Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment InformationThe 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 was previously organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment enables brands to leverage the Conversational Cloud’s sophisticated intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitated online transactions between Experts and Users seeking information and knowledge for a fee via mobile and online messaging. During the first quarter of 2023, the Consumer segment (comprised solely of the Kasamba business) was divested (see Note 20 – Divestiture). The chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, evaluates performance, makes operating decisions, and allocates resources based on the operating income of the remaining Business segment. The Business reporting segment follows the same accounting policies used in the preparation of the Company’s consolidated financial statements which are described in the summary of significant accounting policies. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangible assets 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 were no inter-segment sales.

Presented on a consolidated basis, the following table is a summary of financial information by segment for the three and six months ended June 30, 2023 and 2022, based on the Company’s internal financial reporting system utilized by the Company’s CODM:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Consolidated	(In thousands)
Revenue:
Hosted services (1)	$	81,286	$	103,985	$	168,624	$	219,431
Professional services	16,236		28,580		36,559		43,331
Total revenue	97,522		132,565		205,183		262,762
Cost of revenue	30,888		45,049		73,984		94,616
Sales and marketing	26,724		59,983		61,194		118,115
Amortization of purchased intangibles	876		923		1,750		1,822
Gain on divestiture	—		—		(17,591)		—
Unallocated corporate expenses	33,396		96,859		112,877		182,643
Operating income (loss)	$	5,638	$	(70,249)	$	(27,031)	$	(134,434)

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(1)On March 20, 2023, the Company completed the sale of Kasamba and therefore ceased recognizing revenue related to Kasamba effective on the transaction close date. Further, this sale eliminated the entire Consumer segment, as a result of which revenue is presented within a single consolidated segment. Hosted services includes $7.2 million for the six months ended June 30, 2023, and $9.1 million and $18.3 million of revenue for the three and six months ended June 30, 2022, respectively, relating to Kasamba.

During the first quarter of 2023, the Company completed the sale of Kasamba, which was reported under the Consumer segment, and had ceased recognizing revenues and expenses effective the transaction close date. As a result, the divestiture of Kasamba eliminates the Company’s Consumer segment as the Company focuses on the core Business segment. See Note 20 –Divestiture, for further details.

Geographic Information

The Company is domiciled in the United States and has international operations around the globe. The following table presents the Company’s long-lived assets by geographic region as of the dates set forth below:

	June 30, 2023		December 31, 2022
	(In thousands)
United States	$	465,914	$	476,040
Germany	46,123		46,323
Israel	—		4,064
Australia	11,741		12,057
Netherlands	6,090		3,470
Other (1)	14,149		13,520
Total long-lived assets	$	544,017	$	555,474

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(1)United Kingdom, Japan, France, Italy, Spain, Canada, and Singapore.