Good day, ladies and gentlemen and welcome to Keysight Technologies' Fiscal First Quarter 2018 Earnings Conference Call. My name is Christine and I'll be your lead operator today. After the presentation, we will conduct a question-and-answer session. Please note this conference is being recorded today Thursday March 1, 2018, at 1:30 PM Pacific Time. I would now like to hand the conference over to Jason Kary, Vice President, Treasurer and Investor Relations. Please go ahead, Mr. Kary.

Thank you, and welcome everyone to Keysight's first quarter earnings conference call for fiscal year 2018. Joining me are Ron Nersesian, Keysight President and CEO; and Neil Dougherty, Keysight Senior Vice President and CFO. Joining us in the Q&A session will be Mark Wallace, Senior Vice President of Worldwide Sales, and Satish Dhanasekaran, President of the Communications Solutions Group, who is calling in from Barcelona where he has been for Mobile World Congress this week. You can find the press release and information to supplement today's discussion on our website at investor.keysight.com. While there, please click on the link for Quarterly Reports under the Financial Information tab. There you will find an investor presentation along with Keysight's segment results. Following this conference call, we will post a copy of the prepared remarks to the website. As always, today's comments by Ron and Neil will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. We will make forward-looking statements about the financial performance of the company on today's call. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please review the company's recent SEC filings for a more complete picture of our risks and other factors. Lastly, I would highlight that we are hosting our Investor Day next Tuesday on March 6 at the New York Stock Exchange and we're really looking forward to seeing many of you there. And now, I'd like to turn the call over to Ron.

Thank you, Jason, and thank you all for joining us. We delivered an outstanding first quarter with both revenue and earnings exceeding our guidance and we are pleased with our performance and growing leadership position in the market. I'll focus my formal comments on three key headlines for the quarter. First, 2018 is off to a great start and we delivered a strong quarter across the board. Our better-than-expected results this quarter were driven by robust order growth as well as the strength of our execution. Second, customers are increasing their R&D investments in next-generation technologies and we have continued to build momentum across multiple end markets, contributing to four consecutive quarters of accelerating order growth. And third, Keysight's transformation strategy is delivering results. With our strong performance in the first quarter, we are raising our guidance for the first half of the year. Additionally, our order growth and backlog expansion over the past several quarters has established a strong foundation to drive revenue and earnings growth in 2018. Let's take a deeper look into our performance for the quarter. We achieved earnings of $0.51 per share, which was $0.15 above the midpoint of our guidance and exceeded the high-end of our guidance range. We delivered outstanding order growth this quarter. Orders grew 39% in total, or 16% on a core basis, to reach a new first quarter record. Q1 revenue increased by 18% to reach $856 million, which was also above our guidance. Our better-than-expected results were driven by our strong order growth and execution, including our ability to recover from the Northern California wildfires faster than expected. With the team's diligence, focus and hard work, our Santa Rosa production capacity is running above pre-fire levels. We still have work to do in order to fully recover, but bringing…

Thank you, Ron, and hello, everyone. As Ron discussed, we delivered a very good quarter, even as we managed through several events that included accelerating customer demand, recovering from the wildfires and completing the integration of Ixia into Keysight's ERP. Needless to say, the past three months were extremely busy for Keysight. I would like to start today by discussing orders as given the ongoing production recovery, orders are the best indicator of the underlying business strength. In Q1, we delivered strong 39% order growth, with core orders growing 16%. This was our fourth consecutive quarter of accelerating core order growth. Ramping capacity to meet this high level of demand can be complicated in and of itself, and it is even more challenging when production and shipments are impacted by unforeseen circumstances like the Northern California wildfires. As Ron mentioned, we were pleased with our ability to recover faster than expected, and production capacity is now above pre-fire levels. It is worth noting that we have not had a single customer order cancellation as a result of the fire, and we have grown our backlog by $226 million over the past two quarters. We have made solid progress, but still have a lot of work to do to increase our shipment levels and clear our growing backlog, which was over $1 billion at quarter-end. Moving to revenue, as we discussed last quarter, we expected the disruption from the wildfires to impact the seasonality of revenue and, therefore, focused our guidance on the first half of 2018. As predicted, seasonality was difficult to forecast as we finished the quarter with non-GAAP revenue of $856 million, up 18% with a 2-percentage-point favorable impact from currency. While Q1 revenue was significantly above our expectations, it was still down 2% year-over-year on a core…

Thank you, Neil. Christine, could you please give the instructions for the Q&A?

