Segment and Geographical Information | 3 Months Ended |
Mar. 31, 2014 |
Segment Reporting [Abstract] | ' |
Segment and Geographical Information | ' |
Segment and Geographical Information |
The Company’s two reportable operating segments are Mobility Services and iPass Unity Network Services (“iPass Unity”). The Mobility Services segment includes services that help enterprises manage the networks, connections and devices used by their mobile workforce. The iPass Unity segment provides customers with Wi-Fi and Wide Area Network solutions. The Company’s Chief Operating Decision Maker (the “CODM”) is the Company’s President and Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating segment, using information about its revenue, segment income or loss from operations before income taxes, excluding amortization of intangibles, and restructuring. The accounting policies of the reportable operating segments are substantially the same as those the Company uses for its condensed consolidated financial statements. All direct costs are allocated to the respective operating segments. In addition to direct costs, certain indirect costs are allocated to each operating segment including costs relating to shared services in management, finance, legal, human resources, facilities, and information technology. Indirect costs are allocated based on headcount, salaries and operating segment revenue. |
The total pool of operating costs and network access costs allocated to the reportable operating segments for the three months ended March 31, 2014 and 2013 were $30.6 million and $32.3 million, respectively. Costs related to amortization of intangibles and restructuring activities are not allocated to operating segments. By definition, operating segment operating income (loss) also excludes interest income, foreign exchange gains and losses, and income taxes. |
On February 12, 2014, the Company announced its engagement with an investment banker to explore opportunities to divest its iPass Unity business. No decision to sell iPass Unity has been made, and the Company may ultimately conclude that it will not sell iPass Unity. |
Revenue and operating loss for each reportable operating segment for the three months ended March 31, 2014 and 2013, were as follows: |
|
| | | | | | | |
| Three Months Ended March 31, |
| Net Revenue | | Total |
Segment |
Operating |
Loss |
| (In thousands) |
2014 | |
|
Mobility Services | $ | 17,675 | | | $ | (5,161 | ) |
|
iPass Unity | 7,665 | | | (148 | ) |
|
Total Segment | $ | 25,340 | | | $ | (5,309 | ) |
|
2013 | |
|
Mobility Services | $ | 20,951 | | | $ | (2,535 | ) |
|
iPass Unity | 8,678 | | | (154 | ) |
|
Total Segment | $ | 29,629 | | | $ | (2,689 | ) |
|
Substantially all of the Company’s long-lived assets are located in the United States. The CODM does not evaluate operating segments using discrete asset information. Accordingly, no segment assets have been reported. There were no material intersegment sales or transfers for the three months ended March 31, 2014 and 2013, to arrive at net segment revenue. |
Reconciliations of total segment operating loss to total operating loss and total loss before income taxes for the three months ended March 31, 2014 and 2013, are as follows: |
|
| | | | | | | |
| Three Months Ended March 31, |
| 2014 | | 2013 |
| (In thousands) |
Total segment operating loss | $ | (5,309 | ) | | $ | (2,689 | ) |
Restructuring charges and related adjustments | (14 | ) | | (600 | ) |
Certain state sales tax and federal tax items | — | | | 10 | |
|
Total operating loss | (5,323 | ) | | (3,279 | ) |
Interest income | (33 | ) | | 4 | |
|
Foreign exchange losses, net | (71 | ) | | (73 | ) |
Total loss before income taxes | $ | (5,427 | ) | | $ | (3,348 | ) |
The following table summarizes total Company revenue by country or by geographical region: |
| | |
| | | | | | | |
| Three Months Ended March 31, | | |
| 2014 | | 2013 | | |
United States | 55 | % | | 56 | % | | |
EMEA | 32 | % | | 33 | % | | |
Asia Pacific | 12 | % | | 10 | % | | |
Rest of the World | 1 | % | | 1 | % | | |
No individual country, except for the United States, represented 10% or more of total revenue for the three months ended March 31, 2014. No individual country, except for the United States and United Kingdom, represented 10% or more of total revenue for the three months ended March 31, 2013. No individual customer represented 10% or more of total revenue for the three months ended March 31, 2014 and 2013. |