SEGMENT INFORMATION AND MAJOR CUSTOMERS

We have two reportable operating segments for purposes of ASC 280-10-50 “Segment Reporting”: (i) IoT Products & Services (formerly "M2M") segment, and (ii) IoT Solutions (formerly "Solutions") segment. This determination was made by considering both qualitative and quantitative information. The qualitative information included, but was not limited to, the following: the nature of the products and services and customers differ between the two segments, the Chief Operating Decision Maker ("CODM") is reviewing both segments’ operating results separately and makes decisions about the allocation of resources, and discrete financial information is available through operating income (loss) for both segments. Our segments are described below:

IoT Products & Services

Our IoT Products & Services segment is composed of the following communications products and development services:


•	Cellular routers and gateways;


•	Radio frequency ("RF") which include our Digi XBee^® modules as well as other RF solutions;


•	Embedded products include Digi Connect^® and Rabbit^® embedded systems on module and single board computers;


•	Network products, which has the highest concentration of mature products, including console and serial servers and USB connected products;


•	Digi Wireless Design Services;


•	Digi Remote Manager^®; and


•	Digi Support Services which offers various levels of technical services for development assistance, consulting and training.

IoT Solutions

Our IoT Solutions segment offers wireless temperature and other condition-based monitoring services as well as employee task management services. These solutions are focused on three primary vertical markets: healthcare (including retail pharmacies), food service and transportation/logistics. The solutions are marketed as SmartSense by Digi^™, formerly Digi Smart Solutions. We have formed, expanded and enhanced the IoT Solutions segment through four acquisitions. These include: the October 2015 acquisition of Bluenica Corporation ("Bluenica"), the November 2016 acquisition of FreshTemp^®, LLC ("FreshTemp^®"), the January 2017 acquisition of SMART Temps^®, LLC ("SMART Temps^®") and the October 2017 acquisition of TempAlert, LLC ("TempAlert").

We measure our segment results primarily by reference to revenue and operating income. IoT Solutions revenue includes both product and service revenue. Certain costs incurred at the corporate level are allocated to our segments. These costs include information technology, employee benefits and shared facility services. The information technology and shared facility costs are allocated based on headcount and the employee benefits costs are allocated based on compensation costs.

5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)

Summary operating results for each of our segments were as follows (in thousands):



	Fiscal years ended September 30,
	2018			2017			2016
Revenue
IoT Products & Services	$	201,506		$	174,237		$	202,294
IoT Solutions	26,860			7,397			711
Total revenue	$	228,366		$	181,634		$	203,005
Operating income (loss)
IoT Products & Services	$	14,923		$	12,804		$	18,822
IoT Solutions	(12,601		)	(3,997		)	(1,717		)
Total operating income	$	2,322		$	8,807		$	17,105
Depreciation and amortization
IoT Products & Services	$	6,040		$	3,575		$	4,040
IoT Solutions	6,230			1,922			544
Total depreciation and amortization	$	12,270		$	5,497		$	4,584

Total expended for property, plant and equipment was as follows (in thousands):



	Fiscal years ended September 30,
	2018		2017		2016
IoT Products & Services	$	1,773	$	1,738	$	2,641
IoT Solutions	69		35		88
Total expended for property, plant and equipment	$	1,842	$	1,773	$	2,729

Total assets for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	209,574	$	182,555
IoT Solutions	98,801		47,644
Unallocated*	62,750		114,990
Total assets	$	371,125	$	345,189

*Unallocated consists of cash and cash equivalents, current marketable securities and long-term marketable securities.

Total goodwill for each of our segments were as follows (in thousands):



	As of September 30,
	2018		2017
IoT Products & Services	$	104,358	$	98,981
IoT Solutions	50,177		33,014
Total goodwill	$	154,535	$	131,995

Net property, equipment and improvements by geographic location were as follows (in thousands):



	As of September 30,
	2018		2017
United States	$	6,156	$	12,648
International, primarily Europe	114		153
Total net property, equipment and improvements	$	6,270	$	12,801

5. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)

The information in the following table provides total consolidated revenue by the geographic location of the customer (in thousands):



	Fiscal years ended September 30,
	2018		2017		2016
North America, primarily United States	$	163,397	$	117,749	$	131,457
Europe, Middle East & Africa	39,211		39,403		44,932
Asia	20,881		19,892		20,390
Latin America	4,877		4,590		6,226
Total revenue	$	228,366	$	181,634	$	203,005

Our U.S. export sales represented 29.9%, 37.1% and 38.7% of revenue for the fiscal years ended September 30, 2018, 2017 and 2016. No single customer exceeded 10% of revenue for any of the periods presented. At September 30, 2018, we had one customer, whose accounts receivable balance represented 12.0% of total accounts receivable. No single customer exceeded 10% of total accounts receivable at September 30, 2017.