Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting

Segment Reporting

18. Segment Reporting

Our chief operating decision maker (who is our Chief Executive Officer) reviews our financial information presented on an operating segment basis for purposes of allocating resources and evaluating our financial performance. Following the merger with NetSapiens, Inc., the Company reorganized into two operating segments, a software solutions operating segment and a cloud telecommunications services operating segment. The cloud telecommunications services segment generates revenue from selling cloud telecommunication services, products, and other internet services. The software solutions segment generates revenue from selling perpetual software licenses and software subscriptions, subscription maintenance and support, and professional services. The Company has two reportable operating segments, which consist of cloud telecommunications services and software solutions. Segment revenue, income/(loss) from operations, other income/(expense) and income/(loss) before income tax provision are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue:
Cloud telecommunications services	$	9,183		$	5,233		$	26,306		$	15,371
Software solutions		4,691			3,875			12,729			10,741
Consolidated revenue		13,874			9,108			39,035			26,112
Income/(loss) from operations:
Cloud telecommunications services		73			(639	)		(1,312	)		(2,236	)
Software solutions		291			95			(415	)		(553	)
Total operating income/(loss)		364			(544	)		(1,727	)		(2,789	)
Other income/(expense), net:
Cloud telecommunications services		1,425			(17	)		1,360			(52	)
Software solutions		(52	)		(167	)		25			(286	)
Total other income/(expense), net		1,373			(184	)		1,385			(338	)
Income/(loss) before income tax provision:
Cloud telecommunications services		1,498			(656	)		48			(2,288	)
Software solutions		239			(72	)		(390	)		(839	)
Income/(loss) before income tax provision	$	1,737		$	(728	)	$	(342	)	$	(3,127	)

Depreciation and amortization for the cloud telecommunications services segment was $381 and $115 for the three months ended September 30, 2023 and 2022, respectively and $1,176 and $344 for the nine months ended September 30, 2023 and 2022, respectively. Depreciation and amortization for the software solutions segment was $506 and $509 for the three months ended September 30, 2023 and 2022, respectively and $1,520 and $1,518 for the nine months ended September 30, 2023 and 2022, respectively.

Interest income for the cloud telecommunications services segment was $0 for the three and nine months ended September 30, 2023 and 2022. Interest income for the software solutions segment was $0 for the three and nine months ended September 30, 2023 and 2022.

Interest expense for the cloud telecommunications services segment was $36 and $19 for the three months ended September 30, 2023 and 2022, respectively and $111 and $57 for the nine months ended September 30, 2023 and 2022, respectively.  Interest expense for the software solutions segment was $0 for the three and nine months ended September 30, 2023 and 2022. 

The Company operates in two geographic areas, the United States and international. Revenue by geography is based on the location of the customer from which the revenue is earned. Revenue by geographic location is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
United States	$	12,862	$	8,661	$	36,984	$	25,116
International		1,012		447		2,051		996
Total revenue	$	13,874	$	9,108	$	39,035	$	26,112