Segment Reporting, Geographic Information, and Concentration of Credit Risk

3 Months Ended

Mar. 31, 2024

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, 2024 and 2023 are as follows (in thousands):


	Three Months Ended March 31,
	2024			2023
Identity:
Net revenue	$	12,835		$	14,678
Gross profit		2,834			3,079
Gross profit margin		22	%		21	%
Premises:
Net revenue		9,659			11,319
Gross profit		5,558			6,132
Gross profit margin		58	%		54	%
Total:
Net revenue		22,494			25,997
Gross profit		8,392			9,211
Gross profit margin		37	%		35	%
Operating expenses:
Research and development		3,011			2,707
Selling and marketing		5,302			6,097
General and administrative		4,252			2,948
Restructuring and severance		22			191
Total operating expenses:		12,587			11,943
Loss from operations		(4,195	)		(2,732	)
Non-operating income (expense):
Interest expense, net		(87	)		(50	)
Foreign currency gains (losses), net		(256	)		89
Loss before income tax provision	$	(4,538	)	$	(2,693	)

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, 2024 and 2023 is as follows (in thousands):


	Three Months Ended March 31,
	2024			2023
Americas	$	16,504		$	21,628
Europe and the Middle East		3,998			2,984
Asia-Pacific		1,992			1,385
Total	$	22,494		$	25,997

As percentage of net revenue:
Americas		73	%		83	%
Europe and the Middle East		18	%		12	%
Asia-Pacific		9	%		5	%
Total		100	%		100	%

Concentration of Credit Risk

One customer accounted for 11% of net revenue for the three months ended March 31, 2024. No customer accounted for more than 10% of net revenue for the three months ended March 31, 2023. No customer accounted for 10% or more of net accounts receivable as of March 31, 2024 or December 31, 2023.

Long-lived assets by geographic location as of March 31, 2024 and December 31, 2023 are as follows (in thousands):


	March 31, 2024		December 31, 2023
Property and equipment, net:
Americas	$	667	$	711
Europe and the Middle East		500		519
Asia-Pacific		7,665		8,090
Total property and equipment, net	$	8,832	$	9,320

Operating lease ROU assets:
Americas	$	2,623	$	2,836
Europe and the Middle East		316		371
Asia-Pacific		1,817		2,007
Total operating lease right-of-use assets	$	4,756	$	5,214