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Note 11 - Segment Reporting
 3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
1
1
. Segment reporting:
 
(a)     We are organized and managed based on three operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate and are described as follows:
 
1.     Network Access - Mobile Services - This segment derives revenue from the sale of mobile phones and telephony services to individuals and small businesses through the Ting website, as well as other network access services, including high speed Internet access, Internet hosting and network consulting services. Revenues are generated in the United States.
 
2.     Network Access - Other Services - This segment derives revenue from the provisioning of high speed Internet access, Internet hosting and consulting services.
 
3.     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.
 
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, amortization of intangibles assets, 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.
 
 
Information by reportable segments, which is regularly reported to the chief operating decision maker is as follows:
 
 
 
Network Access (1)
 
 
Domain Name
Services
 
 
Consolidated
Totals
 
                                 
Three months ended March 31, 2016
 
Mobile Services
 
 
Other Services
 
 
 
 
 
 
 
 
 
                                 
Net Revenues
   $ 16,944,070       895,062       27,771,281     $ 45,610,413  
                                 
Cost of revenues
                                
Cost of revenues
     8,548,295       440,737       19,861,441       28,850,473  
Network expenses
     37,150       177,374       1,018,407       1,232,931  
Depreciation of property and equipment
     -       185,680       161,073       346,753  
Amortization of intangible assets
     -       11,532       -       11,532  
Total cost of revenues
     8,585,445       815,323       21,040,921       30,441,689  
Gross Profit
     8,358,625       79,739       6,730,360       15,168,724  
                                 
Expenses:
                                
Sales and marketing
                             5,285,624  
Technical operations and development
                             1,176,360  
General and administrative
                             2,404,927  
Depreciation of property and equipment
                             73,268  
Amortization of intangible assets
                             56,997  
Impairment of indefinite life intangible assets
                             20,985  
Loss on currency forward contracts
                             (110,757 )
Income from operations
                             6,261,320  
Other income (expensees), net
                             82,648  
Income before provision for income taxes
                           $ 6,343,968  
 
(1) Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access,
Internet hosting and network consulting services.
 
 
 
 
Network Access (1)
 
 
Domain Name
Services
 
 
Consolidated
Totals
 
Three months ended March 31, 2015
 
Mobile Services
 
 
Other Services
 
 
 
 
 
 
 
 
 
                                 
Net Revenues
   $ 12,559,231       367,783       27,540,819     $ 40,467,833  
                                 
Cost of revenues
                                
Cost of revenues
     7,129,811       215,346       19,476,217       26,821,374  
Network expenses
     11,903       61,513       1,148,680       1,222,096  
Depreciation of property and equipment
     -       28,890       170,752       199,642  
Amortization of intangible assets
     -       3,924       -       3,924  
Total cost of revenues
     7,141,714       309,673       20,795,649       28,247,036  
Gross Profit
     5,417,517       58,110       6,745,170       12,220,797  
                                 
Expenses:
                                
Sales and marketing
                             3,799,175  
Technical operations and development
                             1,114,195  
General and administrative
                             2,468,022  
Depreciation of property and equipment
                             59,262  
Amortization of intangible assets
                             53,215  
Impairment of indefinite life intangible assets
                             12,493  
Loss on currency forward contracts
                             304,024  
Income from operations
                             4,410,411  
Other income (expensees), net
                             (24,775 )
Income before provision for income taxes
                           $ 4,385,636  
 
(1) Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access,
Internet hosting and network consulting services.
 
 
(b)           The following is a summary of the Company’s revenue earned from each significant revenue stream: 
 
 
  
Three months ended March 31,
  
 
  
2016
    
2015
  
                 
Network Access Services:
                
Mobile Services
     16,944,070       12,559,231  
Other Services
     895,062       367,783  
Total Network Access Services
     17,839,132       12,927,014  
                 
Domain Services:
                
Wholesale
                
Domain Services
   $ 21,270,865     $ 21,175,131  
Value Added Services
     2,302,433       2,241,998  
Total Wholesale
     23,573,298       23,417,129  
                 
Retail
     3,414,632       2,875,728  
Portfolio
     783,351       1,247,962  
Total Domain Services
     27,771,281       27,540,819  
                 
    $ 45,610,413     $ 40,467,833  
 
During the three months ended March 31, 2016 and 2015, no customer accounted for more than 10% of total revenue. As at March 31, 2016, one customer accounted for 10.6% of accounts receivable and no customer accounted for more than 10% of accounts receivable as at March 31, 2015.
 
 
(c)           The following is a summary of the Company’s cost of revenues from each significant revenue stream:
 
 
  
Three months ended March 31,
  
 
  
2016
    
2015
  
                 
Network Access Services:
                
Mobile Services
     8,548,295       7,129,811  
Other Services
     440,737       215,346  
Total Network Access Services
     8,989,032       7,345,157  
                 
Domain Services:
                
Wholesale
                
Domain Services
   $ 17,642,771     $ 17,546,327  
Value Added Services
     479,382       536,132  
Total Wholesale
     18,122,153       18,082,459  
                 
Retail
     1,578,326       1,220,500  
Portfolio
     160,962       173,258  
Total Domain Services
     19,861,441       19,476,217  
                 
Network Expenses:
                
Network, other costs
     1,232,931       1,222,096  
Network, depreciation and amortization costs
     358,285       203,566  
      1,591,216       1,425,662  
                 
    $ 30,441,689     $ 28,247,036  
 
 
(d)           The following is a summary of the Company’s property and equipment by geographic region:
 
 
 
March 31, 2016
 
 
December 31, 2015
 
             
                 
Canada
   $ 1,078,561     $ 1,225,236  
United States
     6,231,488       5,847,666  
Germany
     47,082       53,774  
    $ 7,357,131     $ 7,126,676  
 
 
(e)           The following is a summary of the Company’s amortizable intangible assets by geographic region:
 
 
 
March 31, 2016
 
 
December 31, 2015
 
             
                 
United States
   $ 685,395     $ 702,594  
Germany
     479,080       530,410  
    $ 1,164,475     $ 1,233,004  
 
 
 
 
(f)           The following is a summary of the Company’s deferred tax asset by geographic region:
 
 
 
March 31, 2016
 
 
December 31, 2015
 
             
                 
Canada
   $ 6,847,730     $ 7,621,092  
    $ 6,847,730     $ 7,621,092  
 
(g)           Valuation and qualifying accounts:
 
Allowance for doubtful accounts exclusding provision for credit notes
 
Balance at
beginning of period
 
 
Charged to
(recovered) costs and
expenses
 
 
Write-offs during
period
 
 
Balance at end of
period
 
                                 
Three months ended March 31, 2016
   $ 122,095     $ 16,534     $ -     $ 138,629  
Year ended December 31, 2015
   $ 125,766     $ (3,671 )   $ -     $ 122,095