Welcome to Cisco Systems' fourth quarter and fiscal year 2015 financial results conference call. At the request of Cisco Systems, today's call is being recorded. If you have any objections, you may disconnect. Now I would like to introduce Melissa Selcher, Vice President of Corporate Communication and Investor Relations. Ma'am, you may begin.

Thanks, Kim. Welcome, everyone, Cisco's fourth quarterly FY 2015 quarterly conference call. This is Melissa Selcher, and I'm joined by Chuck Robbins, our CEO, and Kelly Kramer, our CFO. By now you should have seen our earnings release with expanded financial information. A corresponding webcast with slides, including supplemental information, will be available on our website in the Investor Relations section following the call. Income statements, full GAAP to non-GAAP reconciliation information, balance sheets, cash flow statements, and other financial information can also be found on the Financial Information section of our Investor Relations website. Throughout this conference call we'll be referencing both GAAP and non-GAAP financial results. And we'll discuss product results in terms of revenue, and geographic and customer results in terms of product orders unless stated otherwise. All comparisons throughout this call will be on a year-over-year basis unless stated otherwise. The matters we'll be discussing today include forward-looking statements, including the guidance we'll be providing for the first quarter. They're subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Form 10-K and Form 10-Q and any applicable amendments which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. With respect to guidance, please also see the slides and press release that accompany this call for further details. As a reminder, Cisco will not comment on its financial guidance during this quarter unless it's done through a specific public disclosure. I'll now turn the call over to Chuck. Charles H. Robbins - Chief Executive Officer & Director: Thanks, Mel. It's an honor today to lead this call as the CEO of Cisco. While this is only my third week officially in the…

Thanks, Chuck. I am pleased with our execution on our financial strategy of delivering profitable growth, managing our portfolio and strategic investments, and delivering shareholder value. Starting with profitable growth, we saw good top line growth in Q4 with a record $12.8 billion in revenue, up 4%, bringing our full-year fiscal year 2015 revenue to $49.2 billion, also growing 4%. Successful portfolio refreshes across almost every product area and effective resource reallocations to growth areas fueled revenue growth in Q4 in every product area except for SP [Service Provider] video. Specifically in Q4, the continued traction of the new core platforms in high-end routing drove routing revenue growth of 3%. Switching grew 2%, with very strong 200%-plus growth of ACI, both the Nexus 9000 and ASIC, and strong performance in the Catalyst business. And a refresh of the entire collaboration product line accelerated our collaboration growth to 14%. Data center grew 14%, with continued market leadership of UCS. Wireless grew 7%, driven by continued Meraki momentum, and security grew 4%. In security this quarter, we saw the acceleration in the shift from hardware to software. Our customers are rapidly adopting our subscription-based and software offerings, which is helping us build a greater mix of recurring revenue. This transition is accelerating and will remain a focus for us going forward. Security and collaboration both had deferred revenue growth of over 20% at the end of the quarter, and we saw total deferred product revenue grow double digit again this quarter, up 21%. Product orders in Q4 grew 4% year over year, with a book-to-bill comfortably above one. Looking at the geographies, which is the primary way we run our business, the Americas grew 7%, EMEA declined 1%, and APJC declined by 1%. Total emerging markets declined 2%, with the BRICs plus…

Thanks. Kim, let's open for questions. I'd like to remind analysts to please ask just one question. Thanks, Kim.

Thank you. Our first question comes from James Faucette with Morgan Stanley. James E. Faucette - Morgan Stanley & Co. LLC: Thanks a lot. I just wanted to ask a question related to security. That was an area in an otherwise strong quarter that was a little bit below at least where we had modeled. I'm just wondering if you can give a little view on maybe what transpired and how you think about security and what needs to happen there to drive that growth. And I guess as part of that, are you comfortable with your current portfolio in security, or should we expect you to look to make additions there to make it – increase even further the competitiveness? Thank you. Charles H. Robbins - Chief Executive Officer & Director: Hey, James. Thanks for the question. Number one, I am very bullish about where we are with our security portfolio. I think the team has done a tremendous job. They've actually driven the transition that we have begun from hardware to software and subscription business. As we stated, the deferred revenue was up over 20%, I think 26% in the quarter. Software is now 47% of our security portfolio. On the FirePOWER services, which is where we have our malware capabilities, we added almost 3,000 new customers, which before the quarter I think we had 3,000 customers, so we doubled the number during the quarter. And what we plan to do now is take that across all of our 275,000 ASA firewall customers. And I do feel comfortable that in the next couple quarters we'll get the revenue back in the high double digits. So I think it's a transition that we're pushing. I think the team is doing a great job of accelerating that transition. I think it will be good for us in the long run. As it relates to our portfolio, when we think about this, we clearly are going to have to continue to expand our offerings for the customers. And we'll do that through a combination of internal R&D, acquisitions where needed, partnerships where they make sense, co-innovation where it makes sense, so we'll be looking at all alternatives.

