Note 10 — 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 June 30, 2018
Research services revenues
Research	$	41,055	$	—	$	—	$	41,055
Connect		12,538		—		—		12,538
Analytics		4,707		—		—		4,707
Total research services revenues		58,300		—		—		58,300

Advisory services and events revenues
Advisory services		—		11,013		102		11,115
Consulting services		2,085		2,627		14,217		18,929
Events		8,009		—		—		8,009
Total advisory services and events revenues		10,094		13,640		14,319		38,053
Total segment revenues		68,394		13,640		14,319		96,353
Segment expenses		14,896		12,781		7,054		34,731
Contribution margin		53,498		859		7,265		61,622
Selling, marketing, administrative and other expenses								(50,084	)
Amortization of intangible assets								(182	)
Acquisition and integration cost								(329	)
Other income and losses on investments								251
Income before income taxes							$	11,278

						Project
	Product		Research			Consulting		Consolidated
Three Months Ended June 30, 2017
Research services revenues
Research	$	38,132	$	—		$	—	$	38,132
Connect		11,960		—			—		11,960
Analytics		4,483		—			—		4,483
Total research services revenues		54,575		—			—		54,575

Advisory services and events revenues
Advisory services		—		9,056			96		9,152
Consulting services		2,824		2,351			13,795		18,970
Events		7,036		—			—		7,036
Total advisory services and events revenues		9,860		11,407			13,891		35,158
Total segment revenues		64,435		11,407			13,891		89,733
Segment expenses		13,797		12,414			6,589		32,800
Contribution margin (loss)		50,638		(1,007	)		7,302		56,933
Selling, marketing, administrative and other expenses									(46,525	)
Amortization of intangible assets									(194	)
Acquisition and integration cost									—
Other income and losses on investments									70
Income before income taxes								$	10,284

						Project
	Product		Research			Consulting		Consolidated
Six Months Ended June 30, 2018
Research services revenues
Research	$	75,698	$	—		$	—	$	75,698
Connect		25,102		—			—		25,102
Analytics		9,200		—			—		9,200
Total research services revenues		110,000		—			—		110,000

Advisory services and events revenues
Advisory services		—		20,493			136		20,629
Consulting services		4,049		4,789			26,626		35,464
Events		8,009		—			—		8,009
Total advisory services and events revenues		12,058		25,282			26,762		64,102
Total segment revenues		122,058		25,282			26,762		174,102
Segment expenses		25,013		25,494			13,918		64,425
Contribution margin (loss)		97,045		(212	)		12,844		109,677
Selling, marketing, administrative and other expenses									(100,241	)
Amortization of intangible assets									(368	)
Acquisition and integration cost									(329	)
Other income and losses on investments									108
Income before income taxes								$	8,847

						Project
	Products		Research			Consulting		Consolidated
Six Months Ended June 30, 2017
Research services revenues
Research	$	73,656	$	—		$	—	$	73,656
Connect		23,597		—			—		23,597
Analytics		9,065		—			—		9,065
Total research services revenues		106,318		—			—		106,318

Advisory services and events revenues
Advisory services		—		17,592			173		17,765
Consulting services		5,245		4,308			26,175		35,728
Events		7,116		—			—		7,116
Total advisory services and events revenues		12,361		21,900			26,348		60,609
Total segment revenues		118,679		21,900			26,348		166,927
Segment expenses		23,024		24,557			12,443		60,024
Contribution margin (loss)		95,655		(2,657	)		13,905		106,903
Selling, marketing, administrative and other expenses									(93,168	)
Amortization of intangible assets									(385	)
Acquisition and integration cost									—
Other income and losses on investments									(124	)
Income before income taxes								$	13,226