Eightco Holdings Inc. Segments Disclosure
21. SEGMENTING REPORTING
The Company’s principal operating segments coincide with the types of products to be sold. The products from which revenues are derived are consistent with the reporting structure of the Company’s internal organization. The Company’s two reportable segments for the years ended December 31, 2024 and 2023 were the Inventory Management Solutions segment and the Corrugated Packaging Business. The Company’s chief operating decision maker has been identified as the Chairman and CEO, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.
Segment information is presented based upon the Company’s management organization structure as of December 31, 2024 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed. There are no inter-segment revenue transactions and, therefore, revenues are only to external customers.
EIGHTCO HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years ended December 31, 2024 and 2023
21. SEGMENTING REPORTING (continued)
The CODM evaluates segment performance based on net revenues, cost of revenues, gross profit, and selling, general and administrative expenses. These items are reviewed by segment. Depreciation and amortization is also monitored by management and presented below. Certain other costs, such as interest expense, other income (expense), and income taxes, are managed on a consolidated basis and not allocated to segments.
Segment operating profit is determined based upon internal performance measures used by the chief operating decision maker. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes.
Segment operating income excludes certain corporate costs that are not allocated to segments, including corporate-level general and administrative expenses and unallocated shared services. These items are disclosed separately as “Corporate.”
Management measures the performance of each reportable segment based upon several metrics, including net revenues, gross profit and operating loss. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments.
The Company does not allocate impairment charges, interest expense, income taxes, or other non-operating income or expenses to segments. Segment asset information is disclosed where reviewed by the CODM.
Segment information available with respect to these reportable business segments for the year ended December 31, 2024 and 2023 was as follows:
| For the Years Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues: | ||||||||
| Inventory Management Solutions | $ | 39,621,272 | $ | 67,568,353 | ||||
| Corrugated Packaging (Discontinued Operations) | 6,823,277 | 7,729,131 | ||||||
| Total segment and consolidated revenues | $ | 46,444,549 | $ | 75,297,484 | ||||
| Cost of revenues: | ||||||||
| Inventory Management Solutions | $ | 33,639,274 | $ | 61,308,561 | ||||
| Corrugated Packaging (Discontinued Operations) | 4,980,338 | 5,496,462 | ||||||
| Total segment and consolidated cost of revenues | $ | 38,619,612 | $ | 66,805,023 | ||||
| Gross profit: | ||||||||
| Inventory Management Solutions | $ | 5,981,998 | $ | 6,259,792 | ||||
| Corrugated Packaging (Discontinued Operations) | 1,842,939 | 2,232,669 | ||||||
| Total segment and consolidated gross profit | $ | 7,824,937 | $ | 8,492,461 | ||||
| Income from operations: | ||||||||
| Inventory Management Solutions | $ | (2,753,757 | ) | $ | (3,063,241 | ) | ||
| Corrugated Packaging (Discontinued Operations) | 402,975 | 702,645 | ||||||
| Corporate | (6,368,802 | ) | (7,116,576 | ) | ||||
| Total segment and consolidated income from operations | $ | (8,719,584 | ) | $ | (9,477,172 | ) | ||
| Depreciation and amortization: | ||||||||
| Inventory Management Solutions | $ | 2,280,836 | $ | 2,830,306 | ||||
| Corrugated Packaging (Discontinued Operations) | 173,836 | 214,225 | ||||||
| Total segment and consolidated depreciation and amortization | $ | 2,454,672 | $ | 3,044,531 | ||||
| Revenues by geography: | ||||||||
| North America | $ | 13,309,349 | $ | 14,634,111 | ||||
| Europe | 33,135,200 | 60,663,373 | ||||||
| Total geography and consolidated revenues | $ | 46,444,549 | $ | 75,297,484 | ||||
| Segment capital expenditures: | ||||||||
| Inventory Management Solutions | $ | 826 | $ | 51,922,852 | ||||
| Corrugated Packaging (Discontinued Operations) | 69,272 | 2,967,629 | ||||||
| Corporate | 2,409,913 | |||||||
| Total segment and consolidated capital expenditures | $ | 70,098 | $ | 57,300,394 | ||||
| Segment total assets: | ||||||||
| Inventory Management Solutions | $ | 46,533,449 | $ | 50,023,910 | ||||
| Corrugated Packaging (Discontinued Operations) | 1,798,239 | 2,967,629 | ||||||
| Corporate | 2,516,667 | 2,419,904 | ||||||
| Total segment and consolidated assets | $ | 50,848,355 | $ | 55,411,443 | ||||
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.