Segment Information

9 Months Ended

Sep. 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 provides 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 nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue
Software-Systems	$	10,441	$	15,477	$	39,101	$	39,336
Embedded Products and Hardware Services	44,956		29,303		132,730		101,180
Total revenues	$	55,397	$	44,780	$	171,831	$	140,516

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Gross margin
Software-Systems	$	6,226		$	9,081		$	24,186		$	22,354
Embedded Products and Hardware Services	10,070			5,973			24,370			22,043
Corporate and other	(2,050		)	(2,047		)	(6,081		)	(6,163		)
Total gross margin	$	14,246		$	13,007		$	42,475		$	38,234

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Income (loss) from operations
Software-Systems	$	(2,201	)	$	743		$	(1,390	)	$	(3,126	)
Embedded Products and Hardware Services	4,946			1,782			9,954			8,112
Corporate and other	(4,828		)	(4,541		)	(14,029		)	(17,528		)
Total loss from operations	$	(2,083	)	$	(2,016	)	$	(5,465	)	$	(12,542	)

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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
United States	$	34,497	$	18,353	$	116,537	$	57,997
Other North America	44		186		161		473
China	2,767		5,859		8,432		26,414
India	1,730		6,549		5,480		12,494
Other Asia Pacific	3,449		6,798		8,113		19,108
Asia Pacific ("APAC")	7,946		19,206		22,025		58,016
Netherlands	8,197		3,404		23,270		10,591
Other EMEA	4,713		3,631		9,838		13,439
Europe, the Middle East and Africa (“EMEA”)	12,910		7,035		33,108		24,030
Foreign Countries	20,900		26,427		55,294		82,519
Total	$	55,397	$	44,780	$	171,831	$	140,516

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

	September 30, 2016		December 31, 2015
Property and equipment, net
United States	$	4,286	$	3,061
Other North America	169		257
China	643		1,231
India	1,518		1,584
Total APAC	2,161		2,815
EMEA	—		1
Foreign Countries	2,330		3,073
Total property and equipment, net	$	6,616	$	6,134
Intangible assets, net
United States	$	20,762	$	30,322
Total intangible assets, net	$	20,762	$	30,322

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Customer A	33.7	%	N/A		42.1	%	N/A
Customer B	15.5	%	N/A		14.4	%	N/A
Customer C	N/A		14.1	%	N/A		19.5	%
Customer D	N/A		14.2	%	N/A		N/A

The following customers accounted for more than 10% of accounts receivable:
	September 30, 2016		December 31, 2015
Customer A	40.0	%	36.0	%
Customer D	12.2	%	14.7	%
Customer B	11.7	%	N/A