Reportable Segments

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Reportable Segments

8.Reportable Segments

We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief operating decision maker evaluates performance based on revenue and operating results for each reportable segment.

The Americas segment charges royalty fees to the other segments based on software licenses and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $3.1 million and $1.9 million for the three months ended June 30, 2023 and 2022, respectively, and $6.5 million and $4.5 million for the three and six months ended June 30, 2023 and 2022, respectively, are included in costs of revenue for each segment with a corresponding reduction in the Americas segment’s cost of revenue. The revenues represented below are from external customers only. The geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support. Certain corporate expenses included in the Americas segment are not charged to the other segments. Such expenses include research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas segment include all research and development costs, including the costs associated with our operations in India.

In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,
	2023								2022
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	49,612	$	9,782	$	1,549	$	60,943	$	36,184	$	4,947	$	1,072	$	42,203
Software license		2,468		501		776		3,745		3,459		1,262		404		5,125
Maintenance		28,571		4,902		2,353		35,826		29,126		4,738		2,129		35,993
Services		92,743		25,638		6,228		124,609		75,608		20,624		4,709		100,941
Hardware		5,814		79		-		5,893		7,619		43		-		7,662
Total revenue		179,208		40,902		10,906		231,016		151,996		31,614		8,314		191,924
Costs and Expenses:
Cost of revenue		81,356		22,592		4,865		108,813		67,062		17,700		3,884		88,646
Operating expenses		64,356		4,626		1,418		70,400		58,863		4,331		1,085		64,279
Depreciation and amortization		1,170		128		22		1,320		1,564		160		22		1,746
Total costs and expenses		146,882		27,346		6,305		180,533		127,489		22,191		4,991		154,671
Operating income	$	32,326	$	13,556	$	4,601	$	50,483	$	24,507	$	9,423	$	3,323	$	37,253
	Six Months Ended June 30,
	2023								2022
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	95,966	$	19,111	$	3,086	$	118,163	$	67,613	$	9,849	$	2,038	$	79,500
Software license		5,054		1,851		2,192		9,097		7,461		5,261		761		13,483
Maintenance		56,987		9,760		4,729		71,476		57,083		9,631		4,581		71,295
Services		179,557		49,727		11,495		240,779		143,727		38,933		8,199		190,859
Hardware		12,403		111		-		12,514		15,652		91		-		15,743
Total revenue		349,967		80,560		21,502		452,029		291,536		63,765		15,579		370,880
Costs and Expenses:
Cost of revenue		158,723		44,267		9,452		212,442		129,805		34,435		7,833		172,073
Operating expenses		126,724		9,724		2,764		139,212		112,704		9,068		2,317		124,089
Depreciation and amortization		2,547		220		40		2,807		3,127		322		44		3,493
Total costs and expenses		287,994		54,211		12,256		354,461		245,636		43,825		10,194		299,655
Operating income	$	61,973	$	26,349	$	9,246	$	97,568	$	45,900	$	19,940	$	5,385	$	71,225

Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the six months ended June 30, 2023. The majority of our software license revenue (over 75%) relates to our warehouse management product group for the three and six months ended June 30, 2023.

At June 30, 2023, total assets for the Americas, EMEA and APAC segments were $424.1 million, $83.0 million and $19.9 million, respectively.