Company: HCTI
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001213900-25-026218
Chunk: 193

Company: Healthcare Triangle, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 193
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 and the customer will not have the right to take possession of the software Segment wise revenue
breakup.

Cost of revenue

Cost of revenue consists primarily of employee-related
costs associated with the rendering of our services, including salaries, benefits and stock-based compensation expense, the cost of subcontractors,
travel costs, cloud hosting charges and allocated overhead the cost of providing professional services is significantly higher as a percentage
of the related revenues than for our subscription services due to the direct labor costs and costs of subcontractors. Our business and
operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities.

While we may grow our headcount overtime to capitalize
on our market opportunities, we believe our increased investment in automation, electronic health record integration capabilities, and
economies of scale in our operating model, will position us to grow our platform solutions revenue at a greater rate than our cost of
revenue.

37

Operating Expenses

Research and development

Research and development expense (majorly our
investment in innovation) consists primarily of employee-related expenses, including salaries, benefits, incentives, employment taxes,
severance, and equity compensation costs for our software developers, engineers, analysts, project managers, and other employees engaged
in the development and enhancement of our cloud-based platform applications. Research and development expenses also include certain third-party
consulting fees. Our research and development expense excludes any depreciation and amortization.

We expect to continue our focus on developing
new product offerings and enhancing our existing product offerings. As a result, we expect our research and development expense to increase
in absolute dollars, although it may vary from period to period as a percentage of revenue.

Sales and marketing

Sales and marketing expense consists primarily
of employee-related expenses, including salaries, benefits, commissions, travel, discretionary incentive compensation, employment taxes,
severance, and equity compensation costs for our employees engaged in sales, sales support, business development, and marketing. Sales
and marketing expense also includes operating expenses for marketing programs, research, trade shows, and brand messages, and public relations
costs.

We expect our sales and marketing expenses to
continue to increase in absolute dollar terms as we strategically invest to expand our business, although it may vary from period to period
as a percentage of total revenues.

General and administrative

Our general and administrative expenses consist
primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance,
and stock-based compensation expenses, for employees who are responsible