Your first question comes from the line of Farhan Ahmad from Credit Suisse. Your line is open. Farhan Ahmad - Credit Suisse Securities (USA) LLC: Hi, thanks for taking my question. My first question is regarding the order trajectory, you have seen an acceleration in orders. Was there any impact that you saw that people rushed to order equipment because of the wildfires because they wanted to get the test systems early on? And second, looking ahead, do you think that the order momentum can continue?

Hi, this is Ron. We didn't see any rush to the quarter because of the wildfires at all, but that never seemed to come up. None of our customers canceled any orders that they had on the books with us. And what we've seen primarily is a rush to be first in 5G by our customers. And that has driven them to want to purchase more of our equipment and purchase more of our equipment sooner. Now, some of the players in R&D have placed very sizeable orders in order to use that equipment throughout the year. But there wasn't any mention at all of the fires for any reason for the order momentum and we saw that across the broad, broad spectrum of businesses, regions and channels. As was mentioned earlier, we not only saw the fantastic results with regards to 5G in commercial communications, we also saw a double-digit software growth, we saw services growth that was in the high-single digits, we saw automotive growth, which was another double-digit growth quarter. So, the momentum is very, very broad, it's across multiple regions around the world, it's across different businesses, and it's also across both of our channels, our direct channel and our indirect channel. I think that our strategy from four years ago to focus on being first in the market and to invest our R&D dollars and really utilize our talent and expertise and work on standards committees and be there first is paying off. And we're seeing it and if you look at our results versus the competition, we're very pleased with how we're doing. Farhan Ahmad - Credit Suisse Securities (USA) LLC: Got it. Thank you. So, if I look at your press releases at Mobile World Congress, it seems like you have announced a lot of partnerships, then if I compare it to your competitor, it seems like you guys are standing out on the momentum that you have on 5G. Can you just comment on the competitive landscape that you are seeing on 5G and, is it fair to expect that you could have meaningful share gains relative to what you had on 4G?

See, I will say this. We don't like to comment on our competition. We like to speak to ourselves. I will say though in 4G, it wasn't our lack of performance or not being able to compete in 4G, our role as part of Agilent was to provide more cash generation. So, we did not invest in 4G, like we needed to in order to be the top leader. On top of that, we did not invest early enough. But now that we are in control of our own destiny, we are a focused measurement company. We had been doing this since day one and we're seeing great results. Another example is we needed to go ahead and to pull together solutions, and we realized where we had some gaps. So, we went out and acquired Anite, which has a lot of software expertise in the protocol area. And we have come up with solutions for 5G using products or technology that was developed at classic Keysight, at Anite on the software levels, and then AT4 wireless also over in Spain. And we put those things together to really accelerate our offering and be first. Now Satish Dhanasekaran is on the phone at Mobile World Congress. He won't be commenting on competitors, but he can share with everybody what he is seeing there from our Keysight customers.

Yeah. Thank you, Ron. Farhan, thanks for the question. Clearly, the industry acceleration of 5G was on broad display here at Mobile World Congress. Multiple operators declaring accelerated plans, really creates a pull in the ecosystem. Something that we predicted a little bit ago, and we've been continuing to invest with a platform approach that scales for the broad ecosystem. And I know you referenced some press releases, but this goes beyond press releases. Our platform and solutions have enabled many industry-firsts. So, if you were at the Qualcomm booth for example, you would have seen high frequency 28 gigahertz demonstration with the Qualcomm X50 modem. If you were at the Intel booth, on display was our solution that helped showcase a 4K video demonstration amongst others. And if you were at this China Mobile booth, you would have seen our newest acquisition, Ixia Solution on display for 5G. So, these are powerful examples of the scale at which our solutions are being adopted. And we view this acceleration trend as a positive driver and most evidenced by the fact that we had a strong order performance in our commercial communications segment in the most recent quarter. Thanks, Ron.

Thank you. And one last comment, Farhan. The other big factor was we have turned the company on its side over the last four years and transformed it into an industry-focused company, where now, we have a Communications Group that Satish leads up, and he has all the tools and all the products in the company accessible to him, so he could sit down with these top customers and give them exactly what they want and speak for the company. Where in the past, many years ago, while it was appropriate back then, we had many different product lines but were not total solutions focused. And this is making a world of difference because speed is a very, very big priority for our customers. And we can act fast, make commitments more quickly and pull everything together in order to be first. Farhan Ahmad - Credit Suisse Securities (USA) LLC: Got it. Thank you. That's all I have.

