Note 14—Business Segment Information

The Company has two reportable business segments, Telecom & Payment Services and net2phone. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations.

Effective at the beginning of fiscal 2019, the Company modified the way it reports its business verticals within its Telecom & Payment Services and net2phone segments to align more closely with its business strategy and operational structure. The modification to the business verticals did not change the reportable business segments.

The Telecom & Payment Services segment provides retail telecommunications and payment offerings as well as wholesale international long-distance traffic termination. The net2phone segment is comprised of (1) cloud-based communications services offered to enterprise customers mainly through value-added resellers, service providers, telecom agents and managed service providers, (2) SIP trunking, which supports inbound and outbound domestic and international calling from an IP PBX, and (3) cable telephony. Depreciation and amortization are allocated to Telecom & Payment Services and net2phone because the related assets are not tracked separately by segment. There are no other significant asymmetrical allocations to segments.

Operating segments not reportable individually are included in All Other, which included the real estate holdings and other investments that were included in the Rafael Spin-Off.

Corporate costs include compensation, consulting fees, treasury and accounts payable, tax and accounting services, human resources and payroll, corporate purchasing, corporate governance including Board of Directors’ fees, internal and external audit, investor relations, corporate insurance, corporate legal, business development, charitable contributions, travel and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any direct cost of revenues.

Beginning in the third quarter of fiscal 2019, certain expenses that were previously included in the Telecom & Payment Services segment were reclassified to Corporate. Comparative results have been reclassified and restated for all periods presented.

Operating results for the business segments of the Company are as follows:

(in thousands)	Telecom & Payment Services		net2phone			All Other			Corporate			Total
Three Months Ended April 30, 2019
Revenues	$	328,838	$	12,417		$	—		$	—		$	341,255
Income (loss) from operations		6,577		(1,267	)		—			(2,561	)		2,749
Severance		553		—			—			—			553
Other operating expense		—		—			—			(120	)		(120	)

Three Months Ended April 30, 2018
Revenues	$	356,362	$	9,086		$	(38	)	$	—		$	365,410
Income (loss) from operations		3,143		(769	)		(1,138	)		(2,929	)		(1,693	)
Severance		3,592		—			—			66			3,658
Other operating expense		—		—			—			(345	)		(345	)

Nine Months Ended April 30, 2019
Revenues	$	1,018,637	$	34,407		$	—		$	—		$	1,053,044
Income (loss) from operations		18,121		(4,663	)		—			(7,884	)		5,574
Severance		553		—			—			—			553
Other operating income (expense), net		215		25			—			(645	)		(405	)

Nine Months Ended April 30, 2018
Revenues	$	1,128,510	$	25,172		$	1,166		$	—		$	1,154,848
Income (loss) from operations		12,105		(2,233	)		(2,600	)		(9,362	)		(2,090	)
Severance		4,197		—			—			96			4,293
Other operating expense		—		—			—			(1,970	)		(1,970	)