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Segment Reporting | 9 Months Ended
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Sep. 30, 2025
Segment Reporting |
Segment Reporting | 17. 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 tax 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 income tax 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 and nine months ended September 30, 2025 and 2024 are as follows (in thousands):
Three Months Ended September 30, 2025 |  | Cloud |  |  | Software |  |  |  |
(In thousands) |  | Telecommunications |  |  | Solutions |  |  | Total |
|  | Segment |  |  | Segment |  |  | Consolidated |
Service revenue |  | $ | 8,607 |  |  | $ | - |  |  | $ | 8,607 |
Software solutions revenue |  |  | - |  |  |  | 7,521 |  |  |  | 7,521 |
Product revenue |  |  | 1,369 |  |  |  | - |  |  |  | 1,369 |
Consolidated revenue |  |  | 9,976 |  |  |  | 7,521 |  |  |  | 17,497 |
Less: significant and other segment expenses |  |  |  |  |  |  |  |  |  |  |  |
Employee expenses |  |  | 3,809 |  |  |  | 3,110 |  |  |  | 6,919 |
Commissions |  |  | 1,488 |  |  |  | 397 |  |  |  | 1,885 |
Contractor expense |  |  | 635 |  |  |  | 450 |  |  |  | 1,085 |
Depreciation and amortization |  |  | 344 |  |  |  | 495 |  |  |  | 839 |
Other segment items (1) |  |  | 3,541 |  |  |  | 1,922 |  |  |  | 5,463 |
Total operating expense |  |  | 9,817 |  |  |  | 6,374 |  |  |  | 16,191 |
Segment income/(loss) from operations |  |  | 159 |  |  |  | 1,147 |  |  |  | 1,306 |
Less: other segment income/(expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 199 |  |  |  | - |  |  |  | 199 |
Interest expense |  |  | (3 | ) |  |  | - |  |  |  | (3 | )
Other income/(expense) |  |  | (2 | ) |  |  | (6 | ) |  |  | (8 | )
Income/(loss) before income tax |  | $ | 353 |  |  | $ | 1,141 |  |  | $ | 1,494 |
Income tax benefit/(provision) |  |  |  |  |  |  |  |  |  |  | (43 | )
Net income/(loss) |  |  |  |  |  |  |  |  |  | $ | 1,451 |
____________________
(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 September 30, 2024 |  | Cloud |  |  | Software |  |  |  |
(In thousands) |  | Telecommunications |  |  | Solutions |  |  | Total |
|  | Segment |  |  | Segment |  |  | Consolidated |
Service revenue |  | $ | 7,953 |  |  |  |  |  | $ | 7,953 |
Software solutions revenue |  |  |  |  |  |  | 5,860 |  |  |  | 5,860 |
Product revenue |  |  | 1,814 |  |  |  |  |  |  |  | 1,814 |
Consolidated revenue |  |  | 9,767 |  |  |  | 5,860 |  |  |  | 15,627 |
Less: significant and other segment expenses |  |  |  |  |  |  |  |  |  |  |  |
Employee expenses |  |  | 4,093 |  |  |  | 2,981 |  |  |  | 7,074 |
Commissions |  |  | 1,344 |  |  |  | 291 |  |  |  | 1,635 |
Contractor expense |  |  | 420 |  |  |  | 455 |  |  |  | 875 |
Depreciation and amortization |  |  | 349 |  |  |  | 480 |  |  |  | 829 |
Other segment items (1) |  |  | 3,600 |  |  |  | 1,479 |  |  |  | 5,079 |
Total operating expense |  |  | 9,806 |  |  |  | 5,686 |  |  |  | 15,492 |
Segment income/(loss) from operations |  |  | (39 | ) |  |  | 174 |  |  |  | 135 |
Less: other segment income/(expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 68 |  |  |  | - |  |  |  | 68 |
Interest expense |  |  | (7 | ) |  |  | - |  |  |  | (7 | )
Other income/(expense) |  |  | 2 |  |  |  | (4 | ) |  |  | (2 | )
Income/(loss) before income tax |  | $ | 24 |  |  | $ | 170 |  |  | $ | 194 |
Income tax benefit/(provision) |  |  |  |  |  |  |  |  |  |  | (46 | )
Net income/(loss) |  |  |  |  |  |  |  |  |  | $ | 148 |
____________________
(1) | Other segment items primarily includes third-party telecommunication charges, cost of product revenue, software costs, data center costs, and other overhead expenses.
