Segment Reporting

6 Months Ended

Jun. 30, 2020

16.	Segment Reporting

The Company has two operating and reportable segments, Commercial Services and Government Solutions. Commercial Services offers toll and violation management solutions and title and registration services to commercial fleet vehicle owners, rental car companies and violation-issuing authorities. Government Solutions implements and administers traffic safety programs and products for municipalities and local government agencies of all sizes. The Company’s Chief Operating Decision Maker function (“CODM”) is comprised of the Company’s CEO and certain defined representatives of the Company’s executive management team. The Company’s CODM monitors operating performance, allocates resources and deploys capital based on these two segments.

Segment performance is based on revenues and (loss) income from operations before depreciation, amortization, gain (loss) on disposal of assets, net, and stock-based compensation. The measure also excludes interest expense, net, income taxes and is inclusive of other income, net. The tables below refer to this measure as Segment profit (loss). The aforementioned items are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODM for the segments. Other income, net consists primarily of credit card rebates earned on the prepayment of tolling transactions and is therefore included in Segment profit (loss). There are no significant non-cash items reported in Segment profit (loss).

The following tables set forth financial information by segment for the respective periods:

	For the Three Months Ended June 30, 2020
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	27,272		$	35,543		$	—		$	62,815
Product sales		—			16,994			—			16,994
Total revenue		27,272			52,537			—			79,809
Cost of service revenue		646			367			—			1,013
Cost of product sales		—			9,060			—			9,060
Operating expenses		10,750			15,655			—			26,405
Selling, general and administrative expenses		10,191			7,150			503			17,844
Other income, net		(1,507	)		(16	)		—			(1,523	)
Segment profit (loss)	$	7,192		$	20,321		$	(503	)	$	27,010
Segment profit (loss)	$	7,192		$	20,321		$	(503	)	$	27,010
Depreciation and amortization		—			—			29,159			29,159
Loss on disposal of assets, net		5			2			—			7
Loss from tax receivable agreement adjustment		—			—			4,446			4,446
Stock-based compensation		—			—			3,271			3,271
Interest expense, net		—			—			9,539			9,539
Income (loss) before income tax benefit	$	7,187		$	20,319		$	(46,918	)	$	(19,412	)

	For the Three Months Ended June 30, 2019
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	68,091		$	34,966		$	—		$	103,057
Product sales		—			6,518			—			6,518
Total revenue		68,091			41,484			—			109,575
Cost of service revenue		915			698			—			1,613
Cost of product sales		—			2,918			—			2,918
Operating expenses		16,722			14,801			—			31,523
Selling, general and administrative expenses		9,629			7,561			1,135			18,325
Other income, net		(3,308	)		(37	)		—			(3,345	)
Segment profit (loss)	$	44,133		$	15,543		$	(1,135	)	$	58,541
Segment profit (loss)	$	44,133		$	15,543		$	(1,135	)	$	58,541
Depreciation and amortization		—			—			28,865			28,865
Gain on disposal of assets, net		—			(15	)		—			(15	)
Impairment of property and equipment		—			5,898			—			5,898
Stock-based compensation		—			—			2,812			2,812
Interest expense, net		—			—			15,656			15,656
Income (loss) before income tax provision	$	44,133		$	9,660		$	(48,468	)	$	5,325

	For the Six Months Ended June 30, 2020
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	88,514		$	73,798		$	—		$	162,312
Product sales		—			34,210			—			34,210
Total revenue		88,514			108,008			—			196,522
Cost of service revenue		1,453			779			—			2,232
Cost of product sales		—			17,750			—			17,750
Operating expenses		27,280			31,164			—			58,444
Selling, general and administrative expenses		23,575			16,819			788			41,182
Other income, net		(4,396	)		(52	)		—			(4,448	)
Segment profit (loss)	$	40,602		$	41,548		$	(788	)	$	81,362
Segment profit (loss)	$	40,602		$	41,548		$	(788	)	$	81,362
Depreciation and amortization		—			—			58,409			58,409
Loss (gain) on disposal of assets, net		5			(2	)		—			3
Loss from tax receivable agreement adjustment		—			—			4,446			4,446
Stock-based compensation		—			—			6,039			6,039
Interest expense, net		—			—			21,990			21,990
Income (loss) before income tax benefit	$	40,597		$	41,550		$	(91,672	)	$	(9,525	)

	For the Six Months Ended June 30, 2019
	Commercial			Government			Corporate
($ in thousands)	Services			Solutions			and Other			Total
Service revenue	$	130,679		$	70,448		$	—		$	201,127
Product sales		—			6,909			—			6,909
Total revenue		130,679			77,357			—			208,036
Cost of service revenue		1,779			1,223			—			3,002
Cost of product sales		—			3,194			—			3,194
Operating expenses		31,818			28,839			—			60,657
Selling, general and administrative expenses		20,391			15,411			1,135			36,937
Other income, net		(5,478	)		(74	)		—			(5,552	)
Segment profit (loss)	$	82,169		$	28,764		$	(1,135	)	$	109,798
Segment profit (loss)	$	82,169		$	28,764		$	(1,135	)	$	109,798
Depreciation and amortization		—			—			57,804			57,804
Gain on disposal of assets, net		—			(13	)		—			(13	)
Impairment of property and equipment		—			5,898			—			5,898
Stock-based compensation		—			—			4,955			4,955
Interest expense, net		—			—			31,689			31,689
Income (loss) before income tax provision	$	82,169		$	22,879		$	(95,583	)	$	9,465