LOGM 2017 Annual Report

Results of Consolidated Operations The following table sets forth selected condensed consolidated statements of operations data for each of the peri- ods indicated as a percentage of total revenue (dollar amounts in thousands): Years Ended December 31, 2015 2016 2017 Amount Percent of Revenue Amount Percent of Revenue Percent Change Amount Percent of Revenue Percent Change Revenue . . . . . . . . . . . . . . $271,600 100% $336,068 100% 24% $989,786 100% 195% Cost of revenue . . . . . . . . 35,458 13% 45,501 14% 28% 203,203 21% 347% Gross profit . . . . . . . 236,142 87% 290,567 86% 23% 786,583 79% 171% Operating expenses Research and development . . . . . . 42,597 16% 57,193 17% 34% 156,731 16% 174% Sales and marketing . . . 138,946 51% 162,811 48% 17% 346,961 35% 113% General and administrative . . . . . 33,034 12% 60,693 18% 84% 160,366 16% 164% Legal settlements . . . . . 3,600 1% — 0% (100)% — 0% 0% Amortization of acquired intangibles . . . . . . . . 1,916 1% 5,457 2% 185% 134,342 14% 2,362% Total operating expenses . . . . . . . . 220,093 81% 286,154 85% 30% 798,400 81% 179% Income (loss) from operations . . . . . . . . . . $ 16,049 6% $ 4,413 1% (73)% $ (11,817) (1)% (368)% As of December 31, 2015 2016 Percent Change 2017 Percent Change Employees: Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 146 12% 444 204% Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 441 8% 1,031 134% Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357 400 12% 927 132% General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 137 25% 358 161% Total headcount at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006 1,124 12% 2,760 146% Years Ended December 31, 2016 and 2017 On January 31, 2017, our Merger with the GoTo Business added over 1,600 employees as of that date and revenue has increased to over $1 billion on an annualized basis. Accordingly, the revenue and cost comparisons have all increased in 2017 compared to 2016. Revenue. Revenue increased $653.7 million, or 195%, from $336.1 million for the year ended December 31, 2016 to $989.8 million for the year ended December 31, 2017. This increase was primarily attributable to $617.3 million of revenue from the GoTo Business since the Merger closed on January 31, 2017. 41