Stamps.com 2007 Annual Report Download - page 24

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per paid customer in 2007 was $17.26 compared to $17.23 in 2006.
The following table sets forth our results of operation as a percentage of total revenue for the periods indicated:
Revenue
Our revenue is derived primarily from five sources: (1) service fees charged to customers for use of our PC Postage service;
(2) product sales consisting of Supplies Store revenue from the direct sale of consumables and supplies (3) insurance revenue
from our branded insurance offering; (4) PhotoStamps revenue from our PhotoStamps business; and (5) other revenue,
consisting of licensing revenue, and advertising revenue derived from advertising programs with our existing customer base.
Total revenue increased 1% from $84.6 million in 2006 to $85.8 million in 2007.
Twelve Months Ended
December 31,
2007
2006
Total Revenues
Service
65.2
%
63.6
%
Product
11.2
%
10.3
%
Insurance
1.7
%
1.7
%
PhotoStamps
20.8
%
22.2
%
Other
1.1
%
2.2
%
Total revenues
100.0
%
100.0
%
Cost of revenues
Service
11.3
%
11.7
%
Product
3.8
%
3.2
%
Insurance
0.5
%
0.5
%
PhotoStamps
13.8
%
13.7
%
Other
0.1
%
0.2
%
Total cost of revenues
29.5
%
29.3
%
Gross profit
70.5
%
70.7
%
Operating expenses:
Sales and marketing
38.6
%
32.9
%
Research and development
9.6
%
10.4
%
General and administrative
14.6
%
13.8
%
Total operating expenses
62.8
%
57.1
%
Income from operations
7.7
%
13.6
%
Other income, net
5.2
%
6.0
%
Income before income taxes
12.9
%
19.6
%
Provision for income taxes
0.5
%
0.2
%
Net income
12.4
%
19.4
%
22
TABLE OF CONTENTS
Service fee revenue increased 4% from $53.8 million in 2006 to $55.9 million in 2007. The increase in service fee revenue is
primarily due to the increase in our successfully billed customers as a result of the growth in our customer base. As a percentage
of total revenue, service fee revenue increased one percentage point to 65% in 2007 from 64% in 2006, primarily as a result of