Company: ADPT
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000950170-25-030913
Chunk: 171

Company: Adaptive Biotechnologies Corp
Filing Date: 2025-03-03
Form: 10-K
Item: Item 1B
Chunk 171
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 control the timing of customer provided samples. For service and collaboration activities, excluding those related to our worldwide collaboration and license agreement with Genentech, we assess the performance obligations and recognize deferred revenue as current or non-current based upon forecasted delivery times, which are customer coordinated. In certain circumstances, a customer project may be cancelled or terminated prior to the delivery of all related services covered by a customer’s upfront payment. In these circumstances, we recognize revenue when sufficient evidence is obtained that a reversal of revenue is not probable. We also recognize revenue when our estimate of total samples to be provided under certain of our agreements is reduced or, in the case of contract balances related to Medicare, when the likelihood becomes remote that a patient will receive additional testing. See Note 3, Revenue for our deferred revenue policy related to our worldwide collaboration and license agreement with Genentech.

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Adaptive Biotechnologies CorporationNotes to Consolidated Financial Statements (Continued) 

Share-Based CompensationShare-based compensation includes compensation expense for stock option, restricted stock unit and market-based restricted stock unit grants made to employees and non-employees. It represents the grant date fair value of the grants and is recognized over the requisite service period of the awards, usually the vesting period, on a straight-line basis, net of actual forfeitures. We estimate the grant date fair value of stock option and market-based restricted stock unit grants using the Black-Scholes option-pricing model and the Monte Carlo valuation model, respectively. Advertising Advertising costs are expensed as incurred. Advertising expenses were $6.1 million, $8.6 million and $13.7 million for the year ended December 31, 2024, 2023 and 2022, respectively.Cost of RevenueCost of revenue includes the cost of materials, personnel-related expenses (including salaries, benefits and share-based compensation), shipping and handling expenses, equipment costs, allocated facility costs associated with processing samples and professional support costs related to our service revenue activities. Allocated facility costs include depreciation of laboratory equipment, as well as allocated facility occupancy and information technology costs. Costs associated with processing samples are recorded as expense, regardless of the timing of revenue recognition.Research and Development ExpensesResearch and development expenses consist of laboratory materials costs, personnel-related expenses (including salaries, benefits and share-based compensation), equipment costs, allocated facility and information technology costs and contract service expenses. Research and development activities support further development and refinement of existing assays and products, discovery of new technologies and investments in our immune medicine platform. We also include