Great, thanks, James. Operator, next question?

Thank you. Your next question comes from Simona Jankowski with Goldman Sachs. Simona K. Jankowski - Goldman Sachs & Co.: Hi, thanks very much. I just wanted to ask a question on the backlog. It was down year over year even though book-to-bill was strong, as was deferred. I'm just curious if you can help us reconcile that. And just related to that, enterprise I think you said was down 1% year over year, even though you had very strong bookings there last quarter. So I just wanted to understand the dynamics there as well.

Hi, Simona. I'll take the backlog one here. So looking at our backlog, it was down marginally from a year ago. And as you know, that's just a point in time. I think the big difference when you compare that to the great strength you're seeing in our product deferred revenue being up is as soon as we invoice it out of our – invoice whatever it is, the hardware or the software, we remove it from backlog. And then obviously, then as we get our cash for our things or we defer it for a deal, it goes into deferred. So there's a bit of a disconnect between the two of when it's actually invoiced out. But from a backlog weeks, it's right in the same line as what we'd expect at the end of the year. Charles H. Robbins - Chief Executive Officer & Director: And, Simona, on the enterprise portion of the question, so the number that we put out there was a bookings number, order number, new orders. And candidly, I'm not concerned. We see the enterprise business, because of the finite number of customers that exist in that segment, we see those varying quarter by quarter. The commercial and public sector, we sell the same solutions. And I think that if you look at the performance there, we're very optimistic. So I'm not concerned at all about the enterprise business.

Thanks, Simona. Operator, next question?

Thank you. Our next question comes from Amitabh Passi with UBS.

Hi, Chuck. Welcome on your first call. I wanted to piggyback on the last question. I had a similar question on switching. Last quarter, I think there was some concern about switching sales having peaked two quarters ago. I think you saw a sequential uptick in switching. How should we be thinking about the cadence in your overall switching business? Is this a business that you feel comfortable growing kind of this 1%, 2%, 3%, low single-digit percent range? Charles H. Robbins - Chief Executive Officer & Director: Amitabh, thanks for the question. I'm pleased with where we are. If you look at our performance in the campus and in the access piece of our business, we had solid performance. We continue see strength based on, frankly, customers connecting everything, IoE, collaboration. As we continue to drive our collaboration portfolio, all of those video end units require switching ports. Security is driving an element of that, as is the transition we see in wireless. In the data center, we're continuing to work through the transition that we have talked about. I think that you can tell from the numbers that we put up on the Nexus 3000/Nexus 9000 revenue at $438 million, up 53% sequentially, we feel really good about where we are. We're accelerating there, and I think that we are very optimistic and pleased with where we are in our switching business.

Great, thanks, Amitabh. Operator, next question?

And our next question comes from Brian Modoff with Deutsche Bank. Brian, your line is open. You may want to check the mute feature on your phone.

Yes, good idea. Hi, guys. If you could add up your services revenue including Meraki, including some of the enterprise area (20:09) products, what's the revenue based on that? What's the overall growth rate and trend in that business? Thanks.

Just to make sure, Brian, what pieces are you trying to quantify in there?

Meraki, your recurring revenue streams, your services plus your recurring revenue streams.

I see.

What do you have in revenue and what's the growth rate and what's the trend in that? Thanks.

