EFTA01377682.pdf

S- I/A income and expense historically consisted primarily of changes in the fair value of our customer warrant liability measurements. and to a lesser extent, interest expense on our capital lease financings, interest income on cash balances, and foreign currency- related gains and losses. Provision (Benefit) for Income Taxes The provision (benefit) for income taxes consists primarily of local, state, federal, and foreign tax. Our effective tax rate fluctuates from period to period due to changes in the mix of income and losses in jurisdictions with a wide range of tax rates, the effect of acquisitions, the change resulting from the amount of recorded valuation allowance, the permanent difference between GAAP and local tax laws, certain one-time items, and changes in tax contingencies. As of December 31, 2014, we had $45.7 million of federal, $123.3 million of state, and $31.3 million of foreign net operating loss carryforwards, which will begin to expire in 2032 for federal and 2019 for state tax purposes. The foreign net operating loss carryforwards do not expire. An annual limitation may apply to the use of net operating loss carryforwards under provisions of the Internal Revenue Code and similar state tax provisions that are applicable if we experience an ownership change. As of December 31, 2014, we have performed an analysis on the potential limitations on the utilization of net operating losses and determined that as of such date they were not subject to any material limitations that would preclude the use of the net operating losses. We have not conducted an analysis to determine if an ownership change will occur as a result of this offering. Substantially all of our net operating loss carryforwards were subject to a valuation allowance as of September 30, 2015. 74 Tame of contents. Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this prospectus. The following table sets forth our consolidated results of operations for the periods shown: Nine Months Ended Year Ended December 31, September 30, 2012 2013 2014 2014 2015 (in thousands) (unaudited) Consolidated Statement of Operations Data: Revenue: Transaction revenue S 193.978 S 433,737 $ 707,799 $ 501,468 S 751.929 Starbucks transaction revenue 9,471 114,456 123,024 86,508 95.199 Software and data product revenue 12.046 6,022 35.628 Hardware revenue 4,240 7.323 5,300 10.002 Total net revenue 203,449 552,433 850,192 599,298 892,758 Cost of revenue: Transaction costs 126.351 277,833 450,858 318,501 479,937 Starbucks transaction costs 12,547 139,803 150,955 107,889 118.542 Software and data product costs 2,973 1,032 13.820 Hardware costs 6,012 18,330 13.527 16,636 Amortization of acquired technology 1,002 602 2,886 Total cost of revenue 138,898 423,648 624,118 441,551 631.821 Gross profit 64.551 128,785 226,074 157,747 260.937 Operating expenses: Product development 46,568 82,864 144,637 104.967 140.452 Sales and marketing 56,648 64,162 112,577 81,704 107.170 General and administrative 36,184 68,942 94,220 68,585 97,743 Transaction and advance losses 10.512 15,329 24,081 17,826 40.840 Amortization of acquired customer assets 1,050 591 1,373 Impairment of intangible assets 2,430 Total operating expenses 149,912 233,727 376,565 273,673 387,578 http://www.sec.gov/A rehi vestedgar/data/1512673AMS11193125 I 5369092/d937622dsI a.htm[ 11/6/20 15 7:37:12 AMI CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0074833 CONFIDENTIAL SDNY_GM_00221017 EFTA01377682