Segment Reporting Disclosure | Segment Information During the first quarter of 2015, the Company implemented strategic and organizational changes that resulted in measuring the performance of the Company's product line in two segments: Software-Systems and Embedded Products and Hardware Services. The Company's Chief Executive Officer, or chief operating decision maker, regularly reviews discrete financial information for purposes of allocating resources and assessing the performance of each segment: • Software-Systems. Software-Systems products are comprised of three product families: FlowEngine, MediaEngine and CellEngine. • Embedded Products and Hardware Services. These hardware based products provide platforms to control and move data in the core of the telecom network. Cost of sales, research and development and selling, general and administrative expenses are allocated to Software-Systems and Embedded Products and Hardware Services. Expenses, reversals, gains and losses not allocated to Software-Systems or Embedded Product and Hardware Services include amortization of acquired intangible assets, stock-based compensation, restructuring and other charges, and other one-time non-recurring events. These items are allocated to corporate and other. The Company recorded the following revenues, gross margin and income (loss) from operations by operating segment for the three and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue Software-Systems $ 14,170 $ 10,400 $ 23,859 $ 18,241 Embedded Products and Hardware Services 32,879 39,564 71,877 75,522 Total revenues $ 47,049 $ 49,964 $ 95,736 $ 93,763 Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Gross margin Software-Systems $ 7,945 $ 5,816 $ 13,273 $ 11,014 Embedded Products and Hardware Services 6,725 8,397 16,069 16,532 Corporate and other (2,069 ) (2,206 ) (4,115 ) (4,391 ) Total gross margin $ 12,601 $ 12,007 $ 25,227 $ 23,155 Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Income (loss) from operations Software-Systems $ (967 ) $ (1,848 ) $ (3,869 ) $ (4,712 ) Embedded Products and Hardware Services 2,373 9 6,330 (819 ) Corporate and other (4,939 ) (5,590 ) (12,987 ) (11,362 ) Total loss from operations $ (3,533 ) $ (7,429 ) $ (10,526 ) $ (16,893 ) Assets are not allocated to segments for internal reporting presentations. A portion of depreciation is allocated to the respective segment. It is impracticable for the Company to separately identify the amount of depreciation by segment that is included in the measure of segment profit or loss. Revenues by geographic area were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 United States $ 18,472 $ 19,025 $ 39,644 $ 34,731 Other North America 242 579 287 1,703 China 8,862 7,953 20,555 14,980 Japan 3,761 2,674 6,144 9,882 India 5,186 1,388 5,935 1,627 Other Asia Pacific 3,816 3,585 6,176 6,606 Asia Pacific ("APAC") 21,625 15,600 38,810 33,095 Netherlands 2,825 6,130 7,187 11,169 Other EMEA 3,885 8,630 9,808 13,065 Europe, the Middle East and Africa (“EMEA”) 6,710 14,760 16,995 24,234 Foreign Countries 28,577 30,939 56,092 59,032 Total $ 47,049 $ 49,964 $ 95,736 $ 93,763 Long-lived assets by geographic area are as follows (in thousands): June 30, December 31, Property and equipment, net United States $ 3,796 $ 4,558 Other North America 377 672 China 1,609 2,427 Other APAC 2 11 Total APAC 1,611 2,438 India 1,839 2,115 Other EMEA 2 3 Total EMEA 1,841 2,118 Foreign Countries 3,829 5,228 Total property and equipment, net $ 7,625 $ 9,786 Intangible assets, net United States $ 36,730 $ 43,224 Total intangible assets, net $ 36,730 $ 43,224 The following customers accounted for more than 10% of the Company's total revenues: Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Nokia Networks 17.7 % 18.6 % 22.1 % 18.3 % Philips Healthcare N/A 16.0 % 10.0 % 15.1 % NEC N/A N/A N/A 10.6 % An Asian Carrier 10.5 % N/A N/A N/A Mavenir Systems 10.5 % N/A N/A N/A The following customers accounted for more than 10% of accounts receivable: June 30, 2015 December 31, 2014 Nokia Networks 10.1 % 18.5 % Philips Healthcare N/A 13.9 % An Asian Carrier 15.0 % N/A Sanmina SCI Corp (A) 14.6 % N/A Mavenir Systems 11.2 % N/A |