Our next question comes from the line of Toshiya Hari from Goldman Sachs. Your line is open. Toshiya Hari - Goldman Sachs & Co. LLC: Great. Thanks for taking the question and congratulations on the strong results. I had a follow-up question on your order outlook. Ron, I think, in your prepared remarks you gave some additional color for the aerospace and defense part of your business. But I was hoping you could share some color for your comms and your EISG business as well.

Sure. Neil has gone ahead and he's talked about our overall revenue perspective. When you look in the comms business, 5G – I think if you could say one thing about Mobile World Congress is we're seeing operators as well as equipment providers and chip providers looking to accelerate their offerings and that plays right into our hands. We can help them and make them more productive and more successful. So that is good for Keysight business. With regards to automotive, we're seeing much more technology adoption with not just electric vehicles, but autonomous vehicles, and all the wireless communications that are in the actual vehicles. And it's also important to note that we only play in the high value auto. We play in parts that are very high-tech that are new and breakthroughs for this market. And we expect that to continue going forward. I'm going to turn it over to Mark Wallace who is our President (sic) [Senior Vice President] of Sales and let him make some comments too.

Sure. I'll make a comment on aerospace, defense, you'd asked about that. As Ron and Neil mentioned in their prepared comments, we saw strong rebound in aerospace, defense orders in Q1, following a very strong Q4. So, we're very pleased with both of those quarters at nearly 20%. We see strong demand from our customers in the U.S. government and contractors, but we also see continuing strong growth and demand from our international business. And for many years, this has been a fairly stable business for us and this diversity of opportunities coming to Keysight is one of the things that drives that. So in the short-term, we all know that we're waiting for the U.S. defense budget to be signed later this month. And when that does occur, if it does, we should see some orders begin to flow probably toward the latter part of our fiscal year, just like we did last year. Long-term we have a very good position as we continue to see investments being made in modernizing the technology from electronic warfare to radar, and we're in a very good position to continue to capture that business. And then I just want to underscore the automotive initiative: five quarters in a row of double-digit growth, the R&D spend is continuing to expand, and we have really started making some traction in expanding our presence with the Tier 1 OEMs as a result of the Scienlab acquisition, the company in Bochum, Germany that we're using to help us get into the battery test solutions for the Tier 1 OEMs as well. Toshiya Hari - Goldman Sachs & Co. LLC: Okay. Great. Thanks for that. And then as a follow-up, the housekeeping one for Neil. In your prepared remarks you talked about a one-time inventory related item impacting your Ixia business. How big was that? And, separately, I was a little bit surprised to see your margin number come down a little bit for EISG on a year-over-year basis. If you can kind of explain what went on there that would be helpful. Thank you.

Yeah. So couple different things in there. So, first, as it relates to ISG, you'll notice that the gross margin in that business had been running around 77% and they dipped about 1.5% this quarter and it's roughly $100 million a quarter business, a little bit more than that. So that size is – it was less than $2 million – was the size of the inventory cleanup and, again, one-time related to the ERP migration that we did. On the EISG side, the gross margin change is really about mix, right. They sell a wide range of products in that business, and we see mix shift. I think one of the bigger changes there is while our semi business remain relatively strong, we really sell two main products into semiconductor: first is parametric test, which tends to be a little bit on the higher margin side; and then we sell some laser positioning systems that are still good margins but not quite up to parametric test levels. And so we saw that semi mix was a little bit – put some downward pressure on margins in EISG. Toshiya Hari - Goldman Sachs & Co. LLC: Okay. Thank you so much.

Your next question comes from the line of Patrick Newton from Stifel. Your line is open. Patrick Michael Newton - Stifel, Nicolaus & Co., Inc.: Yeah. Good afternoon, Ron, Neil, and Satish. Thank you for taking my questions. I guess first on the order side, a two-part question. Great quarter for organic orders. You commented that commercial communications saw double-digit growth, reached the highest level since forming Keysight. But I'm curious if you could quantify that order growth rate a little more clearly. And then if we think about your revenue growth that you provided for the year, Neil, at 5% to 7%, and we think about double-digit order trends the last two quarters and accelerating order trends overall, can you help us understand I guess the disconnect between the order growth rate and revenue? Are you inferring that future order growth rate is going to decelerate below that 5% to 7% growth rate, or is there a lag effect because you have more software content? You already talked about the military orders having kind of longer duration. And I believe that your 5G orders are also tied more to long-term R&D relationships.

