will commence repaying the 2022 Term Loans in 24 equal consecutive monthly installments, with all obligations under the 2022 Term Loans maturing on March 1, 2027. Interest charged on the 2022 Term Loans will accrue at a floating per annum rate equal to the greater of: (A) the Prime Rate plus 0.25%; and (B) 3.50%. The Company is also required to pay fees on any prepayment of the 2022 Term Loans, ranging from 3.0% to 1.0% depending on the date of prepayment, and a final payment equal to 5.0% of the principal amount of the 2022 Term Loans drawn. Once repaid or prepaid, the 2022 Term Loans may not be reborrowed. The Company accounted for the refinancing as an extinguishment of the original loans and paid a fee of $1.8 million, which was included in interest expense on the Consolidated Statement of Operations and recorded the 2022 Term Loans, net of issuance costs. The issuance costs on the new loans are amortized over the term of the loan. The 2022 Amendment also amended the terms of the revolving credit line under the SVB Loan Agreement, which provided for an aggregate principal amount of $25.0 million, to: (i) extend the maturity date from August 1, 2023 to March 1, 2027, (ii) increase the letters of credit sublimit to $15.0 million and (iii) increase the cash management services sublimit to $15.0 million. Interest charged on the principal amount outstanding under the revolving credit line shall accrue at a floating per annum rate equal to the greater of (A) the Prime Rate plus 0.25% and (B) 3.50%. The Company is required to pay an annual fee equal to 0.15% of the revolving credit line. As of December 31, 2022, no loans were outstanding under the revolving credit line. The 2022 Amendment also amended the SVB Loan Agreement to require the Company to comply, as of the last day of each fiscal quarter, with a quick ratio of at least 1.15 to 1.0 or minimum adjusted EBITDA trailing 6 months of at least $15.0 million. The Company was in compliance with its loan covenants as of December 31, 2022. Future minimum payments Contractual obligations, which comprises of principal payments included in Debt, noncurrent, in the Consolidated Balance Sheets and interest payments under the 2022 Term Loans were as follows (in thousands): Year Ended December 31, 2023 $ 2,337 2024 2,313 2025 15,142 2026 18,412 2027 4,424 Total 42,628 Less: Amount representing interest (7,628) Less: Debt issuance costs (65) Principal payments $ 34,935 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table presents components of the Company’s provision for income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Current expense: Federal $ — $ — $ — State 160 223 181 Foreign 111 150 59 Total current tax expense 271 373 240 Deferred tax benefit: Federal — — — State — — — Foreign (2) (6) (11) Total deferred tax benefit (2) (6) (11) Total tax expense $ 269 $ 367 $ 229 The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense (in thousands): Year Ended December 31, 2022 2021 2020 Tax at statutory federal rate $ (24,323) $ (21,198) $ (9,172) State income taxes, net of federal benefit 160 223 181 Stock-based compensation (3,492) (7,049) (20,762) Meals and entertainment 348 182 177 Section 162(m) limitation - officers compensation 2,498 4,856 544 Other 526 (347) 89 Tax credits (2,695) (381) (1,426) Foreign rate differential (40) (30) (9) Change in valuation allowance 27,287 24,111 30,607 Provision for income taxes $ 269 $ 367 $ 229 Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 111,236 $ 114,856 Tax credit carryforwards 29,455 9,174 Stock-based compensation 11,942 9,812 Capital research expenditures 15,997 — Allowances and other 19,399 20,988 Lease obligation 24,232 23,868 Total deferred tax assets 212,261 178,698 Valuation allowance (188,070) (154,734) Net deferred tax assets 24,191 23,964 Deferred tax liabilities: Depreciation and amortization (9,402) (3,212) ROU assets (14,731) (20,696) Total deferred tax liabilities (24,133) (23,908) Total deferred tax assets $ 58 $ 56 Due to the uncertainties surrounding the realization of deferred tax assets through future taxable income, the Company has provided a full valuation allowance against its U.S. deferred tax assets, and, therefore, no benefit has been recognized for the net operating loss carryforwards and other deferred tax assets. The U.S. valuation allowance increased by $33.3 million, $30.9 million and $35.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. The current year change in the U.S. valuation allowance is primarily related to the increase in reserves and research and development not currently deductible. The Company recorded an immaterial deferred tax asset related to the Company’s foreign operations in the United Kingdom. The valuation allowance for deferred tax assets consisted of the following activity for the years ended December 31, 2022, 2021, and 2020 (in thousands): Balance at Beginning of Year Additions Deductions Balance at End of Year Year Ended December 31, 2022 $ 154,734 $ 33,336 $ — $ 188,070 Year Ended December 31, 2021 $ 123,803 $ 30,931 $ — $ 154,734 Year Ended December 31, 2020 $ 88,433 $ 35,370 $ — $ 123,803 As of December 31, 2022, the Company had approximately $445.0 million of federal and $285.5 million of state net operating loss carryforwards available to offset future taxable income which expires in varying amounts beginning in 2027 and 2022, respectively. Federal losses incurred from 2019 can be carried forward indefinitely. As of December 31, 2022, the Company had research tax credit carryforwards of approximately $10.7 million, and $8.6 million available to reduce future taxable income, if any, for both federal and state purposes, respectively. The federal tax credit carryforwards expire beginning in 2028 and the state tax credits can be carried forward indefinitely. The Tax Reform Act of 1986, and similar state provisions, limits the use of net operating loss and tax credit carryforwards in certain situations where equity transactions result in a change of ownership as defined by Internal Revenue Code Section 382. In the event the Company should experience an ownership change, as defined, utilization of its net operating loss carryforwards and tax credits could be limited. A reconciliation of the Company’s unrecognized tax benefit amount is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 3,310 $ 2,302 $ 1,842 Additions for tax positions taken in current year 996 772 488 Increases in balance related to prior year tax positions 426 236 — Decreases in balance related to prior year tax positions — — (28) Balance at end of year $ 4,732 $ 3,310 $ 2,302 The total amount of gross unrecognized tax benefits was $4.7 million, $3.3 million, and $2.3 million as of December 31, 2022, 2021, and 2020 respectively. None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rate. The Company does not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes. The Company determined that no accrual for interest or penalties was required as of December 31, 2022, 2021, and 2020. The Company files income tax returns in the U.S. and UK jurisdictions. All of the Company's tax years are open to examination by the US federal and state tax authorities. The UK is open to examination for tax years starting 2017 and forward. The Company currently has no federal, state or foreign tax examinations in progress, nor has it had any federal or state examinations since inception. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Common Stock The Company’s amended and restated certificate of incorporation dated October 25, 2016, as amended, authorizes the Company to issue 100,000,000 shares of common stock with a par value of $0.001 per share and 5,000,000 shares of preferred stock with a par value of $0.001 per share. The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the Board, subject to the prior rights of holders of all series of convertible preferred stock outstanding. No dividends were declared through December 31, 2022. The Company had reserved shares of common stock for issuance as follows: December 31, 2022 2021 Options issued and outstanding 328,193 504,106 Unvested restricted stock units and performance-based restricted stock units 2,025,755 1,649,561 Shares available for grant under future stock plans 7,822,637 9,011,213 Shares available for future issuance 10,176,585 11,164,880 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS 401(k) Plan The Company has a defined contribution 401(k) retirement plan (the 401(k) Plan) covering substantially all employees in the United States. Employees who participate in the 401(k) Plan may contribute up to 10% of eligible compensation each year, subject to Internal Revenue Service limitations and the terms and conditions of the plan. Under the terms of the 401(k) Plan, the Company may elect to match a discretionary percentage of contributions. The Company matches contributions up to 50% and a maximum of $5,000 per year. Total matching contributions were $5.1 million, $3.3 million and $2.2 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
EQUITY INCENTIVE PLANS
EQUITY INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY INCENTIVE PLANS | EQUITY INCENTIVE PLANS 2016 Plan In October 2016, the Company adopted the 2016 Equity Incentive Plan, (the “2016 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on October 19, 2016. On the first day of each fiscal year starting from the 2017 fiscal year, the 2016 Plan authorizes an annual increase in the number of shares available for issuance equal to the least of (i) 3,865,000 shares, (ii) 5% of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by the Board. As of December 31, 2022, the Company has reserved 7,822,637 shares of common stock for issuance under the 2016 Plan. Pursuant to the 2016 Plan, stock options, restricted stock, restricted stock units, performance units, performance shares, and stock appreciation rights may be granted to employees, consultants and directors of the Company. Options were not granted during the years ended December 31, 2022, 2021 and 2020. Employee Stock Purchase Plan In October 2016, the Board and stockholders approved the 2016 Employee Stock Purchase Plan (“ESPP”). Under the ESPP, the Company initially reserved 483,031 shares of common stock for issuance as of its effective date of October 19, 2016. On the first day of each fiscal year starting from the 2017 fiscal year, the number of shares reserved for the ESPP increases by the least of (i) 966,062 shares, (ii) 1.5% of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Board. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for 12 month offering periods that each contain two 6-month purchase periods. