Table:
|  | Year Ended December 31, |  | Change |  |
| --- | --- | --- | --- | --- |
|  | 2018 | 2017 | $ | % |
|  |  | (dollars in thousands) |  |  |
| Cost of revenue | $ 46,810 | $ 31,503 | $ 15,307 | 48.6% |
| Gross margin % | 68% | 70% |  |  |
Paragraphs:
Cost of Revenue
Cost of revenue increased by $15.3 million in 2018 compared to 2017. The increase was primarily due to a $7.2 million increase in employee-related costs, which includes stock-based compensation, associated with our increased headcount from 128 employees as of December 31, 2017 to 173 employees as of December 31, 2018. The remaining increase was principally the result of a $7.0 million increase in hosting, software and messaging costs, a $0.6 million increase attributed to office related expenses to support revenue generating activities and a $0.4 million increase in depreciation and amortization expense attributable to our acquired intangible assets.
Gross margin percentage decreased due to our continued investment in personnel and infrastructure to support our growth in revenue.
Question:
In which year was cost of revenue less than 40,000 thousands?
Answer: Because locate and analyze cost of revenue in row 4, the answer is: 2017.