Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

The Company is made up of two operating 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 is comprised of three product lines: FlowEngine, MediaEngine and CellEngine, each of which delivers software-centric solutions to network operators.

• Embedded Products and Hardware Services. Embedded Products and Hardware Services includes the Company's DCEngine products which enables essential infrastructure enabling the transition of network operators to SDN and NFV environments and a variety of embedded products targeting applications in telecommunication networks, medical systems and aerospace and defense applications.

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 and six months ended June 30, 2016 and 2015 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenue
Software-Systems	$	14,601	$	14,170	$	28,660	$	23,859
Embedded Products and Hardware Services	46,687		32,879		87,774		71,877
Total revenues	$	61,288	$	47,049	$	116,434	$	95,736

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Gross margin
Software-Systems	$	9,172		$	7,945		$	17,960		$	13,273
Embedded Products and Hardware Services	8,331			6,725			14,300			16,069
Corporate and other	(2,058		)	(2,069		)	(4,031		)	(4,115		)
Total gross margin	$	15,445		$	12,601		$	28,229		$	25,227

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Income (loss) from operations
Software-Systems	$	31		$	(967	)	$	811		$	(3,869	)
Embedded Products and Hardware Services	3,681			2,373			5,008			6,330
Corporate and other	(4,644		)	(4,939		)	(9,201		)	(12,987		)
Total loss from operations	$	(932	)	$	(3,533	)	$	(3,382	)	$	(10,526	)

Assets are not allocated to segments for internal reporting purposes. 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				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
United States	$	44,275	$	18,472	$	82,040	$	39,644
Other North America	39		242		117		287
China	2,335		8,862		5,665		20,555
India	1,781		5,186		3,750		5,935
Other Asia Pacific	2,345		7,577		4,664		12,320
Asia Pacific ("APAC")	6,461		21,625		14,079		38,810
Netherlands	7,838		2,825		15,073		7,187
Other EMEA	2,675		3,885		5,125		9,808
Europe, the Middle East and Africa (“EMEA”)	10,513		6,710		20,198		16,995
Foreign Countries	17,013		28,577		34,394		56,092
Total	$	61,288	$	47,049	$	116,434	$	95,736

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

	June 30, 2016		December 31, 2015
Property and equipment, net
United States	$	2,747	$	3,061
Other North America	205		257
China	777		1,231
Total APAC	777		1,231
India	1,323		1,584
Other EMEA	—		1
Total EMEA	1,323		1,585
Foreign Countries	2,305		3,073
Total property and equipment, net	$	5,052	$	6,134
Intangible assets, net
United States	$	23,949	$	30,322
Total intangible assets, net	$	23,949	$	30,322

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Customer A	49.6	%	N/A		46.2	%	N/A
Customer B	13.4	%	N/A		13.8	%	10.0	%
Customer C	N/A		17.7	%	N/A		22.1	%
Customer D	N/A		10.5	%	N/A		N/A
Customer F	N/A		10.5	%	N/A		N/A

The following customers accounted for more than 10% of accounts receivable:
	June 30, 2016		December 31, 2015
Customer A	36.9	%	36.0	%
Customer D	11.8	%	14.7	%
Customer B	10.5	%	N/A