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on (i) the first trading day of the offering period or (ii) the last trading day of the purchase period. Equity Incentive Plan A summary of awards available for grant under the 2016 Plan is as follows: Shares Available Balance as of December 31, 2020 6,505,390 Additional awards authorized 1,450,967 Awards granted (1,289,567) Awards forfeited 356,999 Awards withheld for tax purposes 135,886 Balance as of December 31, 2021 7,159,675 Additional awards authorized 1,476,018 Awards granted (1,036,109) Awards forfeited 223,053 Balance as of December 31, 2022 7,822,637 Restricted Stock Units and Performance-Based Restricted Stock Units The fair value of restricted stock units (“RSUs”) and performance-based restricted stock units ("PRSUs") are based on the Company’s closing stock price on the date of grant. The fair value of market based PRSUs were estimated at the date of grant using the Monte-Carlo option pricing model. A summary is as follows: Restricted Stock Units Performance Based Restricted Stock Units and Market-Based Units Shares Underlying RSUs Weighted Average Grant Date Fair Value Shares Underlying PRSUs 1 Weighted Average Grant Date Fair Value Balance as of December 31, 2020 837,204 $ 82.82 276,955 $ 128.54 Granted 1,009,457 88.67 280,110 135.31 Vested (285,335) 78.10 (126,671) 165.39 Forfeited (201,079) 104.19 (142,144) 127.95 Balance as of December 31, 2021 1,360,247 84.99 288,250 119.21 Granted 691,128 147.94 344,981 138.99 Vested (390,238) 85.55 (46,934) 257.61 Forfeited (196,471) 110.22 (25,208) 109.82 Balance as of December 31, 2022 1,464,666 111.16 561,089 120.22 1 Based on the maximum number of performance based restricted stock units in the key executive grant agreements, the actual number of units granted will be based on the annual unit volume CAGR as described below. As of December 31, 2022, there was total unamortized compensation costs of $112.5 million, net of estimated forfeitures, related to unrecognized RSU expense, which the Company expects to recognize over a weighted average period of 1.9 years. Aggregate intrinsic value of the RSUs was $137.2 million, $160.1 million and $198.6 million as of December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, 1.4 million shares of RSUs were expected to vest with an aggregate intrinsic value of $128.2 million. Total vest date fair value of RSUs was $33.4 million, $22.3 million, and $16.3 million during the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, there was total unamortized compensation costs of $28.2 million, net of estimated forfeitures, related to unrecognized PRSU expense, which the Company expects to recognize over a weighted average period of 2.1 years. Aggregate intrinsic value of the PRSUs was $52.6 million, $33.9 million and $65.7 million as of December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, 0.5 million shares of PRSUs were expected to vest with an aggregate intrinsic value of $49.9 million. The vest date fair value of PRSUs was $12.1 million, $20.9 million, and $0.0 million during the years ended December 31, 2022, 2021, and 2020, respectively. PRSUs and Market-based RSUs The Company grants PRSUs to key executives of the Company. PRSUs can be earned in accordance with the performance equity program for each respective grant: In February 2020, the Company granted PRSUs (“February 2020 awards”) to be earned based on compound annual growth rate (“CAGR”) of fiscal year 2022's annual unit volume compared to fiscal year 2019's annual unit volume CAGR, measuring a minimum performance threshold of 19.7% to earn 50.0% of target, and a maximum threshold of 29.0% achieved to earn 200.0% of target. These February 2020 awards are subject to the recipient's continued employment through the vesting date of March 15, 2023. In January 2021, the Company granted PRSUs (“January 2021 awards”) to be earned based on fiscal year 2021's annual consolidated revenue compared to fiscal year 2020's annual consolidated revenue, measuring a performance threshold of 10.0% to earn 100.0% of target. These January 2021 awards were subject to the recipient's continued employment through the vesting date of March 15, 2022. In February 2021, the Company granted PRSUs (“February 2021 awards”) to be earned based on fiscal year 2023's annual unit volume CAGR compared to fiscal year 2020's annual unit volume CAGR, measuring a minimum performance threshold of 19.7% to earn 50.0% of target, and a maximum threshold of 29.0% achieved to earn 200.0% of target. These February 2021 awards are subject to recipient's continued employment through the vesting date of March 15, 2024. In February 2022, the Company granted PRSUs (“February 2022 awards”) to be earned based on fiscal year 2024's annual unit volume CAGR compared to fiscal year 2021's annual unit volume CAGR, measuring a minimum performance threshold of 13.0% to earn 50.0% of target, and a maximum threshold of 23.0% achieved to earn 200.0% of target. These February 2022 awards are subject to the recipient's continued employment through the vesting date of March 15, 2025. In addition, in February 2022, the Company granted market-based RSUs to its Chief Executive Officer. These RSUs to be earned based on both the fiscal year 2024's annual unit volume CAGR compared to fiscal year 2021's annual unit volume CAGR and a comparison of the S&P Healthcare Index to the Company's total shareholder return (“TSR”). The fair value of the TSR was based on the expected term of 2.9 years, interest risk free rate of 1.7%, implied volatility of 81.2% and no dividend yield. These February 2022 awards are subject to the Chief Executive Officer's continued employment through the vesting date of March 15, 2025. Options The following table summarizes stock option activity: Options Outstanding Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Balance at December 31, 2020 609,881 $ 40.18 6.24 $ 120,163 Options exercised (90,939) 31.15 Options forfeited (14,836) 68.81 Balance at December 31, 2021 504,106 40.97 5.20 38,675 Options exercised (174,539) 36.82 Options forfeited (1,374) 83.15 Balance at December 31, 2022 328,193 43.00 4.43 16,635 Options exercisable – December 31, 2022 327,768 42.95 4.43 16,631 Options vested and expected to vest – December 31, 2022 328,191 43.00 4.43 16,635 There have been no options granted since December 31, 2019. As of December 31, 2022, there was an immaterial amount of unamortized compensation costs as the options are fully vested. The total estimated grant date fair value of options vested during the period was $2.4 million, $2.8 million and $4.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. Employee Stock Purchase Plan The ESPP provides for 12 month offering periods that each contain two 6-month purchase periods. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15.0% of their eligible compensation, subject to any plan limitations. At the end of each purchase period, employees purchase shares at 85% of the lower of the fair value of the Company's stock price at the enrollment date and the purchase date. During the year ended December 31, 2022, 87,664 shares of common stock have been issued to employees participating in the ESPP and 2,206,279 shares were available for issuance under the ESPP. On each purchase date, participating employees will purchase common stock at a price per share equal to 85% of the lesser of the fair market value of the shares of the Company’s common stock on (i) the first trading day of the applicable offering period, or (ii) the last trading day of each purchase period in the applicable offering period. If the stock price of the Company's common stock on any purchase date in an offering period is lower than the stock price on the first trading date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period ("ESPP reset"). During the November 30, 2022 purchase period, there was an ESPP reset that resulted in additional expense of approximately $0.2 million, which will be recognized over an offering period from December 1, 2022 to May 31, 2023. The ESPP provides for 12 month offering periods that contain two six-month purchase periods. The fair value using the Black-Scholes option pricing model is estimated on the enrollment date. For the offering period which started on June 1, 2022, the assumptions included the expected term ranging from 0.5 year to 1.0 year, expected volatility ranging from 81.4% to 96.3%, risk-free rate ranging from 1.6% to 2.2% and dividend yield of 0.0%. For the offering period which started on December 1, 2022 the assumptions included the expected term ranging from 0.5 year to 1.0 year, expected volatility ranging from 68.1% to 73.4%, risk-free rate ranging from 4.7% to 4.7% and dividend yield of 0.0%. The fair value of ESPP shares to be purchased during the six-month period from June 1, 2022 to November 30, 2022 was $55.02 per share, for the one-year period from June 1, 2022 to May 31, 2023 was $68.52 per share and the six-month period from December 1, 2022 to May 31, 2023 was $48.34 per share. As of December 31, 2022, the Company had $4.4 million of unrecognized compensation expense that will be recognized over a weighted average period of 0.7 years. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The following table summarizes the total stock-based compensation expense included in the statements of operations and comprehensive loss for all periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 2,153 $ 1,896 $ 27 Research and development 6,976 5,565 7,727 Selling, general and administrative 48,611 47,066 33,761 Total stock-based compensation expense $ 57,740 $ 54,527 $ 41,515 Non-Employee Stock-Based Compensation On July 3, 2020, the Company’s Chief Financial Officer (“CFO”) resigned and entered into a Consulting and Professional Services Agreement (“CPSA”) with the Company to provide consulting services through July 2, 2021. Pursuant to the original terms of the awards, the CFO continued to vest in outstanding awards as long as services are provided to the Company under the CPSA as a non-employee consultant. In accordance with ASC 718, Compensation - Stock Compensation ( "ASC 718" ), the Company recognized expense related to all awards expected to vest over the duration of the CPSA in 2020 as an equity-based severance cost as the consulting services are not substantive. Total expense related to non-employee stock-based compensation recognized for the year ended December 31, 2020, was $1.8 million. On January 12, 2021, the Company's Chief Executive Officer (“CEO”) resigned and entered into a CPSA with the Company. Pursuant to the original terms of the awards, the CEO continued to vest in outstanding awards as long as services are provided to the Company under the CPSA as a non-employee consultant or a member of the Board. In accordance with ASC 718, the Company recognized expense related to all awards expected to vest over the duration of the CPSA in the three months ended March 31, 2021, as an equity-based severance cost as the consulting services are not substantive. Total expense related to non-employee stock-based compensation recognized for the year ended December 31, 2021 was $5.4 million. In March 2022, the former CEO retired from the Board and as a non-employee consultant. Vesting for all outstanding awards was accelerated upon his retirement. The Company recognized expense of $0.9 million related to the retirement of the former CEO during the year ended December 31, 2022. On June 3, 2022, the Company's former Chief Clinical Officer ("CCO") retired and entered into a Consulting Agreement ("CA") with the Company. Pursuant to the original terms of the awards, the CCO will continue to vest in her outstanding awards as long as services are provided to the Company under the CA as a non-employee consultant. In accordance with ASC 718, the Company recognized expense related to all awards expected to vest over the duration of the CA in the current period as an equity-based severance cost because the consulting services are not substantive. The former CCO total non-employee stock-based compensation expense recognized $0.4 million for the year ended December 31, 2022. On July 25, 2022, the Company's former Executive Vice President, Chief Commercial Officer ("EVP") resigned and entered into a CA with the Company. Pursuant to the original terms of the agreement, the EVP outstanding awards will continue to vest during the period of his CA services. In accordance with ASC 718, Compensation - Stock Compensation, the Company will continue to record stock-based compensation expense related to the awards expected to vest over the duration of the CA, because the consulting services are substantive. The EVP's total expense related to non-employee stock-based compensation recognized for the year ended December 31, 2022 was $0.1 million. |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER COMMON SHARE | NET LOSS PER COMMON SHARE As the Company had net losses for the years ended December 31, 2022, 2021, and 2020, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of the basic and diluted net loss per share during the years ended December 31, 2022, 2021, and 2020 (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (116,155) $ (101,361) $ (43,830) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 29,915,720 29,331,010 27,754,404 Net loss per common share, basic and diluted $ (3.88) $ (3.46) $ (1.58) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the years ended December 31, 2022, 2021, and 2020 because their inclusion would be anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 328,193 504,106 609,881 RSUs and PRSUs issued and unvested 2,025,755 1,649,561 1,114,159 Total 2,353,948 2,153,667 1,724,040 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTOn February 21, 2023, the Company's Board of Directors approved a restructuring plan that will result in the transition or augmentation of staff of certain operations to the Philippines. In addition, the restructuring plan contemplates the potential use of third-party service providers to transform certain aspects of the Company's revenue cycle management organization. The Company estimates that it will incur total pre-tax charges and costs of approximately $15.0 million to $20.0 million primarily for consulting services from third party service providers to plan and support the transition, legal expenses, as well as employee severance and retention benefits under both ongoing and one-time benefit arrangements and $8.0 million to $10.0 million of capital expenditures. The Company expects to incur these costs throughout 2023 and expects the restructuring activities to be substantially complete by mid-2024. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The Company has reclassified certain amounts previously reported in its consolidated financial statements to conform to the current presentation. |
