2/24/2018 S-1 Table of Contents obtaining a contract with a user, are deferred and amortized over an estimated period of benefit of five years. Additionally, sales and marketing expenses include non­employee costs related to app store fees and fees payable to third­party sales representatives. We plan to continue to invest in sales and marketing to grow our user base and increase our brand awareness, including marketing efforts to continue to drive our self­serve business model. The trend and timing of sales and marketing expenses will depend in part on the timing of marketing campaigns. We expect that sales and marketing expenses will increase in absolute dollars in future periods and, excluding the impact of certain stock­ based compensation charges described in “—Significant Impacts of Stock­Based Compensation”, vary from period to period as a percentage of revenue. General and administrative. Our general and administrative expenses consist primarily of employee­related costs for our legal, finance, human resources, and other administrative teams, as well as certain executives. In addition, general and administrative expenses include allocated overhead, outside legal, accounting and other professional fees, and non­income based taxes. We expect to incur additional general and administrative expenses to support the growth of the Company as well as our transition to being a publicly traded company, which includes the recognition of stock­based compensation expense related to grants of restricted stock made to our co­ founders. We expect that general and administrative expenses will increase in absolute dollars in future periods and, excluding the impact of certain stock­based compensation charges described in “—Significant Impacts of Stock­Based Compensation”, vary from period to period as a percentage of revenue. As a result of certain stock­based compensation charges described in “—Significant Impacts of Stock­Based Compensation,” we expect our research and development, sales and marketing, and general and administrative expenses to increase significantly in absolute dollars and as a percentage of revenue in the quarter during which we complete this offering. Interest expense, net Interest expense, net consists primarily of interest expense related to our capital lease obligations for infrastructure and our imputed financing obligation for our obligation to the legal owner of our previous corporate headquarters, partially offset by interest income earned on our money market funds classified as cash and cash equivalents. Other income (expense), net Other income (expense), net consists of other non­operating gains or losses, including those related to ongoing subleases and foreign currency transaction gains and losses. Provision for income taxes Provision for income taxes consists primarily of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. For the periods presented, the difference between the U.S. statutory rate and our effective tax rate is primarily due to the valuation allowance on deferred tax assets. Our effective tax rate is also impacted by earnings realized in foreign jurisdictions with statutory tax rates lower than the federal statutory tax rate. We maintain a full valuation allowance on our net deferred tax assets for federal, state, and certain foreign jurisdictions as we have concluded that it is not more likely than not that the deferred assets will be realized. As of December 31, 2017, we had $312.2 million of federal and $143.0 million of state net operating loss carryforwards available to reduce future taxable income, which will begin to expire in 2031 for federal and 2030 69 https://www.sec.gov/Archives/edgar/data/1467623/000119312518055809/d451946ds1.htm 77/235