EFTA Document EFTA01377685

S- I/A acquisitions of BookFresh and Caviar and our 2015 acquisitions of FastBite and Kifi. Product Development The following table sets forth our product development expenses for the periods shown: Nine Months Ended September 30, Product development Percentage of total net revenue 2014 2015 S Change % Change (in thousands) (unaudited) $ 104,967 $ 140,452 $ 35,485 34% 18% 16% Product development expenses for the nine months ended September 30, 2015, increased by $35.5 million, or 34%, compared to the nine months ended September 30, 2014. Product development personnel increased by 8% from September 30, 2014, to September 30, 2015, primarily due to the addition of engineering, design, and product personnel, including those who joined as a result of acquisitions. For the nine months ended September 30, 2015, product development expenses included $33.3 million of share-based compensation expense, a $16.4 million increase compared to the nine months ended September 30, 2014. For the nine months ended September 30, 2015, product development expenses also included $9.1 million of depreciation expense, a $1.7 million increase compared to the nine months ended September 30, 2014. Sales and Marketing The following table sets forth our sales and marketing expenses for the periods shown: Sales and marketing Percentage of total net revenue Nine Months Ended September 30, 2014 2015 S Change % Change (in thousands) (unaudited) $ 81,704 $ 107,170 $ 25,466 31% 14% 12% Sales and marketing expenses for the nine months ended September 30, 2015, increased by $25.5 million, or 31%, compared to the nine months ended September 30, 2014, reflecting an increase of $8.9 million in paid marketing expenses 78 Table of Comeau primarily from direct mail, online, and mobile marketing campaigns that occurred during the period. The balance of the increase was primarily due to an increase in costs associated with our Square Cash peer-to-peer payments service. For the nine months ended September 30. 2015, sales and marketing expenses included $4.5 million of share-based compensation expense, a $2.0 million increase compared to the nine months ended September 30, 2014. General and Administrative The following table sets forth our general and administrative expenses for the periods shown: General and administrative Percentage of total net revenue Nine Months Ended September 30, 2014 2015 S Change % Change (in thousands) d ited) 68,585 97,743 $ 29,158 43% 11% 11% General and administrative expenses for the nine months ended September 30, 2015, increased by $29.2 million, or 43%. compared to the nine months ended September 30, 2014. General and administrative personnel increased by 49% in the period http://www. sec. gov/A rehi vestedgar/data/1512673AMS )119312515369092/d937622ds I a. htnil 11/6/2015 7:37:12 AMI CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0074836 SDNY_GM_00221020 EFTA01377685