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Segment Reporting
 9 Months Ended
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