Segment Reporting and Geographic Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

17. Segment Reporting and Geographic Information

The Company operates its business along three operating segments, which are segregated based on revenue stream: Service Based Gaming, Virtual Sports (which includes Interactive) and Acquired Businesses. 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 September 30, 2020 and 2019, 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, right of use assets, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions. All acquisition and integration related transaction expenses are allocated as corporate function costs.

As a result of improved processes that have allowed us to more accurately allocate assets between reporting segments, we have allocated our right of use asset between segments differently when compared to previous quarters.

Segment Information

Three Months Ended September 30, 2020

	Server Based Gaming			Virtual Sports			Acquired Businesses			Intergroup Eliminations			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	23.7		$	10.9		$	22.4		$	(0.6	)	$	—		$	56.4
Hardware		1.8			—			1.9			—			—			3.7
Total revenue		25.5			10.9			24.3			(0.6	)		—			60.1
Cost of sales, excluding depreciation and amortization:
Cost of service		(5.0	)		(1.2	)		(5.6	)		0.6			—			(11.2	)
Cost of hardware		(0.9	)		—			(1.6	)		—			—			(2.5	)
Selling, general and administrative expenses		(4.5	)		(1.4	)		(12.1	)		—			(3.9	)		(21.9	)
Stock-based compensation expense		(0.2	)		(0.2	)		—			—			(0.7	)		(1.1	)
Acquisition and integration related transaction expenses		—			—			—			—			(1.2	)		(1.2	)
Depreciation and amortization		(5.4	)		(1.5	)		(6.8	)		—			(0.3	)		(14.0	)
Segment operating income (loss)		9.5			6.6			(1.8	)		—			(6.1	)		8.2
Net operating income																$	8.2
Total assets at September 30, 2020	$	61.1		$	69.2		$	149.1		$	—		$	40.9		$	320.3
Total goodwill at September 30, 2020	$	—		$	45.4		$	33.9		$	—		$	—		$	79.3
Total capital expenditures for the three months ended September 30, 2020	$	1.2		$	1.8		$	2.4		$	—		$	1.0		$	6.4

Three Months Ended September 30, 2019

	Server Based Gaming			Virtual Sports			Acquired Businesses		Intergroup Eliminations		Corporate Functions			Total
	(in millions)
Revenue:
Service	$	15.5		$	8.3		$	—	$	—	$	—		$	23.8
Hardware		2.8			—			—		—		—			2.8
Total revenue		18.3			8.3			—		—		—			26.6
Cost of sales, excluding depreciation and amortization:								—		—
Cost of service		(4.1	)		(0.6	)		—		—		—			(4.7	)
Cost of hardware		(2.3	)		—			—		—		—			(2.3	)
Selling, general and administrative expenses		(5.7	)		(1.9	)		—		—		(3.9	)		(11.5	)
Stock-based compensation expense		(0.4	)		(0.3	)		—		—		(1.5	)		(2.2	)
Acquisition and integration related transaction expenses		—			—			—		—		(3.3	)		(3.3	)
Depreciation and amortization		(6.8	)		(1.3	)		—		—		(0.2	)		(8.3	)
Segment operating income (loss)		(1.0	)		4.2			—		—		(8.9	)		(5.7	)
Net operating loss														$	(5.7	)
Total assets at December 31, 2019	$	80.8		$	66.8		$	156.7	$	—	$	23.1		$	327.4
Total goodwill at December 31, 2019	$	—		$	46.4		$	34.5	$	—	$	—		$	80.9
Total capital expenditures for the three months ended September 30, 2019	$	3.7		$	1.4		$	—	$	—	$	0.2		$	5.3

Nine Months Ended September 30, 2020

	Server Based Gaming			Virtual Sports			Acquired Businesses			Intergroup Eliminations			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	40.7		$	29.7		$	45.6		$	(1.2	)	$	—		$	114.8
Hardware		5.5			—			7.9			(0.2	)		—			13.2
Total revenue		46.2			29.7			53.5			(1.4	)		—			128.0
Cost of sales, excluding depreciation and amortization:
Cost of service		(9.6	)		(3.3	)		(9.2	)		1.2			—			(20.9	)
Cost of hardware		(3.0	)		—			(6.8	)		—			—			(9.8	)
Selling, general and administrative expenses		(11.5	)		(4.2	)		(32.6	)		—			(13.3	)		(61.6	)
Stock-based compensation expense		(0.5	)		(0.4	)		—			—			(2.2	)		(3.1	)
Acquisition and integration related transaction expenses		—			—			—			—			(5.6	)		(5.6	)
Depreciation and amortization		(17.6	)		(4.3	)		(17.2	)		—			(0.8	)		(39.9	)
Segment operating income (loss)		4.0			17.5			(12.3	)		(0.2	)		(21.9	)		(12.9	)
Net operating loss																$	(12.9	)
Total capital expenditures for the nine months ended September 30, 2020	$	2.8		$	5.4		$	9.7		$	—		$	3.9		$	21.8

Nine Months Ended September 30, 2019

	Server Based Gaming			Virtual Sports			Acquired Businesses		Intergroup Eliminations		Corporate Functions			Total
	(in millions)
Revenue:
Service	$	52.7		$	27.5		$	—	$	—	$	—		$	80.2
Hardware		6.8			—			—		—		—			6.8
Total revenue		59.5			27.5			—		—		—			87.0
Cost of sales, excluding depreciation and amortization:
Cost of service		(12.9	)		(2.5	)		—		—		—			(15.4	)
Cost of hardware		(4.9	)		—			—		—		—			(4.9	)
Selling, general and administrative expenses		(18.3	)		(6.2	)		—		—		(14.5	)		(39.0	)
Stock-based compensation expense		(1.3	)		(1.0	)		—		—		(4.3	)		(6.6	)
Acquisition and integration related transaction expenses		—			—			—		—		(4.9	)		(4.9	)
Depreciation and amortization		(21.7	)		(4.2	)		—		—		(1.2	)		(27.1	)
Segment operating income (loss)		0.4			13.6			—		—		(24.9	)		(10.9	)
Net operating loss														$	(10.9	)
Total capital expenditures for the nine months ended September 30, 2019	$	8.7		$	4.4		$	—	$	—	$	0.9		$	14.0

Geographic Information

Geographic information for revenue is set forth below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in millions)				(in millions)
Total revenue
UK	$	47.8	$	16.0	$	95.4	$	53.7
Greece		5.7		4.9		13.1		14.5
Italy		2.6		3.6		6.2		12.0
Rest of world		4.0		2.1		13.3		6.8
Total	$	60.1	$	26.6	$	128.0	$	87.0

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

	September 30, 2020		December 31, 2019
	(in millions)
UK	$	99.8	$	116.1
Greece		19.7		26.5
Italy		2.2		2.3
Rest of world		8.3		6.3
Total	$	130.0	$	151.2

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