Concentrations of risk and segment information

9 Months Ended

Sep. 30, 2015

Concentrations of risk and segment information

Segment information

The Company operates as one operating segment as it only reports financial information on an aggregate and consolidated basis to its CEO, who is the Company’s chief operating decision maker.

Customer concentration

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables. The Company believes that credit risk in its accounts receivable is mitigated by the Company’s credit evaluation process, relatively short collection terms and dispersion of its customer base. The Company generally does not require collateral and losses on trade receivables have historically been within management’s expectations.

The Company had the following customers who represented 10% or more of its net accounts receivable balance:



	September 30, 2015	December 31, 2014
Customer A	17%	14%
Customer B	16%	17%
Customer C	12%	*
Customer D	10%	*
Customer E	*	11%

* Less than 10% of total accounts receivable for the period indicated

The Company sold accounts receivables, without recourse, of $55.1 million and $52.4 million in the three months ended September 30, 2015 and 2014, respectively, and $140.9 million and $121.6 million in the nine months ended September 30, 2015 and 2014, respectively, to a third-party banking institution. Factoring fees of $0.5 million and $0.5 million in the three months ended September 30, 2015 and 2014, respectively and $1.2 million and $1.1 million in the nine months ended September 30, 2015 and 2014, respectively, were included in other expense, net.

Customers with revenue equal to or greater than 10% of the Company's total revenue were as follows:



	Three months ended		Nine months ended
	September 30, 2015	September 30, 2014	September 30, 2015	September 30, 2014
Customer A	14%	27%	14%	19%
Customer B	11%	*	*	*

* Less than 10% of total revenue for the period indicated

Supplier concentration

The Company relies on third parties for the supply and manufacture of its capture devices, some of which are sole-source suppliers. The Company believes that outsourcing manufacturing enables greater scale and flexibility. As demand and product lines change, the Company periodically evaluates the need and advisability of adding manufacturers to support its operations. In instances where a supply and manufacture agreement does not exist or suppliers fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all. The Company also relies on third parties with whom it outsources supply chain activities related to inventory warehousing, order fulfillment, distribution and other direct sales logistics.

Geographic and other information

Revenue by geographic region, based on ship-to destinations, was as follows:



	Three months ended				Nine months ended
(in thousands)	September 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014
Americas	$	190,839	$	204,893	$	583,282	$	482,769
Europe, Middle East and Africa (EMEA)	156,639		56,068		432,904		207,285
Asia and Pacific area countries (APAC)	52,862		19,010		167,182		70,238
	$	400,340	$	279,971	$	1,183,368	$	760,292

Revenue in the United States, which is included in the Americas geographic region, was $169.2 million and $185.6 million for the three months ended September 30, 2015 and 2014, respectively, and $513.6 million and $428.9 million for the nine months ended September 30, 2015 and 2014, respectively. During the three months ended December 31, 2014, the Company reclassified four countries it had previously included in the APAC geographical region to be included in the EMEA geographical region. This caused $13.4 million of revenue to be reclassified from the APAC region to the EMEA region for the nine months ended September 30, 2014. The Company does not disclose revenue by product category as it does not track sales incentives and other revenue adjustments by product category to report such data.

As of September 30, 2015 and December 31, 2014, long-lived assets, which represent gross property and equipment, located outside the United States, primarily in China, were $46.7 million and $25.4 million, respectively.