Operating Segments

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Operating Segments

9.Operating Segments

We manage our business by geographic region and have three geographic reportable segments: North and Latin America (the “Americas”); Europe, the Middle East and Africa (EMEA); and Asia Pacific (APAC). All segments derive revenue from the sale and implementation of our supply chain commerce solutions. The individual products sold by the segments are similar in nature and are all designed to help companies manage the effectiveness and efficiency of their supply chain commerce. We use the same accounting policies for each reportable segment. The chief executive officer and chief financial officer evaluate performance based on revenue and operating results for each reportable segment.

The Americas segment charges royalty fees to the other segments based on software licenses and cloud subscriptions sold by those reportable segments. The royalties, which totaled approximately $2.1 million and $1.5 million for the three months ended September 30, 2022 and 2021, respectively, and $6.6 million and $4.4 million for the nine months ended September 30, 2022, respectively, are included in costs of revenue for each segment with a corresponding reduction in the Americas segment’s cost of revenue. The revenues represented below are from external customers only. The geography-based costs consist of costs for professional services personnel, direct sales and marketing expenses, infrastructure costs to support the employee and customer base, billing and financial systems, management and general and administrative support. Certain corporate expenses included in the Americas segment are not charged to the other segments. Such expenses include research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Costs in the Americas segment include all research and development costs, including the costs associated with our operations in India.

In accordance with the segment reporting topic of the FASB Accounting Standards Codification, we present below certain financial information by reportable segment for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended September 30,
	2022								2021
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	38,451	$	5,695	$	1,121	$	45,267	$	27,355	$	4,182	$	659	$	32,196
Software license		4,686		708		992		6,386		7,065		1,024		372		8,461
Maintenance		27,901		5,657		2,262		35,820		26,551		5,639		2,289		34,479
Services		78,479		19,737		5,209		103,425		68,421		16,521		3,230		88,172
Hardware		7,157		46		-		7,203		5,841		36		-		5,877
Total revenue		156,674		31,843		9,584		198,101		135,233		27,402		6,550		169,185
Costs and Expenses:
Cost of revenue		73,787		18,117		4,254		96,158		55,213		13,185		3,105		71,503
Operating expenses		58,475		3,731		1,303		63,509		48,594		3,554		1,209		53,357
Depreciation and amortization		1,498		144		22		1,664		1,699		178		40		1,917
Total costs and expenses		133,760		21,992		5,579		161,331		105,506		16,917		4,354		126,777
Operating income	$	22,914	$	9,851	$	4,005	$	36,770	$	29,727	$	10,485	$	2,196	$	42,408
	Nine Months Ended September 30,
	2022								2021
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
Cloud subscriptions	$	106,064	$	15,544	$	3,159	$	124,767	$	74,498	$	10,947	$	1,989	$	87,434
Software license		12,147		5,969		1,753		19,869		18,646		5,018		1,458		25,122
Maintenance		84,984		15,288		6,843		107,115		84,000		17,409		6,961		108,370
Services		222,206		58,670		13,408		294,284		195,391		49,482		8,361		253,234
Hardware		22,809		137		-		22,946		17,819		170		-		17,989
Total revenue		448,210		95,608		25,163		568,981		390,354		83,026		18,769		492,149
Costs and Expenses:
Cost of revenue		203,592		52,552		12,087		268,231		163,625		42,861		9,710		216,196
Operating expenses		171,179		12,799		3,620		187,598		146,862		12,092		3,673		162,627
Depreciation and amortization		4,625		466		66		5,157		5,434		571		131		6,136
Total costs and expenses		379,396		65,817		15,773		460,986		315,921		55,524		13,514		384,959
Operating income	$	68,814	$	29,791	$	9,390	$	107,995	$	74,433	$	27,502	$	5,255	$	107,190

Cloud subscriptions revenue primarily relates to our Manhattan Active omnichannel, warehouse management solutions, and transportation management solutions for the nine months ended September 30, 2022. The majority of our software license revenue relates to our warehouse management product group (over 85%) for the three and nine months ended September 30, 2022.

At September 30, 2022, total assets for the Americas, EMEA and APAC segments were $440.8 million, $56.5 million and $17.4 million, respectively.