Segment and Geographic Information

Operating segment information is presented based on the internal reporting used by the chief operating decision making group (“CODM”) to allocate resources and evaluate operating segment performance. Our segments consist of Industrial Inkjet, Productivity Software, and Fiery.

Industrial Inkjet consists of our VUTEk super-wide and wide format display graphics, Nozomi corrugated packaging and display, Reggiani textile, and Cretaprint ceramic tile decoration and building material industrial digital inkjet printers; digital ultra-violet (“UV”) curable, light-emitting diode (“LED”) curable, ceramic, water-based, and thermoforming and specialty inks, as well as a variety of textile inks including dye sublimation, pigmented, reactive dye, acid dye, pure disperse dye, water-based dispersed printing ink, supplies, and coatings; digital inkjet printer parts; and professional services. Printing surfaces include paper, vinyl, corrugated, textile, glass, plastic, aluminum composite, ceramic tile, wood, and many other flexible and rigid substrates.

Productivity Software consists of a complete software suite that enables efficient and automated end-to-end business and production workflows for the print and packaging industry. This Productivity Suite also provides tools to enable revenue growth, efficient scheduling, and optimization of processes, equipment, and personnel. Customers are provided the financial and technical flexibility to deploy locally within their business or to be hosted in the cloud. The Productivity Suite addresses all segments of the print industry and consists of the: (i) Packaging Suite, with Radius at its core, for tag & label, cartons, and flexible packaging businesses; (ii) Corrugated Packaging Suite, with CTI at its core, for corrugated packaging businesses, including corrugated control capability using EFI Escada; (iii) Enterprise Commercial Print Suite, with Monarch at its core, for enterprise print businesses; (iv) Publication Print Suite, with Monarch or Technique at its core, for publication print businesses; (v) Midmarket Print Suite, with Pace at its core, for medium size print businesses; (vi) Quick Print Suite, with PrintSmith Vision and essential capabilities of Digital StoreFront at its core, for small printers and in-plant sites; and (vii) Value Added Products, available with the suite and standalone, such as web-to-print, e-commerce, cross media marketing, warehousing, fulfillment, shop floor data collection, and shipping to reduce costs, increase profits, and offer new products and services to their existing and future customers. We also market Optitex computer-aided fashion design (“fashion CAD”) software, which facilitates fast fashion and increased efficiency in the textile and fashion industries.

Fiery consists of Fiery and FreeFlow Print Server (“FFPS”), which was acquired from Xerox Corporation (“Xerox”), that transform digital copiers and printers into high performance networked printing devices for the office, commercial and industrial printing markets. This operating segment is comprised of (i) stand-alone DFEs connected to digital printers, copiers, and other peripheral devices, (ii) embedded DFEs and design-licensed solutions used in digital copiers and multi-functional devices, (iii) optional software integrated into our DFE solutions such as Fiery Central, and Graphics Arts Package, (iv) Fiery Self Serve, our self-service and payment solution, and (v) stand-alone software-based solutions such as our proofing, textile, and scanning solutions.

Operating income is not reported by operating segment because operating expenses include significant shared expenses and other costs that are managed outside of the operating segments. Such operating expenses include various corporate expenses such as stock-based compensation, corporate sales and marketing, research and development, amortization of identified intangibles, various non-recurring charges, and other separately managed general and administrative expenses.

Our revenue and gross profit (i.e., gross profit excluding stock-based compensation expense and amortization of the fair value adjustment on acquired FFPS inventory) by operating segment are summarized as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Industrial Inkjet
Revenue	$	156,434		$	141,693		$	298,643		$	264,956
Gross profit	54,983			52,510			104,690			101,580
Gross profit percentages	35.1		%	37.1		%	35.1		%	38.3		%
Productivity Software
Revenue	$	41,612		$	39,063		$	85,387		$	74,121
Gross profit	29,181			29,168			60,594			54,764
Gross profit percentages	70.1		%	74.7		%	71.0		%	73.9		%
Fiery
Revenue	$	63,026		$	66,291		$	116,908		$	136,661
Gross profit	45,467			46,239			84,222			95,937
Gross profit percentages	72.1		%	69.8		%	72.0		%	70.2		%

Operating segment profit is reconciled to our Condensed Consolidated Statements of Operations as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Segment gross profit	$	129,631		$	127,917		$	249,506		$	252,281
Stock-based compensation expense	(1,043		)	(665		)	(1,811		)	(1,499		)
Gross profit	$	128,588		$	127,252		$	247,695		$	250,782

Tangible and intangible assets, net of liabilities, are summarized by operating segment as follows (in thousands):



June 30, 2018	Industrial Inkjet		Productivity Software			Fiery		Corporate and Unallocated Net Assets		Total
Goodwill	$	150,682	$	170,632		$	74,107	$	—	$	395,421
Identified intangible assets, net	52,216		28,272			17,048		—		97,536
Tangible assets, net of liabilities	240,548		(22,908		)	11,030		45,729		274,399
Net tangible and intangible assets	$	443,446	$	175,996		$	102,185	$	45,729	$	767,356



December 31, 2017
Goodwill	$	154,373	$	174,644		$	74,261	$	—	$	403,278
Identified intangible assets, net	66,547		36,379			20,082		—		123,008
Tangible assets, net of liabilities	221,933		(27,755		)	11,286		49,561		255,025
Net tangible and intangible assets	$	442,853	$	183,268		$	105,629	$	49,561	$	781,311

Corporate and unallocated assets and liabilities consist of cash and cash equivalents, short-term investments, restricted cash equivalents, corporate headquarters facility, convertible senior notes, imputed financing obligation related to build-to-suit lease, income taxes receivable, and income taxes payable.

Geographic Regions

We report revenue by geographic region based on ship-to destination, summarized as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Americas	$	122,294	$	114,014	$	239,679	$	223,909
Europe, Middle East, and Africa (“EMEA”)	94,010		101,513		182,185		189,546
Asia Pacific (“APAC”)	44,768		31,520		79,074		62,283
Total revenue	$	261,072	$	247,047	$	500,938	$	475,738