eFax 2015 Annual Report Download - page 43

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Revenues
(in thousands, except percentages) 2015
2014
2013
Percentage
Change 2015
versus 2014
Percentage
Change 2014
versus 2013
Revenues $ 720,815
$ 599,030
$ 520,801
20%
15%
Our revenues consist of revenues from our Business Cloud Services segment and from our Digital Media segment. Business Cloud Services revenues primarily consist of
revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services. We also generate Business Cloud Services revenues from
IP licensing. Digital Media revenues primarily consist of advertising revenues, fees paid for generating business leads, and licensing and sale of editorial content and trademarks.
Our revenues have increased over the past three years primarily due to the following factors:
• Acquisitions within our Digital Media properties, plus organic growth in that segment;
• Acquisitions within our Business Cloud Services segment, plus organic growth in that segment.
Cost of Revenues
(in thousands, except percentages) 2015
2014
2013
Percentage
Change 2015
versus 2014
Percentage
Change 2014
versus 2013
Cost of revenue $ 122,958
$ 105,989
$ 86,893
16%
22%
As a percent of revenue 17%
18%
17%
Cost of revenues is primarily comprised of costs associated with data and voice transmission, numbers, network operations, customer service, editorial and production costs,
online processing fees and equipment depreciation. The increase in cost of revenues for the year ended December 31, 2015 was primarily due to an increase in costs associated with
businesses acquired in and subsequent to fiscal 2014 that resulted in additional license costs, network operations, customer service, editorial and production costs and depreciation.
The increase in cost of revenues for the year ended December 31, 2014 was primarily due to an increase in costs associated with businesses acquired in and subsequent to fiscal 2013
that resulted in additional network operations, customer service, editorial and production costs, depreciation, customer service and processing fees.
Operating Expenses
SalesandMarketing.
(in thousands, except percentages) 2015
2014
2013
Percentage
Change 2015
versus 2014
Percentage
Change 2014
versus 2013
Sales and Marketing $ 159,009
$ 141,967
$ 131,317
12%
8%
As a percent of revenue 22%
24%
25%
Our sales and marketing costs consist primarily of Internet-based advertising, sales and marketing, personnel costs and other business development-related expenses. Our
Internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships
with an array of online service providers. Advertising cost for the year ended December 31, 2015 , 2014 and 2013 was $63.5 million , $60.5 million and $55.4 million ,
respectively. The increase in sales and marketing expenses from 2014 to 2015 and from 2013 to 2014 was primarily due to increased personnel costs and advertising associated with
businesses acquired within the Business Cloud Services and Digital Media segments.
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