Business Segments and International Operations

3 Months Ended

Feb. 29, 2020

Business Segments and International Operations

Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance. Our chief operating decision maker is our Chief Executive Officer.

We operate as three distinct business segments: OpenEdge, Data Connectivity and Integration, and Application Development and Deployment.

We do not manage our assets or capital expenditures by segment or assign other income (expense) and income taxes to segments. We manage and report such items on a consolidated company basis.

The following table provides revenue and contribution margin from our reportable segments and reconciles to the consolidated income from continuing operations before income taxes:



	Three Months Ended
(In thousands)	February 29, 2020			February 28, 2019
Segment revenue:
OpenEdge	$	77,079		$	65,252
Data Connectivity and Integration	13,685			6,000
Application Development and Deployment	18,919			18,297
Total revenue	109,683			89,549
Segment costs of revenue and operating expenses:
OpenEdge	19,750			18,315
Data Connectivity and Integration	2,680			1,500
Application Development and Deployment	7,288			5,427
Total costs of revenue and operating expenses	29,718			25,242
Segment contribution margin:
OpenEdge	57,329			46,937
Data Connectivity and Integration	11,005			4,500
Application Development and Deployment	11,631			12,870
Total contribution margin	79,965			64,307
Other unallocated expenses⁽¹⁾	49,253			48,898
Income from operations	30,712			15,409
Other expense, net	(3,397		)	(2,003		)
Income before income taxes	$	27,315		$	13,406
⁽¹⁾The following expenses are not allocated to our segments as we manage and report our business in these functional areas on a consolidated basis only: certain product development and corporate sales and marketing expenses, customer support, administration, amortization of acquired intangibles, stock-based compensation, restructuring, and acquisition-related expenses.

Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows (in thousands):



	Three Months Ended
(In thousands)	February 29, 2020		February 28, 2019
Performance obligations transferred at a point in time:
Software licenses	$	30,629	$	22,802
Performance obligations transferred over time:
Maintenance	70,056		59,999
Services	8,998		6,748
Total revenue	$	109,683	$	89,549

In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):



	Three Months Ended
(In thousands)	February 29, 2020				February 28, 2019
North America	$	65,413	59	%	$	46,498	52	%
EMEA	34,988		32	%	33,372		37	%
Latin America	4,000		4	%	4,461		5	%
Asia Pacific	5,282		5	%	5,218		6	%
Total revenue	$	109,683	100	%	$	89,549	100	%

No single customer, partner, or country outside of the U.S. has accounted for more than 10% of our total revenue for the three months ended February 29, 2020 and February 28, 2019. As of February 29, 2020 and November 30, 2019, no individual customer accounted for 10% or more of our net accounts receivable balance. As of February 29, 2020 and November 30, 2019, no individual foreign country accounted for 10% or more of total consolidated assets.