Segment and geographic information (Notes)

9 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment and geographic information

Segment and geographic information

For financial reporting purposes, the Company historically had one reportable segment, which consisted of three operating segments with similar economic characteristics: cinema, 3D consumer electronics and 3D professional, collectively referred to as Cinema. On August 17, 2015, the Company entered into a contract with a computer technology company to develop and commercialize the Company's intelligent backlight technology, or IBT. The Company dedicated a group of employees and resources to support and fulfill our obligations under this agreement. Therefore, the Company created its fourth operating segment, referred to as Consumer. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. In the operation of the business, the Company's management team, including the Company’s Chief Executive Officer (who is also the Company's chief operating decision maker) reviews certain financial information, including segmented internal profit and loss statements.

The reportable segments are described as follows:

Cinema

Cinema consists of three operating segments: cinema, 3D consumer electronics and 3D professional. The Company's product portfolio is primarily used in applications that enable a premium 3D viewing experience across these operating segments. The Company currently generates substantially all of its revenue from the license of its RealD Cinema Systems and the sale of its eyewear, which together enable a digital cinema projector to show 3D motion pictures.

Consumer

Consumer is its own operating segment. This segment is established to support the Company's agreement with a computer technology company to develop and commercialize the Company's IBT technology. The contractual obligations and operating objectives for the contract are different from the Company's existing theatrical 3D viewing business. The Company received $7.5 million for upfront nonrefundable and nonrecoupable license fees which are currently classified under Deferred Revenue, net of current portion, for the fiscal period ended December 31, 2015.

Revenue, cost of sales and operating expenses are generally directly attributed to the reportable segments. Operating expenses are attributed to each reportable segment as follows:

• Sales and marketing expenses are primarily recorded directly to each reportable segment based on identified customer segment.

• R&D expenses are mapped directly in all cases where the value of the expenses only accrues to that reportable segment group.

• General and administrative expenses are generally not allocated. Certain corporate-level occupancy activity is allocated to each reportable segments per head-count, including costs of depreciation , utilities and other common area expenses at the Company's headquarters and R&D facility.

Segment information

As the Company started to have two reportable segments in the second quarter of fiscal 2016, costs related to IBT were not tracked separately prior to executing the Consumer contract in the second quarter of fiscal year 2016. Therefore, it is impracticable to report historical IBT costs and restate prior segment reporting.

Segment revenue, gross profit, operating expenses and operating income (loss) for the three and nine months endedDecember 31, 2015 and December 31, 2014 were as follows:

	Three months ended December 31
	2015							2014
(in thousands)	Cinema		Consumer			Total		Cinema			Consumer		Total
Revenue	$	50,373	$	—		$	50,373	$	32,571		$	—	$	32,571
Gross profit	26,963		—			26,963		14,963			—		14,963
Operating expenses:
Research and development	2,628		1,479			4,107		4,582			—		4,582
Sales and marketing	4,148		355			4,503		4,382			—		4,382
General and administrative	17,036		23			17,059		12,654			—		12,654
Total operating expenses	23,812		1,857			25,669		21,618			—		21,618
Total operating income (loss)	$	3,151	$	(1,857	)	$	1,294	$	(6,655	)	$	—	$	(6,655	)

	Nine months ended December 31
	2015							2014
(in thousands)	Cinema		Consumer			Total		Cinema		Consumer		Total
Revenue	$	142,394	$	—		$	142,394	$	135,558	$	—	$	135,558
Gross profit	75,828		—			75,828		70,536		—		70,536
Operating expenses:
Research and development	8,789		1,789			10,578		14,692		—		14,692
Sales and marketing	14,102		503			14,605		15,493		—		15,493
General and administrative	45,391		23			45,414		35,804		—		35,804
Total operating expenses	68,282		2,315			70,597		65,989		—		65,989
Total operating income (loss)	$	7,546	$	(2,315	)	$	5,231	$	4,547	$	—	$	4,547

Geographic information

Revenue by geographic region, as determined based on the location of our customers or the anticipated destination of use was as follows:

	Three months ended December 31				Nine months ended December 31
(in thousands)	2015		2014		2015		2014
Domestic (United States and Canada)	$	26,470	$	12,341	$	72,265	$	59,413
China	4,650		4,413		16,350		13,683
Rest of world	19,253		15,817		53,779		62,462
Total revenues	$	50,373	$	32,571	$	142,394	$	135,558

Long-lived tangible assets, net of accumulated depreciation, by geographic region were as follows:

(in thousands)	December 31, 2015		March 31, 2015
Domestic (United States and Canada)	$	67,014	$	87,134
China	11,022		10,185
Rest of world	7,956		5,523
Total long-lived tangible assets	$	85,992	$	102,842