Adobe 2010 Annual Report Download - page 68

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68
Research and Development, Sales and Marketing and General and Administrative Expenses
The increase in research and development, sales and marketing and general and administrative expenses during fiscal
2010 as compared to fiscal 2009 was primarily driven by increases in compensation expense due to additional headcount as a
result of our acquisition of Omniture and to higher employee compensation including bonuses based on company
performance to date when compared to fiscal 2009. The decrease in research and development, sales and marketing and
general and administrative expenses in fiscal 2009 as compared to fiscal 2008 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.
Research and Development
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 increased (decreased) due to the following:
% Change
2010-2009
% Change
2009-2008
Compensation associated with incentive compensation and stock-based compensation ......
16
%
(13
)%
Compensation and related benefits associated with headcount growth.................................
2
1
Various individually insignificant items ...............................................................................
2
(3
)
Total change ......................................................................................................................
20
%
(15
)%
We believe that investments in research and development, including the recruiting and hiring of software developers,
are critical to remain 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 application, tool and service offerings.
Sales and Marketing
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. Given the strength of our business during the first half of fiscal 2010, we
made additional investments in sales and marketing which is reflected in the table below under marketing spending related to
product launches and marketing efforts.
Sales and marketing expenses increased (decreased) due to the following:
% Change
2010-2009
% Change
2009-2008
Compensation associated with incentive compensation and stock-based compensation ......
16
%
(8
)%
Compensation and related benefits associated with headcount growth ................................
3
2
Marketing spending related to product launches and overall marketing efforts to
further increase revenue ....................................................................................................
3
(4
)
Various individually insignificant items ...............................................................................
5
—
Total change ......................................................................................................................
27
%
(10
)%
General and Administrative
General and administrative expenses consist primarily of compensation and benefit expenses, travel expenses and
related facilities costs for our finance, facilities, human resources, legal, information services and executive personnel.
General and administrative expenses also include outside legal and accounting fees, provision for bad debts, expenses
associated with computer equipment and software used in the administration of the business, charitable contributions and
various forms of insurance.