Segment Information

9 Months Ended

Sep. 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 MobilityEngine, 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 and nine months ended September 30, 2017 and 2016 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenue
Software-Systems	$	11,306	$	10,441	$	32,943	$	39,101
Hardware Solutions	17,467		44,956		68,533		132,730
Total revenues	$	28,773	$	55,397	$	101,476	$	171,831

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Gross margin
Software-Systems	$	5,420		$	6,226		$	17,128		$	24,186
Hardware Solutions	(2,302		)	10,070			8,211			24,370
Corporate and other	(1,923		)	(2,050		)	(5,914		)	(6,081		)
Total gross margin	$	1,195		$	14,246		$	19,425		$	42,475

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Income (loss) from operations
Software-Systems	$	(2,358	)	$	(2,201	)	$	(7,574	)	$	(1,390	)
Hardware Solutions	(7,885		)	4,946			(8,963		)	9,954
Corporate and other	(3,683		)	(4,828		)	(13,219		)	(14,029		)
Total loss from operations	$	(13,926	)	$	(2,083	)	$	(29,756	)	$	(5,465	)

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,
	2017		2016		2017		2016
United States	$	11,223	$	34,497	$	49,151	$	116,537
Other North America	269		44		703		161
Asia Pacific ("APAC")	5,703		7,946		17,819		22,025
Netherlands	7,849		8,197		21,450		23,270
Other EMEA	3,729		4,713		12,353		9,838
Europe, the Middle East and Africa (“EMEA”)	11,578		12,910		33,803		33,108
Foreign Countries	17,550		20,900		52,325		55,294
Total	$	28,773	$	55,397	$	101,476	$	171,831

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

	September 30, 2017		December 31, 2016
Property and equipment, net
United States	$	5,020	$	4,566
Other North America	55		129
China	354		438
India	1,702		1,580
Total APAC	2,056		2,018
Foreign Countries	2,111		2,147
Total property and equipment, net	$	7,131	$	6,713
Intangible assets, net
United States	$	8,986	$	17,575
Total intangible assets, net	$	8,986	$	17,575

The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Customer B	30.3	%	15.5	%	23.1	%	14.4	%
Customer A	N/A		33.7	%	25.5	%	42.1	%
Customer C	17.7	%	N/A		12.8	%	N/A

The following customers accounted for more than 10% of accounts receivable:
	September 30, 2017		December 31, 2016
Customer B	22.4	%	15.4	%
Customer D	21.7	%	32.6	%
Customer C	10.2	%	N/A
Customer A	N/A		10.4	%