we added approximately 2,890 core customers during 2019 and delivered a net revenue retention rate of 111 % on average over the past four quarters . we use core customers , which represent more than 80 % of our total revenue , as a metric to focus our customer count reporting on the mid-market segment , which is our primary market . we use net revenue retention rate to reflect the stability of our revenue base and to provide insight into our ability to grow existing customer revenues . 37 despite improved revenue during 2019 , our gross margin declined to 70 % compared to 71 % in 2018. the decline in gross margin was due primarily to higher software hosting costs and , to a lesser extent , higher costs to support our international products and operations . operating expenses increased to $ 323.0 million in 2019 from $ 269.5 million in 2018 , as we continued to make significant investments in our future growth . sales and marketing expenses were $ 168.6 million in 2019 , or 44 % of total revenue , compared to $ 168.8 million in 2018 , or 62 % of total revenue . the decrease in sales and marketing expenses as a percentage of revenue in 2019 is partially due to the deferral of sales commission and partner commission expense resulting from our adoption of asc 606. excluding these deferrals , sales and marketing expenses were $ 187.8 million , or 49 % of total revenue during 2019 , reflecting strong improvement in our sales and marketing efficiency from the prior year . operating loss was $ 55.9 million during 2019 compared to an operating loss of $ 76.1 million during 2018. our net loss was $ 50.2 million during 2019 compared to a net loss of $ 75.6 million during 2018. operating loss decreased during 2019 due primarily to the deferral of sales and partner commission expenses of $ 19.1 million . in addition to the benefit to our operating loss from deferred commissions , our net loss in 2019 included $ 6.0 million of interest income , compared to $ 1.6 million in 2018. non-gaap operating loss , excluding the benefit from deferred commissions , was $ 32.9 million during 2019 compared to non-gaap operating loss of $ 45.0 million during 2018. during 2019 , we generated positive free cash flow of $ 12.2 million compared to negative free cash flow of $ 18.5 million in 2018. see the section titled “ use and reconciliation of non-gaap financial measures ” for more information about our non-gaap financial measures . in june 2019 , we completed a follow-on public offering of our common stock and sold 4.1 million shares for net proceeds of $ 274.7 million . as of december 31 , 2019 , we had no borrowings outstanding . we ended the year with $ 467.0 million of cash and cash equivalents . we believe our strong balance sheet positions us well to continue to make additional investments to grow and expand both our products and services , along with the customers we serve . key business metrics we regularly review several metrics to evaluate growth trends , measure our performance , formulate financial projections , and make strategic decisions . we discuss revenue and the components of operating results under “ key components of consolidated statements of operations , ” and we discuss other key business metrics below . replace_table_token_7_th number of core customers we believe core customers is a key indicator of our market penetration , growth , and potential future revenue . the mid-market has been and remains our primary target market segment for marketing and selling our solutions . we use core customers as a metric to focus our customer count reporting on our primary target market segment . as of december 31 , 2019 and 2018 , we had approximately 11,960 and 9,070 core customers , respectively . in 2019 , our core customers represented more than 80 % of our total revenue . we define a core customer as : a unique account identifier in our billing system , or a billing account ( multiple companies or divisions within a single consolidated enterprise that each have a separate unique account identifier are each treated as separate customers ) ; that is active as of the measurement date ; and for which we have recognized , as of the measurement date , greater than $ 3,000 in total revenue during the last twelve months . 38 currently , our core customer count includes only customers with unique account identifiers in our primary u.s. billing systems and does not include customers who subscribe to our solutions through our international subsidiaries or certain legacy billing systems , primarily related to past acquisitions that have not been integrated into our primary u.s. billing systems . as we increase our international operations and sales in future periods , we may add customers billed from our international subsidiaries to the core customer metric . we have a substantial number of customers of various sizes who do not meet the revenue threshold to be considered a core customer . many of these customers are in the small business and self-serve segment of the marketplace , which represents strategic value and a growth opportunity for us . customers who do not meet the revenue threshold to be considered a core customer