Operating Segments

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Operating Segments

8. Operating Segments

The Company manages the business by geographic segment. The Company has identified three geographic reportable segments: North America and Latin America (the “Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific (“APAC”). All segments derive revenue from the sale and implementation of the Company’s supply chain execution and planning 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. The Company uses 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 region.

The Americas segment charges royalty fees to the other segments based on software licenses sold by those reportable segments. The royalties, which totaled approximately $1.0 million and $1.4 million for the three months ended March 31, 2015 and 2014, respectively, are included in cost of revenue for each segment with a corresponding reduction in America’s cost of revenue. The revenues represented below are from external customers only. The geographical-based costs consist of costs of professional services personnel, direct sales and marketing expenses, cost of infrastructure to support the employees and customer base, billing and financial systems, management and general and administrative support.  There are certain corporate expenses included in the Americas region that are not charged to the other segments, including research and development, certain marketing and general and administrative costs that support the global organization, and the amortization of acquired developed technology. Included in the Americas’ costs are all research and development costs including the costs associated with the Company’s India operations.

The following table presents the revenues, expenses and operating income by reportable segment for the three months ended March 31, 2015 and 2014 (in thousands):

	Three Months Ended March 31,
	2015								2014
	Americas		EMEA		APAC		Consolidated		Americas		EMEA		APAC		Consolidated
Revenue:
License	$	15,483	$	3,533	$	298	$	19,314	$	11,458	$	4,450	$	1,199	$	17,107
Services		82,212		14,200		4,791		101,203		70,904		10,864		5,145		86,913
Hardware and other		12,264		572		170		13,006		8,993		365		185		9,543
Total revenue		109,959		18,305		5,259		133,523		91,355		15,679		6,529		113,563
Costs and Expenses:
Cost of revenue		46,401		8,907		2,929		58,237		36,649		7,476		3,427		47,552
Operating expenses		31,781		3,763		1,097		36,641		29,220		4,070		1,182		34,472
Depreciation and amortization		1,595		113		73		1,781		1,353		75		60		1,488
Total costs and expenses		79,777		12,783		4,099		96,659		67,222		11,621		4,669		83,512
Operating income	$	30,182	$	5,522	$	1,160	$	36,864	$	24,133	$	4,058	$	1,860	$	30,051

License revenues related to the Company’s warehouse and non-warehouse product groups for the three months ended March 31, 2015 and 2014 are as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
Warehouse	$	10,925	$	10,668
Non-Warehouse		8,389		6,439
Total software license revenue	$	19,314	$	17,107

The Company’s services revenues, which consist of fees generated from professional services and customer support and software enhancements related to its software products, for the three months ended March 31, 2015 and 2014 are as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
Professional services	$	72,659	$	59,422
Customer support and software enhancements		28,544		27,491
Total services revenue	$	101,203	$	86,913