Nine Months Ended September 30, 2025 |  | Cloud |  |  | Software |  |  |  |
(In thousands) |  | Telecommunications |  |  | Solutions |  |  | Total |
|  | Segment |  |  | Segment |  |  | Consolidated |
Service revenue |  | $ | 25,163 |  |  | $ | - |  |  | $ | 25,163 |
Software solutions revenue |  |  | - |  |  |  | 21,364 |  |  |  | 21,364 |
Product revenue |  |  | 3,579 |  |  |  | - |  |  |  | 3,579 |
Consolidated revenue |  |  | 28,742 |  |  |  | 21,364 |  |  |  | 50,106 |
Less: significant and other segment expenses |  |  |  |  |  |  |  |  |  |  |  |
Employee expenses |  |  | 11,666 |  |  |  | 9,610 |  |  |  | 21,276 |
Commissions |  |  | 4,246 |  |  |  | 1,086 |  |  |  | 5,332 |
Contractor expense |  |  | 1,550 |  |  |  | 1,389 |  |  |  | 2,939 |
Depreciation and amortization |  |  | 987 |  |  |  | 1,479 |  |  |  | 2,466 |
Other segment items (1) |  |  | 9,773 |  |  |  | 4,762 |  |  |  | 14,535 |
Total operating expense |  |  | 28,222 |  |  |  | 18,326 |  |  |  | 46,548 |
Segment income/(loss) from operations |  |  | 520 |  |  |  | 3,038 |  |  |  | 3,558 |
Less: other segment income/(expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 409 |  |  |  | - |  |  |  | 409 |
Interest expense |  |  | (18 | ) |  |  | - |  |  |  | (18 | )
Other income/(expense) |  |  | 7 |  |  |  | 32 |  |  |  | 39 |
Income/(loss) before income tax |  | $ | 918 |  |  | $ | 3,070 |  |  | $ | 3,988 |
Income tax benefit/(provision) |  |  |  |  |  |  |  |  |  |  | (135 | )
Net income/(loss) |  |  |  |  |  |  |  |  |  | $ | 3,853 |
___________________
(1) | Other segment items primarily includes third-party telecommunication charges, cost of product revenue, software costs, data center costs, and other overhead expenses.
Nine Months Ended September 30, 2024 |  | Cloud |  |  | Software |  |  |  |
(In thousands) |  | Telecommunications |  |  | Solutions |  |  | Total |
|  | Segment |  |  | Segment |  |  | Consolidated |
Service revenue |  | $ | 23,865 |  |  |  |  |  | $ | 23,865 |
Software solutions revenue |  |  |  |  |  |  | 16,331 |  |  |  | 16,331 |
Product revenue |  |  | 4,402 |  |  |  |  |  |  |  | 4,402 |
Consolidated revenue |  |  | 28,267 |  |  |  | 16,331 |  |  |  | 44,598 |
Less: significant and other segment expenses |  |  |  |  |  |  |  |  |  |  |  |
Employee expenses |  |  | 12,313 |  |  |  | 7,910 |  |  |  | 20,223 |
Commissions |  |  | 3,762 |  |  |  | 678 |  |  |  | 4,440 |
Contractor expense |  |  | 1,340 |  |  |  | 1,249 |  |  |  | 2,589 |
Depreciation and amortization |  |  | 1,058 |  |  |  | 1,447 |  |  |  | 2,505 |
Other segment items (1) |  |  | 9,634 |  |  |  | 4,009 |  |  |  | 13,643 |
Total operating expense |  |  | 28,107 |  |  |  | 15,293 |  |  |  | 43,400 |
Segment income/(loss) from operations |  |  | 160 |  |  |  | 1,038 |  |  |  | 1,198 |
Less: other segment income/(expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 125 |  |  |  | - |  |  |  | 125 |
Interest expense |  |  | (31 | ) |  |  | - |  |  |  | (31 | )
Other income/(expense) |  |  | 9 |  |  |  | (31 | ) |  |  | (22 | )
Income/(loss) before income tax |  | $ | 263 |  |  | $ | 1,007 |  |  | $ | 1,270 |
Income tax benefit/(provision) |  |  |  |  |  |  |  |  |  |  | (100 | )
Net income/(loss) |  |  |  |  |  |  |  |  |  | $ | 1,170 |
____________________
(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 September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
United States |  | $ | 16,618 |  |  | $ | 14,962 |  |  | $ | 47,012 |  |  | $ | 41,934 |
International |  |  | 879 |  |  |  | 665 |  |  |  | 3,094 |  |  |  | 2,664 |
Total revenue |  | $ | 17,497 |  |  | $ | 15,627 |  |  | $ | 50,106 |  |  | $ | 44,598 |

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- Definition The entire disclosure for reporting segments including data and tables. 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