Segment reporting and concentrations | 11. The Company’s operations are classified in three reporting segments: Digital Data Solutions (DDS), Synodex and Agility. The DDS segment provides AI data preparation services, collecting or creating training data, annotating training data, and training AI algorithms for its customers, and AI model deployment and integration. The DDS segment also provides a range of data engineering support services including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management. The Synodex segment provides an industry platform that transforms medical records into useable digital data organized in accordance with its proprietary data models or customer data models. The Agility segment provides an industry platform that provides marketing communications and public relations professionals with the ability to target and distribute content to journalists and social media influencers world-wide and to monitor and analyze global news channels (print, web, radio and TV) and social media channels. A significant portion of the Company’s revenue is generated from its locations in the Philippines, India, Sri Lanka, Canada, Germany, the United Kingdom and Israel. Revenues from external customers, segment operating profit (loss), and other reportable segment information are as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues: DDS $ 16,003 $ 12,852 $ 41,929 $ 42,944 Synodex 1,728 1,762 5,705 5,376 Agility 4,438 3,833 13,029 11,306 Total Consolidated $ 22,169 $ 18,447 $ 60,663 $ 59,626 Income (loss) before provision for income taxes (1) DDS $ 970 $ 135 $ 473 $ 1,516 Synodex (288) (977) (420) (2,796) Agility 75 (2,216) (1,818) (7,474) Total Consolidated $ 757 $ (3,058) $ (1,765) $ (8,754) Income (loss) before provision for income taxes (2) DDS $ 827 $ (59) $ 36 $ 987 Synodex (154) (778) (19) (2,318) Agility 84 (2,221) (1,782) (7,423) Total Consolidated $ 757 $ (3,058) $ (1,765) $ (8,754) September 30, 2023 December 31, 2022 Total assets: DDS $ 34,495 $ 25,758 Synodex 3,290 3,270 Agility 18,640 19,014 Total Consolidated $ 56,425 $ 48,042 September 30, 2023 December 31, 2022 Goodwill: Agility $ 2,032 $ 2,038 Total $ 2,032 $ 2,038 (1) Before elimination of any inter-segment profits (2) After elimination of any inter-segment profits The table below shows intersegment revenues which are eliminated in consolidation (in thousands). For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Revenues of DDS Segment from: Synodex $ 1,594 $ 2,119 $ 4,829 $ 6,167 Agility 296 425 1,121 1,274 Totals $ 1,890 $ 2,544 $ 5,950 $ 7,441 Revenues for the three and nine-month periods ended September 30, 2023, and 2022 by geographic region (determined based upon customer’s domicile), were as follows (in thousands): For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 United States $ 13,273 $ 11,904 $ 35,469 $ 37,843 United Kingdom 2,589 2,677 8,042 8,312 Canada 2,538 579 6,343 3,234 The Netherlands 1,911 1,734 5,396 5,105 Others - principally Europe 1,858 1,553 5,413 5,132 Totals $ 22,169 $ 18,447 $ 60,663 $ 59,626 Long lived assets by geographic region Long-lived assets as of September 30, 2023 and December 31, 2022 by geographic region were comprised of (in thousands): September 30, December 31, 2023 2022 United States $ 8,760 $ 7,205 Foreign countries: Canada 7,283 7,675 Philippines 3,506 3,682 United Kingdom 1,043 1,198 India 2,026 1,195 Sri Lanka 398 426 Israel 15 3 Total foreign 14,271 14,179 Totals $ 23,031 $ 21,384 Long-lived assets include the unamortized balance of right-of-use assets amounting to $5.2 million and $4.3 million as of September 30, 2023 and December 31, 2022, respectively. One customer in the DDS segment generated approximately 11% of the Company’s total revenues for the three months ended September 30, 2023. No customer generated more than 10% of the Company’s total revenues for the three months ended September 30, 2022. No other customer accounted for 10% or more of total revenues during these periods. Further, for the three months ended September 30, 2023 and 2022, revenues from non-U.S. customers accounted for 40% and 35%, respectively, of the Company’s total revenues. Two customers in the DDS segment generated approximately 10.2% and 10%, respectively, of the Company’s total revenues for the nine months ended September 30, 2023. Another customer in the DDS segment generated approximately 13% of the Company’s total revenues for the nine months ended September 30, 2022. No other customer accounted for 10% or more of total revenues during these periods. Further, revenues from non-U.S. customers accounted for 42% and 37% of the Company’s total revenues for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, approximately 37% of the Company’s accounts receivable was due from foreign (principally European) customers and 30% of the Company’s accounts receivable was due from two customers. As of December 31, 2022, approximately 44% of the Company’s accounts receivable was due from foreign (principally European) customers and 45% of the Company’s accounts receivable was due from four customers. No other customer accounted for 10% or more of the accounts receivable as of September 30, 2023 and December 31, 2022. |