LifeLock 2013 Annual Report Download - page 51

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     
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Cost of services $100,249 $ 79,916 $ 62,630 25.4% 27.6%
Percentage of revenue 27.1% 28.9% 32.3%
Gross profit 269,409 196,512 131,319 37.1% 49.6%
Percentage of revenue 72.9% 71.1% 67.7%
Gross profit for the year ended December 31, 2013 was $269.4 million, or 72.9% of revenue, an increase of $72.9 million, or 37.1%, over gross
profit of $196.5 million, or 71.1% of revenue, for the year ended December 31, 2012. The increase in our gross pro fit from 2012 to 2013 resulted primarily
from increased revenue associated with the growth in the number of our members and increased monthly average revenue per member. The increase in our
gross margin resulted primarily from efficiencies in our member services organization and scalability within certain third party fulfillment contracts as our
member base continued to grow.
Gross profit for the year ended December 31, 2012 was $196.5 million, or 71.1% of revenue, an increase of $65.2 million, or 49.6%, over gross
profit of $131.3 million, or 67.7% of revenue, for the year ended December 31, 2011. The increase in our gross pro fit from 2011 to 2012 resulted primarily
from increased revenue associated with the growth in the number of our members and increased monthly average revenue per member. The increase in our
gross margin percentage resulted primarily from efficiencies in our member services organization, partially offset by higher fulfillment expenses due to
enhancements to our service offerings. Gross profit also increased for the year ended December 31, 2012 due to our acquisition of ID Analytics on March 14,
2012, which added revenue from the enterprise segment at a higher gross margin percentage than from our traditional consumer segment.
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         
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Sales and marketing $162,891 $ 122,989 $ 91,217 32.4% 34.8%
Percentage of revenue 44.1% 44.5% 47.0%
Sales and marketing expenses for the year ended December 31, 2013 were $162.9 million, or 44.1% of revenue, compared with $123.0 million, or
44.5% of revenue, for the year ended December 31, 2012. The increase in our sales and marketing expenses from 2012 to 2013 resulted from increases in our
advertising expenses, external sales commissions, and sales and marketing expenses from ID Analytics, primarily consisting of personnel costs, since our
March 2012 acquisition. The increase in our sales and marketing expenses reflected our investment to drive new membership growth, our continued
advertising of our LifeLock Ultimate service, and our efforts to highlight the growing identity theft issue and to educate consumers.
Sales and marketing expenses for the year ended December 31, 2012 were $123.0 million, or 44.5% of revenue, compared with $91.2 million, or
47.0% of revenue, for the year ended December 31, 2011. The increase in our sales and marketing expenses from 2011 to 2012 resulted from increases in our
advertising expenses, external sales commissions, and sales and marketing expenses from ID Analytics, primarily consisting of personnel costs, since our
March 2012 acquisition. The increase in our sales and marketing expenses reflected our investment to drive new membership growth as well as additional
advertising to market our LifeLock Ultimate service, which was released in the fourth quarter of 2011.
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Technology and development $40,947 $ 29,543 $ 17,749 38.6% 66.4%
Percentage of revenue 11.1% 10.7% 9.2%
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