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Segment Reporting
 3 Months Ended
Mar. 31, 2025
Segment Reporting  
Segment Reporting

16. Segment Reporting

 

The Company has two reportable operating segments, which consist of cloud telecommunications services and software solutions and uses segment income/(loss) from operations to assess performance against forecasted results and allocate resources to its segments. Segment income/(loss) from operations is determined on the same basis as consolidated income/(loss) from operations presented in the Company’s consolidated statements of operations. 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.

 

Our chief operating decision maker (CODM) is our Chief Executive Officer, Jeffrey G. Korn. The CODM uses segment income/(loss) from operations before income taxes for purposes of allocating resources and evaluating financial performance predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis using the segment income/(loss) before taxes measure when making decisions about allocating capital and personnel to the segments. The CODM does not review assets in evaluating the results of the operating segments, and therefore, such information is not presented. Segment revenue, significant segment expenses, income/(loss) from operations, other income/(expense) and income/(loss) before income tax for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

Three Months Ended March 31, 2025

 

Cloud

 

 

Software

 

 

 

 

(In thousands)

 

Telecommunications

 

 

Solutions

 

 

Total

 

 

 

Segment

 

 

Segment

 

 

Consolidated

 

Service revenue

 

$8,182

 

 

$-

 

 

$8,182

 

Software solutions revenue

 

 

-

 

 

 

6,868

 

 

 

6,868

 

Product revenue

 

 

1,007

 

 

 

-

 

 

 

1,007

 

Consolidated revenue

 

 

9,189

 

 

 

6,868

 

 

 

16,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: significant and other segment expenses

 

 

 

 

 

 

 

 

 

 

 

 

Employee expenses

 

 

3,926

 

 

 

3,245

 

 

 

7,171

 

Commissions

 

 

1,342

 

 

 

372

 

 

 

1,714

 

Contractor expense

 

 

444

 

 

 

385

 

 

 

829

 

Depreciation and amortization

 

 

305

 

 

 

466

 

 

 

771

 

Other segment items(1)

 

 

2,991

 

 

 

1,431

 

 

 

4,422

 

Total operating expense

 

 

9,008

 

 

 

5,899

 

 

 

14,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income/(loss) from operations

 

 

181

 

 

 

969

 

 

 

1,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: other segment income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

84

 

 

 

-

 

 

 

84

 

Interest expense

 

 

(9)

 

 

-

 

 

 

(9)

Other income/(expense)

 

 

6

 

 

 

(16)

 

 

(10)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) before income tax

 

$262

 

 

$953

 

 

$1,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(provision)

 

 

 

 

 

 

 

 

 

 

(44)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

 

 

 

 

 

 

 

 

$1,171

 

———————

(1)

 Other segment items primarily includes third-party telecommunication charges, cost of product revenue, software costs, data center costs, and other overhead expenses.

Three Months Ended March 31, 2024

 

Cloud

 

 

Software

 

 

 

 

(In thousands)

 

Telecommunications

 

 

Solutions

 

 

Total

 

 

 

Segment

 

 

Segment

 

 

Consolidated

 

Service revenue

 

$7,845

 

 

$-

 

 

$7,845

 

Software solutions revenue

 

 

-

 

 

 

5,146

 

 

 

5,146

 

Product revenue

 

 

1,295

 

 

 

-

 

 

 

1,295

 

Consolidated revenue

 

 

9,140

 

 

 

5,146

 

 

 

14,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: significant and other segment expenses

 

 

 

 

 

 

 

 

 

 

 

 

Employee expenses

 

 

4,149

 

 

 

2,488

 

 

 

6,637

 

Commissions

 

 

1,181

 

 

 

196

 

 

 

1,377

 

Contractor expense

 

 

419

 

 

 

398

 

 

 

817

 

Depreciation and amortization

 

 

355

 

 

 

483

 

 

 

838

 

Other segment items(1)

 

 

2,958

 

 

 

1,175

 

 

 

4,133

 

Total operating expense

 

 

9,062

 

 

 

4,740

 

 

 

13,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income/(loss) from operations

 

 

78

 

 

 

406

 

 

 

483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: other segment income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5

 

 

 

-

 

 

 

5

 

Interest expense

 

 

(13)

 

 

-

 

 

 

(13)

Other income/(expense)

 

 

2

 

 

 

(17)

 

 

(15)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) before income tax

 

$72

 

 

$389

 

 

$461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(provision)

 

 

 

 

 

 

 

 

 

 

(27)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

 

 

 

 

 

 

 

 

$434

 

 

———————

(1)

 Other segment items primarily includes third-party telecommunication charges, cost of product revenue, software costs, data center costs, and other overhead expenses.

 

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

March 31,

 

 

 

2025

 

 

2024

 

United States

 

$15,353

 

 

$13,431

 

International

 

 

704

 

 

 

855

 

Total revenue

 

$16,057

 

 

$14,286