ARUN » Topics » Operating Expenses

These excerpts taken from the ARUN 10-K filed Oct 7, 2008.
Operating Expenses
 
Operating expenses consist of research and development, sales and marketing, and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of salaries,


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benefits and incentive compensation for our employees, including commissions for sales personnel and stock-based compensation for all employees.
 
We grew from approximately 441 employees at July 31, 2007 to approximately 541 employees at July 31, 2008, including approximately 55 employees from our AirWave acquisition. We expect to continue to strategically hire employees throughout the company as well as invest in research and development.
 
Research and development expenses primarily consist of personnel costs and facilities costs. We expense research and development expenses as incurred. We are devoting substantial resources to the continued development of additional functionality for existing products and the development of new products. We intend to continue to invest significantly in our research and development efforts because we believe it is essential to maintaining our competitive position. We expect research and development expenses to increase on an absolute dollar basis and as a percentage of revenue compared to fiscal 2008.
 
Sales and marketing expenses represent the largest component of our operating expenses and primarily consist of personnel costs, sales commissions, marketing programs and facilities costs. Marketing programs are intended to generate revenue from new and existing customers and are expensed as incurred.
 
We plan to continue to invest heavily in sales and marketing by increasing the number of sales personnel worldwide with the intent to add new customers and increase penetration within our existing customer base, expand our domestic and international sales and marketing activities, build brand awareness and sponsor additional marketing events. We expect future sales and marketing expenses to continue to be our most significant operating expense. Generally, sales personnel are not immediately productive, and thus, the increase in sales and marketing expenses that we experience as we hire additional sales personnel is not expected to immediately result in increased revenues and reduces our operating margins until such sales personnel become productive and generate revenue. Accordingly, the timing of sales personnel hiring and the rate at which they become productive will affect our future performance. We expect sales and marketing expenses to increase on an absolute dollar basis and decrease as a percentage of revenue compared to fiscal 2008.
 
General and administrative expenses primarily consist of personnel and facilities costs related to our executive, finance, human resource, information technology and legal organizations, as well as insurance, investor relations, and IT infrastructure costs related to our new ERP system. Further, our general and administrative expenses include professional services consisting of outside legal, audit, Sarbanes-Oxley and information technology consulting costs. We expect that we will incur significant additional legal costs related to defending ourselves against claims made by outside parties. We expect general and administrative expenses to increase on an absolute dollar basis and as a percentage of revenue compared to fiscal 2008.
 
Operating
Expenses



 



Operating expenses consist of research and development, sales
and marketing, and general and administrative expenses. The
largest component of our operating expenses is personnel costs.
Personnel costs consist of salaries,





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benefits and incentive compensation for our employees, including
commissions for sales personnel and stock-based compensation for
all employees.


 



We grew from approximately 441 employees at July 31,
2007 to approximately 541 employees at July 31, 2008,
including approximately 55 employees from our AirWave
acquisition. We expect to continue to strategically hire
employees throughout the company as well as invest in research
and development.


 



Research and development expenses primarily consist of personnel
costs and facilities costs. We expense research and development
expenses as incurred. We are devoting substantial resources to
the continued development of additional functionality for
existing products and the development of new products. We intend
to continue to invest significantly in our research and
development efforts because we believe it is essential to
maintaining our competitive position. We expect research and
development expenses to increase on an absolute dollar basis and
as a percentage of revenue compared to fiscal 2008.


 



Sales and marketing expenses represent the largest component of
our operating expenses and primarily consist of personnel costs,
sales commissions, marketing programs and facilities costs.
Marketing programs are intended to generate revenue from new and
existing customers and are expensed as incurred.


 



We plan to continue to invest heavily in sales and marketing by
increasing the number of sales personnel worldwide with the
intent to add new customers and increase penetration within our
existing customer base, expand our domestic and international
sales and marketing activities, build brand awareness and
sponsor additional marketing events. We expect future sales and
marketing expenses to continue to be our most significant
operating expense. Generally, sales personnel are not
immediately productive, and thus, the increase in sales and
marketing expenses that we experience as we hire additional
sales personnel is not expected to immediately result in
increased revenues and reduces our operating margins until such
sales personnel become productive and generate revenue.
Accordingly, the timing of sales personnel hiring and the rate
at which they become productive will affect our future
performance. We expect sales and marketing expenses to increase
on an absolute dollar basis and decrease as a percentage of
revenue compared to fiscal 2008.


 



General and administrative expenses primarily consist of
personnel and facilities costs related to our executive,
finance, human resource, information technology and legal
organizations, as well as insurance, investor relations, and IT
infrastructure costs related to our new ERP system. Further, our
general and administrative expenses include professional
services consisting of outside legal, audit, Sarbanes-Oxley and
information technology consulting costs. We expect that we will
incur significant additional legal costs related to defending
ourselves against claims made by outside parties. We expect
general and administrative expenses to increase on an absolute
dollar basis and as a percentage of revenue compared to fiscal
2008.


 




This excerpt taken from the ARUN 10-K filed Oct 12, 2007.
Operating Expenses
 
Operating expenses consist of research and development, sales and marketing, general and administrative and in-process research and development expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of salaries, benefits and incentive compensation for our employees, including commissions for sales personnel and stock-based compensation for all employees.
 
We grew from 282 employees at July 31, 2006 to approximately 441 employees at July 31, 2007. We expect to continue to hire a significant number of new employees to support our growth. The timing of these additional hires could materially affect our operating expenses, both in absolute dollars and as a percentage of revenue, in any particular period.
 
Research and development expenses primarily consist of personnel costs and facilities costs. We expense research and development expenses as incurred. We are devoting substantial resources to the continued development of additional functionality for existing products and the development of new products. We intend to continue to invest significantly in our research and development efforts because we believe it is essential to maintaining our competitive position. However, as a percentage of revenue, we expect research and development expenses to decrease.


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Sales and marketing expenses represent the largest component of our operating expenses and primarily consist of personnel costs, sales commissions, marketing programs and facilities costs. Marketing programs are intended to generate revenue from new and existing customers and are expensed as incurred.
 
We plan to continue to invest heavily in sales and marketing by increasing the number of sales personnel worldwide with the intent to add new customers and increase penetration within our existing customer base, expand our domestic and international sales and marketing activities, build brand awareness and sponsor additional marketing events. We expect future sales and marketing expenses to continue to be our most significant operating expense. Generally, sales personnel are not immediately productive, and thus, the increase in sales and marketing expenses that we experience as we hire additional sales personnel is not expected to immediately result in increased revenues and reduces our operating margins until such sales personnel become productive and generate revenue. Accordingly, the timing of sales personnel hiring and the rate at which they become productive will affect our future performance. However, as a percentage of revenue, we expect sales and marketing expenses to decrease.
 
General and administrative expenses primarily consist of personnel and facilities costs related to our executive, finance, human resource, information technology and legal organizations, and fees for professional services. Professional services consist of outside legal, audit, and Sarbanes-Oxley and information technology consulting costs. We expect that we will incur significant additional accounting and legal costs related to compliance with rules and regulations implemented by the Securities and Exchange Commission, as well as additional insurance, investor relations and other costs associated with being a public company. However, as a percentage of revenue, we expect general and administrative expenses to decrease.
 
In-process research and development expenses relate to the acquisition of Network Chemistry, Inc.’s line of RFProtect and BlueScanner wireless security products, which we purchased in July 2007. In-process research and development expenses were expensed upon the consummation of the acquisition. See Note 3 of our Notes to Consolidated Financial Statements for a further discussion.
 
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