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 business 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 lines: 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 nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Revenue Software-Systems $ 15,477 $ 11,620 $ 39,336 $ 29,861 Embedded Products and Hardware Services 29,303 39,185 101,180 114,707 Total revenues $ 44,780 $ 50,805 $ 140,516 $ 144,568 Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Gross margin Software-Systems $ 9,081 $ 7,857 $ 22,354 $ 18,871 Embedded Products and Hardware Services 5,973 8,940 22,043 25,472 Corporate and other (2,047 ) (2,100 ) (6,163 ) (6,491 ) Total gross margin $ 13,007 $ 14,697 $ 38,234 $ 37,852 Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Income (loss) from operations Software-Systems $ 743 $ 13 $ (3,126 ) $ (4,699 ) Embedded Products and Hardware Services 1,782 1,307 8,112 488 Corporate and other (4,541 ) (5,423 ) (17,528 ) (16,785 ) Total loss from operations $ (2,016 ) $ (4,103 ) $ (12,542 ) $ (20,996 ) 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 Nine Months Ended September 30, September 30, 2015 2014 2015 2014 United States $ 18,353 $ 17,476 $ 57,997 $ 52,207 Other North America 186 254 473 1,957 China 5,859 7,172 26,414 22,152 India 6,549 5,878 12,494 7,505 Other Asia Pacific 6,798 8,253 19,108 24,741 Asia Pacific ("APAC") 19,206 21,303 58,016 54,398 Netherlands 3,404 7,861 10,591 19,030 Other EMEA 3,631 3,911 13,439 16,976 Europe, the Middle East and Africa (“EMEA”) 7,035 11,772 24,030 36,006 Foreign Countries 26,427 33,329 82,519 92,361 Total $ 44,780 $ 50,805 $ 140,516 $ 144,568 Long-lived assets by geographic area are as follows (in thousands): September 30, December 31, Property and equipment, net United States $ 3,381 $ 4,558 Other North America 308 672 China 1,447 2,427 Other APAC — 11 Total APAC 1,447 2,438 India 1,690 2,115 Other EMEA 2 3 Total EMEA 1,692 2,118 Foreign Countries 3,447 5,228 Total property and equipment, net $ 6,828 $ 9,786 Intangible assets, net United States $ 33,509 $ 43,224 Total intangible assets, net $ 33,509 $ 43,224 The following customers accounted for more than 10% of the Company's total revenues: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Nokia Networks 14.1 % 13.0 % 19.5 % 16.5 % Philips Healthcare N/A 18.7 % N/A 16.4 % An Asian Carrier 14.2 % 10.6 % N/A N/A The following customers accounted for more than 10% of accounts receivable: September 30, 2015 December 31, 2014 Nokia Networks N/A 18.5 % Philips Healthcare N/A 13.9 % An Asian Carrier 25.7 % N/A Sanmina SCI Corp (A) 10.0 % N/A |