Segment Information

9 Months Ended

Sep. 30, 2017

12. SEGMENT INFORMATION

We operate in two reportable segments: (1) Network Solutions and (2) Services & Support. Network Solutions includes hardware products and next-generation virtualized solutions used in service provider or business networks, as well as prior-generation products. Services & Support includes our suite of ProCloud^® managed services, network installation, engineering and maintenance services, and fee-based technical support and equipment repair/replacement plans.

We evaluate the performance of our segments based on gross profit; therefore, selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net realized investment gain/loss, other income/expense and provision for taxes are reported on a company-wide, functional basis only. There are no inter-segment revenues.

The following table presents information about the reported sales and gross profit of our reportable segments for the three and nine months ended September 30, 2017 and 2016. We do not produce asset information by reportable segment; therefore, it is not reported.

	Three Months Ended
	September 30, 2017				September 30, 2016
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Network Solutions	$	145,467	$	71,939	$	136,277	$	65,289
Services & Support		39,645		14,559		32,613		10,519
Total	$	185,112	$	86,498	$	168,890	$	75,808

	Nine Months Ended
	September 30, 2017				September 30, 2016
(In thousands)	Sales		Gross Profit		Sales		Gross Profit
Network Solutions	$	444,607	$	214,762	$	398,709	$	195,804
Services & Support		95,457		30,083		75,086		24,753
Total	$	540,064	$	244,845	$	473,795	$	220,557

Sales by Category

In addition to our reporting segments, we also report revenue for the following three categories – Access & Aggregation, Customer Devices, and Traditional & Other Products.

The table below presents sales information by category for the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2017		2016		2017		2016
Access & Aggregation	$	135,959	$	120,618	$	394,741	$	316,705
Customer Devices		35,582		32,984		105,683		106,213
Traditional & Other Products		13,571		15,288		39,640		50,877
Total	$	185,112	$	168,890	$	540,064	$	473,795