Okay, great question. So if I start with – let's see here, let me just get to that data. I'd say if I go to the actual balance, if I start with the deferred balance and then I'll get to the actual revenue piece of that, like I've talked about before, on the product side, we've been increasing the amount of our deferred revenue that is recurring. So that amount year over year of my total product deferred revenue is now over 46%, up from 40% a year ago, so we continue to increase that. Obviously, there are different ranges of the term on that. But on average for product, it's slightly north of $500 million-plus quarter on quarter that we're weighting down, amortizing every quarter on the product side. On the services side, it is obviously a much more accurate run rate. I'll pull it up here as we go through. Just give me a couple seconds here and let me pull it up for you. Or actually, let me follow up with you on the call back because I have to dig it up a little bit. Okay, Brian? Charles H. Robbins - Chief Executive Officer & Director: Thanks, Brian.

Great, thanks, Brian. Operator, next question?

Thank you. Our next question comes from Tal Liani with Bank of America Securities Merrill Lynch. Charles H. Robbins - Chief Executive Officer & Director: Tal, you may be muted as well.

Please check the mute feature of your phone. Tal, your line is open.

Yes, sorry, now you can hear me. Thanks very much for taking my call. I want to go back to the question on switching because I'm trying to understand. This is a major upgrade, and still we don't see the numbers picking up materially. The sequential growth we're seeing is below what we've seen the last two years, and I'm wondering. Can you go over what's offsetting the growth in Nexus 3000 and Nexus 9000? Why are the numbers not showing much greater increase given the magnitude of the cycle? Thanks. Charles H. Robbins - Chief Executive Officer & Director: Tal, this is Chuck. It's a great question. So as we look at our data center switching, again, we are very pleased with the campus and the access switching. We've got a refresh that's being driven there, and that's moving along well. We're very happy with the transition going on in the data center switching space. As we look at customers that are migrating to 10-gig, 40-gig, 100 gig, which is really represented by the data that I gave you earlier, and it's just being offset by the transition from the Nexus 7000 to these new platforms. And we think in the next few quarters we'll see that inflection point.

Great, thanks, Tal. Operator, next question?

Thank you. Our next question comes from Pierre Ferragu with Bernstein. Pierre C. Ferragu - Sanford C. Bernstein & Co. LLC: Hi, thank you for taking my questions. On the service provider side, so you are now getting back to some good revenue momentum. I was wondering. How much of that comes from a change in the landscape in how operators are looking at spending and how much is much more related to your own dynamics and your own product cycle? And then when we look at the second half of the year, of the calendar year, could you give us a sense of how you see the market evolving, especially your largest clients in the U.S.? Thank you. Charles H. Robbins - Chief Executive Officer & Director: Thanks, Pierre. So on the service provider business, clearly we're pleased that we got back to growth this quarter. Our teams have done a great job. We're proud of what they've done. We made some changes over the last 18 months internally in engineering and services and in sales to better position us, and I think that had a lot to do with it. I also think that we have really gotten to a point of what I'd say architectural vision alignment with most of our customers. We saw balance throughout the quarter in SP. We saw good performance from data center, collaboration, high-end routing, even SP mobility. And so while we're pleased with the 2%, we're still cautiously optimistic about where we go. I think that in the second half of the year right now, relative to when you think about SP CapEx, there's a lot of movement right now around the expectations for that in the second half. And candidly, we have not modeled any significant increase in the second half of CapEx spend from SP. And if it does occur, then we'll certainly benefit from that. So again, we're cautiously optimistic in this space.

Great, thanks, Pierre. Operator, next question?

Thank you. Our next question comes from Mark Sue with RBC Capital Markets.

Thank you, maybe a question on how we should think about Cisco's long-term growth on an adjusted basis, considering Cisco has and will continue to make acquisitions, and increasingly you're taking a fresh look at divesting businesses. So can we return to your 3% to 6% long-term growth rate post the SFA divestiture? And concurrently, how should we start modeling the revenue impact as we transition to subscription and as Cisco moves faster to software?

Hi, Mark. So obviously, when I did Cisco Live, we had assumed the SP video set-top business was still in our portfolio. I think, though, to offset that, as you know, we're very acquisitive, and we will continue to be very acquisitive going forward as we continue to build out our portfolio, especially in areas like software and security. So in terms of your second part of your question, we will clearly break out to you – we expect to close the deal officially in the December – January timeframe. And when we give guidance for Q3, we'll make sure it's very transparent so you can adjust your models for what is coming out based on what we were modeling before.

Great, thanks, Mark. Operator, next question?

