Segment and Geographical Information

The CODM is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company’s segments using information about its revenues, gross profit, and income from operations. Such evaluation excludes general corporate-level costs that are not specific to either of the reportable segments and are managed separately at the corporate level. Corporate-level costs include expenses related to executive management, finance and accounting, human resources, legal, training and development, and certain administrative expenses.

The two operating segments, which are the same as the Company’s two reportable segments, are as follows:

•

Automation and Analytics. The Automation and Analytics segment is organized around the design, manufacturing, selling, and servicing of medication and supply dispensing systems; pharmacy inventory management systems; and related software. The Automation and Analytics products are designed to enable the Company’s customers to enhance and improve the effectiveness of the medication-use process, the efficiency of the medical-surgical supply chain, overall patient care, and clinical and financial outcomes of medical facilities. Through modular configuration and upgrades, the Company’s systems can be tailored to specific customer needs. The financial results of InPharmics acquired in the second quarter of 2017 are included in the Automation and Analytics segment.

•

Medication Adherence. The Medication Adherence segment includes solutions to assist patients to remain adherent to their medication regimens. These solutions are comprised of a variety of tools and aids that may be directly used by a pharmacist or a healthcare provider in their direct care for a patient, or the patient themselves, and include software-based systems and medication adherence packaging. Software solutions primarily operate on the Omnicell Patient Engagement platform, a subscription-based software system which provides an environment for patient engagement by clinicians. Services running on this platform include medication synchronization, immunization management, medication therapy management, and a number of tools used by clinicians to manage patient engagement workflows. Medication Adherence packaging is designed either for patient use in care environments where there is a caregiver present or for environments where the patient cares for him or herself and includes the manufacturing and selling of consumable medication blister cards, packaging equipment, and ancillary products and services.

The following tables summarize the financial performance of the Company’s reportable segments, including a reconciliation of income from segment operations to income from total operations:



	Three months ended September 30,
	2018							2017
	Automation and Analytics		Medication Adherence			Total		Automation and Analytics		Medication Adherence		Total
	(In thousands)
Revenues:
Product revenues	$	120,248	$	29,461		$	149,709	$	110,368	$	26,470	$	136,838
Services and other revenues	48,055		6,503			54,558		44,249		5,661		49,910
Total revenues	168,303		35,964			204,267		154,617		32,131		186,748
Cost of revenues:
Cost of product revenues	54,958		24,191			79,149		59,811		19,914		79,725
Cost of services and other revenues	22,214		3,995			26,209		19,929		2,275		22,204
Total cost of revenues	77,172		28,186			105,358		79,740		22,189		101,929
Gross profit	91,131		7,778			98,909		74,877		9,942		84,819
Operating expenses	46,015		10,624			56,639		44,332		9,901		54,233
Income from operations	$	45,116	$	(2,846	)	$	42,270	$	30,545	$	41	$	30,586
Corporate costs						24,775						18,389
Income from operations						$	17,495					$	12,197




	Nine months ended September 30,
	2018							2017
	Automation and Analytics		Medication Adherence			Total		Automation and Analytics		Medication Adherence			Total
	(In thousands)
Revenues:
Product revenues	$	335,441	$	79,563		$	415,004	$	292,463	$	73,371		$	365,834
Services and other revenues	142,633		17,922			160,555		132,908		17,601			150,509
Total revenues	478,074		97,485			575,559		425,371		90,972			516,343
Cost of revenues:
Cost of product revenues	168,506		61,136			229,642		170,974		54,077			225,051
Cost of services and other revenues	65,594		10,176			75,770		58,243		7,907			66,150
Total cost of revenues	234,100		71,312			305,412		229,217		61,984			291,201
Gross profit	243,974		26,173			270,147		196,154		28,988			225,142
Operating expenses	142,572		31,119			173,691		139,902		31,196			171,098
Income (loss) from segment operations	$	101,402	$	(4,946	)	$	96,456	$	56,252	$	(2,208	)	$	54,044
Corporate costs						70,994							59,100
Income (loss) from operations						$	25,462						$	(5,056	)

Significant Customers

There were no customers that accounted for more than 10% of the Company’s total revenues for the three and nine months ended September 30, 2018 and 2017. Also, there were no customers that accounted for more than 10% of the Company’s accounts receivable as of September 30, 2018 and December 31, 2017.

Geographical Information

Revenues



	Three months ended September 30,
	2018		2017
	(In thousands)
United States	$	180,635	$	164,156
Rest of world ⁽¹⁾	23,632		22,592
Total revenues	$	204,267	$	186,748




	Nine months ended September 30,
	2018		2017
	(In thousands)
United States	$	502,481	$	447,877
Rest of world ⁽¹⁾	73,078		68,466
Total revenues	$	575,559	$	516,343

_________________________________________________

⁽¹⁾No individual country represented more than 10% of the respective totals.

Property and Equipment, Net



	September 30, 2018		December 31, 2017
	(In thousands)
United States	$	43,511	$	34,899
Rest of world ⁽¹⁾	6,973		7,696
Total property and equipment, net	$	50,484	$	42,595

_________________________________________________


⁽¹⁾	No individual country represented more than 10% of the respective totals.

Property and equipment, net is attributed to the geographic location in which it is located.