v3.26.3
Segment Reporting
 9 Months Ended
Sep. 30, 2026
Segment Reporting  
Segment Reporting

18. 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, 2026 and 2025 are as follows (in thousands):

 

Three Months Ended September 30, 2026

 

Cloud

 

 

Software

 

 

 

(In thousands)

 

Telecommunications

 

 

Solutions

 

 

Total

 

 

 

Segment

 

 

Segment

 

 

Consolidated

 

Service revenue

 

$15,052

 

 

$-

 

 

$15,052

 

Software solutions revenue

 

 

-

 

 

 

7,695

 

 

 

7,695

 

Product revenue

 

 

2,435

 

 

 

-

 

 

 

2,435

 

Consolidated revenue

 

 

17,487

 

 

 

7,695

 

 

 

25,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: significant and other segment expenses

 

 

 

 

 

 

 

 

 

 

 

 

Employee expenses

 

 

6,316

 

 

 

3,826

 

 

 

10,142

 

Commissions

 

 

3,275

 

 

 

377

 

 

 

3,652

 

Contractor expense

 

 

775

 

 

 

531

 

 

 

1,306

 

Depreciation and amortization

 

 

1,484

 

 

 

400

 

 

 

1,884

 

Other segment items (1)

 

 

5,332

 

 

 

1,784

 

 

 

7,116

 

Total operating expense

 

 

17,182

 

 

 

6,918

 

 

 

24,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income/(loss) from operations

 

 

305

 

 

 

777

 

 

 

1,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: other segment income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

113

 

 

 

11

 

 

 

124

 

Interest expense

 

 

(81)

 

 

-

 

 

 

(81)

Other income/(expense)

 

 

17

 

 

 

2

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) before income tax

 

$354

 

 

$790

 

 

$1,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(provision)

 

 

 

 

 

 

 

 

 

 

(26)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

 

 

 

 

 

 

 

 

$1,118

 

_____________

(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, 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

 

 

 

1,923

 

 

 

5,464

 

Total operating expense

 

 

9,817

 

 

 

6,375

 

 

 

16,192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income/(loss) from operations

 

 

159

 

 

 

1,146

 

 

 

1,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$1,140

 

 

$1,493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(provision)

 

 

 

 

 

 

 

 

 

 

(43)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

 

 

 

 

 

 

 

 

$1,450

 

____________ 

(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, 2026

 

Cloud

 

 

Software

 

 

 

 

(In thousands)

 

Telecommunications

 

 

Solutions

 

 

Total

 

 

 

Segment

 

 

Segment

 

 

Consolidated

 

Service revenue

 

$40,481

 

 

$-

 

 

$40,481

 

Software solutions revenue

 

 

-

 

 

 

22,745

 

 

 

22,745

 

Product revenue

 

 

7,312

 

 

 

-

 

 

 

7,312

 

Consolidated revenue

 

 

47,793

 

 

 

22,745

 

 

 

70,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: significant and other segment expenses

 

 

 

 

 

 

 

 

 

 

 

 

Employee expenses

 

 

17,519

 

 

 

11,132

 

 

 

28,651

 

Commissions

 

 

8,495

 

 

 

1,098

 

 

 

9,593

 

Contractor expense

 

 

2,142

 

 

 

1,628

 

 

 

3,770

 

Depreciation and amortization

 

 

3,696

 

 

 

1,254

 

 

 

4,950

 

Other segment items (1)

 

 

15,437

 

 

 

5,560

 

 

 

20,997

 

Total operating expense

 

 

47,289

 

 

 

20,672

 

 

 

67,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment income/(loss) from operations

 

 

504

 

 

 

2,073

 

 

 

2,577

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: other segment income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

320

 

 

 

32

 

 

 

352

 

Interest expense

 

 

(143)

 

 

-

 

 

 

(143)

Other income/(expense)

 

 

41

 

 

 

-

 

 

 

41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) before income tax

 

$722

 

 

$2,105

 

 

$2,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit/(provision)

 

 

 

 

 

 

 

 

 

 

(80)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

 

 

 

 

 

 

 

 

$2,747

 

____________

(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.

 

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,

 

 

 

2026

 

 

Percentage

 

 

2025

 

 

Percentage

 

 

2026

 

 

Percentage

 

 

2025

 

 

Percentage

 

United States

 

$24,248

 

 

 

96%

 

$16,618

 

 

 

95%

 

$67,661

 

 

 

96%

 

$47,012

 

 

 

94%

International

 

 

934

 

 

 

4%

 

 

879

 

 

 

5%

 

 

2,877

 

 

 

4%

 

 

3,094

 

 

 

6%

Total revenue

 

$25,182

 

 

 

 

 

 

$17,497

 

 

 

 

 

 

$70,538

 

 

 

 

 

 

$50,106