Note 9 — Operating Segments

The Product segment includes the costs of the product management organization that is responsible for product pricing and packaging and the launch of new products. In addition, this segment includes the costs of the Company’s Analytics, Connect and Events organizations. Revenue in this segment includes all revenue for the Company (including Research and Connect) except for revenue from advisory services and project consulting services that are delivered by personnel in the Research and Project Consulting segments.

The Research segment includes the costs of the Company’s research personnel who are responsible for writing the research and performing the webinars and inquiries for the Company’s Research and Connect products. In addition, the research personnel deliver advisory services (such as workshops, speeches and advisory days) and a portion of the Company’s project consulting services. Revenue in this segment includes only revenue from advisory services and project consulting services that are delivered by the research personnel in this segment.

The Project Consulting segment includes the costs of the consultants that deliver the majority of the Company’s project consulting services. Revenue in this segment includes the project consulting revenue delivered by the consultants in this segment.

The Company evaluates reportable segment performance and allocates resources based on segment revenues and expenses. Segment expenses include the direct expenses of each segment organization and exclude selling and marketing expenses, general and administrative expenses, stock-based compensation expense, depreciation expense, adjustments to incentive bonus compensation from target amounts, amortization of intangible assets, other income (expense) and losses on investments. The accounting policies used by the segments are the same as those used in the consolidated financial statements.

The Company is providing disaggregated revenue by product in the segment tables below in accordance with the revenue standard adopted on January 1, 2018.

						Project
	Product		Research			Consulting		Consolidated
Three Months Ended March 31, 2018
Research services revenues
Research	$	34,643	$	—		$	—	$	34,643
Connect		12,564		—			—		12,564
Analytics		4,493		—			—		4,493
Total research services revenues		51,700		—			—		51,700

Advisory services and events revenues
Advisory services		—		9,480			34		9,514
Consulting services		—		2,162			12,409		14,571
Events		—		—			—		—
Analytics services		1,964		—			—		1,964
Total advisory services and events revenues		1,964		11,642			12,443		26,049
Total segment revenues		53,664		11,642			12,443		77,749
Segment expenses		10,117		12,713			6,864		29,694
Contribution margin (loss)		43,547		(1,071	)		5,579		48,055
Selling, marketing, administrative and other expenses									(50,157	)
Amortization of intangible assets									(186	)
Other income (expense) and losses on investments									(143	)
Income before income taxes								$	(2,431	)

						Project
	Product		Research			Consulting		Consolidated
Three Months Ended March 31, 2017
Research services revenues
Research	$	35,524	$	—		$	—	$	35,524
Connect		11,637		—			—		11,637
Analytics		4,582		—			—		4,582
Total research services revenues		51,743		—			—		51,743

Advisory services and events revenues
Advisory services		—		8,536			77		8,613
Consulting services		—		1,957			12,380		14,337
Events		80		—			—		80
Analytics services		2,421		—			—		2,421
Total advisory services and events revenues		2,501		10,493			12,457		25,451
Total segment revenues		54,244		10,493			12,457		77,194
Segment expenses		9,227		12,143			5,854		27,224
Contribution margin (loss)		45,017		(1,650	)		6,603		49,970
Selling, marketing, administrative and other expenses									(46,643	)
Amortization of intangible assets									(191	)
Other income (expense) and losses on investments									(194	)
Income before income taxes								$	2,942