23. Segment Information
|12 Months Ended|
Dec. 31, 2016
|Pro forma financial information|
|23. Segment Information||
Operating segments are defined under U.S. GAAP as components of an enterprise for which separate financial information is available and evaluated regularly by a company's chief operating decision maker in deciding how to allocate resources and assess performance.
The Company has two reportable segments Carrier Services and Business Services. These segments are organized by the products and services that are sold and the customers that are served. The Company measures and evaluates its reportable segments based on revenues and gross profit margins. The Companys measurement of segment gross profit exclude the Companys executive, administrative and support costs. The Companys segments and their principal activities consist of the following:
Carrier Services includes the termination of domestic and international carrier traffic utilizing primarily VoIP technology. VoIP permits a less costly and more rapid interconnection between the Company and internationaltelecommunications carriers, and generally provides better profit margins for the Company than other technologies. The Company currently interconnects with approximately 370 carrier customers and vendors, and is working to expand its interconnection relationships, particularly with carriers in emerging markets.
Through this operating segment, the Company provides cloud communications, cloud connectivity, cloud storage and security solutions to small, medium and large businesses. These services are sold through both the Companys direct sales force and its partner sales channel, which utilizes the efforts of independent third-party distributors to sell the Companys products and services. The Business Services segment includes the Companys acquisition of Apptix effective as of November 14, 2016, TFB effective as of March 31, 2016, RootAxcesseffective as of September 30, 2015, and Fidelity effective as of December 8, 2015/February 2016.
Operating segment information for the years ended December 31, 2016 and 2015 is summarized as follows:
*The Company employs executive, administrative, human resources, and finance resources that service both the Carrier Services and Business Services segments. The amounts reflected as Corporate & Unallocated represent those operating expenses, assets and capital expenditures that were not allocated to a business segment or product line.
The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.
Reference 1: http://www.xbrl.org/2003/role/presentationRef