XML 30 R23.htm IDEA: XBRL DOCUMENT v3.23.2
Business Segment and Geographical Information
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Business Segment and Geographical Information Business Segment and Geographical Information
The Company is a clinical research organization ("CRO"), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. It specializes in the strategic development, management and analysis of programs that support all stages of the clinical development process - from compound selection to Phase I-IV clinical studies. The Company has the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and has the operational flexibility to provide development services on a stand-alone basis or as part of an integrated "full-service" solution. The Company has expanded through internal growth, together with a number of strategic acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process.

The Company determines and presents operating segments based on the information that is internally provided to the chief operating decision maker, the (‘CODM’) in accordance with ASC 280 'Segment Reporting'. The Company determined that the CODM was comprised of the Chief Executive Officer and the Chief Financial Officer.

The Company operates as one reporting segment, which is the provision of outsourced development services on a global basis to the pharmaceutical, biotechnology and medical devices industries.

Revenues are allocated to individual entities based on where the work is performed in accordance with the Company's global transfer pricing model. Revenues and income from operations in Ireland are a function of our global contracting model and the Group’s transfer pricing model.

ICON Ireland (Ireland Segment) acts as the Group entrepreneur under the Company’s global transfer pricing model given its role in the development and management of the Group, its ownership of key intellectual property and customer relationships, its key role in the mitigation of risks faced by the Group and its responsibility for maintaining the Company’s global network. ICON Ireland enters into the majority of the Company’s customer contracts.

ICON Ireland remunerates other operating entities in the Group on the basis of a guaranteed cost plus mark-up for the services they perform in each of their local territories. The cost plus mark-up for each ICON entity is established to ensure that each of ICON Ireland and the ICON entities that are involved in the conduct of services for customers, earn an appropriate arms-length return having regard to the assets owned, risks borne and functions performed by each entity from these intercompany transactions. The cost plus mark-up policy is reviewed annually to ensure that it is market appropriate. The integration of entities acquired through the Merger into this global network and global transfer pricing model remains ongoing.

The geographic split of revenue disclosed for each region outside Ireland is the cost plus revenue attributable to these entities. The residual revenues of the Group, once each ICON entity has been paid its respective intercompany service fee, generally fall to be retained by ICON Ireland. As such, revenues and income from operations in Ireland are a function of this global transfer pricing model and comprise revenues of the Group after deducting the cost plus revenues attributable to the activities performed outside Ireland.
The geographical distribution of the Company’s segment measures for the three and six months ended June 30, 2023 and June 30, 2022 and at June 30, 2023 and December 31, 2022 is as follows:

a) The distribution of revenue by geographical area was as follows:
Three Months EndedSix Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
(in thousands)(in thousands)
Ireland $593,407 $500,972 $1,105,241 $868,330 
Rest of Europe373,810 428,393 788,033 884,458 
U.S.848,019 894,016 1,692,423 1,864,645 
Rest of World205,015 111,812 413,132 219,524 
Total$2,020,251 $1,935,193 $3,998,829 $3,836,957 

b) The distribution of income from operations by geographical area was as follows:
Three Months EndedSix Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
(in thousands)(in thousands)
Ireland *$125,896 $55,544 $177,223 $65,418 
Rest of Europe22,489 59,173 82,255 118,682 
U.S.55,744 53,321 143,833 113,789 
Rest of World5,355 9,751 22,962 50,239 
Total$209,484 $177,789 $426,273 $348,128 
* Includes the full amount of the amortization charge associated with the intangible asset acquired in the Merger.

c) The distribution of long-lived assets (property, plant and equipment and operating right-of-use assets), net, by geographical area was as follows:
June 30, 2023December 31, 2022
(in thousands)
Ireland$148,242 $143,025 
Rest of Europe95,048 99,721 
U.S.195,407 213,311 
Rest of World52,338 48,095 
Total$491,035 $504,152