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•	the growth of the e-commerce industry and the software-as-a-service, or SaaS, enterprise application software market in general and particularly in our markets;

•	the expected growth of gross merchandise value, or GMV, sold on marketplaces and comparison shopping websites and advertising dollars spent on paid search;

•	consumer adoption of mobile devices and usage for commerce;

•	the growth of social networking and commerce applications;

•	our growth strategy; and

•	our beliefs about our capital expenditure requirements and that our capital resources will be sufficient to meet our anticipated cash requirements through at least the next 12 months.

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•	provide a seamless consumer journey from branded manufacturer websites and digital marketing campaigns to the e-commerce sites and physical stores of authorized resellers;

•	reduce dependence on in-house information technology staff and avoid significant up-front capital expenses; and

•	access in real-time the latest product and software upgrades that we regularly release on our SaaS platform to keep up with the rapid pace of change and innovation in the market.

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Emergence and growth of online third-party marketplaces.    Third-party marketplaces, which are marketplaces that aggregate many sellers, are an increasingly important driver of growth for a number of large online retailers. Some of these marketplaces, such as Amazon, offer products from their own inventory, known as first-party products, as well as products sold by others, known as third-party products; other marketplaces, such as eBay, offer only third-party products. In addition, several of the largest traditional brick-and-mortar retailers, including La Redoute, Sears, Tesco and Walmart have incorporated third-party marketplaces into their online storefronts, allowing other retailers and branded manufacturers to market their products to consumers they might not otherwise reach.

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Mainstream adoption of mobile devices for e-commerce.    Mobile internet-enabled devices, such as smartphones and tablets, enable new consumer shopping behaviors, such as in-store barcode scanning to find online promotions, better pricing or alternative products. While benefiting consumers by increasing the transparency and accessibility of e-commerce, the proliferation of mobile devices and mobile commerce requires retailers and branded manufacturers to build additional device-specific optimization and functionality into their sites, increasing the complexity of managing their online presences.

•	Growth of additional online consumer touch points.    As consumers have moved more of their shopping and product discovery online, search engines, social networks and certain comparison shopping sites such as Google Shopping, as well as branded manufacturer websites, have emerged as key influencers and important points of product research for consumers making purchase decisions.

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Global growth in e-commerce driving opportunities for international selling.    The growth in e-commerce globally presents an opportunity for retailers and branded manufacturers to engage in international sales through country or region-specific marketplaces such as Alibaba in Asia. Retailers and branded manufacturers seeking to increase international e-commerce often need to extend their online presence to include a variety of these international channels.

•	Widespread use of social networking and commerce applications.    The rapid growth of social networking and commerce applications provides a nascent but potentially valuable channel through which retailers and branded manufacturers can connect to consumers.

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Increase in branded manufacturers’ participation in direct-to-consumer e-commerce. With the rise of Amazon and the struggles of some traditional retail partners, more branded manufacturers are exploring or participating in direct-to-consumer online sales using their own websites and/or third-party marketplaces. However, because those traditional retail partners still represent a majority of revenue for branded manufacturers, many branded manufacturers desire solutions that allow collaboration with those partners in addition to direct-to-consumer solutions.

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In-house solutions are costly and may be slow to adapt to industry change and innovation.    To maintain pace with the speed of change and innovation of online channels, retailers and branded manufacturers that rely on in-house capabilities are required to invest in and maintain significant technological infrastructure, human resources and industry relationships. Successful in-house solutions may typically require longer periods of setup time, substantial up-front capital expenditures and significant ongoing maintenance expense.

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Point solutions are limited in functionality and channels supported.    There are numerous narrowly tailored, or point, solutions available for retailers and branded manufacturers to help them manage single online channels or a single category of channels, but these point solutions often do not address the needs of retailers and branded manufacturers seeking to manage pricing and inventory across multiple channels through a single, unified platform.

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Solutions provided by the channels are not aligned with customers’ broader online goals.    Most online channels offer their own solutions that help retailers and branded manufacturers connect with their specific channel and provide basic inventory control and data reporting functionality. By their very nature, however, these solutions are not channel independent and cannot help customers coordinate or optimize their online sales across the multiple online avenues available to them. As with point solutions, retailers and branded manufacturers must work with disparate third-party providers to connect with a broad array of channels, which requires significant time and costs.

