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Segment Information
 6 Months Ended
Jun. 30, 2023
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. 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 (loss) associated with our operating segments were as follows:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2023202220232022
Product revenues
Device Solutions$112,509 $103,433 $229,960 $241,319 
Networked Solutions330,668 241,592 612,138 490,860 
Outcomes21,626 14,873 39,029 27,529 
Total Company$464,803 $359,898 $881,127 $759,708 
Service revenues
Device Solutions$651 $1,377 $1,454 $3,056 
Networked Solutions30,262 27,870 62,260 57,422 
Outcomes45,354 42,737 90,847 87,027 
Total Company$76,267 $71,984 $154,561 $147,505 
Total revenues
Device Solutions$113,160 $104,810 $231,414 $244,375 
Networked Solutions360,930 269,462 674,398 548,282 
Outcomes66,980 57,610 129,876 114,556 
Total Company$541,070 $431,882 $1,035,688 $907,213 
Gross profit
Device Solutions$24,719 $13,878 $48,432 $35,684 
Networked Solutions121,873 89,909 227,649 181,260 
Outcomes27,355 22,318 54,234 44,385 
Total Company$173,947 $126,105 $330,315 $261,329 
Operating income (loss)
Device Solutions$14,084 $5,459 $28,162 $17,037 
Networked Solutions88,593 62,282 163,549 123,289 
Outcomes12,676 9,109 25,587 17,450 
Corporate unallocated(80,253)(110,377)(192,591)(184,484)
Total Company35,100 (33,527)24,707 (26,708)
Total other income (expense)(802)(2,697)(2,516)(4,761)
Income (loss) before income taxes$34,298 $(36,224)$22,191 $(31,469)
For the three and six months ended June 30, 2023 and 2022, no single customer represented more than 10% of total company revenue.

Revenues by region were as follows:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2023202220232022
United States and Canada$430,617 $311,831 $803,459 $629,724 
Europe, Middle East, and Africa85,676 96,921 184,420 226,227 
Asia Pacific24,777 23,130 47,809 51,262 
Total Company$541,070 $431,882 $1,035,688 $907,213 

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 June 30,Six Months Ended June 30,
In thousands2023202220232022
Device Solutions$3,229 $3,549 $6,491 $7,483 
Networked Solutions4,068 4,285 8,199 8,725 
Outcomes1,224 1,218 2,478 2,127 
Corporate unallocated5,384 7,362 11,200 14,916 
Total Company$13,905 $16,414 $28,368 $33,251