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2016 Form 10-K 53
Research and Development
Fiscal Year
Ended
January 31,
2016
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2015
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2014
$ % $ %
(in millions)
Research and development $ 790.0 $ 64.8 9% $ 725.2 $ 114.1 19% $ 611.1
As a percentage of net revenue 32% 29% 27%
Research and development expenses, which are expensed as incurred, consist primarily of salaries, bonuses, benefits, and
stock-based compensation expense for research and development employees, and the expense of travel, entertainment and
training for such personnel, rent and occupancy, professional services such as fees paid to software development firms and
independent contractors, and allocated IT and facilities costs.
Research and development expenses increased 9% during fiscal 2016, as compared to fiscal 2015, primarily due to an
increase in employee-related costs from salaries and fringe benefits predominantly driven by increased headcount, an increase
in IT costs allocated to research and development, and an increase in stock based compensation expense due to higher fair
market value of awards granted.
Research and development expenses increased 19% during fiscal 2015, as compared to fiscal 2014, primarily due to an
increase in employee-related costs from salaries and bonuses and an increase in professional fees.
We expect research and development expense to increase in absolute dollars and as a percentage of net revenue during
fiscal 2017, as compared to fiscal 2016.
General and Administrative
For comparability, the balances at January 31, 2015 and January 31, 2014, including the table, were adjusted to align to
current year presentation, and therefore the discussion has been updated accordingly.
Fiscal Year
Ended
January 31,
2016
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2015
Increase compared to
prior fiscal year
Fiscal Year
Ended
January 31,
2014
$ % $ %
(in millions)
General and administrative $ 293.4 $ 10.1 4% $ 283.3 $ 71.5 34% $ 211.8
As a percentage of net revenue 12% 11% 9%
General and administrative expenses include salaries, bonuses, benefits and stock-based compensation expense for our
finance, human resources and legal employees, as well as professional fees for legal and accounting services, certain foreign
business taxes, gains and losses on our operating expense cash flow hedges, expense of travel, entertainment and training,
expense of communication and the cost of supplies and equipment.
General and administrative expenses increased 4% from fiscal 2015 to fiscal 2016 primarily due to an increase in
employee-related costs from salaries predominantly driven by increased headcount. Partially offsetting the increase in expense
was a decrease in certain foreign business taxes.
General and administrative expenses increased 34% from fiscal 2014 to fiscal 2015, primarily due to an increase in
employee-related costs from salaries and bonuses and an increase in professional fees.
We expect general and administrative expense to increase in absolute dollars and as a percentage of net revenue during
fiscal 2017, as compared to fiscal 2016.
2016 Annual Report