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Single, fully integrated solution.    Through our SaaS platform, we provide our platform customers with a single web-based interface as the central location for them to control, analyze and manage their online sales across hundreds of available channels and multiple geographies. This unified view enables our customers to more cost-effectively manage product listings, inventory availability, pricing optimization, search terms, data analytics and other critical functions across channels based on the customer’s specified rules and performance metrics in order to drive traffic and increase revenue.

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Reduced integration costs, time to market and dependence on in-house resources.     Customers can more easily and quickly introduce their products, both to channels on which they already have a presence and to new channels, without the costs related to installing and maintaining their own hardware and software infrastructure. A customer’s initial installation and integration of our solutions can often be completed in less than two months, with additional modules of our software generally available immediately without incurring significant additional resources to integrate. We manage and host our solutions on behalf of our customers, thereby reducing the customer’s cost and dependency on dedicated IT staff or on-premises systems.

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Scalable technology platform.    In 2016, our customers processed approximately $8.1 billion in GMV through our platform. We believe that the scalability of our platform allows us to quickly and efficiently support an increasing number of product listings and transactions processed through our platform as we add new customers, integrate new channels and accommodate seasonal surges in consumer demand.

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Flexibility to adapt and instantaneous access to our most up-to-date capabilities.     Channels are frequently updating their product information requirements, policies, merchandising strategies and integration specifications, requiring customers to frequently revise their product listings, attributes, business rules and possibly even their overall online business strategies. Without the ability to quickly adapt to these changes, customers risk losing revenue. Through our single code base and multi-tenant architecture, we provide platform customers the latest channel updates through regular product upgrades. When we develop and deploy new features, functions and capabilities, or make changes to keep up with the changing priorities and requirements of each channel, our customers simultaneously benefit from those new capabilities and changes.

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Data and reporting analytics.    Through our data and reporting analytics, we provide our customers with insight into the latest channel and consumer trends and general product performance. Our dashboards highlight sales trends, top performing products, seller reputation and repricing activity, among other key performance indicators, and alert customers to issues and errors in product listings. These capabilities provide actionable insights that allow customers to evaluate and, if necessary, improve the efficiency of their business rules on existing or new channels. Additionally, our solution provides branded manufacturers with insights about online assortment, product coverage gaps, pricing trends, and adherence by their retailers to content guidelines.

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Inventory and order management.    We provide a platform for our customers to upload and modify their product catalog data, monitor inventory stock levels and create a single inventory feed that serves multiple available online channels. Managing inventory and order data is the foundation for much of the customer activity on our platform. We offer a variety of ways for customers to enter and modify product data, including through a sophisticated user interface, file exchange and application programming interfaces, or APIs. Our inventory system is capable of scaling across thousands of customers during critical selling periods, such as the year-end holiday season. The flexibility of the system allows each customer to customize the inventory data specific to its products, such as size, color, height and width, and to vary the format of the data to meet the specific requirements of each channel. Our platform provides various features that allow a customer to list products on multiple channels while

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Product matching.    Once inventory is loaded into the platform, we provide features that improve our customer’s ability to successfully list its products on the various channels. Depending on the needs of the particular channel, we are able to pre-validate the customer’s data and formats before sending them to the channel, reducing errors caused by poor data quality and thus reducing the time it takes to list products on that channel. On some channels, we employ advanced product-matching algorithms that are designed to accurately place the customer’s product offerings within the channel’s product classification taxonomy.

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Business rules and templates.    Our platform offers tools that enable a customer to develop and manage sophisticated business rules and product listing templates that automatically determine how and when the product will be displayed in each channel. Through a single interface, a platform customer can utilize these tools to customize product listing descriptions across various channels using different attributes, such as price, time of day and competitive dynamics. For example, a consumer electronics retailer can automatically advertise tens of thousands of products on multiple channels while ensuring real-time accuracy of product availability, optimizing price and managing to specific margin thresholds, all at an individual product level.

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Price optimization.    Our platform provides customers the ability to dynamically price their products across some of our available channels based on a number of factors, such as prices of competitors, margin thresholds and promotions. Prices can vary by channel and, using our sophisticated technology, a customer can automatically update pricing based on the competitive environment. The customer avoids the manual effort of monitoring the competition and changing prices, while preserving the ability to remain price competitive. In 2016, we launched a new Algorithmic Repricer, which offers predictive analytics and machine learning that may help our customers make more sales while maximizing margin.

