Segments

12 Months Ended

Sep. 30, 2019

SEGMENTS

The Company determines its operating segments based on ASC 280, Segment Reporting, how the chief operating decision making group monitors and manages the performance of the business and the level at which financial information is reviewed. The Company’s operating segments are strategic business units that offer different products and services.

The Company's core business is delivering seamless integrated payment and software solutions to SMBs and organizations in strategic vertical markets. This is accomplished through the Merchant Services and Proprietary Software and Payments segments.

The Merchant Services segment provides comprehensive payment solutions to businesses and organizations. The Merchant Services segment includes third-party integrated payment solutions as well as traditional payment services across the Company's strategic vertical markets.

The Proprietary Software and Payments segment delivers embedded payment solutions to the Company's clients through company-owned software. Payments are delivered through both the payment facilitator model and the traditional merchant processing model. The Company's Proprietary Software and Payments clients are primarily in the education, property management and public sector markets.

The Other category includes corporate overhead expenses, when presenting reportable segment information.

The Company primarily uses processing margin to measure operating performance. The following is a summary of reportable segment operating performance for the years ended September 30, 2019, 2018 and 2017.


	As of and for the Year ended September 30, 2019
	Merchant Services		Proprietary Software and Payments		Other		Total
Revenue	$	336,800	$	39,507	$	—	$	376,307

Operating expenses
Interchange and network fees	236,170		6,697		—		242,867
Other costs of services	41,309		2,928		—		44,237
Selling general and administrative	25,150		19,184		18,526		62,860
Depreciation and amortization	11,788		4,223		553		16,564
Change in fair value of contingent consideration	51		3,338		—		3,389
Income (loss) from operations	$	22,332	$	3,137	$	(19,079)	$	6,390

Processing margin⁽¹⁾	$	76,343	$	30,523	$	—	$	106,866
Total assets	$	203,326	$	112,514	$	33,462	$	349,302
Goodwill	$	108,472	$	59,812	$	—	$	168,284

__________________________

1.Processing margin is equal to revenue less interchange and network fees, less other costs of services, $17,022, $641 and $0 of residual expense, a component of other costs of services, are added back to the Merchant Services segment, Proprietary Software and Payments segment, and Other category, respectively.


	As of and for the Year ended September 30, 2018
	Merchant Services		Proprietary Software and Payments		Other		Total
Revenue	$	302,929	$	20,582	$	(3)	$	323,508

Operating expenses
Interchange and network fees	209,695		4,848		—		214,543
Other costs of services	38,399		1,916		(1)		40,314
Selling general and administrative	23,291		7,602		9,692		40,585
Depreciation and amortization	9,535		2,097		207		11,839
Change in fair value of contingent consideration	1,772		2,094		—		3,866
Income (loss) from operations	$	20,237	$	2,025	$	(9,901)	$	12,361

Processing margin⁽¹⁾	$	68,811	$	14,371	$	(2)	$	83,180
Total assets	$	141,977	$	28,339	$	4,826	$	175,142
Goodwill	$	69,666	$	14,288	$	—	$	83,954

__________________________

1.Processing margin is equal to revenue less interchange and network fees, less other costs of services. $13,976, $553 and $0 of residual expense, a component of other costs of services, are added back to the Merchant Services segment, Proprietary Software and Payments segment, and Other category, respectively.


	As of and for the Year ended September 30, 2017
	Merchant Services		Proprietary Software and Payments		Other		Total
Revenue	$	248,005	$	14,582	$	(16)	$	262,571

Operating expenses
Interchange and network fees	185,141		3,971		—		189,112
Other costs of services	27,350		1,559		(111)		28,798
Selling general and administrative	13,858		7,194		6,142		27,194
Depreciation and amortization	8,029		1,938		118		10,085
Change in fair value of contingent consideration	192		(410)		—		(218)
Income (loss) from operations	$	13,435	$	330	$	(6,165)	$	7,600

Processing margin(1)	$	47,389	$	9,423	$	(53)	$	56,759
Total assets	$	113,568	$	8,901	$	17,522	$	139,991
Goodwill	$	49,173	$	9,344	$	—	$	58,517

__________________________

1.Processing margin is equal to revenue less interchange and network fees, less other costs of services. $11,875, $371 and $(148) of residual expense, a component of other costs of services, are added back to the Merchant Services segment, Proprietary Software and Payments segment, and Other category, respectively.