> This is surprising, since they don't have any big capital investments.
I haven't looked at the S-1 and I'm not sure if they even break this out, but user acquisition costs are all paid up front, while the value is realised over the life of the customer, depending on the average lifetime of a customer, this could be fine, if risky. And you often do prepay for AWS since it saves you money over the course of a few years.
> And you often do prepay for AWS since it saves you money over the course of a few years.
I don't think this would show up as an expense. It would just shift assets from cash to prepaid expenses, and not show up on the P&L - until the expenses are realized, which would be over time.
Sales & marketing is 49 million, R&D is 42 million. So, I guess the critical factor is the degree of user turnover. If they lose users too quickly, they need to keep spending big on sales & marketing. It doesn't seem like the sort of market where people jump ship quickly though, since once you've added the piece of code that integrates with their services, you'd only replace it if the other api is a lot cheaper or somehow more capable / reliable.
Right but how expensive is that acquisition cost? So its about the average cost to acquire versus the average lifetime customer value. I think that's an important metric for them to break out
I haven't looked at the S-1 and I'm not sure if they even break this out, but user acquisition costs are all paid up front, while the value is realised over the life of the customer, depending on the average lifetime of a customer, this could be fine, if risky. And you often do prepay for AWS since it saves you money over the course of a few years.