Adobe 2009 Annual Report Download - page 61

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61
Operating Expenses (dollars in millions)
Research and Development, Sales and Marketing and General and Administrative Expenses
The decrease in research and development, sales and marketing and general and administrative expenses in fiscal 2009
was primarily driven by decreases in compensation expense and a decrease in the costs associated with acquired rights to use
technology. The decrease in compensation costs during fiscal 2009 as compared to fiscal 2008 was primarily due to lower
profit sharing and employee bonuses based on company performance. The increase in compensation costs during fiscal 2008
as compared to fiscal 2007 related to increases in headcount and stock-based compensation offset by decreases in profit
sharing and employee bonuses based on company performance.
Research and Development
Fiscal
2009
% Change
2009 to 2008
Fiscal
2008
% Change
2008 to 2007
Fiscal
2007
Expenses ............................
$
565.1
(15
)%
$
662.1
8
%
$
613.2
Percentage of total revenue............
19
%
18
%
19
%
Research and development expenses consist primarily of salary and benefit expenses for software developers, contracted
development efforts, related facilities costs and expenses associated with computer equipment used in software development.
Research and development expenses decreased due to the following:
% Change
2009 to 2008
% Change
2008 to 2007
Compensation and related benefits associated with headcount growth ...........
1
%
7
%
Compensation associated with incentive compensation and stock-based
compensation .......................................................
(13
)
—
Various individually insignificant items ...................................
(3
)
1
Total change .......................................................
(15
)%
8
%
We believe that investments in research and development, including the recruiting and hiring of software developers, are
critical to remaining competitive in the marketplace and are directly related to continued timely development of new and
enhanced products. We will continue to focus on long-term opportunities available in our end markets and make significant
investments in the development of our desktop application and server-based software products.
Sales and Marketing
Fiscal
2009
% Change
2009 to 2008
Fiscal
2008
% Change
2008 to 2007
Fiscal
2007
Expenses ...........................
$
981.9
(10
)%
$
1,089.3
11
%
$
984.4
Percentage of total revenue ...........
33
%
30
%
31
%
Sales and marketing expenses consist primarily of salary and benefit expenses, sales commissions, travel expenses and
related facilities costs for our sales, marketing, order management and global supply chain management personnel. Sales and
marketing expenses also include the costs of programs aimed at increasing revenue, such as advertising, trade shows, public
relations and other market development programs.
Sales and marketing expenses decreased due to the following:
% Change
2009 to 2008
% Change
2008 to 2007
Compensation and related benefits associated with headcount growth ............
2
%
5
%
Compensation associated with incentive compensation and stock-based
compensation ........................................................
(8
)
1
Marketing spending related to product launches and overall marketing efforts to
further increase revenue ...............................................
(1
)
4
Various individually insignificant items ....................................
(3
)
1
Total change ........................................................
(10
)%
11
%