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SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
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infrastructure and operation and support activities to maintain high availability and quality of service. As our business grows, we expect to realize economies of scale in network infrastructure and personnel costs related to professional services, customer support and network operations organizations.

Selling and Marketing

Selling and marketing expenses consist primarily of labor costs (including stock-based compensation) and related expenses for employees in sales and marketing, including commissions and bonuses, advertising, marketing events, corporate communications, expenses, travel costs and allocated overhead. Since our Software segment revenue is delivered and, therefore, recognized over time, we have experienced a delay between increasing sales and marketing expenses and the recognition of the corresponding revenue. We believe it is important to continue investing in selling and marketing to create brand awareness and lead generation opportunities, to increase market share and to support our reseller channels. Accordingly, we expect selling and marketing expenses to increase in absolute dollars as we continue to support growth initiatives, although these expenses as a percentage of our revenue are expected to decrease over time.

Research and Development

Research and development expenses consist primarily of the non-capitalized portion of labor costs (including stock-based compensation) and related expenses for development personnel and costs related to the development of new products, enhancement of existing products, quality assurance, market research, testing, product management and allocated overhead. We expect research and development expenses to increase in absolute dollars in the future as we intend to release new features and functionality on a frequent basis, expand our content offerings, upgrade and extend our service offerings and develop new technologies, although these expenses as a percentage of our revenue are expected to decrease over time.

General and Administrative

General and administrative expenses consist primarily of personnel costs (including stock-based compensation) and related expenses for management, finance and accounting, legal, information systems and human resources personnel, professional fees, other corporate expenses and allocated overhead. We anticipate that we will incur additional employee salaries and related expenses, professional service fees and other corporate expenses related to the growth of our business, the proposed merger with NICE, and future operations. As such, we expect general and administrative expenses to fluctuate in absolute dollars from period to period, although these expenses as a percentage of our revenue are expected to decrease over time.  

RESULTS OF OPERATIONS

Three Months Ended September 30, 2016 and 2015

The following is a tabular presentation of our condensed consolidated operating results for the three months ended September 30, 2016 compared to our condensed consolidated operating results for the three months ended September 30, 2015 (in thousands, except percentages):

 

 

 

2016

 

 

 

2015

 

 

$ Change

 

 

% Change

 

Net revenue

$

67,018

 

 

$

56,078

 

 

$

10,940

 

 

 

20%

 

Costs of revenue

 

31,339

 

 

 

27,093

 

 

 

4,246

 

 

 

16%

 

Gross profit

 

35,679

 

 

 

28,985

 

 

 

6,694

 

 

 

 

 

Gross margin

 

53

%

 

 

52

%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

19,025

 

 

 

17,810

 

 

 

1,215

 

 

 

7%

 

Research and development

 

9,268

 

 

 

7,328

 

 

 

1,940

 

 

 

26%

 

General and administrative

 

12,377

 

 

 

7,750

 

 

 

4,627

 

 

 

60%

 

Total operating expenses

 

40,670

 

 

 

32,888

 

 

 

7,782

 

 

 

 

 

Loss from operations

 

(4,991

)

 

 

(3,903

)

 

 

(1,088

)

 

 

 

 

Other expense

 

(1,770

)

 

 

(1,612

)

 

 

(158

)

 

 

 

 

Loss before income taxes

 

(6,761

)

 

 

(5,515

)

 

 

(1,246

)

 

 

 

 

Income tax expense

 

(100

)

 

 

(163

)

 

 

63

 

 

 

 

 

Net loss

$

(6,861

)

 

$

(5,678

)

 

$

(1,183

)

 

 

 

 

 

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