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Segment Reporting and Customer Concentration
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segment Reporting and Customer Concentration

3. SEGMENT REPORTING AND CUSTOMER CONCENTRATION

Segment Information. Our Chief Operating Decision Maker ("CODM") is our President and Chief Executive Officer. We have evaluated how our CODM has organized the 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 March 31, 2025, there is one reportable segment.

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 expense, 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 quarters ended March 31, 2025 and 2024:

 

 

 

Quarter Ended

 

 

 

March 31, 2025

 

 

March 31, 2024

 

Revenue

 

$

299,453

 

 

$

295,135

 

Less:

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

Transaction fees

 

 

27,901

 

 

 

25,062

 

All other (1)

 

 

125,233

 

 

 

133,323

 

Total cost of revenue

 

 

153,134

 

 

 

158,385

 

Research and development (1)

 

 

39,816

 

 

 

36,070

 

Selling and marketing (1)

 

 

26,673

 

 

 

29,199

 

General and administrative (1)

 

 

28,356

 

 

 

26,614

 

Restructuring and reorganization charges (1)

 

 

7,368

 

 

 

1,998

 

Stock-based compensation

 

 

8,712

 

 

 

7,869

 

Other segment items (2)

 

 

6,705

 

 

 

29

 

Interest expense

 

 

7,198

 

 

 

7,506

 

Income tax provision

 

 

5,361

 

 

 

7,998

 

Segment net income

 

 

16,130

 

 

 

19,467

 

Reconciliation of profit or loss:

 

 

 

 

 

 

Adjustments and reconciling items

 

 

-

 

 

 

-

 

Consolidated net income

 

$

16,130

 

 

$

19,467

 
(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 extinguishment of debt, 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.