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Segment Information
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Information
We operate under the Itron brand worldwide and manage and report under three operating segments: Device Solutions, Networked Solutions, and Outcomes.

We have three GAAP measures of segment performance: revenues, gross profit (gross margin), and operating income (operating margin). Intersegment revenues are minimal. Certain operating expenses are allocated to the operating segments based upon internally established allocation methodologies. Corporate operating expenses, interest income, interest expense, other income (expense), and the income tax provision (benefit) are neither allocated to the segments, nor are they included in the measure of segment performance. In addition, we allocate only certain production assets and intangible assets to our operating segments. We do not manage the performance of the segments on a balance sheet basis.

Segment Products

Device Solutions – This segment primarily includes hardware products used for measurement, control, or sensing that do not have communications capability embedded for use with our broader Itron systems, i.e., hardware-based products not part of a complete end-to-end solution. Examples from the Device Solutions portfolio include: standard endpoints that are shipped without Itron communications, such as our standard gas, electricity, and water meters for a variety of global markets and adhering to regulations and standards within those markets, as well as our heat and allocation products; communicating meters that are not a part of an Itron end-to-end solution, such as Smart Spec meters; and the implementation and installation of non-communicating devices.

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, and associated application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. Networked Solutions includes products and software for the implementation, installation, and management of communicating devices and data networks. Examples from the Networked Solutions portfolio include: communicating measurement, control, or sensing endpoints, such as our Itron OpenWay® Centron and Riva meters, Itron traditional ERT® technology, Intelis smart gas meters, 500G gas communication modules, 500W water communication modules, GenX networking infrastructure products and network interface cards (NICs), Smart City control and management software, Distribution Automation bridge devices, and specific network control and management software applications. The Industrial Internet of Things (IIoT) solutions supported by this segment include automated meter reading (AMR), advanced metering infrastructure (AMI), smart grid and distribution automation, smart street lighting, and an ever-growing set of smart city applications such as traffic management, smart parking, air quality monitoring, electric vehicle charging, customer engagement, digital signage, acoustic (e.g., gunshot) detection, and leak detection and mitigation for both gas and water systems. Our IIoT platform allows all these industry and smart city applications to be run and managed on a single, multi-purpose network.

Outcomes – This segment primarily includes our value-added, enhanced software and services in which we manage, organize, analyze, and interpret data to improve decision making, maximize operational profitability, drive resource efficiency, and deliver results for consumers, utilities, and smart cities. Outcomes places an emphasis on delivering to Itron customers high-value, turn-key, digital experiences by leveraging the footprint of our Device Solutions and Networked Solutions segments. The revenues from these offerings are primarily recurring in nature and would include any direct management of Device Solutions, Networked Solutions, and other products on behalf of our end customers. Examples from the Outcomes portfolio include: our meter data management and analytics offerings; our managed service solutions including Network-as-a-Service (NaaS) and Platform-as-a-Service (PaaS); forecasting software and services; our Distributed Energy Management suite of products and services; our Distributed Intelligence suite of applications and services; and any consulting-based engagement. Within the Outcomes segment, we also identify new business models, including performance-based contracting, to drive broader portfolio offerings across utilities and cities.
Revenues, gross profit, and operating income associated with our operating segments were as follows:
Three Months Ended March 31,
In thousands20222021
Product revenues
Device Solutions$137,886 $170,331 
Networked Solutions249,268 258,703 
Outcomes12,656 13,770 
Total Company$399,810 $442,804 
Service revenues
Device Solutions$1,679 $2,450 
Networked Solutions29,552 29,611 
Outcomes44,290 44,709 
Total Company$75,521 $76,770 
Total revenues
Device Solutions$139,565 $172,781 
Networked Solutions278,820 288,314 
Outcomes56,946 58,479 
Total Company$475,331 $519,574 
Gross profit
Device Solutions$21,806 $32,296 
Networked Solutions91,351 112,759 
Outcomes22,067 21,989 
Total Company$135,224 $167,044 
Operating income (loss)
Device Solutions$11,578 $21,701 
Networked Solutions61,007 79,291 
Outcomes8,341 10,336 
Corporate unallocated(74,107)(80,388)
Total Company6,819 30,940 
Total other income (expense)(2,064)(12,699)
Income (loss) before income taxes$4,755 $18,241 

For the three months ended March 31, 2022 and 2021, no customer represented more than 10% of total company revenue.
Revenues by region were as follows:
Three Months Ended March 31,
In thousands20222021
United States and Canada$317,893 $325,536 
Europe, Middle East, and Africa129,306 160,369 
Asia Pacific28,132 33,669 
Total Company$475,331 $519,574 

Depreciation expense is allocated to the operating segments based upon each segment's use of the assets. All amortization expense is recognized within Corporate unallocated. Depreciation and amortization of intangible assets expense associated with our operating segments was as follows:
Three Months Ended March 31,
In thousands20222021
Device Solutions$3,934 $6,188 
Networked Solutions4,440 4,275 
Outcomes909 1,234 
Corporate unallocated7,554 10,113 
Total Company$16,837 $21,810