Table:
| For the Years Ended December 31, |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | 2019 | 2018 | Change | % Change |
| (In millions, except percentages) |  |  |  |  |
| Revenues | $13.2 | $82.3 | $(69.1) | (84)% |
| Cost of revenues | 1.9 | 15.3 | (13.4) | (88)% |
| Gross profit | 11.3 | 67.0 | (55.7) | (83)% |
| Gross margin | 86 % | 81 % |  |  |
| Operating expenses: |  |  |  |  |
| Selling, general and administrative | 31.7 | 32.2 | (0.5) | (2)% |
| Research and development | 2.0 | 2.1 | (0.1) | (5)% |
| Total operating expenses | 33.7 | 34.3 | (0.6) | (2)% |
| Other expense | (0.3) | (4.0) | 3.7 | (93)% |
| Income (loss) before income taxes | (22.7) | 28.7 | (51.4) | (179)% |
| Income tax provision (benefit) | (6.2) | 8.0 | (14.2) | (178)% |
| Net income (loss) | $(16.5) | $20.7 | $(37.2) | (180)% |
Paragraphs:
Year ended December 31, 2019 compared with the year ended December 31, 2018:
Revenue in 2019 is derived from license agreements that we entered into with third-parties following negotiations pursuant to our patent licensing and enforcement program. The revenue decrease is primarily due to timing of revenues, as further described in "Item 1. Business" - "Licensing and Enforcement - Current Activities, Post 2013".
Cost of revenues includes contingent legal fees directly associated with our licensing and enforcement programs. Cost of revenues primarily decreased in proportion to the decrease in revenues.
Operating expenses consists of sales and marketing, general and administrative, and research and development. Selling, general and administrative expenses ("SG&A") consisted primarily of legal fees incurred in operations and employee headcount related expenses. These comprise approximately 60% of total SG&A expense. Litigation expenses increased $3.0 million to $19.4 million in 2019 compared to 2018 and are primarily due to the timing of various outstanding litigation actions. See "Item 3. Legal Proceedings". Employee headcount related expenses decreased $2.0 million to $3.6 million in 2019 compared to 2018, primarily due to lower incentive bonuses.
Research and development expense remained flat between years.
Other expense decreased in 2019 as we no longer have exposure from the warrant liability, and included $0.7 million related to the sale of our investment in JVP, offset by $0.3 million of net interest income.
Income tax provision (benefit) is primarily a function of income (loss) before income, state income tax expense (benefit) and federal benefit of foreign derived intangible tax benefit related to 2018.
Question:
Where is revenue in 2019 derived from?
Answer: license agreements that we entered into with third-parties following negotiations pursuant to our patent licensing and enforcement program