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Advertising management. Our platform provides customers the ability to create, manage and evaluate advertising across multiple channels. Advertising formats, which can vary and often change, are associated with numerous channels including search engines, social networks and marketplaces. By providing a unified platform to manage advertising, our customer is more efficiently able to manage advertisements across a large number of channels. Additionally, features such as an automated bid manager provide automation that updates bids based on the customer’s goals and performance.

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Proprietary reporting and analytics.    We provide proprietary reporting and analytics capabilities that allow our customers to view general product performance and trends affecting their consumer base across multiple channels and to obtain detailed performance data at a channel or stock-keeping unit level that can be used in a particular online sales campaign. Our dashboards highlight sales trends, top performing products, seller reputation and repricing activity, among other key performance indicators. The dashboards also alert customers to issues or errors, such as data that is in a form inconsistent with the requirements of a particular channel. These capabilities provide actionable insights that allow customers to revise their business rules and listings on a real-time basis with the goal of improving their sales and profitability.

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Developer ecosystem.    We offer third-party developers of complementary e-commerce solutions access to our platform through APIs. These APIs enable these third-party developers to build connections to our platform that meet their specific needs without requiring us to offer customized software code to them. We currently provide APIs to hundreds of third-party developers who have integrated their solutions with ours. For example, our API integrates our platform with business software provided by NetSuite, a provider of SaaS enterprise resource planning, customer relationship management and e-commerce solutions, to further streamline our joint customers’ e-commerce operations.

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Marketplaces.    Our Marketplaces module connects customers to third-party marketplaces including Amazon, eBay, Jet.com, La Redoute, Newegg, Sears, Tesco, TradeMe, Walmart and Zalando. Our standardized integration API, which we refer to as Access ChannelAdvisor, allows additional e-commerce channels to integrate with our platform requiring less support on launch, which we believe will result in a broader array of channels available to our customers. In addition, our platform provides our customers with access to advertising programs and

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Digital Marketing. Our Digital Marketing module connects customers to comparison shopping websites such as Google Shopping, Nextag and Shopzilla, allows customers to advertise products on search engines such as Google, Microsoft's Bing and Yahoo! and connects customers to social commerce sites such as Facebook, Instagram and Pinterest. Our Digital Marketing module also includes Flex Feeds, which allow customers to generate and send customized product data feeds to their partners, such as affiliate networks, retargeting vendors, personalization vendors and product review platforms.

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Where to Buy. Our Where to Buy solution allows branded manufacturers to provide their web visitors or digital marketing audiences with up-to-date information about the authorized resellers that carry their products and the availability of those products online, as well as the ability to identify offline retailers that generally carry those products. This provides consumers with an easier path to purchase from an authorized reseller of their choice. The solution improves the consumer experience and helps branded manufacturers gain a better understanding of consumer behavior through detailed data about the flow of traffic between the branded manufacturer and retailer.

•	Product Intelligence. Our Product Intelligence solution, which we launched in 2016, provides branded manufacturers with insights about online assortment, product coverage gaps, pricing trends and adherence by their retailers to content guidelines.

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•	Potential customers may choose to continue using or to develop applications in-house, rather than pay for our solutions;

•	The channels themselves, which typically offer software tools, often for free, that allow retailers and branded manufacturers to connect to them, may decide to compete more vigorously with us;

•	Competitors may adopt more aggressive pricing policies and offer more attractive sales terms, adapt more quickly to new technologies and changes in customer requirements, and devote greater resources to the promotion and sale of their products and services than we can;

•	Current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to enhance their products and expand their markets, and consolidation in our industry is likely to intensify. Accordingly, new competitors or alliances among competitors may emerge and rapidly acquire significant market share;

•	Current and potential competitors may offer software that addresses one or more online channel management functions at a lower price point or with greater depth than our solutions and may be able to devote greater resources to those solutions than we can; and

•	Software vendors could bundle channel management solutions with other solutions or offer such products at a lower price as part of a larger product sale.

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•	seasonal patterns in consumer spending;

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•	the addition of new customers or the loss of existing customers;

•	changes in demand for our software;

•	the timing and amount of sales and marketing expenses;

•	changes in the prospects of the economy generally, which could alter current or prospective customers’ spending priorities, or could increase the time it takes us to close sales;

•	changes in our pricing policies or the pricing policies of our competitors;

•	costs necessary to improve and maintain our software platform; and

•	costs related to acquisitions of other businesses.

