the results of our operations during the year ended december 31 , 2016 include the operations of shippingeasy for the period from july 1 , 2016 through december 31 , 2016. the results of our operations during 36 the years ended december 31 , 2017 and 2016 include the operations of endicia . the results of our operations during the year ended december 31 , 2015 include the operations of endicia for the period from november 18 , 2015 through december 31 , 2015. please see note 3 – acquisitions in our notes to consolidated financial statements for further description . accordingly , care should be used in comparing periods that include the operations of shippingeasy with those that do not include such operations . years ended december 31 , 2017 and 2016 total revenue increased 29 % to $ 468.7 million in 2017 from $ 364.3 million in 2016. mailing and shipping revenue , which includes service revenue , product revenue and insurance revenue , was $ 449.4 million in 2017 , an increase of 28 % from $ 350.6 million in 2016. customized postage revenue increased 41 % to $ 19.2 million in 2017 from $ 13.6 million in 2016. the following table sets forth the breakdown of revenue for 2017 and 2016 and the resulting percent change ( revenue in thousands ) : replace_table_token_5_th we define paid customers for the quarter as ones from whom we successfully collected service fees or otherwise earned revenue at least once during that quarter , and we define arpu as mailing and shipping revenue divided by paid customers . we define lost paid customers ( lost paid customers ) as customers from whom we successfully collected service fees or otherwise earned revenue at least once during the previous quarter but not during the current quarter , less recaptured paid customers . we define monthly paid customer cancellation rate ( monthly churn ) as a fraction , the numerator of which is the quotient of lost paid customers in a quarter divided by the sum of paid customers in the prior quarter and new paid customers in the current quarter , and the denominator of which is three months . the following table sets forth the number of paid customers in the period for our mailing and shipping business ( in thousands ) : replace_table_token_6_th the following table sets forth the growth in paid customers and arpu for our mailing and shipping business ( in thousands except arpu and percentage ) : replace_table_token_7_th the increase in paid customers is primarily the result of increased sales and marketing spend and better performance in our marketing programs . the increase in our arpu was primarily the result of the growth in our shipping business where we have the ability to better monetize postage volume as compared to monthly flat rate subscription fees . 37 revenue by product the following table shows our components of revenue and their respective percentages of total revenue for the periods indicated ( in thousands except percentage ) : replace_table_token_8_th our revenue is derived primarily from five sources : ( 1 ) service and transaction related revenues from our usps mailing and shipping services , our multi-carrier shipping services and our mailing and shipping integrations ; ( 2 ) product revenue from the direct sale of consumables and supplies through our supplies stores ; ( 3 ) package insurance revenue from our branded insurance offerings ; ( 4 ) customized postage revenue from the sale of photostamps and pictureitpostage postage labels ; and ( 5 ) other revenue , consisting of advertising revenue derived from advertising programs with our existing customers . we earn service revenue in several different ways : ( 1 ) customers may pay us a monthly fee based on a subscription plan which may be waived or refunded for certain customers ; ( 2 ) we may be compensated directly by the usps for certain qualifying customers under our usps partnership ; ( 3 ) we may earn transaction related revenue based on customers purchasing postage or printing shipping labels ; ( 4 ) we may earn compensation by offering customers a discounted postage rate that is provided to the customers by our integration partners ; and ( 5 ) we may earn other types of revenue shares or other compensation from specific customers or integration partners . service revenue increased 31 % to $ 411.3 million in 2017 from $ 313.1 million in 2016. the increase in service revenue consisted of a 12 % increase in our annual average paid customers and an 18 % increase in our average service revenue per paid customer ( service revenue arpu ) . the increase in the number of our paid customers was attributable to the factors described in the previous section . the increase in our service revenue arpu was attributable to ( 1 ) the factors that resulted in an increase in the average total mailing and shipping revenue per paid customer described in the previous section and ( 2 ) the renewal of two of our agreements with