LifeLock 2013 Annual Report Download - page 44

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We calculate cumulative ending members as the total number of members at the end of the relevant period. Most of our
members are paying subscribers who have enrolled in our consumer services directly with us on a monthly or annual basis. A small percentage of our
members receive our consumer services through third-party enterprises that pay us directly, often as a result of a breach within the enterprise or by embedding
our service within a broader third- party offering. We monitor cumulative ending members because it provides an indication of the revenue and expenses that
we expect to recognize in the future.
As of December 31, 2013, we had approximately 3.0 million cumulative ending members, an increase of 21% from December 31, 2012. This increase
was driven by several factors, including the success of our marketing campaigns, increased awareness of data breaches, media coverage of identity theft, and
our continued retention improvements.
We calculate gross new members as the total number of new members who enroll in one of our consumer services during the
relevant period. Many factors may affect the volume of gross new members in each period, including the effectiveness of our marketing campaigns, the timing
of our marketing programs, the effectiveness of our strategic partnerships, and the general level of identity theft coverage in the media. We monitor gross new
members because it provides an indication of the revenue and expenses that we expect to recognize in the future. For the year ended December 31, 2013, we
enrolled approximately 944,000 gross new members, up from approximately 762,000 for the year ended December 31, 2012. This increase was driven by the
success of our marketing campaigns, the continued success of our LifeLock Ultimate service, which accounted for more than 40% our gross new members
during the year ended December 31, 2013, and increased awareness of data breaches and identity theft.
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