•	hire additional personnel, both domestically and internationally;

•	implement additional management information systems;

•	maintain close coordination among our engineering, operations, legal, finance, sales and marketing and client service and support organizations; and

•	further develop our operating, administrative, legal, financial and accounting systems and controls.

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•	difficulties in integrating the operations, technologies, services and personnel of acquired businesses, especially if those businesses operate outside of our core competency of providing e-commerce software solutions;

•	cultural challenges associated with integrating employees from acquired businesses into our organization;

•	ineffectiveness or incompatibility of acquired technologies or services;

•	failure to successfully further develop the acquired technology in order to recoup our investment;

•	potential loss of key employees of acquired businesses;

•	inability to maintain the key business relationships and the reputations of acquired businesses;

•	diversion of management’s attention from other business concerns;

•	litigation for activities of acquired businesses, including claims from terminated employees, customers, former stockholders or other third parties;

•	in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;

•	costs necessary to establish and maintain effective internal controls for acquired businesses; and

•	increased fixed costs.

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•	recruiting and retaining employees in foreign countries;

•	increased competition from local providers;

•	compliance with applicable foreign laws and regulations;

•	longer sales or collection cycles in some countries;

•	credit risk and higher levels of payment fraud;

•	compliance with anti-bribery laws, such as the Foreign Corrupt Practices Act;

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•	currency exchange rate fluctuations;

•	foreign exchange controls that might prevent us from repatriating cash earned outside the United States;

•	economic and political instability in some countries;

•	less protective intellectual property laws;

•	compliance with the laws of numerous foreign taxing jurisdictions in which we conduct business, potential double taxation of our international earnings and potentially adverse tax consequences due to changes in applicable U.S. and foreign tax laws;

•	increased costs to establish and maintain effective controls at foreign locations; and

•	overall higher costs of doing business internationally.

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•	actual or anticipated variations in our operating results;

•	changes in financial estimates by us or by any securities analysts who might cover our stock;

•	conditions or trends in our industry;

•	stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the software industry;

•	announcements by us or our competitors of new product or service offerings, significant acquisitions, strategic partnerships or divestitures;

•	announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;

•	capital commitments;

•	investors’ general perception of our company and our business;

•	recruitment or departure of key personnel; and

•	sales of our common stock, including sales by our directors and officers or specific stockholders.

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•	only one of our three classes of directors is elected each year;

•	stockholders are not entitled to remove directors other than by a 66 2/3% vote and only for cause;

•	stockholders are not permitted to take actions by written consent;

•	stockholders cannot call a special meeting of stockholders; and

•	stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings.

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(1)

We define adjusted EBITDA as net loss plus or (minus): income tax expense (benefit), interest expense, net, depreciation and amortization, stock-based compensation, headquarters relocation and related costs in 2015, one-time severance and related costs in 2015, acquisition-related costs in 2014 and loss on extinguishment of debt in 2013. Please see "—Adjusted EBITDA" below for more information and for a reconciliation of adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP.

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•	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•	adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•	adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;

•	adjusted EBITDA does not reflect interest or tax payments that may represent a reduction in cash available to us; and

•	other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

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•	Total revenue of $113.2 million increased 12.5% year over year;

•	Average revenue per customer of $39,339 increased 14.0% compared with $34,513 at the end of 2015;

•	Fixed and variable subscription fees of 76.0% and 24.0% for 2016, respectively, compared with fixed and variable subscription fees of 75.8% and 24.2% for 2015, respectively;

•	21.7% of total revenue derived from customers located outside of the United States;

•	Gross margin of 75.6% and operating margin of (12.2)% improved by 130 and 890 basis points year over year, respectively;

•	Net loss of $8.0 million decreased 61.8% compared to net loss of $21.0 million in prior year;

•	Adjusted EBITDA of $7.4 million increased 415.3% year over year;

•	Cash balance of $65.4 million at the end of 2016 compared with $60.5 million at the end of 2015; and

•	Operating cash flow of $11.6 million in 2016 compared with $(1.5) million in 2015.

•	Growth in Online Shopping. Consumers continue to move more of their retail spending from offline to online retail. The continuing shift to online shopping and overall growth has contributed to our historical growth and we expect that this online shift will continue to benefit our business.

•	Product Offering Expansion. As online shopping evolves, we continue to expand our product offerings to reflect the needs of companies seeking to attract consumers. This expansion may result in additional research and development investment.