Risk and Uncertainties | Risks and Uncertainties Macroeconomic Factors and Supply Chain Constraints The Company’s operations and performance may vary based on worldwide economic and political conditions, which have been adversely impacted by continued global economic uncertainty, political instability, and military hostilities in multiple geographies, including the COVID-19 pandemic, the ongoing military conflict between Russia and Ukraine, domestic and global inflationary trends, rising interest rates, global supply shortages, and a tightening labor market. For example, the Company has experienced staff shortages at its contact centers as a result of the COVID-19 pandemic and federal, state and local responses thereto. A severe or prolonged economic downturn or period of global political instability could drive hospitals and other healthcare professionals to tighten budgets and curtail spending, which could in turn negatively impact rates at which physicians prescribe the Company’s Zio Services. In addition, higher unemployment rates or reductions in employer-provided benefits plans could result in fewer commercially insured patients, resulting in a reduction in the Company’s margins and impairing the ability of uninsured patients to make timely payments. A weak or declining economy could also strain the Company’s suppliers, possibly resulting in supply delays and disruptions. There is also a risk that one or more of the Company’s current service providers, suppliers, or other partners may not survive such difficult economic times, which could directly affect the Company’s ability to attain its goals on schedule and on budget. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. The Company cannot predict the timing, strength, or duration of an economic downturn, instability, or recovery, whether worldwide, in the United States, or within its industry. The Company’s remote work arrangements resulting from the COVID-19 pandemic and subsequent decision to pursue a sublease for its San Francisco headquarters resulted in an impairment of its right of use asset and related leasehold improvements and furniture, and the Company may incur additional impairment charges related to real property lease agreements. The Company is continuously reviewing its liquidity and anticipated capital requirements. The Company believes it will have adequate liquidity over the next 12 months to operate its business and to meet its cash requirements. As of December 31, 2022, the Company is in compliance with its debt covenants. Macroeconomic factors have contributed to delays in payments of outstanding receivables, supply chain disruptions, including shortages and inflationary pressure, uncertain or reduced demand, and the impact of any initiatives or programs that the Company has undertaken to address financial and operational challenges faced by the Company’s customers. This impact is having a material, adverse impact on liquidity, capital resources, supply chain, operations and business and those of the third parties on which the Company relies, and could worsen over time. In addition, the extent to which macroeconomic conditions, including inflation, increasing interest rates and other effects of the COVID-19 pandemic, impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted. The full extent of potential delays or impacts on the business, financial condition, cash flows and results of operations remains unknown. Reimbursement The Company receives revenue for the Zio Services primarily from third-party payors, which include commercial payors and government agencies, such as the Centers for Medicare & Medicaid Services (“CMS”). Third-party payors require the Company to identify the service for which it is seeking reimbursement by using a Current Procedural Terminology (“CPT”) code set maintained by the American Medical Associations. These CPT codes are subject to periodic change and update, which will impact the reimbursement rates for the Company’s Zio Services. CMS updates the reimbursement rates for diagnostic tests performed by IDTFs annually via the Medicare Physician Fee Schedule, and effective January 1, 2023, CMS established national payment rates for the CPT codes the Company uses to report the long-term Holter monitoring services it performs with its Zio XT System: CPT codes 93247 (for wear-time of greater than 7 days and up to 15 days) and 93243 (for wear-time of greater than 48 hours and up to 7 days). Based on the relative value units CMS assigned to CPT codes 93247 and 93243, the national reimbursement rates for these services in 2023 are $243.65 and $231.79, respectively, and range from $247.59 to $334.46 and $235.54 to $318.17 for the Company’s Medicare-enrolled IDTF locations in Deerfield, Illinois, Houston, Texas, and San Francisco, California, when considering the geographic practice cost index for these locations. Because remote cardiac monitoring technology, including the Zio System, are rapidly evolving, there is a continuing risk that relative value units assigned, and reimbursement rates set, by CMS may not adequately reflect the value and expense of this technology and related monitoring services, and the Company cannot provide certainty that CMS will not reduce these rates in the future, which would adversely affect the Company’s financial results. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the years presented. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances, allowance for doubtful accounts, the useful lives of property and equipment, the recoverability of long-lived assets including the estimated usage of the printed circuit board assemblies (“PCBAs”), the incremental borrowing rate for operating leases, accounting for income taxes, impairment of right-of-use ("ROU") assets, and various inputs used in estimating stock-based compensation. Actual results may differ from those estimates. |
Reportable Segment | Reportable Segment Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker, which the Company has identified as being the chief executive officer, in deciding how to allocate resources and assessing performance. The Company operates as one operating segment. The Company's chief operating decision maker allocates resources and assesses performance at the consolidated level. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of certain of the Company’s financial instruments, which include cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and debt, approximate fair value due to their short maturities. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. |
Short-term Investments | Short-term InvestmentsThe Company's short-term investments consist primarily of commercial paper, corporate bonds, U.S. agency obligations and U.S. treasury securities. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The Company's policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. The Company classifies investments as available-for-sale at the time of purchase and re-evaluates such classification as of each balance sheet date. Available-for-sale debt securities with an amortized cost basis in excess of the estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Allowance for credit losses on available-for-debt securities are recognized as a charge in other income (expense), net on the Company's consolidated statements of operations and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive loss in accumulated deficit on the consolidated balance sheets. |
Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowances | Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowances Accounts receivable includes amounts due to the Company from healthcare institutions, third-party payors, and government payors and their related patients, as a result of the Company's normal business activities. Accounts receivable is reported on the consolidated balance sheets net of an estimated allowance for doubtful accounts and contractual allowances. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on its assessment of the collectability of customer accounts and recognizes the provision as a component of selling, general and administrative expenses. The Company records a provision for contractual allowances based on the estimated differences between contracted amounts and expected collection rates. Such provisions are based on the Company's historical experience and are reported as a reduction of revenue. The Company regularly reviews the allowances by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. |
Concentrations of Credit Risk | Concentrations of Risk Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash balances are deposited in financial institutions which, at times, may be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds. The Company invests in a variety of financial instruments, such as, but not limited to, U.S. government securities, corporate notes, commercial paper and, by policy, limits the amount of credit exposure with any one financial institution or commercial issuer. The Company has not experienced any material losses on its deposits of cash and cash equivalents or investments. |
Inflationary Risk | Inflationary Risk The Company continuously monitors the effects of inflationary factors, such as increases in cost of goods sold and selling and operating expenses, which may adversely affect its results of operations. Specifically, the Company may experience inflationary pressure affecting freight costs, the cost of the components for the Company’s Zio Services, overhead costs relating to maintenance of the Company’s facilities, and in the wages paid to its employees due to challenging labor market conditions. Competitive and regulatory conditions may restrict the Company’s ability to fully recover these costs through price increases. As a result, it may be difficult to fully offset the impact of persistent inflation. The Company’s inability or failure to do so could have a material adverse effect on its business, financial condition and results of operations or cause the Company to need to obtain additional capital in future earlier than anticipated. |
Supply Risk | Supply Risk The Company relies on single-source vendors to supply some of its disposable housings, instruments and other materials used to manufacture the Zio patches and the adhesive that binds the Zio patch to a patient’s body. These components and materials are critical, and there could be a considerable delay in finding alternative sources of supply. A global semiconductor supply shortage is having wide-ranging effects across multiple industries. The supply shortage has impacted multiple suppliers that provide the PCBAs to the Company. The semiconductor supply shortage may have an impact on the Company until global supply is sufficient for global demand. |
Inventory | Inventory Inventory owned by the Company is valued at cost, on the first in, first out (“FIFO”) basis, or the lower of cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand. The Company also records market value based write-downs in consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from three |
Internal-Use Software/Implementation Costs in Cloud-Computing Arrangements | The Company classifies internal-use software in property and equipment. Internal-use software costs are capitalized during the application development stage. Costs related to planning and post implementation activities are expensed as incurred. Capitalized internal-use software is amortized, and recognized as cost of revenue, on a straight-line basis over the estimated useful life of three years.Implementation Costs in Cloud-Computing ArrangementsThe Company capitalizes qualified implementation costs incurred in a hosting arrangement that is a service contract for which it is the customer in accordance with the requirements for cloud computing arrangements ("CCA") to the extent it is incurred in the course of developing internal-use software. These capitalized implementation costs are generally amortized over the fixed, non-cancellable term of the associated hosting arrangement on a straight-line basis are recorded in prepaid expenses and other current assets or in other noncurrent assets. The Company amortizes capitalized implementation costs in a CCA on a straight-line basis over the terms of the associated hosting arrangement. |
