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Segment Information
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment Information 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. These products generally do not have communications capability or may be designed for use with non-Itron systems. 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 and designed to meet market requirements; and the implementation and installation of said hardware products.

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, and associated head-end management and 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) for electricity, water and gas; distributed energy resource management (DERMs); smart grid and distribution automation; smart street lighting; and leak detection and applications for both gas and water systems. Our IIoT platform allows utility and smart city applications to be run and managed on a flexible multi-purpose network.

Outcomes – This segment primarily includes our value-added, enhanced software and services, artificial intelligence, and machine learning in which we enable grid edge intelligence and manage, organize, analyze, and interpret raw, anonymized data to improve decision making, maximize operational profitability, enhance 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, AMI operations, 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 unlock the capabilities of their networks and devices, improve the productivity of their workforce, increase the reliability of their operations, manage and optimize the proliferation of distributed energy resources (DERs), address grid complexity, and enhance the customer experience. Revenue from these offerings are primarily recurring in nature and would include any direct management of Device Solutions, Networked Solutions, and other third-parties' 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 March 31,
In thousands20242023
Product revenues
Device Solutions$125,908 $117,451 
Networked Solutions381,305 281,470 
Outcomes20,609 17,403 
Total Company$527,822 $416,324 
Service revenues
Device Solutions$844 $803 
Networked Solutions26,211 31,998 
Outcomes48,565 45,493 
Total Company$75,620 $78,294 
Total revenues
Device Solutions$126,752 $118,254 
Networked Solutions407,516 313,468 
Outcomes69,174 62,896 
Total Company$603,442 $494,618 
Gross profit
Device Solutions$30,064 $23,713 
Networked Solutions151,025 105,776 
Outcomes24,290 26,879 
Total Company$205,379 $156,368 
Operating income (loss)
Device Solutions$21,703 $14,078 
Networked Solutions116,678 74,956 
Outcomes9,091 12,911 
Corporate unallocated(84,672)(112,338)
Total Company62,800 (10,393)
Total other income (expense)2,416 (1,714)
Income (loss) before income taxes$65,216 $(12,107)

For the three months ended March 31, 2024 and 2023, no single customer represented more than 10% of total company revenue.
Revenues by region were as follows:
Three Months Ended March 31,
In thousands20242023
United States and Canada$482,096 $372,842 
Europe, Middle East, and Africa98,656 98,744 
Asia Pacific22,690 23,032 
Total Company$603,442 $494,618 

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 thousands20242023
Device Solutions$2,598 $3,262 
Networked Solutions4,018 4,131 
Outcomes1,456 1,254 
Corporate unallocated4,672 5,816 
Total Company$12,744 $14,463