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Growth in Mobile Usage. We believe the shift toward mobile commerce will increasingly favor aggregators such as Amazon, eBay and Google Shopping, all of which are focal points of our platform. The systems understand the identity of the buyer, helping to reduce friction in the mobile commerce process, while offering a wide selection of merchandise in a single location. The growth in mobile commerce may result in increased revenue for us.

•	Shift to Larger Customers. We believe that the growth in online shopping increasingly favors larger enterprises. This move impacts our business both in longer sales cycles as well as increased average revenue per customer.

•	Our Employees. None of our success would be possible without our team. We strive to provide our staff competitive compensation and benefits programs to help drive the success of our customers. During 2016, we increased headcount by 16.0% to help drive revenue growth.

•	Foreign Currency. Our operations in the United Kingdom were impacted by the 16.9% devaluation of the British Pound Sterling during 2016. On a constant currency basis, our consolidated revenue declined by $2.0 million in 2016 specifically as a result of the decline in the British Pound compared to the U.S. Dollar.

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Seasonality. Our revenue fluctuates as a result of seasonal variations in our business, principally due to the peak consumer demand and related increased volume of our customers’ GMV during the year-end holiday season. As a result, we have historically had higher revenue in our fourth quarter than other quarters due to increased GMV processed through our platform, resulting in higher variable subscription fees.

•	Dynamic E-commerce Landscape. We will need to continue to innovate in the face of a rapidly changing e-commerce landscape if we are to remain competitive, and we will need to effectively manage our growth, especially related to our international expansion.

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Retailers and Branded Manufacturers. As consumer preferences potentially shift from smaller retailers, we need to continue to add large retailers and branded manufacturers as profitable customers. These customers generally pay a lower percentage of GMV as fees to us based on the relatively higher volume of their GMV processed through our platform. To help drive our future growth, we made significant investments in our sales force and allocated resources focused on growing our customer base of large retailers and branded manufacturers beginning in the fourth quarter of 2015. We continue to focus our efforts on increasing value for our customers to support higher rates.

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Increasing Complexity and Fragmentation of E-commerce. Although e-commerce continues to expand as retailers and branded manufacturers continue to increase their online sales, it is also becoming more complex and fragmented due to the hundreds of channels available to retailers and branded manufacturers and the rapid pace of change and innovation across those channels. In order to gain consumers’ attention in a more crowded and competitive online marketplace, many retailers and an increasing number of branded manufacturers sell their merchandise through multiple online channels, each with its own rules, requirements and specifications. In particular, third-party marketplaces are an increasingly important driver of growth for a number of large online retailers, and as a result we need to continue to support multiple channels in a variety of geographies in order to support our targeted revenue growth. As of December 31, 2016, we supported over 70 marketplaces, up from over 50 at December 31, 2015.

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Global Growth in E-commerce. We believe the growth in e-commerce globally presents an opportunity for retailers and branded manufacturers to engage in international sales. However, country-specific marketplaces are often the market share leaders in their regions, as is the case for Alibaba in Asia. In order to help our customers capitalize on this potential market opportunity, and to address our customers’ needs with respect to cross-border trade, we intend to continue to invest in our international operations, specifically in the Asia Pacific region. Doing business overseas involves substantial challenges, including management attention and resources needed to adapt to multiple languages, cultures, laws and commercial infrastructure, as further described in this report under the caption "Risks Related to our International Operations."

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•	$1.7 million in compensation and employee-related costs mainly due to additional headcount to support our customers;

•	$0.4 million in contractor costs primarily to support our international services team;

•	$0.2 million in rent and facilities costs due to the relocation of our corporate headquarters in the fourth quarter of 2015; and

•	$(0.4) million in hosting, co-location and infrastructure maintenance costs primarily due to our migration to a public cloud infrastructure.

•	$1.5 million in depreciation due to an increase in capital expenditures associated with equipment for our data centers for additional capacity to support the growth in our business;

•	$0.4 million in rent and facilities costs due to the relocation of our corporate headquarters in the fourth quarter of 2015;

•	$0.4 million in salaries and personnel-related costs, mainly due to stock-based compensation; and

•	$(0.6) million due to a charge incurred during the year ended December 31, 2014 for translation costs associated with a short-term initiative designed to expand our customers' presence in certain European countries. As this was a 2014 initiative, we did not incur any comparable translation costs during the year ended December 31, 2015.