PCBAs | PCBAs The Company uses PCBAs in each wearable Zio XT patch, Zio AT patch and the Zio Monitor as well as the wireless gateway used in conjunction with the Zio AT patch. The PCBAs are used numerous times and have useful lives beyond one year. Each time a PCBA is used in a wearable Zio XT patch, Zio AT patch, or the Zio Monitor or a wireless gateway is used with a Zio AT patch a portion of the cost of the PCBA and/or gateway is recorded as a cost of revenue. The Company periodically evaluates and has based its estimates of how many times a PCBA can be used on testing in research and development, loss rates, product obsolescence, and the amount of time it takes the device to go through the manufacturing, shipping, customer shelf and patient wear time and upload process. The fair value of the Company's PCBAs is included in Other Assets on the Consolidated Balance Sheets. |
Goodwill | GoodwillGoodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill amounts are not amortized, but rather tested for impairment at least annually, and more frequently when changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates its business as one reporting unit and the Company completes its annual impairment test in the fourth quarter. In the event that the Company determines that the fair value of the reporting unit is less than the reporting unit's carrying value, goodwill impairment charge will be incurred for the amount of the difference during the quarter in which the determination is made. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future net cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. |
Comprehensive Loss | Comprehensive LossComprehensive loss represents all changes in stockholders’ equity during the year from non-owner sources. The Company’s unrealized gains and losses on short-term investments represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive loss. |
Revenue Recognition | Revenue Recognition The Company has developed a proprietary system that combines an FDA-cleared and CE-marked wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data, with a proprietary cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias. The Company currently offers three Zio System options—the Zio XT System, the Zio AT System, and the Zio Monitor System. The Zio XT System is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio XT patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm. The final step in the Zio Services is the delivery of an electronic Zio report to the prescribing physician with a summary of findings. The Company’s Zio XT services are generally billable when the Zio report is issued to the physician. The Zio Monitor System is the next generation of the Zio XT System, and is a prescription-only, remote ECG monitoring system that consists of the Zio Monitor patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm. The Zio AT System is a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the patch and the ZEUS System during the patient wear period. The wireless gateway, slightly larger than a smart phone, is provided to the patient at the time of Zio AT patch application and collects and transmits data from the Zio AT patch to the cloud via a LTE protocol. The Zio AT service revenue is recognized over the patient wear period and delivery of electronic Zio reports with two performance obligations. The Company recognizes as revenue the amount of consideration to which it expects to be entitled in exchange for performing the service. The consideration the Company is entitled to varies by portfolio, as further defined below, and includes estimates that require significant judgment by management. A unique aspect of healthcare is the involvement of multiple parties to the service transaction. In addition to the patient, often a third-party, for example a commercial or governmental payor or healthcare institution, will pay the Company for some or all of the service on the patient’s behalf. Separate contractual arrangements exist between the Company and third-party payors that establish amounts the third-party payor will pay on behalf of a patient for covered services rendered. A small portion of the Company’s transactions are covered by third-party payors with whom there is neither a contractual agreement nor an established amount that the third-party payor will pay. In determining the collectability and transaction price for its service, the Company considers factors such as insurance claims which are adjudicated as allowable under the applicable policy and payment history from both payors and patient out-of-pocket costs, payor coverage, whether there is a contract between the payor or healthcare institution and the Company, historical amount received for the service, and any current developments or changes that could impact reimbursement and healthcare institution payments. Certain of these factors are forms of variable consideration which are only included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. A summary of the payment arrangements with third-party payors and healthcare institutions is as follows: • Contracted third-party payors – The Company has contracts with negotiated prices for services provided to patients with commercial healthcare insurance coverage. • CMS – The Company has received IDTF approval from regional Medicare Administrative Contractors and will receive reimbursement per the relevant CPT code rates for the services rendered to the patient covered by CMS. • Healthcare institutions – Healthcare institutions are typically hospitals or physician practices in which the Company has negotiated amounts for its monitoring services, including certain governmental agencies such as the Veterans Administration and Department of Defense. • Non-contracted third-party payors – Non-contracted commercial and government payors often reimburse out-of-network rates provided under the relevant CPT codes on a case-by-case basis. The transaction price used for determining revenue recognition is based on factors including an average of the Company’s historical collection experience for its non-contracted services. This rate is reviewed at least quarterly. The Company is utilizing the portfolio approach practical expedient under ASC 606, Revenue from Contracts with Customers, whereby services provided under each of the above payor types form a separate portfolio. The Company accounts for the contracts within each portfolio as a collective group, rather than individual contracts. Based on history with these portfolios and the similar nature and characteristics of the patients within each portfolio, the Company has concluded that the financial statement effects are not materially different than if accounting for revenue on a contract-by-contract basis. For contracted and CMS portfolios, the Company recognizes revenue, net of contractual allowances, and recognizes an allowance for doubtful accounts for uncollectible patient accounts receivable. The transaction price is determined based on negotiated rates, and the Company has historical experience of collecting substantially all of these contracted rates. These contracts also impose a number of obligations regarding billing and other matters, and the Company’s noncompliance with a material term of such contracts may result in a denial of the claim. The Company accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price recognized as revenue. The Company estimates the denied claims which require management judgment. The estimated denied claims are based on historical information and judgement includes the historical period utilized. The Company monitors the estimated denied claims against the latest available information, and subsequent changes to the estimated denied claims are recorded as an adjustment to revenue in the periods during which such changes occur. Delays in claims submissions could lead to an increase in denials if the Company misses the payors’ filing deadlines and could result in a reduction in the Company’s receipt of payments. Historical cash collection indicates that it is probable that substantially all of the transaction price, less the estimate of denied claims, will be received. Contracted payors may require that the Company bills patient co-payments and deductibles and from time to time the Company may not be able to collect such amounts due to credit risk. The Company provides for estimates of uncollectible patient accounts receivable, based upon historical experience where judgment includes the historical period utilized, at the time revenue is recognized, with such provisions presented as bad debt expense within the selling, general and administrative line item of the consolidated statement of operations. Adjustments to these estimates for actual experience are also recorded as an adjustment to bad debt expense. As discussed in the Accounts Receivable, Allowance for Doubtful Accounts and Contractual Allowances section above, the inherent uncertainty caused by the longer collection cycle and claims adjudication process related to delays in submission because of the CPT code transition in 2021 could result in additional provisions for contractual allowances and doubtful accounts which would negatively impact the Company’s results of operations in future periods. For healthcare institutions, the transaction price is determined based on negotiated rates, and the Company has historical experience collecting substantially all of these contracted rates. Historical cash collections indicate that it is probable that substantially all of the transaction price will be received. As such, the Company is not providing an implicit price concession but, rather, has chosen to accept the risk of default, and any subsequent uncollected amounts are recorded as bad debt expense to selling, general and administrative expense in the consolidated statements of operations. For non-contracted portfolios, the Company provides an implicit price concession due to the lack of a contracted rate with the underlying payor. As a result, the Company estimates the transaction price based on historical cash collections utilizing the expected value method. All subsequent adjustments to this transaction price are recorded to revenue. |
Leases | Leases The Company determines if an arrangement is a lease at inception. The Company's lease agreements generally contain lease and non-lease components. Payments under its lease arrangements are primarily fixed. Non-lease components primarily include payments for maintenance and utilities. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component which increases the amount of the Company’s ROU assets and lease liabilities. Certain lease agreements contain variable payments, which are expensed as incurred and not included in the ROU assets and lease liabilities. ROU assets and lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate, because the interest rate implicit in its leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the ROU assets and lease liabilities. ROU assets are adjusted for any prepaid lease payments and lease incentives. |
Cost of Revenue | Cost of RevenueCost of revenue includes direct labor, material costs, overhead, data analysis, customer care, equipment and infrastructure expenses, amortization of internal-use software, and shipping and handling. Direct labor includes payroll and personnel-related costs involved in manufacturing. Material costs include both the disposable costs of the device and amortization of the PCBAs. Each time the PCBA is used in a wearable Zio XT System, a portion of the cost of the PCBA is charged to cost of revenue. |
