Etsy 2015 Annual Report Download - page 53
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Other revenue decreased $0.1 million, or 2.6%, to $4.2 million in the year ended December 31, 2015 compared to the year ended December 31, 2014, mainly
the result of a decrease in fees received from a third-party service provider due to the integration of PayPal into Direct Checkout late in the fourth quarter of
2015.
Cost of revenue
$ 73,633
$ 96,979
$ 23,346
31.7%
Percentage of total revenue
37.6%
35.5%
Cost of revenue increased $23.3 million, or 31.7%, to $97.0 million in the year ended December 31, 2015 compared to the year ended December 31, 2014,
primarily as a result of additional costs to support the increase in Direct Checkout revenue. To a lesser extent, the increase was due to an increase in
depreciation and amortization, an increase in employee-related costs and an increase in hosting and bandwidth costs associated with ongoing maintenance of
our technology infrastructure. Cost of revenue decreased as a percentage of revenue due to moderate growth in employee-related costs and costs related to our
technology infrastructure as compared to the growth in higher-margin revenue streams such as Promoted Listings.
There were 819 total employees on December 31, 2015, compared with 685 on December 31, 2014.
Marketing
$ 39,655
$ 66,771
$ 27,116
68.4%
Percentage of total revenue
20.3%
24.4%
Marketing expenses increased $27.1 million, or 68.4%, to $66.8 million in the year ended December 31, 2015 compared to the year ended December 31,
2014, primarily as a result of an increase in spending on product listing ads and employee-related expenses in our marketing team, which includes our public
relations, communications and seller development teams. The increase in marketing expenses was also impacted by business changes and reorganizations
that occurred at the end of the third quarter in 2014, moving certain teams that were previously focused on product-related projects into marketing.
Excluding the impact of these changes, comparable marketing expenses in the year ended December 31, 2015 grew 57.4% compared to the year ended
December 31, 2014.
Product development
$ 36,634
$ 42,694
$ 6,060
16.5%
Percentage of total revenue
18.7%
15.6%
Product development expenses increased $6.1 million, or 16.5%, to $42.7 million in the year ended December 31, 2015 compared to the year ended
December 31, 2014, primarily as a result of an increase in employee-related expenses in our product and engineering teams. The increase in product
development expenses was also impacted by business changes and reorganizations that occurred at the end of the third quarter in 2014, moving certain teams
to marketing that were previously focused on product-related projects. Excluding the impact of these changes, comparable product development expenses in
the year ended December 31, 2015 grew 22.5% compared to the year ended December 31, 2014.
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