Tucows 2015 Annual Report Download - page 215

18. 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 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:
Network Access
Domain
Name
Services
Consolidated
Totals
Year ended December 31, 2015
Mobile
Services
Other
Services
Net Revenues $58,889,922 3,288,711 110,760,866 $ 172,939,499
Cost of revenues
Cost of revenues 32,615,416 1,627,438 78,847,116 113,089,970
Network expenses 495 605,556 4,858,726 5,464,777
Depreciation of property and equipment - 447,646 697,343 1,144,989
Amortization of intangible assets - 38,520 - 38,520
Total cost of revenues 32,615,911 2,719,160 84,403,185 119,738,256
Gross Profit 26,274,011 569,551 26,357,681 53,201,243
Expenses:
Sales and marketing 18,537,810
(1)
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