“In 2022, we expect pro forma operating expense growth to be between 21% and 27%.”

In context

“As we mentioned last quarter, we expect the volume of trade-ins to be significantly lower in 2022 as compared to 2021. Turning to gross profit. Our full year 2021 pro forma gross profit margin was 71.2%. In 2022, we expect our pro forma gross profit margin to be within a range of between 69.5% and 70.5% of net revenue. The slightly lower gross profit margin anticipated in 2022 reflects higher fixed costs from investments to drive growth of the business, strengthen our operating capabilities and also reflects the impact of higher supply chain costs. Our actual gross profit margin will vary quarter-to-quarter depending largely on product, regional and trade-in mix and the impact of new product introductions. Turning to operating expenses. In 2021, our pro forma operating expenses grew 19%. In 2022, we expect pro forma operating expense growth to be between 21% and 27%. The operating expense growth reflects increased investment in R&D for our new product platforms, expanding OUS capabilities and the return of other spending that was previously restricted by COVID. We expect our noncash stock compensation expense to range between $510 million to $550 million in 2022 compared to $452 million in 2021. We expect other income, which is comprised mostly of interest income, to total between $45 million and $55 million in 2022. With regard to income tax, in 2021, our pro forma income tax rate was 22.2%. As we look forward, we estimate our 2022 pro forma tax rate to be between 22% and 24% of pre-tax income, with the increase primarily due to a change in U.S. tax treatment of certain expenditures that was enacted in 2017, but became effective on January 1, 2022. L”