provide us with market share and awareness , and we anticipate that some may grow into core customers . net revenue retention rate we believe that our net revenue retention rate provides insight into our ability to retain and grow revenue from our customers , as well as their potential long-term value to us . we also believe it reflects the stability of our revenue base , which is one of our core competitive strengths . story_separator_special_tag 45 sales and marketing replace_table_token_16_th sales and marketing expenses for the year ended december 31 , 2019 decreased $ 0.2 million compared to the year ended december 31 , 2018. asc 606 sales and marketing expense for the year ended december 31 , 2019 was $ 168.6 million compared to asc 605 sales and marketing expense of $ 187.8 million for the same period . the difference of $ 19.1 million relates to the deferral of sales commissions costs and partner commission costs under asc 606. all of our sales commission and partner commission costs were expensed as incurred under asc 605. asc 605 sales and marketing expenses for the year ended december 31 , 2019 increased $ 19.0 million , or 11 % , compared to the year ended december 31 , 2018. the increase was due primarily to an increase of $ 9.0 million in employee-related costs , an increase of $ 7.3 million for partner commission expense , an increase of $ 2.2 million in allocated overhead cost , and an increase of $ 1.4 million in marketing campaign expenses , partially offset by a decrease in outside services expenses of $ 1.3 million . sales and marketing headcount increased approximately 21 % from december 31 , 2018 to december 31 , 2019. employee-related costs increased due primarily to a $ 8.0 million increase in salaries and benefits , a $ 3.2 million increase in stock-based compensation expense , a $ 1.7 million increase in employer payroll tax expense on employee stock transactions , and a $ 1.6 million increase in compensation expense related to our bonus plans , partially offset by a $ 5.0 million decrease in sales commissions expense , and a $ 1.3 million decrease in contract and temporary employee costs . sales commissions expense decreased due to lower average commission rates compared to 2018 , which offset increases from strong sales-related activity . our average commission rates were higher in the prior year due in part to a greater percentage of eligible sales personnel exceeding their annual sales targets . asc 605 sales commission expense was $ 30.2 million for the year ended december 31 , 2019 compared to $ 35.2 million for the year ended december 31 , 2018. partner commission expense increased due primarily to higher sales and an increase in the proportion of sales eligible for partner commissions , including new sales which generally earn a higher commission rate compared to renewal sales . asc 605 partner commission expense was $ 29.0 million for the year ended december 31 , 2019 compared to $ 21.7 million for the year ended december 31 , 2018. marketing campaign expenses increased due to an increase in our discretionary spending on customer events and lead generation activities . outside services expenses decreased due to a reduction in our discretionary spending with external advertising and marketing agencies . general and administrative replace_table_token_17_th general and administrative expenses for the year ended december 31 , 2019 increased $ 32.3 million , or 82 % , compared to the year ended december 31 , 2018. the increase was due primarily to an increase of $ 25.2 million in employee-related costs , a $ 5.5 million increase in outside service expenses , a $ 1.8 million increase in bad debt expense , a $ 1.3 million increase in merchant fees , and a $ 0.7 million increase in insurance costs , partially offset by a decrease of $ 3.2 million in allocated overhead cost . 46 general and administrative headcount increased 46 % from december 31 , 2018 to december 31 , 2019 . employee-related costs increased due primarily to a $ 10.2 million increase in stock-based compensation expense , a $ 7.6 million increase in salaries and benefits , a $ 3 . 3 million increase in compensation expense related to our bonus plans , and a $ 2.7 million increase in employer payroll tax expense on employee stock transactions . outside services expenses increased due to higher audit and internal control compliance costs and higher costs from external recruiters for job search and placement fees . bad debt expense increased due primarily to higher u.s. customer bankruptcies and insolvencies and aging of trade receivables in our european operations . merchant fees , which are credit card processing fees , increased due to increased payment activity from customers transitioning to our auto-payment program . insurance costs have increased from the prior period as a result of being a public company for all of 2019 . goodwill impairment replace_table_token_18_th a goodwill impairment charge of $ 9.2 million was recorded in 2018 related to our brazilian operations . there were no goodwill impairment charges incurred in the year ended december 31 , 2019. total other ( income ) expense , net replace_table_token_19_th