“We expect to see a more significant increase in expense in 2025 as we invest in technical hires, the product pipeline, and continue our focus on AI production use cases, all while delivering our goals of sustained GAAP profitability.”

In context

“than 12 months and contractual obligations that fall beyond termination for convenience clauses, both of which are common in most of our government business. Turning to margin and expense. Adjusted gross margin, which excludes stock-based compensation expense was 83% for the quarter and the full-year. Adjusted income from operations, which excludes stock-based compensation expense and related employer payroll taxes was $373 million, representing adjusted operating margin of 45%. Full-year adjusted income from operations was $1.13 billion, representing margin of 39%. Q4 adjusted expense was $455 million, up 1% sequentially and 14% year-over-year and full-year adjusted expense was $1.74 billion, up 9% year-over-year, primarily driven by our continued investment in AIP and technical talent. We expect to see a more significant increase in expense in 2025 as we invest in technical hires, the product pipeline, and continue our focus on AI production use cases, all while delivering our goals of sustained GAAP profitability. On the back of the strength of our results, we want to congratulate our employees for the successful delivery of their market-vesting stock appreciation rights or SARs. As a result of this achievement, we accelerated $131 million of one-time expenses in the fourth quarter related to these equity awards. Fourth quarter stock-based compensation expense was $282 million and employer-related equity tax expense was $80 million. Full year stock-based compensation expense was $692 million and employer-related equity tax expense was $126 million. Fourth quarter GAAP operating income was $11 million, representing a margin of 1%. Fourth quarter operating income, when excluding one-time SAR-related expenses was $142 million, representing a 17% margin. Full-year GAAP operating income was $310 million”