So I'll take the second one of those first and then we'll come back to the order question. So as you start to think about hitting the 5% to 7% revenue growth for the year, and our first-half guide implied 4% core revenue growth. So we're definitely seeing accelerating revenue growth into the second half. But as you noted, we are seeing a lengthening of our order-to-revenue conversion cycle. If you look on our balance sheet, you'll see increasing deferred revenue balances as we have increasing both in the software and services base orders that have time-based revenue recognition. The solutions sale tends to have a longer order-to-revenue conversion cycle than the typical product sale. And as you mentioned within aerospace, defense, as we sell more systems and there are installation and customer sign-off requirements associated with those sales, that can also lengthen that period of time. So as we look at the course of the second half, we're definitely seeing a strong production ramp and a strong revenue ramp as we move from Q1 to Q2. As you go to the back half of the year, certainly the typical seasonality in this business is that you would see Q4 revenue being our strongest quarter of the year with Q3 being a relatively weaker point. At the high level, we think that that basic seasonality probably still continues, but it's probably muted a bit because of the strong backlog position, the production recovery that we're having. So we still see Q4 above Q3 but maybe with a slightly less of an increase given the strong backlog position that remains.

And, Patrick, your question with regard to order growth, as was mentioned, we saw solid triple-digit order growth for 5G. But if you look at all of commercial comps, it was solid double-digit growth for orders. We're very pleased with that. Patrick Michael Newton - Stifel, Nicolaus & Co., Inc.: All right. I was hoping for a finer point, but I'll give you a pass there. And then, Ron, I guess, nitpicking on kind of a negative. The overall business performed incredibly well, but the Ixia assets I think continue to underperform, whether it's related to growth targets in the proxy or consensus expectations prior to the acquisition. So can you help us understand whether the underperformance is all from the 100-gig slowdown in the core Layer 2, 3 test business, and how investors might think about that duration as 4G you already talked about is growing off of a small base? Or is this also visibility business that's seen some slowing growth as well because we've heard challenges from many of your competitors and I guess specifically on the visibility side, can you provide any revenue or order commentary? I didn't really hear any details in your prepared remarks.

Yeah. I'm going to turn this over to Mark Wallace in a second. So there's no doubt you did see some softness in 100G as you've seen in the competitor's results. We still had some overall solid growth, high-single-digit growth for ISG, which was nice to see. There's a lot of moving parts, as you know, when you pull the acquisition together. And on top of that, what we saw in the market situation that you've seen with our competitors, the public ones and the one that has recently gone private. But we're very pleased to see high-single-digit order growth right now. We're very pleased that we were able to integrate that. We're very pleased that we're on with our cost synergies. And we have no doubt that this is going to be a big valuable opportunity for us. And the high-single digit growth was revenue growth. Yeah.

Yeah. And Patrick, this is Mark. I would add to that. We had growth in both orders and revenue in both test and visibility during the quarter. We saw a lot of increased activity in 400G where we're first to market. We're actually shipping a product. There is pricing pressure with the shift from 100G to 400G, but again the demand for 400G is picking up. For wireless and Wi-Fi, we expect to see continued demand for both 5G and next-generation Wi-Fi technologies. At Mobile World Congress, we demonstrated the industry's only integrated cellular and Wi-Fi protocol verification system. We also demonstrated the UE emulation system. These are all solutions that we've introduced since the acquisition. And on the visibility side, we saw growth across all customer segments, right from NEMS, the enterprise and service providers. So it's a good story. Patrick Michael Newton - Stifel, Nicolaus & Co., Inc.: Can you comment what are the...

And I just wanted to add one thing. That UE emulation and Wi-Fi solution combine technologies from both Keysight and Ixia, and so those are directly synergistic on the technical side between the two companies.

