LOGM 2017 Annual Report

GoToMyPC enables mobile workstyles by providing secure, remote access to a PC or Mac from virtually any Internet-connected computer, as well as from supported iOS or Android mobile devices, such as an iPad, iPhone, Kindle Fire and Samsung Galaxy. GoToMyPC sets up easily with a secure encrypted con- nection and enables individuals to remotely use any resources hosted on their desktop just as though they were sitting in front of it. LogMeIn Pro is our premium remote access service that provides secure access to a remote computer’s cloud and/or locally stored files or other Internet- connected devices such as point-of-sale systems or kiosks, from any other Internet-connected computer or iOS or Android-based smartphones or tablets. Once a LogMeIn Pro host is installed on a device, a user can quickly and easily access that device’s desktop, files, applications and network resources remotely from their other Internet-enabled devices. LogMeIn Pro can be rapidly deployed and installed without the need for IT expertise. Users typically engage in a free trial prior to purchase. LastPass is a market leading password management and single sign on, or SSO, solution that gives individuals, business teams and enterprises the ability to securely store, create and access the user identity and login credentials for thou- sands of online applications and websites. Available online, in a desktop app and via iOS and Android mobile apps, LastPass is offered in free, premium and enterprise versions and runs on today’s most popular browsers, devices and operating systems. Sales and Marketing Our sales and marketing efforts are designed to attract prospective customers to our website, drive use of our free services or enroll them in free trials of our services and convert them to, and retain them as, paying customers. We expend sales and marketing resources through a combination of paid and unpaid sources. We also invest in public relations to broaden the general awareness of our services and to highlight the quality and reliability of our services for specific audiences. We are constantly seeking and employing new methods to reach more users and to convert them to paid subscribers. For the years ended December 31, 2015, 2016 and 2017, we spent $138.9 million, $162.8 million and $347.0 million, respectively, on sales and marketing. New Account Sales. Our sales are typically preceded by a trial of one of our services and 98% of our sales transactions are settled via credit card. Our sales operations team manages the processes, systems and procedures that determine whether or not a trial should be managed by a telephone-based sales representative or handled via our e-commerce sales process. In addition, a small sales and business development team concentrates on sales to larger organizations and the formulation of strategic technology partnerships that are intended to generate addi- tional sales. International Sales. We currently have sales teams located in Ireland, the United Kingdom, Germany, India and Australia focusing on international sales. In the years ended December 31, 2015, 2016 and 2017, we gen- erated approximately 30%, 29% and 24%, respectively, of our revenue from customers outside of the United States. As of December 31, 2015, 2016 and 2017, approximately 25%, 29% and 15% of our long-lived assets were located outside of the United States. Online Advertising. We advertise online through pay-per-click spending with search engines, banner advertis- ing with online advertising networks and other websites and email newsletters likely to be frequented by our target consumers, SMBs and IT professionals. Tradeshows and Events. We showcase our services at technology and industry-specific tradeshows and events. Our participation in these shows ranges from elaborate presentations in front of large groups to one-on-one dis- cussions and demonstrations at manned booths. 7