Segment Reporting, Geographic Information, and Concentration of Credit Risk

3 Months Ended

Mar. 31, 2023

Segment Reporting, Geographic Information, and Concentration of Credit Risk

2. Segment Reporting, Geographic Information, and Concentration of Credit Risk

Segment Reporting

ASC 280, Segment Reporting establishes standards for the reporting by public business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses and about which separate financial information is available to its chief operating decision makers (“CODM”). The Company’s CODM is its Chief Executive Officer.

The CODM reviews financial information and business performance for each operating segment. The Company evaluates the performance of its operating segments at the revenue and gross profit levels. The Company does not report total assets, capital expenditures or operating expenses by operating segment as such information is not used by the CODM for purposes of assessing performance or allocating resources.

Net revenue and gross profit information by segment for the three months ended March 31, 2023 and 2022 are as follows (in thousands):


	Three Months Ended March 31,
	2023			2022
Identity:
Net revenue	$	14,678		$	14,579
Gross profit		3,079			3,159
Gross profit margin		21	%		22	%
Premises:
Net revenue		11,319			10,482
Gross profit		6,132			5,807
Gross profit margin		54	%		55	%
Total:
Net revenue		25,997			25,061
Gross profit		9,211			8,966
Gross profit margin		35	%		36	%
Operating expenses:
Research and development		2,707			2,529
Selling and marketing		6,097			5,110
General and administrative		2,948			2,488
Restructuring and severance		191			(140	)
Total operating expenses:		11,943			9,987
Loss from operations		(2,732	)		(1,021	)
Non-operating income (expense):
Interest expense, net		(50	)		(25	)
Gain on investment		—			24
Foreign currency gains, net		89			19
Loss before income tax benefit (provision)	$	(2,693	)	$	(1,003	)

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three months ended March 31, 2023 and 2022 is as follows (in thousands):


	Three Months Ended March 31,
	2023			2022
Americas	$	21,628		$	16,891
Europe and the Middle East		2,984			3,794
Asia-Pacific		1,385			4,376
Total	$	25,997		$	25,061

As percentage of net revenue:
Americas		83	%		67	%
Europe and the Middle East		12	%		15	%
Asia-Pacific		5	%		18	%
Total		100	%		100	%

Concentration of Credit Risk

One customer accounted for 11% of net revenue for the three months ended March 31, 2023. No customer accounted for more than 10% of net revenue for the three months ended March 31, 2022. No customer accounted for 10% or more of net accounts receivable as of March 31, 2023 or December 31, 2022.

Long-lived assets by geographic location as of March 31, 2023 and December 31, 2022 are as follows (in thousands):


	March 31, 2023		December 31, 2022
Property and equipment, net:
Americas	$	706	$	530
Europe and the Middle East		490		458
Asia-Pacific		6,399		5,731
Total property and equipment, net	$	7,595	$	6,719

Operating lease ROU assets:
Americas	$	3,440	$	3,637
Europe and the Middle East		350		384
Asia-Pacific		554		352
Total operating lease right-of-use assets	$	4,344	$	4,373