Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Operating segments, as defined in ASC 280, Segment Reporting, are components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Operating Decision Maker, or CODM, in deciding how to allocate resources and in assessing performance.

The Company's CODM is the President and Chief Executive Officer. The CODM manages the Company's business as three reportable operating segments: Server OEM, Vertical Markets, and Corporate.

Server OEM - The Server OEM segment consists primarily of large OEMs who purchase products from us to sell along with their server products. Our products are typically sold in server led sales into their end-user customers' corporate information technology infrastructure. Server OEM customers include Customer A (refer to Note 1, Summary of Significant Accounting Policies - Concentration of Customers and Suppliers).

Vertical Markets - The Vertical Markets segment consists of strategically selected Vertical Markets, that are recognized as processing large amounts of data. Our target Vertical Markets include Media and Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging, among others. These customers typically embed their products into their customer solutions, which quite often generate revenue for their end-user customers. We sell to these customers through both Vertical Markets OEM partners that include embedded solutions integrators, as well as through channel partners. Vertical Markets customers include Customer B, Customer C and Customer D (refer to Note 1, Summary of Significant Accounting Policies - Concentration of Customers and Suppliers).

Corporate - The Corporate segment consists primarily of costs that support both the Server OEM and Vertical Markets segments.

Net revenues by segment are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2015		2014		2015
Net revenue:
Server OEM	$	27,463	$	36,733	$	53,317	$	61,911
Vertical Markets	20,759		24,806		43,112		60,749
Corporate	—		—		—		—
Total net revenue	$	48,222	$	61,539	$	96,429	$	122,660

Operating income (loss) by segment and a reconciliation to consolidated income (loss) before income taxes is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2015			2014			2015
Operating income (loss):
Server OEM	$	6,242		$	9,189		$	11,364		$	14,583
Vertical Markets	6,762			8,287			14,169			20,773
Corporate	(13,015		)	(16,703		)	(25,947		)	(30,688		)
Total operating income (loss)	(11		)	773			(414		)	4,668
Total other income (expense), net	7			(13		)	(1		)	(27		)
Income (loss) before income taxes	$	(4	)	$	760		$	(415	)	$	4,641

The segments use many of the same assets. For internal reporting purposes, we do not allocate assets by segment and therefore asset, depreciation and amortization, or capital expenditure by segment information is not provided to our CODM.

Operating income (loss) for the Corporate segment for the three and six months endedJune 30, 2015 includes accumulated foreign currency translation amounts reclassified into earnings from accumulated other comprehensive income. Refer to Note 9, Accumulated Other Comprehensive Loss.