Segment Information

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Information

The Company is comprised 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 June 30, 2017 and 2016 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Revenue
Software-Systems	$	11,488	$	14,601	$	21,637	$	28,660
Hardware Solutions	23,605		46,687		51,066		87,774
Total revenues	$	35,093	$	61,288	$	72,703	$	116,434

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Gross margin
Software-Systems	$	6,243		$	9,172		$	11,708		$	17,960
Hardware Solutions	5,732			8,331			10,513			14,300
Corporate and other	(1,967		)	(2,058		)	(3,991		)	(4,031		)
Total gross margin	$	10,008		$	15,445		$	18,230		$	28,229

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Income (loss) from operations
Software-Systems	$	(1,943	)	$	31		$	(5,216	)	$	811
Hardware Solutions	208			3,681			(1,078		)	5,008
Corporate and other	(4,960		)	(4,644		)	(9,536		)	(9,201		)
Total loss from operations	$	(6,695	)	$	(932	)	$	(15,830	)	$	(3,382	)

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,
	2017		2016		2017		2016
United States	$	14,776	$	44,275	$	37,928	$	82,040
Other North America	415		39		434		117
Asia Pacific ("APAC")	6,697		6,461		12,116		14,079
Netherlands	8,378		7,838		13,601		15,073
Other EMEA	4,827		2,675		8,624		5,125
Europe, the Middle East and Africa (“EMEA”)	13,205		10,513		22,225		20,198
Foreign Countries	20,317		17,013		34,775		34,394
Total	$	35,093	$	61,288	$	72,703	$	116,434

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

	June 30, 2017		December 31, 2016
Property and equipment, net
United States	$	4,925	$	4,566
Other North America	78		129
China	369		438
India	1,881		1,580
Total APAC	2,250		2,018
Foreign Countries	2,328		2,147
Total property and equipment, net	$	7,253	$	6,713
Intangible assets, net
United States	$	11,202	$	17,575
Total intangible assets, net	$	11,202	$	17,575

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Customer A	21.8	%	49.6	%	31.9	%	46.2	%
Customer B	25.9	%	13.4	%	20.3	%	13.8	%
Customer C	13.7	%	N/A		10.9	%	N/A

The following customers accounted for more than 10% of accounts receivable:
	June 30, 2017		December 31, 2016
Customer D	20.8	%	32.6	%
Customer A	18.8	%	10.4	%
Customer B	17.4	%	15.4	%