Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

During the first quarter of 2015, the Company implemented strategic and organizational changes that resulted in two segments: Software-Systems and Embedded Products and Hardware Services. The Company's Chief Executive Officer, or chief operating decision maker, regularly reviews discrete financial information for purposes of allocating resources and assessing the performance of each segment:

• Software-Systems. Software-Systems products are comprised of three product families: FlowEngine, MediaEngine and CellEngine.

• Embedded Products and Hardware Services. These hardware based products provide platforms to control and move data in the core of the telecom network.

Cost of sales, research and development and selling, general and administrative expenses are allocated to Software-Systems and Embedded Products and Hardware Services. Expenses, reversals, gains and losses not allocated to Software-Systems or Embedded Product and Hardware Services include amortization of acquired intangible assets, stock-based compensation, restructuring and other charges, and other one-time non-recurring events. These items are allocated to corporate and other.

The Company recorded the following revenues, gross margin and income (loss) from operations by operating segment for the three months ended March 31, 2015 and 2014 (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Revenue
Software-Systems	$	9,689	$	7,841
Embedded Products and Hardware Services	38,998		35,958
Total revenues	$	48,687	$	43,799

	Three Months Ended
	March 31,
	2015			2014
Gross margin
Software-Systems	$	5,328		$	5,198
Embedded Products and Hardware Services	9,344			8,135
Corporate and other	(2,046		)	(2,185		)
Total gross margin	$	12,626		$	11,148

	Three Months Ended
	March 31,
	2015			2014
Income (loss) from operations
Software-Systems	$	(2,902	)	$	(2,864	)
Embedded Products and Hardware Services	3,957			(828		)
Corporate and other	(8,048		)	(5,772		)
Total loss from operations	$	(6,993	)	$	(9,464	)

Assets are not allocated to segments for internal reporting presentations. A portion of depreciation is allocated to the respective segment. It is impracticable for the Company to separately identify the amount of depreciation by segment that is included in the measure of segment profit or loss.

Revenues by geographic area were as follows (in thousands):

	Three Months Ended
	March 31,
	2015		2014
United States	$	21,172	$	15,706
Other North America	45		1,124
China	11,693		7,027
Japan	2,383		7,208
Other Asia Pacific	3,109		3,260
Asia Pacific ("APAC")	17,185		17,495
Netherlands	4,362		5,039
Other EMEA	5,923		4,435
Europe, the Middle East and Africa (“EMEA”)	10,285		9,474
Foreign Countries	27,515		28,093
Total	$	48,687	$	43,799

Long-lived assets by geographic area are as follows (in thousands):

	March 31, 2015		December 31, 2014
Property and equipment, net
United States	$	4,107	$	4,558
Other North America	542		672
China	2,217		2,427
Other APAC	8		11
Total APAC	2,225		2,438
India	1,915		2,115
Other EMEA	2		3
Total EMEA	1,917		2,118
Foreign Countries	4,684		5,228
Total property and equipment, net	$	8,791	$	9,786
Intangible assets, net
United States	$	39,970	$	43,224
Total intangible assets, net	$	39,970	$	43,224

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended
	March 31,
	2015		2014
Nokia Networks	26.2	%	18.0	%
Philips Healthcare	11.9	%	14.2	%
NEC	N/A		13.7	%

The following customers accounted for more than 10% of accounts receivable:
	March 31, 2015		December 31, 2014
Nokia Networks	28.4	%	18.5	%
Philips Healthcare	12.5	%	13.9	%