Note 13 - Segment Reporting

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13.

Segment Reporting:

 

(a)  We are organized and managed based on

two

operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate and are described as follows:

1.

     Network Access Services - This segment derives revenue from the sale of mobile phones, telephony services, high speed Internet access, billing solutions to individuals and small businesses primarily through the Ting website. Revenues are generated in the United States. 

2.

     Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada and the United States.

The Chief Executive Officer (the “CEO”) is the chief operating decision maker and regularly reviews the operations and performance by segment. The CEO reviews gross profit as (i) a key measure of performance for each segment and (ii) to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, amortization of intangibles assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expense net are organized along functional lines and are 

not

 included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are 

not

 reviewed at the segment level by the CEO. The Company follows the same accounting policies for the segments as those described in Notes

2

– Basis of presentation,

3

– Recent accounting pronouncements, and

10

- Revenue.

Information by reportable segments (with the exception of disaggregated revenue, which is discussed in Note

10

– Revenue), which is regularly reported to the chief operating decision maker is as follows (Dollar amounts in thousands of US dollars): 

	Network Access Services		Domain Services		Consolidated Totals
Three Months Ended March 31, 2020
Net Revenues	$	24,456	$	59,529	$	83,985
Cost of revenues
Cost of revenues		11,573		41,615		53,188
Network expenses		538		1,878		2,416
Depreciation of property and equipment		2,414		463		2,877
Amortization of intangible assets		27		327		354
Total cost of revenues		14,552		44,283		58,835
Gross Profit		9,904		15,246		25,150
Expenses:
Sales and marketing						8,985
Technical operations and development						2,751
General and administrative						4,741
Depreciation of property and equipment						113
Amortization of intangible assets						2,947
Loss (gain) on currency forward contracts						441
Income from operations						5,172
Other income (expenses), net						(1,237	)
Income before provision for income taxes					$	3,935

	Network Access Services		Domain Services		Consolidated Totals
Three Months Ended March 31, 2019
Net Revenues	$	23,252	$	55,701	$	78,953
Cost of revenues
Cost of revenues		11,812		40,120		51,932
Network expenses		521		1,874		2,395
Depreciation of property and equipment		1,454		347		1,801
Amortization of intangible assets		11		163		174
Total cost of revenues		13,798		42,504		56,302
Gross Profit		9,454		13,197		22,651
Expenses:
Sales and marketing						8,741
Technical operations and development						2,523
General and administrative						4,448
Depreciation of property and equipment						124
Amortization of intangible assets						1,866
Loss (gain) on currency forward contracts						(79	)
Income from operations						5,028
Other income (expenses), net						(972	)
Income before provision for income taxes					$	4,056

(b)           The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of US dollars): 

	March 31, 2020		December 31, 2019
Canada	$	2,157	$	2,319
United States		91,724		79,758
Europe		408		44
	$	94,289	$	82,121

(c)           The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of US dollars): 

	March 31, 2020		December 31, 2019
Canada	$	4,873	$	5,207
United States		42,745		40,137
	$	47,618	$	45,344

(d)           The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region (Dollar amounts in thousands of US dollars): 

	March 31, 2020		December 31, 2019
Canada	$	-	$	-
	$	-	$	-

(e)           Valuation and qualifying accounts (Dollar amounts in thousands of US dollars):

Allowance for doubtful accounts	Balance at beginning of period		Charged to costs and expenses			Write-offs during period		Balance at end of period
Three Months Ended March 31, 2020	$	131	$	64		$	-	$	195
Twelve months ended December 31, 2019	$	132	$	(1	)	$	-	$	131