10. Segment Information

The Company reports financial performance based on its segments, ACI On Premise and ACI On Demand, and analyzes Segment Adjusted EBITDA as a measure of segment profitability.

The Company’s chief operating decision maker (“CODM”), which is also our Chief Executive Officer, together with other senior management personnel, focus their review of consolidated financial information and the allocation of resources based upon the operating results, including revenues and Segment Adjusted EBITDA, for the segments ACI On Premise and ACI On Demand, separate from the Corporate operations.

ACI On Premise serves customers who manage their software on site. These on premise customers use the Company’s software to develop sophisticated solutions, which are often part of a larger system located and managed at the customer site. These customers require a level of control and flexibility that ACI On Premise solutions can offer, and they have the resources and expertise to take a lead role in managing these solutions.

ACI On Demand serves the needs of retail and financial institutions who use payments to facilitate their core business. The Company sees an increasing number of customers opting for SaaS and PaaS offerings, which offer reduced complexity and cost as well as the ability to rapidly implement and scale.

Revenue is attributed to the reportable segments based upon the product sold and mechanism for delivery to the customer. Expenses are attributed to the reportable segments in one of three methods, (1) direct costs of the segment, (2) labor costs that can be attributed based upon time tracking for individual products, or (3) costs that are allocated. Allocated costs are generally marketing and sales related activities as well as information technology and facilities related expense for which multiple segments benefit. The Company also allocates certain depreciation costs to the segments.

Segment Adjusted EBITDA is the measure reported to the CODM for purposes of making decisions on allocating resources and assessing the performance of the Company’s segments and, therefore, Segment Adjusted EBITDA is presented in conformity with ASC 280, Segment Reporting. Segment Adjusted EBITDA is defined as earnings (loss) from operations before interest, income tax expense (benefit), depreciation and amortization (“EBITDA”) adjusted to exclude stock-based compensation, and net other income (expense). During the first quarter of 2018, the Company changed the presentation of its segment measure of profit and loss. As a result the 2017 segment disclosure has been recast to conform with the 2018 presentation.

Corporate and other unallocated expenses consists of the corporate overhead costs that are not allocated to reportable segments. These overhead costs relate to human resources, finance, legal, accounting, merger and acquisition activity, and other costs that are not considered when management evaluates segment performance.

The following is selected financial data for the Company’s reportable segments (in thousands):


	Three Months Ended
	March 31, 2018			March 31, 2017
Revenue
ACI On Premise	$	105,030		$	131,908
ACI On Demand		104,280			99,554

Total revenue	$	209,310		$	231,462

Segment Adjusted EBITDA
ACI On Premise	$	38,898		$	68,395
ACI On Demand		(4,233	)		(7,007	)
Depreciation and amortization		(24,993	)		(25,638	)
Stock-based compensation		(6,362	)		(6,297	)
Corporate and unallocated expenses		(20,014	)		(25,830	)
Interest, net		(6,621	)		(10,054	)
Other, net		(55	)		649

Loss before income taxes	$	(23,380	)	$	(5,782	)

Depreciation and amortization
ACI On Premise	$	2,975		$	3,261
ACI On Demand		7,736			8,388
Corporate		14,282			13,989

Total depreciation and amortization	$	24,993		$	25,638

Assets are not allocated to segments and the Company’s CODM does not evaluate operating segments using discrete asset information.

The following is selected financial data for the Company’s geographical areas and revenues by geographic location and primary solution category for the periods indicated (in thousands):


	Three Months Ended March 31, 2018						Three Months Ended March 31, 2017
(in thousands)	ACI On Premise		ACI On Demand		Total		ACI On Premise		ACI On Demand		Total
Primary Geographic Markets
Americas - United States		30,864		88,946		119,810		49,193		85,809		135,002
Americas - Other		16,784		2,319		19,103		14,874		2,252		17,126
EMEA		38,686		12,009		50,695		51,904		11,079		62,983
Asia Pacific		18,696		1,006		19,702		15,937		414		16,351

Total	$	105,030	$	104,280	$	209,310	$	131,908	$	99,554	$	231,462

Primary Solution Categories
Bill Payments		—		66,168		66,168		—		65,246		65,246
Digital Channels/Online		11,363		10,644		22,007		12,488		10,491		22,979
Merchant Payments		5,010		12,371		17,381		6,312		11,359		17,671
Payments Risk Management		10,420		11,798		22,218		5,160		10,308		15,468
Real Time Payments		13,641		450		14,091		13,548		195		13,743
Retail Payments		64,596		2,849		67,445		94,400		1,955		96,355

Total	$	105,030	$	104,280	$	209,310	$	131,908	$	99,554	$	231,462

The following is selected financial data for the Company’s long-lived assets by geographic location for the periods indicated (in thousands):


(in thousands)	March 31, 2018		December 31, 2017
Long lived assets
United States	$	854,156	$	759,513
Other		719,610		613,556

	$	1,573,766	$	1,373,069

No single customer accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2018 and 2017. No other country outside the United States accounted for more than 10% of the Company’s consolidated revenues during the three months ended March 31, 2018 and 2017.