Segment Information

We operate within a single industry segment -- computer software and related services. Operating segments as defined under GAAP are 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. Our chief operating decision maker is our President and Chief Executive Officer. We have three operating and reportable segments: (1) the Solutions Group, which includes license, subscription, support and cloud services revenue for our core CAD, SLM and PLM products; (2) the IoT Group, which includes license, subscription, support and cloud services revenue for our IoT, analytics and augmented reality solutions, and (3) Professional Services, which includes consulting, implementation and training revenue. Our reported segment profit includes revenue from third party sales of our products and services, less direct controllable segment costs. Direct costs of the segments include certain costs of revenue, research and development and certain marketing costs. Costs excluded from segment margin include cost of revenue, selling expenses, corporate marketing and general and administrative costs that are incurred in support of all of our segments and are not specifically allocated to our segments for management reporting. Additionally, the segment profit does not include stock-based compensation, amortization of intangible assets, restructuring charges and certain other identified costs that we do not allocate to the segments for purposes of evaluating their operational performance.

The revenue and profit attributable to our operating segments are summarized below. We do not produce asset information by reportable segment; therefore, it is not reported.



	Three months ended						Nine months ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
	(in thousands)
Solutions Group
Revenue	$	222,431		$	217,673		$	654,315		$	652,985
Direct costs	47,362			44,882			138,552			140,465
Profit	175,069			172,791			515,763			512,520

IoT Group
Revenue	25,204			20,678			68,409			51,034
Direct costs	25,454			22,255			72,051			61,478
Loss	(250		)	(1,577		)	(3,642		)	(10,444		)

Professional Services
Revenue	43,658			50,301			134,936			148,277
Direct costs	35,588			42,393			110,681			124,832
Profit	8,070			7,908			24,255			23,445

Total segment revenue	291,293			288,652			857,660			852,296
Total segment costs	108,404			109,530			321,284			326,775
Total segment profit	182,889			179,122			536,376			525,521

Other unallocated operating expenses	170,082			168,711			504,746			484,919
Restructuring charges	1,551			2,815			8,300			44,541
Total operating income (loss)	11,256			7,596			23,330			(3,939		)

Interest expense	(10,200		)	(8,164		)	(32,239		)	(19,511		)
Interest income and other expense, net	(357		)	(136		)	2,049			(369		)
Income (loss) before income taxes	$	699		$	(704	)	$	(6,860	)	$	(23,819	)