Question-and-Answer Session
Operator
(Operator Instruction) Your first question comes from the line of Derek Bingham - Goldman Sachs.
Analyst for Derek Bingham - Goldman Sachs
This is [Joe] on behalf of Derek Bingham. A couple of questions, first of all, could you give us some guidance on how we should think of operating expenses especially G&A and sales marketing, also could you give us a comment on bandwidth pricing changes versus how pricing is being affected due to competition in the pipeline?
Douglas Lindroth
What was the first part of your question on operating expenses for Q3?
Analyst for Derek Bingham - Goldman Sachs
Yes.
Douglas Lindroth
What I would look at for operating expenses is because of some of the items that I have mentioned that we are lower in Q2. So, if you exclude side to side litigation cost for a second and think about the other items, marketing, bad debt and some of our compensation related, I would probably model Q3 total operating expenses excluding litigation more in line with the levels that we had in Q1. If you go back to where our Q1 results were, I would say operating expenses would be more in line with those levels.
And then on the pricing question, gross margins were relatively consistent quarter-to-quarter and so the underlying bandwidth cost you asked about is a substantially component of our cogs and I think just in a quarter-to-quarter comparison. We would say those two were relatively consistent that the compression in bandwidth cost was roughly equivalent with the compression in pricing.
Analyst for Derek Bingham - Goldman Sachs
Okay, thanks. Just one more question, could you comment on your headcount addition plans? Do you have any headcount addition plans for the rest of the year?
Jeffrey Lunsford
We do. We believing that Q2 was a trough and believing that we will see a return to sequential growth here. In the second half, we are making calculated investments in areas of the business that are growing and in products, value added services that we believe will create long term value and we have certain geographic markets that are growing. We have certain lines of business that are growing and so we are planning on adding heads between now and end of the year.
Operator
Your next question comes from the line of David Hilal - FBR Capital Markets.
David Hilal - FBR Capital Markets
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