Segment Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

The Company is made up of two operating segments: Software-Systems and Hardware Solutions. 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 service providers.

• Hardware Solutions. Hardware Solutions includes the Company's DCEngine products and legacy embedded product portfolio which includes hardware solutions targeted for service providers.

Cost of sales, research and development and selling, general and administrative expenses are allocated to Software-Systems and Hardware Solutions. Expenses, reversals, gains and losses not allocated to Software-Systems or Hardware Solutions 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, 2017 and 2016 (in thousands):

	Three Months Ended
	March 31,
	2017		2016
Revenue
Software-Systems	$	10,149	$	14,059
Hardware Solutions	27,461		41,087
Total revenues	$	37,610	$	55,146

	Three Months Ended
	March 31,
	2017			2016
Gross margin
Software-Systems	$	5,465		$	8,788
Hardware Solutions	4,781			5,969
Corporate and other	(2,024		)	(1,973		)
Total gross margin	$	8,222		$	12,784

	Three Months Ended
	March 31,
	2017			2016
Income (loss) from operations
Software-Systems	$	(3,273	)	$	780
Hardware Solutions	(1,286		)	1,327
Corporate and other	(4,576		)	(4,557		)
Total loss from operations	$	(9,135	)	$	(2,450	)

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
	March 31,
	2017		2016
United States	$	23,152	$	37,765
Other North America	19		78
Asia Pacific ("APAC")	5,419		7,618
Netherlands	5,223		7,235
Other EMEA	3,797		2,450
Europe, the Middle East and Africa (“EMEA”)	9,020		9,685
Foreign Countries	14,458		17,381
Total	$	37,610	$	55,146

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

	March 31, 2017		December 31, 2016
Property and equipment, net
United States	$	4,950	$	4,566
Other North America	102		129
China	406		438
India	1,867		1,580
Total APAC	2,273		2,018
Foreign Countries	2,375		2,147
Total property and equipment, net	$	7,325	$	6,713
Intangible assets, net
United States	$	14,388	$	17,575
Total intangible assets, net	$	14,388	$	17,575

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended
	March 31,
	2017		2016
Customer A	41.2	%	42.3	%
Customer B	15.0	%	14.3	%

The following customers accounted for more than 10% of accounts receivable:
	March 31, 2017		December 31, 2016
Customer A	37.7	%	10.4	%
Customer D	24.0	%	32.6	%
Customer B	N/A		15.4	%