Research and Development | Research and Development The Company’s research and development costs are expensed as incurred. Research and development costs include, but are not limited to personnel costs, laboratory supplies, consulting costs and overhead charges. In addition, the Company expenses milestone payments, when probable, for the development agreement with Verily. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses The Company's sales and marketing expenses consist of personnel costs, including stock-based compensation, and sales commissions. Other significant costs include travel expenses, consulting, public relations costs, direct marketing, tradeshow and promotional expenses and allocated facility overhead costs. The Company incurred an immaterial amount of advertising expense during each of the years ended December 31, 2022, 2021, and 2020, which is included in selling, general and administrative expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the estimated fair values of its restricted stock units based on the closing price of the Company's stock on the grant date. For performance-based restricted stock units, the Company estimates the fair value based on the closing price of its stock on the grant date and, if the award includes a market condition, a Monte Carlo simulation model. In addition, for performance-based restricted stock units, the Company applies a probability assessment to determine the probable achievement of the performance-based metrics. Stock-based compensation expense is recognized over the requisite service period using the straight-line method and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company's stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For restricted stock, the compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant, and recognized as compensation expense on a straight-line basis over the requisite service period. The Company recognizes compensation expense related to the Employee Stock Purchase Plan (“ESPP”) based on the estimated fair value of the options on the date of grant, net of estimated forfeitures. The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option pricing model for each purchase period. The grant date fair value is expensed on a straight-line basis over the offering period. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share for all periods presented, since the effect of potentially dilutive securities are anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company continues to monitor new accounting pronouncements issued by the Financial Accounting Standards Board and does not believe any recently issued accounting pronouncements will have a material impact on the Company's consolidated financial statements. |
Contract Liabilities | Contract Liabilities ASC 606, Revenue from Contracts with Customers, requires an entity to present a revenue contract as a contract liability when the Company has an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer, or an amount of consideration from the customer is due and unconditional (whichever is earlier). |
Contract Costs | Contract Costs Under ASC 340, Other Assets and Deferred Costs ("ASC 340"), the incremental costs of obtaining a contract with a customer are recognized as an asset. Incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. The Company’s current commission programs are considered incremental. However, as a practical expedient, ASC 340 permits the Company to immediately expense contract acquisition costs, because the asset that would have resulted from capitalizing these costs will be amortized in one year or less. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Allowance for Doubtful Accounts | The following table presents the changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 14,012 $ 12,711 $ 9,049 Add: adoption of ASC 326, Financial Instruments - Credit Losses — — 461 Add: provision for doubtful accounts 17,191 9,615 10,515 Less: write-offs, net of recoveries and other adjustments (12,728) (8,314) (7,314) Balance, end of year $ 18,475 $ 14,012 $ 12,711 |
Schedule of Changes in Contractual Allowance | The following table presents the changes in the contractual allowance (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 31,274 $ 21,281 $ 15,433 Add: allowance for contractual adjustments 41,158 27,459 20,916 Less: contractual adjustments (31,043) (17,466) (15,068) Balance, end of year $ 41,389 $ 31,274 $ 21,281 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue by Payor Type and Major Service Line | Disaggregated revenue by payor type and major service line for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Contracted third-party payors $ 223,984 $ 193,871 $ 135,939 Centers for Medicare and Medicaid 103,032 44,529 72,536 Healthcare institutions 59,772 57,496 41,396 Non-contracted third-party payors 24,133 26,929 15,295 Total $ 410,921 $ 322,825 $ 265,166 |
CASH EQUIVALENTS AND SHORT-TE_2
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash Equivalents And Investments [Abstract] | |
Schedule of Cash Equivalents and Short-Term Investments | The fair value of cash equivalents and short-term investments at December 31, 2022 and 2021, were as follows (in thousands): December 31, 2022 Amortized Gross Unrealized Fair Value Gains Losses Money market funds $ 24,263 $ — $ — $ 24,263 U.S. government securities 134,709 12 (409) 134,312 Total cash equivalents and short-term investments $ 158,972 $ 12 $ (409) $ 158,575 Classified as: Cash equivalents $ 24,263 Short-term investments 134,312 Total cash equivalents and short-term investments $ 158,575 December 31, 2021 Amortized Gross Unrealized Fair Value Gains Losses Money market funds $ 110,137 $ — $ — $ 110,137 U.S. government securities 50,490 — (46) 50,444 Corporate notes 31,158 — (15) 31,143 Commercial paper 29,982 — — 29,982 Total cash equivalents and short-term investments $ 221,767 $ — $ (61) $ 221,706 Classified as: Cash equivalents $ 110,137 Short-term investments 111,569 Total cash equivalents and short-term investments $ 221,706 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Financial Assets | The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 24,263 $ — $ — $ 24,263 U.S. government securities — 134,312 — 134,312 Total $ 24,263 $ 134,312 $ — $ 158,575 December 31, 2021 Level 1 Level 2 Level 3 Total Assets Money market funds $ 110,137 $ — $ — $ 110,137 U.S. government securities — 50,444 — 50,444 Corporate notes — 31,143 — 31,143 Commercial paper — 29,982 — 29,982 Total $ 110,137 $ 111,569 $ — $ 221,706 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory Components | Inventory consisted of the following (in thousands): December 31, 2022 2021 Raw materials $ 9,338 $ 5,101 Finished goods 5,817 5,167 Total $ 15,155 $ 10,268 |
Schedule of Other Assets | Other assets consisted of the following (in thousands): December 31, 2022 2021 PCBAs $ 18,599 $ 13,863 Cloud computing arrangements 2,523 1,427 Other 1,130 762 $ 22,252 $ 16,052 |
Schedule of Property and Equipment, Components | Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Laboratory and manufacturing equipment $ 4,911 $ 3,192 Computer equipment and software 2,315 2,269 Furniture and fixtures 4,119 4,174 Leasehold improvements 23,144 20,401 Internal-use software 44,877 30,922 Internal-use software in development 28,069 15,739 Construction in progress 3,451 1,951 Total property and equipment, gross 110,886 78,648 Less: accumulated depreciation and amortization (35,216) (22,704) Total property and equipment, net $ 75,670 $ 55,944 |
Schedule of Accrued Liabilities Components | Accrued liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued payroll and related expenses $ 34,752 $ 34,484 Accrued vacation 8,608 7,431 Accrued professional services fees 7,234 1,724 Accrued expenses 7,006 3,112 Claims payable 4,464 2,988 Accrued state and foreign income and sales taxes 2,388 745 Accrued employee share purchase plan contributions 1,045 1,002 Total accrued liabilities $ 65,497 $ 51,486 |
IMPAIRMENT AND RESTRUCTURING _2
IMPAIRMENT AND RESTRUCTURING CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Summary of Changes in the Restructuring Liabilities | The Company's restructuring and impairment charges are described below (in thousands): Year Ended Restructuring charges $ 3,444 Impairment charges 23,164 Total $ 26,608 The following table provides a summary of changes in the restructuring liabilities associated with the Restructuring Plan (in thousands): December 31, Charges Cash Payments December 31, Employee severance $ — $ 3,444 $ (3,050) $ 394 Total $ — $ 3,444 $ (3,050) $ 394 |
Schedule of Impairment Charges | The following table presents impairment charges recorded during the year ended December 31, 2022: Year Ended ROU asset $ 20,451 Leasehold improvements 2,211 Furniture and fixtures 502 Total $ 23,164 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities Payments | Contractual obligations under operating lease liabilities were as follows (in thousands): Year Ended December 31: 2023 $ 20,826 2024 20,586 2025 20,379 2026 20,131 2027 19,731 Thereafter 31,003 Total lease payments 132,656 Less: imputed interest (36,553) Total lease liabilities $ 96,103 |
Schedule of Information Related to Leases | Other information related to the operating leases were as follows: Year Ended December 31, 2022 2021 2020 Operating lease costs ( in thousands) $ 13,524 $ 13,500 $ 12,800 Weighted average remaining lease term (years) 8.75 9.62 10.59 Weighted average discount rate (percentage) 7.3 % 7.3 % 7.4 % |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Contractual Obligations Payments | Contractual obligations, which comprises of principal payments included in Debt, noncurrent, in the Consolidated Balance Sheets and interest payments under the 2022 Term Loans were as follows (in thousands): Year Ended December 31, 2023 $ 2,337 2024 2,313 2025 15,142 2026 18,412 2027 4,424 Total 42,628 Less: Amount representing interest (7,628) Less: Debt issuance costs (65) Principal payments $ 34,935 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The following table presents components of the Company’s provision for income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Current expense: Federal $ — $ — $ — State 160 223 181 Foreign 111 150 59 Total current tax expense 271 373 240 Deferred tax benefit: Federal — — — State — — — Foreign (2) (6) (11) Total deferred tax benefit (2) (6) (11) Total tax expense $ 269 $ 367 $ 229 |
Schedule of Tax Expense Computed at Statutory Federal Rate and Tax Expense | The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense (in thousands): Year Ended December 31, 2022 2021 2020 Tax at statutory federal rate $ (24,323) $ (21,198) $ (9,172) State income taxes, net of federal benefit 160 223 181 Stock-based compensation (3,492) (7,049) (20,762) Meals and entertainment 348 182 177 Section 162(m) limitation - officers compensation 2,498 4,856 544 Other 526 (347) 89 Tax credits (2,695) (381) (1,426) Foreign rate differential (40) (30) (9) Change in valuation allowance 27,287 24,111 30,607 Provision for income taxes $ 269 $ 367 $ 229 |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 111,236 $ 114,856 Tax credit carryforwards 29,455 9,174 Stock-based compensation 11,942 9,812 Capital research expenditures 15,997 — Allowances and other 19,399 20,988 Lease obligation 24,232 23,868 Total deferred tax assets 212,261 178,698 Valuation allowance (188,070) (154,734) Net deferred tax assets 24,191 23,964 Deferred tax liabilities: Depreciation and amortization (9,402) (3,212) ROU assets (14,731) (20,696) Total deferred tax liabilities (24,133) (23,908) Total deferred tax assets $ 58 $ 56 |
Schedule of Valuation Allowance for Deferred Tax Assets | The valuation allowance for deferred tax assets consisted of the following activity for the years ended December 31, 2022, 2021, and 2020 (in thousands): Balance at Beginning of Year Additions Deductions Balance at End of Year Year Ended December 31, 2022 $ 154,734 $ 33,336 $ — $ 188,070 Year Ended December 31, 2021 $ 123,803 $ 30,931 $ — $ 154,734 Year Ended December 31, 2020 $ 88,433 $ 35,370 $ — $ 123,803 |
Schedule of Unrecognized Tax Benefit | A reconciliation of the Company’s unrecognized tax benefit amount is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 3,310 $ 2,302 $ 1,842 Additions for tax positions taken in current year 996 772 488 Increases in balance related to prior year tax positions 426 236 — Decreases in balance related to prior year tax positions — — (28) Balance at end of year $ 4,732 $ 3,310 $ 2,302 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Common Stock Shares Reserved for Future Issuance | The Company had reserved shares of common stock for issuance as follows: December 31, 2022 2021 Options issued and outstanding 328,193 504,106 Unvested restricted stock units and performance-based restricted stock units 2,025,755 1,649,561 Shares available for grant under future stock plans 7,822,637 9,011,213 Shares available for future issuance 10,176,585 11,164,880 |
