Segment information

12 Months Ended

Dec. 31, 2016

Segment information

Segment information

15. Segment information

General information

The segment and geographic information provided in the table below is being reported consistent with the Company’s method of internal reporting. Operating segments are defined as components of an enterprise for which separate financial information is available and which is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM reviews net revenue and gross profit by service by geographical region. The Company operates in two reportable segments; multi‑currency processing services and payment processing services.

Information about revenue, profit and assets

The CODM evaluates performance and allocates resources based on net revenue and gross profit of each segment. For purposes of analyzing segments, gross profit of the multi‑currency processing services segment is equal to net revenue less multi‑currency cost of sales of $2.3 million, $3.7 million and $2.0 million, which is included in “processing and services costs” for the years ended December 31, 2016, 2015 and 2014, respectively.  The gross profit for the payment processing services segment includes net revenue of the segment less the cost of revenue component “payment processing services fees,” which includes interchange and card network fees and assessments. Net revenue and gross profit by geographical region is based upon where the transaction originated. Lastly, the Company does not evaluate performance or allocate resources using segment asset data. Long-lived assets are primarily located in the Americas and Europe and as of December 31, 2016 and December 31, 2015, long‑lived asset amounts are $7.0 million and $7.4 million, respectively.

The Company conducts its business primarily in three geographical regions: Asia Pacific (“APAC”), the Americas, and Europe, Middle East and Africa (“EMEA”). The following table provides revenue concentration by geographic region. Analysis of revenue by segment and geographical region and reconciliations to consolidated revenue, gross profit, and income before the benefit (provision) for income taxes are as follows:

	Year ended December 31,
	2016		2015		2014
Net Revenue:
APAC	$	16,196,244	$	16,265,076	$	16,621,147
The Americas		10,180,218		7,162,346		6,893,337
EMEA		7,711,501		10,036,017		7,439,601
Total multi-currency processing services revenue		34,087,963		33,463,439		30,954,085
Payment processing services revenue		20,249,444		19,351,649		16,414,654
Net revenue	$	54,337,407	$	52,815,088	$	47,368,739
Gross Profit:
APAC	$	16,095,147	$	16,136,562	$	16,513,492
The Americas		9,515,560		6,725,223		6,733,037
EMEA		6,217,730		6,879,321		5,662,081
Total multi-currency processing services gross profit		31,828,437		29,741,106		28,908,610
Payment processing services gross profit		9,799,438		8,447,989		6,010,975
Total reportable segment gross profit		41,627,875		38,189,095		34,919,585
Corporate allocated cost of sales		10,441,825		11,138,471		11,437,807
Total gross profit	$	31,186,050	$	27,050,624	$	23,481,778
Income from operations before benefit (provision) for income taxes:
Total gross profit	$	31,186,050	$	27,050,624	$	23,481,778
Selling, general and administrative expenses		20,860,469		20,408,308		18,370,691
Restructuring charges		504,141		283,726		1,227,204
Income from operations		9,821,440		6,358,590		3,883,883
Interest expense		(273,873)		(57,575)		(65,122)
Interest income		1,763		1,579		2,212
Other income		93,016		89,494		139,875
Total other (expense) income, net		(179,094)		33,498		76,965
Income from operations before benefit (provision) for income taxes	$	9,642,346	$	6,392,088	$	3,960,848

Payment processing services revenue and gross profit are the result of transactions that primarily originated in the Americas.  For the year ended December 31, 2016, Customer B and Customer G had revenue concentration of 15% and 30%, respectively. No individual merchant of the payment processing segment was greater than 10% of segment revenue. 

“Corporate allocated cost of sales” includes expenses of running its platform infrastructure including: internet connectivity, hosting and data storage expenses, amortization expenses of capitalized software development costs, compensation and related benefits  of its technology personnel and a portion of general overhead expenses.

Concentration of revenue by customer by geographical region:

	Year ended December 31,
	2016		2015		2014
Multi-currency processing services revenue:
APAC:
Customer A	57	%	58	%	61	%
The Americas:
Customer D	21		12		20
Customer E	*		12		17
Customer F	*		18		23
Customer I	12		*		**
Customer J	11		*		*
EMEA:
Customer C	60		42		60
Customer H	35		58		40

*            Less than 10% revenue concentration.

**          New customer in 2015.