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Segment and Geographic Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment and Geographic Information

NOTE 17 – SEGMENT AND GEOGRAPHIC INFORMATION

In connection with the Mergers, the Company re-evaluated its reportable segments. The Company concluded that it has two reportable segments for financial reporting purposes: (1) Product and (2) Intellectual Property (“IP”) Licensing. There are certain corporate overhead costs that are not allocated to these reportable segments because these operating amounts are not considered in evaluating the operating performance of the Company’s business segments.

Reportable segments are identified based on the Company's organizational structure and information reviewed by the Company’s chief operating decision maker ("CODM") to evaluate performance and allocate resources. The Company’s Chief Executive Officer is also the CODM as defined by the authoritative guidance on segment reporting.

The Product segment consists primarily of licensing Company-developed audio, digital radio, imaging, edge-based machine learning and multi-channel video user experience (“UX”) solutions. Audio, digital radio, imaging solutions and edge-based machine learning include the delivery of software and/or hardware-based solutions to the Company’s consumer electronics (“CE”) customers, automotive manufacturers or their supply chain partners. UX products and services revenue is primarily derived from multi-channel video service providers and CE manufacturers, licensing the TiVo service and selling TiVo-enabled devices like the Stream 4K, Personalized Content Discovery, enriched Metadata, viewership data and advertising.

The IP Licensing segment consists primarily of licensing the Company’s innovations to leading companies in the media and semiconductor industries. Licensing arrangements include access to one or more of the Company’s foundational patent portfolios and may also include access to some of its industry-leading technologies and proven know-how. In media, the Company’s licensees include multichannel video programming distributors, OTT video service providers, consumer electronics manufacturers, social media, and other new media companies. In semiconductor, the Company’s licensees include memory, sensors, RF component, and foundry companies.

The Company does not identify or allocate assets by reportable segment, nor does the CODM evaluate reportable segments using discrete asset information. Reportable segments do not record inter-segment revenue and accordingly there are none to report. The Company does not allocate other income and expense to reportable segments. Although the CODM uses operating income to evaluate reportable segments, operating costs included in one segment may benefit other segments.

The following table sets forth the Company’s segment revenue, operating expenses and operating income (loss) for the years ended December 31, 2020, 2019 and 2018 (in thousands):

 

 

 

Years Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product segment

 

$

376,101

 

 

$

198,124

 

 

$

218,349

 

IP Licensing segment

 

 

515,919

 

 

 

81,943

 

 

 

187,784

 

Total revenue

 

 

892,020

 

 

 

280,067

 

 

 

406,133

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Product segment

 

 

351,913

 

 

 

186,562

 

 

 

185,370

 

IP Licensing segment

 

 

113,363

 

 

 

44,542

 

 

 

74,002

 

Unallocated operating expenses (1)

 

 

249,117

 

(2)

 

117,671

 

 

 

122,781

 

Total operating expenses

 

 

714,393

 

 

 

348,775

 

 

 

382,153

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Product segment

 

 

24,188

 

 

 

11,562

 

 

 

32,979

 

IP Licensing segment

 

 

402,556

 

 

 

37,401

 

 

 

113,782

 

Unallocated operating expenses (1)

 

 

(249,117

)

 

 

(117,671

)

 

 

(122,781

)

Total operating income (loss)

 

$

177,627

 

 

$

(68,708

)

 

$

23,980

 

 

(1)

Unallocated operating expenses consist primarily of selling, marketing, general and administrative expenses, such as administration, human resources, finance, information technology, corporate development and procurement. These expenses are not allocated because these amounts are not considered in evaluating the operating performance of the Company’s business segments.

 

(2)

Includes approximately $29.4 million in one-time transaction costs related to the Mergers and $14.3 million in post-merger severance and retention costs.

Amortization and depreciation are included in segment operating income as shown below (in thousands):

 

 

 

Years Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Amortization and depreciation:

 

 

 

 

 

 

 

 

 

 

 

 

Product segment

 

$

111,129

 

 

$

93,402

 

 

$

93,582

 

IP Licensing segment

 

 

59,881

 

 

 

13,264

 

 

 

21,544

 

Unallocated

 

 

3,734

 

 

 

—

 

 

 

—

 

Total amortization and depreciation

 

$

174,744

 

 

$

106,666

 

 

$

115,126

 

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asia, and it is expected that this revenue will continue to account for a significant portion of total revenues in future periods. The table below lists the geographic revenue for the periods indicated (in thousands):

 

 

 

Years Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

U.S.

 

$

548,857

 

 

 

62

%

 

$

74,469

 

 

 

26

%

 

$

53,245

 

 

 

13

%

Japan

 

 

114,195

 

 

 

13

 

 

 

85,833

 

 

 

31

 

 

 

88,513

 

 

 

22

 

Korea

 

 

110,782

 

 

 

12

 

 

 

74,790

 

 

 

27

 

 

 

209,245

 

 

 

51

 

Europe and Middle East

 

 

38,830

 

 

 

4

 

 

 

19,638

 

 

 

7

 

 

 

31,864

 

 

 

8

 

Other

 

 

79,356

 

 

 

9

 

 

 

25,337

 

 

 

9

 

 

 

23,266

 

 

 

6

 

 

 

$

892,020

 

 

100%

 

 

$

280,067

 

 

100%

 

 

$

406,133

 

 

100%

 

 

For the years ended December 31, 2020, 2019 and 2018, one, two, and two customers, respectively, each accounted for 10% or more of total revenue.

As of December 31, 2020, 2019 and 2018, property and equipment, net, by geographic area are presented below (in thousands): 

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

U.S.

 

$

54,818

 

 

$

28,273

 

 

$

29,123

 

Europe

 

 

4,842

 

 

 

4,391

 

 

 

1,533

 

Asia and other

 

 

3,547

 

 

 

213

 

 

 

381

 

Total

 

$

63,207

 

 

$

32,877

 

 

$

31,037