higher hosting costs due to increased transaction volume as well as higher compensation costs associated with additional personnel to support growth in active locations. Professional Services and Other Total professional services and other cost of revenue increased $0.3 million, or 28.1%, to $1.5 million for the three months ended September 30, 2021 from $1.2 million for the three months ended September 30, 2020. This increase was primarily the result of increased compensation costs to support growth in active locations. Gross Profit Gross profit margin decreased to 78.2% for the three months ended September 30, 2021 from 82.6% for the three months ended September 30, 2020. Decreases in gross profit margin were driven by higher platform and professional services and other compensation costs to support rapid growth in active locations coming onto the platform. Operating Expenses Research and Development Three Months Ended September 30, Change 2021 2020 $ % (in thousands, except percentages) Research and development $ 14,485 $ 7,871 $ 6,614 84.0 % Percentage of total revenue 38.7 % 28.6 % Research and development expense increased $6.6 million, or 84.0%, to $14.5 million for the three months ended September 30, 2021 from $7.9 million for the three months ended September 30, 2020. This increase was primarily the result of higher compensation costs associated with additional personnel and an increase in the use of software tools to support further investments in our platform development and continued product innovation. As a percent of total revenue, research and development expenses increased to 38.7% for the three months ended September 30, 2021 from 28.6% for the three months ended September 30, 2020. General and Administrative Three Months Ended September 30, Change 2021 2020 $ % (in thousands, except percentages) General and administrative $ 21,270 $ 5,461 $ 15,809 289.5 % Percentage of total revenue 56.9 % 19.9 % General and administrative expense increased $15.8 million, or 289.5%, to $21.3 million for the three months ended September 30, 2021 from $5.5 million for the three months ended September 30, 2020. This increase was primarily a result of increased compensation costs due to increased headcount to support the growth and stage of the organization, as well as, increased insurance costs and professional fees incurred due to operating as a public company. Additionally, we incurred a non- cash charge of $8.0 million for the three months ended September 30, 2021 related to the donation of 172,918 shares of our Class A common stock to a charitable donor-advised fund. We intend to donate additional shares to this fund in conjunction with our Olo for Good initiative. As a percent of total revenue, general and administrative expenses increased to 56.9% for the three months ended September 30, 2021 from 19.9% for the three months ended September 30, 2020. Sales and Marketing Three Months Ended September 30, Change 2021 2020 $ % (in thousands, except percentages) Sales and marketing $ 4,728 $ 2,002 $ 2,726 136.2 % Percentage of total revenue 12.6 % 7.3 % 34
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