EFTA01377639

S-1/A notes included elsewhere in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements and reflect, in the opinion of management, all adjustments, which include only normal, recurring adjustments that are necessary to present fairly the unaudited interim consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results in the nine months ended September 30, 2015. are not necessarily indicative of results to be expected for the full year or any other period, in part because we do not intend to renew our payment processing agreement with Starbucks when it expires in the third quarter of 2016. Further, in August 2015 we amended our payment processing agreement with Starbucks to eliminate the exclusivity provision in order to permit Starbucks to begin transitioning to another payment processor starting October 1, 2015. Under the amendment. Starbucks also agreed to pay increased processing rates to us for as long as they continue to process transactions with us. Starbucks has announced that it will transition to another payment processor and will cease using our payment processing services altogether prior to the scheduled expiration of the agreement in the third quarter of 2016. As a result, Starbucks payment processing volumes will decrease meaningfully in the future. You should read the consolidated financial and other data below in conjunction with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. 17 Table of Content% Consolidated Statement of Operations Data: Revenue: Year Ended December 31, Nine Months Ended September 30, 2012 2013 2014 2014 2015 (in thousands) (unaudited) Transaction revenue $ 193,978 $ 433,737 $ 707,799 $ 501.468 $ 751,929 Starbucks transaction revenue 9.471 114,456 123.024 86.508 95,199 Software and data product revenue — — 12,046 6,022 35,628 Hardware revenue — 4,240 7,323 5,300 10,002 Total net revenue 203,449 552,433 850,192 599,298 892,758 Cost of revenue: Transaction costs 126,351 277,833 450.858 318,501 479,937 Starbucks transaction costs 12,547 139,803 150,955 107,889 118,542 Software and data product costs — — 2,973 1,032 13,820 Hardware costs — 6,012 18,330 13,527 16,636 Amortization of acquired technology — — 1,002 602 2,886 Total cost of revenue 138.898 423,648 624,118 441,551 631.821 Gross profit 64,551 128,785 226,074 157,747 260,937 Operating expenses: Product development 46,568 82,864 144,637 104,967 140.452 Sales and marketing 56.648 64,162 112,577 81,704 107,170 General and administrative 36,184 68,942 94,220 68,585 97,743 Transaction and advance losses 10,512 15,329 24,081 17,826 40,840 Amortization of acquired customer assets - - 1,050 591 1,373 Impairment of intangible assets — 2,430 — — — Total operating expenses 149.912 233.727 376,565 273,673 387,578 Operating loss (85.361) (104,942) (150,491) (115.926) (126.641) Interest (income) and expense 5 (12) 1,058 615 995 Other (income) and expense (167) (950) 1,104 737 1,390 Loss before income tax (85,199) (103,980) (152,653) (117,278) (129,026) Provision (benefit) for income taxes — 513 1,440 (257) 2,502 http://www. sec. gov/A rehi vestedgaddata/1512673ANS1119312515369092/d937622dsla. htm[ 11/6/2015 7:37:12 AM! CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0074790 SDNY_GM_00220974 EFTA01377639