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Note 17 - Segment Reporting
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

17. Segment Reporting: 


(a)     The Company is organized and managed based on two segments, which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The two segments are Domain Services and Network Access Services and are described as follows:


 

1.

Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada.


 

2.

Network Access Services - This segment derives revenue from the sale of retail mobile phones and services to individuals and small businesses through the Ting website. Revenues are generated in the United States.


The Chief Executive Officer is the chief operating decision maker and regularly reviews the operations and performance by segment. The chief operating decision maker reviews gross profit as a key measure of performance for each segment and to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, loss on disposition of property and equipment, amortization of intangibles, impairment of indefinite life intangible assets, loss (gain) on currency forward contracts, other income (expense), and provision for income taxes, are organized along functional lines and are not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the chief operating decision maker. The Company follows the same accounting policies for the segments as those described in note 2 to these consolidated financial statements.


Information by reportable segments, which is regularly reported to the chief operating decision maker is as follows:


Year Ended December 31, 2014

 

Domain

Name

Services

   

Network Access Services

   

Consolidated Totals

 

Net Revenues

  $ 111,780,102       35,887,005       147,667,107  

Cost of Revenues

    85,244,527       21,870,780       107,115,307  

Gross Profit

    26,535,575       14,016,225       40,551,800  
                         

Expenses:

                       

Sales and marketing

                    15,394,065  

Technical operations and development

                    4,305,715  

General and administrative

                    8,505,920  

Depreciation of property and equipment

                    226,432  

Amortization of intangibles

                    596,620  

Impairment of indefinite life intangible assets

                    577,145  

Loss on currency forward contracts

                    1,310,848  

Income from operations

                    9,635,055  

Other expenses, net

                    (206,730

)

Income before provision for income taxes

                    9,428,325  

Year Ended December 31, 2013

 

Domain

Name

Services

   

Network Access Services

   

Consolidated Totals

 

Net Revenues

  $ 113,404,667       16,530,237       129,934,904  

Cost of Revenues

    85,886,930       12,621,093       98,508,023  

Gross Profit

    27,517,737       3,909,144       31,426,881  
                         

Expenses:

                       

Sales and marketing

                    12,141,036  

Technical operations and development

                    4,158,603  

General and administrative

                    7,204,895  

Depreciation of property and equipment

                    215,447  

Amortization of intangibles

                    876,120  

Loss on currency forward contracts

                    676,120

 

Income from operations

                    6,154,660  

Other expenses, net

                    (354,857

)

Income before provision for income taxes

                    5,799,803  

Year Ended December 31, 2012

 

Domain

Name

Services

   

Network Access Services

   

Consolidated Totals

 

Net Revenues

  $ 110,761,217       3,965,684       114,726,901  

Cost of Revenues

    84,388,713       4,129,020       88,517,733  

Gross Profit

    26,372,504       (163,336

)

    26,209,168  
                         

Expenses:

                       

Sales and marketing

                    8,701,446  

Technical operations and development

                    4,302,820  

General and administrative

                    6,610,819  

Depreciation of property and equipment

                    190,420  

Loss on disposition of property and equipment

                    118,944  

Amortization of intangibles

                    876,120  

Gain on currency forward contracts

                    (682,851

)

Income from operations

                    6,091,450  

Other income, net

                    336,848  

Income before provision for income taxes

                    6,428,298  

(b)           The following is a summary of the Company’s revenue earned from each significant revenue stream:


   

Year ended December 31,

 
   

2014

   

2013

   

2012

 
                         

Wholesale

                       

Domain Services

  $ 86,640,949     $ 87,294,173     $ 87,434,450  

Value Added Services

    9,654,734       10,271,219       10,586,460  

Total Wholesale

    96,295,683       97,565,392       98,020,910  
                         

Retail

    10,417,746       8,360,035       6,775,160  

Portfolio

    5,066,673       7,479,240       5,965,147  
      111,780,102       113,404,667       110,761,217  
                         

Access

    35,887,005       16,530,237       3,965,684  
                         
    $ 147,667,107     $ 129,934,904     $ 114,726,901  

During the years ended December 31, 2014, 2013 and 2012, no customer accounted for more than 10% of total revenue. As at December 31, 2014, 2013 and 2012, no customers accounted for more than 10% of accounts receivable.


(c)           The following is a summary of the Company’s cost of revenues from each significant revenue stream:


   

Year ended December 31,

 
   

2014

   

2013

   

2012

 
                         

Wholesale

                       

Domain Services

  $ 72,353,061     $ 73,468,824     $ 73,168,196  

Value Added Services

    2,211,085       2,115,167       2,032,328  

Total Wholesale

    74,564,146       75,583,991       75,200,524  
                         

Retail

    4,539,439       3,521,023       2,675,843  

Portfolio

    886,637       1,234,214       832,008  
      79,990,222       80,339,228       78,708,375  
                         

Access

    21,870,780       12,621,093       4,129,020  
      101,861,002       92,960,321       82,837,395  
                         

Network, other costs

    4,554,635       4,835,939       4,925,058  

Network, depreciation and amortization costs

    699,670       711,763       755,280  
    $ 107,115,307     $ 98,508,023     $ 88,517,733  

(d)           The following is a summary of the Company’s property and equipment by geographic region:


   

Year ended December 31,

 
   

2014

   

2013

 

Canada

  $ 1,131,883     $ 1,292,425  

United States

    379,891       453,223  

Germany

    98,013       12,188  
    $ 1,609,787     $ 1,757,836  

(e)           The following is a summary of the Company’s amortizable intangible assets by geographic region:


   

Year ended December 31,

 
   

2014

   

2013

 

Canada

  $ —     $ 271,300  

Germany

    735,730       1,061,050  
    $ 735,730     $ 1,332,350  

(f)           The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region:


   

Year ended December 31,

 
   

2014

   

2013

 

Canada

  $ 7,378,619     $ 6,451,563  
    $ 7,378,619     $ 6,451,563