Stamps.com 2015 Annual Report Download - page 45
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Please find page 45 of the 2015 Stamps.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.2014 2013
OperatingExpenses:
Salesandmarketing $ 43,659 $ 39,449
Researchanddevelopment 13,309 10,958
Generalandadministrative 25,147 15,794
Contingentconsiderationcharges 8,438 -
Totaloperatingexpenses $ 90,553 $ 66,201
Operatingexpensesasapercentageoftotalrevenue:
Salesandmarketing 30% 31%
Researchanddevelopment 9% 9%
Generalandadministrative 17% 12%
Contingentconsiderationcharges 6% -
Totaloperatingexpenses 61% 52%
TABLE OF CONTENTS
Operating Expenses
Thefollowingtableoutlinesthecomponentsofouroperatingexpenseandtheirrespectivepercentagesoftotalrevenueforthe
periodsindicated(inthousandsexceptpercentage):
Sales and Marketing
Salesandmarketingexpenseprincipallyconsistsofspendingtoacquirenewcustomersandcompensationandrelatedexpensesfor
personnelengagedinsales,marketing,andbusinessdevelopmentactivities.Salesandmarketingexpenseincreased11%to$43.7
millionin2014from$39.5millionin2013.Theincreasewasprimarilyduetotheadditionofsalesandmarketingexpensefromour
ShipStationandShipWorksacquisitionsaswellastheincreasedmarketingspendingaswecontinuedtofocusonacquiringcustomers
inourCoremailingandshippingbusinesswhilespendinginourNon-CoremailingandshippingandPhotoStampsbusinessesboth
decreasedcomparedto2013.Ongoingmarketingprogramsincludethefollowing:customerreferralprograms,customerre-marketing
efforts,directmail,onlineadvertising,partnerships,telemarketing,andtraditionaladvertising.
Research and Development
Researchanddevelopmentexpenseprincipallyconsistsofcompensationforpersonnelinvolvedinthedevelopmentofour
services,depreciationofequipmentandsoftwareandexpendituresforconsultingservicesandthirdpartysoftware.Researchand
developmentexpenseincreased21%to$13.3millionin2014from$11.0millionin2013.Theincreasewasprimarilyduetothe
additionofresearchanddevelopmentexpensefromourShipStationandShipWorksacquisitionsaswellasanincreaseinheadcount-
relatedexpensestosupportourexpandedproductofferingsandtechnologyinfrastructureinvestments.
General and Administrative
Generalandadministrativeexpenseprincipallyconsistsofcompensationandrelatedcostsforexecutiveandadministrative
personnel,feesforlegalandotherprofessionalservices,depreciationofequipment,softwareandbuildingusedforgeneralcorporate
purposesandamortizationofintangibleassets.Generalandadministrativeexpenseincreased59%to$25.1millionin2014from$15.8
millionin2013.Generalandadministrativeexpenseasapercentageofrevenueincreasedto17%in2014from12%in2013.The
increase,bothonanabsolutebasisandasapercentageofrevenue,isprimarilyattributableto(1)theadditionofgeneraland
administrativeexpensefromourShipStationandShipWorksacquisitionsaswellasincreaseinheadcountrelatedexpenses(2)
headcountandinfrastructureinvestmentstosupportourmulti-subsidiarystructurepostacquisitionsaswellasthegrowthinthe
business,(3)increasedcorporatelegalexpensesnotrelatedtoouracquisitions(4)theinclusionofacquisitionrelatedlegaland
accountingrelatedexpensesand(5)theamortizationofacquiredintangiblesin2014thatwedidnothavein2013.
Contingent consideration charges
Contingentconsiderationchargesareattributabletothechangeinthefairvalueofourcontingentconsiderationliabilityrelatedto
theacquisitionofShipStationandwere$8.4millionin2014.Wedidnothave
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