Segment Reporting, Geographic Information, and Concentration of Credit Risk

3 Months Ended

Mar. 31, 2020

Segment Reporting, Geographic Information, and Concentration of Credit Risk

14. Segment Reporting, Geographic Information, and Concentration of Credit Risk

Segment Reporting

ASC 280, Segment Reporting (“ASC 280”) establishes standards for the reporting by public business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method for determining what information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses and about which separate financial information is available to its chief operating decision makers (“CODM”). The Company’s CODM is its CEO.

The CODM reviews financial information and business performance for each operating segment. The Company evaluates the performance of its operating segments at the revenue and gross profit levels. The Company does not report total assets, capital expenditures or operating expenses by operating segment as such information is not used by the CODM for purposes of assessing performance or allocating resources.

Net revenue and gross profit information by segment for the three months ended March 31, 2020 and 2019 are as follows (in thousands):

	Three Months Ended March 31,
	2020			2019
Premises:
Net revenue	$	8,234		$	9,330
Gross profit		4,526			4,379
Gross profit margin		55	%		47	%
Identity:
Net revenue		9,886			10,192
Gross profit		2,974			4,325
Gross profit margin		30	%		42	%
Total:
Net revenue		18,120			19,522
Gross profit		7,500			8,704
Gross profit margin		41	%		45	%
Operating expenses:
Research and development		2,596			2,026
Selling and marketing		4,497			4,498
General and administrative		2,191			2,622
Restructuring and severance		65			(12	)
Total operating expenses:		9,349			9,134
Loss from operations		(1,849	)		(430	)
Non-operating income (expense):
Interest expense, net		(252	)		(279	)
Foreign currency gains (losses), net		86			(2	)
Loss before income taxes	$	(2,015	)	$	(711	)

Geographic Information

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three months ended March 31, 2020 and 2019 is as follows (in thousands):

	Three Months Ended
	March 31,
	2020			2019
Americas	$	13,868		$	14,725
Europe and the Middle East		2,601			2,930
Asia-Pacific		1,651			1,867
Total	$	18,120		$	19,522

Percentage of net revenue:
Americas		77	%		75	%
Europe and the Middle East		14	%		15	%
Asia-Pacific		9	%		10	%
Total		100	%		100	%

Concentration of Credit Risk

No customer accounted for 10% or more of net revenue for either of the three months ended March 31, 2020 or 2019. No customer accounted for 10% of net accounts receivable at March 31, 2020 or December 31, 2019.

Long-lived assets by geographic location as of March 31, 2020 and December 31, 2019 are as follows (in thousands):

	March 31,		December 31,
	2020		2019
Property and equipment, net:
Americas	$	700	$	839
Europe and the Middle East		49		55
Asia-Pacific		1,207		1,148
Total property and equipment, net	$	1,956	$	2,042

Operating lease ROU assets:
Americas	$	3,868	$	4,265
Europe and the Middle East		102		105
Asia-Pacific		132		259
Total operating lease right-of-use assets	$	4,102	$	4,629