Adobe 2015 Annual Report Download - page 47

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Table of Contents
47
Research and Development, Sales and Marketing and General and Administrative Expenses
Research and development and sales and marketing expenses increased slightly during fiscal 2015 as compared to fiscal
2014 primarily due to increases in compensation and related benefits associated with headcount. General and administrative
expenses decreased slightly during fiscal 2015 as compared to fiscal 2014 primarily due to the reversal of a previously anticipated
loss associated with the HTEAL proceedings, offset in part by increases in compensation and related benefits associated with
headcount.
The increase in research and development and general and administrative expenses during fiscal 2014 as compared to fiscal
2013 was primarily due to increases in cash incentive and stock-based compensation. The increase in stock-based compensation
was driven by a change in the vesting term for stock awards granted as part of our annual review process beginning in fiscal 2013,
which decreased the term from four years to three years. The increase in sales and marketing expense during fiscal 2014 as
compared to fiscal 2013 was primarily due to compensation and related benefits associated with additional headcount.
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 due to the following:
% Change
2015-2014 % Change
2014-2013
Compensation and related benefits associated with headcount 2% —%
Compensation associated with cash and stock-based incentives (1) 2
Various individually insignificant items 1 —
Total change 2% 2%
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, subscription and solution offerings. 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, subscription 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.
Sales and marketing expenses increased due to the following:
% Change
2015-2014 % Change
2014-2013
Compensation and related benefits associated with headcount 3% 1%
Compensation associated with cash incentives (2) —
Professional and consulting fees (2) —
Marketing spending related to product launches and overall marketing efforts 2 —
Various individually insignificant items 1 1
Total change 2% 2%
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.