Thank you. Our next question comes from Simon Leopold with Raymond James. Simon M. Leopold - Raymond James & Associates, Inc.: Great, thank you very much for taking my question. I wanted to come back to the routing segment. The results this quarter certainly were a bit better than what we were modeling. But when we compare your results to some of your closest competitors, it does appear that at least in their June-ending quarters, they grew a bit faster. So maybe you could help us understand what might be going on in the routing market overall as well as your competitive position and market share. Thank you. Charles H. Robbins - Chief Executive Officer & Director: Simon, thanks for the question. So as we think about the SPs right now, I mentioned earlier that we had great success in our high-end platforms that we talked about last year as we began the transition, both of them growing over 100%. As we look at the marketplace today, we did really well in the core. We need to probably improve our performance in our edge routing platforms as we look ahead. But I do think that as we look at where the service providers are going, what they want to do with virtual managed services, how we're aligned now around the deployment of NFV and how we move forward with that, we think that we're well positioned with routing as we look ahead.

Great, thanks, Simon. Operator, next question?

Thank you. Our next question comes from Jess Lubert with Wells Fargo.

Hi, guys. I was hoping you could share with us how much of your business is now coming from the Web 2.0 vertical, the trends you're seeing there, how material the opportunity with these customers may be for your prospects in fiscal 2016. And then the service business saw a nice improvement, so any insight as to what drove the improvement there and if there's any reason to believe service growth could accelerate as customers move forward with more complex network architectures. Thanks. Charles H. Robbins - Chief Executive Officer & Director: Jess, thanks. So on the MSDC and web players, what I will tell you is that we've spent a great deal of time over the last couple years really understanding what the requirements are, where they're headed, and how we can provide the technology that they need. And I'll tell you, this quarter the top 10 web-scale players, our order growth exceeded 20%, so we're very pleased with where we're going. We actually embarked on some co-development with one of the cloud titans in the last 12 months, and we delivered last quarter a new high-end platform to them as a result of that co-development. So we're pleased with our progress there. We continue to work with them around their unique needs, and we think with our ability to build out scalable solutions with consideration to their unique needs, I think that we're reasonably well positioned. On the services side, we had good performance this quarter at 4%. I think as we look at our customers and they continue to move to the Internet of Everything and connecting devices, they're going to continue to need more and more services. So we're pleased with where we are, and we feel good about our position in the services business going forward.

Great. Operator, next question?

Thank you. Our next question comes from George Notter with Jefferies.

Hi, thanks very much, guys. I'm somewhat impressed with the growth rates you guys are putting up in the commercial segment, I guess, on year-on-year product orders. You've had a string of fairly attractive year-on-year growth rates. But can you talk about what's going on there? Obviously, Meraki is a part of the story. I know you guys are trying to push that cloud management system onto other products in the portfolio. Can you just talk generally about the initiatives you have going on in commercial and how you keep driving that growth going forward? Thanks. Charles H. Robbins - Chief Executive Officer & Director: Thanks, George. We always appreciate that question. This is why when we look at our enterprise segment this quarter, it doesn't concern me. When you look at our commercial business, our selling motions, our solutions and everything we do are the same. There's just a much broader base of customers to balance it across. So we grew the global business in commercial 11%. Just a couple other data points for you, our U.S. commercial business this past quarter grew 19%. That's 23 consecutive quarters of positive growth, and 16 of those have been double digits, so we've had very consistent performance. I think the key is that we have really shifted both our solutions and our technology as well as our selling motion and our services capability to be much more tightly aligned with how the technology aligns to our customers' business issues. And I think we're doing that very well in the enterprise, and I think the teams have done a really good job of that in commercial. And those commercial customers, those midrange customers, we see it time and time again. They tend to be the early adopters of our new technology because they view it as a way to accelerate their business, to drive their competitiveness, and they just always seem to adopt early. Meraki has clearly been a big success for us, as I said earlier, relative to exiting Q4 almost on a $1 billion run rate from an order perspective. And we continue to see it being a very relevant portion of particularly the lower end of our commercial market, our K-through-12 market in not only wireless, but also we're seeing an expansion into managed cloud switching as well as security. So we're very pleased with where that is going, and we would expect to continue to add more and more functionality to that platform.

