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Segment and Geographic Information and Significant Customers
 12 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Segment and Geographic Information and Significant Customers Segment and Geographic Information
Our Chief Operating Decision Maker ("CODM") regularly reviews segment revenues and segment profits for performance evaluation and resources allocation. Segment revenues include certain acquisition-related adjustments for revenues that would otherwise have been recognized without the acquisition. Segment profits reflect controllable costs directly related to each segment and the allocation of certain corporate expenses such as, corporate sales and marketing expenses and research and development project costs that benefit multiple segments. Certain items such as stock-based compensation, amortization of intangible assets,
acquisition-related costs, net, restructuring and other charges, net, other expenses, net and certain unallocated corporate expenses are excluded from segment profits, which allow for more meaningful comparisons to the financial results of the historical operations for performance evaluation and resources allocation by our CODM.
•
The Healthcare segment is primarily engaged in providing clinical speech and clinical language understanding solutions that improve the clinical documentation process, from capturing the complete patient record to improving clinical documentation and quality measures for reimbursement.
•
The Enterprise segment is primarily engaged in using speech, natural language understanding, and artificial intelligence to provide automated customer solutions and services for voice, mobile, web and messaging channels.
•
The Automotive segment is primarily engaged in providing automotive manufacturers and their suppliers branded and personalized virtual assistants and connected car services built on our voice recognition and natural language understanding technologies. As more fully disclosed in Note 4, on November 19, 2018, we announced our intent to spin off our Automotive business into an independent publicly traded company through a pro rata distribution to our common stockholders. On August 5, 2019, we further announced our plans to brand the Automotive spin-off as Cerence and the spin-off was completed on October 1, 2019.
•
The Other segment includes our SRS and Devices businesses. Our SRS business provides value-added services to mobile operators in India and Brazil (“Mobile Operator Services”) and voicemail transcription services to mobile operators in the rest of the world (“Voicemail-to-Text”). Our Devices business provides speech recognition solutions and predictive text technologies for handset devices. Our Devices revenue has been declining due to the ongoing consolidation of our handset manufacturer customer base and continued erosion of our penetration of the remaining market. During the fourth quarter of fiscal 2018, in connection with our comprehensive portfolio and business review efforts, we commenced a wind-down of our Devices and Mobile Operator Services businesses. In May 2019, we completed the sale of our Mobile Operator Services business in Brazil, and in July 2019, we completed the sale of our Mobile Operator Services business in India. The sale prices and any gain or loss were immaterial to our consolidated financial statement.
As more fully described in Note 4, effective the first quarter of fiscal year 2019, the results of our Imaging segment, previously a reportable segment, have been included within discontinued operations due to the completion of the sale of Imaging on February 1, 2019. As a result, effective the first quarter of fiscal year 2019, we changed our corporate overhead allocation methodology to re-allocate the stranded costs related to our Imaging business to the remaining operating segments included within continuing operations. Stranded costs of $7.0 million for fiscal year 2019, $7.8 million for fiscal year 2018, and $7.1 million for fiscal year 2017 have been included within total segment profits and re-allocated to Healthcare, Enterprise, Automotive, and Other.
As we do not track our assets by operating segment, we do not include total assets or depreciation expenses by operating segment. The following table presents segment results along with a reconciliation of segment profits to (loss) income before income taxes (dollars in thousands):
 
Year Ended September 30,
 
2019
 
2018
 
2017
Segment revenues:
 (ASC 606)
 
 (ASC 605)
 
 (ASC 605)
Healthcare
$
950,593

 
$
984,819

 
$
899,341

Enterprise
510,753

 
483,194

 
474,317

Automotive
306,580

 
279,402

 
252,218

Other
61,461

 
109,064


133,766

Total segment revenues
1,829,387

 
1,856,479

 
1,759,642

Acquisition related revenue adjustments (a)
(6,295
)
 
(14,181
)
 
(31,467
)
Total consolidated revenue
1,823,092

 
1,842,298

 
1,728,175

Segment profit:
 

 
 

 
 

Healthcare
337,471

 
326,658

 
257,825

Enterprise
141,479

 
140,478

 
133,913

Automotive
110,559

 
109,111

 
118,248

Other
23,413

 
28,013

 
41,186

Total segment profit
612,922

 
604,260

 
551,172

Corporate expenses and other, net
(139,806
)
 
(195,704
)
 
(121,935
)
Acquisition-related revenues and costs of revenues adjustment
(6,295
)
 
(14,181
)
 
(31,467
)
Stock-based compensation
(141,212
)
 
(142,909
)
 
(142,901
)
Amortization of intangible assets
(103,563
)
 
(124,883
)
 
(150,731
)
Acquisition-related costs, net
(8,909
)
 
(16,093
)
 
(27,708
)
Restructuring and other charges, net
(80,465
)
 
(57,026
)
 
(59,923
)
Impairment of goodwill and other intangible assets
—

 
(170,941
)
 
—

Other expenses, net
(106,928
)
 
(129,747
)
 
(171,177
)
Income (loss) before income taxes
$
25,744

 
$
(247,224
)
 
$
(154,670
)
(a) 
Segment revenues differ from reported revenues due to certain revenue adjustments related to acquisitions that would otherwise have been recognized but for the purchase accounting treatment of the business combinations. These revenues are included to allow for more complete comparisons to the financial results of historical operations and in evaluating management performance.
No country outside of the United States provided greater than 10% of our total revenue. Revenue, classified by the major geographic areas in which our customers are located, was as follows (dollars in thousands):
 
Year Ended September 30,
 
2019
 
2018
 
2017
United States
$
1,367,752

 
$
1,374,877

 
$
1,244,900

International
455,340

 
467,421

 
483,275

Total
$
1,823,092

 
$
1,842,298

 
$
1,728,175


No country outside of the United States held greater than 10% of our long-lived or total assets. Our long-lived assets from continuing operations, including intangible assets and goodwill, were located as follows (dollars in thousands):
 
September 30,
2019
 
September 30,
2018
United States
$
3,279,186

 
$
3,031,714

International
831,394

 
982,537

Total
$
4,110,580

 
$
4,014,251