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Segment Reporting and Significant Concentration
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting and Significant Concentration

3. Segment Reporting and Significant Concentration

Segment Information. Our CODM is our President and Chief Executive Officer. We have evaluated how our CODM has organized our Company for purposes of making operating decisions, preparing budgets and forecasts, setting targets, allocating resources, and assessing performance. Our CODM manages all business activities on a consolidated basis, and as a result, we have concluded that as of December 31, 2024, there is one reportable segment.

Our one segment provides solutions and services that help companies around the world monetize and digitally enable the customer experience by accurately capturing, managing, generating, and optimizing the interactions and revenue associated with their customers. We generate a substantial percentage of our revenue from customers utilizing Advanced Convergent Platform (“ACP”), a private SaaS platform, and related solutions (e.g., service technician management, analytics, electronic bill presentment, etc.) within the North American communications markets. In addition, a smaller portion of our revenue is generated from our public SaaS revenue management and payments platforms, serving customers globally. In addition, we license certain solutions (e.g., mediation, partner management, rating, and charging) and provide our professional services to implement, configure, and maintain these solutions. These solutions are sometimes provided under a managed service arrangement, where we assume long-term responsibility for delivering and maintaining our solutions and related operations under a defined scope and specified service levels.

The accounting policies of our one segment are the same as those described in the summary of significant accounting policies (see Note 2). As our one segment is managed on a consolidated basis, our measure of segment profit or loss is consolidated net income. Our CODM uses consolidated net income to assess the performance of our one segment and decide how and where to allocate resources and reinvest profits into the business in areas such as R&D, business and/or asset acquisitions, investments in market share expansion with our existing and potential new customers, talent, technology, the repurchase of our common stock, and/or the payment of dividends. Net income, and components of net income, are used to monitor actual performance and are compared to budgeted and forecasted results to assess the performance of our one segment, set targets, and establish management’s incentive compensation. The measure of consolidated segment assets is reported on our Balance Sheets as total assets. We do not have intra-entity sales or transfers.

We regularly provide our CODM a reporting package that shows our results by functional expenses, similar to our Income Statements. However, for purposes of this reporting package, depreciation is included in these functional expense categories, rather than broken out separately. Additionally, certain expenses such as restructuring and reorganization charges, executive transition costs, and acquisition-related charges, along with non-cash charges such as stock-based compensation and amortization of acquired intangibles, are excluded. The following table provides the significant expenses that are regularly provided to our CODM for our one segment, the required disclosable amounts that are included in consolidated net income, and a reconciliation to consolidated net income for the following years:

 

 

 

2024

 

 

2023

 

 

2022

 

Revenue

 

$

1,197,248

 

 

$

1,169,258

 

 

$

1,089,752

 

Less:

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Transaction fees

 

 

97,857

 

 

 

87,430

 

 

 

75,679

 

All other (1)

 

 

513,237

 

 

 

530,109

 

 

 

488,934

 

Total cost of revenue

 

 

611,094

 

 

 

617,539

 

 

 

564,613

 

Research and development (1)

 

 

155,638

 

 

 

142,962

 

 

 

137,102

 

Selling and marketing (1)

 

 

114,323

 

 

 

114,207

 

 

 

111,693

 

General and administrative (1)

 

 

116,761

 

 

 

108,823

 

 

 

107,513

 

Restructuring and reorganization charges (1)

 

 

13,323

 

 

 

16,336

 

 

 

46,308

 

Stock-based compensation

 

 

34,385

 

 

 

29,480

 

 

 

27,945

 

Other segment items (2)

 

 

8,983

 

 

 

16,384

 

 

 

17,365

 

Interest expense

 

 

30,469

 

 

 

31,176

 

 

 

16,432

 

Income tax provision

 

 

25,420

 

 

 

26,105

 

 

 

16,721

 

Segment net income

 

 

86,852

 

 

 

66,246

 

 

 

44,060

 

Reconciliation of profit or loss:

 

 

 

 

 

 

 

 

 

Adjustments and reconciling items

 

 

-

 

 

 

-

 

 

 

-

 

Consolidated net income

 

$

86,852

 

 

$

66,246

 

 

$

44,060

 

 

(1)
These functional expense lines include depreciation expense, which is presented separately on our Income Statements.
(2)
Other segment items include acquisition-related costs (both transaction-related and amortization of acquired intangible assets), executive transition costs, interest income, loss on derivative liability upon debt conversion, and foreign currency gains/losses.

Depreciation expense and interest income are separately disclosed on our Income Statements. Amortization expense is separately disclosed on our Statements of Cash Flows and is discussed in Note 4.

Geographic Concentration. We use the location of the customer as the basis of attributing revenue to geographic location. Revenue from countries exceeding 10% of our total revenue for the following years were as follows:

 

 

 

2024

 

 

2023

 

 

2022

 

United States

 

$

978,308

 

 

$

935,391

 

 

$

869,486

 

All other

 

 

218,940

 

 

 

233,867

 

 

 

220,266

 

Total revenue

 

$

1,197,248

 

 

$

1,169,258

 

 

$

1,089,752

 

Long-lived assets (principally, property and equipment, operating lease right-of-use assets, software, acquired customer contracts, and customer contract costs) classified by the location of the controlling statutory company for countries exceeding 10% of the total long lived asset balance for the following years were as follows:

 

 

 

2024

 

 

2023

 

 

2022

 

United States

 

$

172,412

 

 

$

175,997

 

 

$

210,656

 

All other

 

 

28,462

 

 

 

28,355

 

 

 

33,744

 

Total long-lived assets

 

$

200,874

 

 

$

204,352

 

 

$

244,400

 

 

Customer Concentration. A large percentage of our revenue is generated from a limited number of customers in the global communications industry, with our three largest customers being Charter Communications, Inc. (“Charter”), Comcast Corporation (“Comcast”), and DISH Network L.L.C.

Revenue from customers exceeding 10% of our total revenue for the following years were as follows:

 

 

 

2024

 

 

2023

 

 

2022

 

Charter

 

 

20

%

 

 

21

%

 

 

20

%

Comcast

 

 

19

%

 

 

18

%

 

 

20

%

As of December 31, 2024 and 2023, the percentage of net billed accounts receivable balances attributable to these customers were as follows:

 

 

 

As of December 31,

 

 

 

2024

 

 

2023

 

Charter

 

 

20

%

 

 

23

%

Comcast

 

 

17

%

 

 

17

%

We expect to continue to generate a large percentage of our future revenue from our significant customers. There are inherent risks whenever a large percentage of total revenue is concentrated with a limited number of customers. Should a significant customer: (i) terminate or fail to renew their contracts with us, in whole or in part for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience financial or operating difficulties, it could have a material adverse effect on our financial position and results of operations.