Segment Reporting and Geographic Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

25. Segment Reporting and Geographic Information

The Company operates its business along two operating segments, which are segregated based on the basis of revenue stream: Service Based Gaming and Virtual Sports (which includes Interactive). The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the periods ended June 30, 2019 and 2018, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company's reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions.

As a result of improved processes that have allowed us to more accurately allocate costs between reporting segments, we have reclassified the previously reported segment allocation of selling, general and administrative expenses and stock-based compensation expense for the three and six months ended June 30, 2018.

Segment Information

Three Months Ended June 30, 2019

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	16.4		$	9.2		$	—		$	25.6
Hardware		1.1			—			—			1.1
Total revenue		17.5			9.2			—			26.7
Cost of sales, excluding depreciation and amortization:
Cost of service		(4.4	)		(0.9	)		—			(5.3	)
Cost of hardware		(1.0	)		—			—			(1.0	)
Selling, general and administrative expenses		(6.0	)		(2.1	)		(4.7	)		(12.8	)
Stock-based compensation expense		(0.5	)		(0.3	)		(1.5	)		(2.3	)
Acquisition related transaction expenses		—			—			(0.7	)		(0.7	)
Depreciation and amortization		(7.2	)		(1.4	)		(0.5	)		(9.1	)
Segment operating income (loss)		(1.6	)		4.5			(7.4	)		(4.5	)
Net operating loss										$	(4.5	)
Total assets at June 30, 2019	$	81.0		$	64.9		$	41.8		$	187.7
Total goodwill at June 30, 2019	$	—		$	44.7		$	—		$	44.7
Total capital expenditures for the three months ended June 30, 2019	$	2.1		$	1.6		$	0.5		$	4.2

Three Months Ended June 30, 2018

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	24.5		$	10.0		$	—		$	34.5
Hardware		2.4			—			—			2.4
Total revenue		26.9			10.0			—			36.9
Cost of sales, excluding depreciation and amortization:
Cost of service		(4.6	)		(1.3	)		—			(5.9	)
Cost of hardware		(2.1	)		—			—			(2.1	)
Selling, general and administrative expenses		(8.5	)		(2.4	)		(4.3	)		(15.2	)
Stock-based compensation expense		(0.3	)		(0.2	)		(1.0	)		(1.5	)
Depreciation and amortization		(8.8	)		(1.5	)		(0.3	)		(10.6	)
Segment operating income (loss)		2.6			4.6			(5.6	)		1.6
Net operating loss										$	1.6
Total assets at September 30, 2018	$	103.4		$	69.5		$	35.0		$	207.9
Total goodwill at September 30, 2018	$	—		$	45.8		$	—		$	45.8
Total capital expenditures for the three months ended June 30, 2018	$	11.9		$	2.2		$	—		$	14.1

Six Months Ended June 30, 2019

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	37.2		$	19.2		$	—		$	56.4
Hardware		4.0			—			—			4.0
Total revenue		41.2			19.2			—			60.4
Cost of sales, excluding depreciation and amortization:
Cost of service		(8.8	)		(1.9	)		—			(10.7	)
Cost of hardware		(2.6	)		—			—			(2.6	)
Selling, general and administrative expenses		(12.6	)		(4.3	)		(10.6	)		(27.5	)
Stock-based compensation expense		(0.9	)		(0.6	)		(2.9	)		(4.4	)
Acquisition related transaction expenses		—			—			(1.6	)		(1.6	)
Depreciation and amortization		(14.9	)		(2.9	)		(1.0	)		(18.8	)
Segment operating income (loss)		1.4			9.5			(16.1	)		(5.2	)
Net operating loss										$	(5.2	)
Total capital expenditures for the six months ended June 30, 2019	$	5.0		$	3.0		$	0.7		$	8.7

Six Months Ended June 30, 2018

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	48.1		$	19.7		$	—		$	67.8
Hardware		6.6			—			—			6.6
Total revenue		54.7			19.7			—			74.4
Cost of sales, excluding depreciation and amortization:
Cost of service		(9.3	)		(2.6	)		—			(11.9	)
Cost of hardware		(6.2	)		—			—			(6.2	)
Selling, general and administrative expenses		(16.7	)		(5.3	)		(8.9	)		(30.9	)
Stock-based compensation expense		(0.6	)		(0.5	)		(1.6	)		(2.7	)
Acquisition related transaction expenses		—			—			(0.2	)		(0.2	)
Depreciation and amortization		(17.5	)		(3.6	)		(0.6	)		(21.7	)
Segment operating income (loss)		4.4			7.7			(11.3	)		0.8
Net operating loss										$	0.8
Total capital expenditures for the six months ended June 30, 2018	$	20.7		$	3.7		$	0.1		$	24.5

Geographic Information

Geographic information for revenue is set forth below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)				(in millions)
Total revenue
UK	$	15.5	$	22.6	$	37.7	$	47.2
Greece		4.8		7.6		9.6		13.1
Italy		4.2		4.2		8.4		9.0
Rest of world		2.2		2.5		4.7		5.1
Total	$	26.7	$	36.9	$	60.4	$	74.4

Geographic information of our non-current assets excluding goodwill is set forth below:

	June 30, 2019		September 30, 2018
	(in millions)
Total non-current assets excluding goodwill
UK	$	45.1	$	60.0
Greece		28.4		36.2
Italy		2.1		3.4
Rest of world		5.1		3.9
Total	$	80.7	$	103.5

Software development costs are included as attributable to the market in which they are utilized.