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Segment Reporting
 9 Months Ended
Sep. 30, 2024
Segment Reporting  
Segment Reporting

16. Segment Reporting

 

Our chief operating decision maker (who is our Chief Executive Officer) reviews our financial information presented on an operating segment basis for purposes of allocating resources and evaluating our financial performance. Following the merger with NetSapiens, Inc., the Company reorganized into two operating segments, a software solutions operating segment and a cloud telecommunications services operating segment. The cloud telecommunications services segment generates revenue from selling cloud telecommunication services, products, and other internet services. The software solutions segment generates revenue from selling perpetual software licenses and software subscriptions, subscription maintenance and support, and professional services. The Company has two reportable operating segments, which consist of cloud telecommunications services and software solutions. Segment revenue, income/(loss) from operations, other income/(expense) and income/(loss) before income tax provision are as follows (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

$9,767

 

 

$9,183

 

 

$28,267

 

 

$26,306

 

Software solutions

 

 

5,860

 

 

 

4,691

 

 

 

16,331

 

 

 

12,729

 

Consolidated revenue

 

 

15,627

 

 

 

13,874

 

 

 

44,598

 

 

 

39,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income/(loss) from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

(38)

 

 

73

 

 

 

160

 

 

 

(1,312)

Software solutions

 

 

173

 

 

 

291

 

 

 

1,038

 

 

 

(415)

Total operating income/(loss)

 

 

135

 

 

 

364

 

 

 

1,198

 

 

 

(1,727)

Other income/(expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

64

 

 

 

1,425

 

 

 

104

 

 

 

1,360

 

Software solutions

 

 

(5)

 

 

(52)

 

 

(32)

 

 

25

 

Total other income/(expense), net

 

 

59

 

 

 

1,373

 

 

 

72

 

 

 

1,385

 

Income/(loss) before income tax provision:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud telecommunications services

 

 

26

 

 

 

1,498

 

 

 

264

 

 

 

48

 

Software solutions

 

 

168

 

 

 

239

 

 

 

1,006

 

 

 

(390)

Income/(loss) before income tax provision

 

$194

 

 

$1,737

 

 

$1,270

 

 

$(342)

 

Depreciation and amortization for the cloud telecommunications services segment was $349 and $381 for the three months ended September 30, 2024 and 2023, respectively, and $1,058 and $1,176 for the nine months ended September 30, 2024 and 2023, respectively. Depreciation and amortization for the software solutions segment was $480 and $506 for the three months ended September 30, 2024 and 2023, respectively, and $1,447 and $1,519 for the nine months ended September 30, 2024 and 2023, respectively.

Interest income for the cloud telecommunications services segment was $69 and $0 for the three months ended September 30, 2024 and 2023, respectively, and $127 and $0 for the nine months ended September 30, 2024 and 2023, respectively. Interest income for the software solutions segment was $0 for the three and nine months ended September 30, 2024 and 2023, respectively.

 

Interest expense for the cloud telecommunications services segment was $7 and $36 for the three months ended September 30, 2024 and 2023, respectively, and $31 and $111 for the nine months ended September 30, 2024 and 2023, respectively.  Interest expense for the software solutions segment was $0 for the three and nine months ended September 30, 2024 and 2023, respectively. 

 

The Company operates in two geographic areas, the United States and international. Revenue by geography is based on the location of the customer from which the revenue is earned. Revenue by geographic location is as follows (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

United States

 

$14,962

 

 

$12,862

 

 

$41,934

 

 

$36,984

 

International

 

 

665

 

 

 

1,012

 

 

 

2,664

 

 

 

2,051

 

Total revenue

 

$15,627

 

 

$13,874

 

 

$44,598

 

 

$39,035