the usps with improved economics . product revenue increased 2 % to $ 20.7 million in 2017 from $ 20.2 million in 2016. product revenue is primarily driven by labels , such as netstamps and dymo stamps , which are used for mailing . however , our postage growth has been driven more by shipping than mailing over recent years . insurance revenue was $ 17.4 million in 2017 and $ 17.3 million in 2016. the growth in insurance revenue is less than the growth in service revenue primarily due to the increase in high volume shipper customers . high volume shipper customers often self-insure , so while the high volume shipping business results in higher service fee revenue , it may not result in higher insurance revenue . customized postage revenue increased 41 % to $ 19.2 million in 2017 from $ 13.6 million in 2016. story_separator_special_tag product revenue is primarily driven by labels , such as netstamps and dymo stamps , which are used for mailing . as our growth in postage has been driven more by shipping than mailing over the recent years , our growth in product revenue has been lower than our growth in total revenue . insurance revenue increased 47 % to $ 17.3 million in 2016 from $ 11.7 million in 2015. the increase in insurance revenue was primarily attributable to our acquisitions whose solutions target shipping customers who are more likely than mailing customers to purchase insurance . customized postage revenue increased 88 % to $ 13.6 million in 2016 from $ 7.2 million in 2015. the increase was primarily attributable to ( 1 ) an increase in photostamps high volume business orders , which increased by $ 2.9 million and ( 2 ) the addition of pictureitpostage as a result of our endicia acquisition , which added $ 4.1 million for the full year of 2016 as compared to the shorter period of 2015 for which endicia is included in our results . the increase in customized postage revenue was partially offset by a $ 0.6 million decrease in photostamps revenue from orders placed through the photostamps website . the decrease in revenue from website orders is primarily attributable to a reduction in our photostamps sales and marketing spending . cost of revenue the following table shows cost of revenues and cost of revenues as a percentage of associated revenue for the periods indicated ( in thousands except percentage ) : replace_table_token_15_th cost of service revenue principally consists of the cost of customer service , certain promotional expenses , system operating costs , credit card processing fees and customer misprints that do not qualify for reimbursement from the usps . cost of product revenue principally consists of the cost of products sold through our supplies stores and the related costs of shipping and handling . the cost of insurance revenue principally consists of parcel insurance offering costs through our third party insurance providers . cost of customized postage revenue principally consists of the face value of postage , customer service , image review costs , and printing and fulfillment costs . cost of service revenue increased 43 % to $ 40.0 million in 2016 from $ 28.0 million in 2015. the increase was primarily attributable to higher customer service costs , which increased by $ 6.0 million , to support our 44 growing customer base and higher credit card processing fees , which increased by $ 3.0 million , associated with our higher revenue . promotional expenses were not material in 2016. cost of service revenue as a percent of service revenue declined from 16 % in 2015 to 13 % in 2016. the decline was primarily attributable to achieving scale efficiencies in areas such as customer service from our growth in revenue . cost of product revenue increased 12 % to $ 6.7 million in 2016 from $ 6.0 million in 2015. the 12 % increase in cost of product revenue was primarily attributable to the increase in product revenue over the same time period . cost of product revenue as a percent of product revenue was 33 % in 2016 which was consistent with 2015. cost of insurance revenue increased 36 % to $ 5.4 million in 2016 from $ 4.0 million in 2015. the increase in cost of insurance revenue resulted from growth in the number of insurance transactions , which was primarily attributable to our acquisitions . cost of insurance revenue as a percent of insurance revenue declined from 34 % in 2015 to 31 % in 2016. the decline was primarily attributable to the insurance offerings of our acquired companies having higher prices for parcel insurance as compared to the rest of the company . cost of customized postage revenue increased 80 % to $ 10.8 million in 2016 from $ 6.0 million in 2015. the increase in cost of customized postage revenue is primarily due to the increase in our customized postage revenue . cost of customized postage revenue as a percent of customized postage revenue declined from 83 % in 2015 to 80 % in 2016. the decline was primarily