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Segment Information and Major Customers
 12 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND MAJOR CUSTOMERS SEGMENT INFORMATION AND MAJOR CUSTOMERS
We have two reportable operating segments: (i) IoT Products & Services and (ii) IoT Solutions. 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, discrete financial information is available through operating income for both segments and the Chief Operating Decision Maker is reviewing both segments’ financial information separately to make decisions about the allocation of resources. Effective with the reorganization announcement on October 7, 2020 (see Note 10), our IoT Products & Services business is now structured to include four operating segments, each with a segment manager.
IoT Products & Services
Our IoT Products & Services segment is composed of the following four operating segments:
•Cellular Routers - box devices (fully enclosed) that provide connectivity typically in a place where the device can be plugged in exclusively using cellular communications.
•Console Servers - similar to cellular routers except they are exclusively for edge computing installations and data center applications exclusively using cellular communications.
•OEM Solutions - Original Equipment Manufacturers ("OEM") will be a chip, rather than a boxed device. This can come in the form of a stand-alone chip, or from a systems-on-module ("SOMs"). While cellular connectivity is used, other communication protocols can be used such as Zigbee, Bluetooth or Radio-Frequency ("RF") based on application.
•Infrastructure Management - includes battery operated, cellular enabled connect sensors as well as other types of console server applications that are more Digi Accelerated Linux ("DAL") based than Console Servers. This operating segment has some products that do not use cellular communications, but a large part of this segment does use cellular communications.
As the four operating segments have similar qualitative and quantitative factors, they are aggregated under the IoT Products & Services reportable segment. The qualitative factors include similar nature of products and services, production process, type or class of customers and methods used to distribute the products. The quantitative factors include similar operating income and gross profit. Our CODM reviews and makes business decisions which includes a primary review of operating income but also includes gross profit. Starting in the quarter ended December 31, 2020, the shared general and administrative costs are now allocated to each operating segment. Thus, our measure of segment profit or loss used by our CODM changed. As a result, our disclosed measure of segment operating income (loss) has been updated for all periods presented. The change to the business segment operating income aligns with the update to how the CODM assesses performance and allocates resources for our business segments.
4. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
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 these vertical markets: food service, healthcare (primarily pharmacies and hospitals) and supply chain. The solutions are marketed as SmartSense by Digi®. We initially formed, expanded and enhanced our IoT Solutions segment through four acquisitions, the last of which was completed in October 2017.
We measure our segment results primarily by reference to revenue and gross profit. IoT Solutions revenue includes product, service and subscription revenue.
Summary operating results for each of our segments were as follows (in thousands):
Year ended September 30,
202120202019
Revenue
IoT Products & Services$264,173 $249,530 $215,287 
IoT Solutions44,459 29,741 38,916 
Total revenue$308,632 $279,271 $254,203 
Gross Profit
IoT Products & Services$144,472 $129,349 $100,522 
IoT Solutions22,185 14,623 18,513 
Total gross profit$166,657 $143,972 $119,035 
Operating Income (loss)
IoT Products & Services$18,212 $27,216 $21,806 
IoT Solutions(7,684)(15,899)(11,734)
Total operating income$10,528 $11,317 $10,072 
Depreciation and Amortization
IoT Products & Services$13,109 $11,521 $6,102 
IoT Solutions7,768 7,778 7,294 
Total depreciation and amortization$20,877 $19,299 $13,396 
Total expended for property, plant and equipment was as follows (in thousands):
Year ended September 30,
202120202019
IoT Products & Services$2,257 $878 $8,863 
IoT Solutions*— 21 472 
Total expended for property, plant and equipment$2,257 $899 $9,335 
* Excluded from this amount is $1.8 million, $1.4 million and $1.1 million of transfers of inventory to property plant and equipment for subscriber assets for the year ended September 30, 2021, 2020 and 2019, respectively.
Total assets for each of our segments were as follows (in thousands):
As of September 30,
20212020
IoT Products & Services$386,934 $387,578 
IoT Solutions80,165 86,975 
Unallocated*152,432 54,129 
Total assets$619,531 $528,682 
*Unallocated consists of cash and cash equivalents.
4. SEGMENT INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
Net property, equipment and improvements by geographic location were as follows (in thousands):
As of September 30,
20212020
United States$11,941 $11,297 
International, primarily Europe191 210 
Total net property, equipment and improvements$12,132 $11,507 
Our U.S. export sales represented 26.2%, 25.1% and 28.5% of revenue for the fiscal years ended September 30, 2021, 2020 and 2019. No single customer exceeded 10% of revenue for any of the periods presented. At September 30, 2020, we had one customer whose accounts receivable balance represented 17.2% of total accounts receivable.