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Segment Reporting
9 Months Ended
Sep. 30, 2022
Segment Reporting  
Segment Reporting

15. Segment Reporting

 

Our chief operating decision maker (our Chief Executive Officer) reviews our financial information presented on an operating segment basis for purposes of allocating resources and evaluating our financial performance. Following the merger with NetSapiens, Inc., the Company reorganized into two operating segments, a software solutions operating segment and a cloud telecommunications services operating segment. The cloud telecommunications services segment generates revenue from selling cloud telecommunication services, products, and other internet services. The software solutions segment generates revenue from selling perpetual software licenses and software subscriptions, subscription maintenance and support, and professional services. The Company has two reportable operating segments, which consist of cloud telecommunications services and software solutions. Segment revenue, income/(loss) from operations, other income/(expense) and income/(loss) before income tax provision are as follows (in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

$5,233

 

 

$5,026

 

 

$15,371

 

 

$14,300

 

Software solutions

 

 

3,875

 

 

 

3,784

 

 

 

10,741

 

 

 

4,796

 

Consolidated revenue

 

 

9,108

 

 

 

8,810

 

 

 

26,112

 

 

 

19,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

(639)

 

 

(253)

 

 

(2,236)

 

 

(2,004)

Software solutions

 

 

95

 

 

 

306

 

 

 

(553)

 

 

(9)

Total operating income/(loss)

 

 

(544)

 

 

53

 

 

 

(2,789)

 

 

(2,013)

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

(17)

 

 

(22)

 

 

(52)

 

 

(58)

Software solutions

 

 

(167)

 

 

(19)

 

 

(286)

 

 

(19)

Total other expense, net

 

 

(184)

 

 

(41)

 

 

(338)

 

 

(77)

Income/(loss) before income tax provision:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

(656)

 

 

(275)

 

 

(2,288)

 

 

(2,062)

Software solutions

 

 

(72)

 

 

287

 

 

 

(839)

 

 

(28)

Income/(loss) before income tax provision

 

$(728)

 

$12

 

 

$(3,127)

 

$(2,090)

 

Depreciation and amortization for the cloud telecommunications services segment was $115,000 and $60,000 for the three months ended September 30, 2022 and 2021, respectively and $344,000 and $152,000 for the nine months ended September 30, 2022 and 2021, respectively. Depreciation and amortization for the software solutions segment was $509,000 and $6,000 for the three months ended September 30, 2022 and 2021, respectively and $1,518,000 and $7,000 for the nine months ended September 30, 2022 and 2021, respectively.

 

Interest income for the cloud telecommunications services segment was $0 and $0 for the three months ended September 30, 2022 and 2021, respectively and $0 and $1,000 for the nine months ended September 30 2022 and 2021, respectively. Interest income for the software solutions segment was $0 for the three and nine months ended September 30, 2022 and 2021, respectively.

 

Interest expense for the cloud telecommunications services segment was $19,000 and $24,000 for the three months ended September 30, 2022 and 2021, respectively and $57,000 and $64,000 for the nine months ended September 30, 2022 and 2021, respectively. Interest expense for the software solutions segment was $0 for the three and nine months ended September 30, 2022 and 2021, respectively.