And that's a very important point. One of the things that we saw when we were making the acquisition was the opportunity to bring these two technologies or the technologies of both companies together, and the fact that we're already doing that and doing that in the marketplace is strong. And with our new President, Mark Pierpoint, not only does he understand and know that market, he also knows Keysight very well. So he knows how to plug into the R&D organization. He has run the technology leadership organization that makes a lot of the high-performance integrated circuits and components. So he knows what capability we have, and that helps drive further revenue synergies as we go forward. Also knowing the organization, compared to someone from the outside, he knows how to get cost synergies by understanding the capabilities of both companies and where there is potential overlap. So we're very pleased with where we are right now. It's not perfect, but on the other hand, we're accelerating. And as far as your comment on the pass on orders, we don't report orders for commercial comps at that segment level. Patrick Michael Newton - Stifel, Nicolaus & Co., Inc.: Okay. And then on that visibility side, can you just comment whether the revenue growth rate was single or double digits?

No, we're not going to comment further on that. Patrick Michael Newton - Stifel, Nicolaus & Co., Inc.: Great. Thank you.

Your next question comes from the line of Joseph Wolf from Barclays. Your line is open.

Thank you. Just wanted to follow up on the 5G acceleration, and if you could go through some timing, meaning if these are lab orders moving into field, and what that means for product portfolio mix, breadth of customer base, and then if there is a pull-through into the ISG business as well? And how many quarters we can expect to see momentum in this business given what's going on in the end market?

Yeah. Maybe Satish is best able to answer that given his proximity to those customers.

Thank you, Neil. I would say that the industry acceleration is real. I think those of us in Mobile World Congress got to witness it. And in terms of product SKUs, our customers are still in very early stages, right. So whether it's a base station or a chipset, you're probably still dealing with vintage to prototypes at this point that were on display. But these were very essential to prove that the technology can work and the early trials have really proven that. Having said that, what does this mean for our business. Our customers are having to tool up for 5G. In many cases, it's platforms that have to be upgraded to new equipment, as Ron referenced. And for Keysight, we also are participating in more test insertions in 5G than we've ever done before. The acquisitions of Anite and now and most lately Ixia gave us additional capability to offer a more comprehensive solution to our customers. So with all that, if you sum it all up, we see a clear runway for our solutions. Our collaborations with the lead customers indicate that their plans are not just a quarter or two, but they have a pretty solid roadmap and that bodes well for our future business.

Great. Thank you. And then just to follow up on the cash and the taxes. If you're thinking about I guess the plan once from the spinoff and where you are with cash and the repatriation, does that cause you guys to rethink, accelerate, or keep where you were, any thought about dividends or buybacks?

Yes. So certainly the tax reform is definitely going to help us from an access to cash standpoint. Under the prior tax structure, we had access to about 25% of our cash in the U.S. With the move to the territorial-based system, we'd expect to have access to about 90-plus percent of our cash really anywhere that we want it. From a capital allocation standpoint, our number one priority continues to be the de-levering post the acquisition of Ixia. Obviously we added significant leverage to complete that transaction. I will be talking more about our thoughts on capital allocation at our Analyst Day next week. So look forward to sharing more at that point.

Excellent. Thank you.

Your next question comes from the line of Vijay Bhagavath from Deutsche Bank. Your line is open.

Yeah. Hey, good evening, Ron, Neil. Hope you guys can hear me okay. I'm here in Germany so.

Yes. No problem, Vijay.

Yeah, perfect. So my question is around the mix shift to software and modular. It's obviously very important for investors. So anything you can do proactively, Ron, and Neil please chime in as well, in terms of product portfolio so that you can like engineer an outcome, no pun intended?

Well, there's no doubt that that's part of our overall strategy is to move to a business that was, let's say, less cyclical by moving out of manufacturing to R&D and to increase our recurring revenue. So as we look at the Ixia business, there's obviously more software there, some of it's still classified as being part of the instrument but there are application packs that are effectively are added to their instrumentation. And we've just unveiled a brand new software platform that encompasses the whole product development and all the way to operations lifecycle. And again this is a platform we'll be building on for years. It's more all-encompassing than anything that exists in the industry. It will also be able to take plug-ins from other people's software in certain areas. But whether or not you are going ahead and you are doing research and development, or whether or not you're doing operations, you'll be able to tie those results together to save time. That will help our software portfolio. As I mentioned earlier, our software grew double-digits and we are continuing to accelerate that. Services is a relatively small part of our business, as you know it's less than 15%, but we still see a great opportunity for that. But again, we're not going to waste cash and overpay for acquisitions. We'll take our time and build it ourselves. But that will also help us as we move to recurring revenue. But the move to R&D and the move to software will continue to help us on the gross margin line.

