Company: CSTL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001447362-25-000031
Chunk: 39

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 39
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, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with ASC 606. In accordance with ASC 606, we follow a five-step process to recognize revenues: (1) identify the contract with the customer, (2) identify the performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenues when the performance obligations are satisfied. We have determined that we have a contract with the patient when the treating clinician orders the test. Our contracts generally contain a single performance obligation, which is the delivery of the test report, and we satisfy our performance obligation at a point-in-time upon the delivery of the test report to the treating clinician, at which point we can bill for the report. The amount of revenue recognized reflects the amount of consideration to which we expect to be entitled, or the transaction price, and considers the effects of variable consideration. 

All of our revenues from contracts with customers are associated with the provision of diagnostic, prognostic and predictive testing services. Our revenues are primarily attributable to DecisionDx-Melanoma for CM and our DecisionDx-SCC test for SCC. We also provide a test for patients diagnosed with BE, the TissueCypher test, a test for patients with suspicious pigmented lesions, MyPath Melanoma and DiffDx-Melanoma, and a test for UM, DecisionDx-UM. We also began offering a PGx testing service focused on mental health, IDgenetix, following a business combination completed in April 2022.

Once we satisfy our performance obligations and bill for the service, the timing of the collection of payments may vary based on the payment practices of the third-party payor and the existence of contractually established reimbursement rates. The payments for our services are primarily