total other income for the year ended december 31 , 2019 was $ 6.6 million compared to $ 0.5 million of other expense for the year ended december 31 , 2018. interest income increased due to interest earned on investing our public offering cash proceeds . interest expense decreased due to having no outstanding borrowings during the year ended december 31 , 2019. we discuss borrowings under “ liquidity and capital resources ” below . other ( income ) expense , net was $ 0.9 million other income in the year ended december 31 , 2019 compared to $ 0.6 million of other income in the year ended december 31 , 2018 , primarily due to our earnout liabilities . we estimate the fair value of earnout liabilities related to business combinations quarterly . during the year ended december 31 , 2019 , the adjustments to fair value decreased the carrying value of the earnout liability for our acquisition of indix , resulting in other income of $ 1.7 million , partially offset by an increase in the carrying value of the earnout liabilities for our acquisitions of compli and portway , which resulted in other expense of

liquidity and capital resources we require cash to fund our operations , including outlays for infrastructure growth , acquisitions , geographic expansion , expanding our sales and marketing activities , research and development efforts , and working capital for our growth . to date , we have financed our operations primarily through cash received from customers for our solutions , public offerings of our common stock , private placements , and bank borrowings . as of december 31 , 2019 , we had $ 467.0 million of cash and cash equivalents , most of which was held in money market accounts . borrowings we had a loan and security agreement with silicon valley bank and ally bank ( the “ lenders ” ) that consisted of a $ 50.0 million revolving credit facility ( the “ credit facility ” ) . on june 25 , 2019 , we terminated the credit facility . as of december 31 , 2019 , we had no credit facilities in place and had no borrowings outstanding . prior to the termination of the credit facility , we were required to pay a quarterly fee of 0.50 % per annum on the undrawn portion available under the revolving credit facility plus the sum of outstanding letters of credit . under the credit facility , the interest rate on the revolving credit facility was based on the greater of either 4.25 % or the current prime rate , plus 1.75 % . future cash requirements as of december 31 , 2019 , our cash and cash equivalents included proceeds from our june 2019 and our june 2018 public offerings of common stock . we intend to continue to increase our operating expenses and capital expenditures to support the growth in our business and operations . we may also use our cash and cash equivalents to acquire complementary businesses , products , services , technologies , or other assets . we believe that our existing cash and cash equivalents of $ 467.0 million as of december 31 , 2019 , together with cash generated from operations , will be sufficient to meet our anticipated cash needs for at least the next 12 months .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources we require cash to fund our operations , including outlays for infrastructure growth , acquisitions , geographic expansion , expanding our sales and marketing activities , research and development efforts , and working capital for our growth . to date , we have financed our operations primarily through cash received from customers for our solutions , public offerings of our common stock , private placements , and bank borrowings . as of december 31 , 2019 , we had $ 467.0 million of cash and cash equivalents , most of which was held in money market accounts . borrowings we had a loan and security agreement with silicon valley bank and ally bank ( the “ lenders ” ) that consisted of a $ 50.0 million revolving credit facility ( the “ credit facility ” ) . on june 25 , 2019 , we terminated the credit facility . as of december 31 , 2019 , we had no credit facilities in place and had no borrowings outstanding . prior to the termination of the credit facility , we were required to pay a quarterly fee of 0.50 % per annum on the undrawn portion available under the revolving credit facility plus the sum of outstanding letters of credit . under the credit facility , the interest rate on the revolving credit facility was based on the greater of either 4.25 % or the current prime rate , plus 1.75 % . future cash requirements as of december 31 , 2019 , our cash and cash equivalents included proceeds from our june 2019 and our june 2018 public offerings of common stock . we intend to continue to increase our operating expenses and capital expenditures to support the growth in our business and operations . we may also use our cash and cash equivalents to acquire complementary businesses , products , services , technologies , or other assets . we believe that our existing cash and cash equivalents of $ 467.0 million as of december 31 , 2019 , together with cash generated from operations , will be sufficient to meet our anticipated cash needs for at least the next 12 months .