Okay. A quick follow-on for Neil. Now with the strength you're seeing in 5G testing and also in ADAS connected cars, there's a tendency for management to overspend to capture the momentum in the business. How should we think about OpEx through the rest of the year? Thanks.

Yeah, I mean I think we feel like we're investing in R&D at the right level today, about 15% of revenue. I think however, we are managing differently in that we are keeping our foot on the gas here and making sure that we continue to make the investments that are necessary to win in these areas where we're seeing technology inflection, 5G and automotive being the two best examples. And so, we don't see at this point a material change in the way we're investing either up or down, we're going to continue to invest at more or less the model that we've been using for the past year or so.

Thank you.

Your next question comes from the line of Stanley Kovler from Citi Research. Your line is open.

Hi. Thanks for taking my question. I wanted to start off just asking a little bit about the overall industry landscape. There's been some M&A in your space. One of your competitors acquired a business related to RAM testing. Can you help us understand just how you guys fit in from a competitive landscape perspective and some of the portfolio areas? Ron, especially you mentioned how you've invested in 5G and through portfolio expansion as well versus 4G? But a little bit more color on market position and differentiation will be great.

Sure. Our strategy of differentiation is based around providing solutions. We not only provide hardware and we have the fab that goes ahead and creates high-performance components and makes high-performance measurements to provide great, let's just say, measurement integrity. But we also provide software and we are the largest software provider. But with our new platform that we'll be expanding over years, we're going to be continuing to take that further. But the third part of our overall solution is our people. We have the most technical depth not only because of our size but because of the numbers of years we've been in the core part of our market. When you look at the wireless market that's infiltrating everything from automotive to everything that we see in our communications group, that's an area where customers come to us for solutions, whether it's helping with standards or whether it's devising solutions or consulting before the sale, during the sale, and after the sale. So our big differentiation is providing solutions in our key markets. We're not going to overpay for an acquisition and get an acquisition or do an acquisition that won't return above the cost of capital and we're going to do everything we can to further differentiation in total solutions. And when we provide those solutions, we're helping our customers really get to market more quickly and beat their competition and be very, very effective in the marketplace. So we have a robust M&A process and we look at that. Right now, our priority is on making sure we are successful with Ixia. We have Anite. We've integrated that and we're winning a lot of R&D 5G business due to the components and the parts of the solutions from Anite, as well as from the rest of the company. And in Ixia, we just completed the integration into our systems in nine months and we've expanded our SAM and we're going much further. We've also done other acquisitions which also help us, such as we said our stated goal was to win in automotive. So we made an acquisition of Scienlab, and we're very, very pleased with that. That was the firm in Germany that was mentioned earlier today on the call, but we will do small M&As. But right now, we are focused on making the investments that we made pay off even greater than we thought and delevering.

Thanks. And when we look at specifically the international businesses, particularly I'm thinking of Europe in communications and Japan in communications, is this just a function of this 4G spending versus 5G? Where are those regions in terms of testing for 5G? And how does the trajectory of the recovery there look like? And then I also wanted to ask a follow up to Neil on margins. When we look at the outlook for the first half versus your prior outlook for the first half, it looks like the $0.03 higher at the midpoint could be coming from tax reform. How should we think about where margins should wind up in the first half relative to your prior expectations? I know you're investing in the business, especially on OpEx. And then looking out into the second half of the year, if you can help us with the operating leverage there. Thanks.

I'll answer the first question very quickly. We have seen growth in most all the regions; for instance, our core growth factoring out Ixia and other acquisitions as well as currency, which is embedded in everybody's numbers at this time. Americas was up double-digits, Asia Pacific and Japan, both of them were up very high single-digits and Europe was close to flat. But, overall, our core growth was 16%. So we see growth across basically all of the regions with – Europe was a little bit flat on a core basis.

So, this is Mark. I'll just add on communications specifically. We see 5G demand coming across all the regions. The 4G business is stabilizing because there are investments being made in 4.5G and 4.9G, especially around components and base station, so those two combined together to give us the outcome that Ron just talked about.

