Segment Reporting and Geographic Information

12 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

24. Segmental Reporting and Geographic Information

Operating segments are identified as components of an enterprise for which separate and discrete financial information is available and is used by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief decision-maker is the Chief Executive Officer.

The Company’s chief decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue and operating profit by operating unit. This information is used for purposes of allocating resources and evaluating financial performance.

The Company operates its business along two operating segments, which are segregated based on the basis of revenue stream: Service 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 accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies.”

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the periods ended September 30, 2017, September 24, 2016 and September 26, 2015, 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 principally 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

Period ended September 30, 2017

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	74,072		$	33,424		$	—		$	107,496
Hardware		15,048			—			—			15,048
Total revenue		89,120			33,424			—			122,544
Cost of sales, excluding depreciation and amortization:
Cost of service		(11,688	)		(4,157	)		—			(15,845	)
Cost of hardware		(10,839	)		—			—			(10,839	)
Selling, general and administrative expenses		(15,569	)		(6,168	)		(36,564	)		(58,301	)
Stock-based compensation expense		(231	)		(261	)		(3,743	)		(4,235	)
Acquisition related transaction expenses		—			—			(11,411	)		(11,411	)
Depreciation and amortization		(26,367	)		(5,587	)		(1,856	)		(33,810	)
Segment operating income (loss)		24,426			17,251			(53,574	)		(11,897	)
Net operating loss										$	(11,897	)
Revenue from major customers:
Customer 1	$	31,110		$	1,142		$	—		$	32,252
Customer 2		12,273			525			—			12,798
Total revenue from major customers	$	43,383		$	1,667		$	—		$	45,050
Total assets at September 30, 2017	$	113,692		$	75,975		$	29,356		$	219,023
Total goodwill at September 30, 2017	$	—		$	47,076		$	—		$	47,076
Total capital expenditures for the period ended September 30, 2017	$	22,921		$	7,039		$	2,768		$	32,728

Period ended September 24, 2016

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	78,912		$	33,288		$	—		$	112,200
Hardware		7,573			—			—			7,573
Total revenue		86,485			33,288			—			119,773
Cost of sales, excluding depreciation and amortization:
Cost of service		(12,317	)		(4,308	)		—			(16,625	)
Cost of hardware		(3,789	)		—			—			(3,789	)
Selling, general and administrative expenses		(19,128	)		(7,050	)		(34,495	)		(60,673	)
Acquisition related transaction expenses		—			—			(4,959	)		(4,959	)
Depreciation and amortization		(26,678	)		(6,402	)		(1,930	)		(35,010	)
Segment operating income (loss)		24,573			15,528			(41,384	)		(1,283	)
Net operating loss										$	(1,283	)
Revenue from major customers:
Customer 1	$	33,681		$	971		$	—		$	34,652
Customer 2		12,876			192			—			13,068
Total revenue from major customers	$	46,557		$	1,163		$	—		$	47,720
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 period ended September 24, 2016	$	15,811		$	7,158		$	2,703		$	25,672

Period ended September 26, 2015

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
Revenue:
Service	$	88,139		$	27,186		$	—		$	115,325
Hardware		12,248			—			—			12,248
Total revenue		100,387			27,186			—			127,573
Cost of sales, excluding depreciation and amortization:
Cost of service		(11,895	)		(4,586	)		—			(16,481	)
Cost of hardware		(7,746	)		—			—			(7,746	)
Selling, general and administrative expenses		(22,017	)		(6,691	)		(35,997	)		(64,705	)
Acquisition related transaction expenses		—			—			(524	)		(524	)
Depreciation and amortization		(33,415	)		(3,952	)		(2,019	)		(39,386	)
Segment operating income (loss)		25,314			11,957			(38,540	)		(1,269	)
Net operating loss										$	(1,269	)
Revenue from major customers:
Customer 1	$	36,302		$	1,070		$	—		$	37,372
Customer 2		13,296			110			—			13,406
Total revenue from major customers	$	49,598		$	1,180		$	—		$	50,778
Total assets at September 26, 2015	$	135,841		$	94,017		$	10,082		$	239,940
Total goodwill at September 26, 2015	$	—		$	53,442		$	—		$	53,442
Total capital expenditures for the period ended September 26, 2015	$	44,731		$	5,923		$	1,751		$	52,405

Geographic Information

Geographic information for revenue is set forth below:

	September 30, 2017		September 24, 2016		September 26, 2015
Total revenue
UK	$	79,991	$	87,885	$	95,760
Italy		16,598		21,260		20,674
Greece		11,668		—		1,861
Rest of world		14,287		10,628		9,278
Total	$	122,544	$	119,773	$	127,573

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

	September 30, 2017		September 24, 2016
Total non-current assets, excluding goodwill
UK	$	68,069	$	73,033
Italy		5,761		7,737
Greece		20,728		9,653
Rest of world		14,189		9,002
Total	$	108,747	$	99,425

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