the result of the addition of endicia 's pictureitpostage revenue which has a lower cost of customized postage revenue as a percent of customized postage revenue as compared to photostamps . pictureitpostage does not have a material level of high volume business orders which typically have a higher cost of customized postage revenue as a percent of customized postage revenue as compared to consumer website orders . operating expenses the following table outlines the components of our operating expense and their respective percentages of total revenues for the periods indicated ( in thousands except percentage ) : replace_table_token_16_th sales and marketing sales and marketing expense principally consists of spending to acquire new customers and compensation and related expenses for personnel engaged in sales , marketing , and business development activities . our sales and marketing programs include direct sales , customer referral programs , customer re-marketing efforts , direct mail , online advertising , partnerships , telemarketing , and traditional advertising . sales and marketing expense increased 40 % to $ 78.8 million in 2016 from $ 56.1 million in 2015. the increase is primarily due to ( 1 ) an increase in headcount-related expenses excluding stock-based compensation expense of $ 10.4 million , ( 2 ) an increase in stock-based compensation expense of $ 2.6 million and ( 3 ) an increase in discretionary marketing spend of $ 6.5 million . the increases in headcount-related and stock-based compensation expenses were due to both the addition of headcount resulting from our endicia and shippingeasy acquisitions as well as increased headcount in the rest of the company . 45 research and development research and development expense principally consists of compensation for personnel involved in the development of our services , depreciation of equipment

liquidity and capital resources as of december 31 , 2017 and 2016 , we had $ 153.9 million and $ 108.4 million , respectively , in cash , cash equivalents and short-term and long-term investments . we invest available funds in short-term and long-term securities , including money market funds , corporate bonds , and asset backed securities , and do not engage in hedging or speculative activities . net cash provided by operating activities was approximately $ 197.8 million in 2017 and $ 148.0 million in 2016. the increase in net cash provided by operating activities was primarily attributable to ( 1 ) an increase in net income of $ 75.4 million ; ( 2 ) the lack of a stock option windfall tax benefit , which was $ 26.8 million in 2016 ; ( 3 ) an increase in stock-based compensation expense of $ 6.9 million ; and ( 4 ) an increase in other liabilities of $ 5.3 million ; partially offset by ( a ) a decrease in deferred income tax balance of $ 25.8 million ; ( b ) an increase in current income taxes receivable of $ 22.3 million ; ( c ) an increase in accounts receivable of $ 11.5 million ; and ( d ) an increase in other assets of $ 6.6 million . net cash used in investing activities was approximately $ 5.3 million in 2017 and $ 55.2 million in 2016. the decrease in net cash used in investing activities was primarily due to the prior period acquisition of shippingeasy on july 1 , 2016 for $ 55.4 million , partially offset by the $ 7.0 million decrease in cash from short-term investment sales .


 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 as of december 31 , 2017 and 2016 , we had $ 153.9 million and $ 108.4 million , respectively , in cash , cash equivalents and short-term and long-term investments . we invest available funds in short-term and long-term securities , including money market funds , corporate bonds , and asset backed securities , and do not engage in hedging or speculative activities . net cash provided by operating activities was approximately $ 197.8 million in 2017 and $ 148.0 million in 2016. the increase in net cash provided by operating activities was primarily attributable to ( 1 ) an increase in net income of $ 75.4 million ; ( 2 ) the lack of a stock option windfall tax benefit , which was $ 26.8 million in 2016 ; ( 3 ) an increase in stock-based compensation expense of $ 6.9 million ; and ( 4 ) an increase in other liabilities of $ 5.3 million ; partially offset by ( a ) a decrease in deferred income tax balance of $ 25.8 million ; ( b ) an increase in current income taxes receivable of $ 22.3 million ; ( c ) an increase in accounts receivable of $ 11.5 million ; and ( d ) an increase in other assets of $ 6.6 million . net cash used in investing activities was approximately $ 5.3 million in 2017 and $ 55.2 million in 2016. the decrease in net cash used in investing activities was primarily due to the prior period acquisition of shippingeasy on july 1 , 2016 for $ 55.4 million , partially offset by the $ 7.0 million decrease in cash from short-term investment sales .