Great. Thanks, George. Operator, next question?

Thank you. Your next question comes from Paul Silverstein with Cowen. Paul J. Silverstein - Cowen & Co. LLC: Thanks. I appreciate you taking the question. Just very straightforward, if you could, talk about pricing across regions and in general. And, Kelly, can you remind us what cloud times (32:09) are as a percentage of revenue?

The cloud, we don't actually share that with you. But if I get back to your pricing question, I'd say what you're going to see this quarter is very similar to what you've seen all year. Our pricing has remained very – in a tight range. You're going see that our impact on year-over-year points is basically the same as where it was last quarter, so we're not seeing any incremental discounting going on. And again, that's looking across the board. I think our teams have been executing very, very well, especially outside the U.S. where they're facing the FX headwinds, where they're being very disciplined and managing through the currency effect.

Great. Operator, next question?

Thank you. Our next question comes from Tim Long with BMO Capital Markets.

Thank you. I just wanted to talk a little bit about the emerging markets. It sounds like the U.S. performance has been outstanding, just some of the countries were highlighted as a problem. Could you give us just a little view on how long do you think before we can start to see a more broad-based recovery in the emerging markets, and what pieces of your business do you think are most likely to drive that? Thank you. Charles H. Robbins - Chief Executive Officer & Director: Hey, Tim, good to hear from you. Thanks for the question. So if you look at the emerging markets, I would tell you that story in Q4 was quite similar to the story in Q3. If we go through the five BRICM countries, Brazil actually was negative 45%. Russia was negative 38%. China was negative 3%, which actually was the best performance we've had in eight quarters. And we had some bright spots. India was plus 5%. Mexico was plus 26%, and Mexico had just a tremendous year in general. And all the emerging countries outside of those five actually grew 3%. So overall it was negative 2%, as we stated. So it's very much the same as it was last quarter. I think that largely they're largely macro and geopolitical issues. We have adjusted our cost structure where needed and we've invested in areas where we've seen growth, as you would expect. And we believe that as the macro and the geopolitical issues resolve themselves, we think we'll be a big beneficiary of that. The other comment I'll just make on emerging is if you just look at the EMEA numbers and you remove Russia, EMEA was actually positive. So it was up plus 1% without Russia. So overall, the emerging continued to be a little bit of a strain.

Great, thanks, Tim. Operator, next question?

Thank you. Our next question comes from Jayson Noland with Robert W. Baird & Company. Jayson A. Noland - Robert W. Baird & Co., Inc. (Broker): Yes, thank you, and I guess a follow-up to Europe. How much of that is macro and how much of that is U.S. dollar strength? And then, Chuck, if you can, comment on any head count reductions to start the fiscal year. Cisco has made some cuts the last couple years. Charles H. Robbins - Chief Executive Officer & Director: So as we look at Europe, I think that again, there's an emerging markets element associated with it the way we measure EMEA. And also, I think we stated on the last call that we believe that the currency issue may have as much as one to three points, even though we sell primarily in U.S. dollars in most countries. So I will say that I believe our teams have proven over the last several quarters in Europe that they out-execute our peers and our competitors, and that they – I think if there are macro issues, we'll deal with them. But based on the things that we can control, I think our teams are doing a very good job. Charles H. Robbins - Chief Executive Officer & Director: I'd like to thank everybody for joining the call today. I want to just quickly summarize. I do believe that we are in a very strong position. I think that was reflected in our results. I think they were differentiated from what you've seen from many of our peers. Again, record revenue and record earnings per share as well as the 21% growth in deferred product revenue as we continue to transition our business to a more predictable while growing revenue and earnings at the same time. I really believe that the transition that our customers are going through in the move to digital and the Internet of Everything will only be successful with the network at the center of that transition, and I really do believe that the best years for Cisco are ahead. So thank you very much for joining the call. Mel?

Thanks, Chuck. Cisco's next quarterly call, which will reflect our FY 2016 first quarter results, will be on Thursday, November 12, 2015, a day later than normal because of Veterans Day, at 1:30 Pacific Time, 4:30 Eastern Time. Again, I'd like to remind you that in light of Regulation SP, Cisco's policy is to not comment on its financial guidance during the quarter unless it's been through an explicit public disclosure. Thank you for joining our call.

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