Segment Reporting and Geographic Information

6 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

23. Segment Reporting and Geographic Information

The Company operates its business along two operating segments, which are segregated on the basis of revenue stream: Server Based Gaming and Virtual Sports. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, operating profit/(loss) from continuing operations, total assets and total capital expenditures for the three and six months ended March 31, 2017 and 2016, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions.

Segment Information

Three Months Ended March 31, 2017

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	16,933		$	8,463		$	-		$	25,396
Hardware		2,664			-			-			2,664
Total revenue		19,597			8,463			-			28,060
Cost of sales, excluding depreciation and amortization:
Cost of service		(2,595	)		(637	)		-			(3,232	)
Cost of hardware		(2,451	)		-			-			(2,451	)
Selling, general and administrative expenses		(3,826	)		(1,454	)		(9,124	)		(14,404	)
Stock-based compensation expense		(64	)		(78	)		(1,149	)		(1,291	)
Acquisition related transaction expenses		-			-			(813	)		(813	)
Depreciation and amortization		(5,940	)		(1,555	)		(509	)		(8,004	)
Segment operating income (loss) from continuing operations		4,721			4,739			(11,595	)		(2,135	)
Net operating loss											(2,135	)
Revenue from major customers:
Customer 1	$	7,422		$	256		$	-		$	7,678
Customer 2		3,341			232			-			3,573
Total revenue from major customers	$	10,763		$	488			-		$	11,251
Total assets at March 31, 2017	$	106,771		$	73,866		$	20,894		$	201,531
Total goodwill at March 31, 2017	$	-		$	43,829		$	-		$	43,829
Total capital expenditures for the three months ended March 31, 2017	$	6,947		$	1,565		$	1,250		$	9,762

Three Months Ended March 31, 2016

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	20,530		$	8,621		$	-		$	29,151
Hardware		1,289			-			-			1,289
Total revenue		21,819			8,621			-		$	30,440
Cost of sales, excluding depreciation and amortization:
Cost of service		(2,959	)		(1,166	)		-			(4,125	)
Cost of hardware		(503	)		-			-			(503	)
Selling, general and administrative expenses		(5,723	)		(525	)		(8,347	)		(14,595	)
Acquisition related transaction expenses		-			-			(389	)		(389	)
Depreciation and amortization		(6,981	)		(1,420	)		(771	)		(9,172	)
Segment operating income (loss) from continuing operations		5,653			5,510			(9,507	)		1,656
Net operating loss											1,656
Revenue from major customers:
Customer 1	$	8,659		$	293		$	-		$	8,952
Customer 2		3,644			17			-			3,661
Total revenue from major customers	$	12,303		$	310		$	-		$	12,613
Total assets at September 24, 2016	$	104,117		$	77,282		$	8,471		$	189,870
Total goodwill at September 24, 2016	$	-		$	45,705		$	-		$	45,705
Total capital expenditures for the three months ended March 31, 2016	$	2,843		$	2,270		$	730		$	5,843

 Six Months Ended March 31, 2017

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	35,154		$	15,486		$	-		$	50,640
Hardware		4,457			-			-			4,457
Total revenue		39,611			15,486			-			55,097
Cost of sales, excluding depreciation and amortization:
Cost of service		(5,491	)		(1,489	)		-			(6,980	)
Cost of hardware		(3,612	)		-			-			(3,612	)
Selling, general and administrative expenses		(7,650	)		(3,250	)		(17,235	)		(28,135	)
Stock-based compensation expense		(64	)		(78	)		(1,185	)		(1,327	)
Acquisition related transaction expenses		-			-			(11,273	)		(11,273	)
Depreciation and amortization		(11,593	)		(2,623	)		(956	)		(15,172	)
Segment operating income (loss) from continuing operations		11,201			8,046			(30,649	)		(11,402	)
Net operating loss											(11,402	)
Revenue from major customers:
Customer 1	$	15,228		$	507		$	-		$	15,735
Customer 2		6,273			323			-			6,596
Total revenue from major customers	$	21,501		$	830			-		$	22,331
Total capital expenditures for the six months ended March 31, 2017	$	11,921		$	3,242		$	1,744		$	16,907

Six Months Ended March 31, 2016

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	42,038		$	17,185		$	-		$	59,223
Hardware		2,032			-			-			2,032
Total revenue		44,070			17,185			-		$	61,255
Cost of sales, excluding depreciation and amortization:
Cost of service		(6,117	)		(2,375	)		-			(8,492	)
Cost of hardware		(841	)		-			-			(841	)
Selling, general and administrative expenses		(11,192	)		(2,606	)		(16,973	)		(30,771	)
Acquisition related transaction expenses		-			-			(1,667	)		(1,667	)
Depreciation and amortization		(14,489	)		(2,688	)		(1,267	)		(18,444	)
Segment operating income (loss) from continuing operations		11,431			9,516			(19,907	)		1,040
Net operating loss											1,040
Revenue from major customers:
Customer 1	$	17,921		$	430		$	-		$	18,351
Customer 2		6,983			19			-			7,002
Total revenue from major customers	$	24,904		$	449		$	-		$	25,353
Total capital expenditures for the six months ended March 31, 2016	$	6,602		$	3,500		$	1,341		$	11,443

Geographic Information

Geographic information for revenue is set forth below:

	Three Months Ended March 31,				Six Months Ended March 31,
	2017		2016		2017		2016
Total revenue
UK	$	19,916	$	22,642	$	39,069	$	45,033
Italy		4,075		5,025		8,450		10,374
Rest of world		4,069		2,773		7,578		5,848
Total	$	28,060	$	30,440	$	55,097	$	61,255

Geographic information of our non-current assets excluding goodwill is set forth below:

	March 31, 2017		September 24, 2016
Total non-current assets excluding goodwill
UK	$	69,501	$	73,033
Italy		5,920		7,737
Rest of world		21,601		18,655
Total	$	97,022	$	99,425

Software development costs are included as attributable to the market in which they are utilized.