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 on a direct and indirect basis.


•	Hardware Solutions. Hardware Solutions includes the Company's embedded product portfolio and DCEngine products lines.

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 six months ended June 30, 2018 and 2017 (in thousands):



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Revenue
Software-Systems	$	13,663	$	11,488	$	24,811	$	21,637
Hardware Solutions	10,750		23,605		25,792		51,066
Total revenues	$	24,413	$	35,093	$	50,603	$	72,703



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Gross margin
Software-Systems	$	8,823		$	6,243		$	14,309		$	11,708
Hardware Solutions	2,242			5,732			5,349			10,513
Corporate and other	(1,913		)	(1,967		)	(3,538		)	(3,991		)
Total gross margin	$	9,152		$	10,008		$	16,120		$	18,230



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Income (loss) from operations
Software-Systems	$	923		$	(1,943	)	$	(2,198	)	$	(5,216	)
Hardware Solutions	788			208			1,796			(1,078		)
Corporate and other	(3,735		)	(4,960		)	(7,443		)	(9,536		)
Total loss from operations	$	(2,024	)	$	(6,695	)	$	(7,845	)	$	(15,830	)

Assets are not allocated to segments for internal reporting presentations. A portion of depreciation is allocated to the respective segment. It is impracticable for the Company to separately identify fixed assets by segment whose depreciation 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,
	2018		2017		2018		2017
United States	$	10,366	$	14,776	$	18,987	$	37,928
Other North America	142		415		294		434
Asia Pacific ("APAC")	4,243		6,697		9,446		12,116
Netherlands	4,409		8,378		12,113		13,601
Other EMEA	5,253		4,827		9,763		8,624
Europe, the Middle East and Africa (“EMEA”)	9,662		13,205		21,876		22,225
Foreign Countries	14,047		20,317		31,616		34,775
Total	$	24,413	$	35,093	$	50,603	$	72,703

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



	June 30, 2018		December 31, 2017
Property and equipment, net
United States	$	2,332	$	2,974
Other North America	6		33
China	53		163
India	1,178		1,558
Total APAC	1,231		1,721
Foreign Countries	1,237		1,754
Total property and equipment, net	$	3,569	$	4,728

Intangible assets, net
United States	$	2,613	$	6,862
Total intangible assets, net	$	2,613	$	6,862



The following customers accounted for more than 10% of the Company's total revenues:
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Customer A	30.1	%	25.9	%	35.6	%	20.3	%
Customer C	N/A		13.7	%	10.9	%	10.9	%
Customer D	N/A		21.8	%	N/A		31.9	%



The following customers accounted for more than 10% of accounts receivable:
	June 30, 2018		December 31, 2017
Customer A	27.3	%	19.1	%
Customer B	15.3	%	18.7	%
Customer C	11.2	%	14.5	%