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•	$2.5 million in compensation and employee-related costs, mainly due to additional headcount, stock-based compensation and the payment of increased sales commissions; and

•	$0.3 million in recruiting fees, namely for expanding our international sales personnel, and consulting fees.

•	$(2.5) million in our marketing and advertising expenses, promotional event programs and travel costs to support our strategic effort to strengthen margins in our business; and

•	$(0.4) million in recruiting and consulting costs, resulting from a reduction in headcount and operating efficiencies.

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•	$(1.1) million due to headquarters relocation and related expenses charged in the fourth quarter of 2015;

•	$(0.7) million due to one-time severance and related costs charged in the second quarter of 2015 to support our strategic effort to strengthen margins in our business and identify operating efficiencies;

•	$(0.7) million in bad debt expense driven by lower bad debt write-offs and reductions to our allowance for doubtful accounts based on collections activities;

•	$(0.6) million due to indirect taxes charged in the fourth quarter of 2015; and

•	$2.7 million in compensation and employee-related costs, mainly due to additional headcount, incentive bonuses and stock-based compensation.

•	$1.1 million in the fourth quarter of 2015 for headquarters relocation and related expenses;

•	$0.7 million for one-time severance and related costs during the second quarter of 2015 as a result of our strategic effort to strengthen margins in our business and identify operating efficiencies;

•	$0.6 million in salaries and personnel-related costs, mainly due to stock-based compensation;

•	$0.6 million pertaining to indirect taxes;

•	$0.6 million in depreciation and amortization expense primarily due to the acceleration of depreciation expense as a result of relocating our corporate headquarters to a new facility, as well as amortization expense associated with intangible assets acquired as a result of the E-Tale acquisition in October 2014; and

•	$0.4 million in professional fees related to legal, consulting and audit and tax services.

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•	Interest received on our cash and cash equivalents;

•	Interest expense on our capital leases; and

•	The net effect of foreign currency revaluation gains and losses.

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•	The amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business;

•	The amount and timing of customer payments; and

•	The seasonality of our business, as noted above, which results in variations in the timing of invoicing and the receipt of payments from our customers.

•	Capitalized expenditures to create internally developed software and implement software purchased for internal use; and

•	Purchases of property and equipment to support the expansion of our infrastructure and acquisitions.

•	Proceeds from the exercises of stock options;

•	Payments on capital lease obligations;

•	Tax withholdings related to the net-share settlement of restricted stock units; and

•	Acquisition-related contingent consideration.

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•	a $4.7 million increase in deferred revenue as a result of an increased number of customers prepaying for subscription services invoiced on a semi-annual and annual basis; and

•	a $3.7 million increase in accounts payable and accrued expenses, primarily related to activity-based fees incurred for specific channels on behalf of our customers; partially offset by a decrease in cash due to

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a $2.0 million increase in prepaid expenses and other assets, primarily related to certain customer arrangements for which we collect and remit monthly activity-based fees incurred for specific channels on behalf of our customers. We record the amounts due from customers as a result of these arrangements as other receivables. The increase is partially offset by the receipt of cash for a lease incentive related to our new corporate headquarters; and

•	a $1.9 million increase in accounts receivable as a result of increased billings.

•	$1.8 million of capital expenditures primarily related to the purchase of computer equipment; and

•	$0.2 million of internal-use software development costs.

•	$2.4 million used for the payment of taxes related to the net-share settlement of restricted stock units;

•	$2.1 million used for the repayment of capital leases;

•	$0.3 million used for the payment of our acquisition-related contingent consideration; and

•	$0.9 million in cash received upon the exercise of stock options.

•	a $5.8 million increase in accounts receivable as a result of increased revenue and customer growth; and

•	a $2.9 million increase in prepaid expenses and other assets primarily related to certain customer arrangements for which we collect and remit monthly activity-based fees incurred for specific channels on behalf of our customers; partially offset by an increase in cash due to

•	a $3.6 million increase in accounts payable and accrued expenses, primarily driven by timing of payments to our vendors; and

•	a $3.1 million increase in deferred revenue as a result of customer growth and an increased number of customers prepaying for subscription services.

•	$4.1 million for the purchase of property and equipment; and

•	$0.2 million for the payment of internal-use software development costs.

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•	$1.7 million used for the repayment of capital leases;

•	$0.7 million used for the payment of taxes related to the net-share settlement of restricted stock units; and

•	$0.9 million in cash received upon the exercise of stock options.

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