Segment and Geographic Information

3 Months Ended

Sep. 30, 2015

Segment and Geographic Information

Segment and Geographic Information

12.  Segment Information

Operating segments are defined as 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 to assess performance. Our chief operating decision maker is our President and Chief Executive Officer.

The subscription and software segment is engaged in the licensing of process optimization software solutions and associated support services. The services segment includes professional services and training.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies (refer to Note 2 in the financial statements of our Form 10-K for the year ended June 30, 2015). We do not track assets or capital expenditures by operating segments. Consequently, it is not practical to present assets, capital expenditures, depreciation or amortization by operating segments.

The following table presents a summary of our reportable segments’ profits:

	Subscription and software			Services			Total
	(Dollars in Thousands)
Three Months Ended September 30, 2015
Segment revenue	$	111,859		$	8,437		$	120,296
Segment expenses (1)	(44,275		)	(7,730		)	(52,005		)
Segment profit	$	67,584		$	707		$	68,291
Three Months Ended September 30, 2014
Segment revenue	$	98,743		$	8,383		$	107,126
Segment expenses (1)	(43,087		)	(7,180		)	(50,267		)
Segment profit	$	55,656		$	1,203		$	56,859

(1) Our reportable segments’ operating expenses include expenses directly attributable to the segments. Segment expenses include selling and marketing, research and development, stock-based compensation and certain corporate expenses incurred in support of the segments. Segment expenses do not include allocations of general and administrative; restructuring; interest income, net; and other (income) expense, net.

Reconciliation to Income Before Income Taxes

The following table presents a reconciliation of total segment profit to income before income taxes for the three months ended September 30, 2015 and 2014:

	Three Months Ended
	September 30,
	2015			2014
	(Dollars in Thousands)
Total segment profit for reportable segments	$	68,291		$	56,859
General and administrative	(12,862		)	(12,225		)
Other income, net	896			188
Interest income (net)	81			132
Income before income taxes	56,406			44,954