EQUITY INCENTIVE PLANS (Tables)
EQUITY INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Awards Available for Grant Under 2016 Plan | A summary of awards available for grant under the 2016 Plan is as follows: Shares Available Balance as of December 31, 2020 6,505,390 Additional awards authorized 1,450,967 Awards granted (1,289,567) Awards forfeited 356,999 Awards withheld for tax purposes 135,886 Balance as of December 31, 2021 7,159,675 Additional awards authorized 1,476,018 Awards granted (1,036,109) Awards forfeited 223,053 Balance as of December 31, 2022 7,822,637 |
Summary of Restricted Stock Units, Activity | The fair value of market based PRSUs were estimated at the date of grant using the Monte-Carlo option pricing model. A summary is as follows: Restricted Stock Units Performance Based Restricted Stock Units and Market-Based Units Shares Underlying RSUs Weighted Average Grant Date Fair Value Shares Underlying PRSUs 1 Weighted Average Grant Date Fair Value Balance as of December 31, 2020 837,204 $ 82.82 276,955 $ 128.54 Granted 1,009,457 88.67 280,110 135.31 Vested (285,335) 78.10 (126,671) 165.39 Forfeited (201,079) 104.19 (142,144) 127.95 Balance as of December 31, 2021 1,360,247 84.99 288,250 119.21 Granted 691,128 147.94 344,981 138.99 Vested (390,238) 85.55 (46,934) 257.61 Forfeited (196,471) 110.22 (25,208) 109.82 Balance as of December 31, 2022 1,464,666 111.16 561,089 120.22 1 Based on the maximum number of performance based restricted stock units in the key executive grant agreements, the actual number of units granted will be based on the annual unit volume CAGR as described below. |
Summary of Stock Option Activity Under 2006 and 2016 Plans | The following table summarizes stock option activity: Options Outstanding Options Outstanding Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Balance at December 31, 2020 609,881 $ 40.18 6.24 $ 120,163 Options exercised (90,939) 31.15 Options forfeited (14,836) 68.81 Balance at December 31, 2021 504,106 40.97 5.20 38,675 Options exercised (174,539) 36.82 Options forfeited (1,374) 83.15 Balance at December 31, 2022 328,193 43.00 4.43 16,635 Options exercisable – December 31, 2022 327,768 42.95 4.43 16,631 Options vested and expected to vest – December 31, 2022 328,191 43.00 4.43 16,635 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense Included in Consolidated Statements of Operations and Comprehensive Loss | The following table summarizes the total stock-based compensation expense included in the statements of operations and comprehensive loss for all periods presented (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 2,153 $ 1,896 $ 27 Research and development 6,976 5,565 7,727 Selling, general and administrative 48,611 47,066 33,761 Total stock-based compensation expense $ 57,740 $ 54,527 $ 41,515 |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share | The following table sets forth the computation of the basic and diluted net loss per share during the years ended December 31, 2022, 2021, and 2020 (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (116,155) $ (101,361) $ (43,830) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 29,915,720 29,331,010 27,754,404 Net loss per common share, basic and diluted $ (3.88) $ (3.46) $ (1.58) |
Schedule of Anti-dilutive Securities Excluded from Diluted Net Loss per Common Share | The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the years ended December 31, 2022, 2021, and 2020 because their inclusion would be anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 328,193 504,106 609,881 RSUs and PRSUs issued and unvested 2,025,755 1,649,561 1,114,159 Total 2,353,948 2,153,667 1,724,040 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) operating_segment systemOption performanceObligation reporting_unit | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 01, 2023 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | operating_segment | 1 | |||
Impairment charges | $ 0 | $ 0 | $ 0 | |
Number of reporting unit | reporting_unit | 1 | |||
Long-lived asset impairment charges | $ 23,200,000 | |||
Number of Zio System options | systemOption | 3 | |||
Number of performance obligations | performanceObligation | 2 | |||
Unrecognized tax benefit income tax interest and penalty charges | $ 0 | |||
Internal-use software | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Internal-use software, estimated useful life (in years) | 3 years | |||
Federal Government Agencies | Revenue | Customer Concentration Risk | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk (as a percent) | 25% | 14% | 27% | |
Federal Government Agencies | Accounts Receivable | Accounts Receivable Concentration Risk | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk (as a percent) | 22% | 8% | ||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful life (in years) | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful life (in years) | 5 years | |||
Product And Services Zio X T Service Code93243 | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Reimbursement rate | $ 231.79 | |||
Product And Services Zio X T Service Code93243 | Minimum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated reimbursement rate | 235.54 | |||
Product And Services Zio X T Service Code93243 | Maximum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated reimbursement rate | 318.17 | |||
Product And Services Zio X T Service Code93247 | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Reimbursement rate | 243.65 | |||
Product And Services Zio X T Service Code93247 | Minimum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated reimbursement rate | 247.59 | |||
Product And Services Zio X T Service Code93247 | Maximum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated reimbursement rate | $ 334.46 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of year | $ 14,012 | $ 12,711 | $ 9,049 |
Add: provision for doubtful accounts | 17,191 | 9,615 | 10,515 |
Less: write-offs, net of recoveries and other adjustments | (12,728) | (8,314) | (7,314) |
Balance, end of year | 18,475 | 14,012 | 12,711 |
Cumulative Effect, Period of Adoption, Adjustment | ASC 326 | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of year | $ 0 | 0 | 461 |
Balance, end of year | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Changes in Contractual Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of year | $ 31,274 | $ 21,281 | $ 15,433 |
Add: allowance for contractual adjustments | 41,158 | 27,459 | 20,916 |
Less: contractual adjustments | (31,043) | (17,466) | (15,068) |
Balance, end of year | $ 41,389 | $ 31,274 | $ 21,281 |
REVENUE - Disaggregated Revenue
REVENUE - Disaggregated Revenue by Payor Type and Major Service (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue, net | $ 410,921 | $ 322,825 | $ 265,166 |
Contracted third-party payors | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 223,984 | 193,871 | 135,939 |
Centers for Medicare and Medicaid | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 103,032 | 44,529 | 72,536 |
Healthcare institutions | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | 59,772 | 57,496 | 41,396 |
Non-contracted third-party payors | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, net | $ 24,133 | $ 26,929 | $ 15,295 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liability balance, revenue recognized | $ 3 | $ 0.9 |
CASH EQUIVALENTS AND SHORT-TE_3
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Schedule of Cash Equivalents and Available For Sale Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 158,972 | $ 221,767 |
Gains | 12 | 0 |
Losses | (409) | (61) |
Fair Value | 158,575 | 221,706 |
Classified as: | ||
Cash equivalents | 24,263 | 110,137 |
Short-term investments | 134,312 | 111,569 |
Total cash equivalents and short-term investments | 158,575 | 221,706 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 24,263 | 110,137 |
Gains | 0 | 0 |
Losses | 0 | 0 |
Fair Value | 24,263 | 110,137 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 134,709 | 50,490 |
Gains | 12 | 0 |
Losses | (409) | (46) |
Fair Value | $ 134,312 | 50,444 |
Corporate notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 31,158 | |
Gains | 0 | |
Losses | (15) | |
Fair Value | 31,143 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,982 | |
Gains | 0 | |
Losses | 0 | |
Fair Value | $ 29,982 |
CASH EQUIVALENTS AND SHORT-TE_4
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Cash Equivalents And Investments [Abstract] | |
Available-for-sale securities, weighted average days to maturity | 114 days |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Level 1 | Carrying amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding interest-bearing obligations | $ 34.9 | $ 21.4 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Company's Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Financial assets | $ 158,575 | $ 221,706 |
Money market funds | ||
Assets | ||
Financial assets | 24,263 | 110,137 |
U.S. government securities | ||
Assets | ||
Financial assets | 134,312 | 50,444 |
Corporate notes | ||
Assets | ||
Financial assets | 31,143 | |
Commercial paper | ||
Assets | ||
Financial assets | 29,982 | |
Level 1 | ||
Assets | ||
Financial assets | 24,263 | 110,137 |
Level 1 | Money market funds | ||
Assets | ||
Financial assets | 24,263 | 110,137 |
Level 1 | U.S. government securities | ||
Assets | ||
Financial assets | 0 | 0 |
Level 1 | Corporate notes | ||
Assets | ||
Financial assets | 0 | |
Level 1 | Commercial paper | ||
Assets | ||
Financial assets | 0 | |
Level 2 | ||
Assets | ||
Financial assets | 134,312 | 111,569 |
Level 2 | Money market funds | ||
Assets | ||
Financial assets | 0 | 0 |
Level 2 | U.S. government securities | ||
Assets | ||
Financial assets | 134,312 | 50,444 |
Level 2 | Corporate notes | ||
Assets | ||
Financial assets | 31,143 | |
Level 2 | Commercial paper | ||
Assets | ||
Financial assets | 29,982 | |
Level 3 | ||
Assets | ||
Financial assets | 0 | 0 |
Level 3 | Money market funds | ||
Assets | ||
Financial assets | 0 | 0 |
Level 3 | U.S. government securities | ||
Assets | ||
Financial assets | $ 0 | 0 |
Level 3 | Corporate notes | ||
Assets | ||
Financial assets | 0 | |
Level 3 | Commercial paper | ||
Assets | ||
Financial assets | $ 0 |
BALANCE SHEET COMPONENTS - Comp
BALANCE SHEET COMPONENTS - Components of Inventory and Printed Circuit Board Assemblies ("PCBAs") (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 9,338 | $ 5,101 |
Finished goods | 5,817 | 5,167 |
Total | $ 15,155 | $ 10,268 |
BALANCE SHEET COMPONENTS - Othe
BALANCE SHEET COMPONENTS - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
PCBAs | $ 18,599 | $ 13,863 |
Cloud computing arrangements | 2,523 | 1,427 |
Other | 1,130 | 762 |
Other assets | $ 22,252 | $ 16,052 |
BALANCE SHEET COMPONENTS - Addi
BALANCE SHEET COMPONENTS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory [Line Items] | |||
Depreciation and amortization expense | $ 13.4 | $ 9.8 | $ 6.9 |
Increase in internal use software | 26.3 | ||
Printed Circuit Board Assemblies | |||
Inventory [Line Items] | |||
Other assets | 18.6 | 13.9 | |
Amortization | $ 5.2 | $ 4.4 | $ 3 |
BALANCE SHEET COMPONENTS - Co_2
BALANCE SHEET COMPONENTS - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 110,886 | $ 78,648 |
Less: accumulated depreciation and amortization | (35,216) | (22,704) |
Total property and equipment, net | 75,670 | 55,944 |
Laboratory and manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 4,911 | 3,192 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,315 | 2,269 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 4,119 | 4,174 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 23,144 | 20,401 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 44,877 | 30,922 |
Internal-use software in development | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 28,069 | 15,739 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 3,451 | $ 1,951 |
BALANCE SHEET COMPONENTS - Co_3
BALANCE SHEET COMPONENTS - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued payroll and related expenses | $ 34,752 | $ 34,484 |
Accrued vacation | 8,608 | 7,431 |
Accrued professional services fees | 7,234 | 1,724 |
