Segment Information

6 Months Ended

Jun. 30, 2020

The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment enables brands to leverage LiveEngage’s sophisticated intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitates online transactions between independent service providers (“Experts”) and individual consumers (“Users”) seeking information and knowledge for a fee via mobile and online messaging. Both segments currently generate their revenue primarily in the United States. The chief operating decision maker, who is the chief executive officer, evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s condensed consolidated financial statements which are described in the summary of Critical Accounting Policies and Estimates. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses, restructuring costs and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no inter-segment sales.

Summarized financial information by segment for the three months ended June 30, 2020, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	72,382	$	—	$	—		$	72,382
Hosted services – Consumer	—		7,587		—			7,587
Professional services	11,634		—		—			11,634
Total revenue	84,016		7,587		—			91,603
Cost of revenue	26,085		1,622		—			27,707
Sales and marketing	28,926		5,692		—			34,618
Amortization of purchased intangibles	404		—		—			404
Unallocated corporate expenses	—		—		43,320			43,320
Operating income (loss)	$	28,601	$	274	$	(43,320	)	$	(14,446	)

Summarized financial information by segment for the three months ended June 30, 2019, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	53,672	$	—	$	—		$	53,672
Hosted services – Consumer	—		6,124		—			6,124
Professional services	11,163		—		—			11,163
Total revenue	64,835		6,124		—			70,959
Cost of revenue	16,960		1,089		—			18,049
Sales and marketing	35,568		3,775		—			39,343
Amortization of purchased intangibles	438		—		—			438
Unallocated corporate expenses	—		—		34,150			34,150
Operating income (loss)	$	11,869	$	1,260	$	(34,150	)	$	(21,021	)

Summarized financial information by segment for the six months ended June 30, 2020, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer			Corporate			Consolidated
Revenue:
Hosted services – Business	$	133,435	$	—		$	—		$	133,435
Hosted services – Consumer	—		13,826			—			$	13,826
Professional services	22,430		—			—			$	22,430
Total revenue	155,865		13,826			—			169,691
Cost of revenue	47,430		3,096			—			$	50,526
Sales and marketing	66,395		10,903			—			$	77,298
Amortization of purchased intangibles	809		—			—			$	809
Unallocated corporate expenses	—		—			88,696			$	88,696
Operating income (loss)	$	41,231	$	(173	)	$	(88,696	)	$	(47,638	)

Summarized financial information by segment for the six months ended June 30, 2019, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	105,209	$	—	$	—		$	105,209
Hosted services – Consumer	—		11,531		—			11,531
Professional services	20,621		—		—			20,621
Total revenue	125,830		11,531		—			137,361
Cost of revenue	34,622		2,076		—			36,698
Sales and marketing	65,660		6,719		—			72,379
Amortization of purchased intangibles	899		—		—			899
Unallocated corporate expenses	—		—		66,769			66,769
Operating income (loss)	$	24,649	$	2,736	$	(66,769	)	$	(39,384	)

Geographic Information

The Company is domiciled in the United States and has international operations in Israel, the United Kingdom, Asia-Pacific and Australia, Latin America and Western Europe, particularly France, Germany and the Netherlands. The following table presents the Company’s long-lived assets by geographic region as of the dates presented (amounts in thousands):



	June 30,		December 31,
	2020		2019
United States	$	191,959	$	177,776
Israel	16,674		16,680
Australia	14,394		13,765
Netherlands	8,280		7,705
Other ⁽¹⁾	19,171		18,677
Total long-lived assets	$	250,478	$	234,603

⁽¹⁾ United Kingdom, Germany, Japan, France and Italy