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 Suspicious Activity Report : the results of our operations during the year ended december 31 , 2016 include the operations of shippingeasy for the period from july 1 , 2016 through december 31 , 2016. the results of our operations during 36 the years ended december 31 , 2017 and 2016 include the operations of endicia . the results of our operations during the year ended december 31 , 2015 include the operations of endicia for the period from november 18 , 2015 through december 31 , 2015. please see note 3 – acquisitions in our notes to consolidated financial statements for further description . accordingly , care should be used in comparing periods that include the operations of shippingeasy with those that do not include such operations . years ended december 31 , 2017 and 2016 total revenue increased 29 % to $ 468.7 million in 2017 from $ 364.3 million in 2016. mailing and shipping revenue , which includes service revenue , product revenue and insurance revenue , was $ 449.4 million in 2017 , an increase of 28 % from $ 350.6 million in 2016. customized postage revenue increased 41 % to $ 19.2 million in 2017 from $ 13.6 million in 2016. the following table sets forth the breakdown of revenue for 2017 and 2016 and the resulting percent change ( revenue in thousands ) : replace_table_token_5_th we define paid customers for the quarter as ones from whom we successfully collected service fees or otherwise earned revenue at least once during that quarter , and we define arpu as mailing and shipping revenue divided by paid customers . we define lost paid customers ( lost paid customers ) as customers from whom we successfully collected service fees or otherwise earned revenue at least once during the previous quarter but not during the current quarter , less recaptured paid customers . we define monthly paid customer cancellation rate ( monthly churn ) as a fraction , the numerator of which is the quotient of lost paid customers in a quarter divided by the sum of paid customers in the prior quarter and new paid customers in the current quarter , and the denominator of which is three months . the following table sets forth the number of paid customers in the period for our mailing and shipping business ( in thousands ) : replace_table_token_6_th the following table sets forth the growth in paid customers and arpu for our mailing and shipping business ( in thousands except arpu and percentage ) : replace_table_token_7_th the increase in paid customers is primarily the result of increased sales and marketing spend and better performance in our marketing programs . the increase in our arpu was primarily the result of the growth in our shipping business where we have the ability to better monetize postage volume as compared to monthly flat rate subscription fees . 37 revenue by product the following table shows our components of revenue and their respective percentages of total revenue for the periods indicated ( in thousands except percentage ) : replace_table_token_8_th our revenue is derived primarily from five sources : ( 1 ) service and transaction related revenues from our usps mailing and shipping services , our multi-carrier shipping services and our mailing and shipping integrations ; ( 2 ) product revenue from the direct sale of consumables and supplies through our supplies stores ; ( 3 ) package insurance revenue from our branded insurance offerings ; ( 4 ) customized postage revenue from the sale of photostamps and pictureitpostage postage labels ; and ( 5 ) other revenue , consisting of advertising revenue derived from advertising programs with our existing customers . we earn service revenue in several different ways : ( 1 ) customers may pay us a monthly fee based on a subscription plan which may be waived or refunded for certain customers ; ( 2 ) we may be compensated directly by the usps for certain qualifying customers under our usps partnership ; ( 3 ) we may earn transaction related revenue based on customers purchasing postage or printing shipping labels ; ( 4 ) we may earn compensation by offering customers a discounted postage rate that is provided to the customers by our integration partners ; and ( 5 ) we may earn other types of revenue shares or other compensation from specific customers or integration partners . service revenue increased 31 % to $ 411.3 million in 2017 from $ 313.1 million in 2016. the increase in service revenue consisted of a 12 % increase in our annual average paid customers and an 18 % increase in our average service revenue per paid customer ( service revenue arpu ) . the increase in the number of our paid customers was attributable to the factors described in the previous section . the increase in our service revenue arpu was attributable to ( 1 ) the factors that resulted in an increase in the average total mailing and shipping revenue per paid customer described in the previous section and ( 2 ) the renewal of two of our agreements with the usps with improved economics . product revenue increased 2 % to $ 20.7 million in 2017 from $ 20.2 million in 2016. product revenue is primarily driven by labels , such as netstamps and dymo stamps , which are used for mailing . however , our postage growth has been driven more by shipping than mailing over recent years . insurance revenue was $ 17.4 million in 2017 and $ 17.3 million in 2016. the growth in insurance revenue is less than the growth in service revenue primarily due to the increase in high volume shipper customers . high volume shipper customers often self-insure , so while the high volume shipping business results in higher service fee revenue , it may not result in higher insurance revenue . customized postage revenue increased 41 % to $ 19.2 million in 2017 from $ 13.6 million in 2016. story_separator_special_tag product revenue is primarily driven by labels , such as