Business Segments and International Operations

Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance. Our chief operating decision maker is our Chief Executive Officer.

We operate as three distinct business segments: OpenEdge, Data Connectivity and Integration, and Application Development and Deployment.

We do not manage our assets or capital expenditures by segment or assign other income (expense) and income taxes to segments. We manage and report such items on a consolidated company basis.

The following table provides revenue and contribution margin from our reportable segments and reconciles to our consolidated income before income taxes:



	Three Months Ended						Six Months Ended
(In thousands)	May 31, 2018			May 31, 2017			May 31, 2018			May 31, 2017
Segment revenue:
OpenEdge	$	69,967		$	65,890		$	136,375		$	130,398
Data Connectivity and Integration	5,788			7,096			13,392			13,924
Application Development and Deployment	20,347			20,227			40,382			39,861
Total revenue	96,102			93,213			190,149			184,183
Segment costs of revenue and operating expenses:
OpenEdge	15,013			16,287			30,775			34,164
Data Connectivity and Integration	1,674			2,069			3,303			4,331
Application Development and Deployment	6,199			5,991			12,997			13,527
Total costs of revenue and operating expenses	22,886			24,347			47,075			52,022
Segment contribution margin:
OpenEdge	54,954			49,603			105,600			96,234
Data Connectivity and Integration	4,114			5,027			10,089			9,593
Application Development and Deployment	14,148			14,236			27,385			26,334
Total contribution margin	73,216			68,866			143,074			132,161
Other unallocated expenses (1)	51,428			48,582			103,518			110,655
Income from operations	21,788			20,284			39,556			21,506
Other (expense) income, net	(1,284		)	(1,552		)	(2,869		)	(2,899		)
Income before income taxes	$	20,504		$	18,732		$	36,687		$	18,607

(1) The following expenses are not allocated to our segments as we manage and report our business in these functional areas on a consolidated basis only: certain product development and corporate sales and marketing expenses, customer support, administration, amortization and impairment of acquired intangibles, impairment of goodwill, stock-based compensation, fees related to shareholder activist, restructuring, and acquisition-related expenses.

Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from customers by revenue type is as follows (in thousands):



	Three Months Ended				Six Months Ended
(In thousands)	May 31, 2018		May 31, 2017		May 31, 2018		May 31, 2017
Software licenses	$	26,439	$	25,592	$	51,782	$	49,914
Maintenance	62,323		59,898		123,802		119,036
Services	7,340		7,723		14,565		15,233
Total revenue	$	96,102	$	93,213	$	190,149	$	184,183

In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):



	Three Months Ended				Six Months Ended
(In thousands)	May 31, 2018		May 31, 2017		May 31, 2018		May 31, 2017
North America	$	50,823	$	51,430	$	102,464	$	101,735
EMEA	35,333		30,646		68,347		60,490
Latin America	4,256		5,637		8,717		10,660
Asia Pacific	5,690		5,500		10,621		11,298
Total revenue	$	96,102	$	93,213	$	190,149	$	184,183