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 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 September 30, 2018
Research services revenues
Research	$	38,309	$	—		$	—	$	38,309
Connect		12,780		—			—		12,780
Analytics		5,243		—			—		5,243
Total research services revenues		56,332		—			—		56,332

Advisory services and events revenues
Advisory services		—		9,171			154		9,325
Consulting services		2,030		2,517			13,771		18,318
Events		915		—			—		915
Total advisory services and events revenues		2,945		11,688			13,925		28,558
Total segment revenues		59,277		11,688			13,925		84,890
Segment expenses		11,521		12,688			7,012		31,221
Contribution margin (loss)		47,756		(1,000	)		6,913		53,669
Selling, marketing, administrative and other expenses									(47,348	)
Amortization of intangible assets									(402	)
Acquisition and integration cost									(977	)
Other income and losses on investments									302
Income before income taxes								$	5,244

						Project
	Product		Research			Consulting		Consolidated
Three Months Ended September 30, 2017
Research services revenues
Research	$	36,894	$	—		$	—	$	36,894
Connect		12,506		—			—		12,506
Analytics		4,835		—			—		4,835
Total research services revenues		54,235		—			—		54,235

Advisory services and events revenues
Advisory services		—		8,297			81		8,378
Consulting services		2,250		2,082			12,321		16,653
Events		1,103		—			—		1,103
Total advisory services and events revenues		3,353		10,379			12,402		26,134
Total segment revenues		57,588		10,379			12,402		80,369
Segment expenses		9,764		11,953			6,443		28,160
Contribution margin (loss)		47,824		(1,574	)		5,959		52,209
Selling, marketing, administrative and other expenses									(45,263	)
Amortization of intangible assets									(197	)
Acquisition and integration cost									—
Other income and losses on investments									(626	)
Income before income taxes								$	6,123

						Project
	Product		Research			Consulting		Consolidated
Nine Months Ended September 30, 2018
Research services revenues
Research	$	114,007	$	—		$	—	$	114,007
Connect		37,882		—			—		37,882
Analytics		14,443		—			—		14,443
Total research services revenues		166,332		—			—		166,332

Advisory services and events revenues
Advisory services		—		29,664			290		29,954
Consulting services		6,079		7,306			40,397		53,782
Events		8,924		—			—		8,924
Total advisory services and events revenues		15,003		36,970			40,687		92,660
Total segment revenues		181,335		36,970			40,687		258,992
Segment expenses		36,534		38,182			20,930		95,646
Contribution margin (loss)		144,801		(1,212	)		19,757		163,346
Selling, marketing, administrative and other expenses									(147,589	)
Amortization of intangible assets									(770	)
Acquisition and integration cost									(1,306	)
Other income and losses on investments									410
Income before income taxes								$	14,091

						Project
	Products		Research			Consulting		Consolidated
Nine Months Ended September 30, 2017
Research services revenues
Research	$	110,550	$	—		$	—	$	110,550
Connect		36,103		—			—		36,103
Analytics		13,900		—			—		13,900
Total research services revenues		160,553		—			—		160,553

Advisory services and events revenues
Advisory services		—		25,889			254		26,143
Consulting services		7,495		6,390			38,496		52,381
Events		8,219		—			—		8,219
Total advisory services and events revenues		15,714		32,279			38,750		86,743
Total segment revenues		176,267		32,279			38,750		247,296
Segment expenses		32,788		36,510			18,886		88,184
Contribution margin (loss)		143,479		(4,231	)		19,864		159,112
Selling, marketing, administrative and other expenses									(138,432	)
Amortization of intangible assets									(582	)
Acquisition and integration cost									—
Other income and losses on investments									(749	)
Income before income taxes								$	19,349