SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company reports segment information on the "management" approach which designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. The Company's chief operating decision maker ("CODM") is responsible for reviewing and approving investments in the Company's technology platforms and manufacturing infrastructure. The Company is organized into two reportable segments: Affymetrix Core and eBioscience.

Affymetrix Core is divided into four business units, with each business unit having its own strategic marketing and research and development groups to better serve customers and respond quickly to market needs. Affymetrix Core manufacturing operations are based on platforms that are used to produce various Affymetrix Core products that serve multiple applications and markets and similar customer and economic characteristics. Additionally, the business units share certain research, development, commercial operations and common corporate services that provide capital, infrastructure and functional support. As such, the Company concluded that the four business units represent one reportable operating segment. The following describes the four business units that form Affymetrix Core:

• Expression: This business unit markets the Company's GeneChip® gene expression products and services;

• Genetic Analysis and Clinical Applications: This business unit markets the Company's Axiom® genotyping product line, as well as products with clinical diagnostic and research applications including CytoScan® products, OncoScan® products, and the ViewRNA® in situ tissue hybridization platform for clinical translational research. In addition, the business unit is responsible for managing the Powered by Affymetrix™ (PbA) clinical partnering and licensing program which enables third-party diagnostic companies to access and develop DNA and RNA-based diagnostic tests based on Affymetrix technology platforms. This business unit also markets the CytoScan® Dx product, an FDA cleared microarray system used as an aid for the post-natal diagnosis of children with developmental delays and intellectual disabilities;

• Life Science Reagents: This business unit sells reagents, enzymes, purification kits and biochemicals used by life science researchers and other biological and health care manufacturers, including those developing and marketing Next Generation Sequencing (“NGS”) products and molecular diagnostics; and

• Corporate: This business unit is comprised primarily of incidental revenue from royalty arrangements and field revenue from field-services provided to customers of the Company.

The eBioscience business unit operates with its own manufacturing, research and development, and marketing groups. The business unit does utilize certain Corporate functions such as finance, legal, commercial operations and human resources. This reportable segment specializes in the areas of flow cytometry reagents, immunoassays, microscopic imaging, other protein-based analyses, QuantiGene® single and multiplex RNA solution assays (not including the View RNA in situ tissue hybridization platform) and the ProcartaPlex™ multiplex immunoassay product lines.

All business units sell their products through the Global Commercial Organization comprised of sales, field application and engineering support personnel. The Company markets and distributes its products directly to customers in North America, Japan and major European markets. In these markets, the Company has its own sales, service and application support personnel responsible for expanding and managing their respective customer bases. In other markets, such as Mexico, India, Brazil, the Middle East and Asia Pacific, including China, the Company sells its products principally through third-party distributors that specialize in life science supply. The Company is selectively expanding its presence in the larger and more attractive markets, such as China. For certain molecular diagnostic and industrial opportunities, the Company supplies its partners with arrays and instruments, which they incorporate into diagnostic products or other routine applications and assume the primary commercialization responsibilities.

During 2015, the commercial organization and general and administrative functions are fully integrated. The Company no longer reports these operating expenses at a segment level and began evaluating the performance of its reportable segments based on revenue and gross profit. Revenue is allocated to each business unit based on product codes. The 2014 amounts have been recast to conform to the current presentation.

The following table shows revenue and gross profit by reportable operating segment for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenue:
Affymetrix Core	$	61,689	$	64,645	$	191,173	$	186,177
eBioscience	24,841		22,441		73,041		69,312
Total revenue	$	86,530	$	87,086	$	264,214	$	255,489
Gross Profit:
Affymetrix Core	$	39,896	$	37,991	$	123,030	$	110,225
eBioscience	15,617		13,529		44,399		36,695
Total gross profit	$	55,513	$	51,520	$	167,429	$	146,920