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 Suspicious Activity Report : we added approximately 2,890 core customers during 2019 and delivered a net revenue retention rate of 111 % on average over the past four quarters . we use core customers , which represent more than 80 % of our total revenue , as a metric to focus our customer count reporting on the mid-market segment , which is our primary market . we use net revenue retention rate to reflect the stability of our revenue base and to provide insight into our ability to grow existing customer revenues . 37 despite improved revenue during 2019 , our gross margin declined to 70 % compared to 71 % in 2018. the decline in gross margin was due primarily to higher software hosting costs and , to a lesser extent , higher costs to support our international products and operations . operating expenses increased to $ 323.0 million in 2019 from $ 269.5 million in 2018 , as we continued to make significant investments in our future growth . sales and marketing expenses were $ 168.6 million in 2019 , or 44 % of total revenue , compared to $ 168.8 million in 2018 , or 62 % of total revenue . the decrease in sales and marketing expenses as a percentage of revenue in 2019 is partially due to the deferral of sales commission and partner commission expense resulting from our adoption of asc 606. excluding these deferrals , sales and marketing expenses were $ 187.8 million , or 49 % of total revenue during 2019 , reflecting strong improvement in our sales and marketing efficiency from the prior year . operating loss was $ 55.9 million during 2019 compared to an operating loss of $ 76.1 million during 2018. our net loss was $ 50.2 million during 2019 compared to a net loss of $ 75.6 million during 2018. operating loss decreased during 2019 due primarily to the deferral of sales and partner commission expenses of $ 19.1 million . in addition to the benefit to our operating loss from deferred commissions , our net loss in 2019 included $ 6.0 million of interest income , compared to $ 1.6 million in 2018. non-gaap operating loss , excluding the benefit from deferred commissions , was $ 32.9 million during 2019 compared to non-gaap operating loss of $ 45.0 million during 2018. during 2019 , we generated positive free cash flow of $ 12.2 million compared to negative free cash flow of $ 18.5 million in 2018. see the section titled “ use and reconciliation of non-gaap financial measures ” for more information about our non-gaap financial measures . in june 2019 , we completed a follow-on public offering of our common stock and sold 4.1 million shares for net proceeds of $ 274.7 million . as of december 31 , 2019 , we had no borrowings outstanding . we ended the year with $ 467.0 million of cash and cash equivalents . we believe our strong balance sheet positions us well to continue to make additional investments to grow and expand both our products and services , along with the customers we serve . key business metrics we regularly review several metrics to evaluate growth trends , measure our performance , formulate financial projections , and make strategic decisions . we discuss revenue and the components of operating results under “ key components of consolidated statements of operations , ” and we discuss other key business metrics below . replace_table_token_7_th number of core customers we believe core customers is a key indicator of our market penetration , growth , and potential future revenue . the mid-market has been and remains our primary target market segment for marketing and selling our solutions . we use core customers as a metric to focus our customer count reporting on our primary target market segment . as of december 31 , 2019 and 2018 , we had approximately 11,960 and 9,070 core customers , respectively . in 2019 , our core customers represented more than 80 % of our total revenue . we define a core customer as : a unique account identifier in our billing system , or a billing account ( multiple companies or divisions within a single consolidated enterprise that each have a separate unique account identifier are each treated as separate customers ) ; that is active as of the measurement date ; and for which we have recognized , as of the measurement date , greater than $ 3,000 in total revenue during the last twelve months . 38 currently , our core customer count includes only customers with unique account identifiers in our primary u.s. billing systems and does not include customers who subscribe to our solutions through our international subsidiaries or certain legacy billing systems , primarily related to past acquisitions that have not been integrated into our primary u.s. billing systems . as we increase our international operations and sales in future periods , we may add customers billed from our international subsidiaries to the core customer metric . we have a substantial number of customers of various sizes who do not meet the revenue threshold to be considered a core customer . many of these customers are in the small business and self-serve segment of the marketplace , which represents strategic value and a growth opportunity for us . customers who do not meet the revenue threshold to be considered a core customer provide us with market share and awareness , and we anticipate that some may grow into core customers . net revenue retention rate we believe that our net revenue retention rate provides insight into our ability to retain and grow revenue from our customers , as well as their potential long-term value to us . we also believe it reflects the stability of our revenue base , which is one of our core competitive strengths . story_separator_special_tag 45 sales and marketing replace_table_token_16_th sales and marketing