Accrued expenses | 7,006 | 3,112 |
Claims payable | 4,464 | 2,988 |
Accrued state and foreign income and sales taxes | 2,388 | 745 |
Accrued employee share purchase plan contributions | 1,045 | 1,002 |
Total accrued liabilities | $ 65,497 | $ 51,486 |
IMPAIRMENT AND RESTRUCTURING _3
IMPAIRMENT AND RESTRUCTURING CHARGES - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2022 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 15, 2022 floor | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 3,444 | ||||
Reduction to leased square footage (percent) | 50% | ||||
Impairment charges | 23,164 | $ 0 | $ 0 | ||
Sublease of majority floor space | floor | 1 | ||||
Sublease percentage | 50% | ||||
2022 Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 3,444 | ||||
Employee severance | 2022 Restructuring Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 3,444 |
IMPAIRMENT AND RESTRUCTURING _4
IMPAIRMENT AND RESTRUCTURING CHARGES - Restructuring and Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring charges | $ 3,444 | ||
Impairment charges | 23,164 | $ 0 | $ 0 |
Total | $ 26,608 | $ 0 | $ 0 |
IMPAIRMENT AND RESTRUCTURING _5
IMPAIRMENT AND RESTRUCTURING CHARGES - Summary of Changes in Restructuring Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Charges | $ 3,444 |
2022 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Charges | 3,444 |
Cash Payments | (3,050) |
Restructuring reserve, ending balance | 394 |
Employee severance | 2022 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Charges | 3,444 |
Cash Payments | (3,050) |
Restructuring reserve, ending balance | $ 394 |
IMPAIRMENT AND RESTRUCTURING _6
IMPAIRMENT AND RESTRUCTURING CHARGES - Schedule of Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | $ 23,164 | $ 0 | $ 0 |
ROU asset | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | 20,451 | ||
Leasehold Improvements and Furniture and Fixtures | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | 2,700 | ||
Leasehold improvements | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | 2,211 | ||
Furniture and fixtures | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Impairment charges | $ 502 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands | Feb. 23, 2023 | Dec. 31, 2022 | Dec. 31, 2019 | Sep. 03, 2019 |
Operating Leased Assets [Line Items] | ||||
Purchase commitments due in 2023 | $ 62,000 | |||
Purchase commitments due in 2024 | 1,500 | |||
Collaboration agreement milestone payments | 0 | |||
Collaboration agreement, additional milestone payments, between 2022 and early 2023 | $ 1,750 | |||
Subsequent Event | ||||
Operating Leased Assets [Line Items] | ||||
Collaboration agreement milestone payments | $ 11,000 | |||
Verily Life Sciences LLC | ||||
Operating Leased Assets [Line Items] | ||||
Upfront fee related to development agreement | $ 5,000 | |||
Additional aggregate milestone payments related to development agreement | $ 12,750 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 20,826 |
2024 | 20,586 |
2025 | 20,379 |
2026 | 20,131 |
2027 | 19,731 |
Thereafter | 31,003 |
Total lease payments | 132,656 |
Less: imputed interest | (36,553) |
Total lease liabilities | $ 96,103 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Schedule of Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease costs ( in thousands) | $ 13,524 | $ 13,500 | $ 12,800 |
Weighted average remaining lease term (years) | 8 years 9 months | 9 years 7 months 13 days | 10 years 7 months 2 days |
Weighted average discount rate of operating leases (as a percent) | 7.30% | 7.30% | 7.40% |
DEBT - Additional Information (
DEBT - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||
Mar. 28, 2022 USD ($) paymentInstallment | Oct. 31, 2018 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Mar. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of debt | $ 35,000,000 | $ 0 | $ 0 | |||
Debt issuance costs, net | 1,800,000 | |||||
2022 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant compliance, amount | $ 15,000,000 | |||||
2022 Term Loan | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, quick ratio | 115% | |||||
2022 Term Loan | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, covenant, quick ratio | 100% | |||||
Third Amended and Restated SVB Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs, net | 65,000 | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of debt | $ 35,000,000 | |||||
Amount outstanding under revolving credit line | $ 18,500,000 | |||||
Commitment fee percentage | 5% | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 3% | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 1% | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (in percentage) | 3.50% | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | 2022 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 75,000,000 | |||||
Proceeds from line of credit | 35,000,000 | |||||
Line of credit facility, remaining borrowing capacity | 40,000,000 | |||||
Term loan borrowed installments | $ 10,000,000 | |||||
Repayment consecutive monthly installments | paymentInstallment | 24 | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | 2022 Term Loan | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread (as a percent) | 0.25% | |||||
SVB Term Loan | Third Amended and Restated SVB Loan Agreement | 2018 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of long-term line of credit | $ 18,500,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000 | |||||
Revolving Credit Facility | Third Amended and Restated SVB Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Amount outstanding under revolving credit line | $ 0 | |||||
Commitment fee percentage | 0.15% | |||||
Revolving Credit Facility | Third Amended and Restated SVB Loan Agreement | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (in percentage) | 3.50% | |||||
Revolving Credit Facility | Third Amended and Restated SVB Loan Agreement | 2022 Term Loan | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate spread (as a percent) | 0.25% | |||||
Standby Letters of Credit | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 15,000,000 | |||||
Cash Management Services | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 15,000,000 |
DEBT - Schedule of Future Minim
DEBT - Schedule of Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
Less: Debt issuance costs | $ (1,800) |
Third Amended and Restated SVB Loan Agreement | |
Debt Instrument [Line Items] | |
2023 | 2,337 |
2024 | 2,313 |
2025 | 15,142 |
2026 | 18,412 |
2027 | 4,424 |
Total | 42,628 |
Less: Amount representing interest | (7,628) |
Less: Debt issuance costs | (65) |
Principal payments | $ 34,935 |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current expense: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 160 | 223 | 181 |
Foreign | 111 | 150 | 59 |
Total current tax expense | 271 | 373 | 240 |
Deferred tax benefit: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Foreign | (2) | (6) | (11) |
Total deferred tax benefit | (2) | (6) | (11) |
Total tax expense | $ 269 | $ 367 | $ 229 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Tax at statutory federal rate | $ (24,323) | $ (21,198) | $ (9,172) |
State income taxes, net of federal benefit | 160 | 223 | 181 |
Stock-based compensation | (3,492) | (7,049) | (20,762) |
Meals and entertainment | 348 | 182 | 177 |
Section 162(m) limitation - officers compensation | 2,498 | 4,856 | 544 |
Other | 526 | (347) | 89 |
Tax credits | (2,695) | (381) | (1,426) |
Foreign rate differential | (40) | (30) | (9) |
Change in valuation allowance | 27,287 | 24,111 | 30,607 |
Total tax expense | $ 269 | $ 367 | $ 229 |
INCOME TAXES - Significant Comp
INCOME TAXES - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 111,236 | $ 114,856 | ||
Tax credit carryforwards | 29,455 | 9,174 | ||
Stock-based compensation | 11,942 | 9,812 | ||
Capital research expenditures | 15,997 | 0 | ||
Allowances and other | 19,399 | 20,988 | ||
Lease obligation | 24,232 | 23,868 | ||
Total deferred tax assets | 212,261 | 178,698 | ||
Valuation allowance | (188,070) | (154,734) | $ (123,803) | $ (88,433) |
Net deferred tax assets | 24,191 | 23,964 | ||
Deferred tax liabilities: | ||||
Depreciation and amortization | (9,402) | (3,212) | ||
ROU assets | (14,731) | (20,696) | ||
Total deferred tax liabilities | (24,133) | (23,908) | ||
Total deferred tax assets | $ 58 | $ 56 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Benefit recognized for net operating loss carryforwards | $ 0 | ||
Increase in valuation allowance | 33,300,000 | $ 30,900,000 | $ 35,400,000 |
Net operating loss carryforwards, federal | 445,000,000 | ||
Net operating loss carryforwards, state | 285,500,000 | ||
Tax credit carryforwards | 29,455,000 | 9,174,000 | |
Unrecognized tax benefit | 4,700,000 | 3,300,000 | 2,300,000 |
Accrued interest and penalties | 0 | $ 0 | $ 0 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | 10,700,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards available to reduce future taxable income | $ 8,600,000 |
INCOME TAXES - Summary of Valua
INCOME TAXES - Summary of Valuation Allowance for Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Balance at Beginning of Year | $ 154,734 | $ 123,803 | $ 88,433 |
Additions | 33,336 | 30,931 | 35,370 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | $ 188,070 | $ 154,734 | $ 123,803 |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 3,310 | $ 2,302 | $ 1,842 |
Additions for tax positions taken in current year | 996 | 772 | 488 |
Increases in balance related to prior year tax positions | 426 | 236 | 0 |
Decreases in balance related to prior year tax positions | 0 | 0 | (28) |
Balance at end of year | $ 4,732 | $ 3,310 | $ 2,302 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Dividends declared | $ 0 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule Of Common Stock Shares Reserved For Future Issuance (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Shares available for future issuance (in shares) | 10,176,585 | 11,164,880 |
Options issued and outstanding | ||
Class of Stock [Line Items] | ||
Shares available for future issuance (in shares) | 328,193 | 504,106 |
Unvested restricted stock units and performance-based restricted stock units | ||
Class of Stock [Line Items] | ||
Shares available for future issuance (in shares) | 2,025,755 | 1,649,561 |
Shares available for grant under future stock plans | ||
Class of Stock [Line Items] | ||
Shares available for future issuance (in shares) | 7,822,637 | 9,011,213 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Employer matching contribution, percent of employees' gross pay | 10% | ||
Employer matching contribution, percent of match | 50% | ||
Maximum contributions per employee | $ 5,000 | ||
Contributions | $ 5,100,000 | $ 3,300,000 | $ 2,200,000 |
EQUITY INCENTIVE PLANS - Additi
EQUITY INCENTIVE PLANS - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||||
Dec. 01, 2022 | Nov. 30, 2022 USD ($) | Jun. 01, 2022 | Feb. 28, 2022 | Feb. 28, 2021 | Jan. 31, 2021 | Feb. 29, 2020 | Oct. 31, 2016 offering_purchase_period purchase_period shares | May 31, 2023 $ / shares | Nov. 30, 2022 $ / shares | May 31, 2023 $ / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares available for future issuance (in shares) | shares | 10,176,585 | 11,164,880 | 10,176,585 | ||||||||||||
Equity instruments other than options, vested and expected to vest (In shares) | shares | 500,000 | ||||||||||||||
Options granted during the period (in shares) | shares | 0 | ||||||||||||||
Estimated grant date fair value of option vested | $ 2,400 | $ 2,800 | $ 4,900 | ||||||||||||
Total stock-based compensation expense | $ 57,740 | 54,527 | 41,515 | ||||||||||||
ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares available for future issuance (in shares) | shares | 2,206,279 | 2,206,279 | |||||||||||||
Percentage of payroll deductions of eligible compensation | 15% | ||||||||||||||
Offering period (in months) | 12 months | ||||||||||||||
Number of purchase period | offering_purchase_period | 2 | ||||||||||||||
Purchase period (in months) | 6 months | ||||||||||||||
Percentage of common stock fair market value available for employee purchase | 85% | ||||||||||||||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 8 months 12 days | ||||||||||||||
Total stock-based compensation expense | $ 200 | ||||||||||||||
Expected term (in years) | 6 months | ||||||||||||||
