Segment Information

9 Months Ended

Mar. 31, 2016

Segment Information

Segment Information

14.  Segment Information

Operating segments are defined as 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 to assess performance. Our chief operating decision maker is our President and Chief Executive Officer.

The subscription and software segment is engaged in the licensing of process optimization software solutions and associated support services. The services segment includes professional services and training.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies (refer to Note 2 in the financial statements of our Form 10-K for the year ended June 30, 2015). We do not track assets or capital expenditures by operating segments. Consequently, it is not practical to present assets, capital expenditures, depreciation or amortization by operating segments.

The following table presents a summary of our reportable segments’ profits:

	Subscription and software			Services			Total
	(Dollars in Thousands)
Three Months Ended March 31, 2016
Segment revenue	$	111,722		$	7,495		$	119,217
Segment expenses (1)	(46,176		)	(6,754		)	(52,930		)
Segment profit	$	65,546		$	741		$	66,287
Three Months Ended March 31, 2015
Segment revenue	$	102,543		$	8,756		$	111,299
Segment expenses (1)	(48,887		)	(6,905		)	(55,792		)
Segment profit	$	53,656		$	1,851		$	55,507
Nine Months Ended March 31, 2016
Segment revenue	$	333,707		$	24,957		$	358,664
Segment expenses (1)	(132,577		)	(21,405		)	(153,982		)
Segment profit	$	201,130		$	3,552		$	204,682
Nine Months Ended March 31, 2015
Segment revenue	$	300,002		$	26,213		$	326,215
Segment expenses (1)	(135,960		)	(21,142		)	(157,102		)
Segment profit	$	164,042		$	5,071		$	169,113

(1) Our reportable segments’ operating expenses include expenses directly attributable to the segments. Segment expenses include selling and marketing, research and development, stock-based compensation and certain corporate expenses incurred in support of the segments. Segment expenses do not include allocations of general and administrative; interest income, net; and other income (expense), net.

Reconciliation to Income before Income Taxes

The following table presents a reconciliation of total segment profit to income before income taxes for the three and nine months ended March 31, 2016 and 2015:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2016			2015			2016			2015
	(Dollars in Thousands)
Total segment profit for reportable segments	$	66,287		$	55,507		$	204,682		$	169,113
General and administrative	(15,606		)	(13,776		)	(42,273		)	(36,227		)
Other income (expense), net	(2,686		)	414			(1,947		)	354
Interest income (net)	(240		)	121			(101		)	381
Income before income taxes	$	47,755		$	42,266		$	160,361		$	133,621