Yeah, and then this is Neil to address your question on margins. Obviously we've had – our revenues and shipments are a bit more volatile here in the first half than you would typically expect given what's going on with production. But as I noted in the guide, the guidance that we provided for the half does deliver 4% core growth and it delivers a core incremental that is above 40%, which is our promised incremental on core growth. And so as you think about these, you think about modeling margins for the second half I would anchor on that. We've talked about second half core growth in the 5% to 7% range for the full year. So obviously off of – with 4% in the first half, we'll be growing at better than that in the second half and focused on meeting that 40% incremental. We also from a margin perspective in the second half see significant improvement from the Ixia cost synergies. So we have some that are in the run rate now but it was really this integration into the ERP that is the big triggering mechanism to allow us to start taking cost out of Ixia. And so we'll be doing a lot of that work this quarter such that by Q3 we're at a $10 million per quarter run rate or $40 million annually for Ixia synergies.

Thanks, guys.

Thank you.

Your next question comes from the line of Rob Mason from Baird. Your line is open. Rob W. Mason - Robert W. Baird & Co., Inc. (Broker): Yes, good afternoon. A lot of my questions have been answered, but I did want to ask about the semiconductor business. Ron, I think you had noted maybe some difference in the products there, but strong in the quarter, but I'm curious what the outlook is for that business, how the backlog may look there?

So, Rob, this is Mark, I'll answer the outlook. We have a broad business really in semiconductor. And in the quarter, we saw a strong demand for some of our nano-positioning tools and solutions, as Neil mentioned. And we saw a seasonal decline in the parametric wafer test part of the business as a lot of our customers in the fabs are in the process of utilizing a lot of capacity they purchased last year. Looking forward, we expect to continue to capture growth from investments occurring in China, and that's going to carry over for many years ahead. And we see other opportunities around memory as an example continuing into the second half and beyond. So, the broad nature of our business, I think we're well-positioned. There are some mix shifts over time. Rob W. Mason - Robert W. Baird & Co., Inc. (Broker): Sure. Okay. And then, just maybe following up on your comments earlier around 4G that business stabilizing. I think you had noted that even the prior quarter it grew some, but with the pool end that you're now seeing within 5G, is there a point as you look out over the next year or two where that tips and works against you at a more accelerated rate?

Satish, you want to take that question on how we see the transition from 4G to 5G occurring.

We may have lost Satish, so.

Yeah. I'm here. Sorry. I'm here, Neil. Yes, a very good observation. Last few quarters, we've observed a pretty stabilizing trend in the 4G business driven by 4G enhancements, so that provided the stability that you referenced. As we move forward with 5G, there's two flavors, the non-standalone and standalone. The non-standalone version, we continue to see a lot of innovation occurring with 4G. And there's also automotive use cases coming in C-V2X and other new features along with IoT capabilities which will be first deployed on 4G. So I feel reasonably okay about where 4G is headed. But if you fast forward 10 years from now, maybe you will see the trend that you describe, but it's hard to see in the immediate near-term that there could be a complete turn off of 4G; although there are parts of the businesses that might be experiencing that.

And Satish, I'll just add one. This is Mark. One thing I will say is that the breadth of 5G is very different than 4G. So we're seeing growth in the areas that you mentioned and over-the-air testing and millimeter wave. But on the on the EDGE, we're also seeing continued growth for 400G PAM-4 on the digital side. So I think that's going to combine to be a very different scenario than what we saw in 4G. Rob W. Mason - Robert W. Baird & Co., Inc. (Broker): Okay. Thank you, that's very helpful. Maybe just real quick, Neil, one last question. How did your currencies assumption for the first half change versus the prior guide?

Yes. Over the first half, we're seeing about a 2-point favorable impact from currency on the revenue line, but it's profit neutral. Our expenses are up almost dollar-for-dollar so they were profit neutral. And about half of that currency impact has occurred just over the last three months .So, if we were making – when we called the first half a quarter ago, it was about 1-point favorable on the revenue line and now we're up to 2 points favorable on the revenue line. Rob W. Mason - Robert W. Baird & Co., Inc. (Broker): Okay. Very good. Thank you.

There are no further questions at this time. Mr. Jason Kary, I turn the call back over to you.

All right. Very good. Thank you very much for being on the call today. And we'll look forward to speaking with and seeing many of you next week at our Investor Day. Thank you and have a great day.

This concludes today's conference call. You may now disconnect.