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OPERATING SEGMENT INFORMATION
3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
OPERATING SEGMENT INFORMATION OPERATING SEGMENT INFORMATION
The Company has two reportable segments, which are intended to align with the manner in which the business is managed: Cloud and Edge, and IP Optical Networks.

The Cloud and Edge segment provides secure and reliable software and hardware products, solutions and services for enabling Voice over Internet Protocol ("VoIP") communications, Voice over Long-Term Evolution ("VoLTE") and Voice Over 5G ("VoNR") communications, and Unified Communications and Collaboration ("UC&C") within service provider and enterprise networks and from the cloud. The Cloud and Edge products are increasingly software-centric and cloud-native for deployment on private, public or hybrid cloud infrastructures, in data centers, on enterprise premises and within service provider networks. Ribbon's Cloud and Edge product portfolio consists of its Session Border Controller ("SBC") products and its Network Transformation ("NTR") products.

The IP Optical Networks segment provides high-performance, secure solutions for IP networking and optical transport, supporting wireless networks including 5G, metro and edge aggregation, core networking, data center interconnect, legacy transformation and transport solutions for wholesale carriers. This portfolio is offered to service provider, enterprise and industry verticals with critical transport network infrastructures including utilities, government, defense, transportation, and education and research.

The Company has not provided segment asset information as such information is not provided to the CODM and accordingly, asset information is not used in assessing segment performance. Segment revenue and expenses included in the tables below represent direct revenue and expense attributable to each segment. Please see Note 4 for information regarding the allocation of goodwill between segments.

The CODM utilizes revenue and adjusted gross profit to measure and assess each segment's performance. The Company calculates adjusted gross profit by excluding from cost of revenue: amortization of acquired technology and stock-based compensation, and may also exclude other items in future periods that the Company believes are not part of the Company's core business. Adjusted gross profit is not a financial measure determined in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies, and should not be considered a substitute for gross profit or other results reported in accordance with U.S. GAAP. See below for a reconciliation of adjusted gross profit to gross profit, which is the most directly comparable U.S. GAAP measure.

The tables below provide information regarding revenue, adjusted gross profit, and depreciation expense by reportable segment for the three months ended March 31, 2022 and 2021 (in thousands):
Three months ended
March 31,
2022
March 31,
2021
Segment revenue:
  Cloud and Edge$109,806 $125,422 
  IP Optical Networks63,392 67,350 
    Revenue$173,198 $192,772 

Three months ended
March 31,
2022
March 31,
2021
Segment adjusted gross profit:
  Cloud and Edge$68,293 $84,335 
  IP Optical Networks18,609 26,474 
    Total segment adjusted gross profit86,902 110,809 
Stock-based compensation expense(580)(262)
Amortization of acquired technology(8,267)(10,061)
      Gross profit$78,055 $100,486 

Three months ended
March 31,
2022
March 31,
2021
Segment depreciation expense:
  Cloud and Edge$2,715 $3,137 
  IP Optical Networks1,170 1,089 
    Depreciation expense$3,885 $4,226