SEGMENT INFORMATION:

3 Months Ended

Jun. 30, 2016

SEGMENT INFORMATION:

SEGMENT INFORMATION:

9.SEGMENT INFORMATION:

The Company reports segment information consistent with the way management internally disaggregates its operations to assess performance and to allocate resources.

Revenues and cost of revenue are generally directly attributed to the segments. Certain revenue contracts are allocated among the segments based on the relative value of the underlying products and services. Cost of revenue, excluding non-cash stock compensation expense and purchased intangible asset amortization, is directly charged in most cases and allocated in certain cases based upon proportional usage. 

Operating expenses, excluding non-cash stock compensation expense and purchased intangible asset amortization, are attributed to the segment groups as follows:

· Research and development expenses are primarily directly recorded to each segment group based on identified products supported. 

· Sales and marketing expenses are primarily directly recorded to each segment group based on products supported and sold.  

· General and administrative expenses are generally not allocated to the segments unless directly attributable. 

· Gains, losses and other items, net are not allocated to the segment groups.

We do not track our assets by operating segments. Consequently, it is not practical to show assets by operating segment.

The following table presents information by business segment (dollars in thousands):

	For the Three months ended
	June 30,
	2016		2015
Revenues:
Marketing Services	$	109,715	$	107,726
Audience Solutions		73,744		68,550
Connectivity		31,342		20,619
Total segment revenues	$	214,801	$	196,895
Gross profit(1):
Marketing Services	$	37,466	$	36,034
Audience Solutions		41,912		36,824
Connectivity		17,575		11,953
Total segment gross profit	$	96,953	$	84,811
Income (loss) from operations(1):
Marketing Services	$	20,145	$	16,853
Audience Solutions		25,096		24,087
Connectivity		291		(791)
Total segment income from operations	$	45,532	$	40,149

⁽¹⁾ Gross profit and Income (loss) from operations reflect only the direct and allocable controllable costs of each segment and do not include allocations of corporate expenses (primarily general and administrative expenses) and gains, losses, and other items, net. Additionally, Gross profit and Income (loss) from operations do not reflect non-cash stock compensation expense and purchased intangible asset amortization.

The following table reconciles total operating segment gross profit to gross profit and total operating segment income from operations to income (loss) from operations:

	For the Three months ended
	June 30,
	2016		2015
Total segment gross profit	$	96,953	$	84,811
Less:
Purchased intangible asset amortization		4,077		3,754
Non-cash stock compensation		894		429
Accelerated amortization		—		1,442
Gross profit	$	91,982	$	79,186
Total segment income from operations	$	45,532	$	40,149
Less:
Corporate expenses (principally general and administrative)		24,389		25,478
Gains, losses and other items, net		314		807
Purchased intangible asset amortization		4,077		3,754
Non-cash stock compensation		8,590		8,123
Separation and transformation costs		—		3,414
Accelerated amortization		—		1,442
Income (loss) from operations	$	8,162	$	(2,869)