I am inspired by the work our team had done so far this year. We are just scratching the surface of what is possible in changing how companies raise capital. I am pleased to announce our results for the first half of 2018.
Our revenue increased to $2,421,061 for the six months ended June 30, 2018 (“Interim 2018”) from $770,668 for the six months ended June 30, 2017 (“Interim 2017”), an increase of 214%. StartEngine Premium, which began recognizing revenue in the second quarter of 2017, contributed $691,000 to the increase in revenue. This growth was also driven by event and sponsorship revenue of approximately $301,000 related to the StartEngine ICO 2.0 Summit in April 2018, Regulation Crowdfunding platform fees of approximately $295,000, Regulation D platform fees of approximately $266,000 primarily related to the tZERO Initial Coin Offering, and other campaign-related services of approximately $333,000. These increases were partially offset by lower Regulation A platform fees of approximately $177,000.
Cost of revenue increased to $1,150,009 for Interim 2018 from $233,375 for Interim 2017, an increase of 393%. Our cost of revenue increased primarily as a result of higher transaction costs of approximately $299,000 due to increased campaign volume, higher payroll costs of approximately $256,000 due to an expanded account services team, and higher contractor costs of approximately $155,000 related to campaign copywriting, legal, and accounting services. Our gross margins decreased to 68.2% for Interim 2018 from 79.7% for Interim 2017.
Our operating expenses consist of general and administrative expenses (primarily salaries, stock-based compensation, office rent, legal services and accounting services), sales and marketing expenses, and research and development expenses. Operating expenses totaled $3,085,707 for Interim 2018 from $1,538,880 for Interim 2017, an increase of 101%.
As a result, net loss increased to $1,806,632 from $1,085,941 for Interim 2017 and Interim 2018, respectively. As of June 30, 2018, the company received $3,937,157 in net proceeds from the Regulation A offering.
I want to thank you for your ongoing support and help. We could have not achieved so much without your trust in us.
Please see our full 1-SA filing with the SEC here.
StartEngine Crowdfunding Inc.