Expected minimum volatility (as a percent) | 81.40% | ||||||||||||||
Expected maximum volatility (as a percent) | 96.30% | ||||||||||||||
Risk-free interest rate, minimum (as a percent) | 1.60% | ||||||||||||||
Risk-free interest rate, maximum (as a percent) | 2.20% | ||||||||||||||
Expected dividend yield | 0% | ||||||||||||||
Granted (in USD per share) | $ / shares | $ 55.02 | ||||||||||||||
Total unamortized compensation costs, net of estimated forfeitures related to unvested stock options | $ 4,400 | $ 4,400 | |||||||||||||
ESPP | Forecast | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected term (in years) | 6 months | 1 year | |||||||||||||
ESPP | Forecast | Share-Based Payment Arrangement, Tranche One | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Granted (in USD per share) | $ / shares | $ 68.52 | ||||||||||||||
ESPP | Forecast | Share-Based Payment Arrangement, Tranche Two | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Granted (in USD per share) | $ / shares | $ 48.34 | ||||||||||||||
Unvested restricted stock units and performance-based restricted stock units | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Total unamortized compensation costs, net of estimated forfeitures related to restricted stock unit and performance share | $ 112,500 | 112,500 | |||||||||||||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 1 year 10 months 24 days | ||||||||||||||
Intrinsic value of equity other than options nonvested | $ 137,200 | $ 160,100 | 198,600 | 137,200 | |||||||||||
Equity instruments other than options, vested and expected to vest (In shares) | shares | 1,400,000 | ||||||||||||||
Aggregate intrinsic value of equity instruments other than options, vested and expected to vest | $ 128,200 | ||||||||||||||
Estimated grant date fair value of option vested | $ 33,400 | $ 22,300 | 16,300 | ||||||||||||
Granted (in USD per share) | $ / shares | $ 147.94 | $ 88.67 | |||||||||||||
Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Total unamortized compensation costs, net of estimated forfeitures related to restricted stock unit and performance share | $ 28,200 | 28,200 | |||||||||||||
Unamortized compensation costs related to unvested stock options, expected period of recognition | 2 years 1 month 6 days | ||||||||||||||
Intrinsic value of equity other than options nonvested | $ 52,600 | $ 33,900 | 65,700 | 52,600 | |||||||||||
Aggregate intrinsic value of equity instruments other than options, vested and expected to vest | 49,900 | $ 49,900 | |||||||||||||
Estimated grant date fair value of option vested | $ 12,100 | $ 20,900 | $ 0 | ||||||||||||
Expected term (in years) | 2 years 10 months 24 days | ||||||||||||||
Risk free interest rate | 1.70% | ||||||||||||||
Implied volatility rate | 81.20% | ||||||||||||||
Expected dividend yield | 0% | ||||||||||||||
2016 Plan | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares available for future issuance (in shares) | shares | 3,865,000 | 7,822,637 | 7,822,637 | ||||||||||||
Percentage of outstanding shares | 5% | ||||||||||||||
Employee Stock Purchase Plan("ESPP") | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Shares available for future issuance (in shares) | shares | 483,031 | ||||||||||||||
Percentage of outstanding shares | 1.50% | ||||||||||||||
Increase in shares available for future issuance (in shares) | shares | 966,062 | ||||||||||||||
Percentage of payroll deductions of eligible compensation | 15% | ||||||||||||||
Offering period (in months) | 12 months | ||||||||||||||
Number of purchase period | purchase_period | 2 | ||||||||||||||
Purchase period (in months) | 6 months | ||||||||||||||
Percentage of common stock fair market value available for employee purchase | 85% | ||||||||||||||
Common stock issued to employees (in shares) | shares | 87,664 | ||||||||||||||
Employee Stock Purchase Plan("ESPP") | ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected minimum volatility (as a percent) | 68.10% | ||||||||||||||
Expected maximum volatility (as a percent) | 73.40% | ||||||||||||||
Risk-free interest rate, minimum (as a percent) | 4.70% | ||||||||||||||
Risk-free interest rate, maximum (as a percent) | 4.70% | ||||||||||||||
Expected dividend yield | 0% | ||||||||||||||
Maximum | ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected term (in years) | 1 year | ||||||||||||||
Maximum | Employee Stock Purchase Plan("ESPP") | ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected term (in years) | 1 year | ||||||||||||||
Maximum | 2020 Awards | Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 29% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 200% | ||||||||||||||
Maximum | 2021 Awards | Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 10% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 100% | ||||||||||||||
Maximum | 2021 Awards | Performance shares | Awarded February 2021 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 29% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 200% | ||||||||||||||
Maximum | 2022 Awards | Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 23% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 200% | ||||||||||||||
Minimum | ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected term (in years) | 6 months | ||||||||||||||
Minimum | Employee Stock Purchase Plan("ESPP") | ESPP | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Expected term (in years) | 6 months | ||||||||||||||
Minimum | 2020 Awards | Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 19.70% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 50% | ||||||||||||||
Minimum | 2021 Awards | Performance shares | Awarded February 2021 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 19.70% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 50% | ||||||||||||||
Minimum | 2022 Awards | Performance shares | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Performance threshold (as a percentage) | 13% | ||||||||||||||
Performance target to be earned at performance threshold (as a percentage) | 50% |
EQUITY INCENTIVE PLANS - Summar
EQUITY INCENTIVE PLANS - Summary of Share-based Awards Available for Grant under 2016 Plan (Details) - 2016 Plan - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Awards Available for Grant | ||
Beginning balance (in shares) | 7,159,675 | 6,505,390 |
Additional options authorized (in shares) | 1,476,018 | 1,450,967 |
Awards granted (in shares) | (1,036,109) | (1,289,567) |
Awards forfeited (in shares) | 223,053 | 356,999 |
Awards withheld for tax purposes (in shares) | 135,886 | |
Ending balance (in shares) | 7,822,637 | 7,159,675 |
EQUITY INCENTIVE PLANS - Summ_2
EQUITY INCENTIVE PLANS - Summary of Restricted Stock Units ("RSUs") and Performance-Based Restricted Stock Units ("PRSU") (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs and PRSUs issued and unvested | ||
Shares Underlying RSUs | ||
Beginning balance (in shares) | 1,360,247 | 837,204 |
Granted (in shares) | 691,128 | 1,009,457 |
Vested (in shares) | (390,238) | (285,335) |
Forfeited (in shares) | (196,471) | (201,079) |
Ending balance (in shares) | 1,464,666 | 1,360,247 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in USD per share) | $ 84.99 | $ 82.82 |
Granted (in USD per share) | 147.94 | 88.67 |
Vested (in USD per share) | 85.55 | 78.10 |
Forfeited (in USD per share) | 110.22 | 104.19 |
Ending balance (in USD per share) | $ 111.16 | $ 84.99 |
Performance-Based And Market-Based Restricted Stock Units | ||
Shares Underlying RSUs | ||
Beginning balance (in shares) | 288,250 | 276,955 |
Granted (in shares) | 344,981 | 280,110 |
Vested (in shares) | (46,934) | (126,671) |
Forfeited (in shares) | (25,208) | (142,144) |
Ending balance (in shares) | 561,089 | 288,250 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in USD per share) | $ 119.21 | $ 128.54 |
Granted (in USD per share) | 138.99 | 135.31 |
Vested (in USD per share) | 257.61 | 165.39 |
Forfeited (in USD per share) | 109.82 | 127.95 |
Ending balance (in USD per share) | $ 120.22 | $ 119.21 |
EQUITY INCENTIVE PLANS - Summ_3
EQUITY INCENTIVE PLANS - Summary of Stock Option Activity Plans, Including Grants To Nonemployees (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options Outstanding | |||
Beginning balance (in shares) | 504,106 | 609,881 | |
Options exercised (in shares) | (174,539) | (90,939) | |
Options forfeited (in shares) | (1,374) | (14,836) | |
Ending balance (in shares) | 328,193 | 504,106 | 609,881 |
Options exercisable (in shares) | 327,768 | ||
Options vested and expected to vest (in shares) | 328,191 | ||
Weighted- Average Exercise Price Per Share | |||
Beginning balance (in USD per share) | $ 40.97 | $ 40.18 | |
Options exercised (in USD per share) | 36.82 | 31.15 | |
Options forfeited (in USD per share) | 83.15 | 68.81 | |
Ending balance (in USD per share) | 43 | $ 40.97 | $ 40.18 |
Options exercisable (in USD per share) | 42.95 | ||
Options vested and expected to vest (in USD per share) | $ 43 | ||
Weighted- Average Remaining Contractual Life (years) | |||
Weighted-average remaining contractual life for options outstanding (in years) | 4 years 5 months 4 days | 5 years 2 months 12 days | 6 years 2 months 26 days |
Weighted-average remaining contractual life for options exercisable (in years) | 4 years 5 months 4 days | ||
Weighted-average remaining contractual life for options vested and expected to vest (in years) | 4 years 5 months 4 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value of options outstanding | $ 16,635 | $ 38,675 | $ 120,163 |
Aggregate intrinsic value of options exercisable | 16,631 | ||
Aggregate intrinsic value of options vested and expected to vest | $ 16,635 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Total Stock-Based Compensation Expense for Options, RSUs and ESPP Included in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 57,740 | $ 54,527 | $ 41,515 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 2,153 | 1,896 | 27 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 6,976 | 5,565 | 7,727 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 48,611 | $ 47,066 | $ 33,761 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 57,740 | $ 54,527 | $ 41,515 |
Consulting and Professional Services Agreement (“CPSA”) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 5,400 | $ 1,800 | |
Consulting and Professional Services Agreement (“CPSA”) | Chief Clinical Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 400 | ||
Consulting and Professional Services Agreement (“CPSA”) | Executive Vice President | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 100 | ||
Acceleration of Consulting and Professional Services Agreement | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 900 |
NET LOSS PER COMMON SHARE - Com
NET LOSS PER COMMON SHARE - Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (116,155) | $ (101,361) | $ (43,830) |
Denominator: | |||
Weighted-average shares used to compute net loss per common share, basic (in shares) | 29,915,720 | 29,331,010 | 27,754,404 |
Weighted-average shares used to compute net loss per common share, diluted (in shares) | 29,915,720 | 29,331,010 | 27,754,404 |
Net loss per common share, basic (in USD per share) | $ (3.88) | $ (3.46) | $ (1.58) |
Net loss per common share, diluted (in USD per share) | $ (3.88) | $ (3.46) | $ (1.58) |
NET LOSS PER COMMON SHARE - Sch
NET LOSS PER COMMON SHARE - Schedule of Anti-dilutive Securities Excluded from Diluted Net Loss per Common Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from diluted net loss (in shares) | 2,353,948 | 2,153,667 | 1,724,040 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from diluted net loss (in shares) | 328,193 | 504,106 | 609,881 |
RSUs and PRSUs issued and unvested | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from diluted net loss (in shares) | 2,025,755 | 1,649,561 | 1,114,159 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | ||
Restructuring charges | $ 3,444 | |
Forecast | Consulting Services | Minimum | ||
Subsequent Event [Line Items] | ||
Restructuring charges | $ 15,000 | |
Forecast | Consulting Services | Maximum | ||
Subsequent Event [Line Items] | ||
Restructuring charges | 20,000 | |
Forecast | Employee severance | Minimum | ||
Subsequent Event [Line Items] | ||
Restructuring charges | 8,000 | |
Forecast | Employee severance | Maximum | ||
Subsequent Event [Line Items] | ||
Restructuring charges | $ 10,000 |
Uncategorized Items - irtc-2022
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |