Segment and Geographic Information

12 Months Ended

Sep. 30, 2019

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 two operating and reportable segments: (1) Software Products, which includes license, subscription and related support revenue (including updates and technical support) for all our products; and (2) Professional Services, which includes consulting, implementation and training services. We do not allocate sales & marketing or general and administrative expense to our operating segments as these activities are managed on a consolidated basis. Additionally, 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.



(in thousands)	Year ended September 30,
	As reported ASC 606			ASC 605			As reported ASC 605			As reported ASC 605
	2019			2019			2018			2017
Software Products
Revenue	$	1,088,100		$	1,150,818		$	1,088,487		$	987,316
Operating Costs ⁽¹⁾	377,464			375,268			387,989			366,716
Profit	710,636			775,550			700,498			620,600

Professional Services
Revenue	167,531			160,676			153,337			176,723
Operating costs ⁽²⁾	133,846			128,818			136,964			145,051
Profit (loss)	33,685			31,858			16,373			31,672

Total segment revenue	1,255,631			1,311,494			1,241,824			1,164,039
Total segment costs	511,310			504,086			524,953			511,767
Total segment profit (loss)	744,321			807,408			716,871			652,272

Unallocated operating expenses:
Sales and marketing expenses	385,423			409,932			389,871			357,329
General and administrative expenses	104,393			104,393			108,159			108,363
Intangibles amortization	51,147			51,147			58,056			58,729
Restructuring and other charges, net	51,114			51,114			3,764			7,942
Stock-based compensation	86,400			86,400			82,939			76,708
Other unallocated operating expenses ⁽³⁾	2,802			2,802			1,469			1,435
Total operating income	63,042			101,620			72,613			41,766

Interest expense	(43,047		)	(43,047		)	(41,673		)	(42,400		)
Other (expense) income, net	305			131			(2,284		)	(772		)
Income (loss) before income taxes	$	20,300		$	58,704		$	28,656		$	(1,406	)

(1) Operating costs for the Software Products segment includes all cost of software revenue and research and development costs, excluding stock-based compensation and intangible amortization. Operating costs for the Software Products segment includes depreciation of $4.6 million, $5.1 million and $5.0 million in 2019, 2018 and 2017, respectively.

(2) Operating costs for the Professional Services segment includes all cost of professional services revenue, excluding stock-based compensation, intangible amortization, and fair value adjustments for deferred services costs. The Professional Services segment includes depreciation of $1.4 million, $1.6 million and $1.8 million in 2019, 2018 and 2017, respectively.

(3) Other unallocated operating expenses include acquisition-related and other transactional costs, certain legal accrual expenses, pension plan termination-related costs and fair value adjustments for deferred services costs. Unallocated departments include depreciation of $20.6 million, $22.7 million and $21.2 million in 2019, 2018 and 2017, respectively.

We report revenue by the following two product groups:



(in thousands)	Year ended September 30,
	As reported ASC 606		ASC 605		As reported ASC 605		As reported ASC 605
	2019		2019		2018		2017
Solutions	$	1,099,811	$	1,135,891	$	1,102,546	$	1,060,692
IoT	155,820		175,603		139,278		103,348
Total revenue	$	1,255,631	$	1,311,494	$	1,241,824	$	1,164,039

We license products to customers worldwide. Our sales and marketing operations outside the United States are conducted principally through our international sales subsidiaries throughout Europe and the Asia-Pacific regions. Intercompany sales and transfers between geographic areas are accounted for at prices that are designed to be representative of unaffiliated party transactions. Our international revenue is presented based on the location of our customer. Revenue for the geographic regions in which we operate is presented below.



(in thousands)	Year ended September 30,
	As reported ASC 606		ASC 605		As reported ASC 605		As reported ASC 605
	2019		2019		2018		2017
Revenue:
Americas ⁽¹⁾	$	537,548	$	565,362	$	511,237	$	500,879
Europe ⁽²⁾	464,666		494,864		485,851		435,183
Asia Pacific	$	253,417	$	251,268	$	244,736	$	227,977
Total revenue	$	1,255,631	$	1,311,494	$	1,241,824	$	1,164,039


(1)	Includes revenue in the United States totaling $514.4 million (ASC 606) and $541.7 million (ASC 605), $487.3 million and $475.5 million for 2019, 2018 and 2017, respectively.


(2)	Includes revenue in Germany totaling $185.4 million (ASC 606) and $197.2 million (ASC 605), $193.3 million and $164.7 million for 2019, 2018 and 2017, respectively.

(3)

Substantially all of the Americas long-lived tangible assets are located in the United States.