expenses for the year ended december 31 , 2019 decreased $ 0.2 million compared to the year ended december 31 , 2018. asc 606 sales and marketing expense for the year ended december 31 , 2019 was $ 168.6 million compared to asc 605 sales and marketing expense of $ 187.8 million for the same period . the difference of $ 19.1 million relates to the deferral of sales commissions costs and partner commission costs under asc 606. all of our sales commission and partner commission costs were expensed as incurred under asc 605. asc 605 sales and marketing expenses for the year ended december 31 , 2019 increased $ 19.0 million , or 11 % , compared to the year ended december 31 , 2018. the increase was due primarily to an increase of $ 9.0 million in employee-related costs , an increase of $ 7.3 million for partner commission expense , an increase of $ 2.2 million in allocated overhead cost , and an increase of $ 1.4 million in marketing campaign expenses , partially offset by a decrease in outside services expenses of $ 1.3 million . sales and marketing headcount increased approximately 21 % from december 31 , 2018 to december 31 , 2019. employee-related costs increased due primarily to a $ 8.0 million increase in salaries and benefits , a $ 3.2 million increase in stock-based compensation expense , a $ 1.7 million increase in employer payroll tax expense on employee stock transactions , and a $ 1.6 million increase in compensation expense related to our bonus plans , partially offset by a $ 5.0 million decrease in sales commissions expense , and a $ 1.3 million decrease in contract and temporary employee costs . sales commissions expense decreased due to lower average commission rates compared to 2018 , which offset increases from strong sales-related activity . our average commission rates were higher in the prior year due in part to a greater percentage of eligible sales personnel exceeding their annual sales targets . asc 605 sales commission expense was $ 30.2 million for the year ended december 31 , 2019 compared to $ 35.2 million for the year ended december 31 , 2018. partner commission expense increased due primarily to higher sales and an increase in the proportion of sales eligible for partner commissions , including new sales which generally earn a higher commission rate compared to renewal sales . asc 605 partner commission expense was $ 29.0 million for the year ended december 31 , 2019 compared to $ 21.7 million for the year ended december 31 , 2018. marketing campaign expenses increased due to an increase in our discretionary spending on customer events and lead generation activities . outside services expenses decreased due to a reduction in our discretionary spending with external advertising and marketing agencies . general and administrative replace_table_token_17_th general and administrative expenses for the year ended december 31 , 2019 increased $ 32.3 million , or 82 % , compared to the year ended december 31 , 2018. the increase was due primarily to an increase of $ 25.2 million in employee-related costs , a $ 5.5 million increase in outside service expenses , a $ 1.8 million increase in bad debt expense , a $ 1.3 million increase in merchant fees , and a $ 0.7 million increase in insurance costs , partially offset by a decrease of $ 3.2 million in allocated overhead cost . 46 general and administrative headcount increased 46 % from december 31 , 2018 to december 31 , 2019 . employee-related costs increased due primarily to a $ 10.2 million increase in stock-based compensation expense , a $ 7.6 million increase in salaries and benefits , a $ 3 . 3 million increase in compensation expense related to our bonus plans , and a $ 2.7 million increase in employer payroll tax expense on employee stock transactions . outside services expenses increased due to higher audit and internal control compliance costs and higher costs from external recruiters for job search and placement fees . bad debt expense increased due primarily to higher u.s. customer bankruptcies and insolvencies and aging of trade receivables in our european operations . merchant fees , which are credit card processing fees , increased due to increased payment activity from customers transitioning to our auto-payment program . insurance costs have increased from the prior period as a result of being a public company for all of 2019 . goodwill impairment replace_table_token_18_th a goodwill impairment charge of $ 9.2 million was recorded in 2018 related to our brazilian operations . there were no goodwill impairment charges incurred in the year ended december 31 , 2019. total other ( income ) expense , net replace_table_token_19_th total other income for the year ended december 31 , 2019 was $ 6.6 million compared to $ 0.5 million of other expense for the year ended december 31 , 2018. interest income increased due to interest earned on investing our public offering cash proceeds . interest expense decreased due to having no outstanding borrowings during the year ended december 31 , 2019. we discuss borrowings under “ liquidity and capital resources ” below . other ( income ) expense , net was $ 0.9 million other income in the year ended december 31 , 2019 compared to $ 0.6 million of other income in the year ended december 31 , 2018 , primarily due to our earnout liabilities . we estimate the fair value of earnout liabilities related to business combinations quarterly . during the year ended december 31 , 2019 , the adjustments to fair value decreased the carrying value of the earnout liability for our acquisition of indix , resulting in other income of $ 1.7 million , partially offset by an increase in the carrying value of the earnout liabilities for our acquisitions of compli and portway , which resulted in other expense of