netstamps and dymo stamps , which are used for mailing . as our growth in postage has been driven more by shipping than mailing over the recent years , our growth in product revenue has been lower than our growth in total revenue . insurance revenue increased 47 % to $ 17.3 million in 2016 from $ 11.7 million in 2015. the increase in insurance revenue was primarily attributable to our acquisitions whose solutions target shipping customers who are more likely than mailing customers to purchase insurance . customized postage revenue increased 88 % to $ 13.6 million in 2016 from $ 7.2 million in 2015. the increase was primarily attributable to ( 1 ) an increase in photostamps high volume business orders , which increased by $ 2.9 million and ( 2 ) the addition of pictureitpostage as a result of our endicia acquisition , which added $ 4.1 million for the full year of 2016 as compared to the shorter period of 2015 for which endicia is included in our results . the increase in customized postage revenue was partially offset by a $ 0.6 million decrease in photostamps revenue from orders placed through the photostamps website . the decrease in revenue from website orders is primarily attributable to a reduction in our photostamps sales and marketing spending . cost of revenue the following table shows cost of revenues and cost of revenues as a percentage of associated revenue for the periods indicated ( in thousands except percentage ) : replace_table_token_15_th cost of service revenue principally consists of the cost of customer service , certain promotional expenses , system operating costs , credit card processing fees and customer misprints that do not qualify for reimbursement from the usps . cost of product revenue principally consists of the cost of products sold through our supplies stores and the related costs of shipping and handling . the cost of insurance revenue principally consists of parcel insurance offering costs through our third party insurance providers . cost of customized postage revenue principally consists of the face value of postage , customer service , image review costs , and printing and fulfillment costs . cost of service revenue increased 43 % to $ 40.0 million in 2016 from $ 28.0 million in 2015. the increase was primarily attributable to higher customer service costs , which increased by $ 6.0 million , to support our 44 growing customer base and higher credit card processing fees , which increased by $ 3.0 million , associated with our higher revenue . promotional expenses were not material in 2016. cost of service revenue as a percent of service revenue declined from 16 % in 2015 to 13 % in 2016. the decline was primarily attributable to achieving scale efficiencies in areas such as customer service from our growth in revenue . cost of product revenue increased 12 % to $ 6.7 million in 2016 from $ 6.0 million in 2015. the 12 % increase in cost of product revenue was primarily attributable to the increase in product revenue over the same time period . cost of product revenue as a percent of product revenue was 33 % in 2016 which was consistent with 2015. cost of insurance revenue increased 36 % to $ 5.4 million in 2016 from $ 4.0 million in 2015. the increase in cost of insurance revenue resulted from growth in the number of insurance transactions , which was primarily attributable to our acquisitions . cost of insurance revenue as a percent of insurance revenue declined from 34 % in 2015 to 31 % in 2016. the decline was primarily attributable to the insurance offerings of our acquired companies having higher prices for parcel insurance as compared to the rest of the company . cost of customized postage revenue increased 80 % to $ 10.8 million in 2016 from $ 6.0 million in 2015. the increase in cost of customized postage revenue is primarily due to the increase in our customized postage revenue . cost of customized postage revenue as a percent of customized postage revenue declined from 83 % in 2015 to 80 % in 2016. the decline was primarily the result of the addition of endicia 's pictureitpostage revenue which has a lower cost of customized postage revenue as a percent of customized postage revenue as compared to photostamps . pictureitpostage does not have a material level of high volume business orders which typically have a higher cost of customized postage revenue as a percent of customized postage revenue as compared to consumer website orders . operating expenses the following table outlines the components of our operating expense and their respective percentages of total revenues for the periods indicated ( in thousands except percentage ) : replace_table_token_16_th sales and marketing sales and marketing expense principally consists of spending to acquire new customers and compensation and related expenses for personnel engaged in sales , marketing , and business development activities . our sales and marketing programs include direct sales , customer referral programs , customer re-marketing efforts , direct mail , online advertising , partnerships , telemarketing , and traditional advertising . sales and marketing expense increased 40 % to $ 78.8 million in 2016 from $ 56.1 million in 2015. the increase is primarily due to ( 1 ) an increase in headcount-related expenses excluding stock-based compensation expense of $ 10.4 million , ( 2 ) an increase in stock-based compensation expense of $ 2.6 million and ( 3 ) an increase in discretionary marketing spend of $ 6.5 million . the increases in headcount-related and stock-based compensation expenses were due to both the addition of headcount resulting from our endicia and shippingeasy acquisitions as well as increased headcount in the rest of the company . 45 research and development research and development expense principally consists of compensation for personnel involved in the development of our services , depreciation of equipment

