XML 37 R24.htm IDEA: XBRL DOCUMENT v3.22.4
Segment Information
 12 Months Ended
Dec. 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. Goodwill impairment charges are recognized in Corporate unallocated. Refer to Note 5: Goodwill for discussion of goodwill impairment recognized during the second quarter of 2022. 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. The Industrial Internet of Things (IIoT) solutions supported by this segment include automated meter reading (AMR), advanced metering infrastructure (AMI), distributed energy resource management (DERMs), 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 utility 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 raw, anonymized and aggregated data to improve decision making, maximize operational profitability, drive resource efficiency, improve grid analytics, and deliver results for consumers, utilities, and smart cities. Outcomes supports high-value use cases such as data management, grid operations, distributed intelligence, operations management, gas distribution and safety, water operations management, revenue assurance, DERMs, energy forecasting, consumer engagement, smart payment, and fleet energy resource management. Utilities leverage these outcomes to capitalize on the power of networks and devices, empower their workforce, maximize their operations and enhance the customer experience. 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.
Revenues, gross profit, and operating income associated with our operating segments were as follows:
Year Ended December 31,
In thousands202220212020
Product revenues
Device Solutions$433,354 $635,103 $684,517 
Networked Solutions1,002,156 974,531 1,148,698 
Outcomes64,733 68,561 55,958 
Total Company$1,500,243 $1,678,195 $1,889,173 
Service revenues
Device Solutions$5,356 $10,001 $9,478 
Networked Solutions117,112 118,100 100,704 
Outcomes172,853 175,276 173,995 
Total Company$295,321 $303,377 $284,177 
Total revenues
Device Solutions$438,710 $645,104 $693,995 
Networked Solutions1,119,268 1,092,631 1,249,402 
Outcomes237,586 243,837 229,953 
Total Company$1,795,564 $1,981,572 $2,173,350 
Gross profit
Device Solutions$61,778 $99,355 $86,859 
Networked Solutions361,975 378,633 432,906 
Outcomes98,436 95,181 82,402 
Total Company$522,189 $573,169 $602,167 
Operating income (loss)
Device Solutions$26,703 $57,217 $40,769 
Networked Solutions248,268 254,434 308,099 
Outcomes46,247 50,631 47,619 
Corporate unallocated(328,657)(441,581)(406,882)
Total Company(7,439)(79,299)(10,395)
Total other income (expense)(8,304)(44,511)(46,244)
Loss before income taxes$(15,743)$(123,810)$(56,639)

Our Corporate unallocated operating loss for the years ended December 31, 2022 and 2021 include losses from the sale of businesses of $3.5 million and $64.3 million. Refer to Note 18: Sale of Businesses for additional information on the transactions.

For all periods presented, no single customer represents more than 10% of total company revenue.
Revenues by region were as follows:
Year Ended December 31,
In thousands202220212020
United States and Canada$1,302,241 $1,273,868 $1,434,577 
Europe, Middle East, and Africa391,556 568,008 594,264 
Asia Pacific and Latin America (1)
101,767 139,696 144,509 
Total Company$1,795,564 $1,981,572 $2,173,350 
(1)On June 25, 2020, we sold our Latin American operations. We continue to sell into the region through a distributor.

Property, plant, and equipment, net, by geographic area were as follows:
At December 31,
In thousands20222021
United States$85,704 $94,899 
Outside United States54,419 68,285 
Total Company$140,123 $163,184 

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:
Year Ended December 31,
In thousands202220212020
Device Solutions$14,452 $22,884 $25,058 
Networked Solutions17,539 16,607 16,965 
Outcomes5,501 4,454 5,348 
Corporate unallocated29,271 40,208 49,919 
Total Company$66,763 $84,153 $97,290